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.

West Virginia group demonstrates big impact despite small staff, few resources

Imagine you lead a four-person organization that serves a city with a population of just more 7,000 people, 20 percent of whom are below the poverty line, and a lack of traditional funders like big banks. That’s the challenge John Elza, executive director of the HomeOwnership Center (HOC) of Elkins, WV, faces daily.

And then there is the additional dearth of communications channels. “Reaching customers is challenging. There’s not a lot of media and only one daily newspaper. Getting information out is hard,” Elza says. “A lot of folks don’t have a computer.”

However, the smallness in size and resources haven’t stopped HOC from working to achieve a big impact in the 15 years since its founding, despite the lingering impact of the Great Recession.

“Getting to 15 years after the recession was challenging,” Elza admits. “Production numbers were down, but are starting to come back.  We just ended Fiscal Year ‘13 with a 26 percent increase in production over the prior year.”

HOC grew out of the Randolph County Housing Authority, which Elza describes as the incubation unit for the group. “It decided to spin off a private nonprofit that could do different things.”

The organization became a licensed state mortgage broker and then a NeighborWorks charter organization in 2001. This transition was important for HOC.

“The Housing Authority couldn't go after private funding or foundations because it wasn't a 501c3,” Elza explains. “We wanted to become a licensed broker to be more effective. Initially, the focus was on pre-purchase counseling, since there were certain types of mortgages that didn't require a broker's license. When we received our broker's license, it opened the doors to assisting others.”

HOC assists a mostly rural population, providing education and counseling, financing and development primarily to low- and moderate-income households. “We serve an eight-county service area of 130,000 people,” Elza elaborates. “Randolph County is 146 square miles. We’re up in the mountains. Tourism is a big economic factor here. There’s not a lot of actual industry, and only one regional lender in the area. From a fundraising standpoint, that’s a challenge. We don’t have a big banking presence.”

HOC’s mission is to provide safe, affordable housing, focusing on sustainable homeownership, self-sufficiency, sound environments, healthy quality of life and communities that can sustain these values. To fulfill these goals, HOC provides homeownership education and counseling to more than 200 families each year, with more than 50 becoming home buyers. The organization has been so successful in stretching its resources to achieve its mission that its staff often works with individuals elsewhere in the state who want to offer similar services.

Elza recalls one particular family’s story that illustrates the impact that can be achieved, even on a small scale.

Heather Sackett-Scott, William Scott and their two
children in front of their new home.

Heather Sackett-Scott and William Scott have four children, including one with disabilities. They needed to find a home that was both affordable and accessible to a disabled child. HOC provided counseling and education for the family, helping them to become mortgage-ready. The organization then engaged several partners to provide affordable financing. Highland Community Builders provided a lot, CommunityWorks provided the first mortgage at a below-market rate and Woodlands Development Group constructed the accessible home and also provided partial subsidized financing. HOC processed the blended mortgage loan.

Sackett-Scott said afterward, "I’m just grateful that there are programs like this. And I’m pleased to know that there are people doing these things for other people. If it weren't for this program, my family wouldn't be able to get a house like this, a nice home. It just wouldn't happen."

Written by Lindsay Moore, senior media relations specialist for NeighborWorks America.

Salt Lake City group fights crime by putting youth to work

Safety is one of the most basic requirements of desirable communities. If residents are afraid to walk down their streets, or even to socialize in their own front yards, they will flee the first chance they get – and certainly won’t engage with their community, much less their neighbors.

“We learned early on that we couldn’t just focus on housing,” says Maria Garciaz, executive director of NeighborWorks Salt Lake. “What’s the point of developing more housing if the crime rate is going up and people are afraid to live there?”

That’s what her organization discovered when it first began serving the west side of Salt Lake City (the quintessential “other side of the tracks”). It was 1982, and as members of the organization talked to stakeholders in the community, one problem kept surfacing: the neighborhood was increasingly ruled by gangs. Thus, the West Side Youth Project was born.  It gave youth hanging out on the street corners productive work, along with the skills and motivation to forge a new direction for their lives. Garciaz was probation officer for the local juvenile court at the time, and many of the youth were her charges. It was a natural fit for her to come on board, first as a volunteer, then as director of what came to be known as the YouthWorks program. Garciaz was named executive director in 1989, just a few years before the organization joined the NeighborWorks network – a milestone for which it celebrated its 20th anniversary this year. Other services offered by NeighborWorks Salt Lake are commercial-development projects to reverse blight in retail districts, development of affordable housing and resident leadership training.

