The Struggle for Women’s Rights and Manna

female homeowner and sonDuring my vacation less than two weeks ago, my family and I went to upstate New York to visit the Finger Lakes and enjoy nature’s beauty as well as some fine wine. However, I purposefully made part of the visit historical. Seneca Falls, New York is the site of Harriet Tubman’s home in her later years and also the site of the Women’s Rights Convention that occurred during July 18-20, 1848.

Seneca Falls is an interesting intersection between the struggle to abolish slavery and the fight for women’s rights. Elizabeth Cady Stanton, Lucretia Coffin Mott, and Martha Coffin Wright organized the Women’s Rights Convention which culminated in the issuance of the Declaration of Sentiments, modeled after the Declaration of Independence and listing the ways in which men had subjugated women. The Declaration of Sentiments was signed by 68 women and 32 men including the abolitionist Frederick Douglass. The question for this blog is how are we continuing the struggle for freedom, particularly women empowerment?

The Declaration of Sentiments is a document that describes the political and economic servitude of women. It states that because women cannot vote that, “He (men) has compelled her to submit to laws, in the formation of which she had no voice.” The declaration continues, “He has made her, if married, in the eye of the law, civilly dead. He has taken from her all right in property, even to the wages she earns.” This is rather complete subjugation.

Despite the eloquence and persistence of the suffragettes over the ensuing decades, it took 72 years before the 19th Amendment establishing women’s right to vote was passed in 1920. In fact, the 95th anniversary of the passage of the 19th amendment occurred just last week. It took even longer to combat economic servitude. One effort in this struggle was Congressional passage of the Equal Credit Opportunity Act (ECOA) in 1974 prohibiting gender and race discrimination in lending. Until passage of ECOA, it was common that lenders required male co-applicants before women received loans. Advocacy is difficult and struggles must occur over long periods of time, even decades. But victory, as the 19th amendment and ECOA demonstrate, does occur.

Yet, we are far from finished. The gender gap in pay remains stubborn and persistent.  According to the Institute for Women’s Policy Research, African-American women make 68 cents on average for every dollar earned by white men. Also, women also have access to fewer sources of wealth or other assets. According to Mariko Chang, previously an Associate Professor at Harvard University, a single woman has only 32 cents for every dollar of wealth owned by a single man.

Manna combats gender economic inequalities through its housing program. Manna did not set out to be a women’s rights organization but over the years, about 80 percent of our clients have been women, mostly African-American women. Many of them are single parents.

We have also had heartwarming stories of women’s empowerment collected by my colleague Annelise Osterberg. Consider the case for one Manna homeowner who purchased in the Le Droit Park neighborhood in 1997. After finalizing her divorce, this homeowner decided she wanted to purchase a home so that she could have something to pass on to her grandchild.  However, she soon realized she didn’t have the necessary savings for a down payment.

She recounted, “Back then the bank account was opened in my husband’s name. The credit cards were in my husband’s name. I was a stay at home mom, so I started working late in life and didn’t have a lot saved up.” Because this homeowner had been economically dependent on her husband during their marriage, she became financially vulnerable after the divorce.  However, with Manna’s assistance she was able to purchase her own home. The financial stability that this purchase afforded her gave her the ability to both start her own small business and begin saving for retirement.  Now after strategically managing her finances, she is fully prepared to retire in the next few years as well as pass her home on to her grandchild—a position she would not have been in without help from Manna.

We have much more ground to cover before achieving gender parity. Manna will continue pursing homeownership and neighborhood revitalization as part of the struggle for women’s rights and dignity.

 

 

Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.

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What are the Presidential Candidates Proposing to do about Affordable Housing & Community Development?

Presidential Campaign 2016

It is the summer of 2015 and I am already tired of the campaign season. Why do the campaigns start almost two years before the election? And there is so much money involved that citizens can easily become cynical. However, instead of tuning out, it might be the time to ask the candidates some hard questions about housing and community development. The only way the people take back their democracy is by participating and holding candidates accountable!

If you witness a debate among the candidates or attend a speech, ask the candidates questions about affordable housing and community development. See if their webpages have emails to which you can send questions. Read position papers of the candidates. Do they say anything about housing and community development and is it thoughtful?

