RTC's affordable housing program: Reconciling competing goals

Abstract

Congress gave the Resolution Trust Corporation (RTC) authority to sell modestly valued housing at below‐market prices and with concessionary financing to enable lower income families to become homeowners and to expedite sales. Nonprofits and public agencies seeking to buy properties for occupancy by lower income people also qualified for these favorable terms. Setting a precedent for future housing policy initiatives, Congress conditioned access to this special program on the imposition of permanent low‐income use and affordability restrictions.

This paper considers whether the RTC can reconcile its mandate to maximize preservation of affordable housing with its duty to maximize return on assets and minimize negative impacts on local markets. This issue is addressed through a comparative review of property disposition programs administered by three other federal agencies. The author concludes that the RTC's three goals can be harmonized and suggests criteria for evaluating the RTC's performance in meeting its affordable housing mandate.     

On the use of auctions as a disposition strategy for RTC real estate assets: A policy perspective

Abstract

A sound strategy for real estate asset disposition is of paramount importance to the Resolution Trust Corporation (RTC) in its efforts to maximize costs resulting from the savings and loan bailout. A popular current approach to this problem is to employ expeditious sales structures such as auctions. Although auctions clearly speed up the disposition process, it is unclear whether they maximize net revenues. This paper analyzes the potential of auction structures to maximize sales revenue when such structures are applied to RTC commercial and residential real estate assets.

Absent political constraints, we conclude that auctions are usually inferior to traditional listing and broker sales channels. For the commercial real estate sector, this conclusion is based on the prominence of information‐acquisition costs, on market thinness on the buyer side, and on continued uncertainty regarding local economic recovery. Our conclusion for the residential real estate sector is based on the degree of property concentrations and the apparent inferiority of auctions for residential properties in weak markets. A recognition of short‐term political reality bolsters the case for auction approaches; however, the RTC should clearly stop promoting an image that it wishes to “sell, sell, sell.”     

The legacy of the home owners’ loan corporation

Abstract

The appraisal practices of the Home Owners’ Loan Corporation (HOLC) and its Residential Security Maps are often cited as major contributors to later redlining and the perpetuation of segregation through unequal access to mortgage credit. This article focuses on whether there was a relationship between the HOLC's neighborhood assessments and mortgage outcomes.

Our results indicate that the agency was clearly instrumental in restructuring the home finance system and permitting far greater access to homeowner‐ship, but it is important to consider other factors in examining the HOLC's legacy in the reshaping of the mortgage market and the operation of the financial sector after the Great Depression. Specifically, the issue of increasing segregation in older cities in the late 20th century remains inextricably linked to both the shifting nature of real estate finance after the HOLC era and the demographic, economic, and residential changes affecting U.S. cities.     

The impact of RTC dispositions on local housing and real estate markets

Abstract

This article examines the critical question of whether disposition activity of the Resolution Trust Corporation (RTC) will disrupt local real estate markets by driving values down and encouraging additional defaults. The question is approached by identifying key characteristics of local economies and real estate markets that could be associated with adverse market responses and then examining 12 individual metropolitan areas in this context. A survey of metropolitan areas with high RTC concentrations finds varying potential for adverse impact. Detailed case studies in three metropolitan areas—Dallas, Denver, and Oklahoma City—find the potential to vary widely by property type, quality level, and geographic location. By and large, commercial markets are expected to be less affected because of (1) the already depressed condition of most markets, (2) market segmentation that would insulate investment grade submarkets, (3) capitalization of expectations about disposition, and (4) political constraints on the rate of RTC activity. However, the geographic concentration of inventory that is combined with potential tipping dynamics associated with neighborhood change could render certain affordable housing markets vulnerable to adverse market responses. Policy recommendations to mitigate such impacts are suggested.     

Myths about tigers: Indonesian development policy debates

This paper assesses some of the major policy debates currently occurring in Indonesia. It is argued that, while Indonesia's economic performance over the past 30 years has been very good, some of these debates are centred on misleading or irrelevant 'myths' which may have adverse policy consequences. There is some evidence that the reform momentum has slowed in the past few years, while other pressing policy challenges have not been addressed with the vigour evident in the 1980s. Debate over these myths may therefore be contributing to a somewhat less coherent policy regime, just as the country is wrestling with post-Soeharto succession scenarios.     

Comment on James R. Cohen's “abandoned housing: Exploring lessons from Baltimore”

Abstract

For most cities, the possibility of transforming unused property into community and city assets is as yet hypothetical. Fiscal constraints limit the amount of land acquisition, relocation, and demolition that cities can undertake. Private investors, unsure of which neighborhoods have a chance of becoming self‐sustaining, are reluctant to take risks in untested markets.

Cities need to create citywide planning strategies for land aggregation and neighborhood stabilization and to develop analyses of the risks and opportunities associated with redevelopment opportunities in specific markets. Research seems sorely needed. Although the policy world cannot and will not stand still waiting for academics to design the perfect study or to collect all the data to model the potential effects of various policy options and investments, analysis that can play a more immediately supportive role can and should be done now.     

