Posted by: kjewell | July 21, 2010

HUD “First Look” program asks buyers to overlook PTAF

Earlier this month HUD announced a “first look” initiative which would give participants in HUD’s Neighborhood Stabilization Program (NSP) preference to acquire homes from HUD’s inventory of foreclosed properties. The initiative was announced by HUD Secretary Shaun Donovan at the National Council of La Raza annual conference in San Antonio.

Unfortunately, while it sounds great, this initiative is unlikely to help with the NSP troubles here in Texas, because HUD still refuses to certify that it followed the Protecting Tenants and Foreclosure Act (PTAF).  We’ve discussed this issue here before, but to recap, tenants in foreclosed properties have the right to keep their leases, and, if they don’t have a lease, receive at least a 90 day notice to vacate.

NSP funds may only be used to purchase foreclosed properties for which PTAF was complied with during the foreclosure.  This is important, as reports have shown that PTAF is widely ignored by lenders.

Given this requirement, Texas (rightly) requires that lenders certify that they followed PTAF.  (Other states have been willing to look the other way on lender PTAF compliance.  This ignores the intent of PTAF and NSP rules.)

HUD continues to refuse to certify that they follow the law.

As a result, the agencies are at a standoff.

TxLIHIS recently obtained, through a Public Information Act request, a copy of the letter from HUD declining to certify their homes as having been foreclosed upon in a manner compliant with PTAF.  You can download that letter here.

Here’s the money quote: “Although some ISIIs [Initial Successor In Interest, i.e. foreclosing lenders] may be willing to certify to compliance with the Act, HUD suggests that it is more appropriate to provide grantees with the necessary information for grantees to make their own compliance determination.”

Translation: Buyers of the property can tell if we followed the law as well as we can, so why should we certify?

This is obnoxious because IT IS NOT TRUE.  HUD (or its agents) did the foreclosure.  They were actually there.  They can attest to whether or not they followed the law.  All the buyer can do is pick through whatever records the agents left and speculate about what happened behind the documents.

In this letter is HUD admitting that they lack the internal controls to determine if they are following the law.  Rather than take responsibility for that failure, they have decided to try to pass the buck onto the next buyer.  If HUD certified PTAF compliance falsely, they’d take on additional liability; rather than risk this, they set up the buyer to take the risk of a false certification due to HUD’s failure to follow PTAF.

Who loses here?  Well, for one, the tenants of HUD properties, because no one knows if they got their rights under PTAF.  Second the participants in the NSP program, because they can’t buy the property without aiding and abetting HUD’s possible violation of PTAF.  And third, HUD,  because they lose a prospective buyer of the property.

So in short, everyone.

We call on Secretary Donovan to

1)    Follow the law on PTAF;

2)    Create the internal controls they need to know they are following the law, and

3)    Certify that they are following the law.

Passing the buck on PTAF to local NSP recipients ignores the intent of the law.  HUD should do better.

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Posted by: wrivers | July 20, 2010

Bo McCarver’s weekly news compilation -7/20/2010

Tuesday Report, July 20, 2010
Special to the Texas Low Income Housing Information Service

The paradigm of unlimited growth is abandoned by Rust Belt cities that now cope with receding populations and “ghost neighborhoods.” City administrators ponder how to support over-extended infrastructures with shrinking tax bases.

In Dallas, posh mansions are added to the foreclosure phenomenon that is now fashionable among the nation’s rich.

And in Galveston, hurricane victims continue to languish as creative bureaucrats throw-up new hoops for them jump through to get federal and state help for shelter.

For a pdf version of the full articles, plus contextual stories in social, environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.com

Fannie Mae to prohibit lenders from changing home appraisals

The mortgage giant addresses complaints that home sales have been sabotaged by arbitrary reductions in appraisers’ valuations.

By Kenneth Harney        Los Angeles Times       July 18, 2010

Washington — Picture this: You’ve signed a contract to sell your house. Your buyers say they’ve nailed down the right mortgage. All is well. But then the appraisal comes in low — $25,000 to $50,000 under what was agreed in the contract.
The buyers refuse to pay a dollar more than the appraisal, you decline to go that low and suddenly the whole deal is off. You, the buyers and the realty agents involved are all left sputtering over the appraisal that scuttled the transaction.
This scenario is not unusual in many markets across the country, say home builders, realty agents and appraisers. One little-publicized reason: Lenders unilaterally may be lowering the numbers on the appraisals submitted to them to avoid accusations that the loans they sell to giant investors Fannie Mae or Freddie Mac are based on inflated appraisals — even slightly inflated. Such value inflations can expose lenders to “buyback” demands, forcing them to repurchase loans at huge costs.

Full story at: http://www.latimes.com/business/realestate/la-fi-harney-20100718,0,7456241.story

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Posted by: wrivers | July 14, 2010

Bo McCarver’s weekly news compilation – 7/13/2010

Tuesday Report, July 13, 2010

Special to the Texas Low Income Housing Information Service

This week we learn that the major group defaulting on their mortgages are cleaver rich folks who simply write their negative equity off as tax loses and invest elsewhere. Meanwhile, the middle and lower income mortgage holders struggle to make payments. And despite record-low loan rates, borrowers are not lining up at the banks: the rich don’t need the loans and the poor can’t afford to borrow, no matter the rates.

For a pdf version of the full articles, plus contextual stories in social, environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.com

Mortgages rates are at record lows, so where’s the refinancing activity?

By Alan Zibel and Alex Veiga         Associated Press July 11, 2010

An odd scene has been playing out lately in the offices of mortgage brokers and bankers around the country.

Mortgage rates have sunk to levels not seen in more than a half-century — a seductive 4.57 percent for an average 30-year fixed loan. Yet brokers and lenders report not a flood but a trickle of customers.

So what’s going on?

Call it a tale of the haves and have-nots.

The haves are those who stand to save money from refinancing and have the financial wherewithal to do so. Mortgage rates have been low for so long that most of them already have refinanced in the past 18 months. Doing so again wouldn’t be worth the cost for most.

The have-nots? Those are the millions of Americans pummeled by the housing collapse. They have little or no home equity or no money for down payments. Or they lack the credit or steady income to get or refinance a mortgage.

Full story at: http://www.statesman.com/business/personal-finance/mortgages-rates-are-at-record-lows-so-wheres-795949.html?page=2

Foreclosure crisis phase 2: The negative equity dilemma

Many prime borrowers are being caught between devalued homes and job losses. Will Congress step in?

By Alissa Figueroa Christian Science Monitor July 12, 2010

Boston — For almost a quarter century, Cynthia Johnson, a Boston homeowner, has paid the mortgage on her three-bedroom single-family house on time.

But in July, for the first time, she’ll miss a payment.

“I’m on [the bank's] doorstep at this point, saying, ‘The savings are gone. I can’t pay you as promised,’ ” she said.

Unless something changes, Ms. Johnson (not her real name) is set to join the nearly 2.4 million Americans with prime loans seriously delinquent on their mortgages. They are the new face of the housing crisis.

