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Candidate Sanders’ Housing Policy Prescription

More Affordable Housing, Plus Help for First Timers and Underwater Borrowers

Faith Schwartz    |    Housing Policy

Housing policy, which has pretty much been a back burner issue so far in this campaign, bubbled up to the top recently when Senator Bernie Sanders released a new policy paper that outlined his program for supporting homeownership, expanding affordable housing, helping underwater homeowners, and fighting homelessness.

While many of his housing planks were presented in the abstract (or at least without much detail), one concrete proposal at the top of his list is to fund the National Affordable Housing Trust Fund at least $5 billion a year to construct or rehab at least 3.5 million affordable rental units over the next decade. This isn’t surprising, since he was the lead sponsor in the Senate for the law that created the Trust back in 2008. This new federal housing production program, he noted, would be the first ever designed to build rental housing for extremely low-income households. The demand for affordable rental housing is real. According to CoreLogic, the rate of homeownership is 63.7%. This was the rate of homeownership in 1989, almost three decades ago.

Another concrete proposal is a $15 per hour minimum wage requirement. He puts this into a housing context by noting that the average renter would need to earn a wage of $19.35 per hour in order to afford a modest, two-bedroom apartment. The $15 requirement would be his first step.

Sanders is definitely a fan of housing production programs. He’d like to boost funding levels for existing programs, and he’d like to mandate that any housing built with federal subsidy money stay affordable permanently. (Currently many programs allow the units to convert to market value after a period of 10 or 15 years.)

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Other affordable housing goals are to defend and expand the Fair Housing Act, repair rental housing, protect rental assistance, and expand the Housing Choice voucher program.

For homeownership, Sanders wants to expand programs at the Department of Housing and Urban Development and the USDA that promote first-time homeownership.

He’d also expand pre-purchase housing counseling, implement credit score reform, defend against efforts to weaken the Consumer Financial Protection Bureau, and protect homeowner mortgage interest tax deductibility.

Citing CoreLogic figures that there are still 4.3 million homeowners underwater, the Sanders’ policy paper calls for reinvigorating the Home Affordable Refinance Act Program (HARP) and providing counseling to distressed homeowners.

Sanders said he would like to expand access to the HARP program. He has co-sponsored legislation that would reduce upfront fees, streamline applications, and launch a program to educate homeowners about HARP in an effort to help more borrowers.

The Sanders campaign released the paper as part of its battle for the New York State Primary. Although the senator came in second, he has pledged to continue his campaign and it will be interesting to see whether housing remains a central issue going forward and/or one that might be co-opted by his rival, former Secretary of State Hillary Clinton. The good news is housing is on the radar.

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