In this insightful episode of The Community Effect, host Marietta Rodriguez, President and CEO of NeighborWorks America, is joined by Chris Herbert from the Harvard Joint Center for Housing Studies and Michael Butchko of NeighborWorks America to explore the trends and challenges shaping the future of housing and community development. Reflecting on 2024’s milestones, they discuss the growing affordability crisis, innovative policy responses, and NeighborWorks’ impactful initiatives, including partnerships and training programs. Tune in to gain valuable insights and strategies to navigate the complexities of 2025, and don’t miss Part 2 for a deeper dive into NeighborWorks' strategic vision for lasting change.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Voiceover Narrator (00:01):
In every corner of America, there are stories of
resilience, innovation, and theunwavering spirit of community.
Stories of people and places transformedby the power of connection, collaboration,
and a shared vision for a better future.
The Community Effect, a podcast hostedby Marietta Rodriguez, President and CEO.
Marietta Rodriguez (NeighborWorks President and CEO): Welcome back to the Community Effect, (00:30):
undefined
and Happy New Year to our listeners!
We have an exciting episode to helpset your sights on the future of
housing and community development.
In this conversation, we'll reflecton the milestones of 2024, discuss
the emerging trends that will shape2025, and get a sneak peek into
(00:51):
NeighborWorks new strategic plan.
Whether you're a housing professional,a community advocate, or a policymaker,
this episode is packed with insights tohelp guide your work in the year ahead.
Today, we're joined by two distinguishedleaders, Chris Herbert, Managing
Director of the Harvard Joint Centeron Housing, and Michael Buchko, Vice
(01:12):
President of Business IntelligenceServices at NeighborWorks America.
Chris and Michael, welcometo the Community Effect.
It's a pleasure to have you both here.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): It's great to be here. (01:21):
undefined
Thanks for having us, Marietta.
Marietta Rodriguez (NeighborWorks President and CEO): I'd like to start the conversation with (01:24):
undefined
a little bit of a look back on 2024.
Both NeighborWorks America and theHarvard Joint Center on Housing have
made significant strides this year.
Chris, let's start with you.
What do you see as some of thebiggest impacts on Or achievements
in housing and communitydevelopment that happened in 2024.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: I'm going to go with a bad news, (01:47):
undefined
good news story, just to set us up.
I mean, I think as we look at 2024,the, the thing that comes to mind
most for me is the fact that we brokeanother record for the number of
renters who are spending more than 30percent of their income on housing.
If we look at the amount of moneythat a first time home buyer needs
to get into a home, It's also at ahighest record level in in a long time.
(02:12):
Um, at the beginning of the year,the last data we had, we set
a new record for the number ofpeople experiencing homelessness.
So I think one of the things that reallystands out about 2024 is that we're
setting records and not in a good way.
But in terms of achievements, Ithink we are seeing that lead to
people focusing more on housing.
And I think one big achievementis we look at the 2024 election.
(02:33):
Across the country, there are morethan a hundred ballot initiatives
about housing, many of which passed.
And according to ShelterForce, ittotaled about a billion dollars
in bond funding of various typesto support affordable housing.
Uh, and the other thing I'd pointto is, we've seen a lot of places,
a lot of states take steps to try tofree up the production of housing.
(02:55):
California's been making lots ofheadlines with various initiatives.
It's passed.
Montana, a red state, passedinitiatives to eliminate single
family zoning and enable development.
For I'd like to tout my own home stateof Massachusetts where a couple years
ago we passed the MBTA CommunitiesLaw which mandates that towns served
by mass transit have to allow as aright for multifamily development.
(03:17):
My hometown, Lexington, Mass., wasthe first town to approve of its
plan for that kind of upzoning.
And we now have seen a thousand housingunits permitted in Lexington, in a town
of just ten thousand housing units.
So, we're seeing, you know, states andlocalities take steps to enable the
housing production we need, and now we'reactually seeing that production happen.
Marietta Rodriguez (NeighborWorks President and CEO): So what I'm hearing, Chris, is the need (03:38):
undefined
is growing, the demand for housing isgrowing, both on rental and single family,
and municipalities, at least at the stateand local levels, are responding with new
investment and You referenced some, somebond programs, but you also referenced
some policy changes and you used a termI want you to unpack for us, upzoning.
(04:03):
What do you mean by that?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: So in Massachusetts, what the state (04:05):
undefined
said is you have to, every town hasto have a certain amount of area
that as of right, you can buildhousing at 15 units per acre density.
Now that's not super high density, butit's enough for a three story or four
story apartment building or townhouses.
And so that upzoning means that whatwas, in most cases, zones primarily or
(04:26):
exclusively for single family housing, Hasbeen up zoned to allow for more housing
units, uh, up to 15 units per acre.