Full story at: http://www.csmonitor.com/Money/2010/0712/Foreclosure-crisis-phase-2-The-negative-equity-dilemma

Biggest Defaulters on Mortgages Are the Rich

By David Streitfeld        New York Times July 8, 2010

LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

Full story at: http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=1

Foreclosure double standard: Why the rich get away with defaulting

Homeowners of modest means who walk away from their housing debt are viewed as dead beats while the wealthy who do the same are presumed to be making a good financial decision

Christian Science Monitor blog      July 12, 2010

Although the data compiled may simply be revealing the fact that larger debt instruments have a higher propensity to fail during hard economic times than loans of more modest size, the results may highlight an important difference between the treatment of the wealthy versus the typical.

In general, “homeowners” of modest means who walk away from their housing debt are viewed as dead beats while the wealthy that do the same are presumed to be making a good financial decision.

Full essay at: http://www.csmonitor.com/Money/Paper-Economy/2010/0709/Foreclosure-double-standard-Why-the-rich-get-away-with-defaulting

The Class War We Need

By Ross Douthat        New York Times July 13, 2010

The rich are different from you and me. They know how to game the system.

That’s one interpretation, at least, of last week’s news that Americans with million-dollar mortgages are defaulting at almost twice the rate of the typical homeowner. It suggests an infuriating scenario in which the average American slaves away to keep Wells Fargo or Bank of America off his back, while fat cats and high fliers cut their losses and sail off to the next investment opportunity.

That isn’t exactly what’s happening, most likely. Just because you have a million-dollar mortgage doesn’t make you a millionaire, and a lot of the fat-cat defaulters probably aren’t that fat anymore. Chances are they’re more like Teresa and Joe Giudice from “The Real Housewives of New Jersey,” tacky reality-TV climbers who recently filed for bankruptcy after their decadent lifestyle turned out to be a debt-enabled fantasy.

Full story at: http://www.nytimes.com/2010/07/12/opinion/12douthat.html?_r=1&src=me&ref=homepage

Sales of existing homes fall in North Texas, but new homes rise

By Sandra Baker        Fort Worth Star-Telegram July 7, 2010

The North Texas housing market received mixed news Wednesday, with Texas A&M reporting that sales of existing homes slipped in June while prices were generally flat.

The news was better in the new-home market, which saw starts improve nearly 50 percent from a year ago, and sales were up from year-ago levels for the first time since 2006, according to a separate report.

Existing home sales fell 3 percent from a year ago, to 6,774 homes last month, according to the latest Texas A&M University report on the 24-county North Central Texas region. Home sales were also down 4.8 percent from May, when real estate agents recorded 7,119 sales.

Full story at: http://www.star-telegram.com/2010/07/07/2320066/home-sales-by-area-in-north-texas.html#my-headlines-default

Study: Dallas-Fort Worth home starts up 50%

By Steve Brown        Dallas Morning News July 7, 2010

Home starts in the Dallas-Fort Worth area are up by more than 50 percent this year from the first six months of 2009.

And the number of new homes sold in the area is rising for the first time in four years, according to a second quarter report from Metrostudy Inc.

“This is the second quarter in a row that new home Starts in Dallas-Fort Worth jumped significantly compared to the prior year,” said Metrostudy director David Brown.

“Homebuilders increased starts during the first half of the year in reaction to the increased demand from the homebuyer tax credit and reduced inventory.”

The number of finished new homes for sale in North Texas is at the lowest level in 13 years and 64 percent less than at the peak in 2006.

[End of story: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/070810dnbushomestarts.118848ae1.html]

Last Year’s Auto Dealership May Be This Year’s Grocery

By Keith Schneider        New York Times July 7, 2010

WHITEHALL, Mich. — The Ford dealership in this town of 2,800 closed nearly two years ago, one more victim of the recession in a state that was among the hardest hit in the economic downturn. Yet the 30-acre site is once again filled with cars and trucks, as the home of a Save-A-Lot discount grocery store that opened in March.

Since early 2009, said Norm Miller, vice president of analytics for the CoStar Group, some 2,300 auto dealerships have closed around the country, as new car sales plunged more than 40 percent and the government, after taking ownership stakes in General Motors and Chrysler, forced them to end longstanding franchise contracts. The closings put 70 million square feet of buildings and land on the market, according to CoStar, a commercial real estate research company based in Bethesda, Md.

But in the last five quarters, Mr. Miller said, 649 of those shuttered dealerships found new owners and were put to new uses, including the sale of Whitehall Ford here for $1.1 million. In the first quarter of this year, 152 dealerships were sold for a combined total of $300 million, he said. Prices ranged from $500,000 to $9 million, Mr. Miller said, though most sales were for $1 million to $3 million.

In some cases, automotive-related businesses are supplanting the dealerships. Driven Brands of Charlotte, N.C., the parent company of Maaco Paint and Body, Meineke Car Care Centers and Econo Lube N’ Tune & Brake, is recruiting disenfranchised auto dealers to open new franchises on their properties under one of its three auto service brands.

Full story at: http://www.nytimes.com/2010/06/30/realestate/commercial/30dealer.html?_r=1&ref=commercial

High-Rise, or House With Yard?

By Tara Siegel Bernard       New York Times July 2, 2010

The question starts to hang in the air sometime after the children arrive, and the apartment in the city begins to feel a little tight: Should we consider moving to a house in the suburbs?

But that would mean leaving friends behind, along with easy access to work, the theater, great ethnic restaurants and just the general stimulation of urban living. The prospect of more space, however, is tempting — a bedroom for each child, a lawn to stretch out on. And there’s the luxury of simply pulling into a driveway and a reputable public school just around the corner.

Which to choose?

Ultimately, deciding which lifestyle best suits you — and where to buy — comes down to personal preferences. But if the deciding factor is the relative cost of each, the answer is quantifiable, even if it not immediately obvious given the different tax rates and other variables.

So we set out to do the math, based on an apartment and a house in the New York metropolitan area. Here’s what we found: a suburban lifestyle costs about 18 percent more than living in the city. Even a house in the suburbs with a price tag substantially lower than an urban apartment will, on a monthly basis, often cost more to keep running. And then there’s the higher cost of commuting from the suburbs, or the expense of buying a car (or two) and paying the insurance.

But the one big caveat in all the calculations is private schooling. If the city dwellers decide to send their children to private school — say when their children hit middle-school age — that expense would instantly make the suburbs a bargain.

Full story at: http://www.nytimes.com/2010/07/03/your-money/03compare.html?pagewanted=2&ref=realestate

Rental housing AHF to shed some units

Renters in nine states affected

By Kevin Welch         Amarillo Globe July 9, 2010

The trustee and creditors in the American Housing Foundation bankruptcy indicated Thursday some progress toward a reorganization plan that will affect thousands of renters in nine states.

That will include the selling or otherwise disposing of some of AHF’s affordable housing.

