Friday, January 29, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: Stewards of Affordable Housing for the Future

While the construction of new, green homes will help provide long-term environmental and economic benefits to communities nationwide, the industry must also remember the importance of upgrading the existing housing stock to be more energy efficient.

For its role in addressing this need, NHC Member Partner Stewards of Affordable Housing for the Future’s (SAHF) was named as a NHC 2009 “Pioneering Housing Strategies” Award finalist. Specifically, the organization’s Energy Conservation Initiative is focused on helping upgrade and retrofit existing buildings. This multi-pronged initiative was created to address the full range of challenges associated with carrying out this agenda – from planning and implementation, to lack of data and financing.

To start, SAHF evaluated utility costs experienced by properties in its portfolio from around the nation. To complement the data gathering effort and build support for funding, SAHF designed a series of programs to provide highly subsidized retrofits at the outset. And because of the effort's scale, to migrate over time to financing with shallow or no grants and affordable debt to be serviced in large part by savings over time in lower utility bills.

While the initiative began by focusing on properties in SAHF’s portfolio, the organization’s work fueled its efforts at the national level. Specifically, SAHF collaborated with the U.S. Department of Housing and Urban Development (HUD) and Congress to promote and create wider funding opportunities for retrofits, including policies to retrofit HUD multifamily properties.

The GREEN Act, passed in September 2008, included a title developed by SAHF to temporarily increase section 8 rental subsidies to amortize part of the cost of loans taken out to finance energy retrofits. And, ultimately, due in part to SAHF’s work, the 2009 American Reinvestment and Recovery Act included a designated $250 million for the Office of Affordable Housing Preservation to provide program grants and loans to green HUD housing.

Thursday, January 28, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: San Diego Housing Commission

NHC Member Partner the San Diego Housing Commission (SDHC) was named as a 2009 NHC "Pioneering Housing Strategies" Award finalist for its innovative plan to parlay the equity of its existing properties into additional affordable multi-family housing units for low- and moderate-income families, including seniors, within the city boundaries of San Diego.

SDHC is taking advantage of unique opportunities during a down economy to acquire properties in areas previously out of the agency’s economic reach. The commission’s Real Estate Department plans to acquire more than 40 properties – some distressed but others that are not– suitable to be converted to affordable housing. They include existing rentals, partially finished multi-family developments or other real estate with funding needs.

The plan envisions boosting SDHC’s portfolio of multi-family rental housing by more than 1,000 units over the next three to five years. When completed, the number of affordable housing units owned by the agency will increase from 1,371 to approximately 2,400.

To learn more about this initiative, please read this article from the San Diego Union-Tribune.

Tuesday, January 26, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: Preservation of Affordable Housing, Inc.

NHC Member Partner Preservation of Affordable Housing, Inc. (POAH) was named as a 2009 NHC “Pioneering Housing Strategies” Award finalist for its business model focused on the non-profit ownership and operation of affordable housing properties.

This model was developed to comprehensively and simultaneously help ensure the health of the deal, the health of the portfolio and the health of the sponsor organization. At the deal level, by underwriting for cash flow, this model ensures the long-term preservation of the housing by providing a cushion for the property in the event of hard times, and insulating it from risks posed by external factors. At the portfolio and sponsor level, this approach puts the sponsor organization in a better position to support and stabilize properties throughout its portfolio and to weather the ups and downs of the economic climate.

This approach has successfully contributed POAH’s ability to provide quality affordable housing to an increasing number of families. For example, the organization’s recent acquisition of a portfolio of 846 affordable rental units from a failing non-profit in Florida demonstrates both how the original sponsor’s financial weakness placed units throughout its portfolio at risk and how working with the properties on a portfolio basis created opportunities for preservation of the housing deals. Also, by focusing on the portfolio’s energy consumption, POAH is identifying ways to improve the financial stability of many of its properties. And, the organization’s corporate budget has been sustained in large part from site cash flow this past year, demonstrating how the health of non-profit sponsor organizations should be of real concern, as healthy organizations are in a better position to continue the work of building and preserving affordable housing opportunities.

