White House announces Housing Action Plan
This week President Joe Biden announced a five-year plan to increase the supply of housing nationwide and make housing more affordable for both renters and homebuyers. The whole-of-government approach calls for:
rewarding jurisdictions that make their zoning and land-use policies more housing-friendly
expanding financing options for manufactured housing, accessory dwelling units (ADUs), two- to four-unit properties and other multifamily buildings
expanding existing programs that support multifamily development and preservation
supporting the construction of more homes in 2022 than in any year since 2006
Treasury will finalize its proposed rule on “income averaging” for the low-income housing tax credit (LIHTC) by September. The Department of Transportation is updating its guidelines to give preference to projects that incorporate affordable housing. The Department of Commerce recently reduced tariffs on softwood lumber shipments from Canada. USDA is promoting its Construction to Permanent program, which allows approved lenders and homebuilders to close both construction and permanent loans at the same time. The Department of Energy is providing funds for 30 next-generation retrofit projects that use new housing technologies. Freddie Mac is conducting a feasibility assessment on supporting purchases of personal property manufactured housing loans, subject to FHFA approval.
The Administration is also calling on Congress to approve additional tax credits for housing construction and rehabilitation, and Housing Supply Fund financing to support the construction of 500,000 affordable housing units.
HUD and the National Association of Homebuilders (NAHB) will host an Innovative Housing Showcase on the National Mall next month, with support from the Manufactured Housing Institute, the National Building Museum, and the National Multifamily Housing Council. The showcase will highlight new building technologies and include full-sized prototype homes.
Treasury’s 2022 National Illicit Finance Strategy focuses on loopholes
The US Department of the Treasury released its 2022 National Strategy for Combating Terrorist and Other Illicit Financing this week, identifying four priorities for addressing the most significant threats. First among these is closing the legal and regulatory gaps in the US anti-money laundering/counter the financing of terrorism (AML/CFT) framework, which allow bad actors access to the US financial system through shell companies and all-cash real estate purchases. Treasury said it would also provide clear compliance guidance to make AML/CFT regulations more effective; enhance cooperation among law enforcement, other government agencies, and international partners; and use technology to mitigate risk and stay ahead of the new avenues for abuse presented by digital assets and other new financial products, services, and activities.
Senate Banking welcomes Fed, SEC nominees
Yesterday’s confirmation hearing for Michael Barr, nominated to be the Federal Reserve Board’s Vice Chair for Supervision, and Jaime Lizárraga and Mark Toshiro Uyeda to be Commissioners of the Securities and Exchange Commission, was considerably warmer than the hearing for the previous Fed nominee, Sarah Bloom Raskin. Republican Senators asked Barr about his public statements opposing S. 2155, the 2018 legislation that moderated the regulatory requirements imposed by the Dodd-Frank Act. Barr said that some of his comments at the time had been “immoderate,” and that a managers’ amendment had addressed his most serious concerns. He reiterated several times that he supports a tiered regulatory approach that minimizes regulatory burden on community banks, and that he believes the industry’s current capital and liquidity are strong.
Airports can generate their own electricity, but need infrastructure for alternative fuels
The House Transportation & Infrastructure Subcommittee on Aviation held a short but information-packed hearing on Tuesday to get testimony about how the nation’s airports are addressing climate change. Panel members heard, among other things, about how Pittsburgh International Airport had built its own microgrid on the airport campus, generating enough electricity to not only operate the airport, but also sell to the main local grid. Witnesses representing three airports (Pittsburgh, Dallas-Fort Worth, and Portland, OR), Alaska Airlines, and the General Aviation Manufacturers Association (GAMA) agreed on the need to transition to synthetic aviation fuels (SAFs) or other energy sources, such as hydrogen cells, in order to reduce carbon emissions. SAFs remain prohibitively expensive, however, and airports have no pipelines or storage to make these fuels available in the amounts necessary to fuel commercial airliners. Legislators on both sides of the aisle called for scaling up facilities and infrastructure for production, storage, and distribution of SAFs.
