Neighborhoods of Opportunity vs. Concentrated Poverty

Poverty is closely linked to housing, not just because of the high cost, but because where you live makes all the difference. Living in a neighborhood of opportunity means having access to resources that help build a better life. Examples include things like good schools, good jobs, transportation, and resources such as libraries and parks. Everyone wants to live and raise their families in such neighborhoods. Unfortunately, many low income Virginians grow up in neighborhoods of poverty: neighborhoods without good schools, few jobs, little to no public resources and probably a substantial criminal presence in the area. Families trying to break out of the cycle of poverty already have the deck stacked against them. That’s why reducing poverty means increasing neighborhoods of opportunity and decreasing concentrations of poverty. Below is my summary and discussion of a report entitled “The Re-Emergence of Concentrated Poverty” from the Metropolitan Policy Program at Brookings.

How Virginia plans to spend $69 million mortgage settlement

As you may have heard, Virginia recently received a lot of money from the National Mortgage Settlement agreement. Some of this money will go directly to home owners in need, some will come to directly to the State to offset the costs of the housing crisis. Below is a breakdown of all the funds coming to Virginia:

• Virginia’s home borrowers will receive an estimated total of $409,937,551.22 in benefits from loan term modifications and other relief.
• Virginia’s borrowers who lost their homes to foreclosure from January 1, 2008, through December 31, 2011, and suffered servicing abuse qualify for approximately $31,301,320.91 in cash payments.
• The value of refinanced loans to Virginia’s underwater borrowers will be an estimated $84,309,742.00.
• The Commonwealth will receive a direct payment of $69,657,121.00.
• The Bureau of Financial Institutions at the State Corporation Commission, as Virginia’s banking regulator, also joined the settlement and will receive an additional $1,000,000.

The $69 million direct payment to the Commonwealth is what Virginia could use to address the costs of the housing crisis such as the money Virginia had to spend for foreclosure prevention counseling. This $69 million was a great opportunity to invest in rebuilding home ownership in the Commonwealth. In his presentation to the Senate Finance Committee, Attorney-General Ken Cuccinelli noted this $69 million coming directly to the Commonwealth:

Preference that money be used for foreclosure prevention or counseling programs, or to enhance consumer protection efforts to prevent and prosecute financial fraud.

The Virginia House of Delegates and the State Senate released their respective versions of the State Budget this past Sunday Feb 19^th and neither body used the $69 million settlement for housing. Neither body included any money in the budget for a Housing Trust Fund or any significant investments in addressing the housing crisis many Virginians are still stuck in. Both bodies used the $69 million from the national mortgage foreclosure settlement for aid to local governments and capitalizing a new Fund created to mitigate impact in Virginia of anticipated Federal Budget cuts.

Virginia legislature spends foreclosure settlement on non-housing items

Attorney-General Cuccinelli briefs the State Senate Finance Committee on the settlement funds

Virginia received a direct, one-time payment of $69 million from the National Mortgage Settlement Agreement. This money should have been used to benefit the Virginians struggling through the weak housing market. Virginia is ranked 8^th in the nation for underwater homeowners. Virginians have lost billions of dollars in equity in their homes, rents are rising faster than incomes, foreclosures are hollowing out our neighborhoods, and homelessness is on the rise for the first time in a decade.  Instead of addressing these critical needs, the Virginia General Assembly wasted this one-time opportunity by using the money to fill holes in the budget.

Housing Discrimination Still A Barrier to Wealth

In “The Promise of the Fair Housing Act and the Role of Fair Housing Organizations,” Jorge Andres Soto and Deidre Swesnik discuss the history and continued need for reform of the Fair Housing Act and its enforcement.  Beginning with its roots in the Civil Rights Movement of the 1960’s, Soto and Swesnik explain the importance of fair housing access as a cornerstone in civil rights.

Passed in 1968, the Fair Housing Act was designed to combat housing discrimination and segregation and promote racial integration nationwide.  It prohibited discrimination based on race, color, religion, and national origin in areas including real estate sales, rentals, loans, insurance, and all related services.  Prior to its passage, mortgage bankers, restrictive covenants in housing developments, and public housing authorities all contributed to the deep-set problem of institutionalized racial discrimination in the housing market.  The Act created a new mechanism to address housing discrimination, allowing victims of housing discrimination to submit complaints to the Department of Housing and Urban Development (HUD).

Taking control of your life starts with a home

Control is really key for comfort…it’s good to keep in mind that the best territories have clearly defined borders and allow for some privacy. They’re low on stress and high on security…[t]erritories have rituals.

These statements from an article about staying overnight at a hotel or the homes of family or friends during holiday travel essentially speak to the second most fundamental and basic of human needs in Maslow’s Hierarchy of Needs – the need for security.

Going backwards on Housing, Transportation & Growth

Virginia has a transportation problem. Virginia has a housing problem. Virginia needs to create more jobs. These problems are related and that’s why Virginia must better align jobs, housing and transportation. Unfortunately, the Va General Assembly is going in the wrong direction by making UDA’s voluntary.

Urban Development Areas (UDA’s) are how local governments in Virginia connect housing with jobs and transportation.  Virginia’s growth over the past couple decades has also given rise to more sprawl.  Virginians now must commute further because of a lack of affordable housing in key geographic areas, causing more traffic and transportation problems. Increased spawl has placed disproportionate cost burdens on low and moderate income Virginians.  Rising gas prices are a painful reminder of the burden of longer commutes. An article explains:

Virginia’s homeowners must beware of mortgage scams

With the national foreclosure rate persistently high, Virginia’s residents are still feeling the effects of the foreclosure crisis.  Unfortunately, many homeowners have turned to loan modification or foreclosure “rescue” companies for help—only to realize that they’ve been scammed.  Anyone can become a victim of a loan modification scam.  Often, homeowners dealing with foreclosure are so desperate to find a solution and avoid foreclosure that they end up being taken advantage of by scammers.  For example, many scammers promise vulnerable homeowners that they can definitely stop a foreclosure or save your home.  Under FTC guidelines, no one should ever make this kind of guarantee.  The best way to avoid a scam is to know the signs.  In some cases, even trusted professionals like real estate agents or attorneys have been involved in loan modification scams!