Phillips Foundation Backs Housing First Initiative With $1 Million Grant

The Phillips Foundation, which was established by Phillips Management founder Kermit Phillips and is today administered by his family, made a $1 million grant in 2013 to the Partners Ending Homelessness to launch the Housing First Initiative, which is an effort to end chronic homelessness in Greensboro and is based on a program that has proved effective in other parts of the country. From the announcement:

Phillips Foundation provided a $1 million grant in 2013 to launch this initiative.Those resources allowed Partners Ending Homelessness to hire an international consultant, build out their staff and program, and systematically identify vulnerable individuals who had the most urgent needs.Salvation Army of Greensboro manages the housing portion of the program, and Psychotherapeutic Services, Inc. has developed an Assertive Community Treatment Team (ACTT) for long-term housing support and case management. ACTT is the highest level of mental health service available short of hospitalization. With these teams now in place and working together, the program is ready to scale.

An article in the Greensboro News & Record highlights the early success they are seeing with the program:

The effort in Greensboro is already paying dividends:

The early results reflect the experiences of the first five participants in the year before joining the program and in the six months after joining program.

In addition to paying for a consultant who has worked with other communities, the money has been used to develop an Assertive Community Treatment Team for long-term housing support and case management, the highest level of mental health service available short of hospitalization.

“Although $1 million seems like we are spending a lot of money, the statistics are showing we are saving a lot of money,” said the Rev. Mike Aiken of Greensboro Urban Ministry, one of the partners in Ending Homelessness.

“People are being housed and supported. We were absolutely sold on it.”

The number of emergency room visits also dropped, from eight to none. The cost of housing these people dropped from $30,650 in shelters to $8,927 in rent for their new homes. And the number of nights spent in jail dropped from 28 to none.

This is consistent with the results other states are seeing with the Housing First program. From an article in The New Yorker:

n 2005, Utah set out to fix a problem that’s often thought of as unfixable: chronic homelessness. The state had almost two thousand chronically homeless people. Most of them had mental-health or substance-abuse issues, or both. At the time, the standard approach was to try to make homeless people “housing ready”: first, you got people into shelters or halfway houses and put them into treatment; only when they made progress could they get a chance at permanent housing. Utah, though, embraced a different strategy, called Housing First: it started by just giving the homeless homes…

…Housing First has saved the government money. Homeless people are not cheap to take care of. The cost of shelters, emergency-room visits, ambulances, police, and so on quickly piles up. Lloyd Pendleton, the director of Utah’s Homeless Task Force, told me of one individual whose care one year cost nearly a million dollars, and said that, with the traditional approach, the average chronically homeless person used to cost Salt Lake City more than twenty thousand dollars a year. Putting someone into permanent housing costs the state just eight thousand dollars, and that’s after you include the cost of the case managers who work with the formerly homeless to help them adjust. The same is true elsewhere. A Colorado study found that the average homeless person cost the state forty-three thousand dollars a year, while housing that person would cost just seventeen thousand dollars.

Here at PTAA we’re in early discussions with Partners Ending Homelessness and The Salvation Army to see how our members might be able to participate in the program and as those discussions progress we will let you know how you might be able to participate and help.

September 19, 2014 at 2:51 pm Leave a comment

Apartment Construction Pace Hits 25-Year High

According to Freddie Mac VP and Chief Economist Frank Nothaft, apartment construction is at a 25-year high, but the good news is that those units are being absorbed thanks in part to a continuing drop in home ownership rates:

Freddie attributes these absorption rates to the decline in the overall U.S. home ownership rate, which fell to 64.7 percent in the second quarter of 2014. That was the lowest mark since 1995. As home ownership falls, apartment vacancies have also dropped to their lowest level in 14 years.

