Wednesday, December 6, 2017

Fostering Inclusion: Whose Problem? Which Problem?

by Xavier de Souza Briggs
Ford Foundation
Asking "what would it take"—about housing segregation or any other challenge— assumes, on some level, that we have adequate agreement that some condition or pattern is, in fact, a problem. But in America, we have never been able to take that for granted, not about most of our big challenges, not even about the things that strike many of us as profoundly inconsistent with fairness and equal opportunity as core American values. Moreover, we have shown a persistent and very particular indecision and impasse when it comes to acting on housing segregation. The political Left remains ambivalent about it, wondering whether it is urgent to address segregation per se, whether such effort comes at a cost to other urgent efforts, and whether segregation can be tackled in ways that do not stigmatize poor people of color in particular. Put another way, the seemingly natural allies for an agenda to tackle inequality by addressing segregation have mixed feelings about both the problem and at least some of the solutions. The political Right, on the other hand, has been generally hostile to the idea that segregation is a problem, even if most Americans, on both Left and Right, agree that discrimination in the housing market is not only illegal but morally wrong. And many who go further—who agree that segregation itself is a problem—are less convinced that it warrants government intervention.

These are some of the reasons that we, as a country, "rediscover" segregation and its enormous human costs every decade or so, only to conclude that it is too intractable or questionable to tackle with serious resolve. This rediscovering happened after the civil unrest in Los Angeles in 1992, again after Hurricane Katrina put concentrated black poverty and public outrage squarely on TV screens nationwide, and again as political and media attention to extreme inequality has gown in recent years. Among scholars and opinion leaders, the influential work of economist Raj Chetty and collaborators points to segregation as a key barrier to economic mobility in America—and one that varies sharply between more and less segregated regions of the country. This latest-generation work supports earlier conclusions, by sociologists Douglas S. Massey and Nancy A. Denton in American Apartheid: Segregation and the Making of the Underclass and by others, that housing segregation by race and income is, in fact, one of the lynchpins of American inequality. Along with mass incarceration, it is one of the structural patterns that differentiates America from other wealthy nations (though Europe faces growing challenges too). Segregated housing patterns are durable and enduring in part because they are sustained by forces that many view as legitimate and even unavoidable, if unfortunate. These patterns have been called out explicitly at least since lawyer and planning professor Charles Abrams's book, Forbidden Neighbors: A Study of Prejudice in Housing, and by national policymakers since the landmark Kerner Commission report on the riots that tore apart American cities 50 years ago. For now, there are no signs that we as a people are serious about changing segregation.

In this brief post, I'd like to offer a specific reading of the very thoughtful symposium framing paper and the larger project of which it is a part. I work at a grant-making foundation long committed to expanding knowledge about, and promoting solutions to, inequality, including solutions that center on housing and specifically housing segregation. I have also pursued these aims over several stints in federal government service and tackled them as a community planner at the local level. Finally, about sixteen years ago, when I was a researcher and educator, I organized a symposium and collection of papers—led by the Harvard Civil Rights Project and cosponsored by the Joint Center for Housing Studies and the Brookings Institution's Metropolitan Policy Program—focused on segregation, its causes and consequences, and "what it would take" to effect real change at scale. That produced an edited volume, The Geography of Opportunity: Race and Housing Choice in Metropolitan America. I want to briefly look back—asking what has or has not changed in our understanding of the problems and potential solutions over the past decade plus—and also look forward.



Starting Points

The 2001 symposium had several points of departure, and revisiting them now offers some perspective on how our national mood, key attention-getting trends, political leadership, and more have evolved. One starting point was the sharply increased attention, in the late 1990s, to America's dominant pattern of urban sprawl and the idea of pursuing more sustainable or "smart" growth alternatives. The interest in this issue sparked healthy debate, though mainly among scholars, planners and allied professionals, about the tradeoffs between environmental aims and values of equity, including housing affordability. The environmental justice movement also drew attention to spatial inequality, focusing on the highly disproportionate exposure of poor communities of color to toxins and other environmental risks.

Advancing this debate seemed important in light of evidence that economic inequality was increasing sharply in America, whether measured in wealth, income, or other dimensions. We wondered about more environmentally sustainable but increasingly unaffordable communities pulling away from distressed, built-up and—in some cases—highly polluted places.

Other starting points were even more tectonic, driven by large-scale demographic change. Much of the wealthy world has modest to zero population growth, but America is different: We are a large and still-growing nation, thanks mainly to immigration, which is, in turn, driving greater racial and ethnic diversity. In the 1990s, for example, the population of most American cities would have shrunk if not for immigration. What is more, as of the 2000 census, an estimated one-third of the built environment needed to accommodate population growth in America over the next generation did not yet exist. It represented projected new development. This underscored the huge stakes associated with how we grow, particularly the prospects for inclusionary growth. It also underlined the fact that our debates about persistent segregation cannot be limited to public housing in inner cities or to other long-established fixtures of our current spatial footprint. We always need to be asking about what's next too—about the course of new development, both infill and at the edges of urban regions. And of course, we need to pay attention to how these development trends influence each other and influence our politics and sense of what's possible.

To sum up, in 2001, for the intersecting reasons outlined above, we asked: Can an increasingly diverse nation hope to deal with growing economic inequality if the dominant growth model "on the ground" is one of persistent segregation by race and income? Do the parts of that equation add up?

By comparison, the framing paper for this year's symposium centers more squarely on the growth of inequality and the much greater political and even cultural salience of the issue now versus 15 or so years ago. That salience is encouraging. In terms of local trends, the American media and the public are even more aware now, than after the economic boom of the late 1990s, that "cities are back." Major cities that still showed substantial decline a decade ago—New Orleans and large sections of Detroit, for example—have seen their population trends reverse and have attracted enormous investment since, especially over the course of the recovery from the Great Recession. Housing prices are up, structurally, along with the job economy in those and other revitalizing cities. So, a debate about the drivers of segregation and responses to it today appropriately gives greater weight, than did earlier discussions, to urban redevelopment—and the need for "development without displacement," as advocates in revitalizing cities frame the need.

The sense of displacement, of being pushed out, is much sharper now than in 2001. But in point of fact, the pattern is nothing new, and some observers forecast this predicament long ago, linking it to the forces driving urban vitality after decades of decline. For example, in Dual City: Restructuring New YorkJohn H. Mollenkopf and Manuel Castells showed that New York's comeback from the low point of the bankruptcy crisis of the 1970s had made the city a global magnet for investment capital and high-income occupations, sharply inflating land values and housing prices. Over the 1980s, they reported, poverty had been pushed outward, "like a ring donut," from neighborhoods in the city's core to its outer boroughs as well as its more racially diverse, fiscally vulnerable inner suburbs. The subsequent decades have merely sustained and accelerated those trends, with New York City showing itself one of the canaries in the coal mine. What Detroit and other cities are seeing and debating now, New York, Boston and other "comeback cities" experienced a couple of decades earlier. And it is structural, not an artifact of one business cycle or another. These trends were barely interrupted by the Great Recession.