House Financial Services Committee approves eight bills
Over two days of markup, the House Committee on Financial Services approved eight bills this week, most of them on party-line votes. Legislation to set a time frame for the production of Bank Secrecy Act, reduce the CDFI Bond Guarantee Program threshold from $100 million to $25 million, and make HUD’s Continuum of Care funds available to homeless service providers in rural areas passed by voice vote. Republicans objected to HR 7022, the Strengthening Cybersecurity for the Financial Sector Act of 2022, which would reauthorize and make permanent the NCUA’s authority to examine third-party vendors of credit unions, and would extend similar authority to the Federal Housing Finance Agency (FHFA) for third-party vendors of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
Energy, resilience improvements will lower housing costs, witnesses tell Senate Banking
Approximately 20 percent of US greenhouse gas emissions come from residential buildings, so Senate Banking Committee Chairman Sherrod Brown held a hearing this week to discuss whether and how the federal government should support weatherization and other resilience programs for affordable housing units. Witnesses for the Green & Healthy Homes Initiatives and Enterprise Community Partners emphasized the benefits of these improvements to residents’ health and housing stability as well as their monthly budgets, while a witness from the Heritage Foundation’s Center for Energy, Climate, and Environment said that federally funded weatherization programs and efficiency mandates had “underwhelming” results and a history of waste, fraud, and abuse.
Confirmations, Nominations, Departures
We join our friends at the Conference of State Bank Supervisors (CSBS) in mourning the loss of its President & CEO, John W. Ryan, who died unexpectedly on Monday. John had headed the state financial regulatory association since 2011. He was a former colleague and good friend to some of us in the Washington office, and his death leaves a void not easily filled. James M. Cooper, CSBS’s Executive Vice President for Policy and Supervision, is leading the organization on an acting basis.
The Week Ahead
Tuesday at 12:00 pm House Financial Services Subcommittee on Diversity and Inclusion holds a hearing on “Diversity Includes Disability: Exploring Inequities in Financial Services for Persons with Disabilities, Including Those Newly Disabled Due to Long-Term COVID.”
Wednesday at 12:00 pm House Financial Services Subcommittee on Housing, Community Development, and Insurance holds a hearing on “Reauthorization and Reform of the National Flood Insurance Program.”
Wednesday at 1:00 pm Senate Appropriations Subcommittee on Financial Services and General Government holds a hearing on the proposed FY 2023 budget for Treasury’s Office of Terrorism and Financial Intelligence and the Financial Crimes Enforcement Network (FinCEN).
Wednesday at 2:30 pm Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Examining the US Department of Agriculture’s Rural Housing Service.”
Wednesday at 3:00 pm Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness holds a hearing on “Supply Chain Resiliency: Alleviating Backlogs and Strengthening Long-Term Security.”
Thursday at 11:00 am House Committee on the Budget holds a hearing on “The Congressional Budget Office’s Budget and Economic Outlook.”
Thursday at 12:00 pm House Committee on Financial Services holds a hearing on “Digital Assets and the Future of Finance: Examining the Benefits and Risks of a US Central Bank Digital Currency.”
Thursday at 1:30 pm House Appropriations Subcommittee on Transportation, Housing & Urban Development, and Related Agencies holds a hearing on “Manufactured Housing: Supporting America’s Largest Unsubsidized Affordable Housing Stock.”
The Ellis Insight - Jim Ellis on political news
PRIMARIES - MAY 17 RESULTS
Idaho: Gov. Brad Little won his Republican re-nomination contest against Lt. Gov. Janice McGeachin with a 53-32% margin on Tuesday night. Former President Donald Trump long ago endorsed Ms. McGeachin, and this represents one of his few losses among those he supports. Gov. Little is now well positioned to easily win a second term in the general election.
Rep. Mike Simpson (R-Idaho Falls) won a convincing primary battle against three opponents, most specifically Bryan Smith, who also challenged him in 2014. Rep. Simpson defeated his principal Republican challenger by 22 percentage points and becomes the prohibitive favorite for re-election in November.
Kentucky: Sen. Rand Paul (R) won a landslide 86% re-nomination as expected, and former state Rep. Charles Booker took the Democratic nomination, also as predicted. He now advances to oppose Sen. Paul in the general election. The two-term incumbent remains a heavy favorite in November.
North Carolina: As predicted, US Rep. Ted Budd (R-Advance) defeated former North Carolina Governor Pat McCrory to win the US Senate nomination and won 99 of the state’s 100 counties. Former US Rep. Mark Walker and author Marjorie Eastman finished third and fourth. The general election is now set, as Rep. Budd advances to face former state Supreme Court Chief Justice Cheri Beasley, who became a consensus Democratic candidate. The Tar Heel contest will be one of the most important Senate races in the country.
US Rep. Madison Cawthorn (R-Hendersonville) lost his re-nomination campaign to state Sen. Chuck Edwards (R-Hendersonville). Rep. Cawthorn made many mistakes in his lone congressional term after winning the seat in 2020 at age 25. He then became the subject of a barrage of negative advertising at the end of the race, and while he raised over $3.6 million, he spent poorly and was left with little to defend himself during the crucial time.
