Thoughts on housing preferences

I came across this on WHEDA's website.  This is the statistics "For WHEDA Financed, Tax Credit and HUD Contract Projects."

The left-hand numbers below are the number of projects of that type.  The right-hand numbers are the number of units.  Keep in mind this is not just tax-credit housing, but also housing financed through other WHEDA programs, and subsidized housing contracted with WHEDA for monitoring.  This is not all-inclusive, but should give us a good idea of the numbers.

27 ALL ELDERLY Projects - 1,926 Units

3 MAJORITY ELDERLY Projects - 368 Units

8 ALL FAMILY Projects - 520 Units 
 
As you can see, in Waukesha County, the vast majority of the units are targeted toward the elderly.  This is because communities tend to fight tooth & nail against any other types of units, often based on ignorance and misplaced fears.
 
To be sure, Waukesha County is hardly the only county to show a marked preference.  For instance, Ozaukee County has 8 projects with 402 units that are ALL elderly. 
 
So when people say, "this should not be built here, build it somewhere else" (as New Berlin opponents did with MSP development), often the "somewhere else" say the same thing.  This is called Not In My Back Yard (NIMBY). 
 
Predictably, when developers have the option of either building elderly housing that are more acceptable, or the option of building something that almost certainly will be opposed, the developer will take the easier choice.
 
The cruel irony here, of course, is that LIHTC buildings often are not affordable to people with truly low household income.  Instead, they're rented to households that are near the top of the income restriction limit.  In fact, in many cases, the rent actually is too high for people with rental assistance vouchers.
 
Which is a shame because many people with disabilities (who often have low income) would benefit from the increased accessibility that often results from WHEDA's competitive application process which rewards housing that incorporates Universal Design.

Two Opinion Pieces in Journal-Sentinel

The Affordable Housing Taskforce in Waukesha County's own Donna Ferency has an opinion piece in the Crossroads section of the Journal-Sentinel which ran on Sunday.  Offering an opposing viewpoint is Laura Karvala of Concerned Citizens of New Berlin. 

The two pieces are not quite pro & con as Ms. Ferency focuses on the larger issue of affordable housing in Waukesha County while Ms. Karvala focuses specifically on New Berlin.  But the two pieces do overlap. 

In the interest of full disclosure, I provided some feedback on Ms. Ferency's piece, so I'm hardly unbiased on this issue.  I don't expect everyone to agree with me, nor would I want them to.  But when there's a debate on an issue, I expect people to not try to mislead me, as Ms. Karvala seems to be trying to do with the readers.

Strong words, I know, but in terms of cold hard objective facts, I'll point out the following:

1) Ms. Karvala criticizes the MSP Project for having underground parking, without mentioning that either a covered attached parking or underground parking is required.  The alternative to underground parking is a "covered attached parking" which I'll interpret as a parking garage attached to the development.  Leaving aside the fact there are existing buildings with underground parking in the City Center, I can imagine what the good citizens of New Berlin would've said about a parking garage. Here we have an instance where she's being disingenuous. 

2)  She states, "The main building was very large, four stories high and out of character with other buildings."  That would be the building for those over 55 years old.  Yet it was not this building that the Concerned Citizens of New Berlin opposed-it was the "workforce" buildings that they opposed.  Their petition referred specifically to the workforce portion. Very odd that she left out that tidbit, isn't it?

3)  Ms. Karvala professes concern for young children because of the nearby ponds and creek.  But those ponds and creek would be there regardless of what type of residencies are built there-even luxury condos.  In fact, we have a real-life example. There is an existing condo/apartment building in City Center with a lovely view of a pond.  Was it opposed because of potential harm to children?  No.  In fact, opponents repeatedly said they wanted more of the same-high end condos (never mind the fact that the developer was forced to rent out condos due to a lack of sales).

There's plenty to take issue with in the rest of her piece, but I think those three say it all, don't you?

Thankfully, No Action on Homebuyer Tax Credit

The Obama Administration has indicated that they're unlikely to renew the Homebuyer Tax Credit at this time despite worse-than-expected July sales numbers. 

