14 minute read
1. Outreach, Partnerships, and Community Collaboration
NJHMFA’s outreach, partnership, and collaboration strategies have many notable strengths. The Agency should continue to innovate in these areas to promote homeownership, stabilize neighborhoods, and shrink New Jersey’s racial wealth gap. These recommendations aim to increase knowledge of the Agency’s products among New Jersey communities that have encountered historical barriers to homeownership and wealth accumulation.17,18
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Through community events, online webinars, traditional media coverage, social media, advertising, and a newly redesigned website, NJHMFA has taken steps to make its programs more accessible. Despite this progress, we find that the Agency’s outreach efforts generally do not harness targeted and tailored strategies to reach underserved communities proactively. This gap has been especially detrimental for borrowers who are Black and Asian, groups that make up 17.8 percent and 10.2 percent of the state’s population but only 9.9 percent and 1.3 percent of 2020 DPA recipients, respectively.19
The Agency’s outdated technology infrastructure and insufficient staffing currently impedes its efforts to reach prospective borrowers of color and firstgeneration home buyers. So do its outmoded data collection systems, the barriers between the Agency and consumers, and the private lenders who often poach potential clients.20 The Agency lacks accurate demographic information about borrowers from private lenders, inefficiently tracks contact information for partner organizations, and provides an unwieldy webpage to parties seeking to connect with a lender institution.
Beyond technological and staffing shortfalls, the Agency’s current outreach strategy relies on the institutional knowledge and expertise of a few staff members who oversee community engagement. This model limits the Agency’s ability to scale outreach to new audiences, and it risks major disruptions when those staff members leave the Agency.
NJHMFA partners with New Jersey’s diverse network of nonprofit housing and community development organizations. Given these organizations’ trust and familiarity with New Jersey’s underserved communities, the Agency should prioritize the new partnerships to better address the state’s racial homeownership gap.
The Agency’s meaningful steps to partner with outside organizations have, at times, been frustrated by inconsistent communication with affordable housing stakeholders. Our conversations revealed that many housing organizations lack certainty about the Agency’s key policy priorities, vision for state’s affordable housing landscape, and baseline expectations for the role these organizations should play. And many organizations say they are reacting to the Agency’s new programs, rather than receiving an opportunity to shape them. This dynamic tends to damage trust and frustrate the Agency’s mission.
1.1. Employ a targeted home buyer strategy to prioritize outreach with underserved communities
IMPROVE STAFFING PRACTICES TO ENHANCE TRUST WITH HISTORICALLY MARGINALIZED COMMUNITIES
NJHMFA should expand its community outreach and marketing staff with at least two additional full-time employees to ensure greater diversity and bilingualism. We estimate this would cost $160,000 per year.21
SPOTLIGHT:
NJHMFA’s Hospital Partnership Subsidy Program
In May 2019, NJHMFA announced its $12 million Hospital Partnership Subsidy Program. Under this program, the Agency matches funds from hospitals to develop affordable rental housing for low- and moderate-income families and to set aside units with wrap-around services for individuals who frequently use hospital emergency department services.22,23 One of the program’s first projects involved a partnership between NJHMFA, St. Joseph’s University Medical Center, and two nonprofits, New Jersey Community Development Corporation and New Jersey Community Capital.24 The partnership led to the construction of a 70-unit building on a vacant lot nearby St. Joe’s.25
Foreclosure and Eviction Prevention and Housing Counseling
Through its Foreclosure Mediation Assistance Program, the Agency partners with HUDcertified housing counseling organizations to provide free, one-on-one foreclosure prevention counseling services.26 In March 2020, the program expanded to include New Jersey renters due to a potential surge in evictions after the COVID-19 eviction moratoriums expired.27 The Agency’s network of housing counselors extends to each county in the state and is comprised of trusted nonprofits, including NJ Citizen Action, Housing Partnership, Tri-City Peoples Corporation, Epic Community Development Corporation, and Consumer Budget and Credit Counseling.28 The Agency also oversees subgrant partnerships with several HUD-certified nonprofits across the state to provide pre-purchase counseling services.29
Bulk Purchases of Non-Performing Loans
The Residential Foreclosure Prevention Program establishes NJHMFA’s authority to create public–private partnerships with nonprofits and community organizations for bulk purchases of residential properties or mortgage notes after a mortgage foreclosure judgment.30 The program is meant to curtail foreclosures by helping underwater homeowners modify their mortgages and to prevent the buildup of vacant properties.31 Due to the program’s recency, the Agency has not yet made a bulk purchase partnership.
