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Cheaper to Buy than to Rent

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…

Support Your Neighbors! – Affordable Condo Owners in NW DC

Please raise a voice of support for your neighbors – affordable condo owners in NW DC!

Many affordable condo owners in NW DC, who were integrated into market-rate condo buildings through DC government agreements with various developers, are dealing with rising condo fees that are making their units unaffordable. One owner at Kenyon Square is now paying a condo fee almost more than his monthly mortgage. Due to certain resale and rental restrictions imposed by the City on these affordable units, many of these owners cannot sell or rent and are faced with the choice of future foreclosure or taking the City to court. The City has put these responsible DC residents in an impossible and financially disastrous situation. The City can do better!

For more details on the situation of affordable condos in Northwest DC, see: http://hatdc.org/?p=456

Sign a petition asking the DC government  for an equitable solution to the problem the City has created (please include your address and/or zipcode in the comments section): http://www.ipetitions.com/petition/affordablecondos/

Listen to the stories of affordable condo owners at Kenyon Square in Columbia Heights:

Your voices are essential! Please support your neighbors!

Low Homeownership Rate in DC

According to a new report by the US Census Bureau, the homeownership rate in Washington, DC increased 10.7% between 2001 and 2010. However, DC still has the third lowest homeownership rate (42%) of all US cities, behind New York and Los Angeles. One of the reasons for the low rate is the transient nature of some of DC’s population, but the more prominent reason is the high cost of homes and condos in DC. When looking at African American residents in DC, the homeownership rate is even lower at 38.8%.

Listen to Your Neighbors: The Impact of Long-term Resale Restrictions

The DC government is imposing long-term (15-30 years) resale restrictions on homeowners who receive downpayment assistance and qualify to purchase an affordable home. These homeowners pay back every cent and take on the same risks that other homeowners do, yet these restrictions highly constrict equity build up and ignore regular circumstances that occur in people’s lives.

Listen to and stand with your neighbors by joining the Housing Advocacy Team listserv and following up on future urgent actions.

Subprime Mortgage Meltdown – Challenging the Myths

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.

History of Homeownership and Race in the United States

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”:

Plug into affordable housing issues today!

Check out the updated information in our Issues section. There is new information on the effects of long-term resale restrictions, Manna’s “Resale and Recapture” provision as an alternative to those restrictions, and the Continuum of Housing campaign. So, read up on the issues, let us know what you think, and consider joining the Continuum of Housing campaign.

HAT will offer you more ways to plug in soon. We can’t do our work without you!

New and Improved hatdc.org

The website is back!  With great joy the Housing Advocacy Team ushers in the new and improved www.hatdc.org.  We also have a Facebook page where you can post your photos of HAT events, have discussions, and more.  Please give us “the thumbs up” by clicking on the “like” button! You can follow our Facebook page (and sign up for an account, if you need one) here.

While you are surfing the web.  Check out the following Housing Complex Blog article here

The Situation of Affordable Condo Owners in NW DC

Through agreements with various developers, the DC government has attempted to integrate low and moderate income families into market rate condominium projects, most of which are in Northwest DC. While the idea was noble, it has been ill-designed.

The City placed 20 year resale restrictions on the Affordable Dwelling Units (ADU), assuming that if low and moderate income people (between 30% and 80% of the Area Median Income) purchased an ADU, these affordable owners would be able to resell to another family earning the same income as the original owner earned at the time of purchase. The City also assumed that the original owners would be able to earn a fixed percentage at the end such a sale. Unfortunately, the City did not factor in escalating condo fees or the costs associated with reselling the ADU. So now, when ADU owners need to resell their units for whatever reason, many of them cannot. With the increased condo fees, many of the units would not qualify as affordable for people in the same income categories, and even if they found someone else, the seller would have to come up with 10% of the sale price for closing costs fees in order to resell it at whatever price they originally purchased it for.

Compounding the issue even further for those owners who cannot sell their units, renting out their homes has not been an option either as the City-imposed rental restrictions forced these owners to rent their units at prices that are lower than the monthly costs associated with owning units. Below is a list of market-rate condo buildings with ADU owners facing rising condo fees compounded by resale and rental restrictions, with many owners paying condo fees almost equal to or more than their mortgage payments.

  1. Barcelona – 1435 Chapin St NW
  2. Chase Point – 4301 Military Rd NW
  3. City Vista K – 475 K St NW
  4. City Vista L – 440 L St NW
  5. Fedora – 1451 Belmont St NW
  6. Kenyon Square – 1390 Kenyon St NW
  7. The Heights of Columbia – 2750 14th St NW
  8. Union Row – 2125 14th St NW
  9. Verona Parc – 1348 Euclid St NW

In any scenario, the end result is the complete opposite of what the City originally set out to do, and many of these families, without intervention, will be returned back into the ranks of folks needing affordable housing, but with damaged credit and no prospect of purchasing again. This situation simply does not make sense as these families have to take the same level of risks and responsibilities of being homeowners, while reaping none of the benefits, even after the City is repaid its subsidies (which actually went to the developer in the first place).

In October 2011, Manna organized affordable owners across these buildings, collected physical and online petitions, and met with City Council officials. Throughout 2012, these owners organized within their buildings, sought support from their condo associations, met with City officials, testified publicly and worked through Manna and with the City Council to address their issues. Direct meetings between affordable owners and the Department of Housing and Community Development began in February 2013.

In the summer of 2013, the Department of Housing and Community Development (DHCD) put forward a process to evaluate the affordability of each ADU and possibly allow owners to rent or sell to people in higher income categories. Information on this process and the form are on DHCD’s website at http://dhcd.dc.gov/node/619912. More changes need to be made for current and future owners, but this is a significant step in the process.