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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.

Mobile Homes Move Toward Efficiency

By Lowell Ungar, Guest Contributor on 08/26/2016 @ 11:00 AM

Tags: Housing and Homeownership

Editor's Note: This article originally appeared on

Do you know which government in the United States is the biggest laggard on energy codes for homes? The federal government. But that’s about to change.

Manufactured Homes and the “HUD Code”

Although building codes are mostly set by states, the federal government sets codes for manufactured homes (sometimes called mobile homes) because the factory does not always know where a home will end up. Manufacturers shipped 70,519 homes in 2015, more than the number of single-family homes built in any state except Texas.

Texas and the other states that built the most houses (Florida, California, North Carolina, Georgia, and South Carolina) all have energy codes as good as or better than the 2009 International Energy Conservation Code (IECC), the model code for “stick-built” homes. Unfortunately, the energy provisions of the “HUD Code” (set by the Department of Housing and Urban Development) that governs manufactured housing have not been changed significantly since 1994. Since then the IECC was created and has been updated five times.

So even though manufactured homes are relatively small, the owners pay a lot in energy bills, a national average of $1,800 per year in 2009. Although this is a little less than the average bill for single-family homes, the average energy cost per square foot is more than twice as high. And most of the people who pay the bills are low-income residents. The median income of families in manufactured homes is about $30,000. Many of them spend more on their energy bills than on home loans.

The New Standard Is a Big Saver

In 2007, Congress got fed up and directed the Department of Energy to set energy standards for manufactured homes based on the most recent IECC. The 2011 deadline came and went without even a draft. In 2014 DOE convened stakeholders for a negotiated rulemaking, and in October 2014 we (I was on the committee) successfully came to agreement on the key terms. A year later DOE submitted the proposed standard for Office of Management and Budget Review, and in June, after more than eight years, DOE finally issued the draft. The draft is open for comment through August 16.

The standard will make a real difference for homeowners and rural electric grids. DOE estimates the typical manufactured home will save 27% of energy use compared to a home that meets the current HUD Code. Average lifetime savings for homeowners are estimated at almost $4,000 net present value. Cumulative national savings include 2.3 quadrillion Btu of energy (equivalent to the energy use in one year of all homes in New York and Florida), $3-11 billion customer benefits (depending on discount rate), and 160 million metric tons of carbon dioxide.

In developing the draft, we started from the 2015 IECC but made many changes. Here are a few. We reduced the number of climate regions from eight to four, divided mostly along state lines, to make implementation easier. We replaced the performance path with an overall building shell heat transfer (U-factor) requirement, the metric currently used in the HUD Code (and we left out the new Energy Rating Index, which the manufacturers did not plan to use). We replaced the air leakage standard with construction quality requirements because it is hard to test a two-section home until it is assembled in the field. We adjusted for the lack of room to add roof insulation and still be able to truck the homes. And we eased up on required efficiency levels in the Southeast because manufacturers were especially concerned about the impact of the first cost on their low-income buyers there. But the standard would still save 28% compared to the HUD Code in that region.

Moving Forward

Perhaps most importantly, the committee’s scope did not include implementation or enforcement, and DOE still needs to work out how to ensure manufacturers meet the new code without undue burden or conflicts with HUD’s enforcement of health and safety requirements. There also are more energy savings we should achieve in manufactured homes through voluntary programs or future measures, in part because we did not touch on appliances or heating or cooling equipment.

But the proposed standard would greatly benefit homeowners who need the help. We hope DOE will complete the standard and set a better example for states adopting codes without further delay.

Rent Reporting for Credit Building is a Hit at Home Forward

By Sarah Chenven, Guest Contributor on 08/22/2016 @ 12:00 PM

Tags: Housing and Homeownership, Economic Inclusion

Close to 40% of U.S. households live in rental housing, and that percentage is even higher for families at the lower end of the income spectrum. Many of those low-income renters are among the 100 million U.S. consumers with no, thin or subprime credit and who lack opportunities to establish or build credit. Historically, only homeowners have been able to build positive credit histories when make housing payments on time. And this matters. A good credit score can save a person tens of thousands of dollars in interest and fees over the course of a lifetime and it can make the difference in access — or lack thereof — to safe housing, employment and asset-building opportunities like starting a small business and owning a home.