“We know there are going to be some projects we’ll exit,” said Steve McCartin, an attorney assisting the trustee.

“In fact, we think there will be quite a few.

“There are tens of thousands of tenants, and we don’t want to negatively affect their lives.”

But the bankruptcy’s impact on renters already has begun. After the 200-unit Parkside Village in Waco failed several inspections, the U.S. Department of Housing and Urban Development stopped subsidizing rent for residents and gave them vouchers to move elsewhere last month.

Full story at: http://www.amarillo.com/stories/070910/new_news2.shtml

City, state iron out issues on weatherization

By Tracy Idell Hamilton San Antonio Express-News July 13, 2010

The city of San Antonio and the state agency that oversees a $327 million stimulus-funded federal weatherization program worked through their difficulties Monday morning, with both sides pledging to make the program a success.

“San Antonio is not at risk of losing funds,” said Michael Gerber, executive director of the Texas Department of Housing and Community Affairs.

He met with, among others, City Manager Sheryl Sculley, CPS Energy acting General Manager Jelynne LeBlanc-Burley and state Rep. Jose Menendez, who called the meeting “an open and frank discussion” and “very productive.”

“Our constituents don’t care whose responsibility it is or where things got stuck,” Menendez said. “They just know there’s $12 million coming to San Antonio, and they want to access that and have their bills lowered and homes made more efficient.”

Full story at: http://www.mysanantonio.com/news/city_state_iron_out_issues_on_weatherization_98293404.html

Federal housing official in S.A. to offer praise

By Josh Baugh San Antonio Express-News July 13, 2010

The secretary of the U.S. Department of Housing and Urban Development hailed the effects of federal stimulus spending on job creation and help for families in need after touring a San Antonio Housing Authority senior-living facility that’s being renovated on the city’s South Side.

At the Lewis Chatham Apartments on South Flores Street, HUD Secretary Shaun Donovan praised the work of SAHA’s board of commissioners and executives. The housing authority has received about $20 million in stimulus dollars to spend on capital improvement projects throughout the city.

The thrust of Donovan’s speech, however, focused on job creation and the broad reach of HUD’s stimulus spending. The secretary recalled that 18 months ago, the country was hemorrhaging jobs — 750,000 a month, he said.

Despite six consecutive months of private-sector job creation, Donovan said, too many families are still struggling and some worry that the impact of the American Reinvestment and Recovery Act of 2009 is concluding.

Full story at: http://www.mysanantonio.com/news/Federal_housing_official_in_SA_to_offer_praise_98293394.html

Time is up for boarded-up, Ike-damaged homes

By Hayley Kappes Galveston County Daily News July 12, 2010

CLEAR LAKE SHORES — Residents have complained for months the city should do something about several homes still boarded up almost two years after Hurricane Ike.

The Clear Lake Shores city council on July 6 passed an ordinance that requires businesses or homeowners to either repair or demolish homes that were damaged by the storm.

City officials, before the ordinance, had no clout to require property owners to take action on storm-damaged structures.

“The new ordinance gives us more teeth,” City Administrator Paul Shelley said. “The other ordinance allowed for boarded-up structures as long as they were secure.”

Full story at: http://www.galvnews.com/story/162274

Grant gives a boost to first-time home buyers

By Krista Goerte        Paris News July 8, 2010

The City of Paris has received a grant to give 14 Paris residents assistance in the purchase of a first home.

After applying for the Homebuyer Assistance Grant from the Texas Department of Housing and Community Affairs HOME Investment Partnerships, the city recently learned it was awarded $312,000 in funds to assist first-time home buyers.

The funds are to be administered through Paris Living, and according to Clifton Fendley, board president, will continue the organization’s mission of providing community individuals the opportunity to purchase a home.

“The funds allow us to continue providing assistance to families,” Fendley said.

Full story at: http://theparisnews.com/story.lasso?ewcd=357f541a19d8c825

Obama’s urban policy seeks to shelter 1.6 million, but has a long way to go

By Stephen Szypulski        Daily Caller June 30, 2010

As President Obama watches the fireworks and celebrates his daughter Malia’s birthday on July 4, his 6,300 homeless neighbors in the District of Columbia will be celebrating a bit differently.

The release last week of the Interagency Council on Homelessness’ (USICH) “Opening Doors” plan marks the president’s intent to focus more attention towards ending domestic homelessness through efforts targeting youth, family, veterans, and children.

HUD’s annual report on homelessness noted that a total of 1.6 million people experienced homelessness last year alone.

Prior to the Bush administration, federal efforts to address homelessness were geared towards providing emergency housing for what was widely seen as a temporary spike in domestic homelessness. The importance of providing permanent supportive housing has become apparent only in recent years.

Neil J. Donovan, Executive Director for the National Coalition for the Homeless, believes that increasing supportive housing isn’t necessarily the right direction to take.

“It’s appropriate for a vast minority of the homeless population,” he said. “I think what we are finding is that the supportive housing community has a strong lobby and that they are capturing a good deal of resources and making supportive housing available,” he said.

Full story at: http://dailycaller.com/2010/06/30/obama’s-urban-policy-seeks-to-shelter-1-6-million-but-has-a-long-way-to-go/#ixzz0smEzf

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Posted by: kjewell | July 12, 2010

Texas Prioritizes Sewers and Financial Assistance to For-Profit Businesses over Low Income Housing in CDBG program

The primary objective of this chapter and of the community development program of each grantee under this chapter is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.

- 42USC5301, the statutory basis for the Community Development Block Grant Program

In early June HUD released a report detailing the use of CDBG Funds by the state of Texas in 2009.  State-allocated CDBG funds are administered in Texas by the Texas Department of Rural Affairs.

From February 1, 2009 to January 31, 2010, Texas spent just 3.6% of its state-allocated CBDG funds on housing activities.  Nationally, 25% of CDBG funds are spent on housing.

Texas spent the vast majority of its CDBG funds (78%, or $60 million) on “Public Improvements,” primarily water/sewer systems and roadwork.  It also prioritized Financial Assistance to For-Profit Businesses (7.8%, or $6 million) higher than housing.[1]

By comparison, the single largest line category in the national use of CDBG funds is Single-Unit Residential Housing Rehabilitation.

Category Texas National Relative Priority
Water/Sewer Improvements 58.8% 10.0% 591%
Street Improvements 12.1% 6.2% 234%
Financial Assistance to For-Profit Businesses 7.9% 3.4% 196%
Administrative And Planning 7.6% 15.0% 51%
Housing 3.6% 25.4% 14%

One concern we have with this spending pattern is that it appears that localities use CDBG funds to replace local core infrastructure funding rather than provide additional funding for new initiatives.  This goes against congressional intent as stated in the statute.[2]

Another concern is that only 51% of the beneficiaries of CDBG-funded public work improvements and economic development initiatives have to be  low-to-moderate income individuals for it to be considered a “low-to-moderate income” initiative, while housing initiatives have to benefit 100% low-to-moderate income individuals to get that designation.[3] As a result, Texas’s CDBG program is likely much less targeted than other programs at the low-to-moderate income population for which the funds are “principally” intended.

