New Berlin Claims No Racism

Uh, uh, sure.

New Twist to Story of Homeowner

On Sunday, I blogged about a homeowner who had done nothing wrong, but nevertheless, was facing foreclosure because of the actions of the previous lender.  Now, a not-too-surprising twist to the story.  The bank that bought Mr. Williams' home, Harris Bank, sent someone to change the locks on Mr. Williams' home (which, oddly, was "sold" at a sheriff's sale by a Harris subsidary, Amcore Bank).

"They invaded my privacy - they broke into my house," Williams said. "You can't just walk into somebody's house and change the locks - I'm just shocked."

Unfortunately, during this foreclosure crisis, this kind of mistake happens far too often, with some banks being so notorious that it actually was one of the reasons why a moratorium on foreclosures was placed in many states.  Mr. Williams, unfortunately is "lucky" that nothing was stolen or damaged during this lockout.

Surely...?

Surely if we can't have high-speed rail, we at least can have this?

Tax Credits and NIMBYism

On Friday I discussed the recent announcement of WHEDA's tax-credit awards for 2011, and looked at a bit of history with the awards in recent years.

I ended with:

But keep in mind that there are many developments that never got off the ground because of community opposition, and did not even appear on the lists of applications.

Like it or not, affordable housing and tax credits can be very politicized, especially in local communities with community opposition.  I received some feedback from a professional who follow tax credit development issues:

It might be interesting to know whether the percentages of elderly, family, mixed-income and supportive housing for which developers applied the same as the percentages selected. Or did WHEDA staff choose a "disproportionate" amount of one or the other kind of housing? I say it "might" be interesting because the scoring criteria for awarding tax credits are a lot more complicated than just those factors, and the projects selected (from among the applications) could reflect a different profile for reasons other than the kind of housing (based on those categories).

That is not to imply that there was some kind of bias (although there very well could be).  For instance, one could take a look at this projection of Wisconsin's aging demographics and argue that there's a legitimate need to begin building more elderly housing in anticipation of the aging boom.  Unfortunately, very often communities will plan for affordable housing-but only the elderly-only kind.  Much of the opposition in New Berlin, for instance, was only to the workforce portion of the development.  This kind of behavior should not be rewarded-communities should be open to housing of all types. Personally, I'm opposed to segregated housing, which elderly-only housing are.

In this vein, a fellow advocate told me:

I spoke to a LIHTC developer recently who confirmed to me what we already suspected – “Mayoral support makes or breaks it.” He said if they don’t have community support, they will never submit their application. That’s how WHEDA can always downplays the role of community support, application are never denied because of it – THEY ARE JUST NEVER EVEN SUBMITTED.

I also noticed a good number of applications that were withdrawn for whatever reason.  I'm sure WHEDA knows this is a continuing issue, and the new director of WHEDA should take steps to combat NIMBYism, especially because often WHEDA's good name is smeared by the opposition. 

The Case for More Government Regulation

The Journal-Sentinel published a story about a homeowner who did everything right, and yet is still being foreclosed on.

Keon Williams is on the verge of being thrown out of his house - a startling turn of events, considering that for nearly three years since refinancing in 2008, he faithfully paid his monthly mortgage and his property taxes.

....
The problem: When Williams refinanced with Wauwatosa-based Central States in 2008, cutting his 12.5% interest rate nearly in half, Central States' affiliate, Interim Funding LLC, didn't pay off the original mortgage. Battered by the housing crisis, it took the proceeds from the refinancing and paid other lenders....

While a judge stayed the foreclosure proceedings to give Mr. Williams more time to find a solution, I ask...why is this Mr. Williams' problem?  He's not the one who screwed up.  He's not the one who took the money from the refinancing and used it for something else rather than paying off the original loan.  This should be resolved entirely by the companies involved, including the title company.

Maybe if the government had stronger regulations on the lending companies, maybe if there were more standards holding people and companies accountable, this guy wouldn't be facing the loss of his home.

Update here.

WHEDA Awards Breakdown

I decided to do a calculation of the 2011 awards.