Credit reports and credit scores that do not recognize on-time rental payments as creditworthy behavior present an incomplete and negatively skewed assessment of the credit risk many renters pose, particularly low- and very-low income residents living in public housing and striving to successfully join the financial mainstream.

Fortunately, there is a now a proven and cost-effective way for these renters to benefit from the same credit building opportunities afforded to homeowners through the inclusion of on-time rent payments as valid trade lines on traditional consumer credit reports (view the results of Credit Builders Alliance’s 2012-2014 Power of Rent Reporting Pilot). Rent reporting provides them with the chance to build credit without taking on additional debt or incurring the burden of an additional monthly expense. And now, progressive public housing authorities across the country like Home Forward (HF) in Portland, Oregon (formerly the Housing Authority of Portland), who have long recognized the importance of empowering residents to move toward economic independence, are naturally looking to implement rent reporting programs.

In April 2015, Credit Builders Alliance (CBA) received a generous grant of $40,000 from the Meyer Memorial Trust to work with three entities: Home Forward, to furnish resident rental data; Innovative Changes (a local nonprofit), to provide credit education; and CFED, to help assess resident credit and other outcomes. The primary objective was to implement a responsible rental payment reporting initiative. CBA considers rent reporting (as it does traditional loan data reporting) to be a responsible financial capability strategy when combined with credit education to help establish and/or improve participant credit profiles.

This initiative was piloted at one of Home Forward’s Hope 6 properties — Stephens Creek Crossing — for a group of low-income residents participating in its Family Self-Sufficiency program, GOALS (Greater Opportunities to Advance, Learn and Succeed), which is a natural fit given the program’s purpose. To date, Home Forward has successfully enrolled 67 residents, 28 of whom have now had their rents reported for over three months. Once the benefits of rent reporting spread by word of mouth across the property, Home Forward expects to see even more residents enroll.

To leverage the rent reporting as a financial capability strategy, Innovative Changes was contracted to provide credit education to enrolled residents. Innovative Changes designed a custom, four-part credit workshop series that covered the importance of having a good credit history, how building credit through rent reporting can help households achieve and sustain short- and long-term goals, how to dispute errors on credit reports, how to negotiate with creditors to settle debts and best practices in monitoring and leveraging improved credit over time to achieve goals. In total, 62 residents participated in the various workshops, and pre- and post-survey results revealed that participants were extremely engaged and increased both their knowledge and skills.

CBA also contracted with CFED to help assess credit and other program outcomes of the initiative. With input from CFED, CBA, Home Forward and Innovative Changes decided to track not only credit score changes and debt reduction levels, but also implementation lessons learned. CFED conducted interviews with residents participating in the pilot, as well as Home Forward and Innovative Changes staff, about their respective experiences with the program. In addition to the pre- and post-surveys, these interviews will help inform future iterations of the pilot with respect to outreach and marketing, program design and overall program success.

The final report on this initiative will be formally presented at CFED’s Assets Learning Conference in September 2016 — join us there to hear the details! The preliminary results look promising. Here’s what we know so far:

  • Rent reporting is seen by renters as a great opportunity for credit building. 100% of residents who participated in the final workshop stated that they were likely or very likely to consider their credit when making future financial decisions.
  • Rent reporting offers a significant credit-building opportunity to residents living in public housing.
  • Rent reporting is a viable financial capability strategy for affordable housing providers seeking to help their residents achieve financial stability. According to Rachell Hall, Financial Capability Coordinator at Innovative Changes, “Rent reporting needs to be coupled with financial education – [it is] more impactful when you’re more informed.”

CBA, Home Forward, Innovative Changes and CFED expect this pilot to serve as a model for other public housing authorities hoping to directly report rental payments and partner with local nonprofit experts to integrate credit education as a powerful credit building and financial capability strategy.

Sarah Chenven is Deputy Director of Credit Builders Alliance.

With Homeownership at an All-Time Low, Why Is the Federal Government Tying its Own Hands?

