Tuesday, December 18, 2012

Foreclosure inventory up, pre-foreclosures down...yet the song remains the same

by Blake Warenik, National Housing Conference and Center for Housing Policy

The good news: the rate of homes headed toward foreclosure continues to fall. The bad news: the foreclosure rate is near its all-time high. The rub: the percentage of homes in (or about to be in) the foreclosure process has not budged for the last two years.

The Foreclosure-Response.org team—my colleagues at the Center for Housing Policy alongside our partners at the Urban Institute and Local Initiatives Support Corporation—released the latest foreclosure and delinquency data for all 366 U.S. metro areas last week, including analysis for the 100 largest metro areas and maps for visual learners (a.k.a. humanities majors) like myself.

The story seems to be that there is no story: despite signs of a real housing recovery, including the biggest year-over-year jump in home prices since before the bubble burst and a bounceback in housing starts, the foreclosure crisis continues to drag on so long it's hard to continue calling it a crisis.

Digging into the data for the 100 largest metro areas, the rate of serious delinquency (combining the foreclosure rate with the rate of mortgages that are 90 or more days delinquent) stands at 9.53 percent, hovering between nine and ten percent as it has for the last eight quarters. But the makeup of the number has changed. While the percentage of homes headed toward foreclosure has fallen to 3.53 percent down from the December 2009 high of 5.48 percent, the share of homes in foreclosure has risen from around five percent in December 2009 to around six percent (where it sits for the third consecutive quarter).

The data can tell us a few things about why the foreclosure recovery has stalled out, plus a few details about the most affected areas:

  • The foreclosure inventory is growing. The data indicate that foreclosure starts have outpaced completions since March 2008, when Foreclosure-Response.org began tracking foreclosures.
  • Unemployment and delinquency are a circular problem. Unemployment impacts housing markets when borrowers struggle to make mortgage payments. Distressed housing markets make it more difficult for job-seekers to sell their homes when promotions or new opportunities become available in other areas.
  • Coastal metros are suffering more than the heartland. Metro areas in coastal states like California and Florida tend to have higher rates of unemployment and serious delinquency than areas in the Central U.S. like Texas and central plains states.

I'll leave it to the policy folks to answer how to deal what we hope has not become a new reality, but suffice it to say that foreclosure remains the most intractable problem left in the wake of the housing bubble and the Great Recession.

Wednesday, December 12, 2012

Veteran homelessness is falling. How do we end it?

by Maya Brennan, Center for Housing Policy

The number of homeless veterans dropped 7.2 percent between January 2011 and January 2012, according to the latest data from HUD. The nation’s chronically homeless population shrank by 6.8 percent in the same timeframe. Concerted efforts to provide permanent housing and supportive services are making progress. To build on this achievement, let’s keep pushing forward to serve the needs of chronically homeless veterans and help returning veterans make a successful transition to civilian life.

The national effort to end veterans’ homelessness includes programs that serve veterans at every level of need, including homelessness prevention assistance, emergency shelter beds, transitional housing, and permanent supportive housing. (See an earlier NHC Open House Blog post for a summary of veterans’ challenges.) One component of the solution involves veteran-specific programs like Grant and Per Diem (GPD), Enhanced-Use Leases (EUL) and HUD-VASH vouchers—especially when they can be project-based. But these programs don’t fully serve the needs of homeless veterans without adding in funds from one or more standard affordable housing programs (CDBG and HOME, for example). Permanent housing solutions may also require Low-Income Housing Tax Credits. In short, it takes a full housing policy menu to serve the full array of housing needs.

Veterans’ housing programs work in concert with robust supportive services to help residents recover from trauma, addiction and other mental health issues and stay stably housed. Smart programs can also help veterans become part of a community and rebuild connections that support positive outcomes. Continuing these efforts and finding strong, effective, and replicable models is critically important for our ongoing efforts to serve the nation’s veterans.

Our nation’s veterans have valuable contributions to make to society, and communities should gladly welcome them home—to a real, permanent home.

Tuesday, December 11, 2012

Envisioning the housing programs of the future

by William R. Frey, Enterprise Community Partners

NHC invites guest blog posters to write on important housing topics.  The views expressed by guest posters do not necessarily reflect those of NHC or its members.

Thirty years ago, the Northwest Bronx Community and Clergy Coalition (NWCCC) organized buildings to prevent them from becoming abandoned, but the availability of capital to improve buildings was in short supply. Fordham Bedford Housing Corporation began its work in the Bronx during this time by taking over a building on Decatur Avenue, and managing it through a challenging period.  They were eventually able to obtain capital through a moderate section 8 program with the City of New York to rehabilitate the building with tenants in place. It was a beginning for the revitalization of this neighborhood and for the growth of a strong nonprofit housing organization.  That first 24-unit building was the beginning for an organization that now owns and manages over 3,000 units of affordable housing. 

