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The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Archive for the category “rental housing”

Evictions

There are major new research efforts ongoing that focus on evictions. I see this becoming the next social justice issue. Some people claim the volume of evictions is greater than ever. I don’t know how that claim can be made.

Evictions are bad for both the tenant and landlord. Focusing on eviction as the problem would be like focusing on stopping death or some terrible illness. Most evictions are justified. The problem is poverty and poor life choices rather than focusing on some mechanical solution to evictions like mediation etc. By the time a case gets to eviction it is a lost cause.

Poverty plays a major role in evictions but not always the way one would think. If poverty was the sole cause, public housing where tenants pay almost no rent would have a lower rate of eviction. In fact the rate is higher. Families that are traumatized, poor, and who make poor choices have the greatest chance of losing their unit. Anything that creates restrictions for landlords will simply drive up the rent for other tenants. Written by Paul Dribin

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Effect of Changes to Tax Law on Affordable Housing in St. Louis

The new tax law certainly is controversial and I am certainly not qualified to offer a detailed analysis. One area that I am knowledgeable about are Low Income Housing Tax Credits (LIHTC). This is the main program for developing affordable housing in the United States.

The new tax law would have a detrimental effect on LIHTC which relies on selling tax credits to corporate entities and using the proceeds of those sales as equity for the construction and rehabilitation of affordable housing. Since the new law significantly lowers corporate taxes, it will also lower what corporations are willing to pay for tax credits, thereby making affordable housing more difficult to complete. Missouri suffers a double whammy with the elimination of the State of Missouri Affordable Housing Tax Credit by Governor Greitens and the MHDC board. This with the addition of potential cuts in the Missouri Historic Tax Credits will have dire effects on the City of St. Louis. Written by Paul Dribin

St Louis Affordable Housing Trust Fund

Through the vision of longtime affordable housing advocate Janet Becker, the City of St. Louis has an Affordable Housing Trust Fund. The fund is filled as a percentage of out of state real estate transfer taxes and varies each year. Much good work has been accomplished through the use of this fund, but there are at least 2 problems.

The first problem is that the city has skimmed money off the top for other purposes. That is clearly illegal, but no one has seen fit to challenge it. The statute was clearly passed with the intention of all the funds being used for affordable housing.

Second, like many organizations in Missouri, the decision making process involving the funds is murky. I know of a small non profit who was not funded, and the Executive Director of the fund would not discuss the reasons for non acceptance. This is a clear violation of administrative due process.

The St. Louis Affordable Housing Trust Fund is a great idea. It needs to make some changes to fully live up to its’ mission. Written by Paul Dribin

HUD Failure

This story is not specifically about St. Louis, it is about a failure of HUD that would effect all communities.

I have represented a HUD insured Section 8 project in another part of the country. Their 20 year Section 8 contract is due to expire. HUD requires an analysis called Mark to Market which requires analyzing the rent structure, usually adjusting the rents down and lowering the mortgage. It requires a rent comparability study which is like an appraisal.

HUD used poor comparables in their analysis resulting in the rents being lowered for the project. They used old comperables from when the market was low. I was hired to help appeal to HUD. We lost. As a result the project owners are opting out of affordable housing and turning their project into conventional housing at higher rents.

So HUD’s error which they refused to acknowledge has caused the loss of 62 affordable housing units. This is ironic considering their mission is to preserve it. Something tells me that my situation is not unique. Written by Paul Dribin

Development Subsidies in St. Louis

I attended a neighborhood housing board meeting in one of the neighborhoods of St. Louis recently. The group discussed a rehab job on a vacant house that will cost in the neighborhood of $250,000 to rehab and then sell for $120000. Development subsides will cover the gap.

This process makes no sense to me. I see the need for development subsidies in communities that are comprehensively redeveloping their housing stock and do not yet have housing values to break even in the process. These subsides should be limited to a reasonable percentage of the ultimate value. In the case I cited the subsidy of $13000 is more than the value of the property. This is crazy and it has been done thousands of times in St. Louis. Instead of comprehensive rehabilitation, aldermen or community activists pick out a property to rehab which has not overall effect on improving the community. Someone needs to take a good look at the whole process. Milwaukee where I previously lived and worked required that any housing with rehab costs higher than the end value be demolished. Written by Paul Dribin

Greitens and MHDC Board Vote to Eliminate State Low Income Housing Tax Credits

The MHDC board met Friday and voted to eliminate the state credits. This will result in a significant loss of affordable housing in Missouri which is a tragedy. Reforms needed to be made in the program, but I don’t think Greitens is really interested in reform, simply grandstanding. Nevertheless, a big part of the reason the program was eliminated was the greed of the industry supported by the credits. MHDC never had an open application process with clear standards for judging and eliminating applications. The board made of high level political appointees was subject to legal and illegal graft. The program was run as a political fiefdom and returned far too little of the funds to actual low income recipients.

