http://www.shelterforce.com/ The journal of affordable housing and community building en Copyright 2012 2012-01-23T05:13:04+00:00 http://www.nhi.org/article/2550/shelterforce_interview_shelley_poticha/ http://www.nhi.org/article/shelterforce_interview_shelley_poticha/shelterforce_interview_shelley_poticha/#When:04:13:04Z In 2009, Shelley Poticha was named senior advisor for sustainable housing and communities at HUD and shortly thereafter director of HUD’s Office of Sustainable Housing and Communities. Environmental and sustainability advocates and practitioners noted her extensive qualifications and ability to lend a clear voice to an often-complex policy arena. Poticha previously served as president and CEO of Reconnecting America and as executive director of the Congress for the New Urbanism, helped create the LEED green buildings standards for neighborhood development (LEED-ND), and co-authored a book, Smart Growth in a Changing World. Two years into her tenure, Shelterforce spoke with Poticha about implementing sustainable policy at the federal level while encouraging local innovation, keeping down the cost of green housing, and effecting change while dealing with federal government bureaucracy. You have a strong background in transportation, urban policy, and sound land-use planning. How does this, from a policy perspective, come into play when addressing housing issues? I think they are all a part of the same set of issues. We like to talk about how, when people choose a home, they choose a neighborhood and a community. I think there’s a growing understanding in the housing community that just looking at the unit or the building is not sufficient whether we are talking about comprehensive sustainability, or talking about quality of life. A big part of the focus of the office that I run is to make the connection between the actions we make when we design a building or a home and how important it is to think about making that as healthy and energy efficient as possible. We increasingly need to recognize that if one of our goals is environmental sustainability, a home in a location where you have to drive for almost every trip is not sustainable. And so, we need to think more comprehensively about both what we’re building and where we’re building, and then examine how that supports the vitality of a whole community. It’s really a set of ideas or interventions at almost every scale of the built environment. There are arguments being made that ladling all these goals onto affordable housing restricts the number of units we can offer to people who are in need of housing. How do you address that concern? I think that’s a real, huge, legitimate concern. We need to confront it head on by providing the tools and the support systems so that, for instance, a builder of affordable housing can take advantage of energy cost savings that might incur as a building is operated in order to offset initial upfront costs related to energy efficiency that might be more expensive. We often talk about something we call the split incentive where it’s generally the tenants, the residents of a unit, that directly benefit from the cost savings of lower utility bills, whereas the building owner who has to install that solar panel or greener insulation or higher quality windows—how do they actually recoup some of those costs? One of the housing finance products that we recently unrolled is something called “Green Re-fi Plus,” which is a partnership with Fannie Mae to allow owners of multi-family buildings to refinance at lower interest rates, add on the costs of making energy improvements, and overall reduce their average monthly loan repayment costs. That, we think, could be a helpful incentive to get building owners to take advantage of these opportunities where they can take on the cost of these types of retrofits. Again, this goes beyond the building. For instance, we now know that households that have to drive for every trip are, on average, spending half of their income just on housing and transportation. So, it seems to be logical that assisted housing ought to be in locations where people have viable, real, safe opportunities to walk, bike, and take transit for some of their trips. And, yet, because we haven’t always thought comprehensively about the kinds of changes that go on in communities, the land prices in transit corridors can be extraordinarily high, and that is often seen as a barrier to entry for affordable housing. One of the things we do—which is still very small scale, but I’m hoping we’ll have more folks doing this—is the Community Challenge Planning Grant Program. This is a grant program that allows cities to both do the more detailed planning in neighborhoods to promote sustainable communities, as well as allowing upfront, proactive purchases of property in neighborhoods where we see those benefits of walking and biking and taking transit. So, while we have a dip in the real estate market, we’re giving cities the funds to go out and proactively secure these properties and start doing the planning work that’s necessary to get that type of housing in place without having the barrier to entry be high land costs. Those are a couple of ways we’re trying to address those issues—which are very real concerns and we can’t ignore them. Policies, Housing Policy Interview Series 2012-01-23T04:13:04+00:00 http://www.nhi.org/article/2491/smart_at_the_roots/ http://www.nhi.org/article/smart_at_the_roots/smart_at_the_roots/#When:08:00:57Z What makes a “great” neighborhood? This is a question we heard often as we toured the Massachusetts communities of Roxbury, Dorchester, Somerville, Lawrence, and Winchester on behalf of the Great Neighborhoods initiative. Great Neighborhoods is an initiative of the Massachusetts Smart Growth Alliance) to help local groups in those five communities improve their neighborhoods through smart growth strategies, connecting them with resources and multi-year implementation support. We started with a desire to promote smart growth ideas that cut across socioeconomic boundaries. As it turns out, there’s no one-size-fits-all answer. What does smart growth mean in Roxbury? On one hand, this Boston neighborhood is home to persistent challenges like high unemployment, substandard housing, poor health indicators, and concentrated poverty. Yet it is also a historic African-American community that offers cultural opportunities, affordable housing, and retail space within the expensive Boston market. What does smart growth mean in Winchester? On one hand, this Boston suburb is rich in assets like a solid tax base, affluent and engaged residents, and some of the best-performing schools in the state. Yet rising property values have left the town with little workforce housing, a homogenous population, town center businesses with little foot traffic, and few opportunities for older residents to downsize. We found that everyone wants a high quality of life and access to all of the opportunities of the region. People are linked by their desires for transportation choices, quality housing, and cleaner air. Although