Thursday, March 31, 2011

Centerpiece: Renting vs. Owning – Potential Benefits on Both Sides for Working Families

For the average working American family, is it better to rent or own a home? This has been a long-standing question, but in the last several years it seems to have become more prominent. There has been a substantial drop in home prices throughout many parts of the country, potentially allowing low- and moderate-income families better access to homeownership. Yet at the same time, the economic crisis has caused rampant unemployment and financial challenges for millions of households, pushing many homeowners into foreclosure and into the rental market. As pointed out in a recent Center for Housing Policy report, the number of renter households increased by over 2 million between 2004 and 2007, coinciding with a rising number of mortgage delinquencies.

So what is better for the average working family? Many believe that the recent increase in renting households is a positive trend, particularly for low- and moderate-income households. Given the current volatile state of the homeownership market and prevalence of underwater homeowners, they cite that renting may be a safer bet for working families.

Wednesday, March 23, 2011

Centerpiece: How Does Housing Matter to Families and Communities?

How important is having a stable, affordable, decent place to live, and how does it affect other life outcomes? While the importance of shelter is clear, policy experts in the housing field have long recognized housing’s effect on other social and economic issues. A recent announcement by The MacArthur Foundation that it will fund a $25-million research initiative on affordable housing’s impact underscores the need for more data to explore these connections.

The research initiative is part of McArthur’s 2011 How Housing Matters to Families and Communities research initiative. Proposals can be for quantitative or qualitative research that will add to the empirical evidence of affordable housing’s impact on children, families and communities. Researchers should also consider how their studies could be used to strengthen housing policies or programs or integrate affordable housing into human and community development policies. In the call for proposals, the Foundation noted special interest in research that looks at the connection of housing with outcomes for older adults, public safety and criminal justice system involvement and education. Research abstracts of no more than 1500 words are due on Friday, April 8. Details on submitting abstracts, including the structure and timeline, can be found in the Call for Housing Research Proposals.

The Center for Housing Policy’s research on Housing Intersections also explores these connections. Without stability, families are likely to have higher stress levels, problems accessing medical care, and poorer educational outcomes for their children. When housing is unaffordable, people may defer spending on other important items, such as food and healthcare, settle for poor quality housing or move far from job opportunities and end up spending all of their savings and free time to commute into a high-cost area. When housing quality is lacking, the daily risks to families’ health and safety can be devastating. And, as the foreclosure crisis has shown, housing doesn’t just affect the families who live in it; it can affect the whole community.

Wednesday, March 16, 2011

Centerpiece: Ideas for keeping families in place after foreclosure

As researchers, we often ask the question, where do families move after foreclosure? After all, renter and owner families may face many barriers to secure new housing post-foreclosure. Foreclosure can hurt one’s credit, making it difficult to obtain future housing or get approved for a loan. If a renter is evicted due to foreclosure -- rather than failure to pay rent — they may still be subject to having an eviction on their rental history, putting them at a disadvantage when applying for new housing. These barriers may lead displaced households to move into overcrowded living arrangements with friends and family, or to move into substandard housing that doesn’t require a credit check to move-in, while the foreclosed home remains vacant.

Some policymakers and practitioners are turning to a “right-to-rent” approach to keep families in their home. Developed by the Center for Economic Policy and Research, right-to-rent programs enable at-risk occupants to give up the title of their home and rent the property from the new owner. Freddie Mac and Fannie Mae employ a variation of this approach, allowing renters that are in good financial standing at the time of foreclosure to stay in the property on a month-to-month basis if they agree pay market rents.

In 2009, Boston Community Capital CDFI launched the Stabilizing Urban Neighborhoods (SUN) Initiative, which goes one step further by purchasing REO homes and reselling the properties back to their owners through a 30-year fixed rate mortgage. This unique process helps eligible homeowners or renters stay in their home at payments they can afford, and stabilizes neighborhoods by ensuring that foreclosed homes remain occupied and in productive use.