Marietta Rodriguez (NeighborWorks President and CEO): Yeah. (04:35):
undefined
Okay.
That makes sense.
Michael, let's go to you.
Um, NeighborWorks has had a big year.
Obviously the NeighborWorks network istrying to respond to this growing need.
Can you share some highlights of theNeighborWorks impact over the last year?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Absolutely. (04:50):
undefined
So NeighborWorks finished theyear with 16, 300 new home buyers.
That means it's the first year.
That we have not seen a decline innew homeowners from the previous year.
Since 2019.
So again, with the backdrop of thehome ownership market, what it is, it's
impressive to see the NeighborWorksNetwork hold those gains steady.
(05:12):
The network also continues to servehome buyers of color at a greater
rate than the conventional market.
58 percent of NeighborWorks homebuyers over the last three years
identified as people of color and 66percent of of NeighborWorks counseling
and education clients identifiedof people as people of color.
And from the corporation's perspective,I just want to throw in NeighborWorks
(05:33):
is known as a preeminent trainer ofhousing and community development
professionals across the country.
NeighborWorks completed over 16, 000learning engagements nationwide in
both in person and online modalities.
So there's a lot to be proud of from 2024.
Marietta Rodriguez (NeighborWorks President and CEO): I appreciate those numbers a lot, (05:48):
undefined
but for our listeners, let's Adda little bit more context to them.
So let's go back to thenew homeowners created.
So, uh, the NeighborWorks Network hasa non profit local affiliate in every
state of the union, inclusive of theDistrict of Columbia and Puerto Rico.
And they all report productiondata to us every quarter.
(06:12):
So when they report a new homeownercreated, what exactly does that mean?
And What role does the NeighborWorksorganization in that locality do
to help create that new homeowner?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Great questions. (06:25):
undefined
That means that the organization playedan active role in that individual
or family's homeownership journey.
This can include anythingfrom counseling and education.
In many cases, it also includes lendingservices where the NeighborWorks
organization originated the firstmortgage and or a second mortgage as well.
We have pretty strictthresholds for that reporting.
(06:47):
Uh, and those 16, 000 homeownersare again, evidence of the network
providing an incredible homeownership.
Marietta Rodriguez (NeighborWorks President and CEO): I, I really appreciate that (06:57):
undefined
context and the various rolesNeighborWorks organizations
play in promoting homeownership.
You say in some cases theyoriginated the mortgage.
Does that mean they're banks?
How does that work?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Well, we have about one third of (07:11):
undefined
our network that are communitydevelopment financial institutions.
That is a certification and astatus bestowed by the Department
of Treasury that organizationsmust apply for and maintain.
So they do operate some of our networkabout one third again operates as
financial institutions and theytherefore can Originate loans for
(07:32):
homeowners for consumer lending andeven for commercial or business lending.
Marietta Rodriguez (NeighborWorks President and CEO): That's really helpful you you made (07:36):
undefined
a point of something that we feelreally proud about that those 16
000 new homeowners created are fromdemographics that aren't Traditionally
served by the mainstream market.
Why is that so remarkableor why is that of note?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): What we know and what we've read and (07:58):
undefined
what we hear from various sources isthat for homebuyers of color, they are
more likely to pay more for the samemortgage compared to white homebuyers.
And so for our network to be serving sucha large percentage of population of color,
(08:18):
And making sure that those consumersget the best possible deal available
to them, regardless of anything else.
That's a very telling statisticand one that we're quite proud of,
especially when you compare it tothe home mortgage disclosure data
from private financial entities.
Marietta Rodriguez (NeighborWorks President and CEO): I want to toss this question to Chris. (08:35):
undefined
You know, Michael made a verycompelling case about these 16,
000 homeowners aren't traditionallyserved by normal market channels.
Is that your experience as well?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Oh, absolutely. (08:50):
undefined
Look at the outcomes in terms of thehomeownership rates by race, you know,
African Americans homeownership rate is,um, 27 percentage points less than whites.
That's not far off.
What the gap was in 1968 whenthe Fair Housing Act is passed
Hispanics do a bit better.
They're high 40s, but there's still a morethan 20 percentage point gap as well And
(09:11):
so if you look at just the opportunitiesto own a home It's much less among people
of color and obviously getting access toa mortgage is an important step in that
Marietta Rodriguez (NeighborWorks President and CEO): process So certainly what? (09:21):
undefined
This part of the story here is thatNeighborWorks Network is filling
a market gap that a traditionalmarket channels just aren't meeting.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Yeah, and I think what Michael's (09:31):
undefined
describing in terms of making sure thatpeople have all the information they need
to make a good choice to understand theprocess and then once you find a house
to make sure it's a house that's, youknow, not going to be a liability for
you and making sure that you're getting amortgage that is favorable terms for you.
Uh, there's a lot of, uh, work that hasto go into, uh, Helping people navigate
(09:52):
that process and navigate it successfully.
