U.S. Government Passes Spending Bill to Fund Several Key Housing Programs, But the Threat of a Partial Shutdown Remains
By: American Property Owners Alliance
Mar 11,
2020
The National Flood Insurance Program will lose funding if Congress cannot approve a budget to keep remaining government agencies open by March 22.
On Friday evening, Congress approved a $460 billion spending package to fund many federal agencies and programs. With these new appropriations bills, key housing programs under the departments of Housing and Urban Development and Veterans Affairs have secured funding through the end of the year.
Now, the government must negotiate a second spending bill to ensure all federal agencies are funded ahead of the March 22 deadline. If Congress fails to come to a budget conclusion, the Federal Emergency Management Agency’s National Flood Insurance Program (NFIP) will be impacted.
The NFIP will continue to pay out valid claims until funding depletes, but if the program runs out of funds before Congress can come to a spending conclusion, no new policies can be written and existing policies cannot be renewed. Currently, the NFIP is funded through March 22.
Home sales in some areas could be impacted by an NFIP authorization lapse, as many mortgage companies will not approve loans without flood coverage. But even though the NFIP is the most commonly used flood insurance program, homeowners and future buyers may have other options; private flood insurance companies also offer coverage that would not be impacted by a government shutdown. Learn more about private flood insurance options
here.
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Once Again, A Looming Government Shutdown Could Halt Access to Housing Resources
By: American Property Owners Alliance
Mar 01,
2020
Everything you need to know about how a government shutdown would impact homeowners and buyers if lawmakers cannot come to a federal-spending conclusion by new March deadlines.
What is a government shutdown?
Once again, Congress was able to narrowly avoid a government shutdown by approving a temporary funding bill to keep U.S. government agencies open, shifting new deadline dates to March 8 and March 22. This “continuing resolution” will fund the Departments of Transportation, Agriculture, Housing and Urban Development, and Veterans Affairs, until March 8. Other federal agencies will receive funding until March 22.
Before these deadlines, the U.S. federal government must pass appropriations bills to fund government operations for the next fiscal year. If lawmakers cannot pass the 12 appropriation bills needed to fund the government before these new deadlines, federal agencies must stop all non-essential functions until Congress acts, which is known as a
government shutdown. If Congress passes some of the appropriations bills, only agencies without appropriations must shut down which is known as a partial shutdown.
A government shutdown impacts federal programs that homeowners and buyers rely on. With the possibility of a full or partial shutdown in the coming months, we’ve compiled a list of potential impacts on federal loans and insurance, with resources to help you navigate a shutdown should it occur.
Federally Backed Mortgages
About half of today’s mortgages are federally backed, many of which are utilized by low-income and first-time home buyers. Each federal lender has historically been impacted by government shutdowns differently:
U.S. Department of Housing and Urban Development: Federal Housing Administration and Ginnie Mae
The Federal Housing Administration will continue to insure single-family loans (except reverse mortgages and Title 1 loans) during a government shutdown. Loan processing times could be delayed due to agency staffing limitations as a result of a shutdown. More information on the U.S. Department of Housing and Urban Development’s processes during a government shutdown can be found
here.
Ginnie Mae will also continue to operate during a government shutdown, however staffing limitations may cause delays in response times. Click
here for frequently asked questions regarding Ginnie Mae’s functions during a federal funding lapse.
U.S. Department of Housing and Urban Development Services
The U.S. Department of Housing and Urban Development’s Headquarters, regional and field offices will close for the duration of a government shutdown, with limited staff available to answer questions or concerns. In the event of an emergency, state or city housing offices can often provide referrals to local providers. Click
here for more information. Currently, the U.S. Department of Housing and Urban Development is funded through March 8.
U.S. Department of Agriculture
The U.S. Department of Agriculture (USDA) does not issue new loans or grants during government shutdowns. Although lenders may close loans with outstanding commitments, the USDA cannot guarantee these loans until employees return to work. Click
here for more information on the USDA’s operational procedures during a federal funding lapse. Currently, the U.S. Department of Agriculture is funded through March 8.
Department of Veteran Affairs
The Department of Veteran Affairs continues to process VA loans during government shutdowns. This means your loan application or payout should not be impacted by a government shutdown. More information can be found
here. Currently, the Department of Veteran Affairs is funded through March 8.
National Flood Insurance
The
Federal Emergency Management Agency (FEMA) recently
announced that its National Flood Insurance Program (NFIP) will not be able to issue new policies if it’s authorization lapses as a result of a government shutdown. The NFIP will continue to pay out valid claims until funding depletes, but if the program runs out of funds before new legislation is agreed upon, no new policies can be written and existing policies cannot be renewed. Currently, the NFIP is funded through March 22.
Home sales in some areas could be impacted by an NFIP authorization lapse, as many mortgage companies will not approve loans without flood coverage. But even though the NFIP is the most commonly used flood insurance program, homeowners and future buyers may have other options; private flood insurance companies also offer coverage that would not be impacted by a government shutdown. Learn more about private flood insurance options
here.
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Executive Director Newsletter Q1 2024
By: American Property Owners Alliance
Feb 28,
2020
As we continue to face housing affordability challenges affecting renters, buyers and homeowners, the American Property Owners Alliance remains committed to advocating for policies and regulatory changes that unlock more value for property owners and broader access to homeownership.
In Focus: Tax Policies Impacting Homeowners and Renters
Tax season is right around the corner, and The Alliance is helping homeowners understand and take advantage of the tax credits available to them. At the same time, we are advocating for federal tax policies that would expand deductions for homeowners and incentivize the development of more affordable homes and rentals.
New tax provisions allow property owners to deduct up to 30% of the cost of qualified residential property equipment upgrades. If you made energy efficiency upgrades in 2023, be sure to take advantage of
energy efficiency tax credits or keep them in mind for improvements you’re planning for 2024.
Tax Cuts and Jobs Act provisions that have impacted homeowner tax deductions are set to expire in 2025. The Alliance is laying the groundwork now to help ensure that any new tax law will
restore critical tax deductions for homeowners.
Furthermore, bipartisan policies are on the table right now that can expand tax incentives to address America’s affordable housing shortage, improving access to affordable homes and rentals. We welcome you to
learn more about these commonsense solutions and add your voice to support the swift passage of these policies.
What's New
During Black History Month, we honor and celebrate the many generations of Black Americans who have helped shape our nation. This month and throughout the year, we also acknowledge that the gap in the Black-White homeownership rate is the largest it has been in decades; today, only 44% of Black Americans own a home, compared to 72.7% of White Americans.
Fortunately, there are influential leaders who are taking action across the public and private sector to address barriers to homeownership that have an outsized impact on minority populations.
Learn about three leaders paving the way for equitable homeownership.
