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The Elderly Deserve Affordable and Accessible Apartments

Large numbers of elderly, ages 50-64, are transitioning from homes to apartments. Some are making this move due to financial constraints, while others see apartments as the best option for their current lifestyles. As of 2005, households aged 50 and above now make up more than half of the growth among the renter population. This demographic of renters are predicted to continue to grow as they age into their 70s and beyond. Despite the steady increase of the elderly’s presence in the rental market, many apartments are failing to meet their needs in regards to affordability and accessibility. More than half of the growth in elderly renters stems from the decline in homeownership due to the recession and foreclosure crisis. The homeownership rate amongst 50-64 year olds between 2005 and 2013 decreased five percentage points ; this is greater than the national decrease in homeownership during that same time frame.

There are various reasons why some elderly people choose to move to apartments. Some move because staying in their homes has become too costly. Others move because apartments are easier to maintain, they are usually single story units which make them easier to get around in, and often times they have easy access features such as walk-in showers. Despite these benefits, the elderly still face some hindrances as they enter into the apartment rental market. In many cities, like DC, the cost of apartment rentals are skyrocketing and an increasing number of renters are becoming cost-burdened. High rents especially affect the elderly, who often have greater financial difficulty than the general population. Over half of renters aged 65 or older are cost burdened, which means they spend 30% or more of their income on housing. Furthermore, “the number of severely rent-burdened seniors, spending more than half their income on housing, increased by 34 percent, from 1.4 million to 1.8 million” between 2005 and 2014 – 43 percent of these seniors survive off of Social Security income alone. This financial strain is difficult for the elderly, who need their finances to cover healthcare, transportation, food, and in some cases, retirement savings. Although rents are increasing across the U.S., social security payouts will not increase this year, which increases their need for affordable rentals.

Although the easy-access design is what attracts some seniors to apartment rentals, few rentals actually have all of the amenities seniors need in order to maintain independent lifestyles. There are five basic universal design features that benefit senior citizens, which are “no-step entry, single-floor living, wide hallways and doors, electrical controls reachable from wheelchair height, and lever-style handles on doors and faucets”.  However, less than 1% of apartments actually have these features. Newer apartments are most likely to offer these accommodations, yet only a few of them do. Additionally, newer rentals tend to be more expensive, and lower-income households with disabilities are less likely to afford them. Luckily, there is a program available to DC residents who would like to stay in their homes, but need accessibility accommodations.

The District of Columbia Office on Aging (DCOA), in collaboration with the Department of Housing and Community Development recently launched the Safe at Home Program, to provide our elderly and disabled population with accessibility adaptation grants, which they can use for home modifications, in order to increase the accessibility of their homes.  This program can lend a tremendous amount of aid to disabled and elderly residents who would like to stay in their homes. However, there have to be resources available for those whose best option is to move to an apartment.

The development of affordable housing benefits everyone and now we are seeing just how important it is to seniors. Renters 50 and over now comprise a third of the renter population, and renters 40 and over represent half. It is clear that now is the time to make sure that we have a sufficient amount of affordable and accessible apartment rentals. Whether this is by developing affordable units specifically for seniors or increasing the number of handicap accessible units in new developments this is certainly an affordable housing issue that can’t be ignored.

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DC’s Home Loan Assistance Program, Love it or Hate it

It is my observation that a lot of people have opinions about DC’s home loan assistance program, HPAP, but few people are actually knowledgeable about the program. As a result, there is a lot of misinformation, misinterpretation, and misunderstanding about the program and the people who qualify for an HPAP loan. In order to address this disconnect, I have taken the time to compile a list of opinions and beliefs about HPAP, and I will briefly address them with facts.

1. One opinion about HPAP is that the government should not make it easier for low income households to purchase homes they can’t afford.

Recipients of the HPAP program go through a stringent credit check, and home buyer education programs. They qualify for their first trust mortgage without HPAP, but they need help to be able to afford the full cost of the home including downpayment and closing costs. In short, HPAP helps residents afford their home, and get assistance from a zero interest second mortgage.

