FHA: Recent History and Future Prospects

The Federal Housing Administration (FHA) deserves considerable credit for helping support the housing market during the recent financial crisis by increasing its own market share. However, as the recovery continues, the FHA can gradually return to its “traditional” role as an insurer of low-down-payment home mortgages for low-to-moderate-income and first-time homebuyers. A major concern going forward is susceptibility to increased adverse selection if it continues in nontraditional markets. Indeed, the modest market share of the FHA going into the housing collapse was important both in limiting its losses and in allowing it to maintain the market when other traditional secondary market makers failed.     

Foreclosing on the American dream? The financial consequences of low-income homeownership

Federal programs have consistently encouraged ever-lower-income households to buy homes, despite concerns about the long-term sustainability and desirability of homeownership from the perspective of wealth-building, especially since the recent housing market collapse and the epidemic of mortgage foreclosures. We ask in this paper: can very low-income households build wealth through sustainable homeownership, with the aid of an innovative public program? We answer this question by examining 122 very low-income households who purchased their homes between 1996 and 2007 after completing an extensive asset-building and homeownership education/counseling program offered by the Housing Authority of the City and County of Denver (DHA), called HOP. We analyze our own longitudinal surveys and focus groups, as well as data compiled from administrative agency sources, real estate records, and longitudinal census data from the Neighborhood Change Database and the Piton Foundation's Neighborhood Facts Database. We find that homeownership attained through HOP typically did provide very low-income households with opportunities to build home equity (both absolutely and relative to generic homeowner cohorts in Denver) and net wealth, although this was contingent on time of purchase and ethnicity. Our multivariate analyses revealed that changes in annualized home equity appreciation were associated with the ethnic composition of the neighborhood and age of property. Annualized wealth accumulation was associated with annualized home equity appreciation, being married throughout the tenure of homeownership, and year of home purchase. HOP homebuyers received exceptionally favorable initial mortgage terms and conditions, often enhanced with down-payment assistance from their own DHA escrow account or from local housing and neighborhood development organizations, resulting in a dramatically low rate of default and foreclosure to date. Moreover, HOP homebuyers were not immune to financial stresses, and the continuing lack of wealth for many makes them vulnerable to future interruptions in primary wage earner's employment or health. We discuss the implications for low-income homeownership policy and argue that the goal of expanding homeownership opportunities should not be abandoned.     

The role of limited‐equity cooperatives in providing affordable housing

Abstract

This article develops an economic analysis of the role of limited‐equity cooperatives (LECs) in providing affordable housing. Using a model of the user costs of housing that focuses on housing externalities, it examines methods for overcoming externalities in multiunit rental dwellings.

Investment in management can reduce these externalities and thereby improve the quality of the housing environment, but the added cost excludes low‐income households from housing with a high level of management. LECs can reduce housing externalities without imposing the dollar costs of management on residents. They do this principally by attempting to attract a favorable resident population and by substituting self‐management for traditional hierarchical management. Given these findings, the article makes recommendations regarding the structure of a federally sponsored LEC program and draws implications for affordable housing policies in general. Finally, it calls for further empirical research into the desirable (and undesirable) features of self‐managed affordable housing.     

The young and the restless: housing access in the critical years

Abstract

How do governmental housing policies affect the ability of young people to exit the parental home? This paper makes three claims. First and most important, governments that create accessible and liquid mortgage markets make it easier for young people to launch from the parental home. Second, even in those countries with more liquid housing markets, younger generations today still have an increasingly difficult time realising their preferences compared to prior generations. Third, increasing income and wealth inequality interacts with housing markets to create this uneven playing field both within and across generations. This paper examines these relationships in 20 high-income OECD countries. Fewer adult children live in the parental home in countries with deep mortgage markets, high levels of social rented housing, tax relief for ownership, low buyers' transaction costs and high residential mobility. These countries cut across the traditional housing regime typologies, highlighting the need for additional housing-specific theory building.     

More Than Meets the Market? Landlord Agency in the Illinois Housing Choice Voucher Program

The federal Housing Choice Voucher Program currently serves as one of the nation's predominant strategies for providing affordable rental housing for low-income households. The program is designed around two goals: first, to uphold the U.S. Department of Housing and Urban Development's mission to provide safe, decent, and affordable housing; and second, to facilitate household residential location choices, with the idea that such choices can leverage other types of nonhousing opportunities for assisted households. While scholarly research has described a range of positive and negative household outcomes associated with the voucher subsidy, less is known about how those outcomes are produced on the ground. This research describes findings from 72 in-depth interviews with Illinois landlords and other voucher program stakeholders regarding their experiences with the program, with the goal of linking landlord practices to tenant outcomes. Findings of this research underscore the substantial influence that landlords have on assisted-household residential location choice and tenure, and show the potential for voucher program design to more actively engage with landlords as providers of supports that extend beyond the housing unit.     

