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Cityscape: Volume 9 Number 1


Staff Studies in Housing and Community Development

Volume 9, Number 1

Mark D. Shroder


Staff Studies in Housing and Community Development

Guest Editor's Introduction

Paul K. Gatons
David L. Hardiman
U.S. Department of Housing and Urban Development

This issue of Cityscape diverges from the journal’s usual format of organizing a set of articles around a single subject; instead, the set of articles in this issue presents a unique direction. It highlights inhouse research from the U.S. Department of Housing and Urban Development’s (HUD’s) Office of Policy Development and Research (PD&R).

PD&R provides expert analysis and research on housing markets, program evaluation, and policy analysis to HUD. PD&R is a compact, multidisciplinary organization composed of experts from a variety of housing and economic development research disciplines, including anthropology, architecture, business, economics, engineering, law, planning, political science, public policy, sociology, urban affairs, computer science, and geography. These experts provide objective data and independent analyses that enable policymakers to develop informed government policy.

PD&R produces publicly available information on housing needs and market conditions, evaluates HUD programs, develops analyses of current policy issues, and conducts research on a wide range of housing and community development issues as well as advances in housing technology. This information is accessible at

In this issue of Cityscape, the first article, "Home Equity Conversion Mortgage Terminations: Information To Enhance the Developing Secondary Market," is written by Edward J. Szymanoski and Theresa R. DiVenti from PD&R and James C. Enriquez from the Office of Housing. The article examines loan level data in the Federal Housing Administration’s (FHA’s)reverse mortgage program, also known as the Home Equity Conversion Mortgage (HECM) program. Szymanoski, DiVenti, and Enriquez analyze historical HUD data on HECM loan terminations to determine annual hazard and survival rate tables for HECM loans by the age and type of borrower. They also examine termination experiences among the different groups. The results of this analysis are critical not only for program operations and private market product development but also for developing an effective secondary market for HECM loans.

Todd Richardson, in "Analyzing a Community Development Needs Index," examines the most recent index developed by HUD to determine how well the Community Development Block Grant (CDBG) program targets funds to its grantees based on their relative needs. He also shows how factor analysis can be used in different ways to reduce many variables into a few variables measuring different patterns of distress. He compares two approaches with the 2000 census data and reaches the same basic conclusions about what key variables are important for demonstrating community development need. Richardson’s discourse then turns to examining the wide range of policy choices regarding how to weight those variables in determining what types of need are considered a higher priority for funding than others. He concludes that it is in the weighting of the variables used in the White House Administration’s proposal for changing the formula, rather than the formula variables themselves, that the debate on improving the formula should focus.

"The Value of the Sunshine Cure: The Efficacy of the Real Estate Settlement Procedures Act Disclosure Strategy," by Mark D. Shroder, explores the potential impact of the Real Estate Settlement Procedures Act (RESPA), which regulates the provision of services involved in the sale of most single-family homes in the United States. The intent of RESPA is to protect consumers by regulating the completeness and timing of disclosure to homebuyers. In the article, Shroder poses four essential empirical questions on the effects of RESPA on social welfare. Given the small sample of mortgages issued by the FHA in this study, however, the author provides only tentative conclusions in response to these questions. First, are lending and title fees large enough to be worth regulating? Second, is the Good Faith Estimate, mandated by RESPA, an unbiased and consistent estimate of lending and title fees? Third, does state law significantly affect closing costs? Finally, does RESPA achieve fairness in the negotiating position of buyers and sellers relative to service providers? At the end of his analysis, Shroder determines that RESPA does not achieve fairness.

Meena Bavan, in "Does Housing Discrimination Exist Based on the ‘Color’ of an Individual’s Voice?" uses extensive data from the Housing Discrimination Study (HDS) 2000, sponsored by HUD and conducted by the Urban Institute, to address the issue of whether housing discrimination exists based on the "color" of an individual’s voice; that is, does linguistic profiling enter into an individual’s ability to make an appointment to view a rental or sales housing unit. The HDS 2000 study was conducted from a nationally representative sample of 20 metropolitan areas with a population greater than 100,000 and with significant African American and/or Hispanic minority populations. Linguistic profiling occurs when a person makes judgments over the telephone about the character of the individual they are talking to; in this case, judgments that are based on race. This study finds little association between race and the ability to make an appointment over the phone to view a rental or sales unit. It finds that the predicted probability of making an appointment to inquire about a rental or sales unit is similar across social and ethnic groups, varying slightly at around 97 percent. Using data from the HDS 2000 study, Bavan uses a logit model regression to determine if a pattern exists between a minority caller and his or her ability to make appointments with housing rental or sales agents. Because the purpose of the HDS study was not to examine racial linguistic profiling, Bavan’s conclusions are limited and may require further study.

