For too long Washington has been deadlocked on issues of critical importance. So it came as a pleasant surprise when Congress and the Administration approved landmark housing legislation that helps thousands of Americans stay in their homes, provides cities with the funding they need to stop the downward spiral of home vacancies and neighborhood deterioration, and stabilizes the home financing system.

Until the middle of last week it was unclear whether partisan differences could be overcome in order to address the growing number of housing foreclosures, declining economic markets and concern over the stability of Fannie Mae and Freddie Mac. Legislation that had been introduced and debated for months seemed doomed to the black hole of partisan bickering.

That this fate was averted was momentous for two reasons: substance and process.

First, applause for the substance of the bill. The legislation provides a lifeline to Fannie Mae and Freddie Mac, providing both regulatory oversight and access to cash if needed. This commitment will help rein in the recent volatility of the financial markets, which not only has threatened some of the country’s largest lending institutions, but has affected the stability of the entire housing and financial service industries.

The bill also helps communities facing large numbers of foreclosures, making available $4 billion in neighborhood stabilization funding to states and localities to buy and rehabilitate foreclosed homes – a critical step in stopping the downward spiral of vacant homes, destabilized neighborhoods, and devastated communities, and advancing city efforts in places such as Cleveland and Dallas, where local leaders are working to return hundreds of foreclosed properties to productive use.

The bill will also keep people in their homes by allowing homeowners with houses valued at $625,000 and lower to refinance to 30-year, fixed rate loans backed by the Federal Housing Administration and allowing first-time homebuyers a $7,500 tax credit.

These will bolster efforts in cities such as San Francisco and Cleveland, already trying to keep homeowners from sliding into foreclosure. San Francisco’s Assessor-Recorder’s office automatically reaches out to homeowners in default with multi-lingual information about housing counseling agencies and legal assistance centers. In Cleveland, a city-university partnership helps identify homeowners in various stages of distress, steers them into assistance programs, and through an agreement with lenders enables a 90-day freeze on the foreclosure process to allow homeowners to find alternative financing mechanisms.

In short, the legislation signed today gives local governments the federal assistance they need to bolster and expand the measures they have begun on a city-by-city level.

Next, applause for the process, which broke open a legislative logjam.

Much of the initial credit for this must go to Representative Barney Frank (D-MA), chairman of the House Financial Services Committee, and Treasury Secretary Henry Paulson. Although they come from different political parties and perspectives, these two leaders developed a constructive working relationship guided by a focus on solutions – not politics. Senate Banking Committee Chair Chris Dodd (D-CT) and Ranking Senator Richard Shelby (R-AL) similarly set aside political positioning in an effort to work out a compromise that would garner the support of their colleagues.

In doing so, Congress and the Administration finally did what our local officials must do every day in cities across America – they put aside partisanship and focused on getting the job done.

For the entire history of this country, local governments have been focused on action because that’s what their constituents rightly demand and because that is the goal against which their performance will directly be measured. Potholes aren’t red or blue, and water lines don’t care about what party is in power. The 19,000 municipalities NLC represents understand that when facing a crisis, what’s important is not positioning, but action.

With Americans expected to lose $1.14 trillion in housing wealth by the end of 2008, certainly a crisis looms.

It’s an occasion for applause when national leaders finally set aside ideology and taking positive collective action to address a pressing need. Let’s hope this bill is just the beginning.

This entry was posted on Wednesday, July 30th, 2008 at 3:36 pm and is filed under Uncategorized .