Pro-housing and pro-business candidates fared well in last Tuesday’s elections, leading building industry associations to claim a qualified victory for construction interests.
Among industry-backed U.S. House and Senate candidates, 95% of those supported by the National Association of Homebuilders and 11 of the 13 contenders backed by the National Association of Realtors won their races last week.
In an analysis of the midterm elections’ potential impact on housing, Jim Tobin, senior vice president of government affairs for the National Association of Home Builders, said the housing industry “remains at the forefront of public policy debates in Washington.”
He pointed to housing’s hot-button issues—housing finance reform, credit availability, the industry’s labor shortage and regulatory policies—as the focus of the industry’s legislative effort as the new Congress is seated in January.
Pro-housing winners
NAHB disbursed more than $2.4 million to support 371 pro-housing candidates running for the House and Senate. The the Realtors made more than $10 million in independent expenditures this election cycle, mostly in support of Republican incumbents, up from $3.6 million in 2012.
In local and state races, 77% of the so-called Realtor Party candidates won election.
NAR has said it will push for continued homebuyer access to the mortgage interest deduction and FHA-backed mortgages. It also opposes a shutdown of Fannie Mae and Freddie Mac, at least for now.
Fannie and Freddie
A Republican Senate might look kindly on congressional efforts to wind down Fannie Mae and Freddie Mac, but it’s unlikely conservatives will favor the creation of a new government entity to take their place.
HousingWire.com’s senior financial reporter, Trey Garrison, calls the bipartisan measure known as Johnson-Crapo—named for its Senate sponsors Tim Johnson, D–SD, and Mike Crapo, R–ID, “dead in the water,” as it would replace the government-sponsored enterprises (GSEs) with a Federal Mortgage Insurance Corp., which would regulate the mortgage industry.
Still, the Senate’s new Republican majority might go for the House-backed PATH Act, the more fiscally conservative proposal for GSE reform. Still, Garrison predicts, President Obama is likely to veto any measure that shuts down Fannie and Freddie.
Garrison’s take on the Senate’s ability to override such a veto: “May as well pan for gold in your bathtub.”
Infrastructure impasse
Construction industry officials have said they hope Democrats and Republicans in the new Congress will work together to pass a multiple-year highway-transit bill and other infrastructure legislation.
The day after the election, Obama called for bipartisan support of public works projects. "Traditionally, both parties have been for creating jobs rebuilding our infrastructure—our roads, bridges, ports, waterways,” the president said. “I think we can hone in on a way to pay for it through tax reform that closes loopholes and make it more attractive for companies to create jobs here in the United States."
Geoff Burr, vice president of government affairs for Associated Builders and Contractors, said he hopes that’s true: "We look forward to working with the new Republican majority in the Senate and are hopeful that we now have a Congress that will rise above the gridlock we have seen in the past few years and work with industry in crafting pro-growth legislation that will allow our members to be successful in our business and create jobs in their communities."
And Steve Hall, vice president of government affairs for the American Council of Engineering Companies, told the Engineering News-Record he believes both sides will breathe “new life” into energy construction with support of the proposed Keystone XL pipeline from Canada to Nebraska and energy exploration.
Wall Street investors agreed. The day after the election, stocks in energy companies “had outsized moves,” Reuters reported.
Construction groups also back a six-year surface-transportation bill, which must be approved by May 31 because a short-term highway-transit extension runs out then.
More gridlock ahead
Even with Republican majorities in both Houses of Congress, nobody is predicting a smooth ride for legislation backed by either party.
“For NAHB, the great hope is President Obama and the GOP Congress will reach across the aisle to work productively on issues of importance to the housing industry,” the NAHB’s Tobin said in his analysis. He noted that the NAHB has “a long, successful tradition of working with both political parties to advance their policy goals.”