In a field of eight candidates, incumbent Cawthorn was only able to capture 32% of the vote, losing to Sen. Edwards’ 33% total. North Carolina is a runoff state, but with only a 30% victory threshold. Therefore, Mr. Edwards wins the party nomination and will be favored in November over the new Democratic nominee, Buncombe County Commissioner Jasmine Beach-Ferrara.
Oregon: A Democratic incumbent likely to lose re-nomination is Oregon’s Kurt Schrader (D-Canby). He trails former city manager Jamie McLeod-Skinner 60-40%, but almost half the vote is still outstanding under Oregon’s all-mail voting system. The large margin appears enough for the challenger to replace Rep. Schrader, a seven-term congressional veteran, as the party’s nominee but this situation will become clearer once the preponderance of outstanding votes are counted.
Pennsylvania: The Pennsylvania Senate Republican race is still too close to call, as television Doctor Mehmet Oz and former hedge fund CEO David McCormick are locked in a battle separated by less than two-tenths of a percentage point. It is difficult to tell how many votes remain uncounted because the state will allow ballots postmarked on Election Day to be received in the coming days. It will be some time before we know the outcome, but Dr. Oz has a lead of just over 1,000 votes from the more than 1.34 million votes cast and counting. Pennsylvania election law guarantees an automatic recount if the margin is within .5%. Mr. McCormick claims the remaining mail votes will hand him the victory.
As expected, the Pennsylvania Democrats nominated Lt. Gov. John Fetterman, who lies in a hospital recovering from a recent stroke that occurred from a blood clot in his heart. Mr. Fetterman, who underwent a pacemaker procedure, is expected to make a full recovery but will be sidelined for some time.
In the election, he easily defeated US Rep. Conor Lamb (D-Pittsburgh) and state Rep. Malcolm Kenyatta (D-Philadelphia) with a 59-26-10% landslide victory margin. He won all of the state’s 67 counties in a turnout of more than 1.17 million voters. Surprisingly, Democratic turnout dropped below that of Republicans for the first time in decades. This, despite the party’s 45.8 to 35.9% voter registration advantage.
SENATE
Alabama: The Cygnal group’s new Alabama Senate survey for two media outlets (5/15-16; 634 AL likely Republican primary voters) again finds Business Council of Alabama former President Katie Britt claiming first place in next Tuesday’s Republican primary but with only 31%, while Rep. Mo Brooks (R-Huntsville), and retired “Black Hawk Down” pilot Mike Durant closely following with 29 and 24%, respectively. Assuming no one receives majority support, the top two finishers will advance to a June 21st secondary runoff election. The Republican nominee becomes a lock to succeed retiring Sen. Richard Shelby (R).
Missouri: Former Governor Eric Greitens (R), who was forced to resign from office due to a sex scandal and is now dealing with abuse accusations from his ex-wife, has catapulted back into the lead according to a new Survey USA poll. The study (5/11-15; 1,412 MO likely general election voters; 642 MO likely Republican primary voters; 500 MO likely Democratic primary voters; online) projects Mr. Greitens to a 26-17-11% lead over Attorney General Eric Schmitt and US Rep. Vicky Hartzler (R-Harrisonville/Columbia).
The S-USA poll is a significant change from previous polling and is in direct conflict with the latest Remington Research Group survey taken within the same period (5/11-12; 945 MO likely Republican primary voters; interactive voice response system). These ballot test results find AG Schmitt with a 29% lead over Rep. Hartzler’s 23%, while Mr. Greitens trails with 21%. The Missouri primary is August 2nd.
HOUSE
FL-27: Miami City Commissioner Ken Russell (D) released the results of his internal poll that was conducted back in April (4/18-21; 350 FL-27 likely general election voters). The totals show him within two points of freshman Rep. Maria Elvira Salazar (R-Miami), 43-41%. If the bounced Florida redistricting map is restored in the upper level courts, as many believe will happen, the new 27th plays three points better for Rep. Salazar, though it would still be rated as tipping toward the Democrats by one percentage point.
MI-13: Target Insyght completed a poll of Detroit’s open new 13th District (5/3-5; 600 MI-13 likely Democratic primary voters; live interview) and finds another political contest that is tight among several candidates.