In my new piece, read how The Alliance and aligned organizations are focused on closing the homeownership gap, and learn about our work to address the racial disparities riddling the housing market and improve equitable access to homeownership for all.
What's Coming Up
With presidential primary elections underway in many states, it’s critical for leaders to address the years of underinvestment and underbuilding that have left America with a severe housing shortage and a lack of affordability in the market.
Federal policies exist to increase housing supply and make homes more affordable, including housing grants to remove regulatory barriers to building more homes, tax credits to convert unused or outdated buildings into residential housing, and incentives to build and rehabilitate homes in the communities most in need of investment.
We’re putting a spotlight on the role of the federal government in strengthening housing supply and affordability in communities throughout the country. Learn more about our focus and how to take action by visiting our
Action Hub today.
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And make sure you’re following along on
Twitter and
LinkedIn for industry expertise.
Thank you,
Colin Allen, Executive Director
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Black History Month Spotlight: The Path to Inclusive Homeownership
By: Colin Allen, Executive Director of the American Property Owners Alliance
Feb 06,
2020
During Black History Month, we honor and celebrate the many generations of Black Americans who have helped shape our nation, and we reflect on the triumphs and challenges they have faced throughout U.S. history. At the same time, this month reminds us of the work that still needs to be done in securing a more equitable future for all. A major aspect of that future is unlocking more access to homeownership.
Today, the gap in the Black-White homeownership rate is the largest it has been in decades as only
44% of Black Americans own a home compared to the 72.7% of White Americans.
Owning a home is one of the best ways to build equity and strengthen generational wealth. Yet challenges such as fluctuating mortgage rates, historically low supply, a lack of affordability and limited financial education are creating barriers to these wealth-building benefits.
The Current Landscape
In cities and towns throughout our country, home prices are skyrocketing. Take Dallas, Texas, for example. This major metro area has the
second highest migration of Black residents and, in 2015, was a top destination for Black Californians looking to relocate. A decade ago, the
median price of a home in Dallas was $280,000. Fast forward to today and the
median price of a home in this growing city is now $439,000.
Yet the cost of housing is only one part of the issue. The overall cost of living just about anywhere in America today is increasing faster than many wages can keep up with.
Picture this: A decade ago, the
average price of a car was around $34,000 and the average American family spent
about $4,000 per year on groceries. Today,
the average price of a car is around $48,000 and the average American family spends
about $5,700 per year on groceries.
Unless our leaders act, these numbers will continue their upward climb and the gap in the Black-White homeownership rate will only widen.
Pro-Housing Organizations and Advocates
Fortunately, many organizations and individuals are dedicated to breaking down barriers to homeownership and empowering Black Americans to build wealth through this investment:
- The 3by30 initiative advocates for expanded pre- and post-purchase counseling for borrowers, as well as targeted down payment assistance programs and investments in affordable housing.
- Ready Life is a Black-owned fintech company with the goal of equipping communities with the tools to build and preserve generational wealth, helping set more families and individuals up for homebuying success.
- LaRese Purnell is the co-owner and managing partner of CLE Consulting Firm and author of “Financial Foundations.” Purnell helps expand financial education opportunities and address the most fundamental questions Americans have regarding their finances.
- Secretary Marcia L. Fudge of the U.S. Department of Housing and Urban Development has worked throughout her career to assist underserved communities, advocating for pro-housing policies and programs that will help make the dream of homeownership and its benefits a reality for more Americans.
Learn more about some of the
organizations and advocates who are creating a more equitable path to building wealth through homeownership.
Pro-Housing Policies
The federal government plays a critical role in closing the Black-White homeownership gap by incentivizing the development of affordable homes and providing direct assistance to buyers. After years of underinvestment in housing, it’s imperative for our leaders in Washington to commit to commonsense solutions that will improve equitable access to affordable homes. These pro-housing policies exist, now’s the time to see them through:
- The Neighborhood Homes Investment Act is bipartisan legislation that would create a new federal tax credit to incentivize the development and renovation of family housing in the neighborhoods most in need of investment, adding about 500,000 family homes to the market in the next 10 years.
- A key component to improving access to homeownership is expanding support for first-time buyers. This includes increasing pre- and post-purchase consultation for homebuyers, implementing alternative credit modeling to support equitable access to mortgage loans, and employing a combination of downpayment assistance and incentives for owners to sell to first-time buyers.
- The More Homes on the Market Act is bipartisan legislation that would incentivize current homeowners to sell to help put more homes on the market, benefiting sellers as they would not have to pay as much in capital gains taxes on their home sale, allowing them to better leverage the equity they’ve built throughout their lifetime.
Your Voice Matters
Black History Month is a reminder of the critical need to break down barriers and address the racial disparities riddling today’s housing market. But this isn’t a mission we only work towards during February—it’s a year-round effort, and it takes all of us to see it through.
By strengthening our collective voice in support of the solutions on the table, we can put the dream of homeownership within reach for all who want to achieve it.
Get involved in our efforts and help influence policy decisions impacting home buyers and the future of homeownership.
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Three Leaders Paving the Way for Equitable Homeownership
By: American Property Owners Alliance
Feb 06,
2020
Did you know the gap in the Black-White homeownership rate is the largest it’s been in decades? Only
44% of Black Americans own a home, compared to the 72.7% of White Americans. Homeownership is the foundation of strong communities and one of the best ways to build wealth in America – everyone should have the opportunity to reap these benefits.
It takes an all hands-on-deck approach to break down the barriers that minority home buyers face today. That’s why The Alliance is working to unite industry leaders and grassroots advocates to advance pro-housing solutions that will improve equitable access to homeownership and help close the Black-White homeownership gap.
During Black History Month, we’re highlighting three influential leaders who are taking action across the public and private sector to tackle the challenges black home buyers face and unlock more opportunities to build wealth through homeownership.
Ashley Bell, Founder & CEO of Ready Life
As the CEO and founder of the Black-owned fintech startup,
Ready Life,
Ashley Bell uses his legal and financial expertise to revolutionize the home buying experience for Black Americans. Bell emphasizes the importance of providing first-time and minority home buyers with
financial education resources to help these individuals successfully enter the housing market, advocating for a new path to homeownership that doesn’t rely on traditional credit scores for mortgage approvals.
According to the
Consumer Financial Protection Bureau, the mortgage denial rate for Black applicants was 16.4%, almost three times the denial rate for White and non-Hispanic applicants. Bell is addressing this disparity by advancing a non-traditional credit model to improve the likelihood of mortgage approval for Black buyers, who face higher denial rates.
