by Rebekah King, National Housing Conference
On May 19, 2015, the Housing and Insurance Subcommittee of the House Financial Services Committee held a hearing on the future of housing in America and oversight of the Rural Housing Service (RHS), the division within the U.S. Department of Agriculture (USDA) which administers rural housing programs. Among the programs under review were the Section 502 direct and guaranteed loan programs for homeownership and Section 515 and 521 programs for rental housing. Two witnesses presented testimony: Mr. Tony Hernandez, administrator for the Rural Housing Service at USDA and Mr. Matthew Scire, director of financial markets and community investment for the U.S. Government Accountability Office (GAO).
In summary, the discussion focused on similarities and possible overlap between USDA and Federal Housing Administration (FHA) homeownership programs as well as USDA’s recent efforts to improve and strengthen its rural housing programs. The USDA rural housing budget is much smaller than the Department of Housing and Urban Development (HUD) budget but USDA programs provide important affordable housing in rural communities. Conversations around how to improve its programs, better align with and leverage HUD and Veterans Administration programs and how to involve more nonprofit and private sector partners will be constructive and beneficial for rural households in need of USDA programs. Those conversations should be fully explored and solutions implemented before continuing to discuss program consolidation.
In Mr. Hernandez’s testimony, he discussed the important role of rural housing programs and the various business improvements USDA has made, like shifting to more electronic systems and maintaining low delinquency rates in its lending programs. Mr. Scire discussed recent GAO studies, inefficiencies within RHS programs and the overlap GAO perceives between HUD and USDA programs. He acknowledged that RHS has made improvements based on GAO recommendations but observed that they could still do more, especially in targeting resources to the areas of greatest need.
In the committee discussion, Chairman Luetkemeyer (R-Mo.) raised a point which was repeated during the hearing: the overlap between FHA and USDA homeownership programs in terms of the clients served. A GAO study referenced in the hearing discussed how a large number of FHA clients were also eligible for USDA housing programs. Mr. Hernandez responded that USDA’s products were designed for rural homebuyers without the ability to make a downpayment, in comparison to the 3.5 percent downpayment minimum in FHA loans. The average income of a Section 502 direct loan borrower is $29,000, and for a Section 502 guaranteed loans it is $50,000, income levels that could struggle to afford an FHA loan. Mr. Hernandez also noted that many FHA lenders do not work in rural areas, which limits access to FHA products for rural homebuyers. At the hearing, USDA was unable to share data on how many of its borrowers were also eligible for FHA loans, but this data could be helpful in addressing this overlap question in the future. Questions from several committee members focused on issues of overlap and program consolidation between FHA and USDA homeownership programs.
Representative Williams (R-Texas) asked if the private sector could offer a viable option for rural affordable housing instead of USDA programs. Mr. Hernandez observed that often lenders and developers find rural areas too risky to do business. While not discussed at the hearing, it is also more difficult to make project budgets work for multifamily and homeownership development serving rural low-income households, even with subsidy dollars. USDA programs are designed to serve areas with low real estate values and limited growth potential where private finance and development will not commit resources.
Representative Barr (R-Ky.) raised an interesting point about how the definition of rural is ever-evolving. Congress defines “rural” and thus decides what communities will be eligible for USDA programs. Mr. Barr discussed two communities in his district that needed grandfathering language from Congress to avoid losing access to USDA programs. Some rural areas are easy to distinguish, but rural areas in close proximity to urban areas present a challenge. Rep. Barr argued that this confusion is one reason for consolidating housing programs and eliminating this rural eligibility criterion.
The definition issue is perennial. Any geographic distinction will necessarily be arbitrary in some places (as any resident of a metro area like Washington, DC, or Kansas City that spans state lines would witness). Rural communities face different challenges than urban and suburban communities and do need programs designed to fit their needs. There is an ongoing tension between targeting limited resources on those communities with deepest need and preventing painful dislocation in communities where growth and development change their eligibility relative to a static definition.
Thursday, May 21, 2015
Thursday, May 14, 2015
By Rebekah King, National Housing Conference
On May 13, the House Appropriations Committee approved the FY 2016 Transportation, Housing and Urban Development (THUD) bill. The mark-up session led to five amendments, but none made substantive changes to the bill. Much of the discussion at the mark-up echoed remarks from the subcommittee hearing but with more discussion of the need for sequestration relief and the lack of agreement among the committee to pass a bill that set spending levels above the Budget Control Act caps.
