State Updates
FY 2009 Capital Budget Released; DHCD Allocated $193 Million in Bond Cap for Housing Programs
Last week, the Patrick Administration released its updated five-year capital plan, which increases the FY 2009 bond cap for housing programs from $170,500,000 to $193,000,000. The largest increases are for public housing modernization ($85 million in FY '08 to $99 million in FY '09) and the Affordable Housing Trust Fund ($30 million in FY '08 to $40 million in FY '09 – both include Mass Housing contributions). The Commonwealth's total FY '09 bond cap is increased to $1.575, plus $152 million in unexpended FY '08 bond cap. CHAPA has provided an analysis of FY '09 bond cap by program compared to FY '08 bond caps.
CHAPA commends the Administration for its increased investment in affordable housing programs to help create additional jobs and housing opportunities.
State Budget Shortfall Grows
At a State House hearing to determine revenue projections for FY 2010, it became increasingly clear that the Commonwealth's budget shortfall is likely to be greater than the October 15 projection of $1.1 billion for FY '09.
The latest estimates are that Commonwealth revenues will be approximately $2 billion short, which signals a likelihood of further budget cuts in the coming months and/or a need for additional revenues. The Massachusetts Taxpayers Foundation's revenue projections estimate $19.4 billion in FY '09 state revenues (down from the original estimate of $21.4 billion and the October estimate of $20.3 billion) and $18.6 billion for FY '10.
CHAPA Launches New Online Accessible and Affordable Housing Registry
On December 11, CHAPA and the Massachusetts Rehabilitation Commission (MRC) launched a newly redesigned Mass Access website to help bridge the gap between residents in need of affordable, accessible housing and available apartments across the state.
The updated site (www.massaccesshousingregistry.org) features a user-friendly design and an expanded database of affordable rental housing in Massachusetts, including accessible and adaptable homes for people with disabilities.
The Massachusetts Accessible Housing Registry (Mass Access) is a free online program that matches people with disabilities with accessible housing in their communities. Under a state contract with the Massachusetts Rehabilitation Commission (MRC), CHAPA has managed Mass Access since 1995.
The new Mass Access features a web design constructed to be fully accessible to all users; the ability for property managers to login to the site and post their own property information; and an automated feature using Google maps to track the location of available units.
In 2007, CHAPA decided to redesign and redevelop the Mass Access website in an effort to expand the number and type of properties being listed on the site, as well as to increase the use of the site. Since then, CHAPA, MRC, and Isovera (the web consultants) have worked collaboratively with the housing and disability communities to develop the new website. MRC and MassHousing provided financial assistance for the project.
Warren Group Data Shows Continued Decline of Housing Markets
The Warren Group reported steep drops today in the volume and prices for homes sold in November in Massachusetts. The median price for a single family home sold in November was $275,000, down 16.7% from November 2007. The November data brings the 11-month year to date median single family home price to $309,000, down 11% from the 2007 figure ($347,500) for the same period. November sales (2,620) were 18.4% below the volume for November 2007, and year-to-date sales are down 12.5% from the same period in 2007.
Condominium sales prices also fell sharply in November (down 12%) to $240,000 from $272,700 a year ago, but year-to-date declines in median prices have been less steep than for single family homes, falling by 2% ($275,000 vs. $280,825). The decline in sales volume, however, has been steeper than for single family homes with November 2007 sales volume (1,204 statewide) down 27.5% compared to November 2007 and year to date volume down 23%.
CHAPA Publishes Update on 40B Housing Production
This month, CHAPA released an update on housing production using Chapter 40B. The report found that 53,800 housing units have been built or begun construction using almost 1,000 comprehensive permits and that 55 communities have reached the 10% threshold, more than double the number at 10% in 1997. Just over half of the approximately 28,000 affordable units (54%) are reserved for elderly households and persons with disabilities or special needs.
CEDAC Updates Expiring Use Inventory
The Community Economic Development Assistance Corporation (CEDAC) has released an updated inventory of properties with affordability restrictions that are at-risk of expiring. According to the report, Massachusetts has lost 12,359 affordable housing units through prepayments and rent subsidy contract termination and is at risk of losing 24,638 more subsidized units by December 31, 2012.
The Patrick Administration has worked closely with CEDAC to assess the Commonwealth's expiring use challenges and is poised to meet these challenges through partnerships with the MacArthur Foundation, Mass Housing, Massachusetts Housing Partnership, HUD, private sector owners and managers, non-profit and tenant organizations, and the State Legislature.
Interagency Council on Housing and Homelessness (ICHH) Funds Regional Networks
Eight regional networks were selected to receive $8 million in funds appropriated by the Legislature to coordinate services and find permanent affordable housing for individuals and families that are homeless. The networks will be up and running in early 2009 and will receive funding through the middle of 2010.
