Those on the front lines of the housing crisis have learned some important lessons in community stabilization, said Federal Reserve Governor Elizabeth Duke in a September speech.
In opening remarks at the Federal Reserve REO and Vacant Properties Summit, which took place September 1–2, Duke shared some of those lessons and encouraged participants to continue working to "address the community development needs of neighborhoods that have been harmed by foreclosures."
Among other things, Duke highlighted the importance of having a comprehensive understanding of the complex dynamics and incentives that make up mortgage markets, as well as the importance of data in deciding where scarce resources will have the greatest impact. However, data-based decisions are no easy feat, warned Duke, pointing to another lesson learned—the important role of technology in creating better decision-making tools.
Those involved with neighborhood stabilization, from local governments and community development organizations to lenders and servicers, have also learned about the importance of collaborating in new ways. "It is not sufficient, given current economic conditions and the significant needs of our neighborhoods, to do things the way we have always done them," said Duke. For instance, new redevelopment strategies for REO properties have moved beyond simply promoting homeownership to include uses such as rental housing, lease-purchase, and converting owners to renters, she added.
These lessons, as well as other important insights into the problems associated with vacant and abandoned property, can be found in a new volume of papers released in conjunction with the summit. Governor Duke's speech, along with other presentations from the event, is available on the conference website.