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New White Paper Offers Blueprint for Ending Persistent Rural Poverty

By Pam Bailey, Guest Contributor on 04/25/2017 @ 05:00 PM

Tags: Housing and Homeownership

Editor’s note: This was originally published on NeighborWorks' blog on April 10, 2017.

The U.S. Department of Agriculture’s Economic Research Service defines counties as persistently poor if 20% or more of the population has lived in poverty for the previous 30 years. Think about that. Most of that poverty is intergenerational—passed from one family to another for decades. What if you came from a family in that 20%, and you were born into a hopelessness so pervasive and persistent it is tangible, something you can almost touch in the air around you?

There are currently 353 persistently poor counties in the United States where one in five residents live that reality. Eighty-five percent of those counties are rural. And that’s why NeighborWorks is convening a national forum April 20 in Memphis, titled “Hope in the Delta–Turning the Tide on Persistent Rural Poverty.” What is it that makes poverty so persistent, despite numerous attempts to tackle it since Lyndon Johnson announced his War on Poverty in 1964? What initiatives have been shown to be effective, if they could just be replicated and scaled up? What lessons have the practitioners in this space learned that could provide a blueprint for a path forward? These are among the questions that will be explored at the forum.

To get the “creative juices” flowing in advance, NeighborWorks asked four leading regional- and community-level professionals—leaders of organizations that serve the hardest-hit rural areas in the country—to share their expertise and perspectives in a white paper in advance of the convening.

The entire paper is worth reading, whether or not you attend the forum. (If you’re not, you can register to listen to the two primary panels via a free webcast.) To whet your appetite, I’ve summarized here some of the main observations and recommendations. But first, a bit of an explanation about the authors—the heads of four organizations that serve areas of the country that are unique in their challenges and opportunities, but share some common threads.

  • Nick Mitchell-Bennett, Executive Director of the Community Development Corp. of Brownsville, Texas, speaks for the “colonias”— communities in Arizona, California, New Mexico and Texas within 150 miles of the U.S.-Mexico border.
  • Jim King, CEO of Fahe, represents the Appalachia region, primarily in portions of Kentucky, Tennessee, West Virginia, Virginia, Alabama and Maryland.
  • Bill Bynum, CEO of Hope Enterprise/Hope Credit Union, writes about the Mississippi Delta, known recently for its hurricanes, floods and oil spills.
  • Chyrstel Cornelius, executive director of Oweesta, an intermediary for CDFIs serving Native communities, primarily in the Plains and Southwest.

So, why is persistent poverty higher in rural areas? There is no single answer. Among the factors are population loss/lack of density, lack of infrastructure such as transportation, absence of services, a history of natural-resource extraction without adequate return, scarcity of federal and philanthropic funding, racial and ethnic discrimination and a pervasive spirit of hopelessness among the residents themselves.

“But too many discussions start with the problems and stay there,” says David Dangler, Director of NeighborWorks’ Rural Initiative. “Hope in the Delta, both the paper and the forum, take a look at examples of local and regional success stories and build from there. We want to have a powerful conversation about solutions.”

Indeed, in every challenge, there are insights and opportunities that can be exploited and in fact already have been in many cases at the local level. Here are the authors’ recommendations:

Change the conversation in persistent-poverty counties by achieving immediate, tangible results in “clusters.” Explains King: “It’s incomplete to talk about changing who we elect to office. Poverty is too deep for that. We must first create a ‘ripeness’ for demanding something different of ourselves and others. We have to take residents from ‘I don’t think anything will change’ to ‘I saw something change.’ Once we do that, residents will want to learn more, volunteer and become board members of local nonprofits.”

Research shows that when people can see a ladder for upward mobility, they do better. Role models who make this climb successfully, in their own communities, are particularly important for children.

Develop community leaders and link these authentic voices to complementary networks. Once residents believe that change is possible and they have a place in it, the next step is to identify those individuals who have the potential to be leaders and help them “blossom.” NeighborWorks has made this a focus, helping its network members develop residents as leaders through its Community Leadership Institute. The annual event brings together teams of residents selected by member organizations for leadership training and action planning. Following the meeting, NeighborWorks awards more than $200,000 to implement community-based projects developed by the participants.

“Giving people the information, skills and confidence they need to have a voice can change persistent poverty,” says Mitchell-Bennett. “It’s helping them come up with solutions, then using their personal power to force the company or public entity to do the right thing.”

Improve the efficiency and effectiveness of government programs so that state and national program designs are shaped by the communities intended to benefit. Funding should not be War on Poverty style, in which much of the plans and effort were generated “outside.” Nothing changes in communities without local leaders. Likewise, while matching grants can be useful, a more flexible, tailored approach is more valuable for benefitting the most economically challenged communities. One way to level the field is to ease the threshold requirements for applicants and set aside a portion of any allocation for exclusive use in persistent-poverty areas. For example, NeighborWorks’ grant funding, which is largely financed through a federal appropriation, is unrestricted with no matching requirement. Funding is distributed based on production and becomes of a catalyst for leveraging other funds.

Promote investment using new models that leverage public resources with philanthropy and private equity. One place to start is by working with financial institutions to extend the benefit of the Community Reinvestment Act (CRA) to more rural areas. The CRA was designed to encourage investment in the places where banks have branches, but there has been a lack of local offices in persistent-poverty rural areas such as the Mississippi Delta. HOPE has been assertive about turning that situation around by expanding into more remote areas. Further leveraging of the CRA also could help close the digital divide with more broadband access. Acknowledging that broadband internet connectivity is now considered a basic public utility such as electricity and water, federal agencies such as the U.S. Department of Housing and Urban Development have made access in the home a priority.

“We need to be more intentional about investing in communities to help them go from opportunity deserts to thriving places,” says Bynum.

Build and sustain consumer wealth, supported by educational initiatives, incentives and social and community networks. Financial capability is a growing focus for all organizations looking to build wealth that can be transferred between generations. For example, a small-loan program provides an effective alternative to payday advances—a large and lucrative business in most persistent-poverty counties.

Create jobs by removing barriers, encouraging entrepreneurial business start-ups and anticipating emerging economic engines while reversing out-migration. Almost no other progress is possible without employment opportunities that can build wealth and thus intergenerational transfers. But they must be real jobs that fit the community. You can’t, for example, suddenly create a Silicon Valley clone in an area that traditionally was dependent on coal mining. Nonprofit community development organizations can help small businesses started by citizen entrepreneurs thrive.

Partner locally and regionally to achieve economies of scale sufficient to compete with more densely populated urban markets. All organizations and businesses in a community or region should look around and ask, what can we work on together? Do it intentionally, with an expectation of both shared risk and shared value. “Success breeds success. When people see their neighbor successfully running a business, they feel they can do it too,” says Cornelius.

Do all of these strategies, coordinated together, clustered in communities where they can have the most measurable impact. All of these tactics have been done before. And they are all needed. One alone won’t have the lasting impact required.

Our Racially Divided Housing Market Is Changing, Thanks to Millennials

By Melissa Allison, Guest Contributor on 04/18/2017 @ 11:00 AM

Tags: Housing and Homeownership

Editor’s Note: This post was originally published on on April 11, 2017.

A Look At How We Got Here and Where We're Headed

Kieran Killeen was astounded when he bought a home in Vermont in 2002, and its title barred minorities from living there unless they were servants.

They were empty words. Racial covenants are no longer legal.

But Killeen, who is white, did not like having even a defunct racist restriction on his home’s title. He worked with neighbors to have it removed from his and 121 other homes in South Burlington.

Such covenants were once encouraged by the government. The language on Killeen’s title matched that used by the Federal Housing Administration in the 1930s: “No persons of any race other than the White race shall use or occupy any building or any lot, except that this covenant shall not prevent occupancy by domestic servants of a different race domiciled with an owner or tenant.”

“It took 70 years to undo the paper trail of institutional racism,” Killeen noted.

Unfortunately, this is not just history.

Racial covenants and other practices from the housing market’s racist past carry forward in the form of segregated neighborhoods and diminished wealth. They laid the groundwork for the terrible financial toll that Black and Hispanic communities, in particular, paid during the Great Recession. Even redlining, a common practice from decades ago in which lenders denied loans in minority communities, has made a bit of a comeback in the wake of the housing crisis.

Promising demographic trends could improve the outlook, but some say that’s not enough.

Millennials Narrow the Racial Gap

For more than a century, there has been a persistent gap between White and minority homeownership rates. The most recent data show that 71% of Whites own homes, compared with 41% of Blacks, 45% of Hispanics and 58% of Asians, according to the U.S. Census Bureau’s American Community Survey.

The good news is that the youngest generation of homeowners — millennials — is more diverse. And they’re driving the housing market more than people realized, according to Zillow Group’s Consumer Housing Trends Report.

“While minorities remain underrepresented among homeowners, that is changing as a younger, more diverse set of buyers enters the market,” said Zillow Group Chief Marketing Officer Jeremy Wacksman.

In fact, half of all home buyers are under age 36. Although the housing market as a whole skews heavily white — with Black, Latino and Asian homeowners each representing less than 10% of the market — there’s greater diversity among millennials in general, and among millennials who own homes.

Only 66% of millennial homeowners are White — much closer to Whites’ 61% share of the general population.

Click the image to see the full size.

It’s also encouraging that Latinos and Asians have begun to narrow the gap between their homeownership rates and that of whites. But the gap between whites and blacks has widened.

Blacks Face the Longest Odds

Aside from a run-up during the housing bubble, the homeownership rate for African Americans appears to be in a long-term slump.

The trend going forward is “uniformly worrying,” according to a 2015 report from The Urban Institute. “Erosion of homeownership for Blacks threatens to undermine their ability to gain and maintain economic stability, not to mention build assets.”

That bleak picture follows decades of gains.

The economic fortunes of African Americans began to improve after the Fair Housing Act of 1968, when it became easier to challenge redlining, racial covenants and other forms of discrimination.

By the 1990s, Blacks had finally established a foothold in the housing market.

Click the image to see the full size.

However, during the housing bubble, many of them fell victim to mortgages that were unwise, and in some cases downright predatory, said Rolf Pendall, co-director of the Metropolitan Housing and Communities Policy Center at The Urban Institute.

“If you owned a house in a community where only 40-45% of people owned houses, and you had friends and neighbors and cousins, many of whom were less well off than you were, you might take money out (via refinancing) because you’re helping people get through,” he said.