Today, resources are once again in short supply, making it perhaps a good time to reevaluate how they should be allocated.  

For the most part, housing dollars today are allocated based upon the merits of a project, with some consideration given to the strength of the housing developer and other factors.  In her piece, “Increasing Effectiveness to Maximize Reach and Resources,” Nancy Rase, president and CEO of Homes For America, suggests that funders should consider providing funding based on the qualities of a developer such as “demonstrated capacity to use the funds effectively and efficiently,” resident satisfaction and high property performance.

Funding developers rather than projects could have its advantages. It would:

  • Encourage organizations to place more emphasis on resident satisfaction as a condition of funding.
  • Reward developers who have strong organizational capacity, consistently serve residents and manage properties well.  Those developers could then operate with a fair amount of certainty with respect to funding awards.  Many current funding allocation schemes often intentionally distribute resources so that no one developer is rewarded too often, leading to a lot of fluctuation in the number of projects each organization receives annually, and similarly frequent changes in staffing needs. 
  • Discourage poor stewardship of housing, and prevent low-capacity organizations from developing housing which may requiring additional assistance if buildings fail to perform due to poor management. 

  • Allow small but effective organizations to receive funding who are currently unable to compete with larger organizations. 
There might also be problems. In any funding allocation program, the concern over fairness is crucial.  What if the most effective organizations disproportionately serve one racial demographic?  What if the funding scheme encourages investment in housing by an organization to the exclusion of all other valuable programs that housing organizations used to provide?  Both of these questions are likely to have policy solutions. 
The real question is, is there value in creating a scheme that maintains high-capacity organizations, like the Fordham Bedford Housing Corporation, as the stewards of affordable housing?

William R. Frey is Director of Relationship Management of Enterprise Community Partners New York office. Enterprise Community Partners, an NHC member organization, works to create opportunity for low- and moderate income people through affordable housing in diverse, thriving communities.

Friday, December 7, 2012

NHC members call for stability and liquidity in multifamily lending

by Ethan Handelman, National Housing Conference

This week, two new white papers, both of which are from NHC members, called for a strong government role in multifamily mortgage finance. The papers highlight the need for reliable capital sources in all markets, mechanisms for getting private capital to take risk ahead of government, and the strong track record of Fannie Mae and Freddie Mac in multifamily lending, even during the crisis. These principles have been a consistent theme of advocacy around mortgage finance for multifamily, for instance, in the NHC paper and principles released earlier in the crisis.

The National Multi Housing Council and the National Apartment Association jointly released “Key Principles for Preserving Liquidity and Stability for Multifamily in a Reformed Housing Finance System.” The paper lays out the need for multifamily rental housing and the financing that supports its construction, refinancing, and capital improvements. In particular, the paper articulates the need for carefully calibrated government guarantee role to ensure that capital is available in all markets that need rental housing finance, not just the handful of major markets that attract capital even in down cycles.

The Mortgage Bankers Association’s Multifamily Task Force issued, “Ensuring Liquidity and Stability: The Future of Multifamily Mortgage Finance and the Government-Sponsored Enterprises” which builds on MBA’s earlier blueprint for mortgage finance reform to call for a system of private capital finance of multifamily housing at a securities level, with the guarantee providing only catastrophic backing. The paper also rebuts the Federal Housing Finance Agency’s (FHFA) approach to multifamily by proposing that policy planning focus on how reformed GSE multifamily platforms can best create a stable, liquid market, rather than a narrow evaluation of whether the platforms can operate without government guarantee.

Wednesday, December 5, 2012

Investors looking to housing market for profit again

by Sarah Jawaid, National Housing Conference

An article in The Economist highlights renewed interest by investors looking to profit from a recovering housing market. "House prices have stabilized since their 2009 trough, and have even made small but steady gains in recent months. Investors convinced that a full-blown housing recovery is under way—a big 'if'—are looking for ways to profit from it" by primarily investing in mortgage backed securities, but also through real estate services investments and direct real estate purchases. Read more in The Economist.

Foreclosures on widow(er)s—another hole in the mortgage system

by Ethan Handelman, National Housing Conference

AARP data show that foreclosures for people over 50 are rising faster than for any other age group, in part due to mortgage servicing failures that make it hard for widow(er)s to assume and modify mortgages from their spouses. The New York Times reports on the problem, the initial steps some lenders have taken, and the push for private-sector reforms and public policy responses.

