Housing News Roundup: May 4, 2017 | How Housing Matters

Housing News Roundup: May 4, 2017

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Supreme Court Ruling Allows Discriminatory Lending Lawsuit to Proceed

The City of Miami can sue Bank of America and Wells Fargo, according to a US Supreme Court ruling on Monday. In 2013, Miami filed a lawsuit against the two banks, alleging that the financial institutions violated the Fair Housing Act of 1968 through discriminatory lending practices during the 2008 financial crisis. The city claimed that Bank of America and Wells Fargo lent to black and Latino customers on worse terms than other customers with similar credit, causing neighborhood-wide foreclosures in mostly minority neighborhoods and leading to undue financial harm on the city. Justice Stephen Breyer, who authored the opinion, wrote that the predatory practices, “hindered the City’s efforts to create integrated, stable neighborhoods.” The lawsuit will return to the Eleventh Circuit, where the City will have to prove that the damage done by the banks was worse than a foreseeable outcome. “The housing market is interconnected with economic and social life. A violation of the FHA may, therefore, ‘be expected to cause ripples of harm to flow’ far beyond the defendant’s misconduct,” wrote Breyer.

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Sources: The Atlantic , The Washington Post

Restricting the Supply of New Housing Benefits Older, Richer Homeowners

Old, wealthy homeowners benefit the most from laws that restrict the supply of new housing, according to a new working paper from Edward Glaeser, of Harvard University, and Joseph Gyourko, of University of Pennsylvania. In coastal cities in the United States, laws restrict the supply of new housing, causing housing shortages that inflate home prices. Using household survey data from 1983 to 2013, Glaeser and Gyourko analyzed changes in housing wealth among homebuyers making the median US household income and those earning incomes in the 99th percentile. They found that for those earning the median household income, housing wealth only increased for households headed by those ages 65 to 74. However, for those earning in 99th percentile, housing wealth increased for all age groups, but the largest gains were among the oldest groups. Gyourko explains their findings, “The [chief beneficiary of] binding restrictions on the supply of new housing is the [owner] at the time the restrictions were imposed.”

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Source: Quartz

Philadelphia Reentry Program Attempts to Reduce Recidivism with Housing

Philadelphia’s STAR program helps those returning from prison successfully reintegrate into communities through the provision of comprehensive wraparound services. Nationwide, 70 to 90 percent of those returning from prison live with a family member or loved one, according to Carrie Pettus-Davis of the Institute for Advancing Justice Research and Innovation. Financial obstacles and restrictive laws prevent many from finding a home of their own, which contributes to the reincarceration of over half of the Philadelphia’s returning citizens within three years of release. Pettus-Davis explains, “Any instability or insecurity in housing impacts recidivism by creating much more stress for the individual.” However, STAR, in exchange for closer supervision, connects program participants with housing and employment as well as providing a variety of other services. Participants are connected with housing in many different ways, including vouchers that STAR provides and relationships with nongovernmental organizations and private rental companies. In all cases, STAR helps with housing because, as Anthony Dickerson of the Center for Returning Citizens explains, “Housing is the foundation for everything.”

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Source: Next City

Neighbors Oppose Transitional Housing, Despite Benefits for Homeless Individuals

Neighbors of a proposed transitional housing and homeless resource center in Yakima, Washington, publicly opposed the construction of Yakima Neighborhood Health Services’ newest facility. “For this project, I don’t see the benefit to my neighborhood,” claimed Miguel Alvarez. However, advocates of the facility, which would house up to 40 people in apartment-style units for up to two-years, claim that it would reduce the homeless problem by providing stable housing. In addition to housing, residents would be provided with a case manager through Neighborhood Health who would help address substance and mental health problems; but no services will be provided at the center. Though a decision about the center won’t be made for another three weeks, Lisa Hall, a volunteer at extreme-weather homeless shelters, said “No one project is going to solve all the homeless problems, but having a place that can help up to 40 people is going to make a difference for those folks, for sure.”

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Source: Yakima Herald

Spending Bill Increases Funding for HUD, but Proposed Budget Cuts Still Loom

The new spending bill agreed to by Congress last Sunday will increase funding for the US Department of Housing and Urban Development (HUD) for the next five months, but the administration still proposes budget cuts in  fiscal year 2018. The $1.1 trillion spending bill allocates $38.8 billion in discretionary funds for HUD, a $513 million increase from last year’s level. However, the Trump administration still proposes cutting $6.2 billion in funding for HUD next year. A new report by Liza Getsinger and colleagues of the Urban Institute highlights how these proposed cuts could worsen the country’s affordability crisis. Using Census data, the authors find that almost every county in the country, ranging from large cities to rural areas, have been affected by the housing shortage. With nearly 2.9 million extremely low-income renters relying on federal housing programs, federal rental assistance is necessary as “not one county in the United States has enough affordable housing for all its [extremely low-income] renters.”

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Source: Business Insider

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