Church Foreclosures on the Rise
Posted by Matthew Brian Hersh on March 23, 2012
Boston's historic Charles Street AME never missed a mortgage payment, but the church could not refinance and ultimately fell in arrears on its $4 million construction loan to be used to build a community center. Separately, the church, founded in 1818, has also reportedly defaulted on a $1.1 million balloon loan leading to the church's lender to begin the foreclosure process.
But this wasn't any lender. The black church had originally benefitted from the financial support of OneUnited Bank, a CDFI that lends to churches and community institutions. But the church, hit hard by the recession, had trouble paying its consruction loan off on time, and OneUnited, also affected by the recession, lost millons of dollars in investments, and ultimately received $12 milion in TARP funds, which is has yet to repay.
All of this has resulted in a public deterioration of the relationship between two prominent community institutions.
This is just one of countless instances of banks foreclosing on churches. According to a recent report, 270 churches have been sold after defaulting on their loans, with 90 percent of those sales occurring after the lender, showing no appetite for forbearance, sought to simply foreclose.
What's more, as parishioners, particularly in lower-income communities, lose their jobs, church donations decline, placing additional burdens on a church to find cashflow. All this points to continued fallout from the economic crisis that continues to take disproportionate tolls not only on lower-income communities but also their congregations.
While Charles Street AME's story is tied to a community lender, it's notable that several churches are using the lenten season to urge congregations to move their money to local banks in protest of mass foreclosures. PICO National Network, a coalition of social justice congregations, has taken up the campaign.
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With Merger, Enterprise Expands Financing for “Workforce” Housing, Commercial
Posted by Miriam Axel-Lute on March 22, 2012
Enterprise Community Investment, the for-profit financing subsidiary of Enterprise Community Partners, has merged with Bellwether Real Estate Capital to form Bellwether Enterprise Real Estate Capital LLC. Enterprise says the merger is consistent with the direction offered by its long-term visioning exercise, and is designed to "diversify its revenue streams and augment its LIHTC syndication business revenues."
The new entity will be headquartered in Cleveland, with originators in 13 cities nationwide. The merger moves Enterprise into the commercial real estate sector, and into more market-rate housing. However, this is an expansion, not a shift in focus, says Enterprise. VP Jon Searles told Shelterforce:
Nothing will change for current Bellwether or Enterprise customers. While Enterprise will continue to focus on expanding the supply of affordable and moderate-income rental housing where it is needed most, they will expand their Freddie Mac business into workforce/market-rate housing. CDCs can now access financing across the affordable and market-rate sector as well as the commercial mortgage banking sector to include office, industrial and retail.
Enterprise defines "workforce housing" as affordable up to 120 percent of area median income and located near job centers. "This will allow Enterprise to create more diverse, sustainable communities that offer mixed-income housing and jobs that come with financing and developing commercial mortgage banking properties such as office and retail," said Searles.
This is already a strength of Bellwether's, he adds: Out of the 51 multifamily deals closed by Bellwether in 2011, 50 of them were for financing “workforce” housing.
Lamar Seats (pictured), currently SVP of Enterprise's Multifamily Mortgage Finance business will serve as CEO of Bellwether Enterprise, and Ned Huffman of Bellwether will serve as president. The transaction is expected to close in the second quarter.
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Honoring Justice
Posted by Alan Jenkins on March 16, 2012
Earlier this month, I had the honor of speaking at the memorial service for civil rights hero and respected jurist Judge Robert L. Carter. These were my reflections:
I had the privilege of serving as Judge Carter’s Law Clerk in 1989. But years before that, I was sure that I wanted to know this man, and to be known by him.
During college, I worked as an intern at the American Civil Liberties Union, and I was assigned to assist Dr. Kenneth Clark in fashioning a school desegregation remedy for, of all places, Topeka, Kansas—which had yet to fully desegregate. Dr. Clark had me read Richard Kluger’s book, Simple Justice, chronicling the road to Brown v. Board of Education.
On page 271, I met a man who Kluger described as “a limber, quiet, and strongly self-disciplined black lawyer named Robert Lee Carter, who came to the [NAACP] Legal Defense Fund after a stormy career in the Air Force.” I was intrigued.