By Doug Ryan on 08/18/2016 @ 10:00 AM

Tags: Federal Policy, Housing and Homeownership

It’s been eight years since the 2008 economic crisis and homeownership is at an all-time low. More than five million homes have gone into foreclosure since the housing crisis, and Latino and African-American households are bearing the brunt of that misfortune with higher rates of foreclosure than other groups. But there are signs that the housing market can turn itself around, including home equity surpassing pre-crisis levels. Organizations like CFED are pushing for ways to continue to improve the economic viability in communities of color. With the right policies, we can be a nation with economic equity, no matter your race or socioeconomic status.

But if we know how to create greater economic prosperity for all, why is the housing finance system still in paralysis? A recent article in the Miami Herald noted the two agencies responsible for making home-buying more affordable—Fannie Mae and Freddie Mac—are in a “zombie state,” functioning without enough capital reserves to withstand another market downturn. It turns out that in 2012, the U.S. Treasury decided to sweep all of Fannie and Freddie’s profits into government coffers, leaving them increasingly dependent on the federal government to bail them out in the case of rainy day.

Unfortunately, the current status quo for these housing agencies, and the lack of action from lawmakers and policymakers, have led to uncertainty and instability that has scared buyers and lenders alike. Rising home prices and the tightening of access to credit has left low- to moderate-income borrowers out of the buying market. And, although the current director of the Federal Housing Finance Agency (FHFA) has authorized long-delayed contributions from Fannie and Freddie to the National Housing Trust Fund—which supports affordable housing construction for low-income families—those contributions are at risk if Fannie and Freddie post a bad quarterly report.

The current trend—given the rules put into motion by former FHFA acting director Ed Demarco—seems to be to gradually dismantle Fannie and Freddie and hand over their business to the too-big-to-fail banks. Under a credit risk-sharing policy, Fannie and Freddie push more of the credit risk associated with home loans onto investors, such as mortgage insurers and money-center banks.

In addition, Fannie and Freddie are being forced to build a new financial infrastructure—termed “the common securitization platform (CSP)”—which would ultimately help their competitors. Together, these policies are not a strong plan for comprehensive housing finance reform, but rather part of a strategy to achieve the ideological and competitive goals of privatizing the housing finance market and leaving American homebuyers with fewer protections from predatory practices. These approaches also risk further limiting access to housing credit for lower-income families and first-time homebuyers.

For years, Fannie and Freddie served the nation well by providing countercyclical market liquidity. By 2007-08, it became clear that reforms were needed. These reforms have mostly occurred, but siphoning Fannie and Freddie’s earnings and forcing them to cede the core of their business to large banks leaves taxpayers exposed, marking a move in the opposite direction from what low-income potential homebuyers need. This dismantling of Fannie and Freddie—enterprises established to provide liquidity and stability to our nation’s housing market—is already well under way. No one really knows what the new system will mean for homebuyers, capital markets or taxpayers.

Risk-sharing creates market distortions and instability. It is a much better investment for the American people to make additional fixes to Fannie and Freddie, allow them to recapitalize, and update their structure and regulatory oversight so they can return to their core mission: putting the dream of homeownership within reach for more and more Americans.

NMHOA Head Wants to Give Homeowners a Sense of Security

By Dave Anderson, Guest Contributor on 07/26/2016 @ 01:00 PM

Tags: Housing and Homeownership

I took a big professional step in July. After more than 10 years with All Parks Alliance for Change (APAC), I accepted a position as the new executive director of the National Manufactured Home Owners Association (NMHOA). I take over from Ishbel Dickens, who was the first person to hold this position and did so from 2010 to 2016. In this role, I will provide guidance, training and support to the organization’s leaders and coordinate policy advocacy with national partners. It's an exciting opportunity. I will be able to extend my work on behalf of owners of manufactured homes, from 180,000 people in Minnesota to the 17 million people living in manufactured homes throughout the United States.

This is a far bigger challenge than others I have faced. NMHOA is a national organization responsible for promoting, preserving and enhancing the rights and interests of manufactured homeowners throughout the United States. This means, first and foremost, working to give homeowners an increased sense of security in their communities. While most states have statutes that govern the relationship between community owners and homeowners, many of these laws are weak, unenforceable, and, as a result, do not provide much security. Some community owners can deny residents the right to form homeowner associations, the right to speak with their neighbors about their issues and concerns and in other ways restrict their speech and actions.

