March 4, 2016
Friday’s Government Reports Roundup
- The S. Department of Commerce found that in January 2016, the sale of single-family homes decreased by 9.2 percent from a 10-month high. However, most believe that the housing market remains stable.
March 4, 2016 | Permalink | No Comments
March 3, 2016
The State of Moderate-Income Housing
The Center for Housing Policy’s most recent issue of Housing Landscape gives its 2016 Annual Look at The Housing Affordability Challenges of America’s Working Households (my discussion of the Center’s 2015 report is here). it opens,
Millions of working households face big challenges in finding affordable housing, particularly in areas with strong economic growth. In 2014, more than 9.6 million low- and moderate-income working households were severely housing cost burdened. Severely cost burdened households are those that spend more than half of their income on housing costs. Overall, 15 percent of all U.S. households (17.6 million households) had a severe housing cost burden in 2014, with renters facing the biggest affordability challenges. In 2014, 24.2 percent of all renter households were severely burdened compared to 9.7 percent of all owner households. These percentages were even higher for working households, of whom 25.1 percent of renters and 16.2 percent of owners had a severe housing cost burden.
Housing costs continue to rise, particularly for working renters, who saw their median housing costs grow by more than six percent from 2011 to 2014. And for the first time since 2011, housing costs increased for working owner households as well, marking the end of a three-year downward trajectory. Additionally, more working households were renting their homes as opposed to buying—52.6 percent of working households were renters in 2014, up nearly two percentage points from 2011, when the share was 50.8 percent.
With more working households renting their homes, demand for rental housing continues to grow, pushing rents even higher in already high-cost rental markets. And although incomes are growing for many working households, this growth is not always sufficient to offset rising rents, meaning that working renter households are increasingly having to spend a higher proportion of their incomes on housing costs each month. (1)
The report outlines a series of good policy proposals (many of which are politically unfeasible in the current environment) to address this situation. But my main takeaway is that the wages of working-class households “are not sufficient for meeting the cost of adequate housing.” (5) Their housing problem is an income problem.
March 3, 2016 | Permalink | No Comments
Thursday’s Advocacy & Think Tank Roundup
- The Harvard Joint Center for Housing Studies released 2016 Update on Homeownership Wealth Trajectories through the Housing Boom and Bust, which it had originally released in 2013. “It examines the goals of homeownership and lessons from the housing crisis.”
- The Association for Neighborhood & Housing Development released “Who is Lending and Who is Getting Loans?” report, finding that lending data does not match NY’s demographic data. For example, 22 percent of New Yorkers are black and 29 percent are Hispanic, but 8.7 and 8.4 percent of mortgages went to those groups in 2014, respectively.
- Enterprise Community Partners and the Center for Outcomes Research and Education released “Health in Housing: Exploring the Intersection Between Housing and Health Care”, which shows that having affordable housing paired with health care services reduces emergency room visits, lowers Medicaid costs and increases access to primary care.
March 3, 2016 | Permalink | No Comments
March 2, 2016
Hillary’s Housing Agenda
Hillary Clinton’s housing policy platform is included in her Breaking Every Barrier Agenda. I quote the key passages below and provide my two cents on them. Overall, the proposals strike me as reasonable, progressive ones.
- Support families as they save for sustainable homeownership. Clinton will support initiatives to match up to $10,000 in savings for a down payment for those who earn less than area median income.
I like that this down payment assistance proposal because it requires that homebuyers have skin in the game (and $10,000 is a lot of skin for many first-time homebuyers). Down payment assistance programs that do not require skin in the game can turn out to be unmitigated fiascoes for homebuyers and government programs alike (for instance, see my discussion of the American Dream Down Payment Act of 2003 here).
- Easing local barriers. Clinton will encourage communities to implement land use strategies that make it easier to build affordable rental housing near good jobs by increasing funding available to those that do through both her infrastructure bank and competitive grant programs, like the Department of Transportation’s TIGER initiative.
- Build more affordable rental housing near good jobs and good schools. Clinton will increase support for affordable rental housing in the areas that need it most and encourage communities to implement land use strategies that make it easier to build affordable rental housing near good jobs.
I like these proposals because they acknowledges the outsized effect that local land use policies can have on housing construction. The federal government can use its considerable set of incentives to push local governments to allow for housing where it is needed.
- Overcome pockets of distress. Clinton will provide the resources necessary to overcome blight, giving communities a chance to rebuild and renew with new businesses, new homeowners, and new hope. And she will connect housing support in high-poverty neighborhoods to economic opportunity.
I am not sure if this proposal is specific enough to respond to, but I am concerned that it does not account for the fact that some communities are blighted because the local economy has failed. Decisions to address blight must be made without sentimentality or we will just be throwing good money after bad.
- Connecting housing assistance to community development. Clinton will build on the Choice Neighborhoods and Neighborhood Revitalization Initiative programs, both of which provide communities with support for housing as part of a multifaceted strategy to address the complex challenges of poverty. She will make resources available for economic development, health care, environmental improvement, and more.
Housing policy is clearly just one aspect of social policy, so it makes sense for Clinton to treat it as one thread in a broader fabric. This proposal is also a little short on details, so it is hard to see what she is intending to do, other than continuing current Obama policies.
