Slowly, the world is coming of its pandemic-induced economic slowdown, making headway in recovery efforts. Experts within the real estate industry gathered virtually on Wed., May 12 to discuss a new report on how several factors—such as shutdowns, job losses and societal shifts—will impact the U.S. housing market.
The report—Protecting Homeownership From the Impact of COVID-19—was released by the National Fair Housing Alliance (NFHA) and the National Community Stabilization Trust (NCST). It was discussed in-depth during the National Association of REALTORS® (NAR) Legislative Meetings’ Regulatory Issues Forum: “Light at the End of the Crisis: Understanding Current Housing Challenges and Policy Solutions to Ensure Housing Stability Now and After the Pandemic”
The session was broken down into two sections, focusing on policy solutions to ensure housing stability after the pandemic—including the current programs available and key solutions and recommendations that can be implemented to avoid a housing crisis in the future.
Panelists included:
– Judy Covington, Regulatory Issues Forum Vice Chair, Keller Williams Realty
– Debby Goldberg, Vice President of Housing Policy & Special Projects, National Fair Housing Alliance
– Julia Gordon, President, National Community Stabilization Trust
– Iona Harrison, Regulatory Issues Forum Chair, Pioneer Real Estate, Inc.
– Makada Henry-Nickie, Governance Fellow, Brookings Institution
– Jennifer Schwartz, National Council of State Housing Agencies
“By preventing unnecessary foreclosures and home loss, maintaining access to credit, ensuring vacant properties do not blight communities, and leveling the playing field for owner-occupants to purchase homes, the housing community can prevent the COVID-19 crisis from devastating homeownership and undermining racial equity in housing markets,” the NFHA and NCST’s report reads.
The conversation drew many comparisons to our last housing crash and recession.
“They were two distinct yet turbulent times with similar impacts to the housing industry,” said Henry-Nickie. “However, homeowners are relatively better off now. They have gained about $1.5 trillion in equity despite the economy coming to a grinding halt.”
While the differences largely outshined the similarities, one thing remained clear: getting ahead of the problem through strategic policy and Congressional oversight is key.
“As a result of the Great Recession, almost 8 million homeowners lost homes to foreclosure. What are key policy interventions that Congress can take to assist struggling landlords and other homeowners,” asked Covington.
In order to address the challenges, however, one must first understand what’s at stake.
“While we are ready to get back to business as usual, over the past year, homeowners and renters have been struggling to meet their monthly financial obligations,” said Harrison. “Despite relief, it has been a very challenging time. In March of this year, the Consumer Financial Protection Bureau issued a report that said 22 million families were at risk of losing their homes and were behind on their rent or mortgage payments.”
Henry-Nickie noted that Congress did a “commendable job” to help struggling homeowners, quickly putting into effect forbearance and eviction moratoriums. There’s one problem, though—they’re not a one-size-fits all solution, and there were gaps in coverage.
“It’s really unfortunate that, at the same time, Congress didn’t put in place an emergency rental assistance program, and that’s what we really needed,” said Schwartz. “We do have that now.”
Goldberg said one distinction must be made for those doubtful of the impact these policies have had. It’s not that the policies are ineffective, it’s that one specific policy might not meet the needs of all individuals, but there are other solutions available. According to Goldberg, about 30% of mortgage holders are not covered by forbearance options.
“We should lay out for the borrowers what all their options are so they can look at their choices to determine which one is best for them,” said Goldberg.
Looking toward the future, Henry-Nickie said, “We need to start shifting the conversation away from forbearance and think about the way forward. There needs to be a greater emphasis on loan modification services.”
Gordon agreed, stating the modifications that have been put in place can only extend the term to 30 years not 40 years. “We need to figure out a 40-year modification to achieve the affordability that people need as the economy goes through its long process of recovery. We also have to make sure these programs are easy to use.”
Some suggestions for other long-term policy improvements included:
– Simplifying the application process for borrowers
– Introducing multiple points of entry for assistance
– Supporting alternatives to foreclosure for those who need them
– Encouraging effective communications between borrowers, including those not proficient in English speaking, and their servicers
“With the pandemic’s disproportionate impact on people of color reminding us of the costs of the failure to address housing discrimination, NAR remains committed to advocating for policies that help secure equal housing opportunity for Americans of every background,” said NAR President Charlie Oppler in a statement. “We thank all of the authors for their work crafting this report, and we hope it will be utilized by both policymakers and REALTORS® alike as we seek to address the multitude of economic and societal problems we’ll encounter in the wake of this pandemic.”
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to lizd@rismedia.com.