2. Some people have concerns about HPAP that stem from The Washington Post’s 2012 article. The article states that “Nearly one in five buyers participating in the city’s 35-year-old loan program for first-time homeowners is behind on mortgage payments, city officials said — a default rate at least three times higher than the overall rate in the region. Nearly 50 buyers have received notices of foreclosure in recent years, while more than 50 others have struggled with homeowner association or utility liens.”

It is likely that those statistics are inflated and misinterpreted. The Washington Post’s article, criticized HPAP for having a 1.8% foreclosure rate. However, FHA and Fannie Mae foreclosures on loans originated during the same timeframe are significantly greater than that, and reflect home buyers with higher incomes and greater household assets than the typical HPAP borrower. Furthermore, this less than 2% foreclosure rate is small compared to the District’s overall foreclosure rate of 8.5%.

In addition, the Post’s critiques of the program are misinformed. A lot of HPAP issues had to do with the HPAP loan servicer, not the HPAP borrower. At times, the loan servicer was late in sending out notices to inform people that it was time to begin repayments on their loan, and when notices were sent out, they didn’t have any mention of HPAP on them, so homeowners believed that the notices were a scam. There have also been instances of the servicer marking HPAP borrowers delinquent when they were in fact not delinquent. The attention regarding this issue misrepresented HPAP borrowers, and their ability to pay their loans. As a result, these matters have been brought up in numerous public hearings and meetings, in order to resolve these claims and address HPAP servicing issues.

3. There is also a concern of moral hazard in regard to HPAP. There is a fear that the easier we make it to borrow, the more people will borrow and the more difficulty they will have paying back bigger loans.

HPAP Chart

However, this isn’t necessarily the case. There are currently price caps created by HPAP ratio calculations and compensating factors; the maximum a person is able to borrow at this time is $50,000. HPAP allows people with the lowest incomes to borrow the most money because they have less money to begin with, and need more assistance to purchase their home. Currently, the City Council, along with raising the maximum loan amount to $80,000, is asking DHCD to come up with a different HPAP repayment plan for the lower income borrowers. Practices of other high-priced cities with larger purchase assistance amounts suggest that deferring repayment of purchase assistance loans until future resale or responsible cash-out-refinance is the best way to go.
The chart above outlines income, the maximum HPAP loan amount that income qualifies for and the potential maximum cost of a home; these numbers are based of a 38% housing to income ratio and a 5.5% interest rate assumption. If an HPAP loan plus someone’s own savings allow them to get a conventional loan (which provides a lower interest rate and no mortgage insurance), they will be able to responsibly afford a higher priced house. Per the chart above, there are limits to how much people are allowed to spend on their new home, set by HPAP guidelines and tightened private lending standards. Recipients don’t have the option of borrowing all the money they want.

4. Based on some people’s understanding of HPAP, they believe that in 5 years when the down purchase payment assistance loan comes due it will be unlikely that a household making $42,800 or as much as $50,000 will be able to afford a $248,255 house (in reference to the chart above).

This line of reasoning is incorrect. HPAP buyers start paying on their mortgage, insurance and any homeowner’s fees from day one. Also, when someone is purchasing using HPAP, most are also receiving a 5 year tax abatement, which is calculated in the original ratios for their first trust mortgage. So their ratios actually start off much lower than what HPAP allows, putting them in a place to afford their future property taxes (which will be lower due to the DC Homestead Deduction, which lowers someone’s tax assessed home value by over $72,000) and their HPAP payment.

Furthermore, under today’s underwriting guidelines, HPAP underwriters calculate the total monthly debt which includes: repayment to HPAP in year 6, the mortgage, taxes, insurance, and other monthly debts. If that total monthly debt exceeds the qualifying ratio (43% of the applicant’s monthly income of today’s salary) then the contract will most likely be denied. 43% is industry standard and is a ratio most lenders use. Since 2012, nonprofits, lenders, and real estate agents that have clients working with HPAP have advocated for changes to the program to ensure families are not placed in homes they cannot afford, including restructuring HPAP loan repayments for borrowers with lower incomes.

