Connecticut group trains renters and landlords to ‘bridge the divide’

Helping residents of its diverse community achieve homeownership is a core mission of Neighborhood Housing Services of New Britain (CT). In fact, the organization – which celebrated its 35^th anniversary this year – was chosen to participate in NeighborWorks America’s pilot program when it first started training housing counselors in 1982.

But homeownership isn’t feasible or the desired option for some people, and as Harvard University’s Joint Center for Housing Studies reported this month, there is a growing shortage of affordable rental units. According to the report, the share of renters paying more than a third of their incomes for housing, traditionally considered the minimum threshold of affordability, rose to 50 percent in 2010. Much of the increase was among renters facing severe burdens (paying more than half of their incomes for housing) – a group now representing nearly 27 percent of tenants. 

That reality can be seen in central Connecticut as well. The area, which has a large population of Hispanic and Polish immigrants (giving the neighborhood around the organization’s office the nickname, “Little Poland”), has lost a lot of manufacturing operations over the years and now relies on service businesses for its livelihood. Unemployment is nearly 12 percent.  

The mission of Neighborhood Housing Services of New Britain is to help fill the gap in the supply of affordable housing – in part, through developing rental units, of which it now manages 25. The goal, says Executive Director Maureen Voghel, is to add 10 plus units annually for the next three years, along with two to four single-family homes. 

However, renting poses unique challenges – for both tenants and landlords. And while counseling is offered by many organizations for new homeowners, such training rarely is provided to people on both sides of the renting “equation.” NHS of New Britain is taking the lead by offering preparation classes for both existing and prospective renters and landlords.

“Sometimes, renters become landlords themselves,” observes Evelyn Branch, supervisor of Homeownership and Foreclosure programs for NHS. “It can make sense, once they are ready to purchase, to buy a multi-family unit – like a duplex – and rent out the extra space for some income. But becoming a landlord isn’t easy.”

Participants in the NHS-NB training class for landlords
hear from a police officer.

In the last year, the Connecticut Housing Finance Authority began requiring landlords to receive education on their responsibilities, and with the closest alternative site a less-frequent program in Hartford, the NHS class attracts a regular attendance of about a dozen for each monthly, three-hour session.

The “Landlord 101” workshop, says Branch, covers everything from making the decision to purchase a rental unit and become a landlord, to how to screen tenants, maintain the property, manage their finances and – if necessary – evict residents in accordance with the appropriate protocols. Recently, the curriculum was supplemented to include the importance of green maintenance practices to keep costs low for everyone.

In October, NHS began offering a similar class, but for tenants. In the tenant class, participants discuss how to effectively communicate concerns to their landlords, ways they can bring down energy costs and their rights during eviction. In the future, NHS hopes to forge a partnership with other community-based organizations to provide legal services through pro bono attorneys to both tenants and landlords.

“It’s a two-way street,” explains Branch. “Both have rights, and both have responsibilities. But no one prepares them for that. Our goal is to help them build a good, professional relationship, based on open communication. ”

‘Aging in place’ transformed from dream to reality in Ohio

As with other communities across the country, the Rust Belt town of Springfield, OH, is aging. With high unemployment and the resulting exodus of young people, the population of the small town in southwestern Ohio is increasingly in need of affordable housing tailored to the needs of older individuals who want to stay in their communities, but need a little help to do so.

“Springfield is very segregated in terms of income,” explains Tina Koumoutsos, executive director of Neighborhood Housing Partnership (NHP) of Greater Springfield, which celebrated its 20th anniversary in 2013. “Most of the new development is on the north side, where the more affluent residents live. People in the southern neighborhoods don’t have as many options.”

NHP-GS is doing its part to change that, however. In 2011, it partnered with the City of Springfield to leverage funds from the second round of HUD’s Neighborhood Stabilization Program, created to assist communities whose viability is at risk in the wake of the wave of foreclosures. This funding, says Koumoutsos, was a “blessing. We had no debt to service, and could use the project instead to generate a revenue stream to invest back in our work.”

One year later, NHP offered 12 two-bedroom duplexes for rent, specifically for individuals age 55 or older who are making 50 percent of the area median income or less. In addition to reasonable rents, affordability is assured through green building practices that keep energy costs low.

“We designed these units with ‘smart growth’ in mind,” says Koumoutsos, who was the city’s housing coordinator before she became the founding director of NHP. “That means people and their special needs were our focus, not cars.”

For example, the new development was positioned to be “walkable,” with a YMCA, government offices and a performing arts center within easy reach. The property manager of the complex owns another, larger senior-service project and provides case-manager services to both developments, including recreational activities and transportation when needed.

Front porches (without steps, so people with disabilities
can easily access them) are main features of the new
walkable community for seniors.

In the units themselves, garages are positioned to the back of the homes, shifting the focus to front-yard porches where residents are encouraged to socialize with each other. The University of Michigan’s Health and Retirement Study, which is following more than 7,000 individuals, concluded that living in a neighborhood where you have strong social ties has as much physical benefit as not smoking.

In addition, the development was built with a goal of “zero steps.” Koumoutsos explains that NHP wanted the residents to be able to safely age in place, as well as to welcome disabled friends and relatives. That means no stairs that could become wheelchair obstacles, as well as special touches such as walk-in showers in the bathrooms and accessible kitchen cabinets. At the same time, however, the NHP team worked hard to make the look inviting, rather than institutional, and the second bedroom in each unit offers plenty of space for visiting children and grandchildren.

“All of the units filled almost immediately, and we have a waiting list of about 100,” says Koumoutsos. “We are in discussions now with the city about building more, since we own the adjacent land.”

“Impact” is what Koumoutsos and her team strive for. A recent study documented that in the last five years, NHP of Greater Springfield has contributed $43 million to the local economy, supported 74 jobs and generated $51 million in first mortgages.

“We used to have to struggle to make the case that providing affordable housing has an overall impact on the community at large,” she says. “Now no one questions it.”

Written by Pam Bailey, communications writer for NeighborWorks America.