Tuesday, December 4, 2012

Jeff Lubell has a new monthly column in U.S. News

by Blake Warenik, National Housing Conference and Center for Housing Policy

Yesterday marked the publication of the first of many (roughly) monthly columns in U.S. News & World Report by Center for Housing Policy Executive Director Jeffrey Lubell where he will write on the present and future of housing policy on U.S. News' The Home Front blog, edited by Meg Handley, who has covered the Center's work in the past.

In yesterday's piece, "Three Ways We Can Move Housing Policy Forward," Lubell briefly explores the reasons why—during an election where the economy was hands-down the key topic—was housing hardly mentioned despite its extreme importance to the economy. To elevate housing to top-tier national issue in the public consciousness, he writes that housing-conscious thinkers must work to connect housing to critical social goals, show housing as a universal issue and improve the strategies in place for meeting housing needs.

Read Jeff's piece at U.S. News & World Report.

Wednesday, November 28, 2012

Is the D.C. region a model for walkable urban neighborhoods?

by Janet Viveiros, Center for Housing Policy

Ten minute walk to the grocery store, seven minute walk to the metro, five blocks from restaurants, cafes, stores and public library. Descriptions like this are found in many home and apartment listings in the D.C. metro area. In D.C., and other cities around the country, walkable neighborhoods with public transit and other amenities are increasingly sought out by homeowners and renters. The Center for Real Estate and Urban Analysis at George Washington University recently released DC: The DC WalkUP Wake-up Call by Christopher B. Leinberger, a report that assesses the growth and market trends of walkable urban places, referred to as “WalkUPs” by Leinberger, in the Washington, D.C., metro area. The neighborhoods that constitute WalkUPs typically generate significant economic activity and have a mix of residential, office, and retail space; high density and multiple transportation options, and. Leinberger asserts that D.C. should serve as a national model for developing compact, walkable communities due to the number and variety of WalkUPs in D.C. and the surrounding suburbs. Growing demand for housing in amenity-rich, transit-oriented neighborhoods coincides with expanding awareness of the advantages of compact development policies that encourage denser and mixed-use development.

The dense, mixed-use neighborhoods in the D.C. metro area offer many benefits to residents and the region. The compact and walkable neighborhoods encourage the use of public transportation, walking or biking, and have the potential to reduce traffic, environmental impacts, and increase economic activity. Yet, the news about the growth in demand to live in D.C.-area compact neighborhoods is not all good. 

Many Arlington County residents, like me, are attracted to the highly ranked WalkUPs of the Rosslyn-Ballston corridor that offer walkable neighborhoods with easy access to various amenities and public transportation. However, the Rosslyn-Ballston corridor is notorious for high rents and home prices. The popularity of Arlington’s neighborhoods along the Metrorail corridor supports the expansion of the market for high-cost housing that is unaffordable to moderate- and low-income families. According to the Arlington Partnership for Affordable Housing, the increases in average rents and home sale prices in Arlington have outpaced the increase in median income over the last seven years. Growing demand for desirable, walkable urban neighborhoods throughout the D.C. metro area, in addition to already-high land prices, increases pressure on housing costs and can often lead to the exclusion of moderate- and low-income families from these communities. This exacerbates the challenge that local governments face in providing affordable housing in transit-oriented neighborhoods. 

It is important for local governments to implement comprehensive affordable housing strategies in tandem with compact, mixed-use development in order to prevent moderate- and low-income families from being priced out of these areas. Some of local governments in the region have taken steps to incorporate affordable housing development into their compact development strategies. For example, Fairfax County’s Tysons Corner Comprehensive Plan provides an option for developers to receive rezoning approval in exchange for reserving at least 20% (a relatively high number) of housing units as affordable workforce housing. Tysons Corner will provide an important case study for dense, transit-oriented development and the inclusion of affordable housing as it undergoes densification and compact development in conjunction with the extension of the Metrorail. 

If cities and suburbs around the country use the D.C. metro area’s compact and transit-oriented development as a model, they should also examine the affordable housing strategies of the region’s communities to adopt best practices and also learn from the struggles that local governments face. The potential equity issues associated with WalkUPs should not be overlooked by communities anxious to reap the benefits of compact, walkable developments.

Tuesday, November 27, 2012

State/Local Government Best Practices

by My Trinh, Enterprise Community Partners

Enterprise is highlighting the work of state and local governments for their best practices. Check out our monthly blog profiles on @the horizon:

Having invested heavily in its asset management department in recent years, what best practices does New York City’s Department of Housing Preservation and Development recommend? Find out in @the horizon’s July post on State/Local Government Best Practices.

Which state has realized an estimated $4 million in savings through its compliance streamlining initiative? Which city has reduced its percentage of files and inspections for affordable housing projects by 37? Find out our August post.

What are the keys to success in interagency collaboration? Learn about how much value the Minnesota Interagency Stabilization Group has created in our October/November post.