Housing and community development is often overlooked and neglected. This is the case, I think, because these programs are perceived to be for poor/undeserving people. Most candidates think that housing and community development are not politically popular. They need to be educated. While most beneficiaries of housing and community development are low- and moderate-income, the entire country benefits if thoughtful and effective housing and community development programs can improve the economic well-being of low- and moderate-income people. If low- and moderate-income people live in revitalizing neighborhoods, they are more likely to be employed at livable wages. They are more likely to have access to good education. In the aggregate, if effective housing and community development programs improve the wellbeing of hundreds of thousands of people, then consumer demand increases, economic output increases, and unemployment decreases.

The following are some housing and community development positions. Observe how close the candidates come to these positions:

Restore Department of Housing and Urban Development (HUD) budgets: As reported in a previous blog, as housing needs have increased, HUD budgets have been slashed. The budget for Section 8 vouchers to help very low income households pay the rent has not kept pace with rising rents while housing cost burdens for renters have increased. The HOME budget that provides subsidies for housing and homeownership programs has been cut by more than 60 percent between 2005 and 2012. The District of Columbia Department of Housing and Community Development has used HOME funding for, HPAP, its low downpayment program. Which candidates are clearest about the needs to increase HUD’s budget?

Strengthen the Community Reinvestment Act (CRA): As described in previous posts, CRA requires banks to meet the needs of communities. Federal agencies produce reports cards for banks that are publicly available and which rate banks on their lending, investment, and services in low- and moderate-income communities. CRA needs to be strengthened as applied to banks and needs to be expanded to cover other financial institutions including mortgage companies, insurance companies, and Wall Street investment banks. Do the candidates discuss CRA in their speeches and websites?

Foreclosure prevention and mediation: Frankly, one of the biggest policy failures of the Obama administration has been its foreclosure prevention program. While I agree with a number of the policy approaches of this administration, foreclosure prevention was not a large enough endeavor. The major program was the Home Affordable Modification Program (HAMP) which offered banks financial incentives and subsidies to rework loans and reduce interest rates for homeowners facing foreclosure. Recent reports by an independent inspector general found that only 1.5 million people were assisted by HAMP but that 6.1 million experienced foreclosures during the time period. In addition, HAMP has $21 billion in unspent funds.

Some may say that the distressed homeowners brought this upon themselves by spending too much on housing and stretching their budgets too thin. However, when a problem reaches this magnitude, a more likely explanation is a rotten industry that was pedaling abusive loans on a large scale. Since homeowners were more sinned against than sinning and since the foreclosure crisis continues to impede the overall economic recovery, a fair question for candidates is will they continue this effort and make it more effective.

Promote neighborhood integration and revitalization:  Recently, a columnist suggested that efforts to revitalize economically distressed neighborhoods should be abandoned in favor of using housing subsidies to move minority and lower income households to more affluent neighborhoods. This is a false choice. Over its 30 year history, Manna has pursued both neighborhood revitalization and integration. Do the candidates recognize the complexity of housing and neighborhood development and will they pursue policies and approaches that promote neighborhood integration and revitalization.

Secondary education that benefits all citizens: Various candidates have announced ambitious plans to provide subsidies and aid so that students do not confront high debt after they finish college. President Obama has proposed free community college for students that maintain acceptable performance. The President’s approach is a step forward. Post-secondary education policies and subsidies must include community colleges and vocational training as well as colleges. Otherwise, a large segment of the population served by Manna will not benefit and will still confront high housing costs because more opportunities to earn higher wages via education and training will not be available to them.

Granted, it is hard work to hold the candidates accountable and you may base your voting decisions on many factors in addition to housing and community development. I took a quick glance at some of the candidate websites and they do not seem geared at this point to stimulate dialogue between the citizens and the candidates in the manner of Congressional websites (you can at least send an email to a member of Congress asking them to respond to your opinion). Yet, keep these issues in mind as you evaluate candidates and take advantage of opportunities to ask them hard questions. It is the only way in the long run to hold them accountable for promoting a more prosperous future for everyone.

 

Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.

 

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The False Dichotomy – Housing Choice and Revitalization

Choice road sign

A lot has been written the past couple weeks about where lower-income families should live and where affordable housing should be produced. In the New York Times last week, Thomas Edsall decried affordable housing development in high-poverty neighborhoods and stated that all subsidies should go toward moving poor households into higher cost areas that offer better school and job options; this is only answer to helping families move up and out of poverty. He also went a step further to lay blame for concentrated poverty on the many organizations that help finance and build affordable housing across the country, dubbing them the poverty housing industry.