Missouri group revitalizes neighborhoods with mixed-income housing and urban orchards

When we hear about declining downtown districts beginning to become trendy again, it’s good news. But there’s usually a downside: As property values shoot up, affordable housing becomes scarce and low-income residents are pushed out.

That’s the challenge faced by Kansas City, MO. And the Westside Housing Organization – a NeighborWorks member celebrating the 40th anniversary of its founding this year – is determined to assure that affordable housing remains central to the downtown community’s identity.

Westside serves a primarily Latino population, a demographic that first began making its way to the city in the 1920s and ‘30s for jobs with the railroad, explains Executive Director Gloria Ortiz Fisher, whose own family emigrated from Mexico. The organization was founded in 1973 to lead residents’ fight against the loss of their homes to two new highways. Although they lost that struggle, Westside (named for the neighborhood on the west side of the city’s downtown district) developed into a strong local advocate for residents, and is today the only community development corporation in Kansas City for which a significant focus is Latinos.

As the railroad declined, so did the town’s economy, with the West Side’s working-class residents finding employment in restaurants, hotels and similar, small, service-based businesses. However, that all changed in 2009 when the Sprint Center – an indoor arena for concerts and other entertainment -- was built downtown, followed by a host of other attractions.

“The West Side is now a desirable place to live again,” says Fisher. “There are new businesses coming in and lots of creative artist types. Our focus is to make sure affordable, multi-family housing remains in the mix.”

Westside is headquartered
in a renovated firehouse,
rehabbed to green
standards.

Westside has long been in the business of developing affordable housing to nurture mixed-income neighborhoods. In the 1980s, Westside Housing began acquiring and rehabbing older apartment buildings in the neighborhood, and now has a portfolio of 165 rental units. The organization also facilitated the development of 120 new, affordable houses. Today, it is accelerating that work and hopes to double its rental units to 300. Meanwhile, Westside is eying an old high school, long since closed as young families left the urban core, which it would like to acquire for housing as well as community space. Energy-efficiency is emphasized during construction, both to keep residents’ utility bills low and continue its leadership role. (In December 2012, Westside was recognized as a NeighborWorks America Green Organization.)

“We operate with an average 98 percent occupancy,” says Fisher. “There is always a waiting list.”

Still, it’s a challenge, and many working-class families from the West Side neighborhood are moving to less-expensive homes to the historic northeast district. So, Westside has expanded to serve them, since an older community development corporation in that neighborhood had closed down.

Two residents of the neighborhood water
one of the orchard's trees.

“You can get a house there for $35,000, but there is a lot of crime, and 25 percent of the buildings are abandoned or vacant,” says Fisher. “It’s a good place for fearful immigrants to stay under the radar.”

To help prevent crime through greater community engagement, Westside is recruiting resident leaders to organize clean-ups, advocating for sidewalk construction, starting community gardens and partnering with the police department to implement a program called “Crime Prevention through Environmental Design,” including window repairs and the trimming of shrubs and trees that can hide illicit activity.

One of its more creative projects is an urban orchard designed to accomplish several goals – increase resident engagement (and thus discourage crime), encourage sustainable living and alleviate the “food desert” the area had become. In partnership with SkillsUSA (a nonprofit that trains students in vital job and leadership skills) and TimberlandPro (a footwear manufacturer), and with the help of neighborhood volunteers, Westside Housing planted a 2.5-acre orchard in an empty grass lot behind a community center. Nearly two years later, the orchard is home to more than 200 fruit trees and berry bushes. The trees and shrubbery help improve the poor urban air quality and mitigate storm water runoff, and Westside offers the fruit free for all residents.

“I don’t see broken windows when I walk through a community,” says Fisher. “I see opportunities.”

If you'd like to see for yourself the good work Westside Housing is doing, attend the NeighborWorks Training Institute in Kansas City, MO! At the Dec. 11 symposium, "Real-World Solutions for Community Transformation," one of the "mobile workshops" will be held at its facility.

Written by Pam Bailey, communications writer for NeighborWorks America. 

Atlanta group helps homebuyers save ‘green’ with green housing

Whether housing is affordable is determined by so much more than its purchase price or monthly rent. High energy costs also can be a heavy financial burden on families whose incomes already are stretched. According to the national Green & Healthy Homes Initiative, low-income households typically spend 14 percent of their total income on energy costs, compared with 3.5 percent for other households.

Resources for Residents and Communities (RRC) in Atlanta, which is celebrating its 10th anniversary as a NeighborWorks network member this year, hopes to help homeowners reduce their costs by incorporating an array of green features in its new single-family development, Legacy Pointe.

Legacy Pointe will be a small subdivision within Atlanta’s Reynoldstown community consisting of eco-friendly, pre-fabricated homes for purchase.

“The uniqueness is the development will be mixed-income,” says Jill Arrington, CEO of RRC. “The [homes] that will be affordable will be held in a community land trust to keep them perpetually affordable.”

To earn its “eco-friendly” label, Legacy Pointe will feature energy-efficient LED lighting in the common areas, pervious concrete (highly porous material that allows precipitation to pass through and re-charge ground water levels) in the parking  lot and landscaping that requires very little watering.  Each home also will include separate lines for hot and cold water (thus reducing waste) and temperature controls that reduce reliance on the heating, ventilation and air-conditioning (HVAC) system.

“We didn’t have to turn on the HVAC unit in our model home at all this summer,” Arrington says. “Even last winter, we never had to turn on the heat.”

The first model home in Legacy Pointe was assembled so
quickly it was like "magic."

With such features, it’s no wonder the Reynoldstown community is already abuzz about the new development.  Arrington recounts the day in 2010 that New World Home, a national green home builder and RRC’s partner in this effort, built the first house that inspired the idea of Legacy Pointe.

“They rolled everything in at 7 that morning, [put] the structure in place, and by 5 p.m. that day they locked it with a key,” recalls Arrington with a laugh. Reynoldstown residents were slightly surprised by a house that seemingly appeared out of nowhere.  “If you left early that morning, you saw a vacant lot.  So when you got home later that night and saw a house sitting there, it would have freaked you out.”

