3 Ways to Get Housing Recovery in Virginia
VARbuzz brings an important Op/Ed from the Wall Street Journal to our attention. Author Neal Lipschutz starts by saying “In the end, we can’t dodge housing” and ends with “It’s time to stop trying to work around housing, and take it on.”
- make refinancing easier for people current on their mortgages to take advantage of the historically low 4% rate.
- take a hard look at standards for initial mortgage qualification and determine if there’s a middle ground that would allow more to qualify without excessive risk to lenders.
These are good ideas. But more can be done, especially in Virginia:
- Reduce market barriers to housing: the weak economy & stagnant wages means higher demand for affordable housing in Virginia. An attitude of “Not in My Backyard” (NIMBY) has kept a wide range of housing options for all different demographics from becoming reality in many localities. Discrimination against affordable housing is a significant market barrier preventing Virginia’s housing market from robust recovery. Eliminating discrimination against developments that include affordable housing will address these problems of over-regulation.
- Promoting Short Sales: Virginia’s homeowners who get rejected for loan modifications and sent to foreclosure sale only have 14 days to affect a short sale. This is an impossible time frame (some trustees provide longer notice periods, but under the law they are only required to give a 14 day notice. Most trustees give only a 14 day notice because they are under pressure from the mortgage company to move the property). Foreclosure trustees should be required by law to delay a foreclosure sale if contacted by a licensed Realtor with a pending short sale under contract. Current Virginia law already gives trustees the discretion to do this, but the foreclosure process in Virginia is so fast that many short sales lose the race to foreclosures. Requiring Trustees to delay the sale is a necessity to make sure that pending short sales always come before foreclosure.
- Create a Virginia Housing Trust Fund: this is an idea with a lot of bi-partisan support. Virginia created one several years ago but stopped funding it. Now is the perfect time to bring it back. An Economic study found that a $10 million investment per year for 10 years in the Va Housing Trust Fund would have a $1 billion impact on the economy and create 5,893 jobs in Virginia.
Virginia Gov. Bob McDonnell has been a real leader by recognizing early in his administration that housing was the key to economic recovery. Almost a year ago he identified local barriers to affordable housing and a Housing Trust Fund as two key priorities in his Housing Policy Framework.
If Virginia wants robust economic recovery, these three items must be passed at the 2012 Virginia General Assembly session that begins January 11 in Richmond. Neal summed it up best in his op/ed: “It’s time to stop trying to work around housing, and take it on.”