The eight regional networks include: the Department of Neighborhood Development to cover the City of Boston and the Metropolitan Boston Housing Partnership to cover Metropolitan Boston. The North Shore and Merrimack Valley will be covered by the North Shore Housing Action Group (North Shore Community Action Programs/Lynn Housing Authority) and Community Teamwork (Lowell). The United Way of Greater Plymouth County will cover the South Shore, while the Housing Assistance Corporation (Barnstable) will handle the Cape and Islands. The City of Worcester will cover all of Worcester County and Western Massachusetts will follow the lead of the Pioneer Valley Planning Commission (Northampton).
The pilots were announced as several working groups to study how State government can better coordinate and create permanent affordable housing and services to reduce homelessness. The Working Group reports are due next month.
New Brochure on Tenants' Rights in Foreclosed Properties Released
As part of a broader outreach initiative, the Executive Office of Housing and Economic Development and the Office of Consumer Affairs and Business Regulation have released a new brochure to alert tenants in foreclosed properties of their rights. The brochure directs tenants in foreclosed properties that aren't properly maintained by lenders to call the state Consumer Hotline at (888) 283-3757.
Federal Updates
CHAPA Issues Federal Housing Policy Recommendations for 2009
CHAPA issued a new paper on December 18 outlining recommendations for federal housing policy in 2009. Immediate priority recommendations include providing funds for a number of housing and community development programs in the impending economic stimulus bill, including capital funds for public housing and other federally assisted housing, increases in CDBG funding, preservation program technical corrections, low income housing tax credit fixes and Treasury Department direct purchases of tax credits and tax-exempt bonds. Actions to address the continuing foreclosure crisis are also an immediate priority.
Longer-term priorities include recommendations for re-thinking HUD's role and improving its operations. It also lays out a series of principles to guide HUD reforms and any new initiatives.
Advocates Urge Inclusion of Housing Funds in Stimulus Bill
The National Low Income Housing Coalition and many other housing advocacy groups are also urging the incoming Obama administration to include about $25 billion in housing funds in the stimulus bill expected to be acted upon shortly after January 20.
The bill will be a major part of the new team's two-year "economic recovery plan" to save and create three million jobs. A price tag has not been announced, though recent discussions have been in the $700 billion range.
Among items various groups recommend funding through the bill are up to $5 billion in capital funds for green public housing improvements, up to $3 billion for similar upgrades in other federally assisted housing, up to $10 billion to capitalize the National Housing Trust Fund, funds to fill the gap created by the weak market for low income housing tax credits, up to 400,000 new Section 8 vouchers, $2 billion for homelessness prevention programs and more funds for HUD's Neighborhood Stabilization (NSP) program for foreclosed and abandoned housing. The U.S. Conference of Mayors has published a $90 billion "Main Street Recovery Report" listing "shovel ready" projects by city.
Some of the impetus for seeking funds in the stimulus bill is concern that future budget bills will be very constrained. (The continuing resolution for HUD's FY2009 budget expires March 6th).
New Report Predicts At Least 8 Million Foreclosure Starts in U.S. in Next Four Years
On December 4, international financial services firm Credit Suisse issued a report estimating the likely number of foreclosure starts and actual foreclosures in the United States over the next four years under various assumptions, including continued housing price declines through 2010.
The report concluded that at least 8.1 million mortgages (16% of all mortgages) will enter the foreclosure process in the next four years (through the end of 2012), but noted that that figure could rise to 9 million under a mild recession or 10 million if the recession proves severe. The number actually going into foreclosure will depend on loan modification policies and other items. The report estimated that a 50% loan modification rate and 40% re-default rate would result in 6.3 mortgages going into foreclosure, assuming a mild recession.
OCC Finds High Rate of Defaults on Loan Modifications
On December 8, John Duggan, head of the Office of Comptroller of the Currency (OCC) reported the results of an analysis of recent default rates on home mortgage loan modifications. He reported that the OCC found that 39% of the loans modified by the nation's largest banks in the first quarter of 2008 were in default (at least 30 days overdue) after 3 months and that the percentage rose to 53% after 6 months and 58% after 8 months. OCC found similar re-default rates for loans modified in the second quarter.
However, Duggan noted that looking at the percentage of loans that were at least 60 days overdue (35%) is probably a better measure of the likelihood that re-defaulted mortgages will go to foreclosure. He noted that OCC is now investigating why re-default rates are so high, noting that it may be in part due to the quality of the modifications (e.g., banks have not made modifications on sustainable terms).
