‘Foong on Finance’: Affordable Housing Sector Awaits Obama Budget

By Keat Foong, Executive Editor

President Obama’s State of the Union speech does not seem to be a speech that is particularly underpinned by a conservative economic philosophy. One has to watch the President’s actions, and await the release of the Administration’s budget proposal in a few weeks, to see his intentions.

At the annual National Housing Conference and New York Housing Conference luncheon in December, speakers were not optimistic about the prospects for funding for affordable housing in the current environment, and were girding themselves for tougher times ahead. More funding cannot be expected; only level funding at best.  

President Obama, who proposed a five-year freeze on domestic discretionary spending in his speech, does also mention the need for government investments: in innovation, education and infrastructure. Housing was mentioned directly only in reference to the need for the government to be more efficient: “There are at least five different agencies that deal with housing policy,” said President Obama.  

Also, the President did mention the federal deficit commission, which he had appointed to look into ways to cut the federal deficit. The commission had recommended scaling back or at least reforming the mortgage interest deduction program. This measure may be a boon to the market-rate apartment industry, though maybe not so much to homeowners looking to build equity in their lives.

Affordable housing proponents can hope at this point that housing is included in the investment in “infrastructure” that Obama mentions. Sheila Crowley, president of the National Low Incomes Housing Coalition, said in a statement, “I hope that the President intends to include affordable housing in the list of infrastructure improvements and to spare safety net housing programs from the spending freeze.”