Thursday, April 29, 2010

Hardest Hit Housing State Plan Analysis: Geographic Allocation Methods Show Wide Variations.

I have looked at the proposed geographic allocations in the three complete Hardest Plans I currently have copies for and am struck by the wide variations in the methods used. (All three plans are combined in link in right pane, Hardest Hit Plan Submissions, First Round States).

  1. Arizona: Their plan states what the allocation is going to be, with no supporting background data. From page 9 of their plan: "Based on the geographical makeup of our market place we suspect approximately 75 percent of these households will be in Maricopa County, which includes the Phoenix metropolitan area. It is estimated that of the remaining 25 percent of households to be assisted is estimated to be 9 percent will be in Pinal County and 8 percent will be in Pima County with the remaining 8 percent spread throughout other rural counties in the state."
  2. Florida: Pages 60-62 of their plan provide detailed formulas used to calculate the geographic distribution and include county level data. The formulas used include housing cost decline, a double weighting of unemployment, and county share of seriously delinquent loans.[Note that for second round states Treasury did NOT use housing cost decline in their decision on distribution between the second round states].
  3. Michigan: On page 71, they propose NO geographic distribution in their plan: "The Authority does not anticipate targeting this assistance on a geographic basis, nor have we anticipated specific hard income limits. However, in practical terms these programs will overwhelmingly assist working and middle-income families."
(Note: No guarantee that any of these methods will be accepted by Treasury).

Some Thoughts for Oregon (and other Second Round States):
  1. There is a wide latitude of choices made about geographic distribution, along with supporting data provided.
  2. For any geographic distribution it is important for transparency purposes to provide the specific data, sources, and formulas used to calculate the allocations. (Without locking into the Florida exact formulas, they have done a VERY good job in documenting their sources, methods, and data).
  3. Not ALL funding needs to be geographically distributed, some can be held back for statewide or special project purposes.
  4. An alternate to provide the greatest amount of flexibility in Oregon would be to use an EXISTING county level definition of economic distress found in state statutes. The formula used is described HERE, the Administrative Rule is HERE, and the current county level results are shown HERE.
Originally created and posted on the Oregon Housing Blog.

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