the context for integrating smart growth may differ—in Roxbury one goal is to create areas where people feel safe taking a bus—the end goal is the same: active, welcoming, prosperous neighborhoods where families can spend more time living and less time commuting. These places also share a desire for local stewardship of their communities, with residents in the lead of creating neighborhood change. Our state policy victories were not translating into more smart growth on the ground. We realized that many local groups understood smart growth, had access to tools and best practices, but struggled with implementation. Accomplishing successful smart growth projects required connecting the dots across issues and agencies that spanned various sectors—transportation, housing, economic development, and environment. This was the critical gap that most local groups could not overcome. MSGA has a platform and network of relationships that can help local groups address these systemic challenges. Through Great Neighborhoods, we provide strategic planning, organizing support, and fundraising; our partners identify local barriers, conduct campaigns, build model projects of their own design, and form a regional constituency for policy change. Great Neighborhoods Roxbury is working with Nuestra Comunidad CDC, Quincy Geneva CDC, and Project RIGHT on a 10-year agenda to develop nearly 1,000 new homes, create or retain hundreds of local businesses, and reduce commuting time along Warren Street, the most congested bus route in the MBTA system, by at least 25 percent. Nuestra’s flagship mixed-use project, Bartlett Place, will create over 300 new homes and a wide variety of small businesses on an 8-acre parcel just a short walk away from the Dudley Square transit hub. Community residents are weighing in on MassDOT’s Transit Needs Study. Nuestra’s executive director David Price says Roxbury residents’ idea of a great neighborhood is quintessential smart growth: “Local jobs, improved air quality, and housing where families can live affordably, walk or bike to parks, get to work easily by mass transit, and enjoy a variety of shopping and dining options right in their neighborhood.” Winchester is pursuing a Town Center Revitalization plan to leverage a planned $15 million investment in its commuter rail station to create a range of housing choices and prices to draw people into the town center and create the density required to support local businesses and public transit. Planning board member and local architect Mary McKenna says they want housing that allows people who work the town to live there, such as “fire and police personnel, teachers.” Great Neighborhoods will enable Winchester to conduct a housing feasibility study and provide guidance about deploying the town’s affordable housing trust fund. We anticipate that as more community members engage in local smart growth campaigns like these, more local policy leaders will support changes needed to realize them, and a larger, better informed constituency will be activated at the state level to advocate for systemic changes that will support and enable smart growth neighborhoods for everyone. 2011-12-14T08:00:57+00:00 http://www.nhi.org/article/2495/access16/ http://www.nhi.org/article/access16/access16/#When:08:00:56Z State of the Nation’s Housing 2011, the annual report from Harvard’s Joint Center for Housing Studies, describes “an unusually large number of households leaving homeownership and an unusually small number of renter households buying homes.” While the report points to bright spots in the rental housing market, affordability challenges remain. A new book, Land Banks and Land Banking, by Frank Alexander, co-founder and general counsel of the Center for Community Progress, provides public officials and community leaders a step-by-step guide for taking control of problem properties and then leveraging them to spur smart development and meet community needs. Electronic copies of the book are available at www.nhi.org/go/CCP. Homeownership and Individual Development Accounts, a paper by Reid Cramer, director of the Asset Building Program at the New America Foundation, reports on the 10-year effects of a Tulsa, Okla., IDA program, and raises questions about “the state of homeownership as a means of achieving economic security.” The National Housing Conference and its research affiliate, the Center for Housing Policy, have compiled a fact sheet that summarizes the most recent research available on the role that housing counseling plays in reducing mortgage delinquency and foreclosure. The Assets Report 2011, from the Asset Building Program at the New America Foundation, is an annual analysis of the federal budget designed to give “a more complete understanding of how the federal government encourages the accumulation of assets for families up and down the economic ladder.” Charlotte Housing Authority’s Moving Forward Program, an evaluation conducted by the Center for Urban and Regional Studies at University of North CarolinaÐChapel Hill for the Charlotte Housing Authority, describes the early challenges in implementation of the Moving to Work program in Charlotte, N.C. Navigating Uncertain Waters: Mortgage Lending in the Wake of the Great Recession is a summary of a February 2011 event at the NYU Furman Center’s Institute for Affordable Housing Policy that examined credit availability and lending patterns during the recession. Public Transit’s Impact on Housing Costs: A Review of the Literature, from the Center for Housing Policy, summarizes the extensive body of research on whether and how public transit influences the cost of nearby housing. Access 2011-12-14T08:00:56+00:00 http://www.nhi.org/article/2472/still_transforming_rental_assistance/ http://www.nhi.org/article/still_transforming_rental_assistance/still_transforming_rental_assistance/#When:08:00:56Z HUD, in light of a recent capital needs study, will conduct a “rental assistance demonstration” rather than complete programmatic implementation of its Preserving, Enhancing, and Transforming Rental Assistance plan, which was first announced in February 2010 (see SF Summer 2010). The $350 million package would have allowed the borrowing of private capital to improve and preserve public and private HUD-assisted housing. In late 2010, Rep. Keith Ellison of Minnesota introduced the Rental Housing Revitalization Act (RHRA), which contained many elements of PETRA while trying to address advocates’ concerns about it. While it’s hard to imagine RHRA gaining traction in this Congress, HUD hopes its scaled-down demonstration effort could follow the PETRA model, preserving as many as 263,000 units by converting them to project-based assistance and bringing in private debt to address capital needs. Shelter Shorts 2011-12-14T08:00:56+00:00 http://www.nhi.org/article/2480/nicolas_p._retsinas/ http://www.nhi.org/article/nicolas_p._retsinas/nicolas_p._retsinas/#When:08:00:54Z Nicolas P. Retsinas is a senior lecturer in real estate at the Harvard Business School, where he teaches courses in housing finance and real estate in emerging