Expanding the American Dream Commitment Workforce Housing Initiative Working by kbrillhart


									                   Expanding the American Dream Commitment
                         Workforce Housing Initiative
                      Working Together for Working Families

Workforce Housing Initiative: An Overview

With the announcement of the third phase of the expanded American Dream Commitment® plan,
Fannie Mae has joined with the National Association of Home Builders (NAHB) to place a
particular emphasis on the growing housing needs of working families across America. In too
many places, people working the jobs that allow those communities to function successfully – the
civil servants, the police officers, the fire fighters, the teachers, the retail sales clerks, or the
health care professionals, for example – cannot afford to buy or rent a home in the community in
which they work. Fannie Mae and the NAHB are joining together to highlight this important
issue and to identify ways in which the two organizations can work together to develop
innovative approaches to meet the challenges.

The Workforce Housing Issue: The Facts

•   Between 1997 and 2001, the number of lower-middle and middle-income households
    spending more than half their incomes on housing surged by more than 700,000. (2003 State
    of the Nation’s Housing, Joint Center for Housing Studies, Harvard University)
•   Based on HUD’s fair market rents, households with one full-time minimum wage earner
    cannot afford to rent a one-bedroom apartment anywhere in the country. (Joint Center, 2003)
•   The current “housing wage” – the hourly wage necessary so that housing is no more than 30
    percent of household income – is three times the federal minimum wage. Renter households
    in 40 states (90 percent of all renters) face a “housing wage” over two times the national
    minimum wage. Eleven states have “housing wages” three times the minimum wage. (Low
    Income Housing Coalition, Out of Reach, 2003)
•   In 1999, an estimated 3.9 million working families had critical housing needs (paying more
    than half their income for housing), another 1.6 million lived in overcrowded conditions, and
    another 2.7 million were forced to commute over 45 minutes. (Paycheck to Paycheck,
    National Housing Conference)
•   The average salaries for elementary school teachers ($41,080), police officers ($40,970), and
    licensed practical nurses ($30,670) are too low for them to qualify for a mortgage on a
    $156,000 median-priced home. Workers need to earn almost $14/hour to afford a median
    two-bedroom apartment at $721 a month, putting this out of reach for the average janitor
    ($8.61/hour) or retail salesperson ($8.24/hour). (National Housing Conference)
•   Retail salespersons cannot qualify to purchase the median-priced home in all 60 metropolitan
    markets studied; elementary school teachers could not qualify in 32 markets; police officers,
    28 markets; and licensed practical nurses in 57 markets. (National Housing Conference)
•   Nearly half of the 2.1 million waiters, waitresses, and cooks who rent, spend more than 30
    percent of their incomes on housing. (Joint Center, 2003)
•   Over 50 percent of immigrant families with critical housing needs worked the equivalent of a
    full-time job. (America’s Newest Working Families: Cost, Crowding and Conditions for
    Immigrants, Center for Housing Policy/National Housing Conference, July 2003)
•   The gap between home price and income growth during the last five years is the largest it has
    been since the data has been collected, with home price growth of 45 percent far outstripping
    the 28 percent income growth. (OFHEO, Bureau of Economic Analysis)

Workforce Housing Initiative

As part of the expanded American Dream Commitment plan, Fannie Mae and the NAHB have
joined together to focus on strategies for addressing workforce housing issues. The two
organizations will work together wherever and whenever possible to target transactions,
partnerships, and other initiatives so that those who work in a community are able to live in that
community. The new effort will include an expansion of various existing Fannie Mae products
and services as well as some new innovative approaches that focus on the housing needs of
working families.

•   Launch a Metropolitan-Area Workforce Housing Initiative. NAHB and Fannie Mae will
    collaborate to identify a metropolitan area (where there is interest and capacity) that will
    serve as a laboratory in which the two organizations will work together to address workforce
    housing issues. The effort will include several place-based efforts within that community and
    include coordinated efforts with the local home builder associations, individual home
    builders, lenders, mortgage insurers, real estate professionals, housing finance agencies,
    nonprofits, government agencies, and other partners throughout the region. We would plan to
    select this community by the end of the second quarter. Fannie Mae and the NAHB will
    identify several more communities in future years and expand this effort to other places.
•   Identify Additional Community-Based Workforce Housing Experiments. As part of the
    new 1,000 communities initiative, Fannie Mae and its Partnership Offices, along with local
    home builder associations will focus on workforce housing as a part of the overall community
    revitalization effort.
•   Expand Existing Workforce Housing Tools. Fannie Mae – with support from the NAHB –
    will work to identify which housing tools can have the greatest impact in serving working
    families and then expanding the use of these tools to create workforce housing solutions:
    - Produce/finance more affordable housing using ACF™ financing, single-family
         renovation loans, multifamily financing, community land trusts, limited equity
         cooperatives, manufactured housing, and CDFI investments;
    - Increase the ability for workers to qualify for a mortgage or help them better manage
         their mortgage payments using the Energy Efficient Mortgage, Smart Commute™, the
         Working Mortgage™, and Community Solutions™;
    - Encourage traditional and nontraditional partners to be part of the solution, including
         employers through the Employer-Assisted Housing initiative or employee organizations
         such as the AFL-CIO.
•   Provide National Leadership. NAHB and Fannie Mae will join with others in the housing
    field to support efforts to increase awareness of this issue and to raise workforce housing
    issues and solutions higher on the national agenda.
•   Experiment with New Approaches. Under this initiative Fannie Mae will experiment with
    new solutions designed to address workforce housing problems. Specifically, the company
    will look for ways to work with local communities on public/private partnership solutions
    that may be specific to local needs and opportunities, including flexible zoning ideas, housing
    trust funds, and in-fill housing.
•   Serve as a Source for Workforce Housing Best Practices. Fannie Mae and NAHB will
    identify best practices in addressing workforce housing issues from their extensive networks,
    including Fannie Mae’s Partnership Offices and NAHB’s 800 local and state affiliates around
    the country, and find ways to disseminate the information.


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