5. Another question that has arisen regarding HPAP recipients is how will they be able to afford maintenance of their home?

The required home inspection, which is performed by a HUD-certified inspector, is meant to minimize the risk of an HPAP buyer purchasing a home that will need any upfront maintenance work after purchase. The future cost of maintenance is discussed in the required HPAP 8-hour education course and many HPAP buyers come in with and build savings to cover the cost of maintenance over time. Just like all homebuyers, regardless of income, there are issues out of people’s control that may lead to financial hardship, but that doesn’t mean qualified and educated buyers should not be allowed to purchase a home. At a certain point, HPAP buyers may accumulate equity that they choose to use to help with the upkeep or upgrade of their homes.
 
6. It has been argued that HPAP is a great program, but at the end of the day, it won’t make a big difference.
In response to this belief, I would assert that the program certainly makes a difference to the over 13,500 that have purchased homes with HPAP loans and those that would like to purchase and stay in DC. Also, homeownership has been proven to reduce the wealth gap; If public policy successfully eliminated racial disparities in homeownership rates, so that Blacks and Latinos were as likely as White households to own their homes, median Black wealth would grow $32,113 and the wealth gap between Black and White households would shrink 31 percent, while median Latino wealth would grow $29,213 and the wealth gap with White households would shrink 28 percent. Homeownership allows people to gain equity, which they can use to better their family; students from low- and middle-income families are much more likely to enroll in college when their families experienced gains in housing wealth. Lastly, the ability of one first-time home owner to purchase has the power to change the lives of a family for generations and generations to come; children of homeowners have a 6% greater likelihood of completing a post-secondary education and are 9% less likely to receive welfare benefits between ages 24 and 28.
 
7. An additional misconception about the HPAP loan is that it is forgiven over five years.
However, in actuality, the loan is deferred for five years so people do not have to make their first payment until the sixth year and then they have 40 years to pay it off. There is discussion about going back to a structure when lower income folks with higher loan amounts won’t pay the loan back until they resell in the future – thus ensuring there is not a monthly payment burden on them.

8. Some people around the District hold the belief that HPAP has been an abject failure, because there are sellers that refuse to take offers made with HPAP due to the amount of time and money it may take to work through the HPAP process.
I would agree HPAP has administrative kinks that need to be worked out, but it is far from being a failure. So far, there have been over 13,500 homes purchased through HPAP. MANNA along with CNHED and other housing organizations and advocates have submitted recommendations to DHCD about ways that the program can be improved. It is true that one of the biggest deterrence from people selling to those with HPAP is that there was a second inspection, and it was costly for the seller, and for that reason, sellers were hesitant to sell to HPAP buyers. However, thanks to the advocacy work of the aforementioned groups, that second inspection is no longer required.

9. In conclusion, some people view HPAP as DC simply throwing more money at a problem.

Although it may be easy to jump to this conclusion, I believe that DC is actually promoting a solution rather than simply throwing money at a problem. All of the money lent through the pro-gram gets repaid and relent to new first-time buyers. HPAP is one DC program that addresses the affordable housing crisis. I will admit that HPAP alone won’t solve our affordable housing drought, but it is a step in the right direction towards addressing many of the issues in DC. Homeownership leads to greater educational attainment for homeowners and their families, a reduction in crime, increased political participation, increased family wealth and better physical and mental health. These are things that we would all like to see in DC, and increasing access to homeownership through HPAP is one solution to addressing many of the economic and social problems that exist in the District today.