"Ten Years of Smart Growth: A Nod to Policies Past and a Prospective Glimpse Into the Future," by Regina C. Gray, provides an overview of progress and challenges of the smart growth movement in the 10 years since the first smart growth programs were enacted. Smart growth initiatives seek to remove barriers to homeownership, provide adequate public facilities, and increase employment opportunities by providing access to valuable land resources, limiting urban sprawl, and regulating land use. The article traces the history of the smart growth movement, addresses how smart growth influenced growth management policies at local and state levels, and describes how it is now guiding policies at state and federal levels. Gray concludes the article by assessing how the smart growth movement is currently shaping local and federal government policies regarding city planning and urban growth and by describing best practices and innovative approaches that governments at all levels are implementing.

Although most research in the field of urban and regional economics focuses on intraregional variations, the article by Robyn K. Welch, John I. Carruthers, and Brigitte S. Waldorf, "Public Service Expenditures as Compensating Differentials in U.S. Metropolitan Areas: Housing Values and Rents," examines how public service expenditures contribute to interregional variations in housing values and rents. The research uses an econometric analysis of housing values and rents in a national data set of metropolitan counties to address four questions. Do public service expenditures help explain interregional variation in the cost of housing? What types of spending make the most difference? How does their effect on housing values compare to their effect on rents? Do these effects change through time? The findings suggest that police protection makes the most difference for owners and renters alike, with education and fire protection, respectively, being close seconds. In addition, certain services have a more enduring effect than others. The article adds to the existing body of knowledge by linking a broad spectrum of public goods and services to the place-to-place cost of housing comparisons.

The next two articles discuss the subject of housing affordability for low-income renters. Both of these articles build on PD&R’s development of "worst case needs" for housing assistance, chiefly carried out by Kathryn P. Nelson during her tenure with PD&R. During the 1980s, PD&R developed the "worst case needs" approach to estimate the need for affordable housing, with input from congressional committees, particularly the Senate Committee on Appropriations. PD&R continues to issue regular reports on this subject.

The first article on this subject, "Duration of Rent Burden as a Measure of Need," is written by Scott Susin, an economist with the U.S. Census Bureau, who regularly works with PD&R through a cooperative contract. The article builds on an analysis included in a 2005 PD&R worst case needs report, "Affordable Housing Needs: A Report to Congress on the Significant Need for Housing," and analyzes the length of time low-income families experience periods of high housing costs, defined as paying more than half their income for rent. The analysis uses data from the Census Bureau’s Survey of Income and Program Participation, a nationwide survey of household incomes, labor force information, program participation and eligibility data, and general demographic characteristics. The analysis shows that very low-income families often swing in and out of high-rent-burden status, especially if they have a nonelderly or nondisabled head of household.

The second article on housing affordability, "Is There Enough Housing To Go Around?" by David A. Vandenbroucke examines whether the supply of affordable rental housing stock is available to meet the number of low-income renters. Vandenbroucke uses American Housing Survey data to examine the distribution of housing supply relative to demand. He begins with the assumption that housing can be assigned to householders based on affordability and that rental unit shortages and surpluses can be identified by income ranges. Not all affordable units are available, however, because some of these units may be occupied by higher income renters. Vandenbroucke restricts the analysis to units that are affordable, available, and adequate. Using this framework, he examines specific issues, such as rental supply by income class, variation of rental units by location, the sufficiency of the Fair Market Rent (FMR) standard, changes in housing supply over the period 1985 to 2003, and the relationship between supply and crowding. He concludes that affordable, available, and adequate stock is sufficient to house only 89 percent of all rental households; units renting for less than the FMR are available for only 70 percent of all rental households; nonmetropolitan areas and the Midwest have more available rental stock; and about 5 percent of all renter households live in crowded households.

