Montgomery Bankers Discuss Main Street

On Wednesday, September 19, I met with seventeen bankers, two developers, and Montgomery, Alabama Economic Development Director Chad Emerson. I spoke for fifteen minutes about CNU's Live/Work/Walk initiative, focused on federal housing finance reform.

I came to this meeting expecting to learn as much or more than I would impart to them - and I wasn't disappointed. I first described how new urbanists looked at the federal secondary mortgage programs as unintended obstacles to urban mixed use development; that FHA, Fannie Mae and Freddie Mac all had restrictions on the percentage of non-residential floor space that could be allowed and still be eligible for the programs. These rules assign extra risk to residential property associated with mixed-use buildings. I asserted that these provisions undermined urban forms like America's Main Streets with their low rise apartments and condos above the stores. I asked what they thought, and after a few questions and clarifications, the bankers laid out their points of view.

One of them said the situation was even worse than I had described it. He pointed out that it's significantly easier to sell a house if it's FHA approved. He said he felt a bit guilty when a customer took a mortgage that lacked FHA eligibilty because the customer would likely have a harder time reselling a property that lacked eligibilty. All the bankers had an interest in revitalizing downtown Montgomery and they all felt that the federal restrictions on mixed use were in need of reform.

Chad Emerson is a longtime CNU member and an enthusiastic proponent of New Urbanism in Montgomery. The city has already made great progress. I was in Montgomery seven years ago and I couldn't find a restaurant that stayed open after 7 PM. Now you need more than two hands to count the options, and Montgomery is becoming a lively place. I look forward to working with Chad and his bankers to remove obstacles from Montgomery's further revival.