State Updates
Undersecretary Brooks Announces Gateway Cities Planning Grants
At a September 8 forum on the revitalization of small cities, Undersecretary Tina Brooks announced new planning grants of up to $75,000 for smaller cities in Massachusetts as part of the Governor's Gateway Cities Plus initiative. The $2 million in planning grants will be followed by implementation grants of up to $1.5 million for approximately five cities. DHCD is expected to release a request for proposal (RFP) next week.
The announcement was made at a forum sponsored by the Massachusetts Smart Growth Alliance and MIT Department of Urban Studies and Planning's Community Innovators Lab. The event also featured Lt. Governor Tim Murray, the release of a new national report by PolicyLink, and a panel of practitioners.
CHAPA and the Massachusetts Association of CDCs have been advocating for a comprehensive initiative to assist small cities since the release of our report in late 2006 and are greatly appreciative of this new effort by the Patrick Administration.
CHAPA Launches New Website
This week, CHAPA launched its redesigned web site. Some of the new features include:
- User-friendly navigation and updated design;
- Search functions for primary content, including reports, consultant directory, and other pages;
- A Foreclosure Clearinghouse which tracks foreclosure programs and initiatives around the state and nationwide;
- Photos of affordable housing developments across Massachusetts;
- Ability to login and establish user accounts to post listings on our jobs board, homeownership workshop calendar, and consultant directory.
- A state-of-the-art content management system that will allow for more efficient in-house updating of the site.
CHAPA Releases Updated Housing Guidebook
CHAPA's Affordable Housing Guidebook serves as a resource for legislators, policy makers and practitioners to make policy decisions and help respond to constituent services. CHAPA Director of Research Ann Verrilli recently completed the guidebook's third update to include information on new programs and highlight modifications to existing policy and programs. The 164-page guidebook includes information on state and federal programs, policies, and housing trends.
DHCD Issues Funding Decisions on Rental Housing
Last month, the Patrick Administration, through DHCD, pledged $142 million public and private resources for affordable rental housing in its latest funding round. The funding will help create 1,218 rental apartments in 29 new developments, 1,124 of which will be affordable for low- and moderate-income residents.
EOHED Holds FY 2010 Budget Hearings
The Executive Office of Housing and Economic Development held public hearings on August 28 in Boston and September 4 in Springfield to solicit input to help formulate a budget for 2010. CHAPA submitted testimony outlining a range of affordable housing priorities, and highlighted requests of $87 million for public housing operating subsidies, $50 million for MRVP, and additional attention and funding for fuel assistance.
Group Forms to Oppose Income Tax Repeal; November Ballot Question Would Erase 40% of State Budget
A coalition of civic leaders, unions, and non-profit organizations led by Peter Meade has formed to oppose a ballot question to repeal the income tax. The proposal to repeal the income tax will be on the November ballot. If it passes, the binding proposal would reduce the income tax to 2.65% on January 1, 2009 and eliminate it on January 1, 2010.
Opponents say that it is an irresponsible proposal and will raise property taxes and slash services. CHAPA is extremely concerned about the consequences that lost revenues would have on programs that provide housing opportunities for low-and moderate-income residents in the Commonwealth. Individuals interested in opposing the income tax repeal are being asked to visit VoteNoQuestion1.com to offer support and learn more.
MassHousing Releases Affordable Housing Trust Fund Report
The 2007 Affordable Housing Trust Fund report is now available for review. In fiscal year 2007, the Trust Fund awarded $24 million to 34 affordable housing projects across the Commonwealth. 57.7% of the 1,953 housing units created with Trust Fund dollars in 2007 were restricted to households with incomes between 30% and 60% of area median income (AMI); 8.4 % of the units are restricted to households below 30% of AMI. There were 9 homeownership projects, 20 rental projects, 3 elderly projects and 2 special needs projects. Since fiscal year 2001, the housing trust fund has led to the creation of 213 developments with 8,700 housing units.
Massachusetts Foreclosures through July Surpass 2007 Full Year Total
The Warren Group reports that 1,097 foreclosure deeds were filed in July, bringing the year to date total to 7,804 or 151 more than were filed for all of 2007 (7,653).
