Housing Briefs - September 26, 2008
State Updates
RFR Released for Regional Network Innovations to End Homelessness
There is a bidders’ conference on Wednesday, October 1, 2008 at 9:00 a.m. at Hoagland-Pincus Conference Center, University of Massachusetts Medical School, Worcester Foundation Campus, 222 Maple Avenue Shrewsbury, MA.
Responses are due Friday, October 31, 2008. Please visit Com-PASS and search under the Department of Housing and Community Development Solicitations for the RFR.
- Identify appropriate sites and strategies for a broad range of housing opportunities, either rental or ownership, including affordable, market-rate, workforce, employer-assisted, elderly or special needs.
- Expedite housing construction or rehabilitation through regulatory mechanisms such as changes to zoning, streamlined permitting, and use of comprehensive permits.
- Revitalize neighborhoods that support affordable and workforce housing.
- Minimize the impacts of foreclosures.
- Expand housing opportunities in downtowns or neighborhood commercial areas.
The RFR for consultants has been published on Comm-Pass and on the associated Bidder's Forum. Consultants should visit www.comm-pass.com and search for Solicitation Document Number DHCD2009-02 (not case sensitive, no spaces). Title: Request for Responses (RFR) for DHCD Prequalified Planning and Community Development Consultants Document Number: DHCD2009-02 Comm-PASS Category: Professional Services - OTHER-All Others Not Shown or Combinations; Keywords: facilitation, revitalization. Consultants on this prequalified list may be mandated or strongly recommended for use in other programs by DHCD or by another state agency, requiring consulting services of the nature being procured by the RFR. The duration of the prequalified list is through June 30, 2015.
Applications to receive grants are available by clicking here and are due at DHCD by 5:00 PM on Friday, October 17, 2008. Awards will be announced in October, 2008.
State Leaders Prepare for Potential Budget Woes
State House leaders gathered this week to discuss the impact of the nation’s financial woes on the state budget. Revenues for the first two weeks of September were down $200 million (18.4%) over the same period last year, which has forced leadership to consider when and how to initiate mid-term budget cuts. Governor Patrick has already asked state agencies to prepare spending cuts and has initiated a hiring freeze.
DHCD Begins Work on Public Housing Revitalization Demonstration Program
State Releases Olmstead Plan for Persons with Disabilities
The new plan establishes six broad goals related to eligibility, service coordination, transportation, housing and supportive service needs and lists “action steps” the State will complete over the next 18 months to advance those goals. One step is the development, by February 1, 2009, of a three-year strategic plan to increase the availability and accessibility of affordable community-based housing.
Affordable Housing Groups Launch New Website
CHAPA, the Fair Housing Center of Greater Boston, Massachusetts Affordable Housing
The State Supreme Judicial Court (SJC) heard arguments on September 2 in a case involving a challenge by ten Newton taxpayers to the City’s use of about $766,000 in Community Preservation Act (CPA) funds to improve two parks.
The taxpayers argued that the proposed work was not CPA-eligible under the statute as it did not constitute “creation and preservation of land for recreational use.” After a Superior Court judge agreed, the City appealed and the SJC agreed to hear the case directly.
The taxpayers believe that the proposed work constitutes rehabilitation, while the City believes that the lower court judge used too narrow a definition of “creation and preservation.” It is arguing that the creation of new recreational uses within existing parks that make the areas open and accessible to new groups of users should qualify (e.g., making play areas handicapped accessible and adding features for older children). It also argues that work to prevent erosion falls within the definition of preservation. Links to briefs for each side can be found at the SJC case docket.
CPC Announces Robert Kuehn Community Preservation Award
Bob was president of Keen Development Company, long involved in historic preservation and actively involved in the drafting and passage of the Community Preservation Act, as well as a former President of CHAPA’s Board and a founder of CPC. The new program will award two completed CPA projects, one in large communities (cities and towns with FY2008 local surcharge revenue of over $400,000) and one in smaller communities. Applications must be submitted by December 31, 2008.
Attorney General Finds Lenders Are Not Modifying Loans of Owners Facing Foreclosure
A study of Registry of Deeds records between May 1 and August 1, 2008 found only 144 loan modification filings, while 4,271 foreclosure starts (notices filed with
Foreclosures Down Slightly in August; Other Trends Mixed
Other indicators are mixed. Foreclosure petitions have started to rise again, after the three month delay that began on May 1 when the state’s 90 day right to cure law went into effect. However, August petitions (943) were 70% lower than the same month a year ago, leading some to speculate that lenders may be moving less aggressively due to the costs of the foreclosure process. At the same time, auction notices in August (1,759) were 48% higher than in 2007.
Banker and Tradesman Profiles Location and Disposition of Recent REO Acquisition
In a September 8 news article, Banker and Tradesman looked at what has been happening to foreclosed properties in recent months. It found that 95% (4,186) of the 4,397 residential properties sold at auction between September 2007 and February 2008 were purchased by the foreclosing lender/investors. Three lenders accounted for 42% of the acquisitions, including Deutsche Bank (785), US Bank (535) and Wells Fargo Bank (472). By the end of August, all lenders had sold just over half of their 4,186 acquired properties, while 46% (1,911) remained lender owned, including 35-40% (680) of the properties acquired by the three largest firms.
