September 29, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

The Area Median Income (AMI), explained

(RECAP: There are a number of programs used to create affordable housing, including housing vouchers, inclusionary zoning, low-income housing tax credits and public housing. Each of these programs uses a central statistic—the area median income—to determine whether families are eligible for the program. This explainer focuses on how the AMI is calculated and what it means for affordable housing in the region.)

Innovations in Planning and Public Engagement for Community Resilience

(RECAP: In addition to helping communities make rebuilding decisions after natural disasters, it is also the job of the planner to inform community members and leaders of the consequences of the choices they make. Planners also play a vital role in ensuring that the best science and technical information are conveyed in ways that raise the level of awareness of residents and develop a culture of preparedness.)

For Quick Housing Data, Hit Craigslist

(RECAP: A new paper in the Journal of Planning Education and Research analyzed 11 million Craigslist rental listings across the U.S. and found a treasure trove of information on regional and local housing trends. "Being able to track rental listings data from Craigslist is really useful for urban planners to take the pulse of [changing neighborhoods] much more quickly,” says Geoff Boeing, a researcher at University of California at Berkeley’s Urban Analytics Lab. Here are a couple of big takeaways.) 

September 27, 2016

In Case You Missed It: A Look at Recent National Housing Policy News

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Report on HUD's RAD Program Shows It has Generated Significant Investment in Public Housing 

HUD recently released an independently conducted report evaluating its Rental Assistance Demonstration (RAD) program, which finds that by October 2015, Public Housing Authorities (PHA) participating in the program had generated $2.5 billion in investment to preserve and rehabilitate public housing properties. RAD allows PHAs to leverage public and private sources of financing by converting public housing to project-based Section 8 contracts. Another component of RAD allows Rent Supplement, Rental Assistance Payment, and Mod Rehab properties to convert to project-based Section 8 assistance.  The report finds that nearly 40 percent of the financing for RAD projects, the largest source of financing at approximately $977 million, has come from the Housing Credit, including $503 million from 4 percent Credits and $474 million from 9 percent Credits. Approximately $686 million in RAD financing has come from various soft money sources, including HOME, the Federal Home Loan Banks' Affordable Housing Program, grants, deferred development fees, or other sources of gap financing. The report attributes another $564 million in investment to mortgage financing and other third-party debt. The remainder of the financing for RAD—approximately $250 million, or 10 percent of total financing—has come from PHAs' resources.

Senate Banking Committee Examines HUD Monitoring of PBRA Properties  

The Senate Banking Subcommittee on Housing, Transportation, and Community Development held a hearing recently, titled "Oversight of the HUD Inspection Process" to highlight concerns with HUD's monitoring of project-based rental assistance (PBRA) properties in the wake of federal and local investigation of three properties in Florida managed by Global Ministries Foundation. Subcommittee Ranking Member Bob Menendez (D-NJ) said he hoped that by discussing these specific properties during the hearing, Congress could more broadly shed light on this type of housing and improve HUD's role in responding to troubled assets.

Senator Wyden Releases Draft Legislation to Enact Middle-Income Housing Tax Credit Program 

The Senate Finance Committee Ranking Member Ron Wyden (D-OR) recently released a discussion draft of legislation that would create a new tax credit program to stimulate the development of rental housing for middle-income households earning up to 100 percent of area median income (AMI). The legislation would create a new section of the tax code for the new program, which would be modeled after the Low Income Housing Tax Credit (Housing Credit) and administered by state agencies.  The proposal envisions a state middle-income credit cap of $1 per capita with a small state minimum of $1.14 million, adjusted for inflation in future years. Any middle-income credit authority unused after the first year in which it is received by the state would be carried over into the Housing Credit program for use in developing low-income rental housing.

