Predictions for 2007
What will 2007 hold?
As befits my status as guru, here are ten fearless predictions:
1. Home markets will pick up in spring, 2007, stimulated in part by declining interest rates. The pickup will be accompanied by a series of can-it-last? stories. The correlation between warmer weather and increased home sales activity will entirely escape journalists’ notice, so that when sales slow down in September and October, the newspapers will be able to run their cooling market worries buyers headlines:
The bigger the scare, the bigger the issue sales!
No one will notice that several of these stories will be word-for-word reprints from 2006 and 2005.
2. Housing and affordability will be much bigger on the national stage than any time in the last 18 years. With new Democratic House chairs Barney Frank and Charles Rangel both committed urbanists and long-time supporters of affordable housing, there will be a great deal of activity inaugurated in the House: proposals, concept papers, hearings, and bills introduced.
(With any luck I’ll be asked to participate in the pro bono working groups or to testify as a Congressional witness, which if you ever get the chance is great fun.)
Fun even if most of the Members’ chairs are empty
3. The House will pass a significant new housing authorization bill. It may focus on emerging issues like workforce housing, public housing revitalization and reinvention, additional affordable housing production, and the recapitalization of aging HUD properties.
The House’s ambitious legislation will probably not be enacted; indeed, it may well stall in the Senate. (If so Messrs. Frank and Rangel, long-time Members who have seen enough to know that the game is decided not by its beginning but by its end, will leave the business unfinished in a way that it can be promptly taken up in the second session.) A much more likely year for enactment is 2008.
4. Congress will enact GSE regulatory reform. Although the lame duck never quite flew, the realpolitik practiced by the Administration and Mr. Frank tees up GSE regulatory reform as a mutual-benefit political move, likely to be accomplished in the second quarter.
Mr. Frank contemplates GSE regulation
The GSE regulatory-reform bill will:
· Separate affordability-goal evaluation from safety and soundness.
· Place financial review in a strong regulator reporting to the Treasury.
· Decline to impose hard-dollar caps or statutory prohibitions about the GSEs’ business activities. Instead they will need to appeal to the strong regulator for green lights before entering new areas.
This means no new GSE activity
This means they can enter a new business
The GSE regulatory reform legislative debate will occur against a backdrop of likely further unhappy revelations about Fannie Mae’s prior activities, and further litigation, none of which will remotely be resolved in 2007.
5. GSE regulatory reform will establish a set-aside Affordable Housing Fund. Permissible uses, permissible recipients, and who decides what programs and properties are funded, will collectively attract more testimony, editorializing, lobbying, and advocacy than everything else in the GSE bill put together.
Hey, I want some, too!
6. Earmark reform will sustain its momentum with the enactment of earmark transparency. Congress will not forego its practice of directly funding particular worthy projects — the policy case for earmarks is defensible and the political case is irresistible —
It’s a crave you’ll endorse it’s a powerful force
You’re obliged to perform as there’s no other course
— but it will succumb to blogger and good-governance blandishments to compel every earmark to have an identified sponsor, and to allow a Web-based transparency in earmark scrutiny. The rules will be amended generally to preclude late-night back-room earmark additions.
No earmark sponsors here to throw stones
Congress will imperfectly follow its own rules.
7. The Low Income Housing Tax Credit (LIHTC) will undergo a streamlining/ improvement legislative amendment. The program is popular, successful, efficient, and overdue for some tweaking. Good proposals are floating to address it.
8. Public housing recapitalization will be debated … and not enacted. Even as the public housing delivery system continues to break down, the program-design task of reinventing public housing is large, complex, difficult, and far-reaching.
Even when they look awful, it’s hard to determine what to do
Building an enactable political consensus is the work of more than a single year, and has yet to begin.
First you get everyone to the table
10. AHI will be active in Ireland, the UK, South Africa, Egypt, and two other countries. We’re working in Ireland (designing a rental accommodation scheme modeled on US best practice and lessons learned), and I’ve recently been to both London and Johannesburg, two wonderful cities and great folks to whom I hope to return soon, and frequently. And in Egypt, we may be following up on our previous work in helping the Egyptians determine how they can create 500,000 new affordable homes in six years.
And the other two countries? I have no idea, but we continue to respond to inquiries and requests for proposals, so I’m hopeful.
11. I’ll still be blogging a year from now. It’s addictive — consuming yet pleasurable — and it makes me think about housing in constantly new ways.
You might as well face it you’re addicted to blog
All of you seem to like reading it — the hits and unique visitors have continuously climbed, very pleasing for a specialized subject! I really appreciate having readers.
These predictions go to eleven!