Notes from the field on NSP1, NSP2, AND NSP3: policy alternatives for mitigating the effects of foreclosed and abandoned properties on neighborhoods

Abstract

This paper will present an analysis of the Neighborhood Stabilization Program 1 (NSP1 ), one of three iterations of a federal housing program first adopted in 2008 to address the fallout of the 2007-2008 foreclosure crisis and its resulting impact on neighborhoods. Using the policy analysis framework described by Patton and Sawicki (1993), I will review the problem that this policy was designed to address and propose a framework for evaluating its response. My analysis is informed by real-world experience of having implemented NSP1 in Macon, GA, a city of roughly 93,000 people that has experienced decades of neighborhood decline and long suffered the impact of housing abandonment, vacancy, and foreclosures. One problematic aspect of federal housing policy in general is the need to respond to a diversity of housing markets and conditions nationwide, and I use examples from Macon and other communities to evaluate how adaptable the federal policy was to various local conditions, how well prepared communities were to respond to such a program, and whether and how NSP1 took local capacity into account. These and other questions lead to the examination of alternative policies particularly NSP2-a new iteration of NSP that attempted to correct for some of the problems experienced by NSP1. While the logic behind changes to the program can be read as an attempt to address program deficiencies and incorporate feedback from the implementation of NSP1, an examination of these changes reveals tradeoffs that were made involving equity, efficiency, political viability, and operability /local capacity. A brief analysis of NSP3-the latest iteration of the program-suggests some of these tradeoffs may not have been popular. I will conclude with a comparative evaluation of the three programs and make recommendations based on this analysis for potential future directions of the NSP.