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2	Neighborhood Housing Overview Introduction “There are many reasons for this state of affairs, among them the strength of institutions . . . which serve . . . to prevent “have nots” from seizing opportunities; restrictive building and sanitary codes, . . . trends favoring the building trades . . . and the . . . tendency to do things for have-nots, instead of helping them to help themselves . . . .” Rolf Goetze
3	Neighborhood Housing Overview “When people have no control over or responsibility for key decisions in the housing process . . . dwelling[s] may instead become a barrier to personal fulfillment and a burden on the economy” Fichter and Turner
4	Conditions Assessment
5	Conditions Assessment
6	Demographic Context
7	Neighborhood Typology
8	Neighborhood Typology Profile of Declining Neighborhood Fewer owner-occupant buyers than sellers Lower socio-economic status of buyers than sellers More non-traditional mortgages
9	Neighborhood Typology Profile of Gentrifying Neighborhoods More owner-occupant buyers than sellers Higher socio-economic status of buyers than sellers More traditional mortgages
10	Neighborhood Housing Strategy
11	Neighborhood Housing Strategy
12	Social Capital & Housing Conditions: Autonomous private housing market players Importance of home as investment Sensitivity to neighborhood change Malevolent actors Social capital provides capacity to absorb exogenous change, exert social control, establish housing market control, create local market demand
13	Federal Housing Programs Public Housing Section 202 Section 221 (d) 3 and Section 236 Project based Section 8 Low-Income Housing Tax Credits Tenant based Section 8
14	Federal Housing Programs Multiple Sources of Funding: CDBG / HOME CRA LIHTC Metropolitan Redevelopment Bonds LISC, Enterprise, NRC Foundations Other State & Local sources
15	Community Reinvestment Act Home Mortgage Disclosure Act Community Reinvestment Act: lending institutions have a: “. . . continuing and affirmative need to help meet the credit needs of local communities in which they are chartered . . . consistent with safe and sound operation . . .”
16	Home Mortgage Disclosure Act HMDA Data Requirements
17	Home Mortgage Disclosure Act Analysis of VA/FHA Lending: Negatively related to income (not stat. sign.) Negatively related to growth in housing stock Analysis of Loan Applications Rejected Positively related to minority status Negatively related to growth in housing stock
18	CRA Actions CRA covers federally chartered and insured lending depository institutions including independent mortgage bankers Challenge possible when regulatory approval of merger is sought Regular federal CRA bank evaluations Information sources: CRA Notice CRA Statement Public CRA file CRA Regulatory Performance Evaluation HMDA data Property transfer info Bank annual reports “Call Report”
19	CRA Actions Determine the neighborhood’s credit needs Social characteristics of population, tenure Condition of housing Inventory and needs of local businesses Survey of credit needs and borrowing experiences Determine lending practices and results Interviews with real estate professionals and business owners Lending institution data sources and interviews HMDA data on lending for housing and small businesses Property transfer information
20	CRA Actions CRA Agreements - Set amounts in certain loan categories & specify: Types of loans: single family, multifamily, home improvement, abandoned housing Income levels of recipients - avoid gentrification Assistance for loan applicants - training Flexible underwriting criteria Special terms, i.e. waiver of origination fees and points, lower interest rates Special procedures for loan denials
21	CRA Actions Special loan delinquency provisions Technical assistance to community organizations Deposits with CDLFs or CDCUs Financial services in low income neighborhoods Financial participation in government, CBO, CDC projects Facilitative role of community organizations Grants
22	CRA Actions Examples of CRA Lending Agreements Chicago Mix of housing and small business lending. Partnership with community organizations Denver Partnership with city, foundations, and state pension funds Philadelphia Focus on mortgage lending based on Philadelphia Rehabilitation Plan. Greater Philadelphia First Corp formed by business and neighborhood leaders
23	CRA Outcomes $ billions in agreements to increase housing lending CRA entities lead the market in conventional mortgage loans to lower-income people and neighborhoods Many non-CRA lenders have adopted products for low-income areas, becoming mainstream practices CRA lenders report activities are profitable and create good will
24	Questions How can the CRA be used to increase social capital? How can increased lending improve the lives neighborhood residents and the conditions of their neighborhoods