The Warren Group also reported that between September 2007 and February 2008 lenders took back 4,200 properties at auction (only 200 were sold to third party buyers). When selling these real estate owned properties, lenders lost an average of $33,012 on condos sales, $65, 562 on two family properties, and nearly $100,000 on three-families statewide.
State Median Income, Poverty Rate Flat between 2006 and 2007
The Massachusetts Budget and Policy Center recently issued three fact sheets describing state income trends between 2006 and 2007, based on new Census estimates released on August 26th. It reported no statistically significant increase in median household income between 2006 and 2007 (the state still ranked seventh in the nation overall in 2007 at $62,365). It also found no statistically significant decline in the state's poverty rate between 2006 and 2007 (9.9%).
Real Incomes Declining, Long Term Income Inequality Growing in Massachusetts
A new analysis of household income trends in Massachusetts, published in the UMass Donahue Institute's MassBenchmarks, reports a long term trend of increased income inequality since 1990.
The study examined trends during three periods (1979-1989, 1989-1999 and 1999-2006). It found that between 1979 and 1989, all income groups experienced income growth (ranging from 10% in the lowest quintile to 22% in the top quintile). By contrast, between 1989 and 1999, only the top quintile experienced strong gains (26%), while real incomes stagnated in the middle three quintiles and fell in the bottom quintile.
Since 1999, real incomes have fallen for all quintiles, but the top two quintiles experienced smaller drops (4-5%) than third and fourth quintile (5-8%) and the bottom quintile experienced the biggest drop (16%). Massachusetts now has the fourth highest level of inequality between the top and bottom quintile among all states, according to an April 2008 study by the Center on Budget and Policy Priorities.
The MassBenchmarks study also found regional differences in income growth since 1990, with much stronger growth in the eastern part of the state and general stagnation in the balance of the state. The real income of households in the top quintile grew by 16% between 1990 and 2006 in metro Boston but only 2% in the Pioneer Valley and the income of bottom quintile households in metro Boston dropped 19%.
Study Finds Finances, Cost of Housing Biggest Concerns of Young Adults in Massachusetts
MassInc released a new report last month, Great Expectations: A Survey of Young Adults in Massachusetts, on the results of a survey of 801 young adults (ages 25-39) in Massachusetts. The survey was conducted to learn more about the concerns and priorities of a group that is key to the state's economic future and to identify areas that should be addressed by policymakers.
It found that 22% expect to leave Massachusetts within five years, with higher rates for subgroups struggling economically. Primary reasons for planning to move include the high cost of living in Massachusetts (32%), weather (17%), family/romantic relationships (17%) and job opportunities (15%). When asked what might change their mind, the most common responses were "nothing" (34%), lower taxes (17%), and making housing more affordable (14%).
Federal Updates
New Study Finds Racial Disparities in Lending Greater for Higher Income Borrowers
A July 2008 report by the National Community Reinvestment Coalition (NCRC) has found that "loan price disparities, as compared to white counterparts" are more widespread for middle to upper income (MUI) African-American and Hispanic borrowers than for low and moderate income (LMI) borrowers.
"Income Is No Shield Against Racial Differences in Lending II" examined 2006 HMDA data for 219 metropolitan areas and rural areas. Overall, minority LMI borrowers were more likely than minority MUI borrowers to have a high cost loan (42% vs. 30% in 2004). The percentage of metro areas where a minority borrower was more than twice as likely to receive a high cost loan as a white borrower was much higher for MUI minority borrowers (71% of metro areas) than for LMI borrowers (47% of metro areas). MUI borrowers living in areas with higher minority populations were also more likely to receive high cost loans.
Several local metro areas ranked high on racial disparities in lending, with Essex County ranking 9th in the nation (all races) and three ranking in the top five nationwide in terms of disparities for Hispanic MUI borrower. The report noted that these disparities threaten the wealth of many minority households and communities, given the high rate of foreclosure on predatory loans and recommends increased foreclosure prevention efforts as well as comprehensive anti-predatory lending legislation.
