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Addressing the Foreclosure Crisis: Action Oriented Research in the Greater Atlanta Area Michael J. Rich Emory University.

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Presentation on theme: "Addressing the Foreclosure Crisis: Action Oriented Research in the Greater Atlanta Area Michael J. Rich Emory University."— Presentation transcript:

1 Addressing the Foreclosure Crisis: Action Oriented Research in the Greater Atlanta Area Michael J. Rich Emory University

2 Atlanta Metro Area Year City population (thousands) % of metro area 197049533 198042522 199041516 200041612 200746411

3 Atlanta Profile Georgia is a nonjudicial foreclosure state— – Initiated by lender (or its agent) and not subject to court supervision – Entire process from initial notice to court house sale less than 45 days Few borrower protections Foreclosure filings increased in 13-county metro area from 37,000 in 2005 to 58,000 in 2007 (57%), which is almost 4 times the level of 2000

4 Metropolitan Housing Conditions and Trends U.S. AverageAtlantaChicagoWashington, DC Population (000s, city/suburbs), 2007433/4,8392,738/6,785588/4,718 Poverty (%, 2007, city/suburbs)21/1020/816/6 Housing Units (000s) 2007 % chg/yr, 2000-07 127,895 1.4 2,113 3.6 3,752 1.2 2,133 1.7 Vacancy rate (%, 2007) Renters Owners 8.0 2.5 11.5 4.3 8.1 2.7 7.4 2.3 Homeownership (%, 2007) Total Minority 67 50 70 55 69 53 68 57 Housing Values Owner-Occupied, 2007 Avg. Gross Rent, 2007 278 878 260 909 325 920 521 1,282 Housing Prices (OFHEO Index) Q1/2000 – Q4/2006 Q4/2006 – Q2/2008 5.5 -5.9 2.5 -4.4 5.3 -5.5 11.5 -11.7 Housing Affordability Pay more than 30% income for housing Renters Owners 49 50 47 Hendey, Kingsley, Pettit, Metropolitan Profiles, 2008

5 Home Value Trajectories for the Atlanta Metropolitan Area Source: Case-Shiller Index, Immergluck and Lee, 2008

6 Mortgage Market Conditions and Trends Hendey, Kingsley, Pettit, Metropolitan Profiles, 2008

7 Percent of Home Mortgage Loans Made by Subprime Lenders, 2003-2005

8 Foreclosure filings, June – August 2008 Number of filingsForeclosures per square mile

9 Atlanta Area Response Limited response prior to NSP – Prevention activities Consumer Credit Counseling Services CD and Housing counseling groups Atlanta Legal Aid Homeowner Defense Project DeKalb County Foreclosure Task Force – Mitigation activities Land bank authority reinvigorated ANDP, Enterprise launched initiative (50 homes)

10 Neighborhood Stabilization Program Profile Six recipients in Metropolitan Atlanta – DeKalb County$18.5 million – City of Atlanta$12.3 million – Gwinnett County$10.5 million – Fulton County$10.3 million – Clayton County$ 9.7 million – Cobb County$ 6.9 million – State of Georgia$77.0 million

11 DeKalb County NSP Strategy Geographic targeting: five tiers Social targeting: 25-30% of NSP funds to households <50% of AMI ($35,600) Strategic use of funds (leverage): StrategyDollarsUnits Financing mechanisms$.7.5 million100 single family 1 multi-family Purchase and rehab$7.5 million56 units Land bank$500,0004 units Demolition$500,00028 units Redevelopment$500,0004 units Administration$1.8 million Less than 200 units v. 10,000 foreclosure filings Jan – Sep 2008

12 DeKalb County Priority Areas Number and percentage of subprime loans Number and percentage of foreclosures Number and percentage of defaults and delinquencies Source: DeKalb County NSP Application, draft

13 Sustainability/Stabilization Principles Priorities for properties located in areas with: Existing community group or organization Overlay zone or LCI initiative Senior citizens or youth facilities High crime rate Major employment center Special needs Threat to major multi-family development

14 Partners Public Agencies – Atlanta Regional Commission – DeKalb County, Fulton County, Atlanta – GA Dept. of Community Affairs – Federal Reserve Bank of Atlanta Nonprofit Organizations – NeighborWorks – Atlanta Legal Aid Society – Atlanta Neighborhood Development Partnership – Enterprise Community Partners – Annie E. Casey Foundation Atlanta Civic Site – Atlanta Housing Association of Neighborhood-Based Developers

15 Work Plan Focus on DeKalb and Fulton Counties and city of Atlanta (about 42% of foreclosure filings) Assist with NSP application – Identifying areas of concentration Emphasis on REO neighborhoods – Subprime  Foreclosure filings  REOs 1.Identify inventories and hotspots 2.Profiles of neighborhoods 3.Monitoring response

16 Challenges and Opportunities Challenges Building a data system across multiple counties Time and attention of partners Crowded field but lack of coherence Lack of fit between need and organizations Opportunities NSP funds as a spark for action Recognition of need for good data State funding (NSP) potential for greater state- local interaction

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