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Health and Housing

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A recent blog posted by the National Low Income Housing Coalition (NLIHC) stated that subsidized housing improves conditions related to child and family health outcomes. This post references a study published in the recent issue of Housing Policy Debate titled “Development of an Index of Subsidized Housing Availability and its Relationship to Housing Insecurity.” This study specifically discusses health benefits as they relate to low-income people who move into subsidized rental homes. NLIHC summarized the health component of the study by highlighting the fact that having a sufficient amount of subsidized housing available reduces housing insecurity. Housing insecurity generates a host of problems, which lead to negative health outcomes.

The study reveals that overcrowding and multiple moves are both products of housing insecurity, and are “known predictors of poor child and family health outcomes.”  Additionally, subsidized housing in most municipalities have safety and sanitary requirements, which enhance their health benefits. Poor housing quality is associated with injuries, chronic illness, contaminated water supply, poor waste disposal, and infectious disease that can be an effect of overcrowding, as well as rodent and insect infestations.

This study is relevant to the work that we do here at MANNA. By developing affordable homes for-sale, and rental properties, we are reducing housing insecurity in DC, and deterring overcrowding. There are numerous benefits to homeownership and quality housing. Here at MANNA we like to boast about how homeownership enhances people’s lives. Some of the benefits that we often talk about include greater educational attainment for homeowners and their families, a reduction in crime, increased political participation, and family wealth. I am constantly surprised by the benefits that are attributed to homeownership, and now we can add better health to our list.

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Tribute to Great Friend and Housing Advocate: Nathan Smith


Housing Advocacy Team (HAT) member Nathan Smith recently passed (January 2016).

Nathan  was a Manna board member and dedicated community advocate for affordable housing. Nathan  worked at the Veteran’s Consortium for over 20 years, played in a couple bands, and was active in his church Shield of Faith Christian Center. He was a member of HAT for almost 10 years and was a great advocate, musician and friend.

You can read some of his writing and public testimony on affordable housing below:

Not In My Backyard, January 2015: http://hatdc.org/?p=1876

We Want More Than Crumbs, April 2012: https://www.cnhed.org/blog/2012/04/we-want-more-than-crumbs/

Nathan, we will miss you and keep on fighting in your spirit and memory.

 

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Are Millennials Important to Affordable Housing?

millennialhomeownersWhen I take my usual commute from Arlington to MANNA every weekday morning, I typically pass at least three or four construction sites. The beeping of push shovels backing up greets me almost every morning outside my bedroom window and I dodge dump trucks as I approach MANNA’s front door. Despite being surrounded by construction and spending hours a day working on housing-related projects, I was surprised when I ran across a Washington Post article about the difficulty millennials have finding affordable housing in DC (“Why it’s so hard for millennials to buy a home in the D.C. area”). Luxury condos and apartments seemingly pop up out of nowhere on a daily basis. I am very aware that these dwellings are out of my price range, but the fact that they might be out of reach for most others my age? This was not something I had really considered before.
 
Most affordable housing organizations focus on making themselves accessible to low-income minority groups, and for good reason since they have the most difficulty finding housing. Often times people make a distinction between the minority groups that most affordable housing non-profits already focus on, and the millennials being referenced in the piece. However, in regards to MANNA, this distinction is not necessary since we already receive a number of millennials of minority backgrounds who take interest in joining our programs, and people of all ages and ethnicities are welcomed to be a part.
 
I am not trying to diminish the fact that there is an obvious lack of affordable housing available in the city. While the reasons for the trouble millennials have finding affordable housing are hard to pinpoint, it is safe to say that student debt is a major factor. Furthermore, there are a large number of universities in the District that produce graduates who want to pursue careers in the area, thus leaving them with a lot of competition and few reasonable options. While apartments with high rents are plentiful, there is a concerning lack of affordable homes for sale and rentals. Other factors to consider include low employment rates and the ever-increasing price of housing. Although the article implies that millennials are overlooked in regards to affordable homeownership, that is not the reality at MANNA, because we offer solid support that is beneficial in working to create affordable housing that is available to this younger generation. And we are working with others to improve programs like the Home Purchase Assistance Program, which provide zero interest down payment loans to singles making up to $80,000 annually.
 