Finally, having thus far emphasized those durable, long-run structural trends, I want to acknowledge more recent developments. In addition to the growth of inequality, the framing and other papers in this year's symposium reflect the enormous impacts of the foreclosure crisis, which we had only dimly foreshadowed in the 2005 book's chapter on "The Dual Mortgage Market: The Persistence of Discrimination in Mortgage Lending," by William Apgar and Allegra Calder. Beyond a huge loss of housing wealth and greater regulation in the mortgage market, there is another important legacy of the crisis, and it is a healthy one: We are much more conscious now, than in the real estate boom of the early 2000s, about how profoundly the workings of the real estate industry, and its rapid evolution thanks to information technology, can hurt us. In that vein, one of the most ground-breaking sessions in this year's JCHS symposium focused on the present and future of housing searches in an era of platform apps, algorithms, and technology-mediated screening of many kinds. The session put housing scholars in direct exchange with senior analysts and strategists from online real estate search companies that dominate the housing marketplace. Housing searches were different, and our understanding of them much more limited, 15 years ago.


Solution Set

If the unequal housing marketplace has evolved—dramatically in some ways—over the past 15 plus years, our sense of the best-available levers for changing segregation has not. Nor has our story about why acting on segregation is both legitimate and urgent, both big and structural and doable and achievable. To be fair, by some measures, our prescriptions today are not all that different from those championed by the "open housing" movement—the inheritors of the civil rights movement and the Kerner Commission warnings—in the early 1970s. This suggests at least three lessons over the long run.

The first is that we, as a country, lack will more than we lack imagination—let alone sophisticated analysis. The second is that we need new stories and ways to tell them. In recent memory, the very best case against segregation was made by comedian, John Oliver, who in 2016 used his satirical cable news program Last Week Tonight to explain three extremely important things about how America works: first, how school and housing segregation enable each other; second, why they guarantee that America will reproduce stark inequalities from one generation to the next; and third, how these closely linked forms of segregation stubbornly resist change.

The third lesson over the long run is that beyond lacking a compelling story to motivate change, we sometimes lack perspective as well. Take the persistent tendency to conflate discrimination, which the framing paper emphasizes, with segregation. People in America continue to experience housing discrimination, which is illegal, and continue to under-report it. As we analyzed in detail in the 2005 book, such discrimination, while inconsistent with public opinion in America, is challenging to detect and enforce against. But the larger and less acknowledged point was and is this: discrimination, whether conscious or unconscious, against particular kinds of consumers is far less important, as a driver of segregation, than is the avoidance of certain neighborhoods or localities by those with the best housing options, especially whites and higher skill, higher income people of color. This "self-steering" behavior has big social and fiscal costs, as scholars of segregation have pointed out for nearly half a century now. But it is not illegal. Moreover, as sociologist Camille Charles argued in her 2005 chapter on attitudes toward the racial make-up of neighborhoods, many of us balance what we think we owe our families with what we think might contribute, however modestly, to a fairer and more just society. And many of us experience these values as frequently in conflict, especially when faced with decision to move somewhere.

Laws against housing discrimination by realtors, lenders or others in the marketplace are important and should be enforced. But doing so would have limited effects on segregation. It is far more important to expand real housing choices, especially for lower income people of color, and to understand how people choose among the options available to them.

Finally, as the framing paper demonstrates, the Joint Center's 2017 symposium encompasses an extraordinarily rich and in-depth update of what I think of as the four enduring debates about segregation: the what (the descriptive patterns or shape of the problem), the why (causes), the so what (consequences), and the now what (solutions). And thanks to big data, mobile broadband, a more visible inequality debate, and other developments, it offers a very contemporary take on what's possible, in theory, when it comes to change. In the language of our 2005 redux, the solutions boil down to "curing" segregation (changing stubborn housing patterns) or "mitigating" it (making the patterns less socially costly, by shifting the relationship between where you live and the risks and resources you encounter). The former centers on relocation and inclusionary development strategies, the latter on reinvestment, connectivity, and access to institutions—sometimes life-changing ones—beyond one's segregated neighborhood.

This body of work and those solutions deserve an equally serious and committed story—a resonant narrative—joined to an advocacy and constituency building effort that's relevant in a changing, polarized, deeply unsettled American body politic. Without that, we seem consigned, in practice, to continue rediscovering segregation and also to continue lamenting that it is just too hard—or worse yet, un-American—to undo.



Papers from the A Shared Future symposium are available on the JCHS website

Thursday, November 30, 2017

Rebuilding from 2017's Natural Disasters: When, For What, and How Much?

by Kermit Baker and
Alexander Hermann
The bulk of repairs to homes damaged by this year's record-setting disasters will not be done until 2019 or 2020, according to our analysis of post-disaster spending between 1994 and 2015. The analysis, which looked at the estimated annual cost of natural disasters alongside annual estimates of disaster-related home repairs and improvements, suggests that an increase of $10 billion in total disaster losses any time in the previous three years is associated with about $300 million in additional annual spending on disaster-related home repairs and improvements.

Notes: Dollar values are adjusted for inflation using the CPI-U for all items. Natural disaster costs include only natural disasters that generate over $1 billion in damages after adjusting for inflation.
Sources: JCHS tabulation of US Housing and Urban Development, American Housing Survey, and National Oceanic and Atmospheric Administration data.


The finding is significant because 2017 was an unusually destructive year. While inflation-adjusted, disaster-related damages averaged about $40 billion a year between 1994 and 2015, Hurricanes Harvey, Irma, and Maria together caused about $150 billion in damages, according to estimates from CoreLogic and Moody’s Analytics (Figure 1). Moreover, damages from 2017’s winter storms, droughts, and wildfires will push these numbers even higher. In fact, the total cost of 2017’s disasters could exceed damages from any year in the last two decades, including 2005, the previous record year, when Hurricanes Katrina and Rita (and a host of smaller but significant disasters) combined to cause more than $200 billion in damages (in inflation-adjusted dollars).

As in other years that were marked by particularly destructive storms and other disasters, this year’s damages should lead to a spurt in construction activity. Some of it will be construction of and renovations to infrastructure and commercial buildings. Some will be the construction of new single-family homes and multifamily housing units. And some will be disaster-related repairs and improvements to both owner-occupied and rental housing.

Extensive flooding from Hurricane Harvey in Port Arthur, Texas.