Reynoldstown, which sits less than 10 minutes east of downtown Atlanta, began experiencing growth in its housing market after RRC redeveloped the community in the late 1990s.  Mitchell Brown, RRC’s COO, notes that homes in the community are in high demand.

 “Reynoldstown is now one of the hottest neighborhoods in Atlanta. The average house is priced at $225,000 to $250,000, but they’re selling for around $300, 000,” he says.  “RRC has helped turn the neighborhood around to be a place where people want to live.”

Zach and Anastasia (shown with their daughter, Penelope)
purchased the first model home in Legacy Pointe.

This probably explains why the first model home for Legacy Pointe sold before the actual development is even complete.  The lucky homebuyer?  A client in RRC’s homebuyer education class.

 “The fact that we can provide a quality home for a relatively affordable price to clients in our homebuyer education classes is a win-win,” says Arrington.

As Reynoldstown continues to grow, RRC remains committed to ensuring its residents can stay in the community, in homes that are affordable.

“One of the goals of our founding CEO, Young Hughley Jr., was to provide units of permanent affordability,” explains Arrington. “Legacy Pointe is just one of the projects we have in the works to do this.”

Written by Constance Troutman, public relations specialist for NeighborWorks America. 

Continuing need for foreclosure counseling is sign of still-ailing economy

There’s good news and bad news in the report to Congress this week on the National Foreclosure Mitigation Counseling (NFMC) program, which NeighborWorks America launched in 2008.
First, the good news: Nearly 1.6 million homeowners have received help to date from the NFMC program -- 124,512 in just the 12-month period ending on May 31, 2013. (We know the counseling helps. A 2011 Urban Institute analysis showed that individuals who take advantage of the program are more successful in obtaining mortgage modifications, and are able to negotiate larger monthly savings, than those who do not.)

Pam Bailey, new
blogger for
NeighborWorks
America

It’s also an improvement that in the last year, the ratio of people seeking help who have mortgages with fixed interest rates of 8 percent or less increased to nearly two-thirds (59 percent) – up from just 30 percent in October 2008. Clearly, the disastrous era of destructive “sub-prime” loans – with interest rates that soar higher over time – is on the wane.

The Great Recession and ‘jobless recovery’ take their toll

Why, then, are so many individuals still needing help to avoid foreclosure? An answer can be found in a couple of other statistics in the NFMC report: For example, when they first entered the program, nearly 37 percent of the individuals counseled in the last year were spending half of their income or more on mortgage-related costs – well above the maximum recommended 31 percent. Nearly one in five were spending more than 75 percent of their income on principal, interest, taxes and insurance – a rate that has held steady since 2008.

Housing costs have grown to be such a drag on household budgets primarily due to loss of – or a significant reduction in – employment income (reported by 64 percent of persons seeking NFMC services).   As noted in The New York Times recently, “the consequences of job loss go far beyond the spell of joblessness. Research shows that layoffs can worsen earnings, health and even mortality rates for up to 20 years after the initial displacement. Not to mention home ownership.”

This chart from the NFMC report shows that most
"Level Four" individuals (who have a debt-to-income
ratio of 55%) who seek counseling are aged 45-64.

There are two groups of people who seem to be struggling the most: recent graduates and older workers. A report from The Opportunity Nation released just this week documented that almost 15 percent of individuals between the ages of 16 and 24 (that’s almost 6 million young people) cannot find jobs once they have completed school. However, according to the U.S. Labor Department, while unemployment rates for newly graduated students are higher, older workers who have been laid off have a much harder time finding work. Over the last year, the average duration of unemployment for older people was 53 weeks, compared with 19 weeks for teenagers and young adults. (The NFMC report reflects this trend. Slightly more than half – 53.9 percent – of individuals seeking counseling through the program who have debt-to-income ratios of 55 percent or higher are between the ages of 45 and 64.)

This is a subject that hits close to home for me. After living overseas for three years, I returned home in late 2011 to the Great Recession and a forbidding job market.  I found my way to several LinkedIn forums and discovered large communities of mostly over-50 professionals who had been laid off and just could not find new positions. And the longer they were out of work, the harder it seemed to be to get interviews – a discrimination against the long-term unemployed confirmed by recent research.

Chronic unemployment becomes vicious cycle

A study conducted by Rand Ghayad, a visiting scholar at the Boston Fed, and William Dickens, a professor of economics at Northeastern University, found that as long as you've been out of work for less than six months, you can get called by companies for interviews even if you don't have experience. But after you've been unemployed for six months, it doesn't matter what experience you have. Quite literally.

“There's a new cliff in town, and it's much scarier than the fiscal cliff,” wrote Matthew O’Brien in The Atlantic in December. “It doesn't have anything to do with expiring tax cuts or sequesters. It has to do with people who have been out of work for six months or longer. It's the worst cliff of them all: the Unemployment Cliff.”

My new LinkedIn connections soon got to the point when they felt lucky to be offered any job, even at administrative levels and salaries far below what they once earned. Many a story was posted about having to give up homes and move in with others, whether friends or adult children. And those were perhaps the lucky ones; they had people who would take them in. I didn’t have a house to pay for, fortunately, but rents are high in the DC area, and as I started my job search, I felt their fear. (You can read some of their gut-wrenching stories on the website, "Over 50 and Out of Work.")

Indeed, says Vivien King, a senior manager at NeighborWorks America who works with the NFMC program, although the service has been able to help thousands of families stay in their homes, it is not always possible. “Sometimes a successful outcome is transition out of their home,” she says.

Mr. Chavez (far left)and his daughter with Gerber DeLeón -- a
homeownership preservation specialist with
NeighborWorks member Select Milwaukee.

