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2014 CD Perspectives Report

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Federal Reserve Community Development Perspectives Looking forward There are a number of critical questions and challenges related to this work moving forward: Will housing finance reform, new financial regulations, and the lingering effects of the foreclosure crisis affect lower-income populations? Continuing uncertainty about the long-term structure of the housing finance system, stricter underwriting standards, and the impact of new financial regulations have raised questions. Moreover, the impacts on lower-income and minority borrowers post-crisis is not yet clear. Reserve Banks will continue to provide information on regional housing market dynamics so community leaders can understand how these issues may affect their residents. Staff will also continue to reach out to financial institutions and others to gain perspective on specific mortgage lending issues and challenges on an ongoing basis. What housing and land-use strategies are best suited for communities that have suffered from disinvestment? Reserve Banks are partnering with lenders and servicers, government agencies, and nonprofit housing development organizations to identify common goals around vacant and abandoned properties. They will continue to monitor the impact of investor activities on the availability and quality of affordable housing. Reserve Banks will also utilize their convening ability to bring key stakeholders together to share best practices and ideas, as exemplified by the 2014 Reinventing Older Communities conference. This event explored how older communities are capitalizing on housing and economic development activities in ways that will benefit all residents. How can communities support broad-based community revitalization? Single-strategy prescriptions designed to address the problems that affect lower-income communities, especially those that rely solely on physical improvements to housing stock, no longer appear to hold the broad sway with practitioners and policymakers that they did in the past. The emergence of new participants, new models of holistic collaboration, and changes in funding strategies and priorities by foundations and the federal government will likely continue to reshape place-based community development activities. CD staff will continue to work to enhance collaboration between the field and other sectors, such as public health and transit, to develop a more deliberate and comprehensive approach to challenges facing lower- income communities. How can regions work together more effectively to benefit all communities? Central cities and first-ring suburbs are increasingly confronted with a range of challenges related to municipal finances and the demand for services. The need to work regionally—both to meet local needs and to compete more effectively for development opportunities—is obvious, but difficult to achieve. Identifying ways to promote regional, cooperative strategies, while simultaneously considering the needs of lower-income communities, will be critical. Moving forward, several Reserve Banks and a number of national philanthropic foundations are developing an initiative to identify and promote best practices related to regional efforts to encourage equitable growth. For readers of this report seeking more information about Federal Reserve CD activities related to these issues, visit the "Place" section of FedCommunities.org. This portion of the site features a number of resources focused on affordable housing, 18

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