By Mark Calabria

December 14, 2011

What are the most pressing issues in housing policy today?

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While a variety of challenges continue to plague our housing markets, foremost being the imbalance between supply and demand, housing policy, as distinct from housing market dynamics, is suffering a more fundamental problem. That problem is a basic confusion, if not outright contradiction, in its objectives. Having tried to be everything to everyone, our nation’s housing policies have all too often worked in conflict. Before we can hope to have effective policies, we need to have clear, consistent and achievable goals.

The central conflict in housing policy is the attempt to simultaneously make housing both affordable and expensive. On one hand housing wealth has occasionally provided a jolt to consumer spending. When families witnessed regular and large gains in the value of their homes, they felt, and were, wealthier. Accordingly they also spent more based upon that wealth, helping to drive the economy. That cycle, however, only worked for so long, and only for those who already owned homes. If you did not own, you risked being left behind. So you stretched to save that down-payment or afford those high monthly payments. So what? Appreciation was going to make everything alright.

By Mark Calabria

March 31, 2012

How can housing policy be responsive to today’s urgent needs (e.g., foreclosures, a sluggish housing market, affordability, etc.) and simultaneously address long-term trends (e.g., an aging population, growth of younger households)?

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Our housing market currently suffers from a combination of weak demand and excess supply. The first thing our federal housing policies can do is to stop adding to that problem. Programs, such as the Neighborhood Stabilization Fund, that encourage increased supply in already glutted markets should be discontinued, or at least have those recourses moved elsewhere. Credit regulation should also be mindful of restrictions that reduce the supply of credit, which reduces the demand for housing. To some extent the current problems are the opposite of our long-run problems. Today’s excess supply will eventually be absorbed, with or without government intervention. Demand will rebound, with or without government intervention.

By Mark Calabria

July 5, 2012

What are the best options for the millions of single-family homes that may be left behind by Baby Boomers as they age, many of which are in suburban or exurban communities? Is it realistic to retrofit homes and neighborhoods to accommodate changing demand?

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Perhaps no trend will have greater significance on the American economy than the aging of the American population. We are getting older, with little chance that new immigration or increased fertility will balance out the “pig in the python” that is the Baby Boomers. While everyone has a pet theory about how the aging of America will impact our housing markets, the reality is that we simply don’t know where and how retiring Baby Boomers want to live. Accordingly our best preparation is to maintain a dynamic, flexible and open housing market.

By Mark Calabria

September 6, 2012

What is the role of housing education and counseling in the future housing economy and finance system?

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One of the sacred cows of consumer financial policy, embraced by both major parties, is that an informed consumer will make better choices, and that those choices will lead to better policy outcomes. This logic, as applied to housing, has driven an ever-increasing amount of federal funding devoted to housing counseling. HUD counseling appropriations increased rather dramatically in 1990s, jumping almost 400% between 1991 and 2001. Funding continued to increase. Some of the largest increases were in the years just preceding the peak of the housing market. In just the fiscal year of 2003, HUD funding for housing counseling doubled from about $20 million to $40 million, later increasing to $50 million in FY 2008.