In the early years, YouthWorks targeted hard-core gang members, with youth enrolled for a year at a time. “We saw some amazing changes in their lives,” Garciaz recalls. “Last Monday, a young man who graduated from the program in 1989 walked through the door. I said, ‘I’m so glad to see you’re alive!’ He was so much more than alive…He now has a successful job as a machinist. Another graduate is now on our board of directors!”

A YouthWorks team frames a new, affordable home.

Today, YouthWorks focuses on prevention -- helping larger numbers of young people before they become “hard core.” About 14 youth are enrolled in each three-month “crew” – mostly 16- and 17-year-olds during the school year, and as young as 14 in the summers. Three days a week, they work from 1-6 p.m. building one of the organization’s affordable homes – from framing the building to pouring concrete and painting walls (with expert contractors providing on-site training). “Being able to build a home, to see their work come to such concrete, successful fruition, teaches so many important lessons,” explains Garciaz. “For instance, if the framing doesn’t turn out right, they can take it apart and re-build it. What better analogy for life?”

On the afternoons when they aren’t working on a home or community project, the youth learn the financial-management skills they need to wisely spend the weekly stipend they earn while employed with YouthWorks. Sometimes, they do painting jobs for other nonprofits such as museums, in return for free tickets or a pizza party. “It’s a subtle way to engage them with the community,” she says.

Teamwork is a strong emphasis of the youth program.

Twice a year, female crews are recruited to assure that hormones don’t get in the way of the learning experience. The organization also actively recruits “new Americans” for all of its sessions. Since Utah is a federally designated resettlement state, many youth now come from families who emigrated from countries as far-flung as Afghanistan and Somalia. To date, more than 1,800 youth have graduated from the program.

“We define success as completing high school, staying out of the court system and – once they graduate – either enrolling in college or getting a job,” says Garciaz. Program participants are surveyed a year after they graduate from YouthWorks, but she knows that the impact has longevity. One group of about 100 graduates was contacted 10 years later, and 80 percent owned their own homes, with many starting their own businesses.

“This isn’t the kind of program that produces immediate results, and it will never be economically self-sufficient,” says Garciaz. “But think about it. Seventy-five percent of our kids are poor, often from families of color, who aren’t reached by any other program. They’d be lost to the streets without YouthWorks. What better investment is that?”

Written by Pam Bailey, communications writer for NeighborWorks America.

‘Families and friends’ good for social support, not housing advice

By Pam Bailey, communications writer for NeighborWorks America

It’s been five years since the full force of the Great Recession hit the United States, with a combination of risky mortgages and declining housing prices forcing approximately 4.6 million families into foreclosure. While more than 13 million households are still underwater, saddled with homes worth less than their mortgage loans, the crisis is losing steam. Foreclosures fell 3 percent in 2012, according to RealtyTrac, and this year is looking even better. In October, foreclosure filings were 28 percent lower than the same month in 2012.

Still, many families are still struggling, and making smart choices will continue to be critical for both the next wave of new house buyers and existing owners working to hold on to their homes. In the aftermath of the crisis, are people now equipped with the information they need to negotiate the right mortgage, as well as to make other pivotal choices? If not, do they know where to go to get help that can be trusted?

To learn the answers to those and related questions, NeighborWorks America commissioned a nationally representative survey of 1,000 adults, which was conducted by Widmeyer Communications, a Finn Partners company, Sept. 23-26.  Among the many findings: Seventy-five percent of adults describe the the home-buying process as "complicated," and a quarter (24 percent) admitted to not being knowledgeable about the different kinds of mortgages.

So where, then, do they turn for advice when buying a house or avoiding foreclosure – a decision that is usually among the biggest financial choices they will make in their lifetimes? More than any other source, “family and friends” are relied upon most often.

When respondents who said they are considering buying a house were asked where they go to first for advice, more than a third (39 percent) cited family and friends who had already purchased a home. Distant runners-up were the Internet (17 percent) and real estate agents (16 percent). Far behind were housing counselors and (more specifically) non-profit homeownership advisers (3 and 5 percent, respectively).

The patterns for seeking information on foreclosure prevention are similar.  Individuals are most likely to turn to family, friends and co-workers (30 percent), followed by the Internet (27 percent), real estate agents (26 percent) or mortgage lenders (23 percent). Just 17 percent of respondents reported they are “very likely” to consult with a housing counselor. The reliance on friends, family and co-workers is especially seen among adults under 55 (37 percent) – particularly women.

