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.

The New England Housing Network held its annual conference in Needham, MA yesterday and the speakers and workshops provided a tremendous amount of information and insight into the current state of affairs in Washington, DC.  

Four ideas that stood out for me:

1. It's bad - but it could get worse:  The budget situation in Washington is terrible with significut cuts on the way in FY 2012 and further cuts likely in the coming years. The Super Committee's failure to reach a deal means automatic cuts of about nine percent in FY 2013, but those cuts might actually have been worse had the Committee reached a deal.  Under the default plan, the military will aborb a much greater share of the cuts than under any other likely budget scenario.  And long term budget pressure will likely force deeper cuts in housing and community development funding, absent a broad budget deal that includes both new revenue and reductions in spending on health care.

2. Revenue, revenue, revenue :  All of the national housing advocates made it clear that housing programs, and more importantly the people those programs serve, will be hurt badly without an increase in revenue.  Housing advocates will need to speak out on the need for more tax revenue issue and not simply lobby for our own programs.

3. Housing is a platform for "care" as well as "opportunity:"  MIT Professor, Xavier Briggs, spoke at lunch about the emerging data that documents how the Moving to Opportunity program achieved dramatic outcomes for low income families in the areas of public safety, health, and mental health.  These outcomes dramatically improve the quality of life for these families and reduce the need for public expenditure in other areas, in particular health care. Briggs emphasized that these results are important, even if families did not always see a dramatic increase in their income or economic security. Briggs encouraged housing advocates to more strongly and effectively articulate the value of housing as a platform for "care" as well as "opportunity."  If we can better document how housing investments reduce the cost of health care, we may be able to win more support - and more dollars - for our agenda.  Look to hear much more about this topic in the coming months.

4. Mortgage Finance Reform is happening:  While advocates are forced to largely play defense on budget issues, and most legislation is stuck in gridlock, our national advcocates do believe that Mortgage Finance Reform will happen - probably in 2013 after the election.  This could be the biggest and best opportunity in the near future to advance progressive housing policy (and block regressive policies) so advocates should be fully engaged in this debate now as the proposals advanced in 2012 will form the basis for legislation in 2013.

To learn more about these and other issues discussed at the conference, click here.

Earlier this week, the Washington Post ran  a series of articles alleging widespread failures in the federal HOME program administered by HUD and hundreds of local and state government agencies. The articles claim that hundreds of projects have died, millions of dollars have been wasted and that HUD and local housing agencies have failed to protect the taxpayer's money.

The articles certainly uncover some distressing stories and clearly HUD and our local housing agencies need to do a better job. The story also underscores the importance of providing non profit developers with support, oversight and capacity building services - especially during challenging economic times like these.

However, the Washington Post articles do the country a dis-service by grossly exaggerating the problems and failing to put the small number of problem projects in the context of the one million homes developed by this program over the years. Even Adrian Gonzalez strikes out occassionally and we cannot expect a federal program with thousands of projects underway across the entire country to never have any problems - especially during the worst real estate market since the Great Depression.

Perhaps the most glaring error is the claim that 1 in 7 HOME projects are delayed when in fact less than 2.5% are delayed, and most of those have either been resumed or are delayed due to market conditions. This is not a minor mistake. Check out HUD's response to the Post for more factual errors in the article.

By failing to get its facts right and by failing to put the problems in the context of the overall track record of the program, Post demonstrates either laziness or a desire to create a scandal where none exists. It is unfortunate that the Post seems eager to jump on the "government is broken" bandwagon, especially when articles like this will create real harm for struggling families and communities.

MACDC staff and leaders will be joining with our NACEDA colleagues to take this message to Congress during our annual NACEDA Summit this week. Let's hope our elected representatives take the time to look at the facts and not just the headlines.