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Citizens' Housing and Planning Association: Housing Briefs - September 26, 2008

Housing Briefs - September 26, 2008

State Updates

RFR Released for Regional Network Innovations to End Homelessness

The Interagency Council on Housing and Homelessness has released a Request for Response (RFR) to fund six regional networks with a total of $8 million to coordinate regional responses to ending homelessness.

The 18 month regional grants will advance the cause of ending individual and family homelessness through a coordinated system of early warning, uniform assessment and decision making, and targeting of appropriate resources to the right people at the right time and in the right locations. Convening agencies will apply to lead a defined network of public and private organizations, individuals, and municipal representatives, led by a Leadership Council. One of the regions must be “rural”. Data collected from the six pilots regions, which will not cover the entire state, will be used to inform statewide homelessness policy.

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.

DHCD Announces $2 million in Planning Grants to Boost Neighborhood Revitalization in Small Cities

DHCD released $2 million for a new small cities neighborhood planning program, the Gateway Plus Action Grant. The Gateway Plus Action Grant goals are to 1) increase diversity of housing options across levels of affordability; 2) create and provide more attractive and safer neighborhoods for those who live, work and visit the community, and 3) to build and strengthen partnerships among municipal officials, residents, community-based organizations, and civic, private, business, and institutional sectors.

The program encourages collaboration among state government and municipal officials, civic leaders, community-based organizations, institutions operating in the community/neighborhood and/or region, and particularly the neighborhood residents of Massachusetts' regional cities.

Municipalities with greater than 35,000 people and below average incomes and educational attainment are the only eligible applicants, but they must enter into third-party agreements with pre-qualified consultants approved by DHCD. Eligible activities for the maximum grant amount of $75,000 include the following:

  • 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.

Applicants must enter into third-party agreements with consultants approved by DHCD to conduct these services, using consultants from DHCD's Master Services Agreement ( MSA). Please note that CDCs, non profits, Regional Planning Agencies, and others can be qualified as consultants. Contracted consultants (prequalified by DHCD and hired by the municipalities) can also hire subcontractors. The subcontractors do not have to be selected from the list of prequalified contractors, using DHCD's Master Service A. However, they must be approved by DHCD.

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


DHCD has begun assembling an Advisory Committee to help it design a public housing revitalization program, as authorized in the recent Housing Bond Bill. The bill authorized the use of up to $50 million over five years to test innovative and cost-effective approaches to revitalizing family and elderly state-aided public housing and encouraged regional collaborations and new affordable housing production. As required by the bill, the 7-member advisory committee includes the DHCD Director, three representatives selected (one each) by CHAPA, NAHRO and the Massachusetts Union of Public Housing Tenants, plus three additional members chosen by DHCD. CHAPA has selected Charleen Regan as its representative.

State Releases Olmstead Plan for Persons with Disabilities


On September 12, the Executive Office of Health and Human Services (EOHHS) issued its Community First Olmstead Plan. The plan stems from a 1999 federal Supreme Court decision that requires states to provide services to individuals with disabilities in the most integrated setting possible and encourages States to develop compliance plans.

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 Alliance, the Massachusetts Association of Community Development Corporations and the Massachusetts Nonprofit Housing Association have launched a website to disseminate information on the Commonwealth’s Comprehensive Permit Law. 40BFacts.org contains a wealth of information on how the Comprehensive Permit Law works and the results it has achieved in Ch. 40B’s 40 year history

SJC to Decide Community Preservation Act Lawsuit

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


The Community Preservation Coalition (CPC) announced this month that it is beginning a new award program – The Robert Kuehn Community Preservation Award – to honor the memory and work of Bob Kuehn.

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


In testimony submitted to U.S. House Financial Services Committee on September 17, Attorney General Martha Coakley reported “dismal” results from efforts to encourage lenders and servicers to modify mortgages to help owners avoid 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

Land Court
) and 4,324 foreclosure deeds were during the same period. Even worse, her office found that none of the loan modifications resulted in sustainable loans – with not one of the 144 reducing the owner’s principal mortgage balance and “virtually none” reducing the owner’s monthly payment. She also reported that efforts by her office to get major creditors to commit to a loan modification protocol with measurable results have not worked as these lenders “have simply refused to move beyond platitudes and press releases.”

Foreclosures Down Slightly in August; Other Trends Mixed


The Warren Group reports that 998 foreclosure deeds were filed in August, down 2% from the 1,018 filed in August 2007. However, year-to-date foreclosure deeds reached 8,804, up 79% from the same period a year ago.

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 Massachusetts during the first six months of 2008. It reported that the average single family REO property sold for about 10% ($25,000) less than the outstanding mortgage balance, the average condo for about 18% ($33,000) less, the average two-family sold for about 26% ($65,600 less), and the average three family for about 33% ($99,500) less.