House Financial Services Committee Considers Efficiency and Upward Mobility in the Voucher Program 

The House Financial Services Subcommittee on Housing and Insurance recently held a hearing titled "The Future of Housing in America: A Better Way to Increase Efficiencies for Housing Vouchers and Create Upward Economic Mobility" to discuss changes to federal housing assistance that would improve upward mobility and good stewardship of federal funds.  Subcommittee Chairman Blaine Luetkemeyer (R-MO) said he hoped the hearing would follow in the spirt that allowed Congress to pass commonsense reforms in the Housing Opportunity Through Modernization Act, which became law in July.

Lenders Need to Help Borrowers with Limited English Skills, HUD Says

The Department of Housing and Urban Development is taking a harder look at how mortgage lenders treat borrowers with limited English language skills. The agency issued new guidance last week emphasizing that the Fair Housing Act also protects home buyers with limited English proficiency, or LEP.  The guidance specifically mentions mortgage brokers and lenders in relation to providing LEP borrowers with access to mortgage programs, according to Amy Glassman, a partner at the Ballard Spahr law firm in Washington D.C. It also clarifies HUD's position that discrimination against persons with limited English proficiency can be considered discrimination based on national origin.

September 22, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

Housing Quick Facts 

(RECAP: This fact sheet — part of Housing Virginia’s SOURCEBOOK — provides several affordability measures that indicate the degree of need for affordable housing in the state as a whole, as well as specific cities, counties and Metropolitan Statistical Areas.)

Using Loans: A 101 Guide To Borrowing For Nonprofit Organizations

(RECAP: Like businesses, nonprofit organizations sometimes need cash in the form of a loan to operate their programs effectively. Astute managers and boards understand that loans can be a tool that can help their nonprofit grow and succeed.)

How Cities Are Preserving Affordable Housing

(RECAP: Building more units will help, but preserving existing affordable housing is critical too: It’s generally cheaper than new construction, prevents displacement, takes advantage of existing land use patterns and allows people to remain where they already live. But preservation also presents challenges of its own, often necessitating the blending of multiple federal, state and local funding sources and greater collaboration between developers, policymakers and other stakeholders.)

Looking to Add More Trees? Mind the 'Sidewalk Gray Zone'

(RECAP: A case study provided by the MillionTreesNYC program offers insight into complicated territorial boundaries that can challenge urban greening projects.)

Tools for Fair Housing Planning under the AFFH Rule

(RECAP: Tools, guidance, training, data and mapping, and other resources related to the Affirmatively Furthering Fair Housing (AFFH) rule for use by local governments that receive CDBG, HOME, ESG or HOPWA formula funding from HUD.)

September 21, 2016

In Case You Missed It: A Look at Recent National Housing Policy News

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Household Incomes Grow at Fastest Rate, Ever

Housing Recovery no Longer Dependent on Rates
The household income grew at the fastest rate on record, said Council of Economic Advisers Chairman Jason Furman in a blog post on the White House website. The report, he said, "shows the remarkable progress that American families have made as the recovery continues to strengthen. Income grew for households across the income distribution, with the fastest growth among lower- and middle-income households." He also noted that the poverty rate fell faster than at any point since 1968, and the rate of those without health insurance also declined. The official poverty rate fell 13.5% with 43.1 million in poverty, 3.5 million less than in 2014, the bureau said.

U.S. Households Make Long-Awaited Gains in Housing Recovery

Fewer Households are Paying too Much for a Place to Live, According to New Census Data
Middle-class families are starting to see their biggest housing challenges ease. Housing affordability is finally improving after years during which the struggle to pay rent swelled to crisis levels for many poor and middle-class Americans, according to an analysis of American Community Survey data recently released. Jed Kolko, chief economist at job-site Indeed and senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley, said just over 49% of renters were cost-burdened in 2015, meaning they spent more than 30% of their incomes in rent, compared with about 50% a year earlier—the lowest level since 2008. Indeed, across the board, there are signs that affordability challenges are beginning to ease. Some 33.6% of households were cost-burdened in 2015, meaning they spent more than 30% of their incomes on housing costs, down from 34.6% a year earlier, the fifth straight year of declines.