It's my opinion that all the homebuyer tax credit did was temporarily prop up the sales by robbing another time period of its sales, which we're seeing with the drop in July numbers.  People who want to buy homes will still buy homes-they just rushed to do so before the tax credit expired.  I'm not sure that the tax credit ever did any good other than trying to give the economy a tiny boost.  Instead, they're going to try other things:

Donovan said the administration would be rolling out two tools in the coming weeks to help homeowners: a Federal Housing Administration refinancing effort to help borrowers who are underwater, and an emergency loan program for unemployed borrowers.

New Berlin Center City Meetings

New Berlin is hosting focus groups at City Hall with people from various Districts to discuss the future of Center City. 

What was interesting to me, however, was this part:

An effort is underway to obtain input from New Berlin residents, business owners and property owners within this area....

So only residents and owners can participate, but the employee at Quizno's who commutes can't?  The staff at Regency Senior Housing can't?  How about school teachers who can't find a place to live in New Berlin?  Not even the staff who work at New Berlin day cares?

I think we know the outcome they want from this, don't we? 

Maybe they didn't intend to exclude employees of New Berlin businesses who would like to live in New Berlin, but that's a sure sign of their mindset and their bias, of who they consider to be "real New Berliners," just like excluding non-residents from speaking at public meetings.

Future of GSE (Part II)

Recently I blogged about the future of Government-Sponsored Enterprises (GSE), more commonly known as Freddie Mac & Fannie Mae.  Blogger Kevin Drum discusses it, also.

Drum notes that Freddie Mac & Fannie Mae's traditional role is buying 30-year mortgages from banks that originates them, something it did well for many years.  They could return to this role, or they could be phased out for private market to take over that role, as it does for "jumbo mortgages" which are loans that are larger than what the GSEs can purchase.

Unfortunately (at least, in Drum's eyes), instead of going down either of those paths, the conversation is on creating a hybrid role that he and others feel depends too much on regulatory oversight which has proven to be lax in the past.

Drum is in favor of phasing out both, but I'm not so sure that the private market will entirely serve the same function.  A benefit that Fannie Mae & Freddie Mac provides is that when banks sell their mortgages to the GSEs, the banks now have money to make the next loan.  With low-income homebuyers, would the profit margin be large enough for private market companies to be interested in purchasing those loans?

Fannie Mae and Freddie Mac, in their traditional roles, had guidelines on what type of mortgages they will purchase, which helped keep the lenders honest.  Can we say the same for the system that takes place in their absence?

I recall reading that the only reason the 30-year fixed rate loan is even possible is because of the GSEs.  Otherwise, every loan will look like an ARM loan, and homeownership will be more expensive.

Drum closes with:

More generally, I think we provide home buyers with too many bennies already, and we'd probably all be better off if we allowed the market to set prices here without the distorting influence of federal supports.

The idea that homebuying and homeownership is subsidized is something I've touched upon before here and here.  But I'm not quite ready to give up on the idea of Fanne Mae & Freddie Mac.

One Night, One Community Date Change

I mentioned a few days ago an upcoming community event to raise awareness of homelessness called One Night, One Community.

The date of this has been changed from August 26 to October 9, which will coincide with Mental Illness Awareness Week.

NAMI Waukesha appears to be coordinating this event, and interested people can contact Aaron Winden at (262) 524-8886.

Quick items on Homeownership Policies

Some quick items on homeownership policy issues:

An article on proposals that emerged from the Housing Conference yesterday.

Ezra Klein interviews the Center for Economic & Policy Research director, Dean Baker, who was not at the housing conference.  Even though he was right about the housing bubble.

Abuses in taxing designations

Just happened to notice something in this article about Pabst Farms:

Pabst Farms was able to change the designation of the land from commercial to agricultural assessment rates in 2009. As a condition to the road financing agreement, Pabst Farms will remain classified as farmland until construction begins on the Town Centre.

