The following is a transcript of Episode 5 of The Community Effect Podcast.

Voiceover Narrator: In every corner of America, there are stories of resilience, innovation, and the unwavering spirit of community. Stories of people and places transformed by the power of connection, collaboration, and a shared vision for a better future. The Community Effect, a podcast hosted by Marietta Rodriguez, President and CEO.
Marietta Rodriguez (NeighborWorks President and CEO): Welcome back to the Community Effect, and Happy New Year to our listeners! We have an exciting episode to help set your sights on the future of housing and community development. In this conversation, we'll reflect on the milestones of 2024, discuss the emerging trends that will shape 2025, and get a sneak peek into NeighborWorks new strategic plan.
Whether you're a housing professional, a community advocate, or a policymaker, this episode is packed with insights to help guide your work in the year ahead. Today, we're joined by two distinguished leaders, Chris Herbert, Managing Director of the Harvard Joint Center on Housing, and Michael Buchko, Vice President of Business Intelligence Services at NeighborWorks America.
Chris and Michael, welcome to 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. Thanks for having us, Marietta.
Marietta Rodriguez (NeighborWorks President and CEO): I'd like to start the conversation with a little bit of a look back on 2024. Both NeighborWorks America and the Harvard Joint Center on Housing have made significant strides this year.
Chris, let's start with you. What do you see as some of the biggest impacts on Or achievements in housing and community development that happened in 2024.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: I'm going to go with a bad news, 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 broke another record for the number of renters who are spending more than 30 percent of their income on housing.
If we look at the amount of money that a first time home buyer needs to get into a home, It's also at a highest record level in in a long time. Um, at the beginning of the year, the last data we had, we set a new record for the number of people experiencing homelessness. So I think one of the things that really stands out about 2024 is that we're setting records and not in a good way.
But in terms of achievements, I think we are seeing that lead to people focusing more on housing. And I think one big achievement is we look at the 2024 election. Across the country, there are more than a hundred ballot initiatives about housing, many of which passed. And according to ShelterForce, it totaled about a billion dollars in bond funding of various types to support affordable housing.
Uh, and the other thing I'd point to is, we've seen a lot of places, a lot of states take steps to try to free up the production of housing. California's been making lots of headlines with various initiatives. It's passed. Montana, a red state, passed initiatives to eliminate single family zoning and enable development.
For I'd like to tout my own home state of Massachusetts where a couple years ago we passed the MBTA Communities Law which mandates that towns served by mass transit have to allow as a right for multifamily development. My hometown, Lexington, Mass., was the first town to approve of its plan for that kind of upzoning.
And we now have seen a thousand housing units permitted in Lexington, in a town of just ten thousand housing units. So, we're seeing, you know, states and localities take steps to enable the housing production we need, and now we're actually seeing that production happen.
Marietta Rodriguez (NeighborWorks President and CEO): So what I'm hearing, Chris, is the need is growing, the demand for housing is growing, both on rental and single family, and municipalities, at least at the state and local levels, are responding with new investment and You referenced some, some bond programs, but you also referenced some policy changes and you used a term I want you to unpack for us, upzoning.
What do you mean by that?

Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: So in Massachusetts, what the state said is you have to, every town has to have a certain amount of area that as of right, you can build housing at 15 units per acre density. Now that's not super high density, but it's enough for a three story or four story apartment building or townhouses.
And so that upzoning means that what was, in most cases, zones primarily or exclusively for single family housing, Has been up zoned to allow for more housing units, uh, up to 15 units per acre.
Marietta Rodriguez (NeighborWorks President and CEO): Yeah. Okay. That makes sense. Michael, let's go to you. Um, NeighborWorks has had a big year. Obviously the NeighborWorks network is trying to respond to this growing need.
Can you share some highlights of the NeighborWorks impact over the last year?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Absolutely. So NeighborWorks finished the year with 16, 300 new home buyers. That means it's the first year. That we have not seen a decline in new homeowners from the previous year. Since 2019. So again, with the backdrop of the home ownership market, what it is, it's impressive to see the NeighborWorks Network hold those gains steady.
The network also continues to serve home buyers of color at a greater rate than the conventional market. 58 percent of NeighborWorks home buyers over the last three years identified as people of color and 66 percent of of NeighborWorks counseling and education clients identified of people as people of color.
And from the corporation's perspective, I just want to throw in NeighborWorks is known as a preeminent trainer of housing and community development professionals across the country. NeighborWorks completed over 16, 000 learning 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, but for our listeners, let's Add a little bit more context to them. So let's go back to the new homeowners created. So, uh, the NeighborWorks Network has a non profit local affiliate in every state of the union, inclusive of the District of Columbia and Puerto Rico. And they all report production data to us every quarter.