Consider the Chavez family, who like 19 percent of NFMC clients, are Hispanic (a segment that is just 8 percent of the overall U.S. population and thus is over-represented among those seeking help from the program, along with African-Americans). In 2001, the couple and their four children had moved into a small duplex, followed by purchase of their first single-family home in 2007. They held onto their duplex, renting it out for additional income. Then their world turned upside down. In November of 2011, Ms. Chavez was let go from her full-time job, and the loss of the second income strained the family’s finances so much that they fell behind on their mortgage.  They tried to re-negotiate the terms, but by that time their financial condition was too shaky to allow them to qualify.

Their lender referred them to a NeighborWorks organization, where a Spanish-speaking counselor was able to provide the trusted advice they so desperately needed.  With Ms. Chavez still out of work and no offers on their house after several months on the market, the organization’s counselor helped guide the couple through a deed-in-lieu agreement with the lender, avoiding foreclosure.  Fortunately for the Chavez family, they had a fall-back -- the duplex they had rented out. Today, they live in the duplex, and although they had to give up both their single-family home and the down payment they had invested, they report an overwhelming sense of relief, free of the burden of struggling to make ends meet – and losing.

The Chavez family is relatively fortunate. They had a back-up option. Many others do not, and need assistance in finding new housing that is more affordable. This is why I am so glad to have joined the staff of NeighborWorks America. I can’t find jobs that pay a decent salary for all of those hard-working individuals I met on LinkedIn. But now I can do my part to help make sure they at least can find or keep an affordable place in a good community to call home.

Written by Pam Bailey, communications writer for NeighborWorks America. She would love for you to post your own stories and comments!

Baltimore group serves community through ‘matchmaking’

Match.com and eHarmony could learn a thing or two from the homesharing service offered by St. Ambrose Housing Aid Center in Baltimore: Even the most sophisticated computer algorithms can’t replace good old-fashioned matchmaking, in which professionals get to know clients one-on-one to decide who would make a good “fit.”

It’s a simple concept: There are homeowners who need help paying their mortgage or other expenses, or just want the company. And there are other people who need an affordable place to call home. Why not match them up?

“The idea of homesharing was ‘born’ in the 1970s as a product of the Gray Panthers movement, and St. Ambrose was among the first housing organizations to join, in 1988,” comments Rebecca Burrett Sheppard, director of the program for St. Ambrose and president of the national association for professionals in this arena. “‘The U.S. census had just shown that more than 35,000 widows and widowers were living alone in single-family dwellings in Baltimore, and homesharing was a way of allowing these older individuals to ‘age in place’ – helping them with both chores and income.”  

St. Ambrose, a NeighborWorks organization that is celebrating its 45th anniversary this year, has seen its homesharing program grow exponentially since those early years, fueled since the 2008 housing crisis by homeowners of all ages who need extra income and seekers who are desperate for an affordable rental option.  To date, the organization has made 1,651 matches, about 65-80 annually.

Odd couples can make good matches

Increasing diversity in the neighborhoods
is often a side benefit of homesharing

Currently, slightly more than half of the participants are earning just 30 percent or less of the area median income, with 43 percent between the ages of 40 and 60 and 44 percent between 60 and 80. More than a third (37 percent) of the matches are intergenerational (with the provider and seeker more than 15 years apart in age). The largest age difference the program has seen so far is 37 years.

One such match is Austin Jones, 86, who now has a 28-year-old housemate.

“I moved to West Baltimore in 1982,” explains Jones. “I bought into a co-op and shared it with my cousin. When he died, it was ok, because I was working. But then I had to retire five or six years ago and my Social Security payments aren’t enough to pay all of my expenses. I’ve been in the St. Ambrose homesharing program ever since.”

Jones has had about five housemates over the course of the years, including two currently. John Pittman, the 28-year-old, moved in about a month ago when his roommate moved out and he couldn't afford to live on his own. Pittman says Jones offers both the affordable rent and privacy he needs, and plans to stay at least until he can pay off his debts.

“All of my housemates have worked out pretty well,” says Jones, adding that his most important criteria are tidiness, a history clean of serious crime and good health. (“I’m too old to be able to take care of anyone,” he explains.) “I give Annette (his St. Ambrose “matchmaker”) an A+. She always finds me good people.”

St. Ambrose staff personally interview every applicant for the program, conduct home visits, check criminal records, verify income and contact four personal references for each potential participant. After the counselor identifies a match, the homeowner and house-seeker meet and decide whether they have good chemistry. If it’s a go, the “matchmaker” helps the two structure a written agreement, stipulating the rent to be paid, how chores will be divided, the policy on guests, etc. Arrangements are always month-to-month, to allow maximum flexibility, and the staff keeps in touch for the first year to help work out any problems. (That’s another feature dating sites could benefit from – follow-up “troubleshooting”!) Although the average duration is 18-24 months, Sheppard says three St. Ambrose matches have been together since the 1990s. There are others, however, that last only a couple of months by design.

“It’s not a requirement, but we do see a lot of diverse pairings work out quite well,” says Sheppard, recalling a quadriplegic widower who welcomed an under-employed IT professional, and a chronically homeless 30-year-old who moved in with a 50-something social worker. “The possibilities are infinite.”

Lessons learned for others

Sheppard has become something of national expert on homesharing, and often consults with other organizations considering starting their own program. In fact, she recently returned from New Jersey, where another NeighborWorks organization is initiating one to help people still struggling to make ends meet following the devastation of Superstorm Sandy.

If you’re intrigued by the homesharing concept, here are a few tips from Sheppard:

1. Dedicate sufficient staff to the effort. To get the program off the ground properly, she recommends one full-time employee.
2. Learn from others when it comes to policies and procedures. Expertise and thoughtfulness are required to develop a success record.
3. Don’t skimp on marketing and outreach. Remember, Sheppard says, you have to identify and “cultivate” two separate customer segments: homeowners and seekers. St. Ambrose relies on tactics such as Craig’s List, public service announcements on local media and outreach to other organizations.
4. Don’t expect huge success in the first year. “These programs start slow, but grow exponentially,” she cautions. “Cultivating a client base can take a number of years, but if you’re successful, you’ll eventually be self-sustaining – a very good place to be.”

