WASHINGTON (Reuters) - U.S. policymakers need to focus on affordable rental housing, rather than just extend federal homeownership incentives that benefit a limited number of Americans, bank regulator Sheila Bair said on Monday.
Bair, chairman of the Federal Deposit Insurance Corp, said taxpayer subsidies for homeowners are three times the size of all rental subsidies — a trend that has over time helped push housing prices out of the reach of the groups the government is trying to assist.
“Even as we emerge from this crisis, it is worth asking whether federal policy is devoting sufficient emphasis to the expansion of quality, affordable rental housing,” Bair said in remarks to the Housing Association of Non-Profit Developers Annual Meeting.
Bair has been hailed for her early warnings on the subprime housing crisis, and fought for dramatic loan modifications during the financial crisis that has seen millions of Americans’ homes fall into foreclosure.
On Monday, she said the United States needs to “take a hard look” at housing policies that drove the homeownership rate as high as 69 percent. She said that level proved unsustainable, and may never be reached again.
During the subprime mortgage crisis and wider global credit crunch, U.S. home prices declined by about 33 percent.
Bair said loan modifications are beginning to gain steam, but that more than 11 million homeowners still owe more on their homes than they are worth.
“We still have a long way to go until this crisis is behind us,” she said.
The full text of the speech can be found at: here
Reporting by Karey Wutkowski; Editing by Phil Berlowitz