How is this right?  The land is clearly intended to be used for commercial purposes.  Looking at Google Map, there doesn't seem to be any crops growing there (unless it's hay).  This is an abuse of tax assessment, something that the Institute for Wisconsin's Future is trying to reform. This is a prime example of "real estate speculators who abuse agricultural assessment."  As a result, Oconomowoc is losing $500,000 each year the land has this designation.

Why are the people who are opposed to "handouts" and housing subsidies not livid about this?

Future of GSE being decided

Oh, by the way, folks, at this very moment, the future of Fannie Mae and Freddie Mac, the Government Sponsored Enterprises (GSE) that have been so vital to homeownership for the past few decades, is being discussed.

It's going to be interesting to see what results from this conference, especially since some of the profits from Fannie Mae & Freddie Mac were supposed to fund the Housing Trust Fund.  The housing market collapsed before a single penny was transferred.  Whatever the result, I hope that the Trust Fund will still receive funding in some way.

HUD Fair Market Rent

HUD has published its proposed Fair Market Rent for 2011.  This is the payment standard in areas for "the  the Housing Choice Voucher, the Moderate Rehabilitation, the project-based voucher, and other programs that require location-specific economic data."

The current FMR can be found here (Milwaukee amounts below, or search by metro area or county at this link).

In addition to the small-area FMR discussed previously, HUD previously increased some areas' FMR from the 40% level to 50% for a three-year period to aid with deconcentrating poverty. There currently are 17 areas using this higher standard, including the Milwaukee metro area.  

At the end of the three-year period, areas are evaluated to determine if the 50% standard would continue to be used, or if it will revert back to 40%.  Ten (including Milwaukee) will be evaluated in 2012, with the other seven being evaluated in 2013. A new area has been added this year for a total of 18.


Why is this significant?  Having a higher FMR means that rental assistance voucher holders will have a higher amount for the maximum rent they can rent to, which means more housing options, some which may be in areas with better academic and employment opportunities.

The rent amounts are listed for 0, 1, 2, 3, and 4-bedrooms. 

• 2010: *Milwaukee-Waukesha-West Allis, WI MSA............ 602   718   858   1081   1114
• 2011: *Milwaukee-Waukesha-West Allis, WI MSA............ 617   736   879   1108   1141

There are rules on how many bedrooms a household can qualify for.

Keep in mind those amounts are at the 50% standard rather than the 40% standard.  The higher rent amounts for 2011 are probably reflective of the increasingly tightening rental market as more homes are being foreclosed on and former homeowners moving into apartments.

HUD is seeking comments on the 2011 levels.  Comments can be submitted at Regulations.gov using [Docket No. FR–5430–N–01]. They are due 30 days after the date of publication (August 4) which I believe makes it Friday, Sept 3.

Rebuttal to Jessica McBride column in Freeman

Jessica McBride has written a column in the Freeman on the New Berlin Planning Commission's reversal and rejection of MSP Development's proposal.  It is a stunningly ill-informed article.  Her standard-and of some of the opponents-seem to be that as long as there were not people saying "no (racial/ethnic group) allowed here," then it couldn't possibly have anything to do with race.  There's also the issue of disparate impact, which I'll get into later.

 She opens with a statement that the U.S. Department of Justice made the decision to investigate New Berlin without any public evidence that "New Berlin is full of a bunch of racists."  No public evidence at all. Other than the New Berlin Mayor's own words.  But let's not blame the Mayor here-there were plenty of ugly words and coded language at the public meetings and in the comment section of articles.

She then tries to equate the tax-credit development with living in poverty.

Back to New Berlin. I’ve explained the twisted logic before. Some liberals like to argue that poverty causes crime (personally, I think there is an association, although many people raised in poverty don’t become criminals). However, if a city rejects a housing project for lower income folks because they think the housing project will lead to more crime, the liberal reaction is always mock horror and cries of racism. Well, you can’t have it both ways. If poverty causes (or is associated with) crime, then a housing development for impoverished people is likely to bring crime. Logically speaking. Or, at the very least, it’s not unreasonable to worry that it might.