Early funding is worth its weight in gold

Eileen Fitzgerald,
CEO,
NeighborWorks America

(By Eileen Fitzgerald, CEO, NeighborWorks America) Developing affordable rental housing these days is a lot like putting together a puzzle – when the financing pieces are all in place, a thing of beauty results, but when there’s a piece missing for the puzzle (or in this case, a piece missing from the finance package for rental housing) the project just doesn't work. The result is fewer new affordable rental homes developed and more existing rental homes transitioning into market rate housing or being demolished. The bottom line: Families who need affordable rental housing may have a lot harder time securing the homes that they need.

Getting all of the financing pieces for affordable housing is difficult because nonprofit developers usually have to tap multiple sources of capital, either from one or more private sector banks, or from local or federal government sources such as community development block grants or state housing finance agency money. Essentially, nonprofits have to find all of the pieces to make an affordable rental housing project work.

However, often the private and public sources of financing needed to piece together an affordable rental deal want to see the developer have equity or “skin in the game” before they make the loan or approve the government financing.

That’s tough to do because even large nonprofit owners and developers of rental housing operate at very thin margins on existing projects that leave little room for the accumulation of excess capital to deploy to new projects.

This is why NeighborWorks America has been a long-time proponent of grant makers finding ways to make operating level or flexible funding available. After working with nonprofit rental housing developers for many years, NeighborWorks America knows that a nonprofit developer that has obtained general operating support and flexible money for qualified project on the books or in the planning stages has a leg up on securing other money to get the project done.

Rick Goodemann, chief executive officer of Southwest Minnesota Housing Partnership based in Slayton, Minn, and the owner and developer of nearly 900 affordable rental homes explained the value of early capital this way: “Patient, flexible capital, though limited, is available through such sources as foundations, financial institutions and housing finance agencies. Capital of that nature is extremely valuable and absolutely essential in supporting early feasibility analysis, due diligence activities, and securing real property. But it's most valuable when used to leverage debt, attract investors and provide a level of development and operational risk mitigation.”

Providing nonprofit developers with early funding that they could show other financial supporters is a core community development strategy at NeighborWorks America.  Nonprofits that could tap flexible capital from other sources such as national or community foundations, community development financial institutions (CDFIs) or state housing finance agencies enhances the ability of the organization to move quickly and build new or sustain existing affordable rental housing.

For example, in July of this year, the Massachusetts Housing Finance Agency provided just this kind of capital. Mark Dinaburg, the director of real estate development for nonprofit owner Codman Square Neighborhood Development Corp. said to a local newspaper, “With their help, we have finally been able to refinance and rehabilitate this 80-unit BHP-1 property. Previous to this, we had made multiple efforts to bring together an adequate financing package, while the properties slowly decayed, physically, socially, and financially. Indeed, the entire portfolio was threatened with foreclosure in the dark days of 2009. MassHousing’s willingness to step up with bridge financing, and to participate in a permanent financing package, was key to turning this around.”

Codman Square received more than $200,000 from NeighborWorks America to use as early, flexible capital for its rehab project that helped it secure state HFA funding.

Whether flexible funding helps to hire a development manager, an architect or exists as an early investment that attracts larger supporters, organizations that are able to secure this kind of financing have the best chance of getting a new affordable rental project done or to sustain an existing one.

NeighborWorks America encourages all of the potential sources of early, flexible and first-loss capital to be earlier participants in affordable housing deals. These sources of capital have to be the ones to take the first steps and jump-start affordable rental housing. Without their increased participation, too many deals that could be put together, won’t be completed, leaving some families by themselves to piece together their own affordable housing solutions.

Reposted from Rooflines, the Shelterforce blog.

Vermont quarry closing brings economy down; NeighborWorks affiliate rallies residents

It’s a story that’s been repeated across America: What builds a town up is also what, eventually, brings it down. In Detroit, it was the auto industry. In West Rutland, Vermont, it was marble quarrying.

When high-quality marble deposits were discovered in the 1830s – followed by the extension of the railroad into town – Rutland was suddenly put on the map. The simultaneous decline of the famous quarries of Carrara in Tuscany, Italy, transformed it into one of the leading marble producers in the world. (The name of the main “drag”? “Marble Street,” of course.)

The double-whammy of a large strike in the 1930s and the Great Depression, however, took a toll from which the town never quite recovered. In 1986 the quarry was forced to close, plunging the outwardly idyllic enclave of “cows and jeans” into economic decline.

West Rutland today

“At its height, the quarry alone employed 2,400 people,” recalls Ludy Biddle, executive director of NeighborWorks of Western Vermont. “Now, there are only about 2,500 people living in the entire town and the county is the second-poorest in the state. For all social measures, it’s in the red – poverty, unemployment, teen pregnancies and, recently, foreclosures.”

Another recurring theme in America, however, is the recovery from adversity that’s possible when residents come together in response to crisis. The disastrous year of 1986 also is when the organization was founded by a group of local citizens to help the remaining residents stay in their homes by keeping them in good repair.  By the 1990s, the area serviced by NeighborWorks of Western Vermont had expanded from four neighborhoods to the entire county and a homeownership program was added to help both first-time buyers and a trickle of newcomers – primarily artists and families looking for a semi-rural lifestyle.

This year, the organization is celebrating its 10th anniversary as a chartered member of the NeighborWorks Rural Initiative, which strengthens communities with small populations by helping them integrate into their regional economies. It now serves three counties, not only with its original rehab assistance and homeownership counseling, but also with “financial fitness” coaching and foreclosure prevention. In 2012:

• Two foreclosed houses were purchased by the organization; rehab was begun on another five, with two completed and put on the market.
• 24 individuals graduated from the homebuyer education program and another 25 completed the organization’s financial-fitness training.
• Thirty-seven families successfully negotiated foreclosure alternatives with their mortgage lenders. Another 12 received coaching as they made the decision to opt for a reverse mortgage.
• Nearly $800,000 in loans was dispensed to pay for 40 home repairs.