It will be my job to help guide NMHOA at it works on possible solutions to these problems. This includes requesting legislation at the federal level to provide incentives for community owners to sell their properties to the homeowners, a local housing authority or a nonprofit entity. It will involve supporting work at the state level to enact stronger legal protections for people who own their homes but not the land beneath them. It will mean pushing for some of the CDBG, HOME and other affordable housing money going to the states to be earmarked for manufactured housing community preservation, and, when this money is used for preservation, to require the community owners to respect a basic set of rights that all homeowners should be able to expect.

To achieve these gains, owners of manufactured homes must be informed, empowered and engaged enough to influence the dialogue around federal, state and local policies. I will help our state associations to become more powerful and effective by providing technical assistance on organizing, advocacy, fundraising and leadership development through toolkits, monthly conference calls and our annual convention. I will recruit more state associations, community associations and individuals to join our network. I will also lead efforts to help owners of manufactured homes to establish new associations in states that don’t already have them.

NMHOA must also be a recognized, respected and sought-after voice in discussions about federal, state and local policy change. I will help NMHOA to gain recognition and influence as the national advocate for manufactured home owners. This includes engaging NMHOA members in federal, state and local policy activities, such as constituent contacts, sign-on letters, in-district meetings and lobby days. It means building effective partnerships with other national housing organizations and advocacy groups to identify and respond to emerging policy trends. It also means participating in CFED’s I’M HOME (Innovations in Manufactured Homes) network, the I’M HOME annual conference and the monthly Manufactured Housing Policy Partners conference calls to coordinate with other manufactured housing stakeholders.

It's a bittersweet transition leaving my position as APAC's executive director. At APAC, I helped to do some important work on behalf of park residents: from establishing the Manufactured Home Relocation Trust Fund, to creating a community organizing manual and a consumer guide to parks, to organizing residents to respond to threatened park closures. I'm grateful for my chance to work with so many great leaders, staff and allies through APAC, and I'm glad that my work with APAC is changing, but not coming to an end. I will still be based in Minnesota and will work with APAC part-time as a Senior Advisor & Management Consultant.

I bring to NMHOA 25 years of experience working in the nonprofit sector, including 15 years with nonprofit management. Before APAC, I also served as executive director of the Minnesota Public Interest Research Group (MPIRG), interim executive director of the Minnesota State University Student Association (MSUSA) and associate state director of the Minnesota Senior Federation. In addition, this is not my first experience with NMHOA. In 2007, I obtained NMHOA’s first grant funding and, in 2008 and 2009, I provided its first staffing through a contract between NMHOA and APAC.

I want to thank NMHOA’s board of directors for giving me this opportunity. It is a daunting responsibility to represent the sometimes diverse interests of 6.8 million households, but one I look forward to with excitement.

The Biggest Beneficiaries of Housing Subsidies? The Wealthy.

By Ezra Levin and David Meni, Graduate Intern on 07/01/2016 @ 11:00 AM

Tags: Housing and Homeownership

This article originally appeared on

It’s almost the first of the month, and that means rent’s due. That rent or mortgage check is the single biggest expense in most Americans’ budgets, so it’s no wonder that Congress directs a ton of federal dollars to housing. But what should be surprising—and infuriating—is that a lot of this support goes to housing the wealthy, while very little goes to those who need help landing a stable home. These policies aren’t accidents—they’re bad choices that we should simply stop making.

We’re in the middle of an affordable housing crisis

The United States is in the midst of an affordable housing crisis. Nearly 1 in 3 households with a mortgage devotes more than 30 percent of their income to their home. The situation is even worse for renters—more than half of America’s 38 million rental households are shouldering a cost burden.

Some of this crisis is fallout from the Great Recession, which brought homeownership rates to historic lows. African-American and Latino households were hit particularly hard, because of predatory lending practices that targeted racially segregated communities.