markets. He is also director emeritus of the Joint Center for Housing Studies. Nic has spent a lifetime in pursuit of knowledge for a purpose. His background in public service includes stints as executive director of the Rhode Island Housing and Mortgage Finance Corporation, commissioner of the Federal Housing Administration, and director of the Office of Thrift Supervision. Every job Nic has had has been driven by a simple question: How will this affect people? And for Nic, that’s not an academic question. He takes “a genuine interest in just about every soul he meets,” one long-time colleague observes. I had the pleasure of speaking with Nic about his long service to the field on July 29. Shelterforce: How would you characterize the changes in housing policy and the housing realities for low-income households during the past two decades? Nic Retsinas: Over the last two decades we’ve learned a lot about housing policy, about how people live, and more importantly why housing matters so much. There is a little bit of “we told you so” now that there’s been a housing implosion. We realize bad housing, bad housing policy, can be devastating to families, to neighborhoods and, indeed, to our entire economy. And that’s a lesson you think people have learned? Time will tell. In many ways we lurched away from supporting rental housing for at least a decade. Are we now lurching away from affordable homeownership, especially for low- and moderate-income families? For many years we demonized rental housing. We thought rent was a four letter word. One of the many lessons of the recent crisis is that renting isn’t always bad and it has a place. I don’t know that I would extrapolate from that that owning is now bad. I think the issue is balance. How do we make sure people have an opportunity for the right tenure at the right time? The real issue is security of tenure. In our country renting traditionally has provided less security of tenure than owning over time. Recent events argue the other way. We want to make sure that people have an ability to live in a decent place and they’re not forced to move from that particular place. What does an equitable mortgage market look like and what role does the government play? Well, we know what it doesn’t look like, as we just went through it. It certainly isn’t a market that is unregulated. It is certainly not a market that is obscure and opaque. It is certainly not a market that disguises risk. There’s an important role for government to play in ensuring that the market is transparent, that capital is reasonably priced and that it is accessible, and also that there is some equity in the marketplace. How is that done? Part of it is more information. Part of it is simplification. Part of it is making sure that the regulatory apparatus is not hijacked by the regulated. Will the Consumer Finance Protection Bureau be able to do its job or will we see subprime lending or worse come back? The Consumer Finance Protection Bureau is under serious attack. A lot will have do with who eventually leads the bureau, which of course is going to be, sadly, a political question. I never underestimate the market’s ability to find a way to access people who don’t have the needed skills or who are desperate. In the early ‘90s you were the FHA commissioner. What were some of the challenges that you faced then and what has changed today? An agency that was in severe financial distress, an agency that was an afterthought in the marketplace, an agency that had not invested in infrastructure, particularly information infrastructure. The challenges that FHA faces today are much more severe than those we faced 20 years ago: the foreclosures, the disruption, and unraveling of the marketplace. What can FHA do? FHA is trying to walk the line, and they’ve been able to do that better than most would have imagined. On the one hand, making sure that they are fiscally prudent, that they don’t need to go to the Congress for a so-called bailout. On the other hand, they want to keep lending to people who aren’t able to get the 20Ð25 percent downpayment, who don’t have necessarily unblemished credit. The challenge has been how do they make sure they have the processing and the infrastructure to do that and to do that prudently. Policies, Housing Policy Interview Series 2011-12-14T08:00:54+00:00 http://www.nhi.org/article/2470/true_costs_true_responsibilities/ http://www.nhi.org/article/true_costs_true_responsibilities/true_costs_true_responsibilities/#When:08:00:49Z This past July, a Voice of San Diego investigation charged that rather than doing its job of providing “homes for those who can’t pay San Diego’s high rents,” “affordable housing has instead become a delivery mechanism for a host of public policy goals, from building green and near transit to offering tenants personal finance classes, all of which add cost.” At first blush, its accounts of how expensive affordable units are seem damning. I certainly can’t say that there couldn’t have been some better cost containment on some of the specific projects. However, there’s an interesting assumption underneath the VOSD’s “exposé”: That the taxpayers have somehow agreed that creating affordable units—wherever and however—is an end in itself, rather than a means of bettering people’s lives, creating economic inclusion, and promoting neighborhood stability. It also assumes that short-term cost savings on a construction budget equals overall cost savings for taxpayers, when in fact, many of the costly items the article complains about will actually generate savings elsewhere or down the line. For example, universal accessible design allows for aging in place, which means less money spent on costly nursing home facilities. If market-rate developers are not spending on that kind of design, they are effectively creating healthcare costs. Green design lowers utility bills, repair and replacement expenses, and healthcare costs. Locating near transit and in denser, opportunity-rich areas lowers residents’ transportation costs and increases their access to jobs and other opportunities for self-sufficiency. Along with making a stronger, more just society, these improvements strengthen local economies and save taxpayers money from other pots. In our articles on pages 32–45, we look into how those two sets of goals are being pursued in tandem. On this theme we also have a web-only interview with Shelley Poticha, director of HUD’s Office of Sustainable Housing and Communities, at www.nhi.org/go/Poticha. It’s difficult, of course, politically, to accept upfront costs to achieve savings decades from now, on other budget lines. Lifecycle accounting, as discussed by the National Trust for Historic Preservation in the sidebar on page 35, has been making inroads for a while in Europe, for example, in rules requiring appliance manufacturers to be responsible for disposal costs, which reduces incentives for planned obsolescence. What would it mean for housing developers to be responsible for the lifecycle costs of their design choices, and how would that influence the quality of housing