Beckoning Smart Planning on Beacon Hill

Image Credit: MA Smart Growth Alliance 

Though visitors to Massachusetts often complain about the state's confusing streets patterns, the Commonwealth has remained remarkably resistant to suburban sprawl. In keeping with this spirit, the Massachusetts State House is entertaining an amendment to the state Zoning Act and Subdivision Control Law. See H.B. 1859, "An Act Promoting the Planning and Development of Sustainable Communities." The proposed bill, which was endorsed by the Department of Housing and Community Development, Massachusetts Alliance for Smart Growth, the Department of Public Health and others endorsed following a hearing on Beacon Hill last month, provides a statutory basis for site plan review, consolidates permitting, incorporates reduced requirements for variances, encourages Low Impact Development techniques, and a reformed master planning process. Most interestingly, the bill includes a community "opt-in" in which cities and towns that preserve open spaces in new developments and express commitment to environmentally sustainable projects will receive preferential consideration for funding from the state. David McCay and Brian Casaceli note in Mirick O'Connell's excellent "On Solid Ground" blog that the bill has a long journey to becoming law and follows the path of previous unsuccessful legislative attempts at land use reform but the current climate on Beacon Hill bodes well for a 21st century approach to planning and growing in the historic hub of the nation. 

Breaking the Fourth Wall: Week of June 16

Today we continue the weekly "Breaking the Fourth Wall" series that directs the blog's spotlight toward a particularly innovative or promising affordable housing project, luminary, or organization. 

In her recent piece on crowd funded real estate, Emily Badger profiled Fundrise, a Washington, D.C.-based initiative that serves as a "Kickstarter campaign that may improve neighborhoods." The fund essentially sells small shares of urban renewal projects to neighborhood residents and is making waves in real estate circles for its innovative approach to community development.

Image Credit: Fundriser 

A major bonus of Fundrise's crowd funding model is promoting local ownership of changes to the neighborhood. Real estate development often involves startling changes to urban landscapes. These decisions are usually made by investors who are disconnected from the neighborhood and have little stake in its trajectory. Crowd funding allows residents- even those who only have a small amount of capital to expend- to formulate pro-growth policies at a sustainable pace appropriate for the streets, corners, and squares of individual neighborhoods and not for sweeping redevelopment agendas. Without the developer middlemen, crowd funding presents the opportunity for residents to see (and be surrounded by)  the returns on their investments.

While many commentators express skepticism about the feasibility of Fundrise's future, crowd funding is an exciting alternative to the traditional development model of outside investors taking a gamble on neighborhoods in which they don't live. Whereas breakneck development often displaces longtime residents and prevents those without money from having any say in the future of the neighborhood, Fundrise's low threshold for community engagement might just lead to more inclusive and affordable neighborhoods that embrace change that puts locals first.

Where Do We Come From? Where Are We? Where Are We Going?: Snob Zoning and the Eternal Questions

In her new book, Snob Zones: Fear, Prejudice, and Real Estate (Beacon Press, May 2013), longtime New York Times real estate journalist Lisa Prevost examines the exclusionary zoning policies that have left our cities and towns increasingly segregated by income and have dealt some crushing blows to the affordable housing movement. The decisions of community officials to place onerous (sometimes four-acre) lot requirements and various setback provisions, have blocked the construction of multifamily, mixed-income, and cluster housing in tony suburbs and bucolic country hamlets alike. Prevost centers her coverage on the Northeast, which has been the site of efforts to keep affordable housing out of pricy towns in the name of "low density" or preserving "local character." See Southern Burlington County NAACP v. Twp. of Mount Laurel, 336 A.2d 713 (1975) (holding that a municipality must use its land use regulation to create a variety of housing choices and cannot use its powers for discriminatory purposes); Southern Burlington County NAACP v. Twp. of Mount Laurel, 456 A.2d 390 (1983) (holding that municipality's land use regulation must affirmatively afford the opportunity of low and moderate income housing). Decades after the Mount Laurel decisions, many communities continue to devise subtle zoning policies that result in socioeconomic homogeneity.