We call on Texas to re-focus the CDBG program on low-to-moderate Income beneficiaries by using the funds for initiatives targeted at low- and moderate-income recipients, such as housing, rather than as a replacement funding mechanism for general local infrastructure.

[1] This line item appears to go to the “Texas Capital Fund.”  In 2009, the Texas Capital Fund created or retained 241 jobs at a cost of 25k per job.  According to the Texas Department of Agriculture, the administrator of the funds, the program has not been particularly competitive and last few years of the program they’ve “been able to fund just about everything that came in the door.” (Texas Capital Fund Webinar, at minute 18)

[2] “It is the intent of Congress that the Federal assistance made available under this chapter not be utilized to reduce substantially the amount of local financial support for community development activities below the level of such support prior to the availability of such assistance.” – 42USC5301,

[3] Further complicating this is that only 70% of the funds have to benefit low-to-moderate income individuals at all.  As a result, a CDBG program dominated by public works initiatives may only have 36% low-to-moderate income beneficiaries.  We believe that 36% doesn’t meet a common-sense interpretation of the intent that a program “principally benefit” low and moderate income persons.

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Posted by: John Henneberger | July 9, 2010

Rich are defaulting on mortgages at a higher rate

While lots of criticism from some TV commentators has been heaped on lower-income homeowners who lost their homes to foreclosure, it’s now the rich who are defaulting more frequently on their mortgage loans.

The New York Times reports today that more than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

In contrast, one in 12 mortgages below the million-dollar mark is delinquent.

The NYT reports that it appears many of the well-to-do are purposely dumping their financially draining properties, including second homes and investment properties, as they would any sour investment.

Low- and moderate-income homeowners have generally resisted foreclosure as long as possible, continuing to struggle to pay high mortgage costs supporting debt that is often far in excess of their current home’s value.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

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Posted by: kjewell | July 6, 2010

City of Houston weatherization jobs have not been in low-income communities

The 2009 Recovery Act increased the funding for the Weatherization Assistance Program (WAP) in Texas by 2500%.  This program funds local agencies to provide minor home repairs to low-income Texans.

The Recovery Act was intended to create jobs in the communities most impacted by the recession. The Federal Office of Management and Budget, in a memo regarding implementation of the Recovery Act, states “Departments and agencies should seek to maximize the economic benefits of a Recovery Act-funded investment in a particular community by supporting projects that seek to ensure that the people who live in the local community get the job opportunities that accompany the investment.”[1] (Emphasis ours).

We looked at Davis-Bacon reports filed by the City of Houston for its Weatherization Assistance Program workers.  These reports, filed for 22 workers, give addresses for the workers.  We mapped these addresses and found that City of Houston WAP workers tended to live in more affluent areas.  Of those 22 employees, only 8, or 36%, had addresses within census tracts with a Low-to-Moderate Income (LMI) population above the Harris County Average.

Sheltering Arms, the other WAP provider for Harris county, filed Davis-Bacon reports for 136 workers.  These workers tended to less affluent areas.  63% of Sheltering Arms employees lived in census tracts with above an average percentage of low-to-moderate income population. Dallas area WAP providers reported similar hiring patterns to Sheltering Arms.[2]

A map of the home addresses of WAP workers for the Houston area is below

Given that the WAP program primarily serves low-income households, we requested from TDHCA (the state agency administering the program) the street addresses of the units weatherized with Recovery Act to compare the location of weatherization activities to the location of the jobs created by the program.  TDHCA told us that that information is not currently available: They have requested an Attorney General’s opinion on whether that information can be released to the public and that opinion is not expected until mid-July.[3] This issue has also been previously discussed in the Houston Chronicle.

Facing this delay for exact street addresses, we requested, and obtained, a list of the zip codes of units weatherized using Recovery Act funds.  Due to technical difficulties at TDHCA, less then a quarter of recipients have provided the address of Recovery Act weatherized units to TDHCA at the time of our request.  (Needless to say, that isn’t a good sign.  It’s one thing if the state doesn’t want to release the information: it’s another if they don’t have it.)

Nevertheless, information on the City of Houston was available.  Only 6 of 22 WAP employees lived in zip code where the City of Houston has reported WAP activities, indicating the WAP jobs are not being created in the communities served by the program.  No information on the zip codes of weatherized units was available for Sheltering Arms, the City of Dallas, or the County of Dallas.

Recap:

The vast majority of Weatherization Assistance Program jobs reported by the City of Houston are not being created in the neighborhoods targeted by the program.  We urge the state to use their rulemaking authority in this program to meaningfully encourage all providers to hire locally.

Sheltering Arms, and the Dallas Area providers appear to have done a better job on hiring from the low –income areas served by this program, but TDHCA’s delay in releasing a full accounting weatherized units prevents us from taking a detailed look at this issue.  We urge TDHCA to compile and publicly release, information on weatherized units to facilitate public oversight of this program.

Notes:

[1] Orszag, Peter R. “Updated Implementing Guidance for the American Recovery and Reinvestment Act of 2009,” OMB M-09-15, April 2009.

[2] The City of Dallas filed reports for 91 workers, 62% lived in higher LMI tracts.  The County of Dallas filed reports for 117, 62% also lived in higher LMI tracts.

[3] TDHCA tells us that Sheltering Arms, a Harris County area WAP provider, claims the addresses are “proprietary information” and not subject to an open records request. We disagree.

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Posted by: wrivers | July 6, 2010

Bo McCarver’s weekly news compilation – 7/6/2010

Tuesday Report, July 6, 2010

Special to the Texas Low Income Housing Information Service

As the nation’s economy recalibrates from the heady days of the Bush II Administration, housing starts and sales continue to drop while foreclosures rise.

In Texas, millions of federal dollars meant to convert foreclosed homes into dwellings for low-income households languish and may be return unused.

For a pdf version of the full stories, plus contextual articles in social, environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.ocm

Home Sales and Building Slowed in May

By Christine Hauser       New York Times July 1, 2010

A record drop in pending home sales and a slowdown in the construction market contributed to a sluggish outlook for the economy Thursday, highlighting the significance of government stimulus measures and job growth.

The economic indicators were the latest features that economists and analysts used to gauge the pace of the economic recovery. But all eyes are on the monthly employment figures scheduled for release Friday, which are expected to show a net loss of 125,000 nonfarm payroll jobs in June, and an unemployment rate of 9.8 percent, compared with 9.7 percent in May.

According to new statistics, pending homes sales and construction both declined in May. In addition, figures showed that while manufacturers recorded some gains in June, the pace of activity in that sector slowed last month compared with May and also came in slightly below estimates.

