Wednesday, September 28, 2011

Fair Housing

Last Friday, I attended a seminar on “Affirmatively Furthering Fair Housing: What is Required” which was presented by the North Carolina Fair Housing Project. The session was very informative, and I thought you might be interested to learn more about fair housing as well!

The Fair Housing Act was passed in April of 1968. It was in passed in the midst of the Civil Rights Movement in response to housing segregation based on race. It prohibits discrimination in housing based on the 7 “protected classes” which are:

  • race
  • color
  • national origin
  • religion
  • gender
  • familial status
  • disability

Under the Fair Housing Act, no one can refuse to rent or sell housing, refuse to negotiate for housing, make housing unavailable, or deny a dwelling based on any of the protected classes. It also prohibits falsely denying that housing is available or trying to persuade a homeowner to sell or rent to a particular type of person. The ultimate goal of the Fair Housing Act is to end segregation, primarily based on racial and national origin.

The Fair Housing Act challenges HUD to do more than just refrain from discrimination. HUD must also “assist in ending discrimination and segregation,” and it is required to administer programs in a manner that “affirmatively” furthers the policies of the Fair Housing Act. Local programs that receive money from HUD must meet these same standards.

Legal Aid of North Carolina is working to protect the residents of North Carolina by promoting fair housing with the North Carolina Fair Housing Project. If you live in the state of North Carolina and you believe your fair housing rights have been violated, contact HUD’s regional office in Atlanta at 404-331-5140 or 1-800-440-8091.

Check back soon to learn more about what Forsyth County is doing to affirmatively further fair housing, particularly in regard to those with disabilities. 

Tuesday, September 20, 2011

Why Do People Live Where They Live?

Have you ever thought about why you decided to live where you do? Some people live in the same general area their entire life and probably never give much thought to this question. Some might move around more frequently to new locations that are dictated by jobs. And others might have more freedom to choose the location where they live. Whatever your circumstances are, there were probably a variety of factors that played into your decision to live in a particular home in a particular neighborhood.

Money Crashers recently published an article “Where Should I Live? 14 Important Factors When Deciding the Best Place to Live” which analyzes the most important factors in choosing a home. It analyzes the following fourteen factors:

  1. Affordability
  2. Taxes
  3. Employment Opportunities
  4. Real Estate Value
  5. Crime Rates and Statistics
  6. Proximity to Family and Friends
  7. Climate
  8. Education System
  9. Culture
  10. Commute Time and Public Transportation Options
  11. Food Options
  12. Town or City Size
  13. Healthcare Facilities
  14. Proximity to an Airport

Depending on the stage in your life, the importance of these factors could fluctuate over time. For example, employment opportunities might be the most important factor for a recent college graduate, while the education system might be most important for a young family, and the healthcare facilities might be most important for a retired couple.

Andriana Bicanin, the former AmeriCorps VISTA at the Forsyth County Department of Housing, did a survey of homeowners that had participated in the New Century IDA program. One of the questions she was interested in answering was “Why did you choose to purchase this home?” Of all the homes in Forsyth County, how did you choose to purchase this particular home, in this particular neighborhood?

Andriana’s survey listed 12 reasons for purchasing a certain home. Participants were asked to rank up to 5 reasons why they purchased their home. The survey found that among IDA graduates, the three most common reasons for choosing a particular home were proximity to work, proximity to retail, and the quality of the school district. 20% of participants ranked “proximity to work” as the top reason for purchasing their home, and 20% ranked “proximity to retail” as the top reason. 15% of participants ranked the school district as the top reason for purchasing their home. Other popular factors included proximity to work, proximity to supermarkets, proximity to public transportation, and proximity to parks.

By looking at both Money Crashers’ list of important factors and Andriana’s survey results, it is obvious that convenience is very important. People want a home that is convenient to the places that they travel the most frequently, such as work, grocery stores, school, and family and friends. It is likely that this will only increase in importance as gas prices rise and transportation costs increase.

While convenience is a major factor in a choice of a home, there are so many other factors in play, some of which you may not even be aware. Let us know how you chose your home, then stay tune for more discussion on housing and its connections with other aspects of our community!

Wednesday, September 14, 2011

Congratulations, Wave 28!!

Last night Wave 28 graduated from the New Century IDA program. It was an exciting evening for the graduates, their family and friends, and all of the sponsors and success coaches who were involved with these clients over the last year.