• Elderly/Majority Elderly: 7 developments for 338 units with a total of $3,562,740 tax credits
• Family/Majority Family: 19 developments for 919 units with a total of $11,364,408 tax credits
• Mixed-Income Housing: 2 developments for 121 units with a total of $1,899,587 tax credits
• Supportive Housing: 1 development for 35 units with $232,947 tax credits.

Overall, I have to say I'm surprisingly pleased with the numbers; I actually thought there would be more elderly housing funded than there were.  I'm curious, though, about the mixed-income housing; in my belief, they should have market-rate units mixed in, but only one of two has any market rate units, and even so, only 11 out of 72.  I would prefer to see substantially more market-rate units.  The mixed-income development without any market-rate units is Bradley Crossing in the Village of Brown Deer which will be targeted entirely to persons with disabilities, so "mixed-income" in this sense likely means that the development also has subsidies for people with extremely low income who usually can't afford the typical tax-credit unit.

In Waukesha County the previous years' results (that is, awarded, but not necessarily built) were:

• 2011:  Three applicants for elderly housing; one received funding, all elderly housing.
• 2010: MSP Development had two awards (one family, one elderly) in New Berlin which has been fought off by New Berlin residents; lawsuit pending  There were two other unsuccessful applicants, both for family housing.
• 2009:  WHEDA had a large number of tax credits available thanks to the stimulus funding and Waukesha County awardees were Hampton Regency (Butler, 119 units) for elderly, Oak Hill Village (Waukesha, 158 LI units) for elderly.  Listed also as withdrawn was Buena Vista Senior Housing in Menomonee Falls (56 units Low-Income) which I suspect changed its name to Alta Mira which did receive tax credits in a later round.   Highlands at Meadowbrook (23 LI in Waukesha) for elderly is listed as "on hold" in case funding later becomes available. There were no other applicants that I can see. No family applications.
• 2008: No applicants for Waukesha County.
• 2007: No applicants for Waukesha County
• 2006: No applicants for Waukesha County

So in six years of LIHTC applications, there apparently were only three applications for family housing, unsuccessful for one reason or another (one supported, two opposed)  But numerous applications for elderly-only housing, even though HUD's Worst-Case Housing Needs consistently shows that other population groups also have a need for affordable housing.

If I had to theorize, I'd say that land costs made affordable housing in Waukesha County very difficult until 2009 when extra funding was available through stimulus funding, and then in 2010 and 2011 we had the economic crash which brought some properties into range for some developers.  But keep in mind that there are many developments that never got off the ground because of community opposition, and did not even appear on the lists of applications.

WHEDA announcements

The Wisconsin Housing and Economic Development Authority (WHEDA) has announced the 2011 awards for the Low-Income Housing Tax Credit (LIHTC).  I blogged previously on the applicants.

The only development in Waukesha County to receive tax credits is Wilkinson Manor in Oconomowoc which is an acquisition & rehab that will target mostly people who are elderly.  The award of $573,582 will be for 76 units. Tom  Daykin at the Journal-Sentinel reported on Milwaukee awards here and here.

The one of the applicants from Waukesha County was Fox Chase Apartments in Eagle targeting the older adults which would've had 48 units (41 Low-Income) and it is classified as "on hold" in case more funding is available if one of the other applicants is unable to make their deal work.  They would also be eligible to apply for the next round of funding.  The same is true of Riverview Commons Senior Living which is a planned Residential Care Apartment Complex (RCAC) with 55 units (all but two low-income).

As you may have noticed, and I previously criticized, all those are serving people who are elderly, with no consideration for other people who are low-income.

In other news, WHEDA also announced the availability of $500,000 through the WHEDA Foundation. 

Beneficiaries of this program include: the homeless, runaway youth, alcohol or drug dependent persons, persons in need of protective services, domestic abuse victims, developmentally disabled, low income or frail elderly persons, chronically mentally ill, physically impaired or disabled, people living with HIV disease, and persons without access to traditional housing.