Friday, January 22, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: Ohio Housing Finance Agency

Novel investment approaches play an integral part in funding the development of affordable housing projects and programs. NHC Member Partner the Ohio Housing Finance Agency (OHFA) was noted as a 2009 NHC “Pioneering Housing Strategies” Award finalist for its Housing Investment Fund (HIF), which provides funding for projects or initiatives that do not fit the parameters of existing programs, such as the tax credit and HOME Program, OHFA’s Housing Development Loan program, Housing Development Assistance Program or the Mortgage Revenue Bond program.

By targeting initiatives outside traditional program parameters, OHFA encourages proposals that serve Ohio residents and remove barriers to non-traditional applications, while advancing Agency policies. Approved by the OHFA Board with an initial balance of $8 million in September 2008, for-profit and non-profit organizations, public housing authorities and local governments were encouraged to apply to receive financial assistance for activities such as:
  • Acquisition, holding and disposition of residential real estate;
  • Pre-development, construction, and/or permanent financing for rental or for-sale development;
  • Capital improvements for existing OHFA-financed properties;
  • Capitalized operating subsidy;
  • Funds for Individual Development Accounts linked to homeownership projects in which OHFA is a partner;
  • Homeowner loans for refinance, new purchase, or renovation offered through participating lenders or nonprofit partners;
  • Planning grants for comprehensive community redevelopment;
  • Homebuyer education and counseling to achieve or maintain homeownership;
  • Matching funds for federal or private foundation housing grants or loans; and
  • Other activities or projects that address an urgent affordable housing need.
These investments are directly aligned with the OHFA Annual Plan, allowing the Agency to establish and maintain a strategic focus. The OHFA HIF is funded entirely with Agency funds. Based on a formula, the Agency has committed a portion of net income to the fund. Up to 75% of net income can be dedicated to the HIF. The Agency allocated $4 million in the first round. The second round of the fund will occur in early 2010.

Thursday, January 21, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: NeighborWorks America

NHC Housing Leadership Support Program Partner NeighborWorks® America was named as a 2009 NHC “Pioneering Housing Strategies” Award finalist for its Achieving Excellence in Community Development program (AE) – a high-impact, organizational transformation program designed to produce better leaders in the affordable housing and community development field.

This 18-month, performance-driven program is an organizational investment – providing the forum, the guidance, the push and the opportunities for leaders to move their organizations to a higher level of effectiveness and long-term, sustainable success.

During the program, each participant tackles a performance challenge that is most critical to the future of their organization and the communities they serve. With the participant’s organizational performance challenge as the focal point, participants attend three week-long sessions developed and delivered by Harvard Kennedy School faculty; receive 18 months of intensive executive coaching by a team of top-notch leadership consultants; and share learning and best practices in peer groups.

As a result, participants have created new lines of business, expanded their reach, re-engineered their organization’s business approach, created innovative strategies, built beneficial partnerships and leveraged new financial resources.

AE provides significant returns on investment, with independent evaluations showing nearly all participants and more than 90 percent of staff and board members reporting lasting, profoundly positive impacts on organizational coherence and innovation; outcomes focus; organizational capacity; and community results.

An evaluation of just one program cohort demonstrated:
  • An increase in total clients (146 percent).
  • An increase in affordable housing units developed/managed (32 percent/22 percent).
  • An increase in the number of successful homeowners (15 percent).
  • An increase in the average total assets (23 percent); average increase attributed to AE was $6,860,507/organization with $96,047,109 cumulatively.
These results contribute to NHC’s mission in helping ensure that Americans, regardless of income, have the opportunity to live in decent, affordable housing in a suitable neighborhood.

Wednesday, January 20, 2010

New FHA Policy Changes Focus on Better Managing Risk, While Maintaining Support for Underserved Families

Today the Federal Housing Administration (FHA) announced policy changes aimed at strengthening the “FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities.”

