New Senate Majority Unlikely to End Inertia on Housing Finance Reform

NEW ORLEANS (November 9, 2014) – Now that Republicans have regained control of the U.S. Senate and increased their majority in the U.S. House of Representatives, the Grand Old Party should be poised to pass sweeping reforms, but polarization and infighting will likely stand in the way of any legislative victories, said political strategists yesterday at the 2014 REALTORS® Conference & Expo.

Mark Halperin and John Heilemann, co-authors of Double Down: Game Change 2012, headlined the Federal Legislative and Political Forum and shared insights and analysis about the new political landscape cast by Tuesday’s midterm elections.

"House Speaker John Boehner's historic majority will be more conservative than any other Republican Congress in the history of the Republic. The polarization of politics is the context of everything going forward," said Heilemann.

Both speakers were skeptical that any major legislation will pass in the next two years, especially when it comes to housing policy, which is a divided issue on Capitol Hill. "There are people in Congress who think there should be no role for the government in the housing market. That makes it really hard to do anything on housing," said Halperin.

Neither President Obama nor the conservative Republicans are going to want to compromise on their key principles, and only time will tell if either will relent. "As of now, President Obama is a spent political force, which is a real turnaround from Obama as a candidate, who was seen as someone with huge possibility. The president is now a more polarizing figure than former Presidents Bill Clinton or George W. Bush," Halperin said.

According to the speakers, none of the president’s large scale reforms are going to be touched in the upcoming lame duck session of Congress. However, at least one key piece of legislation that Realtors® support will likely be considered and passed before the end of the year.

Halperin predicted that the federal Terrorism Risk Insurance Act, which creates the federal backstop that encourages private insurers to make terrorism insurance available and affordable for commercial properties, will be reauthorized before its December 31st expiration date. NAR is a strong proponent of the program, which is vital to commercial real estate and development throughout the country.

The speakers were pessimistic that the new Congress will tackle tax reform or any real estate-related tax provisions, which require a lot of political strength from the sitting president and a deep willingness from both parties to negotiate.

NAR will continue to educate policymakers on both sides of the aisle about the importance of the current federal tax provisions that affect real estate and will remain vigilant in opposing any plan that limits or eliminates the deductibility of mortgage interest.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.