While several names have been floated recently in terms of who President-elect of the United States Joe Biden may nominate for Secretary of the U.S. Department of Housing and Urban Development (HUD), one thing is for certain: the next HUD Secretary will face a series of major problems and obstacles that must be addressed stemming from the economic situation created by the COVID-19 coronavirus pandemic.
This is according to reporter Amy Scott at Marketplace, after speaking with housing professionals and academics on the topic of the housing situation in 2021.
“The number one priority is going to be the response to this pandemic and the health crisis that has now also become a housing crisis for millions of people that are facing, potentially, eviction and foreclosure next year,” said Alanna McCargo, vice president of the Urban Institute’s Housing Finance Policy Center to Marketplace.
There will only be so much the administration can do in an attempt to stave off the effects of a housing affordability crisis, particularly as many of the safeguards put into place at the beginning of the pandemic are set to expire at the end of 2020, Scott writes.
“Even a divided Congress may find some common ground on housing,” she writes. “Earlier this year, the House approved the bipartisan ‘Yes in My Backyard Act,’ which would encourage local governments to lift barriers to construction.”
A stated goal for the president-elect’s political campaign was to take on the practice of ‘exclusionary zoning,’ rules which only allow single-family construction in specific areas. This practice provides a notable barrier to the construction of more economically-accessible housing according to Edward Goetz, professor of urban and regional planning at the University of Minnesota.
“When you do that, then you essentially ensure that it’s really quite difficult, if if not impossible, to build housing that is affordable to lower-income households,” said Goetz to Marketplace. “This will have then a disproportionate impact on people of color, because the income distribution in the United States is skewed by race.”
New leadership at HUD could incentivize such action with federal grants tied to less restrictive zoning, but such grants would likely apply to more affluent areas where they would mean inherently less to local officials according to Emily Hamilton, housing policy researcher at the Mercatus Center at George Mason University.
On top of these broader and more immediate housing issues, HUD leadership in 2021 will also have to contend with issues specific to the reverse mortgage industry including the selection of a new Home Equity Conversion Mortgage (HECM) servicing contractor, continued instability in the HECM book of business inside the Mutual Mortgage Insurance (MMI) Fund and various proposals made by the government to reform the HECM program.
Read the article at Marketplace