“Credit is like water. Where credit flows, things grow, opportunity grows. Where credit doesn’t grow, things don’t. For me, it’s about those deserts—the communities, the people that don’t have access to that opportunity, to that water.” – Ashley Bell, CEO and Founder of Ready Life
LaRese Purnell, Founder & Managing Partner of CLE Consulting
LaRese Purnell also understands that the path to homeownership is riddled with roadblocks for minority groups. As an innovative and strategic leader, Purnell is committed to teaching financial literacy and the importance of homeownership for building generational wealth. With 19 years of experience in business management, taxes and finance at large corporations and nonprofit organizations, Purnell uses his knowledge and experience to empower Americans with the financial tools to build and maintain wealth.
Purnell’s book “
Financial Foundations,” addresses fundamental financial questions and takes a conversational approach to help individuals establish the network and tools they need to build wealth and achieve financial freedom. Purnell also offers financial literacy courses and shares his knowledge at events across the country. The Alliance has been proud to partner with Purnell to host
events across the country that connect buyers with financial education resources to set them on the path to build wealth through homeownership.
Marcia Fudge, Secretary for the U.S. Department of Housing and Urban Development
Secretary Marcia Fudge has spearheaded several initiatives under the U.S. Department of Housing and Urban Development (HUD) to remove barriers to homeownership and promote equity in housing.
Secretary Fudge worked with the Federal Housing Agency recently to update its policy on student loan payment calculations—which previously disproportionately impacted those of color—to provide more access to single-family FHA-insured mortgage financing for creditworthy individuals with loan debt. In an effort to expand credit availability, Secretary Fudge has also advocated for alternate credit modeling to improve access to homeownership for all.
HUD’s fiscal year 2022 budget included $100 million for Secretary Fudge’s FirstHOME Homebuyer Assistance initiative, which provides funding to expand homeownership opportunities for households of color by increasing the production of affordable housing nationwide.
Secretary Fudge also assisted in launching the first interagency task force dedicated to ending bias in the home valuation process. The Property Appraisal and Valuation Equity (PAVE)—made up of a team from 13 federal agencies—created an action plan that examines the forms of bias that exist in residential property valuation practices and provides a blueprint for government and industry stakeholders to advance equity through concrete actions.
The Alliance was proud to welcome Secretary Fudge’s Chief of Staff, Julienne Joseph, to our recent event in
Cleveland, where we joined housing advocates for a conversation on the benefits of homeownership for unlocking generational wealth.
Become An Advocate for Equitable Homeownership
As an organization committed to expanding access to homeownership, The American Property Owner’s Alliance works to promote equity in homeownership through grassroots advocacy and resources that support first-time buyers. During this pivotal election year, we welcome you to
join or efforts to advance
pro-housing solutions that address key issues, from support for first-time buyers to expanding America’s affordable housing stock. Together, we can create a strong voice for policymakers to hear and expand critical programs and initiatives that will allow more Americans to build wealth through homeownership.
Follow us on
Twitter (X),
Facebook and
LinkedIn to learn more about our priorities and stay informed on the latest in housing throughout the year.
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Take Advantage of New Energy Efficiency Tax Credits for Homeowners
By: American Property Owners Alliance
Feb 01,
2020
Tax incentives help current homeowners protect their investment and make homeownership more accessible for all. When filing this year, make sure you know about the new federal tax credits that will help make homes more energy efficient while reducing energy costs and demand.
Preserving and expanding tax benefits for property owners is a top priority for the American Property Owners Alliance. That’s why we join together with our strong group of advocates to move forward tax policies that support homeowners and housing providers.
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2024 Preview: What’s Ahead for The Alliance
By: American Property Owners Alliance
Jan 11,
2020
In 2023, The Alliance activated across a range of housing issues, setting the stage for an eventful 2024. This year, we look forward to growing our work to protect property rights and unlock more equitable access to property ownership. We’re working to bolster support for current and aspiring property owners and break down the barriers to homeownership by advocating for solutions to America’s most pressing housing issues - from housing affordability to property owner tax incentives.
In 2024, The Alliance will continue to serve as a trusted resource for first-time buyers looking to embark on their home buying journey, so more Americans can access its wealth-building benefits.
Supporting Access to Homeownership
Today, the path to homeownership is filled with roadblocks, especially for first time home buyers. Low inventory and high home prices make it increasingly difficult for prospective buyers to enter the market. It’s critical that in 2024, we continue to use our voices to advance solutions that will improve housing affordability and
expand support for first-time buyers, like implementing alternative credit modeling, developing downpayment assistance programs and providing more direct support to buyers to promote equitable access to homeownership for all.
Protecting the Value of Homeownership
Homeownership remains one of the best tools to build wealth and sustain our communities, that’s why it’s essential to have protections in place to safeguard this investment. Unfortunately, in 10 states and Washington, D.C., this investment is at risk due to an unjust tax foreclosure policy known as
home equity theft. By advocating for an end to home equity theft where it remains on the books, working to
restore property owner tax incentives and sharing important
estate planning resources throughout the year, our goal is to help ensure the most valuable investment – one’s home – is protected for years to come.
Prioritizing Housing in the Election
With the 2024 election approaching, it’s crucial to stay up to date on where your candidates stand on issues impacting home buyers and owners. Current and future property owners will have the opportunity to choose leaders that will prioritize the housing policies that support them by
registering to vote and updating their registration status ahead of election day.
Join The Alliance to stay up to date on housing and the election and see how you can support pro-housing policies throughout the year.
Stay In the Know
The Alliance has a lot to look forward to this year, and we can’t wait to bolster our support for current and future homeowners in 2024 and beyond. Learn about our priorities and follow us on
Twitter (X),
Facebook and
LinkedIn to stay informed on the latest in housing throughout this new year.
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Executive Director Newsletter Q4 2023
By: Colin Allen, Executive Director of the American Property Owners Alliance
Dec 12,
2020
2023 was a monumental year for the American Property Owners Alliance. We hosted events across the country that connect our members to industry experts and advocated for policies and regulatory changes that unlock more value for property owners and broader access to homeownership.
Housing is at the center of everything we do, and we’re excited to share all that the American Property Owners Alliance has achieved this year, including:
✔️ Holding leaders accountable to protect property rights, improve housing affordability, and end the unethical practice of home equity theft through opinion editorials in
The Boston Herald, Dayton Daily News, and AL.com.
✔️ Supporting first-time buyers with new resources including a
step-by-step guide to prepare for homeownership and reliable
financial education.
✔️ Sponsored events in
Dallas, Charlotte,
Cleveland, and
Montgomery, convening housing industry experts, local leaders and residents for discussions on advancing housing affordability, equity in homeownership, financial education and more.
And we didn’t stop there. We advocated for policy changes like the
Neighborhood Homes Investment Act and the
Revitalizing Downtowns Act, driving 3,213 messages to Congress. We also encouraged Washington to
restore property owner tax credits and
expand support for first-time home buyers.
