Rick Lazio represented New York in the U.S. House of Representatives. He is a member of the executive committee of the J. Ronald Terwilliger Foundation for Housing America’s Families. The Terwilliger Foundation is hosting the Housing America’s Families Forum on November 18, 2016 at the George W. Bush Institute in Dallas, Texas.
HousingWire is a media partner for the event.
So, as a preview, I interviewed the former representative to get some of his thoughts on where affordable housing policy stands now. Spoiler alert: Mr. Lazio said much improvement is still needed.
The is the first of four interviews HousingWire will conduct in the next month and a half. Please read and support our unified cause of increasing the rate of responsible homeownership in this great nation. Feel free to repost and share, as well.... anything to keep our message alive.
HousingWire: We're getting down to the wire in the presidential race. Why hasn’t housing played a more prominent role as an issue in the campaign?
Rick Lazio: Yes, it’s disappointing that housing, something so central to all of us, has received scant attention during the presidential race. But let’s face it: questions about candidate character and personality, not issues, have dominated this campaign.
There have been some bright spots, though. Last October, the J. Ronald Terwilliger Foundation for Housing America’s Families sponsored the first-ever New Hampshire Housing Summit [along with HousingWire, coverage here]. Seven presidential candidates from both parties participated and shared their views on housing. At the Republican National Convention in Cleveland, more than 1,200 people attended a benefit concert for Make Room, an initiative to elevate rental housing on the national agenda. The 2016 platforms of both parties also have strong housing planks. I was pleased to see that the Republican platform recognizes the damaging impact of high rent burdens.
We still have about 25 days left, and that’s a lifetime in politics. Later this month, it would be great if one of the candidates were to deliver a serious policy speech on the key challenges in housing – rising rent burdens, a declining homeownership rate, and a dysfunctional mortgage finance system. I’m not holding my breath, but I believe there is still political ground to be gained here.
According to a recent Ipsos poll, 76% of likely voters would be more likely to support a candidate who made housing affordability a campaign focus. This number cuts across party lines, with large numbers of Democrats, Republicans, and Independents in agreement. The poll also showed that nearly two-thirds of those surveyed disagree Congress is doing enough to improve housing affordability. So there is a real upside for candidates who take up the housing mantle.
Senators Orrin Hatch, R-UT, and Maria Cantwell, D-WA, have recently introduced legislation to increase federal support for the Low Income Housing Tax Credit.
HW: Is there an emerging bipartisan consensus around the need to increase affordable rental supply? Is the point finally getting across?
RL: I believe the message is slowly sinking in on Capitol Hill: America has a severe and unacceptable shortage of affordable rental homes, a deficit that is measured in the millions. This problem has been worsening through Republican and Democratic administrations, through periods of economic expansion and recessions. So kudos to Senators Hatch and Cantwell for introducing this important legislation, which would increase federal support for the Low-Income Housing Tax Credit by 50%. The LIHTC is our nation’s most successful affordable rental production program, stimulating some $100 billion in private investment that has helped support nearly 3 million affordable rental homes. Investor interest in the LIHTC is strong today, so ramping up the program makes a great deal of sense.
As a Republican, I am very pleased that Senator Hatch, the chairman of the Senate Finance Committee, is helping to spearhead this effort. He is part of a long history of Republican support for the LIHTC. The program was created 30 years ago as a component of the Tax Reform Act of 1986, signed into law by President Reagan. Republican Senator John Danforth of Missouri was instrumental in helping shape the program in its early years. More recently, two Republicans from Ohio — Senator Rob Portman and Representative Pat Tiberi — have been among the LIHTC’s strongest supporters.
By 2020, nearly 1 million units financed by the LIHTC will approach the end of their compliance periods. When this fact is combined with the nation’s changing demographics, a drop off in the construction of new starter houses, historically low productivity, and 15 years during which real median incomes have remained essentially flat, the trend is decidedly negative for housing affordability. Passage of the Hatch-Cantwell bill is therefore more important than ever. The good news is that the legislation, like the LIHTC program itself, represents a viable solution that doesn't require the government to bust the bank.
HW: You’ve been outspoken that the rental and homeownership wings of the housing industry need to work together. What are you driving at?
RL: Tighter underwriting standards, regulatory uncertainty, a lack of affordable inventory, and high student loan debt are all factors contributing to a national homeownership rate that has hit a 50-year low. But another factor is rising rents, which are making it increasingly difficult for many young families to accumulate funds for a mortgage down payment and become a first-time homebuyer.
Under these difficult circumstances, the rental and homeownership “wings” of the housing industry should be working closely together. Yet, too often over the years, the advocates for affordable rentals and homeownership have whistled past each other.
Rental housing and homeownership are complementary, not competing, elements of the same system. Making rental housing more affordable through both supply-side and demand-side approaches ultimately benefits the homeownership market, as more renters will eventually have the wherewithal to become first-time homebuyers. Greater access to first-home homeownership can relieve pressure on the rental market. Connecting rental and homeownership will become even more urgent over the next 15 years, when demographic forces will challenge the housing industry like never before.