Commerce Housing Programs Move Update

You may remember that when the transformation of the Department of Commerce into the Wisconsin Economic Development Corporation (WEDC) was announced, I predicted that the housing programs in the Department of Commerce would be moved to the Wisconsin Housing and Economic Development Authority (WHEDA).  Although it was initially announced that the housing programs would be sent to WEDC, my prediction turned out to be spot-on after the proposed budget showed that the housing programs would, indeed, be moved to WHEDA.

Are you keeping up with me?  Let's review a bit of history:  The housing programs were housed in the Department of Administration, then moved into the Department of Commerce a few years ago.  After the elections, it was announced that they would be going along with the Department of Commerce into WEDC.  When the state budget was released, it showed them going into WHEDA, although there were rumors that the Director of Commerce (who would also be the Director of WEDC) wanted to keep the housing programs. 

So you can imagine, then, my exasperation upon learning that the WI Division of Housing & Community Development may be moving to the Department of Administration, their former home.  All this has to happen by July 1, 2011, by the way.  There are pros and cons to this, but all this indecision makes me wonder how committed the administration is to housing.

NLIHC's Advocates Guide

The National Low-Income Housing Coalition (NLIHC) publishes an Advocates' Guide to Housing and Development Policy annually for its members, and makes it available on their website.  It is a great resource, especially for people who may not be familiar with all of the various housing programs.  It comes in at 275 pages, but really, much of it is descriptions of programs and policies, so there's no need to read the entire thing all the way through.  Read whatever strikes your fancy.

For instance, the complaint to HUD by the Metropolitan Milwaukee Fair Housing Council (MMFHC) might be something you want to learn more about.  MMFHC alleges that:

In order to receive federal funds, including CDBG and HOME dollars, Waukesha County must certify to HUD that it analyzes impediments to fair housing and takes action to overcome identified impediments. MMFHC’s complaint alleges that the County has failed to comply with its own civil rights certifications and has continued funding local governments whose laws and policies perpetuate racial and ethnic segregation.

You may be thinking "what the heck is impediments to fair housing?!?"  Go to the handy Advocates' Guide and in the Table of Contents, you see " Affirmatively Furthering Fair Housing: Analysis of Impediments to Fair Housing Choice " on Page 16.  At that page and the next few, you learn the background of Affirmatively Furthering Fair Housing and how communities are required to do an "Analysis of Impediments to Fair Housing Choices" to identify the barriers in the communities and to take steps toward removing those barriers.  They even give some guidance to advocates!

False rumor

During the weekend, I came across a rumor that home sales in 2012 now would be taxed to help pay for the new health care law.  Like any responsible person, I researched the rumor to see if it was true.  I found that this rumor is apparently making the rounds via e-mails and blogs.

First, let's see what it says.  Below is a variation of what I've seen online:

"Under the new health care bill -- did you know that all real estate transactions will be subject to a 3.8% Sales Tax? The bulk of these new taxes don't kick in until 2013 (presumably after Obama's re-election). You can thank Nancy, Harry and Barack and your local Democrat Congressman for this one. If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes. Is this Hope & Change great or what? Does this stuff makes (sic) your November and 2012 votes more important?

"Oh, you weren't aware this was in the Obamacare bill? Guess what, you aren't alone. There are more than a few members of Congress that aren't aware of it either (result of clandestine midnight voting for huge bills they've never read). AND, there are a few other surprises lurking."

Because this is a rumor with what is clearly a political slant, it's not surprising that PolitiFact has taken a look at it (the quote above is from their site as well).  They rated it "Pants on Fire".

To summarize PolitiFact, it's "capital gains" or profits from investment income that are taxed for Medicare.  If you look at your paycheck, you'll see a deduction on it for Medicare, but some people don't have that deduction, such as those Wall Street folks who live on "investment income."  So this new tax is for investment income, but not just any investment income, so don't worry about your stocks being taxed unless you're one of the high earners that are less than 5% of the US population.  If your investment income is more than 200,000 for individual or $250,000 for couples, than all dollars past this point will be taxed at 3.8%.

But, wait!  Home sales have their own exemptions, and for individuals, it's profit (not sales price) past $250,000 or $500,000 for couples.  Unless you think you're going to be able to sell your house at such an awesome price that you have $250,000 in profit (again, not sales price), this isn't going to apply to you.