What makes for an efficient ownership transfer consent policy? Find out why organizations appreciate the Missouri Housing Development Commission’s process in our November post.

Enterprise Green Communities project:
The Wellstone, Minneapolis, MN
What best practices has your local government put in place to promote long-term project or organizational financial sustainability? Please contact us to share a best practice on next month’s blog. Learn more about Enterprise’s work in Building Sustainable Organizations.

My Trinh is a Program Officer with Enterprise Community Partners based at Enterprise's San Francisco offices. Enterprise Community Partners, an NHC member organization, works to create opportunity for low- and moderate income people through affordable housing in diverse, thriving communities.

Monday, November 19, 2012

The future of FHA

by Ethan Handelman, National Housing Conference

Last Friday, HUD released the annual actuarial report for the Federal Housing Administration (FHA). It shows the capital reserve ratio at –1.44% (that's a negative). FHA may not need any additional capital, depending on economic conditions and the results of policy actions in progress, but it might need an infusion from Treasury. Given that FHA is providing essential (and otherwise quite scarce) mortgage capital during an historic housing downturn, we should read this report as better news than we might have gotten. We should also be open to a conversation about structural changes to FHA that make it more flexible and better able to fulfill its essential role.

What does a negative capital reserve ratio mean? It’s a comparison of FHA’s current reserves of $30.1 billion set against $46.7 billion of expected losses on its current portfolio of single-family loans over the next 30 years. It excludes future income from new loans, which are performing far better than the 2007-2009 vintage that account for much of the losses. The full report also attempts to simulate some variation in economic conditions, but the future is as always difficult to predict.

FHA might need an infusion from the Treasury. It’s not necessary yet, and it may not be needed at all. The actuarial report doesn’t take into account income to the fund coming in from new loans originated, and since FHA continues to do a brisk business as private capital remains a much smaller part of the mortgage market, that’s real money. And if housing markets continue to improve, policy changes take effect, and loss mitigation efforts expand, losses may well be quite a bit less than anticipated.

Indeed, we should be impressed that FHA is in as good a shape as it is, given that we have experienced the worst housing downturn since the insurance program was created. FHA remains an essential source of mortgage capital, particularly for borrowers without the accumulated wealth for a large downpayment. With home mortgage lending still very tight from all sources, FHA is more important than ever for sustaining the nascent housing recovery and making sure that all in America have access to affordable homeownership options.

FHA has several actions in progress to shore up the financial position of the insurance fund, including foreclosure prevention policies, distressed note sales, and a small increase in premiums, detailed in HUD’s press release. These are good steps within the existing framework of the agency. The housing crisis provides us an opportunity to think beyond the immediate steps toward an FHA better able to respond to major housing challenges. Once the political hubbub around this actuarial report subsides, committed housing stakeholders should engage in real conversation about what FHA needs, such as the ability to scale its activity up and down, adjust pricing and loan terms, and manage its risk more efficiently. If this crisis provides an opportunity to make the agency better able to fulfill its role, some good may come of it.

For more, see:

Tuesday, November 13, 2012

What does the re-election mean for affordable housing?

by Julie Gould, Mercy Housing

Our nation has had a wild ride leading up to yesterday’s announcement of President Obama’s re-election. A special thanks to our Resident Services staff throughout the country for making sure that Mercy Housing residents were registered to vote and informed about their civic rights and responsibilities.
Julie Gould

Congress and the President have some huge issues to tackle immediately to prevent the nation from going over the fiscal cliff. The first, across-the-board sequestration cuts of 8.2% or more to all federal government programs, will take effect January 1, 2013, unless Congress passes a balanced package of revenues and cuts in its place. Then, they will have to address the debt ceiling, pass the 2013 budget and reform the tax code. It’s a lot to do in six months, especially for a Congress that continues to be much divided along partisan lines!

There are three major areas that we believe this Administration needs to focus on right away in order to continue to strengthen our nation’s economy and provide more affordable housing options for families and individuals in need:

