Housing Flashcards
Urban development action grant
Created in 1977 to supplement private investment. It also provided federal grants to leverage private capital for development projects, including housing, that wouldn’t be feasible without the subsidy.
Community development block grant
Established in the Housing and Community Development Act of 1974. It was designed to simplify federal aid and increase local discretion in the use of funds. Most of the money went to activities benefitting low and moderate income families. There was no requirement for local matching funds. It required a Housing Assistance Plan that requires municipalities to state housing need, housing condition, community goals, where housing will be provided.
Section 8 (Rent Supplement)
It was established under the Housing and Community Development Act of 1974. It provided rent supplements and broadened the way private housing could
be subsidized.
Difference between UDAG and CDBG
CDBG was locally allocated whereas UDAG was awarded at the central HUD office by national competition
1982 President’s Commission on Housing
Basically stated that housing was a state and local responsibility and advocated for concentrating federal aid towards housing allowance, rather than construction subsidy. Recommended less federal intervention in housing finance, more concentration on land use regulatory reform primarily at the state and local levels, and elimination of tax policies that subsidized housing through federal tax deductions.
The President’s Commission on Housing didn’t provide a status of housing need
Federal Reserve System
Regulates and provides credit to federally chartered member banks
Federal Home Loan Bank
Provides credit and regulates federal savings and loan associations, which have been the principal source of mortgage credit
Government National Mortgage Association (GNMA)
Buys mortgages backed by FHA and VA insurance, pools them, and issues securities based on those mortgages
Two national study groups in 1968 that evaluated nation’s housing
The Presidents Committee on Urban Housing (Kaiser’s) and National Commision on Urban Problems (Douglas)
Findings by the President’s Committee on Urban Housing and National Housing on Urban Problems
They found that there needed to be more affordable housing (26 million over the course of 10 years) and that there needed to be more subsidies to help with this effort.
Housing and Community Development Act of 1974
Created CDBG program and Section 8 Housing and the Workable Program for Community Development (which led to the increase in master plans and planning commisssions)
Federal Deposit Insurance Corporation and Federal Savings and Loan Insurance Corporation
Insure deposits in federally chartered institutions, safeguarding depositors savings against possible bank failure
Federal National Mortgage Association
Buys and holds mortgages including conventional ones
Federal Home Loan Mortgage Corporation
Packages mortgages from its member institutions and sells securities
Tax Reform Act 1986
Made rental housing less attractive as an investment and reduced the use of tax exempt revenue bonds for financing housing
It also reduces tax rates that made all deductions, credits, and tax shelters less valuable
Housing and Community Development Act 1980
Expanded federal aid to low and moderate income housing programs
Housing Development Grant (1983)
Made grants specifically for housing projects; this was a national competition.
National Affordable Housing Act (1991)
This was the first major housing act in a decade. Consolidated all remaining federal housing programs and required a Comprehensive Housing Affordability Strategy (CHAS). CHAS was a prerequisite for states and some local governments and needed to be certified by HUD to get money.
Addressed housing, supportive services, homelessness, poverty, economic development, community development
Omnibus Budget Reconciliation Act (1993)
Empowerment Zones and Enterprise Communities. Authorized HUD and Department of Agriculture to designate. Communities have great flexibility in use.
Two traditional local government functions affecting housing
Provision of utilities and determination of land use
Housing’s three interrelated components
Supply, Demand, Finance
Supply - includes all housing stock, new construction, labor, industry, and services needed to maintain the supply
Demand - determined by the number and characteristics of consumers of housing services, ownership patterns, and market behavior
Finance - significantly affects the supply and demand
Characteristics of housing supply
Vast majority of housing is provided by the private sector
Private ownership is widely dispersed (65% of all
Units are privately owned)
Basic unit of measurement for housing supply is housing unit, which may be a single family house, apartment, or condo
US census classified housing units by certain characteristics
Tenure (occupant Or renter)
Housing type (Single family, multi family)
Size (most important measure is the number of bedrooms)
Cost
Basic unit of housing consumption
Household - the demand of households determine in large where housing units will be located in relation to population
Housing demand is influenced by these two factors
Location and cost
Housing Vacancy
Housing vacancy is an important housing indicator because it indicates the degree of choice available.
Too high of vacancy rate can be a problem for owners trying to sell or rent
Too low can force prices up
Vacancies between 4-5 percent are usually considered healthy
17% of US population moved annually, mainly to a different unit in the same area
60% of all movers stay in the same you the and 80% stay in the same state
Filtering
Refers to the process involving a chain of moves: housing trickles down if it becomes available to lower income families and it trickles up if it is occupied by a higher income family
Overall financing of housing
Short term loans for construction of new housing
Long term mortgages for completed and existing housing
Mortgage insurance for protecting the loans
Secondary mortgage markets providing liquidity and investment opportunities
Housing is counter cyclical
Fluctuations in housing construction are largely attributed to fluctuations in financial market.
When the economy is booming, housing construction tends to decline, when the economy is in decline, housing construction is likely to increase before other areas of economic activity do so
Goals for housing: community life
Objective of housing policy is the provision and maintenance of safe , sanitary, satisfactory housing together with efficiently and economically organized community families to support it.
Should be protected from fire, hazards, weather, crime
Zoning, subdivision control, and building and housing codes are means of managing housing and its development
Goals for housing: social and equity concerns
Every community should provide safe, satisfactory housing opportunities for all households at costs they can afford without regard to income race religion national origin family structure or disability
There should be an aIm to address subpar housing for the poor, those unable to find housing, and those that are discriminated against
Goals for housing: stability of production
Housing production should be stabilized to reduce fluctuations in construction, ensure predictable supply of new units,
Provide steady employment, reduce
Inflationary trends, and direct a reliable
Flow of credit into the industry
Goals for housing: design and environment quality
Housing should be designed to accommodate household needs, optimize the quality of life, use land and resources efficiently, create minimal
Adverse impact on the natural environment
Housing need versus housing demand and supply
Housing need is a social or evaluated concept
Supply and demand are economic terms
Before needs can be determined, housing standards need to be established
8 standards of adequacy that can be used to evaluate housing in a community
Cost relative to income, condition, Crowding, Design, Choice (household should be able to select housing unit suitable to its needs), Community facilities, Environmental factors, Control
Housing market analysis
Projects the number of housing units required at some future time
Housing market area
Determine the boundaries of the market area is the first step in market analysis
Housing market area serves as the basis for compiling all data
Market area is an interdependent economic geographic and social entity within which all housing units are potentially competitive
Three factors determining future demand for housing
Change in the number and composition of households.
Change in the number of vacant units
Change in the existing supply of housing
Rent control
Sometimes viewed as a solution to the high housing costs that can result from
Too few vacancies.
In practice, it can discourage the building of additional units - units that would increase the supply, provide more vacancies, result in better housing prices
Steps in housing market analysis
Collect and analyze population data > Collect and analyze housing data > Determined average annual demand
Elements in a housing policy plan
Identify issues
Father and analyze data
Setting program objectives
Implementing plans
Average size of a house has grown significantly over the past 30 years
National Association of Homebuilders found that homes have increased in size. The average American house size has more than doubled since the 1950s.
It now stands at 2,349 square feet.
HOME Investment Partnerships Program
Authorized by Cranston- Gonzalez National Affordable Housing Act 1990 that was a federal block grant that provided funding to states and localities to be used exclusively for affordable housing activities to benefit low income households
