Resuscitating the American Dream

The last few years have been particularly rough on the nation’s housing sector, and few people feel that as sharply as Jerry Howard.

“It’s no secret that our organization reflects our industry, and our industry’s been going through some tough times,” said Howard, who became the chief executive of the National Association of Home Builders more than a decade ago. 

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He held that post when the housing boom looked like it might never end, and when the bubble burst.

The mortgage crisis was central to the 2008 economic collapse, and now Howard and other advocates are pressing to rebuild the housing sector to help spur the current recovery. At the same time, the housing lobby also has to deal with public relations problems that would have seemed unthinkable five years ago.

Both Republicans and Democrats, for example, are taking aim at the struggling mortgage titans Fannie Mae and Freddie Mac, with Howard going so far as to joke that “if Santa Claus had two elves, one named Fannie and one named Freddie, America would be anti-Christmas.”

Some GOP lawmakers have proposed getting the government totally out of the mortgage business. But Howard — and many other policymakers, for that matter — say that while there needs to be a winding down of Fannie Mae and Freddie Mac, there is still plenty of room for the government in the housing finance system. 

“The sins of the past have to be guarded against,” Howard said. “What we think should be done is a housing finance system reinvented that maintains the government guarantee in situations where there could be catastrophic occurrences.”

Moreover, the NAHB, where Howard has worked for more than two decades, has gone through some turmoil of its own in recent years, with scores of staffers heading for the exits. Large builders have also formed a new association, even as they remained members of NAHB.

“But I could never have abandoned it in the tough times and walked away from it,” he said. “I’m enough of an old Boy Scout to want to leave a place in as good or better condition than when I found it.”

Still, Howard knows that it will take a heavy lift to get the housing industry back on solid footing. 

Housing has yet to emerge as a key issue in this year’s election, even as the economy has taken center stage in the campaign. At the same time, policymakers are expected to get little substantive work done on housing and other issues before November’s election. 

But even as he sets up his plan for potential policy battles down the line, Howard remains confident the housing sector will remove the stain of the last few years, brandishing poll results that say a strong majority of voters want tax incentives for homeowners and the government to help those seeking mortgages.

“Nothing is permanent,” Howard told The Hill in a wide-ranging interview at the NAHB offices. “The American people still view homeownership as their best potential long-term investment, as a symbol for their personal success and as one of the most important goals of their lives.”

Howard brings practically a lifetime of experience to the current debate, growing up with a father who was a developer. 

“The way that our members think is exactly the way my dad thought,” Howard told The Hill. “And the topics that they would talk about in our meetings are the same topics we talked about around our dinner table.”

Still, Howard said, it was no sure thing that he would make a career out of housing.

“My dad told me to go to law school because he didn’t want me messing up his business,” he said. 

In his younger days, Howard studied Russian, in the hopes of specializing in international business law.

But Howard said that former President Reagan’s branding of the Soviet Union as an “evil empire” ended those ideas, and he eventually fell into real estate law. 

“Ultimately, I think the apple doesn’t fall far from the tree, whether you intend it to or not,” Howard said. “It came naturally to me. But it wasn’t a conscious decision, really.”

Now, decades later, Howard is dealing with a homebuilding industry facing unprecedented challenges. At their slowest pace in recent years, builders were starting new houses at a pace of fewer than a half million a year. 

That’s down from a pre-bust high of well above 2 million, a figure Howard admits was unsustainable. But the NAHB chief executive says that somewhere between 1.6 million and 1.8 million new houses per year would be a healthy amount, and also a boon to the economy. 

In all, he said, the building of each new home creates three new jobs. And even though millions of homeowners across the country are currently underwater on their mortgages, Howard noted that 70 percent of the country’s foreclosures are crammed into a dozen states. 

With that in mind, the homebuilders association chief believes both media and government officials in Washington and New York have overemphasized foreclosures when discussing the industry’s problems.

“You can say to people, why don’t you buy a foreclosed unit?” Howard said. “Well, if I lived in an area where there are foreclosed units, maybe I’d consider it.”

Howard is also keeping a close eye on officials who show interest in revamping the government backstop in housing and the mortgage interest tax deduction. 

Few in Washington expect those two bulwarks of the housing sector to go completely by the wayside any time soon. But Howard said it’s his job to make sure that’s the case. 

In addition to the harsh opinions held by lawmakers and members of the public regarding Fannie Mae and Freddie Mac, Washington officials have been sniffing around tax reform. The NAHB has noted that President Obama’s own fiscal commission once proposed significantly revamping the mortgage interest deduction. 

Howard, meanwhile, said he cut his teeth in Washington as policymakers worked toward tax reform in 1986 and also watched as officials proceeded to put new special tax breaks back into the code. 

“I don’t think tax reform is as important as protecting the value of citizens’ assets,” Howard said. “I’ve seen that carnival trick before, and I’m not going to play three-card monte with them.”

All in all, not too many observers believe Washington will overhaul the tax code before 2013, as lawmakers and the White House pour their energies into this year’s election.

At the same time, Howard said he has grown frustrated that policymakers are making little headway on the country’s housing problems.

For example, the NAHB chief said his organization disagreed with Edward DeMarco, the acting director of the Federal Housing Finance Agency, who so far has resisted forgiving some mortgage debt to help prevent foreclosures.

“I think there’s a lot of chefs, but I don’t think any of them are cooking,” Howard said. “I think they’re all standing around in the kitchen doing nothing.”