CREF Policy Update March 25, 2021

Commercial and multifamily developments and activities from MBA relevant to your business and our industry.

1. MBA’s RIHA Releases Special Report on Affordable and Subsidized Rental Housing 

MBA’s Research Institute for Housing America (RIHA) released a new study titled, The Location of Affordable and Subsidized Rental Housing Across and Within the Largest Cities in the United States. RIHA’s study provides evidence on changes in rent levels and the availability of subsidized rental housing for low- and moderate-income households over the last two decades in the nation’s 50 largest metropolitan statistical areas (MSAs), and analyzes how the 2018 mandatory adoption of Small Area Fair Market Rents (SAFMRs) in 24 metropolitan areas affected the surrounding neighborhood poverty rates of Housing Choice Voucher (HCV) recipients.

• Among the several key findings, nearly all of the 50 largest MSAs since 2001 have become less affordable for renters and prospective first-time homebuyers, with annual median rent growth rising at 2.0% above inflation, compared to an 0.8% real increase in annual median income. This disparity has led to a typical household in 2020 – compared to 2001 – needing to devote an additional 7.6% of its income to rent a median-priced housing unit.
• Edward Seiler, Executive Director, Research Institute for Housing America, and MBA’s Associate Vice President, Housing Economics said, “RIHA’s study underscores the importance of focusing on local-level solutions to address housing supply shortages and rental housing subsidy policies for low-income households.”

For more information, please contact Eddie Seiler at (202) 557-2739.

2. House Passes Paycheck Protection Program Extension Legislation  

On Tuesday, the House of Representatives passed H.R. 1799, the PPP Extension Act. In the December 2020 stimulus legislation signed into law, the Paycheck Protection Program (PPP) was extended through March 31, 2021. However, many applications are still not processed or funded. The House-passed bill would extend the deadline to May 31, 2021, and allow the Small Business Administration (SBA) an additional 30 days for processing and funding.

• Why it matters: The PPP has served as a lifeline for millions of small businesses impacted by the pandemic and subsequent shutdowns. Keeping the program solvent is a priority for both parties.
• What’s next: The Senate will need to pass the bill and send it to President Biden’s desk before March 31, 2021, to avoid any lapses.     

For more information, please contact Borden Hoskins at (202) 557-2912, Tallman Johnson at (202) 557-2866, and Ethan Saxon at (202) 557-2913.

3. MBA and Industry Groups Comment on HUD’s NSPIRE Model

On Monday, MBA joined other industry trade associations to submit comments to the U.S. Department of Housing and Urban Development (HUD) on its proposed rules on the National Standards for the Physical Inspection of Real Estate (NSPIRE) Model. The NSPIRE model prioritizes the health, safety, and functional defects of multifamily properties over cosmetic features. The industry agrees that it is important for HUD to develop a uniform physical assessment of its housing stock across all of its various programs, but suggested that HUD consider the impacts of some of the proposed changes.

• Why it matters: The proposal would modernize HUD’s physical inspection process and inspection standards into clearly defined protocols, while seeking to ensure that families are living in safe, habitable rental housing.
• What’s next: MBA will continue to work with HUD to provide timely guidance to our member as HUD works to revise its guidance. 

For more information, please contact Sharon Walker at (202) 557-2747.

4. Senate Banking, Housing, and Urban Affairs Committee Holds Hearing on State of Housing in America

On Tuesday, the Senate Banking, Housing, and Urban Affairs Committee held the first of what is expected to be a series of oversight hearings on housing policy this year. There was widespread agreement by committee Chairman Sherrod Brown (D-OH) and other senators on the need to remove barriers to housing construction in order to address the lack of affordable housing. Several democratic senators focused on the impact of the pandemic and expressed concerns regarding foreclosures and evictions as relief measures expire. Ranking Member Pat Toomey (R-PA) outlined his principles for housing finance reform legislation, and Senator Mike Rounds (R-SD) expressed support of the FHFA’s enterprise capital framework. Diane Yentel testified on behalf of the National Low Income Housing Coalition that the “Biden administration should ensure the [CDC eviction] moratorium provides automatic and universal protections to renters,” and that violations of the moratorium order should be enforced by the Department of Justice through court proceedings against landlords that could result in criminal penalties. She also recommended that Congress enact a new federal renters’ tax credit, provide additional housing vouchers and “pair an expansion of rental assistance to legislation to bar discrimination.”

