Reports and Studies

Creating homeownership is a central strategy of community developers, but the success that they have realized is threatened by a recent rise in the rate of mortgage foreclosures. Innovations in the mortgage industry, particularly automated underwriting, risk-based pricing and stratified securitization, have helped foster the development of mortgage products that are flexible and affordable, expanding homeownership opportunities to many households with poorer credit ratings and fewer savings for down payment. But these riskier "subprime" loans, often made with larger up-front fees and higher interest rates, are foreclosed upon at a much higher rate than are prime loans. Subprime lending has also been concentrated in low-income and high-minority areas, often the very places community developers are trying to revitalize.

Community-based development organizations across the country have responded to the increase in foreclosures by providing counseling and loans and by working with local lenders to minimize the number of delinquent mortgages that go into foreclosure. Foreclosure-prevention programs are resource-intensive, however, and community organizations in locations with high foreclosure rates can be quickly overwhelmed by requests for assistance. Nevertheless, many affiliates of the NeighborWorks network have created successful programs. These programs have staff with a wide variety of experience, as they must negotiate with the lender and servicer staff, and also provide counseling and support to the homeowner. Counseling may be needed to cover a variety of topics, including financial education, household budgeting, job skills or family problems, and often requires partnering with other organizations. A number of the foreclosure-prevention programs also provide, or have access to, loans and grants to help homeowners restructure their debt and become current on their mortgages. Complete info »

Insurance companies have a vested interest in communities and homes that are safe and secure. Through their successful but underutilized housing rehabilitation expertise, NeighborWorks organizations seek to improve the quality of older, unsafe and/or vacant and abandoned properties in the communities they serve. Complete info »

In order to understand the roles that public policy and the business and consumer sectors play in paying for homeownership education and counseling, the costs, benefits and beneficiaries of the education and training must be fully accounted for. This paper estimates the total costs of delivering homeownership education and counseling and discusses proven and implied benefits to stakeholders. Based on one set of assumptions, and depending on the level of activities offered, homeownership education and counseling costs range from $500 to $1,500. Empirical and anecdotal evidence suggest that homeownership education and counseling offer important benefits to borrowers, lenders, real estate professionals and communities. Many nonprofit organizations providing such services, however, remain underfunded. Providers, financial institutions and policy makers must increase their knowledge of what works, what costs are incurred, who benefits, and what value is created by homeownership education and counseling activities in order to develop a sustainable delivery system.

This paper uses information from NeighborWorks organizations that offer homeownership education and counseling programs as illustration of the cost structure of the homeownership education and counseling industry. Part 2 provides background information on the homeownership education and counseling industry. Part 3 explains the methodology and assumptions used for this analysis. Part 4 reviews cost accounting and presents a framework for the cost analysis. Part 5 discusses the value proposition for homeownership education and counseling while Part 6 offers conclusions and implications. Complete info »

NeighborWorks America created the Learning Center Consortium as a way to share best practices and develop standards so that learning centers become as effective as possible. Sustainable funding strategies are the cornerstone of advancing the impact of learning centers upon the communities they serve. This paper reviews the resident funding strategies of twelve learning center consortium members. Complete info »

This report, commissioned by NeighborWorks America, in partnership with the Atlanta Alliance for Community Development Investment, explores the impact of gentrification on the residents, CBOs and CDCs of three Atlanta neighborhoods in varying stages of gentrification, and their capacity to manage this change. Additionally, in order to understand factors at play in gentrified communities that have experienced a high level of success in managing change, the research was supplemented with information from two neighborhoods outside Atlanta, the Shaw community in Washington, D.C., and Jamaica Plain in Boston. Complete info »

Enterprise Foundation and Neighborhood Reinvestment have joined forces with regional and local community development organizations in a national collaborative to advance resident services for families in affordable apartment communities. The Resident Services Collaborative meets semiannually to research policy alternatives, explore funding strategies, advance standardizing measures of success, and develop training. Complete info »

The recent rise in nonprime mortgage foreclosures has opened a new and costly chapter in many of the nation's most distressed urban neighborhoods. Particularly problematic is the fact that today's foreclosures impose significant costs not only on borrowers and lenders, but also on municipal governments, neighboring homeowners and others with a financial interest in nearby properties. While there is an extensive literature on the impact that delinquency, default, and foreclosure have on lenders, borrowers, and other entities that are direct parties to the mortgage transaction in question, the costs that these mortgage failures impose on municipalities and other third parties are far less well understood. This is due to two factors. First, municipal and other third party costs are difficult to identify, and therefore often go undetected. Second, even where identified, the activities that generate costs often blend in with other governmental functions, or are otherwise difficult to quantify, reinforcing the tendency for them to remain invisible.

