Arizona Borrowers Still Underwater

CoreLogic® released new data showing that 11.4 million people, or 23.7% of all residential borrowers, were underwater at the end of the first quarter of 2012. In Arizona 561,097 people, or 43.4% of residential borrowers, were underwater. Arizona's negative equity peaked in the fourth quarter of 2009 when 53.7% of borrowers were underwater. Although Arizona's negative equity is dropping, it's rate is still almost twice that of the national average.

Housing Counselors' Less Traveled Road

Not long ago, the road traveled by housing counselors and their clients "diverged in a yellow wood". Before the housing crisis and economic meltdown in Arizona, housing counselors helped families find their way to homeownership. The families learned the tools to become responsible borrowers and homeowners. The road to homeownership was smoothly paved with successful events culminating in the joyful purchase of a first home.  Now housing counselors have become foreclosure specialists, helping homeowners to save their homes. The road to foreclosure prevention is bumpy, filled with potholes of frustration, and ever-shifting  requirements and products. Counselors now must be part financials experts/part social workers, as they help people in the most dire of situations, steps away from homelessness.   Most housing counselors in Arizona work for small nonprofits struggling to stay afloat. In the past month, two housing counseling agencies have been forced to close their doors.  It's time to value our housing counselors and give them the resources they need to ensure their sustainability. In the future, Arizona will need housing counselors that can help families navigate both roads, the bumpy road to foreclosure prevention and the smoother road to homeownership.  Housing counselors were forced to take the road less traveled by, but they have made all the difference.

Celebrating Successes, Seeking Opportunities

Arizona Housing Alliance was hard at work this legislative session. We were successful ensuring the continuation of the Arizona Department of Housing for another 5 years. And we will continue the fight to prevent the last minute legislative budget sweep of $50 million from the $97 million mortgage settlement trust fund. 

One thing is clear from this last session. There is much work to be done in educating our elected officials about the housing needs of Arizonans and the state's role in alleviating these needs.

Whether it's helping them to understand the work of homeowner counselors, the effect of foreclosures on neighborhoods and communities, the lack of affordable rental housing in rural areas, or the overall shortage of decent housing for low income families and seniors, we all must become housing educators. 

2012 is an election year. This means there will be many opportunities to talk to candidates about affordable housing. 

Let's celebrate our successes, take advantage of all educational opportunities, and continue to work together to support policies and resources that ensure every Arizonan has quality housing that they can afford!

Mortgage settlement funds can't come soon enough!

RealtyTrac's March 2012 Foreclosure Rate Heat Map shows that Arizona had the highest foreclosure rate in the country last month. There were 9,497 foreclosure filings in Arizona in March 2012. This means 1 in every 300 homeowners received a foreclosure filing last month, more than twice the national average of 1 in every 662 homeowners.

The Arizona Attorney General's office will soon receive almost $98 million as part of the $25 billion settlement reached with the 5 largest banks and 49 state's Attorneys' Generals. The agreement settles state and federal investigations finding that the country’s five largest loan servicers engaged in unacceptable and sometimes fraudulent mortgage servicing and foreclosure practices. Arizona's settlement stipulates that the funds should be used for foreclosure prevention and mitigation programs. 

Until we solve our foreclosure problem, Arizona will not see economic recovery. 

The settlement funds can't come soon enough. 

Housing Is Health!

A spate of recent activity has highlighted the link between housing and health. 

 

The Center for Housing Policy's Impacts of Affordable Housing on Health summarizes that residential instability leads to mental health problems, elevated stress, and even hypertension and heart disease. Stable, affordable housing provides a platform for people to manage their chronic diseases.

A study of HUD's Moving to Opportunity program, published in The New England Journal of Medicine, found that women who used housing vouchers to move to lower poverty neighborhoods had lower obesity and diabetes rates. 

 

The Center for Disease Control's Health Impact Pyramid, shown below, places socioeconomic factors, such as housing, at the base of healthy interventions that have the largest impact. 

Funders are also catching on to the link between housing and health. An article in the Worcester (MA) Telegram tells how The Health Foundation of Central Massachusetts put the Health Impact Pyramid into action. They funded "Housing First" models to address homelessness in their community and were recognized by the U.S. Interagency Council on Homelessness as the first city of its size to end chronic homelessness. 

Intuitively, it always made sense that affordable housing can make us healthier; and now we have the research to back us up.

Arizona's Shrinking Supply of Housing for Lowest Income Renters

Arizona is the second worst state for providing affordable housing available for our lowest income families and seniors. 

 

According to a recent report by the National Low Income Housing Coalition, The Shrinking Supply of Affordable Housing, Arizona has only 20 affordable units available for every 100 extremely low income renters. That's below the national average of 30 affordable units available for every 100 extremely low income renters.

 

Nevada is the only state doing a worse job providing affordable housing for its poorest renters. Our similar foreclosure crises are wrecking havoc not only on homeowners but also trickling down to renters most in need.

 

Some of the affordable units are occupied by higher income renters, many who recently lost their homes to foreclosure. Other reasons these affordable units may not be available are that some may be in poor condition, or too far from jobs and public transportation. 

 

One consequence of this housing mismatch is that the vast majority of extremely low inome households spend excessive portions of their limited income on rent and utility costs, leaving little, if any, to spend back into the economy. These households are also the most vulnerable to becoming homeless if their income goes down or they have unexpected expenses. 

 

This report counters the perception that the foreclosure crisis and plunging home values have resolved the shortage of affordable housing in Arizona. In fact, the supply of affordable housing for our lowest income renters has actually shrunk.