Wednesday, November 12, 2014

What we have planned for 2015 and beyond

by Chris Estes, National Housing Conference

With the midterm elections over, Washington turns to analysis of what the elections results mean and, more importantly, what the new power dynamic means and what newly elected members of Congress will do when they enter office.

For all of us the real question is, what does this mean for the affordable housing movement in terms of resources and legislation? This is what the next two years look like from my vantage point.

In the “lame duck” session we remain hopeful for passage of a tax extenders bill that will bring price stability to the 9% housing credit for one, ideally two, years. This session will also be an important test of whether Democrats will try and push some federal nominees through the Senate that could incite more pushback from Republicans. The same logic applies to any executive orders the President might make on issues such as immigration. These will provide an indication as to the tone we can expect when the new Congress takes over in January.

While some speculate that not much will change in terms of legislative action in the new Congress, I believe Republicans understand they need to govern to make a strong case for the 2016 election. We expect there to be much attention on tax reform which will require a lot of education from the housing community on the Low Income Housing Tax Credit with special attention to the 4% credit, which has much less congressional support. While Tax Reform is a major issue, trade, energy (Keystone Pipeline) and immigration are also major issues that could demand a lot of Congress’s time and energy.

Another major focus for NHC will be the budget process and funding for housing. It hard to know the likelihood of returning to regular order (as opposed to the continuing resolutions that been funding the government), but it seems likely that there will be additional pressure on housing funding, especially if military demands in the Middle East increase and the need for military spending further squeezes the budget.

While NHC will be very engaged in housing policy on the federal level, we also focus on issues impacting affordable housing and community development at the regional, state and local level. Next week we head to Oakland, Ca. for Solutions 2014, our national conference on state and local housing policy. We look forward to seeing our members there and learning more about the successes and challenges of developing affordable housing and improving neighborhoods in your local communities.

It is our belief that increasing support for policy and funding at the federal level begins at local level. It is where housing gets built and helps transforms lives and communities. It is also where we can work with all of you to build a movement of support with residents, government officials and the public.

Focused on our strengths: The Center’s recent work in its four key research areas

Developing solutions through research
by Lisa Sturtevant, Ph.D, National Housing Conference

The mission of the Center for Housing Policy, NHC’s research division, is to increase awareness of housing needs and to identify effective and promising policy solutions to housing challenges. The Center bridges the gap between research and practice through accessible and relevant research and outreach to practitioners and policymakers.

The Center’s work is organized around four research areas: Housing Affordability, Housing Intersections, Inclusive Communities and Housing Demand. In recent months, we have completed projects that highlight our expertise in these research areas.

In September we released the Paycheck to Paycheck report and online tool, which analyze housing affordability in 210 metro areas for 80 different occupations. The report focuses on workers in five important and growing health care occupations: medical records transcriptionists, medical billing clerks, home health aides, geriatric nurses and case managers.

To help demonstrate the ways in which housing intersects with other indicators of individual and social well-being, we produced case studies of innovative programs that combine housing with other services. These case studies were part of the MacArthur Foundation’s How Housing Matters conference held in October at the National Building Museum.

In the area of inclusive communities, the Center recently completed a report on inclusionary upzoning which profiles six localities that have adopted inclusionary housing policies tied to rezoning and increased development potential. The paper explores how neighborhood context, market context and policy design may affect the success of inclusionary upzoning policies and their potential for adoption in new areas of the country where inclusionary housing has not yet been implemented.
Finally, the Center is working with the Hampton Roads and Roanoke regions in Virginia to produce housing demand forecasts based on projected employment growth. These forecasts will help broaden the conversation about housing needs and explicitly make the link between economic growth and housing in these regions.

The Center’s work will continue to grow in these four research areas. And we will continue to actively link our housing research—and the research of other organizations—to people working on the ground to expand affordable housing opportunities.

