Scoring Homeownership: Looking at the Long Game

Posted by Doug Ryan on February 11, 2016

At the end of January, CFED released its 2016 Assets & Opportunity Scorecard, the most comprehensive measure of the health of the American family’s financial balance sheet. At its core, the Scorecard evaluates the extent to which a family’s financial position has improved, its wealth increased and its resiliency strengthened to withstand a crisis. It also measures what states are doing—or aren’t—to help residents get ahead.

In some ways, and for some families, the economic growth over the last few years—notably strong job gains and emerging wage increases—have eased them out of the worst throes of the recent housing and financial crisis.

Sadly, the data show that today’s economic climate offers little hope to many struggling families. Family incomes still lag in comparison, for example, to rising housing costs in many markets. Many families lack adequate income to cover basic needs such as rental units, which limits their abilities to save and plan for a more prosperous future.

Most striking—though perhaps least surprising—the reality for individuals and families of color is even harsher.

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Socially-Blind Urban Planning

Posted by Murtaza Baxamusa on February 9, 2016

The contrast between prosperity and poverty is most dramatic in the harshness of inclement weather. In San Diego this past weekend, while the storms resulting from El Nino lashed at the city, I drove through East Village, a neighborhood that contains one of the largest concentrations of homeless in the region. It is also the epicenter of Downtown’s new construction boom.

Amidst the broken tree branches and debris, scattered and soaked in the storm water were large black trash bags that homeless people had used to protect themselves. I saw helplessness in the eyes of an elderly couple as the rain whipped at them from every direction, drenching their belongings. An orderly line of about a half dozen people waited on the sidewalk for their turn to use the portable bathrooms, seemingly numb to the pouring rain. A series of blue tents clustered under the freeway bridge, sharing a tarp, and a young woman was braving the gusty winds to stand at that intersection, her hands clenching a soaked cardboard sign that simply read, “Homeless, Hungry.”

In the background, I saw construction cranes idling in the sky above them, poised to continue building a teal-colored luxury condominium tower with yellow and white accents.

America’s Finest City has an ugly problem.

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So, About That Anti-Inclusionary “Study”

Posted by Miriam Axel-Lute on February 8, 2016

Last week, I submitted the following letter to the editor of the LA Times in response to a vicious, and more importantly extremely misleading, op-ed decrying inclusionary housing as a development killer. (Shout out to reader Sala Udin for sending us the link.) Since it seems that I was a little late to get it published, I wanted to share it with Rooflines readers, with a few extra thoughts:

Dear editors,

Contrary to Gary Galles’s ideological claims (op-ed. Jan. 6), multiple independent studies have shown that inclusionary housing policies do not slow production or raise prices. The study Galles emphasizes was builder-funded and has been roundly debunked. Among its many flaws, it didn’t look at comparable cities without inclusionary policies over the same time periods. Lo and behold, production also fell similar amounts in those places, leaving the study’s claim that inclusionary measures caused the drop with no supporting evidence.

Inclusionary housing policies are a win-win for everyone. Hard-working households struggling to make ends meet are able to live where they can get to jobs more easily and send their kids to better schools. Employers enjoy less turnover and more productive workers. And yes, developers win too by knowing what to expect and still earning a healthy profit while increasing opportunity in their communities.

I find it ironic that Galles has a book out that decries political decisions being made on the basis of bias rather than evidence, when that is clearly what he is doing here—relying on one extremely flawed study that supports his Econ 101 assumptions about how inclusionary zoning will affect housing markets to the exclusion of all the other much stronger studies that contradict those guesses. (Thanks to Victoria Basolo and Nico Calavita who took the time in 2004 to explain the study's flaws in great detail.) In the world of economics, "evidence-based" is too often trumped by a set of assumptions about the world that only hold true in the most simplified of situations. And the housing market is definitely not a simplified situation. 

It's important to correct misinformation like this (that is often the theme of our Answer column), even though confirmation bias (which happens to all of us) is very hard to overcome. I'm sure Galles will never be convinced, but those who might read him should have acess to a full picture.

Still we could also see this op-ed as a good sign—hey, inclusionary housing is worthy of debate in the LA Times!

Now is the time to keep telling the stories about why it is necessary and the good it does. Good luck, and tell us how you are getting the story out.