Image Credit: Seabord Properties 

Prevost and Princeton sociologist Douglas Massey posit that this segregation is leading to increased levels of income inequality and fearful misunderstanding of people in other economic classes. The conscious decisions of residents of individual municipalities to isolate themselves into groups of "people like us" is having a larger affect on the entire nation as people of different income levels rarely rub elbows or share postal codes. The effects of these decisions is felt in stratified civil society organizations and is still routinely litigated in courtrooms. Last year, the Connecticut Fair Housing Center brought a lawsuit against the the Housing Authority in the predominately white Litchfield County town of Winchester, alleging that the Authority's policies systematically discriminated against minority applicants to its Section 8 program by limiting program applications to residents of the already very white county. See Carter et al v. Hous. Auth. of the Town of Winchester (D. Conn., filed Aug. 1, 2012). The Litchfield example is just one of many court battles over the future of the makeup of American communities. The proliferation of snob zoning, thoughtfully explored in Ms. Prevost's book, has led to a lack of mobility for those seeking affordable housing options across the country and signals further troubling exclusionary decisions made by America's zoning boards.

Breaking the Fourth Wall, Hon: Week of June 9

Today we continue the weekly "Breaking the Fourth Wall" series that directs the blog's spotlight toward a particularly innovative or promising affordable housing project, luminary, or organization. 

Good Morning, Baltimore!

Like many of the interesting issues covered by this blog, today's Breaking the Fourth Wall post is inspired by Professor Kaid Benfield's article in the The Atlantic Cities and an informative public radio interview. The abandoned buildings in Baltimore, the often-overlooked gem overshadowed by other East Coast cities, are undergoing a remarkable transformation and the mayor's office has implemented its Vacants to Value program to encourage a diverse array of Baltimoreans to partake in the city's new chapter. Vacants to Value is unlike many other ambitious citywide redevelopment projects because it focuses on small scale development, small businesses, and smart growth to avoid the common gentrification pitfall of resident displacement.

Image Credit: Baltimore Sun 

Community Enterprise, Community Effort 

The crux of the Vacants to Value program is the encouragement of the purchase and subsequent rehabilitation of many of Baltimore's more than 16,000 blighted properties. In order to stave off the risk of large-scale developers buying properties and charging unaffordable rents, the program is sponsoring a series of community workshops. These workshops teach local residents about buying vacant properties in the hopes that locals will comprise the vast majority of new homeowners. The program is also aimed at facilitating the purchase of individual units in multifamily and mixed-income buildings and creating incentives for buyers to rent out rehabilitated units at affordable rates below market value (a pleasant surprise in an otherwise market-driven initiative). 

Restoring the Charm to "Charm City"

Baltimore is known to those who love it (and even to some of its detractors) as "Charm City" and the Vacant to Values program is committed to preserving the historic charm- think comely brick row houses and, yes, even formstone. Maryland offers impressive historic property tax credits, including a 20% credit for owner-occupied "certified historic structures", and many homeowners are using these credits to make improvements to formerly deserted neighborhoods. 

Banking on the Land Bank

Vacants to Value extends beyond the transformation of Baltimore's distressed buildings. In the unfortunate cases where abandoned properties have to be demolished, the program effectively establishes a land bank, with vacant lots to be used for greenbelts, public parks, and community gardens. Professor Benfield expresses reservations about the program's commitment to sustainability and the land bank element is the best opportunity for Vacants to Value to contribute to Baltimore's green future. 

Image Credit: Maryland Housing 

Though Vacants to Value is a program experiencing growing pains and many skeptics question the likelihood that program will be able remain committed to providing affordable and mixed-income housing in the face of market forces, it represents a conscientious citywide effort to create a more

livable community that can be accessed by residents of all income brackets. Baltimore is a city on the move that still retains a strong local flavor and hopefully Vacants to Value will provide the opportunity for those who stuck by Baltimore during tougher times to enjoy the city's charming new chapter. 