To estimate how much will be spent on post-disaster home repairs, and when that spending is likely to occur, we combined information on disaster-related damages reported by the National Oceanic and Atmospheric Administration (NOAA) with data on disaster-related home repairs and improvements for the same years found in the U.S. Census Bureau’s American Housing Survey (AHS). The AHS, as a survey of households, only asks owners to report spending on their homes. The comparison suggests that renovation spending continues to increase for about two to three years after the natural disaster occurs, and that an increase of $10 billion in disaster losses any time over the prior three years generates about $300 million in additional disaster-related home improvement spending during the year studied. If this pattern holds, the bulk of the spending from 2017 losses won’t occur until 2019 or 2020. But when it occurs, there is likely to be a substantial increase in spending on home renovations in those years.

While the delay between disaster losses and repair expenditures may seem unusually lengthy, it is consistent with a study funded by the U.S. Department of Housing and Urban Development (HUD) that examined the rebuilding that took place following Hurricanes Katrina and Rita. In a recent Joint Center blog on that study’s implications, our colleague Jonathan Spader (who worked on the initial HUD study) reported that only 70 percent of hurricane-damaged properties in Louisiana and Mississippi had been rebuilt by early 2010, five years after the storms. The study further found that 74 percent of owner-occupied homes had been rebuilt, compared to only 60 percent of the rental properties.

The delays are due to many factors. Insurance companies need to assess the extent of the damage and determine how much is covered. Home improvement contractors, stretched to the limit and suffering from a labor squeeze, must delay certain projects. Owners have to consider local housing and labor market conditions to determine if repairs or improvements make financial sense. Often, federal, state, and local government entities may slow down rebuilding while they decide whether it’s feasible and, if so, whether building codes and insurance guidelines should be more stringent.

Nevertheless, spending will occur and, when it does, it can be substantial. Illustratively, in 2015 (which came after a few relatively mild years for disasters) spending on disaster-related home renovations accounted for almost $11 billion of the $220 billion spent nationally improving owner-occupied homes according to the 2015 AHS. (Lightning and fires accounted for $2.4 billion of this spending, floods for $2.0 billion, and tornados and hurricanes for $1.6 billion. Winter storms, thunderstorms, earthquakes, and drought accounted for the remainder.)

In short, 2017’s hurricanes and other disasters are likely to result in substantial spending on rebuilding, repairs, and improvements to disaster-damaged homes. Moreover, while that spending will ramp up slowly, it is likely to stretch into next decade.

Monday, November 27, 2017

Rationales for (and Challenges to) Addressing Residential Segregation

by David Luberoff, Deputy Director

The consequences of racial segregation, the rationales for public policies to address those consequences, and the priorities for action are the central focus of three papers we released today as part of a new series of papers and blogs on A Shared Future: Fostering Communities of Inclusion in an Era of Inequality.

The newly released papers are:

Sheryll Cashin
Georgetown University
Integration as a Means of Restoring Democracy and Opportunity, by Sheryll Cashin, examines the role physical segregation plays in undermining race relations, democracy, and opportunity in the United States. The paper argues that segregation and supremacy must be dismantled with the same level of concerted effort and intention with which they were cultivated. While Cashin notes that the enduring effectiveness of divide-and-conquer, dog-whistling politics makes it unlikely that this work will be carried out by class-based coalition of people of all colors, she is optimistic about the possibilities for creating ascending coalitions of culturally dexterous whites and progressive people of color that could fight together for integration and equity in the regions where they live.

Nancy McArdle &
Dolores Acevdo-Garcia,
Brandeis University
Consequences of Segregation for Children's Opportunity and Wellbeing, by Nancy McArdle and Dolores Acevedo-Garcia, notes that mounting research evidence increasingly reveals the cost of segregation in terms of children's health, education, and long-term economic success. The paper argues for concentrated efforts to promote integrated, diverse education, which has been shown to improve critical thinking and problem-solving skills, the development of cross-racial trust, and the ability to navigate cultural differences. Given the close connection between residential patterns and school assignments, the policies that encourage neighborhood integration, including affirmatively furthering fair housing, enforcing anti-discrimination laws, providing incentives for affordable housing construction in higher opportunity areas, and inclusionary zoning, would likely also reduce segregation in schools, as well as provide more equitable access to other neighborhood assets that are beneficial to child wellbeing. However, they warn that since new policy directions regarding taxes and entitlements, fair housing, and school choice, to name a few, all have great potential to exacerbate economic and racial/ethnic segregation, the present is an especially significant moment to understand the extent and costs of segregation for children.

       Jennifer Hochschild
    & Shanna Weitz
    Harvard University
Challenging Group-Based Segregation and Isolation: Whether and Why, by Jennifer Hochschild and Shanna Weitz, explores two fundamental contradictions in liberal norms that make it challenging to effectively intervene to reduce the disadvantages of isolated or segregated communities. The first challenge involves the tension between the desire to end segregation and isolation and the fact that, in some situations, liberal ideals permit, and in some circumstances encourage, group isolation and separation. The second is that, while there are well-established ways to address racial and ethnic isolation, the US lacks a parallel set of norms, laws, practices, and advocates for lessening class isolation. The authors conclude by noting that liberal polities have never sorted out the tension between individual rights and group autonomy and probably never will. However, they add, that is no excuse for failing to take the steps toward freedom of choice and exciting opportunities to flourish that any liberal should embrace.

In combination with a previously released framing paper, which summarized existing evidence on patterns, causes, and consequences of residential segregation in the United States, the three papers help set the stage for other papers from the project. Those papers, which will be released monthly over the next half year, will focus on the question of "what would it take" to create and carry out policies to address a range of housing-related issues including integration, gentrification, and education. The papers, which will also be collected into an edited volume to be published in 2018, initially were presented at a two-day symposium that was convened by the Joint Center in April 2017.

Thursday, November 16, 2017

A Shared Future: Fostering Communities of Inclusion in an Era of Inequality

by Jonathan Spader and
Shannon Rieger
Almost 50 years after the passage of the Fair Housing Act, what would it take to meaningfully reduce residential segregation and/or mitigate its negative consequences in the United States?

Over the next several months, the Joint Center for Housing Studies will publish working papers on various aspects of this question written by a diverse set of scholars, policymakers, and practitioners. The papers will be available on our website and will also be collected into an edited volume to be published next year. The papers were presented at a two-day symposium, A Shared Future: Fostering Communities of Inclusion in an Era of Inequality, that was convened by the Joint Center earlier this year.

At the symposium's seven thematically-focused panels, the authors took stock of the changing patterns of residential segregation by race/ethnicity and income, and examined concrete steps that could achieve meaningful improvements within the next 10-to-15 years. On a monthly basis from this fall until next summer, we will publish those papers on a panel-by-panel basis, along with a series of blogs, many of them by others who attended the symposium, that further engage with the event's central question.