Subcommittee Chair Mario Diaz-Balart (R-Fla.) described the bill as “balanced” because it would keep most HUD programs equivalent with FY 2015 funding levels and that funding was sufficient to continue to provide HUD assisted housing. He discussed how the committee had to make strategic reductions to capital programs to meet the caps. Appropriations Chairman Hal Rogers (R-Ky.) discussed how the bill contained the best possible choices given the spending constraints and contained responsible reductions to lower priority programs. He also stated that all families currently served will remain served. In fact, housing agencies are restoring vouchers lost in previous years’ cuts by using the additional funds received in 2014 and 2015, so the total renewal need is still unknown. HUD estimates an additional $848 million will be needed to renew funding for those restored vouchers, an amount not provided by the House FY 2016 THUD bill.
Subcommittee Ranking Member David Price (D-N.C.) had a different response to the bill, stating the bill’s funding levels were totally inadequate and $1.5 billion below what HUD programs need for FY 2016. Ranking Member Price (D-N.C.) then discussed sequestration, making several observations:
- The current approach to reducing government spending fails to address the true causes of the deficit: tax expenditures and mandatory spending.
- Different measures in the bill can be rearranged but there is no way to sufficiently address all of the funding gaps without a budget agreement.
- The committee cannot write a credible THUD bill until Congress can pass a budget agreement.
Committee members proposed other housing amendments which show the concern of many members about the bill’s funding levels for HUD programs. None of these amendments passed:
- Ranking Member Lowey (D-N.Y.) proposed an amendment to increase funding for the lead hazard control and healthy homes programs.
- Representative Marcy Kaptur (D-Ohio) proposed an amendment to provide additional funding for Housing Choice Vouchers, specifically to serve targeted populations.
- Representative Barbara Lee (D-Calif.) proposed an amendment to stop the diversion of funds from the National Housing Trust Fund and to increase funding for the HOME program to the president’s requested level.
Friday, May 8, 2015
by Nabihah Maqbool, National Housing Conference
Having finished my masters in public health last year at the University of Missouri, I have been fascinated with the proposition that all policies can affect a person’s health. I was given the opportunity to work with the National Housing Conference this semester as a research intern, allowing me to investigate some of the ways in which health intersects with housing and housing affordability.
As nonprofit organizations increasingly seek to escape their silos to work with other sectors, new connections are being made to improve the wellbeing of populations, particularly for housing and health. Since the 1800s, social scientists have intuited the link between housing conditions and health. Today, the theory is better understood as a social determinant of health. Social determinants of health refer to the conditions in which people live and work, and how those conditions shape health in addition to factors like personal behavior and genetics.
Beyond basic housing standards, recent research has made clear that access to adequate housing, neighborhood characteristics and stress from unaffordable housing all impact the mental and physical health of residents. More information on the most recent research can be found here in NHC’s new report, The Impacts of Affordable Housing on Health: A Research Summary.
The healthcare field has also become attuned to the health benefits and cost savings of incorporating social determinants of health into patient care. To encourage more holistic patient care, the Affordable Care Act has introduced new changes, including increased funding to community and home services to divert individuals from healthcare institutions and back into communities. Nonprofit hospitals are now also required to complete Community Health Assessments for the areas in which they serve, with many hospitals releasing summaries of housing affordability. Newly formed Accountable Care Organizations are comprised of hospitals and providers coordinating care for patients, and are attempting to bring down costs and improve quality of care by working with community organizations. Housers should present themselves as strategic partners to these new healthcare organizations in order to develop relationships and potentially yield future collaborative opportunities. More information can be found in our upcoming paper on the Affordable Care Act, which will be released later this spring.
Housers can also take the lead in developing collaborative opportunities with health and community organizations. One such avenue is the usage of health impact studies. As previously detailed in Shelterforce, by evaluating health outcomes from a proposed community development change, housers can invite public health officials and the community to participate in the early stages of housing planning to incorporate suggestions from across fields. Factors like walkability, availability of transportation and businesses are emphasized in both the housing and health sectors, and collaborating with hospitals and community health organizations may create a coalition of organizations eligible for additional projects and funding.
With practitioners in public health and affordable housing both seeking to improve social outcomes, merging the efforts of both can help pool the resources and expertise to create communities that are healthy and safe at home.
Thursday, May 7, 2015
by Christy Eaton, HomeAid Northern Virginia
NHC invites guest writers to write on important housing topics. The views expressed by guest writers do not necessarily reflect those of NHC or its members.
There are more than 5,000 reported homeless individuals in Northern Virginia but only 1,065 shelter beds available. This means there are nearly 4,000 people who have been identified as not having a safe, stable place to live.
