RNC Party Platform on Housing/Property Law

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With both of the conventions over, now is a good time to take a look at what the parties have to say about property law and housing policy. Notably, affordable housing has been largely left out of the big policy discussions from both the Clinton and the Trump camps. So, who knows how significant these policy prescriptions (such as they are) will be as we move into the general.

First up for today are the property/housing items from the 2016 Republican Party Platform:

Responsible Homeownership and Rental Opportunities

Homeownership expands personal liberty, builds communities, and helps Americans create wealth. “The American Dream” is not a stale slogan. It is the lived reality that expresses the aspirations of all our people. It means a decent place to live, a safe place to raise kids, a welcoming place to retire. It bespeaks the quiet pride of those who work hard to shelter their family and, in the process, create caring neighborhoods.

The Great Recession devastated the housing market. U.S. taxpayers paid billions to rescue Freddie Mac and Fannie Mae, the latter managed and controlled by senior officials from the Carter and Clinton Administrations, and to cover the losses of the poorly-managed Federal Housing Administration. Millions lost their homes, millions more lost value in their homes.

More than six million households had to move from homeownership to renting. Rental costs escalated so that today nearly 12 million families spend more than 50 percent of their incomes just on rent. The national homeownership rate has sharply fallen and the rate for minority households and young adults has plummeted. So many remain unemployed or underemployed, and for the lucky ones with jobs, rising rents make it harder to save for a mortgage.

There is a growing sense that our national standard of living will never be as high as it was in the past. We understand that pessimism but do not share it, for we believe that sound public policies can restore growth to our economy, vigor to the housing market, and hope to those who are now on the margins of prosperity.

Our goal is to advance responsible homeownership while guarding against the abuses that led to the housing collapse. We must scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders, and avoid future taxpayer bailouts. Reforms should provide clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices. Compliance with regulatory standards should constitute a legal safe harbor to guard against opportunistic litigation by trial lawyers.

We call for a comprehensive review of federal regulations, especially those dealing with the environment, that make it harder and more costly for Americans to rent, buy, or sell homes.

For nine years, Fannie Mae and Freddie Mac have been in conservatorship and the current Administration and Democrats have prevented any effort to reform them. Their corrupt business model lets shareholders and executives reap huge profits while the taxpayers cover all loses. The utility of both agencies should be reconsidered as a Republican administration clears away the jumble of subsidies and controls that complicate and distort home-buying.

The Federal Housing Administration, which provides taxpayer-backed guarantees in the mortgage market, should no longer support high- income individuals, and the public should not be financially exposed by risks taken by FHA officials. We will end the government mandates that required Fannie Mae, Freddie Mac, and federally-insured banks to satisfy lending quotas to specific groups. Discrimination should have no place in the mortgage industry.

Zoning decisions have always been, and must remain, under local control. The current Administration is trying to seize control of the zoning process through its Affirmatively Furthering Fair Housing regulation. It threatens to undermine zoning laws in order to socially engineer every community in the country. While the federal government has a legitimate role in enforcing non-discrimination laws, this regulation has nothing to do with proven or alleged discrimination and everything to do with hostility to the self-government of citizens.

The Fifth Amendment: Protecting Private Property

The Framers of our government knew, from history and experience, that when private property is not secure, freedom is at risk. That is why the Fifth Amendment declares that private property may not be “taken for public use without just compensation.” The Supreme Court’s Kelo decision undermined this safeguard by allowing local governments to seize a person’s home or land not only for vital public use, but also for “public purpose,” which thus allowed the government to seize it for transfer to private developers or other private entities. We call on any state legislatures that have not already done so to nullify the impact of Kelo within their jurisdiction by legislation or state constitutional amendments declaring that private property may be taken only for true public use, and we join House Republicans in supporting the Private Property Rights Protection Act.

