The Good, the Bad, and the Ugly: Housing Policy and Washington Politics

Like the Clint Eastwood movie, when it came to housing policy in 2011, Washington’s actions can be characterized as the good, the bad, and the ugly.

The good

While Congress didn’t take any dramatic steps to help the housing market, it took some baby steps. For example, it decided to reauthorize (temporarily) the National Flood Insurance Program (NFIP), a government program that ensures home owners in 20,000 communities across the country can get access to flood insurance. The Congress also finally agreed with the NATIONAL ASSOCIATION OF REALTORS® that keeping in place higher Federal Housing Administration (FHA) loan limits was good policy for home buyers. 

The bad

Many really bad ideas are still floating around Washington, and they haven’t been completely killed off yet. Some members of Congress are still toying around with the idea of getting rid of the tax deduction for home mortgage interest, a sure way to cause even more confusion in the housing market. Other members of Congress believe that getting rid of Fannie Mae and Freddie Mac would be good policy, but that too could cause a further crash in the housing market. 

The ugly

The Presidential debates have held the interest of the media and of the punditocracy. And while they have been entertaining, they haven’t been particularly informative when it comes to the issue of housing policy. What would these Presidential candidates do about the housing market? What can they do? Fixing the mess may be difficult, but that doesn’t mean that it shouldn’t be discussed, because, let’s face it, we aren’t going to get our economy back on track until we get the housing market back on track. 

All in all, Washington has avoided making some really bad decisions and taken some decent steps in the right direction when it comes to our nation’s real estate market. But all too often, it decided to punt rather than move the ball forward in any dramatic fashion. The economy won’t get better until the real estate market gets better. Time’s a-wasting, Washington.