Why Mortgage Delinquency Rates are Dropping

According to MGIC Investment Corporation, the rate of mortgage delinquencies has dropped in a number of areas recently. The company, which provides private mortgage insurance (PMI), reported that delinquencies have dropped by more than 20 percent. Meanwhile, the Mortgage Bankers Association (MBA) reports that the same is true of mortgages made to purchase commercial and multifamily dwellings. The Association's Commercial/Multifamily Delinquency Report gathered information from several of the biggest investor groups in the country, including mortgages, banks, life insurance providers, Freddie Mac, and Fannie Mae. These groups combined hold more than 80 percent of the mortgage debt that was borrowed for multifamily dwellings or commercial businesses. It is worth noting that these numbers do not include any loans made for construction or land development, even though those loans are often included under the definition of commercial real estate loans.

Affordability Concerns, Uncertainty about Down Payment Requirements Ensnaring Renters, Latest HOME Survey Shows

Lofty home-price growth and tight supply are leading to softening confidence among renters about whether it’s a good time to buy a home, according to the latest installment of the National Association of Realtors® Housing Opportunities and Market Experience (HOME) survey. The survey also found that a misconception about how much of a down payment is needed to buy could be unnecessarily delaying some qualified young adults from entering the market. In NAR’s third quarter HOME consumer survey, respondents were asked about their confidence in the U.S. economy and various questions about their housing expectations, including a series of questions related to down payments and the amount of money they believe they need to purchase a home. Heading into the autumn months, the share of homeowners and renters who believe now is a good time to buy remains at a solid majority but has crept downward since the beginning of this year. Seventy-eight percent of homeowners (80 percent in June; 82 percent in March) and 60 percent of renters (62 percent in the previous two quarters) said it’s a good time to buy. In the inaugural HOME survey in December 2015, 68 percent of renters said it was a good time to buy.

Paycheck to Paycheck
A Snapshot of Housing Affordability for School Workers

From the teachers who are tasked with educating a community’s children to the bus drivers who are responsible for safely transporting children to and from school, school employees are essential elements of every community across the country. Finding affordable housing near their workplaces remains a struggle for many of these school workers, who earn modest incomes despite the fact that the economy has been in recovery for several years. This edition of Paycheck to Paycheck focuses on the affordability challenges faced by both teachers and non-instructional school workers by highlighting five of the 81 occupations in the Paycheck to Paycheck database: bus driver, child care teacher, groundskeeper, social worker and high school teacher. As for any other sector of the economy, the ability of school workers to live near their places of employment is an important aspect of developing strong, inclusive communities. Communities that have high housing costs (and lack programs to offset those costs) can struggle to retain the staff that works to create a safe and supportive environment.

September 16, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

Apartments Offer Inclusive Option For Adults On The Spectrum

(RECAP: Adults with autism soon will be able to move into new apartments where they can live independently, and where half of their neighbors will be people who do not have autism. “Inclusiveness is what makes this different,” said Elliot Frank, president and founder of Autism Housing Development Corp. of Pittsburgh. In the entire country, Frank said, he has found only one other apartment project like this one — in Richmond, Va.)

How much is walkability worth in your neighborhood?

(RECAP: It’s no surprise that homes in more walkable areas tend to be more expensive, but a new study from Redfin now puts numbers to the value of pedestrian-friendly urban real estate: An increase of one Walk Score point bumps a home’s price by an average of $3,250 or 0.9 percent.)

5 Ways to Optimize a Market Study

(RECAP: Industry leaders offer advice for obtaining a strong market study for your next affordable housing deal. Their tips include: seek a “hurt me” analysis, have a scope of work in mind, define the market area, understand the supply analysis and be prepared for changes.)

