Housing Comes First

Don't Look To H.U. D. For Leadership On Housing Issues

2005-10-17T11:11:00.000-07:00

On the occasion of the 40th anniversary of the creation of the Department of Housing and Urban Development, an article by Bruce Katz of the Brookings Institution points out the obvious for everyone working on housing issues--innovative programs and policies are not coming out of H.U.D. Mr. Katz was the Chief of Staff for HUD Secretary Henry Cisneros in the early 1990's.

It's not as if housing isn't a serious issue. According to the nonprofit Center for Housing Policy, more than 14 million households in the country—one out of every eight—now pay more than 50 percent of their income for rent or mortgage payments and/or live in physically dilapidated housing.

Leadership on housing issues is largely being done by other agencies in D.C. and on local and state levels by both governmental agencies and community activists. Katz points out that six times the number of families get the Earned Income Tax Credit from the Treasury Department than there are families getting a HUD housing voucher. He also describes the Low Income Housing Tax Credit (also a Treasury program) as "the principal driver of subsidized rental housing production."

As for more local programs: "states, cities and counties, for example, are experimenting with a range of housing innovations including Housing Trust Funds, progressive zoning efforts and regulatory reforms that promote infill and density. Business and university leaders in places like Philadelphia, Long Island and Chicago are implementing new employer-assisted housing efforts to woo new employees and reward existing ones."

Katz longs for an administration and a Congress that cared enough about housing to provide leadership on the issue. All the programs he mentions are important, but no one is doing the kind of systematic planning that would pull all these efforts together and put a real dent in the problems with America's housing.

Victory Starts In The Streets

2005-10-12T06:11:00.000-07:00

Predatory Lenders saturate neighborhoods with advertisements on television, radio and direct mail. To fight back, we have to go door-to-door in neighborhoods threatened by these loan sharks.

Here's two great examples in the news recently of groups beating the streets:

Housing Opportunities Made Equal of Richmond, Virginia declared September 30th, "Sign Swiping Day" in the city. They organized folks to go throughout neighborhoods taking down advertisements for predatory lenders off of phone poles and other public places.

College students in Dayton, Ohio helped the Miami Valley Fair Housing Center distribute over 1,000 information packets door-to-door in neighborhoods with high rates of mortgage foreclosure. The information would direct them to call a foreclosure hotline set up by the housing center.

Of course, the follow up that community organizers need to do is get these homeowners educated and angry enough to fight for change, not just passively accept social services--but it's a start.

Mortgage Brokers, Predatory Parasites.

2005-10-11T09:54:00.000-07:00

The New York Times article "With Mortgages, Instant Wealth for Middlemen" begins to cast a light on the little pissants that start the predatory lending cycle of pain--mortgage brokers.

The problem is that the article is schizophrenic, at times lionizing these capitalist assholes as "scrappy entrepreneurs", then pointing out the predatory lending that is the heart of their business.

The money quote:

"Like real estate agents, mortgage brokers are paid a percentage of the total transaction, about 1.5 percent on standard 30-year loans and up to 3 percent or more on less creditworthy loans that require more labor, according to Mr. Olson, the consultant. More often than not, the fee comes from the lender instead of the borrower. It is an arrangement with a built-in conflict of interest. . . a broker who steers a borrower to a more expensive loan can snag a bigger fee for himself."

The focus of the article, the owner of one of these loan shark firms in Illinois has an hour-long radio show every week. One epidode covered by the article relates his advice to a credit-card burdened homeowner: refinance out of a 30-year fixed mortgage and into an adjustable rate mortgage paying interest only for now.

THESE GUYS ARE THE ENEMY!

A Different Kind Of Mayoral Forum

2005-10-07T13:29:00.000-07:00

Yesterday, ARISE and the Self-Advocacy Network sponsored another event in the seemingly endless round of Mayoral Forums designed to bore and frustrate even the most civic-minded Syracusan.

This forum was different. (Full disclosure--my wife organized this forum for ARISE. Go Beata!)

The isues discussed are not the typical ones at a mayoral forum, not much talk of Destiny or other economic development projects. It centered on the issues important to folks with disabilities--housing and accessibility in particular.

One good organizing touch at the end--all three candidates were given hard hats emblazoned with "I Will Work For Access" and urged to work for all of those folks who lack housing of their own--either wasting away in a nursing home or forced to live in inaccessible buildings as virtual shut-ins.

I Will Work For Access
Originally uploaded by Phil At Sun.

Miserable by Design

2005-10-04T06:34:00.000-07:00

The Bush administration is conservative.

Families displaced by Katrina need housing assistance.

Conservatives prefer housing vouchers for private market housing to government-run public housing.

The Bush Administration refuses to use vouchers and will create Katrina mobile home ghettoes to house displaced families.

Why the logical disconnect? According to columnist Paul Krugman of the New York Times, Bush doesn't want to use vouchers because he's afraid they may be successful, hampering his efforts to downsize and eliminate voucher assistance.

The money quote:
"Mr. Bush can't avoid helping Katrina's victims, but he doesn't want to legitimize institutions that help the needy, like the housing voucher program. As a result, his administration refuses to use those institutions, even when they are the best way to provide victims with aid. More generally, the administration is trying to treat Katrina's victims as harshly as the political realities allow, so as not to create a precedent for other aid efforts. As the misery of the hurricane's survivors goes on, remember this: to a large extent, they are miserable by design."

