Everybody loves a circus
With the stink of last week’s presidential debate (“presidential” “debate” may be more like it) still burning the eyes of anyone unlucky enough to have watched it, election season will soon be ramping up to full stupidity. Before the noxious- and obnoxiousness of the contest reach their peak, MPA thought it worthwhile to look at the major players – so no Mike Pence – and how their stances on real estate over the years compare.
Recent writing about vice presidential candidate Kamala Harris has concentrated on the size of her modest real estate portfolio, estimated to be worth about $8 million, but the Democratic senator and former attorney general of California has been involved in several significant housing issues, coming down on the side of housing rights advocates in some cases and on the side of shady lenders in others.
As attorney general, Harris introduced the California Homeowner Bill of Rights, which became state law in 2012. While the HBOR was celebrated by consumer groups, industry organizations opposed the law’s stalling of the foreclosure process at a time when the country was still recovering from the Great Financial Crisis.
In April 2019, Harris re-introduced to the Senate the Rent Relief Act, an initiative that would grant households paying more than 30 percent of their income in housing costs a monthly refundable tax credit.
“Housing is a human right,” Harris said in a statement at the time, “and we must act now to end the affordable housing crisis and provide relief to working families who are worried about making each month’s rent.”
In August, Harris introduced a bill that would provide mortgage relief and eviction protection for renters impacted by the COVID-19 pandemic. The Rent Emergencies Leave Impacts on Evicted Families (RELIEF) Act proposes to ban evictions and foreclosures for a year, grant tenants up to 18 months to pay back missed payments, and prohibit mortgage servicers from reporting unpaid rent to credit reporting companies.
Before readers deem Harris a pro-renter socialist, they should know that she has also sided with lenders on more than one controversial occasion. During the Great Recession, she negotiated a $25 billion settlement with the country’s five largest mortgage servicers over rampant robo-signing prior to the nation’s economic collapse. But the deal has been described as a “second bank bailout” that did little to prevent evictions.
“In fact, more families lost their homes as a result of transactions facilitated by the national mortgage settlement than those who got a sustainable loan modification to save them,” wrote The Intercept.
Harris also declined to prosecute current Secretary of the Treasury Steven Mnuchin for his role in alleged mortgage fraud as CEO of OneWest in 2013, despite prosecutors in her office uncovering evidence of what they considered to be widespread misconduct. Mnuchin donated $2,000 to Harris’ Senate campaign in 2016. She was the only Senate Democratic candidate to receive money from Mnuchin.
The former vice president’s housing plan is largely focused on providing affordable housing to renters and making homeownership more accessible for buyers. If elected, Biden says he will invest $640 billion over the next ten years to boost affordable housing supply, end “discriminatory and unfair practices in the housing market”, and provide down payment assistance to buyers through a “refundable and advanceable tax credit.” He is also promoting the idea of a Homeowner and Renter Bill of Rights based on the California Bill put forth by Harris.
Biden has said on multiple occasions, including during last week’s televised train wreck, that he intends to eliminate Trump’s 2017 tax cuts, which could change the rules around mortgage interest deductions. It could also mean an increase in capital gains taxes, which a recent Banker and Tradesman editorial said, “could actually increase real estate investment by making REITs and other tax shelters attractive.” Biden has also proposed a $15,000 tax credit for first-time homebuyers.
Biden’s policies appear to have received some level of approval with donors in the real estate space. Industry donors have so far pledged $17.1 million to Biden and $15.6 million to Trump.
Trump’s relationship with real estate is somewhat more conflicted than Biden’s or Harris’. Prior to becoming president, Trump was sued multiple times by the Justice Department for racial discrimination toward Blacks and has been the subject of fairly substantiated rumors regarding mob ties to the building of the failed Trump Plaza in Atlantic City, New Jersey.
Trump’s record on real estate during his time in office has been less crime-y, but he has yet to stake out positions that have value beyond whipping up support on the campaign trail.
In July, Trump tweeted that he was “happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood…” Trump’s defense of the tweet in the face of immediate criticism didn’t improve matters: He pointed to a change to the Affirmatively Furthering Fair Housing rule proposed by HUD in January that housing advocates said would “dismantle civil rights protections.”
Trump’s 2017 tax cuts provided incentives for developers to bring new housing to low income neighborhoods, a program he touted for bringing $100 billion of investment into 9,000 distressed neighborhoods. Fact checkers found serious problems with the president’s claim. Included in the cuts was a reduction from $1 million to $750,000 in the maximum mortgage amount homeowners could use when claiming tax deductions.
Trump has often railed against the scourge of homelessness, but he has proposed little in the way of solutions outside of criticizing mayors and governors for letting the problem get out of control. His administration did, however, approve almost $3 billion in funding for anti-homeless measures as part of the federal government’s COVID-19 aid program.
In September, the Trump Administration unveiled a plan to reform the Federal Housing Administration and end the government conservatorship of Freddie Mac and Fannie Mae. No end date for the conservatorships was provided, but the plan did call for Fannie and Freddie to face more competition from the private sector.
The slate of reforms included statutory limitations on FHA cash-out refinances, changes to FHA’s and Ginnie Mae’s risk management strategies, and the implementation of a homebuyer sustainability scorecard that would measure low- and moderate-income first-time buyers’ loan performance.
Because real estate is built on quantitative evidence and objective facts, it’s unlike to play much of a role as the election enters its final stretch of dispiriting lunacy. The only house either political party truly cares about is big and White and, to the rest of the American populace, completely off-limits.