Comment on Donald R. Haurin and Hazel A. Morrow‐Jones's “the impact of Real Estate Market knowledge on tenure choice: A comparison of black and white households”

Abstract

Haurin and Morrow‐Jones analyze a sample of survey respondents from Columbus, OH, and find that additional knowledge about real estate markets increases the likelihood of homeownership. They conclude that differences in real estate knowledge contribute importantly to explaining some of the racial gap in homeownership rates; this finding leads to their conclusion that the racial gap can be addressed through public policy interventions, including financial counseling programs.

Their research broadly addresses three questions: Why does the racial gap in homeownership exist? Why does it persist? What can be done to reduce it? We compare their findings with those of other researchers and conclude that improved financial literacy may well be an important tool for reducing the gap, but that the causes for its existence and persistence are complex and that improving financial literacy alone may not be sufficient to have a significant and lasting impact.     

Comment on Donald R. Haurin and Hazel A. Morrow‐Jones's “rhe impact of Real Estate Market knowledge on tenure choice: A comparison of black and white households”

Abstract

Racial differences in tenure have been large and persistent, with white householders much more likely to own their homes than blacks. Haurin and Morrow‐Jones surveyed a sample of 1,002 in metropolitan Columbus, OH, in 2005 to determine the causes of the tenure gap between blacks and whites.

Social and economic differences played a dominant role, but Haurin and Morrow‐Jones also identified a racial difference in real estate and financial knowledge, a difference they suggest could be reduced or eliminated with education. This comment raises questions about national homeownership goals and points out that Haurin and Morrow‐Jones overlook the consequences of pervasive racial residential segregation and the effects of both past and current discrimination.     

Comment on John T. Metzger's “planned abandonment: The neighborhood life‐cycle theory and national urban policy”

Abstract

I take strong exception to the idea that theories of neighborhood change, in and of themselves, caused the decline of inner cities. Rather, the demographic, social, and economic forces that existed in the postwar years caused some inner‐city neighborhoods to decline. The replacement of working‐class and middle‐income households by households with much lower incomes, on average, was the single biggest cause of neighborhood decline. Metzger ignores this fact as an alternative explanation for why some neighborhoods declined. It is highly implausible that my theories and those of other urban experts had such a strong impact on the public policy, building, and finance communities. Because people were responding to real conditions, it is likely that the same events would have occurred even if my model of neighborhood change had never been developed.     

A Review of: “Lessons of Disaster: Policy Change After Catastrophic Events by Thomas A. Birkland”

ABSTRACT

Managers in many public domains have to meet major challenges today, which is why it is essential to focus on their working conditions in order to develop a sustainable situation. In the present study, the aim was to explore different types of managerial situations and how they discriminate in health, motivation, and performance outcomes. Using the job demands-resources model as a framework, four demands and three resources were included in a cluster analysis in order to answer the research question. In total, 548 managers in Sweden participated, including heads of department, middle managers, firstline managers, team leaders, and functional managers. The most important finding was that the eight clusters of managerial situations that were found discriminated in a distinct way against each other regarding health, motivation, and performance. The results can be used as guidance for organizational intervention as both very satisfactory and very unsatisfactory situations are identified.     

Comment on William G. Grigsby and Steven C. Bourassa's “Section 8: The time for fundamental program change?”

Abstract

Grigsby and Bourassa claim that the major problems with the housing voucher program are that most families with affordability problems are not served and that housing assistance is not part of the federal safety net. They propose replacing the program with a housing entitlement for most very low‐income renters, with eligibility linked to receipt of safety‐net benefits. Resources to serve additional families would be generated in part by changes like those found in the Department of Housing and Urban Development's recent block grant proposals.

The Grigsby‐Bourassa proposal lacks a clear assessment of likely costs. Also, there is a risk that the means the authors propose will be heard, but that their call for expansion will not. Finally, their proposal does not intersect with other ideas to modify a basically successful program to better achieve its goals, and questions about rental markets and family and landlord behavior also must be answered.     

