DS News

10 CALABRIA: 'BURDENSOME' LAWS, REGULATIONS IMPACTING HOUSING GROWTH Federal Housing Finance Agency (FHFA) Director Mark Calabria spoke at the National Association of Homebuilders International Builders' Show, where he said housing reform is key to the growth of the industry. "Many of the same warning signs that were ignored in the lead-up to the 2008 financial crisis have been reappearing," Calabria said. "Not only has risk been rising in recent years, but [Fannie Mae] and [Freddie Mac] have also been undercapitalized for too long." He noted that the GSE's own or guarantee $5.5 trillion in both single and multi-family mortgages—nearly half the market. Until recently, they were limited to just $6 billion in allowable capital reserves. e U.S. Department of the Treasury and the FHFA allowed the GSEs to retain capital of up to $45 billion combined. "is point is absolutely critical: If Fannie and Freddie fail again, liquidity in the mortgage market will dry up. If families are unable to get a mortgage, they are unable to buy houses," Calabria said. "And when fewer people are buying houses, new or old, it hurts America's home builders." While he touted the strength and growth of the economy, he added that "there are reasons to believe the foundation is vulnerable." One of housing's main cruxes is its falling inventory and rising home prices. Calabria said in order to build more houses there needs to be more builders. Approximately 700,000 new construction jobs have been added across the nation over the past three years. Additionally, he said "burdensome" laws and regulations are restricting growth and affordability. "America's home builders deal with this challenge every day. It is a national problem with local roots. Local governments are often the source of the most burdensome regulations—like zoning and land-use restrictions, building codes, and permitting requirements," Calabria said. Calabria said the industry has come a long way since 2008 and the Great Recession but "that does not mean that all is well today." "America's home builders know better than anyone that there is still a lot of untapped potential in our nation's housing markets," he said. GOLDMAN SACHS: NEW IPOS REQUIRE DIVERSITY Goldman Sachs Group Inc. has announced that it will no longer be accepting initial public offerings in the U.S. if the company lacks any female or diverse directors, with diversity based on sexual orientation and gender identity, Goldman said in a statement. "Starting on July 1 in the U.S. and Europe, we're not going to take a company public unless there's at least one diverse board candidate, with a focus on women," Goldman Sachs CEO David Solomon said on CNBC's Squawk Box from the World Economic Forum in Davos, Switzerland. "And we're going to move towards 2021 requesting two," he added. Bloomberg reports that Goldman Sachs' mandate is not the first, though Goldman Sachs is the largest underwriter. BlackRock Inc. and State Street Global Advisors are voting against directors at companies without a female director, and public companies with all-male boards face fines in California. "We realize that this is a small step, but it's a step in a direction of saying, 'You know what, we think this is right, we think it's the right advice and we're in a position also, because of our network, to help our clients if they need help placing women on boards,'" Solomon told CNBC. "So this is an example of us saying, 'How can we do something that we think is right and help moves the market forward?'" Goldman Sachs will be raising the threshold in the next year, from one diverse director to two. According to Bloomberg, the bank said the decision came after it learned more than 60 U.S. and European companies in the last two years went public without a woman or person of color on the board. Goldman Sachs has four women on its 11-member board. More than a corporate objective, inclusivity, when properly implemented, is a positive and effective force for millions of Americans. Journal

• Cover