And so, yeah, I think theNeighborWorks network and their work
they do to facilitate that processis really critically important.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Yeah, and I think I (10:02):
undefined
want to add on to that.
Part of the home buying processis making sure that homeowners are
prepared for what may come and not justwhat they can afford in that moment.
And the NeighborWorks Network throughcounseling and education really focuses
on things like making sure that thereare savings in the bank, understanding
how when a roof leaks or a bathroomfixture breaks or any of that stuff,
(10:26):
what options are available to homeowners.
If someone gets into a mortgage thatthey can barely afford, they have no.
safety net, they have no wiggle room,and then they often make financial
decisions that will cause them greaterharm down the line, like paying for
a home repair with a credit cardat a 20 some percent interest rate.
So the housing counseling pieceis critical here, and our network
(10:49):
counsels and educates over 100, 000clients per year to make sure they're
prepared for the eventualities ofhomeownership and all that comes with
Marietta Rodriguez (NeighborWorks President and CEO): it. (10:57):
undefined
I think that's a really critical point,and I think housing counselors are in
every community across the country,and they're Some of the best kept
secrets, um, frankly in communities.
Michael, did you want to,
Michael Butchko (VP, Business Intelligence, NeighborWorks America): I was just going to chime in. (11:11):
undefined
Yes.
Sorry about that.
NeighborWorks is entering into apretty innovative partnership with
our friends at Zillow right now.
We are piloting this in one location,but what we're trying to do is when
a home buyer goes on to zillow.
com and starts looking at properties, oneof the things to Chris's great point is
that they are just not aware that there'sa of down payment assistance, counseling
(11:34):
opportunities, other things like that.
And often when you go on Zillowor any home buying website,
you look at the purchase priceand think, I can't afford that.
And away you go.
And Zillow is trying to retain traffic,but they're also trying to educate people
on opportunities for home ownership.
And that's where the partnershipwith NeighborWorks and NeighborWorks
Home Partners out of St.
Paul, Minnesota comes in.
(11:54):
What we're doing is making sureconsumers are aware of down payment
assistance programs and also counseling.
And trying to pair that to see, doesit mean that more people will be able
to achieve homeownership comparedto before that partnership began?
So, we're really excited aboutthat, and we think that those
sorts of programs in 2025 canhelp bridge the homeownership gap.
Marietta Rodriguez (NeighborWorks President and CEO): The residents in, in many of, (12:15):
undefined
um, the communities that, um,NeighborWorks owns and manages.
Those residents often play really criticalroles in their communities, right?
They are teach, first year teachers,they're paramedics, they're, um,
(12:36):
policemen, they're kindergartenteachers, they're nurse techs.
Um, and so I know, Chris, your teamhas studied this a lot, but making
sure that a community has the abilityto house people that provide the risk,
the critical resources to make anycommunity thrive is really important.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Oh, it is. (13:02):
undefined
And so, you know, for many ofthose folks that you mentioned, um,
obviously when they're doing theirjob, they're of value to the community.
But if they're, when their job ends, ifthey're still there, if they're there
to help a neighbor with their healthcare, if they're, you know, eyes in the
street, uh, as a police officer, um,all those things benefit the community.
And, you know, if people are spending 45minutes or an hour, community, to get to
(13:27):
their job, it's a lot less, uh, valuable,productive time for them as well.
So, keeping them in the community,making their, their time more, uh,
useful is, uh, a great benefit.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): There's also significant (13:38):
undefined
economic benefits as well, right?
If you are living where youare working, that is where you
were buying your groceries.
That is where you weregoing out to dinner.
That is where you were gettingservices from the community.
And then that money that you'reearning is then reinvested
into the place where you are.
So yes, commuting time, environmentalimpacts, just the, The drain on
(14:00):
individuals, but if folks are able to liveand work in the same place, it just has
multiplying effects on that local economy.
It creates stronger communitybonds as Chris was talking about,
and it's just a win for both theresidents and the community at large.
Marietta Rodriguez (NeighborWorks President and CEO): That's a great point. (14:17):
undefined
Mike, I want to get back to when youwere giving us, um, A look back on our
accomplishments, and that's our abilityto deliver training to communities.
Tell us why that's important.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): One of the things that we as NeighborWorks (14:30):
undefined
have heard for a long time, and it waspart of the reason why NeighborWorks
stood up a training institute tobegin with, is that there needs to be
additional professional developmentfor non profit professionals in the
housing and community development space.
So we talked about housingcounseling from the consumer side.
(14:52):
Now let's talk about itfrom the provider side.
There is often significantturnover in housing counseling.
You're a non profit, youhire a housing counselor.
One of the phenomenon that wehave seen recently is that banks
are hiring housing counselors.