Here’s a video of Northaft’s comments:

September 18, 2014 at 7:14 pm Leave a comment

Nationwide Apartment Supply Wave Starting to Impact Fundamentals

From an item published by CoStar Group:

New apartment completions and construction starts continue to trend upward, and the new supply of units is beginning to show up in rising vacancy rates in a number of high-growth U.S. markets…

Vacancy rates in the 54 largest markets tracked by CoStar Group remain at a 10-year low. However, the trend has clearly begun to reverse course. The national vacancy rate has risen roughly 30 basis points over the last three quarters to about 5.5% as supply has overtaken demand, and CoStar is forecasting another 50-basis-point rise in vacancies through the second half of 2014.

Translation – it isn’t happening in secondary or tertiary markets like Greensboro-High Point or Winston-Salem. It’s also restricted to high-end properties:

And while new construction for multifamily housing has picked up in recent months, analysts have also noted that demand for rental housing continues to show strength. As a result, the vacancy uptick has been restricted to Four- and Five-Star properties in markets such as Boston, Austin, Minneapolis and Washington, D.C. Vacancies in Three Star properties haven’t yet seen much movement.

“While the impact of new product will certainly trickle down to the Class B space, it hasn’t happened yet,” Yuen said.

September 18, 2014 at 6:07 pm Leave a comment

Three Forsyth County Apartment Communities Qualify for Credits

From the Winston-Salem Journal:

Three Forsyth County apartment complexes have qualified for federal tax credits and other financing, the N.C. Housing Finances Agency said Tuesday.

Abbington Gardens in Winston-Salem will receive the largest amount in Forsyth at $767,200 for 96 new family units by KRP Investments LLC. Friar Woods Apartments in Kernersville will receive $668,400 for 84 new family units by Landmark Asset Services Inc.

University Place in Winston-Salem received approval for a tax-exempt bond valued at $5.23 million and a tax credit of $289,367 for a rehabilitation project of 97 apartments for the elderly by N.C. Housing Foundation Inc.

September 11, 2014 at 8:19 pm Leave a comment

Texas Case Could Provide Supreme’s With Shot at Disparate Impact

A Texas case could provide the vehicle for the Supreme Court to consider disparate impact. From an Associated Press article about the case:

It’s not easy to prevent the Supreme Court from deciding an issue once the justices have agreed to hear a case.

But over the past two years, civil rights advocates have managed to do just that by coaxing settlements in a pair of high-profile housing discrimination cases weeks before the court was set to hear oral arguments…

In disparate impact cases, plaintiffs rely on statistics to show that seemingly neutral housing or lending practices can disproportionately harm racial minorities, even if there is no proof of intent to discriminate. The theory has been used for years to show bias in employment cases, but Texas officials are urging the justices to find that it doesn’t apply in housing discrimination cases…

In the Texas case, a fair housing group alleged that the state’s system for handing out low-income housing tax credits had a disparate impact on racial minorities. A federal appeals court agreed that the group could use statistics to show the state was approving more low-income housing in black neighborhoods than in white areas. Such policies perpetuate segregated neighborhoods, fair housing advocates say.

The Texas Department of Housing and Community Affairs says allowing disparate impact claims would open nearly every housing decision, from zoning rules to use of credit scores, to potential litigation. The agency also says it puts housing officials in the awkward position of seeking out race-neutral results without actually taking race into account…

There is no indication so far of any settlement talks in the Texas dispute, though that could change if the Supreme Court decides at its Sept. 29 conference to hear the case.


September 8, 2014 at 3:19 pm Leave a comment

NAA’s 2014 Survey of Operating Income and Expenses Executive Summary

NAA has released the executive summary of its 2014 Survey of Operating Income and Expenses in Rental Apartment Communities. The full report will be available by October 1, 2014, but in the meantime there are some interesting tidbits in the summary:

Calendar year 2014 will likely go down as the formal beginning of the shift to a renter-based society. Finding jobs is more important than where to live. Achieving financial stability is taking precedent over residential lifestyle choices. Renting is now perceived as a first, not optional, choice. 