Still the program should not have been eliminated unless something better was around with which to replace it. As always low income people are the ones who suffer the most. Written by Paul Dribin

Housing and Schools

One of the biggest barriers thrown up against the construction of affordable housing, or housing in general, is that the increased number of children will negatively impact the schools. This is often a code for more racist beliefs. In any case, I am supplying an article from Shelterforce Weekly which quotes a study that disputes that notion. Like the author, I am skeptical that facts will change anyone’s mind.

BlogHousing

Adding Housing Doesn’t Overcrowd Schools

Miriam Axel-Lute

November 30, 2017

‘Monopoly’ by Rodrigo Tejeda, via flickr, CC BY-NC-ND 2.0

Only a few things in life are certain: Death, Republicans trying to cut taxes on the wealthy, and the fact that people opposing new housing development will bring up the possibility of overcrowding the local school system.

The fears trotted out in the face of proposed affordable housing developments rarely come to pass. One of our most popular articles describes how the claims made about four specific developments were evaluated after they were built and found to have either not happened, or happened to a much smaller extent than feared. “Many of the common fears about affordable housing are either overstated or simply wrong,” that article concluded, but it called for more systematic study.

The Metropolitan Area Planning Council has delivered with a study that examines the relationship of new housing development and school enrollment in 234 public school districts across Massachusetts. It found they are not correlated at all:

We find that the conventional wisdom that links housing production with inevitable enrollment growth no longer holds true. At the district level, we observe no meaningful correlation between housing production rates and enrollment growth over a six-year period. While it is true that schoolchildren occupying new housing units may cause a marginal change in enrollment, they are one small factor among many. In cities and towns with the most rapid housing production, enrollment barely budged; and most districts with the largest student increases saw very little housing unit change.

There are too many other factors, including changing demographics and bidding up of prices in desirable school systems, that are affecting enrollment numbers. Housing production just isn’t registering.

Is Evidence Enough?

This is good news for housing advocates. Who wouldn’t want an evidence-based rebuttal to NIMBY fears (or what they claim to fear when what they actually fear is not acceptable to admit in public)?

However, I have my own fear. The idea of “more housing units will equal more students” has such an intuitive logic to it (after all, families with children who will go to the public schools could move in), and confirmation bias is very strong. I therefore worry that this will be one of those cases where trying to win a point merely by presenting contradictory evidence might just cause people to dig in their heels. Of course, hopefully decision makers will be more open to evidence than those who are trying to influence the decision makers, but that’s not a guarantee.

It seems to me like this study probably shouldn’t be trotted out during particular permitting fights without being paired with the details of the situation of a particular school system and its capacity, and the particular housing market. For example, is more school enrollment even actually a bad thing? (Many suburbs are seeing marked declines in enrollment, says the MAPC study.)

This is probably also a really good time to review best practices for engaging in high-conflict conversations—leading with values statements, using language that brings people in rather than reinforcing their ideas, shifting the overall narrative.

Here’s hoping that used carefully, these fascinating findings can help smooth the way for more housing where it is needed.

The Benefits of Good and Affordable Housing to a Community

Here is an article copied from Why Housing Matters. It is a very comprehensive statement of the importance of housing to other endeavors such as health and education. It is well worth taking a look at. The data was originally gathered by the MacArthur Foundation. Written by Paul Drib in

Why Educators, Health Professionals, and Others Focused on Economic Mobility Should Care about Housing

November 30, 2017

Cities striving to improve residents’ lives often focus on such issues as schools, parks, jobs, or health. Often overlooked is something equally fundamental. Trace the lineage of many social welfare issues, and you will likely uncover a history of substandard, unaffordable housing. Research increasingly shows that safe and affordable housing in strong and thriving neighborhoods is a launching pad to upward mobility for families.

For more than a decade, the John D. and Catherine T. MacArthur Foundation has supported research on the role of housing as a platform for opportunity among families. The following summary of findings from more than 20 studies shows that housing shapes our lives in critical and long-lasting ways. Through this and other work, our understanding has expanded, providing greater nuance and insight into the pathways through which housing makes a difference in people’s lives and in communities. These pathways include housing stability, affordability, quality, and location.

