- The Government Accountability Office (GAO) has released a report, Affordable Rental Housing, which points out that there are initiatives on the state, local and federal level which address this issue, however they are not always well coordinated, often overlap, and there is “incomplete information to assess performance.” Without sufficient information, the GAO argues it is impossible for Congress or other agencies to set appropriate spending priorities and assess performance. GOA’s recommendation is for the U.S. Department of Housing and Urban Development to work with state and local entities to develop a coordinated assessment and reporting structure.
- Also from the GAO, Pay for Success: Collaboration Among Federal Agencies Would be Helpful as Governments Explore New Financing Mechanisms is a report which describes Social Impact Bonds (SIBs). SIBs are a mechanism by which investors pay for social outcomes and receive an agreed upon return based on the success of the program or as GAO put it, “contracting for social outcomes.” According to the GAO SIBs can be useful in reducing the cost of providing social services while improving success. While the use of SIBs has been limited so far the Office of Management and Budget has been encouraging Federal Agencies to test their potential effectiveness. This GAO report analyzes SIBs that have already been piloted, for example the Department of Labor awarded $24 Million in grants in 2013 to reduce recidivism in New York and Massachusetts. One fear is that SIBs could create perverse incentives. SIBs could eventually be used to finance affordable housing development.
Author Archives: Serenna McCloud
Thursday’s Advocacy & Think Tank Round-up
- Corelogic’s Second Quarter U.S. Equity Report indicated that over three-quarters-of -a-million properties regained equity, while 4.4 million remain in negative equity over the same period. Aggregate negative equity fell $28 billion from $338 billion to $309 billion. According to Corelogic this reduction is caused both by foreclosure completions and home price appreciation.
- According to a study by the National Association of Realtors (NAR) new home construction is trailing job growth in major metro areas. NAR sees this as the primary reason for the affordability crisis now gripping the nation in many of the same areas.
- The National Fair Housing Alliance (NFHA) has filed a complaint with the U.S. Department of Housing and Urban Development (HUD) against certain real estate agencies and individual realtors who are alleged to have treated black and latino buyers in Jackson Mississippi in drastically different ways than they treated equally qualified white buyers. According to the NFHA complaint white buyers were shown a wider variety of homes while black and latino purchasers were largely steer into majority minority neighborhoods.
- The NHFA, in a related vein, also released a study entitled Where You Live Matters – 2015 Fair Housing Trends Report which draws a stark parallel between the historic lack of investment in communities of color and the racial disparities in educational, social, and economic outcomes that have resulted.
- NYU’s Furman Center has released a Brief entitled Black and Latino Segregation and Socioeconomic Outcomes which finds that the burgeoning Latino population in the U.S. is largely “inheriting the segregated urban structures experienced by African Americans.” This segregation seems to lead to reduced socioeconomic prospects when compared with whites, including lower earnings, more violent crime, less access to credit and lower homeownership rates.
Tuesday’s Regulatory & Legislative Round-Up
- The U.S. Department of Housing and Urban Development (HUD) held a policy conference to commemorate the 50 year anniversary of the Fair Housing Act. Among the conference materials is a report from the Government Accountability Office (GAO) which states the the Internal Revenue Service’s (IRS) oversight over compliance with the Low Income Housing Tax Credit Program (LIHTC) has been lax and proposes joint IRS/HUD oversight. The NMTC has been used to create affordable housing through Housing finance Agencies (HFAs). According to the GAO report the IRS has only conducted seven audits of the 56 HFA since 1986. The GAO report states, “Joint administration with HUD could better align program responsibilities with each agency’s mission and more efficiently address existing oversight challenges.”
- The U.S. Treasury has awarded awarded $202 million dollars to 195 Community Development Financial Institutions (CDFIs) through the Community Development Financial Institutions Fund (CDFI Fund). The CDFI Fund was established in 1994 to provide capital and access to credit in underserved communities through CDFIs. CDFIs are mission driven financial institutions which work on the local level to revitalize neighborhoods and create economic change. The CDFI Program invests in and builds the capacity of community credit unions, banks, loan funds, and other financial institutions serving rural and urban communities.
- The Seattle Mayor has proposed new legislation to build 6,000 new affordable housing units. The proposal has been dubbed a “grand bargain” between affordable housing advocates and real estate developers. This grand bargain will require all new development in Seattle pay for affordable housing creation.
- Not to be outdone, the Mayor of Denver has also been mulling over a policy (mentioned in his inaugural address) which would tax new development and also raise the property taxes. Both Seattle and Denver are reacting to a situation in which lower paid professionals including teachers, restaurant and healthcare workers are increasingly difficult to attract and recruit because they are unable to find housing they can afford.
Thursday’s Advocacy & Think Tank Round-Up
- Enterprise Community Partners and other leaders of the #Capshurtcommunities campaign have arranged a National Call in days on September 15 and 16, 2015 to “to educate Members of Congress on just how devastating these cuts are to low-income children, families, seniors, and veterans in our communities.” The #Capshurtcommunities campaign’s goals are to “Realign the federal budget to preserve and expand access to affordable rental housing for low income households while continuing support for homeownership opportunities for low and moderate income families.” According to the campaign’s leaders the low spending caps which Congress has placed on Federal housing programs hamper the U.S.’s ability to meet its diversity, educational and economic mobility potentials.
Tuesday’s Regulatory & Legislative Round-Up
- The Federal Housing Finance Agency (FHFA) is seeking public comment on its revised system of records for the National Mortgage Database Project. The FHFA collects information on all outstanding U.S. mortgages in keeping with its mandate to ensure the creditworthiness of borrowers. Mortgages remain in the NMDB until they terminate through prepayment (including refinancing), foreclosure or maturity. Information from credit repository files on each borrower associated with the mortgages in the NMDB will be collected from one year prior to origination to one year after termination of the mortgage.
Friday’s Government Reports
- The Federal Housing Finance Agency (FHFA) has reported an uptick in mortgage rates from June to July 2015. This is according to the Monthly Interest Rate Survey (MIRS), which measures several indices of new mortgage contracts to arrive at a national average. July’s average was 4.02% up 17 basis points from June’s 3.8%.
- The FHFA has also released its second quarter Home Affordable Refinance Program (HARP) refinance results. According to the report refinances remained unchanged between the first and second quarters of 2015, 31,561 borrowers refinanced with HARP funds, which represented 5% of all U.S. refinances. HARP was established in 2009 in order to assist homeowners unable to refinance because of a decline in their home value. As of March the FHFA estimated that there were over 500,000 borrowers eligible for the HARP program.
- Also according to the FHFA house prices rose 1.2% from the first to the second quarter (Q2) of 2015 and are up more that 5% over Q2 201. This is according FHFA’s House Price Index (HPI) which has been up for the last 16 consecutive quarters.
Thursday’s Advocacy & Think Tank Round-Up
- Corelogic’s recently released, Home Price Indicator (HPI) predicts that home prices will appreciate 4.7% from July 2015 to July 2016.
- MakeRoom’s campaign to bring attention to the millions of families who struggle to pay rent. Every first of the month, when rent due, the organization arranges a concert in the living room of a family struggling to pay rent. On September first the R&B group Miguel played in the home of Devona. Devona, a single mother from Detroit, Michigan who is also raising a nice and nephew, pays over half of her income in rent to keep her family in a safe suburban home.
- The National Housing Conference (NHC) will be hosting a webinar on September 8th to discuss the ways in which affordable housing development policies are linked to educational outcomes and ways in which organizations are addressing the issue.