Housing Groups Should Expand to Repair Work to Help Seniors Age in Place

(RECAP: Habitat for Humanity International is partnering with AARP Foundation to build a holistic program to help seniors in a number of communities with critical repairs and home modifications, as well as other services. “When older adults are able to [remain at home], the advantages multiply. Quality of life improves . . . both individuals and governments realize cost savings when institutional care is avoided,” said Lisa Marsh Ryerson, president of the AARP Foundation.)

September 13, 2016

In Case You Missed It: A Look at Recent National Housing Policy News

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Why So Few Economists Are Prepared to Say Recession Risks Are Fading

Historically, recessions have disproportionately struck near elections
Business investment has been slumping this year, and a leading suspect is the election. By many key measures, the economy has looked fine in recent months. After gradually sliding for most of 2015, industrial production has bounced up. Consumer spending has done well. The economy added 151,000 jobs last month. Initial jobless claims are near a four-decade low.
Yet most economists, when asked to assess the odds of a recession in the next year, have continued to place the odds at about one in five. Not a prediction of imminent doom, but double the odds of a year ago.

Why the Homeownership Rate Will Never Return to Pre-Crisis Peak

Over the past four decades, the U.S. has seen a dramatic increase in the proportion of homeowners to the U.S. population, peaking just short of 70% in the first quarter of 2005, according to the U.S. Census Bureau. Since then, homeownership has declined to the low 60s. The rate of homeownership is likely to continue to decline further into the mid-to-low 50s as changes in demographic trends, increased regulation and stagnant real incomes all work to make the dream of homeownership more difficult to achieve. The housing boom of the 2000s was a bubble supported not just by easy credit, but also by a wave of Americans entering peak childbearing and household-spending years. As these relatively affluent households age and migrate away from single-family homeownership, there is an insufficient supply of new homeowners to replace them. While the recovery of U.S home prices from their nadir in 2012 was largely driven by a lack of supply, the longer term challenge facing the industry will be a dearth of demand — namely, homebuyers and mortgage credit.

Surprising Gender Gaps In Homebuying, Mortgages 

Single Women May Wind Up Paying More, Despite Dependability
Gender, marital status and mortgages don’t get a lot of research attention in real estate, but two new reports examine the exceptional role of single women in the home purchase marketplace and the challenges they face in getting a loan. A couple of highlights:

  • Single women are statistically better at paying their mortgages than men – they default less – yet they are charged more for their loans and are denied credit more often. Though they have lower incomes on average than single men, they tend to make larger down payments, according to researchers at the Housing Finance Policy Center of the Urban Institute.
  • Single women are now the second largest group of buyers in the marketplace, accounting for anywhere from 15 percent to more than 20 percent of all home purchases in recent years. Single men, by contrast, have accounted for about 9 percent of purchases since 2012. Married buyers once represented more than four-fifths of the market, but that has declined over the past several decades. In 1985 married couples made 81 percent of all purchases; last year it was 67 percent. You might assume that unmarried couples have taken up the slack, but that’s not the case. Last year, according to a new research note titled “All the Single Ladies” by Jessica Lautz, managing director of survey research at the National Association of Realtors, unmarried partners accounted for just 7 percent of total sales.

MBA's Stevens Weighs Pros, Cons of Clinton, Trump Administrations

Regardless of who wins in November, the mortgage industry will see significant changes, but Hillary Clinton and Donald Trump would take different approaches to housing and regulatory issues, according to Mortgage Bankers Association President and CEO David Stevens. Stevens declined to indicate a preference for either candidate during an exclusive interview with National Mortgage News, reiterating that the organization is non-partisan and does not endorse political candidates. But he did outline the different ways in which the major party candidates would influence the industry. "There are advantages and disadvantages to either party and either candidate based on how they're talking about housing so far," Stevens said. "There's potential strengths in the platforms on both sides."