How many times does this have to be said?  "Workforce Housing" is designed for working people.  While any poverty is a cause for concern, advocates usually are most concerned about census tracts with concentrated poverty of over 40% of residents living in poverty.  As I noted in a previous post:

As Brookings scholar Edward G. Goetz explains, concentrated poverty ‘‘produces a range of social problems whose whole is greater than the sum of its parts. . . . Something about the extreme concentration of disadvantage begets even more community and individual dysfunction.’ "

This is hardly what you would find in a 80-unit building of working people in a relatively affluent city.  And if Ms. McBride had bothered to read this blog on Friday, she'd find that consultants for Shorewood Hills found that the number of police, fire and EMS calls would be no higher than the village's current rate per housing unit.

Then she writes "Residents also felt the project wasn’t a proper use for the City Center. Earlier plans for City Center were to turn it into an upper scale area for retail and some housing – maybe luxury condos."  She neglects to mention that a) the original plans makes no mention of high-end developments, b) that there already are luxury condos at City Center-that are being rented as apartments because of a lack of sales, and c)  the City Center is struggling to keep businesses.

She writes:

Again, if this is the standard – if rejecting lower-income housing triggers a federal investigation – then I suppose cities should just give up on such zoning laws altogether. I am being sarcastic. Of course, they shouldn’t. Cities should have every right to determine how their downtowns are zoned. Residents should have every right to demand careful, considered development and they have every right to decide they’d rather turn their downtown into Delafield than West Allis. Not that there’s anything wrong with West Allis.

Ms. McBride does not seem to understand that zoning is not the issue.  The lot is zoned multi-family.  The MSP proposal was multi-family.  The proposal initially passed through until the Planning Commission abruptly reversed itself after angry people start making calls. The proposal met all zoning requirements, and was rejected on thin grounds without giving the developer an opportunity to respond at the meeting. So, yes, the federal government should at least take a look.

Not content with slamming West Allis, she goes after Milwaukee:

Wait a minute – in Milwaukee, hasn’t the downtown’s resurgence been tied to highend condo developments? Maybe the federal government should investigate the city of Milwaukee for having the temerity to not build a low-income housing project in the middle of the downtown.

You mean something like this one?  Or City Hall Square and Majestic Milwaukee Loft Apartments, to name two? 

She also employs circular logic, decrying the wasted effort in the U.S. Department of Justice investigating New Berlin, and states "If the feds have such additional evidence to show the investigation was warranted, they should produce it. Otherwise, use our tax dollars elsewhere."  Perhaps Ms. McBride could explain the process in which evidence routinely appears without an investigation?  (The federal letter is here.)

Finally, Ms. McBride does not seem to be aware of the concept of disparate impact.  Essentially, this says that any action that impacts one group more than any other can be considered discriminatory, even if that was not the intent.  For instance, suppose a large bank sets a policy of not making home loans under $100,000 in order to increase their profit margin.  This is seemingly neutral, but it would impact low-income households that are more likely to buy homes under $100,00.  Because minority households are disproportionately low-income, the net effect is discriminatory.

When Congress established the Fair Housing Act (FHA), they recognized that combating all but the most blatant discriminationary practice would be difficult.

...the FHA's sponsors recognized that residential segregation stemmed in part from ostensibly neutral private and public practices, and they sought to undo the effects of those practices. This, along with the recognition that intentional discrimination would often be difficult to prove, confirms Congress‟s goal of outlawing housing practices that disproportionately harm minorities without a legitimate justification. (pg. 12) 

In my opinion, the Department of Justice should also be looking at the impact on people with disabilities since tax-credit and subsidized housing are often the only housing that has accessibility standards that are far beyond the minimum of the Fair Housing Act requirements for multi-family housing.  New Berlin does not have any tax-credit or subsidized buildings that are not targeted at older adults, which leaves non-elderly persons with disabilities with few options for accessible housing.

Laurel Walker article on Waukesha homelessness

Laurel Walker has an article on homelessness in Waukesha.  She uses the recent death of a chronically homeless person as a jumping point to connect with significant cuts in the funding for services for people who are homeless.