The SUN initiative works with homeowners and renters that are going through the foreclosure process, but have not yet been displaced from their home. Clients are referred to SUN by partner organizations that offer housing counseling and legal aid. If clients meet stringent eligibility criteria-- sufficient income to stay in and maintain the property—SUN Initiative staff will provide an offer to the bank or servicer (whichever entity has control of the home mortgage) to buy the home at market value. When SUN initiative staff make an offer on the home, they provide the seller with data on comparable homes and their recent sale price as evidence that they are offering a fair market value for the property. BCC reports that between October 2009 and April 2010, the SUN initiative successfully negotiated the purchase of over 60 homes at an average discount of 53 percent off the original mortgage. SUN Initiative then re-sells the home back to its clients at market rate, and has had a 100 percent success rate to date. Boston Community Capital has raised almost $50 million for this initiative, all from private investors, which is estimated to finance up to 2,000 housing units over five years.
By taking a broad look at financial information and reviewing credit on a case by case basis, the SUN initiative has worked with 100 families that have qualified to participate in the program to buy back their home. This innovative program helps the individual homeowners avoid the struggle of securing a new place to live, as well as stabilizing the surrounding neighborhood.

Wednesday, March 9, 2011

Executive Director Jeffrey Lubell Testifies Before the Senate Committee on Banking, Housing and Urban Affairs

Jeffrey Lubell, Executive Director of the Center for Housing Policy, testified before Congress today about housing affordability trends. Below are his full written remarks which can also be found on the National Housing Conference website.

I am the Executive Director of the Center for Housing Policy, a research organization based in Washington D.C. working to expand awareness of the nation’s housing challenges and to identify proven and promising strategies for meeting those challenges. In addition to analyzing relevant and timely data, we draw on the expertise of the broad range of practitioners that belong to our affiliate, the National Housing Conference.

My testimony this afternoon will focus on housing affordability trends. The bottom line is simple and perhaps counterintuitive: despite several years of falling home prices, housing affordability has worsened for low- and moderate-income households. In 25 states, the share of working households severely burdened by their housing costs rose significantly between 2008 and 2009, while no state saw a statistically significant decline. Lower home prices primarily benefit those in the market for a new home, and renters face steady or rising costs and more competition for low-cost units. For both owners and renters, falling incomes and a grim employment picture have contributed to the erosion of housing affordability.

Thursday, March 3, 2011

Centerpiece: Looking Beyond the Usual Suspects

Whether planning an event or writing up a policy tool, we always look for real-world examples that can help to illustrate concepts and keep the presentation or analysis rooted in practice. Case studies help us to envision how an abstract idea or complex policy plays out on-the-ground. They provide a model and, often, encouragement: This community was able to adopt an inclusionary zoning ordinance – why can’t we? Sometimes, they even provide a reference or contact that other practitioners can reach out to for guidance or advice.

When it comes time to identify the ideal community to profile in a conference session or report, however, we often end up turning to the same examples – the usual suspects. We often select these places for good reason: they have benefited from the vision and dedication of a leader or group of leaders who have made great things happen. It’s difficult to talk about transit-oriented development without referring to the great work happening in Atlanta, Portland, or Denver. Discussions of community land trusts often point to Burlington, Vermont. Inclusionary zoning? Montgomery County. These “usual suspects” have forged a new model for effectiveness and creativity, and in doing so have raised the bar for everyone else.

But what about everyone else?

Certainly there are communities across the country that are doing interesting and innovative things to improve access to affordable housing near transit or work centers. Or that have revised their zoning ordinances to create permanently affordable homeownership opportunities for moderate-income families. We are always looking for these “undiscovered” examples to profile on and, or to feature at a conference, but for researchers sitting behind a desk in Washington they can be hard to find!
As NHC and the Center gear up to plan our next learning conference (coming soon in September 2011!) and release a new toolkit on transit-oriented development, we will be looking for more communities that deserve our attention. Please feel free to email us or post in the comments below.

