Henry Cisneros served as Secretary of the U.S. Department of Housing and Urban Development during the Clinton Administration.
He currently serves on the executive committee of the J. Ronald Terwilliger Foundation for Housing America’s Families.
The Terwilliger Foundation is hosting the Housing America’s Families Forum on Nov.18, 2016, at the George W. Bush Institute in Dallas, Texas. HousingWire is honored to serve as a media sponsor.
In Part 1 of our four-part interview series, Rick Lazio discussed the need for the candidates for President to begin discussing housing policy. Now, in part 2, Cisneros argues that America is simply not doing enough to increase safe access to affordable housing. Here are his solutions.
HousingWire: How does our current housing policy match up to America’s changing demographics?
Henry Cisneros: The short answer is that federal housing policy is not keeping pace with a changing America. In fact, it’s lagging far behind.
At the J. Ronald Terwilliger Foundation for Housing America’s Families, we are focusing on three major trends: First, members of the 75-million strong Millennial generation are now forming households for the first time. They will dominate the housing market for years to come. Lacking the resources for sustainable homeownership, most are now choosing to rent in urban centers, a fact reflected in rising rents and a very low national vacancy rate.
Second, the overall U.S. population is becoming increasingly diverse. The Urban Institute projects that minorities will account for 88% of net new households from 2020 to 2030. Third, as a nation, we are rapidly aging. By 2030, the number of seniors will exceed 74 million, accounting for more than one in five Americans.
These changes will have a dramatic impact on the housing landscape. They will require us to respond to the continuing surge in rental demand, develop new approaches to enhance access to sustainable homeownership, and find ways to more closely link health care and supportive services with the home. We have our work cut out for us.
HW: What types of challenges will an aging population present to our housing system? What are the opportunities?
HC: Surveys show that seniors overwhelmingly prefer to “age in place” in their own homes and communities. But many homes are potential danger zones, lacking the structural features that can allow an older adult to live there safely. Numerous communities also lack easy access to public transportation, grocery stores, pharmacies, and medical services. So accommodating the desire to age in place will be a major housing challenge over the next decade.
With many seniors living on fixed incomes, ensuring there is a sufficient supply of affordable homes will also severely test the housing system. Without access to affordable housing, it becomes virtually impossible to introduce a system of home- and community-based supports that can enable successful aging.
Falls are the leading cause of injury and injury-related deaths for seniors. Most occur in the home and are preventable. Falls also resulted in $31 billion in Medicare costs in 2015. If we can make our homes safer while elevating the importance of falls prevention within the health care system, a key recommendation of the Bipartisan Policy Center Senior Health and Housing Task Force, we can achieve the twin goals of improving senior health and reducing costs. This represents a tremendous opportunity.
HW: We haven’t heard anything about GSE reform during the presidential campaign. What are the prospects for reform in 2017?
HC: Considering the importance of GSE reform to the housing market and the nation’s economy, it’s unfortunate this issue has failed to register this election season. But it’s understandable: GSE reform is highly complex and not something that lends itself easily to campaign sound bites, particularly in the highly charged atmosphere that has unfortunately defined this election.
This past September, we marked the eighth anniversary of the decision to place Fannie [Mae] and Freddie [Mac] under government conservatorship. Yet, today, there is not a clear path forward for the two institutions. The mortgage credit box is very tight, with only the most pristine mortgages being originated, while taxpayer exposure remains unacceptably high. Earlier this year, FHFA Director Mel Watt warned that the GSEs’ dwindling capital reserves, when combined with a disruption in the housing market, could trigger another Treasury drawdown. He urged Congress to develop a thoughtful legislative solution before we confront another crisis.
Today, the center of action is over at the FHFA with its credit risk transfer program for the GSEs. Through this initiative, the FHFA and the GSEs are helping to demonstrate that risk-bearing private capital is indeed willing to step into the mortgage market, a key objective of past legislative efforts.
The prospects for GSE reform will be a major topic of discussion at the upcoming Housing America’s Families Forum in Dallas. With a new Administration and Congress assuming office next year, I am optimistic about the prospects for reform.
I look forward to hearing what the experts have to say at the Forum.
