Braving America without a home has always been hard. Now it’s becoming a crime. A recent survey of 234 cities by the National Law Center on Homelessness and Poverty found that on nearly every front, municipalities are cracking down on the homeless: 24% prohibit begging, 22% prohibit loitering and 16% say it’s illegal to sleep in public places.
In a recent Washington Post Article “In D.C. loan program, mortgage defaults abound”, the District’s homegrown down payment loan program, HPAP, was painted a massive failure that purposely sets low-income residents up for failure. This couldn’t be further from the truth. The article takes the facts about high delinquency rates out of the context, comparing the rates for small down payment loans (historically and expectedly high compared to first trust delinquency rates), as its evidence that the program is a ‘wasteland’ and the District is putting families in ‘loans buyers can’t afford’. However the true measure of the program, a1.8% foreclosure rate, gets dismissed.
Ms. Cenziper isolates a few instances where purchasers paid too much for their homes and are facing problems staying current on their mortgages. Ms. Cenziper contacted Manna in her research and the following was shared to her, none of which appears in her article. A typical HPAP recipient goes through an intake session, a home purchase counseling program, two levels of underwriting for credit and income worthiness, and the professionalism of the program management. The end result is a buyer educated on the risks and responsibilities of being a homeowner.
Manna has been producing affordable homeownership housing for almost 30 years now and we know what a ‘Wasteland’ looks like. The down payment loan program provides a responsible, successful approach for lending money that is repaid and recycled.
Sensationalizing the facts to fit the headline contributes to the misinformation about affordable homeownership housing. With a less than 2% foreclosure rate, it’s hard to make sense of the article. The program has successfully contributed to assisting thousands of low and moderate income people become homeowners in the District. This should be celebrated instead of scapegoated.
Please send the article around to your friends, family and Councilmember, and comment on the article yourself. It is important that your voices are heard, that affordable owners going through this situation are humanized and that solutions are lifted up.
We believe a few things are important for residents of our City to note:
1. These affordable owners are not trying to game the system; they qualified for their mortgages like any other homeowner but have fallen prey to policies that unfortunately have financially burdened them and do not account for normal life circumstances. These policies will also adversely affect market-rate owners.
2. There is a way to provide relief to those in trouble: allowing owners to sell to buyers in higher income categories, allowing owners to rent out at a price that covers their monthly unit costs, creating a fund for condo fees using an affordable owners’ restricted equity, etc.
3. There is another way to structure the Affordable Dwelling Unit program – one that doesn’t allow for windfall profits, but that allows affordable owners to gain equity like any other homeowner and recaptures funds for the District to produce more affordable housing (see http://hatdc.org/?p=428).
Lift your voice for yourselves and your neighbors! We are all in this together.
WAMU reporter Elahe Izadi wrote today about the situation of affordable condo owners who were integrated into market-rate condo buildings and the current issue of escalating condo fees that are making their units unaffordable, and the City-imposed resale and rental restrictions that are locking some of these owners in their units. One thing not covered in the article are solutions that have been presented to the City Council, which include:
1. Allowing ADU owners to resell to buyers in higher income categories
2. Allowing ADU owners to rent out their units at a price that covers the monthly costs of the unit.
3. Creating an Excessive Condo Fee Loan program by utilizing the restricted equity of the ADU units
While it is understandable that the City, as Councilmember Jim Graham says in the WAMU article, “need[s] to understand how widespread [high condo fees are], what kind of impact this is having on people,” the City also needs to work quickly to help owners who are at a breaking point and owners who will get there soon. This is not what the City intended, this issue is only going to get worse, and the City can work efficiently and speedily to address it.
The Continuum of Housing, a campaign of the Coalition for Nonprofit Housing and Development, encompasses a full range of housing options, from supportive housing for the homeless to affordable homeownership and everything in-between. As the market does not provide the type of housing needed at a cost that many can afford, the campaign brings together nonprofits and others along the Continuum to work together and with the DC Government to ensure city housing policies and funding priorities that provide housing options for all DC residents, offering people support and stability as they live and work in the city and helping people to climb up the economic ladder and out of poverty and dependence. Listen below to long-time DC resident, Billy Hart, share his Continuum of Housing story and join us at the December 10th Housing for All/Continuum rally at the MLK Library from 12-2pm to support an inclusive and prosperous city.
In 2007, the same issue that HAT is currently focused on in DC of rising condo fees facing affordable owners who were integrated into market-rate buildings became a concern in San Francisco. This article highlights affordable owners dealing with doubling condo fees and enormous special assessments that the City did not foresee and could not regulate once the condo associations took control of various buildings. These fees were making the units unaffordable for the affordable owners (who were no more than 15% of the buildings), while the market-rate owners could more easily deal with and were more likely to support the increases. The author highlights the need for the City of San Francisco to set up a fund to help pay for the condo fees, support only all-affordable projects where fee increases like this would not take place, or devise more careful plans to truly integrate affordable owners into luxury condo buildings (though the author doubts this is possible). Stay tuned for ways you can advocate for solutions for current affordable condo owners dealing with these issues in DC!
Though homeownership is not for everyone, for those who are interested in and ready for it, now may be a good time to buy in the District. This Washington Post article highlights that for many young professionals in the City, purchasing a home is a cheaper option than renting. Rental prices have gone up 3.7% each year since 2006, and the fair market price for a 2-bedroom apartment is in the $1400s. With low mortgage rates (below 4% on a 30-year fixed mortgage) and more stable housing prices, now is also the time for low and moderate-income people/families to become homeowners. HPAP, the City’s homegrown downpayment assistance program for first-time, lower-income homebuyers, is in place along with excellent homebuyer education. Such programs are the City’s best investment as the buyer ends up paying the money back and people have an opportunity to build wealth and stability through owning their own home. Now may be the time to buy…
For many, the foreclosure crisis has been pinned on uniformed minority and low-income borrowers as well as policies that support them in becoming homeowners. This myth has led some to consider low-income buyers as not ready for homeownership, as part of the problem rather than the solution.
A recent groundbreaking study by Maurice Jordain-Earl of ComplianceTech researches the demographics of the subprime fiaso and reveals that upper-income borrowers across all racial groups had the largest number of subprime rate loans, followed by middle-income borrowers from all racial groups. The study concludes that the meltdown “is better described as a mainstream white suburbia problem with aspects that affect minorities and urban communities. Erroneous assumptions about the demographics of subprime rate lending will only lead to poor decisions that result in ineffective solutions.”
Manna’s and others experiences have been that low down payments, 30 year-fixed rate loans and financial education/counseling have proven to be the key ingredients for making low-income home buyers successful, even through the foreclosure crisis. And homeownership has been a legitimate and important way for these responsible buyers and their families to build assets and move up the economic ladder. Low-income buyers are and can be part of the answer to the crisis we are in.
There has always and continues to be a wealth gap between whites and minority groups in the United States. According to a recent Pew Research Center study, the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households. Though the gap has significantly widened in recent years, this gap also has deep roots in the history of the United States, including discriminatory policies and practices that limited the traditional way Americans have increased their wealth: Homeownership.
For a history of homeownership and race in the United States, see the below segment of the documentary “Race – The Power of An Illusion”: