How Cities Are Preserving Affordable Housing
The U.S. needs more affordable housing. A lot more. Between 2001 and 2013 the country lost 2.4 million rental housing units (both market-rate and subsidized) that were affordable to people making less than 50 percent of area median income. Building more units will help, but preserving existing affordable housing is critical too: It’s generally cheaper than new construction, prevents displacement, takes advantage of existing land use patterns and allows people to remain where they already live. But preservation also presents challenges of its own, often necessitating the blending of multiple federal, state and local funding sources and greater collaboration between developers, policymakers and other stakeholders.
NAR: Renters with Student Debt Hesitant on Homeownership
DIVE INSIGHT:
Last month, a joint NAR/SALT/American Student Assistance survey found that 71% of those who carried student loan debt considered it a barrier to homeownership. More than 50% of those surveyed responded that the financial burden of student loans would keep them out of the homebuying market for more than five years, and 40% said that debt would keep them from moving out of a family member’s home. Not surprisingly, the survey also found that 79% of older millennials (26-35) with $70,000 to $100,000 of debt had the most negative views about their chances of owning a home.
In March, an NAR report found that the baby boomer generation actually carries the most debt, as this group is not only repaying its own student loans but that of their children and other family members as well. The National Association of Home Builders found that student loan debt is one of the reasons the housing market is missing about 2 million young households. The organization said that, in 2014, 8.8 million adults (20%) aged 25 to 34 lived with a family member, up 4.6 million (12%) from 2000. The NAHB maintains that this group represents the estimated 2-million-homeowner hole in the market that homebuilders are missing out on reaching.
Three Questions to Ask Before Choosing Art as a Community Builder
Art creates community and community creates change. – Groundswell, New York City
When reviewing the work of the 11 organizations selected to receive NeighborWorks America’s Catalytic Grant, two threads are common across many of them: community building and art, in all of its many different forms.
The grant program is designed to “strengthen local capacity to plan and implement comprehensive approaches to community stabilization that produce measurable gains.” Art is cool, and often beautiful, for sure—but can it really help stabilize and revitalize a distressed community? There are many believers, and Jackie Harder, multimedia specialist with Community Housing Partners (CHP) in Hopewell, Virginia, is one of them. In fact, she focused her graduate thesis in urban planning on the subject.
“Citizens and artisans alike can bring about conscious social change using art as the platform,” she says, and shares this quote from two of the experts in the field: “It is the nature of art to create openings where one can envision something outside the realm of what already exists for oneself, one’s community and the world—a realm where anything is possible. Artists and their collaborators know that it is within this free space for creative expression that people can explore new identities and possibilities for themselves and their communities.”
NHSIE's Homebuyer Education Program Debunk Three Persistent Home Buying Myths
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FOR IMMEDIATE RELEASE
CONTACT: Gabriela Torres (909) 963-5224
Gabriela.Torres@nhsie.org
NHSIE’s Homebuyer Education Program Debunk Three Persistent Home Buying Myths
San Bernardino, CA – NHSIE today announced an expanded series of homebuyer education workshops to help consumers debunk three persistent home buying myths. According to research from NeighborWorks America, 90 percent of consumers consider owning a home an important part of their American Dream. But the homeownership rate is falling nationally, and buying activity in our community is not where it should be. That’s because three major misconceptions about what it takes to become a homeowner – down payment, credit and lender approval – are combining to hold back many qualified consumers from taking the first steps towards that dream.
“Mortgage rates have been consistently low for a while now, but many potential homebuyers are on the sidelines because they believe the wrong facts about homeownership and what it takes to be a homeowner,” said Dawn Lee (Executive Director of NHSIE). “Our homebuyer education workshops will give consumers the right information when buying a home.”
Myth #1: I need to save 20 percent
Many potential homebuyers believe they need a 20 percent down payment to qualify for a mortgage. Nothing is further from the truth. Lenders throughout our community have mortgages for people who have saved as little as three percent of the down payment. Importantly, there are special lending products in our market where a qualified buyer with only a three percent down payment may not have to pay mortgage insurance. Not everyone is eligible for these loans, but attending a homebuyer education workshop is the best way to learn what it takes to qualify.