At that time, even African Americans and Hispanics with strong credit were steered toward subprime or predatory loans, said Coty Montag, deputy director of litigation at the NAACP Legal Defense and Educational Fund. A former Justice Department attorney, she helped litigate a Department of Justice case against Wells Fargo for such steering that led to a $234 million settlement.

As a result, Black and Hispanic neighborhoods were hit harder and have bounced back more slowly from the housing crisis.

“We look every day at sad faces when people are not able to get those loans,” said Antoine Thompson, national executive director of the National Association of Real Estate Brokers. It’s the oldest minority real estate trade association in the country, representing African American and other minority real estate professionals, and it supports movement toward a new credit scoring model that takes into account rent and utility payments as well as non-traditional forms of income.

The Great Recession meant a tremendous setback, compounding earlier forms of housing discrimination.

Those historical practices included government-sanctioned redlining and racial covenants in the mid-20th century that kept Blacks from buying homes and building wealth at the same time Whites were.

The private sector also played a part back then, Montag said. “Real estate agents would not show African Americans homes in all-White neighborhoods, banks would refuse to grant African Americans conventional mortgages and contractors could not get financial backing to construct homes for African Americans in White neighborhoods.”

There were also personal assaults, sometimes literally.

“White homeowners would actively discourage African Americans who tried to move to their neighborhoods,” explained Montag. “In some areas, there would be violence or other ways of discouraging new Black neighbors.”

Being aware of the past’s injustices is the first step in understanding homeownership among African Americans today.

“Homeownership is the number one way wealth is built in America,” Thompson said. “Whether it was redlining by the government, issues related to African Americans who came home from World War II and did not have access to the GI Bill to go to college or to government-sponsored loans that created the suburbanization of America: We cannot ignore those realities, which played a significant role in where we are today.”

Read more about African Americans and homeownership.

Latinos and the American Dream

The outlook for Hispanics is brighter, and surveys show they are more likely than any other racial or ethnic group to associate homeownership with the American Dream. A hefty 70% of Hispanic respondents told Zillow that owning their own home is necessary to living that dream, compared with 64% of Asian/Pacific Islander respondents, 63% of Black respondents and 58% of White respondents.

“Homeownership is an aspiration for almost all Latinos,” said Lautaro Diaz, vice president for housing and community development at the nonprofit National Council of La Raza.

For good reason: Owning a home can be key to economic stability, better health and more education.

Hispanics face many of the same hurdles as African Americans, including a knowledge and familiarity gap regarding homeownership.

“If you have a parent and they own their home, they’re going to encourage their kids to do the same as soon as they’re in a position to do that,” Diaz said. “If not, the only way to get that incentive is an educational opportunity you go through, or a best friend — word of mouth is very impactful. People see success stories and think, ‘If they can do it, I can do it.'”

Given Latinos’ lower incomes — they make $19,000 less than whites, on average — it’s particularly important for them to create a strategy for buying a house, sometimes as a family. “They have to channel their resources into buying a home and not necessarily sending money back to family in Mexico or Latin America,” Diaz said.

Read more about Hispanics and homeownership.

Knowledge as Mortgage Power

An aversion to debt also hurts minorities disproportionately.

Almost 20% of Americans are “credit invisible” or “unscorable,” according to the Consumer Financial Protection Bureau.

In low-income neighborhoods, that figure is closer to 45% — and there’s a divide along racial and ethnic lines. Only 16% of White consumers are “credit invisible” or “unscorable,” while 28% of Black consumers and 27% of Hispanic consumers are.

“We meet people all the time who are excellent money managers but have no credit, and no idea that they have no credit,” said Ricki Lowitz, founder and executive director of the nonprofit Working Credit. She was a speaker at Zillow’s 2017 Economic Forum in Washington, D.C.

Some are immigrants who don’t trust American financial institutions. Some are African Americans who were told by parents and grandparents that if they didn’t use credit, they’d never go bankrupt.

“You have to borrow to build credit, and that’s a hard message,” Lowitz said.

Here’s the catch: Most landlords, utilities, cable and cell phone companies do not report monthly payment information to credit bureaus the way mortgage and credit card lenders do.

So if you’re saving to buy a house and find yourself tight on cash one month, pay the credit card bill before the cable. “If you’re 35 days late on the cable bill, no one knows. If you’re 35 days late on your credit card, it will be on your credit report for seven years,” Lowitz said. (However, if the cable bill goes to a collection agency, typically at about 180 days overdue, that is in your record.)

In the Asian community, there’s an added wrinkle: Some Asians are averse to debt because it carries negative connotations in their home countries, said Christopher Kui, executive director of the nonprofit Asian Americans for Equality.

Some are used to paying cash, or having to put 30% to 40% down on a home purchase, he said. If they have that large a down payment in the United States, the amount they borrow might be so low that they will not get the best interest rates from lenders.

“We do a lot of classes and workshops about how to save for a home, how you really have to take care of your credit history and delinquencies, and what the system looks for when you apply for a mortgage,” Kui said.

Read more about Asians and homeownership.

Changing the System

Kui and others suggest several ways the system could improve, including new credit scoring mechanisms and new mortgage products for people who don’t fit the standard home-buying mold.

One example is VantageScore, a project of the three major credit bureaus that uses a different model, scoring at least 30 million people who otherwise would be invisible to lenders. Not all low-income advocates love it, saying some measures can be discriminatory. But it’s an alternative for some people who have no score in the traditional system, said Alejandro Becerra, director of research at the National Association of Hispanic Real Estate Professionals.

“Banks could also take into account multi-generational income, seasonal employment and entrepreneurship like driving for Uber,” Becerra said.

He’d also like to see more lenders in minority communities. “Payday lenders and pawn shops have a presence there. There is still the need for a banking presence.”

It’s the kind of opportunity A.P. Giannini seized when he founded Bank of America — then Bank of Italy — back in 1904. At a time when banks catered mostly to the rich, this son of poor Italian immigrants built the largest bank in the country (by the time he died) by making loans to the working class. “Be ready to help people when they need it most…. It’s the helping hand on a dark day that folks remember to the end of time,” he advised.

Dedrick Asante-Muhammad, director of the Racial Wealth Divide Project at the nonprofit Corporation for Enterprise Development (CFED), believes that to make real headway, low- and moderate-income minorities need the same sorts of progressive economic programs — from mortgage insurance to subsidies for the building of middle-class suburbs — that Whites enjoyed.

In the ’40s and ’50s, whites rocketed from 46% to 65% homeownership with those economic boosts. Minorities were explicitly left out via redlining, racial covenants and other practices.

Without aggressive intervention, by 2043, the wealth divide between white families and Black and Latino families will have doubled, according to a study by the CFED and the Institute for Policy Studies. If White wealth remained stagnant and Black and Latino wealth continued to grow as it has for the past 30 years, it would still take black families 228 years and Latino families 84 years to gain parity.

The point of reaching more minority borrowers is not to make everyone a homeowner. Owning a home does not make sense for some people, including those who move frequently or who make so little money that they would have no financial cushion if they put everything into a home.

The aim is to even the playing field so that people with the means to own a home have a fair shot at it.

To Preserve Fair Housing & Fair Lending, We Need a Strong CFPB

By Merrit Gillard and Emanuel Nieves on 04/17/2017 @ 04:00 PM

Tags: Housing and Homeownership, Federal Policy

Fair housing is about a lot more than just prohibiting discrimination when renting apartments. Fundamentally, it’s about protecting the freedom of all people to choose where they live, ensuring equal access to all communities. As Bryan Greene, General Deputy Assistant Secretary of the Office of Fair Housing and Equal Opportunity at HUD, mentioned at last week’s “Downpayment on the Divide” event, the U.S. has made great progress to expand equal opportunity and eliminate housing discrimination in the 49 years since the Fair Housing Act was enacted. However, many Americans still find the promise of fair housing out of reach, especially when trying to buy a home. When that happens, it’s not just HUD and the Department of Justice that have a role in combatting unfairness—the Consumer Financial Protection Bureau (CFPB) has a big part to play, too.

There are a number of different agencies that regulate all aspects of the financial industry, but the CFPB is the only agency dedicated solely to consumer protection. Since it was launched in 2011, the CFPB has done a tremendous amount to protect victims of predatory financial practices and foster fair practices in the financial industry. So far, the independent agency has secured about $12 billion in relief for 29 million consumers—about one out of every 10 consumers in the country. To put that in perspective, the CFPB has helped more people than live in the state of Texas, all while leveraging a total of $2.9 billion in funding, providing taxpayers with a return on public investment at a rate of 4:1.

In addition to returning to money back into the pockets of wronged consumers through its enforcement actions, the CFPB has also put in place new mortgage servicing rules to curb the risky lending that contributed to the financial crisis, proposed rules to rein in the predatory practices of the payday lending industry and the abuse of arbitration clauses and started work on regulations against abusive debt collection practices. Communities of color have disproportionately suffered from abuses in these areas and are positioned to benefit more from these rules.

Fair lending is critical to fair housing, and the CFPB has been integral in holding financial institutions accountable for discriminatory lending practices. In coordination with the Department of Justice, the CFPB has taken actions against a number of financial institutions for intentionally avoiding mortgage lending in communities of color, denying credit to African-American applicants more often than comparable White applicants. These efforts are working to help ensure that households of color get a fair shake in the home buying process. But despite these growing achievements on behalf of consumers everywhere, and the CFPB’s commitment through its Office of Fair Lending to prioritize tackling redlining for this year, plenty of work remains to be done to fight unfair lending.

That includes pushing back efforts by some leaders in Congress to scale back what the Bureau does to protect vulnerable homebuyers. Take manufactured housing, for example. The CFPB has the authority to regulate chattel loans, the personal property loans that are typically used to finance manufactured home purchases. Previously, chattel loans had been largely unregulated and interest rates were excessive, putting many homebuyers at risk of default. Now chattel loans are subject to many (though not all) of the same standards as regular mortgage loans, including the Home Ownership Equity Protection Act (HOEPA) and the CFPB’s Ability to Repay rule. However, before the new rules even went into effect (and any data on their impact), the Preserving Access to Manufactured Housing Act was proposed in Congress in 2012 to weaken consumer protections and clear the way for predatory, high-cost loans. Versions of the bill have been reintroduced repeatedly, including this March. Despite the name, this legislation would not increase access to manufactured home lending but would restrict the CFPB’s ability to protect vulnerable consumers, including home buyers of color who may experience discrimination and be targeted for more expensive loans in the manufactured home lending market.