Moving to Location Affordability? Housing Choice Vouchers and Residential Relocation in the Portland,Oregon, Region

Abstract

Location affordability measures a household’s combined cost of housing and transportation. Low-income households have the most to gain from housing with lower transportation costs. This research analyzes whether Housing Choice Voucher Program households—participants in a program designed to provide low-income households with a greater degree of housing choice—are able to choose housing that lowers their transportation costs in a metropolitan region with a compact, vital urban core. A mixed-methods approach is used to investigate the differences in location affordability and efficiency among 2,026 voucher recipients who moved within the Portland, Oregon, region during 2012–2013. Location mattered to movers, but in some unexpected ways. Urban movers relocated to less location efficient areas, whereas suburban movers’ location efficiency remained stable. In tight housing markets, voucher holders may be edged out of location-efficient neighborhoods and thus incur increased transportation costs.     

Potential Effects of Federal Policy Devolution on Local Housing Expenditures

As 1994 came to a close, the future of the U.S. Department ofHousing and Urban Development (HUD) and the continued role ofthe federal government in low-income housing assistance washighly uncertain. The agency was targeted for elimination bycongressional leaders, its budget was the object of recissionattempts, and agency officials proposed a radical reinventionto alter housing programs and the delivery system for federalhousing assistance. Given the likelihood of either more budgetcuts (resulting in greater reliance on nonfederal sources offunds) or the devolution of policy responsibility through blockgrants, there is heightened concern for how local governmentsallocate housing funds. This article examines housing expenditurestrategies of large U.S. cities. The analysis describes factorsrelated to a greater use of nonfederal housing revenues by cities,and examines the impact of funding source on program and beneficiarytargeting. The data suggest that reduced federal spending ora shift to block grants is likely to result in more housingbenefits directed to moderate-income households and to homeownersand homebuyers.     

THE INFLUENCE OF BLACKS IN STATE AND LOCAL FAIR HOUSING POLICY-MAKING

The influence of black officials and organizations on public policy varies among political settings. Factors responsible for this variation include the relatively limited political resources still available to blacks, the size of the black population in a location, the representation of blacks in elective office, the control of political gate keepers, and prevailing ideology. The ability of blacks to influence fair housing policy is further predicated upon the level of government addressed. Black individuals and organizations were in- strumental in gaining agenda status for the passage of federal fair housing legislation in the 1960s. Experiences in Cleveland and Ohio reveal a less prominent role for blacks in state and local fair housing policy. Two major factors peculiar to this topic, inattention of traditional civil rights groups and diminished public support for civil rights policies, combine with repre- sentational issues to require a broader coalition for support of these policies. The lead in advocacy has been assumed by black/liberal white coalitions that promote managed residential integration contrary to the preferences of black-dominated interests that prefer equality of housing opportunity regardless of racial impact. The latter group, lacking the politi- cal resources of the former, usually reacts to policy rather than initiating policy. Black elected officials, who play a pivotal role in responding to the demand-protests of their constituents, may be hampered or helped by the political resources available in state and local settings. The theory of politi- cal incorporation helps to explain the incremental gains of blacks as com- pared to long-term policy responsiveness in state and local policy-making.     

Credit scores,race, and residential sorting

Credit scores have a profound impact on home purchasing power and mortgage pricing, yet little is known about how credit scores influence households' residential location decisions. This study estimates the effects of credit scores on residential sorting behavior using a novel mortgage industry data set combining household demographic, credit, and financial data with property location information and detailed community attribute data. I employ the data set to estimate a discrete‐choice residential sorting model. I find that credit scores significantly predict residential sorting behavior and models that do not account for credit score provide biased estimates of housing utilities for black households in particular. Simulation results show that increases in credit score are associated with increases in the consumption of higher‐priced homes in more expensive school districts, higher‐quality public schools, and proximity to urban/metropolitan areas. © 2010 by the Association for Public Policy Analysis and Management.     

