NEIGHBORHOODS STATEWIDE A Report of the Maryland Sustainable Growth - - PowerPoint PPT Presentation

HOMEOWNERSHIP FOR STRONGER NEIGHBORHOODS STATEWIDE

A Report of the Maryland Sustainable Growth Commission’s Neighborhood Stabilization & Homeownership Workgroup

January 26, 2015

Request from Speaker Busch

March 19, 2014 letter requested that the Commission convene a broad group of stakeholders to: “…study the impact of the financial crisis on historically

• wner-occupied neighborhoods and to identify

resources and strategies and recommendations to preserve the stability of historically owner-occupied neighborhoods and promote homeownership in these neighborhoods.”

NSHO Workgroup Members

Co-Chairs: Clarence Snuggs, former DHCD Acting Secretary

• Hon. Steve Lafferty, Delegate Maryland General

Assembly Members: 18 leaders from real estate, lending, nonprofit and for profit development, and legal communities and the public sector, representing a rural, suburban and urban balance.

Core Underlying Drivers

• Homeownership is a critical tool for stabilizing and

revitalizing neighborhoods

• Homeownership is not for everyone, but where

sustainable, it is an important asset building vehicle

• The Great Recession and housing downturn set back

prior gains in equity and homeownership

• Recovery is occurring but is uneven across Maryland

NSHO Workgroup Process

August through December 2015:

• Six Workgroup meetings
• One sub-group focused on national regulatory and
• ther issues external to Maryland
• Four focus group meetings with real estate agents,

lenders, housing counselors, housing developers and public sector housing leaders

• Research on housing trends from 2000 to 2013
• Review of current tools available in DHCD tool box
• Review of Best Practices in MD and beyond

Research Highlights:

• Homeownership still

matters.

• Even with the housing

bubble and subsequent downturn, homeowners on build more assets than those households that rent.

Research Highlights:

• Homeownership rates are

gradually returning to pre- bubble levels. Source: The Reinvestment Fund (TRF), Owner

• ccupancy rate changes from

2000 to 2013.

67.7% 69.9% 68.6% 66.5% 72.3% 74.4% 73.6% 71.7% 70.5% 71.7% 70.5% 68.9% 65.9% 67.3% 65.9% 63.5% 58.0% 60.0% 62.0% 64.0% 66.0% 68.0% 70.0% 72.0% 74.0% 76.0% 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013

Owner Occupancy Rate, 2000-2013

Maryland Delaware Pennsylvania United States

Research Highlights:

• Median sales prices as of

2013 have climbed to slightly higher than 2000.

• Houses in lower-priced

markets have not seen the same level of price “regain”

• f the middle- and higher-

priced markets.

• Lower-priced markets are

home to larger concentrations of lower- income and minority households Source: TRF , Changes in median home sales prices from 2001 to 2013, across lower-, middle- and higher-priced housing markets.

$126,875 $166,255 $197,268 $273,381 $254,199 $215,634 $174,276 $178,500 $231,837 $259,388 $301,220 $361,565 $454,533 $440,916 $346,047 $308,968 $316,158 $438,957 $511,010 $585,874 $706,546 $631,074 $552,515 $508,125 $516,145 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Average Tract Median Sales Price (2013 Dollars)

Lower-Priced Markets Middle-Priced Markets State of Maryland Higher-Priced Markets

Research Highlights:

• Foreclosure is still a factor

in Maryland.

• Inventory of older defaulted

loans is making its way through the foreclosure process, but is lower than 2012 peak. Source: TRF , Changes in inventory of loans in foreclosure, 2006 through 2014.

1.55 2.94 3.39 3.85 3.33 2.71 4.29 2.83 0.46 1.60 3.04 4.02 3.22 4.93 4.22 3.96 3.48 3.36 1.05 3.85 4.63 4.27 2.39

0.0 1.0 2.0 3.0 4.0 5.0 6.0 Percent of All Loans (NSA) Year / Quarter

Inventory of Loans in Foreclosure by Quarter, 2006 (Q3) - 2014 (Q3)

PA DE MD US

Research Highlights:

• FHA insured loans are a

significant share of the market in urbanized areas, especially in Census tracts with higher-owner

• ccupancy but lower than

median home values.