HOPE Now Alliance Issues November Data on Loan Modifications
On December 22, the HOPE Now Alliance, a voluntary alliance of mortgage servicers and investors, released summary and detailed data on loan modification activity by its members through November. Its 26 servicer members account for 94% of the subprime market and 69% of the prime market.
Based on that data, it now projects that its members will engage in almost 950,000 loan modifications by the end of 2008 and double that number in 2009. It continues to show a shift towards increased use of loan modifications as a percentage of workout plans. Loan modifications made up 48% of workout plans in November.
Fannie Mae Announces Non-Eviction Policy for Renters in Foreclosed Properties
Efforts by New Haven Legal Assistance in Connecticut led Fannie Mae to announce plans to permanently stop evicting tenants from foreclosed properties.
The announcement, made by letter on December 14 and described in a Wall Street Journal article, follows a late November announcement by Fannie Mae that it would suspend both foreclosures and evictions until January 9. The details of the new eviction policy will be announced prior to January 9. Freddie Mac has not announced similar plans, though it is reported to be reviewing its eviction policy.
Recent Research
U.S. Conference of Mayors Issues Annual Hunger and Homelessness Report
The U.S. Conference of Mayors issued its annual report on the incidence of hunger and homelessness in 25 cities (including Boston). The report also includes extensive data by city on the characteristics of homeless households, their housing situation (e.g. shelter, transitional housing, etc.), causes of homelessness, and local initiatives to assist homeless and hungry households.
Overall, the report found homelessness and demand for food assistance in 2008 (October 1, 2007-September 30, 2008) is up compared to a year earlier. Nineteen (19) of 23 cities (83%) reported a rise in homelessness and overall among the 23 cities, homelessness increased by 12%, including a 16% increase in homeless families. Many cities reported increases in homelessness as a result of foreclosures.
Ninety-five percent (95%) of the 21 cities tracking requests for emergency food assistance reported increases in the past year, and rises in the number of first-time recipients. The report also found that the cost of providing assistance rose even more due to rising food prices. The City of Boston reported a 4% rise in homelessness, even though street homelessness declined. It also reported a 30% increase in requests for emergency food assistance.
National Commission Issues Report on the Future of Fair Housing
The National Commission on Fair Housing and Equal Opportunity, created by four national nonprofits, issued their Report on the Future of Fair Housing this month. The report assessed the state of fair housing 40 years after passage of the federal Fair Housing Act and concludes that while the incidence of discrimination is lower today, it is still too high. It recommends nine actions to reduce discrimination and promote fair housing.
Major recommendations include replacing HUD's fair housing division with an independent fair housing enforcement agency and reviving and strengthening the President's Fair Housing Council to establish coordinated fair housing policies across agencies. Others include ensuring compliance with the obligation to affirmatively further fair housing and adopting a regional approach to fair housing by setting regional goals and requiring states and localities to coordinate efforts toward those goals.
New White Paper on Transforming Foreclosed Properties into Community Assets
The Furman Center for Real Estate and Urban Policy at New York University (NYU) issued a white paper reviewing promising strategies and challenges facing policymakers seeking to promote the transfer of foreclosed properties to responsible owners.
Upcoming Events
CHAPA Breakfast Forum. Private Capital for Affordable Housing: How Will We Come Through the Financial Crisis?
January 9, 9:30 a.m.-11:30 a.m., Suffolk University Law School, Boston
Register at www.chapa.org/calendar
People, Place and Opportunity: Planning for the Commonwealth's Economic Rebound
January 12, 10:00 am-1:30 pm, State House (Great Hall). Experts and policymakers will discuss the findings of a comprehensive statewide analysis of low and high opportunity communities across the Commonwealth. Presented by Massachusetts Legal Services with the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University and Harvard Law School's Charles Hamilton Houston Institute for Race and Justice
Contact opportunitymappinglaunching@mlri.org for additional information.
Hampshire/Franklin County Affordable Housing Expo
January 15, 4:30-7:30 p.m., The Red Barn, Hampshire College, Rt. 116, Amherst
Come hear local non-profit affordable housing professionals talk about their recently completed and upcoming projects.
For more information or to RSVP contact Connie Kruger, Massachusetts Housing Partnership, 413-253-7379 ext. 11, ckruger@mhp.net.
Health, Hunger, and Housing: The Building Blocks of Childhood Success
January 26, 2009, 10 a.m.-Noon, State House, Great Hall
Sponsored by Children's Healthcare Access Coalition
Housing Resources: A Focus on Preventing Homelessness
January 28, 10:30 a.m.-Noon, State House, Room A-1
A Housing Resource Training for Legislators and Staff sponsored by the CHAPA Homelessness Committee, Senator Sue Tucker and Representative Kevin Honan. Register at www.chapa.org/calendar