Currently, one person runs community engagement for the entire state. To break into new markets and build trust in new communities, NJHMFA should invest in more staff of diverse backgrounds.
TARGET DIRECT OUTREACH TO “QUICK WIN” POPULATIONS
“Quick Win” populations are groups with established internal communications mechanisms, high concentrations of people of color, and the financial conditions to be first-time home buyers. Examples include first-generation professionals, state and local government employees, union members, teachers, university staff, and large private employers.
NJHMFA should hold information sessions with these groups or coordinate with their human resource departments to distribute pamphlets or emails. This strategy acknowledges the high cost—and potentially low return—of direct-to-consumer outreach, and it aims to targeting specific groups with greater potential to have true interest in the program.
CREATE A PROMINENT MARKETING CAMPAIGN TARGETING PROSPECTIVE HOME BUYERS OF COLOR
Following practices from other states, including California32 and Colorado,33 engagement with the target communities and representative partner organizations should directly inform this marketing campaign. The Agency should seek feedback, identify gaps in understanding and barriers to access, and tailor messaging to each group’s unique concerns and needs. The campaign’s main web page should be displayed prominently on njhousing.gov to signal that NJHMFA is an active player in this space and understands systemic racism. EMPLOY MESSAGING STRATEGIES TO COMBAT PERSISTENT MYTHS AND MISCONCEPTIONS AMONG MORTGAGE-READY MILLENNIALS
National data from the Urban Institute indicate that a substantial portion of millennials, including millennials of color, are “mortgage ready.” Nevertheless, 39 percent of these potential homeowners mistakenly believe that they must have a down payment of more than 20 percent to purchase, and the majority are unfamiliar with down payment assistance programs.34 To promote awareness of its DPA program and dispel myths about down payment requirements, the Agency should adopt a statewide social media strategy.
We recommend that the Agency advertise on Facebook, YouTube, and Instagram, the three platforms that Americans between the ages of 30 and 49 use the most.35 The campaign should use diverse representation in images and photos. The social media assets NJHMFA already has can be adapted with new messaging.36 This is a long-term strategy to raise awareness of the program, and it is not expected to have significant returns on originating new loans. Since this is not intended to be the central strategy for marketing, we recommend that the Agency spend no more than $10,000 per year on social media advertisements.
Because NJHMFA does not have a presence on Instagram, the Agency should partner with prominent accounts of real estate professionals, associations, lenders and others across the state. For example, while there is a relevant news hook the Agency should partner with @NJGov to advertise to its 58,000 followers on Instagram and 399,000 followers on Twitter.
FINANCIAL READINESS AND HOMEOWNERSHIP TRAINING
NJHMFA should partner with a trusted nonprofit or a research lab at a state university to develop and administer a race-conscious financial readiness and homeownership education curriculum. The program should be developed, piloted, and evaluated by a nonprofit partner with established credibility in communities of color. By using data to target educational efforts in areas with low NJHMFA program take-up rates and in communities of color, this initiative will enhance awareness of the Agency’s homeownership programs and affirmatively address the racial homeownership gap.
Following the model of many HFAs subsidizing nonprofit providers of home buyer counseling, the Agency should provide $50 in financial support for each student. We recommend NJHFMA either budget or request new appropriation of at least $60,000 for the initial pilot to cover subsidies, curriculum adaptation, program management, and evaluation.37
In developing a course, the Agency might consider elements of Getting Your House in Order, the Portland Housing Center’s raceconscious financial readiness community education course developed by Dr. Rhea Combs.38,39 Its curriculum acknowledges the historical and cultural context of financial practices in the African American community. Those who completed the course went on to have more savings, less debt, and improved credit scores. And while 54 percent of the program’s participants reported that they did not feel in control of their finances before they participated in the program, only 10 percent of graduates reported feeling the same way a year out from completion.40 Portland Housing Center developed a similar curriculum for the Latino Spanish-speaking community. This case study demonstrates that tailored outreach and policy design can create pathways to homeownership among traditionally underserved communities.
