The Case of the Disappearing Home

Everyone has been feeling it one way or another, whether you simply scoffed at a $3.49 price tag on an avocado the other day at the grocery store or are frantically looking for a new place to live because your landlord just doubled the rent. You know what I’m talking about – that word that’s currently sharing the news headline spotlight with gun violence, abortion, Ukraine, climate change, monkey pox, baby formula and Jan. 6 – inflation.

According to figures released by the Department of Labor on June 10, inflation hit a 40-year high in May, with the consumer price index rising 8.6% annually. In that month alone, prices rose 1%, compared to 0.3% in April. Gas prices surged 48.7% annually as of May and 4.1% from April to May, while grocery costs jumped 11.9% and 1.4%.

Demonstrating just how insane the gas prices are, The Washington Post reported on June 8 that AAA fielded 50,787 calls from drivers who became stranded because they ran out of gas in April, a 32% increase in the number of such calls from the year prior. And according to a Washington Post-Schar School poll, 44% of drivers randomly contacted between April 21 and May 12 said they have only partially filled their car’s gas tank; that number was 61% for drivers with incomes below $50,000 per year.

Perhaps the biggest punch to the gut though has been the cost of housing. Rent went up right along with home prices, to the tune of 5.2% over the past year as of May and 0.6% from April to May, according to the Department of Labor. A recent Pew Research Center survey found that 85% of Americans are concerned about the availability of affordable housing, and 49% said it’s a major concern.

Throughout the pandemic, I have stayed in a number of monthly Airbnb house rentals in Southern California’s San Bernardino mountain communities, as well as in the region’s High Desert communities (just north of Palm Springs, Calif.). Before heading to a new spot, I like to join Facebook groups created for residents of the destination. While I rarely participate in them, they’re interesting to follow as they give me a flavor of what’s happening in the community and what the people nearby are like.

Recently, I’ve been struck by the number of posts from locals who are desperate to find affordable housing. Their stories are usually some version of, “I have lived in Big Bear for 20-plus years. My kids are in school here. My landlord is selling the house to an investor who wants to renovate/Airbnb the property. I can afford $1,600 a month. I have weeks left to find a place. Please help me.”

And in a video posted in May by the Morongo Basin Conservation Association (MBCA), “Joshua Tree Short-Term Rental Housing Crisis,” which the group presented to the board of supervisors of San Bernardino County, locals voiced concerns over the “Wild West land grab” that has left 10% of children (about 700) in the local school district homeless, and a number of local workers living in their cars and abandoned desert buildings. One business owner said he stumbled upon a Chicago corporation that owns 100 Airbnbs in Joshua Tree. Some of those are likely the former homes of families currently stuck out in the middle of the desert without water or electricity. The MBCA has asked the county to instate a pause on short-term rental permits.

(Full disclosure: I booked two Airbnbs in Joshua Tree and Yucca Valley, Calif., for three months this summer, and after watching that video, I felt pretty crappy about it. For what it’s worth, I’m hoping that spending my money at local businesses all summer will have some kind of positive impact on these communities.)

In short, housing is a disaster right now. While no organization or group of organizations can easily solve the problem, credit unions should be aware of what their members and potential members are currently dealing with. Some credit unions are trying to help make housing more affordable in their communities, while recognizing that their impact on the nationwide crisis will likely be small. One of these credit unions is the $1.9 billion, Williston, Vt.-based New England Federal Credit Union.

NEFCU President/CEO John J. Dwyer Jr. presented during a recent Filene Research Institute webinar on housing insecurity, which focused on ways credit unions can help create equitable wealth, as well as make home buying easier and the renting of quality affordable housing more beneficial, by offering responsive products. Dwyer said while his credit union has been involved in housing solutions in Vermont for many years, it made three significant moves after the pandemic began:

• Contributed $3 million to the Vermont Housing Finance Agency to support affordable homeownership and multi-family rental projects. Dwyer emphasized that this contribution didn’t fund whole housing projects, but rather helped to close funding gaps for projects.
• Invested $3 million in the Champlain Housing Trust, a regional housing agency, to help advance homeownership for BIPOCs (Black, Indigenous and people of color).
• Developed its Home Ownership Made Easier program. While it had already been in place for some time, NEFCU reintroduced the program, which assists first-time home buyers struggling with affordability, last fall. It offers up to 3% down payment assistance in the form of a 0% interest, no-payment second mortgage, and covers mortgage insurance for qualifying first-time home buyers. Since it was reintroduced, the program has assisted 48 members, contributed $300,000 in mortgage insurance payments and funded $350,000 in down payment loans, Dwyer said.

For NEFCU, which has a $2 billion mortgage portfolio, these efforts have been a way to give back to the community, according to Dwyer.

This story that has been unfolding, where finding an affordable, quality apartment or owning a home has become increasingly out of reach even for middle-class households, and where working-class people are left homeless in sweltering desert weather to make room for another Instagrammable Airbnb, is not something we should accept. But what does non-acceptance even look like? Demonstrating in the streets and demanding that it stops? At the end of the day, everyone still needs to live somewhere, and currently that means suffering in some way, either by overpaying or literally having no place to go.

For now, credit unions creating affordable housing opportunities through innovative partnerships, and continuing to be there for their members by working one-on-one with them to come up with solutions for the day-to-day financial problems they’re facing, might be the best place to start.

As Dwyer put it, when asked for his advice to other credit unions, “Don’t get overwhelmed by trying to solve something that’s too big. Tackle something that’s definable. We know we can’t solve housing. We don’t have enough capital in our credit union to solve housing in Vermont. Start with something definable, and you’ll make a difference. If you have one member you got into a house, it makes a huge difference.”

Natasha Chilingerian is executive editor for CU Times. She can be reached at nchilingerian@cutimes.com.