In 2024, we’re committed to supporting current and aspiring homeowners in every way we can. Read more about our advocacy accomplishments in 2023 and see the many ways Congress can support policies that are essential to securing access to homeownership and protecting property owners’ investments.
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Make sure you’re tuned in on
Facebook,
LinkedIn and
Twitter to see what else we’ve been up to this year and stay up to date on the latest in housing as we head into 2024.
Thank you,
Colin Allen, Executive Director
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Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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The Alliance’s 2023 By the Numbers
By: American Property Owners Alliance
Dec 11,
2020
The American Property Owners Alliance (The Alliance) is on a mission to advance policies that help ensure every American can reap the wealth-building opportunities owning a home brings.
From rising mortgage rates to low home inventory and high prices, the challenges 2023 brought ignited our efforts to advance policies, programs and regulations that will improve housing supply and affordability in America.
As we wrap up 2023, let’s look back at some highlights from the year. From expanding resources for first-time home buyers to calling for an end to home equity theft in the states where it remains legal, The Alliance activated across a range of housing issues and policies. What’s more, we grew our strong base of advocates eager to make their voice heard.
Mobilizing Audiences for Action
This year, more than
9,500 Americans joined The Alliance’s network of industry experts and advocates standing up for property rights. Not only did our database grow, but they also
took action.
Throughout the year, advocates sent more than
3,200 messages to Congress in support of the
Revitalizing Downtowns Act and the
Neighborhood Homes Investment Act to increase the supply of affordable homes across the country. What’s more, petitions in support of
ending home equity theft where it remains on the books,
expanding financial education for first-time buyers and
restoring property owner tax incentives garnered more than
300 signatures.
Sharing Resources & Updates
In 2023, The Alliance launched
two new landing pages sharing resources, critical information and calls for action on
ending home equity theft and
expanding support for first-time buyers.
The Alliance’s
News & Resources page continues to provide audiences with the latest updates regarding our priorities and the decisions in Washington. This year, we added
33 publications to the page, spanning newsletters from our executive director to an overview of housing market myths versus facts.
Convening the Experts & Strengthening Communities
The Alliance met with more than
465 prospective and current homeowners and led critical housing discussions in
four cities this year.
Colin Allen, The Alliance’s executive director, joined with local leaders and industry experts in
Charlotte,
Dallas,
Cleveland and
Montgomery to examine the path to homeownership and building generational wealth, explore the pro-housing solutions on the table to help break down barriers to homeownership and share valuable financial education resources with those navigating their local housing market.
Colin Allen also published
three articles informing audiences in states where home equity remains on the books about how they can take action to help end this unethical practice and strengthen property owner protections. Learn more about this unjust tax foreclosure policy and the steps state and local leaders can take to eradicate it in
The Boston Herald,
Dayton Daily News and
AL.com.
What’s In Store for The Alliance?
We’re excited to ramp up our efforts in 2024 and grow our group of advocates in this critical election year. Use the form below to sign up for updates and see how we’re helping Americans hold their leaders accountable to solve America’s housing supply and affordability crisis, restore and strengthen property owner tax incentives, and assist first-time buyers on the path to building equity through homeownership.
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Take The First Steps Toward Homeownership: First-Time Home Buyer Resource
By: American Property Owners Alliance
Nov 27,
2020
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Homeownership is how most Americans build wealth and is one of the most important investments you can make in your community. Although today’s market is riddled with roadblocks for buyers, with the right resources, the dream of homeownership is still achievable. The Alliance has created a guide to help first-time buyers navigate the first steps in the home buying process featuring advice from experts and buyers who recently purchased their first home.
Eight in ten Americans say purchasing a home is a priority for them. The desire is there, but rising mortgage rates, high home prices and low inventory make it more difficult for buyers to achieve homeownership. The average age of a first-time buyer is the highest it’s ever been and the share of first-time buyers in the market is the lowest on record.
A more challenging market demands more support for buyers. That’s why The Alliance created our First Time Home Buyer Resource and supports
housing supply and affordability solutions as well as
expanded support for first time buyers.
Everyone who wants to build equity through homeownership deserves the opportunity. Our First-Time Home Buyer Resource provides prospective buyers with the resources they need to take the first steps towards homeownership. Learn more about the various programs available for new buyers, the different types of mortgage options and receive real advice from industry experts and other first-time buyers.
Take Advantage of These Homeowner Tax Credits Before the New Year
By: American Property Owners Alliance
Nov 16,
2020
Tax incentives help current owners protect their investment and make homeownership more accessible for all. Before 2023 comes to a close, make sure you know about and take advantage of the new federal tax credits that went into effect this year. These incentives help make homes more energy efficient while reducing energy costs and demand.
Preserving and expanding tax benefits for property owners is a top priority for the American Property Owners Alliance. That’s why we join together with our strong group of advocates to move forward tax policies that support homeowners and housing providers.
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How Alabama can strengthen property owner protections
By: Colin Allen, Executive Director of the American Property Owners Alliance
Nov 08,
2020
Homeownership is a direct investment in families, communities and the economy. It’s an American dream, and it’s one worth protecting.
While the path to homeownership is riddled with roadblocks, buyers aren’t the only ones presented with challenges today. For many, the equity and generational wealth they have built through homeownership is threatened due to a lack of estate planning and, in states like Alabama, an unjust tax foreclosure policy known as home equity theft.
Read the full article in AL.com
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The Alliance Leads Discussion on Financial Education and Homeownership in Montgomery, Alabama
By: American Property Owners Alliance
Oct 30,
2020
On October 22, The Alliance led an event in Montgomery, AL, where industry experts and community leaders gathered with more than 70 local home buyers and owners to discuss strengthening resources for those on the path to homeownership and best practices for safeguarding the equity built through homeownership.
The event kicked off with remarks from Colin Allen, executive director of The Alliance; Chris Searcy, Pastor of Fresh Anointing House of Worship; and Bill Green of the Douglass Leadership Institute.
Attendees enjoyed a keynote address from LaRese Purnell, author of “Financial Foundations,” as well as a panel discussion and Q&A on “Making Homeownership a Reality.” Panelists featured Cassandra Andrews of Chosen Realty; Federal Home Loan Bank of Atlanta members Deborah Hill and Kimberly Lumpkin of Synovus Bank, and Steve Stringer and Bill Renfroe of River Bank & Trust.
Throughout the conversation, these experts discussed the challenges first-time buyers face, wealth gaps affecting generations of Black families, and the solutions on the table to help improve equitable access to homeownership for all.
Homeownership is an investment in families, communities and the country. Yet, the path to homeownership today is riddled with roadblocks such as low supply, high home prices, competitive bidding and mortgage rates hovering close to 8%. These challenges create barriers to home buying, keeping hopeful millennial and Generation Z buyers on the sidelines. In fact, the median age of a first-time home buyer today is the highest it’s ever been, at
36 years old.