In an article that attempts to focus on the way in which millennials are often overlooked in the District’s overpriced housing market, the piece fails to discuss the services and development that the government supports, as well as nonprofits like MANNA, that can assist millennials in obtaining affordable rentals, or even reaching their goal of homeownership. The flaws of the DC’s housing market are clear, but a disregard of affordable housing organizations that already work with millennials reveals a lack of public knowledge when it comes to understanding affordable housing, and recognizing the resources that are available in the District. The construction cranes that dot the skyline are a sign of increasingly steep housing prices, but these fears should not diminish the positive relationship that already exist between affordable housing organizations and millennials; yet they should remind us of the need to continue building upon this relationship, in the fight for affordable housing.

 

Ruth Bordett is an AmeriCorps VISTA volunteer at MANNA.

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Wading Through a Sea of Housing Jargon

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The vast amount of jargon and technical terms that exist in the context of affordable housing can be truly mind-boggling. I have finally faced the fact that I will never remember the exact definition of a foreclosure rate or memorize what the initials of AMI stand for (Area Median Income, by the way). I have been serving as MANNA’s AmeriCorps VISTA volunteer since September and previously had no experience in affordable housing. As a result, a lot of my time here has consisted of efforts to remember the meaning of all of these confusing phrases I am constantly hearing in meetings and seeing in emails.

Despite my lack of understanding regarding the jargon that serves as a barrier surrounding the issues at the core of affordable housing, I have found a way of grasping these issues without focusing on the technical terms I am not yet familiar with. These issues are better understood and truly embodied in context of the personal stories of the clients who have bought homes through MANNA and participated in our Homebuyers Club. Everyone that has walked through the doors of this organization has their own unique story and struggle. I have yet to read or hear a story from one of our clients that does not leave me moved in admiration and better informed in my work here at MANNA.

From the story of how Akua Danqua bought her house, I gained a comprehension of the importance of financial stability before purchasing a home. I truly admire Danqua’s perseverance during the years she spent saving and improving her credit score before she decided to purchase. All the same with Abby Vineyard’s journey to homeownership, whose determination helped me understand the comfort and relief of having a place to call home after years of horrible renting experiences. Each story of a MANNA homeowner on their path to homeownership speaks volumes of their bravery and strength.

There is no question that the jargon and technical terms are important to the work that MANNA does. However, until I maintain an understanding of ADU (Affordable Dwelling Unit) and HPAP (Housing Purchase Assistance Program) loans, I will continue to focus on the stories of homeownership that give meaning to MANNA. Furthermore, I encourage anyone else that finds housing jargon leaves them losing sight of the heart of affordable housing efforts, to take the time to look into some of our homeowners’ stories and relate them to your own thoughts associated with home and homeownership.

Ruth Bordett is an AmeriCorps VISTA volunteer at MANNA.

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Housing All Around But Not Much Affordable

Owner, Renter Green Road Sign Over Dramatic Clouds and Sky.

The cycle of ever-increasing rent is making it hard for people who don’t earn high incomes to afford housing, while directly impacting Americans’ possibility of becoming homeowners.  The United States is facing a trend of increased rates of renter households. Many Baby Boomers are downsizing, and transitioning from homeownership to renting. Millennials, on the other hand have been slow to transition into the buyer market, likely due to school loans, tighter mortgage underwriting standards, and being unable to save due to spending most of their income on high rents. These two age groups make up a notable portion of the rental market; however, they do not account for the entire growth. There has been an increase of 9 million new renter households in the US over the past 10 years, across all demographic lines. Heightened demand for rental units is causing the price of renting to rise nationally. Moreover, a significant percentage of new renters are high-income earners, and developers are catering to their demand.

The number of renter households among the top 10% of income earners rose 61 percent over the past decade. This increase is greater than what has been seen from any other demographic. These renters drive the demand for luxury apartments, which in part explains why so many are being developed. Moreover, according to some sources, it isn’t financially desirable for developers to develop non-luxury units.

It is more difficult for developers to construct new apartments that people with median incomes can afford, while still covering the cost of acquisition and construction. There are  various construction requirements and regulations to navigate and the use of public subsidies requires expertise and time, all of which can drive up cost. As a non-profit developer, MANNA specializes in navigating the arena subsidy pools and other financing for affordable housing, but we are one of a few in the District and are constantly trying to find ways to be ever more creative in partnerships and deal structures in order to make affordable developments work. Low or no-cost District land is a huge help and the city has other policy and administrative changes that can be made to increase affordable housing production.

Overall, the amount of older housing stock that is available annually isn’t enough to support affordable housing needs. Although housing becomes available when wealthy renters move out of their old homes and apartments, the total number of low-cost rentals from 2003-2013 only increased by about 10 percent. Meanwhile, renter households in search of low-cost housing rose by over 40 percent during that same timeframe. Furthermore, the availability of affordable housing remains stagnant as much of the older rental housing stock deteriorates, gets demolished or receives extensive upgrades, in order to demand higher rents.

The cause of the shortage of affordable rentals in DC and in the US as a whole is multipronged. However, the lack of affordable rentals ultimately equates to fewer people being able to become homeowners in the future. Presently, there is nowhere in America “where consumers can afford to rent a 2-bedroom apartment off of a full-time minimum wage salary.” Yet, in order for homeownership in America to grow, rentals have to be financially obtainable so people can be able to save, and have the option of owning their own home one day.

The District has sizable purchase assistance programs like HPAP available to help renters transition to ownership, and there is a hearing on January 7 to increase the maximum loan amount and highlight other changes that need to be made to this program. Join us on January 7 to support one of DC’s most important tools to allow low-to-moderate income residents to become homeowners. For more information, contact Sarah Scruggs at sscruggs@mannadc.org

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Fireside Chat With Sarah Scruggs

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Many of you who have been involved with Manna have had the opportunity to meet Sarah Scruggs, or have heard of her work. Sarah is the Director of Advocacy and Outreach here at MANNA, and she advises the Housing Advocacy Team.  Sarah has a number of years of experience in the advocacy arena and she currently specializes in affordable housing issues in DC. I took the time to interview Sarah to discover what sparked her interest in affordable housing, and to gain some insight into the affordable housing climate in the District. Here is our interview below – I hope you enjoy.

 

Victoria: How long have you been at MANNA?

Sarah: I began in Spring 2011 as a part-time consultant.

 

Victoria: What was your experience with affordable housing prior to working at MANNA?

Sarah: Well, MANNA had a three-month, 12 hour-a-week advocacy position available, which I got hired for in 2005. I was responsible for sending out news regarding affordable housing. In addition, since DC residents do not have federal representation, I performed outreach, urging people outside DC to support various federal housing policies that would benefit the District.

However, I have always been familiar with affordable housing. When I was around one or two years old, my family moved into a house with the aid of a housing assistance program in my state. Also, my grandfather benefited from the G.I. bill that helped secure housing for some of the service men and women that returned from war. This knowledge increased my openness and empathy for people in need of affordable housing.

 

Victoria: What was the biggest lesson you’ve learned while at MANNA?

Sarah: I’ve learned  that housing prices can change dramatically with given forces at play. When I first became involved with MANNA in 2005, the District was seeing housing price increases in various parts of the District, but it didn’t even compare to the skyrocketing we are seeing now. It all started happening so fast.

However, the biggest lessons I have learned aren’t around housing but about policy, advocacy, and relationships. I’ve learned that there are hindrances in the system of elections and term limits. They are good on one hand, but once an election cycle passes, and officials/staff are scattered, and you are no longer able to work with those who know you and who understand your issue, you have to start over and go over the same issues and with the next group of representatives. This job is all about building relationships, and repetition. Repetition, aggressiveness, hounding, messaging and strategies are important. But you can’t simply have persistence, you have to be persistent with integrity. People trust MANNA, which is important, and is key in enabling us to get our work done. This doesn’t mean that we don’t take hits, but the integrity helps with relationship building, and attracting and retaining advocates.

