MACDC will join three Massachusetts CDCs (Lawrence CommunityWorks, Twin Cities CDC, and NeighborWorks Southern Mass) at the Community Progress Leadership Institute (CPLI), to be held on the campus of Harvard Law School March 17-20.  Sponsored by the Center for Community Progress; this is the fourth year of the Institute. The Massachusetts participant cities (Lawrence, Fitchburg, and Brockton) will be joined by delegations from Kansas City and St. Louis, Missouri, and from Greensboro and High Point, North Carolina.

CPLI brings together delegations from multiple cities for intense leadership and technical assistance training under the guidance of national experts. These delegations return home better equipped to address large inventories of blighted and vacant properties for the benefit of their communities.

The selected cities range in population from just over 40,000 to nearly half a million and have citywide housing vacancy rates of 6-19% and high rates of abandonment. They also face challenges, such as mortgage foreclosure, poverty, tax delinquency, and other property issues. These cities were selected for CPLI because they demonstrate strong leadership and a commitment to developing new solutions for vacant, abandoned, and other problem properties.

Each participating City will send a delegation that includes a CDC representative, local public officials ranging from Housing and Community Development Directors to City Solicitors to staff from Inspectional Services and Health Departments, and another person from the private or nonprofit sectors. Don Bianchi will be representing MACDC, and the MA Attorney General’s office will also be participating.

For additional information, contact Don Bianchi at MACDC at donb@macdc.org.

The newly-named Revitalize CDC celebrated its membership in MACDC and its status as a newly-certified CDC by the MA Department of Housing and Community Development (DHCD) in an event at Springfield City Hall on January 6th. Formerly Rebuilding Together Springfield, Revitalize CDC has worked in Springfield since 1992, enabling homeowners to stay in their homes by repairing and making them energy efficient. In the last year alone, Revitalize CDC rebuilt 48 homes and utilized 2,500 volunteers.

At the event, CDC Executive Director Colleen Loveless welcomed the more than 40 attendees, while CDC Board Members, clad in matching Revitalize CDC t-shirts, stood alongside. She introduced Springfield Mayor Dominic Sarno, who praised the work of Revitalize CDC and its partnership with community and institutional supporters, including Mass Mutual and local lenders. Don Bianchi of MACDC spoke about the significance of achieving CDC certification, as Revitalize CDC was able to demonstrate to DHCD its community development success in Springfield, and that its constituency, including low-and moderate-income people, are meaningfully represented on its Board of Directors.

Leslie Belay of the Massachusetts Growth Capital Corporation (MGCC) then presented Colleen with a check to help seed Revitalize CDC’s initial foray into providing small business technical assistance. As Colleen noted, these new services will be available to the entire City of Springfield, with a focus on the City’s underserved Latino community.  Everyone present helped launch a new direction, and name, for an organization that has long served its community.

MACDC joined ninety leaders from rural communities across the Commonwealth at the Massachusetts Housing Partnership’s Rural Housing Summit on December 18 in Worcester. MHP convened the Summit as the culmination of a year-long effort to examine rural housing challenges, and explore policy and program options for addressing them.

The Summit was highlighted by opening remarks from DHCD Undersecretary Aaron Gornstein, who cited numerous examples of successful rural housing developments, whose sponsors persevered despite the challenges associated with limited resources and high infrastructure costs. A panel led by Representative Steve Kulik and Senator Dan Wolf spoke about some of the broader economic challenges faced by rural areas in employment, transportation, education and health care.

The Summit featured the release of a white paper that included six policy recommendations to help rural communities with their housing and economic challenges; the paper’s creation was spearheaded by a 19-person steering committee representing rural communities from Cape Cod to Western Massachusetts. The key legislative recommendation is to create a State Office of Rural Policy, to function as a research and policy clearinghouse for rural issues. The paper also includes program recommendations, including the recommendation to create a small-scale rental production program for projects of less than 20 units, with a set-aside for rural areas.

www.mhp.net/uploads/resources/rural.white.paper.final.pdf

Don Bianchi of MACDC, as well as the Directors of several rural CDCs, served on the steering committee, and MACDC will continue to work with MHP to implement the recommendations in the white paper, and to advocate for our rural members.