This process begins today with the publication of our framing paper for the symposium, which summarizes existing evidence on three topics: the current patterns of residential segregation by race/ethnicity and income, the causes of residential segregation in the United States, and the consequences for individuals and society. The paper also examines the rationale for government action in these areas as well as the key levers that policymakers could use to change the current situation. Because each of these topics is the subject of a larger and longstanding research literature, our summary is not exhaustive. Rather, we seek to provide a concise overview of existing research, so that the papers which follow can focus on potential solutions.

Our discussion of these topics is a reminder of both what has been accomplished since the passage of the Fair Housing Act (technically Title VII of the Civil Rights Act of 1968) half a century ago and also how far the US remains from the aspirations put forth when it became law. In particular, we note that while the extent and nature of discrimination have changed int he last five decades, the legacies of historical segregation and exclusion by government, private institutions, and individuals have continued to produce stark and stubborn patterns of racial segregation in US metropolitan areas.

At the same time, we note that changes in demography, income distribution, and the geography of American communities are changing the patterns of residential segregation by income and race/ethnicity. The bursting of the housing bubble and the Great Recession exacerbated distress among poor communities—particularly poor communities of color. In many metropolitan regions, job growth in central cities, improved neighborhood amenities, and increased demand for urban living have also fostered rapid increases in housing costs in longstanding low-income and minority communities located in or near those regions' urban cores. While gentrification has been one of the most visible signs of these changes, the suburbanization of lower-income households and the growing self-segregation of high-income households into wealthy enclaves are equally consequential.

The framing paper also documents the severe costs of this separation for all members of society, as well as the disproportionate burdens imposed on residents of neighborhoods with concentrated disadvantage. Residents of such neighborhoods—who are most often members of minority racial and ethnic groups—face elevated risks to their health, safety, and economic mobility. Moreover, at a national scale, there is compelling evidence that these individual costs constrain the economy from reaching its full potential while also increasing levels of prejudice and mistrust within the populace and impairing the functioning of our democracy. These costs, along with the potential benefits of greater integration, highlight the need for continued attention and innovation to these challenges.

The symposium papers, which will be released over the next few months, will present multiple perspectives about how we might address these challenges. Our hope is that they will raise questions, spur discussions, and ultimately contribute to forward progress.

Monday, October 23, 2017

CDFI Collaboration Enables New Lending to Nonprofit Community Organizations in Minneapolis and Cincinnati

by Alexander von Hoffman
Senior Research Fellow
In the United States, nonprofit organizations provide a wide range of vital services to low-income people, but are often hampered by their inability to buy or upgrade the buildings where they operate. Because of the unconventional or irregular nature of many nonprofits' finances, banks are usually reluctant to give them traditional mortgage loans. Moreover, other pillars of support for non profits - public-sector funders, philanthropic foundations, and individual donors - generally prefer to underwrite programs, not facilities.

All of which makes the Midwest Nonprofit Lenders Alliance (MNLA), the subject of a Joint Center case study, noteworthy. This consortium of three community development financial institutions (CDFIs) came together specifically to provide facility loans to nonprofit organizations serving low-income residents of the Minneapolis-St. Paul, Cincinnati, and Dayton metropolitan areas. Catalyzed by a $3 million award from the JPMorgan Chase & Co. Partnerships for Raising Opportunities in Neighborhoods (PRO Neighborhoods) program, MNLA builds on the unique strengths of its three members: IFF (originally named the Illinois Facilities Fund), which acts as lender, real estate consultant, and developer throughout the Midwest; the Nonprofits Assistance Fund (NAF), which provides loans, financial training, and management advice to its nonprofit clients; and the Cincinnati Development Fund (CDF), which has specialized in loans to develop housing and rehabilitate commercial buildings in low-income neighborhoods in Cincinnati and nearby Kentucky. By sharing capital, underwriting expertise, and knowledge of local markets, the three entities have provided more than $13 million to 14 nonprofit entities looking to purchase or upgrade their facilities.

Community Matters, a Cincinnati nonprofit, opened the Wishing Well Laundromat in Cincinnati's Lower Price Hill Neighborhood using a loan from MNLA partner Cincinnati Development Fund.




























Four important lessons emerge from this work:

  1. Know your markets. This means not only identifying and reaching potential borrowers, but also learning about the competition for those borrowers. According to Kate Barr, chief executive officer of NAF, MNLA's leaders initially thought they could target nonprofits that fell just short of traditional banks' credit standards. But in the first year of the partnership, they discovered "that strata doesn't exist." Instead, the partners found clients who needed funding for unique (but financially viable) transactions that traditional banks would not finance, like converting an abandoned grocery store into a community space. Armed with this knowledge, MNLA aimed an intensive outreach campaign at community organizations and professional networks and created a viable market niche.
  2. Some worthy nonprofits require non-standard loans. Underwriting these types of loans requires a deep knowledge of the prospective borrowers' finances, operations, and goals, which allows lenders to match the needs and financial resources of their customers. Making a loan to Cincinnati's Bi-Okoto Drum and Dance Theater, recalls CDF president and CEO Jeanne Golliher, "took a lot of sitting down, rolling up sleeves, and getting comfortable with the realities behind their financial statements." Although such personalized loans are time consuming, they provide needed credit to agencies that otherwise might now have been able to receive it.
  3. CDFIs may find fruitful collaborations with unexpected partners. Different areas of expertise may offer the possibility of complementary business lines. Although CDF's small staff regularly approved loans for affordable housing projects built by nonprofit entities, the expertise and familiarity needed to make facility loans was, Golliher observes, "beyond our capacity." Within the MNLA umbrella, however, the lead organization, IFF, not only provided training in underwriting such loans, but also the capital to fund them.
  4. Partner organizations should seek common understanding of key terms, concepts, and practices. Lending practices are complex, and lending practitioners use shorthand to refer to different aspects of their work. So it is that key officials in organizations, even in CDFIs with similar missions, often use different language, approaches, and practices when crafting loan packages. Therefore, groups working together need to make sure that they agree on the meaning of the many terms and actions involved in the lending process. Particularly in the early stages of a collaborative venture like MNLA, explains Joe Neri, CEO of IFF, "you really cannot overdo" the time and attention paid to defining terms and practices.

Thursday, October 19, 2017

Growing Momentum Expected for Remodeling Spending

by Abbe Will
Research Associate
Accelerating growth in residential improvement and repair expenditures is anticipated through the third quarter of 2018, according to our latest Leading Indicator of Remodeling Activity (LIRA).The LIRA projects that annual gains in home renovation and repair spending will increase from 6.3 percent in the fourth quarter of 2017 to 7.7 percent by the third quarter of next year.

Recent strengthening of the US economy, tight for-sale housing inventories, and healthy home equity gains are all working to boost home improvement activity. Over the coming year, owners are projected to spend in excess of $330 billion on home upgrades and replacements, as well as routine maintenance.

