To: The Honorable Maxine Waters, Chairwoman
The Honorable Patrick McHenry, Ranking Member
U.S. House of Representatives Committee on Financial Services
2129 Rayburn House Office Building
Washington, D.C. 20515
Date: May 3, 2019
Madam Chairwoman Waters and Ranking Member McHenry:
The Community Mortgage Lenders of America (CMLA) would like to take this opportunity to provide insight with regard to The Committee on Financial Services’ April 30th hearing entitled: “Housing in America: Assessing the Infrastructure Needs of America’s Housing Stock”.
We fully understand and agree that the development and restoration of infrastructure must include affordable housing, and as pointed out in your memorandum pertaining to the hearing, “affordable housing is a component of the nation’s infrastructure and a long-term asset that helps communities and families by connecting them to resources and opportunities”.
These connections and opportunities not only generate construction jobs, but also stimulate the economy for communities that need it most. However, what appears to be lost within the proposed funding is the significant investment needed in single family housing for low- to moderate-income families.
Although there is some proposed investment for single family homes, the vast majority is focused on multi-family rental properties which do not provide the “American Dream” of home ownership.
Homeownership provides stability and financial security for individual families and for neighborhoods. Homeowners are in control of their homes and can’t be displaced by rising rents and the effects of gentrification. Homeownership also stabilizes a family’s housing expense by locking in their monthly payment. In contrast, no landlords are signing 30-year leases. Homeownership also provides for asset building as families contribute to their housing equity with each mortgage payment and enjoy the cumulative impact of market appreciation. Indeed, the Federal Reserve reports that the median wealth of homeowners is 44 times higher than that of renters. With concerns about the ever-widening wealth gap, a renewed focus on access to homeownership is critical.
Moreover, a strong body of evidence shows that homeownership helps stabilize neighborhoods and improve living conditions. Homeownership has positive effects on neighborhood turnover, education outcomes for children, property conditions, crime, and civic engagement.
The CMLA supports the Committee’s efforts to secure multi-family housing as a critical component of a healthy housing spectrum. However, an equal emphasis must be placed on
housing that allows ownership, which will then convert into stronger communities and local economies as well as provide the most effective tool to mitigate gentrification.
Within your memorandum you also pointed out that, “as a result of the lack of investment into the affordable housing infrastructure, many families pay unaffordable rents or live in substandard conditions. Nearly 50 percent of all U.S. renters are cost burdened and spend 30 percent or more of their income on housing”, which may trap them in renting permanently as they cannot accumulate a down payment.” Resources such as those you are proposing to appropriate can address the down payment barrier, which is among the most significant hurdles preventing lower- income families from realizing the benefits of homeownership.
We feel the focus on ownership benefits the consumer as well as improves the overall economy and addresses the declining homeownership rate since the subprime loan crisis.
We appreciate the opportunity to provide this input and welcome any questions or conversations you may like to initiate.
The Community Mortgage Lenders of America