Lessons Learned: Obtaining Value from Federal Asset Sales

If the government decides to sell assets, how can it obtain full value? Four case studies provide valuable lessons: (1) sale of the Elk Hills oil field by the U.S. Department of Energy, (2) sales of loans and property by the Resolution Trust Corporation (RTC) after the savings and loan debacle, (3) loan asset sales by the Small Business Administration (SBA), and (4) excess property sales by the Defense Reutilization and Management Service (DRMS). The federal government should create an office to assist agencies that seek to develop effective asset sales programs.     

Twenty years of Australia's engagement with Asia

Abstract

For the past two decades, ‘engagement with Asia’ has been a central theme in Australian public policy and public debate about Australia's place in the world. The commitment to Asian engagement has been shared by both sides of federal politics throughout this period; however, when in government the Labor Party (1983–96) and the Coalition (1996–2007) pursued radically different approaches to this common objective. This article contrasts and evaluates the differing approaches adopted by the Labor and Coalition governments, in the context of the domestic and regional debates and controversies that accompanied them. In particular, it seeks to explain why Australia is more engaged with Asia than ever before, in seeming defiance of the widespread criticism of the Coalition government's particular approach to Asian engagement.     

The Naturalistic Side of Hegel’s Pragmatism

Abstract

This paper contrasts the Hegelianism of contemporary neo-pragmatism (Brandom) and the Hegelianism of classical pragmatism as it has been reassessed in contemporary Deweyan scholarship. Drawing on Dewey’s interpretation of Hegel, this paper argues that Hegel’s theory of the spirit is in many aspects more akin to Dewey’s pragmatism than Brandom’s. The first part compares Dewey’s pragmatism with Hegel’s conceptions of experience and the theory/practice relation. The second part compares Dewey’s naturalism with Hegel’s theory of the relation between nature and spirit.     

Global inequality as one of the root causes of the financial crisis: a suggested explanation

Abstract

The global financial crisis was caused because the volume of toxic assets in the financial system had grown to the point where the system could no longer cope. The dominant view among heterodox economists is that this point of critical mass was reached because of various failures in the financial system. This paper puts the accompanying view that the toxic assets were created largely in response to external pressures, a principle source of which was global inequality: while income inequality was an important factor behind the supply of those assets, wealth concentration was a major factor behind the demand for them. The policy implications of this analysis are that income distribution and wealth ownership have to be more equitably structured if global financial crises are to be avoided in the future. This is not to exclude other proposals for making the financial system more transparent and accountable. The point, rather, is that these proposals are insufficient on their own. No matter how radical the re-structuring of the financial system, as long as there remain external pressures on it to create products or to indulge in practices that are harmful to it, such products and practices will continue to be introduced and financial crises will continue to occur.     

Public housing and the American dream: Residents’ views on buying into “the projects”

Abstract

This article examines residents’ attitudes toward homeownership in five large inner‐city public housing projects composed of multifamily apartment buildings. Based on 267 interviews with public housing residents in Boston, it contrasts their broad support for homeownership as a concept with their wholly mixed reaction to the idea of owning a public housing apartment. Interest in homeownership in public housing is shown to be independent of residents’ current employment status and closely tied to residents’ social investment in specific housing developments and to their perceptions about the quality of that development's management, maintenance, and security.

The findings cast renewed doubt on policies that would make public housing sales a centerpiece of national policy, but they provide qualified support for more modest efforts to increase homeownership in public housing developments and in low‐income neighborhoods around them.     

Failures,downsizings, and mergers among community development corporations

Abstract

Over the past 30 years, community development corporations (CDCs) have become increasingly important actors in low‐ and moderate‐income communities. One prominent view of CDCs is that they have experienced uninterrupted growth since the 1970s. Despite their growth and productivity, however, many are facing serious challenges to their continued viability. When confronted by such challenges, CDCs are likely to respond in one of three ways: go out of business, downsize, or merge with one or more other groups. The major goal of this research was to assess the causes of these failures, downsizings, and mergers.

First, we found that these changes do not appear to be isolated instances; rather, they are prevalent across the country. Second, we identified a number of contextual and organizational factors leading to CDC failures, downsizings, and mergers. Finally we suggest a series of actions CDCs, support communities, and policy makers can take in response.     

Community development intermediary systems in the United States: Origins,evolution, and functions

Abstract

Acting between the forceful capital market and the state, community development intermediaries are finding ways to assist resource‐poor community development organizations to increase production volume and to gain access to a wider capital and political market.

This article presents a brief historical review of how the intermediary system originated and how it has evolved into different large‐scale models since the 1960s. The philosophies and programs of three major intermediary organizations—the Local Initiatives Support Corporation, The Enterprise Foundation, and the Neighborhood Reinvestment Corporation—are considered. The article concludes by recognizing the contributions of intermediaries while raising issues with their accountability and future direction.     