The most important decisions affecting how much the State spends on affordable housing will be squarely on the shoulders of the new Governor.  The State’s “Capital Budget”, which arguably has a bigger impact on affordable housing than what is commonly called the “State Budget” (and is more accurately called the “State Operating Budget”), is something over which the State Legislature has no control.

The State Operating Budget contains the funds appropriated by the State Legislature every year for all matter of State spending requirements.  This budget is absolutely essential for meeting a myriad of needs, including the need for affordable housing.  The Massachusetts Rental Voucher Program (MRVP) provides rental assistance so that very low-income families can afford to live in an apartment.  Other programs help individuals and families avoid homelessness, or helps them find housing and shelter if they become homeless.  The State cannot house families in need without these programs and other essential programs funded through the State Operating Budget.

Likewise, adequate funds from the State’s Capital Budget are essential to meeting the affordable housing needs of families across the State.  And in fact, the programs that provide the dollars for the actual construction or rehabilitation of this housing come primarily from the Housing Capital Budget, or as they are commonly called, bond funds.  Public housing authorities rely on bond funds for necessary improvements to the aging public housing stock.  Private affordable housing developers, including many nonprofits and CDCs, rely on bond funds for both the production and preservation of affordable housing.  Providers of housing for persons with disabilities rely on these bond funds as well.

Thus, the amount of the State’s Housing Capital Budget will be among the most consequential decisions facing Governor-Elect Baker in 2015, and each year thereafter.  At the MACDC Convention on October 25, then-candidate Charlie Baker made this pledge with regard to the housing capital budget: “We will not spend any less than the $190 million that is already on the table.”  Getting this pledge is a great first step!  But we have our work cut out for us - to hold the new Governor to his pledge to not cut the housing capital budget, and to advocate for a much-needed increase.

Like the State Operating Budget, the State’s Capital Budget originates with the State Legislature, through passage of a Housing Bond Bill.  While the operating budget appropriates specific dollar amounts to be spent on programs, however, the capital budget establishes overall spending caps, within which the Governor can raise funds through the sale of bonds.  In 2014, the Legislature passed, and Governor Patrick signed, a $1.4 Billion Housing Bond bill, establishing spending caps for nine separate housing programs for what is expected to be a 5-year period.  This was the largest housing bond bill in the State’s history, and provided authority to the Governor to spend what is needed on important housing programs.  It doesn’t take a complex algorithm, but merely a calculator, to figure out that $1.4 Billion over 5 years comes out to $280 million per year.  Yet Governor Patrick’s most recent Housing Capital Budget, released for the fiscal year that began July 1, provides an increase from the prior year to just over $190 million for the current year.  Why the mismatch?

In 2014, the Governor, through the Executive Office for Administration and Finance (A&F), established a 5-year Capital Investment Plan that covers the broad spectrum of investment categories to be funded through the sale of bonds.  These include housing, economic development, transportation, health and human services, energy and environment- to name a few.  From this plan, the Administration sets spending limits (bond caps) for the current fiscal year for each of these categories.  Therefore, in any given year, the amount of the bond cap for housing is a function of two determinations by the Governor: first, the overall amount of funds that the State spends in the capital budget, and second, the relative share of that amount to be spent on housing.  Within the caps established by the Housing Bond Bill, the amount of the housing bond cap is totally within the Governor’s sole discretion.

How has housing fared over the years in the capital budget?  Well, in fiscal year 2007 (the year that started July 1, 2006), then-Governor Romney’s last capital budget set the housing capital budget at $147 million.  Since then, in the capital budgets established by Governor Patrick, we have seen an increase, to where the housing capital budget (for fiscal year 2015) currently stands at $190.5 million, an increase of just under 30% over 8 years.

