Tag Archives: housing policy

Hillary’s Housing Agenda

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United States Department of State

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.

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I will review the other candidate’s housing platforms in the coming weeks.

Bold New Housing Plan?

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photo by Cybershot800i

Wanderer Above the Sea of Fog by Caspar David Friedrich

Enterprise Community Partners has released An Investment in Opportunity: A Bold New Vision for Housing Policy in the U.S. I thought it would be useful to highlight its specific proposals to make rental housing affordable for low-income households:

I. ENSURE BROAD ACCESS TO HIGH-OPPORTUNITY NEIGHBORHOODS

  1. Improve the Section 8 program and expand regional mobility programs to help more families with rental assistance vouchers access high-opportunity neighborhoods 
  2. Establish state and local laws banning “source of income” discrimination by landlords and property owners 
  3. Balance the allocation of Low-Income Housing Tax Credits and other federal subsidies to both high-opportunity neighborhoods and low-income communities, while creating more opportunities for mixed-income developments 
  4. Establish inclusionary zoning rules at the state and local levels 
  5. Establish state and local regulations that encourage innovation and promote the cost-effective development of multifamily housing 
  6. Incorporate affordable housing considerations into local and regional transportation planning through equitable transit-oriented development

II. PROMOTE COMPREHENSIVE PUBLIC AND PRIVATE INVESTMENTS IN LOW-INCOME NEIGHBORHOODS

  1. Make the public and private investments necessary to preserve existing affordable housing while creating mixed-income communities 
  2. Build capacity of public, private and philanthropic organizations at the local level to pursue cross-sector solutions to the problems facing low-income communities 
  3. Create state and local land banks and other entities to return vacant and abandoned properties to productive use 
  4. Make permanent and significantly expand the New Markets Tax Credit 
  5. Create a new federal tax credit for private investments in community development financial institutions and other community development entities 
  6. Establish federal regulations that encourage “impact investments” in low-income communities by individual and institutional investors

III. RECALIBRATE OUR PRIORITIES IN HOUSING POLICY TO TARGET SCARCE SUBSIDY DOLLARS WHERE THEY’RE NEEDED MOST

  1.  Reform the Mortgage Interest Deduction and other federal homeownership subsidies to ensure that scarce resources are targeted to the families who are most in need of assistance 
  2. Gradually double annual allocations of Low-Income Housing Tax Credits and provide additional gap financing to support the expansion 
  3. Significantly expand funding to Section 8 vouchers to ensure that the most vulnerable households in the U.S. have access to some form of rental assistance 
  4. Expand funding to the Housing Trust Fund and the Capital Magnet Fund as part of any effort to reform America’s mortgage finance system 
  5. Break down funding silos to encourage public investments in healthy and affordable housing for recipients of Medicaid 
  6. Create permanent funding sources at the state and local level to support affordable housing

IV. IMPROVE THE OVERALL FINANCIAL STABILITY OF LOW-INCOME HOUSEHOLDS

  1. Establish minimum wages at the federal, state and local levels that reflect the reasonable cost of living for each community 
  2. Expand the Earned Income Tax Credit, the Child Tax Credit and other essential income supports to America’s low-wage workers 
  3. Create a new federal fund to help test and scale innovative financial products that encourage low-income households to save, with a primary focus on unrestricted emergency savings 
  4. Help more low-income families build strong credit histories 
  5. Establish strong protections against predatory financial products

Not sure if I could really categorize this as “bold.” “Unrealistic” seems more apt in today’s political environment. Indeed, it reads like a wishlist drafted by a committee.

That being said, I think that Enterprise’s vision is helpful in a variety of ways. First, it offers a pretty comprehensive list of policies and programs that that can be used to  make housing more affordable. Second, it recognizes income inequality is a big part of the problem for low-income households. Third, it acknowledges that current federal housing policy favors wealthy households (cf. mortgage interest deduction) over the poor. Finally, it acknowledges that restrictive local land use policies inflate the cost of housing.

I wonder if a bolder plan would be just to fully fund Section 8 so that all low-income households were able to afford a safe and well-maintained home. Probably just as unrealistic as Enterprise’s vision, but it has the virtue of being simple to understand and execute.