at all income levels? Accountability Lenders and servicers need to be, and can be, partners in neighborhood stabilization (See “Uncle Sam Outdone by Ocwen’s SAM,” p. 4). We’ll be delving into how capital markets can be brought to bear on bringing stabilization to scale in our next issue of Shelterforce. But even as there is partnership potential, the power relations between affected communities and financial corporations are still severely imbalanced, and communities continued to be harmed. The Occupy Wall Street movement emerged as we were wrapping up this issue—but they are not the first to be demonstrating, or even getting arrested, in the name of bank accountability. On pages 8–23 we hear from those trying to pile on the scales on the side of communities, seeking what Michael McQuarrie, writing about Ohio’s organizing group ESOP in our Spring 2010 issue, described as the “respect and recognition that comes from successfully negotiating an outcome to a confrontation—something that can never be achieved when confrontation is off the table.” From California to Boston, organizers are weaving together actions as local and immediate as eviction blockades with campaigns to change the larger conversation about our financial systems. Meanwhile, inside the courts, judges like Cleveland’s Raymond Pianka have been getting creative in order to make the law stick to irresponsible speculators. Keeping different scales in mind at once—whether in organizing, or thinking about both green materials and green locations—is difficult, but ultimately worthwhile. We’d love to hear from you about how you are knitting them together in your work. Editor's Note 2011-12-14T08:00:49+00:00 http://www.nhi.org/article/2490/smart_can_be_affordable/ http://www.nhi.org/article/smart_can_be_affordable/smart_can_be_affordable/#When:08:00:47Z The farmers’ market in Langley Park sells amazing crazy corn. It’s covered in mayonnaise and topped with cheese, which truthfully would make just about anything delicious but it’s particularly good on roasted corn. The farmers’ market is open each week on Wednesday afternoons in a diverse Maryland community just over the District of Columbia line, in an area better known for wide swaths of multi-lane roads than accessible public transportation options. If the Washington Metropolitan Area Transit Authority’s substantial expansion plans work out, however, all that might be changing. Plans for a bus depot, a new Metro stop, better pedestrian facilities, and mixed-use development in the area have residents and housing affordability advocates in Langley Park worried. These features, while increasingly attractive to homebuyers not just in D.C. but also in towns and cities across the country, have local advocates worrying about how the new development will drive up real estate demand in the area, raise housing prices, and make what’s currently a working-class neighborhood simply unaffordable. This is a story familiar to housing affordability advocates, residents, and planners in neighborhoods around the country. Public and private efforts to create smart growth features like neighborhood parks, safe sidewalks, local coffee shops, and transportation choices are often seen as threats rather than as benefits. Features like these can indeed raise real estate prices, but that isn’t necessarily a reason for smart growth and housing affordability to diverge. The challenge for advocates of both smart growth and housing affordability is to make sure the high demand for smart growth neighborhoods does not force out the people who can benefit most from them. This tension is understandable, but not unmanageable. The two issues share many common goals and, increasingly, advocates for both get better results when they join forces. Strategies that can keep neighborhoods affordable are already integral to smart growth development, and communities across the country are using smart growth strategies to improve affordable housing. Working toward these complementary goals can build wealth for existing communities, reduce costs for households and taxpayers, and create healthier, more stable places for all of us. Affordable Housing 2011-12-14T08:00:47+00:00 http://www.nhi.org/article/2494/industry_news21/ http://www.nhi.org/article/industry_news21/industry_news21/#When:08:00:35Z Organizations The Citi Foundation and NeighborWorks America have launched the Financial Capability Demonstration Project, a two-year, $5 million joint effort that aims to expand nonprofit capacity to provide financial management assistance to low- and moderate-income Americans. They estimate the project will help as many as 65,000 people. The Virginia-based Housing Association of Nonprofit Developers awarded its 2011 HAND Housing Achievement Awards to: Arlington Partnership for Affordable Housing, Arlington, Va.; The Summit at St. Martin’s Apartments, Washington, D.C.; Poppleton II, Baltimore; Heritage Park Apartments, Fredericksburg, Va.; The Preventing and Ending Homelessness Initiative of the Fairfax County Office to Prevent and End Homelessness; The Rev. Msgr. Ralph J. Kuehner; The Michael Group, Baltimore; and Virginia State Sen. Mary Margaret Whipple. People The Ford Foundation has bestowed one of its Visionaries Awards, created in honor of Ford’s 75th anniversary, upon Martin Eakes, co-founder and CEO of Self-Help and CEO of the Center for Responsible Lending. Eakes has also since joined the Ford Foundation board. Other awardees include Bryan Stevenson, founder and executive director of Equal Justice Initiative in Montgomery, Alabama, and Ellen Bravo, executive director, Family Values @ Work in Milwaukee. For a complete list see www.nhi.org/go/visionaries. Xavier de Souza Briggs has gone back to the MIT faculty after more than two-and-a-half years as associate director for general government programs at the White House Office of Management and Budget. Briggs, who told Shelterforce that his decision reflects a desire to be back with his family, was replaced by Dana Hyde who previously served as senior policy advisor to the deputy secretary of state for management and budget. See the 2009 Shelterforce interview with Briggs and his pre-2008 election essay for Shelterforce. Luther Ragin is the new executive director of the Global Impact Investing Network. Ragin was formerly the vice president of investments at the F.B. Heron Foundation. GIIN was launched at the 2009 annual meeting of the Clinton Global Initiative. Janice Nittoli is the new president of The Century Foundation. She previously served as associate vice president and manager of The Rockefeller Foundation. Kathe Newman, associate professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, will direct the school’s new Ralph W. Voorhees Center for Civic Engagement. Bernie Mazyck, president and CEO of the South Carolina Association of CDCs, is the new chair of the National Alliance of Community Economic Development Associations. He succeeds founding chair Diane Sterner, executive director of the Housing and Community Development Network of New Jersey and a board member of the National Housing