It's never too early to prepare for the home buying journey, and our panelists discussed the steps every individual needs to know on the path to homeownership, including:
- Saving for a downpayment
- Creditworthiness and financial education
- Questions to raise with realtors, lenders, underwriters and inspectors
- Protecting your investment and building generational wealth
The Alliance is working to advance the solutions that will expand support for first-time buyers and improve access to homeownership in Alabama and throughout the country.
By expanding pre- and post-purchase consultation, we can provide more direct support to buyers during every step of the journey, from compiling savings to securing homeowners insurance. Next, implementing alternative credit modeling that’s not based solely on credit scores will strengthen equitable access to mortgage loans and set buyers up for financial success. Lastly, developing downpayment assistance programs to help buyers secure an affordable property, and creating incentives for current owners to sell to first-time buyers, will help expand the marketplace.
Conversations at the event also touched on the importance of protecting homeownership long after one acquires the keys and is in the door. This includes developing an
estate plan to ensure all assets and valuable items are managed, and that the next generation is set up for success. What’s more, Alabamians can further property owner protections in their state by advocating for an end to
home equity theft, an unjust tax foreclosure policy that allows the government to take more than what is owed in taxes, interest and penalties when a homeowner falls behind on their property taxes.
The event in Montgomery is the fourth of its kind this year, followed by conversations in
Dallas,
Charlotte and
Cleveland.
Sign up to learn more about future events and stay up to date on the latest housing news and resources.
The Alliance is committed to helping individuals and communities throughout the country access the wealth-building benefits of homeownership. Stay tuned to see where we’re headed in 2024, and follow us on
X,
LinkedIn and
Facebook to keep up with our efforts and be the first to know about future events near you.
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Protecting Your Investment Through Estate Planning
By: American Property Owners Alliance
Oct 13,
2020
Homeownership brings households throughout the country an avenue to create and strengthen generational wealth, and a place to house cherished memories and time spent with loved ones. Through life planning, you can ensure these moments and investments remain protected for years to come.
An estate plan details who will inherit your assets after you’ve passed. It’s not always easy and can be challenging to think about, but having a plan in place is critical to ensure the next generation is set up for success and valuable possessions are managed, with one of the most important possessions being the place you call home.
If you don’t designate who will receive your property after you pass, you lose control over what happens to it. The process differs by state, but often results in a probate court deciding who will inherit your home, a lengthy process that can produce a great deal of fees and even drive rifts in families.
It’s important to remember that the courts won’t automatically transfer assets to the surviving spouse, nor will they know the most responsible or trusted child, sibling or loved one to give ownership of your property.
If an individual does not have any heirs—no spouse, children, grandchildren, surviving parents, siblings, nieces, nephews, aunts or uncles—the property will be returned to the state. This process may also occur if assets go unclaimed for an extended period of time.
Learn about the laws in your state.
Today, just
one in three American adults (34%) have an estate plan, and of those individuals, 20% have not updated their plan in the past five years. What’s more, about 72% of adult American women, and 59% of adult American men, are without a plan.
Estate planning isn’t just for the rich—everyone can benefit from having one in place.
Explore the answers to common questions many individuals have about estate planning and learn how you can get started with the process.
Estate Planning Frequently Asked Questions
Question: Why do I need a will?
Answer: A will allows you to designate heirs to your property, investments, bank balances and valuable possessions, and ensure that these wishes are carried out after you pass. Likewise, a will allows you to leave any assets to an institution, organization or charity of your choice. A will is critical to protecting your loved ones by preventing them from receiving a large tax burden after you pass, eliminating any family arguments before they start, and ensuring any children are cared for by those you trust most. Ultimately, it makes for a seamless process and gives your loved ones one less thing to worry about after you pass.
Question: When should I create a will?
Answer: You can begin creating a will as soon as you become a legal adult. It’s critical to have a will in place and to update your will when experiencing any of the following major life occurrences:
- Owning property
- Getting married
- Having children
- Amassing significant savings or investments
- Venturing on big trips or traveling for extended periods of time
- Inheriting money or other assets
- Going through a divorce
- Welcoming grandchildren and new family members
Question: How often can I update my will?
Answer: You can change your will as often as you like. Even if you haven’t experienced any of the aforementioned major life occurrences since the last time you updated your will, you should still read over the document every few years to ensure it remains as you like.
Question: How do I create a will?
Answer: Begin preparing your Last Will and Testament by gathering a list of your assets, debts and beneficiaries, as well as the chosen executor and any legal guardians, if necessary. You may create the document on your own through a number of
online will makers, or you may work in-person with an attorney to have a guide by your side throughout the process. Once your will is drafted, it must be witnessed by typically two individuals. These are people of sound mind, at least 18 years of age, and trusted by you and your loved ones. Many states require a will to be notarized. You can do so at law firms or law offices, AAA and UPS offices, accountant offices, real estate firms and offices, and similar places.
Locate a notary in your area.
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Unlocking Generational Wealth Through Homeownership: A Conversation in Cleveland, Ohio
By: American Property Owners Alliance
Oct 02,
2020
On September 17, The Alliance hosted an event in Cleveland, OH, where prospective buyers were able to discuss building wealth through homeownership with housing and finance industry experts.
LaRese Purnell, Author of “Financial Foundations,” U.S. Department of Housing and Urban Development Chief of Staff, Julienne Joseph, and local leaders spoke to more than one hundred Cleveland residents about solutions to the housing affordability crisis and tools for first-time buyers to navigate the financial journey of homeownership.
“Homeownership education and counseling is key…and the reason why I say that is that it empowers you. It allows you to take ownership of the process,” said Joseph.
Today, first-time home buyers make up just
26% of buyers in the market, compared to 34% just last year. Homeownership is the number one driver of wealth in the U.S., but rising mortgage rates, affordability challenges and low inventory are making it more difficult for first-time home buyers to enter the market. It’s clear more support is needed to help Americans achieve the dream of homeownership.
"We're trying to help folks accumulate wealth so they can use it for their own well-being, and so you can pass it down to your kids and your families through sustainable homeownership," said Colin Allen, executive director of the American Property Owners Alliance.
In addition to The Alliance’s work to
expand first-time home buyer support nationally, events like this are critical to directly engaging with prospective homeowners, allowing them to interface with experts who understand their unique market challenges and connecting them with resources in their community.
“We have to do so much more to connect our community with the resources and programs that are available. Buying a home is complicated, it’s confusing and it’s consequential…it can be intimidating. But a lot of those barriers can come down if we meet people where they are,” said Congresswoman Shontel Brown, who spoke at the event.
