Housing crisis: Attention refocuses on aiding families, neighborhoods

By David Pendered

Editor’s Note: This story has been updated to note that Congress created NeighborWorks America.

Nearly six years after the official end of the Great Recession, a lot of work remains to be done in metro Atlanta to help families recover what for many is their greatest source of wealth – home values.

Buckhead interior

Home prices in Buckhead have traditionally led the region in housing value recovery. This house on Blackland Road is for sale and priced at $14.2 million; Fulton County assessed its value at $3.5 million. Credit: http://buyandsellatl.idxre.com

A central challenge policymakers face is the uneven nature of the recovery in home values that has occurred across the region.

“Housing is very local – block by block, street by street – but there also are some systemic issues,” said John O’Callaghan, president and CEO of Atlanta Neighborhood Development Partnership. “We have to look at systemic changes to provide a quilt of solutions, because no one bullet is going to cure it.”

Georgia Tech Professor Dan Immergluck released a report in October that identifies the recovery issue in metro Atlanta.

In parts of Buckhead and Brookhaven, values are up by as much as 71 percent since January 2001. By contrast, values are down by as much as 47 percent in central DeKalb County, south Atlanta, most of Clayton and parts of Henry County, according to Immergluck’s research.

These stats indicate the market is repairing values in more affluent neighborhoods.

Neighborhoods that remain underwater, those with negative equity, may benefit from policy changes that could provide the liftoff needed to reach the point where the market could take over. Otherwise, lenders aren’t likely to provide loans in areas that appear stagnant and the result with be more stagnation, according to Immergluck’s report.

Immergluck: Uneven housing market

The recovery of home values in metro Atlanta is significantly greater in the northern region. This reality adds to the complexity of policies that could promote more equitable equity gains across the region. File/Credit: Dan Immergluck

There’s an uptick in discussion about the state of the housing recovery in metro Atlanta.

The Atlanta Regional Commission produced a report in February that updated an array of data related to housing costs, including the cost of transportation, which places Atlanta below the 50 percent mark. The city of Atlanta released a five-year plan last month that suggests a number of policies aimed at spurring $100 million in new residential investments and raising the city’s population by 42,000 residents.

Civic leaders are slated to gather March 17 to discuss various types of housing policies. The program titled, “Underwater Atlanta: Addressing Negative Equity in Our Region,” is convened by Piece by Piece: A Regional Foreclosure Response Initiative.

The keynote speaker, Paul Weech, serves as president/CEO of a non-profit corporation created by Congress in 1978. NeighborWorks America funds and monitors more than 230 agencies to fulfill a mission to, “Promote reinvestment in urban, suburban and rural communities by local financial institutions working cooperatively with residents and local government,” according to a description posted on a website of the U.S. Department of Housing and Urban Development.

“One of the benefits of the ‘Underwater’ conference is to remind ourselves … that this is a priority and impacts not only residents of those areas, but also the counties’ property tax collections, buying power of these families, and business starts [often funded by home equity]. It’s an issue that impacts everyone in the region,” O’Callaghan said.

Paul Weech

Paul Weech

The forum also will serve as a grim reminder that metro Atlanta is tied for first place for the proportion of underwater homes.

In metro Atlanta and Las Vegas, 35 percent of home mortgages are underwater, according to a 2014 report by the Haas Institute for a Fair and Inclusive Society, at the University of California, Berkeley.

O’Callaghan highlighted several policies that are already being implemented, or in the pipeline, that intend to address affordable housing. They include:

  • Georgia has a program to prevent foreclosure. The Georgia Mortgage Assistance Program was funded with federal stimulus dollars and helps homeowners facing foreclosure because they are unemployed or underemployed, or delinquent on their mortgage because of a prior job loss. The goal is to make sure the state spends the entire allotment of federal funds.
  • Another state program funded with stimulus dollars created a tax credit related to the construction of affordable housing. Most of the credits have been repaid, and the goal is reinvest it in housing aimed at households earning 80 percent or less of median area income.
  • The Urban Land Institute of Atlanta is conducting research on the results of an ANDP program that raised the value of homes it rehabilitated in Douglas County. The goal is to determine the extent to which those sales can be used to leverage an increase in the value of other homes in the neighborhood, in order to help the other homeowners recover wealth and attract buyers.
  • The Federal Housing Finance Agency has started a pilot program in Chicago and Detroit that provides special provisions for not-for-profit agencies to acquire bank-owned homes and other notes. The goal is for FHFA to expand the program in metro Atlanta, specifically targeting those underwater neighborhoods in south Atlanta and the southern suburbs.
  • The Federal Housing Administration has lowered the rate for mortgage insurance. The reduction, a half-percent, has the impact of reducing the rate on a mortgage by 10 percent.
  • Fannie Mae and Freddie Mac, two leading sources of equity for homebuyers, are offering loans that require 3 percent downpayment. Buyers must have good credit and agree to work with a counseling agency to be a responsible homeowner.

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

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