The government at every level must always pay just compensation whenever it takes private property to achieve a compelling public use, with the money coming from the budget of the agency performing the taking. This includes the taking of water rights and the taking of property by environmental regulations that destroy or diminish the property’s value.

Civil asset forfeiture was originally intended as a way to cripple organized crime through the seizure of property used in a criminal enterprise. Regrettably, it has become a tool for unscrupulous law enforcement officials, acting without due process, to profit by destroying the livelihood of innocent individuals, many of whom never recover the lawful assets taken from them. When the rights of the innocent can be so easily violated, no one’s rights are safe. We call on Congress and state legislatures to enact reforms to protect law-abiding citizens against abusive asset forfeiture tactics.

The Fifth Amendment: Intellectual Property Rights

Private property includes not only physical property such as lands and homes, but also intellectual property like books and patents. Article 1, section 8 of the Constitution gives Congress the power to safeguard intellectual property rights for “Authors and Inventors.” By protecting the proprietary rights of creators and innovators, the Constitution promotes the general welfare by providing incentives for investment in all sorts of technology and artistic works. Intellectual property is a driving force in today’s global economy of constant innovation. It is the wellspring of American economic growth and job creation. With the rise of the digital economy, it has become even more critical that we protect intellectual property rights and preserve freedom of contract rather than create regulatory barriers to creativity, growth, and innovation.

Protecting intellectual property is also a national security issue. We must guard against counterfeit parts that can compromise the reliability of our weapons systems and the safety of military personnel. Today, the worst offenses against intellectual property rights come from abroad, especially in China. We call for strong action by Congress and a new Republican president to enforce intellectual property laws against all infringers, whether foreign or domestic.

A couple of thoughts: The platform promotes "clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices." Assumedly this means that the Dodd-Frank Act's "ability-to-repay" mandatory analysis is not what the RNC is aiming for here, but I'm curious to know what would replace it? Do they mean mandatory underwriting (i.e., imposed by law) or do they mean industry self-regulated standards? They also note that "compliance with regulatory standards should constitute a legal safe harbor to guard against opportunistic litigation by trial lawyers." The "qualified mortgage" rule is  a safe-harbor that insulates mortgage lenders from predatory lending suits related to proper underwriting, so is that what the party is talking about (if so, then it already exists) or do they mean something different?

Also, the platform states that "For nine years, Fannie Mae and Freddie Mac have been in conservatorship and the current Administration and Democrats have prevented any effort to reform them." This is pretty much false all the way around. The Housing and Economic Recovery Act of 2008—which put Fannie and Freddie into conservatorship—was signed by President George W. Bush back in July 2008. The entire effort was lead and supported by his treasury secretary, Henry Paulson. So this was hardly the work of Democrats. Indeed, it was entirely bipartisan. And the fact that the conservatorship hasn't ended yet is also a bipartisan problem. Members of Congress from both parties have tried (i.e., the Corker-Warner Bill, the Johnson-Crapo Bill) but failed to get any traction for their proposals. 

As to zoning, the platform criticizes the Affirmatively Furthering Fair Housing regulations as being merely a way to socially engineer a community and a form of "hostility to the self-government of citizens." There may be reasons to criticize the AFFH rule, but I wish there would have been  more here about what the RNC thinks should be done about the very real problem of housing discrimination in this country.

The platform also seems to take a muscular view toward Takings Law by emphasizing the need to pay just compensation when property is taken (with a focus on environmental regulation and water rights). Whether this leads to any real pull back on federal takings seems unlikely. 

Lastly, there's some mention about the emergence of the digital economy and the need to protect IP rights, but nothing more than that. It mostly appears to be centered on cyber-security.  There are some bigger issues dealing with online commerce that could use some treatment (i.e., how to deal with the rise of virtual assets, the growth of online lending, possibilities with trustless public ledgers etc.).

Next week I'll post the 2016 Democratic Party Platform and share some musings on that as well. Would love to hear your thoughts on the RNC's platform in the comments section below. Have a good weekend!