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Hunter Kurtz, Vice Chair and Founding Partner at Gate House Strategies, has spent his professional career working in the affordable housing industry at the local, state and federal levels. In the first Trump Administration, he served as Assistant Secretary for Public and Indian Housing at the U.S. Department of Housing and Urban Development, as well Deputy Chief of Staff to HUD Secretary Ben Carson. At the local level, Hurtz served as Director of the City of Detroit’s Department of Housing and Revitalization, in Mayor Mike Duggan’s administration.
Tell us about your work at Gate House.
I’m on the affordable housing and community development side of the business. I work with local governments, affordable housing developers and public housing authorities, helping them solve problems and unwind the larger issues they face in their work to create more housing opportunities in their communities. Housing needs and solutions are always uniquely local. Boise isn’t Fort Wayne which isn’t Mobile which isn’t San Antonio. We know how to guide local officials and their partners to be as effective in meeting their goals as possible. We help identify what they can seek from the federal government and other sources of financing, tools and unique solutions that are best suited for them. And because the full Gate House team covers a full spectrum of experience in the government, the private sector and the financial markets, we are effective in helping clients navigate the different players and cultures involved in successful community development efforts. Public housing authorities have their unique language, as do lenders, federal officials, and housing developers, just to name a few of key players in any proposed project. Gate House specializes in helping all of them better understand each other and work together for results.
What can the federal government do under the incoming administration to make things better for localities working to create affordable housing?
Mostly get out of the way. Look, housing is having a moment right now because the affordability crisis has risen to the level of an urgent national policy agenda matter. The new administration will be under pressure from all sides to produce real solutions. But for the most part, the biggest hurdles that local affordable housing practitioners face are rules and regulations.
Going after unnecessary regulatory barriers sounds like something the incoming administration would be very focused on.
Absolutely. For instance, there are so many federal requirements for reports which are quite outdated, and frankly useless. Still, they demand an enormous amount of valuable staff time that could otherwise be spent on solving real problems and creating opportunities. We did an analysis, for example, that revealed public housing authority and tribal housing staffs spend over 20 percent of their work week producing reports. Many of these reports sent back to Washington are never read and serve no purpose, yet they are legally required to be submitted. I’m confident the new HUD Secretary will be looking at unnecessary regs that hinder real progress toward greater housing affordability in America.
Long-time Mortgage Bankers Association executive Steve O’Connor recently retired after working with industry leaders for four decades. We asked Steve to share his observations about what industry professionals should be focused on right now.
Gate House: What changes in the marketplace could mortgage lenders be anticipating in the current environment?
O’Connor: President-elect Trump has promised to create more opportunity for the business sector. Lenders should definitely watch for proposed changes in tax policy. We know the new administration intends to work with Congress to renew the tax cuts that are due to expire. Mortgage professionals also should be following issues that may not, at least on their face, seem to be directly on their own agenda. Take three high profile issues from the campaign: immigration policy, tariffs and deregulation. Stricter immigration requirements could have an impact on the labor force in the construction trades. That could affect housing supply which affects the cost of housing which affects the mortgage sector. As for tariffs, that could create increases in the cost of building materials. And we all remember how the sharp rises in the price of lumber affected our own industry just a couple of years ago. On the regulatory side, we could see changes to Basil lll and a potential sidelining of CRA reform. No one can predict the future, and everything is going to require careful monitoring, especially for senior management whose responsibility it is to look ahead.
Gate House: What longer-term things would you say are a priority for them?
Well, let’s just look at the demographic changes that are already well underway. Between 2020 and 2030, the U.S. will have created 8.5 net new households, of which less than half a million will be white. The person of color will be the future homebuyer. That means you have to build a more diverse workforce. And not just your production staff and sales team, but also at the management, compliance, marketing and servicing levels.
Gate House: What practical steps can mortgage firms take to operationalize this new reality?
O’Connor: Do the things you need to do to create a future pipeline of buyers. Often the industry focuses heavily on the mortgage-ready consumer, those who are qualified. That’s the low hanging fruit. People often lean into only the short term, understandably so, when they’re having to make payroll and bring in revenue. The higher and quicker return of course is going after those mortgage-ready borrowers. But to build that future pipeline and of the near-ready or not-yet-ready borrowers, you can become a trusted partner with local nonprofits, the community development corporations, housing counselors and others. Working with these community partners will help you reach those emerging clients and get them ready to become new buyers. That’s going to sustain you in future purchase markets. Play the long game.