"Geographic Information Systems Supporting Disaster Response and Recovery," by Todd Richardson and Robert Renner, describes the extensive use of Geographic Information Systems (GIS) by HUD in response to national disasters, specifically those created by Hurricanes Katrina, Rita, and Wilma. GIS data were used to provide information and analyses on the disasters’ impacts on the housing stock and the people who lived in those homes. The data were also used to inform policymakers on decisions they needed to make in response to the aftermath of the disasters and to support data analysis used in making funds allocation decisions, such as deciding how supplemental appropriations of CDBG funds should be given—to assist individual jurisdictions or to facilitate long-term disaster recovery. In general, GIS data enabled policymakers and planners to decide how to estimate the impact of the disaster areas and to judge how federal and local resources could facilitate long-term recovery.

Dianne T. Thompson’s study, "Evaluating Length of Stay in Assisted Housing Programs: A Methodological Note," introduces new methods and approaches that augment findings from previous research on tenants’ length of stay in assisted housing programs. First, most previous research used mean and median calculations for a single program year, but the present study evaluates data from an 8-year period, from 1995 to 2002. Second, largely due to data limitations, prior research has generally focused on current assisted households who continue to receive housing assistance. This new research includes data for households that have exited the programs (former households). By including former households, this study gains a broader perspective on housing tenure. Third, this study identifies multiple program participants, or mixed households, identified as those who move between public housing and housing voucher programs across the 8-year study period. Fourth, this study includes participants who stay in assisted housing for very short durations (less than 6 months). By including this subgroup, the analysis may reflect an administrative data collection problem or may suggest some other phenomenon among assisted housing recipients needing further investigation. Fifth, this study systematically identifies data gaps, logical inconsistencies, and out-of-range data in the file by using a data quality process that goes beyond what has been done in past studies. Finally, and perhaps most importantly, this study presents tenure estimates for assisted households based on median survival time, which may be more realistic than calculations that rely solely on mean and median summary statistics. Furthermore, measurements of housing tenure based on mean and median survival time may underestimate tenure because current recipients have not yet left the program. Using a life-table method, including the median survival time, however, will produce statistics that more accurately and realistically measure tenure in assisted housing programs.

Home Equity Conversion Mortgage Terminations: Information To Enhance the Developing Secondary Market
by Edward J. Szymanoski, James C. Enriquez, Theresa R. DiVenti

Analyzing a Community Development Needs Index
by Todd Richardson

The Value of the Sunshine Cure: The Efficacy of the Real Estate Settlement Procedures Act Disclosure Strategy
by Mark D. Shroder

Does Housing Discrimination Exist Based on the "Color" of an Individual's Voice?
by Meena Bavan

Ten Years of Smart Growth: A Nod to Policies Past and a Prospective Glimpse Into the Future
by Regina C. Gray

Public Service Expenditures as Compensating Differentials in U.S. Metropolitan Areas: Housing Values and Rents
by Robyn K. Welch, John I. Carruthers, Brigitte S. Waldorf

Duration of Rent Burden as a Measure of Need
by Scott Susin

Is There Enough Housing To Go Around?
by David A. Vandenbroucke

Geographic Information Systems Supporting Disaster Response and Recovery
by Todd Richardson, Robert Renner

Evaluating Length of Stay in Assisted Housing Programs: A Methodological Note
by Dianne T. Thompson



Cityscape is published three times a year by the Office of Policy Development and Research (PD&R) of the U.S. Department of Housing and Urban Development. Subscriptions are available at no charge and single copies at a nominal fee. The journal is also available on line at

PD&R welcomes submissions to the Refereed Papers section of the journal. Our referee process is double blind and timely, and our referees are highly qualified. The managing editor will also respond to authors who submit outlines of proposed papers regarding the suitability of those proposals for inclusion in Cityscape. Send manuscripts or outlines to

Opinions expressed in the articles are those of the authors and do not necessarily reflect the views and policies of HUD or the U.S. government.

Visit PD&R’s website,, to find this publication and others sponsored by PD&R. Other services of HUD USER, PD&R’s research information service, include listservs, special interest and bimonthly publications (best practices and significant studies from other sources), access to public use databases, and a hotline (800–245–2691) for help with accessing the information you need.


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