Congressional challenges can be seen throughout the whole range of the CFPB’s portfolio—including its auto-lending, prepaid cards or payday work—but there’s also a big fight looming on the horizon that could upend the consumer watchdog agency entirely. Recently we’ve seen these attacks surface in the form of proposals to convert CFPB into a bi-partisan commission, which is likely to result in continual gridlock and/or a Congressionally hamstrung agency. The challenges to the Bureau are likely to come to head later this month with the re-introduction of the Financial CHOICE Act. This bill would essentially gut the CFPB and prevent it from doing the job Congress tasked it to do: protect consumers.

Fair housing can only go so far if mortgage originators are not held accountable for racial disparities in lending. Without a strong and independent CFPB, home buyers of color would be left vulnerable to the same practices that fueled the economic crisis and contributed to the vast racial wealth divide we see today. Instead of breaking down this critical agency, Congress should be building and supporting it.

Want to learn how you can help protect consumers and expand opportunities for affordable homeownership? Sign up for CFED’s advocacy campaigns here!

After 49 Years, the Fair Housing Act Still Needs Our Support

By Merrit Gillard on 04/11/2017 @ 12:00 PM

Tags: Housing and Homeownership

Today marks the 49th anniversary of the enactment of the Fair Housing Act, a landmark bill that laid the groundwork to eliminate housing discrimination and residential segregation. At CFED, we celebrate the progress that our country has made to over the past half-century to give all people the freedom to live where they choose—and we know that our work to create truly equal opportunity is far from complete.

Click the image to read the Fact File.

Passed just a week after the assassination of Dr. Martin Luther King, Jr., the Fair Housing Act of 1968 outlaws discrimination in the housing market and establishes the expectation that all communities welcome residents without regard to race, religion, national origin, sex, familial status or disability. The law prohibits discrimination in the sale, rental, financing or insuring of homes, critical conditions to making affordable homeownership a possibility for more Americans. Without the protections enshrined in the Fair Housing Act, CFED’s work to enable low- and moderate-income households to build wealth through homeownership would be severely constrained.

In recognition of this important milestone for anti-discrimination law, today we are releasing a new Fact File about the importance of fair housing. Exploring the historical policies that perpetuated housing discrimination—and the practices that continue to strip wealth from homebuyers of color—this primer serves as a resource for advocates and policymakers working to combat unequal treatment in the housing market.

Despite the great strides we have made, unequal treatment still pervades the real estate and lending industry and has tangible, adverse impacts on the wealth of households of color. Today, Black and Asian homebuyers still find out about fewer homes than comparable White buyers, while Black and Latino buyers are more likely to be denied mortgage credit than White applicants. Black and Latino buyers are also more likely to be offered more expensive, subprime loans, especially if they had relatively high incomes. Put together, these trends help explain why households of color are still less likely to own homes—and why disparities in homeownership are such a major driver of the racial wealth divide.

Our work to end discrimination did not end 49 years ago; it was merely a step in the right direction. Our country took another step forward with the Fair Housing Act amendments enacted in 1988 to expand HUD’s enforcement authority, giving the law teeth. The impact of the Fair Housing Act was again strengthened in 2015 when HUD finalized the Affirmatively Furthering Fair Housing (AFFH) rule, which provides a way for communities to fulfill their obligations not just to prohibit discrimination, but also to actively dismantle segregation.

However, this progress is now in jeopardy, as Congress threatens to roll back the AFFH rule. We must continue to work together to insist that our country’s leaders remain committed to fair housing and push for positive policy change that can ease the racial disparities in homeownership and enable more Americans to build wealth in their homes. Find out how you can work with us and add your voice to a growing coalition that’s working to make sure that households of color are not locked out of the opportunities of affordable homeownership.

CFED’s Strategy to Make Homeownership More Affordable

By Merrit Gillard on 04/10/2017 @ 10:00 AM

Tags: News, Housing and Homeownership, Racial Wealth Divide

Homeownership has long been the largest asset that most U.S. families own. Yet many families—especially those of color—have been locked out of the opportunity to buy a home of their own. Making things worse, in the run-up to the housing crisis, predatory practices stripped away the homeownership advances that communities of color had made in recent decades. Meanwhile, people of color who do buy homes don't enjoy the same wealth-building benefits as White homeowners. Today, homeownership remains one of the largest drivers of the racial wealth divide. But, as our latest report highlights, it doesn't have to be that way.

For many years, CFED’s homeownership work has focused largely on building housing equity and stability for residents of manufactured homes. Now, we are greatly expanding the scope of our homeownership strategy to support access to the financing, services and housing options that all families need in order to successfully become homeowners.

One of the first items on the agenda is to develop a policy strategy for closing the racial homeownership divide. That's why our recently released report, A Downpayment on the Divide, explores the decades of racist policies and real estate industry practices that have created deep racial disparities in homeownership. The report proposes a number of simple, common-sense policies that would ease this divide in homeownership, such as protecting the Consumer Financial Protection Bureau, reforming the tax code, ensuring access to affordable mortgage credit, promoting alternative credit scoring models and expanding the CDFI Fund. While there is no silver bullet to reverse the years of discrimination that people of color have experienced in the housing market, these recommendations taken together have the potential to create a more positive and equitable housing market going forward.

The report also underscores the importance of protecting fair lending and anti-discrimination policies. CFED has been working with national partners to ensure that the Fair Housing Act and the Affirmatively Furthering Fair Housing rule remain in effect and that leaders in the new Administration show a serious commitment to fighting discrimination in the housing market. Given that this month is National Fair Housing Month, we will be taking the opportunity to educate lawmakers about the importance of fair housing policies and fighting threats to fair housing law in Congress. Find out more about how you can engage in this work here.

Also coming up this week is an exciting event on the intersection of homeownership and the racial wealth divide. On April 12, CFED will bring together the Leadership Conference on Civil and Human Rights, Capital Area Asset Builders, Urban Institute, and other local and national experts to discuss race and homeownership, the policy recommendations in our recent report and other promising work in the field to expand homeownership opportunities. RSVP here!

We believe that many more Americans can get on the path to homeownership, but we can't achieve this ambitious agenda alone. If you want to get involved in making homeownership more affordable—or if you just want to learn more about our upcoming events, publications and advocacy opportunities—sign up today to connect with Affordable Homeownership @ CFED!

Act Now to Protect Fair Housing

By Merrit Gillard on 04/07/2017 @ 10:00 AM

Tags: Financial Capability, Housing and Homeownership

April is Financial Capability Month, a time to reflect on the tools and resources that empower low- and moderate-income families to build stronger financial futures. A stable, affordable place to live is a linchpin of that future, so it’s appropriate that April is also Fair Housing Month. This month marks the 49th anniversary of the enactment of the Fair Housing Act, giving us a chance to celebrate the progress we have made to fight housing discrimination over the past five decades and consider how we can create more equal opportunity in every community.

One of the most important things we have to do now, however, is to make sure that that progress isn’t reversed. Unfortunately, two bills in Congress would do just that.

The Local Zoning Decision Protection Act of 2017—Rep. Gosar’s H.R. 482 and Sen. Lee’s identical S. 103—would repeal the Affirmatively Furthering Fair Housing (AFFH) rule, stripping away tools for communities to reverse housing segregation. The AFFH rule, finalized in 2015, gives communities guidance on how to fulfill their obligations to “affirmatively further fair housing,” meaning that jurisdictions that receive HUD funding must not only prohibit housing discrimination but must also actively work to dismantle patterns of housing segregation in their communities.

The requirement to affirmatively further fair housing has been an explicit part of fair housing law for half a century, but until the AFFH rule was adopted, communities often lacked the tools and data needed to identify and counteract this segregation. Under the new rule, HUD has made available a database of geospatial information on racial disparities in access to affordable housing, and HUD grantees will use the database to analyze the housing landscape in their communities and set actionable fair housing goals.

There is still much work to be done to ensure that people of color have truly equal housing opportunity. Today, people of color are still less likely to own homes than Whites, homes in communities of color appreciate more slowly than those in similar White communities and Black families are far more likely to live in poor neighborhoods than White families. Also, disparities in homeownership are a major driver of the racial wealth divide.

The Local Zoning Decision Protection Act would deal a huge blow to fair housing protections. This bill would gut the AFFH rule, prohibit any similar rule from being promulgated in the future and forbid the use of federal funds for the geospatial database. There is also a concern that the language of the bill might get added as an amendment to an appropriations bill. We need your help to prevent this harmful effort from becoming law.

Here's what you can do:

  1. Tell your Representative and Senators to oppose the Local Zoning Decision Protection Act. Here's how:

    Call 202.224.3121 and ask to be connected to your Representative's or Senators’ offices. If you don't know who your Representative is, find out here. If you don’t know who your Senators are, find out here.

    Once you're connected, here's what to say:

    My name is [your name] from [your city and state], and I’m calling to request that you oppose [H.R. 482, if calling your Representative, or S. 103, if calling your Senator], the Local Zoning Decision Protection Act. This bill would prevent communities from having access to the tools they need to end housing segregation, which would make it harder for households of color to access neighborhoods of opportunity. I also urge you to oppose including language from the Local Zoning Decision Protection Act to any appropriations bill. Please show your commitment to fair housing by opposing this harmful bill.
  2. Ask three friends or colleagues to call their Representatives and Senators, too.
  3. Share this action alert on social media throughout the month of April. Share on Twitter and Facebook.

Want to learn more about what you can do make homeownership more affordable for more Americans? Connect with Affordable Homeownership @ CFED!

Homeownership Equity Depends on Racially Equitable Policy

By Doug Ryan on 03/31/2017 @ 10:00 AM

Tags: Housing and Homeownership, Racial Wealth Divide

Editor's Note: This post was originally published on

Once again, we hear rumblings that housing finance reform, the wind-down of Fannie Mae and Freddie Mac, and the retooling of the mortgage marketplace are coming. A new administration—with allies in Congress and in private industry—may have a remarkable opportunity to reshape what amounts to nearly an eighth of the American economy.

Perhaps the silver lining in all of this is an opportunity to rethink public policy about housing, wealth, access to credit, and more, through the lens of racial equity. We need to take a closer look at racial equity before and since the mortgage crisis, all while being honest about the crisis itself.

To start, there is the false narrative about what caused the crisis—or more accurately, who caused it. The narrative peddled by leading members of Congress in opposition to finance reform blamed “ill-informed borrowers or those unprepared for homeownership,” tricked into the American Dream by Fannie and Freddie. As the argument goes, mortgages went to naïve borrowers who simply could not afford them. Indeed, the Tea Party was birthed in part by rants about the government forcing taxpayers to “subsidize the losers’ mortgages.”