And so they often are able to pay moremoney to have those folks join their team
at these private lending institutions.
(15:14):
Well, that leaves our organizationsthen with fewer staff and they need
to find someone to fill those roles.
NeighborWorks having a traininginstitute that provides certification,
week long training for housingcounselors is a critical way to
fill that pipeline for very neededprofessionals within this field.
NeighborWorks.
Marietta Rodriguez (NeighborWorks President and CEO): Thank you. (15:35):
undefined
I'm going to ask you both this question.
Um, as, as a member of the housing,affordable housing industry, we
feel most recently that housingis having its moment in America.
Do you think that more people areaware of the importance of housing
(15:55):
today than they were several years ago?
And, and what do you think's driving that?
I'll start with Chrisand then go to Michael.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: There's definitely greater awareness of (16:02):
undefined
our housing affordability challenges.
You know, I think it is most evident inthe fact that housing took center stage
in the presidential election this season.
As housers, you often watch thepresidential debates and the
back and forth of campaigns andhope that housing get mentioned.
This time, it was there constantly.
(16:24):
Why is that?
It's not for a good reason.
It's as we talked about at the outset.
We're adding way too few housingunits relative to the number of
people looking for those homes.
And so we need to expand the supplyof housing and we need to create more
pathways into good quality rentalhousing and entry level home ownership.
So it's the extent of the problem thatreally has brought this to everyone's,
(16:46):
the forefront of everyone's attention.
Marietta Rodriguez (NeighborWorks President and CEO): Michael, anything to add there? (16:47):
undefined
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Yeah, I agree wholeheartedly with that. (16:49):
undefined
It feels like in the past, if you werenot a homeowner You could become one,
assuming, right, you had a decent income,you had a decent credit score, etc.
Now, a consumer can have allthose things, and what's missing
is the supply of housing.
Or, the supply is quickly scoopedup by investors, or all cash buyers.
(17:13):
All cash is driving the homeownership market, and really keeping
people from entering that market.
And then one other point I'dadd for existing homeowners.
The belief about homeownership in thepast was, well, you get into a 30 year
mortgage and that's going to be yourhousing cost generally for the entirety
of the time you're in that house.
(17:35):
Over the last two years, the cost ofinsurance for homeowners has really, I
think, elevated the conversation abouthousing affordability and pressed people
who were in homeownership back outbecause they were no longer able to afford
the increases in their home ownership,their homeowner insurance premiums.
(17:55):
And so When you have all of thosefactors together, yes, housing is
having a particular moment, but agreewith Chris, it's a moment of scarcity.
And I think there's a lot of thepopulation who just is worried
that they may not ever be ableto achieve homeownership, which
previous generations could,
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: you know, and Marietta, if I (18:11):
undefined
just add on that, I think so.
There's an opportunity here now thathousing has become center stage and
we're getting more popular attention.
The need for solutions, as Isaid at the outset, you know, 100
different Uh, ballot initiativesin November, many of which passed.
I think one challenge, though, is is thatthe nature of the housing problem is not
(18:33):
one problem as we've talked about here.
It's access to homeownership.
It's access to good quality.
for people with moderate incomes.
It's access to good quality, affordablehousing with services for people
at the lowest end of the spectrum.
Um, we haven't even talked abouthomelessness and the need to get
people off the streets and intopermanently supportive housing.
So we need to have a multiplicity.
(18:54):
Of responses, all of which areexpensive, and in some ways we end up
that in competition with each other.
So I think the challenge wehave in the housing spaces.
How do we take advantage of theattention of this to get expanded
resources and policy, innovationand regulatory relief that can
still serve a broad range of these?
Of these needs because weneed to address them all.
Marietta Rodriguez (NeighborWorks President and CEO): Yeah, the layer the layering of (19:15):
undefined
factors make solutions more complexto deliver At a community level
it does and it seems like these.
Um Trends as we look back on 2024They will shape housing policies and
strategies in 2025 Because they're notthey're not going away anytime soon.
(19:36):
Do you agree?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Sadly, I I do agree. (19:39):
undefined
I mean, I think if you look atwhat's happened with housing prices
outpacing incomes At best, we'regoing to enter a period where
rents and prices growth will slow.
It's not going to fall.
And so I think we're going to be in aperiod of time, particularly if interest
rates stay higher for longer, which itlooks like they will, that we're not going
to see a quick rebound in affordability.
(20:00):
So I think this is an issue we're goingto be dealing with for the next few years.
Hopefully over time we'll getmore supply and then we'll, when
people's incomes will grow and we'llstart to chip away at the issue.
But it's in broad strokes,we're going to be facing
affordability crisis for a while.
Marietta Rodriguez (NeighborWorks President and CEO): Wow. (20:17):
undefined
What an insightful discussion about thetrends and challenges shaping the future
of housing and community development.