Specifically, FHA is proposing to take the following steps:

1) Increase the mortgage insurance premium (MIP) – The first step will be to raise the upfront MIP to 2.25 percent and request legislative authority to increase the maximum annual MIP that the FHA can charge. If authority is granted, the upfront/annual premium structure will be adjusted, with some of the upfront premium being shifted to the annual premium. The shift will allow for an increase to the capital reserve with less impact on the consumer.

2) Update the combination of FICO scores and down payments for new borrowers – According to the FHA, new borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5 percent downpayment program. New borrowers with less than a 580 FICO score will be required to put down at least 10 percent;

3) Reduce allowable seller concessions from 6 to 3 percent – The FHA has found that the current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.

4) Increase enforcement on FHA lenders – This includes publicly reporting lender performance rankings to complement current available data and enhancing monitoring of lender performance and compliance with FHA guidelines and standards.

Notable media coverage of this announcement includes detailed articles from The New York Times and The Washington Post, as well as a Q & A on the changes from Reuters.

Friday, January 15, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: Metropolitan Planning Council

NHC Member Partner the Metropolitan Planning Council (MPC) was selected as a 2009 NHC “Pioneering Housing Strategies” Award finalist for its Interjurisdictional Collaboratives Initiative, which creates systemic efficiencies in promoting equitable and sustainable housing opportunities in the Chicago metropolitan region.

The program was borne out of MPC’s partnership with the Metropolitan Mayors Caucus (MMC) – a forum of more than 270 mayors in metropolitan Chicago – with whom MPC has been partnering since 2001 on a regional Housing Action Agenda.

After establishing an extensive toolbox, and piloting these tools in a number of towns, all parties realized that each and every town could never attain the technical expertise and political capacity to develop and implement needed housing policies and programs. Furthermore, major housing challenges do not adhere to municipal borders. In 2007, MPC and MMC responded to this by pursuing an interjurisdictional collaboration by bringing partners together to build trust and create mechanisms for a cooperative effort.

The interjurisdictional initiative began with simultaneous Employer-Assisted Housing (EAH) discussions with five towns in the North Shore and five others in the Northwest suburbs. These two interjurisdictional clusters, both in affluent parts of the region, were seeking to increase their housing options affordable to local workers and others shut out of the market.

In late 2008, MPC and MMC launched two additional interjurisdictional efforts in the South and West Suburbs, which both have been devastated by foreclosures. For these hard-hit suburbs, the goal was to connect housing to broader community and economic development plans, and build the necessary capacity for successful implementation.

Over the past year, the program has succeeded in accomplishing EAH-related goals in areas such as the North Shore. For example, Lake Forest donated land near its transit stop to be competitive for a 2009 Low Income Housing Tax Credit award that was subsequently approved.

And, in October 2008, leaders from the South and West clusters convened with the federal Neighborhood Stabilization Program (NSP) to formalize their efforts to be competitive for NSP funding. Rather than competing for state and county NSP resources, towns in these two clusters formed well-functioning, interjurisdictional entities to submit joint proposals for NSP. Their coordinated efforts proved successful. On November 4, Cook County awarded the two clusters more than $12 million in NSP funding. Both are pursuing additional funding at this time to further fulfill their goals.

Wednesday, January 13, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: Mercy Housing Idaho

NHC Member Partner Mercy Housing Idaho was named as a 2009 NHC “Pioneering Housing Strategies” Award finalist for its Self-Help Single Family Homeownership program, which helps low- and moderate-income Idaho families achieve homeownership through its comprehensive approach.

Using sweat equity, each family commits 35 hours per week to build their home and the homes of their neighbors. Once completed, the homes are typically valued from $110,000 to $120,000, with the sweat equity investment equaling roughly $20,000 per house. Using rural development mortgage loans from the U.S. Department of Agriculture, families who live in these homes often see interest rates as low as 1 percent.

To make the program work, Mercy Housing staff provides construction supervision, financial literacy and home maintenance classes to all participating families. This model provides low- and moderate- income participants with the opportunity to increase their assets and help build a more solid future for their families. In turn, Idaho's rural communities also benefit from capital investments in creating new housing stock, new neighborhoods, and an increased tax base, as well as new jobs for local contractors and suppliers.