Myth #2: I Need perfect credit
It’s not necessary to have perfect credit to qualify for a mortgage. Although weaker credit usually means that a buyer may not receive the lowest mortgage rate available, the difference in rate typically doesn’t slam the door on homeownership. Moreover, by attending the homebuyer education workshop, a consumer will learn how to most successfully find a mortgage lender that matches their credit profile. While perfect credit isn’t necessary to qualify for a mortgage loan, homebuyer education will help a homebuyer manage their credit during the process. Lenders are checking credit practically up to the time of home purchase. By not paying attention to credit during this process – for example missing a single payment for 30 days – may severely damage a credit report. Homeownership counselors at NHSIE work with consumers every step of the way to help prevent last minute mishaps.
Myth #3: One lender said no, they’ll all say no
Mortgage lenders are not all the same. One lender that says ‘no’, does not mean that all lenders will. The NeighborWorks survey found that most Americans are confident that they could find the mortgage that is right for them, but one-out-of-five are not confident at all, and two-thirds of consumers say that the entire home buying process is complicated. NHSIE homebuyer education workshop is here to help make the process smoother, including helping a consumer find the lender that will help affordably get a home today and for the long-run.
Additional Funding Allows Keep Your Home California to Help More Homeowners
Keep Your Home California has received an additional $383.3 million in funding from the federal government, providing the free mortgage-assistance program with resources to help at least 12,000 more homeowners.
The U.S. Department of the Treasury announced the additional funding last month, the second phase of funding approved for Keep Your Home California from the Hardest Hit Fund during the past three months.
With the additional dollars, Keep Your Home California will continue to December 31, 2020, or until the money is used. Previously, the deadline for the federally funded program was December 31, 2017.
“The announcement of additional funding for Keep Your Home California further validates the ongoing challenges many Californians are experiencing with homeownership,” said state Treasurer John Chiang. “We are excited to have the opportunity to help many more California homeowners who are struggling with their mortgages due to unaffordable payments, unemployment, negative equity and other financial hardships.”
The additional funding comes soon after Keep Your Home California reported its two best quarters since the state-managed program started in February 2011. Keep Your Home California issued more than $95 million in funding during the third and fourth quarters of 2015 – or a combined $190 million-plus for the second half of last year.
Foundation Spotlight: Neighborhood Housing Services of the I.E.
Neighborhood Housing Services of the Inland Empire helps residents get the information and assistance they need to buy their own homes or keep the ones they are in.
The ideal result is stronger communities.
Neighborhood Housing Services of the Inland Empire was founded in 1981 by World War II veterans Leonard Davenport, Luis Navarette and Jack Hill. Their focus was helping underserved populations in San Bernardino buy housing. Today, the organization serves all of the Inland Empire and has a larger goal of supporting sustainable communities and improving people’s quality of life.
According to Lily Rodriguez, board president of NHSIE, first-time homeowners must navigate a maze of misinformation to find the tools they need and to be truly prepared to buy a house. NHSIE combats this by offering free educational workshops designed to give participants the right information, increase their financial knowledge and address their ability to buy and maintain a home.
“Homeownership is attainable,” Rodriguez said. “We unfortunately live in a society of instant gratification, but homeownership doesn’t fall under this category and you can’t put it in someone else’s hands. You have to educate yourself and do the work.”
In addition to financial counseling, the organization offers realty and lending services that make managing a down payment and closing costs feasible. Rodriguez said offering such services to potential homeowners is an important component to building strong communities because someone living in a home he buys has a higher likelihood of upgrading and maintaining a home compared with an investor.
“A homebuyer going into a fixer has zeal and the energy of pride of ownership that is very high,” Rodriguez said. “You have a very good chance that the home will be brought up to a higher level of curb appeal. They will also establish roots and become more involved in the community.”
Such commitment to the community can be seen on NHSIE’s board. Rodriguez said one of the families the agency assisted was a young single mother who had lost her home but was able to get back on track and buy another one.
“She took advantage of the programs, bought into the community and she is fixing up her own home,” Rodriguez said. “More than that, now she’s giving back by serving on the board.”
NHSIE also assists homeowners who are struggling to stay out of foreclosure. It offers trained and experienced homeownership advisers who work one on one with clients to get on a path of financial stability. Rodriguez said this also is critical to the health of a community.
“When a homeowner gives up on keeping their home, from a community visual standpoint, you lose curb appeal,” she said.
Getting the word out about the services NHSIE offers is challenging. Rodriguez said when people have managed to navigate out of a difficult financial situation, they are unlikely to share their story.