In 2014, the seasonally-adjusted number of multifamily permits will range from 350,000 to 365,000. Multifamily starts should remain around 300,000. Completions will hover around the 230,000 to 240,000 level on a seasonally-adjusted basis. The number of permits, starts and completions will exceed 2013 totals. Demand for rental living will remain strong as more Americans are expected to rent in 2014. Investor interest in urban, micro-units and senior-living apartments is expected to increase in 2014.

Rents in 2014 are expected to range from a 3.1 percent to 3.2 percent increase nationally, which will again be higher than the rate of inflation. The demand for rental apartments is directly tied to the number of jobs being created. As the U.S. economy continues its slow recovery, the pent-up demand will continue to increase. Ironically, the rapid rise in apartment rents is in contrast to the much slower increase in median household income (today around $53,000, or about 3.8 percent higher than at the recession low point reached in August 2011)…

The 2014-2015 outlook for owners and operators of apartment properties is very positive.

In 2014 and beyond, the apartment industry will continue to attract investor interest in both primary, secondary and, in some cases, tertiary markets and among all rental property types. As the U.S. continues its gradual shift to a more rental-based soci-ety, the demand for apartment units will continue to increase. However, the looming impact of rising construction costs, poten-tial interest rate increases, flat household income growth and a rising number of part-time employees will put pressure on rents. The shift to smaller units, demand for more urban/mixed-use properties in employment growth markets, and increasing resi-dent demands and expectations for more—not fewer—services will continue to challenge CEOs and leadership teams through-out the apartment industry. In addition, the impact of technol-ogy on how apartments are operated, sold and maintained will continue to require apartment owners and operators to bring their “A Game” each and every day of the year…

The apartment industry is in great shape; however, during the next five to seven years, there will likely be further consolidation, legacy exits, and the emergence of new and dynamic competi-tors. Achieving success tomorrow requires one to take care of business today. While the outlook remains very positive for apart-ment owners and operators, the next two to three years is the time to set the stage for some likely challenges ahead. 

Below is one of the charts from the summary (click to enlarge). For the full summary click here.



September 5, 2014 at 8:45 pm Leave a comment

Homeowners and Renters – The New Integration

The Washington Post has a fascinating article about the integration of homeowner and renter communities:

Not surprisingly, as the national homeownership rate has declined, and as homes that were traditionally owned became rentals, Kolko found that owners and renters became more integrated between 2000 and 2010 in 70 of the 100 largest metros in the country. This trend was driven by the decline of neighborhoods where nearly everyone owns a home, and the steady rise of the kind of Census tracts where 20-60 percent of households are rented…

On the one hand, this means that people who are renters now have neighborhoods open to them that weren’t in the past. On the other, Kolko points to a Trulia survey last year that found that 51 percent of homeowners believe it’s important that their neighbors be homeowners, too. In other words, renters may not always be welcome, as the New York Times described in a story last summer about formerly owner-occupied neighborhoods changing in “profound ways,” portending “reduced home values, lower voter turnout and political influence, less social stability and higher crime.”

Kolko’s data suggest that few places are dramatically flipping from all-owner to all-renter. But even a much subtler change can still bring out anxieties grounded in all of the beliefs we’ve long held about each other. I’m not sure what this proximity will teach most of us — that some of the values associated with homeownership might rub off on nearby renters? That homeowners have less (or more) to fear from renters in the midst than they think? That our financial relationship to our homes matters less than it used to?

Given our modern lifestyles of dual income homes, kids who never play outside and a general decline in community participation it’s not like neighborhoods full of homeowners are all as tight-knit as they were in the past, so it’s possible that people might not know who’s a renter and who’s not. Still, it will be interesting to see if this trend changes the public’s general perception of renters, but even if it does it’s not likely to help apartment developers overcome NIMBYism. Can’t you just hear it now? “Well, single home renters are different from those apartment people.”

September 4, 2014 at 11:57 am Leave a comment

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