And the Center has a new staff member!  Mindy Ault joined the team in September. Prior to joining NHC, Mindy worked with The Road Home, a homeless services provider in Salt Lake City , doing direct practice work with chronically homeless families and single adults. Her primary research interests are the effects of affordable housing on other aspects of community and individual well-being and housing policy as a means of poverty reduction. She earned a Master of Public Policy from American University with a concentration in advanced quantitative analysis. She will work on housing and health research and on Housing Landscape 2015.

Vermont Housing & Conservation Board awards $3.65 million for statewide affordable housing projects

News from NHC's family of members
by Radiah Shabazz, National Housing Conference

Last month NHC member Vermont Housing & Conservation Board (VHCB) awarded over $3 million in grants and loans for land conservation and affordable housing projects across the state.  The funds will be used primarily to preserve, rehabilitate and create over 150 affordable homes and conserve almost 1,200 acres of farmland across the state.

The funds were dispersed to ten communities across Vermont and have been allocated to the Burlington Housing Authority, Champlain Housing Trust, Housing Vermont, RuralEdge, Shires Housing, Windham & Windsor Housing and the Cathedral Square Corporation. The awardees will use the funds for a range of projects including construction of a community center, development of mixed-income apartments, rehabilitation of 55 apartments in 11 different buildings, conservation of dairy and beef farmland and much more.

“The Board is pleased to support these community-driven projects in all corners of the state,” VHCB Executive Director Gus Seelig said in a press release. “Housing developments receiving commitments of VHCB funding are located in Lyndonville, Brattleboro, Bennington, Burlington and Hinesburg, while land will be conserved in the towns of Ferrisburgh, Hinesburg, Hartland, Bridgewater and Reading.”

The funding pledged to develop and maintain affordable housing throughout Vermont will be of great assistance to the 21 percent of low- and moderate-income Vermont households that spend at least half their income on housing costs. Our Housing Landscape 2014 report shows that 16 percent of households in the state are severely cost-burdened, equal to the 16 percent national average. VHCB’s efforts to ensure access to more affordable housing options are a great step in countering the housing affordability challenges in the state.   

Since 1987, VHCB has awarded nearly $260 million to nonprofit housing and conservation organizations to develop nearly 1,500 projects across the state. 

NHC members celebrate opening of affordable housing developments in two Chicago neighborhoods

News from NHC's family of members
by Radiah Shabazz, National Housing Conference

Two Chicago neighborhoods recently celebrated the opening of affordable housing developments, and NHC members The Community Builders, Inc. and Volunteers of America were responsible for making the action happen.

In the Englewood neighborhood, Volunteers of America celebrated the opening of Hope Manor II, an affordable mixed-use development designed for previously homeless veterans, or veterans at risk of homelessness, and their families. Englewood’s Hope Manor II will house 73 veterans and their families, and provide free tutoring for children, family counseling, job training and other supportive services. Like its predecessor Hope Manor I, Hope Manor II was funded through low income housing tax credits and additional funding through the Illinois Housing Development Authority and the Department of Commerce and Economic Opportunity. The opening of Hope Manor II will bring Chicago one step closer to meeting its goal of ending veteran homelessness by the end of 2015. 

Meanwhile in Bronzeville, The Community Builders celebrated the grand opening of the Shops and Lofts at 47, the community’s first residential and commercial development in the area in 50 years. The new development will play a major part in revitalization of the Bronzeviile neighborhood as part of Alderman Toni Preckwinkle’s neighborhood renaissance plan. After nearly a decade of work to jumpstart the project, and more than a year since construction began, the community will have access to ground-floor retail via Walmart Neighborhood Market and 96 mixed-income affordable apartment homes. The new development revitalizes the neighborhood and allows the creation of 150 construction jobs and more than 100 full-time retail jobs to residents in Bronzeville and surrounding communities.

