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RHINO is the Rental Housing Information Network in Ohio
September 26, 2016 -- Johnny Appleseed Day. You can find his offspring all over Ohio.
RHINO motto for the third third of 2016: “What we learn, we share"

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Making HUD great (again?) Part 3: More mid range challenges
     In part 1 of Making HUD great (again?) RHINO focused on three urgent needs facing the new administration on November 9, 2016. In part 2 of this series, RHINO looked at some mid-range challenges for programs already underway. You can read parts 1&2 at http://home.rhinohio.com/advocate/making-hud-great-again. This month, RHINO focuses on some mid-range challenges that may fundamentally reshape both HUD and Federal housing policy over the next decade. In part 4, RHINO will look at two long challenges that have not hit HUD’s radar…yet. Watch for part 4 on October 24, 2016
     Address affordability. All during this election season, RHINO has lamented the “more of the same” approach to housing affordability that was evident in the Clinton and Sanders campaigns. The public is far ahead of elected leaders in recognizing that this is an issue. RHINO has conjectured that candidates get their understanding of the housing agenda from the Finance, Investment, Real Estate, Developer (FIRED) industry. Challenging housing affordability means addressing the problem from both ends: increasing supply of affordable units and increasing the ability of renters to pay higher rents. 
     In the short term, increasing supply means increasing reliance on the Low Income Housing Tax Credit program which is the only Federal program which is actually creating “affordable” housing. By itself, LIHTC is not structured to reach the lowest income households, but it's a start. 
     Preserving affordable units is another strategy that HUD uses to maintain the supply of existing affordable housing. Some new solutions are needed to reduce the cost of housing development and increase the incentive to build for the middle class. 
     Right now the only other hope for affordable housing is that a glut of upper income rental units will “trickle down” to more affordable levels. Don’t hold your breath. Most likely that hard hit localities will develop local initiatives like inclusionary zoning and local housing trust funds to increase supply of affordable units. It seems like Rental Assistance Demonstration (RAD) program will be the template for future preservation programs. Owners of senior housing in the 202 PRAC program, for example, are clamoring for RAD-like programs to revitalize their old housing stock.
      Increasing renter income to match the rising rents might mean expanding the numbers of housing vouchers or, enacting some form of universal rent subsidy program as an alternative to vouchers. While skeptics believe "that will never happen” there’s an interesting convergence of Republicans and Democrats in the House and the Senate looking at new ways to address housing and poverty issues. RHINO will be writing more about this in the next installment. Non-HUD solutions will include raising household incomes by increasing the minimum wage and improving general economic conditions.
      Enhance affordability in a new housing finance system. There’s a broad consensus in the housing finance field that the collapse of Fannie Mae and Freddie Mac in the Great Recession has created an opportunity to rewrite that Federal housing finance system. HUD, which owns the Federal Housing Administration, will have a role in the system wide overhaul, but is unlikely to be in the lead. Congress and the White House will need to agree on a new framework for supporting the housing finance system. National Housing Conference (NHC) has some ideas and Bloomberg News suggests that “Everybody Has a Plan for Fannie and Freddie But Nothing Gets Done.” While HUD won’t be a direct player, HUD should have an interest in preventing a sudden shift to unwind the glut of houses in FHA and GSE inventories and promoting regulations which require a portion of Federally guaranteed mortgages to be directed to low/moderate income units. 
     Learn how to regulate outcomes instead of processes. One of the underlying themes of the current electoral campaign is that US citizens are tired and resentful of intrusive regulation in their lives. HUD is one of the worst offenders. The proliferation of “HUD rules” needs to shift from how business gets done, to what housing achieves. To it’s credit, HUD has been experimenting with Management by Objective for HUD grantees and Pay for Success (PFS) models for some specific programs. 
     Here’s the reality, HUD stinks at regulation because it’s time consuming and requires hard decisions. Instead, bad properties are given “more time” to comply with “regulations” than to produce suitable outcomes. HUD’s inability to focus on outcomes is reflected in a recently released report on the RAD program. The report calculates all the dollars spent, units created, and investment generated, but Housing Finance magazine notes “A second phase of HUD’s evaluation will focus on how successful RAD is at improving the physical and financial conditions of federally assisted properties and how tenants have been impacted….” one is reminded of the quote by John Maynard Keynes that “in the long run, we’re all dead.” With Republicans in Congress demanding more cuts in administrative costs, deregulation of programs and, ironically, more accountability, HUD needs to move away from counting the beans it shells out and start counting the lives that are changed by their efforts.
posted September 25, 2016

What do you want to do? 
Mary Clark responds to CityScape story on Slumlords in Cincinnati.
"As an agent with a background in rental housing, especially multifamilies, I have always wondered what we can do to bring standards to investment and how to mandate some kind of education for any entity or person planning on purchasing rental housing in Ohio. This is a complicated situation but the lack of education for prospective investors seems to be an important aspect which is overlooked." Read more here.

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Affordable in Ohio is a five part series in November 2015 looks at affordability issues in Ohio. here

Affordable in Ohio here

Change in the Air here

Eviction in Ohio here


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Spencer Wells,
Aug 21, 2016, 7:29 AM