What we need to remember, however, are the facts surrounding the mortgage crisis, the fallout from the tightened credit market, and the loss of wealth among borrowers and families of color due to the foreclosure meltdown. We also need to recognize that wealth-stripping practices that have put households of color way behind their white counterparts are far from new.

Fannie and Freddie’s Affordable Housing Goals did not cause the crisis. In fact, the goals only put mortgages within reach for a slightly-larger handful, more low- and moderate-income families. Nor did low downpayment loans or the Community Reinvestment Act cause the mortgage collapse.

What did happen, however, is that African-American wealth fell by more than half in the years following the Great Recession, largely driven by loss of home equity. Latino wealth dropped even more, by an astounding two-thirds (white households lost about 16 percent in the same timeframe). These families were not “unprepared" for homeownership, nor were they “losers” looking for a bailout. These families were too often scammed by refinancing schemes or offered unnecessarily high-cost mortgages.

Black families, unlike other groups stripped of wealth during the crisis, had long been the target of discriminatory lending, land use, and other programmatic discrimination from federal, state, and local governments. In many ways, these more modern, less transparent practices are new versions of blockbusting, redlining, and other more historically explicit and planned strategies for limiting African-American buyers’ choices. Though new, these practices had the same effect: they segregated families of color into poorer, more slowly appreciating communities.

Many of these practices are outlined in a new report we released recently. A Downpayment on the Divide: Steps to Ease Racial Inequality in Homeownership underscores the historical, structural, and programmatic challenges to homeownership equality. In the report, we examine how in the early 20th century, the federal government, local authorities, and communities explicitly prohibited Black families from living in white neighborhoods. We also explore blockbusting, which directly led to the devaluation of homes in communities across the country.

Just as important, A Downpayment on the Divide lays out how predatory and discriminatory lending practices led to unnecessary foreclosures, loss of wealth, and the lowest homeownership rate for African Americans since before the adoption of the Fair Housing Act in 1968.

CFED, like many others, sees the Mortgage Interest Deduction as unnecessary for the majority of taxpayers who benefit from it, and believe its reform will provide an opportunity to advance first-time homeownership via a targeted tax credit. We also call out the need to support the Consumer Financial Protection Bureau as currently funded and organized. We also support Affordable Housing Goals for Fannie and Freddie—even if they are dissolved.

We have always seen these reforms as essential, but last week’s unveiling of President Trump’s "Skinny" budget for FY 2018 makes the critical nature of these reforms crystal clear. Despite the remarkable lack of details on revenues, economic assumptions, and entitlements, community stakeholders, housing advocates, and local leaders all released audible gasps at the sheer magnitude of the budget cuts aimed squarely at low- and moderate-income households in this country.

While administrations’ budgets are very much political documents, they are—in perhaps too cliché a way—moral documents as well. More to the point, while likely dead on arrival at Congress, the president’s budget proposal sheds light on the thinking underlying its text. Among a slew of key federal agencies, the budget would gut HUD. Critics are primarily—and rightfully—looking at the document through the rental housing lens. Yet, as the White House proposes eliminating the CDFI Fund, legal aid services, NeighborWorks America, the Community Development Block Grant, and the HOME Investment Partnerships, among many others, we can reasonably speculate that the administration views affordable homeownership as unimportant to our economy and to many of the families that elected President Trump to office.

Housing advocates need to be clear on one point: policy matters. In this vein, CFED and others want to ensure that families and communities across the country are not again excluded from affordable, fair and sustainable homeownership—especially not because of the color of their skin.

Act Now to Preserve Consumer Protections for Buyers of Manufactured Homes!

By Merrit Gillard on 03/29/2017 @ 10:00 AM

Tags: Federal Policy, Housing and Homeownership

A bill recently introduced in Congress would roll back some basic consumer protections for buyers of manufactured homes. That's right: the Preserving Access to Manufactured Housing Act, H.R. 1699, has been resurrected once again—putting vulnerable homebuyers at risk.

Take action now!

Tell your Representative to oppose the Preserving Access to Manufactured Housing Act. Here's how:

  • Call 202.224.3121 and ask to be connected to your Representative's office. If you don't know who your Representative is, find out here.
  • Once you're connected, here's what to say:

My name is [your name] from [your city and state], and I’m calling to request that you oppose H.R. 1699, the Preserving Access to Manufactured Housing Act. This bill would roll back critical consumer protections for buyers of manufactured homes and would once again expose vulnerable homebuyers to predatory, high-cost loans that put them at risk of losing their homes.

Why does H.R. 1699 matter? Before the Dodd-Frank Act, chattel lending—which is used to finance most manufactured homes—was largely unregulated. Interest rates on chattel loans were high, as were default rates. Dodd-Frank gave the Consumer Financial Protection Bureau (CFPB) authority to regulate chattel loans; now, many of the same laws and regulations that govern mortgage lending also apply to chattel lending. The law already provides a few exemptions for manufactured home dealers and lenders, but H.R. 1699 would harm vulnerable individuals and families by stripping away needed protections.

Find out more about this bill and read the letter that CFED and consumers groups signed in opposition to the 2015 version.

This Law Could Put Thousands of Dollars Back in the Pockets of Wyoming Manufactured Home Owners

By Mikah Zaslow on 03/14/2017 @ 12:00 PM

Tags: Housing and Homeownership, Economic Inclusion, Local Policy

When Wyoming resident Jason Halvorson sought to refinance his manufactured home, he didn’t know he was embarking on a nine-month endeavor that would lead to changing state law. But, as Wyoming Public Radio reports, that’s what it took for the homeowner to avoid getting gouged and spending an extra $50,000 on his mortgage.

The problem? A law that made it impossible for many manufactured home owners to get the titling paperwork they need for fair financing.

Halvorson wanted to refinance his home after making upgrades, but he learned that the traditional method of going to a banker would not work as he did not have the Manufacture’s Statement of Origin for his home—and a duplicate could not be issued by the county clerk. While financing is available without this paperwork, the options have higher unfixed rates and are out of reach to many homeowners. Halvorson reached out to his coworker State Rep. Tyler Lindholm about the issue, who looked into the matter and was struck by the legal inequality of the state’s titling law. And earlier this month, their efforts resulted in Governor Matt Meade changing Wyoming’s titling law.

CFED’s Doug Ryan, who was interviewed for the story, brought up the lack of consistency in the way states handle titling laws. While New Hampshire, Vermont and Oregon have favorable titling laws, most are somewhere in between. According to Ryan, Wyoming’s house bill is an important example for other states, and that because manufactured housing represents an affordable means of homeownership, “states need to be more creative and more aggressive in making sure these homes are part of the housing system.”

Halvorsen said that other manufactured home owners can benefit from these changes as well if they are willing to dig in to the law. Our new resource guide, Titling Reform: How States can Encourage GSE Investment in Manufactured Homes reviews current state titling laws and can be used to aid in efforts to improve states’ manufactured home titling laws. Titling manufactured homes as real property is also important for the eligibility for the Duty to Serve rule, which details how Fannie Mae and Freddie Mac must serve the manufactured home market. However, outside of a proposed chattel property pilot, manufactured homes must be titled as real property to be eligible for credit under the rule.

States that want to reform their laws don’t have to start from scratch, though. In 2012, the Uniform Law Commission approved a model law—the Uniform Manufactured Housing Act (UMHA). If enacted, UMHA would resolve the many deficiencies and ambiguities in the existing state titling laws and greatly increase the number of homes eligible for financing that satisfies the new Duty to Serve requirements. A clear statutory titling procedure also has the potential to open up new markets for real property lending, offering lenders new lines of business and borrowers better options.

Titling manufactured housing as real property creates financial opportunities and serves to create greater equality among homeowners. The work of advocates like Halvorson is critical to ensuring that manufactured home residents have the same opportunities to access affordable financial products as owners of site-built homes.

"Everybody Has a Voice": Transforming Niche Ideas into Thriving Communities

By Andrea Levere on 02/10/2017 @ 10:00 AM

Tags: From the President, Housing and Homeownership

In late December, NPR’s “All Things Considered” featured a two-part series on life in manufactured home communities.

In the first segment, NPR Correspondent Daniel Zwerdling walked listeners through life in the Syringa Mobile Home Park in Moscow, Idaho. The families who have lived in Syringa for decades remember the “good old days,” but those memories have faded, Zwerdling notes. Squalid conditions and unscrupulous practices by the community’s owner have left residents without running water or fully functioning sewage systems, while roads in the community have become almost impassible due to disrepair.

Residents of Turnpike Park Cooperative in Westborough, Mass., celebrate the ROC’s refinancing, which allowed the community to immediately begin work on a massive infrastructure renovation project. (Photo credit: ROC USA)

For residents of Park Plaza in Fridley, Minnesota, Syringa would be almost unrecognizable. As Zwerdling explains in the second segment in the NPR series, Park Plaza is a thriving community. Families in the community—just 30 minutes from Minneapolis—have a great deal of pride in their mobile home park. Although their homes may be modest, residents enjoy life in Park Plaza, in part because of the amenities it offers, but mostly because they feel like the other members of their community are family.

Ultimately, the contrast between Syringa and Park Plaza is Zwerdling’s powerful way of illustrating the potential of resident ownership in manufactured home communities. Unlike its Idaho counterpart, Park Plaza is owned by the residents who live there. But this wasn’t always the case. Park Plaza residents established a cooperative with help from the Northcountry Cooperative Foundation, working in partnership with a national social venture, ROC USA, which guided the residents through the daunting process of purchasing their community when it was put up for sale and at risk of being redeveloped. Beyond the residents’ ability to continue calling Park Plaza home, the result of their purchase is that they have say in all aspects of community life—something the folks in Syringa don’t enjoy.

Indeed, Zwerdling tells a compelling story, but perhaps even more compelling is how the idea of resident ownership came into being in the first place, and how it has taken off into a nationwide, full-scale approach to helping families live better lives.

Much of that story can be attributed to Paul Bradley, President of Resident Owned Communities USA, LLC— or ROC USA®.

In Paul’s home state of New Hampshire, folks have seen manufactured houses as an opportunity for affordable homeownership for decades. But manufactured homes carry many risks that their site-built counterparts do not, one of which is that the residents typically own their home but not the land underneath it. If the owner of the land decides it is more lucrative to sell that land to a developer, the residents are left with few options. Typically, residents can pay to move their homes (which, contrary to popular belief are far from “mobile”) to a new site, or they can abandon their homes altogether. If homeowners are forced into the latter of these “choices,” they not only walk away from their homes—they walk away from the stability and security they enjoyed as homeowners.