Environment-shaping: An Alternative Approach to Applying Foreign Development Assistance

Development assistance has a chequered past, in large part because planning for development assistance is historically such a fractured enterprise internally, and so disassociated from development assistance recipients’ assets and needs. The authors of environment-shaping offer an alternative development programme planning methodology that highlights above all else the ever-important relationship between development assistance and the environment into which it is offered. The authors employ an asset-based, rather than a traditional deficit-based, approach to assessing the environment for which development assistance will be formulated. The authors then highlight the power of perceptions in the creation of policy programming and in identifying and reinforcing opportunities for positive feedback loops within the recipient environment as critical to truly ‘sustainable’ development.     

Designing Policy Pilots under Climate Uncertainty: A Conceptual Framework for Comparative Analysis

Abstract

An ongoing challenge while designing policies pertains to their proportionality with the change that is likely or expected in a future policy context. This article conceptualizes proportionality as a feature of policy design to compare different policy strategies launched in response to current and expected changes in the policy context and contributes to comparative policy theory and practice. The conceptual framework is operationalized with climate change as a complex policy problem that challenges policymakers in designing proportionate strategies to enable adaptation to change in the climate and associated impacts. Under conditions of uncertainty, policy piloting provides an opportunity to experiment and test the design features of alternatives to status quo policies to function in a changed policy context. The theoretical discussion is supplemented with examples of policy pilots launched as a form of policy experimentation to address climatic risks to agriculture in rainfed zones of India. Policy design features in four settings of change in policy context, ranging from small-scale incremental to highly flexible adaptive responses, are compared using the framework of proportionality.     

Precedents,parliaments, and foreign policy: historical analogy in the House of Commons vote on Syria

Abstract

This analysis investigates the role of historical analogies in the influence that parliaments have in foreign policy. Our empirical focus is the UK Parliament’s unusual opposition to the Prime Minister on UK involvement in Syria in 2013. The vote challenges many conventional expectations about the role of parliament in security affairs. Important in this vote were lessons learned and strategically used from UK participation in the intervention of Iraq in 2003. This argument is developed theoretically based on research on historical analogies: parliaments, ‘learn’ (primarily negative) lessons about past foreign policy events which guide parliamentary preferences and procedures and can enhance parliaments’ role in subsequent foreign policy. The article contributes to research on analogies by extending the logic to lessons on process. This use of precedents can offer more structurally oriented perspectives that translate critical junctures into reforms in procedures and policy-making practices.     

Does neighborhood matter? Assessing recent evidence

Abstract

This article synthesizes findings from a wide range of empirical research into how neighborhoods affect families and children. It lays out a conceptual framework for understanding how neighborhoods may affect people at different life stages. It then identifies methodological challenges, summarizes past research findings, and suggests priorities for future work.

Despite a growing body of evidence that neighborhood conditions play a role in shaping individual outcomes, serious methodological challenges remain that suggest some caution in interpreting this evidence. Moreover, no consensus emerges about which neighborhood characteristics affect which outcomes, or about what types of families may be most influenced by neighborhood conditions. Finally, existing studies provide little empirical evidence about the causal mechanisms through which neighborhood environment influences individual outcomes. To be useful to policy makers, future empirical research should tackle the critical question of how and for whom neighborhood matters.     

Ethnic Decentralization and the Challenges of Inclusive Governance in Multiethnic Cities: The Case of Dire Dawa,Ethiopia

Abstract

Ethnic decentralization which could emerge in the form of autonomy and/or federalism has become an important way of responding to the challenges of ethno-nationalist conflicts. Since 1991, Ethiopia has adopted an ethnic federal structure which provides territorial autonomy to its various ethnic groups. This approach to autonomy, however, has brought challenges to multiethnic cities and ethnic borderlands where different ethnic groups coexist. By examining the experience of Dire Dawa, the second largest city in Ethiopia, this article shows how federalism and territorial autonomy by themselves are not enough to address problems of participatory governance in multiethnic cities. The article finally underscores the need for policy innovations that would ensure power-sharing in multiethnic cities.     

Japan's leadership role in East Asian security multilateralism: the Nakayama proposal and the logic of reassurance

Abstract

United States’ foreign policy towards the Asia-Pacific region is set to be fundamentally altered by two developments in Washington's defence policy. The first is the so-called pivot towards the region in terms of overall defence strategy. The second, occurring at roughly the same time, is a move towards a far greater role for advanced conventional weaponry in the US defence posture. We analyse the interaction of these two trends and discusses a central tension between short and long-term challenges, suggesting that, contrary to current developments, either a freeze in the deployment of these weapons programmes or a return to a strategy underpinned by traditional notions of deterrence may well be necessary.     

Policy Spaces: Applying Lefebvrian Politics in Neo-institutional Spaces

The purpose of this paper is to explore the utility of conceptualising policy institutions as neo-institutional spaces. The goal of this paper is to promote a more collaborative policy-making process that recognises the importance of cultivating and articulating shared spatial interests between policy actors. To facilitate a more collaborative process, the paper applies the principles of Lefebvre's triad to understand the internal and external policy geographies that inform government decision-making and promote the stability or instability of policy sub-systems. The utility of the proposed approach is examined within the context of two proposed scenarios. The paper concludes that a new policy geography might be effectively used to promote the overall political viability of policy sub-systems.