Sometimes Even Houses Are Beyond Fixing!

Brokenhouses082013

Driving down Greenmount Avenue to the Baltimore Montessori School, a sweet little 4 year old exclaimed gleefully, “O goody, we get to see the broken houses.”

Hidden behind those broken houses are community groups who have kept the faith with their neighborhoods and private and nonprofit developers who have steadily resurrected those broken houses, one at a time.  Telesis, People’s Homesteading, St. Ambrose Housing Aid Center, Harbor Development, AHC, and individual homesteaders trying to hold on to their vision of a home for themselves and their loved ones.

Next year, St. Ambrose will hit the 500 mark – 500 vacant, foreclosed properties turned into lovely family homes,   The City has joined with us to make our efforts more visible by tackling the issue of 16,000 vacant properties that overwhelm the efforts of community partners like HUD, MICA, Hopkins and University of Baltimore.

Echoing a quote from an editorial in this morning’s Sun, “….That’s why last week’s announcement by the Rawlings-Blake administration of a major push forward in the Vacants to Value program is like a fresh breeze on a smoggy summer day. It demonstrates that when it comes to the issue of vacant homes, city leaders “get it.” They realize that the piecemeal, glacially slow approach of recent years, whereby a few hundred derelict houses are demolished annually, simply isn’t good enough for a city in a hurry to take its rightful place among the leaders in the nation’s ongoing urban renaissance.”  To read more – http://www.baltimoresun.com/news/opinion/editorial/bs-ed-vacant-houses-20130822,0,5392477.story.

To learn more about the City’s methodical plan to approach this problem, check out their website.  http://www.baltimorehousing.org/vacants_to_value.aspx

Demolition! Oh No! OH, YES!

In the seven years I have lived in Baltimore, I have seen amazing changes in and around my community, both where I live -Waverly, and where I work – Barclay/Harwood.  However, so much of the progress is overshadowed by the demoralizing sight of derelict houses, plywood covered doors and windows and sky showing through destroyed roofs -visions from a war zone.

And based on the data map published this week in the City Paper –  overlaying the homicides that have occurred this year -126 – on top of a map of the vacants in the city, those areas are war zones.

However, I want to talk about a garden.  

At the end of Falls Street which is one block long and runs from 24th to 25th Street between Barclay and Guilford, there was an abandoned end-of -row property.  During the 7 years I have worked on 25th Street, mountains of household goods were dumped in the back yard of the house and drug dealers regularly used it to store their wares and offer free samples to prospective customers.  Not a pretty or encouraging environment for the little ones in the home whose backyard looked out on it.

Two months ago, Baltimore Housing brought in a demolition team of bulldozers and dumpsters and took it down and BAM! a pretty fenced-in garden space with pebble walkways and flowers and baby trees grew up in its place.

Imagination blossoms and neighborhoods feel empowered when they are given a blank canvas not crammed with falling down bricks and trash.

Let the demolition continue!

 

Housing America’s Future – Bipartisan Housing Commission Publishes Report

St. Ambrose Housing Aid Center applauds the release recently of a new report by the Bipartisan Policy Center’s Housing Commission that offered bold recommendations for strengthening the availability of homeownership and rental housing choices at all stages of a person’s life. The report follows the worst housing downturn since the Great Depression that has affected the housing future of young and old alike.

The Bipartisan Policy Center’s (BPC) four main policy proposals around sustainable homeownership, an improved housing finance system, stronger rental housing assistance and performance measurement, and a comprehensive approach to meeting the needs of our nation’s seniors, make broad sense for the many families in our communities who are struggling to achieve homeownership or obtain affordable rental properties.  The report also underscored the importance of quality housing counseling that is included in the BPC report.

Quality housing counseling is extremely important to the stability of the housing market, both ownership and rental. We’ve seen in our own business that housing counseling provided by trained and certified professionals can help consumers make sound financial decisions for the long-run.

In 2012, St. Ambrose provided housing counseling to over 400 prospective homebuyers.  Due to the generous incentive programs in Baltimore, the low mortgage interest rates and affordable housing values, the agency expects the demand for quality housing counseling to continue well into 2013. As a member of the NeighborWorks network, St. Ambrose contributed to the more than 121,000 people provided housing counseling by NeighborWorks organizations last year.

 Renter’s Need Homes, Too!!

According to data from the U.S. Department of Housing and Urban Development and emphasized in the BPC’s report, nearly half of renters at all income levels pay more than the federal standard of 30 percent of their income for rent.

The Housing Commission’s rental recommendations go far in helping families obtain quality, affordable rental housing where current markets and assistance do not meet the need.  Moreover, it’s important to note that much more work and coordination has to occur to help ensure that as many households that need assistance receive the quality, affordable housing that they deserve.

St. Ambrose Housing Aid Center owns and manages 307 rental homes in the Baltimore area. Overall, members of the NeighborWorks network own or manage nearly 100,000 rental homes, the majority of which are affordable to families with very low and low incomes.