Since his article, there has been a firestorm of responses:

Enterprise writes that “uprooting low-income families and moving them to affluent neighborhoods” is not a panacea to socioeconomic mobility and all the other issues faced by families in poverty. If we abandon communities that have experienced divestment for years, we take away those residents’ choices and condemn those communities to a dismal future.

Similarly, The Atlantic explores how efforts to combat segregation, when that is the only focus, may end up in divestment from communities that need it most. The article highlights a woman named Kellee Coleman, a 34 year old African American single mother from East Austin. Coleman knows the studies on how families like hers would flourish if they moved to “the wealthy suburbs”, but she doesn’t want to move to an area far from public transportation and neighbors that know and support her. She’s also concerned about her children going to school in a predominantly white suburb with few African Americans in leadership to look up to.

The Urban Institute emphasizes that all families, including those who are lower-income, should have the choice to live where they choose. As Edsall points out, these families face constrained choices due to lack of affordable housing in high-cost neighborhoods and discrimination, among other things. However, like Kellee Coleman says, there are many factors that lower-income families weigh when thinking about home. For Edsall to blame the constrained choices of lower-income families on the affordable housing industry is to ignore the effects of redlining and disinvestment targeted towards people and communities of color in this country, disinvestment that many community-led organizations were founded to combat. He is also ignoring where revitalization has occurred and how community-led affordable housing and community development groups have played a part and worked with their lower-income neighbors to stay and benefit.

Ultimately, this is about a both-and public policy approach and sustained investment from private and public partners…policy that promotes expanded choices for lower-income families and that also focuses on revitalizing neighborhoods. In thinking about Manna’s history, this both-and approach has been absolutely key. If Manna and others had only focused on high-income areas of DC (which were almost impossible to build in), then there would not be affordable housing in areas like Shaw and Adams Morgan today – there would be even less diversity in those neighborhoods today. For Manna’s first homeownership development, we had to go to 33 banks before finding one who would provide a construction loan – sacrifices were made and it was done with the community. And affordable housing is not just one type of housing – it’s an entire continuum that people can move along over time, from supportive housing up through homeownership. Finally, it’s not just about affordable housing but combining that with community and economic development, being strategic about partnerships and investments and an advocacy approach centered on the needs of people and neighborhood.

 

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The Subpar State of the Nation’s Housing

State of Housing

Each year, the Joint Center for Housing Studies at Harvard University produces a comprehensive overview of the state of the nation’s housing, including affordability and availability of homeowner and rental units. This year’s report is a sober read, particularly for minority and lower income households.

The homeownership rate of 64.5 percent is the lowest homeownership rate since 1993. Rates for minorities remain 25 percentage points lower than rates for whites. The Great Recession and financial crisis wiped out gains in homeownership due to high levels of foreclosures.

During the economic recovery, two factors impeding increases in the homeownership rate are stagnant incomes and restrictions in credit availability. In 2013, the median household income was $51,900, which was 8 percent below the 2007 level and equivalent to the 1995 level. At the same time, credit availability remains restricted. According to the Urban Institute, home purchase loans for borrowers with credit scores of 660 to 720 dropped 37 percent from 2001 through 2013 compared with a 9 percent decrease for borrowers with higher scores. While not pristine, credit scores in the range of 660 to 720 are usually associated with prime loans at market interest rates. In addition, the growth rate of home purchase loans in predominantly minority neighborhoods was half that in white neighborhoods from 2012 to 2013.

The decrease in homeownership has been accompanied by a boom in renters. The decade from 2004 through 2014 marks the fastest in the growth of renters since the 1980s. The national vacancy rate has dropped to 7.6 percent, the lowest level in 20 years. As a result of the surge in demand for rental housing, rents have increased and so have cost burdens (spending more than 30 percent of income on renting). Almost half of all renters in the nation have cost burdens! An incredible 80 percent of households with incomes at or below the federal minimum wage face housing cost burdens! Twenty six percent of African-American and 23 percent of Hispanic households have cost burdens compared with just 14 percent of white households.

