Advertisements



New NC development has micro-units. Could it help solve the housing shortage? (Gallery)

Nearly all apartments in the building are micro-studio units with an average size of around 500 square feet. “It’s a housing type that is desperately needed in the Triangle," the developer said......»»

Category: topSource: bizjournalsDec 5th, 2021

The supply chain crunch for US homebuilders may ease as China"s ailing property market slows, says the CEO of a $4 billion investment portfolio

"It's lumber … it's appliances, it's paint, it's drywall, countertops, cabinetry," that are in short supply, says RealtyMogul CEO Jilliene Helman. Hill Street Studios/Getty Images A sustained slowdown in Chinese property development could prove helpful for US home builders, the CEO of RealtyMogul tells Insider. Cooling housing starts in China should free up materials that are in short supply, said the investment platform's chief, Jilliene Helman. From lumber to paint to flooring, materials are harder to secure than a year ago, she said. The slowdown in China's massive property sector - highlighted by the debt crisis at developer Evergrande Group - may hold a silver lining for builders in the US wrestling with shortages of construction materials, says the CEO of a $4 billion real estate investment platform. While struggling with more than $300 billion in liabilities, Evergrande appeared to have staved off default again over the past week. But its near collapse has underscored the cooling in China's $52 trillion property market, which is twice as big as America's residential housing market and accounts for about 30% of China's GDP. For example, output in construction industries reportedly shrank by 1.8% in the third quarter, according to China's statistics bureau."If development in China slows considerably, I think that there could be an advantage to the US in that it will free up construction materials for US builders," Jilliene Helman, CEO of RealtyMogul, told Insider."So it should speed up developments, enable new inventory to come to the market faster and hopefully bring supply and demand into greater equilibrium which can help to solve our affordable housing crisis in the US." The Los Angeles-based crowdfunding platform offers access to institutional-quality real estate investments, and there are more than $4 billion in deals on the site. The US housing market remains tight with inventory for starter homes at a 50-year low. Meanwhile, widespread disruptions in global supply chains have cropped up in the construction industry, making it challenging to secure building materials. "It's lumber … it's appliances, it's paint, it's drywall, countertops, cabinetry," said Helman, noting that her firm invests in apartment units that are getting flooring and electrical upgrades. "It's challenging to get the same level of raw materials … than it was 12 months ago. It's just a totally different world. And as a result of that supply crisis, you're seeing costs go up." Building materials prices have climbed 12.2% so far in 2021 compared with a 4.5% rise over the same period in 2020, according to the National Association of Home Builders' Eye on Housing blog, which monitors data from the Labor Department. China is a powerhouse of manufactured goods, both in producing and consuming construction supplies like textiles, furniture and flooring. And if China is using less of that supply, there should be more available for exports, said Helman."I think that the US being the largest importer of Chinese goods and materials could be in a position to benefit from that," she explained, "because China's consuming less of that supply in their own domestic market." But in addition to supply shortages, rising costs for US homebuilders also stem from a labor shortage, Helman said. The construction industry needs at least 2 million workers over the next three years to keep up with demand for new houses, according to the Home Builders Institute, a nonprofit partner of the NAHB that provides training for the industry.But despite the housing sector's current woes, which also include a possible interest rate increase by the Federal Reserve next year, Helman said there's still "tremendous bullishness" about the US market.That upbeat view comes from discussions RealtyMogul has with its 220,000 members. But Helman also has seen it all first hand, as she's been involved in underwriting more than $5 billion of real estate, according to the company's website. "We started with a $110,000 duplex in Compton, and one of the last deals we worked on is a $110 million development deal in the heart of Miami," she said. "So we've come a long way." Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 14th, 2021

Fetner to build new mixed ‘micro’ apartment development on Upper West Side

Fetner Properties announced the closing of 270 West 96 Street, a 23-story mixed use building, which will bring a total of 171 market-rate and affordable apartments to Manhattan’s Upper West Side, 83 of which will be micro units. The residential residences, designed by SLCE Architects, is the first new rental project in... The post Fetner to build new mixed ‘micro’ apartment development on Upper West Side appeared first on Real Estate Weekly. Fetner Properties announced the closing of 270 West 96 Street, a 23-story mixed use building, which will bring a total of 171 market-rate and affordable apartments to Manhattan’s Upper West Side, 83 of which will be micro units. The residential residences, designed by SLCE Architects, is the first new rental project in the neighborhood in many years. “This project is an excellent example of how public private partnerships can create much needed housing in Manhattan,” said Hal Fetner, president and CEO of Fetner Properties. “We are truly proud to have successfully taken 270 West 96 through the ULURP process despite challenges presented by the pandemic. We are eager to be bringing this building to the vibrant Upper West Side community.” The City of New York sold 266 West 96 Street, a former power transformer substation, in exchange for the creation of affordable housing. Fetner Properties combined this site with two privately owned parcels purchased from the Salvation Army   and the NAACP Roy Wilkins Center, Inc. The proceeds from the sale of the Roy Wilkins Center will go to the New York Community Trust’s Roy Wilkins Fund to continue its programming. Wells Fargo is providing the senior construction financing for the new rental building.  The Project budget is $125 million. “The rare opportunity to create new rental homes in one of the most iconic neighborhoods in New York City has been a four-and-a-half-year journey of perseverance, challenging work and vision, all of which supported by a world-class team of professionals, colleagues and or course, our financial partners, added Damon Pazzaglini, Chief Operating Officer of Fetner Properties. “Our plan now becoming a reality, with construction beginning immediately. “ Fetner has been highly active this past year with other new projects in New York City. Construction has begun on the first of a two-phase development in Long Island City, 27-01 Jackson Avenue, and permits have been filed for another tower across the street at 26-32 Jackson Avenue. As with 270 West 96 Street, SLCE Architects is the architect for both Long Island City residential rental buildings, which will bring 600 units to Queens. “We are thrilled to partner with Fetner Properties on the development of this new residential project in Manhattan. This will not only be a welcome addition to the neighborhood, but will also help meet the demand for affordable housing in New York City,” said Jonah Belkin, Managing Director of Peakhill Equity Partners. Peakhill is a partner in the project, as is another institutional investment firm attracted to 270 West 96th Street as part of their Social Impact Investor Program. Located between West End Avenue and Broadway, 270 West 96 Street is one block north of the 96th Street subway station, which is serviced by the 1, 2, and 3 trains. Riverside Park, astride the Hudson River, is a block away and the lively neighborhood is filled with restaurants, schools and public amenities. The post Fetner to build new mixed ‘micro’ apartment development on Upper West Side appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyDec 20th, 2021

NAR 2022 Forecast Focuses on Inventory, Affordability and Equity

With one spectacularly unique year coming to a close and the start of a particularly uncertain year looming, the National Association of REALTORS® (NAR) held a virtual Forecast Summit bringing together a swath of experts to hopefully provide both perspective on the wild ride of 2021 while shining a light on the opportunities and challenges […] The post NAR 2022 Forecast Focuses on Inventory, Affordability and Equity appeared first on RISMedia. With one spectacularly unique year coming to a close and the start of a particularly uncertain year looming, the National Association of REALTORS® (NAR) held a virtual Forecast Summit bringing together a swath of experts to hopefully provide both perspective on the wild ride of 2021 while shining a light on the opportunities and challenges of 2022. Featuring insights from dozens of economists and industry insiders, NAR Chief Economist Dr. Lawrence Yun and Vice President of Demographics and Behavioral Insights, Dr. Jessica Lautz, led discussions and presentations looking at data, projections and insights on everything from long-term demographic-driven trends to current federal legislation to racial gaps in equity and homeownership. “2021 has certainly been a year unlike any other—what will 2022 bring?” asked new NAR President Leslie Rouda-Smith. “We are here today to look into the future. We don’t have a crystal ball, but much of the success REALTORS® had in 2021 was due to insight.” In the shadow of rocketing inflation and a housing market that was severely restricted by supply-side limitations, the speakers quickly highlighted the top-line concerns that real estate professionals should be looking at next year. “One thing we already know about next year is our country’s inventory shortage and the resulting affordability crisis will still be acute,” Rouda-Smith said. According to Todd Richardson, who heads up the research division of the federal office of the United States Department of Housing and Urban Development (HUD), the country is between 5 to 6.8 million housing units short going into 2022, many of them concentrated in the affordable housing sector. “The pandemic has made that problem worse,” Richardson said. “To solve that requires innovation and out-of the-box thinking. It also requires knowing what is going on.” Other high-level predictions from Yun and other economists surveyed included home prices rising around 5% and mortgage rates climbing to around 3.7% by the end of the 2022, along with unemployment falling only slightly from the rate of 4.2% it sits at now. For this last metric, though, Yun warned that many states still are well below the number of jobs they had pre-pandemic as people have dropped out of the workforce, meaning some of the optimism coming out of those broad unemployment numbers could be misleading. Richardson and others spent some time speaking about programs in the currently proposed Build Back Better bill, which remains jammed up in the Senate. Billions of dollars for first-time homebuyer support, the Low Income Housing Tax Credit, zoning reform and rental housing vouchers could all help alleviate these pressures, according to Richardson and several of the other experts. “There’s a lot of regulatory changes and movement happening and I would encourage REALTORS® to be a part of that,” said Andre Perry, a fellow at the Brookings Institute. Discussion of the Build Back Better housing programs—which NAR and numerous other housing advocacy organizations have zealously lobbied for—sparked a lively political discussion in the virtual chat, which was locked early on in the panel. Ken Johnson, a former real estate broker and professor at Florida Atlantic University, was less optimistic about price growth. “I do think some markets are significantly overpriced at this time, but most are not as overpriced as they were 15 years ago. So we’re going to get a mixed bag result,” he said. The effect around the country will not be uniform.” Johnson highlighted Miami, Florida, as a metro with relatively accurate price growth by underlying measures, while calling out Detroit, Michigan, as an area that was likely overvalued in the medium- to long-term. As far as regions, Yun also highlighted ten “hidden gems” where he expected a hot market in 2022, with nearly every single one of these areas in the South. These towns were centered on Fayetteville, Arkansas; Knoxville, Tennessee; Spartanburg, South Carolina; Dallas-Ft. Worth, Texas; Huntsville, Alabama; Daphne, Alabama; San Antonio, Texas; Tucson, Arizona; Pensacola, Florida; and Palm Bay, Florida. The Big Challenges A number of panelists, ranging from government officials to academics, emphasized that without significant regulatory shifts, as far as zoning and funding, there is no realistic way to overcome an inventory and affordability crisis that has been accelerated by the pandemic. “For those REALTORS® who live in expensive coastal cities, we are on an unsustainable track as far as housing price appreciation,” said Issi Romem, a fellow at the UC Berkeley Terner Center for Housing Innovation. “Densify, do not revert to sprawling…that needs to be allowed to happen. You gotta remind people.” The kind of restrictive zoning that swallows up big tracts of land and prevents any kind of dense building, which is most prevalent in coastal markets, will have to be modified to keep a healthy housing market according to economists and other panelists who spoke. Romen urged REALTORS® to “sympathize” with the ongoing movement to diversify zoning, “even if you don’t like seeing your neighbors get a second story window that can look into your backyard.” “It’s for the greater good,” he said. Because a large portion of jobs will still require or encourage people to live physically close to an office or other location (Romem said most metros will have around 30% remote offerings for their labor force), even cities like San Francisco will have to expand housing offerings or end up with “Manhattanization,” where only the ultra-rich can afford to buy anything. Racial equity was another big topic, with Perry citing a study he had led in 2018 that showed homes of similar qualities in Black neighborhoods are valued 23% less than other neighborhoods, costing Black homeowners $156 billion cumulatively. Despite this, federal legislation and other trends during the pandemic have given opportunities to address this, according to Perry. “We saw a spike among Black millennials, particularly Black women, purchasing homes,” he said. “People were able to save more, people were not using their discretionary income for bars and clothing and such.” A pause on student loan payments was also helpful, he added, but a lack of intergenerational wealth continues to hamper prospective Black homebuyers. Other large term demographic trends that will affect real estate include a huge drop in the birth rate and marriage rate, according to Lautz. In 2021, 31% of households had a child in the home, compared to 58% today. This so-called “baby bust” could have extremely broad implications for the real estate market, with families less likely to move, upsize, downsize or renovate based on the life stage of their children. “All those factors are removed,” she said. At the same time, prospective buyers still are very much interested in having a real estate agent “who they trust, is honest and will help them navigate” the home-buying process, according to Lautz, with a survey showing 87% of potential buyers would prefer to have an agent of their own rather than work with a seller directly or a builder. iBuyers were “a statistical 0” as far as that data, according to Lautz. Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to jwilliams@rismedia.com. The post NAR 2022 Forecast Focuses on Inventory, Affordability and Equity appeared first on RISMedia......»»

Category: realestateSource: rismediaDec 17th, 2021

2021: The Legislative Year in Review

After throwing out the legislative playbook just weeks into 2020 due to the pandemic, it was back to full steam ahead for our advocacy goals this year. And 2021 was not for the weary in Washington. The year began with a sixth major COVID relief bill, the American Rescue Plan. The bill continued policies supported […] The post 2021: The Legislative Year in Review appeared first on RISMedia. After throwing out the legislative playbook just weeks into 2020 due to the pandemic, it was back to full steam ahead for our advocacy goals this year. And 2021 was not for the weary in Washington. The year began with a sixth major COVID relief bill, the American Rescue Plan. The bill continued policies supported by the National Association of REALTORS® (NAR) that protected our members’ health and economic well-being, including benefits for sole proprietors, the self-employed, small business owners and independent contractors. The bill also included new measures like aid for state and local governments, expanded child tax credits and another $21 billion in rental assistance. Congress spent most of the year debating President Biden’s Build Back Better infrastructure plans. In November, a traditional public works bill became law, filled with longtime NAR priorities like investments in roads, bridges, ports, airports, roadways and a historic $65 billion for broadband. At the time of this writing, a second social spending infrastructure plan is advancing in Congress. Some of the earliest tax proposals to pay for this plan could have devastated the real estate sector, which makes up nearly one-fifth of the entire economy. We worked to educate lawmakers on these tax issues for more than a year. When House leaders finally unveiled the bill in October, it did not include the most-feared taxes and limits on real estate investment. It contained no 1031 like-kind exchange limits, no capital gains tax increases, no change in step-up in basis, no tax on unrealized capital gains, no increased estate tax, no carried interest provisions and no 199A deduction limits. But it did include SALT relief. Also included, a robust investment in affordable housing, which is critical to opening up homeownership for first-generation and first-time buyers. NAR CEO Bob Goldberg joined other housing leaders and members of Congress at the U.S. Capitol for a press conference in support of these affordable housing measures. While Bob headed to the Capitol, NAR President Charlie Oppler headed to the White House with other business leaders to meet with President Biden on the debt ceiling.  The very next day, Congress struck a deal to avoid a catastrophic default. Another major focus of our advocacy efforts has been addressing the housing supply shortage. Earlier this year, NAR released a landmark report that confirmed that the shortage of 6 million units is a crisis that will take a “once-in-a-generation” policy response. The media cited our report far and wide, garnering millions of impressions. And it also impressed lawmakers to act. Our policy recommendations began making appearances in infrastructure plans. It was also a standout year for NAR’s Community Outreach Programs, as 263 state and local REALTOR® associations received support for advocacy efforts in 2021. There are success stories nationwide. A Fair Housing Grant helped the Birmingham Association of REALTORS® highlight fair housing issues at a hybrid summit. The Fredericksburg Area Association of REALTORS® used a smart growth poll to create a regional growth and housing action plan. And in northern Idaho, a Placemaking Grant helped the Selkirk Association of REALTORS® support the development of an ADA-compliant trail. We have other regulatory and legislative accomplishments this year as well, like work protecting independent contractor status and progress on remote online notarization—too many to list in this space. There is no other trade association in Washington like NAR for one reason: our members. We don’t represent an industry; we represent 1.5 million individuals. They are thoughtful, engaged pillars of their communities. Our advocacy operation is successful because of them. It is bipartisan and issue focused. Our members played a vital role in the nation’s economic resilience this year and will help lead our economy in the years to come. Shannon McGahn is chief advocacy officer for the National Association of REALTORS®. The post 2021: The Legislative Year in Review appeared first on RISMedia......»»

