Affordability and the Funding Gap Trends among Low-and Moderate-Income Households, 1995-2005

The period between 1995 and 2005 was a tumultuous one for low- and moderate-income (LMI) households seeking to purchase their first home. A booming housing market, stagnant incomes, and low interest rates taken together have presented both opportunities and challenges for these households. Meanwhile, regional disparities have increased markedly due to the different rates of price appreciation across housing markets. The upshot of these regional disparities is that LMI households can achieve homeownership without significant subsidies in some places, while in other places multiple layers of grants and concessionary financing, in combination with other policy tools, are the only hope for such families to ever achieve homeownership.The severe erosion of housing affordability in many markets has undermined the ability of government and nonprofit organizations to promote homeownership attainment by blunting the effectiveness of their traditional policy approaches. The response to this situation is a two-stage process. First, the nature of affordability challenges must be understood at the market level, and metropolitan-level housing markets must be accurately classified based on the difficulty that low- and moderate-income households face in becoming homeowners in each place. Second, organizations operating in each market must have access to the right tools to help their clients become owners; the approach must be accurately matched to the affordability regime in the market(s) in which they operate.This paper addresses the first issue. It develops a housing market typology based on affordability into which markets can be sorted, and to which homeownership policy approaches can be matched. The paper unfolds in several steps. It begins by deconstructing housing affordability into three elements -- house prices, incomes and mortgage costs -- and reviewing recent changes in each. It then looks at the performance of house price indexes over the past decade, explaining why they tend to show only small affordability declines despite substantial changes in house price. Following this, the paper examines affordability conditions for low- and moderate-income families in 127 housing markets using two measures: the change in affordability-index values and the gap between the maximum mortgage a household can afford and the amount required to purchase a modest home. Based on these results, we develop an affordability-based typology of market types that can be linked to policy interventions designed to promote homeownership attainment in each type of market

Mortgage Foreclosures in Atlanta: Patterns and Policy Issues

Metropolitan Atlanta is experiencing a foreclosure boom as the number of failed mortgages more than doubled in less than five years, between 2000 and 2005. These foreclosures impose significant costs not only on borrowers and lenders, but also on municipal governments, neighboring homeowners and others with a financial interest in nearby properties. As a result, foreclosure avoidance strategies must involve not only federal, state and local public agencies, but also responsible mortgage industry officials, consumer groups, and community-based, not-for profit organizations. This report was commissioned by Doug Dylla at NeighborWorks America to help build awareness of foreclosure problems and craft a comprehensive foreclosure-avoidance strategy for metropolitan Atlanta. The work presented here serves as a companion to the Foreclosure Prevention Forum cosponsored by NeighborWorks America and the Atlanta Federal Reserve on May 23, 2005. The forum brought together more than 150 leaders from the mortgage industry, state and local government, the advocacy community, and academic and policy researchers. These participants generated a variety of collaborative approaches to address issues related to mortgage failures and foreclosures in the Atlanta region.The report was written and researched by Mark Duda and William Apgar. It expands on research presented by Duda at the forum and is intended to characterize the current situation with respect to mortgage failures in metropolitan Atlanta, as well as previous research completed by the authors on foreclosure avoidance in Chicago and Los Angeles. The foreclosure data used in this report were generously provided by EquiSystems, LLC, producer of the Atlanta Foreclosure Report

The twenty-fifth anniversary of the Community Reinvestment Act: past accomplishments and future regulatory challenges

This paper was presented at the conference "Policies to Promote Affordable Housing," cosponsored by the Federal Reserve Bank of New York and New York University's Furman Center for Real Estate and Urban Policy, February 7, 2002. It was part of Session 4: Housing Subsidies and Finance.Community Reinvestment Act of 1977 ; Credit ; Housing - Finance ; Mortgage loans - Law and legislation ; Housing subsidies

The Municipal Cost of Foreclosure: A Chicago Case Study

The recent rise in nonprime mortgage foreclosures has opened a new and costly chapter in many of the nation's most distressed urban neighborhoods. Particularly problematic is the fact that today's foreclosures impose significant costs not only on borrowers and lenders, but also on municipal governments, neighboring homeowners and others with a financial interest in nearby properties. While there is an extensive literature on the impact that delinquency, default, and foreclosure have on lenders, borrowers, and other entities that are direct parties to the mortgage transaction in question, the costs that these mortgage failures impose on municipalities and other third parties are far less well understood. This is due to two factors. First, municipal and other third party costs are difficult to identify, and therefore often go undetected. Second, even where identified, the activities that generate costs often blend in with other governmental functions, or are otherwise difficult to quantify, reinforcing the tendency for them to remain invisible.This study attempts to fill that void. Using the City of Chicago as a case in point, this study presents a conceptual framework that makes explicit the various costs of foreclosure, especially as they relate to local governments and courts. By carefully reviewing the foreclosure process as it plays out in Chicago, the paper isolates 26 separate costs incurred for the provision of 'foreclosure related services.' These costs reflect actions undertaken by 15 separate governmental units that are part of the overall municipal infrastructure underlying the foreclosure process. While in some cases these municipal activities are limited to simple and relatively inexpensive ministerial duties of agencies like the Recorder of Deeds, in more complex foreclosure scenarios these municipal costs can reach tens of thousands of dollars. In extreme cases, the concentrated foreclosures can put downward pressure on area property values and indirectly rob area homeowners of hundreds of thousands of dollars of home equity