AUDITING NJHMFA’S COMMUNITY OUTREACH AND EVENTS CALENDAR
NJHMFA should audit its current calendar of outreach events to identify, and address, gaps in its regional distribution, and reach to communities of color. The Agency should consult trusted housing stakeholder organizations—such as the Affordable Housing Alliance, Morris Habitat for Humanity, Urban League of Essex County, and Garden State Episcopal Community Development Corporation—to identify community events that do not have an NJHMFA presence.
1.2. Expand lender and real estate professional relationships with strong ties to communities of color and leverage their outreach capacity
Because most client referrals come from lenders and real estate professionals, NJHMFA should ensure that this pipeline supplies a diverse population of potential home buyers. The Agency should proactively diversify and strengthen its relationships with lenders and real estate professionals. Some of the affinity groups the Agency already works with may be invaluable in these efforts including the New Jersey Association of Minority Real Estate Professionals, the New Jersey Chapter of the National Association of Hispanic Real Estate Professionals, and the Northern New Jersey Chapter of the Asian Association of Real Estate Professionals.41
Many communities of color distrust traditional banks and many rely on mortgage
brokers or mission-driven institutions like credit unions. Similarly, home buyers of color increasingly use online, algorithm-based lending platforms, which are not allowed access to NJHMFA programs under the Agency’s preferred lender list.42
NJHMFA should audit its internal data to identify which lenders originate the most loans among borrowers of colors and identify the geographic areas they serve. Then, the Agency should use this information to identify gaps in service and develop concrete goals to prioritize targeted outreach to lenders who work with home buyers of color and firstgeneration home buyers. These metrics should shape every step of the outreach strategy.
NJHMFA should also survey lenders every six months to identify the challenges they face in navigating the Agency’s processes. For example, surveys might identify efficiency challenges, such as underwriting turnaround times, that could then be addressed.
NJHMFA should solicit feedback from community partners (discussed more below) to identify which lenders, real estate professionals, and mortgage brokers its clients are using. The Agency should leverage these relationships to build connections with new housing professionals and identify and address barriers to NJHMFA products.
Meanwhile, NJHMFA should establish preferred lender relationships with credit unions and online mortgage service providers. In doing so, the Agency may choose to amend its requirement that preferred lenders have physical presences in the state. Consumers who use online mortgage services are digitally savvy, but they may lack the personalized support offered by banks and traditional lenders. As a result, they will seek information about the Agency online.
Once the Agency establishes a partnership with a provider—for example, Rocket Mortgage —it should create a “NJ First Time Homebuyer with Rocket Mortgage” page on its website and provide step-by-step instructions. These referral processes can be streamlined by creating tailored landing pages on the Agency’s website with direct referral links. That is, Rocket Mortgage would ideally embed a link from its website to link directly to the NJHMFA website.
NJHMFA should also collect and understand information on each lender’s internal commission policies. Some lenders, like Prosperity Home Mortgage, LLC base commissions on the loan amount and do not consider the type of loan product at all, making them ideal candidates to partner with NJHMFA.
EDUCATE HOUSING PROFESSIONALS ACROSS THE STATE
NJHMFA already offers training for lenders, but these training efforts should expand to include tailored breakouts and networking opportunities for all housing professionals at conferences and events. These trainings should focus on increasing awareness of the programs NJHMFA offers, but importantly, they should emphasize the message we heard repeatedly from top lenders: First time home buyers will eventually want to buy a second home, and they will remember the lenders that helped them get free money. At each of these events, the Agency should survey housing professionals to learn about their needs and identify opportunities for new lending relationships.
