Gene Sperling, a top economic advisor to Democratic presidential candidate Hillary Clinton, recently said that housing will play an important role in a Clinton administration, according to a release from The National Association of Home Builders (NAHB).
“For Hillary Clinton, growing middle class jobs and middle income security is the single lens in which she will judge economic policy,” Sperling said in an address to the National Association of Home Builders (NAHB) Board of Directors at their Midyear Meeting in Miami. “What better helps the middle class than housing? Housing creates jobs in the United States. There is probably no other sector that creates jobs throughout income levels – from construction jobs to professional and servicing jobs.”
NAHB says that Sperling noted the credit pendulum has swung too tight in the aftermath of the Great Recession and cited a study from the Urban Institute that compared credit availability during the pre-crisis levels to the standards of today which found 5 million fewer home loans have been issued as a result of current tight lending standards.
“Our challenge now is to never swing back to where we were, but to get to an equilibrium where people who are creditworthy can get the housing they need,” said Sperling. “This will lead to increased housing starts, construction and affordable housing, which we need in this country.”
The release says that Sperling felt that housing finance reform is “really tough,” but specified that a government backstop is critical to protect the 30-year mortgage.
“You need a backstop to ensure the United States of America still has a 30-year fixed mortgage,” said Sperling. “That is something that gives people the opportunity to become home owners in this country.”
Sperling says that if Clinton is to be elected come November, she plans to defend and expand the Low Income Housing Tax Credit, as well as encourage communities to utilize land use approaches that make it easier to construct affordable rental housing near better jobs. He says this will be done by increasing funding for infrastructure banks and competitive grant programs. Additionally, Sperling says Clinton plans to also support common sense relief for community banks and make sure that any reforms level the playing field so that Wall Street banks do not have any advantages over community lenders. Likewise, she plans to focus on a major infrastructure plan in which “she sees construction and housing as part of that larger infrastructure.”
NAHB says that in regards to the mortgage interest deduction, Sperling says Clinton’s tax plan would hold the mortgage interest deduction but cap the marginal rate at which households can take their deductions at 28 percent. “So for 98 percent of Americans, the mortgage interest deduction is completely untouched,” said Sperling.