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The Lifecycle of Predatory Equity
Posted by Matthew Brian Hersh on March 15, 2012
The New York City Urban Homesteading Assistance Board (UHAB) has a new report out that examines the "lifecycle" of predatory equity—a practice where real-estate speculators over-leverage buildings with the intention of forcing tenants out.
The report points to a potentially alarming cycle where banks, looking to stabilize their balance sheets, sell notes in foreclosure to the highest bidder at face value:
Not only has this debt-level already proven to be unsustainable, it does not account for the already deteriorated conditions. Thus, affordable housing stock in NYC is being swept into a second round of Predatory Equity. Tenants suffer throughout the process."
Click here to read the report. UHAB follows predatory equity developments on its blog, The SurRealEstate.
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The End of the Rural “Suburb?”
Posted by David Holtzman on March 13, 2012
I read a recent column that suggested getting rid of the word “suburb.” While there’s still a distinction between the central city and the outskirts, the author noted that many of the outskirts have acquired an urban character, and can no longer be dismissed as the white bread, boring suburbs. The stereotypical suburb, with its connotations of white flight and a rigid separation of residential areas from commerce, is transforming into something more interesting, more comparable to its downtown neighbor, and the old term no longer fits.
What about suburban-type places that exist in isolation from cities? I’m thinking of suburban subdivisions that have popped up over the years in seemingly random locations, well outside the metropolitan orbit. One such place near where I live, 50 or so miles from Richmond, Virginia, is a subdivision built in the 1960s. This gated community has a homeowner’s association, small lots, meandering streets that get you nowhere in a hurry, and utter isolation from any stores, cafes, or civic institutions. (Except to the extent that the homeowner association is a civic institution) Over time the neighborhood has probably changed somewhat in its demographics, as some of the homes have filtered to people with lower incomes and more renters. What has not changed is what the neighborhood was designed for, to give people a chance to settle outside crowded urban cores, away from incompatible business and industry. And, perhaps, away from other undesirable elements, though as with any neighborhood, what is undesirable is in the eye of the beholder.
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NYC’s Philanthropy Bagel Hole
Posted by Michael Hickey on March 11, 2012
New York City has everything, just like this bagel. Yum! The secret, as they say, is in the water. And water, as they say, is life.
But there’s a hole in the bagel, dear Liza, dear Liza. When I first came to NYC, still wet behind the ears and tasked with helping distribute money from Deutsche Bank’s foundation, I was sent to meetings. Lots of meetings. Very interesting meetings, where the community development banking luminaries of the day would hold court: Carol Parry, Phyllis Rosenbloom, Mark Willis, Marc Jahr, Bob Rosenbloom, Michael Feller, Greg King, Hildy Simmons, Gary Hattem. Or other meetings, where the United Way, Ford or Rockefeller called the tune, and the jolly members of NYRAG would troop in to talk about the inner workings of domestic microfinance, workforce development, educational reform, financial literacy, homeownership, arts and economic development, you name it. There was a palpable core of philanthropic leadership really focused on the challenges of the city, and they held significant mass. Their effect was gravitational: where they led, others followed. They drove discussion, led thinking, catalyzed partnerships, commanded attention. You may not have loved what they thought, or how they went about things, but their presence was manifest, and their impact was broad.
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Don’t Rewrite Andrew Breitbart’s Legacy
Posted by John Atlas on March 7, 2012
I extend condolences to Andrew Breitbart’s family. He died last week at the young age of 43. Because my brother died at age 36, I know how a sudden death of a young man shocks, saddens, and pains a family.
I followed Breitbart closely while writing Seeds of Change, the Story of ACORN, the controversial anti-poverty organization. Despite his untimely death, we can’t and shouldn’t rewrite his legacy.
Let’s be clear: to cheer his death as many on the left have done is morally wrong. Breitbart was tough, funny and hard working, qualities that his friends, family, and even his opponents admired and loved. Among conservatives he will be remembered as a hero whose narratives mercilessly punished liberals with good cause.
Yet Andrew Breitbart devoted his life to serving the privileged and powerful, and particularly in the right wing establishment, through his special genius at manipulating mainstream media.
