October 18, 2011
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Remarks delivered by NCSHA President and Idaho Housing and Finance Association President and Executive Director Gerald Hunter at NCSHA’s 2011 Annual Conference & Showplace, during the opening plenary on Monday, October 3.
 
I’m sure that many of you have come to our Annual Conference with some apprehension and mixed feelings about what the future holds for affordable housing and our industry. The uncertainty created by our federal budget deficit, the polarizing political landscape, and the world economy have presented each of our organizations with some unprecedented challenges. Consider some recent actions taken last month on federal housing expenditures and tax policy with which you are all likely familiar. On September 8, the House Appropriations Subcommittee on Transportation and HUD (T-HUD) marked up its FY2012 spending bill and, in addition to other actions, cut funding for the Home Investment Partnerships (HOME) Program by 25 percent, compared to 2011, funding the program at $1.2 billion. Well, given the House’s recent actions on budget matters, I suppose this shouldn’t have been particularly surprising. 
 
Then, on September 20, the Senate Appropriations Subcommittee passed its FY2012 T-HUD appropriations bill, cutting HOME Program funding by 38 percent to $1 billion, $200 million less than the House. This was a shocking surprise; not only because of the Senate’s more moderate political stance, but because one of the HOME program’s strongest supporters, Senator Patty Murray (D-WA), is the Committee’s Chairwoman. Chairwoman Murray stated that appropriators must cut spending in a responsible way and at the same time invest in the future and protect the most vulnerable. The bill required difficult decisions, including making deep cuts to HOME, CDBG, and other programs she has long supported. The full Senate Appropriations Committee then supported this action the very next day, September 21, on a vote of 28 to 2.
 
On another item, on September 12, President Obama released the text of the American Jobs Act, the Administration’s most recent response to our country’s economic woes. To offset the projected $447 billion cost of the legislation, the bill includes a proposal to cap tax-exempt interest for higher-income taxpayers, including interest from housing bonds. The Bond Buyer summed up this provision in a front page headline this way, “Obama Proposal Stuns Market.” While passage of the bill is not likely, this type of proposal coming from the Administration as it did was a big surprise, no matter what your political leanings might be.    
 
Just considering these very recent events should give us all cause to ponder the future of affordable housing resources with some trepidation. What’s really worrisome about these events, and others, is the lack of transparency and public debate associated with them, and the fact that long-term staunch supporters of HFA programs seem to be under-prioritizing critical housing resources. On a personal note, my own Senator Mike Crapo (R-ID), a member of the Senate Finance and Banking committees, who has been a very strong long-term supporter of HFA resources, has told me that everything is on the table in light of deficit reduction.
 
I have taken the time to highlight these events here today to emphasize how different our current environment is compared with any past times or situations that I can recall, and to help frame a key question of how we as an industry can and should move forward in light of these challenging times. 
 
Already, many of you have significantly contributed to our future path in a variety of ways. Some have worked tirelessly on advocacy issues, responding to NCSHA calls to make specific contacts with your congressional representatives. Others have been innovating and trying to find new ways we can pursue our mission. Our NCSHA Board of Directors, Executive Committee members, many HFA staff and Board members throughout the country, affiliate members, and of course, our NCSHA staff are all devoting significant time and effort to this cause. I would like to thank all of you who have contributed over the past year. Your contributions are greatly appreciated, and I ask that you renew your commitment at this conference to continue doing all you can to move our HFA industry successfully forward. 
 
In thinking about how NCSHA is responding to our current challenges, I would like to highlight three categories that I think summarize our efforts:
 
  1. Protect, renew, and extend our existing resources (this is our direct advocacy work that so many of us are involved with);
 
  1. Develop new tools, new partners, and new approaches to meet our affordable housing mission; and
 
  1. Make our presence felt, our strong track record known, and keep our message in front of policy makers no matter how long it takes.      
 
This third point is really a subset of the first two, because it speaks to how we can hopefully accomplish both the first and second categories. 
 
“Make our presence felt, our strong track record known, and keep our message in front of policy makers no matter how long it takes.” 
 
The premise behind this effort is simple. It may take time before key decisions are made about housing finance reform and how affordable housing will interface with whatever approaches are ultimately adopted by Congress and regulatory bodies. It may take time to see Congress reach a compromised approach to deficit reduction that allows for more thoughtful debate on critical affordable housing resources. But, in time, these discussions and decisions will take place. And when they do, we want policy makers to think first and foremost of our national HFA network. I think we all believe HFAs can make the best case for being the nation’s premiere affordable housing providers. However, it can be frustrating to make rational and even exceptional pitches to policy makers and hear in response, “This isn’t the right time; I don’t know how I will respond; everything is on the table,” or some evasive response. It is important, however, that we don’t become frustrated and allow our efforts to be curtailed. 
 
NCSHA’s leadership is now meeting multiple times each year with key housing policy makers such as HUD Secretary Shaun Donovan and FHFA’s Director, Ed DeMarco. The goal is to stay in front of them and keep our message in the front of their minds, the best we can. One could call it “dogged repetition.” Of course, the effort to make our presence felt is important for all of us. Being seen, highlighting our strong record of performance, and explaining the human impact of what we do, will win the day when the time comes, if we as an industry can collectively keep this effort ongoing.
 
The second category I mentioned was, “Develop new tools, new partners, and new approaches to meet our affordable housing mission.” I personally believe this is one of our industry’s greatest strengths. Over my fairly long tenure in this business, I’ve watched us overcome market and funding difficulties many times through innovation, and by rethinking the way we do business. The very fact that there are 54 individual HFAs, plus all of our affiliates, creates a huge advantage and opportunity for innovation and creativity.
 
Some of our HFAs have been building new lending platforms to access the taxable mortgage market. Some of our affiliate members have devoted significant time working on a more streamlined and competitive vehicle for accessing the tax-exempt market. A number of HFAs are looking at opportunities for joint collaboration. NCSHA is pushing for new lending preferences and products with FHA, Fannie Mae, the Treasury Department, and USDA Rural Development. Of course, efforts at innovation involve all of us, because we never know where the next great idea will come from. But it does take a willingness to rethink the way we do things. It takes a willingness to collaborate with each other, and a willingness to think creatively. And, I might add, a willingness to take some reasonable risk. Just being here in San Diego for our Annual Conference is a great way to learn from and collaborate with each other. 
          
The forces we are facing today – the deficit, the economy – are very real and I suspect will ultimately impose a degree of sacrifice on most all federally funded programs and benefits. But, I am also optimistic that our strong advocacy, our creative and innovative work, and our exceptional track record will position us for a successful future. We just need everyone to “Make your presence felt, promote your strong track record, and keep your message in front of policy makers no matter how long it takes.”      
 
Thank you for being here at the conference. And, thank you for your commitment to affordable housing.