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 Worcester alone.

 

 


Federal Updates

HUD Releases Grant Allocations for Neighborhood Stabilization Program


In a September 26 press release, HUD released state and local allocation amounts under its new $3.92 billion block grant program to help localities to deal with vacant and abandoned properties. It also released the formula it used to arrive at grant amounts. Program rules are due out on Monday, September 29.

Massachusetts will receive a total of $54.8 million. Of that, $11.3 million will go directly to four cities, including Boston ($4.23 million), Springfield ($2.57 million), Worcester ($2.39 million), and Brockton ($2.15 million). The remaining $43.47 million will go to the State. Spending rules are not yet known, but the National Association for County, Community and Economic Development (NACCED) reported last week a draft sent to Congress last week would allow 10% of the grant to be used for program administration, require grantees to submit a program plan to HUD by December 1 and to commit all their funds within 18 months of the funding award and allow States allocations to supplement local allocations.

National Community Stabilization Trust Proposed to Facilitate Sale of REO Properties

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.

Fannie Mae and Freddie Mac Put into Conservatorship


On September 4, the FHFA - the new independent federal regulator created by the Housing and Economic Reform Act (HERA) on July 31, 2008 - announced that it had sent a notice of official establishment to the Federal Register. FHFA is responsible for overseeing the activities of Fannie Mae, Freddie Mac and the Federal Home Loan Bank system. On September 7, FHFA, Treasury Secretary Paulson and Federal Reserve Chair Bernanke announced that both entities were being put into conservatorship (putting them under the “control and direction of FHFA) and that the U.S. Treasury would make capital available to them and take other steps as needed to ensure their solvency.

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.

He also reported that he will wait for the GSE third quarter results before deciding whether to suspend the new assessments imposed on the GSEs to cover the cost of more bonds for the FHA HOPE refinancing program and to fund the National Housing Trust next year. He stated that FHFA is firmly committed to the GSEs’ affordable housing mission, and that while they will missed several sub-goals this year, FHFA has begun to meet with affordable housing advocates about implementing the new goals established by HERA. He noted that it expects to issue a new regulation by October 1, implementing the provision in HERA that permits use of Federal Home Loan Bank Affordable Housing Program (AHP) funds to help homeowners with incomes below 80% of median to refinance through FHA HOPE or other programs.

FHFA Affirms GSE Commitment to Multifamily Housing Finance


Following the announcement of conservatorship for Fannie Mae and Freddie Mac, many observers expressed concern about what it would mean for multi-family finance activity. They noted that Fannie Mae and Freddie Mac represent almost 80% of the secondary market for these loans, that delinquency rates have been extremely low, and that the GSEs have also accounted for 30-40% of tax credit investments in recent years. Some feared that the entities might liquidate their tax credit holdings and flood the markets.

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 Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) released a joint Mortgage Metrics Report this month profiling the performance, between January and June 2008, of 34.7 million mortgages serviced by national banks and federally regulated thrifts, with details by loan type (prime, subprime, alt-A and other). These mortgages represent about 60% of all outstanding mortgages in the U.S. (the authors caution that their findings should not be used to draw conclusions about the other 40%) and almost (88%) are owned by third parties through securitization.

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 New England

A new report by the Federal Reserve Bank of Boston, “Age Restricted Housing in New England”, published in the Fall 2008 Issue of Communities and Banking, concludes that “municipal leaders who believe that promoting over-55 housing will reduce education costs are in for a rude awakening.”

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 New England. It notes that the number of households aged 30-39 living in New England fell by 13.7% compared to a 5.4% decline in the nation as a whole and that the six New England states rank in the top 10 nationwide in terms of median age.

Upcoming Events

Friday, October 3, 7:30 a.m. – 2:15 p.m., Keeping Current with Chapter 40B, Holiday Inn, MansfieldMA. 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, 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.

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 HoldTown Hall Meetings on the "State of Civil Rights in the Commonwealth"


The State Office of Access and Opportunity, the Attorney General’s Office, the Massachusetts Commission Against Discrimination (MCAD), the Massachusetts Office on Disability and DHCD will sponsor five evening town hall meetings across the state (click here for dates and locations) to get input on concerns and activities.

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.


EOT to Hold Public Workshops to Get Input on State Transportation Priorities


The Executive Office of Transportation (EOT) announced this month that it has scheduled ten workshops across the state to get public input for the Strategic Transportation Plan, to be known as “youMove Massachusetts”.

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.

Become a CHAPA Member and Sign Up for Housing Briefs On-line

Following CHAPA’s website redesign, colleagues and friends interested in signing up or changing their personal contact information for Housing Briefs may do so through http://www.chapa.org/?q=JoinEmailList. In addition, those interested in joining CHAPA to become involved in housing policy development and advocacy can do so at https://www.chapa.org/?q=joinchapamember.