(#MBACREF23) Broeksmit: A ‘Special Urgency in These Uncertain Times’

(MBA President & CEO Bob Broeksmit, CMB, addresses Opening General Session of CREF23 in San Diego on Monday.)

SAN DIEGO–Mortgage Bankers Association President and CEO Bob Broeksmit, CMB, opened the MBA Commercial/Multifamily Finance Convention & Expo here on Monday with a reminder that circumstances can change in a heartbeat.

” We feel a special urgency in these uncertain times, “Broeksmit said. “It’s astounding how dramatically things have changed over the past three years. At the start of the pandemic, we went from a booming economy to a near-unprecedented collapse. COVID has profoundly disrupted where people work and live, and there’s probably no going back.”

Broeksmit said he remains confident MBA members will continue to make a difference. “You represent the vast lending universe that we call commercial real estate lending,” he said. “When Americans head out, they often leave a home you financed and go to an office, warehouse, store, hospital or restaurant you financed as well. You will envision and deliver the workplace of the future. You will continue to redevelop malls into experiential space and finance last-mile warehouses to accommodate the changing consumer shopping landscape. And at this very moment, you are financing the construction of more rental units than ever before.”

Broeksmit noted people attend CREF to catch up with longstanding partners, make new connections and ultimately make deals. “Of course, the deals of today look a little different than yesterday’s,” he said. “They have to, given everything that’s happened, and all that’s happening still. In the past three years, the workplace has transformed. Offices cleared out almost overnight, and the businesses that serve workers saw traffic drop almost to zero. In the early days, it looked like things might snap back to normal. Instead, we have a new normal, with the hybrid workplace and a smaller in-person workforce.” 

MBA is committed to helping members pivot quickly and profitably in response to events, Broeksmit noted. “That’s why we fully support tax credits and incentives for conversion projects,” he said. “To put it simply, they’re a win-win for everyone involved. They help you come through downturns and they help downtown areas stay vibrant. Good policy doesn’t get much clearer than that. We’re taking this message to policymakers at every level of government, including the White House and Congress. Our nation’s leaders are looking for ways to support the economy, and tax credits are a no-brainer.”

Broeksmit said MBA’s biggest multifamily focus is increasing the rental housing supply. “It’s what our members, and our society, need,” he said. “Last year, our advocacy led HUD to take meaningful steps to improve processing times, raise its National Loan Committee and Regional Loan Committee limits, extend the allowance for new construction deals to go directly to firm application, and allow new projects to access surplus cash monthly rather than semiannually. There is far more work to be done, however, and we’ll continue to work to resolve the other issues with FHA, and strongly advocate for increases to both the large and statutory loan limits.”

For MBA’s Agency lenders, Broeksmit said he is proud to see the Federal Housing Finance Agency adopt many MBA recommendations, including streamlined housing goals and lending caps, limiting new radon testing, increasing LIHTC caps and maintaining the focus on affordable rental housing. 

“MBA was also engaged with the White House as it created its recently released Tenant Protection plan,” Broeksmit said. “Throughout the numerous meetings we had over six months with the Administration, I repeatedly reinforced two simple facts: First, commercial real estate finance does not interact with the renter. While it is always in our best interest to have healthy and satisfied renters, our end customer is the borrower. Second, I made clear that rent control is not the answer. Ever. Believe me, when I say that every time the topic of rent control comes up, we’re on it. Rent control is never a smart call, but it’s especially foolish right now.”

MBA is building a nationwide coalition of like-minded associations to spread that message about rent control, Broeksmit said. “We’re working with realtors, homebuilders, the National Multifamily Housing Council and the National Apartment Association, to name just a few. And we’re affecting the rent-control debate at the highest levels of government. In the fall, I was at the White House for an important meeting. It was in the Roosevelt Room, just a few steps away from the Oval Office, and a lot of big names were there, including the HUD Secretary and the Director of FHFA, as well as the heads of the National Economic Council and the Domestic Policy Council. We talked at length about housing supply, and at one point, the conversation turned to rent control. I listened to the arguments, which we’ve all heard. Then I offered the facts. I said if we want to increase the supply of housing, then we should never pursue rent control. It’s not the solution. It would worsen the problem. And there are better ways–real ways–to get more people into affordable homes.”

Broeksmit noted MBA has some issues with the Administration’s Tenant Protection plan, “but I am very happy to say that not one action in the release directly affects our lenders or servicers. And it does not contain a rent control mandate.”This shows that MBA makes its members’ voices heard–even around the Oval Office.”

“You’re the ultimate long-term thinkers–and the best long-haul planners I’ve ever met,” Broeksmit added. “The actions you take and the deals you make will reverberate for decades. And if the past is prologue, which I’m certain it is, then you will lead us into a brighter and better future.”