HELOCs Are Making a Rebound: Experian

Home equity line of credit originations are in the midst of a comeback, fueled by the rise in home prices, according to a white paper released by Experian. As of the fourth quarter of 2015, HELOC originations were at $43.03 billion, 111% higher than five years earlier, Experian reported in the paper released Thursday. Meanwhile, only 0.49% of consumers with an open HELOC were between 90 and 180 days past due, in line with pre-recession levels. Experian also estimated that roughly $29 billion in HELOC debt originated between 2005 and 2008 has been paid down over the past year, a reflection of the fact that many of these lines of credit are entering repayment. But those who were delinquent on their HELOCs were more likely to be delinquent on other loans, such as auto loans or bank cards, Experian found in its research.

September 9, 2016

Save the Date: Attend DHCD's CDBG Input and How-to-Apply Workshops

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An invitation from our partners at the Virginia Department of Housing and Community Development (DHCD).

You are invited to attend the Community Development Block Grant (CDBG) Input Workshop to provide comments for the 2017 CDBG Program Design. DHCD will provide a basic overview of CDBG resources and develop an agenda to attain feedback regarding the best uses for the 2017 CDBG program year funding. 

Monday, September 26
9:30 a.m.-noon
Main Street Centre
12th Floor South Conference Room
600 East Main Street
Richmond, VA 23219

Wednesday, September 28
9:30 a.m.-noon
Southwest Virginia Higher Education Center
Executive Auditorium
One Partnership Circle
Abingdon, VA 24210 

Save the Date:
How-to-Apply Workshops

DHCD will conduct two how-to-apply workshops for  the CDBG program on Monday, December 12  in Abingdon and Wednesday, December 13 in Richmond. More information will be coming soon, including a registration link.

Contact Information


600 East Main Street
Suite 300
Richmond, VA 23219  
(804) 371-7067

September 8, 2016

Beyond Bricks and Sticks

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A weekly digest of current trends in housing and community development. The discussion examines topics from infrastructure to community fabric.

Rural Housing Initiative

(RECAP: Housing Virginia has almost completed its series of meetings with rural housing and service providers around the state to conduct a deeper analysis of each area’s needs and the trends they’re seeing. Here’s where you can find the regional data and summaries from meetings conducted in Abingdon, Blackstone and Martinsville.)

APA Virginia Chapter Recognizes Teaching Excellence

(RECAP: This year, APA's Virginia Chapter added a new award category to its roster of chapter awards presented annually during its conference. The APA Virginia Chapter Teaching Award was created to recognize faculty members from the three Planning Accreditation Board (PAB) universities located within the commonwealth. The award also focuses on how superb teaching can serve as the bridge between students and the planning profession.)

Vibrant murals transform this Virginia city into a giant art gallery

(RECAP: Crystal City is known for being very safe and clean, but because so many of its buildings are constructed with so much concrete, the area can also come across as a little stale. In a roughly 10-year effort to visually revitalize the area, this concrete canyon has been transformed through the visual arts to become a vibrant and colorful area.)

America’s newest communities are designed to look like old-fashioned, small towns

(RECAP: With quaint shops, wraparound porches and pedestrian-friendly streets, these new communities appeal to homebuyers’ desires for a strong sense of place.)

States Urged To Strengthen Community-Based Options

(RECAP: Federal Medicaid officials are pushing states to do more to ensure that people with disabilities have access to the care they need in order to remain in the community. In a new bulletin, the Centers for Medicare & Medicaid Services is outlining a number of steps states and disability service providers can take to ensure a strong home care workforce is in place.)

New Capital for Housing Preservation

(RECAP: A report from the Urban Land Institute Terwilliger Center for Housing sheds light on an encouraging development in affordable and workforce housing: the growth of innovative financing approaches bringing new sources and structures of capital to preserve the affordability of existing subsidized and “naturally occurring” affordable properties. ULI’s report analyzes three principal types of financing approaches: below market debt funds, private equity vehicles and real estate investment trusts.) 