The findings are organized for educators, health professionals, and economic development experts who regularly see the direct impact of poor-quality, unaffordable housing but who may not realize housing’s role in those outcomes.

Why educators should care about housing

Safe, stable, and affordable housing during childhood sets the stage for success in school. Children are profoundly affected by their environments during key developmental stages. Chaos in their neighborhood, frequent moves, exposure to pollutants, and unhealthy conditions leave a deep and lasting imprint. When housing consumes too much of a household’s budget, kids may not have enough nutritious food to eat to be ready to learn. Teachers see the ramifications of these conditions in the classroom.

MacArthur Foundation-supported research shows the following:

1 Adolescents living in poor-quality housing have lower math and reading scores and lower math skills in standardized achievement tests, even after adjusting for parenting and other factors.

2 Among young children in high-poverty neighborhoods, substandard housing is the strongest predictor among several housing-related conditions of behavioral or emotional problems.

3 Improving housing stability has long-term benefits for children. Any residential move during childhood is associated with a nearly half-a-year loss in school. Each additional move is associated with small declines in social skills. A majority of US children move at least once during childhood, and a sizable group moves three or more times. The negative effects, however, fade with time.

4 Moving three or more times in childhood is associated with lower earnings, fewer work hours, and less educational attainment later in life.

5 Between ages 6 and 10 is a particularly sensitive time to move. At that age, any move, voluntary or not, is linked to lower educational attainment and lower earnings later in life. (See here for results at other ages.)

6 Families who spend 30 percent of their household income on rent spend more on child enrichment than those who spend either more or less than that on rent.

7 Homelessness is linked to behavioral problems in children, though it is relatively rare and often a one-time experience.

8 Too few families can move to high-performing neighborhood schools, even with housing vouchers to help with rent. One-third of public housing families and one-fourth of families using housing vouchers live near schools that are ranked in the bottom 10th in their state.

9 The Low-Income Housing Tax Credit (LIHTC) does better than housing vouchers in placing families near high-performing schools, though the LIHTC serves slightly better–off families.

Why health care professionals should care about housing

Both neighborhood and health disparities are stark in the United States. One’s zip code is as important as one’s genetic code in determining health status or life expectancy. The disparities are linked because where you live offers access to what makes you healthy or unhealthy, from housing without lead or asthma triggers to grocery stores with fresh vegetables, to parks and sidewalks, and access to jobs. Physicians, nurses, and public health experts recognize this, and they are doing more to ensure that the residents they serve live in homes and neighborhoods that promote their health and well-being.

MacArthur Foundation-supported research shows the following:

1 Substandard housing contributed to children’s poor health at age 6 and developmental delays by age 2. (For insights on why, see here.)

2 Housing affects mothers’ health. Poor housing conditions and overcrowding (even just perceived overcrowding) are associated with more depression and hostility among Latino mothers in the Bronx.

3 Moving to low-poverty neighborhoods can improve physical and mental health for adults, including decreased diabetes and obesity.

4 Neighborhood pollution has clear health consequences. Reducing prenatal exposure to pollutants from traffic congestion alone could mean 8,600 fewer preterm births annually, for an annual savings of at least $444 million.

5 Among Latinos living in public housing in the Bronx, the prevalence of cardiovascular disease is significantly higher than for either Section 8 voucher holders or low-income Latinos in general. Nationwide, public housing residents tend to live in poorer neighborhoods than do voucher holders.

6 Neighborhood social cohesion reduces the risk of depression or hostility among low-income Latinos in New York City.

7 About 10 percent of low-income children in a nationally representative survey of urban families were homeless at one point in their childhoods. These children relied more on emergency rooms for health care and had more behavioral problems.

8 Housing for homeless families and rental assistance for food-insecure families improves health outcomes of vulnerable children and lowers health care spending.

Why people focused on ensuring greater economic security and mobility should care about housing

Housing is a launching pad to successful lives. High-quality housing in strong neighborhoods positions residents to capitalize on opportunities. And investing in communities reaps benefits beyond the neighborhood in lower social, health, and economic costs for the city and region. Cities nationwide are working to reverse entrenched poverty and providing needed opportunities for all residents. The findings below demonstrate the connection between housing, neighborhood, and upward mobility.

MacArthur Foundation-supported research shows the following:

1 Improving neighborhood social cohesion and access to jobs and reducing environmental hazards have a strong effect on health, earnings, and well-being.

