Podcast: One-On-One With Ed Pinto Of The AEI Housing Center
Welcome to The Mortgage Note’s latest podcast series. We’re sitting down one-on-one with industry leaders to learn more about their careers and to find out their perspectives on lending and housing.
Our first guest is Ed Pinto, Co-Director and Senior Fellow at AEI Housing Center in Washington, DC.
Scott Kimbler recently spoke with him about what they do and how the federal government could approach the national housing crisis.
Pinto said that AEI is a think tank founded in 1938.
Its full name is the American Enterprise Institute for Public Policy Research, and its motto is “Freedom, Opportunity, Enterprise”.
“We’re looking for ways to allow the private sector to do what it does best, which is provide goods and services to the people of this country and the world, and doing that in a way that’s based on market principles, as opposed to government subsidies and government dictates,” Pinto said.
Pinto co-founded The Housing Center in 2013 with the goal of preventing a repeat of the 2008 financial crisis, which was centered around housing. Since then, they’ve expanded to all facets of housing and housing finance.
“We focus on supply and demand, house prices, and we focus on new construction. We focus on how to add to housing supply, and so we publish a wealth of information that’s all put out for free for public use to explain and track what’s going on in the housing market,” Pinto said.
Pinto talked about why he chose this career path, saying he’s always had an interest in numbers and data.
“I’m an attorney by training. I have my law degree from Indiana University but I started working on housing in law school. I drafted an ordinance that got passed by the Bloomington City Council and signed by the mayor back in 1975,” he said. “So I was interested in housing, even in law school.”
Pinto’s first job as an attorney was at the Michigan State Housing Development Authority.
“After about three years, I became the general counsel of the Michigan State Housing Development Authority, and that allowed me to get involved much more in policy,” he said. “And that very directly led to my going to Fannie Mae in 1984 where I was vice president of negotiated transactions.”
Pinto worked his way up to executive vice president and chief credit officer for Fannie Mae.
In 2010, Pinto began working at AEI as a resident fellow. Today, he’s still excited about his job.
“The motto I’ve set for the Housing Center is ‘We turn data into information, information into knowledge, knowledge into action.’ It’s taking that data and information and actually learning something from it.
“What’s that knowledge? What’s driving the market? Why are house prices acting the way they’re acting? Why is risk building? Why are these things happening? Why is housing supply not growing? Why are house prices going up faster than incomes? These are all the things we wrestle with literally every day, and we’re creating new knowledge every day,” Pinto said.
It is the Housing Center’s position that if the government would get out of the way, the private sector could solve the housing crisis in five to 10 years.
“Once land can be used at the highest and best use, then somebody could decide to build townhouses on that new subdivision that’s going to get built, rather than homes on one-acre lots. Or build homes on 10 per acre, rather than one or two per acre. Build townhomes at 20 or 25 per acre. That’s a decision that the private sector should be making, not planners and government officials,” Pinto said.
Pinto went on to expand on how President Donald Trump’s administration could have a positive impact on housing.
“I was asked if I were in an elevator with Donald Trump, what are the three things I’d be saying he should do? The first thing he should do is order the Secretary of Interior to work with the Bureau of Land Management to sell upwards of 800 square miles of federal land that is currently undesignated for any particular purpose,” he said.
They estimate that could lead to three to four million new homes over the course of 10 years.
Pinto said that eliminating or changing regulations, and reversing policies that delay foreclosures, could also help.
“Basically there’s a saying that ‘Religion without hell is not a religion.’ Well, housing finance without foreclosure is not housing finance. It’s an entitlement,” Pinto said.
Pinto said everyone needs a home, but the question is how to do it without government interference or subsidies.