Low income and minority communities remain hard hit. The Joint Center for Housing documents that in the communities where housing prices are 35 percent lower than before the Great Recession, minorities are the majority of households and the median poverty rate is 19 percent. In addition, negative equity (the outstanding mortgage amount exceeds equity gains) plagues minority and lower income neighborhoods. In the 10 percent of zip codes with the highest rates of negative equity, minorities made up 51 percent of the population and the income levels were low- and moderate-income.

What can be done to alleviate cost burdens and racial inequalities in homeownership and equity gains? The Joint Center for Housing does not provide a comprehensive menu of policy recommendations but does offer some hints. For very low-income and low-income renters, federal housing vouchers need to increase in availability. But despite higher federal budgets for vouchers between FY 2005 and FY 2015, the increased funding was offset by higher rents, meaning that the program did not serve more renters. In response, the District of Columbia has added more vouchers to its own local voucher program, though the same challenges exist in regards to higher rents.

At the same time, funding for the Federal HOME program that funds housing construction and rehabilitation of affordable housing (homeownership and rental) has been cut by an incredible 62 percent during FY 2005 and FY 2015. HOME funding is channeled to local agencies like the District’s Department of Housing and Community Development (DHCD) and is used to support housing developments by Manna and other nonprofits.

On the lending front, Freddie Mac and Fannie Mae (which buy loans from lenders and thus help lenders make more loans) created downpayment programs allowing for 3 percent downpayments. Likewise, the Federal Housing Administration (FHA) reduced upfront mortgage insurance on loans it insures, which should also increase the availability of low downpayment loans that clients of Manna use. Yet, it is still too early to determine the impact of these reforms.

As discussed in previous columns, community groups should use the Community Reinvestment Act (CRA) to work with and motivate lenders to make more loans and investments in affordable housing. The District of Columbia’s Responsible Banking Ordinance (RBO) can also motivate lenders to increase their financing of affordable housing once the RBO is implemented.

The state of the nation’s housing is indeed subpar for the populations that Manna serves. But we know what works: responsible lending combined with subsidies, some of which can be repaid and recycled. The Dodd Frank Wall Street Reform and Consumer Protection Act required the Consumer Financial Protection Bureau (CFPB) to promulgate anti-predatory and responsible lending standards. This step has been taken. Now we must pressure the federal government to reverse the decline in subsidies for housing. And we must work with lenders to increase their responsible lending.

Now some may complain that subsidies are not spent effectively and encourage dependence. We have enough experience to demonstrate that carefully administrated programs avoid the pitfalls that can be associated with subsidies. And the alternatives are worse: continued inequalities and stagnant economic recovery. We all sink or swim together. Continued economic depression in growing minority communities drags down the nation as a whole.

Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.

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Decreasing Flood of Millenials & DC Housing

MIllenials

It seems the flood of millennials that have been coming to the District has come to an end. The population of 25-34 year olds has shown significant signs of drying up. The change has been drastic; in 2010, the year millennial growth outpaced that of any other city in the country, 10,430 individuals in that age range moved into the District, compared to only 2,662 millennials in 2014. This huge surge in the young adult population subsequently led to the rapid rise in apartment housing and restaurants catering to a more transient and youthful way of life. This sharp change in demand has some worried. “We have concerns about the millennials and their appetite to move into DC,” says Cardinal Bank president Kevin Reynolds. Kevin’s counterpart, EVP of real estate lending Andy Peden, says millennials are “just like every other generation,” except they are postponing larger life decisions. While there is still demand for housing and more specifically apartments, this shift will more than likely lead to either rental stabilization or a drop in prices.

What’s more important is why this happening is, and what the effects are. Over the last decade college graduates from all over the country have been pouring into District neighborhoods that had suffered from earlier blight and disinvestment. Now neighborhoods like Shaw, Columbia Heights, NoMa, and H Street NE are seeing tremendous growth and increasing home values. The arrival of primarily white collar, white workers felt like an invasion to some. Many new developments and restaurants in the District co-opted the names of historically significant African American figures and events for their high priced eateries and housing complexes, a sort of cultural appropriation.

One of the main contributors to the waning growth is the large decrease in public sector jobs; D.C. lost 11,800 public sector jobs in the past four years. Millennials have also become victims of their own success. The high housing cost that is excluding an entirely new population of young adults was in part generated by the demand created by their predecessors. This is why Director of Planning, Eric Shaw said he was “excited by the fact that people are remaining here.”