Comment on Michael A. Stegman et al.’s “Preventive servicing is good for business and affordable homeownership policy”: What prevents loan modifications?

Abstract

After discussing the article by Stegman et al., this comment describes the barriers to preventive servicing for securitized residential loans and assesses the importance of loan modifications, given the recent increases in default and foreclosure rates for subprime loans. Several hurdles slow or reduce such modifications, even those that help borrowers and investors alike. For example, self‐interest may reduce servicers’ willingness to modify loans rapidly. In addition, underlying securitization agreements may impede servicers’ ability and discretion in this area. Further, tax laws that govern a common securitization entity may limit modifications, as may accounting standards. Finally, “tranche warfare,” the sometimes contradictory fiduciary duties servicers have toward investors holding different tranches of securitized pools, may decrease their ability or their willingness to modify loans.

This comment concludes that barriers to effective loan modifications should be reduced or eliminated where feasible, but that the securitization of subprime loans creates risks for borrowers.     

Comment on Chester Hartman and David Robinson's “evictions: The hidden housing problem"—protection or protraction?

Abstract

Since the 1960s, judges and legislatures have made it increasingly difficult for landlords to evict tenants even in those instances where tenants have breached their leases. Sometimes, the growth of tenant protections has actually harmed law‐abiding tenants by raising costs to landlords and allowing rule‐breakers to remain in their apartments. Most landlords and tenants should want a system of laws that provides for both fair and efficient eviction procedures. Tenants should be entitled to legal representation when they are threatened with eviction, but their attorneys should not use the legal system to obtain free accommodations for their clients.

In the end, efforts to improve the housing of low‐ and moderate‐income households should rely not on setting up impediments to eviction, but rather on increasing tenants’ ability to afford housing and reducing the cost of housing development and operation.     

The “revival of communism” or the effect of institutions?: The 1993 Polish parliamentary elections

In several Eastern European countries the breakdown of communism in 1989 was followed by a surprising return to power of post-communist parties. Yet, some electoral victories of post-communists look puzzling when contrasted with a small size of a shift in voters' preferences that has led to them. Such is the case of the 1993 Polish parliamentary elections. Using partition-function form games and results of simulated elections, we estimate the impact of three factors that were blamed, in addition to the shift to the left in voters' preferences, for the 1993 victory of the post-communists in Poland. We show that the shift to the left was insufficient to assure post-communists an electoral victory, and that this victory would not have happened under the old electoral law or under a unified coalition of the Right. Our results show the high sensitivity of emerging democracies to the details of their institutional backbones.     

Comment on James E. Rosenbaum,Linda K. Stroh,and Cathy A. Flynn's “Lake Parc Place: A study of mixed‐income housing”

Abstract

Rosenbaum, Stroh, and Flynn confirm existing community leader perceptions that this model mixed‐income development in the predominantly low‐income South Side of Chicago has produced a positive residential environment. Increased tenant voice, not role modeling, seems to be a factor in producing increased resident satisfaction with the building and a strong sense of commitment to the mixed‐income alternative to exclusively low‐income housing projects. The extra resources invested in physical improvements and the extraordinary media attention paid to this model project may have created a “Hawthorne effect,” which also produced higher levels of satisfaction. The existence of this successful model is not sufficient to provide more housing alternatives; community‐based advocacy for more mixed‐income developments is needed.     

Comment on Andrew S. Carron and R. Dan Brumbaugh,Jr.’s “The viability of the thrift industry”

Abstract

Krueckeberg summarizes Hernando de Soto's premise on property rights and offers a critical interpretation of de Soto's work, arguing that it emphasizes efficiency over equity and, ultimately, that enhanced property rights alone are unlikely to significantly improve housing stability or access to capital for households living in informal arrangements. I clarify several of Krueckeberg's discussions of de Soto's ideas from the perspective of the Institute for Liberty and Democracy (ILD).

