Multi-Housing Groups Regret House Rejection of $700B Bailout Package; Possibility of ‘Housing Depression’ Cited

By Anuradha Kher, Online News Editor and Keat Foong, Executive EditorWashington, D.C.–Multi-housing groups regret the House’s rejection yesterday of the $700 billion package to provide the financial markets with much needed liquidity. While citizens across the nation appear so far to be opposed to what they see as the plan’s bailout of  Wall Street, multi-housing observers come down on the side of passing the package in the interest of maintaining liquidity in the market. Jim Arbury, senior vice president of government affairs at the National Multi Housing Council (NMHC), echoed this sentiment. “It is unfortunate that the bailout package did not pass. A legislation like this is a big compromise but it would undoubtedly enable credit to flow smoothly,” Arbury tells MHN.NMHC has no complaints with the current version of the bailout package. “We have no problems with helping people who have been forced out of their homes due to foreclosures,” he says. “But we are against any additions to the bill that might add unnecessary benefits and goodies to the homeownership market. Fortunately, the bill did not have any of that,” says Arbury.He believes that the package is a reasonable attempt to bring in the stability required in the markets right now. “If and when the bailout package passes, it will no doubt have a positive impact on multifamily. Even though Fannie Mae and Freddie Mac are currently providing a major share of financing to the multifamily sector, conventional financing is also needed, depending on volume and number of deals being done,” concludes Arbury.Bob Nielsen, vice chairman and secretary of the board of the National Association of Home Builders (NAHB) and a housing developer, similarly supports passage of the financial rescue package. He warned of serious consequences for the economy and multi-housing industry if the package does not pass Congress.”We think this bailout is absolutely critical,” Nielsen, who is also president of Shelter Properties Inc., tells MHN. “At this time, the credit markets are non-operational and frozen. Without a package to get rid of the bad assets [for the banks], the markets could snowball into a housing depression.”