 

Victoria: Have you seen improvements in the affordable housing arena since you began your work?

Sarah: I have seen many improvements while I have been in this position, but there are always new challenges. We have more money in our housing trust fund than any other city, and through advocacy efforts, we have been able to acquire policy tools to increase affordable housing development. Yet, there are regulation challenges, as well as funding challenges, both locally and federally. The local system that people have to go through in order to buy affordable homes is inefficient. Now, it is our job to streamline the process.

I have seen HPAP funding continuously decrease, loan amounts not increase with the rising market, and there are administrative issues with the program. However, we know how to fix these problems, but it’s about getting all of the parties involved aligned in order to fix them.

DC has one of the worst affordable housing crises in the nation. We need to build more units than ever before, and there are a lot of non-profit organizations as well as some for-profit ones that are up for the challenge.  However, it is hard. There is so much competition in DC, the cost of land is high, and there is great opportunity for financial gain for those who want to build only market-rate developments. I have never seen this much competition before.

 

Victoria: What sparked your interest in affordable housing?

Sarah: I cared about affordable housing since my family benefited from it, and my grandparents benefited from it. I have always believed that home is important, but before MANNA, I did advocacy work on issues in the Middle East. Some of the people I worked with in the West Bank lost their homes, or were in the process of losing their homes due to the turmoil there. I saw just how important home was during that time. But I came to MANNA with advocacy and outreach experience. Housing wasn’t the main thing I was interested in, but I became a specialist in housing issues in the process.

 

Victoria: If you were able to implement one housing policy, and it was to run effectively, what would it be?

Sarah: There are currently around 800 vacant and blighted properties that are stuck in limbo in our tax system. I would create a program to get those properties out of the system, redeveloped, and to DC households that need them. I am not saying that these properties are the biggest affordable housing issue, but getting them out would have a big impact on our ability to provide affordable housing, particularly affordable homeownership, to DC residents.

 

Victoria: Well those are all of the questions that I have for today. Thank you so much for sharing with us.

Sarah: Thank you Victoria.

 

I would like to thank Sarah for the opportunity to interview her, and for sharing a bit of her personal life with us. I appreciate her highlighting both the progress that has been made in DC’s affordable housing arena, as well as the challenges housing advocates face. I think Sarah’s insights provide hope for the future of affordable housing in DC, while teaching us that advocacy work is never done.

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How Homeownership Reduces Crime

There has been a lot of concern regarding crime trends in the District in recent months. DC is one of many cities that have seen an increase in homicide rates after two decades of declines.  As of November 18th, 146 murders have taken place in the District this year, compared to 108 in 2011. Despite this increase DC’s homicide rates are far lower than what the District saw during the crack epidemic in the 1980s, when DC was considered the “murder capital”, and suffered from 400 homicides a year. Nevertheless, according to a Washington Post poll, crime is a significant concern among DC residents.  For the first time in a decade, residents rate crime as a bigger concern than the quality of public schools or the economy.

The mayor has been struggling to address the issue of crime in the District, although she has noted that not all crime has increased. There has actually been a 2 percent drop in the total number of robberies, shootings and other incidents, which is a decrease from 5,433 to 5,336 (as of Wednesday Nov 18th). Yet unfortunately, there has been an uptake in the number of armed robberies, with certain neighborhoods feeling the impact the most.  Although increased punishment and high levels of police enforcement are common tactics to fighting crime, “building a safer city requires that we invest in our communities through job creation and training that removes barriers to employment; after-school programs, particularly for youth of color; resources for citizens returning from prison, and permanent access to quality, affordable housing”. In addition, research shows that homeownership can improve community safety and reduce crime as well.