The ILD perspective, informed by de Soto's writings, contrasts with Krueckeberg's in the following five areas: access to utilities and services in squatter settlements, the criminal nature of these communities, the ability of the poor to fulfill the responsibilities of formal ownership, their ability to borrow against formally owned property, and the impact of formalizing property on rental housing. I close by considering how the ILD perspective on formalization might be brought to bear in the United States.     

Comment on Scott A. Bollens's “In through the back door: Social equity and regional governance”

Abstract

The resurgence in regionalism is not coming about primarily because cities and suburbs see themselves as interdependent competitors in the global economy, as argued in Scott A. Bollens's “In Through the Back Door: Social Equity and Regional Governance.” Instead, enough communities are finding tax equity programs, land use measures, and cooperative governance in their own self‐interest to create gentle progress toward regional equity. However, regionalism lags in ending concentrated poverty and racial segregation because few civil rights organizations are raising these issues as fundamental to a regional agenda. The race issue is not being raised because of lack of understanding and because of competing visions on how to do it.     

Comment on Michael A. Stegman,Walter R. Davis,and Roberto Quercia's “The Earned Income Tax Credit as an instrument of housing policy”

Abstract

The article by Stegman, Davis, and Quercia is a careful, comprehensive analysis of the current impact of the Earned Income Tax Credit (EITC) on the housing cost burdens of working families. Its major proposal, a graduated supplement to the EITC to reflect housing costs, is compared with my broader concept of addressing severe cost burdens through supplements to major income support programs. Criticisms of my concept, chiefly administrative difficulties and incompatibility with the EITC benefit structure, are discussed.

My primary concerns are that Stegman, Davis, and Quercia's proposal does not sufficiently target families with severe housing costs and that the formula for calculating the additional benefit does not reflect diverse housing costs throughout the country and provides the smallest increases to the recipients with the lowest incomes. However, it is more important to generate discussion of the reality that “income policy IS housing policy” than to argue about details.     

Comment on “Does the Likely Demographics of Affordable Housing Justify NIMBYism?”

Abstract

Automated underwriting (AU) systems have become the tool of choice in mortgage lending decisions. While these systems provide significant benefits to mortgage originators and investors, questions have been raised about their impact on underserved populations. The questions focus on the relative accuracy of AU compared with manual underwriting and whether AU has increased the flow of mortgage credit to underserved consumers.

Using information from Freddie Mac's Loan Prospector AU service, we provide statistics useful in examining these issues. The data strongly support our view that AU provides substantial benefits to consumers, particularly those at the margin of the underwriting decision. We find evidence that AU systems more accurately predict default than manual underwriters do. We also find evidence that this increased accuracy results in higher borrower approval rates, especially for underserved applicants.     

“Hunkering Down or Hunkering Away?” The Effect of Community Ethnic Diversity on Residents' Social Networks

We identify two issues with the current literature suggesting that community ethnic diversity undermines social capital: (1) studies predominantly use attitudinal indicators of social capital; and (2) these attitudinal indicators are neighbourhood specific. We suggest the “size” of, and “frequency of interaction” within, individuals' social networks form more valid indicators of social capital. Thus it remains unknown: (1) whether diversity undermines individuals' social connectivity or only attitudes towards neighbours; or (2) whether diversity undermines individuals' total levels of social connectivity or only neighbourhood connectivity. We demonstrate that diversity negatively predicts both local trust and local social connectivity. However, diversity does not negatively predict individuals' total levels of connectivity. From a social connectivity perspective, diversity may undermine local social capital yet exert little effect on individuals' total levels of social capital. Instead, individuals in diverse communities possess equally sized (and active) but less neighbourhood-centric networks. However, this appears dependent on the ability to maintain dispersed social networks: less mobile individuals (e.g. the elderly) report both lower local and lower total social capital in diverse communities.