LEVERAGE CO-BRANDING OPPORTUNITIES WITH LENDERS
NJHMFA already offers social media toolkits for lenders to co-brand, but these opportunities should expand to other media, including television, radio, print, and direct mail. NJHMFA should select one lending partner to pilot a co-branded marketing campaign, which should include both direct mail and a social media campaign with tracking links to measure the impact of the strategy. The Agency should also expand co-branding opportunities to real estate professionals by providing social media templates and sample copy for posts to Facebook, Twitter, and Instagram.
1.3. Enhance community engagement and partnerships strategy to build trust with home buyers of color
ESTABLISH AN ANNUAL CONFERENCE FOR COMMUNITY PARTNERS ON COLLABORATION AND RACIAL EQUITY
NJHMFA should launch an annual conference focused on nonprofit, community development, and advocacy stakeholders. The conference should serve as a platform for Agency leadership and stakeholders to identify shared goals in areas such as affordable housing repair and construction, foreclosure mitigation, and homeownership expansion.
The Agency should organize panel discussions and plenary sessions to highlight new collaborations between the Agency and organizations, review lessons from previous partnerships, identify opportunities to scale existing partnerships so that they reach underserved communities, and discuss how the Agency and housing professionals can collaborate to close the state’s racial gaps in wealth and homeownership.
Two conferences—the Governor’s Conference on Housing and Economic Development, and the Housing and Community Development Network of New Jersey’s annual conference— already center on affordable housing and community development. NJHMFA’s conference would uniquely focus on racial equity, partnerships, and collaboration. It will also help the Agency and stakeholders ensure that their efforts complement, rather than compete against, each other, a concern cited by several organizations throughout our field research.
During the conference, NJHMFA should solicit feedback on its existing policies and programs to inform its annual strategic plan, as described in Recommendation 5.1, and refine its vision for racially equitable homeownership opportunities in New Jersey. Because no single state agency or housing organization has the perfect strategy for resolving New Jersey’s complex racial disparities in homeownership, the Agency will need to combine different ideas offered by various organizations to develop the necessary comprehensive approach for tackling these deep-rooted inequities.43
ANNUAL CONFERENCE COSPONSOR PARTNERSHIPS
To reduce costs associated with the annual conference, NJHMFA should host the conference in its own office space and create cosponsor partnerships with trusted nonprofit, advocacy, and community development organizations. Potential partner organizations include Fair Share Housing Center; New Jersey Institute for Social Justice; the Housing and Community Development Network of New Jersey; and Affordable Housing Alliance, New Jersey Policy Perspectives. Cosponsors’
office spaces may serve as alternate conference venue options. Such partnerships would help the Agency build trust and legitimacy with influential housing professionals in these sectors.
We estimate that the cosponsorship would cost the Agency $30,000 per year.44
DESIGNATE A NONPROFIT, COMMUNITY DEVELOPMENT, AND ADVOCACY STAKEHOLDER LIAISON
NJHMFA should designate a full-time, inhouse liaison who oversees partnerships with nonprofit, community development, and advocacy stakeholders. The liaison should report directly to the Agency’s Executive Director and understand the state’s pervasive racial discrepancies in homeownership rates and wealth accumulation. In addition, the liaison should have substantial experience working in the nonprofit, advocacy, or community development sectors such that she is familiar and credible to stakeholders. The liaison’s salary should be comparable to other Agency leadership positions in order to draw experienced candidates with high levels of trust among New Jersey’s nonprofit and advocacy stakeholders.
As part of her responsibilities, the liaison should convene regular listening sessions with trusted representatives from partner organizations to solicit feedback on the strengths and weaknesses of NJHMFA’s policies and partnership practices, especially those that disproportionately affect communities of color. Her findings should be incorporated into NJHMFA’s regular internal process improvements discussed in Section 5. Finally, the liaison should prioritize communication with stakeholders in North and Central Jersey to help NJHMFA cultivate more robust networks in these regions. DRAFT FORMALIZED MOUs WITH COMMUNITY PARTNERS SERVING HOME BUYERS OF COLOR
Memoranda of understanding can formalize the process by which the Agency shares information with partners, refers nonmortgage-ready borrowers to partners, and receives referrals for candidates to NJHMFA programs from partners. These memoranda should be simple and not impose any new administrative burdens on NJHMFA staff.
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