July 10, 2019
Introducing our new Vice President for Policy & Partnerships, team effort builds a strong community in Clark-Fulton, NHIA bill dropped in the U.S. House, and more!
A Message From Our New Vice President for Policy and Partnerships
by Kris Siglin, NCST
I’m looking forward to working with many of you as I begin my new role as the Vice President for Policy and Partnerships at NCST. I come to NCST with a background in affordable housing and community development, and I was drawn to the job because I have worked with Julia Gordon and Rob Grossinger for years and respect the work that NCST and the NCST buyers have done to turn problems into assets for neighborhoods. 

NCST is appealing to me because it combines practical and direct community reinvestment efforts with a sophisticated and savvy advocacy platform. Most of my career has been spent using what I learned working in Congress to advance the cause of affordable housing and community development. The best way to make policy change is to use specific examples of successful projects to ask policymakers to support clear and practical recommendations. I have always enjoyed the process of thinking through how one neighborhood revitalization project could lead to broader change if there are policy lessons that can be brought to the attention of the right elected official. Vague complaints and too much negativity render much advocacy ineffective. A Senator can’t act on “Everything is terrible in our neighborhood” but she can act on “We need you to support this bill.” 

Before I came to NCST, I directed advocacy efforts at Housing Partnership Network (HPN), one of the sponsors of NCST. HPN members are single family developers, multifamily developers, and CDFIs, and the efforts of HPN’s single family developers who work in distressed neighborhoods are what got me interested in the issues that NCST works on. While the foreclosure crisis has waned in much of the country, the ongoing problem of neighborhoods where it costs more to rehabilitate a house than the house can be sold for needs a policy solution. 

I came to work at NCST because there are millions of Americans living in neighborhoods where aging housing stock can’t be repaired or upgraded because valuations can’t support the necessary debt. This leaves the families in these neighborhoods unable to become homeowners - the strategy that historically has been the most effective one for families to build wealth. It is an urgent challenge to me that the unfettered working of the real estate market will leave people and places behind unless we can change the dynamics.  

Compounding the market problem is the racial equity dimension: many families of color live in neighborhoods with stagnant and declining property values. The racial wealth gap can’t be closed without a strategy to increase sustainable homeownership. The African American homeownership rate is lower today than it was before passage of the Fair Housing Act in 1968 – when segregation was legal. We need to work together on an advocacy strategy that creates subsidies that can fill the valuation gap, access to capital for mission-driven entities that work in distressed communities and the right incentives for local governments to foster healthy real estate markets.

I am also interested in the broader context for affordable housing development – there are so many issues that intersect with housing. Health care outcomes, educational attainment, environmental quality and economic inequality are all impacted by the availability and quality of rental housing and sustainable homeownership. Before I worked at HPN, I worked at Enterprise Community Partners and the Millennial Housing Commission, which both taught me a lot about the broader social context for housing. 

Prior to that I worked in progressively more responsible jobs in the Senate and the House of Representatives, working on everything from postal and farm issues to consumer finance at the Senate Committee on Banking, Finance and Urban Affairs. It makes me feel like a very old person to observe that Congress used to function much better than it does currently, and I am hoping that the changes we’ve seen in the most recent election are harbingers of broader institutional renewal.

In the meantime, please be in touch with me at ksiglin@stabilizationtrust.org if you want to talk about policy challenges you are facing and how NCST might be able to help. 

Kris Siglin is NCST's Vice President for Policy and Partnerships .
Buyer Spotlight
A Team Effort Builds a Strong Community in Clark-Fulton
by Chris Garland, NCST

As we reflect on what’s needed in order for neighborhoods and their housing markets to stabilize, we have frequently found that the answer lies in having not just one, but a number of key partners all working in alignment. This certainly seems to be the case in Cleveland’s Clark-Fulton neighborhood. Clark-Fulton is a vibrant community situated just southwest of downtown Cleveland and is the densest Latinx neighborhood in Ohio. 

Since 2010, the Metro West Community Development Organization (itself originally established as a subsidiary of a larger parent organization, the Detroit Shoreway Community Development Organization, also a long-time NCST partner) has worked to foster development in the Clark-Fulton community in keeping with the neighborhood’s priorities (focusing on Safety, Economic Development, Community Organizing as well as Housing). Like so many other CDCs around the country, Metro West becomes familiar with the community they serve on a granular, or parcel, level. 

However, success in recovering a challenged housing market requires strategic partners with varying levels of capacity and scale. With this in mind, local partners who work throughout the region such as Habitat for Humanity of Greater Cleveland and CHN Housing Partners have brought their unique expertise to bear in targeted portions of Clark-Fulton. Cleveland Habitat is clustering 50 homes within the Clark-Fulton and Stockyards neighborhoods (a combination of 35 new construction and 15 full rehabs of vacant houses). In fact, Cleveland Habitat is completing six rehabs on one block of Roehl Avenue, making a transformational impact on this long-blighted block. The initiative also includes neighborhood spruce-up events during which Cleveland Habitat will help existing residents with minor or modest exterior repairs, such as minor painting, porch and step replacement/repair, landscaping and debris removal.

Likewise, CHN Housing partners is successfully completing two single family infill projects in the Clark-Fulton neighborhood utilizing low income housing tax credits. CHN’s International Village Homes is nearly complete and includes 22 scattered site homes near Thomas Jefferson International Newcomers Academy. CHN will also break ground on another 30-unit scattered site single family project in the La Villa Hispana area in Fall 2019. These new construction homes are located on sites of former strategic demolitions completed by the Cuyahoga County Land Bank or the City of Cleveland and managed by the Cleveland Land Reutilization Program. The homes area is purposefully designed to fit well within the neighborhood’s character, while meeting the needs of today’s residents.  