A lot has to happen before the Bipartisan Policy Center’s Housing Commission report recommendations are implemented.  However, the report is a big step forward for making all types of housing more affordable and accessible for not only families in Baltimore, but for families all across the country.

To read the report, http://bipartisanpolicy.org/library/report/housing-america%E2%80%99s-future-new-directions-national-policy

New Program Brings $40 Million to Maryland for Foreclosure Prevention

Official Logo of HUD, Which Administers the Program

As many of you may know, Maryland recently gained $40 million for foreclosure assistance as part of the Emergency Homeowner Loan Program, signed into law several months ago by President Obama.  Governor O’Malley used these funds to kick off the Emergency Mortgage Assistance Program last week.  On her popular Real Estate Wonk blog, Jamie Smith Hopkins succinctly describes the program’s bullet points:

Borrowers could receive as much as $50,000 in interest-free loans to pay off past-due amounts and to make up to two years of payments. They must have taken an income hit of at least 15 percent, be three to 12 months behind on their mortgage and have a “reasonable likelihood” of being able to get back on their feet.

The emergency help is like loan-to-grant money given to first-time homebuyers: No payments are due for five years, and every year the total is reduced by 20 percent until nothing is owed — as long as the homeowner keeps the property and stays up-to-date on the mortgage during that time.

Ms. Hopkins then asks: “what do you think? Better or worse off than loan modifications?”  While perhaps failing to directly proffer a response, my thoughts are below:

Maryland’s adoption of the new Emergency Mortgage Assistance Program is welcome news, no doubt, but it’s important to temper our optimism with strong caution.  As it stands, the new program delivers cash, not regulation.  And as we’ve seen all too often in our counseling sessions and discerned from our peers across the nation as well as from the news media, cash alone certainly may not result in a tangible step towards mitigating the impact of the foreclosure crisis, which, at least ostensibly, is the goal of this legislation.  Take for example Bryan Sheldon’s recent commentary about a “typical” mediation process, in which Bryan, a veteran counselor, accurately describes some of the common troubles that home-owners face while utilizing HAMP: banks’ ridiculous and erroneous demands for documents unrelated to foreclosure, the government’s inability to enforce program guidelines (and the banks’ inability to comply), and the banks’ illegal practice of commencing foreclosure proceedings while the borrower is under review for HAMP assistance.  Recently, policymakers were forced to draft legislation prohibiting lenders from initiating a foreclosure while the borrower is actively seeking mediation.  While this prospective reform is a breath of fresh air, it should have been totally unnecessary: common sense should prompt one to realize that such a practice is dishonest and unethical.

Frankly, Bryan hits the nail on the button when he writes, “the basic problem with the available government programs is that they have been implemented in the grossly deficient regulatory system which contributed to the foreclosure crisis in the first place.”  Indeed, I’m not convinced that this new program will produce results without robust, broad financial regulation to accompany it.

It’s important to remember that the foreclosure crisis was two-fold.  The predatory lending scams defined stage one, causing massive foreclosures and therefore families without housing, an aggregate loss of equity across the nation, and oddly as well as most consequentially, a crash in the U.S. securities market.  This last consequence led to stage two: large-scale layoffs, which subsequently forced many middle class families to default on their mortgages and eventually face the inevitable.

These victims still exist.  Many are still jobless, even homeless. And while many such people borrowed beyond their means, this trend emerged because of the gaping income inequality and stagnant wages that pervaded the last few decades, obligating many middle-class Americans to borrow more than they could take on.

These problems are now structural, and in addition to emergency benefits like the one’s offered in the new package, a structural fix is likewise necessary. To be sure, The administration has made some good efforts: the Frank-Dodd bill aimed at regulating the financial markets, the concept of a Consumer Financial Protection Bureau, headed by Elizabeth Warren, to name a few. But these development aren’t cutting it, indicated by the continuing prevalence of foreclosures nationwide.

I’m worried that the administration will stop with this initiative and that it will turn into another HAMP, which does not grant the Treasury Department the ability to impose fines on banks, a loophole that the latter group routinely abuses, among other shortcomings.  Along with foreclosure assistance to states, the President Obama needs to return to the drawing board and draft comprehensive financial regulation that 1) includes consumer protection measures, 2) defines and streamlines the process of responding to a foreclosure, while consolidating paperwork, 3) rigorously regulates the trading and development of dangerous securities, and 4) provides stringent enforcement measures.  This last point is crucial, as it had become fairly obvious that the government, all too often, has been plainly unable to administer the rule of law.

Until then, unfortunately, I am not convinced that this measure won’t fall short.  So while the state should welcome the Emergency Homeowner Loan Program with open arms, first and foremost, in order to stymie the foreclosure crisis and ensure it does not reoccur, we must mend “the grossly deficient regulatory system” that caused it.