Tag Archives: The Housing Crisis

The New, Suburban, Face of Poverty

Between 2000 and 2008, large metropolitan areas saw their suburban poverty rates grow at twice the rate of inner cities, according to a new report by the Brookings Institution.

For example, in 2008, 23 percent more people were living in poverty outside the city of Cleveland’s borders than inside it. That’s a 44 percent jump since 2000, for a total of 9 percent of the suburban population. Meanwhile the number of poor in the city of Cleveland decreased, WCPN Ideastream reports.

Similar trends were reported in Akron and Youngstown.

Also of note:

-Social service providers are ill equipped to serve the decentralized population of the new suburban poor.

-Sun Belt cities like Miami, Phoenix and Los Angeles, hard hit by the housing crisis, have seen significant increases in poverty over the last two years.

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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.

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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.

-AS

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Buying my First House in Youngstown, Ohio

This article was contributed by Megan Reed, a late-20ies Youngstown resident and software salesperson.

As many young adults do, I recently took upon the endeavor of buying my very first home. I began my search after many years (almost ten) of renting apartment after apartment, and then renting an entire house. I always enjoyed the freedom that comes with renting. An apartment felt like an over extended stay in a hotel room, it really wasn’t my place to begin with, I just stayed there for a while-I can leave anytime I want, or that is, when my lease ends. After some time, I started to see and hear the value of ownership from friends who became proud home owners.

I began my search in Youngstown, focusing on both the North and south sides of the city. I first moved to the north side of Youngstown in 1999 for college, stayed mostly in the city for the majority of my time in college, and then found an amazing job in downtown Youngstown. Being familiar with living in the city, especially the north side, I had no apprehensions about moving back. I grew up in downtown East Liverpool, in a house from the 1890s my parents completely restored- and I knew I wanted something similar to the big, old house I loved so much as a child. The suburbs-Boardman, Poland and Canfield-had none of the architecture or price range I was looking for. Youngstown became my only answer.

One of the first sources of opposition I faced during this time was convincing my colleagues, family and some friends that buying a house in the city was not going to be such a “terrible mistake,” as one family member put it. I listened, nodded and then explained my theory- “If you want to make the city better, don’t sit back and wait for it to happen, do it.” I feel one of the greatest problems plaguing Youngstown has been the deterioration of our beautiful and historical homes run down by numerous slum lords, blight and abandonment. Yet regardless of how anyone felt about Youngstown, I received constant lectures about my safety, property values and of course- school districts.

After a year or so of searching, going on multiple home tours throughout the city, many times walking into homes whose next visitor is probably a wrecking ball, I found my house!
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It is a grand, all brick, 2600 square feet Craftsman style home from 1927. The area I live in is the South Side, a neighborhood as described by the appraisal as “stable.” The neighborhood has its own bright and dark spots- many of the houses surrounding me are well taken care of, and many are empty. (The house next to us is empty and has been for over a year)

Now that I determined which home to purchase my next step was to get the loan. I went through a brokerage agency- who took the best care of me. However that care came with a price- I worked non-stop for thirty days to provide every document ever created from my financial life. The experience is not one I want to relive anytime soon- constant time spent on the phone with the agency, working non-stop to save every penny to put for the down payment and working with my realtor to make sure every precaution necessary was in place to ensure this was a good house.
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After one month of signing the contract, working to produce everything but my first born to the brokerage agency, we moved into our house. Now that I’m here there have been a few additional surprises I was unprepared for.

Insurance: Finding home owner’s insurance involved trying to wrap my head around their system. The cost for my home’s insurance was through the roof- why? Because of the “rebuild” value. It would take X amount of dollars to rebuild this old house, and then factor in the city’s crime rate. This has also impacted my car insurance- why? Because the insurance companies feel living in the city of Youngstown increases my chances of theft, damage and bothering them for a claim.

Stigmas: First- i will state it is not my family who really has fears for me living in the city, they are very supportive and not from here- but our other family, colleagues and some friends expressed great concerns of us living in Youngstown. I’m not certain where their fears lie. Perhaps from the news, statistics or just the general stigma the suburbanites have against Youngstown, but it is prevalent. They have stated numerous times, “Are you sure you want to live there? Do you know how bad it is? You’ll never be able to get any money out of that house.”

So far yes, we have heard noises that I question to be either fireworks, cars back firing or gun shots. Yes- there is an abandoned home next door to me and many in the neighborhoods behind our home (about two on the block directly behind our house) and many across the street. There are occupied homes with great neighbors that I have met. They are proud people, taking care of amazing homes built to last for centuries. My neighbors were elated to meet us, relieved a young couple bought the home on their street- keeping out landlords, blight and protecting the integrity of the street. We have many homes around us who are kept up by proud homeowners such as myself. We have more than a purpose than home value- we are keeping the value of the city alive come hell or high water. My goal is not only to live in Youngstown, taking great care of my house but also my street, block, and city. There are many good people and homes left in our city, still many great neighborhoods with architecture unknown to the modern contractor, yet to be discovered.

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Homeless Find Homes Thanks to Cleveland’s Metanoia Project

A John Carroll University senior in Cleveland is using the city’s surplus of inexpensive housing and a $40,000 grant to house the homeless.

Brian Mauk began the Metanoia Project (from a Greek term for a drastic change in one’s life) last year to rehab foreclosed and abandoned homes for the area’s homeless.

Homeless people are recruited from the streets of Cleveland to take part in the project. Those who are matched with a home are expected to help out by working on other rehab projects.

Check out this video from WKYC:

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Preventing Foreclosure in Cleveland

Detroit Public Radio is praising the Cleveland nonprofit community for pulling together in the name of rehab, demolition and prevention.

First, there’s Neighborhood Progress Inc., drawing on $6 million budget to rehabilitate homes, two-thirds of which is private money.

Then, there’s Case Western Reserve University’s Center on Urban Poverty and Community Development, which has compiled a database of homes in the city which shows which are vacant and which have high-cost loans.

Finally, ESOP (East Side Organizing Project) goes door to door offering troubled homeowners assistance. Their success rate: 80%.

Apparently, the foreclosure crisis effort in Detroit pales in comparison. Cleveland has been seen as a model in this arena for quite a while.

An ESOP worker making rounds.

An ESOP worker making rounds.

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Left to Rot

By now, we’ve all seen these. Half-finished condominum complexes, shopping centers, homes, abandoned and left vulnerable to the elements.

This $5.8 billion complex was to contain 5,000 hotel rooms on the Las Vegas strip.

This $5.8 billion complex was to contain 5,000 hotel rooms on the Las Vegas strip.

The New York Times has catalogued some striking examples in a slide show called The Ruins of a Second Guilded Age.

“The sudden shift in the economy has unmasked such excess,” said photographer Edgar Martins.

Says Michael Olivares, a 30-year-0ld accountant who bought his Bakersfield Calfornia home for $410,000 in 2006, “We get a lot of tumbleweeds rolling through.”

Nine homes on his street have been foreclosed on this year.

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Columbus’ Condo Market Faltering

Columbus’s downtown condo market is (of course) suffering under the current housing bust, Columbus’ alt-weekly, The Other Paper, reports.

This is worrisome because the city had vested its hopes for revitalizing downtown on a influx of residential young professionals.

Columbus' Carlyle's Watch: Built During Boom Times

Columbus' Carlyle's Watch: Built During Boom Times

Condo sales account for 2 percent less of overall sales than they did before the bust and many new downtown condo developments are half empty, the paper reports.

This must be happening elsewhere. What will the timing of the economic downturn mean for this relatively new, and once-hot real estate market?

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