  • Foreclosure Prevention. While the housing market is starting to show signs of improvement, foreclosure prevention is still a major issue threatening many households in our country. In his last term President Obama launched a Foreclosure to Rental pilot program as well as several loan modification programs for underwater homeowners. The programs work with banks to modify loans, with matching funds and housing counseling provided by government and nonprofits. Nonprofits can compete in place-based auctions of Federal Housing Administration (FHA) properties, as Mercy Housing is doing in Chicago through its Mortgage Resolution Fund partnership. We only hope that more attention will be given to this critical issue during this time of economic recovery.
  • HUD. The Obama Administration has attracted great talent to the U.S. Department of Housing and Urban Development (HUD), who has actively reached out to partner with nonprofits like Mercy Housing. While the Administration has continued to invest in HUD, Section 8 renewals account for 85% of their resources and growing, so controlling Section 8 costs is going to be a major challenge in the near future. WE hope that The Obama Administration will continue to focus on addressing neighborhoods in distress through programs like HUD’s Choice Neighborhoods program which recently awarded $300,000 to Mercy Housing’s Sunnydale development in San Francisco to support our work in this much-needed community. Additionally, we hope President Obama will continue his plans to support housing priorities like Project Based Section 8, and link housing programs with other federal agencies such as the Veterans Administration, Health and Human Service, and Transportation.
  • Jobs. Employment is one of the biggest drivers of the need for affordable housing. While President Obama has already created 4.6 million jobs, much more needs to be done to help families and individuals find stability. President Obama plans to increase infrastructure investment, hire more state & local workers, double the payroll tax cut, and create new tax cuts for small businesses and companies that hire new workers.

There is a lot of work ahead of us and Mercy Housing is up for the challenge. We welcome all the newly elected leaders and hope that we can all come together across party lines to close the gap that exists between the supply and demand for affordable housing and strengthen communities for families and individuals throughout the country.

Julie Gould is Senior Vice President for Policy and Advocacy at Mercy Housing, a national nonprofit working in the development, preservation, management and/or financing of affordable, program-enriched housing across the country. Mercy Housing is an NHC member. This piece was originally posted on the Mercy Housing Blog and has been republished with permission here.

Wednesday, November 7, 2012

The results are in, but the campaign for bipartisan support of good housing policy continues

A statement from Chris Estes, President and CEO of the National Housing Conference

Chris Estes
The National Housing Conference congratulates President Obama on his reelection. Against the backdrop of political turmoil abroad, we also applaud both campaigns and our nation for participating in the peaceful collective choice upon which our democratic republic rests. The people have spoken, and now it’s time to get back to work.

And there is much work to do for leaders in both parties. Both parties must recognize that the economic recovery that we are all looking for cannot occur without a housing recovery, which will take strong and careful policies to create. Housing solutions have not yet played the necessary central role in the federal response to the financial crisis and economic downturn. Even as home prices are finally beginning to rise again in some places, many other areas still struggle and housing costs outpace incomes for millions of Americans. The Obama Administration in its second term must work with the new Congress to:

  • Strengthen our housing finance system, so that there are multiple efficient channels of capital for homeownership and rental homes. Government’s role is essential for ensuring stable and liquid housing finance.
  • Rebuild communities damaged by foreclosures, while strengthening the foreclosure prevention policies that limit further aftershocks from the crisis. New federal resources should accompany better effort to coordinate neighborhood stabilization efforts.
  • Plan communities for the future, by better aligning housing, transportation, environmental, health, and other policies. We need to build communities where people can live near where they work, access the services and amenities they demand, live healthier, and provide opportunities for people of all incomes living in urban, suburban, and rural America.
  • Create a stronger, balanced federal housing policy, that provides essential housing assistance, draws in private capital and entrepreneurship, and provides both homeownership and rental housing opportunities for all in America.

We recognize that our nation faces significant challenges to both strengthen the economy and reduce our deficit. We cannot achieve the needed recovery if vital housing investments are dramatically reduced or eliminated. At NHC our guiding principle is we are all stronger together. Now is the time for members of both parties to recognize this as well. It is time for practical governance to replace partisan division.

We hope that the clear mandate granted by this election encourages Democrats, Republicans, and independents to focus together on the real housing challenges facing the country. With the election behind us, we can be truly stronger together—creating a strong federal housing policy can set us on the path forward to a housing and economic recovery.

Monday, November 5, 2012

Permanent triage in housing assistance

by Ethan Handelman, National Housing Conference

Less than one-third of those who qualify receive housing assistance.

The Washington Post’s recent story, “For many, D.C. housing waiting list offers little more than hope” made that reality a little more immediate by highlighting how the limited resources and resulting long wait have affected individuals like Ceola Lewis, who has been on the waiting list for 35 years, and Mary Hordge, who is 71, homeless, disabled, and still hoping for housing assistance.

