Multifamily Market Musings: Q&A with MBA’s Sharon Walker

MBA NewsLink interviewed MBA Associate Vice President of Commercial/Multifamily Sharon Walker, who represents MBA members active in multifamily finance. She advocates on policy issues primarily related to Fannie Mae, Freddie Mac and the Federal Housing Administration and oversees numerous related committees, working groups, councils and events.

MBA NEWSLINK: The GSEs’ new multifamily lending caps and relief bill in Congress are two big ticket items impacting the multifamily sector in 2021. What is your perspective on multifamily opportunities and challenges looking forward?

SHARON WALKER: The processes of working through continued moratoriums and application of recently passed legislation providing rental assistance is a huge lift, whether it be for agency lenders or private capital. Though on a relative basis, multifamily continues to be a resilient performer compared to other asset types. Government support whether through stimulus, unemployment benefits or Fed intervention seems to be working relatively well with respect to loan performance at MBA member firms. While there have been challenges as compared to a year ago, the performance delta remains negligible compared to how the year has treated the economy and many tenants whose livelihoods have been affected more broadly.

The challenges are sorting through demand shifts, whether you are talking about urban/suburban preferences broadly or evolving dynamics around student housing or seniors housing. Whether it be blips in housing demand for students during all virtual education or demand volatility in the healthcare sector. Regardless of product type or segment, the pandemic has impacted operations and how the dynamics unwind or shift throughout 2021 and beyond will create opportunities and potentially tailwinds.

The level of activity from the GSEs, Fannie Mae and Freddie Mac will be interesting to observe and impactful to entire marketplace with their focus on affordability being the notable growth area. Also, the Federal Housing Finance Agency just announced a substantial increase in funding of Fannie Mae and Freddie Mac’s affordable housing funds.

According to the agency’s press release, $711 million of the funds will go to HUD’s Housing Trust Fund, an increase from the $326.4 million disbursed for 2019. Meanwhile, $383 million will go to the Department of the Treasury’s Capital Magnet Fund, $175.8 million more than was provided in 2019.

NEWSLINK: A lack of supply of affordable housing continues to create substantial challenges for our country. Affordable and workforce housing markets do and will continue to provide opportunities for apartment owners and their lenders. What’s MBA’s focus in terms of the multifamily and the rental side of the equation? 

WALKER: Affordability remains a challenge and not a new one. MBA is very active on this front under the leadership of Senior Vice President Steve O’Connor, who is fully dedicated along with his team to leveraging MBA’s infrastructure and external partnerships to make progress. I will mention a few items coming up applicable to the rental side as opposed to homeownership strictly given where I focus in my role and the members I work with directly. 

On March 19, MBA will host CONVERGENCE: Analyzing Housing Supply Shortages in the U.S.

The second edition in a six-part webinar series on “The Physics of Affordable Housing” features experts speaking on different housing affordability topics. Applicable to both single-family and multifamily members, the conversation includes Caitlin Sugrue Walter, Vice President of Research with the National Multifamily Housing Council, among others.

On March 31, MBA will host Renter Counseling to Mitigate Evictions and Reduce Operational Costs.

The pandemic has brought to light the financial vulnerability of many renters, and the need for interventions that can mitigate the risks of evictions. One tool for helping these renters is counseling. However, in contract to the homeownership market, the rental industry has not yet integrated rental counseling into its mainstream operations. Given the potential of renter counseling to reduce evictions and save multifamily owners and lenders money, the time is ripe for exploring this concept.

As a part of MBA’s Affordable Housing Initiative, the organization is partnering with National Council of State Housing Agencies on this webinar which will make the case for why renter counseling deserves consideration as a loss mitigation tool, and potential ways to operationalize and scale the concept.

On April 8, MBA will host The Location of Affordable and Subsidized Rental Housing Across and Within the Largest Cities in the United States.

This webinar will bring Research Institute for Housing in America’s white paper of the same title to life and allow members to hear directly from its author. The report illustrates a significant and growing lack of affordable rental housing in the largest cities in the United States. While housing was already unaffordable for LMI households in a few of the largest cities located in geographically constrained areas in 2001, almost all cities became less affordable over the next two decades with median rents increasing annually at 2% above inflation while median incomes only increased 0.8%. Multifamily professionals at all levels will want to attend this discussion and hear how the data, trends and programs can impact your business.

On April 14, MBA will host an Affordable Rental Housing Summit.

The Mortgage Bankers Association’s Affordable Rental Housing Advisory Council will host two conversations as part of the association’s commitment to contribute to progress on solving affordability challenges. Dialogues will occur amongst both leading policy experts as well as practitioners in the business on the outlook for providing capital and policy solutions in the space.

There is a lot happening is an understatement and I am proud to say MBA has a deep bench in terms of members and staff that are investing a great deal of time and resources into this set of issues.

NEWSLINK: You took on a new assignment in 2020 leading MBA’s Diversity, Equity and Inclusion Council for commercial/multifamily members. How is that going so far? What should we expect to see on this front in 2021?

WALKER: I am very excited about this part of my portfolio and these responsibilities which I added last year. As someone whose worked on these issues throughout my career including at MBA member firms, I must confess they are daunting and at the same time so important to focus on to improve our industry. 

We have formed a Diversity, Equity and Inclusion Council made up of member firm representatives. We are exploring partnerships across the industry landscape as well as ways to better leverage and promote existing MBA offerings such as CREF Careers which connects college students across the country with member firm employers. 

Also, MBA hired Charmaine Brown, who I am extremely glad to be working closely with. As an expert in this field, Ms. Brown brings a wealth of energy and expertise. Including her in CREF efforts and CREF member needs in her deliverables will be very impactful. One role we would like the MBA to play is providing feedback and technical assistance to member firms as they attempt to make progress on these issues within their institutions. 

We hope to bring together thought leaders from across the industry for a Roundtable discussion on Diversity, Equity and Inclusion in commercial/multifamily finance later in 2021. This will be a great way to highlight diverse leaders in an industry where their representation is lacking in senior management and the board room.