Homeownership rates in DC range from 22%-59%, depending on which ward you live in, with 40%homeownership in Ward 7 and 22% in Ward 8.  According to a nationwide study, a 1% rise in homeownership has been found to lead to a 1.5% drop in property crimes and a 1.1% drop in violent crimes. If these statistics were applied to Ward 7, and homeownership was increased by just 1%, that would equate to 39 less incidents of property crimes and 13 less incidents of violent crimes. While in Ward 8, a 1% increase in homeownership would equate to 42 less incidents in property crimes, and 14 less incidents of violent crimes. If the rates of homeownership increased in these wards alone, the potential impact it would have of DC crime rates could be enormous.

There are many social benefits associated with homeownership, such as increases in wealth and educational attainment, as well as  reductions in crime. This evidence strongly suggests that continued financial support from DHCD and other federal, and local departments and initiatives that foster homeownership are socially desirable. Promoting homeownership, among other things, is synonymous with supporting increased quality of life, and safety in DC.

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The District of Columbia: A Good Candidate for A Minimum Wage Increase

Last Thursday, CNHED hosted a two part panel discussion, the first half was regarding DC’s Universal Paid Leave legislation, which was presented by Councilmember Elissa Silverman.  The second portion was about DC’s ballot initiative to raise our minimum wage from 10.50 to $15 dollars by 2020, which was presented by Delvone Michael, Washington DC Director of Working Families. These initiatives strive to increase the quality of life of residents and workers in the District, and make DC a more affordable and equitable place to work and live. Although both initiatives are important, this week’s blog will focus of the $15 minimum wage.

Many cities across the nation are pushing for a $15 minimum or living wage. Research shows that Washington, DC would be a good candidate for this increase. Not only do many of our native and low-income residents need the wage increase, but the District’s economy is strong enough to absorb the costs.   

As an organization that builds affordable housing, we strive to help DC residents increase their social mobility and economic resources through homeownership and other types of housing. However, receiving a wage in which one can afford housing, health insurance and child care goes hand in hand with achieving equality and mobility in the District.

Whenever large changes like a minimum wage increase are considered, opposition and concern are natural. However, overall, increasing the minimum wage in DC should have little, if any negative impact on employment.  Moreover, the positive impacts that it will have on those who need it will be substantial. Research shows that in the District, higher minimum wages would reduce the share of individuals with incomes below 50, 75, and 100 percent of the poverty line . This is an important statistic, and it illustrates that increasing the minimum wage could be a life changer for many residents.

Currently, the average minimum wage worker is a 35 year old woman with at least some education, and is likely to have kids. Can you image how difficult it is to raise children on $10.50 an hour? Various studies recommend that the minimum wage should be set at 50% of the median wage. In the 1960’s and 1970’s, the US minimum wage relative to the median wage was 48%. However, in 2015, DC’s current median wage is $31.20 an hour, while our minimum wage is only 34% percent of that, at $10.50 per hour.

A common concern is that this type of initiative would harm small businesses. However, a survey conducted by the Department of Labor has shown that on the federal level, most small businesses approved an increase in minimum wage from $7.50 to $10.10 Although $15 is significantly, larger than $10.10, this data reveals that overall, small businesses are not opposed to increasing their employees pay and given the right circumstances, more cities may be open to increasing the minimum wage to $15.

Furthermore, in places where a $15 minimum wage was put into effect, many businesses saw an increase in revenue, which may be due to businesses benefiting from the low turnover rates that result from higher wages, greater employee motivation, and price increases that companies implement in order to pay their employees.

Given recent research, it appears that Washington, DC would be a good candidate for a $15 minimum wage. In order  for there to be income equality in the District, people have to be able to afford to live and work here. Increasing the minimum wage is one way to reduce income inequality. If you would like to support it, be sure to look out for the $15 minimum wage on the ballot in 2016.

 

Special thanks to Adam Kent of LISC and Katharine Richardson of Princeton University  for their assistance with this piece.                                       

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