Todman said the bulk of demand comes from millennials forming families, planning to own homes and not wanting to pay rent anymore. But they face competition from large institutional investors in the housing market.
“There’s been a fair amount of supply that’s been removed from inventory when we think about the large institutional investors who are buying and selling single-family homes. And that’s not a criticism but an observation,“ Todman said. “There is a number of the short-term rental market that has also taken a lot of typically available homes off the market as well.“
Todman said that HUD has a role in incentivizing the private marketplace to build more starter homes through its programs and grants. It’s working in partnership with mayors and the U.S. Department of the Treasury. But there’s also a need to make sure people can access these homes, including “a whole generation of Black and brown people who are completely left out.“
Before joining HUD, Todman was the CEO of the National Association of Housing and Redevelopment Officials (NAHRO) from 2017 to June 2021. She also served as executive director of the District of Columbia Housing Authority (DCHA).
Todman is succeeding Marcia Fudge, who announced her resignation from office on March 11. Fudge has since joined law firm Taft as a partner and chair of public policy.
“I mentioned before: I’m a practitioner. I like to look at rules and make a determination on which ones make a whole lot of sense and which ones are just there for the sake of being a rule,“ Todman said. She added that she’s working with the Biden administration on streamlining things and having the rules either “harmonize together or just get out of the way.“
One of the most recent steps by HUD was to double the fee paid to servicers for assumable mortgages to $1,800. These government-backed loans allow qualified buyers to purchase a home by assuming responsibility for the sellers’ mortgage terms, including the current balance and interest rate. It can make sense in the current environment since a buyer can assume a seller’s 2% to 4% mortgage rather get a new one at 7%.
HUD is ensuring that “we’re getting our money out the door,“ Todman said.
But, according to Todman, the current problem is that “we’ve not had a housing strategy for this country,“ which is essential since the housing market has been “a roller coaster.“ The responsibility for this should be on the departments “with housing in their names,“ she added.
“One truth is that housing isn’t Democrat or Republican. Everybody needs it,“ Todman said. “There are questions about how to get there. But at the end of the day, when I talk to my conservative friends, I think that there’s more alignment about what we need for housing … and maybe disagreements about the product.“
Todman mentioned the Neighborhood Homes Tax Credit, which the Biden administration announced during the president’s State of the Union address in March. The credit would be directed to “build or renovate affordable homes for homeownership, which would lead to the construction or preservation of over 400,000 starter homes.“
This tax credit would be a “means to propel into a better supply situation,“ but we “can’t get a bill from Congress,“ Todman said.
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