articles about “Housing Policy”
Better Off Than 4 Years Ago? Voters Didn’t Care
Obama got less, not more, of the vote in 2012 relative to 2008 in metro areas where unemployment fell and home prices rose during his first term.
(After publishing this post, we got great feedback and decided to do a more technical and detailed follow-up, which is here — JDK.)
Why did Obama win? Throughout the campaign and in exit polls, voters said the economy was their #1 issue. But election data shows that voters did not reward the President in markets where the jobs and housing recoveries are strongest.
How Obama Fared In 2012 Versus 2008
To see how the local housing and jobs recoveries affected the election, let’s first compare Obama’s margin in 2008 with Obama’s margin in 2012, using county-level election results compiled by the U.S. Election Atlas. Nationally, the latest count shows that Obama won 50.6% of the popular vote in 2012 compared to 47.8% for Romney – a margin of 2.7% (the numbers don’t add up due to rounding). In 2008, Obama won 52.9% versus 45.7% for McCain – a margin of 7.3%. Nationally, therefore, Obama’s margin fell from 7.3% in 2008 to 2.7% in 2012 – a drop of 4.5 percentage points.
In general, in metro areas where voters favored Obama in 2008, they favored him again in 2012. (The correlation between Obama’s margin in 2008 and Obama’s margin in 2012 across metro areas was 0.99.) But Obama’s margin grew in some metros between 2008 and 2012 while falling in most metros. Comparing the presidential votes in 2008 and 2012 among the 100 largest metros, Obama’s margin increased most in Miami and New Orleans. His margin also increased in New York and the upstate metros of Syracuse and Albany.
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Where Obama’s Margin Increased the Most |
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| # | U.S. Metro |
Change in Obama’s margin, 2012 vs 2008 |
Obama’s margin vs Romney, 2012 |
Obama’s margin vs McCain, 2008 |
| 1 | Miami, FL |
7.6 |
23.7 |
16.1 |
| 2 | New Orleans, LA |
6.1 |
-0.1 |
-6.2 |
| 3 | New York, NY-NJ |
2.4 |
48.3 |
45.9 |
| 4 | Baton Rouge, LA |
1.8 |
-12.4 |
-14.2 |
| 5 | Edison-New Brunswick, NJ |
1.5 |
3.1 |
1.6 |
| 6 | Syracuse, NY |
1.5 |
16.9 |
15.4 |
| 7 | San Jose, CA |
1.0 |
41.3 |
40.4 |
| 8 | Albany, NY |
0.9 |
15.5 |
14.6 |
| 9 | Fort Lauderdale, FL |
0.2 |
34.9 |
34.7 |
| 10 | Columbus, OH |
0.2 |
6.1 |
5.9 |
| Among 100 largest metros. | ||||
In the other direction, Obama did worse relative to his Republican challengers in 2012 than in 2008 in most metros – and more than 10 points worse in Salt Lake City, Indianapolis, and Lake County – Kenosha County (just north of Chicago).
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Where Obama’s Margin Decreased the Most |
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| # | U.S. Metro |
Change in Obama’s margin, 2012 vs 2008 |
Obama’s margin vs Romney, 2012 |
Obama’s margin vs McCain, 2008 |
| 1 | Salt Lake City, UT |
-19.5 |
-20.1 |
-0.6 |
| 2 | Indianapolis, IN |
-10.5 |
-8.0 |
2.5 |
| 3 | Lake County-Kenosha County, IL-WI |
-10.3 |
9.0 |
19.3 |
| 4 | St. Louis, MO-IL |
-9.4 |
6.6 |
16.0 |
| 5 | Grand Rapids, MI |
-8.5 |
-9.6 |
-1.1 |
| 6 | Kansas City, MO-KS |
-8.3 |
-3.1 |
5.2 |
| 7 | Omaha, NE-IA |
-8.3 |
-10.9 |
-2.6 |
| 8 | Austin, TX |
-7.0 |
7.1 |
14.1 |
| 9 | Ventura County, CA |
-6.9 |
5.3 |
12.2 |
| 10 | Allentown, PA-NJ |
-6.7 |
2.6 |
9.3 |
| Among 100 largest metros. | ||||
What Obama’s Re-Election Means for Housing
Refinancing, new mortgage regulations, and the mortgage interest deduction all won on Tuesday. But the best shot at more principal reductions might have been lost.
Throughout the 2012 presidential campaign, both candidates were short on specifics about their housing policy, to put it very kindly. They ignored housing in the debates and acted as if the housing crisis were over. Neither their actions nor their policy statements gave a clear idea of what they might do about housing. But what the candidates DIDN’T do or say helps draw out the differences between what housing policy will look like during Obama’s second term and what housing policy would have looked like with a Romney administration. Here’s what Obama’s re-election means for housing:
1. The refinancing push continues. The Obama Administration has made it easier for homeowners to refinance at today’s low mortgage rates and plans to make refinancing available to even more borrowers. Refinancing is economic stimulus since it gives homeowners with mortgages more spending money, but it doesn’t help most people on the verge of losing their homes. Although refinancing has been a priority for Obama, Romney made no mention of refinancing in his housing plan – despite strong support for refinancing from one of his economic advisors.