The need for affordable housing in Chicago and nationally is grave. Data from our annual Paycheck to Paycheck report shows that many community workers cannot afford the costs to rent or own in the Chicago metro area, and of five health care jobs studied, three (home health aides, medical billings clerks and medical transcriptionists) cannot afford to live in median fair-market priced apartments. These new developments will lessen the cost burden housing places on many lower-income families in Chicago.

The U.S can show Ireland the way on mortgages

What we're building
by Ethan Handelman, National Housing Conference

U.S. mortgage regulators made a wise decision last month to keep mortgage credit available to people of modest means, but Ireland may go in the opposite direction. Ireland’s central bank has proposed limiting most mortgages to those with a 20 percent down payment, but has recently signaled it may back off.  Our friends across the pond are facing, in essence, the same question we just resolved. How many people are we willing to exclude from homeownership in an attempt to avoid repeating the mortgage bubble?

After several years of study, debate, and (of course) bureaucratic wrangling, six separate U.S. regulators decided not to impose a 20 percent down payment requirement as part of the new risk retention rules, but instead to align with the product restrictions in the qualified mortgage rule. NHC and many other coalition allies in our un-ironically named Coalition for Sensible Housing Policy worked hard to clarify for regulators that high down payment restrictions do more to exclude responsible low-wealth borrowers than to reduce systemic risk (the best quantification of this tradeoff came from UNC’s Center for Community Capital). Simply put, having a down payment at all matters much more for the likelihood of default than how big the down payment is, and safe, stable 30-year fixed rate loans are far less likely to default than the no-doc, exploding rate loans eliminated by the recent qualified mortgage rule.

The housing crash and financial crisis hit Ireland even harder than the U.S. Property prices fell by more than 50 percent and the country coined a new term for abandoned, partly built developments: ghost estates. With that experience so recently with them, it’s no wonder Ireland’s financial regulator wants to prevent another housing bubble. U.S. regulators clearly felt the same way. But the Irish should take a page from our book and try to tailor new policy to keep out risky loans while allowing responsible households to take out mortgages, buy homes and help the economic recovery along.

Ireland’s Taoiseach (or prime minister) has already offered a plan to deploy government insurance to get around the central bank’s proposal and allow down payments as low as 10 percent, in part because he recognized that keeping people out of homeownership puts even more pressure on stressed rental markets. The comment period for the central bank’s proposal remains open, and I expect others there will weigh in before the new rule would take effect on Jan. 1. I’ve sent some of our work to fellow housers across the pond, along with hope and encouragement toward a path that keeps housing affordable for all.

Monday, October 27, 2014

Key takeaways from the Regional Housing Forum

by Rebekah King, National Housing Conference
Last week NHC hosted a regional housing forum in Chicago, in partnership with the Federal Home Loan Bank of Chicago. The day-long event had four great sessions, and I’ve shared a few highlights below. In summary, I was reminded that we need a long-term strategy to address the historically underserved populations in this country, which requires some action at the federal level. In the meantime, communities are innovatively responding to the needs they face and deploying creative programs and strategies in the Illinois and Wisconsin region and across the country. They are effectively utilizing available resources and also pursuing new strategies; the diversity of partnerships showcased between nonprofits, lenders, foundations, local and state governments and CDFIs was amazing. You can view the recorded event here.

Housing’s Past

  • It’s important to understand how we got here and apply lessons learned as we move forward from the housing crisis.
  • The demographics of this country are changing rapidly and our housing finance system needs to recognize that reality; seven out of 10 new households formed will be households of color.
  • We don’t need to loosen underwriting; we need to refine it. Fannie Mae and Freddie Mac are using credit score models that are 10 years old.

Housing’s Future
  • Our current challenge is the left behind markets and navigating neighborhood changes, like foreclosed homes becoming rental properties and the role of large investors in those shifts.
  • Importance of programs like FHA Section 542 Risk Share to help finance small rental projects and the Neighborhood Stabilization Initiative (begun in Detroit and coming to Chicago next) to address hardest hit areas.