To date, more than 104 homes have been built through this initiative, without a single family experiencing foreclosure. Additionally, many of the homeowners go back to school to achieve their goals of higher education, increase their family size, volunteer in their communities as leaders, take on new jobs at a higher wage, and more. Mercy Housing Idaho continues to expand this program, helping families across the state achieve homeownership and accomplish their life goals.

Monday, January 11, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist: Mercy Housing Lakefront

According to a recent report from the Urban Land Institute, the supply of affordable rental housing in Chicago’s Cook County is expected to decrease by 78,000 units by 2020.

To help prevent the dramatic loss of affordable housing in the Chicago area, Mercy Housing Lakefront (MHL) is undertaking several affordable housing preservation projects that will ultimately leverage more than $200 million to preserve 1,800 units of housing with expiring government-assisted contracts and subsidies.

MHL was named as a NHC 2009 "Pioneering Housing Strategies" Award finalist for the first preservation project completed in this series, Malden Arms, which is an 83-unit supportive housing building serving formerly homeless, low-income, and disabled individuals.

Site improvements included the introduction of many green elements to make the building, originally constructed in the 1920s, more energy efficient. These upgrades were intended to not only reduce the building’s impact on the environment, but also to lower utility costs for residents.

While the project was under budget and ahead of schedule, MHL had to successfully overcome the unique challenge of creating a sustainable, long-term financing structure for Malden Arms.

To help solve the project’s financial dilemma, MHL secured a Long Term Operating Support subsidy from Chicago’s Low Income Housing Trust Fund for 52 of the 83 supportive housing units. The funding allowed MHL to increase rent revenues without impacting tenants’ out-of-pocket housing costs, decreasing a portion of the tenants’ rent in most cases and generating a positive net operating income to support the building’s long-term affordability.

Furthermore, MHL projected that half-way through the life of the building’s tax credits, operating expenses would again exceed projected increases in rents. To proactively overcome this challenge, MHL and its tax credit investor, the National Equity Fund, front-funded a “future losses reserve account” to bridge the financial gap when this time period occurs, ensuring the financial viability of the project through its 17th year.

In the coming years, MHL’s larger goal is to leverage more than $1 billion in affordable housing investment across the Chicago region by creating or preserving more than 5,000 affordable housing units. The strategies and lessons learned through the Malden Arms project will allow MHL to accomplish these goals and more.

Friday, January 8, 2010

New Landmark Study Defines Role and Impact of Mission Entrepreneurial Entities on Affordable Housing Delivery

On January 6, the Affordable Housing Institute (AHI) published the findings of a new landmark study, Mission Entrepreneurial Entities (MEEs): Essential Actors in Affordable Housing Delivery, which examines the characteristics of MEEs, their role and importance in housing delivery, and their principles of success.

MEEs are private organizations – usually nonprofit housing entities – whose focus is on change-making that involves developing a sustainable organizational and financing infrastructure for the creation of affordable housing. Through “mission entrepreneurship,” these organizations convert ideas and resources into tangible results in the form of successful housing developments and outcomes, which help influence both economic and policy change.

A year in the making, the study took an in-depth look at 23 MEEs, 12 from the U.S. and 11 from the U.K., finding that both countries produced entities with similar roles and characteristics. The most successful MEEs from both countries were born “right” and grown “right,” meaning that they were grown consciously from the right organizational vision, business model design, value chain linkages, and civic supporters and partners. Unsuccessful MEEs tended to be more unfocused with a less scalable model and over-reliance on a handful of visionaries and partners.

To help examine these characteristics, the study categorized MEEs in the U.S. and U.K. into Neighborhood MEEs and Production MEEs, as well as Small Scale MEEs and Scaled MEEs. In general, Neighborhood MEEs tend to be Small MEEs, and Production MEEs tend to be Scaled MEEs. This is because Neighborhood MEEs derive their value by being in extremely close touch with a place and its people, and Production MEEs derive their value through a value-chain assembly of resources resulting in tangible outcomes, usually housing properties produced or preserved.

In part, the study also identified critical geographic gaps between MEE need and capacity – indicating the urgency to jump-start new MEE formation in those areas that lack the necessary capacity to turn challenges into solutions.