We will be continuing this conversationwith Chris and Michael in part two of
this episode where we'll dive deeperinto NeighborWorks America's new
strategic plan and for our vision forcreating lasting change in communities.
(20:39):
Thank you for tuning into The Community Effect.
Voiceover Narrator (20:42):
This is The Community Effect, brought to
you by NeighborWorks America.
In every corner of America, there are stories of
resilience, innovation, and theunwavering spirit of community.
Stories of people and places transformedby the power of connection, collaboration,
and a shared vision for a better future.
The Community Effect, a podcast hostedby Marietta Rodriguez, President and CEO.
Marietta Rodriguez (NeighborWorks President and CEO): Welcome back to the Community Effect, (00:30):
undefined
and Happy New Year to our listeners!
We have an exciting episode to helpset your sights on the future of
housing and community development.
In this conversation, we'll reflecton the milestones of 2024, discuss
the emerging trends that will shape2025, and get a sneak peek into
(00:51):
NeighborWorks new strategic plan.
Whether you're a housing professional,a community advocate, or a policymaker,
this episode is packed with insights tohelp guide your work in the year ahead.
Today, we're joined by two distinguishedleaders, Chris Herbert, Managing
Director of the Harvard Joint Centeron Housing, and Michael Buchko, Vice
(01:12):
President of Business IntelligenceServices at NeighborWorks America.
Chris and Michael, welcometo the Community Effect.
It's a pleasure to have you both here.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): It's great to be here. (01:21):
undefined
Thanks for having us, Marietta.
Marietta Rodriguez (NeighborWorks President and CEO): I'd like to start the conversation with (01:24):
undefined
a little bit of a look back on 2024.
Both NeighborWorks America and theHarvard Joint Center on Housing have
made significant strides this year.
Chris, let's start with you.
What do you see as some of thebiggest impacts on Or achievements
in housing and communitydevelopment that happened in 2024.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: I'm going to go with a bad news, (01:47):
undefined
good news story, just to set us up.
I mean, I think as we look at 2024,the, the thing that comes to mind
most for me is the fact that we brokeanother record for the number of
renters who are spending more than 30percent of their income on housing.
If we look at the amount of moneythat a first time home buyer needs
to get into a home, It's also at ahighest record level in in a long time.
(02:12):
Um, at the beginning of the year,the last data we had, we set
a new record for the number ofpeople experiencing homelessness.
So I think one of the things that reallystands out about 2024 is that we're
setting records and not in a good way.
But in terms of achievements, Ithink we are seeing that lead to
people focusing more on housing.
And I think one big achievementis we look at the 2024 election.
(02:33):
Across the country, there are morethan a hundred ballot initiatives
about housing, many of which passed.
And according to ShelterForce, ittotaled about a billion dollars
in bond funding of various typesto support affordable housing.
Uh, and the other thing I'd pointto is, we've seen a lot of places,
a lot of states take steps to try tofree up the production of housing.
(02:55):
California's been making lots ofheadlines with various initiatives.
It's passed.
Montana, a red state, passedinitiatives to eliminate single
family zoning and enable development.
For I'd like to tout my own home stateof Massachusetts where a couple years
ago we passed the MBTA CommunitiesLaw which mandates that towns served
by mass transit have to allow as aright for multifamily development.
(03:17):
My hometown, Lexington, Mass., wasthe first town to approve of its
plan for that kind of upzoning.
And we now have seen a thousand housingunits permitted in Lexington, in a town
of just ten thousand housing units.
So, we're seeing, you know, states andlocalities take steps to enable the
housing production we need, and now we'reactually seeing that production happen.
Marietta Rodriguez (NeighborWorks President and CEO): So what I'm hearing, Chris, is the need (03:38):
undefined
is growing, the demand for housing isgrowing, both on rental and single family,
and municipalities, at least at the stateand local levels, are responding with new
investment and You referenced some, somebond programs, but you also referenced
some policy changes and you used a termI want you to unpack for us, upzoning.
(04:03):
What do you mean by that?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: So in Massachusetts, what the state (04:05):
undefined
said is you have to, every town hasto have a certain amount of area
that as of right, you can buildhousing at 15 units per acre density.
Now that's not super high density, butit's enough for a three story or four
story apartment building or townhouses.
And so that upzoning means that whatwas, in most cases, zones primarily or
(04:26):
exclusively for single family housing, Hasbeen up zoned to allow for more housing
units, uh, up to 15 units per acre.
Marietta Rodriguez (NeighborWorks President and CEO): Yeah. (04:35):
undefined
Okay.
That makes sense.
Michael, let's go to you.
Um, NeighborWorks has had a big year.
Obviously the NeighborWorks network istrying to respond to this growing need.
Can you share some highlights of theNeighborWorks impact over the last year?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Absolutely. (04:50):
undefined
So NeighborWorks finished theyear with 16, 300 new home buyers.