And while it’s too early for our LIRA model to capture the effects of recent hurricanes and other natural disasters experienced around the country, there is certainly potential for even stronger growth in remodeling next year as major reconstruction and repairs get underway in affected regions.



For more information about the LIRA, including how it is calculated, visit the JCHS website.

Monday, October 16, 2017

Far From Static, Rural Home Prices are Dynamic and Growing in Most of the Country

Research Assistant
While many believe that home prices in rural areas are largely stagnant, this is not the case, according to a new Joint Center analysis from the Federal Housing Finance Agency (FHFA). Rather, non-metro home prices are dynamic, highly variable, and growing—much like home prices for the nation as a whole.

Nationally, home prices grew significantly over the last half-decade, following years of decline in the aftermath of the housing crisis. But these broad indicators mask significant variation by region, market, and even neighborhood. While these trends were discussed extensively in this year's State of the Nation's Housing report and on our blog, those analyses focused almost exclusively on the roughly 62 million homeowners living within metropolitan areas, where 83 percent of the country's owner-occupied units are located.

But what about home prices in the largely rural, non-metro areas that are home to about 15 percent of the population? Due to limited data availability, these areas often are ignored in discussion about trends in home prices. A new Joint Center analysis of the FHFA House Price Index, which measures price changes from the sale, refinancing, and appraisal of the same properties, seeks to fill this gap. In particular, the analysis examined house prices for all counties outside of Metropolitan Statistical Areas (MSAs). (Metro-area counties are those that contain an urbanized area of at lease 50,000 persons plus any adjoining counties that commuting patterns show are economically integrated with their metropolitan neighbors.)

Several key findings emerge from this analysis, most notably:

  • Rather than stagnating, home prices outside the metropolitan areas grew considerably between 2000 and 2016. In nominal terms, non-metro home prices grew 58 percent and real non-metro home prices grew nearly 15 percent. Moreover, by the fourth quarter of 2016, nominal non-metro and rural home prices were two percent above their pre-recession peak—the same as national home prices at the same point. However, when adjusted for inflation, home prices in non-metro areas were still 11 percent below their peak, which again, is somewhat similar to national patterns (Figure 1).





















Note: The US non-metro index is a weighted-average of state non-metro HPIs, with each state's value weighted by its share of non-metro detached single family housing units. Real home prices are adjusted for inflation using the CPI-U for All Items less shelter. 
Source: JCHS tabulations of the Federal Housing Finance Agency, All-Transactions House Price Index.


  • While significant, these increases were more modest than the gains experienced by the nation as a whole. Nationally, real home prices grew 23 percent in 2000-2016, about 8 percentage points more than prices in non-metro areas (Figure 2). The difference is largely due to the more modest cyclicality of non-metro home prices movements during and after the recession. In the immediate aftermath of the housing crisis, national home prices fell severely for several years before starting to rise steadily in early 2012. In contrast, home prices in non-metro areas were mostly stagnant from 2011 to 2014, and, compared to metro areas, have grown less quickly since. As a result, between 2012 and 2016, the percentage-point increase in non-metro home prices was greater than the percentage-point increase in statewide prices only in Alaska, Hawaii, Mississippi, Montana, and Nebraska.



















Note: The US non-metro index is a weighted-average of state non-metro HPIs, with each state's value weighted by its share of non-metro detached single family housing units. Real home prices are adjusted for inflation using the CPI-U for All Items less shelter. 
Source: JCHS tabulations of the Federal Housing Finance Agency, All-Transactions House Price Index.


  • Rural home price trends by state vary widely. While non-metro home prices within states generally change in ways that are similar to the broader state-wide trends, increases in rural areas did not always trail overall increases in their states (Figure 3). Rather, from 2000 to 2016, the increase in non-metro house prices actually exceeded statewide prices increases in 24 of the 47 states where at least some part of the state was not in an MSA. (Three states—Delaware, New Jersey, and Rhode Island—do not have non-metro areas.)

    The gaps were largest in North Dakota (13 percentage points greater), Nebraska (12 percentage points greater), South Dakota (11 percentage points greater), New Mexico (7 percentage points greater), and Louisiana (6 percentage points greater). In contrast, the increases in statewide prices most exceeded rural prices in coastal states, where prices in metropolitan areas have grown significantly. The gaps were greatest in California (26 percentage points), Hawaii (23 percentage points), Virginia (22 percentage points), Oregon (19 percentage points), and Maryland (18 percentage points).

























  • Non-metro home prices rose more slowly in the run-up to the housing crisis, and rarely fell as far in the aftermath. Between 2000 and 2007, real non-metro home prices increased by 28 percent, far less than the 41 percent increase for all single-family homes. However, in about half of the 47 states with non-metro areas, the percent increase for all single-family homes. However, in about half of the 47 states with non-metro areas, the percent increase in non-metro home prices exceeded states-wide home-price gains in the run-up to peak. After the crash, real national home prices fell below 2000 levels briefly in 2012, while non-metro prices remained about three percent above their 2000 levels. Moreover, this pattern held true in most states. In only 10 of 47 states were the recessionary-low home prices (relative to 2000) in non-metro areas lower than for the state overall.

  • Unclear signals for the future. While this analysis shows that non-metro house prices generally follow national patterns, since the recession price growth in rural areas has been slower than in the nation as a whole. The homeownership rate in non-metro areas was also about 71 percent in 2015, nearly 9 percentage points higher than in metro areas. These differences held across racial and ethnic groups, as well as for low- and moderate-income households. Collectively, this indicates that these markets merit close attention in the coming years.

Monday, October 2, 2017

The Negative (and Positive) Spillovers of Concentrated Foreclosure Activity in New York City

by Kristin L. Perkins
Postdoctoral Fellow
Foreclosures have negative effects not only for the people who lose their homes, but also for the neighborhoods where they lived.

In an article that recently appeared in Urban Affairs Review, Michael J. Lear, Elyzabeth Gaumer, and I conclude that, at least in New York City, neighborhood foreclosure activity during the peak of the Great Recession was associated with an individual property's risk of foreclosure, but not in the way that most previous research has assumed. These findings suggest that financial institutions' practices during the foreclosure process may have contributed to how quickly neighborhoods recovered from that crisis above and beyond the institutions' roles in causing it. The research focused on two key phases in the foreclosure process, an early phase when a lender filed a foreclosure notice after a property owner missed some mortgage payments, and a later phase when properties were actually scheduled to be auctioned. (In New York, the latter process often occurs more than a year after the former one.)

Although New York City's housing market fared better than many other markets during the recession, it was not immune to the problems associated with that downturn. Illustratively, in 2007 and 2008, there were nearly 14,000 foreclosure filings annually, double the number in 2004. In 2009, the number increased to over 20,000. The number of foreclosure auctions, however, was much smaller, ranging from 3,000 to 4,500 a year between 2007 and 2009.