Overall, the study reinforced the need to distinguish MEEs from other nonprofit organizations to help appropriately develop their change-making capabilities for the future. Regarding applications to the global South, the report did not prescribe answers, but rather it raised questions, noting the need to explore profound differences when comparing similarly-focused entities elsewhere.
“The Affordable Housing Institute has produced a long-awaited analysis,” said Conrad Egan, NHC president and CEO. "It tells how and why mission directed entrepreneurial entities focused on producing and preserving affordable homes in the USA and the UK are successful, and how lessons about their powerful progress can illuminate and energize further momentum toward more affordable homes for all.”
The study was co-authored by Ray Christman, Atlanta, GA; Gaynor Asquith, Manchester, UK; and David Smith, Boston, MA.

This past fall, the findings of the study were previewed at a World Habitat Day-related event hosted by NHC in partnership with AHI and the Housing Partnership Network. In addition to the co-authors, event panelists included: Tom Bledsoe, Housing Partnership Network; Carol Galante, U.S Department of Housing and Urban Development; Michael Pitchford, Community Preservation and Development Corporation; and Debra Schwartz, The John D. and Catherine T. MacArthur Foundation.

Read the Full Press Release
Read the Report

The study was partially funded by a grant AHI received from the Bill & Melinda Gates Foundation to promote research and education on the socioeconomics of housing and shelter in urbanizing countries throughout the global south, with emphasis on housing as a catalyst for improving informal communities and non-governmental organizations as enterprises that make visible change.

Wednesday, January 6, 2010

NHC 2009 "Pioneering Housing Strategies" Award Finalist the Fairfax County Department of Housing and Community Development

When it comes to developing a tailored, comprehensive affordable housing strategy, collaborative partnerships play a key role in helping communities overcome obstacles related to their specific needs.

In concert with this, NHC Member Partner the Fairfax County Department of Housing and Community Development (DHCD) was named as a 2009 NHC “Pioneering Housing Strategies” Award finalist for its partnership efforts with four other entities – both public and private – to create to the Partnership for Permanent Housing (PPH) program in Fairfax County, VA, which was developed to assist homeless families achieve self-sufficiency.

Launched in 2006, PPH teaches valuable life lessons that help participants break the cycle of poverty by creating a solid foundation of life skills, which is also intended to help improve the chance of upward mobility for their children.

PPH measures self-sufficiency in four different areas, including: economic self-sufficiency; stable, permanent housing provided first through rental subsidy and ultimately through homeownership; improved life functioning; and improved well-being of children as measured through educational achievement.

Since its inception, the program has seen measurable results, especially when it comes to education. For example, five clients are participating in GED preparation classes, eight clients are attending college level courses and three clients are participating in vocational training. Additionally, average participant credit scores have increased by 20 points, and 100 percent of the families in the program are on track to complete PPH-related training.

This “full-scope” approach is to be commended for helping to provide stability for area families by also concentrating on a range of complex issues related to cyclical poverty and homelessness.

Tuesday, January 5, 2010

Helping Communities At Risk: Ideas for Urban Areas Affected by Foreclosures

Foreclosures are deeply impacting cities across the nation, triggering a spiral of abandonment, decay and municipal budget shortfalls.

A recent report from Living Cities, entitled “Communities At Risk: How the Foreclosure Crisis Is Damaging Urban Areas and What is Being Done About It,” takes a closer look at the severity of these issues and highlights pilot projects in 10 different cities across the U.S. aimed at tackling foreclosure-related challenges.

The report outlines:
  • How the housing crisis in some cities has kicked off a cycle of plummeting real estate values, increasing crime and dwindling municipal revenues;
  • The innovative tactics that these 10 pilot projects have developed to fight for their communities, including becoming landlords, scaling back rehabs and backing demolition; and
  • What government, the private sector and others must do to rebuild neighborhoods riddled with foreclosures.
While the strategies featured in the report have helped address the needs of the foreclosure-ridden communities cited, Living Cities argues that broader solutions will require both significant investment and major policy changes – from Wall Street to City Hall to the White House.