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Lessons in Revitalization
Posted by Richard Layman on March 5, 2012
Having lived in DC for nearly a quarter century now, I am still flabbergasted to see white people pushing baby carriages on streets in my old neighborhood on H Street in Northeast. Now a national example of successful "commercial district revitalization," in the late 1980s the area was collateral damage in the crack epidemic and stages for murder, violence, and despair..
Even in some of DC's worst times we've had the advantage of operating in a comparatively strong metropolitan real estate market so that there was some demand, especially for historic residential building stock, even if this demand was mostly generated by "urban pioneers" willing to buck the trends that then favored suburban living choices.
Probably the biggest lesson I have learned is that your opportunities are shaped by whether or not your market is "strong" or "weak, that is, "is the metropolitan area adding population?" If you aren't adding population to your region, attractive new housing in the suburbs typically comes at the expense of already existing housing in the center city and inner ring suburbs of your region, setting the stage for disinvestment and blight.
At the same time, neighborhoods within metropolitan areas compete against each other as well. Even in weak markets, stable urban neighborhoods can be popular places to live with positive property values, and we can work with historic preservation, commercial district revitalization, and other strategies to reposition places so that more neighborhoods can become or remain competitive vis-a-vis other compelling neighborhoods. The National Trust Main Street Center of the National Trust for Historic Preservation is a great resource for commercial district revitalization programs, and the National Trust for Historic Preservation has many resources on historic preservation that are generalizable to neighborhood revitalization as well.
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Catalysts Turned Stalemates
Posted by Stephanie Allewalt on March 4, 2012
All too often in cities around the country, a once-clear vision of a "catalytic development project" is easily blurred by protracted discussions about whose idea provides the silver bullet. At the same time, we want to keep the development pendulum from swinging in the direction of shortsighted action. As we work to renovate our nation's existing building stock in the coming years, communities like Milwaukee may find that success means reviving that happy medium which provides for both insightful planning and swift transformation.
The Sydney Hih building in Milwaukee reveals just how the development pendulum often gets stuck. Sydney Hih, situated on the western edge of the city’s central business district, looms over Milwaukeeans just before or after they have traversed the Park East corridor. For those who are not familiar with the Park East corridor, the name hails from the days when Milwaukee engaged in the nationwide freeway frenzy which enamored countless mid-20th century planners and architects.
Where the Park East corridor now offers–somewhat unsettlingly–a plethora of undeveloped land with endless potential, the elevated Park East freeway once seamlessly carried travelers from the west side of downtown to a quaint neighborhood adjacent Lake Michigan.
The 2002-2004 razing of the Park East freeway became a national model for removing oversized vehicular corridors in central business districts, but left a fragmented land ownership pattern that included owners like the City of Milwaukee and Milwaukee County. Beautiful plans, design guidelines, and a form based code embraced the years following the freeway’s removal, and a mix of developments erupted on the corridor’s eastern fringes. Today, the illustrious Pabst Brewery on the corridor’s western end is seeing new life due to a late developer and philanthropist who committed to the brewery’s renaissance and established a family legacy. The land between these areas still provides a clear line of sight between the north and south ends of the corridor, with the exception of Sydney Hih.
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Urban Over Here ≠ Loss of Rural Freedom Over There
Posted by David Holtzman on February 29, 2012
On the national level, the Tea Party has been viewed by some as a conservative movement concerned with rolling back changes over the past few decades for social and economic justice. On the local level, though, community developers and planners may notice more a particular interest of Tea Party and associated "patriot" groups. This interest has to do with the false idea that planners are trying to change how people in suburban and rural areas live, by forcing them to move into urban, densely developed enclaves, or removing their right to build in rural areas.
Here in Virginia this idea has upended the comprehensive planning process in several localities, notably recently in Chesterfield County, a suburb of Richmond, where the leadership sent a draft plan back to planners for a re-write after Tea Party types challenged it. In other areas of the state citizens have questioned a state law that requires counties over a certain minimum population to designate areas for "urban development." The state chapter of the American Planning Association supports a bill in the state legislature this winter that would make these urban development areas optional, rather than mandatory, understanding that every locality is different and a one size fits all solution may not be appropriate.
National Housing Institute