Full story at: http://www.nytimes.com/2010/07/02/business/economy/02econ.html?_r=2&hpw

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Posted by: wrivers | July 6, 2010

Bo McCarver’s weekly news compilation – 6/22/2010

Tuesday Report, June 22, 2010

Special to the Texas Low Income Housing Information Service

The theory that the cost of shelter is self-regulated by supply/demand is further discredited as low-income renters and homeowners pay dearly for roofs over their heads — despite the glut of vacant units on the market. A fresh Harvard study shows a sharp increase in the number of households paying more than 50 percent of their monthly income for housing.

Meanwhile, those who can afford to buy homes have gotten picky: faced with a small population of homebuyers who are still affluent enough to purchase, realtors are to shelling-out dearly for amenities.

While the rest of the nation’s cities continue to promote unlimited growth, Detroit deals with downsizing. Their struggle, pressed by hard economic times, is similar to that of New Orleans in the aftermath of hurricanes. The BP oil spill will press the same grim specter on all Gulf Coast communities and urban areas.

For a pdf version of the full articles, plus contextual stories in social environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.com

Housing Costs Devour More Family Budgets

18.6 million American households –renters and homeowners alike – spend more than half their income on housing.

By Eileen Markey City Limits              June 21, 2010

Despite neighborhoods littered with vacant homes and sale prices that dropped dramatically in the past three years, more Americans are spending more of their money on housing expenses than ever before. A report by Harvard University’s Joint Center for Housing Studies found 18.6 million American households –renters and homeowners alike – spend more than half their income on housing, up from 13.8 million in 2001. Dedicating more than 30 percent of income to rent or mortgage is considered unhealthy.

The study, Harvard’s annual State of the Nation’s Housing report found that as the housing market slowly recovers, it is getting harder for low-income people to afford their homes. More homeowners and renters are devoting half or more of their income to housing costs than ever before. And low-income renters are the most burdened.

It wasn’t always so dire. In 1960, only 12 percent of renters spent half their income on housing. Between 2000 and 2008, that number jumped by a third, to 16 percent. And among the poorest 20 percent of renters, half now spend 54 percent of their income on housing. The report’s authors blame falling wages.

Full story at: http://www.citylimits.org/news/articles/4064/housing-costs-devour-more-family-budgets Read More…

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Posted by: wrivers | July 6, 2010

Bo McCarver’s weekly news compilation – 6/15/2010

Tuesday Report, June 15, 2010
Special to the Texas Low Income Housing Information Services

The bright blip in housing sales caused by the federal tax credit has an equally low dip in June. Homebuilders have anticipated the lagging sales and cut back on construction starts. The market continues to ebb and flow with the extended recession.

In California, cheap properties have motivated some of the affluent to purchase and raze adjacent homes to create dry-land moats.

For a pdf version of the full articles, plus contextual stories about social, environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.com

Home sales silver lining: immigrants set to drive up demand
Homes sales have taken a beating in this recession. But the growth of the immigrant community should result in more home buyers, according to a Harvard study.
By Mark Trumbull Christian Science Monitor        June 14, 2010
Here’s one bright spot in the housing market: Demographic trends suggest that the US will have many new home buyers in the coming decade.
That’s one core conclusion of a report released Monday by Harvard University’s Joint Center for Housing Studies.
In the next 10 years, “household growth should match the 12.5 million” level seen during the decade from 1995 through 2005, according to the report which the research center issues once a year. That should be the case even if immigration runs at a relatively slow pace.
A key reason: Immigrants and their native-born children who are already in the US are filling out the ranks of the “baby bust” and “echo boomer” generations, so that each of those groups will now rival the baby boom generation in size.
Full story at:  http://www.csmonitor.com/Money/2010/0614/Home-sales-silver-lining-immigrants-set-to-drive-up-demand
Read More…

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Posted by: John Henneberger | July 2, 2010

Habitat for Humanity now 8th largest US homebuilder

the Wall Street Journal today reports in the wake of continued strong home production by the charity and the sharp drop off in private homebuilding, that Habitat is now the 8th largest US homebuilder.

Despite a decline of 9 percent in donations from last year, Habitat closed 5,294 homes in 2009. A growing number of homes Habitat produces are rehabs according to the WSJ article (700 in 2009).

Habitat says its foreclosure rate is about 2%.

This is good news for Habitat and the families they serve but also a sad comment on the state of the private homebuilding industry in the US.

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Posted by: John Henneberger | July 1, 2010

Current FEMA disaster recovery policy will leave low-income hurricane survivors unassisted

Lester Washington was denied FEMA assistance after his home in Houston was knocked off its foundation by Hurricane Ike. FEMA's reason, the house needed other repairs before the hurricane.

Lower income Texas families whose homes are damaged by Hurricane Alex and future hurricanes this season will be denied financial assistance due to an undocumented Federal Emergency Management Agency (FEMA) repair policy. FEMA’s policy of refusing to assist households whose homes needed repairs before a hurricane (termed “deferred maintenance”) came to light in the wake of hurricanes Dolly and Ike in 2008, leaving 115,000 Texas elderly, disabled and low-wage homeowners without the help they need to repair their homes.

“This tragedy will be repeated again unless FEMA stops its ad hoc policy of denying home repairs to help poor families with disaster damage,” said John Henneberger, co-director of the Texas Low income Housing Information Service (TxLIHIS). “We met with FEMA Administrator Craig Fugate on the ground in Texas to show him the devastating consequences of this discriminatory policy six months ago, yet nothing has changed.”

Following Hurricane Ike, FEMA denied 85 percent of claims for housing assistance, with “insufficient damage” being the most common reason for denial (over 100,000 denied Texas claims). Many low-income families — the vast majority of them low-wage workers, the elderly and the disabled — were sent a FEMA form letter stating that their “insufficient damage” was based on “deferred maintenance.”

FEMA uses an ad hoc “deferred maintenance” test to deny home repair assistance if inspectors somehow determine the damage was caused more by a home’s pre-disaster condition than the storm itself. After Hurricane Dolly hit South Texas two years ago, FEMA spokesperson Charles Powell explained that Dolly’s high rate of “deferred maintenance” denials resulted from the fact that, “a lot of the homes built were built from second-hand materials…. So the damage was, in most cases, caused from the faulty building of the house and not the storm.”

The federal Disaster Mitigation Act of 2000 states: “[t]he President may provide financial assistance for … the repair of owner-occupied private residences, utilities, and residential infrastructure … damaged by a major disaster to a safe and sanitary living or functioning condition….” It further states, “[t]he President shall prescribe rules and regulations to carry out this section, including criteria, standards, and procedures for determining eligibility for assistance.” Congress set a deadline of October 15, 2002 for FEMA’s compliance. Over seven years later, FEMA has yet to adopt a final policy regarding denial of assistance for homes with pre-disaster maintenance needs.

Texas Rio Grande Legal Aid (TRLA) filed suit against FEMA in a case known as LUPE v FEMA. Brownsville Federal District Judge Hilda Tagle ruled that existing FEMA regulations were insufficient, and issued a preliminary injunction requiring FEMA to clarify the basis for denying disaster assistance due to “deferred maintenance.”