The story also illustrated how perennial lack of resources can tie policy up in knots. To a very limited extent, scarcity of resources can impose discipline, but beyond that point, it leads to painful triage. Year after year of flat or decreasing funding (particularly when compared to rising costs of providing housing) has put housing assistance in a state of permanent triage, continually choosing among lesser evils. Some examples:

  • Absolute need vs. potential help. Triage requires choosing among those who need help. Do we help those whose need is direst, such as the homeless or disabled? Or those who are most likely to become more self-sufficient with a little help, such as employable workers who are temporarily displaced? Or those whose more claim feels undeniable, such as returning veterans? Few of us find refusing help to any of those people an easy choice to make.
  • Competing levels of triage. Federal policy imposes some triage requirements on housing providers, for instance by targeting 75% of housing vouchers to those with extremely low incomes. Local voucher programs also have some choice in creating preferences, for instance, for homelessness, victims of domestic violence, the elderly, or the disabled. Periodically, higher levels of need arise, such as the wave of returning veterans, that prompt calls for even further preferences. The layers get complex very quickly, to the point that “the [D.C.] housing authority can’t provide applicants with numbers, as their spots are constantly shifting on the list, based upon need” according to the Post’s story.
  • Long, complex lines. The continual increase in housing costs relative to incomes creates need much faster than turnover (as current recipients graduate from assistance) frees up assstance. As need continually outstrips available aid, the number of people waiting and hoping for housing assistance gets larger. Some housing assistance providers manage this through short-term waiting lists that open only when assistance is available, forcing periodic scrambles to wait in line or be disappointed. D.C. maintains a long-term waiting list, on which you can find folks like Ceola Lewis, who has been on the waiting list since 1975 but never high enough in priority to receive assistance. There isn’t a magic waiting list policy that can solve the problem—the confusion and complexity result directly from the scarcity of assistance.

Triage is inherently painful. Its only virtue is that it is temporary—at least, usually. For housing assistance, we need to find a way to break through the very loud public conversation on fiscal constraint to make a case for providing enough housing assistance meet the need. Otherwise, if we focus just on triage, we will fragment, focusing too much on narrow preferences and competing moral imperatives and dissipating our political strength.

Friday, October 26, 2012

NHC joins other housing stakeholders in comments on Basel III rule

by Ethan Handelman, National Housing Conference

NHC joined with many other housing stakeholders to call for changes that would protect the affordability and availability of housing from disruption by the proposed Basel III rule. Simply put, the rule implementing Basel III capital standards for banks affects how expensive it would be for regulated financial institutions to invest in home mortgages, multifamily housing, and other housing assets. In two separate comment letters, NHC and its partners called for specific changes:

  • A joint letter from the National Association of Realtors, Mortgage Bankers Association, and National Association of Home Builders, NHC, and others calls for maintaining existing risk weights (which determine the capital charge banks must pay to hold specific assets) for home mortgages and give credit in risk weighting for mortgage insurance. Read the letter.
  • A letter written by the Mortgage Finance Working Group of the Center for American Progress (on which NHC serves) which advocates several changes to support sustainable home lending at LTVs below 20%, encourage modifications of troubled loans, protect loans for multifamily affordable housing, and to protect small banks, community lenders, and Community Development Financial Institutions from disruptive changes. Read the letter.

The Basel III rule is just one of several regulatory actions that could seriously disrupt the affordability and availability of housing. When combined with the qualified mortgage rule, the qualified residential mortgage rule, and the future uncertainty around the entire housing finance system, this rule-making has far-reaching implications for housing options (or the lack thereof) for years to come.

Wednesday, October 24, 2012

To develop leadership, young housers need mentorship

by Eva Wingren, Mercy Housing

Like many a young D.C. wonk I moved cross-country, not knowing anyone, to take a job that would ultimately rely on who I knew. My employer is a small incarnation of a large nonprofit with offices spread all over the country—it's hard in a small office like mine to get a lot of one-on-one career guidance from others in the housing world. Fortunately, Young Leaders in Affordable Housing's mentorship program introduced me to my D.C. colleagues at other organizations. I was particularly blessed to be matched with Barbara Burnham, Vice President for Federal Policy at LISC. Barbara has incredible longitudinal experience in campaigns and federal policy, and a keen sense of the political realities we are dealing with. She also knows where to push.

At my first meeting with Barbara, I remember despairing of ever accomplishing anything or even understanding the system. “Keep this in mind, Eva,” she said, “you’ve come to Washington at the worst time I can remember. Congress is the most bogged down in partisan infighting, the White House is the most distracted from domestic policy issues, HUD is the most constrained in creating new programs because almost 85% of their funding goes toward renewals of Section 8. It’s bad. If this is the only reality you know, and you jump right in regardless, you’re ahead of the rest of us.”

Of course, Barbara and I spent time discussing my professional development, but where this experience differed from other mentors I’ve had is that, being in the same field, the knowledge she shared actually helped me do my job. My employer is bringing its board to D.C. to advocate on Capitol Hill early next year, and the structure of this big endeavor was created based on contacts she facilitated for me. With the community development field being so interconnected, I have no doubt that other mentors inspired similar collaborations.

I’ve been in D.C. almost a year and a half now and finally feel like I understand the system here, at least a little bit. I’m not holding my breath for the partisan-ness to decrease; rather, I’m just thankful for the wonderful support system I have developed through YLAH and the mentorship program. Now I know who I need to know; the plan for next year is to meet them!