“We need to have a wide range of housing choices. So it’s not just the micro-units,” he said. “People are deciding to remain here for longer as they find a partner, add a dog, start a family. They are finding the neighborhood where they want to be.” And we also need to have more affordable housing and Class B apartments. Over the last decade, high end and Class A properties have been the focus to cater to a growing affluent population, but in the wake, the District’s affordable housing has decreased.

Now the time to truly address the city’s housing crisis. While new comers are scarcer, we need to take a harder look at how we can do more for the District’s long-term at-risk households.

 

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Raising the Minimum Wage – Indispensable for Affordable Housing

minimum-wage

Last Thursday, two prominent newspapers, the Washington Post and New York Times, had stories on their front pages about raises in the minimum wage. In New York State, it is likely that fast food workers will have a minimum wage of $15 per hour. In Washington DC, the voters are likely to vote in 2016 whether to increase the minimum wage to $15. Currently, the minimum wage is $10.50 and is scheduled to increase to $11.50 next year in the District of Columbia, a policy change which took years of organizing and political work to make happen.

Affordable housing and minimum wage policy go hand-in-hand, creating housing that families can afford with enough income left over for other basic necessities. Even if the minimum wage increases to $15, it would probably take two wage earners in a household to afford unsubsidized housing in the District of Columbia. The DC Fiscal Policy Institute calculates that in 2010, about two-thirds of households with incomes below 30 percent of area median income, or $31,050 for a family of four, paid more than half of their income on housing.

A minimum wage of $15 per hour brings a full time worker to about $31,200 in annual income or the income for households that was likely to result in a severe cost burden or spending more than half of income on housing. The minimum wage in the District of Columbia has just raised to $10.50 or $21,840 per year, which is clearly still too low to afford housing. Manna has sold affordable homes to families making around or under $30,000, but we and other affordable developers cannot build enough to meet low-income working families’ needs. There is not enough vacant housing stock and public and private subsidies to build enough affordable housing for low-income households without also making efforts to raise wages.

Opponents of minimum wage increases state that while it is laudable to increase workers’ wages, the increases will generate more unemployment because the cost of production will increase and profits will be reduced below minimums needed to sustain small businesses. When wages increase beyond a certain point, the opponents of wage increases will be correct. However, the minimum wage has not kept up with inflation. Paul Krugman, a Nobel Laureate economist and columnist in the New York Times, states that minimum wages have not kept up with inflation for four decades while worker productivity has doubled. There is clearly room to raise the minimum wage.

Moreover, Krugman documents that states that raised minimum wages did not experience increases in unemployment when neighboring states left minimum wages the same. Finally, there is a motivational factor at play. If a company pays a worker decent wages, the worker will be more committed, work harder, and call in sick less frequently. The positive experiences of Costco which pays relatively good wages is contrasted with the poor work environment of Walmart that has lower wages and benefits (http://www.nytimes.com/2015/04/03/opinion/paul-krugman-power-and-paychecks.html and http://www.nytimes.com/2015/07/27/business/economy/scale-of-minimum-wage-rise-has-experts-guessing-at-effect.html?_r=0).

During the coming year, the debate over the minimum wage will ebb and flow. It will get heated. But just remember that adequate increases are long overdue, and affordable housing construction and programs are only part of the solution. Housing has become so expensive in Washington DC that we need multiple policies to make it more affordable for DC workers to have a chance at actually living in DC. It’s time for more change and living wages!

 

Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.

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New Accountability Tool – Consumer Complaint Database

bills

 

Do you feel powerless to resolve a debt payment issue, a credit report mistake, or a mortgage servicing issue? Does the financial company promise to resolve the problem, you make repeated calls over several months, and the problem does not get resolved?

Fortunately, you now have one more accountability tool in your toolbox. The Consumer Financial Protection Bureau (CFPB) was required by Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to handle and help resolve consumer complaints. The CFPB also did a smart thing: it publishes the complaint data on the internet. Of course, financial companies hate this and complain, but my bet is that the publicly available data has reduced the number of problems and helps resolve complaints faster than they were fixed before. If you feel you need help on an unresolved issue, you can go to http://www.consumerfinance.gov/complaintdatabase/ to file a complaint and also to view other complaints about mortgages, bank accounts, debt collections, student debt, and more.

