EDITOR’S NOTE: Three Economic Plans in Eight Days
- Feb 25, 2009
By Keat Foong, Executive EditorA whirlwind of actions under the new Obama Administration. In quick succession, in the space of a little more than seven days, we have seen the following developments: (1.) Feb. 10: The announcement by Treasury Secretary Timothy F. Geithner of the White House’s financial rescue effort, the Financial Stability Plan, that will involve using the remaining $350 billion from TARP, and the employment of as much as $2.5 trillion in total; (2.) Feb. 17: the signing by President Obama of the $787 billion economic stimulus bill, The American Recovery and Reinvestment Act; (3.) Feb. 18: President Obama’s announcement of the $275 billion housing foreclosure alleviation plan, Housing Affordability and Stability Plan, to help lower interest rates for as many as seven to nine million homeowners. The implications for multifamily housing are varied. This issue of Multi-Housing Finance and Investment provide a number of reports on this subject. In short, (1.) The Financial Stability Plan expands TALF (Term Asset-Backed Securities Loan Facility) to include the purchase of CMBS—which is a good thing from the point of view of multifamily financing. (2.) The economic stimulus plan includes, according to the National Association of Home Builders: certain favorable provisions for the Low Income Housing Tax Credit and New Markets Tax Credit programs; additional appropriations for Section 8 project-based, CDBG, and HOME programs; and increases in FHA, Fannie Mae and Freddie Mac loan limits. And although this stimulus act is something of a half-measure in terms of its adoption of homebuyer tax credit proposals to help jump start the housing market, the National Association of Realtors says it can cause a “quick lift” in home sales this buying season. (Good news for condos, not so good news for apartments.)(3.) Finally, from the housing industry point of view, the Housing Affordability and Stability Plan is both commended for heading off millions of foreclosures, and taken to task for ignoring renters, who make up a critical part of the housing market, or focusing too much on keeping people in their homes.