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Wednesday, March 2, 2011

What Will Happen to Housing Funding in the Next 2 Years?

On Friday, February 25, 2011 NHC hosted its annual Budget Forum in Washington, DC. With over 160 congressional staff, housing advocates and  thought-leaders in attendance this year's forum resulted in a fruitful discussion on the housing-related requests in the President's FY 2012 Budget Proposal, critical affordable housing research and the outlook for housing programs in both the FY2011 and FY2012 budgets and beyond.

Barbara Sard,Center on Budget and Policy Priorities, gave the keynote address at the Budget Forum and is the guest blogger for today's post.

With a focus on spending cuts coming both from Congress and the Administration, many are wondering what this means for low-income housing programs for the next two years. This past Friday, at the National Housing Conference’s 2011 Budget Forum, I explained the broader budget context for this question. My presentation (slides here) focused on what’s likely to happen to funding for federal housing programs this year as well as in the next few years. Unfortunately, I don’t have a crystal ball and can’t predict exactly how negotiations will play out. I can, however, provide some parameters of what’s likely to happen by going over housing funding levels under two competing budget proposals: the House-passed budget plan for 2011 and the President’s budget plan for 2012.
For some context, here’s a chart from my presentation that shows how much of the federal budget goes to community development and housing assistance: 

The House-passed budget proposal (which isn’t likely to pass in the Senate and the President has threatened to veto), is a mixed bag from the perspective of low-income housing assistance. It cuts Department of Housing and Urban Development (HUD) funding by $5.4 billion below the 2010 level, a 12 percent cut, and by $7 billion, or 15 percent, below the President’s 2011 request. Block grants are cut the most sharply (see this slide for specifics). And, despite record increases in severe housing needs, there is no new funding for programs helping the most vulnerable populations, like veterans and the elderly (see this slide for specifics). On the flip side, renewal of ongoing rental assistance is largely protected under the House plan, except for a $1 billion cut in public housing capital funds. Project-based Section 8 (PBRA) and the Housing Choice Voucher program saw funding increases (more here).

Under the President’s 2012 budget proposal, there are modest gross funding increases that continue to prioritize the renewal of existing rental assistance. It makes some progress against homelessness (a $632 million increase, including new vouchers) – but not enough to reverse the substantial increase in homelessness in the last several years -- and funds the Sustainable Communities, Choice Neighborhoods and TRA initiatives. However, to fund these priorities, the proposal trims some of the HUD block grants.

The bottom line is that under both of these proposals, there is a commitment to renewing existing rental assistance and reduce spending due to budget constraints. The Obama proposal would make at least some small steps forward to reduce homelessness and leverage other public and private investments to improve housing and communities. The final budgets for this year and next should put a greater focus on meeting housing needs, both to boost the economic recovery and to assist vulnerable populations.

Tuesday, March 1, 2011

A Housing Great Passes Away at 87

Muriel Gilman, an inspirational woman who dedicated her life to serving the community, died Thursday, February 24 at the age of 87.

Muriel was an icon who cared passionately about housing, equality and community development. She and her husband, Marvin, were strong and generous supporters of the National Housing Conference and the Center for Housing Policy for many years. Additionally, Muriel was a longtime executive for the United Way of Delaware.

Muriel's commitment to affordable housing and community service was truly admirable. She was a tireless community activist who cared deeply about making a difference in the lives of others.

NHC honored Muriel's late husband, Marvin, in 1994 with the Housing Person of the Year Award. They made a striking and formidable team.

She will be deeply missed. Muriel is survived by her two children and their families -- Peter and Susan Gilman of Wynnewood, Pa. and Martha Gilman and Greg Smith of Yorklyn.

A memorial service for Muriel will be today, Tuesday, March 1 at 11 a.m. at University of Delaware's Arsht Hall, 2700 Pennsylvania Ave,. Wilmington, De.

To read a full article on Muriel's celebrated life and many achievements from the Delaware News Journal, please click here.