Of course, the dollars are spent on specific programs that allow important housing projects to go forward, which is why we ask for more money. (Massachusetts FY 2015 Housing Capital Budget)  The Affordable Housing Trust Fund, the Housing Stabilization Fund, and the Housing Innovations Fund help address the pipeline of affordable rental and homeownership development proposals that are forced to wait too long, often several years, for commitments of state resources.  The Facilities Consolidation Fund and the Community Based Housing Program expand housing choice for persons with disabilities.  The demand for funds under these, and other, programs far exceeds their supply.  Furthermore, the State dollars awarded leverage tens of millions of federal dollars from low-income housing tax credits and other programs, and locally-allocated dollars as well.  This is why each year MACDC, and our allies, advocate with the Governor for more money in the Housing Capital Budget.

There is one thing we know about Governor-Elect Baker, from his role in a prior administration as the Secretary of Administration and Finance.  He knows that when it comes to programs to fund affordable housing development, the capital budget is the key.  And so do we.

On a warm, sunny morning in late September, approximately 35 people gathered to celebrate the Open House for Westhampton Woods, Phase II, a 8-unit affordable housing development for seniors in the hilltowns of Western Massachusetts. Sponsored by Hilltown CDC, the construction of the second phase is the culmination of a community effort that began in 2000 when local residents, organized through the Westhampton Congregational Church, approached Hilltown CDC for assistance. The success of Phase I, completed in 2005, led to development of this second phase, bringing the total number of homes on this lovely wooded site to 15.

The successful development of any affordable housing in Massachusetts is challenging. Land suitable for building can be hard to find, restrictive zoning laws can be a barrier, and sponsors must often queue up through several competitive funding rounds to access the subsidized funds required. The development of rural housing adds an additional layer of challenges and impediments, especially in a town like Westhampton, which has fewer than 2,000 residents. Municipalities typically have limited capacity, and few dollars to contribute. Rural areas lack the infrastructure (water, sewer, and roads), and the market rents in these areas tend to be lower. Rural projects tend to be smaller so that they can adhere to the rural character of the town in which they are located and because neither the community nor the market will support a large, dense development. While smaller projects can have some advantages (such as faster permitting and wood-frame construction) they lack certain economies of scale. More significantly, low income housing tax credits - the primary source of subsidizing affordable housing in MA- are simply not an available source for small projects.

Yet affordable housing is urgently needed in all communities in Massachusetts, including rural communities. Rural communities face a range of housing challenges from decreasing and aging populations, an aging housing stock and, in some regions, high demand pressures from second home buyers. Incomes in rural areas tend to be lower, exacerbated by limited or no access to public transportation and few employment opportunities, and rental housing in some communities is almost nonexistent.

MACDC has joined an effort initiated by the Massachusetts Housing Partnership (MHP), a quasi-public agency, to take on the challenges associated with rural housing in Massachusetts. MHP has brought together CDCs and other nonprofit organizations, State agencies, regional planning agencies, and local officials to identify and advocate for strategies to address these challenges. We expect recommendations to be forthcoming this fall, to the incoming Governor and to the MA Department of Housing and Community Development (DHCD).

Despite the challenges, we gathered to celebrate Westhampton Woods. This was especially exciting for me, as I was the Housing Director at Hilltown CDC in 2000 when the residents approached the CDC and asked for help in developing senior housing. I can vividly recall those early meetings in the Church basement, where all we had was the “who” (local volunteers and a responsive CDC), the “what” (senior housing), and the “why” (seniors who could no longer maintain their homes had nowhere in town to go), but no idea of the how and the where and the when. On this bright September day almost 15 years later, at 13 Main Road in Westhampton, those questions were answered.

The challenge facing the Commonwealth of Massachusetts now is to provide a path to answering these questions for more rural residents. At the Westhampton Open House, DHCD Undersecretary Aaron Gornstein noted the importance of housing options for seniors, and pledged DHCD’s support for smaller-scale rental projects. Rita Farrell from MHP added that this was a model they would like to see replicated in many rural communities. When support from State agencies is combined with resident initiative and a capable nonprofit developer, our Commonwealth has the potential for many more celebrations like the one in Westhampton.

Massachusetts Governor Deval Patrick released his capital budget for Fiscal Year 2015, and the Housing Capital Budget is increased by $11 million over the FY14 amount, now totalling just over $190.5 million. The capital budget for privately-produced housing (not including public housing) is now at just over $100 million, the first time it has reached this milestone in the eight years of the Patrick Administration. This is good news!  

