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Notes |
Welcome to the first electronic edition of Notes, the newsletter of University Neighborhood Housing Program. Some of you have received our newsletter by postal mail in the past, while others are new to our mailing list. If you know of someone who would like to join our mailing list, please have them send us an email to notes@unhp.org with “subscribe” in the subject line (or "unsubscribe" if you would like to be removed from our list). Our emails are infrequent (not more than a few each year) and we will not share your email address with outside organizations. You can access the Notes archive here. In this Issue: Water and Sewer: The News Just Gets Worse Loan Fund Updates New Resources Added to Community Resource Guide A Remedy for Rising Foreclosures BIP-ing the City The West Bronx Online
Water and Sewer: The News Just Gets Worse The New York Post reported on October 2nd that an 18% mid-year increase is possible unless the Water Board’s financial picture changes significantly. Before we go further, here is a quick refresher on how the cost of water is determined in New York City: Water rates = capital costs (paid through debt service on bonds) + a rental payment to the City of New York + the actual operation cost of the water system. If enacted, this 18% increase would come just 6 months after an 11.5% increase that took effect on July 1, 2007. The Department of Environmental Protection (DEP) reports that the proposed increase is required due to lower than projected collections, as a result of the City Council’s failure to authorize the sale of stand-alone water liens. The Daily News is reporting that City Council Speaker Christine Quinn has promised to hold an oversight hearing on the Water Board’s budget and operations on October 22. The discussions will likely focus on the stand-alone water lien sales and the proposed mid-year rate hike. Political gamesmanship aside, this latest rate increase threat makes UNHP’s call for a change in the way rates are set even more compelling. Even before this news, the recent sharp water rate increases were having a major impact on homeowners and affordable housing operators. Further rate increases can only exacerbate the growing foreclosure crisis in the Bronx, where filings on 1-4 family homes were 76% higher in 3rd Quarter of 2007 than in the 3rd Quarter of 2006 (read more on page 3). And while the battle lines are drawn on the lien sale proposals, there has been no apparent progress on renegotiating this year’s $154 million City Rental Payment. A renegotiation of that number would go a long way to solving the immediate problem that DEP is citing in their shortfall. In addition, there has been no accountability for the dramatic capital cost overruns on the Van Cortlandt filtration plant. The City’s Independent Budget Office has estimated the actual costs to be $2.8 billion; the original estimate from DEP had been $1.2 billion. Increased capital costs are reflected in increased debt service numbers. This debate has to be broadened beyond collections. An ample and safe water supply cannot be achieved at the expense of an ample supply of safe and affordable housing. We should revise the City Rental Payment so water rate payers are not subsidizing the City’s general budget. A better system of controls needs to be developed to ensure that capital projects are legitimate, budgets are real and costs are controlled. Areas that need to be explored include the City rental payment, capital needs and costs, and sources of funding. UNHP will organize a forum on the cost of water and its impact on affordable housing within the next 4-6 weeks. Notices will be sent out as soon as the date is set.
Twenty years ago, University Neighborhood Housing Program began its work as a community loan fund for the acquisition and preservation of affordable housing in the Northwest Bronx. Some banks, a private foundation and a few religious organizations provided low or no interest loans and lines of credit to UNHP with faith that the funds would be re-lent to community-controlled affordable housing projects. Approximately 15 years ago, UNHP created a Green Loan Fund to provide very low interest loans to projects for energy conservation and security upgrades. Green Loans have been used for roof replacements, boiler repair and other work that helps to reduce operating expenses related to fuel usage. Subsequently, UNHP also created the Short Term Interest Rate Reduction (STIRR) Fund to provide financing to community-controlled projects needing to refinance high-interest back payments to the city for taxes and/or water and sewer after addressing issues that may have been affecting the cash flow of the building. Our latest acquisition loan went to Fordham Bedford Housing Corporation this past spring to help acquire 6 buildings and preserve them as affordable. Since its first loan two decades ago, UNHP has made more than 100 loans with a value of over $4.5 million. As our lending has grown, so has our capacity for the administration of our funds. Just this summer intern Mary Morgan headed-up the search for software focusing on features such as user-defined fields, lender tracking and fund sources, price, and automatic amortization. In researching different loan servicing software companies, UNHP came upon a small employee-owned company called Grants Management Systems which provides Revolving Loan Servicing Software (GMS-RLSS); the new software helped UNHP achieve an even higher standard of efficiency. For more information on UNHP’s lending programs, please contact Johanna Kletter, UNHP’s Financial Director at 718-933-3101.
New Resources Added to Community Resource Guide Seven years ago UNHP launched the Community Resource Guide (CRG) on its website to guide users to and through online community data sources on demographics, crime, banking, health and housing data. This year, summer intern Connor Murphy developed a new section for CRG on Community Resources to help New Yorkers learn about the resources and benefits available to them. The Tenant Rights & Home Ownership section includes legal resources regarding eviction proceedings and links to guides on rent increases and tenant rights. There are also links to guides for first-time homebuyers. The Welfare & Social Services section directs users to sites where they can determine their eligibility for various public benefits, and to a number of handbooks. The Immigration section helps those looking for resources on immigration law, health access, visa applications and public benefits. Finally, the Tax, Credit and Financial Resources section guides users to free tax preparation assistance, and to sites where they can learn about credit, access their credit reports for free, and receive financial education. Check it out at www.unhp.org/crg.html.