The authors reported that the number of REO sales was equal to about 8% of all residential sales in
The study also found much higher foreclosure rates for two- and three-unit properties compared to single family homes and condominiums. While single family homes and condominiums make up 69% of the state’s housing stock, they accounted for only 56% of the 4,397 properties foreclosed (2,152 single family homes and 631 condos). By contrast, two- and three-family homes accounted for 29% (1,285) of foreclosed properties, though they make up less than 9% of the state’s housing stock. Larger (329) properties accounted for the remaining 7%. The study also showed the 40% of the 4,397 foreclosed properties were concentrated in 10 cities, with 15% (674) in
Federal Updates
HUD Releases Grant Allocations for Neighborhood Stabilization Program
National Community Stabilization Trust Proposed to Facilitate
Four national organizations – Enterprise Community Partners, the Housing Partnership Network, LISC and NeighborWorks – are working to create a National Community Stabilization Trust (NCST) to facilitate the transfer of foreclosed properties owned by lenders and investors (often referred to as real-estate-owned or REO) to local groups working to stabilize targeted neighborhoods. The Trust will focus on the hardest-hit areas in the nation.
It aims to establish a standardized, efficient and cost-effective transfer mechanism, with standardized methods for establishing the value of the properties, as well as standardized transfer procedures and documents. It also aims to aggregate capital from foundations and other sources to support these transfers, to organize and facilitate local collaborative efforts to carry out neighborhood stabilization and to engage in policy advocacy as needed. The sponsor groups are working with HUD to ensure that NCST programs will mesh with the new Neighborhood Stabilization Program funds. The Trust expects to launch a pilot program this Fall with a full launch shortly thereafter.
As conservator, FHFA immediately replaced the CEOs of the two entities, suspended stock dividend payments, suspended all Fannie and Freddie political activities, including lobbying, and announced that it would be reviewing their charitable activities in light of their mission and financial state. It also stated Fannie and Freddie’s single- and multi-family businesses will continue as usual.
In testimony submitted to the Senate Banking Committee on September 23 and to House Financial Services Committee on September 25, the FHFA director updated Congress on FHFA’s foreclosure prevention and affordable housing activities. He reported that the GSEs have begun working more aggressively to prevent foreclosures and looking at how to create systematic approach to loan modifications guided by the FDIC approach with the IndyMac Bank.
FHFA Affirms GSE Commitment to Multifamily Housing Finance
On September 12, however, FHFA issued a statement of support reaffirming that the GSE multi-family lending programs would continue, including low income housing tax credit and mortgage revenue bond programs.
Falling Low Income Housing Tax Credit (LIHTC) Prices Raise Concern
On September 15, Housing and Developer Reporter reported that the price investors are willing to pay for federal low income housing tax credits has been steadily declining in recent months. It reports that prices nationally have fallen by between three and five cents per dollar of tax credit since June and now average in the high 70-cent and low-80 cent range for nonguaranteed funds, down from the low 90-cent range last November and December. According to the article, financial services companies who need CRA credits made up the bulk of recent investors, while many insurance, energy, pharmaceutical and other firms that were active in the past are not currently interested.
Recent Research
Federal Bank Regulators Release Report on Loan Modification and Foreclosure Trends
The report shows a continued rise in delinquency rates, with 7.3% of all loans at least 30 days delinquent in the second quarter (April-June), up from 6.6% of the portfolio in the first. It also reported an increase in loss mitigation activity, with new mitigation actions for 252,508 loans during this period - through payment plans (140,155) and loan modifications (112,353) – but noted that the mitigated loans represented less than 9% of seriously delinquent loans as of the end of June. By the end of June, 555,680 foreclosures were in process.
Background Report on National Hot Button Housing Issues for Voters and Candidates
KnowledgePlex released a special report earlier this month on key national housing policy issues facing candidates and voters. The report includes short briefing papers on homelessness, public housing, affordable rental housing, and other topics.
New Report Finds Age Restricted Housing No Fiscal Panacea in
A new report by the Federal Reserve Bank of
It finds that school district and municipal costs are not materially affected by year to year fluctuations in student or total population. It warns that the tilt toward an older population raises health insurance costs and can suppress economic growth and that discouraging housing for younger households may be a factor in the growing imbalance in the age-distribution in
Upcoming Events
Friday, October 3, 7:30 a.m. – 2:15 p.m., Keeping Current with Chapter 40B, Holiday Inn,
Ongoing through December 21 (daily 10-5; free), Red Lines, Death Vows, Foreclosures, Risk Structures: Architectures of Finance from the Great Depression to the Sub-Prime Meltdown; exhibition exploring possible relationships between finance and buildings through models, videos, photographs, and drawings; MIT Museum, Compton Gallery - Room 10 – 150, 77 Massachusetts Ave, Cambridge.
Friday, December 12. Save the Date for the Patrick Administration’s 2008 Smart Growth/Smart Energy Conference at the Boston Convention and Exhibition Center, 415 Summer Street, Boston, Massachusetts. This year’s conference theme will be Think Green: Educate and Engage. Workshops will include:
- The Green Communities Act
- Energy Efficiency and Clean Energy Strategies for Municipalities
- Transit Oriented Development
- Green and Healthy Affordable Housing
- Civic Engagement
Registration information will be available shortly.
State to
Representatives from all five agencies will attend and hope to hear from residents, civil rights organizations, fair housing organizations and human rights agencies. Written comments can also be submitted at the meetings or by email. Further information is available by contacting Ronald Marlow at Ronald.Marlow@state.ma.us or at 617-727-2040.
The workshops will be held through October 20, primarily in the early evening (6-8 p.m.) in local libraries (click here for details). The Plan will set priorities for transportation improvements across the state. EOT is interested in hearing about mobility gaps and transportation challenges and needs through the workshops or online. It has set up a website, www.youmovemassachusetts.org that can accept comments and includes a Google map onto which users can place pins and comment about transportation issue specific locations.
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