With the growing sentiment against government involvement in single-family housing finance, should the government also move out of multifamily housing finance? On Wednesday, the American Enterprise Institute hosted a panel of multifamily finance experts to discuss the research of panelists Thomas White and Charlie S. Wilkins about the future of multifamily housing finance reform. White, previously of Fannie Mae and the Federal Housing Administration, emphasized that the research is a work in progress, with the goal being to develop a process by which the housing finance community can have a healthy private-capital marketplace for multifamily housing. Wilkins, an adviser to the US Department of Housing and Urban Development, made a strong case against government finance intervention by pointing out that it takes away too much risk from the marketplace. Some risk is good for proper decision making, he contended, as is some difficulty in borrowing money in the capital markets. He went on to detail how federal intervention distorts capital flows through loan guarantees. In response to the research, John C. Weicher of the Hudson Institute pointed out how the loan guarantee bias for large (50+ unit), multifamily housing creates specific resource-sapping contracts that generally reduce the amount of new large, multifamily contracts. Thomas Watt, member of the board of directors of Enterprise Community Investments, added that the underwriting standards for low-income, multifamily housing and the public policy that stems from it should be examined, as high-quality large, multifamily housing cannot exist without excessive government subsidies.
Over the decades, single- and multifamily housing have vied for government attention, often with disastrous consequences for one or both. While growing consensus is that the government must reduce its involvement in single-family finance, many argue for continued or even expanded involvement in multifamily finance. And rental housing is gaining prominence in the housing reform debate as it becomes more obvious that ownership is not for everyone. Supporters of a government role plead for one form or another of continuing government guarantees of private multifamily mortgage loans, but is this really necessary? And does government involvement help lower rents for low- and moderate-income households? At this event, Thomas White and Charlie S. Wilkins, drawing on their long involvement in multifamily finance, will present their prescription for the future of multifamily housing finance reform, and John C. Weicher and Thomas Watts will draw from their own deep wells of experience to comment on the presentation.