- Giving recipients of assistance more choice. Clinton will work to expand the choices that recipients of housing vouchers have in deciding where to live. Today those with vouchers must often choose among the very pockets of poverty the vouchers are intended to allow them to leave. Clinton believe we should expand their range of options to include neighborhoods with more jobs and better schools.
I am a big fan of giving low- and moderate-income households more choice when it comes to their housing options, so I think it is great that Clinton wants to expand the voucher program.
- Support counseling programs for the significant financial commitment of homeownership. Clinton will increase funding and broaden credit terms for housing counseling programs shown to help borrowers become sustainable homeowners.
I am not sure that the evidence is there that homeownership counseling works, so I would caution the Clinton campaign to look at the research on this topic.
- Enforce fair housing and fair lending laws. Clinton will make sure that the Department of Justice enforces fair lending and fair housing laws and will work closely with regulators to make sure that Fannie Mae, Freddie Mac and the nation’s lenders meet their responsibility to provide lending in communities that have been historically underserved.
No question, fair housing and fair lending enforcement should be a priority for the DoJ. I would like more details about Clinton’s expectations for Fannie and Freddie though. It is important that any policies implemented through Fannie and Freddie are designed to encourage sustainable homeownership, not just homeownership that can end up being a part of a cycle of purchase and default.
- Reducing the cost. Clinton will defend the current supply of Low Income Housing Tax Credits and provide additional credits in communities where the demand for these credits far exceeds the supply. The additional credits will be allocated through a competitive process to those cities and states that are in the best position to use them effectively.
The Low Income Housing Tax Credit has bipartisan support as an engine of housing construction for low-income households, so it seems reasonable that Clinton would want to expand it in the current political environment.
* * *
I will review the other candidate’s housing platforms in the coming weeks.
March 2, 2016 | Permalink | No Comments
Wednesday’s Academic Roundup
- Buying Happiness: Property, Acquisition, & Subjective Well-Being, David Fagundes.
- Growth and Volatility of Micro Statistical Areas in the U.S., Bienvenido S. Cortes, Michael Davidsson & Michael McKinnis, The International Journal of Business and Finance Research, v. 9(4), pg. 89–102, 2015.
- What Drives Racial and Ethnic Differences in High Cost Mortgages? The Role of High Risk Lenders, Patrick J. Bayer, Fernando V. Ferreira & Stephen L. Ross, Economic Research Initiatives at Duke (ERID) Working Paper No. 206.
- A Study on the Consistency between Housing and Urban Planning Policies, N. Kosavera et al., High School of Economics Research Paper No. WP BRP 03/URB/2016.
March 2, 2016 | Permalink | No Comments
March 1, 2016
Your Neighbor’s Dog
Realtor.com quoted me in Salma Hayek’s Dog Shot by Neighbor: Was He Right? It reads, in part,
Actress Salma Hayek is mourning the death of her dog Mozart—a dog she nurtured from birth, according to her Instagram post. The 9-year-old pooch, a Belgian Malinois, was found dead on her Washington state ranch on Friday with a visible wound close to his heart. And this sad story only got worse once police discovered the culprit: Hayek’s neighbor.
According to TMZ, the neighbor was sick of Hayek’s dogs, several of whom regularly trespassed on his territory and attacked his dogs. So on that fateful Friday, this neighbor responded to a dogfight in his garage by shooting an air rifle just to scare off the one attacking his dog, the Associated Press reports. Mozart, who was hit, ran off and died from internal bleeding. In fact, the shooter’s wife Kim Lund told the AP, “We didn’t even know we killed a dog. I’m in shock.”
Claiming a pellet gun would normally not be deadly, the police ruled the shooting justified, but plan to send the case to prosecutors for additional review.
* * *
According to “When Killing a Dog Is Legally Justified” on Nolo.com, most state laws do not allow homeowners to shoot dogs that are merely running loose on their property. And even if they’re attacking your own dog or cat, you’re not off the hook.
“Someone who does injure a dog that’s chasing another dog … may be liable for damages to the dog’s owner,” writes Mary Randolphnd the killer may also be guilty of cruelty to animals.”
In other words, Hayek’s neighbor could pay for pulling the trigger. Plus there’s the bigger picture, points out David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School: “How’s it going to be to continue living next door to your neighbors after you shot their dog?”
Imagine how awkward it will be for this guy to run into Hayek from now until the end of his days there. Maybe he could have tried to fix the problem earlier with something other than rubber bullets.
“There certainly are steps you could take before shooting the dog,” Reiss says. “You could call animal control or law enforcement. In some places, if a dog owner has received a warning about his or her pet, he or she could face liability for allowing it to roam free.”
Bottom line: Talk first, shoot only as a last resort.
March 1, 2016 | Permalink | No Comments
Tuesday’s Regulatory & Legislative Roundup
- HUD is making $40 million in grants to supports housing counseling organizations across the country to enable them to assist low- and moderate-income families.
- Los Angeles County has approved a comprehensive plan to fight homelessness, which includes a $2 billion investment over 10 years and $100 million in the next year for homeless services.
- Denver introduces a new Social Impact Bond Initiative (SIB) to provide housing and services for 250 homeless individuals struggling with mental health and substance abuse issues.
- The S. Treasury Department announced its $2 billion additional Troubled Asset Relief Program (TARP) funding for the Hardest Hit Fund (HHF), which will help assist struggling homeowners and stabilize neighborhoods through state Housing Finance Agencies.
March 1, 2016 | Permalink | No Comments