Long‐term care reform and the role of housing finance

Abstract

The Clinton administration's recently announced home and community‐based care proposals have potentially important implications not only for long‐term care policy, but also for housing policy in the United States. This article attempts to draw out some of those implications. The first section examines problems inherent in the current “medical/welfare” system of financing long‐term care, which constrains consumer choice by limiting the supply of providers to control costs and by increasing medical professionals’ control over the types of services provided in the name of quality control. The medical/welfare dominance of long‐term care policy has resulted in an overreliance on nursing homes as providers, resulting in both escalating costs and continued consumer dissatisfaction.

The second half of the article looks at recent market and policy developments in response to consumer demand for lower cost alternatives to nursing homes. These alternatives promote more consumer autonomy and control in supportive housing arrangements. A more comprehensive services and housing policy could promote these developments in an approach that combines the security of public financing of supportive services with the benefits of consumer choice, market competition, and legal protections that characterize housing markets. In such a scenario, housing finance institutions—including government agencies, lenders, developers, and investors—could play a pivotal role in the long‐term care debate not only by unlocking substantial financial resources but, equally important, by transforming the provision of long‐term care services to promote consumer choice and autonomy.     

The road home: an examination of the successes and challenges of housing non-profits in New Orleans since Katrina

Hurricane Katrina claimed the lives of nearly 1000 Louisiana residents and damaged about 80% of the building stock in New Orleans. Unequal protection from the hurricane and uneven recovery patterns have left some communities (predominantly low-income and black) with few options to rebuild their homes. These factors have created a high demand for housing non-profits specializing in new construction as well as low-cost home repairs. Drawing from interviews with a number of stakeholders including non-profits completing home repairs and new construction for low-income residents, this article identifies the type, amount and target areas for work done by housing non-profits in post-Katrina New Orleans. Additionally, it identifies the challenges for future work and limitations in the non-profits’ ability to address housing inequity in New Orleans.     

Peak Millennials: Three Reinforcing Cycles That Amplify the Rise and Fall of Urban Concentration by Millennials

The rise and fall of the Millennial generation congregating in central cities is a product of life course meeting unique historical context. Three reinforcing cycles harmonized before 2010 to maximize Millennial presence, and then will harmonize in 2020 to reduce presence. In 2015, the peak Millennial birth cohort passed age 25, with smaller cohorts to follow. Job opportunity that had sharply worsened following the Great Recession is reversing, with renewed job growth opening entry positions, and with less competition from smaller cohorts. In housing, Millennials were doubled up at entry levels of their housing life cycle, blocked by older peers who were unable to turn over their apartments for better homes. With renewal of new construction and home buying, stronger vacancy chains will again stimulate outflow. The combined effect of the three reversed cycles will reduce central concentrations of young adults. Preferences may persist for urban walkability but, freed of their former constraints, preferences will now be expressed through choice from a broader range of locales. Cities and suburbs can compete for Millennials passing age 30 with walkable districts, transit, and better schools and housing.     

廉租住房实物配售与配租的效果研究——基于陕西省XX市的调查

实物配售和实物配租是廉租住房补贴实施的主要方式,实证分析两种补贴的政策效果对廉租住房的开展具有重要意义。本文运用效用分析方法,结合陕西省XX市廉租住房住户随机抽样调查获得的数据,对比分析实物配售和实物配租两种补贴方式的实施效果。研究结果表明,两种补贴方式均提高了受补贴家庭的消费效用水平,但效用增加量的大小与住房消费获得的效用占总消费获得效用的比重r相关:当r小于0.5974时,实物配租的效用增量大于实物配售;当r大于0.5974时,实物配售的效用增量大于实物配租。研究表明廉租住房建设过程中,应当适当考虑其建设地点或完善小区周围的学校等公共设施。现阶段两种补贴方式在廉租住房保障中都能够发挥一定的作用。因而政府通过建设廉租住房解决家庭住房困难问题,可以采取实物配租和实物配售相结合的方式。两种方式的具体选择可以依据住房消费效用占家庭消费总效用的比例来确定。     

An analysis of the neighborhood impacts of a mortgage assistance program: A spatial hedonic model

Down payment or closing cost assistance is an effective program in addressing the wealth constraints of low‐and moderate‐income homebuyers. However, the spillover effect of such programs on the neighborhood is unknown. This paper estimates the impact of the City of Dallas Mortgage Assistance Program (MAP) on nearby home values using a hedonic model of home sales from 1990 to 2006. We define neighborhoods of 1,000 feet around each sale and estimate the average differences in sales prices between neighborhoods with various numbers of MAP properties before and after their appearance. We find that MAP properties tend to locate in neighborhoods with lower property values; however, unless a concentration of MAP properties forms, the infusion of MAP properties has little detrimental impact on neighboring property values. Moreover, low concentration of MAP properties has a modest positive impact on surrounding property values. © 2010 by the Association for Public Policy Analysis and Management.     

