HUD Secretary Tiptoes Around Another Tax Credit, Pushes Balanced Housing Policy
In the wake of arnfull week full of bad economic news, especially housing indicators, Secretaryrnof Housing and Urban Development (HUD) Shaun Donovan appeared on CNNs Sundayrnmorning news and interview program State of the Union. Host Ed Henry prefaced the interview withrnJuly housing numbers – a 27 percent decline in existing home sales and new homernsales at their lowest levels since 1963. rn”Manyrnanalysts,” Henry said, “believe that housing started this wholernfinancial crisis. We saw some pretty grim headlines this week sparking somernfears about a double dip recession.” rnHe asked Donovan, what he could say to reassure Americans that this willrnnot happen.</p
Donovan said that the diprnin house sales in July was not unexpected because it would mark the end of the homebuyers’rntax credit that had been successful in spurring those sales. But, he said, the numbers were clearly worse thanrnexpected. The Secretary said, inrnresponse the Administration would be launching two additional critical tools inrnthe next few weeks. The first will bernan FHA refinancing effort to help borrowers who are underwater in their homes,rnthe second is an emergency homeowners’ loan program to help unemployedrnborrowers to in their homes. </p
Asked point-blank by Henry whether a nother housing tax credit was dead, the Secretary said that it was toornearly, based on just one month of post-credit housing numbers, to say whether itrnwould be revived, but that the Administration would be watching where thernmarket is moving going forward and would do everything possible to make sure itrnstabilizes and recovers.</p
The Secretary also sentrnanother signal that the nation’s ownership-centric housing policy may bernundergoing review. Henry referenced therncurrent cover story in Time magazine</aabout rethinking home ownership which quoted Deputy Housing Secretary RaphaelrnBostic as saying, "There is this notion that being housed well isrnsynonymous with being a home owner. That narrative has got to change." Henry said, "This is kind of a radicalrnnew idea that is being talked about, a debate throughout the country that maybernhomeownership is not for everybody. Where does the administration come down onrnthat?"</p
Donovan said he and thernpresident have both been consistent about promoting the need for a morernbalanced housing policy. “For toornlong, our focus at the federal level was only on homeownership to the exclusionrnof rental. Homeownership is important, and we are going to continue to make surernfolks have access to homeownership, but we need to make sure that we haverndecent, affordable rental housing in this country as well.” </p
The Secretary was speakingrnfrom New Orleans where he was attending observances marking the fifthrnanniversary of Hurricane Katrina. Hernpointed to the 40,000 families who were in FEMA trailers at the beginning ofrnhis administration and now are mostly in permanent housing. This, he said, is a perfect example of thernAdministration’s approach. “We havernbeen focused on making sure the public housing residents can get back in theirrnhomes. That’s why today there are more federally assisted rental units in NewrnOrleans than there were before the storm. And so we’re going to continue tornfocus on having a truly balanced housing policy in the country. </p
He said that a house may nornlonger be a homeowner’s piggy bank it was in the past but it is too early tornsay whether home prices will now rise only in step with inflation. The key is “we’ve got to get back tornbasics on homeownership. We’ve got tornhave decent, safe, smart loans that help families not just get into a home butrnstay in a home. And look, the issue here is families can choose homeownership.rnThey ought to be able to choose homeownership, but if they do that, they oughtrnto get it with a safe mortgage loan that will keep them in that home long term.”rn</p<prnrnrnrnrnrnrn
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