Tuesday, March 31, 2015

Native American housing: Obstacles and opportunities

by Amanda Gold, National Housing Conference

On March 24, 2015, HUD’s Office of Policy Development and Research hosted a panel discussion and webcast entitled, “Native American Housing: Obstacles and Opportunities.” Despite improvements, Native Americans are still more likely to live in homes that are crowded, physically inadequate and unaffordable when compared to the nation as a whole. Many tribal communities lack developed housing and lending markets, leaving them dependent on federal funding to address housing needs. Roger Boyd, from the Office of Native American Programs (ONAP), kicked off the convening with an overview of the different Native American programs offered through HUD. The rest of the conversation focused on improving the demographic, socioeconomic and housing data available on Native Americans and the challenges of affordable housing in Alaska.

Native American housing programs: ONAP provides funding to 566 federally recognized tribes in the U.S. through a number of programs, including:
  • Indian Housing Block Grant: This grant provides annual funding to tribes according to a needs-based formula.
  •  Indian Community Development Block Grant: Part of the Community Development Block Grant program, this program leverages other federal agency funds with private sector funds on a 5-1 ratio to bring capital into the community.  
  • Native Hawaiian Housing Block Grant 
  • Native Hawaiian Loan Guarantee
Data: Getting an accurate picture of housing challenges on tribal land
  • Accurate data on Native communities is an important mechanism for funding decisions and informed policymaking, yet there is a dearth of information on this subject.
  • The Urban Institute is undergoing a specialized data collection effort that focuses on national estimates of Native populations. The housing component will be the most comprehensive national housing survey of tribes to date. You can find the interim report here.
Building affordable housing in Alaska
  • Challenges 
    • Need: In some Native Alaskan communities, up to 50 percent of residents experience housing problems and overcrowding is twice as high as the national average.
    • Cost: Building new housing is expensive. Alaska has limited infrastructure, and housing and plumbing are vulnerable to extreme weather conditions.
  •  Innovations 
    • Building housing that fits: The Cook Inlet Housing Authority (CIHA) has implemented housing strategies that are better suited for their environment, including the development of mixed use buildings which combine housing and small business incubators, and the prioritization energy efficient and low maintenance homes. 
    • Using housing to make systemic and local change: The strategic removal of blight in Alaska has revitalized neighborhoods. Following 10 years of involvement in one community, CIHA has seen educational improvements in the form of reading, writing and math scores. A credit union has replaced a pawn shop, and the community enjoys new street lights, benches and a new middle school.

Thursday, March 26, 2015

Appropriations subcommittee hearing discusses HUD programs and questions costs

by Rebekah King, National Housing Conference

On March 24, HUD Secretary Julian Castro testified a second time before the House Appropriations Transportation and Housing and Urban Development subcommittee on the president’s FY 2016 HUD budget request. Chairman Diaz-Balart (R-Fl.) dispensed with opening statements so that members could dive into questions. Most of the chairman’s questions focused on compliance and cost, foreshadowing the strong justification HUD will need to provide to move the proposed program changes and funding increases in the president’s budget forward.

The other members discussed a range of HUD programs and issues with Secretary Castro, focusing on the request to restore housing vouchers, create targeted vouchers, address public housing capital needs and sustain homeless assistance grants.

Targeted vouchers

Rep. Mike Quigley (D-Ill.) asked about the proposed new targeted vouchers in the FY 2016 HUD budget. This voucher proposal would restore the remaining vouchers lost to sequestration.
  • 4,900 vouchers would serve survivors of domestic violence.
  • 2,600 would be Family Unification vouchers; these would also allow youth aging out of foster care to use these vouchers for five years, instead of 18 months. These vouchers will be allocated through a competitive process. 
  • 22,500 vouchers would serve the homeless, including families and veterans; veterans could access these vouchers even if they did not receive an honorable discharge. These vouchers will be allocated through a competitive process. 
  • 37,000 vouchers will be need-based and allocated based on a formula set by PD&R.
Public housing capital needs

Ranking Member David Price (D-N.C.) expressed great concern about the tremendous backlog of capital needs in public housing. He described current levels of PHA capital funding as insufficient and identified the Choice Neighborhoods program and the Rental Assistance Demonstration (RAD) as the only current options for addressing those capital needs. Choice Neighborhoods provides a comprehensive development approach and leverages private capital, but even with the proposed $250 million for FY 2016, only 6-10 implementation grants can be funded. RAD provides an opportunity to improve public housing stock and successfully leverages private dollars at a 1:19 ratio, based on an evaluation of the first 60,000 units approved for conversion. While these programs have proven to be effective, they are unable to meet all of the public housing capital needs, leaving a problem that still needs to be solved.