Resident-Owned,Informal Mobile Home Communities in Rural California: The Case of Rancho Don Antonio,Coachella Valley

California's farmworkers are among the lowest-paid wage earners in the state. They often live in crowded or substandard housing. The Polanco Bill—state legislation enacted in the early 1990s—aimed to increase the supply of housing for farmworkers by encouraging the development of employee housing on land zoned for agriculture. This article discusses the implementation and effects of the Polanco Bill in the agricultural area of the eastern Coachella Valley. It finds, somewhat unexpectedly, that groups of farmworkers, often family members, have used the bill to collaborate and develop small, resident-owned, informal mobile home communities, called polancos, and focuses on one such case. Although the article's key contribution is to identify the informal approach and its key attributes, it also discusses whether a new housing model based on the collectively owned polancos is possible.     

Revitalizing the Parramore heritage renovation area: Florida's state housing initiatives partnership program and Orlando's historic African‐American community

Abstract

Housing programs increasingly contribute to broader community revitalization efforts rather than strictly serving production‐oriented goals. As implementation of this strategy moves beyond the traditional housing leaders in cities such as Boston, Cleveland, and Baltimore, an assessment of other areas is instructive. This article examines how the nation's largest housing trust fund, which Florida directs primarily to local governments through the State Housing Initiatives Partnership (SHIP), contributed to Orlando's ambitious community revitalization effort in the Parramore neighborhood.

Given the consistency between SHIP goals and those of the Parramore project and Orlando's experience with developing partnerships and affordable housing initiatives, SHIP should have proven an effective tool. The initial findings demonstrate that housing programs need to be sufficiently flexible to permit a comprehensive approach to neighborhood revitalization. Such an approach should seek a balance between product‐based redevelopment and people‐based housing strategies, expand the role of community development corporations, and create housing choice.     

The Home Maintenance and Improvement Behaviors of Older Adults in Boston

Prior studies have found that older homeowners spend less money maintaining and improving their homes, which may reduce their quality of life and eventually pose larger, more costly housing problems. Delayed repairs and improvements may also have adverse spillover effects on neighborhoods. We explore the home maintenance expenditures, housing conditions, and credit access of older homeowners in Boston, Massachusetts, where many aging adults have limited incomes and live in older structures but also have substantial home equity that could be used as a financial resource. We find evidence that older homeowners spend less on home maintenance, and many live in low-income areas with high numbers of constituent complaints about housing conditions and less access to cheaper forms of credit. A particular policy intervention, the Boston Senior Home Repair Program, helps by providing home repair assistance to low- and moderate-income older homeowners.     

Property values in inner‐city neighborhoods: The effects of homeownership,housing investment,and economic development

Abstract

This article examines the determinants of property values in Cleveland with a focus on three approaches to improving or maintaining neighborhood quality: investing in new housing, attracting and retaining homeowners, and encouraging economic development. Data comprise home sales in 1996 and 1997, investments in new housing from 1991 to 1995, homeowner migration between 1991 and 1995, and changes in the number of business establishments from 1991 to 1995.

The results suggest that (1) investments in new houses have a positive impact on housing values, especially for houses close to the new investment; (2) homeowner out‐migration has a negative effect; and (3) growth in the number of business establishments, except for social service establishments, also has a negative effect. These results further suggest that while programs to encourage housing investment and homeowner‐ship can increase neighborhood property values, care should be taken to avoid an inappropriate mixing of land uses.     

Evaluating the Concept of Location Affordability: Recent Data on the Relationship Between Transportation,Housing, and Urban Form

The concept of location affordability holds that housing affordability should be augmented to include transportation cost as a related and substantial household cost burden. The recent United States foreclosure crisis of 2006–2008 offers an opportunity to evaluate location affordability as a concept for policy and practice by investigating the relationship between transportation cost burdens and negative housing outcomes. This article contributes to the growing literature on location affordability and the recent crisis with an analysis of default and foreclosure data for 70 metropolitan areas. The analysis includes transportation and housing cost burdens and demographic data, as well as multidimensional measures of urban form. High rates of automobility are associated with increased foreclosure. The urban form variables yield mixed results, suggesting the relationship between urban sprawl and affordability is complex. However, across a range of specifications, high levels of development intensity are associated with increased foreclosure rates. The results have implications for both the housing and transportation sectors and lend support for the notion of location affordability.