• Recent announcement by

Obama Administration to lower FHA fees may be of assistance. Source: TRF , Trends in average percentage of FHA loans in urban Census tracts, relative to owner-occupancy and home values.

54.8% 5.9% 43.1% 58.0% 45.0% 35.9% 39.2% 29.3% 1.4% 32.9% 24.3% 20.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 2006 2007 2008 2009 2010 2011 2012 2013

Average Tract Percent FHA Loans - Urban Tracts

3.00 Urban, Low Ownocc, Low Value 6.00 Urban, High Ownocc, Low Value 9.00 Urban, Low Ownocc, High Value 12.00 Urban, High Ownocc, High Value State of Maryland

Research Highlights:

• Throughout the study

period, Maryland’s designated Sustainable Community Areas (SCAs) exhibited lower sale prices than the remainder of the state.

• Overall rise of sales prices

in SCAs was 28%, which is reasonably similar to 31% in non-designated areas. Source: TRF , Trends in median sales prices in designated Sustainable Community Areas, 2001 to 2013.

$219,473 $238,076 $273,543 $310,087 $324,333 $414,578 $401,724 $376,469 $347,832 $322,104 $300,871 $282,826 $287,057 $144,010 $159,384 $183,115 $194,767 $203,170 $278,237 $271,294 $257,576 $235,062 $218,974 $191,749 $172,751 $184,418 $204,080 $298,825 $385,917 $323,914 $259,606 $265,465 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Median Sales Price (2013 Dollars) - Sustainable Communities Designation

Not Designated Sustainable Community Sustainable Community State of Maryland

NSHO Workgroup Recommendations

Four overarching focus areas:

• Financial Tools & Partnership
• Consumer Education & Outreach
• Capacity Building
• Advocacy & Legislation

NSHO Workgroup Recommendations

Goals: Financial Tools & Partnership

#1 – Create innovative residential financing tools and incentives to encourage households, developers and lenders to investment in neighborhoods targeted for revitalization. #2 – The State should maintain and enhance its innovative “tool kit” of neighborhood revitalization programs. #3 – Expand partnerships between private-sector lenders, DHCD and

• ther stakeholders to expand innovative mortgage lending practices to

increase homeownership investment in designated Sustainable Communities.

NSHO Workgroup Recommendations

Goals: Consumer Education & Outreach

#4 – Expand access to high-quality objective financial education beginning in school and into adulthood. #5 – Expand outreach and education about state and local programs with homeownership incentives. #6 – Expand outreach to real estate agents about incentives that are available for home buying and selling in targeted revitalization areas.

NSHO Workgroup Recommendations

Goal: Capacity Building

#7 – Build the capacity of nonprofit developers and for-profit developers and their contractors to expand homeownership investment in targeted revitalization areas.

NSHO Workgroup Recommendations

Goal: Advocacy & Legislation

#8 – A policy-oriented group of stakeholders from the public and private sector should meet regularly to determine how they might advocate jointly for issues that encourage homeownership and neighborhood stability

NSHO Workgroup Recommendations

Potential Legislation:

• Increased flexibility for DHCD to utilize its mortgage lending and

downpayment assistance programs in Sustainable Community (SC) areas

• Enhancement of the Neighborhood Conservation Act of 2012 to include a

state incentives to match local property tax incentives in (SC) areas

• Requirement for financial education courses, K thru 12, in public schools

statewide

• Establishment of an ongoing advisory NSHO policy group staffed by DHCD

NSHO Workgroup Recommendations

Other priority recommendations for DHCD:

• Develop “purchase/rehab” and “rehab” lending tools to sustain and

attract homeowners with choices to areas with older housing stock.

• Utilize the Maryland Housing Fund in innovative ways to attract private

investment in homeownership and rehab in weaker markets.