Trying to help the homeless is not easy-or cheap.  But studies have documented that when you factor in police contacts, emergency room services, etc., it's actually better & more cost-effective to try to help the chronically homeless into housing rather than the traditional model of encouraging them to pull themselves up by the bootstraps.

Some agencies are planning an event to call attention to the issue of homelessness.

On Aug. 26, the Housing Action Coalition will try again with "One Night, One Community."


The "campout" limited to 100 people will begin at 5 p.m. and be staged at a lot and parking lot on the corner of Perkins Ave. and E. Main St., owned by the Waukesha Housing Authority. A candlelight walk at dusk is planned.

Pre-registration materials indicate the potential for cancellation should severe weather or other emergency arise - a luxury unavailable to the truly homeless.

The article doesn't say who the contact people are for this campout, but if you call either the Women's Center or the Hebron House of Hospitality, they should be able to get you connected with the right person.


But even a successful event won't solve the crucial question of where additional funding will come from.

Facing $300,000 in cuts among nearly a dozen agencies, representatives say they won't.

For example, Hope Center expected to serve 240 with emergency rent help this year, but it'll have funds for about 50, officials say.

And Hebron House of Hospitality has seen a 141% increase in emergency shelter demand since 2007.

Update:  Initial post edited slightly to correct formatting error.

ACLU files complaint against Shorewood Hills

American Civil Liberties Union (ACLU) has filed a complaint with the U.S. Department of Housing and Urban Development (HUD), alleging Shorewood Hills discriminated against minorities.  Shorewood Hills is a suburb of Madison with an African-American population of only 1.4 percent, compared to 5.8 for Madison.

In some ways, this case is very similar to what has been happening in New Berlin.

The Village Board rejected a developer's request for permission to build 69 apartments, saying it lacked time to evaluate the impact the project would have on the mostly owner-occupied lakeside enclave.

One thing that I often hear from opponents are the imagined impact of Section 42 (Low-Income Housing Tax Credit) properties on property values and taxes. Apparently the Village was concerned about this as well, so concerned that they hired a consultant.

Before the proposal was rejected, village officials hired the Vierbicher consulting firm to study the impact.


The study, dated May 5, predicted the village would suffer no serious financial impact from the proposed Section 42 housing....

The consultants said national studies indicated that Section 42 units almost always have a positive effect on surrounding property values. Numbers of police, fire and EMS calls would be no higher than the village's current rate per housing unit, the consultants said.

Good comment in an article

I came across this article about a Georgia public housing authority being overwhelmed by over 30,000 people.  While reading the comments (it's my new hobby), I came across a comment that I thought was a good perspective on the problem.

While people can be surprisingly insensitive, even mean, there's always some reasonable voices.  In this type of article, there's the predictable complaints about people "receiving handouts" and "being lazy" but this commenter, JCF-1362859, pushes back:

I worked in a social services agency for 17 years helping people apply for government programs. The vast majority of these people were working (upwards of 85%), and most of the rest were either disabled or elderly. The problem was that these people (who were supposedly living off of your dime) were underemployed and underpaid. My question to you is this? Who is actually receiving the government assistance? The person who is working but still needs to apply for government programs to feed his family, or the employer who pays his employees so low that they qualify for government assistance to begin with. Seems to me that there's a little bit (or a lot) of government assistance in that employer's profit margin that he wouldn't have seen had he paid his workers an adequate amount of wages. In these cases, the government is subsidizing the employer, not person who is receiving government assistance.

I think this is a point many people simply don't consider or appreciate; the fact that many people (especially those with disabilities) are underemployed and that so many companies are paying wages that are so little that people quite literally cannot survive on it (especially if a single-parent household). 

Are there people who take advantage of subsidies and other benefits?  Of course.  Show me a system where that never happens, even among the wealthy (except it's called lobbying).  But too often accountabilty & auditing are cut to reduce costs.

If you want to know more about the relationship between wages & housing, the National Low-Income Housing Coalition has a good report on this.

Psychology of Home Sales

We now know the best way to sell homes, thanks to this article. (Hat Tip to Judy Karofsky at the Coalition of Wisconsin Aging Groups for sharing this.)

