Magazine article Mortgage Banking

Housing's Moment on Capitol Hill

Magazine article Mortgage Banking

Housing's Moment on Capitol Hill

Article excerpt


At a recent visit to a Detroit shelter, Senator Don Riegle (D-MI) met a mother with three children, including a nine-day-old baby, about to hit the streets after her limited time allotment for transitional housing expired. Afterward, the Senator declared to the Michigan Housing Council: "If the adminstration isn't willing to lead on the issue, then it better be ready to follow."

It is too early in the year to place bets on the particulars of housing legislation still in its formative stages on Capitol Hill. However, there is uniform opinion that this will be the year for a major, landmark housing bill that will set the debate around housing for the 1990 elections and perhaps the next Presidential election.

According to Don Campbell, staff director of the Senate Housing Subcommittee, "Housing is the top priority of the Banking Committee. Both Senator Riegle [D-MI] and Senator Cranston [D-CA] have made it clear that it's the first bill out of the chute this year." Riegle chairs the Banking, Housing and Urban Affairs Committee while Cranston chairs the housing subcommittee. The bill is Cranston - D'Amato (R-NY), S. 566, The National Affordable Housing Act.

Indeed, the political stage has been carefully set. In 1987 the Rouse-Maxwell Commission issued their report on the critical situation in housing. Many recommendations were quickly adopted by the Senate Democratic Housing Task Force with the goal, as stated by Senator Paul Sarbanes (D-MD), of overcoming "a decade of neglect, fraud and favoritism and to restore our commitment to the national goal that every American family be able to afford decent housing." The HUD and S&L scandals are generating new rounds of publicity.

If the latter crisis carries a double-edged sword, courtesy of Charles Keating, (former owner of Lincoln Savings and the center of a political ethics controversy that has embroiled five U.S. senators--two on the banking committee), observers cannot detect any negative effect on housing bill efforts. If anything, it may increase determination to get a quality bill out in a timely fashion.

Senate staffers are confident of producing a bill, with mark-up by late March or early April. The question they pose is whether or not it will be a bill to be proud of or a bill that is essentially a symbolic gesture that stops short of real action.

That concern results from a perception that the housing lobby, has been unsuccessful in forging a unified front to push through legislation in recent years. They have been split by differences over particulars that prevent unification behind a large housing legislative package.

Says Campbell, "The process of coming up with the Cranston - D'Amato bill has been as open and inclusive as any we've ever had. If we can't come together around a bill that incorporates an emerging consensus, it will be a very, very bad sign about the ability of housing groups to carry the fights into the subsequent years...[they will be] seen as an easy coalition to break up and diffuse. The mortgage bankers are clearly a key interest group supporting housing, and they and every other group will have to really pull out all the stops to affect housing policy this year or it's going to cost in future years.

"I'm not singling out the mortgage bankers," says Campbell. "There are a lot of reasons for housing interests to be split up. There's not a national housing market. Programs and policies that work well in one area aren't necessarily important to another. Although there are some large regional lenders, typically most home builders and housing organizations deal with very specific local needs, as housing is local."

Another reason for housing interests to be fragmented is that for a long time housing policy was a very large part of the budget. Each housing program had constituencies pushing for it. There was an overconfidence that programs would come and go but each new administration would have one. …

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