Category: realestateSource: rismediaDec 1st, 2021

Buying a House Feels Impossible These Days. Here Are 6 Innovative Paths to Homeownership

A dozen Grade-A eggs will run you about $0.40 more than they did a year ago, and you’ll have to fork over $0.66 more for a pound of ground beef. At the gas pump, a gallon of unleaded is now $1.23 higher than it was in 2020. But few year-over-year price increases compare to what’s… A dozen Grade-A eggs will run you about $0.40 more than they did a year ago, and you’ll have to fork over $0.66 more for a pound of ground beef. At the gas pump, a gallon of unleaded is now $1.23 higher than it was in 2020. But few year-over-year price increases compare to what’s happened to the American housing market. The sale price of a median home in the U.S. has ballooned by more than $67,000 in the past year, according to the Federal Reserve Bank of St. Louis — surging from just under $338,000 to nearly $405,000. There’s lots of reasons for this. In the past year, a combination of low interest rates and COVID-19, which forced tens of millions of people to work from home, fueled demand for houses. Longtime renters began looking to buy a place with more space, while those who were already homeowners began looking for secondary vacation residences. (Mortgage applications for second homes spiked 84% between January of 2020 and 2021.) [time-brightcove not-tgx=”true”] That jump in demand was compounded by a nationwide slump in housing supply—the result of both nationwide labor shortages and disruptions in the supply chain of crucial building materials, like copper and lumber. These recent issues have been exacerbated by lags in new housing construction over the past twenty years, according to a June report from the National Association of Realtors. The end result is that millions of American families across the income spectrum are now effectively locked out of homeownership. The problem is particularly acute for young people and people of color. The homeownership rate among millennials, ages 25-34, is 8 percentage points lower than it was for both baby boomers and Gen Xers in the same age cohort. Black homeownership, meanwhile, remains at just 45%—30% lower than that of white families and nearly unchanged since 1968, when overt housing discrimination was outlawed. It’s more than just a housing dilemma. Since home ownership remains the best way for an average family to accrue wealth over a lifetime, it’s a prosperity issue, too. Homeowners in the U.S. have, on average, forty times more wealth than renters, according to a September 2020 report from the Federal Reserve. In light of this crisis in home ownership, here are six ways that communities and companies around the country are legislating and innovating to help Americans buy a house. 1. A narrow case study in reparations for Black families Like most cities in the U.S., Evanston, Illinois has a long history of racist housing laws. For decades, Black residents were segregated into poor neighborhoods where occupancy rates were estimated to be 150% and some units lacked crucial amenities, like heating. While hundreds of vacant homes were available in more desirable parts of town, landlords and real estate agents explicitly barred Black families from renting them, and banks blocked Black families from financing. “Owners and agents of vacant property plan to prevent the negroes from spreading from their own quarters,” a 1918 Evanston News-Index article read. Housing segregation fueled wealth inequality: Black families in Evanston earn $46,000 less than their white counterparts on average. Former Evanston Alderman Robin Rue Simmons sought to address that sordid history. While in office in 2019, she created the first-ever taxpayer-backed reparations fund in a U.S. city. It sets aside $10 million in revenue, raised by the city’s tax on recreational marijuana, over a 10-year period. The first $400,000 out of that reserve will go to victims of racial housing discrimination and their descendants, divided up into $25,000 grants which can be used this year for down-payments on new homes, mortgage payments or renovations on existing homes. That initial $400,000 will hardly solve the problem. There are more than 12,000 Black residents in Evanston and the initial outlay will provide just 16 households with funding. But, Simmons argues, “it’s better than zero”—and the program also sets a key precedent. In the years since Evanston stood up its reparations fund, several other locales, including Detroit, Michigan and Amherst, Massachusetts, have voted to explore or start similar programs. “If you think of any significant, transformative national or federal legislation, it started with localities and grassroots efforts organizing and pushing their local leaders,” Simmons says. “This is no exception.” 2. Community Land Trusts: Buying the home but not the land The most unique part of the two-story home in Winooski, Vermont that Sarah and husband Colin Robinson bought for $172,000 in 2008 wasn’t its quaint terrace garden or the funky bunk-room upstairs. It was the fact that the Robinsons didn’t own the land that it was built on. That’s because the house is part of what’s known as a community land trust (CLT)—a non-profit, community-controlled collection of properties. The first CLT in the U.S. was created in Albany Georgia in 1969. Now there are more than 220 nationwide, offering more than 12,000 homes total. While the particular rules of each CLT are a little different, the idea is the same: aspiring homeowners share the cost of purchasing a house with the CLT, which owns the land the home is built on. When the homeowner sells, he or she returns a share of the appreciation with the CLT. Champlain Housing Trust—the CLT that helped the Robinsons become homeowners—is the largest in the country, with 636 properties in the Burlington area. Under its rules, the purchase price of an average home is offset by about 30%, and upon selling, the homeowner keeps a quarter of the home’s appreciation price, plus the cost of any major renovations invested into the property. The average Champlain Housing Trust member keeps their home for 7.5 years and walks away $25,000 richer—money that they can then put toward purchasing more expensive homes on the regular market. A 2010 Urban Institute analysis of Champlain Housing Trust, founded in 1984, found that 68% of those who left CLT went on to purchase market-rate homes. The Robinsons are a model of how it’s supposed to work. When they sold their first, CLT home in 2014, they walked away with $40,000 in equity, which they rolled into the purchase of their second home on the regular market. “We were able to bring that money with us, and that was really what made it possible,” says Sarah. “It really changed the trajectory of our lives.” 3. Zoning overhaul: Ending de-facto redlining Nowhere in the country is the racial housing gap wider than in Minneapolis, Minnesota, where more than 70% of white families own, compared to just 20% of Black families, according to a 2021 Urban Institute report. One big reason for this disparity is an insufficient supply of affordable homes: the state is 40,000 housing units short of demand, according to a Minnesota Housing Finance Agency estimate. Restrictive zoning rules built on decades of discriminatory policies worsen this shortage. After the federal government outlawed explicit racial housing discrimination in the 1960s, local lawmakers scrambled to bolster different regulations—namely single-family zoning ordinances that would maintain the homogeneousness of their neighborhoods. Under those rules, construction companies were banned from building anything other than standalone homes—including more affordable row homes, condominiums, duplexes, triplexes—in most upscale neighborhoods, which had the effect of pricing Black and brown families out of the market. Lisa Bender, president of Minneapolis’ City Council, argues that changing those rules is “the very bare minimum first thing” that policymakers can do “to fix centuries of racial exclusion.” In 2018, she spearheaded a City Council effort to rescind regulations reserving 70% of the city’s residential land for single-family zoning—a move that could effectively triple the housing supply in some Minneapolis neighborhoods by prompting construction of new, more cost-efficient multi-family units. The rule change went into effect in 2020. Portland, Oregon and the entire state of California have since enacted policies that effectively end single-family zoning too. Most Popular from TIME 4. 3D printing: Construction meets environmentalism and efficiency Jason Ballard, who grew up in an oil-soaked East Texas town, was always interested in environmental sustainability. But it wasn’t until college that he realized the best way he could explore environmentalism was not by becoming a biologist, but by becoming a builder. “Buildings are the number one user of energy. Construction is the number one producer of waste,” he says, adding that construction is also one of the top users of water behind agriculture. In 2017, he cofounded ICON, a construction technologies company that builds affordable, structurally sound, environmentally resilient single-family homes using a 3D printing method that creates far less waste than traditional building processes. While the startup is just getting off the ground—its first four homes sold this year—its cost of construction appears to be 10-30% less than traditional builders, thanks largely to reductions in labor and supply needs. In October, ICON announced a project to use its technology to break ground on 100 homes in the Austin area in 2022, creating the largest community of 3D-printed homes to date. Ballard predicts costs will continue to decrease as ICON automates more components of the construction process. The method also has the potential to be unbelievably speedy. While constructing an average American home the normal way takes 7.7 months, according to a 2018 U.S. Census Bureau survey, a Boston-based 3D printing construction company, Apis Cor, says it can make a move-in ready three-bedroom, two-bath in less than a month. Illustration by Wenjia Tang for TIME 5. Modular housing: building houses like Henry Ford built cars There’s no way that Sara and Jon Comiskey, both in their mid-20s, would have been able to afford a house in the Buena Vista area of Colorado, where median home prices hover around $515,000, if it wasn’t for a start-up called Fading West. In 2016, Fading West began building homes that were constructed off-site, in a factory, streamlining the production in the same way that manufacturers build cars. Workers complete most components of a house—house siding, flooring, and walls—at scale, then attach them to a foundation on site. Final features, like garages and porches, are added once the home is at its final resting place, says Fading West founder Charlie Chupp. “You wouldn’t build a Camry in someone’s driveway,” he says. Why do it for a house? Chupp says his company’s lean production model reduces waste by eliminating weather-related damage to materials like is typical during outdoor construction, requires fewer skilled laborers, and significantly reduces the time required to make a home. “With 100 people on a traditional system, you might be able to build between 100 and 150 homes a year,” he says. “We think we can do between 600 and 700 homes a year.” There are downsides. The need to transport the house components from factory to foundation curtails how large the end-product can be, and the standardization of the process means homeowners must accept limited design options. Customers get two cabinet choices, three tile options, three window sizes, and one color carpet. “We offer a standard quartz countertop in any color you want,” Chupp jokes, “as long as it’s white.” But Chupp also offers something that many other real estate developers don’t: affordability. He estimates his off-site produced houses are at least 25% cheaper than comparable models in the area. In April 2021, the Comiskeys bought a 900-square-foot Fading West townhouse in Buena Vista for $240,000. 6. Divvy: A fresh take on rent-to-own Adena Hefets grew up listening to her parents’ stories of how difficult it was for them to purchase a home in the early 1980s. As an immigrant from Israel, her dad didn’t have an established credit score and so couldn’t get a mortgage. Eventually, her family was able to buy a seller-financed home—a rare home-buying mechanism where a seller allows a buyer to pay for a home in increments, rather than making mortgage payments to a bank. In 2017, Hefets started Divvy, a tech company, that offers prospective homebuyers a very similar model. Divvy purchases homes on the open-market and covers closing costs, taxes, insurance and repairs in exchange for the client paying monthly rent that is approximately 10-25% more than what they would pay for comparable rentals in the area. The differential goes toward equity in the home. The client can then buy back the home with the equity they accrued through paying the rent, or cash out the equity at the end of their lease. It’s not a universal solution. Divvy requires that buyers have moderate credit scores and clients must be able to pay above market-rate rents. But in the last five years, the company has entered partnerships with thousands of families, roughly 47% of whom end up purchasing their home back from Divvy. LaCresa Hooks, who works as an accountant, couldn’t find a traditional mortgage because she was working as a short-term contractor. In October 2020, she signed a lease with Divvy and less than a year later, she’d bought back her 3-bedroom, 2-bath Georgia home with bank financing thanks to the equity she accrued. Now, she looks forward to something most people loathe: Paying her mortgage. “I’m building something now,” she says. “With rent, you aren’t building anything. You’re just paying your landlord and that’s it for the next 30 days.”.....»»

Category: topSource: timeNov 22nd, 2021

The affordable housing crisis has gotten worse — here"s why just building more homes isn"t the solution

In much of the country, there isn't a shortage of housing. The problem is that millions of people lack the income to afford what's on the market. The pandemic has made the affordable housing crisis a lot worse, in part by increasing the rate of evictions.Cory Clark/NurPhoto via Getty Images The housing affordability problem is pervasive in the US, and COVID-19 made it much worse. The problem isn't a lack of housing; even basic housing units are often unaffordable for those with low incomes. The solution: Cover the difference between what renters can afford and the actual cost of the housing. Even before 2020, the US faced an acute housing affordability crisis. The COVID-19 pandemic made it a whole lot worse after millions of people who lost their jobs fell behind on rent. While eviction bans forestalled mass homelessness — and emergency rental assistance has helped some — most moratoriums have now been lifted, putting a lot of people at risk of losing their homes.One solution pushed by the White House, state and local lawmakers, and many others is to increase the supply of affordable housing, such as by reforming zoning and other land-use regulations.As experts on housing policy, we agree that increasing the supply of homes is necessary in areas with rapidly rising housing costs. But this won't, by itself, make a significant dent in the country's affordability problems — especially for those with the most severe needs.In part that's because in much of the country, there is actually no shortage of rental housing. The problem is that millions of people lack the income to afford what's on the market.Where the crisis hits hardestRenters with the most severe affordability problems have extremely low incomes.Nationally, about 45% of all renter households spend more than 30% of their pretax income on rent — the widely recognized threshold of affordability. About half of these renters, 9.7 million in total, spend more than 50% of their income on housing, greatly impairing their ability to meet other basic needs and putting them at risk of becoming homeless.Nearly two-thirds of renters paying at least half of their income on housing earn less than $20,000, which is below the poverty line for a family of three. Renters with somewhat higher incomes also struggle with housing affordability, but the problem is most pervasive and most severe among very-low income households.For a household earning $20,000, $500 per month is the highest affordable rent, assuming the affordability standard of spending no more than 30% of income on housing. In contrast, the median rent in the US in 2019 was $1,097, a level that's affordable to households earning no less than $43,880.And homes that rent for $500 or less are exceedingly scarce. Fewer than 10% of all occupied and vacant housing units rent for that price, and 31% are occupied by households earning more than $20,000, pushing low-income renters into housing they cannot afford.A pervasive problemThe problem of housing affordability doesn't affect only a few high-cost cities. It's pervasive throughout the nation, in the priciest housing markets with the lowest vacancy rates like New York and San Francisco, and the least expensive markets with high vacancy rates, such as Cleveland and Memphis.For example, in Cleveland, with a median rent of $725, 27% of all renters spend more than half of their income on rent. In San Francisco, with a median rent of $1,959, 18% of renters spend at least half their income on rent. And it's even worse for the poorest residents. In both cities, more than half of all extremely low-income renters spend at least 50% of their income on rent.In fact, there is not a single state, metropolitan area or county in which a full-time minimum wage worker can afford the "fair market rent" for a two-bedroom home, as designated by the US Department of Housing and Urban Development.Even the smallest, most basic housing units are often unaffordable to people with very low incomes. For example, the minimum rent necessary to sustain a new a 225-square-foot efficiency apartment with a shared bathroom in New York City built on donated land is $1,170, affordable to households earning a minimum of $46,800. That's way out of reach for low-income households.At the heart of the nation's affordability crisis is the fact that the cost to build and operate housing simply exceeds what low-income renters can afford. Nationally, the average monthly operating cost for a rental unit in 2018 was $439, excluding mortgage and other debt-related expenses.In other words, even if landlords set rents at the bare minimum needed to cover costs — with no profit — housing would remain unaffordable to most very-low-income households — unless they also receive rental subsidies.The subsidy solutionCovering the difference between what these renters can afford and the actual cost of the housing, then, is the only solution for the nearly 9 million low-income households that pay at least half their income on rent.The US already has a program designed to help these people afford homes. With Housing Choice Vouchers, also known as Section 8, recipients pay 30% of their income on rent, and the program covers the balance. While some landlords have refused to accept tenants using vouchers, overall the program has made a meaningful difference in the lives of those receiving them.The $26 billion program currently serves about 2.5 million households, or only 1 in 4 of all eligible households. The current version of Democrats' social spending bill would gradually expand the program by about 300,000 over five years at a total cost of $24 billion.While this would be the single largest increase in the program's nearly 50-year history, it would still leave millions of low-income renters unable to afford a home. And that's not a problem more supply can solve.Alex Schwartz, professor of urban policy, The New School and Kirk McClure, professor of urban planning, University of KansasRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 21st, 2021