Homeless assistance grants

Rep. David Joyce (R-Ohio) expressed concern about the sustainability of homeless assistance grant renewals and the importance of ensuring that lower performing projects are not renewed. Secretary Castro discussed how HUD is working to measure outcomes and implement metrics across programs, to ensure they are as effective as possible. Members also discussed the progress made toward ending homelessness, with veterans homelessness down to 49,000 based on the 2014 Point in Time Count.

Monday, March 23, 2015

New data on housing affordability points the way for housing policy

by Ethan Handelman, National Housing Conference

NHC's release of Housing Landscape 2015 this week throws into sharp relief the housing challenges so many people in America face. Some problems are steady over time, like the roughly one quarter of working renters who spend more than half of their income on housing.  Others vary more based on economic conditions.  The pressure of spending too much on housing hits renters and owners across this country at many income levels, and the effects are most intense for people with the least means. There isn't a single policy answer, but rather several dimensions to pursue.

Percentage of working households with
extreme housing cost burden.
1. Help pay the rent. At a very basic level, rental assistance is simply necessary to bridge the gap between what extremely low-income households can pay and what it costs to provide stable housing.  Federal resources are essential here, although they have been shrinking relative to the need. Mobile vouchers, property-based assistance, public housing and other sources go directly and immediately to serve need. Federal appropriations should reflect that need.

In the medium- to long-term, however, we need to make housing cost less. If all we do is chase rising housing costs with shrinking federal funds, we will lose the race. In parallel to meeting immediate need, we need to:

2. Lower the cost of housing in places where people want to live.  That second part is important: housing gets too expensive, especially near jobs, good schools, health care and the transportation that gets people to those destinations. Here's where state and local land use decisions are so critical, as well as the federal policies that shape those decisions. We need to empower states, cities, towns and counties to lower barriers to development, preserve the investments already made in housing and create opportunities near where people already live.

But the patterns of where we already live are shaped by a long and complicated history. As the Housing Landscape data shows, the problem of unaffordable housing falls disproportionately on people of color. Unless we engage directly with this disparity, we will not fundamentally solve our nation's housing challenges. So, we should:

3. Address the racial disparities in housing opportunity. This isn't easy and we don't know all the answers. Housing is an essential nexus of economic, educational, health and other opportunity. Where people live affects what they have access to, so we need to focus local, state and federal efforts on bringing more opportunity to communities that have seen in some cases decades of disinvestment, and create pathways to places of new opportunity for those who want to follow them.

Only with simultaneous action for immediate, medium-term and long-term challenges will we solve our country's housing challenges.

Download Housing Landscape 2015 on our website.

Tuesday, March 17, 2015

Housing affordability improves slightly, but challenges remain for working renters and people of color

by Mindy Ault, National Housing Conference

In Housing Landscape 2015, the National Housing Conference’s Center for Housing Policy examines trends in housing affordability for low- to moderate-income working families throughout the United States. Using the U.S. Census Bureau’s 2013 American Community Survey data, we observed that while the share of households with severe housing cost burden—that is, spending more than half a household’s gross monthly income on housing costs—decreased overall from 2010, housing affordability remains a significant issue for working households, particularly for renters.  From 2010 to 2013, the share of working renter households with a severe housing cost burden decreased slightly from 25.6 percent to 25.0 percent. However, the number of severely cost-burdened working renter households grew by more than 175,000 from 2010, when there were 5.9 million severely housing cost-burdened working renter households.

Percentage of working households with a severe housing cost burden
According to our analysis, the share of working renter households with severe housing cost burdens in 2013 was 25 percent, notably higher than the 17 percent of severely cost-burdened working households who own their homes. Additionally, median monthly housing costs for renters are steadily increasing while ownership costs are falling. In 2010, the difference in median monthly housing costs between owners and renters was $207. In 2013, the difference had shrunk to $91.

