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.