New Website Documents Impact of Foreclosures on Renters
The National Low Income Housing Coalition (NLIHC) has set up a website with research, news reports and other information on how foreclosures are affecting renters around the nation.
Brookings Study Finds Concentrated Poverty Rising Again
A new study by the Brookings Institute, "Reversal of Fortune: A New Look at Concentrated Poverty in the 2000s", indicates that the number of high poverty areas in the U.S. is rising again, after falling between 1990 and 2000, with most of the rise occurring in older areas in the Northeast and Midwest that have experienced economic downturns since 2000.
The study examines where working poor families - households who claimed the earned income tax credit (EITC) – lived in 1999 and 2005 in 58 metropolitan areas. It found that the percentage of EITC claimants who lived in "high working poor" zip code areas (areas where at least 40% of all taxpayers claimed EITC) rose by 40% (from 10% of all filers in 1999 to 12% in 2005) while the percentage of taxpayers receiving EITC rose by only 13%. In addition, areas that had higher rates of working poverty in 1999 experienced greater increases in concentration. Not all areas experienced increases, however.
Of the 58 areas studied, 24 (mainly in the West and South) had decreases. The study recommended that policies to promote regional economic growth include policies to improve job opportunities for residents in high working poor neighborhoods and greater economic integration.
Home Price Declines Likely to Eliminate Wealth Gains of Past 20 Years
A new study by the Center for Economic and Policy Research (CEPR), "The Impact of the Housing Crash on Family Wealth", examines the impact of falling housing prices on wealth accumulation.
It compares the wealth of households in 2004 with their projected 2009 wealth under three housing price scenarios (2009 prices are the same, 10% lower or 20% lower than March 2008 prices). If prices hold steady, most households will have between 25% and 59% less net worth than in 2004, with younger households hit the hardest. If prices drop 10%, most households under the age of 45 will have less than half the net worth they had in 2004, while households in the 45-54 age range would lose 35% of their net worth. That scenario would leave the median household aged 35-44 with a lower net worth than their counterparts 20 years ago and median households in the age 45-54 cohort with only 0.8% more than their 1989 counterparts.
Study Finds Zoning Restrictions Often Lower Multifamily Housing Production
A new study, "Zoning as a Barrier to Multifamily Housing Development" published by the American Planning Association, has found that geographic areas with barriers to multifamily development are often "less dense and often more expensive than neighboring communities".
The study analyzed zoning regulations and housing market conditions in 2000 in six metropolitan areas, including Greater Boston. It also found that other factors, such as market conditions, land availability, public services, planning goals, environmental concerns, and conservation efforts play a role in multifamily production levels. It recommended state and/or regional oversight of local land use policies to reduce barriers.
New Study Rates States on Property Tax Treatment of Affordable Rental Housing
The Stewards of Affordable Housing, a coalition of large nonprofit housing developers, has released a survey of state property tax policies and the extent to which they support the financial viability of affordable multifamily rental housing. The survey found that six states have policies that have a "very positive effect" on such housing, while policies in another 22 states (including Massachusetts) have a "somewhat positive" effect, 8 have policies with a neutral or unclear effect and 15 have policies with negative effects.
Upcoming Events
Friday, October 3, 7:30 a.m. – 2:15 p.m., Keeping Current with Chapter 40B, Holiday Inn, Mansfield MA. Sponsored by Citizens' Housing and Planning Association, the Massachusetts Department of Housing and Community Development, MassHousing and the Massachusetts Housing Partnership Fund. The deadline for registration is Friday, September 26. Cost: $50. For registration information, including link for online registration, click here.
Monday, October 6, 7:30 a.m. – 1:30 p.m., Open Doors: Making New Foreclosure Programs Work, Colonnade Hotel, Boston. Sponsored by Citizens' Housing and Planning Association and The Warren Group. Featured speakers include Representative Barney Frank, Governor Deval Patrick, Mayor Thomas Menino, Undersecretary Dan Crane, and State Banking Commissioner Steven Antonakes. Cost: $40 for non-profit and government employees, $75 for all other attendees. For registration click here
Thursday, October 16, 5:30 p.m., CHAPA Annual Dinner, Boston Convention and Exhibition Center. Cost: $90.
