Tag Archives: Freddie Mac

Alyssa Katz: Reconsidering the American Dream

Author Alyssa Katz called on concerned individuals to play an active role in shaping new federal policies toward homeownership in a speech today at Cleveland State University’s Levin College of Urban Affairs.


Katz, author of Our Lot: How Real Estate Came to Own Us, spoke as part of the CSU’s ongoing “Building Our Future Beyond Foreclosure” speaker series.

“History has handed this country and all of us this great tragedy and this great opportunity,” Katz said. “In the throes of this national trauma, the idea of community development really has to go mainstream.”

Federal invention in the housing market has a long history in the United States, Katz said, beginning following the Great Depression with the creation of the Federal Housing Administration.Government sponsored housing lenders Fannie Mae and Freddie Mac followed. Later, during the white flight of the 1970s, the government enacted the Community Reinvestment Act to hold lenders accountable for supplying credit in low- and moderate-income neighborhoods.

Now, following the devastation of the foreclosure crisis in Cleveland and elsewhere, our regulatory and housing subsidy environments are in need of another overhaul, Katz said.

She recommended retooling the Community Reinvestment Act and overhauling the banking regulatory structure to meet the challenges of the 21st Century.

“How can a global investment system that pools resources from all over the world remain accountable to local communities?,” Katz implored. “This question is one of particular urgency for Cleveland and Ohio.”

Building stable communities with lasting value will take the cooperation of bankers, community development officials and city planners in addition to average citizens that demand sensible policy solutions, Katz said.

“If the federal commitment to supporting home ownership is not in question. The terms on which it will operate are still in question,” she said.

“How can [banks] underwrite not just the value of an underwrite on one home but on the total community in which it sits?”

Prior federal interventions achieved meaningful results, drastically reshaping American neighborhoods and giving birth to suburbanization and later urban renewal, she said.

But special interests are using the housing crisis to attack successful government housing policies like CRA, despite overwhelming evidence that CRA lending did not contribute to the housing crisis, Katz said.

Moving forward, we need an “explicit government framework for community reinvestment,” Katz said. “Those of us who know how important government policies are to giving communities access to credit have to be pretty specific.”

Katz’s speech was followed by a panel discussion including Robert Curry, director of The Cleveland Housing Network, Christine Henry, director of the WECO Fund and Ruth Clevenger, Community Affairs Officer at The Federal Reserve Bank of Cleveland.

Addressing potential changes to the CRA, Clevenger recommended expanding the legislation to include more financial service providers, outside of traditional “brick-and-mortar” banks.

Secondly, she said, despite CRA’s benefits, it hasn’t been enough to address the current vacancy and abandonment problems being seen across the region.



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