Streaming Live: The Fed’s REO and Vacant Property Strategies for Neighborhood Stabilization
Posted by Matthew Brian Hersh on September 1, 2010
The Federal Reserve System is sponsoring a national summit on September 1 and 2 to discuss methods and resources for encouraging neighborhood stabilization in the aftermath of the U.S. home mortgage foreclosure crisis. The forum will showcase findings from Federal Reserve research and policy efforts, including the release of the publication REO and Vacant Properties: Strategies for Neighborhood Stabilization.
People living in communities with vacant properties face declining property values, loss of public services due to reduced tax revenue, and increased levels of crime. The summit will examine practical and tested strategies that nonprofit organizations, local and regional governments, federal officials, and lenders can use to mitigate the impact of vacant and real estate owned (REO) property—property held on the books of banks, typically after failure to sell at foreclosure auction.
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Help Restore Post-Katrina NOLA Neighborhoods by Tearing Down the Freeway
Posted by Kaid Benfield on August 30, 2010
As we reflect on the five years that have passed since Hurricane Katrina devastated New Orleans, we can observe both progress and much, much left to be done. Speaking at Xavier University yesterday, President Obama spoke for many when he said that despite progress there are still too many vacant lots, too many people unemployed and “too many New Orleanians who have not been able to come home.” Writing for the Associated Press, Cain Burdeau and Michael Kunzelman also report that the President noted the harsh reality that the recession and the Gulf oil spill have only compounded the challenges of recovery.
Rebuilding one of our nation’s most loved (if also impoverished) cities has been inherently a matter of planning and architecture, and the task has brought out many ideas, some fabulous, others well-intentioned but falling short of the mark, in my humble opinion.
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What? No Investment Opportunity?
Posted by Matthew Brian Hersh on August 24, 2010
Here’s a headline o’ the times, courtesy of The Wall Street Journal though it’s a shame that we were ever in a place where buying a home was anything other than buying a place to live:
“Fed’s Hoenig: Mistake To View Housing As Investment Opportunity.”
The article stemmed from a statement issued by Thomas Hoenig, president of Federal Reserve Bank of Kansas City, who said during testimony at a field hearing by the U.S. House Financial Services Committee’s oversight and investigations subcommittee in Overland Park, Kan. that “if the American people are looking at the housing market to be their investment opportunity, I think they are making a mistake.”
This no-brainer comes with the news that, for the 17th month in a row, foreclosure filings have topped 300,000. In July alone, In 92,858 homes were repossessed, according to a New York Times editorial that cited data provided by RealtyTrac.
“As repossessed homes are put up for sale, house prices are likely to fall further. As prices fall, more borrowers end up underwater owing more on their mortgages than their homes are worth. Thats a big risk factor for default, especially when coupled with high unemployment. Moody’s Economy.com estimates that 1.9 million homes will be lost this year, down only slightly from 2 million in 2009.”
What’s more is that the editorial goes on to cite a staggering figure—and one that we already know—that fewer than 400,000 loans have been permanently modified through the administration’s loan modification program and that just over 1 percent—$3.21 million—of the program’s $30 billion allotment has been spent in the program that is voluntary for lenders.
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Instantly See Average Transportation Costs, Emissions for Any Location
Posted by Kaid Benfield on August 14, 2010
The latest in the snazzy series of useful tools and research on housing and transportation costs published by the Center for Neighborhood Technology is called Abogo. It works like Walk Score: you enter an address and the site produces a GIS-coded map and data for that address, including the average amount of monthly spending per household for transportation in the address’s neighborhood and the average monthly amount of carbon emissions per household for transportation, in both cases compared to regional averages.
CNT explains its methodology including, in part, the following:
We estimate total transportation costs for an average household from your region living in your neighborhood, including commuting, errands, and all the other trips around town. We count money spent on car ownership and use, as well as public transit use. For CO2 emissions, we count car use only. We use data from the Housing + Transportation Affordability Index, a project of the Center for Neighborhood Technology.
On my NRDC blog, I show not only the map and info for my house, which you see here – our location is below the regional average in both costs and emissions – but also for NRDC’s office neighborhood in DC and for my sister-in-law’s location in an outer suburb. Because of greater regional accessibility, we would expect the downtown location to perform best and the outer suburb to perform worst. That’s exactly the case. Check it out, here.