An Examination of Manufactured Housing as a Community- and Asset-Building Strategy

An increasing share of lower-income families, the same population targeted by community-development organizations, are opting to live in housing that was built off-site in a factory to meet the performance standards of the national HUD manufactured-housing code. However, most community-development practitioners are just beginning to come to terms with the implications of manufactured housing for their work.This paper explores advantages and disadvantages of manufactured housing for those entities whose mission is community development and asset building. Several challenges are presented for practitioners: First, working to educate consumers while also creating financing processes that ensure manufactured home buyers obtain credit on the best terms for which they can qualify. Second, using the increased scrutiny under the Manufactured Housing Improvement Act of 2000 to advocate for states to enforce more rigorous installation standards and increased accountability. Third, working to overcome land-use controls which prevent manufactured homes from being placed in communities in need of affordable housing, as well as areas with more potential for appreciation. Fourth, working with designers and planners to develop innovative designs and housing developments, while maintaining manufactured housing's affordability advantages.Finally, equal effort must be devoted to address the difficult conditions of many lower-income people -- owners and renters alike -- living in older, and often deteriorating, mobile homes. While a few of these families and individuals could be relocated to new and better quality homes with the help of subsidies, resource limitations suggest the need to create cost-effective methods to eliminate health and safety problems by upgrading or rehabilitating this extremely affordable element of the nation's housing inventory.As a companion to this paper, an exhaustive literature review has been compiled

Gauging Residential Knowledge and Behavior to Inform Stormwater Outreach Efforts across South Carolina

Public outreach and education are important components of local stormwater management efforts aimed at protecting water quality and reducing pollutants of concern. Increasingly, educators recognize that creating effective outreach material depends on an understanding of the target audience, their current behavior, and their barriers and motivations to adopting pro-environmental behaviors. Clemson Extension’s Carolina Clear program partners with 39 communities across South Carolina to provide compliance-based stormwater education and outreach. On behalf of these community partners, Carolina Clear conducted the third iteration of a telephone survey to gauge local knowledge, perceptions, and behaviors of residents related to stormwater and watershed health. Results presented here will highlight key knowledge gaps (e.g., the misconception that stormwater runoff is treated) and behaviors (e.g., dumping down storm drains) that could potentially be targeted through education and removal of barriers (e.g., storm drain markings). Survey results showed ongoing misperceptions about the major sources of stormwater pollution, whether stormwater is treated, and what behaviors generate pollution. However, results also show a high level of concern about water quality, as well as a desire to practice pro-environmental behavior. Highlighting the connection between potential sources of pollution, such as pet waste and septic systems, and impacts, such as shellfish bed closures and swimming restrictions, could provide stronger awareness and motivation, particularly among the large number of residents who enjoy visiting beaches and who swim, fish, and boat in local waterways. Ultimately, the survey results can be used by a variety of educators and practitioners statewide to better understand and identify target audiences and to guide the development of stormwater programming that addresses these knowledge gaps. Conducting focus groups with subpopulations of residents is recommended as a next step to further identify specific motivations within subpopulations of residents. Combining the survey results with focus-group data can help educators remove barriers to taking action and further motivate behavior change

Testing for Network and Spatial Autocorrelation

Testing for dependence has been a well-established component of spatial statistical analyses for decades. In particular, several popular test statistics have desirable properties for testing for the presence of spatial autocorrelation in continuous variables. In this paper we propose two contributions to the literature on tests for autocorrelation. First, we propose a new test for autocorrelation in categorical variables. While some methods currently exist for assessing spatial autocorrelation in categorical variables, the most popular method is unwieldy, somewhat ad hoc, and fails to provide grounds for a single omnibus test. Second, we discuss the importance of testing for autocorrelation in network, rather than spatial, data, motivated by applications in social network data. We demonstrate that existing tests for autocorrelation in spatial data for continuous variables and our new test for categorical variables can both be used in the network setting

Mental Qualities and Employed Mental Techniques of Young Elite Team Sport Athletes

Research on the psychological characteristics of elite performers has primarily focused on Olympic and World champions; however, the mental attributes of young developing and talented athletes have received less attention. Addressing this, the current study had two aims: (a) to examine the perceptions held by youth athletes regarding the mental qualities they need to facilitate their development and (b) to investigate the mental techniques used by these athletes. Forty-three male youth rugby players participated in a series of focus groups. Inductive content analysis revealed 11 categories of psychological qualities, including enjoyment, responsibility, adaptability, squad spirit, self-aware learner, determination, confidence, optimal performance state, game sense, attentional focus, and mental toughness. Techniques employed included personal performance strategies, refection on action, taking advantage of a supportive climate, and team-based strategies. Findings are discussed in relation to their implications for mental skills training program development and evaluation in the case of youth elite team sport athletes.</jats:p