Institute. Catherine V. Godschalk, former director of the DC office of Self-Help Ventures Fund/Self-Help Credit Union, now manages the U.S. lending team at the Calvert Foundation. Following her departure, Tucker Bartlett will take over Self-Help’s NSP2 program, Deborah Momsen-Hudson its lease-purchase pilot efforts, and Tina Johnson its local community development lending efforts in the DC metro area. Michelle Knapik is the new director of the Sustainable Environments Program at the Surdna Foundation. Knapik was previously the environment program director at the Geraldine R. Dodge Foundation in New Jersey; before that she was the director of energy policy for Philadelphia’s Municipal Energy Office. She succeeds Sharon Alpert, who now serves as Surdna’s senior director of programs and strategy. Carol Galante as been named acting commissioner of the Federal Housing Administration, stepping into the post after a stint as HUD deputy assistant secretary for multi-family housing programs. Prior to joining HUD in 2009, she was president at BRIDGE Housing Corporation, headquartered in San Francisco. Robert C. Ryan, who led FHA after David Stephens left in April to head the Mortgage Bankers Association, is now a senior advisor to HUD Secretary Shaun Donovan. Peter S. Rummell is now chairman of the Urban Land Institute. Rummell, principal of the Rummell Company in Jacksonville, Fla., is former chairman of the ULI Foundation. Shelterforce mourns the passing of Robert Hohler, executive director of the Melville Charitable Trust and a national leader in the effort to end homelessness, who died in June at the age of 78. Hohler, who in 2009 was honored as the year’s Distinguished Grantmaker by The Council on Foundations, was a driving force across Connecticut and the nation supporting and fostering solutions to both prevent and end homelessness, and was an important supporter of the National Low Income Housing Coalition’s successful effort to bring the National Housing Trust Fund into existence. Industry News 2011-12-14T08:00:35+00:00 http://www.nhi.org/article/2492/transit-oriented_preservation/ http://www.nhi.org/article/transit-oriented_preservation/transit-oriented_preservation/#When:08:00:32Z As the U.S. economy slows, the likelihood of significant federal or local investment in new mass transit diminishes. But low- and moderate-income families still stand to benefit from affordable housing near transit through reduced commuting expenses and improved access to jobs, schools and other opportunities. While robust new growth and new modes of transit are not out of the question, the future is more likely to be framed by redevelopment near existing transit stations and routes. Indeed, the rental market has already begun to grow tighter in communities near existing transit. This in turn will lead to slowly escalating property values, making it more difficult to ensure long-term housing affordability, especially if we wait to act. Thousands of existing affordable apartments—privately owned, both HUD-subsidized and unsubsidized—are located near transit and are at risk of being lost as property values rise. In 2009, AARP released a report co-authored by the National Housing Trust and Reconnecting America demonstrating that more than 250,000 privately owned, HUD-subsidized apartments exist within walking distance to quality transit. However, nearly 150,000 of these apartments were covered by federal housing contracts set to expire over the next five years, raising the possibility that owners may opt out of the government programs as values rise. These apartments house a very vulnerable population. The average annual income of residents in HUD subsidized housing is less than $12,000, approximately 66 percent of residents are elderly or disabled, and most are people of color. Low-income people and people of color are as much as four times more likely to rely on public transit to get to work than middle-class whites. Preserving this housing is critical to maintaining access to jobs and resources for these disadvantaged populations. In an environment where resources are scant, preservation becomes a critical priority, as well as an attractive option. Preserving an existing home is significantly less expensive than constructing new affordable housing. Rehabilitating an existing affordable apartment can cost one-third less than building a new apartment. In more expensive communities with high land costs, the cost of building new affordable housing could be as much as double the cost of preserving existing housing. Ironically, the economic downturn gives us an opportunity to safeguard affordable housing by taking action ahead of expected property price appreciation near transit. 2011-12-14T08:00:32+00:00 http://www.nhi.org/article/2475/extending_a_bank_branch_to_the_community/ http://www.nhi.org/article/extending_a_bank_branch_to_the_community/extending_a_bank_branch_to_the_community/#When:08:00:29Z We have long known that fewer local bank branches spells declines in financial investment in a community. As John Taylor, president and CEO of the National Community Reinvestment Coalition, pointed out in our Fall/Winter 2009 issue, the systemic closing of bank branches in low- and moderate-income neighborhoods is followed by payday lenders, pawnshops, and check cashing services stepping in to fill the void. A new report out of UVA’s Darden School of Business, Perdido en la Traducción, looks at the positive flip side of this phenomenon: It finds that in low-income, Latino communities in Virginia when the number of community bank branches at which residents open accounts increases, neighborhood crime decreases, property values increase, and financial literacy improves. There are almost 39,000 Latino households in Virginia that do not have savings or checking accounts with a bank or credit union. These unbanked households, the report goes on, generate on average $23,500 in annual income, “suggesting that at least $917 million annually is not being serviced by Virginia’s depository institutions.” Sounds like reversing the loss of bricks-and-mortar branches could be a win-win for neighborhoods and lenders. More local bank branches might also help with the persistent disparities in access to conventional lending products in communities of color. As was reported earlier this year in the fifth annual installation of Paying More for the American Dream, a joint report compiled by several groups including the Woodstock Institute and the Neighborhood Economic Development Advocacy Project, which examined seven U.S. metro areas, certain neighborhoods are still faring disproportionately badly when it comes to access to credit. In 2008 and 2009, the number of conventional refinance loans made in predominantly white neighborhoods in the American Dream’s study area “more than doubled in all seven cities examined. During this time, however, conventional refinance lending declined sharply in communities of color in all but one of the seven cities examined.” Shelter Shorts 2011-12-14T08:00:29+00:00 http://www.nhi.org/article/2488/leading_the_way_to_green/ http://www.nhi.org/article/leading_the_way_to_green/leading_the_way_to_green/#When:08:00:27Z Nine years ago the Virginia Housing Development Authority (VHDA), Virginia’s housing finance agency, became concerned about the construction quality, attractiveness, and durability of the state’s tax credit developments. Seeing in emerging green building practices the kind of longevity and quality they were looking for, VHDA began awarding points for adopting green building standards as part of the state’s competition for Low Income Housing Tax Credits. Initially, points were awarded for including such items as high efficiency heat pumps and Energy Star¨ windows and appliances. In 2006, VHDA ratcheted up the process and began to stipulate tax credit projects had to be green-certified by EarthCraft Virginia, a third-party, nonprofit organization. The incentives have worked. “Affordable housing developers are going full speed ahead bringing green building to scale all over Virginia,” says Jessica Abralind, Arlington County green building specialist. Philip Agee, green building technical manager for EarthCraft Virginia, agrees. “By incentivizing green building, VHDA has really revolutionized multifamily housing, especially affordable projects, in Virginia.” Good Economic Sense Sustainable building makes sense for the affordable housing industry. “We plan to own and operate our affordable communities for years to come,” says Walter D. Webdale, president and CEO of AHC Inc., a nonprofit affordable housing developer based in Arlington, Va. “Investing in green building not only pays off for us by reducing operating costs, but it also provides more healthy living environments for our residents and helps reduce their expenses as well. Plus, building green helps us be good neighbors and community leaders.” AHC Inc. is not alone. Of the 75 multifamily projects EarthCraft has under construction, 68 are affordable. “It makes sense that affordable housing developers, who plan to own their project for a long time, are interested in durability and investing more upfront in design and construction costs to save more over the long term,” says Agee. “Durability and maintenance costs—a lot of those decisions are being guided by green building. The affordable housing industry was tuned into this before many market-rate developers.” Still, affordable housing developers have to take a pragmatic approach to adding green features. “We are very sensitive to the costs of our projects,” says Curtis Adams, AHC project manager. “We pick and choose what green features are prudent for the project. Everyone wants to build green; it’s just a matter of what we can buy with our dollar.” Carefully used, that dollar goes a long way though. AHC has found that the cost of creating its EarthCraft-certified buildings has generally only accounted for about a 2 to 3 percent increase in upfront construction costs; Earthcraft notes that a recent market rate-development it certified only increased its costs by 1.7 percent to qualify. Some other certification programs, such as the U.S. Green Building Council’s LEED Gold or above, can be much more expensive. “It’s a balancing act,” says Adams. “AHC, like the entire industry, is on a learning curve to find the best cost/benefit combination for each project.” 2011-12-14T08:00:27+00:00 http://www.nhi.org/article/2473/what_affordable_housing_enforcement/ http://www.nhi.org/article/what_affordable_housing_enforcement/what_affordable_housing_enforcement/#When:08:00:27Z In 2010, N.J. Governor Chris Christie introduced legislation to abolish the Council on Affordable Housing, the enforcement body for New Jersey’s fair share affordable housing rules, which grew out of the famed 1975 Mt. Laurel lawsuit (see SF Summer 2010). That bill has now stalled in the state Legislature’s lower house. But Christie has found another way move his agenda, dissolving COAH through an administrative move into the state’s Department of Community Affairs, whose commissioner is appointed by the governor. COAH was previously an independent entity. Housing advocates say the move is illegal and have vowed to fight it. “The only thing worse than a dysfunctional COAH is Chris Christie running the show,” Kevin Walsh, associate director of the Fair Share Housing Center, told The Star-Ledger. “He’s going to take it so far in the direction of towns doing whatever they want.” Fair Share says it will battle the governor’s move in court. Shelter Shorts 2011-12-14T08:00:27+00:00 http://www.nhi.org/article/2484/the_peoples_court2/ http://www.nhi.org/article/the_peoples_court2/the_peoples_court2/#When:08:00:25Z It isn’t every day that a municipal court judge smacks a convicted criminal with a fine of more than $10 million. After all, municipal courts typically hear misdemeanors, not big time felonies or organized crime cases. Equally unusual is for the judge to tell the criminal how to avoid paying a substantial amount of the fine. But that is exactly what Judge Raymond L. Pianka, the housing court judge in Cleveland, did in June 2010. Two South Carolina-based firms, Interstate Investment Group and Paramount Land Holdings, had neglected 13 properties they owned until they were so dilapidated that the City of Cleveland had to have them demolished to protect public safety. After the firms were summoned to court and failed to appear, they eventually pled “no contest” in all cases, and Pianka levied a total of $13 million in fines. Pianka’s attempts to bring far-flung speculators to account for their effects on Cleveland’s neighborhoods are bucking conventional legal practice on several fronts. How and why has Cleveland’s Housing Court become, in the words of Alex Kotlowitz in a 2009 New York Times Magazine article, “one of the most powerful instruments in the city’s fight for survival”? Communities 2011-12-14T08:00:25+00:00 http://www.nhi.org/article/2486/green_is_affordable/ http://www.nhi.org/article/green_is_affordable/green_is_affordable/#When:08:00:24Z For a long time, green building was seen as a luxury. However, over the past 5 to 10 years affordable housing advocates have steadily figured out that a great majority of “green building” is in fact common sense that supports quality affordable housing: better windows, more insulation, construction materials that don’t make residents sick, improved ventilation, better lighting, and greater access to the surrounding community and transportation. Green and affordable pioneers have been steadily bringing these standards into all corners of the industry. Evolution of Green Building Green building originated out of energy conservation efforts of the 1970s. While many of those initial efforts fell to the wayside once energy costs became cheaper and more stable, cities such as Austin, Texas, and Boulder, Colo., continued to focus on ways to increase the energy efficiency of the homes and buildings in their community. In 1985, Austin adopted its first energy code and began rating single-family homes on their energy performance; within five years, the program had expanded to include water conservation, efficient materials