A rise in median income for working households—both owners and renters—has helped to lessen the share of households with severe housing cost burden. But it is important to note that housing affordability remains a challenge: in 2013, more than 15 percent of all U.S. households were severely housing cost burdened and the percentage for working households was even higher, at more than 21 percent.

This year’s report also examines housing affordability by race/ethnicity for the first time. We found that working households headed by non-white individuals are more likely to be severely cost burdened than their white counterparts. In 2013, the share of white-headed working households with a severe housing cost burden was 18.4 percent, compared to about one in four African-American- and Hispanic-headed working households.  The percentage of severely housing cost-burdened working households is highest among Asian- or Pacific Islander-headed households, at more than 28 percent.

Coming from a background of direct practice social work with chronically homeless families, working on Housing Landscape was a thought-provoking experience for me. Many of the families with whom I worked in Salt Lake City were working-class, and the Census Bureau’s data echoes what was apparent in these families’ experiences: Rents continue to rise and low- to moderate-income workers struggle to afford adequate housing.

To me, one of the more surprising findings in the data was how the gap between the median costs of homeownership and renting for working households is shrinking so dramatically. It seems intuitive to me that renting is becoming more expensive as the rental market absorbs more people who no longer own homes. But I was not aware of the extent to which the costs of homeownership are declining for low- to moderate-income working households. I am interested to find out if the narrowing cost difference between owning and renting leads to increased opportunities for renters to become homeowners, and if so, how that might affect families’ economic wellbeing. 

For many more detailed results, read the full report here.

Thursday, March 12, 2015

Senate appropriations subcommittee hearing on HUD budget discusses negative impacts of sequestration

by Rebekah King, National Housing Conference

Yesterday, the Senate Appropriations subcommittee on Transportation, Housing and Urban Development held its hearing on the HUD budget. HUD Secretary Julián Castro shared major points from the President’s FY 2016 budget request before taking questions from committee members. A theme throughout opening statements and member questions was sequestration, specifically the need for an alternative solution and the negative impact of sequestration on the HUD budget. Committee members also raised thoughtful questions about specific HUD programs, highlighting the value of HUD investments and illustrating how HUD programs positively impact thousands of Americans and help move people out of poverty.

Both Subcommittee Chair Susan Collins (R-Maine) and Ranking Member Jack Reed (D-R.I.) made striking comments about sequestration in their opening remarks:
  • Sen. Collins discussed how sequestration is ill-conceived and harmful, noting that it will force difficult choices in the HUD budget.
  • Sen. Reed discussed how sequestration spending levels in FY 16 will not provide sufficient funding to maintain current programs or to make investments looking to the future. He observed that for example, the Section 202 program has been cut by 50 percent since 2010, when the need for housing for older adults is growing and will only increase.
  • Senator Reed called for legislators to increase the spending caps for non-defense discretionary programs and find another way forward.
Much of the initial committee member discussion was around homelessness:
  • Committee members raised questions about the HUD-VASH program for combining rental assistance with VA case management, the progress toward ending veteran homelessness, and the flexibility around discharge status in the proposed targeted vouchers in HUD’s budget.
  • Senator Collins expressed specific interest in youth homelessness and mentioned a hearing planned for April on that topic.
The conversation also touched on specific HUD programs and local issues.
  • Housing for people with disabilities. Senator Chris Murphy (D-Conn.) discussed how the Section 811 program is a small investment but with significant outcomes in terms of health care savings.
  • Disaster resilience. Senator Murphy also highlighted the value of the Rebuild by Design program for Bridgeport, Connecticut. Secretary Castro discussed the National Disaster Resiliency Competition as extension of Rebuild by Design’s success; awards are expected later this year and will help local and state communities plan, prepare and build for resiliency. 
  • State and local housing challenges. Members also asked about specific housing challenges that play out in different ways at the local and state level, like the homelessness crisis in Hawaii. 
  • Housing challenges in tribal communities. Senator Steve Daines (R-Mont.) discussed the needs of tribal communities; while they are only one percent of the population, they are four percent of all homeless individuals. One positive recent step to address this need is that HUD VASH will now be available to tribal communities.

