Friday, February 10, 2012

Designing a Fix for Housing (NYT Op Ed)

By JEANNE GANG and GREG LINDSAY
Published: February 9, 2012

RECENT efforts to fix the housing market — including Thursday’s $26 billion settlement with five of the nation’s biggest banks — have focused purely on the financial aspects of the slump. A permanent solution, however, must go further than money to address issues that have been at the core of the crisis but have been wholly ignored: design and urban planning.

Mortgage Plan Gives Billions to Homeowners, but With Exceptions (February 10, 2012)
Too often during the bubble, banks and builders shunned thoughtful architecture and urban design in favor of cookie-cutter houses that could be easily repackaged as derivatives to be flipped, while architects snubbed housing to pursue more prestigious projects.

But better design is precisely what suburban America needs, particularly when it comes to rethinking the basic residential categories that define it, but can no longer accommodate the realities of domestic life. Designers and policy makers need to see the single-family house as a design dilemma whose elements — architecture, finance and residents’ desires — are inextricably linked.

Take Cicero, Ill., a Chicago suburb that we studied as part of a new exhibition on the housing crisis at the Museum of Modern Art. The town may be infamous as the base of Al Capone or the site of anti-integration protests in the 1950s and ’60s, but today 80 percent of its residents are Latino, half of them foreign born.

Cicero is representative of a suburban transformation that went little noticed during the housing bubble and bust: suburbs have replaced inner cities as the destination of choice for new immigrants.

Indeed, nearly half of all Hispanics now live in suburbs, and new arrivals favor them over cities by two to one. Immigrants are one reason the number of suburban poor climbed 25 percent nationwide between 2000 and 2008. They’re also why Cicero was hit so hard by the housing crisis, with 2,049 foreclosures in 2009 alone — the second highest in Illinois, after Chicago.

Here’s where design comes in. Most of Cicero’s housing is detached, single-family homes. But these are too expensive for many immigrants, so five or six families often squeeze into one of Cicero’s brick bungalows. This creates unstable financial situations, neighborhood tensions and falling real estate values.

Too often, we see such mismatches as a purely financial issue. But instead of forcing families to fit into a house, what if we rearranged the house to fit them?

This doesn’t mean bulldozing Cicero’s housing stock. Instead, it means using existing, underused properties that might be renovated to provide a better fit. In Cicero’s case, that might mean turning to the scores of abandoned factories around it.

Such buildings are often no man’s lands thanks to fears of industrial contamination, which have left older suburbs pockmarked by blight while jobs and homes sprawl outward. But new techniques like “phytoremediation” — using plants like poplar and willow trees to absorb toxins — open the door to safer, less-expensive rehabilitation.

What remains is a wealth of steel, masonry and concrete that could be recycled into flexible live/work units. Rather than force Cicero’s residents to contort themselves to fit the bungalows, their homes can expand or shrink to fit them.

There’s one problem with such a plan: it’s illegal under Cicero’s zoning code. The town’s rules are typical of most suburbs, including the segregation of residential, commercial and industrial facilities; prohibitions on expanding and reusing buildings for new homes and businesses; and tight restrictions on mixed-use properties. Cicero’s code also defines “family” in a way that excludes the large, multigenerational groupings now common across the country.

This has been an issue for urban planners for years, but many of the proposed alternatives to suburban zoning merely swap one restrictive code for another. Only by loosening zoning to allow new combinations of home and work will we be able to bring innovative design to bear on the single-family house.

But new housing forms also demand new types of financing. Starting in the 1990s, subprime lenders targeted low-income and minority suburbs like Cicero, even when many residents would have qualified for prime loans. Latino homeowners tend to disproportionately invest savings in their homes, and as a result they lost two-thirds of their wealth between 2005 and 2009.

One long-term solution would be a type of co-op in which residents buy and sell shares according to their changing needs and circumstances. Unlike traditional co-ops, residents could purchase shares corresponding only to the units they occupy, not the land beneath, which remains in the hands of a “community land trust.” Such a structure would keep housing costs down while limiting residents’ exposure to the market. It would also provide a backstop for struggling homeowners, since the trust would have the legal right to step in and assist residents in the event of foreclosure.

Land trusts have thrived on a small scale in New York City and Chicago, among other places. The federal government should now scale up the efforts by transferring some of the nearly 250,000 foreclosed homes acquired by Fannie Mae, Freddie Mac and the Federal Housing Administration into a national trust or a series of local trusts.

Even after the housing crisis is over, we will need to build connections among local government officials, policy makers, financial institutions, residents and architects. Solving the slump requires a multidisciplinary approach combining new design, new paths to homeownership and new zoning to support both — in Cicero and beyond.

Jeanne Gang and Greg Lindsay are, respectively, an architect and a visiting scholar at the Rudin Center for Transportation Policy and Management at New York University.

Sunday, February 5, 2012

Feds sue St Bernard Parish for housing discrimination.

