Q&A with Doug Bibby, President of the National Multifamily Housing Council (NMHC)

About Doug

Douglas M. Bibby is President of the National Multifamily Housing Council (NMHC), a national organization of more than 1,100 member firms involved in the multifamily housing industry. Under his leadership NMHC represents the industry on Capitol Hill and before the regulatory agencies, promotes research and the exchange of information, and advocates for rental housing across a broad spectrum of issues. Prior to joining NMHC, Bibby spent 16 years as a senior officer of Fannie Mae, where he served on the company’s Management Committee throughout his tenure. He was part of the top management team that is credited with the remarkable turnaround at Fannie Mae in the book Good to Great.

Q: What are your top takeaways from the NMHC Annual meeting?

A: First, I witnessed across-the-board exhilaration for the return of in-person meetings. Second, there is a palpable sense of optimism about the sector’s prospects in light of multifamily’s preferred status in real estate. Still, there is an underlying apprehensiveness about possible changes in tax policy as “pay fors” for proposed legislation.

Q: Can you comment on the current multifamily market and your projection for the remainder of the year?

A: It’s a great market for sellers, but buyers face a double whammy of low cap rates and increased competition, especially from non-traditional players. The “wall of capital” seeking placement in our sector reflects investors’ belief that there aren’t better opportunities to deploy capital in real estate. It will be a big year for transactions, but a little off for deliveries of new units due to construction costs and delays. Overall, a very solid year.

Q: How have the stimulus packages impacted the multifamily market?

A: The stimulus packages have been HUGE! Starting with the CARES Act that provided direct assistance to consumers and $600 per week in unemployment benefits through July, Congressional action has stabilized what could have been a disaster in rental housing as millions of people lost jobs overnight. The subsequent packages in December 2020 and the spring of this year provided for an unprecedented amount of rent relief of nearly $50 billion that will further stabilize and strengthen the market when it makes its way to renters and owners. I’m proud to say that NMHC had a big hand in securing the funds under the Emergency Rental Assistance Program (ERAP).

Q: What potential tax policy changes are you tracking most closely?

A: Given the uncertainties surrounding the next two omnibus bills proposed by the Biden administration and the funds required to pay for the programs, we must watch a panoply of potential tax changes to protect the industry from deleterious consequences like those that really hurt the real estate market in the mid-1980s. Of most concern are proposals affecting the 1031 Exchange program and stepped-up basis, along with concerns about overreach on both capital gains and ordinary rates. We’re working hard with industry allies to convince policymakers not to disrupt our real estate markets just when the economy is poised to rebound.

Q: What is being done to bring down the price point to make housing more affordable?

A: Unfortunately, not enough at any level. The Biden administration has come out forcefully against exclusionary zoning, which inhibits the ability to deliver the right kind of housing to the areas where it’s most needed. However, these and other manifestations of NIMBYism are still stifling affordable housing at the local level. I’m hopeful that the infrastructure bill that finally sees the light of day will incorporate some teeth into the federal government’s ability to force change among states and localities. But the cost of land, pervasive and onerous regulation, cost to construct affordable housing, and myriad financing challenges all combine to frustrate everyone who cares about closing the gap.

Q: What, if any, lasting impacts do you believe the COVID-19 pandemic will have on the multifamily market?

A: Two come to mind. We’ve discovered that we can use virtual reality in our business lives more quickly and effectively than most imagined. This will have a significant bearing on staffing and business travel in the months and years ahead. Second, where we work will change too, given that we found that working remotely can get the job done. I don’t see the demise of the office, as we continue to need face-to-face interactions for a variety of reasons, including, as we just found out in San Diego, the importance of the human touch in our lives. I most certainly do not buy the “end of the city” prognostications that have been bandied about. We’ve come too far in revitalizing our downtown areas to step back to a suburban-centric model!

Q: Thinking back on your time leading NMHC, what are you most proud of?

A: There are so many things to be proud of, and I share so much of the credit with my incomparable staff, a long line of talented and caring volunteer Officers of NMHC, and the membership at large. If forced to single out one thing, I would say that I am enormously proud that multifamily housing is properly understood and valued as an asset class in real estate. When I took this job twenty years ago, investors demanded 250 to 300 basis points to compensate them for the “risk” of investing in our sector, and rental housing was seen as housing for the poor or as a way station on the journey to homeownership. We are now attracting institutional capital from all over the world and are THE preferred asset class in real estate. We can all be proud of how far we have come!

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