Where Do the 2016 Presidential Candidates Stand on Housing Reform?

Where do the Republican and Democratic parties stand when it comes to housing reform? An issue that has perhaps not been discussed enough in this year’s election is on the minds of many RE professionals. So with Trump and Clinton officially nominated as the respective candidates of each party, where do they stand on housing?

The Republican Platform

The Republican platform is 66 pages long and includes a section on “Responsible Homeownership and Rental Opportunities.” The platform espouses the virtues of a property-owning democracy that safeguards individual liberties, strengthens communities and builds wealth – and blames Democratic housing policies for the housing bust and ongoing conservatorship of Fannie Mae and Freddie Mac.

The Republican platform offers five interesting thoughts on housing policy:

  1. The concept of “responsible homeownership” seems consistent with much of the Dodd-Frank Act efforts to create prudential standards for mortgage underwriting, but Republican antipathy to Dodd-Frank has led to an alternative approach centered around lender-initiated efforts and borrower behavior, rather than what the Consumer Financial Protection Bureau (CFPB) dictates.
  2. The platform acknowledges supply-side constraints as well, and includes recommendations to reduce restrictions that limit the ability of new construction to keep up with demand.
  3. The platform expresses frustration with the lengthy conservatorship of Fannie Mae and Freddie Mac, but encourages the examination of their roles, marking a change from prior Republican calls to wind down the entities.
  4. The platform criticizes the Federal Housing Administration (FHA) for operating outside of its mission footprint and losing money, and recommends income limits on FHA activities.
  5. Finally, the platform mentions (but does not discuss) renting, within the context of eliminating restrictions to promote greater supply of rental opportunities.

The Democratic Platform

The Democratic platform is shorter than the Republican Party’s platform at 51 pages, but is equally full of position statements and policy recommendations. Because the incumbent administration is a Democratic one, there is no criticism of current housing policy, although the Democratic platform does share a strong commitment to encouraging homeownership with the Republican platform.

However, the Democratic platform differs in one significant respect from its Republican counterpart. The platform avoids any commitment to structural housing finance reform or review of any federal housing programs. In that respect, the platform retreats from the Obama administration’s framework for housing finance reform by emphasizing borrower outcomes instead. If anything, the scope of recommended government involvement is increased, not decreased. Missing is any discussion regarding the roles of Fannie Mae and Freddie Mac, or efforts to promote greater use of private capital to reduce taxpayer risk.

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