Nowhere land
Last week, our headline asked if we “were there yet?”
This week, we definitely landed somewhere. And it was not into a good place, if you are looking for a loan via the USDA 502 Direct mortgage program, which serves rural areas of the United States.
This includes the two families who were nearing completion of their mortgage applications for our completed homes in Philmont, NY. They were “pre-qualified” by USDA but had not yet received loan commitments. That cannot happen now until the new US fiscal year starts on October 1. And from what I understand, that funding will drop further in FY 25, reducing the number of individuals and families this program can serve.
This is the result of a more than 1/3 cut in funding for this vital USDA program in the two year budget agreement Congress enacted in March. But retrograde political action it is not limited to Federal money. This year, New York killed a mortgage program that offered subsidized financing for affordable homeownership through the State of NY Mortgage Agency (SONYMA.)
It was not a large program, at about $5 million annually, but it was a source of low-interest mortgage products for Habitat partner families that does not exist in the commercial market. It was a lifeline for dozens of Habitat operations and their partner families. Many are now in limbo. Habitat affiliates across the state are scrambling to complete the sales of constructed homes. Lives are on hold, and for non-profit operations running on shoestring budgets, the return of capital invested in construction is delayed, critically endangering sustainability.
So, in the midst of the greatest housing crunch in modern times, with residents fleeing NY and the northeast for more affordable locales, affordable mortgage money has all but dried up for home ownership programs.
So what, you may ask; can’t we impact more people by focusing on developing rental properties? While this is true at a certain level, it obscures the point that those impacted by the lack of access to safe decent housing are those who have traditionally been disenfranchised by existing housing systems.
There are a number of studies that demonstrate the social and economic benefits of homeownership. There is this study, and this one, and this one, for starters.
Families need homes, not apartments. One or two bedroom rental units are not solving our supply crisis. Housing affordability is a key driver of economic prosperity.
As the nature and structure of families changes, the flexibility that owning one’s home offers provides stability and security that rentals cannot.
In its new “Out of Reach” housing report, research organization Hudson Valley Pattern for Progress laid out the stark reality of the un-affordability of the region’s housing market. In Columbia and Greene counties, wage growth has fallen far behind housing inflation, and these calculations were based on market rate mortgage finance programs. Habitat programs offer substantially better terms than typical first time homebuyer programs: we cap our sales price at 30% of household income. Subsidized mortgages, like USDA and SONYMA, helped bridge the cost gap even more, when combined with our program. So this too is now further out of reach.
As Pattern summed up in its report:
To preserve our wellbeing and our quality of life, the region must welcome and encourage more housing, rather than opposing and protesting it. We must be open-minded about different kinds of housing, including co-ops, mobile homes, smaller homes on smaller lots, and housing that utilizes new building technologies. Our land-use boards must commit to a process that is rational, predictable, and relatively quick, all while protecting human and environmental health.
Is anybody there? Does anybody care?