Well done, CNT. Go here to try Abogo for yourself and for more information.
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In Chicago, a Partial Solution to the Foreclosure Crisis?
Posted by John Atlas on August 2, 2010
This week Chicago Alderman Pat Dowell, at the request of Action Now, the former Illinois chapter of Acorn, which broke away in 2008, and their allies, like Southwest Organizing Project, in the Foreclosure Convening, introduced a new ordinance that would charge the banks the real cost of their actions to foreclose and evict. If passed, the ordinance would pass the responsibility for securing and maintaining vacant buildings onto lenders, regardless of whether they have actually reclaimed legal possession of a building. This proposed legislation would hold banks responsible for the properties they foreclose on by requiring the bank post a bond of $10,000 on every vacant building.
The ordinance would also provide for a finder’s fee to be given to neighbors who report maintenance violations on vacant properties. The finder’s fee would be 5 percent of the total fines and fees assessed at a vacant property, usually amounting to somewhere between $50 and $250.
As homeowners watch their blocks become more and more dangerous and vermin-infested because of the unkempt vacant buildings, we finally have a way to get the banks to pay for at least a portion of the damage they are causing. The ordinance empowers community organizations to help people with the required research and documentation.
For more information on the ordinance, call Action Now at (312) 676-4280.
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Washington Post Misses the Point on Inclusionary Zoning
Posted by Kaid Benfield on August 2, 2010
Earlier this week, The Washington Post featured an article by Jeffrey OConnell headlined, “DC affordable housing policy has put up a goose egg.” The article casts a pall over the city’s new inclusionary zoning program, citing a city report to the effect that the law had created no new affordable homes in Washington between last August, when it went into effect, and March of this year.
A little quick to judge a policy designed to produce long-range effects, dont you think, six months during a recession? The city’s Department of Housing and Community Development summarizes the policy’s requirements and objectives:
“Inclusionary Zoning requires that a certain percentage of units in a new development or a substantial rehabilitation that expands an existing building set aside affordable units in exchange for a bonus density. The goals of the program are to create mixed income neighborhoods; produce affordable housing for a diverse labor force; seek equitable growth of new residents; and increase homeownership opportunities for low and moderate income levels.”
Worthy goals, those. If one stays with the Post story, one eventually comes to the more promising facts: development proposals requesting zoning approvals for 4800 homes have been submitted to the city. If those projects are approved and built, at least 430 new affordable homes (offered at below-market rents to qualifying applicants) will be included as part of the projects under inclusionary zoning. Further, building permits have already been sought for another 92 homes, eleven of which will be affordable because of the new policy.
In other words, while the recession has dampened homebuilding since the rules took effect, over 400 affordable homes are in planning because of inclusionary zoning, representing nine percent of the new units coming on line. So which is the real story here?
No one has argued that inclusionary zoning is a panacea for assuring access to housing for working families and other low- to moderate-income households. As a market-dependent strategy, its impacts will be greater when more homes are being built. But it is a valuable tool, as experience in communities across the country is indicating.
For more commentary, go here. (Photo of mixed-income housing in Chicago by Payton Chung)
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Tassafaronga Village: Affordable Green, Gold and Platinum in East Oakland
Posted by Kaid Benfield on August 1, 2010
Oakland, California’s Tassafaronga Village is a new mixed-income, green neighborhood development that is bringing a high degree of environmental excellence to a traditionally underserved portion of the city’s Elmhurst district. A federally assisted HOPE VI development built by the Oakland Housing Authority, Tassafaronga is replacing 87 deteriorated public housing units with 60 affordable apartments in a new, three-story building, an additional 77 in a section of new two- and three-story townhouses, and 20 more, along with a medical clinic, in an adapted building that formerly housed a pasta factory.
In addition, Habitat for Humanity is building 22 affordable, for-sale townhomes on the site. (Habitat has also constructed a nearby project that I really like in another portion of East Oakland.)
