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While we are still a long way from everything looking rosy, there are some signs that the economic crisis has reached a bottom and the financial system is beginning to recover. In the community development world, large amounts of federal funding from the Housing and Economic Recovery Act of 2008 (HERA) and the American Recovery and Reinvestment Act of 2009 (ARRA) are expected to generate positive results. In May 2010, at this Fed's biennial conference on older communities, we will look at changes as a result of the foreclosure crisis and the opportunity that new federal funding brings. But long before next spring, you will want to hear what is happening, so read on.
The Neighborhood Stabilization Program, which was created by the HERA last year, is providing more than $131 million in funding to the states of Delaware, New Jersey, and Pennsylvania and another $41 million to individual cities such as Philadelphia, Pittsburgh, and Newark. The article by Jacob Arem provides more details on who has received first-round NSP funds and how they will be spent.
One of the most difficult consequences of the financial crisis has been the delay of construction of many low-income rental housing units. Lately, investors have had smaller appetites for purchasing the tax credits that finance these important affordable housing units. As the prices for equity investments have fallen, a gap in financing has developed. The ARRA provides two means of getting these projects going again, and Buzz Roberts of the Local Initiatives Support Corporation writes about other ways to improve the likelihood that these projects will be built.
While all three states are expecting multiple types of funding through the ARRA, Delaware has clearly identified its plans in an article by the state's lieutenant governor, Matthew Denn. In his article Denn talks of the challenges of 1) understanding the contents and requirements of the ARRA quickly and accurately, 2) letting the citizens of the state understand the opportunities, 3) remembering that the ARRA is a temporary stream of funding, and 4) planning to keep tight controls on spending without slowing down the disbursement of the funding.
And just when you think the foreclosure problem cannot get worse, we hear more stories of efforts to trick desperate homeowners. New Jersey has taken legal action against a number of companies and individuals, and Pennsylvania has issued cease and desist orders against several outof- state companies. Both states and Delaware are implementing marketing campaigns to alert consumers to these foreclosure prevention scams. See Keith Rolland's story about these plans.
In future issues, we will continue to bring you stories on individual communities' recovery efforts.