The CFPB has started issuing monthly reports that will help consumers and counselors understand trends and pinpoint emerging issues. Since 2012, the CFPB has received 650,700 complaints. For June of 2015, the CFPB reports that the top three products/services in terms of complaints in descending order was debt collection, mortgages, and credit reporting.

The database can be sorted by state, issue, company, and resolution status. When looking at Washington DC, complaint volumes increased 10 percent from April through June compared to a year ago (http://files.consumerfinance.gov/f/201507_cfpb_monthly-complaint-report-vol-1.pdf).  Complaints in DC now run about 577 complaints per 100,000 people which is a higher rate per capita than all the other states! Maryland also has a high per capita rate of 333 per 100,000.

A new feature of the complaints database is consumer complaint narratives. The individual consumer is not identified in order to protect privacy, but the narrative appears (if the consumer wants the narrative displayed). Looking at a couple of narratives reported from consumers in Washington DC shows typical complaints. In one case, a debt collection company kept contacting a consumer about debt his brother owed. In another case, a credit reporting company kept records of medical debt owed even though the consumer reports that the insurance company paid the bill.

It is hard to judge a company’s performance definitively on this database without some additional analysis. The companies that show up frequently are large companies, which by their unwieldy nature, will have some staff or divisions that do not do a good job. An analyst needs to “normalize” the data or figure out complaints per loans or complaints per assets or some other measure like this. The CFPB is currently taking comments on how to “normalize” the data. While consumers should certainly use this database to hold companies accountable, they should also be careful in labeling a company bad until additional analysis is conducted. The CFPB itself scours the database to help companies identify issues or bad offices and in some cases to pursue legal enforcement if misbehavior is due to a systematic pattern or practice.

Overall, the CFPB complaints database is a powerful accountability tool for consumers and counselors. Use it!

 

Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.

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Assessment of Fair Housing: Public Input Must be Robust in Order to Create Thriving Communities

fair housingIn the wake of the Supreme Court decision upholding disparate impact theory as a legal tool to combat discrimination, the Department of Housing and Urban Development last week released its final rule on Affirmatively Furthering Fair Housing (AFFH). The AFFH rule requires jurisdictions receiving HUD program funding to proactively combat discrimination and segregation. The jurisdictions are to periodically develop and update Assessment of Fair Housing (AFH) strategies that describe barriers to fair housing choice, establish goals for removing those barriers, and develop performance measures to assess progress in meeting the goals.

HUD promises to provide a comprehensive amount of data, maps, and charts that will enable jurisdictions to perform fair housing analyses. The analyses are to address the following:

  • Identification of integration and segregation patterns by race, gender, religion, and disability.
  • Identification of racially or ethnically concentrated areas of poverty.
  • Identification of significant disparities in access to opportunity by protected class (that is, minorities, women, disability).
  • Identification of disproportionate housing needs for any protected class.

After identifying these barriers and disparities, the jurisdictions are required to identify contributing factors causing these barriers and disparities and to prioritize which factors they will combat. Jurisdictions are to develop goals for attacking the factors and how they will measure their progress against these goals.

When developing an AFH, a jurisdiction will need to strike a balance between promoting housing opportunities in integrated neighborhoods and revitalizing struggling neighborhoods. As stated in previous blogs, Manna believes that developing affordable housing in integrated communities and in struggling communities is vital to truly promote choice and fair housing. HUD recognizes this by stating that strategies to affirmatively further fair housing and to reduce disparities include development of affordable housing in “areas of opportunity” and “place-based strategies to encourage community revitalization.” It would seem to be a violation of affirmatively fair housing if a jurisdiction purposively neglected struggling neighborhoods (which are often predominantly minority). This would not provide meaningful fair housing choice to residents of these neighborhoods that want to remain and build their communities. Likewise, it would be a violation of fair housing choice if jurisdictions did not provide meaningful opportunities for low-income and minority families to move into affordable housing developments in integrated neighborhoods.