Congress spends a lot on housing, mostly through tax programs

Given these crises in housing affordability and homeownership, congressional strategies to support housing deserve special scrutiny.

Congress supports housing in two main ways: rental assistance programs and homeownership tax programs. In 2015, the price tag for federal rental assistance programs—which includes Section 8 housing vouchers, public housing, Homeless Assistance Grants, and other programs—was $51 billion. In contrast, two of the largest homeownership tax programs—the Mortgage Interest Deduction and the Property Tax Deduction—cost $90 billion in 2015. That’s nearly double the amount spent on public benefit housing programs.

The biggest beneficiary of the billions spent on homeownership tax programs? The wealthy.

There’s nothing wrong with providing support through the tax code—benefits are benefits, whether you get them from your local HUD office or on your tax return. The important question is: who benefits? Rental assistance programs are designed to help those who will benefit most—primarily individuals and families with less income and less stable housing. But this isn’t the how Congress designed homeownership tax programs. All told, households making over $100,000 a year received nearly 90 percent of the $90 billion spent on the two tax programs discussed above. Households making less than $50,000 got a little more than 1 percent of those benefits.

It gets uglier. There are nearly eight million low-income homeowners that struggle to pay for housing from month to month. On average, low-income households get about eight cents per month from these two homeownership tax programs. Eight cents. There are also about four million middle-income households paying more than 30 percent of their income on housing. The average monthly benefit from these tax programs for middle-income earners? Twelve bucks. Don’t spend it all in one place.

In contrast, the top 0.1 percent of earners—folks with an average annual income of more than $9 million—get an average of $1,236 per month (nearly $15,000 per year) from just these two homeownership tax programs. That federal benefit is much more than the typical cost of rent in most American cities, and it’s going to wealthy households who really don’t need help keeping a roof over their heads.

Why these tax programs are so upside down

So why are these tax programs so out of whack? It’s no accident—it’s how the programs are designed. Most low-income families don’t even qualify because they don’t itemize deductions. Even among those that do qualify, every dollar they deduct is worth less than a dollar that a high-income earner deducts. As nonsensical as it sounds, the value of homeownership tax support goes up as your income goes up. In addition, higher-income households get bigger deductions when they buy bigger houses (or bigger yachts, which qualify for the same tax benefits).

If we ran the Food Stamp (SNAP) program the same way we run our housing tax programs, low-income parents buying a simple, nutritious meal for their kids would get somewhere around zero dollars in federal support. Millionaires charging their MasterCard with a $5,000 FleurBurger, seared foie gras, truffle sauce, and bottle of 1995 Château Petrus would get a few thousand dollars in federal benefits.

Clearly, this would be a crazy way to run a social program—but this really is how we structure billions in support for wealthy homeowners through the tax code. Even worse, study after study shows that the Mortgage Interest Deduction doesn’t even succeed in boosting homeownership.

How we can get away from this upside-down system

It’s not hard to think up a better way to spend $90 billion. That’s the focus of the Turn it Right-Side Up campaign, which zeroes in on reforming unfair tax programs like these homeownership boondoggles. We could redirect this spending to help lower-income Americans save for a down payment, or use some of these funds to create a first-time homebuyer credit, or create a simple refundable credit for all homeowners. Or all of the above.

In other words, there are options that don’t include flushing billions in tax subsidies down a golden toilet in a millionaire’s yacht (which he claims as a second home, for the tax break). Next time someone argues that we can’t afford to fix widespread housing insecurity, our response should be that we can’t afford to keep spending so much to house the wealthy. Let’s make a different choice—let’s start using these homeownership tax programs to actually solve the affordable housing crisis.

When it Comes to Inclusive Homeownership, Our Work is Just Getting Started

By Doug Ryan on 06/30/2016 @ 11:00 AM

Tags: Housing and Homeownership

Just as the nation wraps up National Homeownership Month 2016, the Department of Justice wrapped up its long-standing investigations into Angelo Mozilo, the one-time CEO of Countrywide, which once reigned as the top mortgage lender in the United States. As it did with its criminal inquiry, justice decided not to pursue civil fraud charges against Mr. Mozilo.

