Rethinking Housing Blog

The Federal Reserve Bank of San Francisco recently released its Spring issue of Community Investments which focuses on affordable housing. The issue looks at how current stakeholders in the affordable housing industry are seeking out alternative ways to provide affordable housing in a particular challenging economy. They follow practitioners to learn about new public-private funding partnerships, as well as cross-sector efforts in healthcare, transportation, and energy efficiency.

One paragraph we found especially important on the topic ‘Looking Ahead’ from the report is as follows:

“In the current context of diminishing government funding, we need to be ambitious and creative in leveraging the resources we do have. In order to create affordable homes and other community needs, the community development finance field needs to continue to push our new boundaries and stretch our models to create partnerships and pool resources. Public and private interests need one another to succeed. Silos between the transportation, health, and housing sectors are being removed, partially out of necessity and partially out of a conceptual shift in which diverse partners realize we seek similar outcomes. The promise of creative diversification of funds for a public- minded mission, evident in the examples described above, can inspire similar efforts using this model to build and support stable communities through pooled resources and strong coalitions.”

To read the full report, click here.

In a recent State of the Market by RECAP Real Estate Advisors titled The Problem of Cost by David A. Smith he discussed the issues with a shrinking government budget and higher costs but says the costs of affordable housing development can be lowered without reducing the quality.

Smith states a number of reasons why affordable housing development costs are higher than they need to be:

• LIHTC resources are not used efficiently
• The extreme complexity of affordable housing developments adds many soft costs
• Lack of residuals causes increased development fees

To learn more about Smith’s thoughts high cost in affordable housing development and to read the State of the Market 52: The Problem of Cost in its entirety, click here.

A recent article on ULI’s UrbanLand site by Tricia Riggs titled The Future of Housing Demand Is Compact, Urban, and Transit-friendly discusses a report which looks at America’s views on their communities, housing, and transit.  The report found 4 major findings:

• Changes in demographics which include Generation Y will increase the amount of mixed use development and easily accessible transit
• Demand for suburban housing is expected to decrease
• Boomers are seeking out city living versus suburbs (smaller homes, shorter commute)
• The Generation X population is more likely to prefer suburbs and to not support increased transit options

To read the article on UrbanLand, click here.

To read the full Americans’ Views on their Communities, Housing, and Transportation report prepared for ULI, click here.

A recent MinnPost article titled What makes people attached to a city? featured Katherine Loflin, a placemaking expert, working as the lead consultant for the Soul of the Community Project which is a three-year study by Gallup and the John S. and James L. Knight Foundation focusing on people’s attachment to cities and why they are attached to them. Loflin states that people used to go where jobs were, but now jobs go where people are because quality of life matters and they want to be in a city they love.  The study finds that when people love a city, it will prosper.

To read the MinnPost article, click here.

To learn more about the Soul of the Community Project, click here.

The Metropolitan Council and ULI Minnesota/ Regional Council of Mayors are hosting an event titled HOUSING CHOICE: an accelerator of regional economic competitiveness to discuss the range of housing choices necessary to ensure the region remains economically competitive.  The event is being held on June 6th from 8am to 11:30am at the Bloomington Center for the Arts. The event features national experts:

Dr. Arthur (Chris) Nelson, Director Metropolitan Research Center, City and Metropolitan Planning, University of Utah, a renowned researcher whose work focuses on the changing demographics of urban real estate markets

Melina Duggal, Senior Principal, RCLCO, a real estate expert on mixed use land development and the changing implications of rental housing

Following  Dr. Arthur and Melina Duggal, a local responder panel, moderated by Steve Cramer, President and Executive Director, Project for Pride in Living, will include:

• Mary Tingerthal, Commissioner, Minnesota Housing
• Dr. Bruce Corrie, Associate Vice President for University Relations and International Programs, Concordia University
• Bill McKinney, Vice President of Talent and Long Term Development, Thrivent Financial for Lutherans
• Beth Pfeifer, Director of Development, The Cornerstone Group

To RSVP, click here.