This foreclosure activity was also highly concentrated. Between 2007 and 2009, over half of the city's foreclosure filings occurred in just nine of the city's 55 sub-borough areas (SBAs), all of them in Brooklyn or Queens. Moreover, over half of the city's auctions took place in just six SBAs. Not all specific areas with the highest concentration of foreclosure auctions, however, were among the areas with the highest concentration of foreclosure filings. Rather, the share of foreclosure filings that result in scheduled foreclosure auction varied considerably across boroughs, from less than 10 percent being scheduled for auction in parts of Brooklyn to more than 40 percent in parts of Queens.

My coauthors and I hypothesized that the number of scheduled foreclosure auctions surrounding a property that had received a foreclosure filing is positively associated with the likelihood of that property itself reaching auction, net of other factors. Since foreclosure filings do not necessarily involved a transfer of ownership, however, we thought they might not have as strong an association as auctions may have.

Drawing on data about individual property and neighborhood characteristics in addition to foreclosure activity, we found that levels of neighborhood foreclosure activity in both phases were, in fact, associated with an individual property's outcome, but in different directions. Holding constant individual property and neighborhood characteristics, as the number of nearby properties with a foreclosure filing increases, the probability that an individual financially-distressed property will be scheduled for foreclosure auction decreases. This pattern is reversed for properties in the later phase of the foreclosure process. As the number of nearby properties scheduled for auction increases, the probability that an individual financially-distressed property will be scheduled for foreclosure auction also increases (See Figure).



These findings also suggest that at least in New York, banks and loan servicers may have delayed the processing of foreclosures in areas with larger numbers of properties with foreclosure filings. They may have done so because foreclosed properties may not sell as quickly or as profitably as in more desirable areas where there are fewer distressed properties and/or where foreclosed properties sell right away. Future research should examine these practices in more detail, not only in New York, but in other states as well and, in doing so, underscore the importance of financial institution practices not just in the lead up to the Great Recession, but throughout the recovery process as well.

Thursday, September 28, 2017

Successful Collaboration in Community Development: Easier Said Than Done

by Alexander Von Hoffman
Senior Research Fellow
What are the keys to successful collaborations of nonprofit housing organizations? A remarkable attempt to form a novel alliance by five such groups in western New York State reveals several keys to an effective collaboration. Each of the five organizations -- NeighborWorks® Rochester, West Side (Buffalo) Neighborhood Housing Services, Niagara Falls Neighborhood Housing Services, Arbor Housing and Development, and NeighborWorks® Home Resources -- were long-established in their geographic areas. Moreover, each belonged to the network of NeighborWorks® America, a congressionally chartered nonprofit corporation that provides grants, technical assistance, training, and organizational assessment to housing and community development organizations. Their experiences, which are documented in a recent Joint Center case study, shows both the problems and the possibilities of putting the idea of collaboration into action.

Buffalo, New York


Before going into details, it bears mention that it has become almost an axiom in the community development field that nonprofit organizations must "collaborate" if they are going to survive, much less transform low-income communities. And the idea of collaboration is appealing: two or more organizations agree to coordinate activities in a systematic way -- as opposed to carrying out a one-time joint venture. Such collaborations can range from a temporary partnership to outright mergers (or anything in between). But many practitioners and scholars believe such initiatives can address a host of serious problems. For most community development organizations, money is always short, and especially so in recent years as the federal government has reduced funding for the Community Development Block Grant (CDBG) program. In addition, many nonprofit groups appear to be financially weak, undersized, relatively unproductive, organizationally stagnant, or some combination of the above. By sharing business lines, programs, and administrative functions, smaller and financially weaker groups could become more efficient and possibly tap the resources and knowledge of stronger organizations. If so, they could stabilize their finances and begin to grow, which would allow them to devote more time and attention to serving their low- and moderate-income constituents effectively.

But as the new case study documents, putting these ideas into practice can be difficult. After extensive discussions, in 2012 the leaders of five western New York State groups devised the concept of a "collaborative merger." In this structure, each organization would become a subsidiary division of a new central organization. As subsidiaries, the five groups would maintain their separate identities, offices, and geographic service areas while increasing their capabilities and expanding the types and volume of business. The central organizations, which would be overseen by board members from each of the participating groups, would provide core administrative functions, and, in doing so, bring the efficiency and resources of a large organization to the work of what had been separate smaller groups.

Just as the groups were about to create the new entity, however, the alliance came to an abrupt halt. Many factors contributed to the breakdown of the process. The biggest obstacle was the difficulty of bringing five disparate groups together under a common structure. The organizations covered starkly different kinds of geographic territories. Three of the organizations (NeighborWorks® Rochester, West Side Neighborhood Housing Services (Buffalo), and Niagara Falls Neighborhood Housing Services) were rooted in cities. The other two (Arbor Housing and Development, and NeighborWorks® Home Resources) were rural entities with geographically extensive service areas.

Moreover, there were significant differences in the organizations' programmatic offerings. Arbor, the largest of the five groups not only provided residential services for people with special needs and victims of domestic violence, it also developed and managed low-income housing. The other four groups were traditional "neighborhood housing service" groups that emphasized homeownership counseling, lending, and community engagement. Over time, key staff and board members of the housing service organizations became increasingly concerned that if the alliance went forward, their organizations would lose their identities and be less able to perform their core functions. Ultimately, the concerns became so great that the groups' leaders decided not to proceed with the planned alliance.

That was not the end of the story, however. Following the original idea, albeit on a smaller scale, the three urban-oriented neighborhood housing service groups (NeighborWorks® Rochester, West Side Neighborhood Services, and Niagara Falls Neighborhood Housing Services) merged to form a new organization called NeighborWorks® Community Partners. Meanwhile, Arbor, which continued to be a NeighborWorks® member, has not only thrived, but has also expanded its service area as far as Pennsylvania and Albany, NY. The fifth organization, NeighborWorks® Home Resources, remained in business under the name Rural Revitalization Corporation, but has left the NeighborWorks® network.

The experiences of these five organizations not only underscores the importance of building trust among partners in any collaboration, it also offers several lessons for those interested in collaborating with other entities. First, prospective collaborators might do well to begin by collaborating on actual programs before they start building a grand organizational structure. Second, collaborators should take time to develop a common vision, which means wrestling honestly with with the differences that separate the participating groups. Third, and related to the above, communication - open and constant - is essential, as is the full and committed participation of all of the involved parties. The leaders of such efforts must go to great lengths to ensure that everyone - including staff and board members from all the organizations - understand and support the collaborative effort.

Finally, everyone must understand that bringing existing groups into a new organizational arrangement is not business as usual. It is an act of creation that will change the status quo. Such a collaboration requires extraordinary care to ensure that the participants recognize the process and the outcome as legitimate. And this in turn means it is essential to tackle difficult questions about management, sharing leadership, and the roles and responsibilities of staff and board members sooner rather than later.