Frenzies and Bidding Wars: Leaders Share Tactics to Win in the Post-Pandemic Market

After a year that relied heavily on Facetime rather than actual face time, real estate professionals are wondering what they should expect in 2022’s post-pandemic market. As market dynamics continue to shift, leading brokers shared how they’ve been planning for the future at RISMedia’s 26th Annual Power Broker Forum, held during the REALTORS® Conference & […] The post Frenzies and Bidding Wars: Leaders Share Tactics to Win in the Post-Pandemic Market appeared first on RISMedia. After a year that relied heavily on Facetime rather than actual face time, real estate professionals are wondering what they should expect in 2022’s post-pandemic market. As market dynamics continue to shift, leading brokers shared how they’ve been planning for the future at RISMedia’s 26th Annual Power Broker Forum, held during the REALTORS® Conference & Expo last week. The forum was moderated by John Featherston, founder, president, and CEO of RISMedia, Inc., and York Baur, CEO of MoxiWorks. From L to R:  John Featherston, Founder President & CEO, RISMedia; Cindy Ariosa, senior vice president, regional manager, Long & Foster Real Estate Inc.; Allan Dalton, senior vice president of Research and Development, Berkshire Hathaway HomeServices, HomeServices of America; Helen Hanna Casey, CEO, Howard Hanna Real Estate Services; and Anthony Lamacchia, broker/owner & CEO, Lamacchia Realty, Inc. The panel of experts included Cindy Ariosa, senior vice president, regional manager, Long & Foster Real Estate Inc.; Helen Hanna Casey, CEO, Howard Hanna Real Estate Services; Allan Dalton, senior vice president of Research and Development, Berkshire Hathaway HomeServices, HomeServices of America; and Anthony Lamacchia, broker/owner & CEO, Lamacchia Realty, Inc. “You’ll notice if you stop by our booth that we have a t-shirt that says ‘information is currency,’ and it is,” Featherston kicked off the forum. “That phrase reigns true in our industry now more than ever. It’s the information that our consumers are looking for that you have and that you present that keeps you in the forefront of their minds and keeps them coming back to you, the skilled real estate professionals that help them through their real estate goals and objectives.” From rethinking office space to implementing the right technology to addressing the new needs of today’s buyers and sellers, each panelist discussed their market expectations as 2022 nears. After a year of uncanny market conditions fueled by the coronavirus pandemic and government intervention, Dalton indicated that a market correction was imminent. However, he also noted that there was a more pressing question that needed to be addressed. From L to R: John Featherston, Cindy Ariosa and Allan Dalton “I never seem to hear much discussion about where our industry is going to take the market,” Dalton said, noting that instead of trying to predict the future of the market, agents should focus more on how they are guiding clients through shifting tides. In preparation for 2022, Hanna Casey suggested that agents and brokers start expanding their data tracking beyond typical “real estate numbers.” From L to R: Helen Hanna Casey and Anthony Lamacchia “We have a bigger problem in this country, and it’s not pricing,” Hanna Casey said, pointing out declining numbers of marriage, birth rates and household formation specifically as potential factors in market shifts slated for years to come. “I think we are going to be okay in the sense that we are still going to have a shortage, and as long as there is a shortage, there will be a demand, but if you look over a five-year period, I think we have to be doing something,” Hanna Casey added. This year, a slowdown in people willing to list contributed to the strained supply and buyer frenzy that drove prices sky-high during the summer. With a dearth of inventory slated to carry over into next year, Lamacchia forecasted “bidding wars and frenzies from coast to coast” to hit the market as early as this winter. Anthony Lamacchia “What I am hopeful of is that now that people are vaccinated, sellers and many would-be sellers are willing to list their homes faster than this past year,” Lamacchia said. However, he also warned agents not to view slowing sales as a detriment to the market. “Once we get to the winter and inventory is down, you’re going to see bidding wars go wildly again, but I’m hoping that we come out of it quicker by spring,” said Lamacchia. The increase in aging homeowners choosing to stay in place hasn’t done any favors regarding closing the supply-demand gap. However, Ariosa was optimistic for the coming year as new development of housing and apartments in Baltimore—and nationwide—could likely incentivize older people to list their houses. “I think they’re scared that they have nowhere to go, which is why they don’t want to get out of their house,” said Ariosa, suggesting that new units could be a boon for the market. The conversation then focused on what each panelist has done to take advantage of the shifting market in 2022. “Markets are great until they are not and as has been noted, none of us have a crystal ball – at least one that works – and so we’ve alluded to how you prepare for changes in the market, but I’m curious what have you already started to do over these last six months for further preparation to take advantage of things as they are but also with an eye towards how they might change beyond 2022,” said Baur. Both Ariosa and Hanna Casey have focused on sprucing up their customer and agent experience. Cindy Ariosa Ariosa noted that Long & Foster had expanded its client-facing services to improve its “one-stop-shop” offering along with its ancillary services. “We’re trying to create customers for life with this experience,” said Ariosa. “We’re very excited, and we think that’s going to help the experience. Everybody wants a good experience.” Hanna Casey said that increased training at her company has been a silver lining to the pandemic, noting that the brokerage recently introduced new marketing and technology products to assist their agents along with improved training opportunities. “Today, they are able to meet the consumer needs better than they could before, and what we found was that we, perhaps, were not doing enough training internally, and so we continue with that training,” Hanna Casey added. Rather than focusing on the shiny new tech options inundating the industry, Hanna Casey suggested that her family’s firm has doubled down on the tech solutions they’ve been using and building around them. Baur also weighed in on the topic, stating, “The best technology is the one you use, and the other is it’s still about relationships.” “We have to quit trying to over-apply technology to replace humans instead of applying it to help humans be better and particularly be better around relationships,” Baur added. Among the challenges that lie ahead in the industry—of which there are plenty—Dalton indicated that real estate professionals need to change their approach surrounding their databases and social media strategies. York Baur, CEO of MoxiWorks Dalton opined that there needs to be a greater focus on converting databases into client bases for agents. “Doctors, lawyers, and financial planners are focused on client bases while we’re focusing on databases,” he said. Dalton went on to state, “the industry is settling on paying tariffs on the buying side, and the only way they are going to preempt the listing side disruption is converting their database.” He also critiqued the overall approach to social media marketing. “A lot of agents are mimicking high school kids on TikTok, and they are not bringing value to the marketplace, and they are not engaged in social media marketing,” he said. According to Dalton, a significant threat facing the market is the decline in how consumers value real estate agents. “We don’t have an image problem, but when it comes to value, we do,” Dalton said, suggesting that most consumers perceive a real estate transaction as a “fee-inflated event which they have to subsidize in order to promulgate an inefficient industry.” “The fact that a homeowner can live in a town for ten years and then when they decide to move, they call a complete stranger is a colossal indictment to the industry,” Dalton continued. “These are very serious damaging issues to perceived value when people say artificial intelligence will transcend human reasoning.” Lamacchia echoed similar sentiments, stating, “it’s somewhat of an embarrassment of our industry that some people are going to financial advisors and lawyers for real estate advice before REALTORS®, but it’s our fault.” He indicated that he has been training agents on how to guide apprehensive sellers who want to sell and buy, which play a role in the lull of listings during the pandemic. “If even half the REALTORS® out there knew how to properly explain to a seller that ‘you can do this,’ you wouldn’t see inventory go as low as it does in the winter and stay that low as long,” Lamacchia added. Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com. The post Frenzies and Bidding Wars: Leaders Share Tactics to Win in the Post-Pandemic Market appeared first on RISMedia......»»

Category: realestateSource: rismediaNov 17th, 2021

As Real Estate Changes, NAR’s Shannon McGahn Is Always Trying to Stay a Step Ahead

Real estate is a dynamic industry and one that’s only true constant is change. This has been evident to anyone who’s been following the industry since at least The Great Recession. And certainly the pandemic has reinforced that idea. The industry has seen moments of extreme lows and, now, extreme highs. Often, some of this […] The post As Real Estate Changes, NAR’s Shannon McGahn Is Always Trying to Stay a Step Ahead appeared first on RISMedia. Real estate is a dynamic industry and one that’s only true constant is change. This has been evident to anyone who’s been following the industry since at least The Great Recession. And certainly the pandemic has reinforced that idea. The industry has seen moments of extreme lows and, now, extreme highs. Often, some of this ebb and flow in real estate is impacted by public policy. It serves as a steward that can ensure stability in the market. And behind that policy are individuals like Shannon McGahn, chief advocacy officer at the National Association of REALTORS® (NAR). Given the weight of her role, and so much happening in real estate, and Washington D.C., we thought it would be a good time to catch up with her and learn more about what she and her team at NAR have been up to, and what critical pieces of policy real estate professionals should be monitoring. Caysey Welton: First, tell us about your role as chief advocacy officer—both from a high level and on a day-to-day basis. Shannon McGahn: The advocacy group supports the policies and the policymakers who support our members and the real estate industry, which is a pillar of the American economy. Taking over the chief advocacy officer position during the middle of a pandemic was not an experience that came with any playbook. Advocacy is about real relationships, not virtual ones. Usually, the chief advocacy officer would count steps running through the halls of Congress. But so far, day-to-day life relies more on Zooming around Congress. The challenges of the pandemic wreaked havoc on the Congressional calendar, with massive relief bills passing one after another. Add in a power change in government, and 2021 was not for the weary in Washington. Thankfully, NAR has an impressive team of leaders to help drive the association’s advocacy efforts. Bryan Greene leads the policy team. He came to us from HUD, where he served as the longtime director of fair housing. This team has faced an enormous task with a new administration and congressional majority eager to enact widespread change. Bryan and his team monitor policies coming out of the executive branch, proposing changes and new directions. Joe Harris and Helen Devlin, both seasoned NAR and Washington pros, lead congressional advocacy. Their team educates lawmakers and advocates for the entire industry, including consumers. On top of this work at the federal level, perhaps our most significant focus is state and local association engagement. We work on everything from local ballot initiatives to community grants to ensure our members are active at all levels. CW: How has a role like yours changed within the organization, and what initiatives have you introduced since taking on the role? SM: Under CEO Bob Goldberg’s leadership, we took on a mission to modernize advocacy with a renewed focus on cultivating relationships both within our organization and externally—with policymakers, industry partners, and state and local associations. This modernization has paid off in ways that we could never have imagined as the pandemic overtook the agenda at all levels of government. Without our established relationships and decades of educating elected officials, we could not have navigated these past two years as well as we did. And we did it all virtually—from our living rooms and basements and even a few hands-free Zoom sessions in the car, which gave me a new appreciation for how excited my dogs get to go for a ride! Our new advocacy structure also relies on a team of political representatives that travel the country speaking with REALTORS®, GADs, AEs and communications directors at all levels. And our legislative and policy representatives use that information to take their message directly to elected officials. The lines of communication are more open than ever. There is no such thing as a federal issue versus a state or local issue. If it impacts one of us, it impacts all of us. Collaboration at all levels is essential to our overall success. Our advocacy operation is effective, bipartisan and truly the envy of Washington. CW: What makes NAR’s advocacy team so unique from other trade associations? SM: There is no other trade association in Washington like NAR for one reason: our members. We don’t represent an industry; we represent 1.5 million individuals. They are thoughtful, civically engaged and pillars of their communities. It is an army that equals the populations of San Diego or the state of Hawaii. We are also the largest bipartisan trade organization in America. We live “REALTOR® Party purple.” The roots of our advocacy successes are the REALTOR® Party model that is issue-focused, not party-focused. Power comes and goes for political parties, but our issues stay front and center. We have friends in all political corners in times of need and normalcy. CW: You’re approaching a year on the job, so what would you consider your biggest wins thus far? SM: In all, six COVID relief bills passed between March 2020 and March 2021, and NAR had its imprint on each one. We helped secure an array of benefits to ensure the health and economic wellbeing of REALTORS® during the pandemic. The self-employed, independent contractors and sole proprietors were all eligible for new federal benefits, which was unprecedented. Many REALTORS®, mostly small business owners, could access Pandemic Unemployment Assistance, Paycheck Protection Program loans, Economic Injury Disaster Loans, and paid sick and family leave. As lockdowns swept the country, we leveraged every relationship and resource to get real estate deemed an essential service in jurisdictions nationwide. It was a messy process, but we got it done. As the pandemic entered a second calendar year, NAR helped secure nearly $50 billion in rental assistance in two separate bills to cover up to a year-and-a-half of combined back and future rent for struggling tenants and small housing providers. And we supported a legal fight on the CDC eviction ban that ended up before the Supreme Court, where a favorable ruling helped protect property rights now and in the future. Real estate makes up one-fifth of the entire U.S. economy, so our industry and NAR played a big part in the nation’s economic resilience. There is now clear evidence that the rescue measures and programs we fought so hard for were vital to our country’s economic health. CW: From your perspective, in terms of policy, what do you see as the most significant challenges or threats for your association members and how are you addressing it/them? SM: Congress is debating President Biden’s Build Back Better plan that, if enacted, would provide a historic investment in the country’s social safety net. Some of the earlier tax proposals to pay for the plan could have devastated the real estate sector. We built our advocacy operation for crossroads moments like these and worked to educate lawmakers on these tax issues for more than a year. Our FPCs contacted every member of the tax-writing committees in the House and Senate in a targeted Call for Action. When President Biden released the long-awaited bill framework in October, the most feared taxes and limits on real estate investment were not included. It contained no 1031 like-kind exchange limits, no capital gains tax increases, no change in step-up in basis, no tax on unrealized capital gains, no increased estate tax, no carried interest provisions and no 199A deduction limits. It was a positive development for consumers, property owners and the real estate economy. We also feared lawmakers would strip affordable housing provisions from the bill as they worked to narrow the legislation. Affordable housing is a key NAR priority and the key to unlocking prosperity for millions of Americans currently excluded from the American Dream. This investment is critical for closing the racial homeownership gap and addressing income disparity.  It opens up homeownership for first-generation and first-time buyers. We continued to press both publicly and privately for these provisions. Bob Goldberg joined other housing leaders and members of Congress at the U.S. Capitol for a press conference calling for affordable housing provisions in the final bill. And just days later, the new framework included $150 billion for affordable housing. A key member of Congress said it was because of NAR’s support. Under the agreement, public housing and rental assistance would get funding boosts.  The plan would also create more than one million new affordable rental and single-family homes and invest in down-payment assistance. The exclusion of harmful real estate investment taxes and the inclusion of affordable housing provisions in the bill are a testament to the effectiveness of our education campaign in Washington. CW: Without speculating too much, are there any policy issues that could become potentially problematic for real estate? SM: Like many other sectors of the economy, supply issues are also hitting real estate.  But the pandemic isn’t the only reason. The housing shortage existed before the pandemic—and will exist long afterward. NAR commissioned a study by Rosen Consulting Group earlier this year and found the U.S. is short about six million residential housing units. Those hit hardest are the middle class, millennials and first-time and first-generation homebuyers. It is fair to say the housing supply shortage rises to the level of a crisis.  Without a coordinated, national effort, the housing shortage will persist. We need it all: affordable, market-rate, single-family and multifamily housing. Builders would need to exceed the long-term historical average pace of 1.5 million units a year to shrink the supply deficit. Even at 2.1 million units a year, near the level reached in 2005, it would take a decade to close the gap. A package of policy responses is needed to increase the housing supply. Solutions include funding affordable housing construction, preserving and expanding tax incentives to renovate distressed properties, converting unused commercial space to residential, and incentives for zoning reform. Addressing the housing shortage isn’t just good for real estate. It is good for the economy. Expanding new-home construction to more than two million units a year for ten years would create 2.8 million new jobs and generate more than $400 billion in economic activity. CW: Likewise, are there any new policies recently enacted, or that you’re advocating for, that real estate professionals should be aware of and embrace? SM: On Oct. 1, FEMA’s new flood insurance pricing system, Risk Rating 2.0, went into effect for new policies. NAR spent nearly a decade working with FEMA on this new system that prices each home individually and more accurately using modern technologies, standards and science. So far, we see a few very high-risk, high-value properties with higher NFIP premiums under the new system. But homeowners need to know the true cost to insure these properties so they can make informed decisions. Many other policyholders, especially those with lower-value homes, will see decreases. Too often, under the old system, low-value properties were subsidizing high-value properties. Risk Rating 2.0 is a win for consumers. The previous 50-year-old system simply could not stay the way it was. Caysey Welton is RISMedia’s content director. Email him your real estate news ideas to cwelton@rismedia.com. The post As Real Estate Changes, NAR’s Shannon McGahn Is Always Trying to Stay a Step Ahead appeared first on RISMedia......»»

