Tag Archives: displacement

Equitable Transit-Oriented Development

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Forest Hills RR Station

Enterprise Community Partners has issued a white paper, Promoting Opportunity Through Equitable Transit-Oriented Development (eTOD): Making the Case. The Executive Summary opens,

Investments in transportation infrastructure can catalyze regional growth and improve mobility. Given limited public funds, public officials and transportation planners have increasingly recognized the benefit of coordinating transportation investments with land use, housing and economic development investments and policies. In particular, there has been a specific emphasis on facilitating transit-oriented development (TOD) – a growth model characterized by compact development, a mix of land uses, and multi-modal transportation connectivity. When properly planned, such development can support transit ridership and revenues, boost property values and enhance economic competitiveness.

While TOD can take many forms, for a variety of reasons there has been increased demand for transit-oriented neighborhoods with a critical mass of population, neighborhood-serving retail establishments, employment opportunities and/or economic activity. Some prefer these transit-oriented, amenity-rich neighborhoods based on lifestyle preferences. However, for others – particularly people with lower incomes or for whom driving is difficult or impossible – the accessibility that TOD offers is crucial to reaching jobs and life’s other necessities in an efficient and economical manner.

Unfortunately, a number of factors – most notably the prevalence of zoning codes that separate residential from commercial and retail uses – have limited the number of compact, mixed-use, multi-modal neighborhoods. To the extent that demand for housing in such neighborhoods – as a result of either choice and/or necessity – remains strong, scarcity of housing in these neighborhoods can increase property values. Significant price increases can lead to additional cost burdens, potential displacement and/or barriers to entry for low- and moderateincome households. If these households are displaced it can also reduce likely riders’ access to transit and limit employees’ and customers’ access to businesses.

One solution to these challenges is equitable TOD (eTOD), which is well-planned and implemented development near transit that accounts for the needs of low and moderate-income people, largely through the preservation and creation of affordable housing. eTOD can expand mobility options, lower commuting expenses and enhance access to employment, child care, schools, stores and critical services. This development model also conveys ancillary benefits to the broader community, the economy, the environment and the transportation system. (5-6)

This is all to the good, but the report does not struggle with a fundamental problem: local governments do not want to build housing for low- and moderate-income households because they tend to be a net drain on municipal budgets a opposed to the typical household living in a single-family home. Even local politicians who are sympathetic to eTOD will face many roadblocks from their constituents if they try to make it happen. Enterprise promises a second report that will address barriers to eTOD. Hopefully, it will address this issue head on.

Risky Reverse Mortgages

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The Consumer Financial Protection Bureau released a report, Snapshot of Reverse Mortgage Complaints:  December 2011-December 2014. By way of background,

Reverse mortgages differ from other types of home loans in a few important ways. First, unlike traditional “forward” mortgages, reverse mortgages do not require borrower(s) to make monthly mortgage payments (though they must continue paying property taxes and homeowners’ insurance). Prospective reverse mortgage borrowers are required to undergo mandatory housing counseling before they sign for the loan. The loan proceeds are generally provided to the borrowers as lump-sum payouts, annuity-like monthly payments, or as lines of credit. The interest and fees on the mortgage are added to the loan balance each month. The total loan balance becomes due upon the death of the borrower(s), the sale of the home, or if the borrower(s) permanently move from the home. In addition, a payment deferral period may be available to some non-borrowing spouses following the borrowing spouse’s death. (3, footnotes omitted)

The CFPB concludes that

borrowers and their non-borrowing spouses who obtained reverse mortgages prior to August 4, 2014 may likely encounter difficulties in upcoming years similar to those described in this Snapshot, i.e., non-borrowing spouses seeking to retain ownership of their homes after the borrowing spouse dies. As a result, many of these consumers may need notification of and assistance in averting impending possible displacement should the non-borrowing spouse outlive his or her borrowing spouse.

For millions of older Americans, especially those without sufficient retirement reserves, tapping into accrued home equity could help them achieve economic security in later life. As the likelihood increases that older Americans will use their home equity to supplement their retirement income, it is essential that the terms, conditions and servicing of reverse mortgages be fair and transparent so that consumers can make informed decisions regarding their options. (16)
Reverse mortgages have a number of characteristics that would make them ripe for abuse: borrowers are elderly; borrowers have a hard time refinancing them; borrowers can negatively affect their spouses by entering into to them. Seems like a no brainer for the CFPB to pay close attention to this useful but risky product.

Affordable Housing Preservation in NYC

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Leaders of Brooklyn Legal Services Corporation A have released a white paper, Mayor de Blasio’s Housing Plan:  The Most Important Housing Plan in NYC History? Just to get the suspense out of the way, they pretty much feel that it is. But they do push the Mayor to pay more attention to the preservation aspect of his Housing Plan. They write,

Based upon our experience, representing the low-income tenants we serve, we have observed that rent decontrol is often brought about by predatory actions from landlords to push protected tenants out of their apartments in order to reach decontrol status. In 2013, over 30,000 New York City families were displaced from their homes. Without access to free legal services, many of these families had to represent themselves in Housing Court and were unable to fight the predatory and often illegal actions that made them lose their homes. The most recent reports from the Task Force to Expand Access to Civil Legal Services commissioned by the Chief Judge of the State of New York stated that 99% of tenants are unrepresented in eviction cases in New York City. The need for legal services is very real, and without increasing the very limited resources available for such services the fight for preserving affordable housing will almost certainly not be successful.

Brooklyn A’s attorneys are constantly witnessing how this perfect storm of rising housing values and limited supply of affordable housing can impact low-income communities. In many neighborhoods landlords are more incentivized than ever to try and push out rent protected tenants by any means necessary, so that they can void the rent protections and bring in new tenants willing to pay the inflated market price. We are currently representing tenants from a building whose main waterline, boiler and gas meters were destroyed in the middle of the night, only a short time after the tenants refused offers by their landlords to get bought out of their apartments. In another recent case the landlord shut off all heat, hot water, and sewage in the building to provoke a vacate order to force the rent-stabilized tenants out. The tenants had to live in emergency Red Cross shelters for a period of time because they lost their home; including one who had lived at the building for thirty years. Unfortunately, these are just a couple of examples of increasingly common practices by landlords to violate and then deregulate those apartments. (2, footnotes omitted)

During earlier run ups in real estate prices, landlords seeking to make a quick profit were known to send in thugs with baseball bats and pit bulls to frighten tenants, particularly elderly tenants, so that they would move and make the apartments available for tenants who would paid higher rents. The predatory equity that has been documented in NYC in the last decade has used less obviously threatening behaviors such as “repairs” that lead to long term loss of utilities and frivolous filings in housing court. But the goal is the same — get rid of tenants paying low rent-regulated rents.  Brooklyn Legal Services Corporation A is right to focus on the role that legal services attorneys can play in protecting existing affordable housing in a cost-effective way.