- TCW Asset Management Co. will continue to face $128 million suit from investors for allegedly lying about the value of mortgage-backed securities.
- A court found that the City of Saratoga Springs failed to timely appeal in case over incorporation of affordable housing.
- The Second Circuit affirmed decision that found that an insurer did not need to pay out $15 million to Nomura for misleading descriptions of residential mortgage-backed securities.
- National Union Fire Insurance Co. filed a brief in case over ski resorts, claiming that claims notes are privileged “because they contain legal advice from outside counsel.”
Tag Archives: affordable housing
Thursday’s Advocacy & Think-Tank Round-Up
- Corelogic’s National Foreclosure Report shows a total of 36,000 foreclosures in August, nationwide. This represents a decline of over 20% when compared to August of 2014.
- The Make Room Campaign has completed an analysis of the affordable housing crisis in Florida, where they find that 30% of renters spend more than 50% of their income on rent per month.
- In an effort to decrease costs for affordable housing developers NYC proposes to eliminate off-street parking mandates for developments with good transit access.
Tuesday’s Regulatory & Legislative Round-Up
- A bill to reform Housing Assistance including programs like section 8 and project based assistance was introduced in the House Financial Services Housing Subcommittee by Republican Blaine Luetkemeyer (MO). The bill (HR 3700) seeks to streamline costs to increase efficiency and to reduce energy and water waste.
- The Chairman of the House Financial Services Committee, Texas Republican Jeb Hensarling, will be hosting a Hearing entitled The Future of Housing in America: 50 years of HUD and its Impact on Federal Housing Policy. The hearing is scheduled for Oct. 22 at 10 am and Rep. Hensarling has released a statement calling for public input. Hensarling characterizes HUD as having failed to live up to its mission, despite 1.6 trillion dollars in spending, he then calls for innovation in solving the generational cycle of poverty which, in his view, is the real issue.
Thursday’s Advocacy & Think Tank Round-Up
- Citylab finds that urban farmers and real estate developers are teaming up in an unlikely alliance to create housing which incorporates on site food production, the latest in trendy, locavore hip.
- Enterprise Community Partners has launched a national sign on letter to oppose Cuts, lift spending caps and restore funding to the Home Investment Partnership Program (HOME). HOME, according to Enterprise, is “the only Federal Housing Program exclusively focused on providing states and localities flexible gap financing for affordable housing development” for the low and very low income populations (seniors, the disabled, etc.)
- A New York Times editorial argues that the relief promised to homeowners facing foreclosure only materialized for banks, who unloaded toxic loans on the government, and private equity firms, who are now purchasing loans back from the government, at a discount and continuing to foreclose.
- National Association of Realtors finds that most Zombie homes (think unoccupied – long term vacancy) are not foreclosures but owned free and clear of mortgages.
State of Lending for Latinos
The Center for Responsible Lending has posted a fact sheet, The State of Lending for Latinos in the U.S. It reads, in part,
At 55 million, Latinos represent the nation’s largest ethnic group and the fastest growing population. However, Latinos continue to face predatory and discriminatory lending practices that strip hard-earned savings. These abusive practices limit the ability of Latino families to build wealth and contribute to the growing racial wealth gap between communities of color and whites. The Center for Responsible Lending (CRL), along with its numerous partners, has sought to eliminate predatory lending products from the marketplace. High-cost, debt trap lending products frequently target Latinos and other communities of color. (1)
No disagreement there. The fact sheet continues,
Barriers to Latino Homeownership
According to a 2015 national survey of Latino real estate agents, nearly 60 percent said that tighter mortgage credit was the No. 1 barrier to Latino homeownership; affordability ranked second.
In 2014, Latino homeownership dropped from 46.1 percent in 2013 to 45.4 percent. In 2013, Latinos were turned down for home loans at twice the rate of non-Latino White borrowers and were more than twice as likely to pay a higher price for their loans. (1)
I have a few problems with this. First, I am not sure that I would unthinkingly accept the views of real estate agents as to what ails the housing market. Real estate agents make their money by selling houses. They are less concerned with whether the sale makes sense for the buyer long-term. Second, it is unclear what the right homeownership rate is. Many people argue that higher is always better, but that kind of thinking got us into trouble in the early 2000s. Finally, stating that Latinos are rejected more frequently and pay more for their mortgages without explaining the extent to which non-discriminatory factors might be at play is just sloppy.