Organizing Update--New York City

2005-09-27T07:34:00.000-07:00

Housing Here and Now! is a coalition of affordable housing groups, labor unions, AIDS activists, churches and community groups in New York City. They decided to get togther and force housing onto the 2005 NYC Mayoral Election agenda.

The group uses organizing tactics as well as political pressure. Their Fix It Now! campaign focuses on the city's worst slumlords. This article details how tenants used a slumlord's mortgage company as leverage to get repairs made on a crappy building.

The group also has a web site New York City's Worst Landlords so that tenants can report problems from all over the city.

Blacks Get More High Cost Loans--No Racism?

2005-09-26T11:09:00.000-07:00

According to a report released by the Federal Reserve, minority families often pay more for their home mortgages than white families.

As stated in an article in the Washington Post: "Blacks and Hispanics are getting a disproportionate share of high-cost mortgages compared with whites, according to new federal figures released yesterday. The analysis of 2004 home-lending data shows that even after adjusting for factors such as income level, loan size and property location that could raise the interest rate offered on a mortgage, blacks are still nearly twice as likely as whites to be given a high-cost loan."

New regulations under the Home Mortgage Disclosure Act require banks to report on the cost of loans, as well as the race, income and outcome of the loan request. For years, community groups have suspected that minority families were steered into sub-prime loans, complete with higher interest rates, more fees and other costs.

The increase of sub-prime and predatory loans has devastated our communities, leading to a rash of foreclosures and vacant houses. How can these figures not point to racial steering? The data controls for income, location and loan amount. The only variable is race. Banks claim the variable is credit. This begs the question, blacks are twice as likely as whites (in all income groups) to have damaged credit?

The banks point to the fact that increased sub-prime lending expands mortgage availability to families with less than perfect credit. Activists point to studies like one completed in March for the State of Pennsylvania Banking Department that links the increase in foreclosures to the increase in predatory loans.

HUD To Merge Officer and Teacher Next Door

2005-09-22T13:14:00.000-07:00

from the September 8th edition of the Housing Assistance Council's HAC News:

Separate HUD notices make firefighters and emergency medical technicians eligible for the Officer Next Door sale program and propose regulations for combining OND and Teacher Next Door to create Good Neighbor Next Door. Comments are due Nov. 7. See Federal Register, 9/8/05, pp. 53487-88 and 53479-86, or http://www.hudclips.org.
Contact Joseph McCloskey, HUD, 202-708-1672.

Low-income communities like Syracuse have not been able to take advantage of this program, that gives teachers and cops a 50% discount on HUD Houses. Housing prices in our neighborhoods are very low, well-paid and unionized workers such as these can easily afford homes without such discounts. Their relatively high paying positions coupled with state laws exempting them from residency requirements, have created a mass exodus out to the suburbs.

The reform we need is to add teacher aides to the program. Teacher aides are definitely in need of financial assistance for home purchases, and more likely to want to live in our city neighborhoods.

Appraisal Abuse

2005-09-22T13:01:00.000-07:00

According to a June 13, 2005 article in the Buffalo News, appraisers are feeling pressure to inflate home value estimates. This trend is going to disproportionately effect families in rust-belt cities like Syracuse and Buffalo:

"...observers are now worried about what may happen in places with lower prices and slower growth, such as Buffalo, or when the perceived housing bubble bursts and prices drop. They say people would find themselves with less equity than they thought, unable to repay a loan, and unable to afford a down payment on a new home. "If people began selling their homes and found they didn't have at least the value they had originally borrowed, there would be severe problems," said John Taylor, president and CEO of the National Community Reinvestment Coalition, a fair lending group."

Also--these out-of-whack appraisals are the key to property flipping--buying a house low and selling for an artificially high price to the unsuspecting and the credit-damaged.

"In places like Buffalo, where prices are unusually low, such appraisals also are used to "flip" properties in low-income areas. That's where participants buy homes cheaply and then quickly sell them for significantly inflated values, defrauding the eventual buyer and possibly leading to foreclosures that hurt communities by leaving homes vacant."

HOUSING COMES FIRST!

2005-09-22T10:15:00.000-07:00

One thing that Republicans and Democrats agree on is the goal to increase the number of families that own their home. Both the Bush and Clinton Administrations have trumpeted their ability to increase the rate of homeownership to over 65% nationally. Special attention has been paid to minority homeowners--whose homeownership rates languish at under 50%.

How then do you explain cases like these? Too many families are being raked over the coals by unscrupulous realtors, mortgage companies and appraisers. As we are increasing the rate of homeownership, we are also seeing a startling increase in foreclosures. Some critics, both left and right, are now pulling back from the warm and fuzzy notion of owning your home. It is being suggested that the newest homeowners aren't really ready, that we've moved too quickly.

BULLSHIT! We are letting professional larcenists fleece these families--often on the government's tab. Appraisers are largely unregulated. Fly-by-night mortgage companies and large "mainstream" financial institutions alike strangle new homeowner's dreams with predatory loans--high interest rates, hidden fees and other fraudulent terms. Supposedly "non-profit" agencies set up to rescue families from foreclosures end up stealing homes out from under unsuspecting clients.

Grassroots organizations know how to help families buy a home safely: home inspections, financial counseling, using the Community Reinvestment Act to bring prime rate loans to low-income neighborhoods. We want more homeowners and less fraud. Stop The Backlash!