In 1984, after seeing one community after another go up for sale or face closure, the New Hampshire Community Loan Fund—which would soon become Paul’s employer, acted on a powerful idea: What if the people who owned their homes could also own the land in their community, much like owners of condominiums own a portion of their buildings? One transaction led to another, and today, the Loan Fund has converted 25% of the manufactured housing communities in the state—without ever losing a penny. After working almost 20 years in New Hampshire, Paul decided to take resident ownership to scale nationally, and launched ROC USA® in 2008.

Today, ROC USA provides financing, technical assistance and a range of support services to residents of manufactured home communities who want—or need—to purchase their parks. ROC USA’s network of Certified Technical Assistance Providers, which includes nonprofit organizations like the Northcountry Cooperative Foundation, helps owners navigate the process of securing financing, negotiating sales prices, establishing homeowners’ cooperatives and more. ROC USA and its Network is one of two social ventures in CFED’s Innovations in Manufactured Homes (I’M HOME) Network. Next Step is a social venture focused on delivering new energy-efficient manufactured homes “done right.” I’M HOME’s national partners also include other value-add organizations like Rebuilding Together and policy experts like the National Consumer Law Center. These I’M HOME National Partners are the leading nonprofits focused on leveraging the benefits of the country’s largest stock of unsubsidized affordable housing.

In all, the resident-ownership model has transformed from a niche idea in New Hampshire into a major game-changer for vulnerable families in states like Minnesota, Washington and everywhere in between. For families feeling the despair that comes with the possibility of losing their homes and their very livelihoods, the opportunity to purchase a community and establish a cooperative transforms this loss into hope, pride and security. ROC USA has proven that with thoughtful partnership and abundant patience, a small idea can blossom into now 200 thriving communities and 12,000 homeowners.

President Trump and Congressional Republicans Have Already Begun to Reduce Americans' Housing Choices

By Doug Ryan, Emanuel Nieves and Anju Chopra on 01/24/2017 @ 12:00 PM

Tags: Housing and Homeownership

Four days into having total control of the federal government, Republicans have moved quickly to make it more expensive for Americans to purchase their first home as well as harder to ensure that federal funds are not being used to perpetuate housing segregation.

Making Mortgages More Expensive & Blocking Thousands from the Opportunity to Own a Home

The most recent of these actions comes from President Trump who just hours after being sworn into office signed an executive order that reverses a recently announced reduction in mortgage insurance premiums charged by the Federal Housing Administration (FHA).

Contrary to the economic populism theme of his campaign, President Trump’s actions will increase the cost of owning a $200,000 home (roughly the median size of an FHA backed mortgage sold in 2016) by additional $500 a year. That’s real money for many families. Even more alarming, despite the fact that this policy was on firm financial grounds—as FHA’s reserves rose for the fourth consecutive year in 2016 and critically, rose beyond the 2% target for the second year running—the President’s action could also end up blocking as many as 250,000 new homebuyers from entering the market over next three years.

What’s particularly telling about this decision to raise the cost of homeownership for Americans is that Ben Carson, the Housing and Urban Development (HUD) Secretary nominee, hasn’t been confirmed yet. The White House would not even allow the new HUD leadership to, as Dr. Carson said during his confirmation hearing, “really examine that policy.” That this decision was made within hours of the new president’s swearing in is remarkable, and deeply disappointing.

Stemming Progress to Stop Housing Discrimination

More alarming is the ‘‘Local Zoning Decisions Protection Act of 2017,” the misnamed bill introduced on January 12 in both houses of Congress by Rep. Paul Gosar (R-AZ) and Sen. Mike Lee (R-UT). If enacted, the bill would roll back HUD’s Final Rule on Affirmatively Furthering Fair Housing (AFFH), the meticulously written rule the agency released in 2015. The AFFH codifies what the Fair Housing Act had long aspired to achieve since its enactment in 1968: That, among other things, federal funds would not be used to further, enable or calcify housing segregation.

The bill just introduced is a dagger straight at the heart of the Fair Housing Act. It prohibits federal collection of data by banning any “future database of geospatial information on racial disparity with regards to affordable housing.” Given what we know about the role that federal public policies—particularly housing policies, like redlining—have played in creating and fueling the economic realities of communities of color today, including, among other things, lower homeownership rates, home values and a gaping racial wealth divide, this ban on racial data collection is extremely concerning.

Hiding behind the guise of federalism or “states’ rights,” the bill’s call for consultation with state and local officials reads simply as a delaying tactic, as the bill authorizes no way to finalize a rule to do, if, as is likely, all parties in the process do not agree.

In his press release, Rep. Gosar says that the AFFH is designed “to dictate where Americans are allowed to live.” No, it’s not. Sadly, by allowing as Sen. Lee proposes, a locality to choose “residents according to its distinct values,” this new legislation would codifying housing discrimination, allowing race to continue to be an acceptable standard for where a person can and cannot call a place home.

If this is what President Trump and Congressional Republicans had in mind for achieving the President’s most notable campaign slogan, then Americans—particular those of color—aiming to have access to affordable and fair housing are in for a tough road ahead.

As part of our work to build an opportunity economy for all, we will continue to monitor the effects these policy choices might have on American families and will work to inform you of those impacts. More importantly, as this and any other bill that aims to limit affordable homeownership makes in way through Congress, we will be reaching out to you to help us pushback.

When that happens, we hope you'll join us in telling Congress and the new administration that instead of reducing housing choice and opportunity, they should instead work to expand the economic opportunity that so many Americans voted for this past November.

Three Cabinet Nominees Have a Chance to Show Their Commitment to Fair Housing. Will They?

By Doug Ryan on 01/12/2017 @ 11:00 AM

Tags: Housing and Homeownership, Featured Stories

Editor's Note: This story was originally published on The Hill on January 10, 2017.

Photo credit: Getty Images

There is one issue that binds together three of President-elect Donald Trump’s Cabinet nominees, and it should be front and center during their confirmation hearings starting this week. The issue is fair housing, and the Departments of Housing and Urban Development, Justice and Treasury all play important roles.

In fact, it isn’t an exaggeration to suggest that Dr. Ben Carson, Sen. Jeff Sessions (R-Ala.) and Steve Mnuchin could soon collectively determine the future of homeownership in America.

Homeownership rates are hovering around their lowest point in five decades, and the rates for black and Latino households are about 20 percentage points lower than the national rate. Black homeowners, even in wealthy neighborhoods, still don’t see the same kind of return on their investment as white homeowners.

The question now is whether the new administration will commit to fair housing for all the nation’s homeowners.

Since Trump nominated Carson to be HUD secretary, commentators have pointed out his lack of enthusiasm for the 2015 “affirmatively furthering” fair housing rule. This view makes him a troubling choice to head one of the principal agencies tasked with enforcing fair housing law.

Civil rights leaders have lauded the rule, which requires states and localities to assess and work to root out patterns of residential segregation in their communities. It’s viewed as an important step to dismantle this country’s legacy of racial discrimination and to build on the progress we’ve made since the Civil Rights era.

Apparently, Carson disagrees.

In a 2015 Washington Times op-ed, the retired neurosurgeon wrote that the rule goes too far, calling the integration effort “social engineering.” Carson recognizes that much earlier government policies, such as redlining, encouraged residential segregation, even framing these as “attempts at social engineering.” But he stops short of supporting government policies designed to reverse this segregation. This contradictory view casts doubt on Carson’s willingness to enforce HUD’s legal obligation to protect the housing rights of all Americans.

Upholding fair housing is not just the responsibility of HUD, however. The Department of Justice also has a role in bringing suit against individuals, housing providers, creditors and municipalities that discriminate.

It is far from clear that attorney general nominee Sessions will make fair housing enforcement a priority. Although he has highlighted his civil rights record ahead of his confirmation hearing, former colleagues have raised doubts about his role. Sessions also co-sponsored a bill to prohibit funding for HUD’s enforcement of the “affirmatively furthering” rule. Such a position suggests Sessions has little intention of aggressively pursuing housing discrimination cases.

Fair housing isn’t only about “fair housing.” It’s also about fair lending, especially when it comes to making sure that people of color get a fair chance to become homeowners and build wealth.

For decades, the Federal Housing Administration’s “redlining” practices locked communities of color out of homeownership opportunities by denying them access to affordable mortgage credit. But while blatant mortgage discrimination was outlawed by the Fair Housing Act in 1968, people of color continue to face barriers in accessing credit. In the years leading up to the most recent housing crisis, for example, many black and Latino homebuyers were targeted by “reverse redlining” schemes in which banks steered borrowers of color to subprime and higher-cost loans — even if they qualified for conventional mortgage financing.

These discriminatory lending practices saddled homeowners with less safe, more expensive loans, and contributed to the high foreclosure rates in communities of color. In the wake of the foreclosure crisis, a number of major financial institutions entered into settlements with the Justice Department after investigations revealed mortgage discrimination or reverse redlining practices. Sessions hasn’t yet said whether he intends to aggressively pursue lenders who prevent borrowers of color from accessing the credit for which they qualify.

Even more troubling, Treasury nominee Mnuchin’s former bank has been credibly tied to discriminatory lending and foreclosure practices. Homebuyers of color also could face further hurdles in accessing mortgage credit if administration and congressional leaders achieve their housing finance reform agenda for Fannie Mae and Freddie Mac. Speaker Paul Ryan wants to dismantle them entirely, while Mnunchin says he hopes to “privatize” the two government-sponsored enterprises. If the housing finance system is transformed without codifying affordable housing obligations, access to affordable home loans will be sharply curtailed.

The public records and statements of the three nominees raise serious concerns about the new administration’s commitment to a housing market that it fair to all Americans. Senators should use the upcoming confirmation hearings to pointedly ask each of them if they’re committed to upholding fair housing and accessible financing. Their answers should guide confirmation votes.

In the Delta, Homeownership Strategies Need Innovation

By Doug Ryan on 01/05/2017 @ 11:00 AM

Tags: Housing and Homeownership

Editor’s note: This post originally appeared on Rooflines on December 21, 2016.