Advantages of nonprofit housing counselors

There is nothing wrong, of course, with calling upon your social network. In fact, much research has documented the importance of family and friends in helping individuals cope with all sorts of stress. However, rarely are they professionals in the field of housing or banking, and even when they have gone through the process of home buying or loan modification themselves, each family’s financial situation is unique, not to mention the fact that rules vary depending on the lender and the timing.

“Having a supportive family is wonderful, and the Internet offers a wealth of information,” says Rose Marie Roberts, an advisor with the NeighborWorks Homeownership Center in Utica, NY. “But I wouldn’t go from there to action.” For example, when trying to prevent foreclosure, she notes, “rules and available programs, plus the related legal aspects, change almost daily. It’s a challenge to stay on top of them. But that’s the job of a housing counselor.” (Roberts talks about foreclosure counseling in a NeighborWorks America video.)

With the Government Accountability Office reporting that complaints about fraudulent “foreclosure rescue” schemes jumped from 9,000 in 2009 to more than 18,000 in 2012, it’s critical to have a professional advocate on your side. (Since 2007, NeighborWorks America has managed, at the request of Congress, the National Foreclosure Mitigation Counseling program. It funds more than 1,700 agencies that have assisted nearly 1.6 million homeowners struggling to stay in their houses – without charging a fee. In fact, one sure sign of a scam is an individual or program that attempts to charge for this service. Yet, the survey found that slightly more than a third – 33 percent – of people think that free help is not as good as counsel that you pay to receive.)

A nonprofit housing counselor can help head off
trouble during the complicated home-buying process.

While realtors and mortgage lenders are essential advisors as well, housing counselors with nonprofit organizations such as those that are supported by NeighborWorks America take a holistic approach to each client’s situation – helping them evaluate far more than how much a particular house is worth, which mortgage they can afford or whether they are eligible for re-financing.

“For example, some of the residents in our community are attracted to the less-expensive homes one county over,” recounts Letty Plasencia, a counselor with NeighborWorks Orange County (CA). “But you have to look at more than the sales price. How much time and money will it take to commute to your job, for instance?”

There is hard data showing that pre-purchase counseling by a trained counselor works. A study conducted of 75,000 loans originated between October 2007 and September 2009 showed that clients receiving pre-purchase counseling and education from NeighborWorks organizations were one-third less likely to fall behind on their payments during  the two years after receiving their mortgage.

It’s not surprising that most people don’t think first of turning to a nonprofit housing counselor. Most local organizations do not have the budget for extensive public education. (One of the most successful national campaigns was the “Nothing is worse than doing nothing” campaign launched by NeighborWorks America and the Ad Council, centered on a series of public service announcements for broadcast. Another is the Loan Modification Scam Alert website and hotline.) Instead, local organizations typically rely on referrals and word-of-mouth. The good news is that clients do spread the word to friends and family. And many states and organizations, such as unions, have institutionalized referrals to housing counselors for residents or employees who find themselves underwater.

“In New York, lenders are required to notify homeowners in trouble,” says Roberts. “The problem is that they often don’t trust the lender by that point, or they assume they are a lost cause and no one can help them. I’d say 75 percent of the time, we get these individuals late in the game, from a lawyer or Supreme Court judge who handles settlements.”

The challenge for housing organizations is to build and better leverage relationships with a diverse array of other community stakeholders, such as schools and health clinics, to spread the word about their services to people before they need it. (And of course, expanded demand would require increased staff.) It is clear, counselors agree, that the best time to see a housing adviser is early on, prior to any critical decision-making.

Kevin Washington, a counselor with Neighborhood Housing Services of New York City (NHS-NYC) who specializes in foreclosure intervention, gives this example: “By the time people get to me, they often have gotten advice from a neighbor down the block who has been through foreclosure before, and they end up getting further in trouble. For example, sometimes these clients close all of their accounts down to pay off their debts, but that’s very bad for their credit scores. Plus, you’ll need some money to cover down payment and closing costs (to buy a more affordable house). You don’t need to pay off your debts; you just need to make the required payments. If they get to us too late, and they’ve already made mistakes, they have to wait even longer (to buy) so they can build their assets back up again.”

But perhaps Ruth Pena, another counselor with NHS-NYC, sums up the value of a housing counselor the best: “We create an action plan, and then hold (our clients’) hands through the entire process. Who else will do that?”