Foreclosure Rate Drops and Optimism Spikes

Image Credit: The Warren Group/ Boston Globe  

This week, a new study released by the Massachusetts Housing Partnership meant more good news for the Commonwealth's foreclosure prevention movement. The study, using metrics from the data firm RealtyTrac, found that the number of foreclosures in the first quarter of 2013 decreased by 65 percent when compared with the same period last year (see graph for previous foreclosure figures). Many experts attribute this drop to the new state law that took effect on November 1, 2012. See St.2012, c. 194. This law, an amendment to M.G.L c. 244, requires lender to inform borrowers of their loan modification rights, mandates that all mortgage assignments be recorded, and created a task force to consider mediation. However, the full effects of this law and its relationship to the foreclosure rate in Massachusetts will not be felt for months and, in the meantime, housing advocates claim that there is always room for improvement, noting that the law does not apply to investment properties and fell short of establishing mandatory foreclosure mediation.

For Foreclosure Prevention Litigation, Procedural Steps Toward Substance?

Image Credit: Wikimedia Commons 

In his recent article, "New Formalism in the Aftermath of the Housing Crisis" (PDF), Fordham Law professor Nestor Davidson claims that recent judicial victories that have helped borrowers avoid foreclosure may present a "[problematic] shift too far toward procedural reform over structural efforts to respond to the legacy of the housing crisis." See 93 B.U. L. Rev. 389 (2013). While Professor Davidson raises some important concerns that "formalist" arguments that render foreclosures void- such as banks sending improper notices of default, failing to mention the role of Mortgage Electronic Registration Systems (MERS) as servicer, and failing to serve adequate process- will not create any incentive for lenders to change the substance of their lending practices and make meaningful changes, formalist arguments to void foreclosures do not always yield formalist, procedural results. In Massachusetts, this blog's home base, strong consumer protection laws and a cohort of top-notch legal aid providers have notched some impressive formalist victories that have translated into more opportunities for borrowers facing foreclosure to remain in their homes. See e.g.,  Eaton v. FNMA, 462 Mass. 569 (2012); U.S. Bank Nat'l Ass'n v. Ibanez, 941 N.E.2d 40 (Mass. 2011). In the wake of these landmark foreclosure decisions, laws have been passed (or, in some cases, seriously enforced for the first time) that require lenders to notify borrowers of their loan modification rights and set up face-to-face consultations with borrowers and, in a handful of communities (now including Lynn, MA!) have passed mandatory foreclosure meditation ordinances. It is true that banks have deeper litigation pockets and will begin to find ways to dodge procedural or formalist foreclosure arguments. However, the remarkable judgments won by those victimized by unscrupulous lending practices through these procedural channels have sparked foreclosure prevention with impact far beyond the letter of the law.

Fannie and Freddie Five Years On: Time for Contribution

Image Credit: Center for American Progress 

Nearly five years after the Housing and Economic Recovery Act (HERA) of 2008 established the National Housing Trust Fund to build, preserve, and manage affordable rental housing, the U.S. faces an estimated shortage of 7.1 million rental units for low-income and disabled Americans. See Pub.L. 110-289. Despite the grim state of affordable housing, the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation (Fannie Mae and Freddie Mac respectively) have recently posted record profits. Fannie and Freddie's improved financial positions have prompted the National Low Income Housing Coalition and others to call for the organizations' to fulfill their statutory requirement to contribute a portion of their profits to the National Housing Trust. This provision was waived when Fannie and Freddie were taken into a conservatorship by the Federal Housing Finance Agency (FHFA) in late 2008, but after five years and a turnaround in profits, the special protections given to Fannie and Freddie seem to have outlived any utility. As Congress prepares to hold confirmation hearings regarding Mel Watt, President Obama's nominee to succeed Ed DeMarco as FHFA director, serious pressure should be applied to the FHFA to lift the pass given to Fannie and Freddie and force them to contribute their statutorily mandated share to the National Housing Trust.