The conversation in Cleveland is the third event of its kind this year, following conversations in
Dallas and
Charlotte. Next month, The Alliance is hosting an event in Montgomery, AL, to help provide local homeowners with helpful resources on their ownership journey and to use their home to build generational wealth and also to help prospective homeowners as they embark on the path to homeownership. Event information can be found
here.
“This isn’t just important in Cleveland,” said Purnell, “but this information is necessary around our nation.”
Visit our website to see how you can get involved as we make the dream of homeownership accessible for everyone. Follow us on
X,
LinkedIn and
Facebook to stay up to date on our efforts and be the first to know about future events near you.
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Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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Ohio needs to close its unjust tax foreclosure loophole
By: Colin Allen, Executive Director of the American Property Owners Alliance, and Jim Manley, State Legal Policy Deputy Director at Pacific Legal Foundation
Sep 27,
2020
Homeownership is a direct investment in families and communities across the Buckeye State and throughout our nation. It’s the “American dream” — owning a home provides unmatched value and wealth-building opportunities for individuals, families and future generations.
Protecting Ohioans on the path to building equity through homeownership is critical. Protecting their equity long after it’s been accrued is just as important. Unfortunately, here in Ohio, many homeowners are at risk of losing their equity due to a loophole allowing local governments to take more than what is owed in property taxes — otherwise known as home equity theft.
Read the full article in the Dayton Daily News
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Protecting and Expanding America’s Affordable Housing Supply
By: American Property Owners Alliance
Sep 06,
2020
America faces a housing shortage unlike ever before. Years of underproduction and underbuilding have resulted in skyrocketing housing costs, a decline of
about 4.7 million affordable apartments, and an insufficient supply of
about 1 million homes on the market, compared to the 4 million available in 2007.
Large investors, private equity firms and other corporations are escalating affordability challenges by purchasing large portions of residential property as profit making ventures. These groups charge high rent or sell at prices unaffordable for most Americans, and they’re less willing to negotiate affordable rental agreements.
Ensuring there are enough affordable rentals to meet demand is critical, especially for Americans who want to save for a downpayment and access the benefits of homeownership. To close the supply-demand gap, we must incentivize development of more affordable rental properties and protect local housing providers who contribute
more than 40% of all rental housing today and are more likely to negotiate affordable rent.
These small,
mom-and-pop landlords—those who own properties of about one to four units in their local community and conduct the day-to-day management—are more likely to provide
naturally occurring affordable housing (NOAH). NOAHs are multifamily rental properties that are affordable to low-income households without a public subsidy attached. Large investors are less likely to provide these affordable rentals without government incentives because they can afford to have a “this is the rent, take it or leave it” mentality.
Today, NOAHs account for most affordable housing units across the United States. Preserving and expanding NOAHs is critical to ensuring Americans can access affordable rentals now and into the future. Supporting local housing providers is a key pillar of this effort.
Unfortunately, NOAHs are at risk due to ongoing effects of the COVID-19 pandemic, which exacerbated the housing affordability crisis and put economic strains on millions of households and their landlords.
As housing providers
share their stories with us to help bring the challenges they face to light, Nathan R. of Chicago stated, “Now, people that used to live here [Chicago] are being priced out not just of homeownership, but rental housing too… Our renters are often working two jobs just to pay for the now $995 one-bedroom rent.”
Megan E., a housing provider in Los Angeles, shared, “I own rent controlled units in the city of L.A. During the Covid era rent freeze and eviction moratorium, I have lost thousands of dollars and have found it difficult to make necessary repairs. The city has shown complete disregard for the small business housing providers like myself. We already had significantly below market rents before the pandemic due to the strict rent control laws in place. With the rent freeze, we’ve seen operating costs skyrocket with record inflation year after year. Freezing all increases since our last increase in 2019 has meant net operating income has fallen significantly.”
You might think rent control is the best solution to avoid rising rents. However, economists have studied the
impact of rent control across a number of markets and drawn the same conclusion: rent control actually decreases affordability in the long run. You heard that right—rent control is a band-aid solution that undermines small housing providers’ ability to maintain NOAHs and stalls the development of additional housing stock by taking away incentives for developers.
The right path to housing affordability is to provide targeted assistance to renters who are facing economic distress and invest in increasing America’s housing stock to close the supply-demand gap.
Fortunately, there are
long-term solutions on the table right now that can support renters and protect and expand America’s affordable housing stock:
- Providing direct, targeted assistance to renters facing economic distress will help stabilize households and properties and set individuals up for financial success when entering the market.
- Creating housing grant programs to help pass pro-housing policies at the state and local levels will remove regulatory barriers so more homes can be built faster.
- Passing the Neighborhood Homes Investment Act would create a new federal tax credit to incentivize the development and renovation of family housing in the communities that need it most, putting about 500,000 more family homes on the market in the next decade.
- Passing the Revitalizing Downtowns Act would create a tax credit to convert unused office buildings into residential, commercial and retail spaces, adding more affordable housing units to the market.
By pushing forward these solutions, we can not only tackle today’s housing crisis, but we can help the small, local housing providers continue to serve their communities in the most effective ways possible. Here are two things you can do today to support our effort:
- Visit our Action Hub to add your voice in support of pro-housing solutions.
- Housing providers, share your story and help policymakers understand the challenges you face and the most effective solutions.
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Financial Education Support Can Improve Black Homeownership Rates
By: Colin Allen, Executive Director of the American Property Owners Alliance
Aug 25,
2020
Thousands of Black Americans are
leaving large metropolitan areas like New York City, Los Angeles and Chicago for growing communities throughout the South.
In North Carolina, about
44,250 Black residents moved to Charlotte’s Mecklenburg County in 2021, now accounting for 35.2% of Charlotte’s population and
22.3% of the entire state’s. In Georgia, the population of Black residents has
nearly doubled in the past 30 years, totaling more than 3 million residents according to the 2020 census. To top that,
Texas recently surpassed Georgia as having the highest number of Black residents with about 3.4 million individuals, according to Pew Research Center.
Factors such as the cost of raising children, accessibility and quality of life, coupled with the stability provided by Fortune 500 companies headquartered throughout the region, make these southern states an appealing place to live. However, one area in particular is creating challenges when relocating: the housing market.
According to the
National Association of REALTORS®, the gap in the Black-White homeownership rate is the largest it’s been in decades, with only 44% of Black Americans owning a home, compared to the 72.7% of White Americans.
As the South’s popular metro areas continue to grow, housing supply can’t keep up with demand. Rising mortgage rates on top of regulatory barriers, infrastructure limitations, high costs to build, and general resistance to new construction have driven up property values and limited the availability of affordable homes.
In addition to supply constraints, other factors have disproportionate impacts on minority residents. Nationally, young Black Americans
have lower credit scores than their white counterparts, making it harder to qualify for loans at affordable rates. What’s more, college debt is creating a barrier to homeownership for many:
36% of U.S. millennials say their college debt is a major obstacle to saving for a down payment.