That means it's the first year.
That we have not seen a decline innew homeowners from the previous year.
Since 2019.
So again, with the backdrop of thehome ownership market, what it is, it's
impressive to see the NeighborWorksNetwork hold those gains steady.
(05:12):
The network also continues to servehome buyers of color at a greater
rate than the conventional market.
58 percent of NeighborWorks homebuyers over the last three years
identified as people of color and 66percent of of NeighborWorks counseling
and education clients identifiedof people as people of color.
And from the corporation's perspective,I just want to throw in NeighborWorks
(05:33):
is known as a preeminent trainer ofhousing and community development
professionals across the country.
NeighborWorks completed over 16, 000learning engagements nationwide in
both in person and online modalities.
So there's a lot to be proud of from 2024.
Marietta Rodriguez (NeighborWorks President and CEO): I appreciate those numbers a lot, (05:48):
undefined
but for our listeners, let's Adda little bit more context to them.
So let's go back to thenew homeowners created.
So, uh, the NeighborWorks Network hasa non profit local affiliate in every
state of the union, inclusive of theDistrict of Columbia and Puerto Rico.
And they all report productiondata to us every quarter.
(06:12):
So when they report a new homeownercreated, what exactly does that mean?
And What role does the NeighborWorksorganization in that locality do
to help create that new homeowner?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Great questions. (06:25):
undefined
That means that the organization playedan active role in that individual
or family's homeownership journey.
This can include anythingfrom counseling and education.
In many cases, it also includes lendingservices where the NeighborWorks
organization originated the firstmortgage and or a second mortgage as well.
We have pretty strictthresholds for that reporting.
(06:47):
Uh, and those 16, 000 homeownersare again, evidence of the network
providing an incredible homeownership.
Marietta Rodriguez (NeighborWorks President and CEO): I, I really appreciate that (06:57):
undefined
context and the various rolesNeighborWorks organizations
play in promoting homeownership.
You say in some cases theyoriginated the mortgage.
Does that mean they're banks?
How does that work?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Well, we have about one third of (07:11):
undefined
our network that are communitydevelopment financial institutions.
That is a certification and astatus bestowed by the Department
of Treasury that organizationsmust apply for and maintain.
So they do operate some of our networkabout one third again operates as
financial institutions and theytherefore can Originate loans for
(07:32):
homeowners for consumer lending andeven for commercial or business lending.
Marietta Rodriguez (NeighborWorks President and CEO): That's really helpful you you made (07:36):
undefined
a point of something that we feelreally proud about that those 16
000 new homeowners created are fromdemographics that aren't Traditionally
served by the mainstream market.
Why is that so remarkableor why is that of note?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): What we know and what we've read and (07:58):
undefined
what we hear from various sources isthat for homebuyers of color, they are
more likely to pay more for the samemortgage compared to white homebuyers.
And so for our network to be serving sucha large percentage of population of color,
(08:18):
And making sure that those consumersget the best possible deal available
to them, regardless of anything else.
That's a very telling statisticand one that we're quite proud of,
especially when you compare it tothe home mortgage disclosure data
from private financial entities.
Marietta Rodriguez (NeighborWorks President and CEO): I want to toss this question to Chris. (08:35):
undefined
You know, Michael made a verycompelling case about these 16,
000 homeowners aren't traditionallyserved by normal market channels.
Is that your experience as well?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Oh, absolutely. (08:50):
undefined
Look at the outcomes in terms of thehomeownership rates by race, you know,
African Americans homeownership rate is,um, 27 percentage points less than whites.
That's not far off.
What the gap was in 1968 whenthe Fair Housing Act is passed
Hispanics do a bit better.
They're high 40s, but there's still a morethan 20 percentage point gap as well And
(09:11):
so if you look at just the opportunitiesto own a home It's much less among people
of color and obviously getting access toa mortgage is an important step in that
Marietta Rodriguez (NeighborWorks President and CEO): process So certainly what? (09:21):
undefined
This part of the story here is thatNeighborWorks Network is filling
a market gap that a traditionalmarket channels just aren't meeting.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Yeah, and I think what Michael's (09:31):
undefined
describing in terms of making sure thatpeople have all the information they need
to make a good choice to understand theprocess and then once you find a house
to make sure it's a house that's, youknow, not going to be a liability for
you and making sure that you're getting amortgage that is favorable terms for you.
Uh, there's a lot of, uh, work that hasto go into, uh, Helping people navigate
(09:52):
that process and navigate it successfully.
And so, yeah, I think theNeighborWorks network and their work
they do to facilitate that processis really critically important.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Yeah, and I think I (10:02):
undefined
want to add on to that.
Part of the home buying processis making sure that homeowners are
prepared for what may come and not justwhat they can afford in that moment.