This study attempts to fill that void. Using the City of Chicago as a case in point, this study presents a conceptual framework that makes explicit the various costs of foreclosure, especially as they relate to local governments and courts. By carefully reviewing the foreclosure process as it plays out in Chicago, the paper isolates 26 separate costs incurred for the provision of 'foreclosure related services.' These costs reflect actions undertaken by 15 separate governmental units that are part of the overall municipal infrastructure underlying the foreclosure process. While in some cases these municipal activities are limited to simple and relatively inexpensive ministerial duties of agencies like the Recorder of Deeds, in more complex foreclosure scenarios these municipal costs can reach tens of thousands of dollars. In extreme cases, the concentrated foreclosures can put downward pressure on area property values and indirectly rob area homeowners of hundreds of thousands of dollars of home equity. Complete info »

"Americans are caught in an image of housing that's over 20 years old -- they are really surprised when they see what affordable housing is now." Nancy Belden of Belden Russonello & Stewart elegantly captured the challenge of the perception gap between public opinion and the reality of affordable housing. On May 5 and 6, 2004, the Neighborhood Reinvestment Corporation, in partnership with The Campaign for Affordable Housing, analyzed the challenge of closing that gap in its fourth NeighborWorks Symposium on Multifamily Excellence.

The symposium, held in Minneapolis, was entitled "Changing Minds, Building Communities: Advancing Affordable Housing through Communications Campaigns." The symposium brought together 300 local and national affordable housing leaders from across many organizational and institutional sectors to engage in a day of candid exchange on one issue key to strengthening communities and expanding housing opportunities. The issue? How we can better communicate publicly and through marketing campaigns to advance the development of homes all Americans can afford.

While affordable housing stories are often filled with conflict, and projects are completed against the odds, participants were energized and enthused to find that successes are happening across the country. Fifteen successful cases were used as a backdrop against which key issues were discussed and debated. The context for these successes was demonstrated through opinion research that shows untapped opportunities for support -- a kind of new "silent majority" that recognizes and is concerned about the corrosive effect affordability problems have on families and communities.

However, the affordable housing industry will only tap that support if it learns to employ professional communications tools to move its message from simply "housing" to "homes, family and community."

From case studies, research, and the candid reactions and debate from participants, 10 key points emerged that suggest a communications strategy for the affordable housing community. Complete info »

This research examines how nonprofit owners of affordable multifamily rental housing choose their approach to property management. It draws on existing literature on property management, insight from leading policymakers and practitioners, and survey responses from Neighborhood Reinvestment Corporation's NeighborWorks organizations that participate in the Corporation's Multifamily Initiative. The paper explores how the structural features of a nonprofit's portfolio and local market, the owner's priorities driven by its mission and resources, and the capacity and incentives of managers shape the property-management approach that the owner embraces. It encourages owners to evaluate these factors and seek out a range of choices. By considering portfolio size and stage of organizational development, the importance of property management to the core mission, and the quality of property-management options in their local market, nonprofits can align their property management approach with the financial and mission-driven double bottom-line focus of their organization. The paper also presents findings that describe how third-party managers tend to bring economic advantages of efficiency, while nonprofit managers often better serve owners seeking to organize and empower resident communities.

Policymakers should be mindful of the constraints that limit nonprofits from being effective stewards of their properties: burdensome requirements for regulatory compliance, insufficient financial resources to support asset management, and an underwriting process in which funders and developers can underfund operating budgets because of a desire to stretch limited subsidies. Policymakers and intermediaries can improve the quality of property and asset management by continuing to invest in property- and asset-management training and funding for the growing numbers of nonprofits becoming owners and developers of affordable housing. They can also contribute in a meaningful way by helping nonprofits to clarify their mission focus and by providing them with examples of effective decision-making and ongoing management practices drawn from strong self-managed and vendor-managed properties. Complete info »

In recent years, partnerships between nonprofits and private developers to develop affordable housing have become a topic of increasing interest. Through a review of current literature and interviews with housing thought leaders, nonprofits, private developers, affordable housing capital sources and others, this paper seeks to explore multifamily rental housing development partnerships. More specifically, research identifies attributes critical to these partnerships, and the economic, social and political drivers to both partnerships and the subsequent negotiated partnerships terms.

This paper concludes that there is a broad range of negotiated partnership terms between nonprofits and private developers. However, across all these relationships, both nonprofits and private developers prioritize two partnership terms: development fee profits, and degree of involvement and oversight. Further, research reveals while there are many different drivers shaping the decision to partner and subsequent partnership conditions, there are two key determinants: development experience and knowledge, and financial factors. Finally, while not all partnerships are beneficial, under the appropriate conditions, partnerships have the potential to not only build nonprofit capacity but also address some of our nation's affordable housing challenges. Complete info »