(Photo credit: Horia Varlan, via flickr, CC BY 2.0)

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The Danger in Restricting Our Definition of “Preservation”

Posted by Barbara Samuels on February 8, 2016


A post last week here on Rooflines, called "Duty to Serve = Your Duty to Comment," by Michael Bodaken and Ellen Lurie Hoffman, highlights several proposals within FHFA's new Duty to Serve rule that they believe warrant our field's closer inspection and comment. In the post, they assert:


"While we strongly support new construction deals with long-term affordability restrictions in high opportunity areas, we firmly reject including such housing within the 'preservation' category in this rule … We strongly discourage FHFA from categorizing this activity as a subset of preservation because including 'new construction' within 'housing preservation' … dilutes the very concept of preservation. Of course we urge Fannie and Freddie to provide preservation incentives in higher opportunity areas, but within their housing goals, not as part of their Duty to Serve."

I have to disagree with the unduly limited definition of “preservation” in this piece. The real focus of preservation—and the definition—should be on the bigger picture of preserving the assisted/affordable housing stock in a community or region—the numbers of units available to meet the housing needs of people living in an area—and not just on the smaller picture of the fate of individual properties.

Preservation of the inventory does not only or always entail acquisition and rehabilitation of an individual building or project. Rehabilitation of an existing project is not always feasible or the best strategy for meeting the housing needs of the residents of the developments, much less of the community generally. In some cases, it is safer for residents and/or more cost effective, desirable, or strategic to shift the operating subsidy and available capital funding to another location(s).

But Bodaken and Hoffman would limit the definition of “preservation,” and thereby FHFA’s Duty to Serve, to rehabilitation of existing buildings, as and where they are, even excluding new replacement housing in another location.

One problem with this cramped view is that when it has been infeasible or undesirable to rehab a specific project—or simply when no one stepped forward to do so—both the units and the subsidy have been lost altogether to the area’s inventory of affordable housing  (e.g. where the project is near an environmental hazard, in an unsafe area, few tenants want to stay, lacks the unit mix to meet current needs, or is too deteriorated to feasibly be rehabbed.) The fate of our affordable housing inventory, and the families that depend on it, should not be so tied to the fate of specific properties and sites.

Another problem with Bodaken and Hoffman’s proposed definition is that it assumes the inherited geography of segregation in the locality and region will be re-upped for another 40 plus years. This is neither morally nor legally acceptable. FHFA could and should be playing an active role in correcting the mistakes of the past by helping to finance expanded housing choice and opportunity.

In short, the limited definition proposed in the piece for FHFA’s duty to serve would unduly restrict FHFA in meeting both its preservation mission and its duty to affirmatively further fair housing.

Photo credit: Steven Martin, via flickr, CC BY-NC-ND 2.0)

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Stop Talking About Displacement

Posted by Tony Pickett on February 5, 2016

We’ve all heard the tale: long neglected places, usually in major cities, usually communities of color, are “discovered” in Christopher Columbus-like fashion and begin changing in ways that cause long-time residents to be physically displaced, or at the very least feeling a significant loss of political control and neighborhood identity.

These neighborhood transformations can sometimes be intentional, initiated by planned economic development efforts like large-scale public investment to create new infrastructure and amenities; transportation projects, sports arenas, convention facilities and parks. But more often, the changes labeled as gentrification are unknowingly sparked by some random combination of well-intentioned actions over the course of several years.

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Why the Presidential Race Ignores Urban America

Posted by Randy Shaw on February 4, 2016

[Editor's note: The following piece originally appeared on the website on Jan. 28, 2016]

Despite overwhelming media coverage, the 2016 presidential race has ignored the housing and economic crises impacting urban America.

Neither Bernie Sanders nor Hillary Clinton has uttered the phrase “housing crisis” during their debates, and no question has addressed it. Republicans fear even mentioning a problem whose solution  requires federal dollars.

Presidential campaigns routinely overlook the nation’s housing crisis. In 2001, I won a Project Censored award for the 9th most censored story for an In These Times article about Al Gore, George W. Bush, and Ralph Nader ignoring the affordable housing crisis in the 2000 campaign.

I could have written the same story about the 2004, 2008 and 2016 elections.

Ignoring the nation’s housing crisis is a symptom of a larger problem. Addressing it requires changing how the media, politicians, and public perceive urban America.

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Duty to Serve = Your Duty to Comment

Posted by Michael Bodaken and Ellen Lurie Hoffman on February 3, 2016

In gridlocked Washington, rarely does one have the ability to truly influence community development or housing policy. Well, wait for it . . . that time is upon us!