use, and solid waste handling. Austin Energy Green Building is now celebrating 20 years in the market. Since its inception, it has certified 10,000 green homes, saved over 53.6 million kilowatt hours of electricity and 65.8 million gallons of water, and diverted 120,698 tons of construction waste from local landfills. Boulder launched its GreenPoints Program in 1994 and in 1996 became the first municipality in the country to mandate green building codes for residential construction. These programs are the pioneers of today’s green building movement. Throughout the 1990s, other energy efficiency and green building efforts emerged. At the federal level, the Environmental Protection Agency launched the Energy Star label for homes in 1995. Energy Star focuses on energy improvements in several key areas: high-performance windows, tight construction and ducts, and efficient cooling and heating systems, and involves third-party verification. In 1999, Southface Energy and the Greater Atlanta Home Building Association launched the EarthCraft House Program. EarthCraft is now offered throughout the southeast and a good portion of the mid-Atlantic region (see p. 36). Green building programs also began popping up in Wisconsin, California, Washington, and numerous other states throughout the 1990s and early 2000s. While none of these sets of standards specifically targeted affordable housing, some affordable developers took note and started incorporating green building practices into their projects. 2011-12-14T08:00:24+00:00 http://www.nhi.org/article/2493/a_surprising_victory/ http://www.nhi.org/article/a_surprising_victory/a_surprising_victory/#When:08:00:20Z In November 2009, the board of Citizens for Modern Transit (CMT), a St. Louis nonprofit that advocates for public transit, met at the BJC conference center, a gleaming new office/retail development next to a light rail stop. At the time, St. Louis public transit faced a crisis. Without additional revenue, bus routes would have to be cut by 60 percent the following spring, hitting communities of color especially hard, and light rail expansion would come to a halt. Preventing this would require voter approval of a countywide ballot measure to increase the sales tax. The conventional wisdom on winning a ballot measure in St. Louis was simple: Make your case to Civic Progress, an organization representing the 30 largest corporations in St. Louis. Civic Progress would provide the money to hire consultants and create and run ads and direct mail campaigns. But at this meeting, the CMT board got devastating news: Civic Progress was not on board. Tom Irwin, executive director of Civic Progress and also a CMT board member, explained that the CEOs who ran Civic Progress thought it was the wrong time to place a tax increase on the ballot. Who could blame them? An identical measure had failed in 2008. The last light rail project of Metro, the regional transit agency, had been more than $100 million over budget, the agency had failed in a bid to recover some of the overruns by suing the consultants, and a poll showed only 55 percent support for the transit tax, well short of the 60 percent generally thought to be necessary to prevail on election day. In addition, along with the rest of the nation, St. Louis was mired in a deep recession and the anti-tax Tea Party Movement was gaining momentum. The rejection by the business community put CMT board members in a grim mood, but they felt they had to forge ahead anyway. Despite the business opposition, the St. Louis County Council voted (4–3) on December 21, 2009, to put the transit tax on the ballot for the April 2010 election, and CMT needed to put up a fight. Organize! 2011-12-14T08:00:20+00:00 http://www.nhi.org/article/2479/the_sword_and_the_shield/ http://www.nhi.org/article/the_sword_and_the_shield/the_sword_and_the_shield/#When:08:00:20Z It was a hot August day when more than a hundred people gathered outside Drusilla Francis’s home in Boston’s Dorchester neighborhood. Signs emblazoned with “We Will Not Be Moved” and other candid sentiments regarding bank behavior were on display as two policemen looked on. A constable, equipped with a moving van and orders to evict the 60-year-old Francis and her two foster children, talked frantically on the phone to his client, U.S. Bank. Perhaps he did not expect to be challenged. Several lawyers on Francis’s side explained to the constable that he did not have the appropriate paperwork to evict Francis, a Central American immigrant, and eviction was avoided that day. Had he brought the proper documents, the policemen would have walked through the marching protesters to arrest various the members and allies of City Life/Vida Urbana (CLVU), an affordable housing and tenants’ rights organization, who had volunteered to stand peacefully in the way of eviction. The eviction and the arrests, had they occurred, would have been captured by news cameras and print reporters, and it would have been another devastating loss for a family in bank foreclosure. But all that was averted thanks to collective action and resistance that let the banks know that they could no longer easily upend peoples’ lives and avoid public relations debacles. Tisa Taylor, whose home was saved by a similar action, but not before her father suffered a devastating stroke soon after the family home was foreclosed upon, explained why she took a day from work to attend the blockade: “I keep coming back to these actions to help because CLVU was there for us. I don’t want to see my neighborhood boarded up. I want to see my community flourish.” CLVU has long employed a paired organizing-legal defense method known as The Sword and the Shield to save tenants from displacement due to harassment and attempts at gentrification. Recently, these tactics have been adapted and applied to prevent evictions of foreclosed owners and their tenants, creating public relations nightmares for large financial institutions. 2011-12-14T08:00:20+00:00 http://www.nhi.org/article/2474/land_bank_of_america/ http://www.nhi.org/article/land_bank_of_america/land_bank_of_america/#When:08:00:18Z “What we now have taking place in Cleveland is an ‘REO Race’,” wrote Frank Ford in our Fall/Winter 2009 issue, describing a “tsunami” of neglected, vacant, unmaintained properties affecting his city’s neighborhoods. “Can financial institutions ‘unload’ or ‘dump’ their liability before the local municipal code enforcement officials catch up with them? In their race to dump property, the banks are making no effort to screen the buyers.” Both the irresponsible investors banks were selling to and the banks themselves were ignoring properties they owned, allowing them to decay past the point of no return. It got so bad that the Cleveland Municipal Housing Court (see p. 26) levied millions of dollars of fines on REO investors and servicers for failing to show for court hearings. Now, in at least a few cases, properties with no real market value are heading in a different direction: In June, Wells Fargo donated a handful of vacant properties to the Cuyahoga Land Bank, which