As many know, Countrywide became the poster child for the excessive practices of mortgage lenders and loan servicers, including their sloppy and dishonest practices in pursuing foreclosures. New York Times business writer Gretchen Morgenson does an excellent job retelling the stories of Mozilo and, more importantly, some of the lives that Countrywide ruined. We even get a great quote form Mozilo himself: “Loans were originated through our channels with serious disregard for process, compliance with guidelines and (with) irresponsible behavior relative to meeting timelines.” To further underscore the firm’s predatory practices, Morgenson notes that “Countrywide charged some borrowers in foreclosure $300 to mow their lawns.”

No matter. Even if Mozilo won’t be held accountable for the actions of his firm (though he has paid millions in fines and is barred from banking), policymakers, lenders and investors must have taken the lessons of the mortgage meltdown to heart, ensuring that loan underwriting is well-documented, that borrowers have the ability to repay and that loan servicers do their best to keep families in their homes. We also, no doubt, have accepted the too-often sordid history of mortgage lending in the US, from redlining to predatory loans. To further bolster the safety of home mortgages, Congress created an agency that regulates lender practices, not just lender soundness.

Maybe we haven’t quite learned from what should be obvious lessons. There are ad campaigns attacking the Consumer Financial Protection Bureau, supported by political and industry opponents of the agency. Prominent members of Congress continue to misrepresent, or misinterpret, the causes of the financial crisis, and, in effect, oppose measures to keep families in their homes. Perhaps one of the most historically discriminatory loan practices, land contracts between seller and buyer (really, renter), is making a comeback in certain communities. Special interests continue to ask for regulatory relief from a pliant Congress, even after a number of reviews of their claims undercuts their validity.

So how can we move forward and advance safe and sustainable homeownership as a wealth-building strategy for all? First, we need to acknowledge what helps get families ready for homeownership, which loan products and development strategies work for particular circumstances and how best to ensure that homeowners can stay owners, build wealth and develop community and family assets. All of this may not seem that complicated, but there are more than a few actors out there that want to frustrate progress.

It’s unclear, and perhaps pointless to try discerning, what percentage of American families own their homes. What is clear is that homeownership rates are down considerably in the United States, from a peak of 69.4% in second quarter of 2004 to 63.6% in the first quarter of this year (the latest data reflect a slight uptick over 2015). Furthermore, the rates of homeownership for African-American and Latino households continues its decline to levels well-below 50%. The loss of pace on homeownership directly correlates to the disparity among the races on wealth. And while foreclosure rates have ebbed, 30% of all homeowners are cost-burdened, which means losses of income or costly bills could push them towards default.

We want and need to reverse these trends, and do so responsibly. We know what some of the challenges are. For example, there are clear links between segregation and predatory lending, which can combine to depress home values and strip wealth from homes and communities.

Over the next few years, CFED will implement a new homeownership strategy, which is currently in development, to frame the debate on how to advance responsible homeownership. Since 2005, CFED has run its Innovations in Manufactured Homes (I’M HOME) initiative to make that sector a viable homeownership strategy. We have made great progress in this area, and the key to furthering it is to better integrate into established and emerging solutions, which include homeownership preparedness, reduced barriers to purchasing and sustainability.

Let’s start with what works. For years, advocates believed that housing counseling and other readiness programs would help first-time buyers purchase homes and sustain homeownership. The evidence, however, was not quite fully formed. Recently, studies have documented the value of such programs, especially one-on-one sessions, to improve credit scores and reduce delinquencies. CFED’s own research has shown that low-income homeowners that also owned Individual Development Accounts (IDAs) had better mortgage terms and significantly lower foreclosure rates. We have also documented that owners of manufactured homes whose mortgages include high-touch servicing are also more likely to avoid defaults.

Studies also support that inclusionary zoning in costly markets, opportunity to purchase laws for manufactured housing communities, and other low-cost pathways to affordability and sustainability work. What we need to do is better articulate the case for affordable homeownership, deflate the argument that low-income communities caused (rather than were victimized by) the housing crisis, and scale policies and strategies that work.

As National Homeownership Month 2016 comes to a close, we’re recognizing more and more that our work to make homeownership affordable and inclusive is just getting started. We hope you’ll join us in this quest.