Monday, March 9, 2015

CFPB Director Richard Cordray testifies before the House Financial Services Committee

by Amanda Gold, National Housing Conference

On March 3, 2015, the House Financial Services Committee held a hearing entitled “The Semi-Annual Report of the Bureau of Consumer Financial Protection.” The witness was the Honorable Richard Cordray, the Director of the Consumer Financial Protection Bureau (CFPB). Questions from committee members bounced from the partisan to the practical and back, touching on several areas relevant to housing. The qualified mortgage (QM) rule was front and center in the discussion, as were issues around payday lending and overdraft protection. The partisan split appeared in the rhetoric, with Democrats highlighting the need for consumer protection and Republicans emphasizing consumer choice in the marketplace.

The housing discussion focused on the qualified mortgage (QM) rule:
  • Chairman Jeb Hensarling (R-Texas) pressed Director Cordray on several housing issues including whether the QM unduly restricted his constituents’ access mortgage credit, and whether the CFPB plans to revise the exception to the QM rule for Fannie Mae and Freddie Mac in advance of the deadline several years from now.
  • Democrats, including Rep. Maxine Waters (D-Calif.) and Rep. Lacy Clay (D-Mo.), praised the CFPB for its response to consumers and its facilitation of direct consumer relief on mortgage debt. 
  • Rep. Michael Capuano (D-Mass.) highlighted that owner-occupied properties with two or three rental units, such as many triple-deckers in Boston and nearby suburbs, may not meet the current QM rule’s criteria for a single family property. The result is that in New England, many working class residents are at a disadvantage in accessing mortgage credit. On a lighter note, the question provided perhaps the most entertaining moment of the hearing when Director Cordray, in response to a question from Rep. Capuano, speculated that a triple-decker might be a kind of sandwich.
Oversight and accountability:
  • Chairman Hensarling and other Republicans stated their desire to see the CFPB run by a board rather than a director to make it more accountable to Congress.
  • Various members asked Director Cordray about fulfilled or outstanding requests for information, which he generally acknowledged.
Overdraft protection:
  • Committee members disagreed on the issue of overdraft protection for prepaid cards. A proposed CFPB rule states that if prepaid card issuers offer overdraft protection, they must give consumers the same protections that they do with credit cards. Rep. Randy Neugebauer (R-Texas) and a number of other Republicans argued the new structure limits consumer choice and may cause issuers to discontinue overdraft protections on prepaid cards altogether.
  • Congresswoman Carolyn Maloney (D-N.Y.) disagreed, saying that overdraft fees are still far too high and argued that CFPB’s proposal to limit overdraft fees, instead of banning them outright, would incentivize companies to find loopholes in the rule and continue to charge high fees.
Payday loans or predatory lending?
  • The CFPB is investigating the potential for consumer harm in payday lending. Director Cordray acknowledged the demand for small dollar credit, and that people need to have access to emergency credit. However, many consumers are rolling over debts with high interest rates (sometimes with an effective annual rate of as high as 390 percent), and they are becoming overly debt burdened. Committee members’ discussion highlighted the difficult balance between access to emergency credit and protection for vulnerable consumers from exploitative products.

Tuesday, March 3, 2015

Getting to yes: April Solutions convening to tackle the perennial problem of NIMBY

by Chris Estes, National Housing Conference

One of the most important decisions we made for 2015 was to turn our annual Solutions conference into a series of shorter, topic-specific convenings to be held in different locations throughout the year.  Our first Solutions convening of 2015 will be Solutions for Housing Communications: Building Acceptance for Affordable Housing. It will be held at the Renaissance Seattle Hotel in Seattle, Wash., April 7-8.

We all know that despite the improvements in design, maintenance and operations, gaining community acceptance for affordable housing remains a difficult challenge. We are sometimes heartened by polls that show increased concern about the lack of housing affordability as well as support for solutions to homelessness, but when it comes building, neighbors often balk at the prospect of affordable housing being developed nearby– an attitude better known as NIMBYism.

The goal of this convening is to bring together over 200 affordable housing developers, advocates, funders and government officials for panels, workshops and roundtable discussions on challenges and opportunities in overcoming NIMBYism and building community acceptance. I think both for-profit and nonprofit developers should find this especially useful, as will local government officials who are trying to increase the supply of affordable housing in their communities. No matter where you work or what you do in housing, the lessons we’ll learn at Solutions for Housing Communications will be useful in education and advocacy efforts at the local, state and federal government levels.