Image: Christian Heilmann,, via flickr, CC BY 2.0

Last month, CFED partnered with the Federal Reserve Bank of St. Louis for two convenings to discuss The Role of Housing as an Asset for Families and Economic Development Driver for Communities in the Delta. We met in Greenwood, Mississippi, and Helena, Arkansas, where about 80 people—advocates, community and political leaders—discussed the daunting housing challenges facing families in the Delta regions of Mississippi and Arkansas. The meetings offer a lens to see some of the greatest housing challenges this country faces.

The Delta region is one of the poorest areas in the nation, with some counties facing poverty rates three times higher than the United States as a whole. Moreover, Arkansas and Mississippi are two of just a handful of states where poverty rates rose in 2015 compared to the previous year. Housing and other key costs are generally lower in the area, but the weight of low wages is clearly driving housing instability in the region.

Both Arkansas and Mississippi have relatively low “housing wages,” as per the National Low Income Housing Coalition. Yet, in the Delta, both rental and homeownership experiences are challenging. It is, perhaps surprisingly, more expensive to rent than to own in the region, according to CFED’s recent analysis of housing data. Nevertheless, the homeownership rate in the region is about 56%, considerably lower than those of the two states and that of the nation as a whole.

In addition, renters are much more likely to be cost-burdened than owners, which is a reflection of the incomes of renters. Renters in the region, in fact, have median incomes nearly $4,000 below the national poverty line, and 55% of renters are cost-burdened, compared to 22% of Delta homeowners, again reflecting challenges of low incomes even in low-cost markets.

With these challenges, the question becomes whether it is still reasonable to pursue policy and program fixes to enhance homeownership for low- and moderate-income residents in the Delta. The answer is yes, but it’s important to understand what is happening on the ground in the region and the roles of local stakeholders.

The aging of rural America will impact housing tenure, increasing the demand for housing for seniors who cannot age in place. It also will temper the homeownership rate for rural communities, including the Delta, as younger generations may not form households locally.

Housing quality and homeownership sustainability are also issues in the Delta region. These also directly impact the wealth-building opportunities of ownership, including the generational transfer of wealth.

Truly inadequate housing units are largely a national crisis of the past. This isn’t to dismiss local housing issues, but the share of homes with “red flag conditions,” such as no hot water or working toilets, continues to decline to about two percent of the housing stock today. In contrast, CFED’s analysis finds that about 5.3% of the stock in the Delta lacks hot and cold running water and 2.8% of the stock lacks a toilet. A drive through parts of the region confirms that housing quality is uneven, and some of the stock is in deep need of repair or replacement.

Other challenges facing current and potential homeowners in the Delta include the lack of major lenders in the local housing market and generally weak public policy. CFED rates Mississippi’s key wealth-building policies as the worst in the nation. Mississippi uses no state funds for housing programs, making it a considerable policy outlier. Arkansas’ laws are somewhat better, but it is also in the bottom third of all states. Some data on Mississippi underscore how these factors can manifest themselves: the state has one of the highest rates of 90-day delinquencies in the nation and the 12th-highest rate of high-cost mortgage loans. Making housing such a low policy priority suggests that the future is not much brighter than the recent past.

In absence of state leadership, there are positives in the nonprofit and community banking arenas. According to a recent report, about one-third of all housing loans in the Delta are made by community development financial institutions (CDFIs), such as HOPE Credit Union. That’s an unusually high share of lending. HOPE will lend to borrowers with very challenged credit, well below what is required of borrowers accessing Fannie Mae or Freddie loan programs. The average FICO score for borrowers in GSE programs is almost 750, which excludes many potential borrowers. (For comparison, the average for mortgages is 730; for FHA loans, 686. Far too many families are left out, but the non-public agency funders have no obligation to serve all markets) HOPE and other CDFIs have to keep many of its most innovative loans on their books, which reduces the scale they can achieve. Combined with the GSE creaming, many Delta families are locked out from good housing credit, even when they can demonstrate good rental payment histories, which can be an indicator for home loan repayment risk.

While not a perfect proxy for all home loan applications, the denial of credit to buyers of manufactured homes is instructive. Next Step found that only about 22% of manufactured home loan mortgage applications in Mississippi closed, compared to the national average for all housing types, which is 74%. The Next Step data suggests that the top two reasons for failing to close are inadequate credit and lack of down payment funds. Connecting denied families to homebuyer education and credit building initiatives could go a long way to prepare new first-time homebuyers.

As in many communities across the country, the Delta is challenged by a too-tight mortgage credit box, limited access to lenders, and shifting demographics. Yet the region also offers key lessons on the value of the nonprofit sector. For instance, innovative lending can meet housing needs responsibly, and good public policy is important (its absence needlessly compromises community well-being). These are lessons that policymakers at all levels need to relearn.

Manufactured Home Communities in Central Virginia

By Jonathan Knopf, Guest Contributor on 12/16/2016 @ 12:00 PM

Tags: Housing and Homeownership, Data and Research

Central Virginia is home to 13,200 manufactured homes. About 5,000 are found throughout the region’s 66 mobile home parks. While these communities have provided a source of unsubsidized affordable housing to thousands of low-income families for decades, many have also suffered from neglect and unflattering stereotypes. There is a clear need to reexamine the role manufactured home communities might play in the future of Virginia’s affordable housing continuum.

That is why, following a series of high-profile building code enforcement campaigns in mobile home parks in the City of Richmond, a concerned group of service providers and nonprofits gathered to form the Virginia Mobile Home Park Coalition. Earlier this year, the Coalition, along with a group of area funders, sponsored a report on the existing conditions of the region’s parks to lay the framework for improving and preserving these communities. By combining Census data with visual surveys for 54 of the region’s parks, the study provides a detailed demographic and socioeconomic profile of manufactured home households and illustrates the wide range of housing conditions found in mobile home communities. The full text of the report, along with a four-page executive summary, are available on the Virginia Housing Alliance website.

Major Findings

  • Although most the region’s manufactured homes are in rural areas, over half of all the parks are in suburban or urban communities.
  • Park size positively correlates with overall park quality. Larger parks generally have better amenities, infrastructure and housing conditions.
  • There is no “typical” manufactured home park in Central Virginia. Communities range from small rural enclaves to large, master-planned neighborhoods.
  • A significant share of this housing stock is in poor condition. Just over a quarter (27%) of the region’s manufactured homes were built before HUD began regulating safety and quality standards in 1976.

Resident Profile

  • The median household income for families in manufactured homes is $27,000 – half the regional average. Manufactured home residents are also twice as likely to be in poverty (28%) than the average (14%).
  • Central Virginia’s manufactured home parks are home to many households of color. While only 5% of the region’s households are Latino, they account for 30% of households in parks.

Financing and Affordability

  • The median monthly housing costs for a manufactured home in Central Virginia is $602 – over a third less than the regional average for all homes. The average lot rent in parks is $400.
  • About 40% of all households in manufactured homes are housing cost burdened, meaning they spend more than 30% of their income on housing costs. One in four manufactured home households are severely cost burdened, paying more than half of their income on housing costs.
  • Because Virginia law prohibits mobile homes in lot-lease communities from being titled as real estate, buyers cannot access traditional mortgages and are left to pursue chattel loans. One in five manufactured homeowners report interest rates above 8%.

Park Conditions

  • Many parks have deteriorating infrastructure. Only two have sidewalks, and 25% have roads in very poor condition. Four in five parks do not have curbs or gutters.
  • Homes with permanent foundations were found in only eight parks. Poor quality siding and broken windows were found in 35% of all parks.
  • Fewer than half of parks have a management office onsite. Even when there is a dedicated office, it may only be open to residents a few hours per week.
  • Many parks struggle with low connectivity and limited access to services. Three in four parks are over half a mile away from a public transit stop, and 22 are located in food deserts.

Park Typologies

To help bust the myth that all manufactured home communities conform to negative “trailer park” stereotypes, a set of six unique park typologies was developed. These categories represent the types of communities found across Central Virginia and provide a starting point for developing strategies to preserve and improve parks at every level of condition and quality.

1. Top Performers (7 parks)

Excellent park management, high-quality amenities, clear homeowner investment in properties.

2. Traditional Suburban (8 parks)

High unit density in medium- to low-density areas. Lower-quality amenities, but overall acceptable conditions.

3. Under Pressure (10 parks)

Parks along major urban/suburban thoroughfares, threatened by rezoning and redevelopment. Generally older units and inadequate maintenance.

4. Rural Enclave (12 parks)

Smaller, less dense, few amenities, but in good condition. Self-maintained parks with older households.

5. Transitional (3 parks)

Parks “reinventing” to mimic traditional suburban site-design with units parallel with roads. Injection of newer homes, and active management.

6. Obsolete (14 parks)

Widespread infrastructure, housing, management, and amenity problems. Very difficult to repair and rehabilitate. Many pre-HUD homes. Requires significant planning and reinvestment.

Next Steps

The release of this report has sparked significant interest in this topic across the region. On November 3, the Coalition hosted a symposium on the issue to not only present these findings, but also to bring together local stakeholders and policymakers. Nearly 100 people attended the event, which featured presentations by Doug Ryan of CFED, Stacey Epperson of Next Step and Mike Sloss of ROCUSA. Attendees also heard from resident advocates and nonprofit representatives involved in manufactured home communities. On December 7, the report was also presented to a regional group of local government officials and housing providers.

Advocates for safe, affordable housing in manufactured home communities across Virginia are faced with some significant challenges. Nonetheless, there is growing momentum to elevate the issues faced by park residents and to capitalize on the increasing national efforts to resolve these problems through equitable policy reforms at the state and local levels.

By mobilizing a diverse group of concerned residents, advocates and policymakers, the Coalition intends to build a future where families in Virginia’s manufactured home communities are knowledgeable, supported and empowered.

Jonathan Knopf is the Senior Associate for Research and Programs at HDAdvisors, which conducted this study. He may be reached at

In the Mississippi Delta, Housing is Cheap – and Largely Unaffordable

By Merrit Gillard on 12/05/2016 @ 10:00 AM

Tags: Housing and Homeownership, Data and Research, State Policy

The Mississippi Delta region is at once home to some of the richest farmland in the country—and some of the poorest people. This predominantly rural region was once a thriving agricultural center, but new technology and foreign competition did away with many of the jobs in the Delta. A long, violent history of racial oppression also continues to shape the economic and social fabric of the Delta, which is marked by a stark Black-White wealth divide. Today, poverty and unemployment rates are high, and housing affordability is a major problem. We recently studied the housing landscape in Delta region counties in Mississippi and Arkansas, and here’s what we found.