Tassafaronga has been certified by the LEED for Neighborhood Development pilot program at the gold level, and the individual homes, which incorporate solar power for the generation of electricity and hot water, are being built to platinum standards under the LEED-Homes program. The development has also won awards from the Pacific Coast Builders Conference as “best green sustainable community of the year” and “best infill, redevelopment, or rehab site plan.”
Site improvements include reconstructed streets with traffic calming, green stormwater infrastructure, and green roofs. In addition, the apartments are designed to hide a parking structure to their rear, and the Village includes a common public plaza as well as semi-private shared outdoor spaces within each of the three main clusters of housing. The Local Initiatives Support Corporation provided $25.3 million in equity financing with low income housing tax credits through its National Equity Fund.
There is an abundance of bus transit nearby, as well as a BART line to the Village’s southwest, though the nearest BART station is a longish walk from the edge of the site. Bus rapid transit is planned for the commercial corridor visible to the east. There are two elementary schools, a community center and a park bordering the site, as well as a pharmacy, hardware store, eateries and food markets within walking distance. The site’s Walk Score varies from 49 to 60, depending on where the measurement is taken; that is below average for Oakland, but one hopes that Tassafaronga can be a catalyst for further neighborhood improvements, including additional shops and services.
LISC characterizes Tassafaronga as a development that not only builds new homes, but also transforms an under-served, tough neighborhood, with “an example of how affordable housing can be built attractively and responsibly.” I agree, and congratulations to the sponsors for their well-earned awards.
I have lots more good photos and some additional commentary here for interested readers.
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Senate Passes Financial Reform; NSP 3 Included
Posted by Matthew Brian Hersh on July 15, 2010
With the Senate passing today, by a 60 to 39 margin, a major overhaul to the financial regulatory system (the Restoring American Financial Stability Act of 2010), we’re going to keep our eye on the key provision that contains $1 billion for NSP3 and the vacant property fix, plus the $1 billion for the emergency mortgage relief program. This brings the total NSP funding to $7 billion—a number that please advocates, to be sure, but one that they, and Rep. Barney Frank, the Massachusetts Democrat, chair of the House Financial Services Committee, and sponsor of the Financial Stability Act, say is not nearly enough to adequately address the problem on the ground. In a recent interview with Shelterforce that will be published in our upcoming issue, Frank weighed in on NSP.
Here’s an excerpt (note at the time of the interview, there was $2 billion in NSP funds proposed):
Shelterforce: NSP1 and NSP2, and the $2 billion more coming in regulatory reform: Do you think its enough?
Barney Frank: No.
He goes on something of a rallying cry for advocates, urging people to demand more funding for programs like NSP:
“I mean, money doesnt solve everything, but the absence of money makes solving these things almost impossible…Id like it to be more. Id also like us to withdraw from Iraq, but, in the current situation, $2 billion is, well, were fighting right now for $2 billion.
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Walkability Dictates Severity of Housing Decline
Posted by Matthew Brian Hersh on June 30, 2010
Here’s an interested graphic from Calculated Risk that reflects the recently released Case-Schiller Home Price Index. The chart indicates that those areas with more central, walkable downtowns have held up better in terms of property value loss than others, or, as Richard Florida noted on his blog, “In particular, walkability and neighborhood quality seem to be emerging as the best hedge against massive housing price declines.
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HAMP Takes a Licking
Posted by Matthew Brian Hersh on June 24, 2010
All we can say is “ouch.” Dow Jones reports that Thursday’s hearings held by the House Oversight and Government Reform Committee designed to assess HAMP’s progress resulted in what amounted to a criticism of the changing rules and bureaucratic hurdles of the government’s foreclosure prevention program:
Real-estate financial services consultant Edward Pinto described the Home Affordable Modification Program in two words: “numbing complexity.”
“At last count, HAMP had 800 requirements and servicers are expected to certify compliance,” he said. “With ever changing regulations, a constant need to re-evaluate past decisions in light of new regulations, and multiple appeals, it is no wonder that the HAMP pipeline became clogged through no substantial fault of servicers.”
According to Treasury and HUD’s most recent April data, HAMP, short for Home Affordable Modification Program, accounted for almost 300,000 permanent modifications, constituting an increase of 68,000 or almost 13 percent over March.
National Housing Institute