For FY15, there are significant increases for the Housing Stabilization Fund, the Housing Innovations Fund, the Facilities Consolidation Fund, and the Home Modification Fund. MACDC, in collaboration with CHAPA and our allies in The Building Blocks Coalition, have long advocated for an increase in the Capital Budget and we are very pleased to see such a significant increase this year. It will directly result in the production of more housing for families who desperately need it.

Click here for a spreadsheet with the detail of the FY15 budget, along with a comparison of how the housing capital budget has varied over the past eight years.

The MACDC GOALs Initiative highlights the annual achievements of our members in six categories of community development. Results are aggregated from a comprehensive annual, web-based survey, in order to record significant trends and accomplishments over time.

Preliminary Results for 2013:

• Engaged 2,602 community leaders in building stronger neighborhoods
• Built or preserved 849 homes, with an additional 728 homes in construction and slated for completion in 2014
• Created or preserved 4,755 jobs
• Helped 1,165 entrepreneurs start, grow, or stabilize their businesses
• Supported 54,380 families with housing, jobs, and other services
• Attracted almost $420 million worth of private and public investments for community revitalization

Check our GOALs page for more information about the program and data from prior year's reports.

On March 25th in Haverhill, MACDC attended Governor Patrick’s announcement of over $25 million in awards to fund the creation of 335 new units of supportive housing. With these units, the Administration exceeded its goal of creating 1,000 units of permanent, supportive housing, one year ahead of schedule.
 
MACDC Members were at center stage, literally and figuratively.  Madeline Nash, Director of Real Estate at Coalition for a Better Acre, spoke eloquently about Haverhill Veterans Housing, which will provide 27 homes for veterans and their families.  Overall, of the 16 awards made by the MA Department of Housing and Community Development (DHCD), 11 went to 9 MACDC Member organizations.  In addition to Coalition for a Better Acre, members receiving awards included Viet Aid, The Neighborhood Developers, Domus, Inc., Common Ground Development Corporation/Community Teamwork, Inc., Caritas Communities, Father Bill’s & Mainspring, Pine Street Inn, and South Middlesex Opportunity Council.

With project based rental assistance to ensure affordability and additional funding for supportive services, the Commonwealth has taken a bold step to address homelessness.  MACDC is grateful to Governor Patrick, DHCD Undersecretary Aaron Gornstein, and other State officials for their support for these much-needed projects.

For more information, go to DHCD's press release.

On February 9, 2012, the Federal Government and Attorneys General from 49 States reached an agreement with the five largest mortgage servicers for $25 billion in payments to resolve violations of state and federal law and to implement comprehensive new mortgage loan servicing standards.  The five servicers are Ally Financial, Inc. (formerly GMAC), Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo.

After much deliberation, Massachusetts Attorney General Martha Coakley decided to join the national settlement, so the Commonwealth will receive its $46.5 million share of payments to the states to be distributed by the States’ attorney generals to “foreclosure relief and housing programs, including housing counseling, legal assistance, foreclosure prevention hotlines, foreclosure mediation, and community blight remediation.”

Here’s why the Attorney General’s decision to join the national settlement is, on balance, a good decision for Massachusetts:

The foreclosure crisis shows no signs of abating. Foreclosure petitions were 67 percent higher in September than they were in May.  The Massachusetts Housing Partnership’s Foreclosure Monitor's assessment of real estate data and economic trends indicates that foreclosures in Massachusetts will increase, there are still thousands of properties in the foreclosure pipeline, and we will not likely see a full real estate recovery until 2014 or later.  In this context, getting help to homeowners now is vital.

Resources to address the foreclosure crisis are drying up.  In response to the crisis, Massachusetts has made resources available for foreclosure prevention and for the redevelopment of foreclosed properties.  The MA Division of Banks continues to make annual awards for foreclosure prevention counseling under Chapter 206 of the 2007 law that MACDC was instrumental in passing.  However, as the mortgage licensing fees that fund these grants have declined, so have the awards: from $2 million in 2008 to $1 million in 2011.  The primary funding source for redeveloping foreclosed properties, the federal Neighborhood Stabilization (NSP) Program, which has been used to purchase and rehabilitate over 1,300 units statewide, is completely spent.  We need the resources generated by this settlement and we need them now.