Such lack of awareness makes finding funding challenging. Recently, NHSIE received financial assistance from the Youth Grantmakers-San Bernardino fund through the Community Foundation, but it can always use more funding.
It also needs the community to promote NHSIE.
Why Climate Change Action Cannot Succeed Without Social Equity
Over 120 cities and counties in California have a climate action plan either completed or in the pipeline. As cities develop these plans and initiatives to address climate change, it is important to emphasize that social equity is integrated within environmental policies. The vulnerabilities, resilience and sustainability of the human ecosystem are as much determined by diversity and interdependence as its natural counterpart. As Pope Francis said in Laudato Sí, “a true ecological approach always becomes a social approach; it must integrate questions of justice in debates on the environment, so as to hear both the cry of the earth and the cry of the poor.”
Sustainability is framed as a three-legged stool consisting of the three ‘E’s: environment, economy and equity. However, the third leg, social and economic equity, is often the weakest.
Environmental plans often ignore social issues
U.S. cities have historically ignored equity goals as part of their climate and sustainability plans, and even when they do, treat equity as a secondary or tertiary issue. A recent study of Climate Action Plans from a sample of 28 medium and large cities (including an earlier version of San Diego’s plan), found that although there is an emerging trend of addressing equity, it was lost among other environmental and economic priorities.
For example, San Diego’s adopted climate plan laudably has enforceable greenhouse gas emissions goals. There is a chapter on “Social Equity and Job Creation.” However, there are no enforceable standards on equity beyond those already in place. The climate action plan acknowledges that there is a need to prioritize programs and actions that reduce emissions in impacted communities, though, nonchalantly states that the city cannot change the underlying socio-economic factors of disadvantaged populations.
For communities that have been disproportionately impacted, this is like treating the symptom (concentrated emissions) and ignoring the cause (poverty and race).
It is no wonder then, that climate plans often sit on planners’ proverbial shelves gathering dust, or displayed on flashy websites as marketing gimmicks. Research by Adam Milliard-Ball from the University of California, Santa Cruz of municipal climate planning in California found little evidence of causal impacts of these plans. Here is an excerpt from the study:
“If the motivation for climate planning is primarily to compare favorably to neighboring cities, to showcase a city’s existing efforts, and to defuse political pressure to do more on climate change, it is perhaps unsurprising that there is limited evidence that planning has a causal impact. The climate plan becomes more of a marketing device than a template for action, helping a city to gain a (probably deserved) ‘green’ reputation for action that predated or occurred independently of climate planning.”
The absence of social equity as an integral element of sustainability also surprised researchers James Svara (University of North Carolina at Chapel Hill), Tanya Watt (Arizona State University) and Katherine Takai (U.S. Environmental Protection Agency). They used data on one the most comprehensive survey of over two thousand local governments in the U.S., followed by a more detailed survey of 300 selected governments, and then case studies of nine of them. This study, published by the U.S. Housing and Urban Development last year, found that although there was an extensive range of activities related to social equity, most local governments did not organize and resource these activities in a manner that placed a high priority on social equity as a part of sustainability. For example, requirements for contractors to pay a living wage were used by less than a quarter of the detailed surveys, and the numbers fell even further down on other job quality measures.
Wells Fargo Down Payment Assistance Program Helps 11,000 Homeowners
NeighborWorks America has teamed up with Wells Fargo to offer residents of more than forty communities down payment grants via its newly created Neighborhood LIFT program. To date, more than 11,000 homeowners have been provided with down payment assistance.
Wells Fargo said it’s now planning an expansion. The next step is to introduce the Neighborhood LIFT program to neighborhoods in San Diego Country this month, before rolling out to residents in the Philadelphia area in April.
HousingWire reports that Wells Fargo has paid out more than $300 million to help homeowners via its LIFT programs, in the form of down payment assistance grants, home buyer education, program support and other areas. Wells Fargo first launched the program back in 2012, to help boost local economies in the aftermath of the housing crisis. In particular, the program was established with the goals of “advancing neighborhood revitalization” and “boosting sustainable home ownership”, the bank said.
“The reaction we receive from home buyers receiving a down payment assistance grant is true excitement,” Kim Smith-Moore, LIFT programs national manager with Wells Fargo Home Mortgage, told HousingWire. “Having completed home buyer education, these 11,000 families and individuals are better prepared to be successful and sustainable home owners over time.”