Eleven contenders are in the Democratic field, but only three enter double digits. Former Detroit City Councilwoman Sharon McPhail leads the group at 20%, John Conyers III, son of former 52-year congressional veteran John Conyers, is second with 15%, and state Rep. Shri Thanedar (D-Detroit) trails with 12%. The Michigan primary is August 2nd. The seat is open after Rep. Brenda Lawrence (D-Southfield) announced her retirement and Rep. Rashida Tlaib (D-Detroit) decided to seek re-election in District 12.
NY-10: The revised New York congressional map has not yet received final judicial approval, but candidates are starting to make moves in anticipation of this being the active 2022 district plan. Because the map pairs NYC Democratic incumbents Carolyn Maloney and Jerrold Nadler, another safe Democratic open seat was created adjacent to the hotly contested 12th CD.
The new 10th District will be decided in the Democratic primary. Former New York City Mayor Bill de Blasio announced his congressional candidacy, but so did state Senator Brad Holyman (D-NYC). Assuming the map is approved, this will be a hotly contested primary election (Aug 23) that should attract national attention.
TN-5: Before the early April filing deadline, the Tennessee Republican Party adopted new candidate qualification rules that included past voting history requirements. The new standard requires that all potential GOP office seekers must have voted in the last three statewide elections. Thus, a trio of filed candidates in the new 5th Congressional District were disqualified because they recently moved into the state. The three are former State Department spokeswoman Morgan Ortagus, who former President Donald Trump was supporting, business owner Baxter Lee, and video producer Robby Starbuck.
REDISTRICTING
Kansas: In April, a Kansas district court disqualified the legislature’s congressional map as a partisan gerrymander. Gov. Laura Kelly (D) originally vetoed the map, but the legislature was able to override her action with 2/3 support in both houses. Now, the Kansas state Supreme Court has overturned the lower court ruling, meaning the original map that puts the state’s 3rd District, in and around Kansas City, into competitive status is back for the 2022 cycle. Two-term Rep. Sharice Davids (D-Roeland Park) currently represents the district. This seat will again become a 2022 Republican conversion target.
Missouri: Gov. Mike Parson (R) signed the legislation enacting the new Missouri congressional districts yesterday, meaning that New Hampshire remains the only state that has not completed the re-mapping process.
The Missouri map is largely an extension of the current eight-district plan and will likely continue to send six Republicans and two Democrats to Washington. Rep. Ann Wagner’s (R-Ballwin) 2nd District becomes more Republican, thus stabilizing her seat. Interestingly, the legislature did not change the candidate filing deadline, so no new individuals can enter the congressional races even though the district lines are somewhat different. Missouri candidates originally filed for the 2022 election on March 29th.
New York: The judge presiding over the congressional and state Senate map re-draws is expected to make a final ruling on Friday. The special master’s map improves the political situation for Republicans, giving them at least one more seat than the Democratic draw, but putting possibly as many as ten of the 26 seats into potential competition.
The map pairs two sets of Democratic incumbents. In New York City, Reps. Jerrold Nadler and Carolyn Maloney are placed in one district. Both said they oppose each other. The new district contains 61% of Ms. Maloney’s district and 39% of Mr. Nadler’s. It is safely Democratic in the general election.
Rep. Mondaire Jones (D-Westchester County) finds himself having to choose a Democratic pairing either against Reps. Sean Patrick Maloney (D-Cold Spring) or Jamaal Bowman (D-Yonkers), or possibly running in an open 18th District that is relatively far from his current CD. If this map is adopted, we will see a much different New York election cycle than what was originally intended.
GOVERNOR
Minnesota: Minnesota Republicans met in their state nominating endorsement convention and chose, on the sixth ballot, former state Sen. Scott Jensen as their official party candidate. Former Attorney General nominee Doug Wardlow announced that he will enter the August 9th Republican primary, and others may also join the candidate field. The eventual GOP gubernatorial nominee will then challenge Gov. Tim Walz (D). The Governor’s favorability index is an anemic 44:41% positive to negative.
Wisconsin: Democratic pollster Public Policy Polling surveyed the Wisconsin Republican gubernatorial primary and produced results not found in other polls. The study (5/9-10; 675 WI likely Republican primary voters) projected construction company executive and 2004 US Senate nominee Tim Michels taking a small lead over former Lt. Gov. Rebecca Kleefisch. This is the first poll finding anyone but Ms. Kleefisch claiming the top position. The ballot test gave Mr. Michels a 27-26% edge, with businessman Kevin Nicholson trailing well behind in third place with 9% preference. The Milwaukee Works, Inc. organization released the ballot test portion of the PPP survey.