CREF Policy Update July 7, 2022
Mike Flood mflood@mba.org; Bill Killmer bkillmer@mba.org.
Commercial and multifamily developments and activities from MBA relevant to your business and our industry.
Last week, Reps. Beth Van Duyne, R-Texas, and David Rouzer, R-N.C., introduced companion House legislation designed to help increase affordable housing supply across the country through targeted reforms to the Davis-Bacon Act. Additionally, the House Financial Services Committee and its Subcommittee on Oversight & Investigations held hearings focused on the affordable housing crisis. And on Wednesday, legislation to amend California’s Equity Foreclosure Sales Process was approved by the state’s Assembly Judiciary Committee.
House Members Introduce Companion Legislation of Davis-Bacon Wage Rate Bill
This week, Reps. Beth Van Duyne, R-Texas, and David Rouzer, R-N.C., introduced House companion legislation designed to help increase affordable housing supply across the country through targeted reforms to requirements under the Davis-Bacon Act. H.R. 8235, the “Housing Supply Expansion Act,” reflects MBA feedback and would address the burdensome split-wage determinations (assigning other wage rate types to some items of construction, such as “building” or “highway”) and would reduce unnecessary delays by locking in Davis-Bacon wage rates at the time of application. H.R. 8235 mirrors companion legislation (S. 3941) introduced earlier this year by Senators John Thune, R-S.D., and Jerry Moran, R-Kan. A link to Rep. Van Duyne’s press release can be found here.
- Why it matters: The current application of Department of Labor applied wage rates under the Davis-Bacon Act hamper the viability of Federal Housing Administration financing for new construction or substantial rehabilitation of multifamily and residential healthcare properties. “Split-wage” determinations for residential housing projects continue to create significant administrative burdens and complexity.
- What’s next: Any legislative effort related to Davis-Bacon wage rates remains a partisan exercise in Congress, making passage of H.R. 8235 this year challenging. Earlier this month, DOL updated regulations implementing Davis-Bacon and related acts that reaffirmed current policy and practice on multiple wage rate (split-wage) determinations and the effective dates for wage rate revisions for projects insured by the FHA.
For more information, please contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.
House Financial Services Committee Holds Hearings on Affordable Housing Crisis
Last week, the House Financial Services Committee and its Subcommittee on Oversight & Investigations held hearings focused on the affordable housing crisis. The Subcommittee hearing focused its attention on the issue of private equity firms that have purchased single-family rental properties in large quantities to lease to tenants. The full committee hearing included discussions regarding institutional investors and PE firms, the Low-Income Housing Tax Credit and local zoning issues.
- Why it matters: Democrats discussed the perception that institutional investors are targeting minority and low-income neighborhoods and advocated for more investment in housing through legislation like last year’s House-passed Build Back Better Act. Conversely, Republican members argued that the high rate of inflation is deterring housing choices for Americans and criticized Democratic proposals they feel would increase housing demand without adequately addressing issues related to housing supply.
- What’s next: Given the challenges in affordability and headwinds facing the housing market, additional hearings and potential legislation aimed at affordable housing solutions remain possible. More complete summaries of both the hearings can be found here.
For more information, please contact Borden Hoskins at (202) 557-2712 or Alden Knowlton at (202) 557-2741.
Senate Committee Continues Flood Insurance Hearings with Little Consensus on Reforms
As lawmakers consider reauthorizing the National Flood Insurance Program ahead of its expiration on September 30, the Federal Emergency Management Agency urged senators to adopt broader reforms to the program. Testifying before the Senate Banking Committee last week, acting NFIP administrator David Maurstad laid out more than a dozen initiatives for the beleaguered program, such as dropping coverage for frequently flooded properties and denying coverage for homes and commercial properties in the most flood-prone areas. A summary of the hearing can be found here.
- Why it matters: Consistent with previous hearings, lawmakers from both political parties appeared to have serious reservations with various elements of FEMA’s legislative reform proposal.
- What’s next: Another short-term reauthorization for the NFIP – following almost two dozen stop-gap reauthorizations in recent years – is expected before the program lapses on September 30, 2022. The last long-term reauthorization of the program (the “Biggert-Waters” reforms) were enacted in 2012.
For more information, please contact Ethan Saxon at (202) 557-2913 or Tallman Johnson at (202) 557-2866.
Bill to Amend California Equity Foreclosure Sales Process Revised to Exclude Commercial and Multifamily Properties
Last Wednesday, a California bill (SB.1323) was amended to exclude foreclosures involving commercial and multifamily properties, and approved by the Assembly Judiciary. The language of the bill remains concerning for single-family mortgage foreclosures because it would create a new foreclosure process that requires lenders in foreclosure proceedings to hire a real estate agent to sell the secured property for its appraised value on a Multiple Listing Service (MLS) if the borrower has more than 10 percent equity in the property.
- Why it matters: Without the exclusion for commercial and multifamily properties, the bill could have had an adverse impact on commercial and multifamily foreclosures across California.
- What’s next: If the current draft is approved by the Assembly, it will need a concurring vote in the Senate. MBA and the California MBA will support the exclusion of commercial and multifamily properties but will continue to oppose the bill because of its impacts on single-family foreclosures.
For more information, please contact William Kooper at (202) 557-2737, Kobie Pruitt at (202) 557-2870 or Grant Carlson at (202) 557-2765.
IMF Issues Report on Strengthening Capital Markets
The International Monetary Fund issued a report last week, “Strengthening Capital Markets—National Progress and Gaps.” The report distills key findings regarding the regulation and supervision of global capital markets from IMF bilateral financial surveillance, and calls for new market liquidity backstops, increased stress testing, and more regulation of asset management. The report also highlights climate and cyber resilience as emerging issues that regulators should prioritize.
- Why it matters: The recommendations in the report could influence the actions of U.S. regulators.
- What’s next: MBA will continue to track international efforts that could affect US regulators.
For more information, please contact Grant Carlson at (202) 557-2765.
State Trackers
For more information, please contact William Kooper at (202) 557-2737 or Grant Carlson at (202) 557-2765.
REGISTER: VOICES: Courageous Conversations with Men of Color
MBA is pleased to extend its award-winning webinar series, Voices: Courageous Conversations with Women of Color, to include a new conversation focusing on the male experience. Hear from a dynamic and diverse lineup of male industry leaders on their personal journeys throughout their careers. This timely conversation will inspire and inform while giving voice to the challenges and lessons learned.
- What’s next: The next installment of VOICES is July 19. Register here.
For more information, please contact the DEI team.
Upcoming MBA Education Webinars on Critical Industry Issues
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 webinars – which are complimentary to MBA members:
- Effective Internal Audit Function: Beyond the Basics – July 11
- Latest on AML Regulations and Impact of Economic Sanctions – July 12
- Tech Stack Optimization: Analyzing Efficiencies in the Current Economic Landscape – July 19
- Mortgage Servicers: Take Back Control to Accelerate and Modernize Borrower Communications – July 21
- Special Purpose Credit Program Toolkit: Overview and Walkthrough – July 21
MBA members can register for any of the above events and view recent webinar recordings. For more information, please contact David Upbin at (202) 557-2931.
