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Wednesday, April 23, 2014

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Cascade: No. 73, Winter 2010

Message from the Community Affairs Officer

In former Federal Reserve Governor Edward Gramlich’s book, Subprime Mortgages: America’s Latest Boom and Bust, he argued that housing policy starts with rental housing. He felt the subprime mortgage crisis grew in part because rental housing had taken second place to homeownership. Today, as millions of homeowners become renters after foreclosure, Gramlich’s words resonate.

In this issue of Cascade, we feature various articles about rental housing. Because the median income of renter households in Pennsylvania and nationwide is about half that of homeowners, this is an important topic for low- and moderate-income people and communities. One article focuses on a Fed study that explores the availability and affordability of rental housing in Pennsylvania. In this study, authors Erin Mierzwa and Kathy Nelson, with help from Harriet Newburger, quantified the number of lower-income residents that need affordable rental housing in each region of the commonwealth and assessed how the number has changed over time. The complete report is available on our website.

The foreclosure crisis has also generated several stories about rental concerns, including renters’ rights and the effects of having foreclosed properties in communities. Danna Fischer, legislative director and counsel of the National Low Income Housing Coalition, has written a great description of the new federal law that protects renters who are living in properties in foreclosure. And Karen Black reports on how different communities are dealing with the increasing number of purchases of foreclosed homes by investor owners.

Although there are some negative aspects to communities with absentee landlords, it is important to note that owners of small properties (one- to four-family units) provide a large percentage of all rental housing. How to support smaller multifamily rental housing properties and their owners and tenants was the subject of a Federal Reserve conference in Washington, DC, earlier this year. This type of housing is also the beneficiary of new funding mainly through weatherization funds provided by the American Recovery and Reinvestment Act of 2009.

The National Housing Trust describes its efforts to ensure that federal weatherization funds are used to improve the energy efficiency of subsidized multifamily housing. A similar program offered by the Pennsylvania Housing Finance Agency is also described.

The need for more affordable rental housing will not end, but we hope these articles will provide you with information to make a change in your communities. More affordable rental housing with lower energy costs is a combination we can all support.

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Federal Reserve Bank of Philadelphia
Community Development Studies and Education Department
Ten Independence Mall
Philadelphia, PA 19106-1574

(215) 574-6458 – phone
(215) 574-2512 – fax
info.communitydevelopment
@phil.frb.org

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