Joan Jackson

Biddle is particularly proud of her organization's participation in the NeighborWorks Green Organization. In fact, in 2010, it was awarded a $4.5 million grant from the Department of Energy for its H.E.A.T. squad (Home Efficiency Assistance Team) – which now boasts the highest penetration rate in the country among similar programs.

Joan Jackson, a retired librarian who has lived in her Wallingford home since 1959, is just one example of the 577 households that received an “energy check-up” in 2012, thanks to the program. Her roof had been damaged by winter ice, the house was so cold she was constantly bundling up to stay warm and the increasing cost of fuel was a persistent worry due to her fixed income. But with the installation of insulation in her basement and upstairs walls, along with air sealing around her doors, ceiling and attic hatch, she is warmer and her fuel bills are 34 percent lower. (Watch a video interview with Biddle, as she explains just how the program works.)

“Twenty-five percent of the people we’ve been able to help with our H.E.A.T. squad are below 80 percent of the area’s median income – individuals who usually aren’t able to participate in programs like this, even though they need it the most,” says Biddle, adding that the organization is now looking for additional funds as the DOE grant sunsets. “The average household we serve spends 3-8 percent of their already-low income on energy. With H.E.A.T, they save an average of 386 gallons of fuel a year – about $1,500 a year. It’s central to our mission to make homeownership affordable.”

Unconventional allies: Finding common cause with workers on the ‘front lines’ of communities

By Eileen Fitzgerald
Chief Executive Officer
NeighborWorks America

A woman with diabetes, evicted from her home after failing to keep up with her mortgage, is forced to find shelter with a string of friends. Unable to keep track of her medications or maintain a stable, healthy diet, her disease spirals out of control.

A youth’s grades plummet and he drops out of high school, unable to concentrate on his homework because he shares the same cramped living quarters with five siblings, his parents and grandparents.

An employee of a small business is chronically late and misses key deadlines because she cannot afford to live close to work or secure reliable transportation.


It’s true: Home matters. The lack of safe, clean, affordable housing concerns a wide network of frontline workers in the community. Talk to health care professionals, teachers and business managers, and the critical necessity of decent, accessible housing for health and productivity immediately becomes apparent.

Forty years of research show that reducing overcrowding, for example, lessens exposure to infectious diseases and promotes better health overall. One recent study by the University of Michigan illustrates that housing instability triggers depression and anxiety.

Likewise, teachers testify that children who live in safe, healthy, permanent homes do better in school. National Housing Conference research documents that children who move frequently are absent more from school, have trouble concentrating on their studies, and have difficulty making and keeping friends. In addition, children who live in overcrowded homes have lower math and reading scores, and are less likely to graduate from high school.

In the work world, managers at enterprises both big and small have learned firsthand that employees who are not stressed every month about how they will make their rent or mortgage payments—and ideally do not have arduous or expensive commutes—are more reliable and productive.

By remembering that safe, affordable housing affects virtually every aspect of a person’s life, the number and type of potential partnerships ripe for exploration expands exponentially.

This is re-posted from the Bipartisan Beat blog on the Bipartisan Policy Commission website.

NeighborWorks America Teams Up With Neighborhood Housing Services of Oklahoma City to Help Tornado Victims

By Brian Levinson, public affairs and communications advisor for the midwest region, NeighborWorks America

A fireplace is all that's left of this house in Moore, Oklahoma
Photo credit: Travis Marak

Soon after tornados struck Moore, Oklahoma on May 20, the extent of the devastation was apparent. Entire blocks and neighborhoods were flattened or heavily damaged, including two elementary schools, and 24 people were killed. Less than two weeks later, a second twister with winds exceeding 200 mph struck western Oklahoma City and El Reno, Oklahoma. It killed more than 20 people and went on record as the widest tornado ever recorded.

When the first storms hit, NeighborWorks America staff immediately reached out to Roland Chupik, executive director of Neighborhood Housing Services (NHS) of Oklahoma City, to check on staff and clients. As Chupik received preliminary damage estimates, he quickly focused his team on immediate housing issues: helping residents deal with FEMA, insurance companies, mortgage lenders and other organizations that were providing financial assistance.

“The emotional impact of losing your home is almost impossible to imagine. Most homeowners are overwhelmed with that loss, which can make it difficult to shift gears to start the recovery process,” Chupik said. “The NHS staff was not directly impacted by the tornados and has the expertise helping clients deal with government agencies and lenders, so we immediately jumped into action and offered our help to homeowners applying for assistance and completing insurance claims.”

Then, Chupik and NeighborWorks America staff focused on the next need: temporary housing. With 12,000 homes damaged and 1,400 destroyed, creating additional affordable housing units became critical. NeighborWorks America gave NHS of Oklahoma City a $100,000 grant to begin repairs on 15 foreclosed properties donated by J.P. Morgan Chase and Bank of America.

Front Row, right to left:  Corinne Cahill, deputy regional director, midwest region, NeighborWorks America;  Janet Barresi, Oklahoma State superintendent of public instruction;  Roland Chupik, executive director of Neighborhood Housing Services of Oklahoma City (NHSOKC);  Elizabeth Jones, City of Moore director of community development
Back Row, right to left:  Wiley Rice, chairman, board of directors of NHSOKC;  Linda Rowe, director of home ownership, NHSOKC;  William Fulmer, housing director, NHSOKC;  Ashley Dickenson, neighborhood capacity builder, Neighborhood Alliance of Oklahoma City;  Jared Jakubowski, City of Moore special projects coordinator.

“The NeighborWorks grant will help us immediately start fixing up these homes so that some of the families who lost their homes can have a place to live,” Chupik said. “It will also help us pursue funds from private funding sources, so that we can rehab all 15 homes as quickly as possible.”