And the NeighborWorks Network throughcounseling and education really focuses
on things like making sure that thereare savings in the bank, understanding
how when a roof leaks or a bathroomfixture breaks or any of that stuff,
(10:26):
what options are available to homeowners.
If someone gets into a mortgage thatthey can barely afford, they have no.
safety net, they have no wiggle room,and then they often make financial
decisions that will cause them greaterharm down the line, like paying for
a home repair with a credit cardat a 20 some percent interest rate.
So the housing counseling pieceis critical here, and our network
(10:49):
counsels and educates over 100, 000clients per year to make sure they're
prepared for the eventualities ofhomeownership and all that comes with
Marietta Rodriguez (NeighborWorks President and CEO): it. (10:57):
undefined
I think that's a really critical point,and I think housing counselors are in
every community across the country,and they're Some of the best kept
secrets, um, frankly in communities.
Michael, did you want to,
Michael Butchko (VP, Business Intelligence, NeighborWorks America): I was just going to chime in. (11:11):
undefined
Yes.
Sorry about that.
NeighborWorks is entering into apretty innovative partnership with
our friends at Zillow right now.
We are piloting this in one location,but what we're trying to do is when
a home buyer goes on to zillow.
com and starts looking at properties, oneof the things to Chris's great point is
that they are just not aware that there'sa of down payment assistance, counseling
(11:34):
opportunities, other things like that.
And often when you go on Zillowor any home buying website,
you look at the purchase priceand think, I can't afford that.
And away you go.
And Zillow is trying to retain traffic,but they're also trying to educate people
on opportunities for home ownership.
And that's where the partnershipwith NeighborWorks and NeighborWorks
Home Partners out of St.
Paul, Minnesota comes in.
(11:54):
What we're doing is making sureconsumers are aware of down payment
assistance programs and also counseling.
And trying to pair that to see, doesit mean that more people will be able
to achieve homeownership comparedto before that partnership began?
So, we're really excited aboutthat, and we think that those
sorts of programs in 2025 canhelp bridge the homeownership gap.
Marietta Rodriguez (NeighborWorks President and CEO): The residents in, in many of, (12:15):
undefined
um, the communities that, um,NeighborWorks owns and manages.
Those residents often play really criticalroles in their communities, right?
They are teach, first year teachers,they're paramedics, they're, um,
(12:36):
policemen, they're kindergartenteachers, they're nurse techs.
Um, and so I know, Chris, your teamhas studied this a lot, but making
sure that a community has the abilityto house people that provide the risk,
the critical resources to make anycommunity thrive is really important.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Oh, it is. (13:02):
undefined
And so, you know, for many ofthose folks that you mentioned, um,
obviously when they're doing theirjob, they're of value to the community.
But if they're, when their job ends, ifthey're still there, if they're there
to help a neighbor with their healthcare, if they're, you know, eyes in the
street, uh, as a police officer, um,all those things benefit the community.
And, you know, if people are spending 45minutes or an hour, community, to get to
(13:27):
their job, it's a lot less, uh, valuable,productive time for them as well.
So, keeping them in the community,making their, their time more, uh,
useful is, uh, a great benefit.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): There's also significant (13:38):
undefined
economic benefits as well, right?
If you are living where youare working, that is where you
were buying your groceries.
That is where you weregoing out to dinner.
That is where you were gettingservices from the community.
And then that money that you'reearning is then reinvested
into the place where you are.
So yes, commuting time, environmentalimpacts, just the, The drain on
(14:00):
individuals, but if folks are able to liveand work in the same place, it just has
multiplying effects on that local economy.
It creates stronger communitybonds as Chris was talking about,
and it's just a win for both theresidents and the community at large.
Marietta Rodriguez (NeighborWorks President and CEO): That's a great point. (14:17):
undefined
Mike, I want to get back to when youwere giving us, um, A look back on our
accomplishments, and that's our abilityto deliver training to communities.
Tell us why that's important.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): One of the things that we as NeighborWorks (14:30):
undefined
have heard for a long time, and it waspart of the reason why NeighborWorks
stood up a training institute tobegin with, is that there needs to be
additional professional developmentfor non profit professionals in the
housing and community development space.
So we talked about housingcounseling from the consumer side.
(14:52):
Now let's talk about itfrom the provider side.
There is often significantturnover in housing counseling.
You're a non profit, youhire a housing counselor.
One of the phenomenon that wehave seen recently is that banks
are hiring housing counselors.
And so they often are able to pay moremoney to have those folks join their team
at these private lending institutions.
(15:14):
Well, that leaves our organizationsthen with fewer staff and they need
to find someone to fill those roles.
NeighborWorks having a traininginstitute that provides certification,
week long training for housingcounselors is a critical way to
fill that pipeline for very neededprofessionals within this field.
NeighborWorks.
