News Round-Up: Housing Disasters, Natural and Man-Made

In this week’s News Round-Up, we find news stories showing that both natural disasters, and the disastrous economy, have combined with the nationwide shortage of rental housing affordable to low income people to create a crisis for many American families.

In Vermont, manufactured home park residents whose homes were flooded during Hurricane Irene had no other choice but to destroy their own homes, as repair was impossible and the fee to dispose of them was more than the residents could afford. In a state with the second lowest rental vacancy rates and the seventh highest rents, these former homeowners will have a tough time finding a place they can afford. They will also find themselves in competition with other low income families for scarce affordable rental opportunities. As the need grows, service providers have difficulty stretching the state and federal funding available to them, and must cobble together donations and other resources to help their clients.

Franklin County, Pennsylvania’s shelter system is under stress due to the poor economy and lack of housing affordable to low income people. Waiting lists for vouchers and public housing mean the shelters stay full.

We find a similar story in Indiana, where the minimum and low wage jobs available pay nowhere near the $17.84 Housing Wage there. Service providers say they’re seeing an increase in homeless families in particular.

Talk of the Town: The Long Slog

Oh, the jobs report. The first Friday of every month is a day of anticipation and anxiety as we await the release of the Department of Labors’ monthly employment situation summary. Will the unemployment rate finally drop? Will the U.S. create more jobs? Will the “long slog” towards economic recovery finally speed up a little?

No, some, seems unlikely. The July unemployment rate increased to 8.3% from 8.2% in June (which at least three newspapers referred to as just a “ticking up,” though deeper analysis reveals that a broader unemployment measure actually shows a 15% increase in total unemployment), and the number of jobs increased by 163,000.

The “jobless recovery” rears its ugly head. According to the New York Times,

the economy now produces as many goods and services — more, in fact — than it did before the downturn officially began in December 2007. But it does so with almost five million fewer jobs.

This is a lot of American workers doing the work of more than one person, and it could be a sign that employers are still too uncertain about the economy to invest in hiring more workers. Even still, the Dow Jones surged 2% after the jobs report was released, so at least Wall Street found something to like. And since it’s an election year, there’s plenty of talk about what this means for the electoral prospects of President Obama and Governor Romney.

So what’s going on? Matthew Yglesias at Slate is among those who think the Federal Reserve is not helping improve matters. While they noted earlier this week that the economy is not looking so great now, it’s not going to improve dramatically in the near future, and inflation is going to stay pretty low, the Fed isn’t going to move to loosen monetary policy (i.e., make more money and credit available in the market) right away. The European Central Bank isn’t making big moves, either.

Another frequent target of scorn is the Federal Housing Finance Agency, whose acting director decided this week not to implement debt forgiveness for underwater homeowners (NLIHC takes no position on this matter). Writing in the New York Times, Paul Krugman says that “reducing the burden on Americans in financial trouble would mean more jobs and improved opportunities for everyone,” so some principle reduction scheme should be implemented.

What’s your take on this month’s jobs report? Do you have hope for the economy turning around? What do you think elected leaders and federal agencies should do about it? How about the private sector? Let’s talk about it the in comments.

Protecting Renters from Foreclosure- Permanently.

The housing market is sending decidedly mixed signals to Americans: On the one hand, increases in new home construction are suggesting to analysts that the housing slump might finally be over, which could mean positive economic impacts outside of the housing construction sector. On the other hand, banks are sending increasing numbers of homes into foreclosure, putting the stability of many households at further risk.

What is for certain is that foreclosure has a serious, if often hidden, impact on renter households. Approximately 40% of families affected by foreclosure rent their homes. It used to be that these tenants could be evicted from their homes with as little as a few days notice, for no fault of their own. Thanks to the Protecting Tenants at Foreclosure Act of 2009, when landlords go into foreclosure, bona fide tenants can now stay in their homes for the remainder of their lease or for at least 90 days. This legislation has prevented countless individuals and families from being uprooted from their homes and their lives.

There’s just one problem: The Protecting Tenants at Foreclosure Act is set to expire in 2014. Foreclosure is clearly an ongoing problem, and NLIHC is among the many groups that believe this law should be ongoing as well.

