Brian Montgomery touches on condominium rule, efforts to address affordable housing shortages
Representatives from the National Association of Realtors® traveled to the Department of Housing and Urban Development last week to hear from administration officials regarding a host of regulatory issues impacting the housing industry. HUD Acting Deputy Secretary and Federal Housing Commissioner Brian Montgomery addressed the group as 11,000 NAR members were in the nation’s capital for the 2019 Realtors® Legislative Meetings & Trade Expo.
NAR’s 2019 Vice President of Advocacy Tracy Kasper opened the event by introducing Montgomery, who jumped immediately into a discussion on housing affordability.
“You all know better than most that affordability is an enormous challenge in many markets around the country,” Montgomery told a room of more than 100 Realtors®. “Large constraints on the housing market by regulations have exacerbated the shortage for hard-working families who are employed and willing to buy but continue to be priced out. The good news is that in today’s economy we have job growth, low unemployment and wage gains that have provided an additional shot in the arm.”
Montgomery pointed out that overregulation and misguided zoning laws have helped contribute to the housing affordability and accessibility issues facing many U.S. markets.
“The combination of regulatory overreach and an aging housing stock has meant not enough affordable units are left—or worse, being built,” he said. “Zoning, environmental and sometimes labor restrictions have made it more difficult for areas across the country to meet the growing [housing] demand. We will need continued wage and economic growth and regulatory reform to mitigate affordability constraints. This will also require that not just HUD but states and localities ease the regulatory burden and other impediments to development.”
Representatives from the Federal Housing Administration, Department of Veterans Affairs and the United States Department of Agriculture’s Rural Housing Service were also on hand to highlight their agency’s housing policy priorities. Gisele Roget, John Bell III and Cathy Glover spoke on behalf of the FHA, VA and RHS, respectively.
Realtors®, however, may have been most pleased to hear Commissioner Montgomery address FHA efforts to finalize a new rule surrounding condominium policies. NAR supports the proposed revisions to FHA’s current condominium policies, including allowing owner-occupancy level determination on a case by case basis, allowing up to 45% commercial space without documentation and implementing a five-year approval period for project certification.
“As you all know, one opportunity is condominiums, which have been traditionally a mainstay of affordable housing for both first-time homeowners and seniors,” the Commissioner said. “We’ve been in the process of revising our condominium project approval requirements to get to a final rule and update our policies.
“We anticipate that the updated regulations will be more flexible, less prescriptive and more reflective of the current market than existing provisions. It may also include single unit approvals for loans that meet HUD standards for unapproved projects, allowing HUD to set the specific percentage.”
Montgomery added that the final rule is currently under review by the Office of Management and Budget, and said he believes the end of the process is in sight.
The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.