was in formation when Ford was writing in 2009. Crucially, Wells also contributed up to $7,500 per property to cover the cost of demolition ($3,500 per property in NSP2 target areas). Before long, Bank of America was on board with the same price model. Russ Cross, Midwest regional servicing director for Wells Fargo Home Mortgage said in a statement made at the time of their announcement that Wells has donated 26 properties and $127,000, “and we will look at additional properties that we can contribute.” It’s clear why such a move would be in the self-interest of the lenders: they off-load properties where they won’t recover costs anyway in a way that reduces possible legal exposure (and fines) and mitigates the increasingly negative PR they are getting. But that’s OK: it’s also in the best interests of Cleveland’s neighborhoods. Of course, at this volume the donations make a very small dent in a much bigger vacant and abandoned properties problem. The work of creating incentives for owners of vacant properties to do the right thing, through codes and the courts and the streets, clearly needs to continue. Shelter Shorts 2011-12-14T08:00:18+00:00 http://www.nhi.org/article/2476/the_new_bottom_line/ http://www.nhi.org/article/the_new_bottom_line/the_new_bottom_line/#When:08:00:10Z Spring is shareholder meeting season for the big banks. These meetings are usually carefully scripted events, ignoring a handful of dissenters and quickly voting down shareholder resolutions that challenge unfair bank policies. But this year was different. For two weeks, from coast to coast and north to south a growing coalition of community groups and labor unions confronted and challenged Wells Fargo, Bank of America, and JPMorgan Chase, demanding they pay to help fix the economy they crashed. In Seattle, a weather balloon held up a banner that read “Wells Fargo, pay your taxes” as Judith Runstad, a local Wells Fargo board member, departed for the bank’s annual shareholder meeting in San Francisco. Runstad and other board members and shareholders were met by hundreds of us: homeowners, clergy members, and union leaders. We surprised them by attending the meeting with shareholder proxies. Twelve community leaders were arrested when they openly challenged Wells Fargo CEO John Stumpf to stop foreclosing on families. We knelt and prayed for justice in Charlotte with religious leaders at the Bank of America meeting, calling on the bank to follow the words of Micah and not “defraud people of their home.” We marched 20,000 strong in New York City, shutting down much of Wall Street as part of a week of actions demanding that banks and millionaires pay their fair share so that there is money to fund critical public services. We crossed a “moat” using a portable drawbridge in Columbus, Ohio, at the JPMorgan Chase shareholder meeting where people dressed as Robin Hood outwitted an army of security to march on the meeting. Despite the use of mace, police horses, and dogs, hundreds of protesters held their ground while others who had shareholder proxies confronted CEO Jamie Dimon directly. “As a person of faith, my God believes you shouldn’t take advantage of people when they are down,” said Dawn Dannenbring of the community group Illinois People’s Action while addressing Dimon. “Do you believe in the same God I believe in?” Dimon’s response: “That’s a hard one to answer.” There were also dozens of similar demonstrations against the bad behavior of banks and Wall Street going on around the country from Florida to Illinois, Iowa, Maine, and Missouri. They were all connected together with a common message about “making Wall Street and big banks pay” to fix the economy they wrecked. There was widespread local and national media coverage, and we used Facebook, YouTube, Twitter, websites, and Internet ads to spread our message about both who caused the economic crisis and the role banks should play in getting people back to work, keeping people in their homes, and raising the revenue to fund local and state governments. All of this, of course, didn’t happen by accident. 2011-12-14T08:00:10+00:00 http://www.nhi.org/article/2471/uncle_sam_outdone_by_ocwens_sam/ http://www.nhi.org/article/uncle_sam_outdone_by_ocwens_sam/uncle_sam_outdone_by_ocwens_sam/#When:08:00:06Z This summer, mortgage servicer Ocwen Financial Corp. officially launched a mortgage principal reduction program for homeowners with negative equity—one of the first programs conducted without the help of a government agency. With the Shared Appreciation Modification program, Ocwen will write down loan principal to 95 percent of a home’s current market value. The write-down is forgiven in one-third increments over a three-year span, “so long as the homeowner stays current on the modified mortgage,” according to an Ocwen news release. If and when the house is sold or refinanced, the borrower holds on to 75 percent of the appreciation; the remaining 25 percent goes to the investors who own the loan. Other servicers have sporadically used Hardest Hit Fund and Home Affordable Modification Program dollars to subsidize principal write-downs, but this is a first-of-its-kind effort. Over the past few years the principal reduction drumbeat played by advocates has grown ever louder. The New Bottom Line has made principal reduction for all underwater loans one of its goals. Clearly Ocwen, which is no charity, believes what advocates have been saying for a long time: when you take a clear-eyed look at the situation, principal reduction is the route to real loss mitigation. But with the GSEs recently insisting they will not write down principal, it’s unclear how long it will take before principal reduction programs of any sort become an industry-wide standard. While waiting for an answer, underwater borrowers will have no choice but to hold their breath. Shelter Shorts 2011-12-14T08:00:06+00:00 http://www.nhi.org/article/2485/the_human_right_to_housing/ http://www.nhi.org/article/the_human_right_to_housing/the_human_right_to_housing/#When:08:00:05Z Anyone working on homelessness and affordable housing issues is familiar with the statistics and the human suffering behind them. We know homelessness has been a national crisis for 30 years and we know the recession and dramatic increases in foreclosures have made things much worse. Just look at the most recent Annual Homelessness Assessment Report from HUD: family homelessness increased by 20 percent between January 2007 and January 2010. In December 2010, the U.S. Conference of Mayors’ annual survey of cities across the country reported a 9 percent increase in family homelessness in 2010 alone. And in addition to people who are in shelters or on the streets, over 6 million are doubled up due to economic necessity. In many communities tent cities are going up. We know we suffer from affordable housing and homelessness crises—but how often do we think of them as human rights crises? As it happens, more and more local advocates are using a human rights framework to address issues of homelessness and housing—and they’re gaining ground. 2011-12-14T08:00:05+00:00