• Why it matters: Several Senators used the hearing to preview specific legislation they will continue to advocate for enactment, including Senator Catherine Cortez Masto’s (D-NV) effort to expand HMDA data reporting requirements; and Senator Elizabeth Warren’s (D-MA) re-introduction of the American Housing and Economic Mobility Act which provides for a major expansion of the National Housing Trust Fund.
• What’s next: MBA will continue to work with senators who mentioned their specific housing legislative priorities, as the committee starts work on considering a housing title that could be included in comprehensive infrastructure legislation.

For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.

5. 60-Day Comment Period Starts on Proposed Private Flood Insurance Q&As 

On Thursday, the Federal Reserve, Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Farm Credit Administration (FCA) published proposed Q&As regarding the agencies’ final private flood insurance acceptance regulations in the Federal Register. The agencies had released the text of the proposal last week, but publication in the Federal Register started the clock on the 60-day comment period, which will close on May 17, 2021.

• Why it matters: The new proposed Q&As on mandatory acceptance, discretionary acceptance, and private flood insurance general compliance will supplement the 118 Q&As that the agencies have previously issue on flood insurance.
• What’s next: MBA will work with our CREF and residential flood insurance member groups to analyze and comment on the proposed Q&As.

For more information, please contact Sara Singhas at (202) 557-2826 or Bruce Oliver at (202) 557-2840.

6. SEC Welcomes Comments on Climate Change Disclosures

On Monday, Securities and Exchange Commission (SEC) Acting Chair Allison Herren Lee asked for public input regarding whether current climate change disclosures “adequately inform investors.”

• Why it matters: The SEC Chair has proposed 15 questions regarding the adequacy of corporate disclosures regarding climate change. While the request for input appears focused on corporations, the final question essentially asks “what else” should be considered for ESG disclosures.
• What’s next: MBA staff will analyze the request for information with its membership in order to understand the implications for the commercial and residential marketplaces.

For more information, please contact Bruce Oliver at (202) 557-2840 or Mike Flood at (202) 557-2745.

7. State Updates

MBA Leads Coalition in Opposition to Proposed New York Mezzanine Debt and Preferred Equity Tax

MBA is leading a coalition to send a strong joint trade letter to New York Governor Andrew Cuomo and legislative leaders early next week in opposition to a proposed tax and recording requirement for mezzanine debt and preferred equity.

• Why it matters: This past weekend, the New York Assembly and Senate unveiled annual state budget proposals, both of which included this new tax. The Governor’s budget proposed in January 2021 did not include tax increases. The deadline to pass a budget is April 1, 2021.
• What’s next: MBA will continue to work with state and national industry partners to oppose this tax’s enactment, and New York-based MBA members should watch for a Mortgage Action Alliance (MAA) call to action to oppose the new tax.

For more information, please contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

State Trackers

• State eviction moratorium and legislative activity tracker available here.

For more information, please contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.

8. New HUD Cityscape Publication Features Guest Research Article on Housing Regulation and Affordability from MBA’s Fratantoni, Woodwell and Seiler  

This week, HUD published its latest issue of Cityscape. Created by the Office of Policy Development and Research (PD&R), the new issue features a joint guest article, Trends in Regulation and Affordability in Select U.S. Metropolitan Areas and Communities, written by Mike Fratantoni, MBA’s Senior Vice President and Chief Economist, Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research, and Eddie Seiler.

• Why it matters: The article links land-use restrictions in the last decade and a half to the evolution in housing supply and affordability within a diverse set of U.S. metro areas. Fratantoni, Woodwell and Seiler conclude that while comparing metropolitan areas across the country can be informative, within-metropolitan area analysis – although more difficult to obtain – may be more useful in informing local policymakers on the impacts of their potential regulatory actions on housing affordability.
• Read the article here.  

For more information, please contact Mike Fratantoni at (202) 557-2935, Jamie Woodwell at (202)557-2936, and Eddie Seiler at (202) 557-2739.

9. Commercial/Multifamily Mortgage Debt Increased 5.8 Percent in the Fourth Quarter of 2020 

MBA on Tuesday released its latest quarterly Commercial/Multifamily Mortgage Debt Outstanding report. In the final three months of 2020, total mortgage debt outstanding rose by 1.5 percent ($58.2 billion) compared to last year’s third quarter, with all four major investor groups increasing their holdings. Multifamily mortgage debt grew by $41.8 billion (2.5 percent) to $1.69 trillion during the fourth quarter, and by $127.9 billion (8.2 percent) for the entire year. The level of commercial/multifamily mortgage debt outstanding at the end of 2020 was $212 billion (5.8 percent) higher than at the end of 2019.