On January 29, 2010 FEMA Administrator Craig Fugate toured Houston homes that were denied assistance under FEMA’s “deferred maintenance” policy. Fugate visited the damaged home of Lester Washington, an elderly Texas veteran located in Houston’s Acres Homes subdivision. Winds from Hurricane Ike blew the house off its foundation and trees fell through the roof of the modest wood frame home where Washington lived since he was a child.

72 year-old Houston army veteran Lester Washington received letter denying him help to rebuild his home. Washington is one of 115,000 Texas families denied assistance from FEMA because their homes needed repairs before the hurricane.

“I haven’t heard anything from FEMA even though they promised to look into it, Mr. Washington said. “They need to make a change so that more people don’t end up in my situation, with an unlivable house and no money to fix it up.” Washington is a member of the Texas Organizing Project, a grassroots community organizing effort in Houston.

Standing in front of Washington’s battered home six months ago, the FEMA director indicated he would investigate the case and the FEMA policy that denied assistance to over 100,000 homes in Texas in the wake of Hurricane Ike. Mr. Washington never heard from FEMA again.

Instead, FEMA appealed Lupe v. FEMA to the 5th Circuit Court of Appeals. On June 2, 2010 the appeals court ruled that more legal proceedings needed to occur before courts could compel FEMA to issue the long overdue regulations.

“So far all courts have agreed that FEMA’s regulations are rather poor, and if FEMA wants to continue defending the way it treats poor families after disasters, it may have to defend itself all the way to the Supreme Court,” said TRLA attorney Jerome Wesevich.

“FEMA’s refusal to operate in a transparent and accountable manner has resulted in individual suffering and misallocation of funds across the Gulf Coast since Hurricane Katrina,” said Maddie Sloan, an attorney with Texas Appleseed who works for lower-income hurricane survivors in Texas.

“Instead of resorting to legal delaying tactics, President Obama should direct FEMA to comply with the law and publish a policy telling homeowners whether their homes damaged by hurricanes this season will qualify for federal assistance,” said Mr. Henneberger. “Simply because a family’s home had repair needs before the hurricane should not be a reason to deny all help to that family.”

Over the course of the coming months Texans will work to repair their wind and flood damaged homes. FEMA will help some families thanks to President Obama’s declaration of South Texas as a disaster area. “Without change to FEMA’s policy, the President’s proclamation won’t make any difference in the lives of many low-income homeowners who will be denied the help they need to rebuild,” said Mr. Henneberger.

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Posted by: John Henneberger | June 30, 2010

Texans prepare for another hurricane in their unique way

The Washingtom Post today reported on preparations for Hurricane Alex by residents on South Padre Island, Texas…

Jerry Wilson, 50, also didn’t think much of Alex, though he struggled in the fierce gusts to hoist a cloth-tipped pole to clean high-mounted cameras across the island that will let Internet viewers watch Alex’s arrival live online.

“We got two generators and lots of guns and ammo, so we’re not worried about it,” Wilson said.

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Posted by: kjewell | June 30, 2010

Texas failing to spend federal funds for foreclosure-impacted communities

New report finds that millions are at risk of being returned to the federal government

Austin, TX – Texas may be forced to return an estimated $42 million in unspent federal funds meant to stabilize foreclosure-impacted communities, unless state and local agencies begin properly utilizing the funds, according to a report released today by the Texas Low Income Housing Information Service (TxLIHIS). The Texas Department of Rural Affairs alone may be forced to return $16 million.

Much of the funding allocated to Texas through the Neighborhood Stabilization Program (NSP) is still not committed, with just three months left in the program. The NSP program is designed to help local communities turn foreclosed, abandoned, or blighted housing around to low- and moderate-income families for affordable purchase or rental and to create construction jobs. Uncommitted funds must be returned to the federal treasury.

“It would be a huge shame if Texas loses out on a source of millions of dollars and hundreds of jobs when the economy is struggling and cities and counties all over the state are trying to survive huge budget crises,” said John Henneberger, TxLIHIS co-director. “It’s not too late, but if the agencies in charge of these funds don’t take quick and drastic action, Texas will lose out.”

Texas received $178 million in NSP funds, which was parceled out to 15 different agencies. According to TxLIHIS’ report, the largest recipient of funds — the Texas Department of Housing and Community Affairs (TDHCA) — is ranked 43rd in committing funds, out of the 50 state-administered programs. Part of TDHCA’s program is administered by the Texas Department of Rural Affairs (TDRA) and is performing even worse, with only 4 percent of their funds for rural communities committed to foreclosure relief projects, which puts $16.2 million at risk of being returned to Washington.

Moreover, according to TxLIHIS’ study, poor reporting has put in doubt whether many agencies are meeting the federal requirement that 25 percent of the funds benefit the very poor: those who make below 50 percent of the area median income. “Foreclosure stricken communities are suffering while agencies sit on money, and compounding this tragedy is the very real possibility that the spent funds aren’t helping the families that need help the most,” Mr. Henneberger said.

The TxLIHIS report details how improper utilization or failure to spend funds is affecting local communities. In Dallas, the very poor are losing out, as the city is falling far short of its obligation to serve Very Low-Income families. The greater Austin area is on track to lose $4.1 million because localities are not committing funds. In the Houston area, which received the most funds of any region, the city is perilously close to losing $11.8 million in funds and Fort Bend County has so far only committed the 10 percent allowed for administrative overhead, while not providing any actual housing.

The potential benefits of NSP program, and the missed opportunities of underutilizing the funds extend beyond housing: new construction-related jobs created through the program can stimulate the economy, and federal rules stipulate that low-income people should receive preferential hiring for this work. Yet when funds aren’t spent, these job possibilities are lost.

TxLIHIS is the state partner of the National Low Income Housing Coalition and the only nonprofit research and advocacy organization in Texas devoted exclusively to affordable housing issues.

The report is available for download here.

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Posted by: kjewell | June 19, 2010

USDA Rural Housing Service in Texas: Progress and Potential

Last winter TXLIHIS released “USDA Rural Housing Service in Texas: Turning Away from the Poor,” a report detailing how in 2009 Texas failed to take advantage of over $14 million in subsidized low-income  mortgage loans.  These loans are allocated to the state by the United States Department of Agriculture (USDA) Rural Housing Service under the 502 Direct loan program.

This article takes a look at developments in the program since then.

An Earnest Start

Shortly after the report’s release, USDA issued a press release reiterating support for the program.  They also provided a week-long training for its Texas field staff on qualifying low-income families for this unique mortgage program and sent another press release highlighting successful families in the program to rural newspapers in April.

We recently obtained (courtesy of the fine folks at the Housing Assistance Council) data regarding Texas’s utilization rate in the 502 Direct program in the 2010 federal fiscal year.  In the first eight months of the 2010 fiscal year (i.e. through the end of May) Texas had already obligated $33.3 million in the 502 Direct program, up from $26.8 million over the entire 2009 fiscal year.