Category: realestateSource: rismediaNov 16th, 2021

Radical Rent Control Measure Blows Up In St. Paul In Less Than A Week

Radical Rent Control Measure Blows Up In St. Paul In Less Than A Week Authored by Mike Shedlock via MishTalk.com, Unlike almost every rent control law in the country, the ordinance passed by St. Paul voters includes no exemption for new construction... A radical rent control measures capping increases at 3% passed in St. Paul Minnesota. The payback was immediate.  Reason reports Developers Halt Projects, Mayor Demands Reform After St. Paul Voters Approve Radical Rent Control Ballot Initiative. In last Tuesday's municipal election, 52 percent of voters approved Question 1, an ordinance that puts a hard annual 3 percent cap on rent increases. It makes no allowances for inflation or exemptions for vacant apartments and new construction that are typical in other rent control policies. The new ordinance doesn't go into effect until May 2022. Nevertheless, several real estate companies with large projects in the works have already announced that they're pulling their permit applications. That includes Ryan Companies. Local NBC affiliate KARE 11 reports that the company pulled applications for three buildings in its proposed 3,800-unit Highland Bridge project. Other developers are singing a similar tune. "We, like everybody else, are re-evaluating what—if any—future business activity we'll be doing in St. Paul," Jim Stolpestad, founder of development company Exeter, told the Minneapolis Star-Tribune. The Star-Tribune reports that developers have also been calling Nicolle Goodman, the city's director of planning and economic development, to say that they were placing hundreds of new units on hold in response to the passage of rent control. All of this could well encourage landlords to just get out of the rental market altogether and sell their properties to owner-occupiers. Rising home values in St. Paul, where prices have increased 12 percent in the last year, only make this option more attractive for landlords. This is what happened in San Francisco where an expansion of preexisting rent controls led to a 15 percent reduction in the supply of rental housing, according to one 2018 study. That study found that incumbent tenants benefited handsomely from the limits on rent increases but that their windfall came "at the great expense of welfare losses from future inhabitants." Mayoral Lie Despite the insanity of doing something that's tried and failed everywhere, St. Paul voters upped the ante by passing the most restrictive measure ever. Blame Mayor Melvin Carter. He backed the initiative and it only barely passed. Carter's not so brilliant idea (lie) was he could amend the law after it passed. Whatever the outcome of this ballot question, our work will continue. Bold action on our housing and equity goals cannot wait. (2/2) — Melvin Carter (@melvincarter3) October 12, 2021 But he can't materially change the bill nor can the city council.  The problem for Carter, which he knew in advance, is the council cannot by law make "substantive" changes to the law.  The city council president admitted what Carter now wants to do is "substantive". Rent Control Advocates Celebrate  Despite the clear housing disaster that awaits, Rent Control Advocates Celebrate.  “We didn’t wait for policymakers or funders. We leveraged the power of the people and direct democracy to do this for ourselves,” said Danielle Swift, an organizer with the Frogtown Neighborhood Association. “Text banking, phone banking, door-to-door, 100 percent grassroots organizing got it done.” Alarmed by overnight rent hikes for low-income tenants, organizations such as the Housing Justice Center, TakeAction Minnesota, the Alliance and the West Side Community Organization gathered signatures to get their own rent-control proposal on the Nov. 2 ballot by petition. Swift blamed “generations of economic exploitation and exclusion from homeownership” for marginalizing communities of color — some 82 percent of the city’s Black households rent, compared to 39 percent of white households.  “This policy will have a dramatic and immediate impact in advancing housing and racial justice in our city,” she said. Shortages Loom Judging from rent prices, there is already a severe shortage of housing in St. Paul. The most likely reason is fear of something like this or insurance and maintenance hikes in the wake of George Floyd riots. And now that the bill has passed many new development projects, some for thousands of units, were cancelled.  Small landlords will sell to live-in owners further reducing supply.  Finally, with 3% caps regardless of tax hikes, inflation or any other issues, landlords will not make capital improvements to their property. The overall quality of remaining rental units is sure to decline. *  *  * Like these reports? If so, please Subscribe to MishTalk Email Alerts. Tyler Durden Sun, 11/14/2021 - 16:00.....»»

Category: blogSource: zerohedgeNov 14th, 2021

Gowanus locals reach deal that paves way for rezoning

Council Members Brad Lander and Stephen Levin, leaders of Brooklyn Community Board 6, and members of the Gowanus Neighborhood Coalition for Justice, announced this morning that they have reached consensus with the de Blasio Administration on “Points of Agreement” (POA) that ensure the Gowanus Neighborhood Rezoning will meet community goals.... The post Gowanus locals reach deal that paves way for rezoning appeared first on Real Estate Weekly. Council Members Brad Lander and Stephen Levin, leaders of Brooklyn Community Board 6, and members of the Gowanus Neighborhood Coalition for Justice, announced this morning that they have reached consensus with the de Blasio Administration on “Points of Agreement” (POA) that ensure the Gowanus Neighborhood Rezoning will meet community goals. The Gowanus Neighborhood Rezoning, the largest under the de Blasio Administration, will enable the construction of approximately 8,000 new housing units, nearly 3,000 of them affordable to low- and moderate-income families in a mixed-use, mixed-income neighborhood around a remediated and revitalized Gowanus Canal. The rezoning includes the most stringent affordability and sustainability requirements of any previous neighborhood rezoning. The “Points of Agreement” between City Hall and the Council Members, the result of extensive community organizing and public engagement, provides that every one of the 1,662 units in NYCHA’s Gowanus Houses and Wyckoff Gardens developments will receive a comprehensive interior modernization estimated at $200 million. The City will invest hundreds of millions more in flooding and stormwater infrastructure, parks, schools, and workforce development, and substantial funding commitments for renovations at the Pacific Branch Library ($14.7 million) and the Old Stone House ($10.95 million).  Community conversations about the future of the neighborhood have been active for nearly a decade, including the “Bridging Gowanus” community planning process convened by Council Member Lander’s office in 2013, that worked to identify shared principles for any development in the area. The Department of City Planning commenced its community engagement in 2016 with five working groups open to all community members and scores of public meetings, attended by thousands of residents and stakeholders. The Gowanus Neighborhood Coalition for Justice, a coalition of tenants, homeowners, public housing residents, small business owners, artists, environmentalists, and affordable housing advocates, organized hundreds of residents to elevate the voices of community members usually left out of the City’s planning processes. GNCJ developed a broad community platform, including three key demands that today’s Points of Agreement address: Upfront funding to meet the capital needs of the public housing in the Gowanus neighborhood, with oversight by NYCHA residents.POA commitment: The City will fund comprehensive in-unit renovations of all apartments at Gowanus Houses (1,134 units) and Wyckoff Houses (528 units) at an estimated cost of $200m. This work includes replacement of kitchens, bathrooms, plumbing, electrical, flooring, interior doors, and lighting fixtures. The City has additionally committed to regular reporting and consultation with residents through the construction process to oversee commitments and protect tenant rights. The City will also fulfill previous commitment to renovate and reopen the Wyckoff Gardens and Gowanus Houses community centers.Mandate “net-zero” combined sewage overflow (CSO) from new construction created as a result of the rezoning.POA commitment: In order to ensure that new development does not pollute the Gowanus Canal, the City has adopted the stringent new 2021 Unified Stormwater Rule that will go into effect before any construction begins. The rule increases on-site requirements for stormwater detention and introduces new retention requirements, which will reduce CSO volumes and events, and help address localized flooding. The City is also committing to a $174 million upgrade to sewer infrastructure to address long-standing flooding along 4th Avenue, which is especially severe at the intersection of Carroll Street.   Gowanus Rezoning Oversight Task Force to monitor compliance with public and private commitments.POA commitment: To ensure compliance with public and private commitments, the agreement includes commitments by all relevant City agencies to regular reporting as well as senior agency staff participation in a Community Oversight Task Force dedicated to monitoring rezoning-related commitments. The Task Force will be supported by an independent facilitator, and include representation from elected officials, CB6, NYCHA residents and leaders, and core community organizations and stakeholders.  On June 3, 2021, Community Board 6 held a highly-attended, indoor/outdoor, hybrid in-person and online public hearing as part of the Uniform Land Use Review Process (with additional opportunities for public input ordered by Judge Katherine Levine pursuant to a lawsuit). Out of that hearing, CB6 voted “Yes with Modifications,” including an extensive set of recommendations that are reflected in today’s agreement. Borough President Eric Adams also recommended to approve the rezoning with modifications, and stood with public housing residents, GNCJ members, and the Council Member to insist on adequate funding for public housing. The Gowanus Neighborhood Rezoning is the first MIH neighborhood rezoning in a whiter, wealthier neighborhood. For the first time ever, a Racial Impact Study was completed providing strong evidence that the plan will result in a more racially and economically inclusive neighborhood.  In addition to historic investments in public housing, stormwater retention, and flood readiness, the Gowanus Neighborhood Rezoning includes:  Nearly 3,000 units of affordable housing, including a commitment to 100% affordability on the City-owned Public Place site. The plan for Gowanus Green includes approximately 950 units priced for extremely low to low income tenants and homeownership opportunities for moderate income families, as well as a new 1.5 acre park and space for a potential new school. The Gowanus Green site will be extensively remediated, under the supervision of the EPA, NYS DEC, and NYC DEP. The EPA has stated that it is feasible for the site to be cleaned up to safely allow for these uses.On sites, the rezoning will require either Mandatory Inclusionary Housing (MIH) Option 1, which requires 25% of units affordable to households at or below 60% of AMI, with 10% of units affordable to households at or below 40% of AMI; or the “deep affordability” MIH option of 20% of units affordable to households at our below 40% of AMI ($43,000 for a family of 3). This is anticipated to generate approximately 2000 affordable units.Investments in new open space, including a resilient waterfront esplanade along the Gowanus Canal. The City has committed to renovations, following meaningful community engagement, at the new Gowanus Green public park and Boerum Park, and Thomas Greene Park. It has committed to build new public spaces on the Salt Lot and the Head End CSO site, following construction of each Superfund-mandated CSO tank, the Bond Street Street-End and at “Transit Plaza” along the Canal by the Smith/9th subway station. Canal developers will be required to build and maintain a new 40-foot public esplanade, following detailed guidelines to ensure continuity and public access between sites, and designed for flood resiliency through the year 2100.Environmental requirements on new development. In addition to the waterfront esplanade and new stormwater management requirements, all new buildings must: Dedicate 100% of their rooftop area to solar, wind, or green infrastructure pursuant to City legislation from 2019. Meet city flood elevation standards, determined on a site-by-site basis, which exceed FEMA standards. Complete remediation of any contamination indicated by the new e-designation, with oversight by the City and State. Innovative new zoning tools to address infrastructure needs. To ensure local school capacity can accommodate neighborhood growth, on certain large sites around the canal, developers can exempt floor area leased to NYC School Construction Authority for the development of new public schools as new seat-need comes online.The plan includes an easement requirement and new citywide transit bonus available for developers along 4th Avenue in exchange for transit improvements. Historic preservation and tools to keep Gowanus creative and mixed-use.  Five historic buildings were designated as landmarks during the rezoning process, including the Old American Can Factory and Powerhouse Arts.Mid-block areas will remain zoned for industrial and commercial use, with modest additional development rights that do not allow for hotels or self-storage. The new “Gowanus Mix” use group codified in zoning will generate over 300,000 square feet dedicated space for light manufacturing, arts, and non-profits.Community, social service, and workforce development resources.City Hall will expand the MAP (Mayor’s Action Plan for Neighborhood Safety) initiative to Gowanus Houses and Wyckoff Gardens, an investment of approximately $2 million annually. MAP brings together neighborhood residents and government agencies to reduce crime. Strategies including youth development and employment, conflict mediation, sports and arts programs aim to address concentrated disadvantage and physical disorder and promote neighborhood cohesion and strong citywide networks.Investments of approximately $1 million annually in workforce development for local residents, with a focus on NYCHA residents, including dedicated funding for industrial job training.Commitments to street safety improvements at high-crash intersections and a comprehensive traffic study of 3rd avenue and the IBZ to address road safety and truck circulation issues. The City will provide over $10 million for new curb extensions and widened sidewalks, bioswales and other green infrastructure, and street furniture such as benches, wayfinding signs, bike racks, and street trees.Tenant protections including an expanded Certificate of No Harassment program (recently adopted citywide through legislation sponsored by Council Member Lander), resources for tenant outreach, and a tailored rezoning that protects rent-stabilized units.  The full Points of Agreement document will be available at the City Council’s Zoning Subcommittee meeting prior to the vote today. In addition to the public commitments in the rezoning plan, developers in Gowanus have committed to additional affordability and use restrictions to preserve the industrial and arts character of the neighborhood. Affordable artists studios: 10 property owners of large sites along the Canal and bordering Thomas Greene Park have committed to enter an agreement with Arts Gowanus to provide over 150 permanently-affordable artist studios in new developments. Arts Gowanus will match eligible artists with available spaces. A portion of the studios will be available for low-income artists, including NYCHA residents, to rent at a more deeply reduced rate. As a part of the agreement, Arts Gowanus will occupy and manage a Gowanus Community Arts Center, including a gallery. Parks Improvement District: Ten developers have committed to cooperate in the formation of a Gowanus Waterfront Business Improvement District focused on stewardship, access, and public programming of open spaces, especially the new waterfront esplanade along the canal. This entity will provide maintenance, public programming, technical assistance, and environmental and ecological advocacy. The steering committee is expected to hold its first meeting in December 2021, and will flesh out details and develop support with input from community members and stakeholders.  All told, the Gowanus Rezoning’s 3,000 new units of permanently affordable housing, a continuous public esplanade along the waterfront, climate-resilient buildings and landscaping, and use restrictions to preserve arts and industry are among the most aggressive, forward-looking set of requirements ever imposed on developers in the United States.  “Today’s agreement shows that community-led, inclusive, sustainable growth is possible. After nearly a decade of conversations among neighbors, and in partnership with the Department of City Planning and City Hall, this community has created one of the best models for inclusive growth anywhere, with strong attention to equity and affordability, and mindful of the environmental history and future of this area. Debates about development are not easy, but I am truly proud of the way we’ve engaged them here. Together, we are setting the stage for a more diverse, more sustainable, thriving, creative neighborhood that will welcome new residents while improving and preserving the ability of public housing residents, artists, small businesses, and neighbors to continue to thrive here for generations to come,” said Council Member Brad Lander. “The Gowanus Rezoning will be a milestone in land use actions in New York City,” said Council Member Stephen Levin.  “Discussions about the Gowanus neighborhood, one of the most vibrant and historic in Brooklyn, have been ongoing for decades. And today we reach a turning point where those discussions have resulted in action. This rezoning will result in not only new housing including a substantial increase in affordable units, but unprecedented investments in our public housing, improvements in the sewer systems and monitoring of our combined sewer overflows, preservation of manufacturing and light industry, and a commitment to protect our artists and public spaces.  There are so many people that helped bring us here but first and foremost I want to thank the residents of Wyckoff Gardens and GowanusHouse and the members of the Gowanus Neighborhood Coalition for Justice. They provide a guide to making sure we are always focused on what is most important. And of course thanks to all the staff and Councilmember Lander who attended more meetings then we can count in the name of true engagement. This process only begins here and it is up to the future elected officials to ensure that all the promises are met but we couldn’t have given them a better place to start.” The post Gowanus locals reach deal that paves way for rezoning appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyNov 10th, 2021