The National Housing Conference and the Center for Housing Policy recently published the Housing Landscape 2013 report stating for the third consecutive year that housing cost burdens for working renters have increased.  Specifically 26.4% of working renters spent more than half of their household income on rent.  While housing costs were increasing, annual income was decreasing creating difficult financial situations for working renters that are unsustainable.  To read the entire report and including details of housing cost burdens on homeowners, click here.

In this post on the Atlantic Cities website by Richard Florida he discusses the report, entitled How Housing Matters: Americans’ Attitudes Transformed By The Housing Crisis & Changing Lifestyles, prepared by Hart Research Associates. Florida talks about the report’s discussion of the changing appeal of homeownership in America.  The report states that 57% of those surveyed felt that buying has become less appealing and 54% say renting has become more appealing.  The report is summarized by Peter Hart when he states, “While the desire to own a home remains a bedrock principle in American life, this survey demonstrates that the American public’s views about housing are changing, in part due to the hangover from the housing crisis, but importantly, also because of changes in our lifestyles. The dynamic is no longer simply ‘renting versus owning’ – perspectives are more complex, and people are viewing housing in a more holistic way. …Many of the positive attributes that have long been associated with homeownership are fading, and on the flip side of the coin, it is remarkable that nearly half of all homeowners can picture themselves one day becoming a renter.”

To read Richard Florida’s post and for a link to read How Housing Matters: Americans’ Attitudes Transformed By The Housing Crisis & Changing Lifestyles, click here.

Take a moment and check out the Living Cities Blog, The Catalyst: Ideas and Insights from Living Cities.

The most recent post by Amy Chung is titled Critical Factors to Making Equitable TOD a Reality and discusses the goals of equitable TOD, which are:

• creating more livable communities where individuals of all income levels have access to the jobs, housing and community amenities and facilities that they require while also minimizing the burden of housing;
• lowering transportation costs for everyone, especially low-income residents.

…and provides recommendations on how to achieve those goals, which include:

• Equitable TOD Needs New Forms of Collaboration and Partnerships Between Unlikely Bedfellows
• Conventional Financing Products Need to Evolve to Support Equitable TOD
• Clarity of Intent is Critical

Read Amy Chung’s post and more here.

As a part of CFED, the ”Market Opportunity” newsletter I’M HOME provides information related to affordable manufactured housing and provides opportunities for collaboration in the field. Their most recent issue released in April of 2013 covers three important topics:

1. What You Didn’t Know about Mortgages – discusses a Fair Mortgage Collaborative to work towards expanding affordable mortgages for manufactured homes.
2. Research Highlights the Power of Homeownership Counseling – talks about the importance of pre-purchase counseling and a study that found significant benefits to new homeowners who take advantage of this type of counseling prior to purchasing a home.
3. Incorporating Energy Efficiency Into The Mortgage Equation - discusses a study that was able to but the benefits of energy efficiency into measurable terms.

To read the newsletter in its entirety, click here.

In mid-March, many representatives from the housing and community development fields gathered in Chicago at a Living Cities Learning Community summit. At the event they heard from Jeremy Nowak, the author of the report “Smart Subsidy in Community Development.”

In the report, Nowak provides a practitioner’s reflection on the use of subsidy in real estate development and finance. The paper presents a three-pronged argument:

• Community development bridges economic development and social inclusion. As a result the use of subsidy requires the consideration of unique costs.
• Desirable application of project level subsidy adheres to a one of a set of principles.
• Smart subsidy requires the use of strong analytical tools to distinguish between levels of desirability.

Jeremy Nowak is the President of J Nowak and Associates, LLC, a consulting firm. He is the Chairman of the Federal Reserve Bank of Philadelphia Board of Directors and has served as a director since 2008. He served as the President of the William Penn Foundation from 2011-2012. Prior to that he acted as the founding CEO of The Reinvestment Fund, a Philadelphia-based community development financial institution.

To read the full report, click here.