Learn more about CFED’s affordable homeownership work by visiting our I’M HOME initiative.

To Reduce Recidivism Rates, Turn to Housing Policy

By Doug Ryan on 06/29/2016 @ 10:00 AM

Tags: Housing and Homeownership

A couple months ago here on Rooflines, I wrote about the value of addressing housing challenges that many former prisoners face upon release. Back then, it seemed that Congress might even pass bipartisan criminal justice reform. Sadly, that seems less likely now, but the need to confront the injustices built in to the system are no less urgent.

We have made some progress. HUD has prohibited housing providers from reflexively denying applicants with criminal records. Maryland, with a Republican governor and Democratic legislature, adopted moderate but meaningful reforms. And, perhaps most strikingly, courts in California and Michigan have ruled that residency restrictions that limit where or how close to a school a convicted sex offender can live violate state constitutions, and are too vague or otherwise fail to make sense. Last year, a federal judge ruled that Minnesota’s inability to find housing for offenders effectively extended their sentences illegally. In response to the California ruling, the state announced earlier this year that it would no longer enforce the blanket restrictions that have come to characterize so many of these state rules. Minnesota’s legislature may address some of its challenges in a special session.

Congress, in its 1998 Public Housing reform law, barred individuals on lifetime sex offender registries from federally assisted housing, an approach that at least offered some options to lower-level offenders. Yet far too many states have adopted one-size-fits-all policies that lump all classes of sex offenders together, despite study after study showing that these statutes are ineffective at best.

Wisconsin, perhaps not surprisingly for the state that led the nation in the race to the bottom on welfare “reform,” has seemingly gone out of its way to avoid linking its policy to reality. First, in 2014, Milwaukee came up with a 2,000-foot restriction policy that, in effect, left just 55 homes available to violent and repeat sex offenders. Early this year, Governor Scott Walker signed a bill banning sex offenders from living within 1,500 feet of any school, park, day care center or church in the state. Wisconsin legislators introduced a bill that would have reduced statewide residency restrictions to 1,000 feet, softening the earlier bill. It failed.

These are serious crimes, and they deserve serious policy proposals, but our approaches to housing sex offenders often choose the easy responses at the expense of the effective ones. We need to rethink our approach, and legislators need to take the lead.

The criminal justice system has immense influence on an ex-offender’s ability to work, live, and interact post-release. Treating all sex offenders as one, rather than treating them as individuals therapeutically and programmatically, makes no sense, especially if we are interested in reducing risk, improving lives, and saving money.

So what is going on here? One study of the California restrictions, which effectively eliminated 97 percent of San Diego County’s homes as an option for the state’s sex offenders, found that “there is no evidence that residence restrictions are related to preventing or deterring sex crimes against children.” Indeed, other research has found that restricting proximity to child care or school buildings provides no measurable benefit to public safety.

Of course, none of this should be surprising. First, sex offenders have relatively low recidivism rates compared to other offenders. (One caveat, however, is the low reporting rate of sex offenses.) Even Wisconsin knows this, as the state has reported that offender recidivism of sexual offenses was in the single digits for various timeframes. Other states have drawn similar conclusions. For example, Connecticut officials found even lower rates of such recidivism than Wisconsin found. We also know that sex offenses against children, crimes that many consider to be the most heinous and least forgivable, overwhelmingly involve a victim and perpetrator who are known to each other. Preventing such crimes where the assailant likely has access to private settings, such as a home, is very difficult.

In the three years after California’s restrictions took effect in 2006, homelessness among sex offenders jumped 24-fold. By 2011, nearly one-third of sex offenders on parole in the state were homeless due to the restrictions. Many analysts attribute this rise to the reduction in housing options for ex-offenders who, like many released from prison, would have lived with relatives, even if only temporarily. Too many of these relative’s homes, it seems, were within 2,000 feet of a school or park, making them off limits to the ex-offender. Cutting off the network of family or friends upon reentry is a major blow to rehabilitation.

