Holly Chisa

By Holly Chisa, UTA Washington Lobbyist, HPC Advocacy

As part of the on-going discussions around foreclosure law, issues around housing affordability are often raised. The home market is stabilizing, home values are increasing, and now, instead of arguments about how to keep people in their homes, we hear questions about how to get people into affordable housing in the first place.

With the shift to providing affordable housing, as opposed to “managing” (read ending) foreclosures, advocates are focusing on loan origination, rental agreements, rent controls, and, recently, loan rates for mobile homes. As home prices rise and there are shortages in both the rental and retail housing markets, people focus concerns to whether individuals can afford to live in urban areas, or afford their first home. We saw these issues before the housing market collapse in the 2000’s. In the urban markets in Washington State, there were closed bidding wars over available homes, and prices were extraordinarily high. Rental pricing was also high to compete with the homeowner market. It was during this time that some lenders began using mortgage tools that encouraged potential buyers to borrow money they may not have had the resources to afford. Advocates are concerned this pattern will emerge again as the housing market gets hot again.

And what do these efforts look like? The City of Seattle continues to debate before its Council whether high density housing and micro-apartments should be allowed to be built in urban neighborhoods. Community groups continue to advocate for eminent domain (as we’ve addressed in previous columns.) As part of the minimum wage debate, individuals are also pushing for the ability to pass a local ordinances for rent control. Housing advocates would like to repeal a preemption in state law that prevents rent control ordinances from being passed by local governments. Since Seattle has already begun the process of increasing its minimum wage rate to $15 an hour, there is now a belief that, even with that wage increase, affordable housing will remain elusive. Increasing wages means increasing rents and home prices, which, again, puts people at a disadvantage.

Couple with this an in-depth article from the Seattle Times on lending for mobile homes by Clayton Homes. The articles, published in April of 2015, debate the integrated relationship of Clayton Homes, and its ownership of the manufacturers, suppliers, and lenders of mobile homes. Accusations in the store are made about kick-backs to retailers from lenders if they’re able to get buyers to sign for these “predatory loans.” Future articles highlight attempts by Congress in Washington, D.C., to further deregulate financial industry regulations, including provisions relating to mobile homes. The article from May, 2015, describes the “looser” changes in mobile home lending as a “boon for [the] Buffet company.”

For trustees, the ever-changing real estate market means an ever-changing dynamic in property laws. If rental properties are required to follow a City-structured pricing schematic, it may be difficult for property owners to maintain their own payments, causing more foreclosures in the market. Mandatory housing pricing and requirements for density restrict flexibility in the marketplace, and could adversely affect the housing market in Washington. The United Trustees Association continues to monitor legislation in Washington State not just for laws specific to foreclosure and the Deed of Trust Act, but other legislation that might inadvertently harm or overregulate the housing market as a whole. While UTA may not take a formal position on these bills, we do monitor their potential impact to the real estate market to keep our members informed of changes to the law. This is especially important when local governments make changes, which can affect only portions of the market. UTA will continue to watch state agencies and local governments as they consider policies that may inadvertently affect the stabilizing housing market.