Race, Poverty and Housing Policy

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Signing of the Housing and Urban Development Act

Signing of the Housing and Urban Development Act of 1965

Ingrid Gould Ellen and Jessica Yager of NYU’s Furman Center contributed a chapter on Race, Poverty, and Federal Rental Housing Policy to the HUD at 50 volume I have been blogging about. It opens,

For the last 50 years, HUD has been tasked with the complex, at times contradictory, goals of creating and preserving high-quality affordable rental housing, spurring community development, facilitating access to opportunity, combating racial discrimination, and furthering integration through federal housing and urban development policy. This chapter shows that, over HUD’s first 5 decades, statutes and rules related to rental housing (for example, rules governing which tenants get priority to live in assisted housing and where assisted housing should be developed) have vacillated, reflecting shifting views about the relative benefits of these sometimes-competing objectives and the best approach to addressing racial and economic disparities. Also, HUD’s mixed success in fair housing enforcement—another core part of its mission—likely reflects a range of challenges including the limits of the legal tools available to the agency, resource limitations, and the difficulty of balancing the agency’s multiple roles in the housing market. This exploration of HUD’s history in these areas uncovers five key tensions that run through HUD’s work.

The first tension emerges from the fact that housing markets are local in nature. HUD has to balance this variation, and the need for local jurisdictions to tailor programs and policies to address their particular market conditions, with the need to establish and enforce consistent rules with respect to fair housing and the use of federal subsidy dollars.

The second tension is between serving the neediest households and achieving economic integration. In the case of place-based housing, if local housing authorities choose to serve the very poorest households in their developments, then those developments risk becoming islands of concentrated poverty. Further, by serving only the poorest households, HUD likely narrows political support for its programs.

The third tension is between serving as many households as possible and supporting housing in high-opportunity neighborhoods. Unfortunately, in many metropolitan areas, land—and consequently housing construction—is significantly more expensive in the higher-income neighborhoods that typically offer safer streets, more extensive job networks and opportunities, and higher-performing schools. As a result, a given level of resources can typically house fewer families in higher-income areas than in lower-income ones.

The fourth tension is between revitalizing communities and facilitating access to high-opportunity neighborhoods. Research shows that, in some circumstances, investments in subsidized housing can help revitalize distressed communities and attract private investment. Yet, in other circumstances, such investments do not trigger broader revitalization and instead may simply constrain families and children in subsidized housing to live in areas that offer limited opportunities.

The final apparent tension is between facilitating integration and combating racial discrimination. Despite the Fair Housing Act’s (FHA’s) integration goal, legal decisions, which are discussed further in this chapter, have determined that the act’s prohibition on discrimination limits the use of some race-conscious approaches to maintaining integrated neighborhoods.

To be sure, these tensions are not always insurmountable. But addressing all of them at once requires a careful balancing act. The bulk of this chapter reviews how HUD programs and policies have struck this balance in the area of rental housing during the agency’s first 50 years. The chapter ends with a look to the challenges HUD is likely to face in its next 50 years. (103-104, citation omitted)

The chapter does a great job of outlining the tensions inherent in HUD’s broad mandate. It made me wonder, though, whether HUD would benefit from narrowing its mission for the next 50 years. If it focused on assisting more low-income households with their housing expenses (for example, by dramatically expanding the Section 8 housing voucher program and scaling back other programs), it might do that one thing well rather than doing many things less well.

Housing Policy and Economic Mobility

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Pamela Blumenthal

Pamela Blumenthal

John McGinty

John McGinty

 

 

 

 

 

 

 

 

Pamela Blumenthal and John McGinty of the Urban Institute have written an interesting research report, Housing Policy Levers to Promote Economic Mobility. I generally believe that housing policy should be designed to assist low- and moderate-income households live in safe, decent and affordable housing, but I rarely consider how housing policy can actually help low- and moderate-income households become upwardly mobile. This report does just that and concludes,

At a time of growing income and wealth inequality, economic mobility provides a frame through which to consider the potential of housing policy to change the trajectories of individuals and communities. Economic mobility is about the opportunities individuals have to improve their economic well-being and requires education and other skill acquisition, available jobs, transportation networks, and other resources. Stable housing with access to those components gives low-income and minority individuals and families a chance to climb out of poverty. The current structures too often constrain individual choice because families cannot find affordable housing near a good school or in a safe neighborhood.

National policies that enforce fair housing, more fairly distribute tax benefits, and invest in people and places that have long suffered from disinvestment can begin to change the trajectory. State policies that fund affordable housing production and preservation in location-efficient areas and create requirements or incentives for local jurisdictions to integrate affordable housing throughout the community can also help.