September 7, 2016

In Case You Missed It: A Look at Recent National Housing Policy News

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MBA president: The next President needs a housing policy director

While the past eight years have been dominated by the housing crisis, it’s time to turn a new page and create policy that will reflect the evolved housing market, according to a blog for The Hill by David Stevens, Mortgage Bankers Association president and CEO. During the past eight years, policy makers have focused on policies that help families in distress, however now we are well beyond the crisis, the blog states. Part of turning this new page should be creating a position for a point person responsible for coordinating and executing on the new policy. In short, the administration needs a change in approach towards housing, and that will fall to the next president to lead, according to the blog.

How Would a Fed Rate Hike Affect the Mortgage Industry?

The August jobs report from the Bureau of Labor Statistics fell short of expectations, leaving many to pull back on their predictions that the Federal Reserve will raise short-term interest rates in September. Many analysts and industry participants are saying December is more likely for a Fed rate hike if the economy shows sufficient improvement. December would make it exactly one year since the Fed’s historic liftoff from near zero interest rates, where the rates had been for the past nine years. Meanwhile, mortgage rates have hovered above their historic lows for the past few months and have been below four percent for the whole year (Freddie Mac reported the average 30-year FRM at 3.46 percent for the week ending September 1, only 15 basis points above the all-time low). What effect will a Fed rate hike have on the mortgage market? Refinances are popular and are likely going to stay that way from the time up until the Fed raises rates and even for a time afterward. The refi market is going to remain hot up until the time they raise rates. At the time they do increase rates, it's going to remain relatively hot from a refinance perspective based on how low rates are currently. Estimates vary as to how many borrowers are eligible to refinance, generally from seven to eight million. A rate hike by the Fed might prompt some of those borrowers eligible to refinance to take advantage of it.

GSEs to Offer New Refinancing for High LTV Borrowers

The Federal Housing Finance Agency said Fannie Mae and Freddie Mac will implement a new refinance offering aimed at borrowers with high loan-to-value ratios. FHFA also announced that the Home Affordable Refinance Program, which was set to expire this Dec. 31, will be extended through September 2017. The new refinance offering is more targeted than HARP, but as with HARP, eligible borrowers are not subject to a minimum credit score, there is no maximum debt-to-income ratio or maximum LTV and an appraisal in many cases would not be required. Unlike HARP, there are no eligibility cut-off dates connected with the new offering and borrowers will be able to use it more than once to refinance their mortgage. Borrowers with existing HARP loans are not eligible for the new offering unless they have refinanced out of HARP using one of the GSEs' traditional refinance products.

Mortgage Debt Continues to Grow

Reports indicate that the outstanding amount of housing-related debt (of both home mortgages and equity lines of credit) totaled $8.8 trillion in the second quarter of 2016, according to the Household Debt and Credit Report released by the Federal Reserve Bank of New York. That number is 2.6%, or $225 billion, greater than the level from one year ago. However, the outstanding amount of home equity lines of credit declined by 4.2% ($225 billion) greater than the level one from last year marking the 26th consecutive quarter of annual declines.

MBA: 2Q Commercial/Multifamily Delinquencies Remain Low

Delinquency rates for commercial and multifamily mortgage loans remained low in the second quarter, the Mortgage Bankers Association reported in its Commercial/Multifamily Delinquency Report. MBA said based on unpaid principal balance of loans, delinquency rates for each group at the end of the second quarter were as follows:

  • Banks and thrifts (90 or more days delinquent or in non-accrual): 0.66 percent, a decrease of 0.07 from the first quarter;
  • Life company portfolios (60 or more days delinquent): 0.11 percent, an increase of 0.05 from the first quarter;
  • Fannie Mae (60 or more days delinquent): 0.07 percent, an increase of 0.01 percentage points from the first quarter.
  • Freddie Mac (60 or more days delinquent): 0.02 percent, a decrease of 0.02 percentage points from first quarter;
  • Commercial mortgage-backed securities (30 or more days delinquent or in REO): 4.04 percent, an increase of 0.17 percentage points from the first quarter.