The third phase of the recovery effort is focused on a critical, long-term need: storm shelters. NeighborWorks America is working with all three network members in Oklahoma – NHS of Oklahoma City, Community Action Project of Tulsa and Little Dixie Community Action Agency in Hugo – to develop a strategy for building storm shelters for existing single-family home and multi-family projects, as well as incorporating storm shelters into future developments.

John Santner, Midwest Region director for NeighborWorks America, said the collaborative and multi-pronged approach to dealing with the housing needs reflects NeighborWorks America’s commitment to working with local groups who are in the best position to assess community needs, and addressing affordable housing needs in a way that has a long-term, positive impact on residents.

“We are eager to help our Oklahoma network members respond to these devastating storms in a comprehensive way that creates more and safer affordable housing in the communities they serve,” Santner said.

Homeownership the NeighborWorks Way: Prepare, Invest and Retain

By Marietta Rodriguez
director, National
Homeownership
Programs & Lending

Every June is National Homeownership Month. While the most recent housing crisis has perhaps put homeownership into question, homeownership provides many benefits to homeowners and to communities. Sufficient preparation when considering homeownership is critical. We like to call the services NeighborWorks provides homeownership the NeighborWorks way.

While homeownership may not be the right choice for every person at every stage of their lives, homeownership is an important cornerstone of our communities. And NeighborWorks America and the NeighborWorks network are trusted resources for homeowners, creating thousands of homeowners each year. In 2012 NeighborWorks America and the NeighborWorks network helped 15,000 homebuyers achieve their dream of homeownership.

For 35 years, NeighborWorks America and the NeighborWorks network have provided access to homeownership and to quality housing in thousands of communities across the country. The more than 240 NeighborWorks organizations across the country provide current and potential homeowners a suite of specialized homeownership programs and services. These include an analysis of homebuyer readiness, comprehensive education on the homebuying process, one-on-one financial coaching, important information about the availability of possible financial assistance with down payment and closing costs, and access to affordable mortgage products.

Preparing for Homeownership with Pre-Purchase Education 

Successful homeownership requires more than just having enough money on hand. It’s about knowing how to navigate the home buying process, what to expect once you become a homeowner, and having a reliable partner to turn to when questions come up. For example, for many homebuyers, pre-purchase homebuyer education and counseling is a critical component to successful and sustainable homeownership.

NeighborWorks organizations, located in every state, are a great place for prospective homeowners to start because they help individuals become mortgage-ready and better equipped to manage the process. Counselors work with individuals to ensure their credit profile reflects strength and help identify experts who could explain what kind of maintenance – immediate or long-term – the home may need.

It is important to remember not all mortgages are created equal. NeighborWorks counselors can help potential homeowners secure a mortgage suitable to their current needs. In addition, NeighborWorks services offer a free or low cost alternative to  higher cost services,  and that’s an important distinction. Ultimately, it’s a NeighborWorks homeownership counselor’s goal to make sure that each homeowner is matched with the right homeownership products. In 2012 NeighborWorks organizations provided nearly 122,000 individuals and families with education and counseling services.

Providing Help through a Network of HomeOwnership Centers

NeighborWorks America’s National Homeownership Programs offer technical assistance and grants to our network that, in turn, provide a continuum of strategies to help ensure successful, sustainable homeownership for people of modest means in every state. There are more than 100 NeighborWorks HomeOwnership Centers around the country, and many offer affordable first and second mortgages. They are “one-stop” shops for prospective homebuyers and homeowners. Customers can access all of the services and training necessary to shop for, purchase, renovate, maintain, and manage a home. To locate a NeighborWorks HomeOwnership Center, visit here.

NeighborWorks America knows that for many individuals the road to homeownership can seem, at times, challenging. But dependable NeighborWorks staff work hard every day to make the dreams of homeownership a reality for thousands of individuals every year. Join us in celebrating those who will achieve their homeownership dreams in 2013 and help us ensure all those interested in pursuing homeownership know about homeownership the NeighborWorks way: prepare, invest and retain!

NeighborWorks Rochester Expands Healthy Blocks Approach

By Ascala Sisk, Senior Manager
Neighborhood Stabilization
NeighborWorks America

Reposted from StableCommunities.org

NeighborWorks Rochester has partnered with residents in three neighborhoods to make exterior home improvements, address quality of life issues, and attract new residents and investment. Through this targeted “Healthy Blocks” approach, homeowners, tenants and landlords work together to create neighborhoods of value and choice.

After eight years of sponsoring “Makeover Madness” home beautification campaigns, organizing social events, planting gardens, sponsoring neighborhood clean-ups, and promoting new neighborhood branding, the Healthy Blocks approach has proven to be successful in improving physical conditions, creating pride, and fostering a community identity. For example, in “The Pocket,” a 7-block neighborhood of 750 residents in the East Main–Atlantic area, NeighborWorks Rochester has observed that physical conditions are improving, the average sales price is up 20 percent since 2008, and homes on the market sell in an average of 18 days as compared to 27 days in 2008 — all signs of a rebounding housing market.

Building on this success, NeighborWorks Rochester is considering candidates for its next two Healthy Blocks initiatives. To help with the selection and to train new staff members on the core components of this approach, NeighborWorks Rochester CEO Kim Brumber turned to David Boehlke, the nation’s leading Healthy Neighborhoods strategist. Joining them over the course of two rainy days in January 2013 were representatives from NeighborWorks Western Vermont who wanted to learn how they might apply this thinking to their own newly selected target neighborhood in the town of Rutland.

With a healthy dose of offbeat humor, Boehlke stressed the need for strategies that are grounded in market realities and build confidence among existing residents. “Markets need to be built,” he said, “not just houses.” This is especially true in cities with stagnant or declining populations where potential homebuyers have many homes and neighborhoods to choose from. In order to compete, you need to reposition your neighborhood in the marketplace. Building confidence in the future of the neighborhood validates people’s choice to live there, creates pride, and encourages investment because it makes economic sense.

