Housing moves into the campaign spotlight

The future of the housing market is finally getting some attention from the presidential campaigns. 

Gene Sperling, a top economic adviser to Democratic nominee Hillary Clinton, on Wednesday said that housing will play an important role in a Clinton administration.

{mosads}”For Hillary Clinton, growing middle class jobs and middle income security is the single lens in which she will judge economic policy,” Sperling said in an address to the National Association of Home Builders (NAHB) at their midyear meeting in Miami.

“There is probably no other sector that creates jobs throughout income levels — from construction jobs to professional and servicing jobs,” he said. 

So far, trade and foreign policy have dominated the debate on the campaign trail, leaving out a broader discussion on housing’s role in the nation’s economic growth. 

Sperling’s remarks come on the eve of a planned speech by Republican nominee Donald Trump to the same group of housing industry leaders on Thursday in Miami.

A looming issue for the next president will be housing finance reform, the last remaining piece from the 2008 financial crisis that needs a long-term solution. 

There have been a couple of efforts in the Senate to move legislation — the Senate Banking Committee approved a bill two years ago — but lawmakers have been unable to get a big enough head of steam across Capitol Hill to pass an overhaul of mortgage giants Fannie Mae and Freddie Mac. 

Sperling called housing finance reform “really tough” and insisted that any legislation must include a government guarantee to protect the 30-year mortgage.

“You need a backstop to ensure the United States of America still has a 30-year fixed mortgage,” Sperling said. “That is something that gives people the opportunity to become home owners in this country.”

Housing experts have said that an overhaul of Fannie and Freddie would free up credit for more buyers and spur broader market growth.

“Our challenge now is to never swing back to where we were but to get to an equilibrium where people who are creditworthy can get the housing they need,” Sperling said.

“This will lead to increased housing starts, construction and affordable housing, which we need in this country,” he said. 

Sperling said Clinton’s tax plan would keep the mortgage interest deduction but cap the marginal rate at which households can take their deductions at 28 percent. 

“So for 98 percent of Americans, the mortgage interest deduction is completely untouched,” he said. 

As president, Clinton would protect the low income housing tax credit, bolster housing construction and provide relief for community banks to compete with their larger counterparts, he said.