The fact sheet quotes CRL Executive Vice President Nikitra Bailey, “As the slow housing recovery demonstrates, there is a market imperative to ensure that Latino families have access to mortgages in both the public and private sectors of the market. The market cannot fully recover without them.” (1) But what Latino households and the housing market need is not just more credit. They need sustainable credit, mortgages that are affordable as homeowners face the expected challenges of life — unemployment, sickness, divorce. It is a shame that the CRL –usually such a thoughtful organization — did not address the bigger issues at stake.
The Next Urban Renaissance
The Manhattan Institute has released an electronic book, The Next Urban Renaissance: How Public-Policy Innovation and Evaluation Can Improve Life in America’s Cities. Ingrid Gould Ellen, the Faculty Director of NYU’s Furman Center for Real Estate and Urban Policy, has a chapter on Housing America’s Cities: Promising Policy Ideas for Affordable Housing. She suggests three reforms:
First, cities could incentivize construction and development—and thereby increase the supply of housing—by more heavily taxing land than property. Such a “split-rate” tax would encourage development of underutilized land by reducing the added tax burden that standard property taxes impose on improving buildings.
Second, cities could reduce (or even eliminate) minimum parking requirements that significantly increase the cost of housing.
Finally, cities could shift some of the public funds currently spent on homeless shelters to time-limited rental subsidies for those at risk of homelessness. None of these ideas is new, but each deserves serious reconsideration as housing affordability problems mount around the country, especially in high-demand, coastal cities. (1-2)
I think the split-rate tax is worth exploring, although it may not be political feasible at this time. The property tax system in NYC is incredibly screwed up, so any proposal that involves scrapping it and replacing it with one that is more equitable is a step in the right direction.
The elimination of minimum parking requirements is a no-brainer. This is not only because they increase the cost of new housing (by increasing construction costs and by reducing square footage that would be available to other building uses). It is also because we should be trying to disincentivize people from owning cars in NYC, not incentivizing them with subsidizing parking.
The last proposal — time-limited rental subsidies — is also worth exploring although it sounds a little too good to be true. Early research indicates that program beneficiaries are unlikely to end up in shelters. If these findings are confirmed by more rigorous studies, then time-limited rental subsidies would be a brilliant policy innovation.
While none of these proposals are going to solve NYC’s affordable housing crisis, they will all have a positive impact at the margins. They are worth further study.
Affirmatively Furthering Fair Housing
![OLYMPUS DIGITAL CAMERAAnthony22 at English Wikipedia [GFDL (https://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons](https://i0.wp.com/www.refinblog.com/wp-content/uploads/2015/10/Westchester_Couny_Center_December_3_2013.jpg?ssl=1)
The United States Court of Appeals for the Second Circuit issued a ruling in Westchester v. HUD, No. 15-2294 (Sept. 25, 2015) the longstanding case regarding whether Westchester County has “adequately analyzed — in its applications for HUD funds — impediments to fair housing within the County’s jurisdictions.” (3) The Second Circuit affirmed the District Court’s judgment in favor of HUD, which means that HUD’s withholding of funds under the Community Planning and Development (CPD) Formula Grant Programs stands.
HUD withheld those funds because it found that the County had failed to “assess the impediments to fair housing choice caused by local zoning ordinances or to identify actions the County would take to overcome these impediments.” (6) HUD further found, as a result that the County would not “affirmatively further fair housing” as required by the Fair Housing Act. (6)
The case resolved a narrow, legalistic question:
May HUD require a jurisdiction that applies for CPD funding to analyze whether local zoning laws will impede the jurisdiction’s mandate to “affirmatively further fair housing”? Because HUD may impose such a requirement on jurisdictions that apply for CPD funds, and because the decision to withhold Westchester County’s CPD funds in this case was not arbitrary or capricious, we conclude that HUD’s action complied with federal law. (50)
While the case was decided on narrow grounds, the Court does notes that
The broader dispute between the County and HUD implicates many “big‐picture” questions. Beyond prohibiting direct discrimination based on race or other protected categories, what must a jurisdiction do to “affirmatively further fair housing”? What is the difference, if any, between furthering “fair” housing and furthering “affordable” housing? How much control may HUD exert over local policies, which, in its view, impede the creation of “fair” or “affordable” housing? And if conflicts of this sort between HUD and local governments are to be avoided, is the simplest solution to avoid applying for federal funds in the first place? (32)
These are all very good questions and it is unfortunate that this case does not help to answer any of them. The level of segregation in the United States by race has been a tragedy for many, many decades and we are no closer to figuring out how to deal with it after all these years.