So, how do you build confidence? A lot of it has to do with image and physical conditions. Neighborhoods with houses that are reasonably well-maintained and have tidy gardens and litter-free streets instantly convey that this is a neighborhood where current residents succeed, and where future homeowners would want to buy. But according to Boehlke, the key to building confidence is engaging residents and building their capacity to manage day-to-day neighborhood issues. Ultimately, people are more likely to invest in areas where residents work together to improve the quality of life.

As NeighborWorks Rochester considers its next Healthy Blocks, it will select neighborhoods where resident engagement activities and modest investments in home repairs are likely to leverage additional investment. As the team from NeighborWorks Western Vermont also learned, Healthy Blocks’s focus on building markets, improving image and physical conditions, and fostering resident leadership offers lessons for other organizations that are designing place-based revitalization strategies.

To learn more about the Healthy Neighborhoods approach that David Boehlke created and teaches, take a look at his monograph, Great Neighborhoods, Great Cities, written about the Healthy Neighborhoods approach in Baltimore for the Goldseker Foundation.
 

Powerful Benefits Linked to Pre-Purchase Housing Counseling

This is reposted from the Bipartisan Beat blog on the Bipartisan Policy Commission (BPC) website.

Counseling can help families decide whether they are prepared for the obligations of homeownership

By Christopher S. Bond

The BPC Housing Commission believes that counseling and education must be a central part of a more responsible approach to homeownership, particularly for first-time buyers.

I first learned about the benefits of housing counseling from NeighborWorks America, one of our country’s leading community development organizations. In 2007, then-Senator Dodd and I sponsored legislation supporting NeighborWorks’ efforts to help forestall foreclosure for struggling families.

When homeowners experience an unexpected setback – the loss of a job, a medical emergency, or some other crisis – housing counselors can help them find solutions before they fall behind on their mortgage payments. But the benefits of counseling are often felt even before the home purchase takes place, as counseling can help families decide whether they are prepared for the financial and other obligations of homeownership. In meetings with counselors, civic officials, and families, I heard time and time again that pre-purchase counseling’s most important contribution may be helping prospective buyers understand when it is not the right time for them to buy a home.

The latest proof that pre-purchase counseling can offer powerful benefits comes from a recent NeighborWorks study examining 75,000 mortgages originated over a two-year period from October 2007 to September 2009. The study concludes that mortgage borrowers who participated in NeighborWorks’ pre-purchase counseling program were nearly one-third less likely to be 90 days or more delinquent on payments in the first two years after closing than those borrowers who did not receive counseling. This percentage reduction in mortgage delinquencies was the same for both first-time and repeat buyers.

Pre-purchase counseling provided by the NeighborWorks network of organizations consists of a minimum of eight hours of group education and individual counseling sessions. These sessions examine the potential homebuyer's personal and financial situation; details about house selection, the financing process, and the closing; and post-purchase concerns like home maintenance.

Also, the NeighborWorks study responds to one of the main challenges in evaluating the effectiveness of pre-purchase counseling: selection bias. The concern is that people who enter counseling may have certain “unobserved” characteristics related to how they manage credit that can affect mortgage performance, either positively or negatively. To mitigate the impact of selection bias, the study utilized data about borrowers’ credit practices and behaviors from the credit-rating agency Experian and employed a procedure called “propensity scoring” to create a comparison group with the same observable characteristics as the counseling clients.

The NeighborWorks study makes a significant contribution to the public’s understanding of the potential effectiveness of pre-purchase counseling. It’s good to see that the study is receiving some national attention, and it is a must-read for housing practitioners and policy makers.

Former Governor and Senator Christopher S. "Kit" Bond serves as a co-chair of BPC's Housing Commission.

Mountain Housing Opportunities: Building Homes as a Community

This blog is part of our 35th Anniversary Celebration series, highlighting NeighborWorks member organizations which are celebrating milestone years marking either their membership in the network or their incorporation as an organization.

By Brittany Hutson, NeighborWorks
America Public Relations fellow

Twenty-five years ago, a group of 10 volunteers completed seven home repairs in seven months for seniors in the Asheville area. These repairs included roof and porch repairs, replacing furnaces, correcting electrical hazards, and water and sewer problems. Out of this effort was born Mountain Housing Opportunities, a community development corporation based in Asheville, North Carolina, that builds and improves homes, neighborhoods, and communities for people of Asheville and Buncombe County. Several of those volunteers served on the original board of directors of Mountain Housing, including Executive Director Scott Dedman. Today, the organization completes 150 emergency home repairs each year for families with children and elderly and disabled homeowners.

In the early 1990s, Mountain Housing moved into developing single family homes and affordable/workforce apartments, and later townhomes and condominiums for first-time homebuyers.  Since the financial crisis, Mountain Housing has temporarily stopped producing multifamily homes for homeownership.

Self Help Homeownership families work together to frame a house

“We are building single family homes and have expanded our production of apartments since the rental market continues to expand dramatically,” says Dedman. As part of the organization’s single family home development effort, Mountain Housing worked with the U.S. Department of Agriculture, Rural Development office to start a Self-Help Homeownership program, where families spend approximately 20 hours per week building their own homes for about eight months. “We build six homes per years with families through that program,” explains Dedman. Production for apartments averages about 60 per year. To date, 535 apartments have been completed.

Two members of the six Self Help HomeOwnership
families measure wood to cut for their home

Mountain Housing became a NeighborWorks charter member five years ago, and since then, Dedman says the organization has dramatically grown in production and services. For example, after becoming a member, Mountain Housing began a down payment assistance program that provides an average of 25 to 30 homebuyers per year with loans for as much as $15,000 per home.

Since Mountain Housing earned a LEED Gold certification for a building completed in 2010, they have been incorporating even more green features into their developments. Dedman is also proud that Mountain Housing has helped more than 4,500 families and individuals. “We’ve saved people’s homes and lives through emergency repair,” he says. “We’re providing families with children and elderly and disabled folks a safe and attractive apartment in good neighborhoods. We’ve helped families move up in their quality of life.” 

Learn more about Mountain Housing Opportunities at http://www.mtnhousing.org