Return on Investment
  • Organizations are exploring how to measure impact as well as how to include social return in investments. 
    • Forward Community Investments focuses on projects that increase equity.
    •  The Housing Partnership Network’s (HPN) has created a Real Estate Investment Trust to create a way to assemble capital early so it can act quickly to preserve naturally occurring affordable housing.
  • At a project level, given limited resources, this means choosing strategic properties that are critical to their community.
  • Important to recognize the potential funding options of impact philanthropy and mission related investing.

Service Enriched Housing
  • Service enriched housing covers a continuum of need, from lighter touch to wrap-around services aimed at ending chronic homelessness.
  • States can use traditional affordable housing tools like the Low Income Housing Tax Credit, HOME and property-based rental assistance to create service enriched housing, as well as specialized tools like cooperative agreements with local public housing authorities.
  • Limitations we face in more supportive and service enriched housing are the lack of existing relationships with healthcare providers and the lack of funding for resident service coordination.
  • Creative programs are proving effective like CSH’s pilot, Keeping Families Together, working with vulnerable families in the welfare system.

Tuesday, October 14, 2014

HousingWorks RI leverages affordability data for housing advocacy

by Nicole Lagace, HousingWorks RI

NHC invites its members, partners, and other recognized housing experts to write guest blog entries on important topics. The views expressed by guest writers do not necessarily reflect those of NHC or its members or funders. 

Much of the campaign season in Rhode Island has been focused on the state’s lagging economy and need for more jobs, and rightfully so. In a state with the third highest unemployment rate in the country, jobs certainly need to be a priority for the next governor of Rhode Island. But missing from the conversation has been the connection between housing and jobs. It’s good to target and grow certain industries, but we must also consider if workers employed in those industries will be able to affordably live here. A newly elected governor could bring a new vision for Rhode Island and HousingWorks RI at Roger Williams University (HWRI) wants to ensure that vision includes housing affordability as a public policy priority.

Early this summer we recognized the unique opportunity our annual Housing Fact Book Luncheon provided to insert housing into the hectic election season conversation. Each year HousingWorks RI puts out a Housing Fact Book looking at housing affordability in Rhode Island’s 39 cities and towns. The book is released in the fall at a luncheon typically attended by about 200 business and community leaders along with elected officials and policy makers.

Knowing our strategy, we started working with all six gubernatorial campaigns back in July to help ensure their participation in the Oct. 3 event.

The candidates discuss housing affordability.
Photo by Julie Brigidi
Rhode Island’s primary was held on Sept. 9. Cranston Mayor Allan Fung won the Republican nomination and General Treasurer Gina Raimondo won the Democratic nod. We were thrilled that local housing expert Barbara Fields agreed to host the conversation with the candidates. The former Regional Administrator for the U.S. Department of Housing and Urban Development (HUD), Fields asked a range of questions from implementation of the state’s plan to end chronic homelessness to reducing barriers to improve affordability of market rate homes.

The candidates each had 20 minutes for their own conversation with Fields. General Treasurer Raimondo spoke first and encouraged Rhode Island to have “big audacious goals” when it comes to housing. In particular, she said she would like Rhode Island to be the first state to end homelessness. Mayor Fung cited the lack of public investment as a barrier to more affordable housing and called for more Community Development Block Grant dollars to help Rhode Island’s cities and towns.

We were thrilled to have had the candidates on hand to speak about the future of housing and the economy in Rhode Island. Whatever the outcome for November’s election, we are hopeful that our next governor will have an integrated approach to improving housing affordability in our state to ensure a wide range of housing options that support the well-being and prosperity of Rhode Islanders. In turn, we’re confident this will lead to a brighter economic future for all of Rhode Island.

HousingWorks RI is a program in the Division of University Outreach and Engagement at Roger Williams University. HousingWorks RI at RWU is an authoritative source of information about housing in Rhode Island that conducts research analyzes data to inform public policy, and develops communications strategies and promote dialogue about the relationship between housing and the state’s economic future.