Tuesday, September 19, 2017

Are Integrated Neighborhoods Becoming More Common in the United States?

by Jonathan Spader and
Shannon Rieger
The share of the population living in racially and ethnically integrated neighborhoods in the US has increased since 2000, according to our new Joint Center research brief. However, most Americans continue to live in non-integrated neighborhoods, and evidence suggests that some of the recent increases in integration may be the temporary byproduct of gentrification and displacement.

The new brief, "Patterns and Trends of Residential Integration in the United States Since 2000," assesses whether the nation's increasingly diverse population is fostering the growth of integrated neighborhoods or whether the choices people make about where to live are reinforcing existing lines of segregation and exclusion. Specifically, we use data from the 2000 Census and the 2011-15 American Community Survey (the most recent data available at the census tract level) to describe the number, stability, and characteristics of integrated neighborhoods.

Because there is no single measure for identifying integrated neighborhoods, our analyses applies two commonly-used definitions to define integration. The first approach—which we refer to as "no-majority neighborhoods"—defines integrated neighborhoods as those where no racial or ethnic group accounts for 50 percent or more of the population. While this definition identifies neighborhoods with a plurality of races and ethnicities, it may exclude some neighborhoods with relatively high levels of integration relative to the median neighborhood in the United States. For example, under this definition, a census tract that is 49 percent black and 51 percent white would be classified as non-integrated.

The second definition—which we refer to as "shared neighborhoods"—uses a broader definition of integration, identifying neighborhoods as integrated if any community of color accounts for at least 20 percent of the tract population AND if the tract is at least 20 percent white. While this definition might be expanded to include neighborhoods in which any two groups account for at least 20 percent of the tract's population, this definition requires that the neighborhood population be at least 20 percent white because of whites' long history of exclusionary practices as well as attitudinal surveys suggesting that, on average, whites are less willing that other groups to live in integrated neighborhoods.

Both definitions suggest that the number of integrated neighborhoods—and the share of the US population living in integrated neighborhoods—increased between 2000 and 2011-15 (a time when the white, non-Hispanic share of the population fell from 69.1 percent to 62.3 percent). The number of "no-majority neighborhoods" increased from 5,423 census tract in 2000 to 8,378 in 2011-15, and the share of the US population residing in such tracts increased from 8.0 percent in 2000 to 12.6 percent in 2011-15 (Figure 1).

Similarly, the number of "shared neighborhoods" increased from 16,862 tracts in 2000 to 21,104 tracts in 2011-15, and the share of the US population residing in "shared" tracts increased from 23.9 percent in 2000 to 30.3 percent in 2011-15. These figures are higher than the estimates for "no-majority" tracts, reflecting the broader definition of integration used to define "shared neighborhoods." Nonetheless, both definitions show increases in integration between the 2000 Census and the 2011-15 ACS.



Notes: "No-majority neighborhoods" are census tracts in which no racial or ethnic group accounts for 50 percent or more of the population. "Share d neighborhoods" are census tracts in which whites account for 20 percent or more of the population and any community of color accounts for 20 percent or more of the population. 
N=71,806 Census tracts.

While the share of the population living in integrated neighborhoods has increased since 2000, most Americans continue to live in non-integrated areas, with white individuals the least likely to live in integrated areas. While 12.6 percent of the total US population lives in one of the 8,378 "no-majority" tracts, these neighborhoods include just 7.2 percent of the nation's whites, compared to 20.3 percent of blacks, 20.3 percent of Hispanics, 30.9 percent of Asians, and 19.5 percent of individuals of other races and ethnicities (Figure 2).

A similar pattern is present within "shared neighborhoods." While 30.3 percent of the total US population lives in one of the 21,104 "shared neighborhoods," these neighborhoods include just 22.9 percent of the nation's whites, compared to 43.0 percent of blacks, 42.8 percent of Hispanics, 44.8 percent of Asians, and 36.5 percent of individuals of other races and ethnicities.



Note: Estimates show the percent of each group that live in integrated neighborhoods. White, black, Asian, and Other are non-Hispanic.

The research brief provides more specific details about the relative composition of integrated and non-integrated neighborhoods by race, ethnicity, and other demographic characteristics. Additionally, it describes the stability of integrated neighborhoods between 2000 and 2011-15, as well as the geographic distribution of integrated neighborhoods across central cities, suburbs, and non-metropolitan areas.

Taken together, this evidence offers support for the conclusion that the number of integrated neighborhoods has increased in recent years. However, it also highlights that this conclusion is subject to two important caveats. First, some portion of the increase in integration reflects neighborhood change processes associated with the gentrification and displacement pressures affecting the central areas of many cities. While some of these neighborhoods may become stably integrated areas, it is not yet clear how many of the newly integrated neighborhoods will become stably integrated and how many will eventually become non-integrated areas.

Second, integrated neighborhoods remain the exception rather than the rule in the United States. The 2011-15 ACS shows that fewer than one in three Americans lives in a shared neighborhood, with just 12.6 percent living in "no-majority neighborhoods." As the country moves toward a population in which people of color are projected to be a majority by the middle of the century, further growth will be necessary for such changes to produce a more inclusive society.

Wednesday, September 6, 2017

Rebuilding Housing in Harvey’s Aftermath: Two Lessons from Hurricanes Katrina and Rita

by Jonathan Spader
Senior Research Associate
As floodwaters finally subside in Houston, and as Florida residents prepare for Irma, residents, civic leaders, and policymakers can glean two important lessons from the intensive efforts to rebuild homes and communities after Hurricanes Katrina and Rita, two devastating storms that hit the U.S. in back-to-back succession in 2005. 

First, rebuilding residential properties is a lengthy process likely to take several years. Second, the rebuilding process will be especially lengthy for rental properties (as compared to owner-occupied homes), which could greatly affect the 950,000 renters (who account for 41 percent of households) in the greater Houston metropolitan area, as well as additional renters affected by Hurricane Harvey in elsewhere in Texas and in other states. The slower pace of rental rebuilding is due to several factors including both renters’ dependence on property owners to rebuild rental housing units and historical differences in the availability and terms of federal aid for rental property owners as compared to homeowners.

To be sure, the need for emergency assistance and shelter for displaced residents will continue for weeks to come. Nevertheless, Congress is already starting to discuss an aid package. Moreover, the extensive damage (and the need to reauthorize the National Flood Insurance Program before September 30) may spur new efforts to develop policies and programs to support housing recovery in the wake of future natural disasters. As policymakers, civic leaders, and local residents begin to focus on the rebuilding process, they might want to keep the following in mind.

