Innovations in Neighborhood Stabilization: Responses to the Foreclosure Crisis

Volume 9, Issue 2 | December 31, 2013

December 2013


Sarah Berke*
Housing Partnership Network

Carolina Reid
University of California, Berkeley

Five years ago, in July 2008, the Federal Reserve Bank of San Francisco convened a symposium in Los Angeles on the topic of stabilizing communities in the wake of foreclosures. The goal of the conference was to identify strategies that could help to mitigate the negative spillover effects of foreclosures on families and neighborhoods. At the time, there were few models to turn to for neighborhood stabilization—and many unanswered questions. How could we leverage federal funding to bring additional financing partners to the table? What strategies could be deployed in cities with weak markets, where rehab costs exceeded market values? Was it possible to manage scattered site rentals?

Since then, nonprofit organizations across the country have been responding to these questions in innovative ways, drawing on their expertise to meet the challenge of foreclosed and abandoned homes head on. It hasn’t been easy—funding for neighborhood stabilization remains small in comparison to need, and the volatile housing market has required quick thinking and the ability to design new solutions on the fly. And although the housing market has finally begun to rebound, nonprofits are working to sustain their work in response to continued historically-high levels of foreclosures and bank-owned inventory. They are also looking ahead to develop strategies for community development work in the post-crisis environment.

In this issue of the Community Development Investment Review, we have brought together a series of articles that highlights some of the stabilization strategies emerging from the efforts of committed nonprofits across the country. The articles in the first section of this issue reflect the lessons learned from the Housing Partnership Network’s (HPN) 2011-2013 Innovations in Neighborhood Stabilization and Foreclosure Prevention Initiative, funded by the Citi Foundation. The goal of the Innovations Initiative was not only to support emerging strategies for neighborhood stabilization, but also to share experiences across nonprofits and create a body of knowledge of successful strategies for the community development field. On behalf of HPN, we would like to thank the organizations who participated in the Innovations Initiative, as well as those who served on the advisory committee, including Eric Belsky, Pat Gamble-Moore, Patricia Garrett, Bill Gilmartin, Catherine Godschalk, Bob Kantor, Alan Mallach, Mike Mullin, Craig Nickerson, Rebecca Regan, and Laura Sparks.

In the second section of this issue, we bring you a series of essays written by influential nonprofit and public sector leaders that enriches the conversation about neighborhood stabilization, providing new and provocative perspectives on this work. Together, the articles and essays reveal the passion and expertise that the field has brought to the crisis, and point us toward strategies that will continue to be relevant, post-crisis, for investing public and private resources to make a real impact in low- and moderate-income communities.

Sarah Berke is Director of Research & Development at the Housing Partnership Network.

Carolina Reid is Assistant Professor in the Department of City and Regional Planning at the University of California, Berkeley.

*The authors would like to thank Laura Choi, Federal Reserve Bank of San Francisco, Matt Perrenod, Housing Partnership Network, and Peter Richardson, Housing Strategies, Inc. for their editing and support for this issue.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System. Material herein may be reprinted or abstracted as long as the Community Development Investment Review is credited.

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Table of Contents

Innovative Strategies for Mitigating the Foreclosure Crisis and Stabilizing Communities

Thomas Bledsoe, Housing Partnership Network; and Brandee McHale, Citi Foundation

Policy Lessons from the Neighborhood Stabilization Innovations Initiative

John O'Callaghan, Atlanta Neighborhood Development Partnership; and Paul Weech, Housing Partnership Network

Targeted Neighborhood Stabilization: Lessons in Resilience in Weak Market Cities

Rob Curry, Cleveland Housing Network; Kate Monter Durban, Cleveland Housing Network; and Sarah Page, HAPHousing

Scaling Social Enterprises: Flexible Responses for Neighborhood Stabilization

Michael Bodaken, NHT-Enterprise; Elyse Cherry, Boston Community Capital; and Cindy Holler, Mercy Housing Lakefront

Rethinking Tenure: Building a Diverse Landscape of Affordable Housing Options

Joan Carty, Housing Development Fund; Barbara McCormick, Project for Pride in Living; Tayani Suma, Atlanta Neighborhood Development Partnership

Strengthening Neighborhood Stabilization: Refining Business Models for Housing Counseling

Danielle Samalin, Housing Partnership Network

The Federal Housing Administration’s Distressed Asset Stabilization Program: An Innovative Solution for Addressing the National and Local Impacts of the Recession

Carol Galante, Federal Housing Administration

Reflections on the Crisis: The Need for Public Sector Entrepreneurialism

Mercedes Márquez, Los Angeles Housing + Community Investment Department

In 2012, Mercedes Márquez left her post as the U.S. Department of Housing and Urban Development’s (HUD) Assistant Secretary of Community Planning and Development to return to Los Angeles and resume her role as the head of its Housing Department (LAHD). By virtue of these dual roles, she had the unique opportunity to see the foreclosure crisis and the response from both the local and federal policy perspective.

Affirmatively Furthering Fair Housing in REO-to-Rental Programs

Diane Glauber, Lawyers' Committee for Civil Rights Under Law; Philip Tegeler, Poverty & Race Research Action Council

Foreclosure Recovery: The Work That Remains

Paul Staley, Self-Help Foreclosure Recovery and Asset Building Project