Marietta Rodriguez (NeighborWorks President and CEO): Thank you. (15:35):
undefined
I'm going to ask you both this question.
Um, as, as a member of the housing,affordable housing industry, we
feel most recently that housingis having its moment in America.
Do you think that more people areaware of the importance of housing
(15:55):
today than they were several years ago?
And, and what do you think's driving that?
I'll start with Chrisand then go to Michael.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: There's definitely greater awareness of (16:02):
undefined
our housing affordability challenges.
You know, I think it is most evident inthe fact that housing took center stage
in the presidential election this season.
As housers, you often watch thepresidential debates and the
back and forth of campaigns andhope that housing get mentioned.
This time, it was there constantly.
(16:24):
Why is that?
It's not for a good reason.
It's as we talked about at the outset.
We're adding way too few housingunits relative to the number of
people looking for those homes.
And so we need to expand the supplyof housing and we need to create more
pathways into good quality rentalhousing and entry level home ownership.
So it's the extent of the problem thatreally has brought this to everyone's,
(16:46):
the forefront of everyone's attention.
Marietta Rodriguez (NeighborWorks President and CEO): Michael, anything to add there? (16:47):
undefined
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Yeah, I agree wholeheartedly with that. (16:49):
undefined
It feels like in the past, if you werenot a homeowner You could become one,
assuming, right, you had a decent income,you had a decent credit score, etc.
Now, a consumer can have allthose things, and what's missing
is the supply of housing.
Or, the supply is quickly scoopedup by investors, or all cash buyers.
(17:13):
All cash is driving the homeownership market, and really keeping
people from entering that market.
And then one other point I'dadd for existing homeowners.
The belief about homeownership in thepast was, well, you get into a 30 year
mortgage and that's going to be yourhousing cost generally for the entirety
of the time you're in that house.
(17:35):
Over the last two years, the cost ofinsurance for homeowners has really, I
think, elevated the conversation abouthousing affordability and pressed people
who were in homeownership back outbecause they were no longer able to afford
the increases in their home ownership,their homeowner insurance premiums.
(17:55):
And so When you have all of thosefactors together, yes, housing is
having a particular moment, but agreewith Chris, it's a moment of scarcity.
And I think there's a lot of thepopulation who just is worried
that they may not ever be ableto achieve homeownership, which
previous generations could,
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: you know, and Marietta, if I (18:11):
undefined
just add on that, I think so.
There's an opportunity here now thathousing has become center stage and
we're getting more popular attention.
The need for solutions, as Isaid at the outset, you know, 100
different Uh, ballot initiativesin November, many of which passed.
I think one challenge, though, is is thatthe nature of the housing problem is not
(18:33):
one problem as we've talked about here.
It's access to homeownership.
It's access to good quality.
for people with moderate incomes.
It's access to good quality, affordablehousing with services for people
at the lowest end of the spectrum.
Um, we haven't even talked abouthomelessness and the need to get
people off the streets and intopermanently supportive housing.
So we need to have a multiplicity.
(18:54):
Of responses, all of which areexpensive, and in some ways we end up
that in competition with each other.
So I think the challenge wehave in the housing spaces.
How do we take advantage of theattention of this to get expanded
resources and policy, innovationand regulatory relief that can
still serve a broad range of these?
Of these needs because weneed to address them all.
Marietta Rodriguez (NeighborWorks President and CEO): Yeah, the layer the layering of (19:15):
undefined
factors make solutions more complexto deliver At a community level
it does and it seems like these.
Um Trends as we look back on 2024They will shape housing policies and
strategies in 2025 Because they're notthey're not going away anytime soon.
(19:36):
Do you agree?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Sadly, I I do agree. (19:39):
undefined
I mean, I think if you look atwhat's happened with housing prices
outpacing incomes At best, we'regoing to enter a period where
rents and prices growth will slow.
It's not going to fall.
And so I think we're going to be in aperiod of time, particularly if interest
rates stay higher for longer, which itlooks like they will, that we're not going
to see a quick rebound in affordability.
(20:00):
So I think this is an issue we're goingto be dealing with for the next few years.
Hopefully over time we'll getmore supply and then we'll, when
people's incomes will grow and we'llstart to chip away at the issue.
But it's in broad strokes,we're going to be facing
affordability crisis for a while.
Marietta Rodriguez (NeighborWorks President and CEO): Wow. (20:17):
undefined
What an insightful discussion about thetrends and challenges shaping the future
of housing and community development.
We will be continuing this conversationwith Chris and Michael in part two of
this episode where we'll dive deeperinto NeighborWorks America's new
strategic plan and for our vision forcreating lasting change in communities.
(20:39):
Thank you for tuning into The Community Effect.
Voiceover Narrator (20:42):
This is The Community Effect, brought to
you by NeighborWorks America.
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