Homeownership Is Relatively Rare…

The homeownership rate in the Delta is relatively low—just 56% of the region’s residents own their homes, compared to about two thirds of residents in Mississippi, Arkansas or the U.S. as a whole. There is a glimmer of light in the homeownership situation in the Delta, though: residents of manufactured housing in the region are more likely to be homeowners. 63% of manufactured home residents in the Mississippi Delta and 66% in the Arkansas Delta own their manufactured homes.

…Especially Among Black Residents

Sharp racial disparities in homeownership persist in the Delta region. Even though 60% of the region’s residents are Black, only 45% of the region’s homeowners are black. Whites make up just 37% of the total population but more than half of homeowners in the Delta region.

Housing Costs Are Low in the Delta…

The median rent, mortgage payment and owner costs for housing are lower than in the Delta region than in Mississippi or Arkansas as a whole, two states with some of the lowest housing costs in the country. In addition, housing costs are even lower among owners of manufactured homes than they are for renters or all homeowners.

…But People Still Can’t Afford Their Housing Costs

Unfortunately, even though housing costs are so low in the Delta region, residents still struggle to afford their homes because incomes are especially low. More than half of renters and more than one in five homeowners in the Delta are cost burdened, meaning them spend more than 30% of their income on housing. Also, there is a severe shortage of affordable housing the Delta. Only 20% of the region’s homes are affordable to very low-income households, compared to 28% of homes in both Mississippi and Arkansas as a whole. (Once again, the situation is a little better for manufactured housing. A greater share of manufactured homes are affordable and a smaller share of manufactured home residents are cost burdened in the Delta region than are residents of all types of housing.)

Arkansas Is Doing Some Affordable Housing Work, But Mississippi Is Doing Very Little

Arkansas offers targeted homeownership assistance to the Delta region by easing eligibility requirements for the “ADFA Advantage” First-Time Homebuyer Program in a number of Delta counties. In addition, Arkansas is one of just 13 states that have established state tax credits for housing. There is no such credit in Mississippi. Both Mississippi and Arkansas disburse federal dollars for affordable housing—such as through the Community Development Block Grant (CDBG) and the Home Investment Partnership Program (HOME)—but there are few other state resources available to support housing affordability, especially in Mississippi. Neither the state of Mississippi nor the Delta counties spend any funds on affordable housing, and advocates in the region note that any proposal that requires new revenue or tax increases is a political non-starter.

Manufactured housing presents an affordable housing option in an area where affordable options are few and far between. Unfortunately, Arkansas and Mississippi aren’t doing much to protect or preserve this type of housing—both states have among the fewest protections for homeowners living in manufactured home communities of any state in the nation.

More Needs to be Done to Make Housing More Affordable

The housing needs of the Delta region are great. In order to make housing more affordable, put homeownership within reach of more Delta families and help close the gaping Black-White homeownership gap, the Delta region needs better laws to protect manufactured housing and more resources to strengthen the region’s housing stock.

Check out these resources to find out more about housing in the Delta Region:

Housing Advocates Gather for Largest-Ever I'M HOME Conference

By Mikah Zaslow on 12/01/2016 @ 01:00 PM

Tags: News, Housing and Homeownership, Events

Last month, 180 housing developers, lenders, policymakers, industry experts, homeowners and community organizers from 30 different states gathered to participate in CFED's 2016 I'M HOME Conference in San Antonio. This conference was made possible thanks to generous support from Wells Fargo Housing Foundation, the Ford Foundation and NeighborWorks America. Our biggest gathering yet, this year’s I’M HOME Conference opened with a keynote address from NeighborWorks America CEO Paul Weech and featured conversations and learning opportunities related to manufactured housing policy at all levels of government, as well as products and services that propel potential homeowners to achieve their dreams. Participants also learned about recent research regarding the cost burdens of energy-inefficient homes in Appalachia and explored avenues for reforming how manufactured homes are financed.

The Conference wouldn't have been possible without the tireless work of the I'M HOME Network's national partners, including Next Step, ROC USA and the National Manufactured Home Owners Association (NMHOA). In addition joining CFED on the plenary stage to share about the Network's many accomplishments over the past year, national partners led specially-designed breakout sessions on a number of issues critical to manufactured home owners and advocates. These panels dicussed the eHome America online homeownership education platform, manufactured home foundation requirements, tips for positive allyship with manufactured home residents, lending products for manufactured homes and filling vacancies in communities.

Throughout the Conference, several themes emerged that focused on how manufactured housing can continue to be an asset that empowers residents. However, the Conference also made clear that more work remains if we are to realize the full potential of the largest unsubsidized stock of affordable housing in this country. Conference attendees reflected on the need to reverse the stigma surrounding manufactured housing and its residents, to promote greater understanding of the potential of manufactured housing to expand homeownership to more families, and to scale the innovations and solutions that help enhance quality of life for residents of manufactured homes. Especially as homeownership for other housing types becomes increasingly unaffordable, the industry must approach development in new ways and in new real estate markets, such as through “land re-adjustment” to make communities more amenable to manufactured housing and to adapt to density planning needs.

As I’M HOME and the manufactured housing industry adapt to the evolving housing landscape, CFED will continue to facilitate discussions about how we can work together to achieve the goals of the I’M HOME Network and to advance manufactured housing initiatives.

If you couldn’t join us in San Antonio, you can check out session presentations, handouts, reports and other materials from the Conference here. Then, mark your calendars for the 2017 I'M HOME Conference, to take place October 2-4 in Providence, RI!

Success! USDA 502 Pilot Approved in California

By Alicia Sebastian, Guest Contributor on 11/28/2016 @ 02:00 PM

Tags: Housing and Homeownership

A State in Crisis

California’s housing crisis has been well-documented and conjures images of San Francisco and Silicon Valley, or Los Angeles and coastal communities. Conversations about this crisis often exclude rural California and manufactured housing communities.

  • In California, at least 1 million people live in more than 5,000 registered manufactured housing communities, or mobile home parks.
  • Even more Californians live in unregistered manufactured housing communities, in individual manufactured homes on private land or in American Indian Tribal communities.
  • These homes make up over 4% of all housing across the state and are more concentrated in rural areas.
  • Manufactured home communities are located everywhere from remote areas of the Sierra Nevadas to the coasts of Santa Monica and in the heart of Silicon Valley.
  • While the price of homes, lots and land vary widely across communities, manufactured homes make up a significant portion of California’s limited affordable housing stock.
  • In the last 10 years, almost 5,000 mobile home spaces have disappeared.

With the recovery of the housing market, these communities are being marked by owners and investors for acquisition and conversion to other uses, leading to the displacement of many low-income residents and putting thousands of others at risk. For many, moving into new communities or upgrading their homes will be impossible, and there are no other affordable options for owning or renting outside of these parks in the communities where they live.

So, What are We Gonna Do About It?

CCRH has partnered with CFED, nonprofit affordable housing developers, advocates, the California Department of Housing and Community Development, the California Housing Finance Agency and USDA Rural Development California to prioritize the preservation of manufactured housing communities in California.

In the past year, these partners have:

  • Supported processes for HUD’s approval of a more affordable foundation product, making 502 home loans more economically feasible.
  • Successfully advocated for clarification to recent sponsored legislation, allowing state funding through the Mobilehome Park Rehabilitation and Resident Ownership Program to be used for replacement of mobile homes in addition to rehab and to fund the full cost of park acquisition.
  • Worked with Assemblymember Ed Chau to pass AB 587, which assists the tens of thousands of mobile home owners who do not have current title to their homes. The bill creates a three-year tax abatement program for mobile home owners who never received title to their home and may owe back taxes as a result. The bill gives homeowners a path to bringing title current without significant financial burden.

Big Win: USDA 502 Pilot Program Approved in California

One huge success this year has been gaining approval for the USDA RD 502 Pilot in California. The California Office of USDA Rural Development announced that — as of November 1, 2016 — California will join New Hampshire and Vermont in entering into a two-year USDA 502 pilot program for financing energy-efficient manufactured and modular housing in land-lease communities. This pilot will allow low- and moderate-income homebuyers to get USDA mortgages on manufactured homes in parks owned by a nonprofit, cooperative or tribal community. It is the first program of its kind for residents of manufactured home communities, where financing options are typically higher cost and shorter term than a traditional 30-year mortgage. The individual Section 502 loans will be on new manufactured homes secured with a first mortgage or leasehold interest on the land and a first lien on the home structure. This pilot will apply to both the direct and guarantee single-family housing loan programs.

It’s been a big year for manufactured home residents in California—and we’re just getting started!

Alicia Sebastian is Director of Housing and Community Development Programs at the California Coalition for Rural Housing.

About the California Coalition for Rural Housing

Formed in 1976, CCRH is the oldest statewide association of affordable housing developers and advocates in the nation. Its mission is to improve the living conditions of rural and low-income Californians through the production and preservation of decent and affordable housing and creation of sustainable rural communities. CCRH’s members are nonprofit housing developers, state and local government officials, lenders, housing advocates, and social service providers.

Solving the Homeownership Crisis Requires Far More than Affordability

By Doug Ryan on 10/14/2016 @ 04:00 PM

Tags: Housing and Homeownership, Data and Research

Editor's Note: This post originally was published on October 13, 2016, on Rooflines.

According to recent research, the availability of starter and trade-up homes is in the midst of a four-year decline, which, at least in most markets, shows little evidence of abating. (Trulia defines starter homes as those priced in the bottom third of the market and trade-up homes as the middle third.)

Homeownership rates continue to tumble from their 2005 perch of about 69 to less than 63%. The rates for African Americans and Latinos has settled in the mid-40% range.

This problem may get worse. A forthcoming paper by Arthur Acolin, Laurie Goodman, and Susan Wachter suggests that as California goes, so goes the nation. California, for many reasons—not the least of which is housing costs—has had in recent memory a homeownership rate considerably lower than that of the rest of the nation. According to the most recent data, California’s rate continues to decline. At 53.4%, the state now has the second-lowest rate of homeownership in the country (after New York). Acolin and his colleagues suggest that the factors that influence California’s low homeownership rate may drag the rest of the nation to the low 50s by 2050. One major reason, these authors argue, is the shortfall of production—300,000 fewer units than household formation in 2014.

A shortage of all homes impacts the likelihood of new homeowners. Fewer for-sale and rental homes, of course, raises prices, excluding families from the homeownership market. Meanwhile, the tight rental market eats up the cash that could otherwise be set aside for downpayments. And of course, not all markets are the same. The great variation among metropolitan areas is significant, and while prices in some markets have vaulted well past their previous highs, other have still not recovered. Dallas and Denver, for example, are up at least 30% above their July 2006 highs, yet much of Florida’s homeownership market remains stagnant.