Jurisdictions should also be careful in developing new programs and policies to ensure that housing needs or inferior housing options do not disproportionately impact protected classes. For instance, inclusionary housing programs aim for the laudable goal of promoting integration through mixed income housing. Yet, some of these programs provide homeownership options that limit, to various degrees, the amount of equity that homeowners can accumulate. This is done to promote long-term affordability of the homeowner units. Yet, in the process, the programs may create a housing need or issue that disproportionately impacts protected classes. In particular, African-Americans have considerably lower homeownership rates and equity than whites. An inclusionary program that disproportionately places African-Americans in homeownership units with limited equity possibilities is not combating lower levels of equity among African-Americans and may, in fact, be exacerbating racial disparities in equity accumulation. It would behoove these types of inclusionary zoning programs to provide substantial opportunities for equity gains or traditional homeownership for every homeowner unit of limited equity if these programs are not to run afoul of the spirit if not the letter of the new AFFH requirements.

AFH plans need to scrutinize private sector as well as public sector actions from a fair housing perspective. For instance, some lending institutions have contributed to segregation and lack of fair housing opportunities for protected classes. Rigorous AFH plans must examine and develop strategies to combat disparities in access to credit impacting protected classes.

How do we ensure that AFH plans promote affordable housing development and fair housing choice in integrated and struggling neighborhoods? How do we make sure that inclusionary zoning programs are carefully crafted to preserve equity building opportunities for all protected classes?  How do we ensure that public and private sector actions are carefully scrutinized by AFH plans? One critical way of doing this is to make sure that the community participation requirements are robust and meaningfully allow for input of all communities, including minority and modest income communities. All laws intended to redress historic and ongoing discrimination from CRA to the Fair Housing Act work best when the community is at the center and has real opportunities for input.

 

Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.

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Micro Units and the Affordable Housing Squeeze

micro-units-museum-city-new-yorkThere’s been a housing revolution on the rise, one comprised of tiny, albeit luxurious apartments called micro units. Micro units are all the rage in the nation’s most expensive city’s because they allow for far more density, and adhere to the transient lifestyle of Millenials. Currently in the D.C. metropolitan area there are seven large micro unit projects that will be coming online in the near future. One of those projects, the only one completed is the Harper, located off of the U St. Corridor. The Harper has been featured in the Washington Post and NPR as a prime example of the growing trend in micro living. A 400 sq. /ft.  unit is going for $2,050/ month in that neighborhood.

So what does this mean for the rest of the District’s housing landscape, especially affordable housing? This type of housing tends to have a dual effect on the market it participates in. On one hand the increased density from the smaller units allows for more housing, which in turn frees up more space around the city. But on the other hand there is an adverse effect. This increase in available stock increases the amount of individuals interested in relocating to the area, as long as they’re willing to deal with tighter quarters.

In the beginning of the microunit boom in the District, the Washington Post did a feature on the relatively new form of housing, featuring individuals who moved from surrounding areas to the District.  One of those featured was Julie Williams, who moved from a two-bedrrom in Olney, Md. To a micro unit in the District the size of a large master bedroom. This trend is also accompanied by an additional layer. These units are being developed to cater to the growing millennial work force, who are finding it increasingly difficult to remain in the District as housing prices continue to skyrocket. Because of the walkability and close proximity to transit and a multitude of dining options millennials love the city, but are facing the same issues as the District’s less affluent population. However, millennials usually are more affluent than long standing residents, and further contribute to the housing squeeze.

In order to combat this issue the District must be very strategic, it the housing it approves for development, as well as the resources it uses to support affordable housing in the city. Increases at all income categories must be sustained, as well as robust resources that support current and long standing residents who want to remain in the District.

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How Nonprofit Development Promotes Neighborhood Integration/Opportunity & Why that’s Important

Last week, Manna released a new study, Does Nonprofit Housing Development Preserve Neighborhood Diversity? An Investigation into the Interaction between Affordable Housing Development and Neighborhood Change, demonstrating that nonprofit housing development promotes neighborhood integration and diversity. The study reveals that Manna’s nonprofit housing development has preserved homeownership opportunities for more than 700 minority and modest income homeowners in revitalizing neighborhoods. Without the nonprofit affordable homeownership, a sizable number of these households would have experienced displacement or not been able to afford to purchase in these neighborhoods

 

Throughout its history, Manna has purposefully developed in both revitalizing and struggling neighborhoods. Manna sought to create opportunity and community development where it was needed most and for low- and moderate-income residents. Manna has worked with local partners and taken a neighborhood approach, seeing promise in neighborhoods that others discarded, some of which have seen great change.