Using the example cited in the e-mail, of the $400,000 home, let's assume you're a single individual and that this home magically came into your possession, so any sale is pure profit.  There's an exemption of $250,000, which leaves us with $150,000.  At 3.8%, this is a $5,700 tax.  That's out of $400,000 of pure profit.  Oh, the humanity, what a terrible burden!

Another site also debunks this, and throws in some free advice:

Step One: If you read something that seems as ridiculous as this does, don’t automatically believe it. (Had Congress passed a bill that was going to cost everyone who sells a home 3.8 percent of the proceeds, don’t you think you’d have heard about it long before now? Trust me – you’d certainly have read about it here!)

Step Two: Put the “facts” into your favorite search engine. In this case, for example, I did a search for “3.8% home sales tax.”

Step Three: Read some of the results. It took my search engine about one-third of a second to point me to several articles by actual journalists written over the last several months about this particular piece of disinformation.

Remember what I said earlier about being a responsible citizen and investigating before passing on rumors and e-mails?  For all of our sakes, please do.  Snopes and PolitiFact are great sites for debunking e-mails like this.

Shocking News

Absolutely shocking.

Subsidized Housing & Housing Needs in WI

The Center for Budget & Policy Priorities did a state-by-state report on federally subsidized housing programs and the housing needs in each state.

American Community Survey tells us that there is an estimated 2,246,512 households in the state.  In the report for Wisconsin, we find out that 31% of Wisconsin's households, or 701,295 households, are renters.  This is a percentage that will likely increase as the workforce becomes more mobile, even as many communities fight to keep the population mostly homeowners.

Forty percent of the subsidized units are targeted at persons who are elderly, with  the rest split evenly between households with a person with a disability and family households.

Think about that.  Over 2 million households.  Of which 79,427 households use federally subsidized housing assistance (which doesn't include tax-credits).  A relatively small number, yet such a fuss made over those units in some communities!

Now let's look at the overall number of low-income households who are paying over half of their income toward rent, 166,090 households in Wisconsin.   Remember the rule of thumb is you should be paying about 30% of your income on housing costs, and the report shows us that there are 309,026 households paying more than 30% of their income on housing. 
How many of those households could be paying less if communities had better housing policies?  What are those households sacrificing to stay in those homes? Low-income households who struggle with housing costs are at higher risk of being homeless: 

Point-in-time surveys suggest that at least 6,525 people are homeless in Wisconsin.

But Point-in-Time surveys doesn't count homeless people doubled up or staying with friends & families, so this is likely significantly higher.

Good news for Community Groups

I heard that Hebron House of Hospitality was having financial difficulties with some of their programs due to cuts in their funding.  Siena House was at the verge of being closed in the near future.  It is very good news that a donor provided money to Hebron House and other community groups, apparently as part of an estate.  Siena House is an emergency shelter that serves women and families, and its loss would've been a significant blow to efforts to end homelessness in the community.

While this donation to keep Siena House running is great, what of the future?  I serve on the board of a different organization serving people who are homeless, and the projected budget cuts from federal sources for 2012 are very frightening, especially if the final budget is more like the proposed House budget rather than the Senate or the President's proposed budgets.  Cuts of up to 60% were projected for some programs, which would've made them impossible to keep operating.

Waukesha has been good to Hebron house and other organizations, but ultimately, for long-term sustainability, there has to be support from government sources, whether state or the federal government.  There are extensive studies on best practices and models for efficient program operations that have come out in the past decade.  With President Bush's pledge to end Homelessness, programs for homelessness have seen more resources and support than they have in long time, and in those difficult economic times, it'd be a shame to see many of the organizations serving the homeless lose the expertise and staff experience that has been built up over the years because of arbitrary budgeting decisions.

April is Fair Housing Month

HUD is promoting the Fair Housing Month with the Born Free...er, I mean, the Live Free campaign.

Rural Housing in the Budget

A bit out of date given the recent events in Washington DC, but here's a look at the proposed budgets for USDA Rural Housing. 

The most significant change seems to be the elimination of housing preservation programs, although it is expected that an increase in the budget for Section 515 loans would also cover preservation efforts.  That seems in line with the Obama administration's ongoing efforts to consolidate similar or redundant programs to make them more effective and easier to manage.

