Press Release

At Democratic National Convention, Housing Experts Cite Need for Regulatory Reforms to Boost Homeownership

BOSTON—Emphasizing the need to make equal access to housing a national priority, panelists gathered at a housing forum during the sponsored by the Federal Home Loan Bank of San Francisco cited the need for new approaches to increasing the nation’s homeownership rate. The forum was held yesterday during the Democratic National Convention.

Participating in the lively discussion were former HUD Secretary Andrew Cuomo; Nicolas Retsinas, Director of Harvard University’s Joint Center for Housing Studies; Helen Kanovsky, Chief Operating Officer of the AFL-CIO Housing Investment Trust; and San Jose Mayor Ron Gonzales. Lawrence H. Parks, the Bank’s Senior Vice President for External and Legislative Affairs, was the moderator.

"This was an opportunity to discuss a range of housing issues, including the important role that the Federal Home Loan Banks play for families and individuals of all income levels who purchase homes," Mr. Parks said. "One thing is clear: any stronger regulations must continue to let the Home Loan Banks play a crucial role in providing funds to our member institutions so they can originate mortgages and reinvigorate neighborhoods and communities."

With a standing-room only crowd looking on, the panel members discussed a number of critical housing issues, including affordable housing, the future of the housing government-sponsored enterprises (GSEs), housing availability, and the Section 8 Program.

Mr. Retsinas opened the discussion with an overview of the housing trends during the past decade, noting that "the Federal Home Loan Banks do good work." However, despite the housing boom of the 1990s, there remains insufficient affordable housing, which has resulted in homelessness for many families and individuals. He said a large number of minorities are still denied homeownership opportunities.

"…A 25% gap between minority and majority homeownership rates (exists)," Mr. Retsinas said. He added that a key barrier to homeownership has also been the limited availability of new housing. New affordable housing developments, he said, "have matched the rate at which old housing is being removed from the market, resulting in a net zero gain."

Leading the 11th largest city in the nation, Mayor Gonzales discussed the challenges and opportunities he experienced in reaching his five-year goal of building more than 6,000 affordable housing units to address San Jose’s demand for housing affordability. "When I started my first term as mayor five years ago, the median home price in San Jose was $520,000, and the median rent was $1,600," he said. "Great cities are made of great neighborhoods, and great neighborhoods are made of families who don’t have to spend over 50% of their income on housing."

Echoing Mr. Retsinas’ sentiments, Ms. Kanovsky also noted that multifamily housing developments are one of the keys to make housing more affordable. The Federal Home Loan Banks are an important source of funding for multifamily developments.

There was a consensus among the panelists that government should proactively intervene in the market place to ensure that the supply of new homes is increased. Policy recommendations from Mr. Cuomo and others included reforming the Section 8 Program, which gives rent subsidies to low-income residents. Others emphasized that any regulatory changes must keep the GSEs strong because they play such an important role in the housing finance industry. For example, in California many of the Federal Home Loan Bank of San Francisco’s member financial institutions are instrumental in providing jumbo mortgages so that middle-class families and individuals can purchase homes in areas where housing prices have skyrocketed.

"GSEs must continue to play a formidable role in the housing equation if we are going to continue to reach the underserved populations desiring homeownership and decent affordable rental housing," Mr. Parks said. "Working together, the administration’s policy towards GSEs and the FHLBanks needs to reflect a strong understanding of this role."

About the Federal Home Loan Bank of San Francisco

The Federal Home Loan Bank of San Francisco delivers low-cost funding and other services that help member financial institutions make home mortgages to people of all income levels and provide credit that supports neighborhoods and communities. The Bank also funds community investment programs that help members create affordable housing and promote community economic development. The Bank serves and is owned by 337 commercial bank, savings institution, credit union, thrift and loan, and insurance company members headquartered in Arizona, California, and Nevada.

Contact:
Dwight Alexander, (415) 616-2678
alexandd@fhlbsf.com

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