 

The pursuit of neighborhood integration and not giving up on neighborhoods becomes even more relevant in the wake of the recent riots and unrest in Ferguson, MO, Baltimore, MD, and other cities. Highly segregated neighborhoods with concentrations of poverty greatly diminish the quality of life, educational opportunities, and success in the job market. In addition, recent research has found that lower income and minority children do better at school and earn more if they can move to more economically viable neighborhoods. Moreover, research also shows that African-Americans, even middle-income African-Americans, reside in poorer neighborhoods than poor whites.

 

Manna’s neighborhood approach, seeing promise in both revitalizing and struggling neighborhoods, has helped homeowners achieve significant gains in equity. Another recent study by Manna, The Financial Benefits of Homeownership: An Evaluation of a Nonprofit Housing Development Model, evaluates the equity accumulation and foreclosure experience of homeowners that purchased Manna-developed units since 1982. The study finds that the typical Manna homeowner, who started off as low- and moderate-income, gained $171,000 in equity. This equity accumulation has provided a pathway to the middle class and enabled the new homeowners to escape intergenerational poverty. In addition, Manna homeowners experienced lower rates of foreclosure than other homeowners in the District.

 

Manna CEO and President Jim Dickerson remarks, “These studies demonstrate that homeownership for low- and moderate-income families is one of the most effective and efficient strategies for building assets for modest income people, promoting neighborhood integration, and combating inequality that is prolonging the nation’s economic recovery. We are proud of Manna’s hardworking homeowners who underwent hours and hours of counseling to prepare themselves and successfully weather the Great Recession to the benefit of themselves and their neighbors.”

 

Here are the major findings of the neighborhood study:

 

  • Manna’s developments succeeded in preserving affordable housing for minorities and lower income households in rapidly changing neighborhoods.
  • Overall, the percentage of African-Americans fell in both census tracts with Manna properties and the District of Columbia. The percentage dropped from 60 percent to 50 percent in the city and from 76 percent to 62 percent in the tracts with Manna properties between 2000 and 2013. Despite the decrease in the African-American population, Manna’s development of housing units was in neighborhoods with greater racial and ethnic diversity in 2000 and still more racial and ethnic diversity in 2013.
  • Manna’s neighborhoods had higher percentage of Latinos than the District in both 2000 and 2013.  Eleven percent of residents in the census tracts with Manna properties were Latinos while Latinos made up 8 percent Washington’s populations in 2000. In 2013, the tracts with Manna properties have 12 percent Latinos compared to 10 percent in the District of Columbia.
  • A dramatic increase in the share of whites is evident in Manna’s neighborhoods. The percentage of whites grew from 9.1 percent to 21.5 percent in the census tracts with Manna properties between 2000 and 2013.
  • Median household income increased from $30,000 to $55,000 between 2000 and 2013 in the census tracts containing Manna’s properties.
  • In census tracts in which Manna homeowners experienced the largest equity gains, the median income increase was even more dramatic. In 2000, the median income of the census tracts with greatest equity gains for Manna’s homeowners was 79 percent of the median income of Washington, DC. It grew to 123 percent of the city’s median income by 2013.
  • Although many Manna properties had more rapid growth in home value than the median housing unit in a census tract, the values of most Manna properties are still lower than the median values of the census tracts containing Manna’s developments. That means Manna properties did not lead or cause appreciation in the tracts but benefited from overall housing price movements in the tracts.

Housing nonprofit development is not the complete answer in gentrifying neighborhoods, nor in neighborhoods that are struggling. I am not sure anyone has completely solved the riddle of trying to maintain racial and income integration in gentrifying neighborhoods, while also putting resources into struggling neighborhoods. Manna’s history has taught us that both are important. If any reader knows of successful policy and programmatic approaches that focus on both while helping low- and moderate-income residents to thrive, we are eager to learn. It is clear, however, that nonprofit housing development is an important tool for providing opportunity and preserving a degree of racial and income integration. Manna will never give up on this tool and continually seeks opportunities to create affordable housing and preserving opportunity in neighborhoods undergoing change.

 

Josh Silver is the Development Manager at Manna, Inc. Prior to his time at Manna, Josh served as Vice President of Research & Policy at NCRC. Josh is an avid District sports fan and loves spending time with his daughter.

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