According to the
Center for Responsible Lending, for a variety of reasons, borrowers who attended historically Black colleges and universities are disproportionately burdened with debt, making it more difficult to build wealth through homeownership or invest in retirement funds.
Pursuing a college education shouldn’t come at the cost of owning a home. These are milestones that should only put Americans on the path to more wealth-building opportunities.
While there are many
resources to assist homebuyers and current homeowners—including the Financial Literacy and Education Commission’s budgeting tools, the Federal Student Aid’s resource hub, and various grant programs and housing counselors—we need a more proactive approach to helping young buyers understand the role of credit in the home buying process.
As executive director of the
American Property Owners Alliance (The Alliance), I dedicate a great deal of time advocating for local, state and national policy solutions that remove barriers to homeownership and increase housing supply. It’s critical that our leaders prioritize resources that support Black residents long before the home buying process begins. As more individuals and families put down roots in growing areas, some may want additional support in learning how to build credit and manage debt so they can ultimately position themselves to purchase a home and build generational wealth.
They should be able to find the support they need, easily.
At The Alliance, we’re calling on Congress to support three bipartisan solutions that will aid buyers on multiple fronts and unlock more equitable access to homeownership.
First is expanding pre- and post-purchase consultation to provide buyers with more direct support at every step of the homebuying journey, from saving for a downpayment to securing homeowners insurance. Next, is implementing alternative credit modeling that’s based on your bill and rent payment history, not solely on credit scores. This way, buyers can have competitive access to mortgage loans. Lastly, developing downpayment assistance programs will help buyers secure an affordable home, and creating incentives for current owners to sell to first-time buyers will help expand the marketplace.
These efforts, combined with even more creative housing policy solutions and assistance programs, will set up all first-time homebuyers for success.
People are moving to their desired communities with hopes of upward mobility, and homeownership is a major component of that dream. By expanding financial education resources for today’s buyers and those to come, we can create a foundation for homeownership to thrive for generations.
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Executive Director Newsletter Q3 2023
By: Colin Allen, Executive Director of the American Property Owners Alliance
Jul 21,
2020
The American Property Owners Alliance is focused on advancing solutions to improve protections for homeowners and address housing affordability issues across the nation. Read more below about the actions we’ve taken recently to combat
Home Equity Theft, provide the Federal Housing Finance Agency with input as they consider new multifamily protections and to explore potential opportunities for new tenant protections backed by the federal government, and recognize the ongoing value of homeownership in June.
Calling for an End to Home Equity Theft
The Alliance remains committed to ending the practice of home equity theft everywhere it remains legal. In several states, local governments are authorized to take beyond what is owed in property taxes when a homeowner falls behind and underpays, robbing homeowners of the wealth they’ve built over a lifetime.
The Alliance is working to end this unethical practice in 10 states and Washington D.C. where it is remains on the books. A recent survey conducted by The Alliance concluded that a majority of respondents oppose the practice. I recently partnered with Pacific Legal Foundation to share
our opinion with the
Boston Herald about how this practice impacts homeowners in Massachusetts and nationwide.
State legislators should begin crafting legislation now to close all loopholes allowing a practice that undermines the value of homeownership and the financial benefits that come with it.
Read our opinion piece in the Boston Herald.
Federal Housing Finance Agency Multi-Family Tenant Protections Comment Portal
Housing providers play a key role in creating opportunities for upward mobility for tenants by helping them access safe, affordable homes. In May, the Federal Housing Finance Agency (FHFA) published a Request for Input (RFI) to investigate issues tenants residing in multi-family properties face and to explore new tenant protections backed by the federal government.
Earlier this year, the White House directed the FHFA in its
“Blueprint for a Renters Bill of Rights” to “identify the opportunities and challenges of adopting and enforcing tenant protections including policies that limit egregious rent increases at properties with enterprise-backed mortgages.”
Through the end of this month, the FHFA is collecting input from tenants and multifamily housing providers, as well as other stakeholders, to identify these challenges and inform policies related to rent increases, source of income, communication timeframes, causes for eviction and more.
Providing perspective from housing providers is critical at this moment, please visit our page to share your input before the July 31 deadline.
#UnlockingHomeownership Wins During National Homeownership Month
During the 21st National Homeownership Month, we celebrated the ongoing value of homeownership and took action on key issues that will unlock more value for current owners and broader access to homeownership. Some key wins included:
🏠 Sending over 950 messages to Members of Congress in support of the
Neighborhood Homes Investment Act and
Revitalizing Downtowns Act
🏠 Adding over 5,000 new advocates to The Alliance
🏠 Gathering over 150 signatures pledging support to end home equity theft
And, while Homeownership Month has wrapped, we remain laser-focused on supporting pro-housing policies.
Visit our Action Hub to learn about key issues and add your voice.
###
For more updates, news, and resources, follow me on
LinkedIn and
Twitter.
Thank you,
Colin Allen, Executive Director
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Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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Broadening the Path to Homeownership: A Q&A with Ready Life’s Ashley Bell
By: American Property Owners Alliance
Jul 17,
2020
The Alliance’s executive director, Colin Allen, recently sat down with Ashley Bell, Founder and CEO of
Ready Life, to discuss the role financial education plays in the homebuying journey and how expanding resources in this area can set first-time buyers up for success.
Bell leads Ready Life, a Black-owned fintech company, with the goal of equipping communities with the tools to build and preserve generational wealth. Through Ready Pay, a digital spending and payment account, customers can make financial transactions—whether buying a home or just making everyday purchases. Ready Life also offers a platform for small businesses and nonprofits, presenting a new way to accept payments. In addition, Ready Life Mortgage puts forward a new path to homeownership that doesn’t use traditional credit scores for mortgage approvals. For example, when users pay their rent on time through Ready Pay, Ready Life uses this data to underwrite a mortgage and help set families and individuals up for homebuying success.
Homeownership provides an important avenue to build wealth, but the path to owning a home today is ridden with roadblocks for many buyers. What’s more, the gap in the homeownership rate between Black and white families in America is the largest it’s been in decades:
44% of Black Americans own a home compared to the 72.7% of white Americans. It's time to not only close this gap, but to also put resources in place so all who desire to own a home one day can successfully enter the market and begin building equity.
In this Q&A discussion, Allen and Bell explore Ready Life’s work to build a more equitable path to homeownership:
Allen: What drew you into this area of banking and finance, and financial awareness?
Bell:
Credit is like water. Where credit flows, things grow, opportunity grows. Where credit doesn’t grow, things don’t. For me, it’s about those deserts—the communities, the people that don’t have access to that opportunity, to that water.