Eva Wingren is a Policy Associate with Mercy Housing, Inc., responsible for public policy, advocacy, and education for one of the nation’s largest nonprofit affordable housing developers, and a member of NHC's Young Leaders in Affordable Housing (YLAH).

YLAH volunteers are preparing right now for a January 2013 launch of the YLAH Mentorship Program’s second year. In 2013, the program will: (1) provide a bigger launch event to help more mentors and mentees get to know both their peers and their mentor-mentee matches; (2) provide events for mentors and mentees to attend together; and (3) foster a broader sense of community among all program participants.

If you would like to participate as a 2013 YLAH Mentor or Mentee, please contact Ben Funk, YLAH Professional Development Committee Chair, or Elina Bravve, YLAH Mentorship Program Subcommittee Chair. You can reach Ben at (202) 674-3797 or benjaminfunk@gmail.com, and you can reach Elina at (585) 329-4798 or elina.bravve@gmail.com.

Tuesday, October 23, 2012

D.C. region is the nation's most affordable. Counterintuitive? The Center's Robert Hickey explains

by Blake Warenik, National Housing Conference and Center for Housing Policy

Washingtonians are incredulous to learn that, despite the highest housing costs in the nation, the D.C. region is the nation's most affordable metro area when factoring in America's highest median income and the region's moderate transportation costs. Those were some of the findings from Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation, the new report from the Center for Housing Policy and the Center for Neighborhood Technology, released Thursday.

But many moderate- and low-income residents aren't sharing in the windfall, just straining under the metro area's astronomical housing costs. Watch this report from ABC 7 Washington's Jay Korff, where he interviewed the Center's Robert Hickey, a co-author of the report, and got the whole story.

Thursday, October 18, 2012

Housing advocates brief Hill staff on the impact of further cuts to housing programs

by Sarah Jawaid, National Housing Conference

The Campaign for Housing and Community Development Funding and the National Housing Trust held two briefings for Congressional staff today on the effects of sequestration on housing and community development programs. Doug Rice, Senior Policy Analyst of Center on Budget and Policy Priorities provided an overview of the disproportionate cuts that have already hit housing and community development programs over the last two years. He added that further cuts through sequestration would hurt the most vulnerable communities in need of rental assistance.

The administration estimated in Sept. 2012 that sequestration would cause "over a quarter million families—close to a million people, more than half of whom are elderly or disabled—[to] lose their housing vouchers and risk homelessness." The administration also said 100,000 families who receive homeless assistance grants would lose them, including 1,500 veterans and their families. Added cuts to HUD's budget would prevent 80,000 struggling homeowners from seeing a housing counselor and 53,000 jobs would be lost. Rice added that while the possibility of sequestration is a bad idea, replacing it with a deficit reducing mechanism that cuts deeper into non-defense discretionary programs like essential housing assistance would be worse.

Other speakers included:
  • Bill Faith, Executive Director of the Coalition on Homelessness and Housing in Ohio who talked about the impact of cuts to programs in Ohio when local communities are already struggling to keep people housed;
  • Hilary Saunders, Board Member of New York State Tenants and Neighbors who spoke about the importance of housing programs more generally in his role as a tenant advocate;
  • Regina Mitchell, Executive Director of the College Park, MD Housing Authority and Diane Sterner, Executive Director of the Housing and Community Development Network of New Jersey who spoke about the direct impact cuts in housing and community development programs have in their respective communities.
A similar briefing on the House side took place in the afternoon.

Housing and transportation expenses outpace incomes, take a bigger bite from the household budget

by Robert Hickey, Center for Housing Policy

Policymakers increasingly understand that the true cost of a home is not just the mortgage (or rent) plus utilities. When you select a home, you also take on the transportation costs tied to that location. Where you live affects how much—or how little—you will need to spend traveling to work, getting to school, doing errands, and making all the other trips that are part of the weekly routine. It’s not truly “affordable,” then, if your rent or mortgage are low, but your location means you have to own one or more cars and drive so much that the cost of car ownership and gas negates these housing savings.
For this reason, researchers, governmental agencies and others increasingly look at a household’s combined housing and transportation expenses to fully understand and track America’s affordability challenges.

Today, we at the Center for Housing Policy, along with our partners at the Center for Neighborhood Technology, are proud to release Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation. It is the first nationwide assessment of combined housing and transportation costs since 2006, when the Center and CNT released their seminal report, A Heavy Load: The Combined Housing and Transportation Burdens of Working Families.

Losing Ground finds that for households living in the nation’s 25 largest metropolitan areas, combined housing and transportation expenses rose 44 percent during the 2000s—1.75 times faster than income— leading to greater stress on already stretched household budgets.