So when they report a new homeowner created, what exactly does that mean? And What role does the NeighborWorks organization in that locality do to help create that new homeowner?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Great questions. That means that the organization played an active role in that individual or family's homeownership journey.
This can include anything from counseling and education. In many cases, it also includes lending services where the NeighborWorks organization originated the first mortgage and or a second mortgage as well. We have pretty strict thresholds for that reporting. Uh, and those 16, 000 homeowners are again, evidence of the network providing an incredible homeownership.
Marietta Rodriguez (NeighborWorks President and CEO): I, I really appreciate that context and the various roles NeighborWorks organizations play in promoting homeownership. You say in some cases they originated 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 our network that are community development financial institutions.
That is a certification and a status bestowed by the Department of Treasury that organizations must apply for and maintain. So they do operate some of our network about one third again operates as financial institutions and they therefore can Originate loans for homeowners for consumer lending and even for commercial or business lending.
Marietta Rodriguez (NeighborWorks President and CEO): That's really helpful you you made a point of something that we feel really proud about that those 16, 000 new homeowners created are from demographics that aren't Traditionally served by the mainstream market. Why is that so remarkable or why is that of note?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): What we know and what we've read and what we hear from various sources is that for homebuyers of color, they are more likely to pay more for the same mortgage compared to white homebuyers.
And so for our network to be serving such a large percentage of population of color, And making sure that those consumers get the best possible deal available to them, regardless of anything else. That's a very telling statistic and one that we're quite proud of, especially when you compare it to the home mortgage disclosure data from private financial entities.
Marietta Rodriguez (NeighborWorks President and CEO): I want to toss this question to Chris. You know, Michael made a very compelling case about these 16,000 homeowners aren't traditionally served by normal market channels. Is that your experience as well?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Oh, absolutely. Look at the outcomes in terms of the homeownership 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 when the Fair Housing Act is passed Hispanics do a bit better. They're high 40s, but there's still a more than 20 percentage point gap as well And so if you look at just the opportunities to own a home It's much less among people of color and obviously getting access to a mortgage is an important step in that
Marietta Rodriguez (NeighborWorks President and CEO): process So certainly what?
This part of the story here is that NeighborWorks Network is filling a market gap that a traditional market channels just aren't meeting.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Yeah, and I think what Michael's describing in terms of making sure that people have all the information they need to make a good choice to understand the process and then once you find a house to make sure it's a house that's, you know, not going to be a liability for you and making sure that you're getting a mortgage that is favorable terms for you.
Uh, there's a lot of, uh, work that has to go into, uh, Helping people navigate that process and navigate it successfully. And so, yeah, I think the NeighborWorks network and their work they do to facilitate that process is really critically important.
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Yeah, and I think I want to add on to that. Part of the home buying process is making sure that homeowners are prepared for what may come and not just what they can afford in that moment.
And the NeighborWorks Network through counseling and education really focuses on things like making sure that there are savings in the bank, understanding how when a roof leaks or a bathroom fixture breaks or any of that stuff, what options are available to homeowners. If someone gets into a mortgage that they can barely afford, they have no.
safety net, they have no wiggle room, and then they often make financial decisions that will cause them greater harm down the line, like paying for a home repair with a credit card at a 20 some percent interest rate. So the housing counseling piece is critical here, and our network counsels and educates over 100,000 clients per year to make sure they're prepared for the eventualities of homeownership and all that comes with
Marietta Rodriguez (NeighborWorks President and CEO): it.
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. Yes. Sorry about that. NeighborWorks is entering into a pretty 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, one of the things to Chris's great point is that they are just not aware that there's a of down payment assistance, counseling opportunities, other things like that.
And often when you go on Zillow or any home buying website, you look at the purchase price and 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 partnership with NeighborWorks and NeighborWorks Home Partners out of St.
Paul, Minnesota comes in. What we're doing is making sure consumers are aware of down payment assistance programs and also counseling. And trying to pair that to see, does it mean that more people will be able to achieve homeownership compared to before that partnership began? So, we're really excited about that, and we think that those sorts of programs in 2025 can help bridge the homeownership gap.
Marietta Rodriguez (NeighborWorks President and CEO): The residents in, in many of, um, the communities that, um, NeighborWorks owns and manages. Those residents often play really critical roles in their communities, right? They are teach, first year teachers, they're paramedics, they're, um, policemen, they're kindergarten teachers, they're nurse techs. Um, and so I know, Chris, your team has studied this a lot, but making sure that a community has the ability to house people that provide the risk, the critical resources to make any community thrive is really important.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Oh, it is. And so, you know, for many of those folks that you mentioned, um, obviously when they're doing their job, they're of value to the community. But if they're, when their job ends, if they're still there, if they're there to help a neighbor with their health care, 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 45 minutes or an hour, community, to get to 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 economic benefits as well, right?