Bitcoin & The US Fiscal Reckoning

Bitcoin & The US Fiscal Reckoning Authored by Avik Roy via NationalAffairs.com, Cryptocurrencies like bitcoin have few fans in Washington. At a July congressional hearing, Senator Elizabeth Warren warned that cryptocurrency "puts the [financial] system at the whims of some shadowy, faceless group of super-coders." Treasury secretary Janet Yellen likewise asserted that the "reality" of cryptocurrencies is that they "have been used to launder the profits of online drug traffickers; they've been a tool to finance terrorism." Thus far, Bitcoin's supporters remain undeterred. (The term "Bitcoin" with a capital "B" is used here and throughout to refer to the system of cryptography and technology that produces the currency "bitcoin" with a lowercase "b" and verifies bitcoin transactions.) A survey of 3,000 adults in the fall of 2020 found that while only 4% of adults over age 55 own cryptocurrencies, slightly more than one-third of those aged 35-44 do, as do two-fifths of those aged 25-34. As of mid-2021, Coinbase — the largest cryptocurrency exchange in the United States — had 68 million verified users. To younger Americans, digital money is as intuitive as digital media and digital friendships. But Millennials with smartphones are not the only people interested in bitcoin; a growing number of investors are also flocking to the currency's banner. Surveys indicate that as many as 21% of U.S. hedge funds now own bitcoin in some form. In 2020, after considering various asset classes like stocks, bonds, gold, and foreign currencies, celebrated hedge-fund manager Paul Tudor Jones asked, "[w]hat will be the winner in ten years' time?" His answer: "My bet is it will be bitcoin." What's driving this increased interest in a form of currency invented in 2008? The answer comes from former Federal Reserve chairman Ben Bernanke, who once noted, "the U.S. government has a technology, called a printing press...that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation...the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to...inflation." In other words, governments with fiat currencies — including the United States — have the power to expand the quantity of those currencies. If they choose to do so, they risk inflating the prices of necessities like food, gas, and housing. In recent months, consumers have experienced higher price inflation than they have seen in decades. A major reason for the increases is that central bankers around the world — including those at the Federal Reserve — sought to compensate for Covid-19 lockdowns with dramatic monetary inflation. As a result, nearly $4 trillion in newly printed dollars, euros, and yen found their way from central banks into the coffers of global financial institutions. Jerome Powell, the current Federal Reserve chairman, insists that 2021's inflation trends are "transitory." He may be right in the near term. But for the foreseeable future, inflation will be a profound and inescapable challenge for America due to a single factor: the rapidly expanding federal debt, increasingly financed by the Fed's printing press. In time, policymakers will face a Solomonic choice: either protect Americans from inflation, or protect the government's ability to engage in deficit spending. It will become impossible to do both. Over time, this compounding problem will escalate the importance of Bitcoin. THE FIAT-CURRENCY EXPERIMENT It's becoming clear that Bitcoin is not merely a passing fad, but a significant innovation with potentially serious implications for the future of investment and global finance. To understand those implications, we must first examine the recent history of the primary instrument that bitcoin was invented to challenge: the American dollar. Toward the end of World War II, in an agreement hashed out by 44 Allied countries in Bretton Woods, New Hampshire, the value of the U.S. dollar was formally fixed to 1/35th of the price of an ounce of gold. Other countries' currencies, such as the British pound and the French franc, were in turn pegged to the dollar, making the dollar the world's official reserve currency. Under the Bretton Woods system, foreign governments could retrieve gold bullion they had sent to the United States during the war by exchanging dollars for gold at the relevant fixed exchange rate. But enabling every major country to exchange dollars for American-held gold only worked so long as the U.S. government was fiscally and monetarily responsible. By the late 1960s, it was neither. Someone needed to pay the steep bills for Lyndon Johnson's "guns and butter" policies — the Vietnam War and the Great Society, respectively — so the Federal Reserve began printing currency to meet those obligations. Johnson's successor, Richard Nixon, also pressured the Fed to flood the economy with money as a form of economic stimulus. From 1961 to 1971, the Fed nearly doubled the circulating supply of dollars. "In the first six months of 1971," noted the late Nobel laureate Robert Mundell, "monetary expansion was more rapid than in any comparable period in a quarter century." That year, foreign central banks and governments held $64 billion worth of claims on the $10 billion of gold still held by the United States. It wasn't long before the world took notice of the shortage. In a classic bank-run scenario, anxious European governments began racing to redeem dollars for American-held gold before the Fed ran out. In July 1971, Switzerland withdrew $50 million in bullion from U.S. vaults. In August, France sent a destroyer to escort $191 million of its gold back from the New York Federal Reserve. Britain put in a request for $3 billion shortly thereafter. Finally, that same month, Nixon secretly gathered a small group of trusted advisors at Camp David to devise a plan to avoid the imminent wipeout of U.S. gold vaults and the subsequent collapse of the international economy. There, they settled on a radical course of action. On the evening of August 15th, in a televised address to the nation, Nixon announced his intention to order a 90-day freeze on all prices and wages throughout the country, a 10% tariff on all imported goods, and a suspension — eventually, a permanent one — of the right of foreign governments to exchange their dollars for U.S. gold. Knowing that his unilateral abrogation of agreements involving dozens of countries would come as a shock to world leaders and the American people, Nixon labored to re-assure viewers that the change would not unsettle global markets. He promised viewers that "the effect of this action...will be to stabilize the dollar," and that the "dollar will be worth just as much tomorrow as it is today." The next day, the stock market rose — to everyone's relief. The editors of the New York Times "unhesitatingly applaud[ed] the boldness" of Nixon's move. Economic growth remained strong for months after the shift, and the following year Nixon was re-elected in a landslide, winning 49 states in the Electoral College and 61% of the popular vote. Nixon's short-term success was a mirage, however. After the election, the president lifted the wage and price controls, and inflation returned with a vengeance. By December 1980, the dollar had lost more than half the purchasing power it had back in June 1971 on a consumer-price basis. In relation to gold, the price of the dollar collapsed — from 1/35th to 1/627th of a troy ounce. Though Jimmy Carter is often blamed for the Great Inflation of the late 1970s, "the truth," as former National Economic Council director Larry Kudlow has argued, "is that the president who unleashed double-digit inflation was Richard Nixon." In 1981, Federal Reserve chairman Paul Volcker raised the federal-funds rate — a key interest-rate benchmark — to 19%. A deep recession ensued, but inflation ceased, and the U.S. embarked on a multi-decade period of robust growth, low unemployment, and low consumer-price inflation. As a result, few are nostalgic for the days of Bretton Woods or the gold-standard era. The view of today's economic establishment is that the present system works well, that gold standards are inherently unstable, and that advocates of gold's return are eccentric cranks. Nevertheless, it's important to remember that the post-Bretton Woods era — in which the supply of government currencies can be expanded or contracted by fiat — is only 50 years old. To those of us born after 1971, it might appear as if there is nothing abnormal about the way money works today. When viewed through the lens of human history, however, free-floating global exchange rates remain an unprecedented economic experiment — with one critical flaw. An intrinsic attribute of the post-Bretton Woods system is that it enables deficit spending. Under a gold standard or peg, countries are unable to run large budget deficits without draining their gold reserves. Nixon's 1971 crisis is far from the only example; deficit spending during and after World War I, for instance, caused economic dislocation in numerous European countries — especially Germany — because governments needed to use their shrinking gold reserves to finance their war debts. These days, by contrast, it is relatively easy for the United States to run chronic deficits. Today's federal debt of almost $29 trillion — up from $10 trillion in 2008 and $2.4 trillion in 1984 — is financed in part by U.S. Treasury bills, notes, and bonds, on which lenders to the United States collect a form of interest. Yields on Treasury bonds are denominated in dollars, but since dollars are no longer redeemable for gold, these bonds are backed solely by the "full faith and credit of the United States." Interest rates on U.S. Treasury bonds have remained low, which many people take to mean that the creditworthiness of the United States remains healthy. Just as creditworthy consumers enjoy lower interest rates on their mortgages and credit cards, creditworthy countries typically enjoy lower rates on the bonds they issue. Consequently, the post-Great Recession era of low inflation and near-zero interest rates led many on the left to argue that the old rules no longer apply, and that concerns regarding deficits are obsolete. Supporters of this view point to the massive stimulus packages passed under presidents Donald Trump and Joe Biden  that, in total, increased the federal deficit and debt by $4.6 trillion without affecting the government's ability to borrow. The extreme version of the new "deficits don't matter" narrative comes from the advocates of what has come to be called Modern Monetary Theory (MMT), who claim that because the United States controls its own currency, the federal government has infinite power to increase deficits and the debt without consequence. Though most mainstream economists dismiss MMT as unworkable and even dangerous, policymakers appear to be legislating with MMT's assumptions in mind. A new generation of Democratic economic advisors has pushed President Biden to propose an additional $3.5 trillion in spending, on top of the $4.6 trillion spent on Covid-19 relief and the $1 trillion bipartisan infrastructure bill. These Democrats, along with a new breed of populist Republicans, dismiss the concerns of older economists who fear that exploding deficits risk a return to the economy of the 1970s, complete with high inflation, high interest rates, and high unemployment. But there are several reasons to believe that America's fiscal profligacy cannot go on forever. The most important reason is the unanimous judgment of history: In every country and in every era, runaway deficits and skyrocketing debt have ended in economic stagnation or ruin. Another reason has to do with the unusual confluence of events that has enabled the United States to finance its rising debts at such low interest rates over the past few decades — a confluence that Bitcoin may play a role in ending. DECLINING FAITH IN U.S. CREDIT To members of the financial community, U.S. Treasury bonds are considered "risk-free" assets. That is to say, while many investments entail risk — a company can go bankrupt, for example, thereby wiping out the value of its stock — Treasury bonds are backed by the full faith and credit of the United States. Since people believe the United States will not default on its obligations, lending money to the U.S. government — buying Treasury bonds that effectively pay the holder an interest rate — is considered a risk-free investment. The definition of Treasury bonds as "risk-free" is not merely by reputation, but also by regulation. Since 1988, the Switzerland-based Basel Committee on Banking Supervision has sponsored a series of accords among central bankers from financially significant countries. These accords were designed to create global standards for the capital held by banks such that they carry a sufficient proportion of low-risk and risk-free assets. The well-intentioned goal of these standards was to ensure that banks don't fail when markets go down, as they did in 2008. The current version of the Basel Accords, known as "Basel III," assigns zero risk to U.S. Treasury bonds. Under Basel III's formula, then, every major bank in the world is effectively rewarded for holding these bonds instead of other assets. This artificially inflates demand for the bonds and enables the United States to borrow at lower rates than other countries. The United States also benefits from the heft of its economy as well as the size of its debt. Since America is the world's most indebted country in absolute terms, the market for U.S. Treasury bonds is the largest and most liquid such market in the world. Liquid markets matter a great deal to major investors: A large financial institution or government with hundreds of billions (or more) of a given currency on its balance sheet cares about being able to buy and sell assets while minimizing the impact of such actions on the trading price. There are no alternative low-risk assets one can trade at the scale of Treasury bonds. The status of such bonds as risk-free assets — and in turn, America's ability to borrow the money necessary to fund its ballooning expenditures — depends on investors' confidence in America's creditworthiness. Unfortunately, the Federal Reserve's interference in the markets for Treasury bonds have obscured our ability to determine whether financial institutions view the U.S. fiscal situation with confidence. In the 1990s, Bill Clinton's advisors prioritized reducing the deficit, largely out of a conern that Treasury-bond "vigilantes" — investors who protest a government's expansionary fiscal or monetary policy by aggressively selling bonds, which drives up interest rates — would harm the economy. Their success in eliminating the primary deficit brought yields on the benchmark 10-year Treasury bond down from 8% to 4%. In Clinton's heyday, the Federal Reserve was limited in its ability to influence the 10-year Treasury interest rate. Its monetary interventions primarily targeted the federal-funds rate — the interest rate that banks charge each other on overnight transactions. But in 2002, Ben Bernanke advocated that the Fed "begin announcing explicit ceilings for yields on longer-maturity Treasury debt." This amounted to a schedule of interest-rate price controls. Since the 2008 financial crisis, the Federal Reserve has succeeded in wiping out bond vigilantes using a policy called "quantitative easing," whereby the Fed manipulates the price of Treasury bonds by buying and selling them on the open market. As a result, Treasury-bond yields are determined not by the free market, but by the Fed. The combined effect of these forces — the regulatory impetus for banks to own Treasury bonds, the liquidity advantage Treasury bonds have in the eyes of large financial institutions, and the Federal Reserve's manipulation of Treasury-bond market prices — means that interest rates on Treasury bonds no longer indicate the United States' creditworthiness (or lack thereof). Meanwhile, indications that investors are growing increasingly concerned about the U.S. fiscal and monetary picture — and are in turn assigning more risk to "risk-free" Treasury bonds — are on the rise. One such indicator is the decline in the share of Treasury bonds owned by outside investors. Between 2010 and 2020, the share of U.S. Treasury securities owned by foreign entities fell from 47% to 32%, while the share owned by the Fed more than doubled, from 9% to 22%. Put simply, foreign investors have been reducing their purchases of U.S. government debt, thereby forcing the Fed to increase its own bond purchases to make up the difference and prop up prices. Until and unless Congress reduces the trajectory of the federal debt, U.S. monetary policy has entered a vicious cycle from which there is no obvious escape. The rising debt requires the Treasury Department to issue an ever-greater quantity of Treasury bonds, but market demand for these bonds cannot keep up with their increasing supply. In an effort to avoid a spike in interest rates, the Fed will need to print new U.S. dollars to soak up the excess supply of Treasury bonds. The resultant monetary inflation will cause increases in consumer prices. Those who praise the Fed's dramatic expansion of the money supply argue that it has not affected consumer-price inflation. And at first glance, they appear to have a point. In January of 2008, the M2 money stock was roughly $7.5 trillion; by January 2020, M2 had more than doubled, to $15.4 trillion. As of July 2021, the total M2 sits at $20.5 trillion — nearly triple what it was just 13 years ago. Over that same period, U.S. GDP increased by only 50%. And yet, since 2000, the average rate of growth in the Consumer Price Index (CPI) for All Urban Consumers — a widely used inflation benchmark — has remained low, at about 2.25%. How can this be? The answer lies in the relationship between monetary inflation and price inflation, which has diverged over time. In 2008, the Federal Reserve began paying interest to banks that park their money with the Fed, reducing banks' incentive to lend that money out to the broader economy in ways that would drive price inflation. But the main reason for the divergence is that conventional measures like CPI do not accurately capture the way monetary inflation is affecting domestic prices. In a large, diverse country like the United States, different people and different industries experience price inflation in different ways. The fact that price inflation occurs earlier in certain sectors of the economy than in others was first described by the 18th-century Irish-French economist Richard Cantillon. In his 1730 "Essay on the Nature of Commerce in General," Cantillon noted that when governments increase the supply of money, those who receive the money first gain the most benefit from it — at the expense of those to whom it flows last. In the 20th century, Friedrich Hayek built on Cantillon's thinking, observing that "the real harm [of monetary inflation] is due to the differential effect on different prices, which change successively in a very irregular order and to a very different degree, so that as a result the whole structure of relative prices becomes distorted and misguides production into wrong directions." In today's context, the direct beneficiaries of newly printed money are those who need it the least. New dollars are sent to banks, which in turn lend them to the most creditworthy entities: investment funds, corporations, and wealthy individuals. As a result, the most profound price impact of U.S. monetary inflation has been on the kinds of assets that financial institutions and wealthy people purchase — stocks, bonds, real estate, venture capital, and the like. This is why the price-to-earnings ratio of S&P 500 companies is at record highs, why risky start-ups with long-shot ideas are attracting $100 million venture rounds, and why the median home sales price has jumped 24% in a single year — the biggest one-year increase of the 21st century. Meanwhile, low- and middle-income earners are facing rising prices without attendant increases in their wages. If asset inflation persists while the costs of housing and health care continue to grow beyond the reach of ordinary people, the legitimacy of our market economy will be put on trial. THE RETURN OF SOUND MONEY Satoshi Nakamoto, the pseudonymous creator of Bitcoin, was acutely concerned with the increasing abundance of U.S. dollars and other fiat currencies in the early 2000s. In 2009 he wrote, "the root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." Bitcoin was created in anticipation of the looming fiscal and monetary crisis in the United States and around the world. To understand how bitcoin functions alongside fiat currency, it's helpful to examine the monetary philosophy of the Austrian School of economics, whose leading figures — especially Hayek and Ludwig von Mises — greatly influenced Nakamoto and the early developers of Bitcoin. The economists of the Austrian School were staunch advocates of what Mises called "the principle of sound money" — that is, of keeping the supply of money as constant and predictable as possible. In The Theory of Money and Credit, first published in 1912, Mises argued that sound money serves as "an instrument for the protection of civil liberties against despotic inroads on the part of governments" that belongs "in the same class with political constitutions and bills of rights." Just as bills of rights were a "reaction against arbitrary rule and the nonobservance of old customs by kings," he wrote, "the postulate of sound money was first brought up as a response to the princely practice of debasing the coinage." Mises believed that inflation was just as much a violation of someone's property rights as arbitrarily taking away his land. After all, in both cases, the government acquires economic value at the expense of the citizen. Since monetary inflation creates a sugar high of short-term stimulus, politicians interested in re-election will always have an incentive to expand the money supply. But doing so comes at the expense of long-term declines in consumer purchasing power. For Mises, the best way to address such a threat is to avoid fiat currencies altogether. And in his estimation, the best sound-money alternative to fiat currency is gold. "The excellence of the gold standard," Mises wrote, is "that it renders the determination of the monetary unit's purchasing power independent of the policies of governments and political parties." In other words, gold's primary virtue is that its supply increases slowly and steadily, and cannot be manipulated by politicians. It may appear as if gold was an arbitrary choice as the basis for currency, but gold has a combination of qualities that make it ideal for storing and exchanging value. First, it is verifiably unforgeable. Gold is very dense, which means that counterfeit gold is easy to identify — one simply has to weigh it. Second, gold is divisible. Unlike, say, cattle, gold can be delivered in fractional units both small and large, enabling precise pricing. Third, gold is durable. Unlike commodities that rot or evaporate over time, gold can be stored for centuries without degradation. Fourth, gold is fungible: An ounce of gold in Asia is worth the same as an ounce of gold in Europe. These four qualities are shared by most modern currencies. Gold's fifth quality is more distinct, however, as well as more relevant to its role as an instrument of sound money: scarcity. While people have used beads, seashells, and other commodities as primitive forms of money, those items are fairly easy to acquire and introduce into circulation. While gold's supply does gradually increase as more is extracted from the ground, the rate of extraction relative to the total above-ground supply is low: At current rates, it would take approximately 66 years to double the amount of gold in circulation. In comparison, the supply of U.S. dollars has more than doubled over just the last decade. When the Austrian-influenced designers of bitcoin set out to create a more reliable currency, they tried to replicate all of these qualities. Like gold, bitcoin is divisible, unforgeable, divisible, durable, and fungible. But bitcoin also improves upon gold as a form of sound money in several important ways. First, bitcoin is rarer than gold. Though gold's supply increases slowly, it does increase. The global supply of bitcoin, by contrast, is fixed at 21 million and cannot be feasibly altered. Second, bitcoin is far more portable than gold. Transferring physical gold from one place to another is an onerous process, especially in large quantities. Bitcoin, on the other hand, can be transmitted in any quantity as quickly as an email. Third, bitcoin is more secure than gold. A single bitcoin address carried on a USB thumb drive could theoretically hold as much value as the U.S. Treasury holds in gold bars — without the need for costly militarized facilities like Fort Knox to keep it safe. In fact, if stored using best practices, the cost of securing bitcoin from hackers or assailants is far lower than the cost of securing gold. Fourth, bitcoin is a technology. This means that, as developers identify ways to augment its functionality without compromising its core attributes, they can gradually improve the currency over time. Fifth, and finally, bitcoin cannot be censored. This past year, the Chinese government shut down Hong Kong's pro-democracy Apple Daily newspaper not by censoring its content, but by ordering banks not to do business with the publication, thereby preventing Apple Daily from paying its suppliers or employees. Those who claim the same couldn't happen here need only look to the Obama administration's Operation Choke Point, a regulatory attempt to prevent banks from doing business with legitimate entities like gun manufacturers and payday lenders — firms the administration disfavored. In contrast, so long as the transmitting party has access to the internet, no entity can prevent a bitcoin transaction from taking place. This combination of fixed supply, portability, security, improvability, and censorship resistance epitomizes Nakamoto's breakthrough. Hayek, in The Denationalisation of Money, foresaw just such a separation of money and state. "I believe we can do much better than gold ever made possible," he wrote. "Governments cannot do better. Free enterprise...no doubt would." While Hayek and Nakamoto hoped private currencies would directly compete with the U.S. dollar and other fiat currencies, bitcoin does not have to replace everyday cash transactions to transform global finance. Few people may pay for their morning coffee with bitcoin, but it is also rare for people to purchase coffee with Treasury bonds or gold bars. Bitcoin is competing not with cash, but with these latter two assets, to become the world's premier long-term store of wealth. The primary problem bitcoin was invented to address — the devaluation of fiat currency through reckless spending and borrowing — is already upon us. If Biden's $3.5 trillion spending plan passes Congress, the national debt will rise further. Someone will have to buy the Treasury bonds to enable that spending. Yet as discussed above, investors are souring on Treasurys. On June 30, 2021, the interest rate for the benchmark 10-year Treasury bond was 1.45%. Even at the Federal Reserve's target inflation rate of 2%, under these conditions, Treasury-bond holders are guaranteed to lose money in inflation-adjusted terms. One critic of the Fed's policies, MicroStrategy CEO Michael Saylor, compares the value of today's Treasury bonds to a "melting ice cube." Last May, Ray Dalio, founder of Bridgewater Associates and a former bitcoin skeptic, said "[p]ersonally, I'd rather have bitcoin than a [Treasury] bond." If hedge funds, banks, and foreign governments continue to decelerate their Treasury purchases, even by a relatively small percentage, the decrease in demand could send U.S. bond prices plummeting. If that happens, the Fed will be faced with the two unpalatable options described earlier: allowing interest rates to rise, or further inflating the money supply. The political pressure to choose the latter would likely be irresistible. But doing so would decrease inflation-adjusted returns on Treasury bonds, driving more investors away from Treasurys and into superior stores of value, such as bitcoin. In turn, decreased market interest in Treasurys would force the Fed to purchase more such bonds to suppress interest rates. AMERICA'S BITCOIN OPPORTUNITY From an American perspective, it would be ideal for U.S. Treasury bonds to remain the world's preferred reserve asset for the foreseeable future. But the tens of trillions of dollars in debt that the United States has accumulated since 1971 — and the tens of trillions to come — has made that outcome unlikely. It is understandably difficult for most of us to imagine a monetary world aside from the one in which we've lived for generations. After all, the U.S. dollar has served as the world's leading reserve currency since 1919, when Britain was forced off the gold standard. There are only a handful of people living who might recall what the world was like before then. Nevertheless, change is coming. Over the next 10 to 20 years, as bitcoin's liquidity increases and the United States becomes less creditworthy, financial institutions and foreign governments alike may replace an increasing portion of their Treasury-bond holdings with bitcoin and other forms of sound money. With asset values reaching bubble proportions and no end to federal spending in sight, it's critical for the United States to begin planning for this possibility now. Unfortunately, the instinct of some federal policymakers will be to do what countries like Argentina have done in similar circumstances: impose capital controls that restrict the ability of Americans to exchange dollars for bitcoin in an attempt to prevent the digital currency from competing with Treasurys. Yet just as Nixon's 1971 closure of the gold window led to a rapid flight from the dollar, imposing restrictions on the exchange of bitcoin for dollars would confirm to the world that the United States no longer believes in the competitiveness of its currency, accelerating the flight from Treasury bonds and undermining America's ability to borrow. A bitcoin crackdown would also be a massive strategic mistake, given that Americans are positioned to benefit enormously from bitcoin-related ventures and decentralized finance more generally. Around 50 million Americans own bitcoin today, and it's likely that Americans and U.S. institutions own a plurality, if not the majority, of the bitcoin in circulation — a sum worth hundreds of billions of dollars. This is one area where China simply cannot compete with the United States, since Bitcoin's open financial architecture is fundamentally incompatible with Beijing's centralized, authoritarian model. In the absence of major entitlement reform, well-intentioned efforts to make Treasury bonds great again are likely doomed. Instead of restricting bitcoin in a desperate attempt to forestall the inevitable, federal policymakers would do well to embrace the role of bitcoin as a geopolitically neutral reserve asset; work to ensure that the United States continues to lead the world in accumulating bitcoin-based wealth, jobs, and innovations; and ensure that Americans can continue to use bitcoin to protect themselves against government-driven inflation. To begin such an initiative, federal regulators should make it easier to operate cryptocurrency-related ventures on American shores. As things stand, too many of these firms are based abroad and closed off to American investors simply because outdated U.S. regulatory agencies — the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Treasury Department, and others — have been unwilling to provide clarity as to the legal standing of digital assets. For example, the SEC has barred Coinbase from paying its customers' interest on their holdings while refusing to specify which laws Coinbase has violated. Similarly, the agency has refused to approve Bitcoin exchange-traded funds (ETFs) without specifying standards for a valid ETF application. Congress should implement SEC Commissioner Hester Peirce's recommendations for a three-year regulatory grace period for decentralized digital tokens and assign to a new agency the role of regulating digital assets. Second, Congress should clarify poorly worded legislation tied to a recent bipartisan infrastructure bill that would drive many high-value crypto businesses, like bitcoin-mining operations, overseas. Third, the Treasury Department should consider replacing a fraction of its gold holdings — say, 10% — with bitcoin. This move would pose little risk to the department's overall balance sheet, send a positive signal to the innovative blockchain sector, and enable the United States to benefit from bitcoin's growth. If the value of bitcoin continues to appreciate strongly against gold and the U.S. dollar, such a move would help shore up the Treasury and decrease the need for monetary inflation. Finally, when it comes to digital versions of the U.S. dollar, policymakers should follow the advice of Friedrich Hayek, not Xi Jinping. In an effort to increase government control over its monetary system, China is preparing to unveil a blockchain-based digital yuan at the 2022 Beijing Winter Olympics. Jerome Powell and other Western central bankers have expressed envy for China's initiative and fret about being left behind. But Americans should strongly oppose the development of a central-bank digital currency (CBDC). Such a currency could wipe out local banks by making traditional savings and checking accounts obsolete. What's more, a CBDC-empowered Fed would accumulate a mountain of precise information about every consumer's financial transactions. Not only would this represent a grave threat to Americans' privacy and economic freedom, it would create a massive target for hackers and equip the government with the kind of censorship powers that would make Operation Choke Point look like child's play. Congress should ensure that the Federal Reserve never has the authority to issue a virtual currency. Instead, it should instruct regulators to integrate private-sector, dollar-pegged "stablecoins" — like Tether and USD Coin — into the framework we use for money-market funds and other cash-like instruments that are ubiquitous in the financial sector. PLANNING FOR THE WORST In the best-case scenario, the rise of bitcoin will motivate the United States to mend its fiscal ways. Much as Congress lowered corporate-tax rates in 2017 to reduce the incentive for U.S. companies to relocate abroad, bitcoin-driven monetary competition could push American policymakers to tackle the unsustainable growth of federal spending. While we can hope for such a scenario, we must plan for a world in which Congress continues to neglect its essential duty as a steward of Americans' wealth. The good news is that the American people are no longer destined to go down with the Fed's sinking ship. In 1971, when Washington debased the value of the dollar, Americans had no real recourse. Today, through bitcoin, they do. Bitcoin enables ordinary Americans to protect their savings from the federal government's mismanagement. It can improve the financial security of those most vulnerable to rising prices, such as hourly wage earners and retirees on fixed incomes. And it can increase the prosperity of younger Americans who will most acutely face the consequences of the country's runaway debt. Bitcoin represents an enormous strategic opportunity for Americans and the United States as a whole. With the right legal infrastructure, the currency and its underlying technology can become the next great driver of American growth. While the 21st-century monetary order will look very different from that of the 20th, bitcoin can help America maintain its economic leadership for decades to come. Tyler Durden Tue, 10/19/2021 - 23:25.....»»