Chart of 502 Loans

Much of this improvement comes from loans funded by the American Recovery and Reinvestment Act (ARRA).  This program appears to have finally gotten underway in earnest.  Last year, Texas made only 11 loans under the ARRA 502 Direct program.  In the first eight months of this fiscal year, Texas has already done 132 ARRA 502 Direct loans.

Some of this improvement likely comes from changes in the mortgage market in 2010 vs. 2009.  Most notably, existing home sales are up in the market as a whole, while commercial lenders remain on the sidelines.  As a result, government loan programs have captured a large portion of this rebound.

Nevertheless, the volume of 502 Direct lending in Texas has risen more than in other states, supporting the hypothesis that USDA Texas’s increased outreach and attention is paying dividends.  Last year Texas ranked 18th in dollar volume of obligations in the 502 Direct program.  As of May, Texas had risen 5 places in the ranking, and now ranks 13th.

We’re still concerned

While 13th in utilization is an improvement from the past, USDA estimates that Texas has the highest level of need for the 502 Direct program in the country.  In fact, according to the allocation formula used to distribute the funds, Texas has 43% greater need than the second ranked state, North Carolina.

Given the enormous need, and even with the recent improvements, Texas will leave funds unused. A gap remains between the state’s high initial allocation and its relatively modest utilization.

One of the most valuable characteristics of 502 Direct loans is an interest rate subsidy tied to the borrower’s income.  If a borrower’s circumstances change, (for example, if they lose their job or get a raise), the subsidy is reevaluated based on their new financial circumstances.  As a result, this product is particularly suitable for very low-income borrowers.  In our report last winter, we found that Texas fell short of the statutory requirement that 40% of the national volume of 502 Direct loans should to be made to very low-income borrowers.

This shortfall continues: So far this fiscal year, Texas has made only 33% of its loan volume to very low-income borrowers.

More Work Underway

In response to our report, USDA and TDHCA have both designed new programs to build capacity in Texas to use 502 Direct funds.  These programs are just now getting underway but have the potential to narrow the Texas utilization gap even further.

The first initiative is a cooperative agreement between USDA Rural Development and a consortium of local providers affiliated with Texas Community Capital (TCC).  This agreement is designed to increase participation in USDA 502 Direct loan program by expediting the loan approval process.  Our report last winter found long processing times for 502 applications to be a barrier to the program’s use.

Under the agreement, a network of providers affiliated with TCC will pre-package loan applications, and TCC will quality-check the paperwork prior to delivery to USDA; in exchange, USDA agreed to be “processing the received loan application packages in a timely, expeditious  manner.”

The agreement calls for the TCC network of providers to package 200 loans in the 502 Direct program by September 30, 2010, including 100 loans for very low-income borrowers.  This program is specifically targeted at 59 persistent poverty, colonias and underserved counties in Texas.  This geographical targeting, along with the very low-income service requirement, has the potential to improve Texas’s performance serving very low-income borrowers.

USDA has set aside $75,000 from the American Recovery and Reinvestment Act (ARRA) to fund the work by TCC and its affiliates.  Because this program is funded through ARRA, loans made through this program must be obligated by September 30, 2010.

USDA nationally recently indicated that they intend to allow loans to continue to be packaged for expedited processing after September 30th, but funding for the packaging will no longer be made available by USDA.   Unfortunately, we expect the termination of the packaging subsidy to disproportionately impact Very low-income loans, as they are less likely to be able to cover packaging costs as an administrative fee to the loan.

TCC recently had its first loan packaged under this program approved by USDA.

The second initiative is the Rural Housing Expansion Program, a new program administered by the Texas Department of Housing and Community Affairs (TDHCA).  Under this program, local providers can access the Housing Trust Fund to offset the cost of packaging and submitting loans to USDA.  Providers can also access up to $5,000 for training and capacity building activities.  The program has a $500,000 budget, although costs reimbursed under this program must be reserved in TDHCA’s system by December 29, 2010.

The final Notice of Funding Availability (NOFA) for this program was approved in Mid-May, and TDHCA is now receiving applications from providers.  Providers must be approved at a TDHCA board meeting before they can access the system to apply for funds for individual loan applications.

While these two initiatives are separate, TDHCA has stated that they do not intend to fund the packaging of loans that have been already funded in full by USDA.  Given the staggered end dates of the program and the overlap in providers expected to participate in the programs, we expect that providers will give preference to the USDA/ARRA program until September 30th, 2009, and will then turn to the TDHCA/Housing Trust Program through the end of the calendar year.

Open Government: HMDA
One other recommendation in last winter’s report was to extend HMDA-equivalent reporting requirements to USDA for their Direct loan programs. While this could be done statutorily, we encouraged USDA to pro-actively report this information under the “Open Government Directive,” the administration’s initiative to proactively release high-value information held by the federal government.
Unfortunately, there is no evidence that this initiative has been adopted by the Rural Housing Service in relation to the 502 Direct program.
This information could and would be used by the community served by USDA Rural Development to monitor the success and equity of its Direct lending program, and we continue to urge for the proactive release of this data.

Going Forward

USDA Texas’s new outreach and the new capacity building new initiatives hold promise to help close the gap between Texas’s need-based appropriation in the USDA 502 Direct program and its capacity to obligate funds.  Nevertheless, the gap is large, and we doubt the entire shortfall will be made up by the end of the year when the funding for these programs expire.

Both USDA and TDHCA need to be looking ahead to ensure that the momentum and capacity built by these initiatives is carried forward into 2011.  We call for both agencies to evaluate, improve, and continue these programs.  Without capacity support for loan packaging, Texas will continue to fail to serve very low-income borrowers with the 502 Direct program.

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Posted by: wrivers | June 14, 2010

Bo McCarver’s weekly news compilation – 6/8/2010

Tuesday Report, June 8, 2010

Special to the Texas Low Income Housing Information Service

Class wars abound in Texas cities: San Antonio begins to press its homeless population out of downtown while razing older homes under capricious judgments of city inspectors. Meanwhile, Dallas contemplates bulldozing homes in its historic districts if they don’t pass muster with new standards.

Galveston struggles to recover from hurricane damage but the city is now faced with a myriad of law suits from homeowners claiming various abuses. State Farm has raised its home insurance rates on the island 39 percent.

For a pdf version of the full articles, plus contextual stories in social, environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.com

Bank of America to pay borrowers $108 million

By Alan Zibel      Associated Press June 7, 2010

WASHINGTON — Bank of America will pay $108 million to settle federal charges that Countrywide Financial Corp., which it acquired nearly two years ago, collected outsized fees from borrowers facing foreclosure.

It’s the latest evidence of misconduct at Countrywide, once an industry giant that has since fallen. Last year, three top executives, including former CEO Angelo Mozilo, were charged with civil fraud and insider trading by the Securities and Exchange Commission.