2. New mortgage regulations are coming. The Consumer Financial Protection Bureau, established by the Dodd-Frank Act, will set new mortgage standards by January 2013. These standards will define which mortgages are judged to be beyond a borrower’s ability to repay and would therefore trigger legal and financial implications for lenders. These standards, yet to be established, will need to strike a delicate balance between protecting consumers from high-risk loans and giving lenders the incentive to expand mortgage credit. Romney blamed Dodd-Frank for holding back mortgage lending, pledging to “repeal and replace” it. But with Obama’s re-election, Dodd-Frank–and the coming mortgage regulations–is a reality.
0 commentsThe Second Presidential Debate: Capping Itemized Deductions IS Housing Policy
Housing-related tax deductions, including home mortgage interest and real estate taxes, account for 49% of total itemized deductions. For middle-income tax itemizers, 56% of deductions are housing-related, which means a low cap on itemized deductions would reduce homeownership benefits for the middle class.
In the second presidential debate, the candidates did everything they could to avoid talking about housing. In listing what he did over the last four years, Obama didn’t mention any housing accomplishments. And, in listing all the problems that Obama failed to fix, Romney didn’t mention housing, either. Both candidates even avoided the mortgage interest deduction when talking about taxes. Romney suggested capping aggregate deductions at $25,000 without explicitly limiting any particular deduction, and Obama criticized Romney for not specifically calling out which deductions he would limit.
But housing was a part of this debate, even if not by name. Nearly half of the value of itemized deductions is housing-related, and capping deductions at $25,000 would hit many middle-income people. To see what a cap on itemized deductions would mean for housing, we looked at the most recent published IRS data on individual tax returns (2009) to sort out the facts.
First, let’s start by looking at who actually itemizes their tax deductions. The table below shows that only one-third of tax-filers itemize, but this ranges hugely by income. Only 15% of filers with less than $50,000 adjusted gross income (AGI) itemize their deductions, compared with 96% with $200,000 or more AGI. Higher-income filers include a much higher average total of itemized deductions, too. A cap of $17,000 – which is what Romney suggested two weeks ago – is roughly equal to the amount that the typical itemizer with less than $50,000 AGI deducts, so many lower-income itemizers wouldn’t be affected at all by that cap. But even a higher cap of $25,000 would hit many people in the $50,000-$200,000 range and probably most in the $200,000-plus range.
0 commentsThe First Presidential Debate: Apparently, This Housing Crisis Is Over
The candidates made just two mentions of housing: acknowledging the market is improving, and talking about policies designed to prevent the next crisis.
If I had a housing-debate bingo card, I would have tossed it out halfway through the debate. In the only debate focused solely on domestic policy, the candidates never mentioned foreclosures, refinancing, Fannie Mae, or Freddie Mac. Instead, Romney gave a shout-out to “qualified mortgages” – which was definitely too obscure for my bingo card. What happened tonight? Two mentions of housing:
First, in his opening remarks, Obama said “housing has begun to rise.” He’s right: the housing market is in better shape today than when he took office in 2009. More surprising was that Romney didn’t argue. Romney did point out several ways that broader economic performance worsened during Obama’s presidency, but the housing market wasn’t one of them. Had Romney wanted to point to the ongoing pain from the housing crisis, he could have pointed to the stubbornly high foreclosure rate in many states or the fact that the market is still not even halfway back to normal. But he didn’t.
0 commentsWill the Housing Markets of the Presidential Debate Cities Inspire a Serious Housing Discussion?
Of the three Presidential debate host-cities, only Boca Raton, FL – not Denver or Hempstead, NY – could spark a housing debate between Obama and Romney. But, ironically, it won’t.
In October, Barack Obama and Mitt Romney will debate with each other three times: in Denver on the 3rd; in Hempstead NY (on Long Island) on the 16th; and in Boca Raton FL (in the West Palm Beach metro area) on the 22nd. The Denver, Long Island and West Palm Beach metro housing markets are just about as different as could be – and each would give the candidates a very different backdrop for a debate about housing. Let’s compare them in order of the debates.
Denver’s housing market is twice-blessed, relative to the rest of the country. First, the housing bust was mild in Denver: prices fell only 8% from the peak to the trough, which is 19th-best among the 100 largest metros. That means the housing crisis left only a modest number of vacant and foreclosed homes in Denver – its current vacancy rate of 2.5% and foreclosure rate of 10.6 per 1,000 units are both lower than the majority of large metros. Second, Denver’s housing market is now recovering strongly, with the 7th fastest asking-price gain in August, according to the Trulia Price Monitor, and a high level of construction activity that ranks 15th among the 100 largest metros. In fact, Denver is the only market with big prices increases today that didn’t suffer huge price declines during the bust. Strong job growth, not bargain-hunting, is driving Denver’s housing demand.
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