This past December, the Federal Housing Finance Agency (FHFA) published a proposed “Duty to Serve” rule, which requires Fannie Mae and Freddie Mac to increase their secondary market activities to help very low-, low-, and moderate-income families buy or rent a home.

We should be paying attention to this because the proposed rule provides a-scarce-as-hen’s-teeth opportunity for the public to weigh in on a federal agency that wants to drive investment for community development. FHFA has brainstormed dozens of creative ideas about how to prod Fannie and Freddie to drive billions more into affordable housing financing, so it’s urgent that folks working on community revitalization, preservation, and tenants’ rights take a close look at these proposals and weigh in about what makes sense and what does not.

Comments are due to FHFA before March 17, and so its worth setting aside a chunk of time now to consider this lengthy proposed rule. The National Housing Trust will submit complete comments, but here are a few proposals that will perhaps spur you to take a closer look.

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The REAL Rental Housing Issue

Posted by Alan Mallach on February 1, 2016

We know a few things about the majority of very low-income renters: They live in private market housing, not tax credit projects or public housing. They receive no housing subsidies. They are paying far more than they can afford for what is too often substandard housing in distressed neighborhoods.

These statistics are well enough known, but we don’t think about them as much as we should, and often lose track of the actual human toll behind them.

A book coming out in March called, simply, Evicted, by Harvard scholar Matthew Desmond, tells that story. It should be required reading for anyone in community development (A paper by Desmond titled “Eviction and the Reproduction of Urban Poverty” addresses some of the same issues as his forthcoming book). It’s a twofold problem: The most fundamental problem is that the economics of what poor people live on–either from public assistance or low-wage jobs–are totally inadequate to afford what it costs to create or provide even minimally decent housing. The 25th percentile rent in the United States–the low-end median rent, where 1/4 of the units rent for less and 3/4 rent for more, was $670/month, which takes an income of $26,800 to afford. Realistically, even the most self-sacrificing landlord can’t pay off a mortgage, pay taxes and maintain a rental unit in decent shape for what a poor family can consistently afford to pay.

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Attitudes Toward Exploited Cities Helped Poison Flint

Posted by Miriam Axel-Lute on January 29, 2016

Flint’s water crisis started long before corrosive river water starting running through its pipes. Though there’s no question that those who signed off on the decisions and covered up the results are criminally responsible, responsibility also falls on all of us for setting the stage for such desperate measures.

News coverage of the water crisis regularly refers to Flint as “bankrupt” and “cash-strapped,” and notes that it had been placed under an emergency fiscal manger by the state, just as Detroit was. These things are all completely true, but without context, they can give the sense that Flint and its residents got themselves into this mess, or at best that they are a sad charity case to be pitied: “It’s no one’s fault; so sad that they got poisoned on top of it.”

Now, it has come out recently that this disastrous interim water switch can't even be described as about saving money, since Detroit had offered six different cheaper deals to try to maintain the relationship. The reasons they stuck with the plan, and who made that decision are not fully clear yet.

Nonetheless, Flint's fiscal struggles were real, seem to have been behind the initial impulse to look into different water sources, and were used to excuse the switch, even if there were worse motives behind it in the end. So how we regard the reasons certain communities are cash-strapped still play into how we let this (and so many other public health and environmental disasters) happen.

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Flint: Tainted Choices, Tainted Water

Posted by Laura Barrett on January 27, 2016

Like the water itself, the situation in Flint, Mich.should be crystal clear: elected and appointed officials, at the state and federal levels, have done harm, some even irreparable, to the brains and futures of thousands of kids.

A disastrous choice by Gov. Rick Snyder’s hand-picked city overseer to switch water sources brought lead, copper, fecal coliform bacteria, trihalomethanes (THMs) into the faucets of the homes of many already-struggling Flint families.

The health of the children and adults of Flint has been irremediably compromised and can never be calculated, while the bills for this short-sighted bureaucratic bungle will pile up and burden taxpayers for years to come. But the more staggering and unforgivable cost is the health of the children and adults of Flint. Residents report skin lesions, hair loss, chemical-induced hypertension, vision loss and depression. Over the years, long term health concerns issues such as cancer and liver, kidney malfunctions from exposure to coliform bacteria and trihalomethanes will likely emerge. And the worst pollutant, lead–which has been the focus of local and federal lead paint remediation efforts for years–undeniably results in permanent brain damage. Flint’s lead poisoned girls will do more poorly in school and its lead poisoned boys will be more apt to enter the pipeline to prison.

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