A Remedy for Rising Foreclosures The Northwest Bronx continues to display an alarming number of foreclosures. Since the 3rd Quarter of 2005, when UNHP began tracking this data, foreclosures in the Northwest Bronx have been steadily rising; in fact, the 3rd Quarter of 2007 saw a jump of 39% compared to the previous quarter, the highest of the four borough regions (see chart). Borough-wide, this most recent quarter saw a new high of 441 foreclosure filings (lis pendens), a 19% increase from the previous quarter and a 76% increase above the 3rd Quarter of 2006.
It is against this backdrop that UNHP continues its outreach efforts to homeowners facing foreclosure. Through this work, we have witnessed many cases of homeowners who have fallen victim to predatory lending and other scams. In many cases, brokers pushed loans that were either unaffordable from the beginning or would soon become so. These practices have set-up countless homeowners for almost certain failure. UNHP has also encountered numerous individuals who have fallen victim to so-called “foreclosure rescue” scams. These scams typically play out after a homeowner has entered foreclosure. Oftentimes the “rescuer” approaches the homeowner promising to stop the foreclosure proceedings for a fee. Upon payment, the “rescuer” does nothing and avoids the homeowner’s calls. In these cases, the homeowner usually loses between $500 and $2,000 and the valuable time during which they trusted the scammer. However, another scam known as deed theft involves the homeowner losing the home and all the equity outright. In two recent cases UNHP has encountered homeowners who were under the impression that they were taking out a small loan, but were actually signing away the deed to their homes. Senior citizens are typically targeted in these scams, and in nearly all cases the victims receive no compensation for the “sale” of their home. Because of the rising foreclosures that UNHP has documented, the Bronx is ripe for rampant fraud and abuse, and the resources to combat these practices are still severely lacking. To address this deficiency, UNHP held a Homeownership Preservation Workshop earlier this month. Two area lenders, Chase and Washington Mutual, participated in the outreach by inviting their Bronx borrowers. The workshop provided homeowners with information on how to avoid foreclosure including the opportunity to speak with a foreclosure prevention counselor from Neighborhood Housing Services of the North Bronx and representatives from Chase and WaMu to discuss loss mitigation options. It is important that there be a continued effort to develop and improve resources for Bronx home-owners, especially those already in foreclosure or who have fallen prey to the myriad of scams. For more information, please contact Eric Fergen, UNHP’s Outreach Coordinator at 718-933-2539.
Last summer UNHP undertook a massive project involving the expansion of our Building Indicator Project (BIP) database to include all 7,170 Bronx multifamily buildings. It took countless hours of tedious work by UNHP interns and staff to make it possible. While we are thankful to those who worked on the project, we don’t want to put others through this mind-numbing experience. Fortunately, we have located and contracted with an outside group to write software that will allow us to automatically update the information on all multifamily rental properties in the Bronx, Manhattan, Brooklyn, and Queens. LotInfo has already drafted a working version of the software, and expects the final version to be ready later this month. The updated database will include owner, violation, lien and mortgage information for the more than 50,000 properties in New York City with at least 6 rental units. We will continue to use our scoring system to highlight physically and/or financially distressed properties, now on a much broader scale. UNHP will use this expansive database to continue our work with mortgage lenders through our Multifamily Assistance Center to improve the conditions in distressed multifamily properties and prevent foreclosures; 74% of the distressed properties identified to our lender partners in 2005 had seen an improvement in their conditions by late 2006. UNHP will also be able to offer the data to community development and organizing groups throughout the City for work on various affordable housing campaigns. For more information on the BIP database, contact Greg at gjost@unhp.org.
The West Bronx Online There have been some exciting developments in the world of news about the West Bronx in the past year. In addition to completely revamping their website, the Norwood News (www.norwoodnews.org) has worked with a number of neighborhood partners to create the West Bronx News Network and the West Bronx Blog. The West Bronx New Network includes the Norwood News, the Mount Hope Monitor and the Highbridge Horizon. Together these local news sources cover Bronx Community Boards 3, 5 and 7. The editors, reporters and some readers of these news sources contribute to the West Bronx Blog, where readers can track news and information about topics related to the west Bronx, and offer their comments as well. UNHP Deputy Director Gregory Lobo Jost is one of the regular contributor to the blog, accessed at www.westbronxnews.blogspot.com.
Notes is a publication of University Neighborhood Housing Program: working to create, preserve and finance affordable housing in the Northwest Bronx. Available online at www.unhp.org/notes.html Please direct comments, questions and suggestions to:
© 2007, University Neighborhood Housing Program
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