• MBA’s Woodwell, said, “Despite a fall-off in borrowing and lending during 2020, the total amount of commercial and multifamily mortgage debt outstanding increased during the year. Continuing the trend of previous quarters, growth in multifamily mortgage debt outpaced other property types, with increases in federally-backed mortgages from Fannie Mae, Freddie Mac, and FHA driving that growth. Strong appetites from all the major capital sources should keep growth going in 2021, but with key differences across property types.”

For more information, please contact Jamie Woodwell at (202) 557-2936. 

10. MBA Releases 2020 Rankings of Commercial/Multifamily Mortgage Firms’ Origination Volumes

• On Wednesday, MBA released its 2020 Commercial Real Estate/Multifamily Finance Firms – Annual Origination Volumes report. The report is a comprehensive set of listings of 141 different commercial/multifamily mortgage originators, their 2020 volumes, and the different roles they play. Origination volumes in more than 140 categories are also presented, including by role, by investor group, by property type, by financing structure type, and by the location of the originating office. 
• The following firms were the top commercial/multifamily mortgage originators in 2020: JLL, CBRE, KeyBank, Meridian Capital Group, Walker & Dunlop, JP Morgan Chase & Company, Wells Fargo, Eastdil Secured, Berkadia, and Newmark.

For more information, please contact Jamie Woodwell at (202)557-2936.

11. MBA and ACLI Update on NAIC Life RBC in Motion: COVID, TDR, Real Estate, and CMBS

On Tuesday, MBA and American Council of Life Insurers (ACLI) jointly hosted a member call to provide updates on recent and ongoing changes to National Association of Insurance Commissioners (NAIC) life company risk-based capital rules.

• Why it matters: Industry and trade association expertise provided updates on COVID-19 relief, including TDR relief, as well as on proposed changes to RBC treatment of equity investments in real estate and CMBS.
• What’s next: Slides from the event are available here; a recording is available here (passcode: @f3n&XzU).

For more information, please contact Bruce Oliver at (202)-557-2840 or Andrew Foster at (202) 557-2740.

12. Register Today: MBA’s Spring Conference & Expo 2021 – April 20-22. 

MBA’s Spring Conference & Expo 2021, taking place via MBA Live, will feature several must-see sessions, including remarks from FHFA Director Mark Calabria and other prominent Washington policymakers and stakeholders. 

• Why it matters: Calabria will discuss the various policy issues at FHFA, while MBA leadership and others will examine the latest updates on Capitol Hill and within the Biden administration.
• What’s next: To register for the conference, click here. 

For more information, please contact Dawn Williams at (202) 557-2877.

13. Register Today: MBA’s National Advocacy Conference – May 11-12

Registration is now open for MBA’s National Advocacy Conference (NAC) May 11-12. NAC allows you to connect directly with elected officials online from your home or office. Your story matters—share it with key policymakers as they consider and pass legislation that affects all of us. 

• Why it matters: Our industry has helped provide unprecedented aid and assistance to millions of American families and businesses—especially the most vulnerable—that continue to struggle. Last week, President Joe Biden signed into law The American Rescue Plan Act of 2021, which included key provisions to help support homeowners and renters as the economy recovers from the pandemic. NAC will provide a great opportunity for our industry to call on Congress to strengthen the nation’s economy in the wake of the pandemic, increase access to homeownership, and bolster affordable rental housing and community development.
• What’s next: Share your experiences, your voice, and your passion for our industry May 11-12! Register today at mba.org/nac and take advantage of the $99 early bird rate.

For more information, please contact Alden Knowlton at (202) 557-2816.

14. [VIDEO]: mPower Moments: On Being an Advocate for Yourself and the Industry with FormFree’s Christy Moss

In this episode of mPower Moments, mPower Founder Marcia M. Davies sits down with Christy Moss, CMB, Head of Sales and Marketing, at FormFree. Moss shares the interesting path she’s taken in her successful career, and explains how mPower has helped her become a stronger advocate for herself and the industry.

• Why it matters: As a member of MBA’s MAA Steering Committee and the mPower representative on that committee, Moss also explains why it’s important for women to get involved in advocacy.
• What’s next: To watch more mPower Moments, click here.

For more information, please contact Marcia Davies at (202) 557-2707.

15. Upcoming and Recent MBA Education Webinars on Critical Industry Issues

MBA MBA Education continues to deliver timely programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – which are complimentary to MBA members:

• Renter Counseling to Mitigate Evictions and Reduce Operational Costs – March 31
• The Location of Affordable & Subsidized Rental Housing Across and Within the Largest Cities in the United States – April 8

MBA members can register for any of the above events and view recent webinar recordings by clicking here.

For more information, please contact David Upbin at (202) 557-2890.