Each of these market dynamics impacts the availability of homes for new buyers.

If prices are too high, the market is simply out of reach. Consider the Wells Fargo/National Association of Home Builders Housing Opportunity Index (HOI), which calculates what percentage of an area’s housing stock is affordable to a family with the region’s median income (based on “standard” underwriting of 10% down and 28% of income spent on housing). San Francisco, often the poster child for out-of-control housing markets, has really been this way since the crisis. In early 1994, nearly 22% of its for-sale homes were affordable to the median-income family. Today, the same can be said of just 8.5% of homes for sale in the Bay Area.

The reverse also hurts potential buyers. In Miami, the HOI is now about 40%, up from a nadir of 10% in 2007. Much of this is because the home values in the region are about 30% below their peak, according to the Wall Street Journal’s analysis. Miami now has one of the lowest homeownership rates of any major city in the nation, despite the measure of affordability.

One reason for this trend—a trend we see in markets across the country—is that despite good affordability ratios, there just isn’t enough housing stock on the market. When owners are underwater due to the crash, they stay in their homes, which prevents starter homes from entering the market, reducing incentives for construction and generally keeping a local market soft. Across many markets, there is a dearth of both starter and trade-up homes, essentially freezing out new buyers.

The fall of the homeownership rate in the U.S. isn’t only due to our failure to create new homes. Also to blame are mortgage policies, both before and after bubble burst. Far too many families faced crises from predatory loans, such as refinancing, and from the subsequent downturn in the economy. Yet when faced with such a market crisis, many lenders and guarantors failed to work in the best interest of the borrower or even comply with the law. A recent article about Philadelphia’s experience with HUD’s Distressed Asset Stabilization Program underscores how better policy and practice could have kept families in homes and shielded their neighbors from some of the fallout from the crisis.

We also know how to better prepare families for homeownership and lower the barriers to entry. A comprehensive study of NeighborWorks America’s housing counseling efforts supports this claim. Buyers who participated in counseling were about one-third less likely to become delinquent on their mortgages. This has huge implications for advocates and new entrants to the market. Couple this with what we already know about the potential of low-downpayment loans, such as Self Help’s Community Advantage Program, and we have an effective pathway to addressing the homeownership crisis. A number of major lenders are offering such low-downpayment loans by accessing Freddie Mac or Fannie Mae products, but the uptake has been slow. We need to rethink how we approach these opportunities.

Access to credit is still a huge challenge. The White House recently highlighted many of the artificial and antiquated ways that local jurisdictions limit affordability and affordable housing development. The Housing Development Toolkit is a solid starting point for all of us to approach this work. Parking requirements, lack of density, permitting delays and idle land all raise costs for future residents and potential developers while limiting new stock.

Since before the housing crisis, and certainly in the years since, we have known what tools work: good preparation, good underwriting, good servicing and good local laws. Loans should be designed to be sustainable. Local laws must support these tools.

Even the “Worst Housing Stock” in America is Unaffordable to Many

By Merrit Gillard on 09/07/2016 @ 10:00 AM

Tags: Housing and Homeownership, Local Policy

Manufactured housing may be the largest source of unsubsidized affordable housing in the country, but for many low-income residents, it’s still not affordable enough. In some of the most economically distressed regions of the country, old and energy-inefficient mobile homes eat up so much of residents’ incomes that they struggle to cover other basic needs.

A new study out this week by the Virginia Center for Housing Research (VCHR) at Virginia Tech, part of an initiative led by CFED, Fahe and Next Step, with support from NeighborWorks America and the Wells Fargo Housing Foundation, takes a look at the manufactured housing landscape in the Appalachian regions of Alabama, Kentucky, Tennessee, West Virginia and Virginia. Manufactured homes make up a large share (between 13-19%) of the housing mix in these regions. In some areas, such as Southeastern Kentucky, manufactured homes make up more than a third of all occupied housing.

Residents of manufactured homes are slightly more likely than households as a whole to be “cost-burdened,” meaning they spend 30% of their incomes on housing costs—and may not have enough left over for their other expenses. That’s the situation facing half of manufactured home renters and nearly 35% of those with a home loan.

Typically, most cost-burdened households are struggling to pay their rent or mortgage, but residents of manufactured homes also face another big cost: utility bills. The study finds that residents of manufactured homes are much more likely than other households to be cost burdened by energy bills alone, and more than 70,000 manufactured home households in the study region (11%) spend over 30% of their incomes just on utilities. In Alabama, where residents sweat through sweltering summers, more than half of cost-burdened families living in manufactured homes are cost-burdened by their alone.

The problem is worse for residents of mobile homes, which make up 20% of the manufactured housing stock in the study areas and were built before 1976 when the federal government established minimum energy efficiency standards. These homes may have leaking roofs, dangerous or inefficient heating sources, a lack of insulation and other problems that not only put residents’ health and safety at risk but also keep energy bills high.

But despite these findings, manufactured housing offers a pathway to affordable homeownership and financial security for many low-income families. After all, the cost per square foot for a new manufactured home is half the cost of the site-built equivalent. It’s worth noting that residents who own their manufactured homes free and clear were far less likely to face cost burdens than renters or those with an outstanding loan. Plus, modern manufactured homes are built to strict standards that make them much more efficient than their pre-1976 counterparts.

Still, there’s much more to be done to make this housing option safer, healthier and more affordable for residents. That includes replacing mobile homes with new, energy efficient models, as well as supporting other energy efficiency measures and making mortgage financing of manufactured homes more easily accessible. We are looking forward to working with our partners on this study to develop a series of concrete policy recommendations to improve the experience of the more than 17 million residents of manufactured homes in Appalachia and throughout the US.

When Neighbors Resist Affordable Housing, What’s a City to Do?

By Kate Davidoff on 09/01/2016 @ 10:00 AM

Tags: Housing and Homeownership, Local Policy, Federal Policy, Racial Wealth Divide

When affordable housing developments get off the ground, communities often have a lot to say about them—especially when information about the proposal is scarce. But with the federal government starting to push states and municipalities to do more with their housing programs, getting neighbors invested in new developments in a positive way is more important than ever. Without their buy-in, projects can stall for months or even years, and local governments sometimes try to avoid clashes with residents by making deals as quietly as possible. Housing leaders need to make neighborhood engagement a priority if efforts to expand opportunity are going to be successful—and equitable—for all community members.

For years, the legacy of residential segregation has kept many households of color locked out of neighborhoods—and wealth-building opportunities—in communities across the country. In recent years, the federal government has started to crack down on housing policies that keep communities segregated—even inadvertently. In a much discussed decision, the Supreme Court ruled in last year that state and local governments do, in fact, violate federal housing laws when they spend money from the U.S. Department of Housing and Urban Development (HUD) on policies that perpetuate segregation. The ruling stipulated that this is the case even if the intent of the policy itself was not explicitly to segregate housing by race.

This decision is still reaching municipalities and their efforts to build affordable housing that doesn’t perpetuate decades-old divisions along the lines of race. Partially as a result of this decision, HUD is providing local governments with the data necessary to understand and measure segregation, in the hopes that localities will use this data to comply with the Supreme Court’s order: creating affordable housing in new places and ending the seemingly endless cycle of segregation in housing in America.

However, regardless of the Supreme Court’s decision, HUD’s data and the White House’s support, state and local officials' ability to comply with this rule can be greatly impacted by individual citizens, like Veronica Walters.

On Dec. 12, the Baltimore Sun published a 6,100 word story…that describes how the city Housing Authority, complying with a federal court order, has been quietly buying homes over the past decade in prosperous suburbs to use as public housing…The reaction to the Sun story was immediate. “City housing program stirs fears in Baltimore County,” Donovan wrote in a follow-up piece.

Veronica Walters, 73, who lives in Catonsville, a middle class, largely white Baltimore County neighborhood with a median household income of $77,165, told Donovan. “We have worked for years in order to have a house in the county, and the government is pushing people out here,” she said, before adding: “They don’t deserve to have what my family worked hard for. It’s a shame we didn’t know about this ahead of time. I would have been right there protesting.”

Wealthy suburban counties such as Veronica’s are not the only group to resist affordable housing. Earlier this month, in the Inwood neighborhood in Northern Manhattan, residents protested and successfully stopped rezoning efforts that would’ve cleared the way for the construction of a new 23-story, mixed-use development that included over 150 affordable units. The predominantly Latino neighborhood felt that the below-market-rate rents weren’t below-market enough to be affordable for most New Yorkers. Moreover, residents feared that, if the building succeeded, it would gentrify the neighborhood, raise rents and lead landlords to force current residents out of their homes.

The dueling examples of Baltimore and Inwood highlight the difficulty of implementing an affordable housing program. Each example offers its own lessons, but both illustrate existing residents’ resistance to change, and how this hampers the ability of governments to use affordable housing to lift people out of poverty.

The reaction to affordable housing certainly isn’t new, but hiding its implementation isn’t the answer. Baltimore city officials have long faced resistance to affordable housing. In one noteworthy example, 1990s Moving to Opportunity project that would’ve relocated people living in segregated poverty to middle income neighborhoods was met with such protest (in one case just 10 new homes were slated to be built in a majority white neighborhood) that the project had to be abandoned. Just this month, under pressure from suburban residents who feared lower property values, Baltimore City Council rejected a bill that would have made it illegal for landlords to discriminate against prospective tenants who use Section 8 vouchers to pay their rent, making it even more difficult for families to find affordable units. These are just some of many examples in Baltimore—so it’s no surprise why city officials may have wanted to keep the purchasing of homes in suburban counties a secret from residents like Veronica.

However, purchasing homes in secret, and trying to keep entire housing programs operating under the radar only encourages the stubborn, occasionally virulent skepticism with which existing residents treat affordable housing. The Supreme Court decision and the provision of HUD data calls for transparency from advocates and city officials alike while giving them the ability to address segregation and poverty. The hard conversations with residents should be at the forefront of these efforts, rather than at best an afterthought and at worst a non-entity. Residents should have the opportunity to understand what the problem is, why the court decisions matter and how they may work together to improve the lives of everyone in the community. The CFED data illustrates the depth of the problem, and the potential for affordable housing to be an effective solution. The opportunity to recognize these benefits exists, but the people who can put a stop to affordable housing are also the people who can ensure its success. Advocates and city officials shouldn’t fear these people; they should welcome them into the process.

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