Apparently if you're selling your home, have neutral colors (no pink rooms!), don't list recent repairs or improvements (which makes people wonder what else needs to be fixed), and most of all, have an attractive female agent.

In brief, the study found that the more attractive a male buyer found the female agent, the higher the price he was willing to pay for the house. Women buyers also responded positively to attractive female agents, though not as much as men, the study said.

The closing lines made me laugh:

Interestingly, the study also found that neither men nor women responded much to attractive male agents. Apparently nobody trusts them.

Is it logical?  No.  The agent isn't going to be there after you buy the home.  But it's the same logic the pharmaceutical industry have been criticized for using in marketing drugs to doctors.

So now you know how to get the best price for your home!  And better yet, how to find a hidden gem in your next home purchase by being aware of the psychology of home sales to figure out what homes are marketed badly & low-balling the offer.

Here we go

The Department of Justice is taking a hard look at New Berlin.

Anyone shocked by this please raise your hand.

Proposed budgets for HUD for FY2011

All interested parties have submitted their version of what the 2011 budget should look like for HUD.  Although the Senate version is not finalized yet as it has only passed out of Appropriations Committee and will not be voted on until after the November elections, it offers a glimpse of what the Senate is thinking.  You can find a handy chart at either NLIHC or HAC.  NLIHC's chart has previous years for comparison and some more details, while HAC seem to have some Senate line items that NLIHC has not filled out (yet?).

HUD apparently will definitely proceed with the of merging tenant-based rental assistance programs under the same umbrella, with Section 811 Mainstream vouchers and others moving under the Section 8 program for the first time.  This was proposed as part of Transforming Rental Assistance, which Congress declined to fund.

It is interesting to see that Congress has ignored the President's requests in some situations, such as declining to reduce the amounts for Public Housing, CDBG, HOME, Native American Housing, etc. as suggested by the Administration.  In the case of HOME, CDBG, 811 and 202 funds, I've heard HUD staff say that they feel that the ARRA monies funded some of the projects that would've been in the pipeline under those programs, and thus there is not as much of a need for those programs to be funded at previous levels.   I'm not sure I appreciate the logic of using ARRA funds to stimulate the economy, and then reversing the "stimulus" effect by reducing the funding for those programs.

Project-based rental assistance continue to see funding increases, up to $9.376 billion (at least), a significant increase from $5.037 billion in 2006.  Overall, the current Administration has been very good for housing, with an increase from $34.27 billion in 2006 to $41.59 billion proposed (by the Administration) for 2011.

Some updates on innovative programs proposed:

• Sustainable Communities budgeted as requested at $150 million
• Choice Neighborhoods Initiative, the planned replacement for HOPE VI, received support in the Senate at $250 million, but the House stuck with Hope VI and reduced the amount to $200 million.
• As noted earlier, Congress declined to fund PETRA (Preservation, Enhancement, Transformation of Rental Assistance).  Without studying the issue further, the Congress is understandably leery about the substantial impact it could have on housing authorities around the country and their tenants.

While there have been increases in funding for housing under President Obama as compared to near-constant proposals to cut housing programs under President Bush, the reality is with the current recession and the foreclosure crisis, there is even more demand for affordable housing.  It is very unlikely that enough money will ever be appropriated to meet the need for affordable housing, so it is very important that a multiple-pronged approach should be taken; not only to increase funding, but also to reduce barriers that communities often put up that makes housing more expensive. 

Blogging to Resume soon

Did you all miss me?  With the A Home for Everyone Conference, flying to Washington D.C. for the Disability Policy Summit and a brief vacation, I've been away since mid-July.  I'm pleased (well, sort of) to say that I'll be around for the near future and that blogging will resume shortly.

Posts soon to come will cover what HUD's 2011 budget may look like, the future of new initiatives at HUD that is not getting a warm reception in Congress, as well as an update on what's been happening in New Berlin.

But if you have any news or issues that should be covered, feel free to make suggestions in the comments section, or to send me an e-mail.

Until then, here's some food for thought.