Massachusetts is more likely to gain from the national settlement than from going it alone.  Under the national settlement, in addition to the $46.5 million going directly to the state for various programs, Massachusetts homeowners will receive $224 million in loan modifications and other direct relief and $32.7 million in refinancing of underwater homes.  Borrowers who lost their homes and suffered servicer abuse will gain $14.7 million.  Furthermore, the five banks agreed to implement unprecedented changes in how they service mortgage loans, handle foreclosure, and ensure the accuracy of information. Not everyone likes the Agreement; some take the attorneys general to task for not holding out for a better settlement.  It’s true that Attorney General Coakley could have conceivably obtained more resources for MA by declining to join the national settlement, but this is by no means certain, and what is certain is that the resources would be longer in coming.  Plus, this settlement does not preclude federal and state pursuit of further criminal enforcement actions.  Given the options and uncertainties, I believe that the Attorney General made the right decision for Massachusetts.

To ensure that the resources best address the foreclosure crisis in Massachusetts, MACDC and its allies need to engage, advocate and negotiate with the Attorney General on behalf of the families and communities most impacted by the ongoing crisis.  We need to be aggressive in speaking out about the uses for the $46.5 million, when the money flows, and how it is spent.  Our task is just beginning.

On December 18th, CBS’ 60 Minutes broadcast a story entitled There Goes the Neighborhood about the impact of abandoned properties due to foreclosures and declining home values.  The piece focuses on Cleveland, Ohio where Cuyahoga County officials have demolished more than 1,000 homes this year - and plan to demolish 20,000 more - rather than let the blight spread and render nearby homes near worthless.

Although I grew up just outside of Cleveland, I’ve lived away long enough to appreciate that I am in no position to make an informed judgment about whether the decision to demolish these homes is in the interest of Cleveland’s citizens.  I know that the market context in Cleveland is very different than in Boston, and perhaps the neighborhood is served by demolishing vacant homes before they become vandalized and blighted, or worse.  Deeding the resultant vacant lots over to abutters for open space or community gardens may well help stabilize the value of surrounding properties.

However, there is something so sad that all these homes, many of them sound structures, are being demolished, especially when so many people in Cleveland don’t have a decent home.  Beyond that, I believe that aggressive demolition as a defensive response to homes becoming vacant represents a failure in public policy nationwide.  We, as citizens, are collectively responsible for this failure.

First, stable homeownership requires appropriate financing, and we failed to provide the necessary oversight and regulation of the lenders, brokers and appraisers who knowingly sold predatory loan products to families who could not afford them.  Second, when homeowners got into trouble, whether due to the loan products they bought or the economic calamities they faced, they appealed to lenders who too often refused to modify loans to payment levels borrowers could afford and adjust principal amounts to reflect a home’s current value.  We have failed to enact laws that can require lenders to negotiate in good faith with borrowers, and to enact federal bankruptcy reform that will allow homeowners to restructure their debts.

Third, when foreclosure occurred, we failed to protect the residents, both renters and owners, from being evicted.  Fourth, we failed to enforce building codes to require the foreclosing lender to better maintain the properties they acquire after foreclosure (or control prior to foreclosure).  And fifth, we failed to provide the funding and technical assistance so that nonprofit organizations and individual homebuyers can acquire, renovate, and maintain foreclosed properties so they become an asset to rather than a blight on the neighborhood.

By the time the City of Cleveland, or any other City, is faced with the option of leaving a vacant home to deteriorate or demolishing the home before it deteriorates, we have already lost five opportunities to intervene.  Unless we are assured that there is sufficient quality, affordable housing to meet everyone’s needs- and I don’t know of a place where we can have that assurance- demolishing homes rather than preserving and improving them represents a fundamental failure in public policy: in laws and regulations, in code enforcement, in resources, and in political will.  The public tools are there if we choose to prioritize them.