On Sunday, January 25 the Washington Post printed an article entitled "Priming the Pump" that criticizes the inclusion of funding for many spending program in the upcoming economic recovery package.
Specifically, this article questions Congress for providing additional program funding for the Neighborhood Stabilization Program (NSP), arguing that this program gives lenders an "incentive to foreclose."
NHC working alongside Enterprise Community Partners and NeighborWorks America as members of the National Foreclosure Prevention Neighborhood Stabilization Task Force, replied to this editorial to clear NSP of any wrongful allegations. The written response, drafted by NHC's Sharon Price, is available below.
Regarding “Priming the Pump” (Editorial, page B06, January 25):
No one wins after foreclosures.
The foreclosure crisis harms not only the millions of homeowners who have lost or are faced with losing their homes but also the low- and moderate-income communities that are becoming plagued with concentrations of foreclosed properties that will sit vacant unable to be sold. When foreclosed homes stand vacant, they create crime, arson hazards and drag down home prices throughout entire neighborhoods. When prices are driven down, everyone loses—the homeowner and the neighborhood.
The Neighborhood Stabilization Program (NSP) funding is vital to ensuring that foreclosed homes remain in good condition while vacant and do not lead to lower property values and other conditions that can undermine communities.
The NSP helps communities hit hardest by foreclosures gain desperately needed economic stability. Expending $5 billion in new neighborhood stabilization funds will allow communities to purchase and rehabilitate more than 125,000 vacant, often blighted properties. Those properties will create more than 100,000 new jobs; pay in excess of $210 million in property taxes annually and generate an additional $10.7 billion in economic activity nationwide.
While opponents of the NSP may call the funding “sheer irrationality,” we call it fiscal responsibility and job creation.
We need to stabilize America’s neighborhoods before it’s too late.
Coordinator, National Foreclosure Prevention and Neighborhood Stabilization Task Force
The National Foreclosure Prevention and Neighborhood Stabilization Task Force includes nearly 100 national and local organizations that have been meeting since November 2007 to discuss, craft and advocate for federal policies to mitigate the foreclosure crisis.
The Council of State Community Development Agencies, the National Association for County Community and Economic Development, the National Association of Counties, the National Association of Local Housing Finance Agencies, the National Community Development Association and the U.S. Conference of Mayors also defended NSP.
The groups drafted the Sign-On letter below that is addressed to the Washington Post.
January 30, 2009
The Washington Post
The undersigned organizations are compelled to respond to your January 25 editorial, “Priming the Pump.” Specifically, your assertion that the Neighborhood Stabilization Program (NSP) would give lenders “an incentive to foreclose on more houses” is absurd.
Neighborhoods throughout the nation have been ravaged by foreclosures. Not only does the presence of foreclosed houses depress the property values of surrounding homes, but these units are magnets for vandalism and criminal activity, and may cause health and safety issues. They strain government resources by increasing the demand for police, fire and code enforcement services. Data from around the country indicates that the impact of foreclosures is more keenly felt in low and moderate income neighborhoods that may have already faced considerable challenges.
With more than three million foreclosures in 2008, prior to any resources being made available for neighborhood stabilization, it is clear that the decision to foreclose results from a series of calculations, but these do not include the existence of NSP funds to help neighborhoods.
Certainly, we need resources directed at preventing additional foreclosures and this is happening at all levels of government. However, we must also help those neighborhoods that are already suffering. States and localities have taken on this task, with their own neighborhood stabilization funds and land trusts, but the Federal government must contribute to this effort. Tax revenue has declined precipitously in areas hard-hit by the foreclosure crisis. The Neighborhood Stabilization Program is targeted to these communities and will help them halt the decline in property values and limit the other negative impacts of foreclosed and vacant properties.
These resources are urgently needed in neighborhoods all over America to eliminate blighted properties, create jobs and generate tax revenue and economic activity.
Council of State Community Development Agencies
National Association for County Community and Economic Development
National Association of Counties
National Association of Local Housing Finance Agencies
National Community Development Association
U.S. Conference of Mayors