On January 23, the Committee on Financial Services’ Subcommittee on Housing and Community Opportunity held a field hearing in Minneapolis, Minnesota on “The Impact of the Foreclosure Crisis on Public and Affordable Housing.” The subcommittee sought advice on how improvements to the Neighborhood Stabilization Program could assist communities facing high numbers of foreclosures as well as on what actions Congress might take to more generally address the troubled housing market.
Chairwoman Maxine Waters began the hearing by thanking Congressman Keith Ellison for his work to pass the Protecting Tenants at Foreclosure Act. The legislation, which went into effect in May 2009 – and is, unfortunately, set to sunset in 2012 – entitles tenants living in foreclosed rental property a 90-day notice before they are must move and holds the purchaser of foreclosed property to the terms of the prior lease.
To set a context for future remarks, Congressman Ellison noted that his district saw the highest number and concentration of foreclosures in Minnesota. Area homeless shelters, he recounted, saw that 10% of the demand for their services came from households impacted by foreclosure.
Two panels spoke to the area’s need of more federal attention. The first, comprised of local government officials, included: State Senator Linda Higgins, State Representative Jim Davnie, Hennepin County Commissioner Gail Dorfman, Minnesota State Housing Agency Commissioner Dan Bartholomay, and Minneapolis Director of Housing Policy and Development Tom Steitz. All agreed that barriers in the Neighborhood Stabilization Program kept it from working optimally. For example, some NSP requirements delay when a public entity can purchase a property. Before those requirements can be fulfilled (e.g. an environmental assessment), the property is sold to a private investor. Panelists also agreed that NSP’s requirement that properties be sold at a discount give an advantage to speculators who might pay more than a public entity for a property can.
A second panel was made up of people impacted by the foreclosure crisis as well as advocates. Former NLIHC board member Chip Halbach, with the Minnesota Housing Partnership, pointed out that the divergence of income and housing costs were the ‘main culprit’ of the crisis we are in. In Minnesota, he noted, that “between 1980 and 2008 rents increased 19% while incomes for renters decreased 10%.”
“America’s affordable housing need predates the foreclosure crisis, “noted Michael Dahl, of HOME Line, an organization that offers free legal, organizing, and advocacy services so tenants throughout Minnesota can solve their own rental housing problems. Both Dahl and Halbach thanked the Subcommittee for putting $1 billion for the Housing Trust Fund in the House Jobs bill, but pointed out that we need an ongoing source that produces $5 billion per year for the next 10 years. They stated that the absence of a federal housing production program was hurting us years ago and is hurting us now.
Straying from his written testimony, Mark Ireland, an attorney with the Housing Preservation Project, addressed the issue of race in housing disparities. “In every study I’ve seen, the foreclosure crisis and the housing crisis disproportionately impacts people of color and communities of color … we have to talk about race.” Both Waters and Ellison stated that they greatly appreciated testimony that so directly named the impact of bias and inequity.
The hearing concluded with testimony from two rental households impacted by foreclosure. Marion Anderson recounted his year-long struggle to maintain his rental unit and building as the owner / landlord went from neglect to abandonment. Utility shut-off notices, squatters, and an eventual new owner who seemed to want to price out the existing tenants made last year even more difficult than it needed to be … he was laid-off twice last year.
“The whole experience has been very stressful. I have an apartment full of stuff and have often thought that I had 24-72 hours before I’d be out on the streets.”
He thanked Legal Aid for helping him navigate a very stressful situation.
Lastly, Christina Louden, described her 6 ½ years on the Section 8 waiting list. Job loss and health problems made the absence of affordable housing even worse. Thankfully, in July 2009 she received her voucher and was “leased up in November 2009.” Christina ended her testimony noting, “I want you to know that assistance should be viewed as an investment. With the investment you are making in me and my family, you will see a big return. I will graduate college, find a good-paying job and help my children, so hopefully, they will not have to experience the difficulties I have had to face.”
For more reporting on the Field Hearing, visit:
