What Is the U.S. Government’s Role in Multifamily Housing?

hamilton-zanze December 05, 2013

Despite calls for increased private capital funding and less federal involvement in multifamily financing, experts maintain that federal government-backed GSEs (such as Fannie Mae and Freddie Mac) should play a significant role in the apartment market. Gordon Gerson, managing partner of Gerson Law Firm APC, asserts that, “Affordable rental housing is as much a part of the American Dream as single-family housing. If you take the GSEs out of their traditional role, it could rocket out of control.”

Gerson cites declining single-family home ownership as evidence that GSEs need to play a key role in the future of apartment housing. Ownership has dropped from from 67% before the Great Recession to 64% today and is forecasted to plummet to 51% in the next decade. “Multifamily mortgages and the multifamily market performed better than any other sector of the real estate economy during that period…[because] GSEs expanded to meet market need while other sectors of the lending industry went dark.”