The administration's budget also eliminates funding for Section 523, which is the self-help program in which families invest sweat equity by helping build their homes.

Advocates and professionals in rural housing are unhappy with the budget, viewing it as one of the "worst requests ever" for rural housing.

Transportation & Jobs

Although this blogs focuses mostly on housing issues, one cannot ignore the fact that transportation is very closely related to housing, to the extent that a Housing + Transportation Index has been created to calculate the total cost of living in a place.

Transportation is also very important to employment.  Not everyone can drive; maybe it's because of poor eyesight, poor night vision, age, possibility of seizures, or even as a personal choice.  This can have a big impact on the jobs available to people.  Lack of employment eventually leads to lack of housing.

A good article at Huffington Post about the transportation situation in Milwaukee County.

Peggy Schulz was fed up. In March, after being unemployed for nearly two years, she performed an experiment: She went to a job-search website, limited the search to the Milwaukee area and typed in a simple term: "bus line."

The results displayed what had long been plaguing her. Job posting after job posting featured similar caveats: "this is not on a bus line," "need reliable transportation not on bus line," "positions are NOT on a bus line," "our client that is not located on a bus line is interested in having you work ..."

Over time, many new employment centers have been created in the suburbs, but with a lack of public transportation to those employment centers.  This means that people who don't want to drive, or more likely, cannot drive, do not have access to an increasing number of jobs, especially as bus lines shrink, as rail is blocked.

It's not just the employees who suffer, but also the employers. 

Across Milwaukee County, workers want jobs, and businesses want workers. Eric Isbister is the chief executive of GenMet, a metal fabricator located one block north of Milwaukee county. He needs new employees -- the expansion of his business depends on it -- but he can't get them.

The nearest bus stop is more than two miles from his factory. He advertises in newspapers, and regularly interviews prospective employees, but he continually runs up against the same problem. Often, he said, he'll see an interviewee's friends or family waiting in a car outside, ready to give the person a ride home. When he sees that, he knows he won't be able to hire the worker.

Isbister said he'd hire a dozen new employees on the spot, if only he could.

Realtors Survey on Smart Growth

The National Association of Realtors has released a press release on their survey regarding home buyer preferences.

Walkable communities are defined as those where shops, restaurants, and local businesses are within walking distance from homes. According to the survey, when considering a home purchase, 77 percent of respondents said they would look for neighborhoods with abundant sidewalks and other pedestrian-friendly features, and 50 percent would like to see improvements to existing public transportation rather than initiatives to build new roads and developments.

The survey also revealed that while space is important to home buyers, many are willing to sacrifice square footage for less driving. Eighty percent of those surveyed would prefer to live in a single-family, detached home as long as it didn't require a longer commute, but nearly three out of five of those surveyed -- 59 percent -- would choose a smaller home if it meant a commute time of 20 minutes or less.

The survey also found that community characteristics are very important to most people. When considering a home purchase, 88 percent of respondents placed more value on the quality of the neighborhood than the size of the home, and 77 percent of those surveyed want communities with high-quality schools.

While the study shows that people do prefer detached single-family homes on larger lots, that preference can be tempered by other factors such as community amenities, although age and party can have an impact.

• Younger people who are unmarried tend to prefer the convenience of smart growth, walkable communities. Subdivision-type communities appeal more to middle-aged, married couples. 
• Political views are predictive of what type of communities Americans prefer. Democrats and liberals tend to prefer smart growth-type communities, while Republicans and conservatives are more likely to favor sprawl-type communities.

The problem with having larger detached single-family homes on larger lots is that by their nature, everything is forced to be further away.  Sure, you can try to design clusters around community amenities, but it's much more difficult.  Ideally, you'd have a mix of home designs and sizes so that any given community or neighborhood will have multiple options, and that might allow you to have more of a walkable neighborhood than you might otherwise have.

Evidence of "Progress"

#10 is where we are at after decades of "progress".

Update:  I meant Slide #10, rather than implying Milwaukee was #10.  Should've been clearer.