A pair of industry trade organizations representing multifamily housing has criticized the U.S. Department of Housing and Urban Development (HUD) for not keeping pace with the volume of multifamily mortgage applications.
The National Multi Housing Council (NMHC) and National Apartment Association (NAA) stated that the failure by HUD to process multifamily mortgage applications is creating a housing shortage and jeopardizing thousands of jobs related to the construction of new apartment housing.
‘In 2010, new apartment construction set a post-1963 low, at just 97,000 new starts," says Peter Evans, a partner at Chicago-based Moran and Co., who represented NMHC and NAA in testimony submitted before the House Financial Services Committee's Subcommittee on Insurance, Housing and Community Opportunity. "We need to build 300,000 units a year to meet demand, yet we'll start fewer than half that many this year.’
Evans added that demand for apartment financing from the Federal Housing Administration (FHA) has increased more than five-fold, with applications increasing from $2 billion annually to $10 billion. He warned that the federal government cannot delay responding to this situation.
"While there may be an oversupply of single-family housing, the nation could actually see a shortage of multifamily housing as early as 2012," he continues. "The shortage is particularly acute in the area of workforce and affordable housing. The Harvard Joint Center for Housing Studies estimates a nationwide affordable housing shortfall of three million units."
In his testimony, Evans offered suggestions to streamline FHA processing that would still protect the safety and soundness of FHA's multifamily portfolio, including having the FHA instruct field offices to more consistently follow its multifamily accelerated processing guide to expedite transactions.Â