What the statistics don’t tell us is that a number of families and individuals in jeopardy of becoming homeless find themselves in this situation because they have lost a source of income, have credit problems or are fleeing domestic violence situations. Numbers alone don’t reflect the families and individuals who have doubled- or tripled-up and are living in one home, because they cannot afford housing; are behind on mortgage payments; or simply can’t afford basic necessities like rent, food and utilities.
As part of our efforts to change this harsh reality, members of the Northern Virginia Building Industry Association (NVBIA) founded HomeAid Northern Virginia (HANV) in 2001 so that their members—primarily homebuilders and industry trade partners—could renovate and build housing for the homeless. HANV became one of HomeAid America’s 15 chapters, a leading national non-profit provider of housing for the homeless, and together, we are changing lives.
How do we accomplish such change? In short, partnerships. We believe that in order to create successful partnerships, we need to identify people and organizations with the skills, expertise, resources and vested interest in serving the homeless community. For us, that has meant fostering relationships with homebuilders and trade partners who have the unique skills to build and renovate housing—and who have a passion for giving back to the communities in which they work. We partner with service providers who are on the front lines of providing care, shelter and programming to the homeless, and who understand current housing trends and know what it takes to get people back on their feet. We stay in front of elected officials to keep them informed of our efforts, so that we can better pursue projects that will help their constituents.
Our Board of Directors, for example, is made up of builders and trade partners, representatives from shelter organizations, bankers and attorneys who specialize in land use. We strive to provide best practices and always invest in materials and designs that will ensure longevity so that our backers and supporters know a HANV project is a solid investment.
Since 2001, our public-private partnerships have resulted in 96 projects valued at more than $12 million, serving more than 72,000 individuals.
One of those projects, completed in 2013, was a $900,000 renovation led by HANV and Builder Captain Pulte Homes. More than 30 homebuilders and trade partners rehabilitated 10 apartments at Community Lodgings in the City of Alexandria, and supporters included the executive director of the Freddie Mac Foundation and the City of Alexandria’s mayor and Council.
In another enormously successful public-private partnership, HANV completed a $250,000 renovation of an eight-unit transitional shelter with Loudoun County and Volunteers of America Chesapeake. The units are used by the Loudoun Transitional Housing Program as housing for homeless families and single women. Builder Captains Miller & Smith and Winchester Homes, along with 32 trade partners, helped the shelter realize an 87 percent savings on the cost of the renovation.
Our efforts are, of course, about more than housing. Because our builders and trade partners donate up to 100 percent of materials and labor for the projects, shelter providers can direct their own funding toward programs and services for clients, rather than on costly maintenance and construction projects. The services we provide also help area shelters care for more children at risk for homelessness and children already in shelters, almost half of whom are under the age of five. These projects also enhance the neighborhoods and communities where the individuals live, and the renovations make a positive impact on the outlook of residents.
Homelessness has been considered an insoluble social problem, but through our partnerships, we’re finding solutions. We recognize that our partners have the expertise, skills and talents uniquely suited to make a difference, and we’ve framed our partnership model around that knowledge. By actively looking for opportunities that will make it easy for our partners to give back and perform a public good—and by consistently providing them with valuable returns—we build a spirit of trust and feed a passion for supporting the community in ways that are giving thousands of homeless people a home and a second chance.
Christy Eaton is executive director of HomeAid Northern Virginia. You can reach her at firstname.lastname@example.org. For more information about HomeAid Northern Virginia, visit www.homeaidnova.org.
Tuesday, May 5, 2015
Last week I had the opportunity to speak at a unique conference in Columbus, Ohio. Hosted by the Ohio Housing Finance Agency and Ohio Capital Corporation for Housing, the Starting at Home Conference brought together researchers, developers, service providers, philanthropy and others involved in affordable housing and community development. The focus was on the intersections between affordable housing and community revitalization, education and health.
This intersection is exactly where NHC believes the affordable housing field needs to more fully focus its work. Emphasizing the comprehensive outcomes our developments and partnerships produce for communities is a way not just to change how we communicate about our work with the public and policymakers; it’s a best practice framework everyone in the business of affordable housing can use.
I often refer to this as “movement” thinking vs. “industry” thinking. Affordable housing certainly is a sophisticated industry. But we aren’t just making widgets. We are changing lives and transforming whole communities by connecting affordable homes with the resources low- and moderate-income people require to access opportunity and succeed in their daily lives. Our work spans the continuum of housing, from homelessness to homeownership, and it touches all aspects of the lives of individuals and of communities. Housers work in partnership with other fields and with our neighbors to advance our shared ideas and make change in our communities. That is the definition of a movement.