Graduating from New Century is quite an achievement. Each graduate completed 24 hours of financial literacy training, which includes topics such as budgeting, wise use of credit, reducing debt, preparing for homeownership, and investing for the future. Each participant also learned to transition from a lifestyle pattern of consumption to one of saving. They learned to budget and save money by opening an Individual Development Account, which they have been contributing to for the past year. Adopting a new behavior is difficult, and it required a commitment from each graduate.

Throughout the celebration last night, graduates also received some words of wisdom. Success Coach Bianca Green reminded the graduates that they will still face challenges. However, Ms. Green said, “You can only hold yourself accountable.” She said each graduate must stay true to their goals and aspirations, and “stay in the lane” on the way to homeownership. She also reminded graduates to love themselves. She said you must love yourself enough to make the decisions that will help you achieve the goal of homeownership, and you must love yourself enough not to let anyone cause you to lose focus.

It was a great night and a great celebration honoring Wave 28 and all of their hard work over the past year. As graduates of New Century IDA they are prepared for homeownership, and we look forward to seeing how their journey to homeownership progresses in the coming months. Check our Facebook page for more pictures of Wave 28’s graduation!

Monday, September 12, 2011

Individual Development Accounts: Program or Product?

In recent years there has been discussion about presenting Individual Development Accounts as a product rather than a program. IDA programs offer a unique opportunity for moderate to low income Americans to begin building their assets. Some leaders in the IDA movement have argued that a new model is needed in order to reach a broader base of asset- poor Americans. They have proposed a private sector account project that would be similar to a 401 (K) or an expanded IRA and would be managed through the financial services industry.

A study conducted by the National Economic Development and Law Center explains why some have argued that it is necessary to transition IDAs to a standardized financial product. The assumption is that over the long run, a standardized financial product would reduce per unit costs, and increase efficiency which would allow more low- income people to benefit from IDAs. They argue that the current program  based model is too expensive and resource intensive to be offered to millions of people and that it is not a profit maker for financial institutions.

Some large IDA sites have already begun standardizing some programmatic components and procedures. For example, they have used technology to standardize curricula for financial education and asset- specific education, online applications, data collection and management, training tools, and outreach. Some leaders are arguing for even greater standardization.

Despite the benefits that standardization could provide, there is concern about how this will affect IDA clients. A standardized web based financial education curriculum might meet the needs of the “average” IDA client but not specific needs of other users.  There is also a concern that this would exclude some populations in favor of less- labor intensive and more cost- efficient segments of the population.

Over the years, New Century IDA has maintained its “high touch/ hands on” approach. New Century attributes much of its success to this approach, realizing that it allows them to have a much deeper impact on participants. For example, a “high touch” program is able to change behavior, provide lifelong budgeting skills, and help clients become “banked” for the first time. These are high quality services that are difficult to measure but have a significant impact on the lives of clients.

Dan Kornelis, Executive Director of the Forsyth County Department of Housing, argues that the depth of service is more important than the number of people served. By investing more in each individual client, New Century is able to have a more lasting impact. Although high touch programs may not directly serve as many people as standardized programs, the reach is still broad. For example, if New Century is able to change the life of a single mother by helping her become more financially stable and purchase a home, then New Century has touched the lives of her children as well. The children benefit from growing up in their own home, and they also have a role model from which to learn budgeting and money management.

There is also the concern of whether or not low income Americans would access standardized programs. Financial products such as 401 (K)s and IRAs are already available to them. Since they are not accessing these products in large numbers now, it is unlikely that they would utilize a standardized IDA product. According to a 2008 report by the Employee Benefit Research Institute, participation rates in a 401 (K) type plan increase with income. The study found that among workers with family incomes less than $10,000, only 7.4% participated in 2005. That is compared to 45.2% of workers from families with incomes of $75,000 or more.

It would also be more difficult to complete a financial literacy curriculum online. Not all potential clients have access to the internet. Furthermore, the element of accountability is lost. With a high touch program, clients have coaches and build relationships with people that support and encourage them throughout the entire process. This element of a high touch program is essential for long term success, and it is lost with standardization.

The value of a high touch program is evident in the great success New Century has had since 1999. The program has helped 440 families purchase homes, and 98% of these families still live in these homes. This impressive success rate can be attributed to the relationships New Century builds with its clients and the support system it provides. As New Century continues to utilize this “high touch/ hands on” approach, we look forward to helping many more families become first time homebuyers!