GlobeSt.com: How do you rate your success to date?

Crowley: I would say it's mixed. If you look at absolute numbers, the housing circumstances of the very poor are still in a crisis state. From a federal-policy perspective we've made some important inroads in terms of establishing the programs that bridge the gap between the number of low-income people and the number of housing units. But it's certainly nowhere near enough to stem the loss of units that low-income people can afford, and it doesn't close the gap that still exists.

GlobeSt.com: Does the fear, documented in recent years, of units being converted to market rate still exist?

Crowley: It does. These are projects with contracts that have expired or are expiring and the owners have the option to continue to participate in the program or take their properties to market. On a national basis we've lost upward of 300,000 of the units in the privately owned, publicly assisted stock developed through the Section 8 program and earlier subsidy programs from the '60s and '70s.

GlobeSt.com: In what time frame have you lost the bulk of that housing?

Crowley: It's been dissipating since the early '90s, but Congress has passed some very good legislation to preserve these units. So now, it's really up to the discretion of HUD and how aggressively they implement those programs. But we see much less interest in affordable-housing preservation under the current administration.

GlobeSt.com: In the face of shrinking inventory, how much is the need growing?

Crowley: By our estimate, there are five million more households in the extremely low-income category, people who are at 30% of area median income or less and need affordable housing and don't have it. There's certainly a lot of housing out there, and the administration is quick to point out that the vacancy rates are high in some places. But that doesn't mean that the housing is affordable to people in the lowest end of the spectrum, so there's a mismatch between the cost of units and the people who need them.

And when I talk about 30% of median income, that varies from community to community based on overall income. So in DC, extremely low income is $25,000 a year or less. In some rural places, it could be $12,000 or less.

GlobeSt.com: What exactly would an Affordable Housing Fund do?

Crowley: We anticipate the fund will happen, not without a lot of work, but it will happen. The fund that's in the House bill would direct 5% of Fannie and Freddie's after-tax profit into two funds that they would be required to administer, primarily in the form of grants that would go to eligible entities, primarily non-profit housing organizations, to build new or rehabilitate existing housing. That would benefit people in the extremely low income population. Now the House bill says extremely and very low income so it targets people at 30% and 50% median income. We think it's off target to bring it up to that higher level.

GlobeSt.com: Why?

Crowley: Because the data tell us the shortage is really in the under-30% level. That doesn't mean there is no shortage in certain areas at the higher income, but on a national basis the funds should be targeted very specifically so we can make a dent where there's the most serious problem.

GlobeSt.com: But you're confident of passage?

Crowley: I'm confident that if Congress passes GSE-reform legislation--reform of Fannie and Freddie--then there will be provisions for an affordable housing fund in that legislation. What's holding it up now is not the fund itself but other issues regarding the regulation of the two corporations. The Senate bill has come out of committee, and it doesn't include the fund. The House bill does. There was considerable discussion about adding it on the floor of the Senate. To do that they will have to solve the other regulatory issues, and there's motivation on many fronts for there to be a bill that strengthens the regulation of Fannie and Freddie. There's a desire in Congress and I'm sure Fannie and Freddie wants to know what's expected of them. The desire to regulate has presented us with an opportunity to access more resources for affordable housing. It's an opportunity to gain some ground using dollars that are part of the earnings of these large mortgage companies.

GlobeSt.com: If it is passed, when is the earliest that capital will begin to flow?

Crowley: By the time the bill goes to the floor there will be some adjustments. I think a year or a year-and-a-half out. Right now, there isn't even a consensus as to where the fund should be administered. The major issue holding things up is whether or not Congress has the authority to limit the assets Fannie and Freddie can hold in portfolio. The house bill gives the new regulator the ability to do that for purposes of safety and soundness. In the Senate the Democrats agree, but the Republicans want to go beyond that and impose much more restrictive limits on their portfolio. That's also the position of the White House.

GlobeSt.com: It always seems to me that government doesn't get it, doesn't get the need, regardless of who's in office. Fair?

Crowley: It's true that issues like healthcare and other social issues get a lot more coverage and interest. That seems to be changing with the fact that the affordable-housing problem is affecting more people.

Instant Insights /

Sheila Crowley of Low-Income Housing Coalition

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