In the midst of these targeted efforts, Clark-Fulton’s anchor institution, MetroHealth Health System, is taking a leadership role in both revitalizing the neighborhood’s commercial corridor and supporting residential development. In addition to investing nearly $1 billion in their main hospital, outpatient plaza and public greenspace, MetroHealth is partnering in the development of three mixed use/mixed income residential projects and recently announced incentives for employees to invest in neighborhood homes. 

Both local and statewide government entities have created incentives which are advancing development in Clark-Fulton. The City of Cleveland Mayor’s Office has identified Clark-Fulton as a Neighborhood Transformation Initiative target area which has leveraged $25 million in City bond funds and attracted an additional $40 million in bank, non-profit and philanthropic funds with a goal to invest in disadvantaged neighborhoods just outside of growth zones and encourage the private market to return without the need of public incentives. And more recently, in recognition of the 50 th Anniversary of the Fair Housing Act, the Ohio Housing Finance Authority’s FHAct50 program included Cleveland – along with Columbus and Cincinnati – as a recipient to receive $3 million in tax credits over the next three years. Clark-Fulton was selected as the Cleveland target neighborhood for this fund, and project planners are working with community stakeholders to determine which projects to invest in throughout the neighborhood.

As we look forward to the next decade, NCST will continue to work to advance such efforts and meet stakeholders at that scale where they can best effect positive change in their communities. Whether it involves working on regional/statewide issues or at the neighborhood and even parcel level, NCST is proud to be a partner in this work. 

Chris Garland serves as a Community Development Manager for NCST .
Cleveland Habitat is presently rehabbing six homes on a block of Roehl Avenue in the Clark-Fulton neighborhood (image credit: Chris Garland):
CHN Housing Partners thoughtfully incorporates key elements of neighborhood design such as gable returns, setbacks and front porches in order to fit well in the Clark-Fulton neighborhood (image courtesy of CHN Housing Partners):
Policy Corner
U.S. House of Representatives Introduces Tax Credit Bill For Single Family Rehab!
by Theo Chang, NCST

NCST is excited to announce that a single family tax credit bill has been introduced in the U.S. House of Representatives by Representative Brian Higgins (D-NY) and Representative Mike Kelly (R-PA) – the Neighborhood Homes Investment Act ( H.R. 3316)!

As many are aware, we have been working alongside several housing organizations in the Neighborhood Homes Investment Act (NHIA) coalition for the past few years to develop federal legislation to bridge the value gap that exists when the costs to acquire and rehab a home exceed its fair market value. The legislation approaches this problem through the mechanism of a tax credit because it's unlikely that we'll see another subsidy program like the Neighborhood Stabilization Program in today's political climate.

In addition to the efforts of NCST staff in helping to develop the NHIA concept and to build the coalition, NCST was particularly well prepared to provide granular information and advice about specific aspects of the bill based on the years of data we've collected from working with our local community buyers. Specifically, we used our data and mapping expertise to refine the definition of "substantial rehabilitation" and develop maps of neighborhoods that would qualify for the tax credit.

In order to qualify for the tax credit under H.R. 3316, developers must substantially rehabilitate the home, with “substantial development” defined as follows:

(4) SUBSTANTIAL REHABILITATION.—The term ‘substantial rehabilitation’ means rehabilitation efforts involving qualified development costs that are not less than the greater of—
“(A) $20,000, and
“(B) 20 percent of the cost of acquiring buildings and land.

Originally, the draft bill included a flat minimum of $25,000. However, NCST's analysis showed that while the median rehab cost was $40,000 when we aggregated data from all markets, the median rehab cost was just a little over $20,000 in lower cost markets such as Detroit and Dayton. This is shown below in Images 1 and 2, respectively. Our analysis led us to advocate for a more flexible definition of “substantial rehabilitation” to increase the likelihood that our buyers in distressed communities with low-value homes would be able to qualify for this tax credit. We believe that these are the geographic areas of the country that could benefit most if this bill becomes law. 

We also used our mapping capability to help create visual depictions of the areas eligible for the tax credit. We shared these maps with partners and Congressional offices, including bill co-sponsors Rep. Higgins and Rep. Kelly, to build support for our proposal. For example, Image 3 (below) shows the areas of Rep. Higgins’ (NY-26) district that would qualify for the tax credit. Image 4 (below) specifically focuses on the Erie community within Rep. Kelly’s (PA-16) district, where approximately half of the neighborhoods would qualify. Under the current legislative language, homes must be located in a census tract that meets the following requirements:

-          Tract poverty rate is greater than 130% of the area poverty rate
-          Tract Median Family Income is less than 80% of the Area Median Family Income
-          Tract median home value is less than 100% of the area median home value.

There are many more steps before this bill becomes a law, but bill introduction is a necessary first step. We applaud our House sponsors for introducing the legislation, and we are going to work with them to build support for this idea in both the House and the Senate. It can take years to move bills through Congress but sometimes there is an opportunity to include something like the NHIA as part of a broader bill, and we will continue meet with policymakers to advocate for this. During this time, we encourage you to check out the NHIA website for legislative updates and reach out to us at any point with questions.

Theo Chang serves as the Director of Strategy and Research for NCST.
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Industry News
Staff, Phone or Email Changes?
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About NCST: The National Community Stabilization Trust (NCST) is a non-profit organization that works to restore vacant and abandoned properties to productive use and protect neighborhoods from blight. Our programs facilitate the rehabilitation of vacant but structurally sound homes, enable safe, targeted demolition when necessary, and support creative and productive re-use of vacant land.