The settlement, which seeks to refund money to about 200,000 borrowers, was announced Monday by the Federal Trade Commission. It is the largest mortgage industry settlement for the agency, which oversees non-banking functions such as debt collection.

The FTC’s chairman, Jon Leibowitz, accused Countrywide of “callous conduct, which took advantage of consumers already at the end of their financial rope.”

Bank of America purchased Countrywide in July 2008. The actions in the case took place before the acquisition.

Full story at: http://hosted.ap.org/dynamic/stories/U/US_BANK_OF_AMERICA_LENDING_SETTLEMENT?SITE=TXDAM&TEMPLATE=BUSINESS.html&SECTION=HOME

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Posted by: John Henneberger | June 14, 2010

74% of those with “worst case housing need” have extremely low incomes according to HUD report

HUD has published it’s latest assessment of the households that have a “Worst Case Housing Need”.

The key findings are:

  • 93% (5.48 million) experienced severe rent burden;
  • 73% (4.33 million) had extremely low incomes;
  • 37% (2.19 million) had at least one child under 18. Nearly half of these were working the equivalent of full-time and earning at least minimum wage. 404,000 of families with children had an adult with a disability;
  • 20.5% (1.21 million) were elderly, 10% (602,000) were non-elderly disabled, and 32% (1.9) million were classified as other;
  • 2.92 million were non-Hispanic white, 1.35 million were non-Hispanic black, and 1.23 million were Hispanic; and
  • More than 40% of the city dwellers lived in higher poverty neighborhoods, while those living in suburbs and nonmetropolitan areas were in low-poverty neighborhoods.

The report is addressed to Congress and is intended to inform how government housing funds are directed.

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Posted by: John Henneberger | June 14, 2010

New York Times praises State of Texas/TxLIHIS disaster recovery settlement

The New York Times published this editorial Monday about our settlement with the State of Texas.

Editorial

HUD Steps Up in Texas

Published: June 13, 2010

Washington too often looks the other way as state governments rob low-income victims of their fair share of federal disaster aid. The Department of Housing and Urban Development did the right thing recently in forcing Texas to revise a $3 billion spending plan for aid provided in the wake of the 2008 hurricanes Ike and Dolly.

The storms ravaged the coastal and near-coastal counties, especially Harris, Orange and Galveston. They destroyed thousands of homes, including a large number owned by poor families that didn’t have the money to rebuild. Instead of directing the aid to the most-damaged regions and the people with the fewest resources, the Texas plan spread it across the state and gave local planning agencies near carte blanche on how to spend it.

Two prominent fair housing groups, Texas Appleseed and the Texas Low Income Housing Information Service, filed a complaint with HUD charging that the plan did not adhere to the most basic condition of federal disaster aid, which requires that half of the money be used to benefit low- and moderate-income people. They also argued that it would violate federal civil rights and fair housing laws.

After the HUD secretary, Shaun Donovan, took the extraordinary but justified step of rejecting the initial proposal, the state negotiated an agreement with the advocates. The new plan will ensure that 55 percent of the money will be spent to help low- and moderate-income families. More than half the fund will be spent on rebuilding homes, with a fair share allocated to the poorest residents.

The state will rebuild all of the desperately needed public housing units that were destroyed in Galveston. Local opposition groups had pressured the city not to rebuild. As part of the agreement, Texas will also create new programs to help low-income and minority residents find housing in less-segregated or storm-vulnerable areas.

Thanks to tough bargaining by Secretary Donovan, hundreds of millions of dollars will be spent as Congress intended and fairness requires: helping to rebuild devastated communities and helping the most vulnerable residents rebuild their lives.

http://www.nytimes.com/2010/06/14/opinion/14mon3.html

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Posted by: kjewell | June 8, 2010

Don’t bypass low income homeowners in weatherization program

The GAO recently issued its bimonthly report of activities funded by the Recovery Act (ARRA)  in Texas, including a discussion of the Weatherization Assistance Program (WAP).

The good news for TDHCA is that the GAO stated ” TDHCA has internal controls for WAP to help ensure that Recovery Act funds are spent according to program objectives and the state’s 44 subgrantees are adequately monitored.”

The primary criticism in the report is not new, as the GAO states “delay in weatherizing homes has delayed realization of the potential economic benefits of the Recovery Act funds allocated to WAP and energy savings for many low-income Texans eligible for weatherization assistance.”

We’ve discussed this challenge here before, stating we’d rather the Texas program do weatherization right than do it quick.  As such, we are troubled by the report’s statement “To complete weatherization work on the target number of homes statewide, TDHCA plans to increase its attention on weatherizing multifamily units.”

Multifamily and Single family units should not be considered interchangeable in this program.  We discourage TDHCA from bypassing eligible homeowners to weatherize extra apartment buildings.  Low income Texans in homes and apartments deserve to be served by this program.

The detailed discussion of the GAO report also touches on work quality issues in the program.  We’ve recently submitted a Pubic Information Act request to TDHCA on this issue, and we’ll be reviewing quality monitoring reports at the department this week.  Stay tuned.

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Posted by: John Henneberger | June 3, 2010

Margaret Shaw removed as Austin housing director

Margaret Shaw has been removed as director of the City of Austin’s housing department by Austin City Manager  Marc Ott. SHe served as housing director for two years.

Signs of trouble for Shaw have been evident to observers for several months. Her management style clearly rankled employees within the department and some in the Austin community.

Last month the director of the City of Houston’s housing department was dismissed by Houston Mayor Annise Parker. A number of larger city housing departments have been plagued by management problems, including the housing department of the City of Dallas.

Shaw is a high energy, extremely talented housing expert and we wish her the best of luck.

Taking Shaw’s place temporarily as housing director is Assistant Director Betsy Spencer, formerly chief operations officer for the San Antonio Alternative Housing Corporation.

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Posted by: wrivers | June 3, 2010

Bo McCarver’s weekly news compilation – 6/1/2010

Tuesday Report, June 1, 2010

Special to the Texas Low Income Housing Information Service

The recession drags into a third year with mortgaged homeowners still folding under over-priced loans for over-priced homes. Stories from California and Memphis confirm the pattern; in Memphis aspiring African-Americans have been knocked from the middle class. Others foreclosure is stride and string out the proceedings with the bank.

In Texas, a revised plan to refocus hurricane relief funds to low-income groups has drawn the approval of HUD.

For at pdf version of the full articles, plus contexural stories in social, environmental and legal areas, contact Bo McCarver @ bmccarver@austin.rr.com

Owners Stop Paying Mortgages, and Stop Fretting

By David Streitfeld       New York Times June 1, 2010

ST. PETERSBURG, Fla. — For Alex Pemberton and Susan Reboyras, foreclosure is becoming a way of life — something they did not want but are in no hurry to get out of.

Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino.

“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”

A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.

This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can.

Full story at: http://www.nytimes.com/2010/06/01/business/01nopay.html?hp

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