NEW ORLEANS (CN) - The United States claims St. Bernard Parish used a "blood relative ordinance" to deny African-Americans housing and keep them out of the parish after Hurricane Katrina.
St. Bernard Parish is just east of New Orleans' Lower Ninth Ward, which was devastated by Katrina.
A Louisiana parish is the equivalent of other states' counties.
In its federal complaint, the United States says St. Bernard Parish enacted an illegal "blood relative ordinance" after the hurricane to prevent homeowners from renting to anyone not related to them by blood.
Two other plaintiffs filed similar complaints this week: the Greater New Orleans Fair Housing Advocacy Center, and Nola Capital Group, of South Dakota.
All three plaintiffs accuse the parish of violating the Fair Housing Act, and ask the court to enjoin it from its "multiyear campaign to limit rental housing opportunities for African-Americans in St. Bernard Parish under the pretext of post-Hurricane Katrina recovery planning."
In his complaint, the U.S. attorney general says that in July 2005, before Hurricane Katrina, St. Bernard Parish was approximately 86 percent white and 10 percent African-American, and just 4 percent of the African-Americans were homeowners.
Neighboring Orleans Parish was 29 percent white and 67 percent African-American.
"As a result of the devastation of Hurricane Katrina, St. Bernard Parish and the surrounding communities lost, and have yet to fully replace, a significant percentage of their single and multi-family rental housing stock," the complaint states.
The average vacancy rate for rental housing in St. Bernard Parish from 2005 to 2009 was 6.3 percent.
On Nov. 25, 2005, two months after Hurricane Katrina, the parish imposed a 12-month moratorium on re-establishment or development of any multifamily dwellings without parish approval.
Uncle Sam says that in the metropolitan New Orleans housing market, including St. Bernard Parish, 52 percent of African-American households are renters, while just 25 percent of white households rent.
"The parish's moratorium was intended to and had the effect of limiting or reducing the supply of multifamily housing of more than five units and disproportionately disadvantaged African-Americans seeking to rent housing in St. Bernard Parish," the complaint states.
"On March 7, 2006, the parish passed another moratorium, this time prohibiting the rental of single-family homes in St. Bernard Parish allegedly to 'preserve the integrity of single-family neighborhoods ... until such time as the post-Katrina real estate market in the parish stabilizes.'" (Ellipsis in complaint.)
Four months later, the parish enacted an ordinance to restore single-family rentals, but required renters to obtain a permit from the parish. Not long after, the parish allowed renters who rented to persons "related by blood" to do so without a permit.
The United States says" "The parish's blood-relative exception disproportionately disadvantaged African-Americans seeking to rent housing in the predominantly white community of St. Bernard Parish."
"The parish's stated purpose in enacting the blood-relative ordinance was to reestablish 'preexisting neighborhoods,' and to maintain the 'integrity,' 'quality of life,' 'family atmosphere' and 'quiet enjoyment' of 'long established neighborhoods.'
"However, a council member who voted against the ordinance stated that it was passed 'to block the blacks from living in these areas.'
"Craig Taffaro, a member of the Parish Council at the time, drafted and sponsored the blood-relative ordinance. Taffaro admitted at the time that 'all we're doing is saying we want to maintain the demographics.'
"The parish's blood-relative exception was designed to be a proxy for race in order to artificially fix the racial composition of renters in St. Bernard Parish."
In August 2007, the parish issued a new renter permit process that included a $250 application fee, granted the parish discretion to deny permits, and allowed no more than two permits to be issued for every 500 feet in districts zoned for single-family use.
"The parish has denied homeowner-applicants, including African-Americans, permits to rent their single-family dwellings," the complaint states.
The parish rescinded its permit requirement in April 2011.
Between 2008 and 2011, 10 residents and homeowners complained to the Department of Housing and Urban Development that the parish racially discriminated through its permitting process. (g 35)
After investigation, the matter was turned over to the attorney general.
In 2009, the parish made comprehensive revisions to its zoning ordinances that eliminated multifamily housing as a permitted use in four zones. The revisions restricted new multifamily dwellings - defined as housing with three or more units - to just one zone.
"Through the comprehensive revisions, the parish reduced the land available for development of multifamily housing as of right by 99.3%, leaving only 109 acres for such developments," the complaint states.
The comprehensive revisions "severely limited or reduced the supply or availability of multi-family housing of more than three units and disproportionately disadvantaged Africa-Americans seeking to rent housing in St. Bernard Parish."
A federal judge in October 2011 ruled in a case brought in 2006 against St. Bernard Parish by the Greater New Orleans Fair Housing Action Center that the sequence of events surrounding zoning requirements in St. Bernard Parish "suggests the defendants have doggedly attempted to preserve the pre-Katrina demographics of St. Bernard Parish" and "presents ample evidence of intentional discrimination" against African-Americans.
"On January 28, 2011, John Trasvina, HUD's Assistant Secretary for Fair Housing and Equal Opportunity, filed a housing discrimination complaint on behalf of the HUD secretary ... alleging that the parish violated the Fair Housing Act by enacting and implementing the comprehensive revisions so as to continue to exclude African Americans from residing in the parish. On January 20, 2012, HUD referred this complaint to the Department of Justice as a potential pattern or practice violation of the Fair Housing Act," the complaint states.
In 2008, the parish and the Greater New Orleans Fair Housing Advocacy Center entered into a consent order settling the center's lawsuit against the parish.
Four months later, Provident Realty Advisors, a multifamily housing developer, approached Parish President Craig Taffaro with plans to develop four multifamily, affordable-housing developments in the parish at a cost of $60 million.
The parish was told that $34 million of the funding would come from low-income housing tax credits. The tax credits would expire if not used by 2010.
In response, the parish enacted a moratorium on new construction of multifamily housing.
"Between July 2009, and November 2011, the court repeatedly found the parish in contempt over its attempts to prevent or impede the construction of Provident's affordable-housing developments," the government says.
The U.S. seeks an injunction and civil penalties.