Homesick: The Continuing Need to Stabilize Neighborhoods

By Thomas Bledsoe

We all need a place to call home. Increasingly, a safe, decent and affordable home seems beyond reach for many Americans still struggling with foreclosure. Thankfully, nonprofit organizations have remained at the forefront, helping households and communities address the profound challenges and disruptions precipitated by the crisis and subsequent recession. In some areas, the market is beginning to recover. However, the recovery is uneven and many hard-hit neighborhoods are still severely impacted by blight and vacancy, lost homes and lost wealth. Federal resources have dwindled as well, constrained even more since the crisis began. In short, many families are homesick, their communities destabilized by foreclosure.

But there’s good news. Even though the federal Neighborhood Stabilization Program is effectively over, the ground-level work of neighborhood stabilization continues—carried forward by a mission-driven, high-capacity nonprofit sector, with new skills and new approaches for sustaining the work of stabilizing neighborhoods and communities.  

The new issue of the Community Development Investment Review, “Innovations in Neighborhood Stabilization: Responses to the Foreclosure Crisis,” focuses on the work of innovative, entrepreneurial nonprofits that are making inroads and applying lessons learned to the next phase of stabilization work. The Review also showcases the new ways public sector leaders are helping to stabilize communities.

In the first half of the issue, member organizations of a business collaborative of the nation’s leading housing and community development nonprofits, the Housing Partnership Network (HPN), reflect on the entrepreneurial initiatives they led as part of the Innovations in Neighborhood Stabilization and Foreclosure Prevention Initiative, a 2-year program created by HPN and funded by the Citi Foundation. Co-authored by members and HPN, the articles surface a number of strategies and innovations that can be replicated and scaled for communities across America.

With a focus on policy, Paul Weech and John O’Callaghan point out opportunities to advance policies—at little or no cost to the federal budget—to support the continued recovery and prevent future crises in communities. Concerning weak markets, Rob Curry, Kate Monter Durban and Sarah Page describe the challenges facing weak-market cities, and the power of highly-targeted neighborhood investment efforts led by housing nonprofits and their public and private partners. Touting the benefits of social entrepreneurship, Michael Bodaken, Elyse Cherry and Cindy Holler reflect on their experience advancing social enterprises and more sustainable business models for improving individuals’ lives and communities. In addition, Joan Carty, Barbara McCormick and Tayani Suma argue for resources to support a wider range of tenure options, such as owner-occupancy, lease-purchase and rental, for an important source of affordable housing, single-family and small multifamily buildings. Recognizing the importance of housing education and advisory services, Danielle Samalin describes changes in the housing counseling industry that are emerging in the wake of the crisis and highlights the potential to fully integrate counseling within mortgage transactions.  

The second half of the Review features essays from public sector, nonprofit and advocacy group leaders who spotlight important, relevant issues that should remain part of the conversation about neighborhood stabilization. Additional perspectives on the crisis are shared by Commissioner and Assistant Secretary for Housing, Carol Galante, who describes the FHA’s innovative Distressed Asset Stabilization Program and its neighborhood stabilization goals. Mercedes Marquez reflects on the city of Los Angeles’ response to the foreclosure crisis, drawing on the perspective of her tenure at HUD. Diana Glauber and Philip Tegeler argue that the Federal Housing Finance Agency’s initial round of the REO-to-Rental program was a missed opportunity to affirmatively further fair housing goals. Finally, Paul Staley assesses the way in which concentrated investor ownership of single-family housing in many neighborhoods affects the “American Dream” of homeownership for families.

So what does all of this mean? It means the work to stabilize neighborhoods and help families through the foreclosure crisis continues. The authors of this Review have had the rare chance as practitioners, typically engaged in day-to-day work on the ground, to reflect and take stock of what has been accomplished, what might have been done differently, and what lies ahead. It’s also encouraging that these high-performing nonprofits will continue the work of stabilizing, rebuilding and revitalizing neighborhoods. For sure, challenges remain. However, as a nonprofit sector, working together with the public and private sectors, we are poised to build on the lessons learned about the crisis and our response to it—and do our part to prevent another one.   

Thomas Bledsoe is president and CEO of the Housing Partnership Network, a business collaborative of the nation’s leading housing and community development nonprofits.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

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