Category: worldSource: nytOct 20th, 2021

RXR breaks ground for first South Bronx project

RXR Realty has broken ground for its inaugural South Bronx development, a future residential building located at 2413 Third Avenue. Situated next to the Third Avenue Bridge and minutes to the 6 train, the 27-story, 200-unit tower will designate 60 units as affordable apartments for middle income households. It will... The post RXR breaks ground for first South Bronx project appeared first on Real Estate Weekly. RXR Realty has broken ground for its inaugural South Bronx development, a future residential building located at 2413 Third Avenue. Situated next to the Third Avenue Bridge and minutes to the 6 train, the 27-story, 200-unit tower will designate 60 units as affordable apartments for middle income households. It will feature 81 on-site enclosed parking spaces and electric vehicle charging stations and 721 s/f of retail space. The project is slated for completion in 2023.  This summer, RXR and Bank of America closed on a $75.2 million construction loan to fund the development of 2413 Third Avenue. Rendering of the new tower “As the South Bronx continues to grow, it is crucial to see increased direct investment in affordable housing to support vibrant neighborhoods like Mott Haven. I am proud to celebrate the groundbreaking of over 60 affordable units for middle income households that will provide stability and opportunity for Bronx residents. I look forward to seeing continued investment in affordable housing in the South Bronx in order to lift up working families,” said Congressman Ritchie Torres, NY-15.  “We are thrilled to break ground today on our first entry into the Bronx market and celebrate the creation of 200 new apartments and retail space in the vibrant Mott Haven neighborhood. As the South Bronx’s population grows, RXR welcomes the opportunity to meet this demand and provide accessible, smartly designed and amenitized homes,” said Joanne Minieri, Senior Executive Vice President, Chief Operating Officer of Development and Construction, RXR Realty. “RXR is fully committed to working in partnership with the community to increase local hiring and activate the neighborhood through direct investment.” “We are excited to welcome RXR to the Bronx and to the thriving network of Chamber members who are investing in our neighborhoods to create new jobs and opportunities for community partnerships,” said Lisa Sorin, President of the Bronx Chamber of Commerce. Designed by CetraRuddy Architects, a the building will feature an open concept cafe and gallery space on the ground floor, a state-of-the-art fitness center, flexible common area, and electric vehicle charging stations. Units will be equipped with stainless steel appliances, white oak flooring, matte black iron fixtures and subway tiling. The 145,643 s/f development will also feature exterior amenity areas, including landscaped seating areas and lounges, rooftop grilling, dining areas and a gaming space. The tower is centrally located within walking distance of the 4/5/6 transit lines and one block from the Major Deegan Expressway.  “The building design is rooted in the traditions of the vibrant community of Mott Haven. A bold massing creates a sculpted presence that both engages the sky while opening up to pedestrian activity. Art is an integrated design element throughout the interior and exterior to enliven the street and the resident experience. Indoor/outdoor connectivity and integration with nature is an important element that helped form the project, creating gardens and varied outdoor spaces. Authenticity of materiality helps to create a welcoming structure that has the welcome of home,” said Nancy J. Ruddy and John Cetra of CetraRuddy Architecture. The post RXR breaks ground for first South Bronx project appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyOct 13th, 2021

NYC"s likely next mayor wants to tackle the housing crisis. "We need to look at those sacred cows like SoHo."