To truly move the needle in promoting upward mobility, however, housing policy may need to adopt a lens through which programs are adopted, implemented, and evaluated based on their ability to promote upward mobility. Just as initial concerns about housing quality in the 1930s gave way to a focus on affordability in federal housing policy, another transition may be occurring. This goes beyond recognizing that a stable, safe, affordable home is critical to healthy development and well-being, to addressing the important role that neighborhood context plays—particularly for children. The importance of enabling all families to live in neighborhoods where they have access to jobs, good schools, parks, and other community resources and are free from violence, toxins, noise, and other harmful environments may become future federal housing policy. (41)

I don’t think that there is anything earth-shattering in this report, but it does focus attention on housing policy in a fruitful way.

Thursday’s Advocacy & Think Tank Round-Up

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  • The Center for American Progress (CAP) has released An Opportunity Agenda for Renters in which it laments its finding that where one lives determines such things as income, mobility and education.  In order to address these stubborn patterns CAP recommends a two pronged approach, promoting residential mobility and investment in racially segregated neighborhoods.

Feds Financing Multifamily

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Brett VA

The Congressional Budget Office has released The Federal Role in the Financing of Multifamily Rental Properties. The report opens,

Multifamily properties—those with five or more units— provide shelter for approximately one-third of the more than 100 million renters in the United States and account for about 14 percent of all housing units. Mortgages carrying an actual or implied federal guarantee have been an important source of financing for acquiring, developing, and rehabilitating multifamily properties, particularly after the collapse in house prices and credit availability that accompanied the 2008–2009 recession. According to the Federal Reserve, the share of outstanding multifamily mortgages carrying such a guarantee increased by 10 percentage points, from 33 percent at the beginning of 2005 to 43 percent at the end of the third quarter of 2014. (A slightly larger increase of about 16 percentage points occurred in the federal government’s market share of the much larger single-family market.) Such guarantees are made by a variety of entities, and some policymakers are looking for ways to make the federal government’s involvement more effective. Other policymakers have expressed concern about that expanded federal role and are looking at ways to reduce it. (1)

This debate is, of course, key to housing policy more generally: to what extent should the government be involved in the provision of credit in that sector?

This report does a nice job of summarizing the state of the multifamily housing sector, particularly since the financial crisis. It provides an overview of federal mortgage guarantees for multifamily projects and reviews the choices that Congress faces when it decides to determine Fannie and Freddie’s fate. That is, should we have a federal agency guarantee multifamily mortgages; take a hybrid public/private approach; authorize a federal guarantor of last resort; or take a largely private approach?

We should start by asking if there is a market failure in the housing finance sector and then ask how the government should intercede to correct that market failure. My own sense is that we intercede too much and we should move toward a federal guarantor of last resort with additional support for the low- and moderate-income subsector of the market.

 

 

 

Affordable New York

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Beyond My Ken

I just came back from a great couple of exhibits at the Museum of the City of New York that would be of great interest to the readers of this blog. The first, Affordable New York: A Housing Legacy, provides a history and education of affordable housing programs that have been integral to the development of the City:

New York City has a long history of creating below-market housing for its residents. Today the city offers subsidized housing to families across a wide economic spectrum; more than 400,000 in public housing, and many more in privately or cooperatively owned apartments. With affordable housing a cornerstone of Mayor Bill de Blasio’s administration, New York’s housing legacy—often overlooked and little understood—is more relevant than ever.

Affordable New York traces over a century of affordable housing activism, documenting the ways in which reformers, policy makers, and activists have fought to transform their city. A focus on current and future housing initiatives demonstrates how New Yorkers continue to promote subsidized housing as a way to achieve diversity, neighborhood stability, and social justice.

The exhibit has a lot of good pictures that give a sense of the range of options that exist for affordable housing development. It also provides a condensed history of the NYC experience with subsidized housing.

The other exhibit, Jacob A. Riis: Revealing New York’s Other Half, is a bit more somber, but when viewed in the context of the first it shows the great progress we have made in providing decent housing to a broader range of City residents:

Jacob Riis (1849-1914) was a pioneering newspaper reporter and social reformer in New York at the turn of the 20th century. His then-novel idea of using photographs of the city’s slums to illustrate the plight of impoverished residents established Riis as forerunner of modern photojournalism. Jacob A. Riis: Revealing New York’s Other Half features photographs by Riis and his contemporaries, as well as his handwritten journals and personal correspondence.

This is the first major retrospective of Riis’s photographic work in the U.S. since the City Museum’s seminal 1947 exhibition, The Battle with the Slum, and for the first time unites his photographs and his archive, which belongs to the Library of Congress and the New York Public Library.

The pictures of the homeless kids are heartbreaking — Newsies without the songs — and the recreation of one of Riis’ public talks is pretty extraordinary. The shows are running for a few more months, so there is still plenty of time to see them.