Government Affairs Monthly Report12-12-2018
|Council Says No to Six Unrelated People In Multifamily Housing Units
In a move that will likely lead to a new debate on a current ordinance, City Council decided last week that six unrelated people are not considered a family in multifamily housing units such as apartments and condominiums.
A change to the definition in city code was proposed after the city received a complaint of a code violation last year at Steamboat Ski and Resort Corp.'s employee housing, the Ponds, where six people each were living in 30 of the apartment complexs two-bedroom units.
In discussion about changing the definition, familiar issues on both sides of this discussion surfaced. Housing is expensive for seasonal workers throughout the valley, and the multifamily units that hold six family members are an attractive option for people working during ski season. At the same time, neighbors and permanent residents expressed parking, trash removal and noise concerns about so many unrelated people living together. Ultimately, Council decided to reaffirm the current code, and require those violating the ordinance to vacate after ski season.
Steamboat Springs Board of REALTORS® CEO Ulrich Salzgerber was the lone citizen not a resident of the complex to speak in favor of the change. Salzgerber highlighted the fact that the affordable housing issue was not going away any time soon and urged council to consider creative solutions such as this change in order to keep options open for seasonal workers and others in need of lower priced housing.
While this topic is likely to resurface again due to lack of affordable housing options, Council expressed interest in considering revising city code to make the definition of a family more similar between units. The current definition allows three unrelated people in a single-family home and five in a multifamily unit.
Federal News: Proposed Increase to Residential Appraisal Threshold
On Nov, 20, 2018, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively "the Agencies") released a proposed rule that would increase the current threshold for residential real estate transactions requiring an appraisal to $400,000. The current threshold is $250,000.
In lieu of an appraisal, an evaluation would be required that is consistent with safe and sound banking practices. This rule would only affect Federally Related Transactions overseen by the Agencies. Residential real estate transactions covered by the Fair Housing Administration, the U.S. Department of Veterans Affairs, the U.S. Department of Agriculture, Fannie Mae, and Freddie Mac would still be subject to those entities' appraisal requirements.
NAR Meets with Chairman Hensarling on Housing Finance Reform
Recently, NAR legislative staff met with House Financial Services Committee Chairman Jeb Hensarling (R-TX) to discuss his recent housing finance reform discussion draft called the Bipartisan Housing Finance Reform Act of 2018, which is cosponsored by Rep. John Delaney (D-MD).
The proposal directs Ginnie Mae to guarantee mortgage-backed securities (MBS) that are backed by loans with various credit enhancements. In addition to borrowers having more skin in the game, additional credit enhancements must come from Federal Housing Finance Agency (FHFA)-approved private credit enhancers (PCEs). Once appropriate credit enhancements have been made, Ginnie Mae-approved issuers will then be allowed to issue government-backed securities through its platform.
NAR supports many components of the legislation such as an explicit government guarantee, flexibility given to regulators to set standards in the new mortgage finance system, and the use of a Common Securitization Platform (CSP) as the issuance platform for mortgage-backed securities. These provisions will help build a new housing finance system structure that will be more transparent, while providing a countercyclical mechanism to help ensure mortgage credit is available during periods of economic distress.
While these components are a good foundation for a future housing finance market, NAR provided suggestions to the Chairman that would improve the proposal. Among other things, NAR suggested to include language that would require Ginnie Mae to have a dual mandate to safeguard the secondary mortgage market, but also to ensure for a deep, liquid, affordable, and national mortgage market. Finally, NAR committed to continue to work with the Chairman to create a mortgage market that provides access to affordable mortgage credit for all creditworthy Americans, while ensuring taxpayers are properly protected.