Eric Adams, winner of the Democratic primary for mayor, says it's time for rich, exclusionary neighborhoods to add more homes for the poor. New York City Democratic Mayoral Candidate Eric Adams. TIMOTHY A. CLARY/AFP via Getty Images New York City's likely mayor wants to solve the housing crisis with denser buildings in rich neighborhoods. Eric Adams' strategy is a major change from decades of zoning for more housing in poorer areas. Upzoning in "sacred cows" like SoHo and other wealthy areas can even the playing field for homebuyers, he told Ezra Klein. See more stories on Insider's business page. New Yorkers in posh neighborhoods like SoHo may end up getting a lot more neighbors if Eric Adams has his way.After a slim victory in the Democratic primary during the spring, Adams is cruising toward becoming New York's second Black mayor ever and first since David Dinkins in the early '90s. The current Brooklyn borough president has carved out a reputation for being friendly to the real-estate industry, and he sounded very pro-development in a recent podcast appearance.Adams says he's offering a change from the policies that entrenched segregation and gentrification under his predecessors.For years, the city government's solution to skyhigh real-estate prices has been to upzone - construct denser residential buildings - in "affordable" areas, but it's clear now that the upzoning fix hasn't worked, Adams said in a recent appearance on Ezra Klein's New York Times podcast.Adams did not immediately respond to Insider's request for comment.Upzoning in poorer areas did little to actually improve those neighborhoods, while housing remained unattainable in much of the city. The neighborhoods that did improve as a result of upzoning saw poorer residents displaced, Adams said - a trend that's come to be known as gentrification.Instead of building affordable housing in poorer areas, the government should try to level the playing field and target the wealthiest neighborhoods, he added. "I say we need to look at the entire city," Adams said. "We need to look at those sacred cows like SoHo and other parts of the city where we used these methods to keep out groups. We must all share the affordable housing crisis."He said, for example, that upzoning should also apply to neighborhoods "from 34th Street down to 14th Street, from 9th Avenue over to Park Avenue," which would affect the affluent neighborhoods of Chelsea and Gramercy Park, as well as Union Square.Adams' plan hopes to improve more than just New York home affordability. The housing solution "must solve a multitude of problems," including access to schools and grocers, the Democratic candidate said. The lack of affordable housing is central to the city's inequality, and bringing affordable units to market can counter the unevenness that's emerged through the pandemic recovery, Adams said."We're going to integrate access to healthy food, to good transportation," he said. "We are extremely segregated as a city, and our housing plays a major role in that segregation."Upzoning in wealthy neighborhoods is just one part of Adams' housing plan. The likely mayor aims to repurpose government office buildings for affordable housing, as well as allow private offices and hotels to convert into residential buildings. A planned collection of regulatory changes could also create hundreds of thousands of affordable apartments by permitting basement units and single-room apartments, according to Adams' campaign website. Changes are afoot in housing policy beyond New York. Berkeley, California, voted earlier this year to ban single-family residential zoning and pave the way for duplexes on such lots. The Bay Area city introduced the restrictive zoning practice in 1916 but now serves as a first-mover in progressive zoning reform."Part of Berkeley's efforts is acknowledging that what happened was wrong and that we're learning from our past mistakes and we're trying to correct them," Berkeley Mayor Jesse Arreguín told Insider in September.California has since followed suit. Gov. Gavin Newsom signed a bill to eliminate single-family zoning in September, making it just the second state to ban the practice.Adams' extensive fundraising from the city's real-estate industry has been reported on by The City and The New York Times, and his mayorship may open more neighborhoods for development than New York has seen in decades. What will the neighbors think?Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 6th, 2021

A former Beverly Hills mayor is so committed to keeping home prices high that he said the freedom to block dense housing deserves to be protected like gay marriage

John Mirisch said California is tolerant of "lifestyle choices" - like homosexuality - and argued single-family zoning deserves the same protection. Musician Ringo Starr and Beverly Hills Mayor John Mirisch speak at a public art dedication for Starr's donated sculpture "Peace and Love" at Beverly Gardens Park on November 02, 2019 in Beverly Hills. Michael Tullberg/Getty Images Choosing where to live is a "lifestyle choice," like choosing who to love, former Beverly Hills mayor John Mirisch said in a column. Mirisch made the comparison while arguing against pro-development housing activists. His passion on the issue sums up the housing market's tension between the conservative status quo and change. See more stories on Insider's business page. A war is being waged over US housing. Beverly Hills, California, is a key battleground, and one of the city's former mayors feels so strongly about protecting home values that he wrote a column comparing it to the freedom to "love whom you love."The column, by John Mirisch in CalMatters, underscores the wide gap between pro-housing advocates and those looking to protect home values. These groups have acquired the monikers YIMBYs and NIMBYs, as in "yes in my backyard" and their "not in my backyard" opponents. Preventing development in your backyard is good for home values, and for Mirisch, that's beyond a policy debate - it's a lifestyle choice."In California we pride ourselves on being very tolerant of a diverse array of lifestyles and lifestyle choices," wrote Mirisch, who remains a member of Beverly Hills' city council. "Dress how it suits you; love whom you love; define yourself in accordance with your own preferences."In a sign that NIMBYs are threatened by the direction of the debate, Mirisch sounds the alarm. "If living in a home with a garden is your thing, you probably shouldn't expect Californian tolerance from a certain group of people who with cult-like zeal will tell you that your lifestyle is bad, wrong, immoral and even 'racist.'"Mirisch is likely responding to the recent spate of victories by YIMBYs, who are largely millennial and Gen Z housing advocates. YIMBYs argue for denser apartment developments, more home construction, and widespread housing availability. The group successfully pushed Berkeley to reverse its century-old history of exclusionary zoning and, just weeks ago, was pivotal in California outlawing single-family zoning.Mirisch specifically decries how the YIMBY agenda is an "elimination of single-family neighborhoods," and said the activist group's ideals would strip Californians of an important lifestyle option.A handful of Mirisch's claims fall short. For one, homosexuality isn't a "lifestyle choice" that can be likened to music preferences or fashion. Also, YIMBYs argue for more housing density, including duplexes on single-family lots, not necessarily eradicating single-family neighborhoods.Mirisch also leaves unaddressed how single-family zoning has its roots in explicitly racist policy from the early 1900s. For example, a CNN investigation from February 2020 found a contemporary Beverly Hills deed that included language restricting occupancy by "any person other than of the white or Caucasian race."Beverly Hills is among the most expensive neighborhoods in the US, with median home prices nearing $4 million at the end of August, according to Zillow. The city is therefore one of the least likely to cave to pro-housing initiatives.Mirisch didn't immediately reply to a request for comment.Mirisch is not alone in his passion on housing issues. Over the last year, outrage over property prices has reached a fever pitch, as the dire housing shortage is keeping millions from climbing the socioeconomic ladder. Millennials are struggling to buy homes just as they hit peak homebuying age.In most cities, the shift to remote work during the pandemic and record-low mortgage rates kicked off a nationwide homebuying spree in 2020. That drove home inventory to all-time lows, and the market broke down as contractors were slow to bring more houses to market.Price growth is cooling on a monthly basis as the pandemic housing mania subsides, but the barrier to homeownership is now permanently higher.Other solutions exist for shaping a more inclusive housing market. Congress is pushing for a historic construction drive, hoping to solve the shortage with an onslaught of new homes.At least one other California mayor is on the side of the YIMBYs. Berkeley Mayor Jesse Arreguín, who once opposed denser zoning, is now among the most vocal pro-housing officials in the US. He told Insider in September that "single-family zoning was established on a foundation of racism in Berkeley and it's the basis upon which our zoning is built."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 5th, 2021

A majority in Berlin"s election just voted to strip 240,000 rentals from major landlords and fight the city"s housing crisis

About 56% of Berliners want the German capital to buy apartments from big landlords - a radical new idea for solving the global housing shortage. Protesters attend a demonstration against rent increase in Berlin, Germany, Saturday, April 6, 2019. Slogan in the foreground reads 'Stopp Deutsche Wohnen (housing company)' Michael Sohn/AP Photo About 56% of voters in Berlin, Germany, approved a measure for the city to buy apartments from major landlords. The rule would affect up to 240,000 apartments in Berlin and aims to cool the city's red-hot housing market. The move joins similar measures in other countries to curb skyrocketing home prices. See more stories on Insider's business page. In an unconventional David and Goliath story, pro-housing Berliners just dealt the city's biggest landlords a major blow.Roughly 56% of Berlin voters backed an initiative on Sunday that would force the city government to buy units owned by corporate landlords. The measure could lead the government to buy up to 240,000 apartments from the corporations. The rule targets landlords that own more than 3,000 rental units, meaning property giants like Deutsche Wohnen - which owns more than 100,000 units in Berlin alone - would be most affected.The outcome represents a progressive effort to cool one of Europe's hottest housing markets. Rent prices have surged 13% in the last 12 months, according to Berlin-based real estate firm Guthmann. Years of underbuilding now leave the city with an apartment shortage of 205,000 units, the firm said. With three-quarters of Berlin residents renting, the lack of sufficient housing supply has powered a stifling jump in rent prices.The referendum marks a shift from the free-market model and toward one that views affordable housing as a human right.Public ownership of units would offer more affordable housing options. The proposal's approval also shows Berliners are interested in more drastic steps to cool the market than denser zoning or more building on the city's outskirts.To be sure, the rule is non-binding, meaning the government doesn't have to act in accordance to the initiative. The Berlin government elected on Sunday will have the ultimate say on whether the rule goes into effect.The city's landlords don't expect the referendum to make enough of a difference. Government purchases of privately owned apartments "do not solve the manifold challenges on the Berlin housing market," Rolf Buch, CEO of property giant Vonovia, said in a statement to Reuters.The city's new leading party - the Social Democrats - is also skeptical. The referendum has to be respected, but it won't shore up more supply or fix the market, said the party's mayoral candidate Franziska Giffey, who is set to be Berlin's first female mayor, according to the same election's provisional results.Berlin's housing problems are globalThe Berlin referendum echoes efforts in other countries to boost housing affordability.In the US, lawmakers are pushing forward with legislation that, among many other things, aims to increase home supply. Democrats' $3.5 trillion spending proposal includes $213 billion in funding that's estimated to create 2 million new homes.Separately, President Joe Biden announced in September a series of regulatory changes that seek to build 100,000 new homes and promote denser residential zoning.On the state level, California Gov. Gavin Newsom approved a law on September 16 that outlaws single-family home zoning in the state, clearing the way for the building of duplexes on any single-family lots. The progressive measure immediately allows for the creation of 700,0000 more homes in existing neighborhoods. By comparison, California typically permits 100,000 new homes each year. By banning single-family zoning, the state reversed a century-old status quo that protected property values instead of providing denser and more affordable housing. In Canada, Prime Minister Justin Trudeau proposed a housing plan in September that would end "blind bidding," a process through which prospective buyers can't see what other buyers have offered for a home. Trudeau also plans to ban the buying of Canadian homes for investment purposes, saying Canadians "shouldn't lose a bidding war on your home to speculators." Investor interest has driven home prices higher and exacerbated shortages in housing markets across the world, including the US, Canada, and New Zealand.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 27th, 2021

Multifamily Activity Bolsters Housing Starts, but Single-Family Production Low

Strong multifamily activity pushed overall housing starts up in August but single-family starts have dipped in response to continued supply chain and labor challenges. Total starts increased 3.9% to a seasonally adjusted annual rate of 1.62 million units, according to the latest data from the U.S. Department of Housing and Urban Development and the U.S. […] The post Multifamily Activity Bolsters Housing Starts, but Single-Family Production Low appeared first on RISMedia. Strong multifamily activity pushed overall housing starts up in August but single-family starts have dipped in response to continued supply chain and labor challenges. Total starts increased 3.9% to a seasonally adjusted annual rate of 1.62 million units, according to the latest data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The August reading of 1.62 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 2.8% to a 1.08 million seasonally adjusted annual rate, but are up 23.8% year-to-date. The multifamily sector increased 20.6% to a 539,000 pace. The breakdown: Housing Starts: 1.62 million (+3.9%% month-over-month, +17.4% year-over-year) Multifamily Starts: 530,000 Single-Family Starts: 1,054,000 Building Permits: 1.73 million (+6.0% month-over-month, +13.5% year-over-year) Multifamily Permits: 632,000 Single-Family Permits: 1,048,000 Completions: 1.33 million (-4.5% month-over-month, +9.4% year-over-year) Multifamily Completions: 356,000 Single-Family Completions: 971,000 Regional year-to-date data: Midwest: +14% South: +20.2% West:  +23.9% Northeast: +35.96% What the industry is saying: “Total housing starts and housing permits made decent gains in August compared to the month prior, but the focus was on multifamily units. Single-family housing starts fell 2.8% while single-family housing permits, a gauge for future activity, were essentially unchanged after falling in the past four months. Multifamily starts, comprising mostly apartments, increased by 20.6% while multifamily permits rose 15.8%. “There is certainly a housing shortage, as reflected in the low inventory of homes for sale and in low rental vacancy rates. However, a shift toward rental buildings means less access to homeownership over the long run and the accompanying opportunity for wealth gains. Home-price gains will surely moderate after experiencing gains of nearly 20% in the first half of this year. But given the housing shortage and the lack of big increases in the construction of single-family homes, home prices will continue to move higher than most people’s income gains. That’s good news for property owners, but bad news for those wanting to become homeowners.” — Dr. Lawrence Yun, Chief Economist, National Association of REALTORS® “Single-family construction is normalizing at more sustainable levels after an increase in building material pricing. Demand remains strong, but the market is facing increasing housing affordability issues after a run-up in new and existing home prices. Multifamily construction increased in August, with NAHB expecting a solid gain for apartment construction in 2021 after a slight decline last year.” — Chuck Fowke, Chairman, National Association of Home Builders “More inventory is coming for a market that continues to face a housing deficit. The number of single-family homes under construction in August-702,000-is the highest since the Great Recession and is 32.7% higher than a year ago. While some building materials, like lumber, have seen easing prices, delivery delays and a lack of skilled labor and building lots continue to hold the market back.” — Robert Dietz, Chief Economist, National Association of Home Builders “The pace of new construction reflected homebuilder shifts toward higher margin projects amid fluctuating costs. As August saw home builder sentiment dip over concerns of slipping buyer traffic and sales, builders sought permits for more multifamily projects. However, this week’s September sentiment numbers show a rebound is in the works, as residential construction companies work through their order backlog and look forward to increased traffic heading into 2022. Real estate markets are grappling with a decade of underbuilding, which has pushed this year’s buyers to pay record-high prices for a tight number of homes for sale. As millennials—the largest generation in our country’s history—came of age during the last 10 years, new construction volume lagged, creating a shortage of 5.2 million new homes. Moreover, completed new homes have been mostly aimed at the premium segment of the market, with the share of new-home sales priced at or below $300,000 dropping from 43% of total in 2018, to 32% in the first half of 2021. “For builders, demographics offer tremendous potential, as the millennial generation is in its peak household formation years. In a promising recent development for builders and buyers alike, California’s recent legislative move to expand access to more homes through relaxing single-family zoning standards could serve as a model for other states and open the door for an influx of affordable new construction supply.” — George Ratiu, Manager of Economic Research, realtor.com® “New-home starts recovered in August, following a brief period of decline in July due to supply chain issues. Additionally, the backlog of homes authorized but not started has grown to record levels over the late spring and summer, and as builders are able to secure materials and labor it is not surprising to see starts begin to pick back up. This backlog is a promising metric, and while some of the pipeline of units may be canceled, it is likely that a good share of the backlog will make it to market due to robust housing demand.” — Kelly Mangold, Principal, RCLCO Real Estate Consulting The post Multifamily Activity Bolsters Housing Starts, but Single-Family Production Low appeared first on RISMedia......»»