Of course, if the real point of these laws is to help law enforcement and health providers stay in contact with released sex offenders, provide assistance and generally reduce risk to the community, then having a third of the target population unaccounted for doesn’t seem to be particularly effective policy. Some will argue that homeless offenders can be tracked by GPS. Many states do this, but this approach hardly enables housing stability or ensures access to the variety of services that housing can provide.

Securing housing for ex-offenders is vital to reducing recidivism and to assuring victims and victims’ families that perpetrators comply with parole requirements. States, mostly through the courts, have begun to recognize the real limitation of the non-individual-specific restrictions. Until state legislators act, however, little will change. In our current environment that sees marginalization of unpopular groups as good politics, good policy need not matter. With criminal justice reform in the air and on the airwaves, this is a real lost opportunity.

How Decades of Housing Policy Left Households of Color Behind—And What We Can Do about It

By Lillian Singh and Kylie Patterson on 06/21/2016 @ 03:00 PM

Tags: Racial Wealth Divide, Housing and Homeownership

Editor's Note: This article originally appeared on the Huffington Post.

This week began with a special day: Juneteenth. The celebration commemorates a day 150 years ago when Texas slaves were finally informed of their freedom — two and half years after the Civil War and Emancipation Proclamation. It marks a day where federal policy, fundamentally though belatedly, changed the lives of thousands of people.

And since June is also National Homeownership Month, there is no better time to think about how policy could, though belatedly, change the financial futures of millions of households of color by expanding access to homeownership.

Now more than ever, there is a huge gap in wealth and homeownership between whites and people of color. Nearly 74% of white households own homes, compared to 47% of households of color. The gap became pronouncedly worse due to the recession, where the black rate reduced to 43% and the Hispanic rate to 46%. While home equity is the greatest source of wealth for the majority of U.S. households, homeownership is now at a 10-year low, down to 64% in the first quarter of 2016 from a high of 69% in 2006. Much of this dip is due to the lingering effects of the recession and housing market crash. Unfortunately, when the U.S. catches a cold, minorities catch pneumonia. Homeowners of color lost a larger share of their wealth in the housing crisis than white homeowners, and their portfolios have been slower to recover.

It is often argued that the recession is the reason for the depressed homeownership rates found among communities of color. This is far from the full story. Today, homeownership is the bedrock of wealth building for most in the United States, yet this was not always the case. The homeownership rate did not cross the 50% mark until the 1940’s and 1950’s when the U.S. government began heavily investing in homeownership. These investments allowed for the majority of white households to become homeowners, but this did not trickle down to communities of color.

Why’s that? Well, when the federal government made huge investments into supporting homeownership, it was designed for white households only. Starting in the 1930s, the Federal Housing Administration institutionalized the practice of redlining, which explicitly excluded homebuyers in predominantly minority neighborhoods from qualifying for more affordable federally backed loans. People of color were again systemically and purposefully prohibited from benefiting from the GI bill following World War II, at which time we see a major increase in white homeownership.

Additionally, residential segregation, which lowers demand for homes in minority neighborhoods, and historic differences in access to credit have severely crippled communities of color in their quest for homeownership.

The legacy of racist policies, coupled with discrimination against borrowers of color, has been a powerful driver of the racial wealth divide. That’s because homes purchased by white households in the 1940’s and 50’s experienced significant appreciation, building the family’s wealth and enabling the family’s children to leverage the appreciation to purchase larger homes of greater value—and the wealth accumulation continued to snowball. Unfortunately, minority communities who were unable to purchase homes decades ago have not been able to benefit from the wealth building power of such appreciation.

This month, given its theme and historical importance, it is time again to begin advocating and developing federal policy to right past wrongs. Currently, the United States spends at least $70 billion through the mortgage interest reduction each year- which disproportionately helps the wealthiest Americans continue to build their wealth. Let us look at a new policy solution - such as tax credits that are tied closer to the median home value versus subsidizing the ownership of McMansions. This tax credit would be targeted toward low- and moderate-income families that own homes and will enable them to better weather storms and keep their homes throughout retirement.

Households of color were denied access to the wealth-building power of homeownership for too long. Now is the time for policymakers to take action to begin to close the racial wealth gap by allowing more households of color to buy a home of their own.

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