If you are living where you are working, that is where you were buying your groceries. That is where you were going out to dinner. That is where you were getting services from the community. And then that money that you're earning is then reinvested into the place where you are. So yes, commuting time, environmental impacts, just the, The drain on individuals, but if folks are able to live and work in the same place, it just has multiplying effects on that local economy.
It creates stronger community bonds as Chris was talking about, and it's just a win for both the residents and the community at large.
Marietta Rodriguez (NeighborWorks President and CEO): That's a great point. Mike, I want to get back to when you were giving us, um, A look back on our accomplishments, and that's our ability to 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 have heard for a long time, and it was part of the reason why NeighborWorks stood up a training institute to begin with, is that there needs to be additional professional development for non profit professionals in the housing and community development space.
So we talked about housing counseling from the consumer side. Now let's talk about it from the provider side. There is often significant turnover in housing counseling. You're a non profit, you hire a housing counselor. One of the phenomenon that we have seen recently is that banks are hiring housing counselors.
And so they often are able to pay more money to have those folks join their team at these private lending institutions. Well, that leaves our organizations then with fewer staff and they need to find someone to fill those roles. NeighborWorks having a training institute that provides certification, week long training for housing counselors is a critical way to fill that pipeline for very needed professionals within this field.
NeighborWorks.
Marietta Rodriguez (NeighborWorks President and CEO): Thank you. 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 housing is having its moment in America. Do you think that more people are aware of the importance of housing today than they were several years ago?
And, and what do you think's driving that? I'll start with Chris and then go to Michael.
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: There's definitely greater awareness of our housing affordability challenges. You know, I think it is most evident in the fact that housing took center stage in the presidential election this season. As housers, you often watch the presidential debates and the back and forth of campaigns and hope that housing get mentioned.
This time, it was there constantly. 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 housing units relative to the number of people looking for those homes. And so we need to expand the supply of housing and we need to create more pathways into good quality rental housing and entry level home ownership.
So it's the extent of the problem that really has brought this to everyone's, the forefront of everyone's attention.
Marietta Rodriguez (NeighborWorks President and CEO): Michael, anything to add there?
Michael Butchko (VP, Business Intelligence, NeighborWorks America): Yeah, I agree wholeheartedly with that. It feels like in the past, if you were not 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 all those things, and what's missing is the supply of housing. Or, the supply is quickly scooped up by investors, or all cash buyers. All cash is driving the home ownership market, and really keeping people from entering that market. And then one other point I'd add for existing homeowners.
The belief about homeownership in the past was, well, you get into a 30 year mortgage and that's going to be your housing cost generally for the entirety of the time you're in that house. Over the last two years, the cost of insurance for homeowners has really, I think, elevated the conversation about housing affordability and pressed people who were in homeownership back out because they were no longer able to afford the increases in their home ownership, their homeowner insurance premiums.
And so When you have all of those factors together, yes, housing is having a particular moment, but agree with Chris, it's a moment of scarcity. And I think there's a lot of the population who just is worried that they may not ever be able to achieve homeownership, which previous generations could,
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: you know, and Marietta, if I just add on that, I think so.
There's an opportunity here now that housing has become center stage and we're getting more popular attention. The need for solutions, as I said at the outset, you know, 100 different Uh, ballot initiatives in November, many of which passed. I think one challenge, though, is is that the nature of the housing problem is not 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, affordable housing with services for people at the lowest end of the spectrum. Um, we haven't even talked about homelessness and the need to get people off the streets and into permanently supportive housing.
So we need to have a multiplicity. Of responses, all of which are expensive, and in some ways we end up that in competition with each other. So I think the challenge we have in the housing spaces. How do we take advantage of the attention of this to get expanded resources and policy, innovation and regulatory relief that can still serve a broad range of these?
Of these needs because we need to address them all.
Marietta Rodriguez (NeighborWorks President and CEO): Yeah, the layer the layering of factors make solutions more complex to deliver At a community level it does and it seems like these. Um Trends as we look back on 2024 They will shape housing policies and strategies in 2025 Because they're not they're not going away anytime soon.
Do you agree?
Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies: Sadly, I I do agree. I mean, I think if you look at what's happened with housing prices outpacing incomes At best, we're going 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 a period of time, particularly if interest rates stay higher for longer, which it looks like they will, that we're not going to see a quick rebound in affordability.
So I think this is an issue we're going to be dealing with for the next few years. Hopefully over time we'll get more supply and then we'll, when people's incomes will grow and we'll start 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. What an insightful discussion about the trends and challenges shaping the future of housing and community development. We will be continuing this conversation with Chris and Michael in part two of this episode where we'll dive deeper into NeighborWorks America's new strategic plan and for our vision for creating lasting change in communities.
Thank you for tuning in to The Community Effect.
Voiceover Narrator: This is The Community Effect, brought to you by NeighborWorks America.