Category: realestateSource: rismediaSep 21st, 2021

BFC Partners Closes on 475 Bay Street, Company’s Latest Development Project in SI

Today BFC Partners, the Brooklyn-based mixed use and mixed income developer with active projects in all boroughs and Buffalo, announced the closing of their latest project in Staten Island. 475 Bay Street, a 250,173 square-foot development, will be the first development site in the newly rezoned stretch of Bay Street... The post BFC Partners Closes on 475 Bay Street, Company’s Latest Development Project in SI appeared first on Real Estate Weekly. Today BFC Partners, the Brooklyn-based mixed use and mixed income developer with active projects in all boroughs and Buffalo, announced the closing of their latest project in Staten Island. 475 Bay Street, a 250,173 square-foot development, will be the first development site in the newly rezoned stretch of Bay Street to break ground and will bring 269 residential units with one super’s unit and 9,000 square feet of pedestrian friendly retail to the neighborhood. You can see a rendering of the project here.  “The closing at 475 Bay Street is an exciting milestone in the revitalization of Staten Island’s North Shore. As the first project to break ground on this newly rezoned piece of Bay Street, this development will pave the way for necessary development in the neighborhood,” said Joseph Ferrara, Principal of BFC Partners. “BFC Partners is committed to the borough, and this latest project demonstrates our continued investment in the North Shore of Staten Island.” The residential units are 100% affordable. 131 units will be set aside for tenants whose household income is at or below 80% of AMI, which is $85,920 for a family of three, and 138 units will be set aside for tenants whose household income is at or below 30% of AMI for formerly homeless seniors, which is $25,080 for an older adult living alone.  The total development cost of the project is approximately $151 million, with the New York State Housing Finance Agency (HFA) issuing a first mortgage loan of $99,865,000. The loan is funded from a series of tax-exempt Affordable Housing Revenue Bonds. 475 Bay Street will also receive an annual subsidy for frail and older adult residents from the New York State Empire State Supportive Housing Initiative (ESSHI). The ESSHI subsidized supportive services will be provided by Selfhelp Community Services, Inc. The building will have a variety of top-of-class amenities, including a rooftop recreation area, indoor fitness area, children’s play space, a multifunctional lounge, and unparalleled views of NYC skyline, the harbor and Verrazzano Bridge. 475 Bay Street will also have an older adult multifunction screening room and an older adult outdoor recreation deck, with older adult services also provided by Selfhelp.  “Selfhelp is proud to be part of 475 Bay Street which is bringing affordable housing with services to Staten Island’s North Shore. For decades, Selfhelp has been providing older adults and other vulnerable New Yorkers with affordable housing and services to age with independence and dignity in the neighborhoods they call home. We look forward to bringing SHASAM, Selfhelp Active Services for Aging Model, to 475 Bay Street to provide low-income older adults with the on-site services they need to remain healthy at home.” said Stuart Kaplan, CEO of Selfhelp Community Services. The post BFC Partners Closes on 475 Bay Street, Company’s Latest Development Project in SI appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJan 15th, 2022

Choc Monarch architect wins IDA 2021 design recognition 

Maria Song, AIA LEED AP, has received the honorable mention from the International Design Awards for the design of The Monarch Apartment Homes, a 60-unit affordable housing community currently under development by the Community Housing Opportunities Corporation (CHOC).  The award underscores the critical nature design plays in the development and creation of affordable... The post Choc Monarch architect wins IDA 2021 design recognition  appeared first on Real Estate Weekly. Maria Song, AIA LEED AP, has received the honorable mention from the International Design Awards for the design of The Monarch Apartment Homes, a 60-unit affordable housing community currently under development by the Community Housing Opportunities Corporation (CHOC).  The award underscores the critical nature design plays in the development and creation of affordable housing. The first affordable housing complex to break ground in the area in over a decade, completion is slated for January, 2023.    Interactive Design is honored and humbled to be a part of this team – client, agencies, investors, designers, engineers, and contractors – which has been recognized by the International Design Awards,” said Song, a principal with Palm Springs-based Interactive Design Corporation. “We’re hopeful this honor continues to bring attention to the need for housing at all economic and social levels. Well-designed and affordable housing is essential for emotional and physical health. Every person deserves housing that is stable, beautiful, and livable.”  Awards are chosen from thousands of entries that came from more than 80 countries around the world. IDA seeks out truly visionary designers who showcase creativity and innovation.    “We saw a large number of designers reflecting on the current state of the world including the pandemic, social distancing, sustainability, climate change, and circular economies all of which were clearly evident,” said Jill Grinda, Vice President, Marketing and Business Development for the IDA. “The jury had an enormous task in selecting the winners from some truly outstanding design submissions. The IDA has always been about seeking out truly visionary designers showcasing creativity and innovation.”  This complex, which broke ground last October, is located on a 3.62-acre vacant parcel of land at the Southeast corner of N. Indian Canyon and San Rafael Drive in the Upper Westside One Palm Springs Neighborhood. In partnership with the city, the rental apartments consist of one-, two- and three-bedroom units. All units will have balconies or patios with a community building for a computer classroom, a rental office, and a community lounge that can be used for group functions. Amenities include a Monarch splash pad adjacent to a children’s play area, as well as two BBQ areas.  “Once we broke ground on the Monarch Apartment Homes, we knew this development marked a significant opportunity to help change lives in the community,” said CHOC Southern California Regional Director Joy Silver, who was elated to hear about the recognition by this global design authority.  “IDC has proven that affordable housing design is a key factor in community economic and regional integration, and serves to purge the dated notions of those who cling to the Not In My Backyard (NIMBY) philosophy.  My sincere congratulations to Maria Song. I’m proud to be a part of this monumental effort of beauty and innovative community development. It will impact families now and generations to come.”   The post Choc Monarch architect wins IDA 2021 design recognition  appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJan 14th, 2022

How Tesla, Nio, Xpeng, and Li Auto dodged the chip crisis, hit record car deliveries, and boosted their share prices

Tesla and its Chinese rivals have been some of the most successful companies in recent years thanks to the push for sustainability. The figures are impressive, especially when viewed in the context of the chip shortages.Associated Press Tesla and its Chinese competitors have had their best year in terms of sales. Experts believe that the trend will continue in 2022. Elon Musk’s company could see a 67% increase in units delivered. Tesla and its Chinese rivals have been incredibly successful in recent years, thanks to the success of electric cars and the push for sustainability.Many experts have warned of a bubble in the market, as Musk's company has a higher market value than the rest of the most relevant companies in the industry combined; others believe that its progressive growth confirms its ability to continue trading at high multiples in the markets.Tesla managed to weather the chip shortage and posted record fourth-quarter sales. This represents an increase of 71% year-over-year.Tesla's strong fourth quarter of 308,600 vehicles delivered saw its annual deliveries rise 87% to 936,000 units. The three Chinese electric vehicle manufacturers also posted strong numbers in December. NIO, XPeng, and Li Auto delivered 40,000 units altogetherXPeng set a new monthly record with 16,000 deliveries in December. In all of 2021, XPeng delivered 98,155 vehicles, according to InsideEVs. This is up 263% compared to the previous year's data.Li Auto delivered 14,087 units in December. A figure that is also a monthly record with 90,491 vehicles sold in all of 2021, up 177% compared to 2020.NIO set a new quarterly record and delivered 91,429 vehicles in 2021.December vehicle deliveries for all EV producers may have been driven by a subsidy cut for Chinese electric car buyers in 2022. The subsidies have been cut each year from 2020 and will disappear at the end of 2022, according to Reuters. The subsidy for an electric vehicle is about 10,000 yuan (roughly $1,500) to 14,400 yuan ($2,250).The drop in subsidies is a factor that investors will have to consider with respect to Tesla and Chinese EV manufacturers in 2022. However, more deliveries in December could translate into higher profit estimates for NIO, XPeng, Li Auto, and Tesla going forward. More sales mean better forecasts.At the current delivery rate, Tesla will be on track to produce 1.2 million units, InsideEVs reported. Factoring in Tesla's expected delivery growth rate of 50%, this figure would be 1.4 million units. This could rise again considering the 87% growth rate in the last year.A sign of what's to come for Tesla and Chinese competitors Some analysts consider this a good starting point for what may come next for these companies.The figures are extremely impressive, especially when viewed in the context of the chip shortages.The rest of the automotive industry is expected to report falling sales figures for the final quarter of 2021.As reported by CNN, Cox Automotive expects fourth-quarter sales in the US to drop 24%. This is due to the chip shortage which forced its production plants to shut while also limiting dealership inventories and increasing prices."The industry ran out of vehicles, and sales stalled in the second half," said Charlie Chesbrough, chief economist for Cox Automotive, to CNN."Total sales in the second half of 2021 were the slowest in a decade. Demand is healthy, but supply and production disruptions kept the industry in check. You can't sell what you don't have," he added.Although Tesla and its Chinese counterparts had their own chip shortage problems during the year, they've been able to solve them.Tesla's share price increased 52% in 2021 in recognition of its strong performance in the face of the chip shortage.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 14th, 2022

Phipps Houses Closes on 2nd Phase of redevelopment

Phipps Houses, New York City’s oldest and largest nonprofit developer of affordable housing, has closed on $188 million in construction financing for the second phase of Lambert Houses, a landmark $600 million redevelopment project in the Bronx’s West Farms neighborhood. The ongoing project will entirely rebuild the outdated 1970s complex... The post Phipps Houses Closes on 2nd Phase of redevelopment appeared first on Real Estate Weekly. Phipps Houses, New York City’s oldest and largest nonprofit developer of affordable housing, has closed on $188 million in construction financing for the second phase of Lambert Houses, a landmark $600 million redevelopment project in the Bronx’s West Farms neighborhood. The ongoing project will entirely rebuild the outdated 1970s complex over roughly 15 years, eventually bringing its number of permanently affordable homes to approximately 1,665 — more than double its original number. All Lambert Houses tenants will be offered apartments in the new development. Phipps Houses opened the first phase, a 163-unit apartment building, to residents in August 2019.  The second phase comprises a 16-story building at 2080 Boston Road, with construction financing provided by the New York City Department of Housing Preservation and Development, the New York City Housing Development Corporation’s ELLA Program, along with Citi and the Urban Investment Group within Goldman Sachs Asset Management (“Goldman Sachs”). Designed by Dattner Architects, 2080 Boston Road will include 279 affordable units available for existing Lambert tenants with 42 units homeless households. Construction is expected to begin in January with an expected completion in mid-2024. Phipps Houses has relocated all residents of the now-demolished buildings at 2080 Boston Road in anticipation of the construction of the new building.  “The redevelopment of the Lambert Houses complex is a once in a lifetime opportunity to correct the flaws of the Urban Renewal Era and create better community connections and services for our residents,” said Adam Weinstein, President and CEO of Phipps Houses. “We hope this project will be a model for other large-scale housing providers to see that when you have available land, you can transform a development to a higher aspiration: to produce even more affordable housing and to better serve the residents of the complex.” “The redevelopment of the Lambert Houses is a monumental project that aligns with my priorities of keeping The Bronx affordable for our current residents,” said Bronx Borough President Vanessa Gibson. “With the closing of the second phase of this project, including 279 affordable units for existing Lambert tenants and 42 units for recently homeless individuals, some of our most vulnerable Bronxites as well as our longtime residents will have a new and affordable place to call home, with state-of-the-art amenities. This project is a great addition to the West Farms section of The Bronx and I want to thank Phipps Houses, HPD and HDC who helped make it possible.” “The redevelopment of Lambert Houses exemplifies the City’s commitment to both create and preserve quality affordable housing. Existing residents have the peace of mind that they can remain in an affordable home that is now safer, upgraded, and more energy efficient, while hundreds of additional opportunities open up for New Yorkers looking for an affordable home” said HPD Commissioner Louise Carroll. “I want to commend our partners at Phipps Houses for taking on this ambitious project to significantly improve conditions for existing residents and increase housing opportunities for low-income New Yorkers.” “The expansive redevelopment of Lambert Houses will ultimately bring more than 1,600 permanently affordable homes, along with improved security features, a host of amenities, and community facility space to the Bronx,” said HDC President Eric Enderlin. “Congratulations to all our partners on the closing of the most recent phase of this ambitious effort which will help to revitalize the West Farms community, while ensuring our city remains affordable.” “The Lambert Houses project is a great example of how the public and private sectors can collaborate with communities to drive transformational impact in their neighborhoods,” said Michael Lohr, Managing Director at Goldman Sachs Asset Management. “We are proud to partner with Phipps, HPD and HPC to increase the quantity and quality of affordable housing in the City and usher in a new era for the Lambert Houses and the West Farms neighborhood.”  “Citi Community Capital is excited to be a part of the team that is financing the second phase of the redevelopment of Lambert Houses, a unique opportunity to correct well meaning, but flawed projects built in an earlier era,” said Richard Gerwitz, Managing Director of Citi Community Capital. “Phipps Houses has put together a thoughtful redevelopment plan and assembled a financing and development team that will serve this community for years to come.”  The original Lambert Houses complex had a host of increasingly problematic issues, including outdated structural and mechanical systems, poorly designed open space within a superblock layout, and security issues created by a maze-like series of buildings, many interconnected by narrow hallways, with 14 separate addresses. Of the complex’s eventual 1,665 apartments, 728 will serve households that qualify for Section 8, including the current tenants of Lambert Houses. The remaining units will be affordable to households at different levels of Area Median Income. Phipps Houses’ new layout for Lambert was designed to re-integrate the buildings with the streetscape and neighborhood. 2080 Boston Road will offer a range of studios, one, two, three and four-bedroom units with a standalone garage and storage building. Tenants will have access to a landscaped courtyard with a children’s play yard, bike room, exercise room, laundry rooms and a lobby concierge. The new buildings will also feature updated mechanical systems and energy efficiency standards along with a dramatically improved security system.  Lambert Houses is adjacent to the Bronx Zoo and the West Farms Square-East Tremont Avenue 2/5 subway station. The Lambert Houses redevelopment plan was approved through the City’s Uniform Land Use Review Procedure in 2016. The post Phipps Houses Closes on 2nd Phase of redevelopment appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJan 13th, 2022