Happily, Representative Keith Ellison (D-MN) introduced legislation, the Permanently Protecting Tenants at Foreclosure Act (H.R. 3619) that would make the the act a permanent law. H.R. 3619 would address the ongoing impact of the foreclosure crisis on renters by removing the sunset date, ensuring that renters have a basic level of federal protections irrespective of when their residence is foreclosed on. The legislation would also add a private right of action for tenants whose rights under the act have been violated. Giving the law some “teeth” will make it even more effective, and make it easier for renters to exercise their rights.

Right now, this bill needs cosponsors. We’re inviting organizations from across the country to sign on to a letter urging representatives to cosponsor the Permanently Protecting Tenants at Foreclosure Act. You can read the letter and sign your organization on today.

The deadline to sign on is Friday, July 20, so we urge any organization that may be interested to take action quickly to support the bill. Renters in your community will thank you.

News Round-Up: Doubling Up

This week’s news round-up shows the affects our nation’s high rental costs have on families and communities.

According to the Coalition, Maryland is the 4th most expensive state for rental housing in the country. The Sentinel reports that many Maryland households are “doubling up” in response, putting a strain on households and putting more families at risk of homelessness.

Both the New York Times editorial page editor’s blog and the MSNBC Lean Forward blog posted NLIHC’s popular minimum wage map last week. Andrew Rosenthal of the Times  points out that “there are plenty of single-parent households as well as families where, for various reasons, only one member is able to work,” making the comparison between two-bedroom apartment rents and what minimum wage earners can afford relevant to the policy debate, and the presidential election.

It is easy to predict the result of this disparity between wages and rents: low income Americans are desperate for rental housing they can afford. In Sacramento, the county housing authority plans to open its Housing Choice Voucher waiting list this week. The housing authority has just 3,000 spaces open on its waiting list, and while housing authority staff have no way of predicting how many applications they will receive, they expect many individuals and families will be interested. The last time the list opened up, 35,000 applications were received.

Long-term un- and underemployment lead to cost burden among renters, but even an improving economy can put stress on the rental market. In inland California, the rental occupancy rate is up, as are rents. An economist quoted in this article suggests that as the job market improves, people who have doubled up are starting to use their new income to move into the rental market on their own, making affordable apartments even more scarce.

What Can FHFA Learn from the Banks’ Big Mistakes?

The National Fair Housing Alliance’s report, The Banks Are Back, Our Neighborhoods Are Not: Discrimination in the Maintenance and Marketing of REO Properties has people talking over at the National Low Income Housing Coalition. It’s not just the report’s finding that bank or “real estate-owned” (REO) properties in white neighborhoods are much better maintained and marketed by private than such properties in African-American and Latino neighborhoods.  It’s what the report’s findings might mean for the REO-to-rental pilot program launched by the Federal Housing Finance Agency (FHFA) in late February.

There are some differences. The report focused on REO properties held by private banks, while the properties included in the pilot are all held by Fannie Mae. Nonetheless, we at NLIHC see some lessons that can be transferred and that warrant additional attention, most notably the statement in the report that “banks have an obligation to implement sound quality control practices to guarantee REOs are maintained and marketed without regard to the racial or ethnic composition of the neighborhoods in which REOs are located.” NFHA also notes that “direct contracts with local vendors typically have better onsite maintenance of REOs.”

NLIHC submitted comments to FHFA when the agency was seeking input on what an REO disposition program should look like, that include these general principles. Specifically, NLIHC emphasized that community-based and mission-driven organizations with strong track records should be given the opportunity to participate in the program, to ensure proper maintenance of rental properties. NLIHC also noted that past efforts to dispose of REO properties held by FHA have not been as successful as they could have been because there was no associated funding provided to help with operating and rehabilitation costs. We recommended that REO sales be paired with National Housing Trust Fund dollars to make some of the properties affordable to extremely low income households.  Finally, we recommended that landlords and property managers must contractually agree to meet certain housing quality standards for all properties, whether or not a particular unit is subsidized.

The first FHFA pilot includes few restrictions, none of which relate to affordability. However, it is extremely small scale, with fewer than 3,000 properties included, the majority of which are already occupied. FHFA has indicated that this pilot is just the first step in a REO disposition program. It is important that advocates weigh in now to ensure affordability, maintenance, and marketing issues are all sufficiently addressed as the REO-to-rental program takes shape.

What do you think? Do you see ways that affordability and adequate maintenance can be woven into future iterations of the REO to rental program? Let’s talk about it in the comments.