February 15, 2018

Community Developments: Study Highlights Connection between Access to Mortgage Loans and Race

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  • Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans at rates far higher than their white counterparts, according to a new analysis by Reveal from The Center for Investigative Reporting. The analysis, which is based on all records publicly available under the Home Mortgage Disclosure Act, shows that black applicants were denied mortgage loans at significantly higher rates than their counterpart white applicants in 48 cities, Latino applicants in 25, Asian applicants in nine and Native American applicants in three. It controlled for nine economic and social factors, including an applicant’s income, the amount of the loan, the ratio of the size of the loan to the applicant’s income and the type of lender; however, credit score was not included because that information is not publicly available. According to the analysis, there is a pattern of troubling denials for people of color across the country, including major metropolitan areas such as Atlanta, Detroit, Philadelphia, St. Louis and San Antonio. (The Associated Press, February 15) 
     
  • An op-ed by Sue Reynolds, president & CEO of Community Housing Works, and Matt Schwartz, president & CEO of California Housing Partnership, notes that the adoption of last year’s tax reform legislation has weakened the Low-Income Housing Tax Credit (Housing Credit). The op-ed explains that the Tax Cuts and Jobs Act reduced the top corporate tax rate from 35 to 21 percent, which has reduced pricing and subsequent production for the Housing Credit. Reynolds and Schwartz highlight that the Housing Credit has created more than 23,000 affordable rental homes and 14,000 jobs in San Diego County, and the reduction in the top corporate tax rate could lead to as many as 5,000 fewer affordable apartments built or preserved over the next 10 years. Reynolds and Schwartz urge lawmakers to pass the Affordable Housing Credit Improvement Act of 2017, bipartisan legislation in the Senate that would expand the Housing Credit by 50 percent, noting that strengthening the Housing Credit is critically important to addressing San Diego’s homelessness and affordability challenges. (The San Diego Union-Tribune, February 14) See the ACTION Campaign’s Advocacy Toolkit for resources to advocate for the Affordable Housing Credit Improvement Act.
     
  • The New York City Department of Housing Preservation and Development (HPD) has selected nine development teams to construct 490 affordable homes on 87 vacant city-owned parcels. These vacant parcels will be developed as 100 percent affordable buildings that will include a mix of affordable rentals and homeownership opportunities. The affordable housing developments comprise the third and final round of designations by the department’s New Infill Homeownership Opportunities Program (NIHOP) and Neighborhood Construction Program (NCP), which aim to facilitate construction on small or challenging lots and have supported the construction of over 600 affordable homes on 81 city-owned parcels. (NYC.gov, February 13) Last year Enterprise released Public Benefit from Publicly Owned Parcels: Effective Practices in Affordable Housing Development, which is a national report that identifies leading practices and recommendations for overcoming challenges to creating affordable housing and other community benefits through the publicly owned parcel development process. Learn more about the report and the Public Parcels research initiative on Enterprise’s website.
     
  • According to Curbed, the city of Berkeley, CA is considering using cryptocurrency - a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds - to raise funds for affordable housing measures. The city, in partnership with Blockchain Lab and municipal finance startup Neighborly, is exploring an “initial coin offering” that would exchange a new cryptocurrency backed by municipal bonds for cash that would go toward affordable housing measures. Such currencies have been at the center of the financial world as Bitcoin’s value has skyrocketed, but they have been extremely volatile and entering the digital currency market presents an enormous risk. If Berkeley moves forwards with the proposal it would be the first municipality to issue its own cryptocurrency. (Curbed, February 14)
     
  • An analysis by CoreLogic shows that 5.1 percent of home mortgages in November were delinquent by 30 days or more, marking a 0.1 percentage point decline since last year. Between November 2016 and November 2017, the national foreclosure inventory rate, the share of mortgages in some stage of the foreclosure process, declined slightly to 0.6 percent. The analysis also shows that Florida was the state with the highest rate of mortgages in some stage of delinquency at 9.9 percent. (CoreLogic, February 13)
     
  • LOCUS, a national coalition of real estate developers and investors who advocate for sustainable, equitable, walkable development in America’s metropolitan areas, is accepting nominations for its 2018 Leadership Awards. Applicants can submit nominations for developer/investor of the year award that honors a company or individual who has shown exceptional leadership in smart growth development; company of the year award that recognizes companies that have a clear history of public leadership in supporting projects that transform communities and create lasting value for the citizens who live there; and the Richard Baron Award for Affordable that honors an outstanding developer who has been building attainable housing while ensuring equitable outcomes. The deadline to submit nominations is February 23, and winners will be announced on March 5. The awards will be presented at the 2018 LOCUS National Leadership Summit: Rebuild America’s Neighborhoods, taking place on April 22-24, 2018 in Washington, D.C.
     

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