The truth of our movement is in the work itself. The day before the conference I got a full tour of a multi-year development effort in the Weinland Park neighborhood of Columbus, near Ohio State University, part of the Community Properties Initiative led by Ohio Capital Corporation for Housing. This effort involved preservation and rehabilitation of existing affordable housing, construction of new market-rate housing and of a school and retail, and incorporation of supportive services and public safety measures. The Community Properties Initiative has received awards from a range of organizations, from the U.S. Conference of Mayors to the National Trust for Historic Preservation, and many others, for outstanding work on many levels.
It’s about to be honored again. Join us at the 43rd Annual NHC Gala on Thursday, June 11 as we honor the Community Properties Initiative, and the Piece by Piece Underwater Neighborhood Recovery Initiative of Atlanta, with the Housing Visionary Award. You can read more about our honorees, purchase your tickets, become a sponsor or register for the free Policy Symposium on our website.
|What we're building|
The homeownership rate always garners headlines. Recent versions include the “22-year low” to clumsy attempts to connect homeownership to presidents’ policy. There are some more thoughtful takes, too, but most naturally converge on the recent boom and bust in housing. The boom and bust focus, however, obscures the basic fact that about a third of us rent homes and about two-thirds of us own homes. That’s been true as long as we’ve been counting.
For a recent talk I did at a Women in Housing and Finance conference, I put together two charts of the same data. Here’s the first one, of the homeownership rate as measured by the Census Bureau annually, in essentially the default graph that you can generate from the Commerce Department website. It illustrates the boom and bust focus:
The chart shows a big run up from 1995 to 2005, and then a dramatic fall, with no previous peak nearly as high. Looking at that immediately prompts questions about why it happened and how to prevent it from happening again.
Here are the same data, but with one change: the vertical axis goes from zero to 100 percent instead of from 60 percent to 70 percent.
Looks pretty darn stable this way. Above the line, people rent their homes. The boom and bust looks like a gentle swell. Below this line, people own their homes. Again, the data are exactly the same. All that changed is the scale.
Variations in the homeownership rate matter a lot, of course. The gentle swell above represents millions of people and many more millions of dollars. But zooming out helps to put the housing boom and bust in perspective.
Our public policy should focus far less on how high we can push the overall homeownership rate and far more on how we can make sure that everyone has safe, stable, affordable housing. We know that stability, not owning vs. renting, is what matters most for children. We know that there are ways to make homeownership stable and achievable for low-income families in growing neighborhoods. We know that rental housing can be a platform for essential supportive services, such as those being used by veterans in need. And most of all, we know that Americans are still struggling to afford stable housing, be it rented or owned. So the next time you read an exciting headline about the homeownership rate, zoom out a little bit, and put it in perspective.
Monday, May 4, 2015
|News from NHC's family of members|
NHC member Eden Housing recently celebrated the grand opening of Monteverde Senior Apartments in Orinda, California. Monteverde provides housing to extremely low-income older adults who earn at or below 30 to 50 percent of Contra Costa County’s area median income. In partnership with the Housing Authority of Contra Costa County, Eden received a 15-year project-based voucher commitment for 100 percent of the units, which enables Eden to serve older adults who rely chiefly on social security benefits.
Monteverde features several community amenities for its residents, including an exercise room, a library and learning center, a courtyard and community garden and a community room. The development also incorporates solar hot water heating and photovoltaic electrical systems for sustainability, all of which contribute to residents’ increased ability to age in place. These systems keep costs low for residents by providing lower utility costs.
“This is truly a spectacular site for an affordable older adult community,” Eden Housing Board member Jim Kennedy said in a press release. “The location perfectly suits an aging population, allowing them to readily access the Orinda Community Park, Community Center, and Public Library, as well as nearby services, a major grocery store, pharmacy, restaurants, retail stores and the nearby BART.”
Affordable housing, coupled with access to supportive services, allow older adults to have an improved ability to age independently. Amenity-rich communities also aid in the overall quality of life of residents. Our Annual Gala will honor two comprehensive community development campaigns, both of which also provide support for their residents to ensure healthy, independent lifestyles and improved quality of life. Read more about our honorees and plan to attend the Gala on June 11 at the National Building Museum.
Several local officials and dignitaries were on hand to celebrate the grand opening. Speakers included City of Orinda Mayor Steve Glazer, Contra Costa Housing Authority Executive Director Joseph Villareal, and Congressman Mark DeSaulnier (Ca.-11).