REFinBlog

Editor: David Reiss
Brooklyn Law School

March 24, 2017

Friday’s Government Reports Roundup

By Jamila Moore

  • The United States Department of Housing and Urban Development (HUD) has released its new guidelines for the Section 108 loan of the Community Development Block Grant (CDBG) Program. The CDBG is a grant that provides financial resourcexs for large-scale real estate development projects, housing needs, and “financing for economic development.”
  • Freddie Mac mortgage rates decreased despite a vote for a mortgage rate increase by the federal government. This is the greatest fall in mortgage rates within the past 60 days. The Freddie Mac rate is 4.23% which is down from the 4.31% rate of last month. Despite the decrease, the low rate of 3.71% at the end of the Obama administration has not been matched.
  • Freddie Mac is helping borrowers without a credit score gain access to home loans. “The mortgage giant” will allow borrowers to use payment references and rent payment records to prove their history of timely payments.

 

 

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March 24, 2017 | Permalink | No Comments

March 23, 2017

Light Bloggin’ Through March

By David Reiss

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March 23, 2017 | Permalink | No Comments

Thursday’s Advocacy & Think Tank Roundup

By Jamila Moore

  • Dan Green writes an article entitled, “FHA Loan With 3.5% Down vs Conventional 97 Loan With 3% Down” which analyzes the benefits and drawbacks to each of the loan types mentioned. Based on the research, the conventional 97 loan seem to be more cost efficient over time for borrowers with higher credit scores; however, if an individual will not keep their initial home for a lifetime, then the FHA loan may be a better deal.
  • Although the Trump Administration would like to reform Freddie Mac and Fannie Mae, the agency’s reform is not as pressing according to staffers of the Senate’s Banking Committee. “Dodd-Frank financial” reform and flooding relief are more of a priority for legislative reform.
  • Harlem’s Community Board 11 has approved a potential 68 floor tower in the East Harlem community. This approval is contingent upon 50% of the units being affordable, members of the community board 11 having a preference when applying, and creating three new school buildings in the surrounding areas.

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March 23, 2017 | Permalink | No Comments

March 22, 2017

Judge Gorsuch v. Uncle Sam

By David Reiss

The Hill published my latest column, Where Does Judge Gorsuch Stand on Limiting the Federal Government? It opens,

This week, all eyes are on Judge Gorsuch’s confirmation hearing for a seat on the Supreme Court. While Gorsuch has not explicitly stated that he wants to drown or deconstruct the federal government, there is troubling language in his opinions that indicates that he shares that goal. While this will hearten many a Tea Partyer, moderate Republicans along with Democrats should be wary of someone who does not value the good that the federal government can and does do.

His opinion in Caring Hearts Personal Home Services v. Burwell describes a federal government that has ceased to function rationally: “The number of formal rules [administrative] agencies have issued thanks to their delegated legislative authority has grown so exuberantly it’s hard to keep up. The Code of Federal Regulations now clocks in at over 175,000 pages. And no one seems sure how many more hundreds of thousands (or maybe millions) of pages of less formal or ‘sub-regulatory’ policy manuals, directives, and the like might be found floating around these days.”

You can read the rest of it here.

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March 22, 2017 | Permalink | No Comments

March 21, 2017

The Economic Implications of the Housing Supply

By David Reiss

Ed Glaeser and Joe Gyourko posted The Economic Implications of the Housing Supply which is forthcoming in The Journal of Economic Perspectives. In it, they

review the basic economics of housing supply and the functioning of U.S. housing markets to better understand the impacts on home prices, household wealth and the spatial distribution of people across markets. Section II documents the state of housing affordability in the U.S., and begins with three core facts about housing supply. First, when building is unrestricted by regulation or geography, housing supply curves seem relatively flat, meaning that we can approximate reality by referring to a single production cost. Second, both geography and regulation severely restrict the ease of building in some parts of the country. These constraints raise building costs both directly, by increasing time delays and reducing the amount of available land, and indirectly, by ensuring the homes are produced more on a one-by-one basis rather than in bulk. Third, the supply of housing is kinked and vertical downwards because housing is durable. (2, citation omitted)

These are themes that Glaeser and Gyourko have touched on before, but this essay does a service by updating them ten years after the financial crisis.

Glaeser and Gyourko have consistently hit on some important points that can garner attention at the national level , but there has been no real action on them as of yet:

  • where supply is regulated, housing costs more;
  • heavy land use regulation in places like NYC and SF reduces the nation’s overall economic output; and
  • existing homeowners tend to oppose new projects, which is consistent with their financial self-interest.

Glaeser and Gyourko do not give up hope that policymakers can craft solutions that deal with the political economy of housing construction. One first step would be to develop a toolkit of carrots and sticks that can be employed at the national and state level to incentivize local governments to take actions that are in the interest of their broader communities and the nation as a whole.

We know we need more housing in highly productive regions. We just need to figure out how to build it.

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March 21, 2017 | Permalink | No Comments

Tuesday’s Regulatory & Legislative Roundup

By Jamila Moore

  • The United States Department of Agriculture (USDA) currently offers some of the lowest mortgage rates in the country. Recently, the government branch added another component to assist with providing Americans with affordable housing. Soon residents of all 50 states will be able to refinance their homes at lower rates.
  • The Federal Reserve was examined by Congress’ Monetary Policy and Trade Subcommittee. The committee sought to analyze the agencies practice in balancing America’s financial plans in a more economically forward way. The committee found “‘masking’ of federal reforms and compromise” of the Obama administration which hurt the U.S. economy.

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March 21, 2017 | Permalink | No Comments