President-elect Donald Trump's transition team announced this morning that he has selected Dr. Ben Carson to be his Administration's Secretary of the Department of Housing and Urban Development (HUD). Carson is former Republican candidate for President and served as the director of pediatric neurosurgery at Johns Hopkins Hospital in Maryland from 1984 until his retirement in 2013. A Trump statement released today says, "Ben Carson has a brilliant mind and is passionate about strengthening communities and families within those communities." It also says, "We have talked at length about my urban renewal agenda and our message of economic revival, very much including our inner cities. Ben shares my optimism about the future of our country and is part of ensuring that this is a Presidency representing all Americans. He is a tough competitor and never gives up."
Real Estate aggregator Trulia released a report titled, "There Doesn't Go the Neighborhood: Low-Income Housing Has No Impact on Nearby Home Values." The report studied the impact of new Low Income Housing Tax Credit (Housing Credit) developments on nearby home values between 1996 and 2006. The report compared the price per square foot of homes at two separate distances from new Housing Credit developments. Homes within 2,000 feet were considered close to the development for the purpose of the study, and were compared to homes between 2,000 and 4,000 feet from the development. The authors state that using linear distance as the studied factor is common in property value studies and reduces the idiosyncratic impact of neighborhoods.
Recap and Release: Many of the president-elect’s advisors are strong opponents of the Treasury Department’s net worth-sweep, and include a plaintiff in ongoing litigation about the legality of the third amendment to the Preferred Stock Purchase Agreements. One might surmise that this should increase the new administration’s support for enabling the government-sponsored enterprises (GSEs) to rebuild capital as a possible prelude to their eventual re-privatization. While eliminating the sweep could be done without an act of Congress, it would require approval by the new Treasury secretary and the current director of Federal Housing Finance Agency (FHFA), Mel Watt, whose term has two more years to run. Director Watt has suggested he wants to replenish the GSEs’ diminishing capital buffers, but there is no indication he supports recap and release as a reform strategy. Further muddying the waters is that we are only half-way through a congressionally-imposed two-year cooling off period that would make it very hard to execute recap and release.
Earlier today the Federal Housing Administration (FHA) announced the county loan limits for its single-family mortgage programs for 2017 and issued a Mortgagee Letter that increases the minimum loan limit for low-price areas and the maximum loan limit for high-cost areas. FHA currently sets the loan limit for most counties at 115 percent of the county's median home price. Mortgages that exceed the limit are not eligible for FHA insurance. In addition, FHA also establishes a "floor" for low-cost areas, which it defines as counties where the median home price is 65 percent or less of the Federal Housing Finance Agency's (FHFA) conforming loan limit. Similarly, FHA also establishes a maximum loan limit for high-cost areas, where the median home price reaches or exceeds 150 percent of the conforming loan limit.
HUD published in the Federal Register a final rule regarding the use of small area fair market rents (SAFMR) in certain metropolitan areas, and replacing HUD's existing 50th percentile fair market rent (FMR) policy for the Housing Choice Voucher (voucher) program. SAFMRs reflect rent standards in zip code areas while traditional FMRs reflect a single rent standard for an entire metropolitan region. According to HUD, 50th percentile FMRs—the current policy for addressing high voucher concentration – have been largely ineffective. HUD expects that SAFMRs will better address high levels of voucher concentration in certain communities and give voucher holders access to areas of high opportunity by providing a subsidy that is adequate to cover rents in those areas.
Smoking will be prohibited in public housing residences nationwide under a federal rule. Officials with the Department of Housing and Urban Development said that the rule would take effect early next year, but that public housing agencies would have a year and a half to put smoke-free policies in place. The rule will affect more than 1.2 million households, the officials said, although some 200,000 homes already come under smoking bans adopted voluntarily by hundreds of public housing agencies around the country.