Gene Sperling, a top economic advisor to Democratic presidential candidate Hillary Clinton recently said that U.S. housing will play an important role in a Clinton administration.
"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) Board of Directors at their Midyear Meeting in Miami. "What better helps the middle class than housing? Housing creates jobs in the United States. There is probably no other sector that creates jobs throughout income levels - from construction jobs to professional and servicing jobs."
Noting that the credit pendulum has swung too tight in the aftermath of the Great Recession, Sperling cited a study from the Urban Institute that compared credit availability during the pre-crisis levels to the standards of today. The study found that 5 million fewer home loans have been issued as a result of current tight lending standards.
"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," said Sperling. "This will lead to increased housing starts, construction and affordable housing, which we need in this country."
Sperling noted that the issue of housing finance reform is "really tough," but stipulated that a government backstop is essential to protect the 30-year mortgage.
"You need a backstop to ensure the United States of America still has a 30-year fixed mortgage," said Sperling. "That is something that gives people the opportunity to become home owners in this country."
If Clinton is elected president, Sperling said she will:
Defend and expand the Low Income Housing Tax Credit.
Encourage communities to implement land use strategies that make it easier to build affordable rental housing near good jobs by increasing funding for infrastructure banks and competitive grant programs.
Support common sense relief for community banks and make sure that any reforms level the playing field so that Wall Street banks do not have any advantages over community lenders.
Focus on a major infrastructure plan in which "she sees construction and housing as part of that larger infrastructure."
Regarding the mortgage interest deduction, Sperling said that Clinton's tax plan would retain 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," said Sperling.