Registration is only $100 for NHC members and $150 for non-members. We are able to keep the cost so low due to the generosity of our presenting sponsor, JPMorgan Chase, and our premier sponsor, Wells Fargo Housing Foundation. We also have tremendous support from our local partners at the Washington Low Income Housing Alliance and the Housing Development Consortium of Seattle-King County. For more information on the event, registration and hotel reservations, visit our website.

Thanks again to everyone who attended or watched the archived version of our Annual Budget Forum. We were very pleased to have over 200 participate in the webinar and over 400 watch the archived version. In case you missed it, you can still find it on our website.

While the President’s budget had many positive elements for housing, the work now begins in Congress with the establishment of the funding caps for discretionary spending programs. Ethan discussed this in our Budget Forum and it is one key element of the budget process that can be easy for folks outside of Washington to miss.

While the focus and headlines are on the stalemate and narrowly averted shutdown of the Department of Homeland Security, now is the time for the affordable housing community to be pressing our case for the value and the impact of our programs with our congressional delegations. NHC has worked hard as a member of the Campaign for Housing and Community Development Funding on this issue. Rebekah has more information below on how you can add your organization’s name to a letter developed by CHCDF that will be sent to every member of Congress.

Monday, March 2, 2015

Framing housing for a new Congress

by Ethan Handelman, National Housing Conference
What we're building

The 2015 Congress has many new faces and the Senate has a new leadership, many of whom don’t see affordable housing as a natural issue for their constituency. To make the case for housing to these new leaders, we can’t lead with need. We should frame housing in terms that connect with their core values while also forthrightly challenging false narratives about housing. Housing affordability is an issue that can play well to both sides of the aisle if we make our case effectively.

Most of us as affordable housing advocates naturally think about housing need first, and we do great work to document that need effectively: NHC’s Housing Landscape and Paycheck to Paycheck, the Joint Center for Housing Studies’ State of the Nation’s Housing, NLIHC’s Out of Reach, and many more. But need alone cannot be the primary justification to legislators who see great unmet need in many places but have scarce federal resources to deploy. What makes housing stand out from childhood nutrition, education, border security, pollution, highways, veterans’ medical care or any other issue? Our case is even more difficult to make to lawmakers who perceive, rightly or wrongly, that housing groups organize politically on the other side.

Here are a few ways that housing can connect with the core values of nontraditional supporters:
  • Housing assistance can make families more self-sufficient. Public housing residents can enroll in savings programs that provide financial literacy training and other support to help build wealth. Recently, Congress expanded the Family Self-Sufficiency Program to allow residents eligible in participating privately-owned affordable housing. Policy lessons for this program build on behavioral and cognitive science, and they are effective. 
  • Housing helps kids perform better in school. A stable home, whether owned or rented, makes children healthier, reduces stress and makes them more successful in class. Affordable housing also creates opportunities for families to relocate into stronger school districts.
  • Housing leverages private capital efficiently, creating true public-private partnerships. A prime example is the Low Income Housing Tax Credit, which has leveraged nearly $100 billion of private capital to create properties with private ownership, property management and asset management, in a program that only pays if properties deliver affordable housing successfully. Another is the Capital Magnet Fund, which deploys enterprise-level capital to CDFIs that use it to attract private investment (last round with an average leverage ratio of 12:1).
  • Housing construction creates jobs. Housing overall represents 17 percent or more of GDP. If we focus on affordable housing, we see a typical LIHTC property creates 116 jobs. This is more a collateral benefit to investments in housing than a leading point to make—there are more efficient ways to just create jobs—but it can be a compelling illustration of the additional benefits of investing scarce resources into housing.
Housing stakeholders should forthrightly confront misinformation even as we seek to persuade on merits. When partisan battles devolve into repetition of misinformation, as happened at a recent House Financial Services Committee hearing questioning HUD Secretary Julián Castro about the Federal Housing Administration, we should not be shy about speaking truth. We know that FHA loans provided safe, fixed-rate homeownership options and buoyed the mortgage market during the depths of the crisis. We also know it could do better to build stronger neighborhoods and empower low-income homebuyers. This is just one example of why housing stakeholders should have strong relationships on both sides of the aisle, so that lawmakers can hear first-hand how important housing is to communities across this country.