Extensive flooding from Hurricane Harvey in Southeast Texas. Air National Guard photo by Staff Sgt. Daniel J. Martinez

1. Rebuilding residential properties takes time.

An initial lesson from Hurricanes Katrina and Rita is that the rebuilding process takes time, with many properties continuing to show observable damage several years after the storms had passed. In early 2010—almost five years after both hurricanes made landfall—a HUD-commissioned study that I worked on surveyed the exterior conditions of properties damaged by those storms. The survey produced representative estimates of the rebuilding outcomes of properties that experienced “major” or “severe” damage—defined by FEMA as $5,200 or more in storm-related damage—that were located on significantly-affected blocks—defined as a city block on which three or more properties experienced “major” or “severe” damage.

The survey found that 17 percent of hurricane-damaged properties in Louisiana and Mississippi still showed substantial repair needs as of early 2010, almost five years after the storms had hit. Almost half these properties did not meet the U.S. Census Bureau’s definition of a “habitable structure,” a housing unit that is closed to the elements with an intact roof, windows, and doors and does not show any positive evidence (e.g. a sign on the house) stating that the unit was condemned or was going to be demolished. Only 70 percent of hurricane-damaged properties in Louisiana and Mississippi were rebuilt by early 2010, and 13 percent contained cleared lots in which the damaged property had been removed from the parcel (Figure 1).

In the case of Hurricanes Katrina and Rita, the properties that still were damaged included some whose owners had received rebuilding grants through federal programs designed to aid housing recovery. The largest source of assistance following the 2005 hurricanes was the $18.9 billion special Community Development Block Grant (CDBG) appropriations passed by Congress between 2005 and 2008. Some portion of the properties with remaining damage likely also reflect abandonment by owners who moved elsewhere in the wake of the hurricanes. For such properties, funding for demolition, rehabilitation, and land banking may be necessary to transition the properties to a new use, and potentially to support efforts to encourage residents to rebuild in areas with lower flood risks.

Notes: Sample is representative of properties in Louisiana and Mississippi that experienced major or severe hurricane damage and that were located on significantly-affected blocks. Rebuilt structures are residential structures that do not show substantial repair needs as defined in Turnham (2010). Cleared lots contain an empty lot or a foundation with no standing structure. Damaged structures are residential structures that show substantial repair needs—and include all uninhabitable structures. Uninhabitable structures are residential structures that do not meet the Census definition of habitability. 

2. Rental properties were rebuilt more slowly than homeowner properties.

A second lesson from the rebuilding process following Hurricanes Katrina and Rita is that rental properties were rebuilt more slowly than owner-occupied homes. This likely was due to several factors. While homeowners directly control the rebuilding progress of their home, renters are dependent on landlords’ rebuilding decisions. Smaller “mom-and-pop” landlords may also be slower to rebuild investment properties if their own home is also damaged. And policymakers have been wary of providing rebuilding assistance to rental property owners who did not purchase sufficient insurance.

Following Hurricanes Katrina and Rita, both Louisiana and Mississippi used the CDBG special appropriations for disaster recovery to create rebuilding assistance programs for homeowners and small rental property owners. (Texas, which faced less damage from Hurricanes Katrina and Rita, created only a homeowner program.) In both Louisiana and Mississippi, the homeowner programs covered much of the difference between the estimated cost to rebuild and the amount available to the homeowner from insurance and other rebuilding-assistance programs. Conversely, the grant programs for 1-4 unit small rental properties included a more complex set of eligibility requirements that included commitments for the rebuilt units to be rented to qualifying low- and moderate-income tenants. The result was that few rental property owners applied for and received rebuilding assistance, compared to widespread take-up of the homeowner assistance programs. While concerns about the incentive effects associated with bailing out under-insured investors are reasonable, a secondary effect was to reduce the number of rebuilt properties available to renters.

Figure 2 displays the share of hurricane-damaged properties on significantly-affected blocks that received a rebuilding grant through the CDBG-funded homeowner and small rental programs, along with the share of homeowner and small rental properties that were rebuilt by early 2010. The results show that 58 percent of hurricane-damaged homeowner properties in Louisiana and Mississippi received a rebuilding grant, compared to 10 percent of small rental properties. While this rental figure is limited to 1-4 unit small rental properties, a GAO report similarly found that federal assistance through CDBG, the Individual and Households Program, and the Home Disaster Loan Program together reached only 18 percent of all damaged rental units (including units in larger multi-family buildings), compared to 62 percent of damaged homeowner units. The rebuilding outcomes documented in the HUD-commissioned survey also showed sizable gaps, with 74 percent of homeowner properties rebuilt by early 2010 compared to 60 percent of rental properties.


A final question for policymakers is whether to use this opportunity to create a permanent program to support housing recovery following natural disasters. While Congress has relied on the CDBG program for this purpose since the early 1990s, its role is currently defined by the special appropriations legislation drafted following each individual disaster. Making disaster recovery a permanent function of the CDBG program (or creating some other permanent program for housing recovery) would allow HUD to develop permanent regulations and program guidance in anticipation of future disasters. While it is too late for this change to benefit victims of Hurricane Harvey, it might improve preparedness for the next disaster.

Friday, August 25, 2017

Managing Rapid Urbanization: Lessons from Mongolia

by David Luberoff
Senior Associate
Director
The capital city of Mongolia, Ulaanbaatar, provides a useful lens for understanding tensions that arise from rapid urbanization, according to two recent journal articles reporting on research funded in part by the Joint Center's Student Research Support Program.

In the first piece, which appeared in International Planning and Development Review, Raven Anderson (formerly a research fellow in the Social Agency Lab at the Harvard Graduate School of Design) and Michael Hooper (an associate professor of urban planning at the GSD) explain that because of an economic boom, a series of harsh winters, and the decline of the rural economy, Ulaanbaatar grew dramatically over the last two decades. In response, a diverse array of domestic and international organizations converged on the city to help address the environmental, spatial, and social challenges created by the rapid growth.

Anderson and Hooper, interviewed representatives from 18 of these organizations and learned that while there is agreement about the city's main challenges there is a lack of consensus about how to tackle them. The result, they note, was a "proliferation of plans, in which local organizations' perspectives are often given relatively little attention."

In the second article, which appeared in the Journal of Urbanism, Anderson, Hooper, and Allie Aldarsaikhan Tuvshinbat (also a former researcher at the Social Agency Lab) use interviews with about 120 residents to explore some of the differing perspectives. They found that while there were relatively high levels of support for increases in unit-level density and for apartment living, the majority of interviewees also favored low land-use density.

The tension between the two findings, they note, is "a central theme in the results. The limited appeal of high-density land use likely reflects Mongolian cultural attitudes towards land and open space. These attitudes are generally not reflected in the global 'compact city' models that are promoted by international organizations and which appear to be driving the current city masterplan and other formal planning efforts in the city."

The divergence between residents' views and the organizations' desires, note Anderson and Hooper in the first article, "is likely to further reduce the city's ability to effectively cope with rapid urban growth."