Rising housing and transportation costs continue to disproportionately impact “moderate-income households,” defined in the report as those earning between 50 and 100 percent of median income in a given metro area. This broad segment of the economy includes families in which the primary earner is a teacher, a police officers or a nurse. Losing Ground calculates that moderate-income households spend an average of 59 percent of income on housing and transportation—11 percentage points higher than the combined cost burden of a median-income household.

Combined cost burdens vary by metro area, with the highest cost burdens not always falling where you might expect. For example, comparing costs to local incomes, Losing Ground finds Miami to be the least affordable metro area for local moderate-income households, with housing-plus-transportation costs consuming a stunning 72 percent of income. Combined costs are similarly out of sync with incomes in the next most burdened metro areas: Riverside-San Bernardino, CA, (69 percent of income on housing and transportation), Tampa (66 percent), and Los Angeles (65 percent).

High local incomes can also make up for high housing and transportation costs. In spite of its pricey housing, the Washington, D.C., metro area emerges as the most affordable for moderate-income households, due to very high local incomes. However, it should be noted that high local incomes do nothing to help low-income residents who often must still contend with inflated rental and homeownership markets skewed by the higher-median income.

While combined cost burdens vary by metro area, moderate-income households are paying more than half their income toward housing and transportation in each of the 25 metro areas studied.

But the report is not all bad news. Losing Ground outlines various steps that policymakers can take to reduce the combined cost of housing and transportation by addressing these expenses together. It identifies promising policy tools for increasing the availability of affordably-priced homes in places that are inexpensive to get around, and increasing low-cost transportation options in areas where home prices are already affordable and land-use patterns can support more alternatives to car use.

In light of the growing burden of housing and transportation costs nationwide, these tools are worth a closer look, as is the full report.

Friday, October 12, 2012

Ireland is ahead of the U.S. in housing policy

by Ethan Handelman, National Housing Conference

The U.S. is used to leading the world: economically, militarily, in space exploration, you name it. Even in the special niche of housing policy, other countries look to the America as a place that has pioneered public-private partnerships, an affordable 30-year fixed rate mortgage, and a vibrant rental sector. But in the post-Great Recession, post-housing crash world, we’re not quite the model we once were. We need only look to Ireland as an example of a country struggling with a deeper real estate correction but able to muster stronger policy responses.

Two telling examples:

Some of the difference between the two sides of North Atlantic is the severity of the crisis: In Ireland, property values fell by 50%, on average, while the average in the U.S. was 30% (the U.S. also has a wider variety of housing markets that fared better or worse). I was able to observe the difference in Dublin first-hand, seeing the massive spike in home values and the concomitant struggle to create affordability, followed by the disastrous crash and the abandoned, half-finished properties called ‘ghost estates’. Ireland’s Housing Agency is in part an expansion of the Affordable Homes Partnership, which led housing affordability efforts before the crash.

Another part, however, is political will. Ireland has nationalized much of its banking sector, which means taxpayers are on the hook either way. That’s made it easier to recognize the economic reality that writing down debt now prevents the painful and destabilizing vacancies that result from widespread foreclosures. Perhaps Ireland’s experience in coming months will help to demonstrate to U.S. policymakers that principal reduction is viable.

Wednesday, October 10, 2012

The growing costs of place

by Blake Warenik, National Housing Conference and Center for Housing Policy

Conventional wisdom holds that metro areas like New York, San Francisco, Boston and D.C. are the most expensive places to live for average families. After all, these traditionally upmarket cities have some of the highest housing costs in the nation. But conventional wisdom is the name given to a popular idea about to be debunked; housing costs are just one part of this story. A new report from the Center for Housing Policy and the Center for Neighborhood Technology draws attention to the other, often hidden, factors that contribute to a growing cost of place for American households.

Cover image from the report
The report, Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation, further explores a phenomenon first covered in the seminal 2006 report A Heavy Load: The Combined Housing and Transportation Burdens of Working Families. Losing Ground draws the latest five-year data from the American Communities Survey and finds that for the average family in the 25 largest U.S. metro areas, any income gains made in the last decade have been erased—and then some—by the skyrocketing cost burden of housing and transportation combined.

Among other findings, the report notes that for every $1.00 increase in nominal income since 2000 for these families, the share of their household budgets going to housing and transportation has shot up by more than $1.75. So how are families getting by? The report includes a case study on the Los Angeles metro area, showing that a typical moderate-income renter household's monthly expenses exceed monthly income by $328. This family must choose among dipping into savings, racking up debt or cutting corners on groceries, health care, clothing and school supplies. None of these choices is sustainable. It's a losing proposition for families in Los Angeles and all around the country.

Read the report now