2 Housing affordability and stability encourage work. Families using housing vouchers were working more consistently after five years than similar low-income families without vouchers.

3 Policies that focus on moving families to better neighborhoods are not enough to address every problem related to poverty. Families need additional supports to overcome their circumstances.

4 Siblings who lived in public housing as teenagers fared better than their siblings who spent less time in public housing. They earned more as young adults and were less likely to be incarcerated. More room in family budgets to invest in children may be one reason for the better results.

5 Improving housing stability for children has long-term benefits. Moving three or more times in childhood—especially between ages 6 and 10—lowered later earnings nearly 52 percent.

6 In Milwaukee, Wisconsin, 16 households are evicted every day. Poor, black women are especially vulnerable. Evictions disrupt children’s schooling and perpetuate economic disadvantage.

7 Racial segregation and a tight rental market constrain housing choice for low-income families and may be one reason voucher holders live near lower-performing schools.

8 Inclusionary zoning policies expand access to more economically diverse neighborhoods and better-performing schools, though inclusionary zoning is only a small slice of the affordable housing pie.

9 For low-income seniors, reverse mortgages can be a lifeline. The most effective strategy to reduce default rates is escrowing funds for property tax and insurance payments for borrowers with low FICO credit scores.

These findings underscore the need to invest in healthy, affordable housing for all Americans. Opportunities are shaped by a person’s housing, neighborhood, and environment. Policies that address housing and neighborhood’s role in creating and sustaining opportunities or disadvantage may be one of the most effective ways to fight poverty and promote upward economic mobility.

This article was originally published on the MacArthur Foundation’s website, and has been reproduced in a modestly modified form with permission from the Foundation.

More About Housing Tax Credits

Much is being written and discussed about the Governor’s decision to terminate Missouri State Affordable Housing Tax Credits. The loss of these credits will make affordable housing difficult to do and adversely affect a certain category of poor person. I am not in favor of eliminating these credits simply because there is really nothing else to work with in the affordable housing arena.

Nevertheless, the greed of some members of the affordable housing industry made this decision by the Governor inevitable. There are many developers, syndicators, attorneys, and consultants who have gotten rich off the program. Too much of a dollar of tax credits does not go for actual housing expenses. Many in the industry do not really care about poor people.

In addition, the Low Income Housing Tax Credit Program is both inefficient and ineffective. Inefficient for the reasons cited above plus a hugely complicated program. Ineffective because the program does not house poor people who need it the most. Tenants still must pay a $400-$600 monthly rent. Homeless people need not apply.

If the traditional public housing program was allowed the same per unit expenditures and site location it would have been a more efficient and effective housing program. Unfortunately, anything that smacks of public involvement is frowned upon these days. Written by Paul Dribin

Great Groups in St. Louis

This blog tends to focus on the problems going on in St. Louis. Today I want to write about organizations doing really positive work to improve the community and the lives of people. Here are the groups:

1. Beyond Housing- This organization led by a brilliant and dynamic President, Chris Krehmeyer is doing amazing work. They are most active in the area around the Normandy School District doing total community development though the 24:1 program. Efforts include housing, a movie theatre, health facilities, a bank, matching funds for college and many other program. This organization goes about community development the right way.

2.Better Family Life-This organization located in north St. Louis is focused on housing, financial literacy, credit building, and housing counseling. They are the only community based organization I know that is attempting to resolve the violence on the streets of North St. Louis.

3. DeSales Housing Development Corporation- This organization has been successful for years in developing and rehabilitating housing in the Benton Park area and providing a wholistic approach to community development.

4. Rise- This non profit has worked for years to build and rehabilitate affordable housing throughout St. Louis and to provide support and technical assistance to non profits.

5. Justine Petersen Housing Corporation- This organization provides micro loans to small businesses, credit counseling, and provides sources of financing and saving to people who do not have a regular relationship with a bank or poor credit.

6. St. Louis City Acadamy- This private school provides a world class education to mostly low income African American students in the City of St. Louis. All the students receive scholarships.

7. Hawthorn Leadership School for Girls- This charter school led by Mary Stillman provides STEM education to girls regardless of economic background. They have now begun their high school program.

8, Boys Hope/Girls Hope- BHGH provides a 24 hour living environment and education to academically strong students from a difficult background who would benefit from a change in living conditions. The scholars are provided with 24:7 support, attend regular high schools, and most of them go to and succeed in college.

I am sure there are other worthy organizations but these are the ones for which I am familiar. Written by Paul Dribin

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