Download the Report

Monday, January 4, 2010

WAMU: Housing Affordability Not Getting Better, Trends for D.C. and Northern Virginia

On December 31, the Center for Housing Policy's Keith Wardrip was featured on WAMU 88.5 FM Radio (D.C.) to highlight a new Center report, entitled Housing Affordability Trends for Working Households, which found that housing affordability actually worsened for many of America’s families between 2005 and 2009.

For areas in D.C. and Northern Virginia, the number of households spending more than half of their income on housing grew significantly despite falling home prices. In 2005 the number of households in D.C., Arlington and Alexandria devoting half their income to housing costs was 18 percent and by 2008, it had risen to 22 percent.

The report suggests that this increase is due in part to adjustable rate mortgages and higher utility costs. High unemployment levels are also making it difficult for owners to afford their homes.

According to Wardrip, things aren't likely to get better until unemployment goes down, and government assistance programs give more help to those struggling to meet monthly payments.

Listen to the Full Audio Segment

Enterprise Rose Fellowship: Transforming the Way We Think About, Design, Locate and Build Affordable Homes for Low-Income Families

NHC member partner Enterprise Community Partners was a 2009 “Pioneering Housing Strategies” Award finalist for their highly competitive Enterprise Rose Fellowship in Community Architecture – the only national program that develops the next generation of architects focused on uniting a community-based approach to development with best practices in affordable housing design.

According to Enterprise, many affordable housing developers have historically accepted the premise that design excellence must be compromised by budget constraints. The Rose Fellowship is living proof that the long-term financial and social viability of affordable housing, in fact, depends on design excellence, sustainability and community engagement in the development of their neighborhoods. To make these practices universal, the fellowship seeks to nurture a movement of designers committed to working with communities to design and develop high-quality, green affordable housing. It achieves this by making a valuable grant – for the purpose of employing a highly skilled emerging architect – to a community development corporation (CDC) for a period of three years. The CDC benefits from having the creativity, imagination and training of an architect on staff. The architect benefits from deep involvement in the neighborhood where his or her affordable housing projects move forward. The program is so successful, that by the end of the three-year commitments, many of the host organizations take the leap to create a position for their architect-fellow to remain a permanent member of their staff. Even those fellows who do not stay on with their hosts though, remain in the field of community-based architectural design.

The Fellowship has offered 31 of the nation’s finest early-career architects a chance to receive three years of rigorous training and experience in sustainable community design work. The Rose Fellowship is an important part of Enterprise’s Green Communities initiative. The initiative transforms the way we think about, design, locate and build affordable homes for low-income families.

Since the fellowship’s launch in 2000, Enterprise Rose Fellows have helped to design and develop over 4,400 affordable homes and apartments valued at nearly $1 billion and 43 community facilities valued at over $42 million, including neighborhood and child care centers, community gardens, health clinics and mixed-use space for nonprofits and small businesses. Rose Fellows have also led nine major community planning efforts and have been leaders in greening affordable housing. The breadth of the fellows’ work ranges from a straw-bale housing development in Montana to a center for troubled teens that won the Virginia Governor’s Award for Best Housing Project.

Last year, after conducting an independent evaluation, the Rensselaerville Institute reported: “Fellows are publishing, teaching, and choosing to stay on as architects and leaders in the community development field—all of this representing measurable progress in realizing the program’s primary goal of creating a new generation of community architects in the United States.”

Fifteen of 20 former Fellows have gone on to positions of leadership in the fields of community design, sustainable design, and community development—including the director of the Mayor’s Institute on City Design, the director of the Austin Community Design Center, and a professor of architecture at Penn State University. And their work has received broader public recognition—through over 350 media stories—which we believe is crucial to winning broader public support for quality design in affordable housing development.

After completion of the three-year fellowships, nearly 90 percent of host CDCs report that the fellowship led them to adopt new policies and standard practices to incorporate community input and sustainable design principles. Finally, 85 percent of the host organizations have chosen to employ either the Fellow or an additional architectural designer full-time.