The co-founder of my company is Dr. Bernice King, and Dr. King and I have been joined at the hip at trying to make sure we can erase those deserts and bring that opportunity to the people that need it the most.
Allen: How did you and Dr. King come up with the idea of Ready Life and expanding access to credit through a new and innovative opportunity?
Bell:
Dr. King and I started working together during the Covid crisis. [….] During that time, I was promoted up to the White House to become Policy Advisor on Entrepreneurship and Innovation. In that role, I was able to coordinate and work with all of the agencies to help create and to execute what became the Payroll Protection Program (PPP), and in that, it was really tough to reach that last mile of entrepreneur, and Dr. King really had a passion there. She saw the hurt that was going on in our country and the lack of access to those federal funds. In our collaboration working together, we were able to reach many of the people that were off the grid that needed help when big banks and big companies were sucking up all the federal dollars—some using it well and some using it not so well.
During Covid, you had the culmination of a great economic crisis and also at the same time, the greatest civil unrest in our country since 1968, and her father [Dr. Martin Luther King Jr.] said around that time that there were “inseparable twins” of economic and racial injustice. You cannot separate the two—if you choose to talk about racial justice in our country, you can’t have that conversation without economic justice. So, Dr. King has been focused on her father’s work on the racial side, and I’ve been focused a lot on the economic side, and we felt that joining the two could create a comprehensive ecosystem of solutions that we hope can put a dent in the racial wealth gap, and that’s what is the nexus of what created Ready Life.
Allen: Is there a nexus between homeownership and entrepreneurship? Does having that financial security through homeownership play a role in the ability to be able to start your own business?
Bell:
Yes, it’s absolutely connected, and Ready Life is at the forefront of allowing people to be more than a credit score, to be bigger than the three digits that are attached to your name and your social security number.
Credit scores are now the proxy for the old status quo. Every number tells us that when you look at the fact that 54% of African Americans are deemed to be not worthy of having the credit to own a home. Well, that's impossible to believe that half of a race of an entire people shouldn't have a home in this country. That lets you know that numbers are off.
For people whose credit scores work for them, that's great. Keep using them. But for us, we think that there's a vast majority of people who have the cash and have the ability to pay. That was highlighted when you and I were together in Atlanta—when they showed that the average rent in Atlanta was $1,538 and mortgage was $1,500. So how can you have a system where people are paying the exact same thing, but half of them are able to create equity in their home? And that equity goes as a safety net when there's a health crisis, and when you're looking at starting a business and getting a home equity line to create wealth, generational wealth—all those things come from owning a home.
You see companies every day popping up financing cars and other unsecured debt not using a credit score. That model just hasn't been brought to the real estate market yet. We’re bridging the gap in this new world that believes that credit scores are a thing of the past, and what’s in the future, is a world where three digits don’t define you.
Allen: Are there other resources that the federal, state, and local government should be leaning into to offer opportunities like what you’re doing?
Bell:
The federal government needs to do everything it can to help create this new marketplace where we can get investors to come and pull capital, and to create alternative scoring systems to give access to credit to those people who the current system doesn't serve.
This is happening in silos all across our country now—the auto loan industry is leading it, the unsecured loan industry is leading it, and Ready Life is going to be embracing that as well. What the federal government needs to do is create a regulatory environment where every company doesn't have to reinvent the wheel every time—every company who is doing these loans, they're all coming up with their own algorithms.
The quicker we can speed up creating that marketplace where capital can flow, that credit, that water that we talked about, can reach the people that need it most. That is what the federal government can do the best.
Allen: What can first-time home buyers, who maybe aren’t ready to enter the market yet, do education- and savings-wise to prepare?
Bell:
So right now, interest rates are high, not a lot of people are buying houses, and that's on purpose. But it’s a great time to put yourself in the best position and take advantage of the market when it bounces back.
Ready Life leans into using your rent as a primary indicator of your ability to pay a mortgage. That's what current credit scores don't do. Some will take rent into consideration, may give you five points or 10 points here. But at the same time, a missed credit card payment from two years ago will affect your credit score more than paying rent for two years. That system doesn't add up for me. It doesn't add up for most Americans. So what we believe is that your rent should be a priority and other things should go to support that.
You should understand how to evaluate your credit, do the things to get your debt down, and to get your credit score up. But at the exact same time, you should also be aware of services like Ready Life, how you spend your money and what you spend it on. We can create a separate credit profile for you and work with you to be able to have a pathway to homeownership that's alternative to the current system.
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Massachusetts property owners need better protections
By: Colin Allen, Executive Director of the American Property Owners Alliance, and Jim Manley, State Legal Policy Deputy Director at Pacific Legal Foundation
Jul 17,
2020
In several states, local governments are authorized to take beyond what is owed in property taxes when a homeowner falls behind. Known as home equity theft, this practice robs homeowners of the wealth they’ve built over a lifetime. In fact, it’s happening right here in Massachusetts, despite a recent Supreme Court ruling holding the practice unconstitutional.
According to a recent study by Pacific Legal Foundation, homeowners in Massachusetts lose an average of 82% of their equity to this tax foreclosure policy. For the 315 Massachusetts homes in Pacific Legal Foundation’s dataset, households lost a total of $48 million, with the average homeowner losing more than 15 times the debt they owed.
Read the full article in the The Boston Herald
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Survey Indicates Americans Want an End to Home Equity Theft
By: American Property Owners Alliance
Jun 26,
2020
Washington, D.C.—The American Property Owners Alliance (The Alliance) finds majority of respondents in a May 2023 survey oppose the practice known as
home equity theft, which allows state and local governments to keep beyond what they are owed in taxes, interest and penalties when a property owner falls behind on their property taxes and enters foreclosure—no matter how small the debt.
Property ownership is one of the most significant ways to build equity in America, but in Alabama, Arizona, Colorado, Illinois, Maine, Massachusetts, Minnesota, Nebraska, New Jersey, New York, Oregon, South Dakota and Washington, D.C., the practice of home equity theft remains legal and puts homeowner’s equity at risk. What’s more, in Alaska, California, Idaho, Montana, Nevada, Ohio, Rhode Island, Texas and Wisconsin, loopholes exist allowing this practice in certain instances.
The Alliance opposes home equity theft in all circumstances and, in March, filed an
amicus brief with the U.S. Supreme Court in support of the petitioner in Tyler v. Hennepin County, a case examining the practice in Minnesota. On May 25, the Court ruled 9-0 in favor of 94-year-old Geraldine Tyler who lost her home and $40,000 in equity due to what was originally a $15,000 debt. The Court’s unanimous decision is based on Hennepin County’s unconstitutional retaining of excess value following a foreclosure and a long-standing principle that the government cannot take more from a taxpayer than what they owe.
While this is a win for property rights and will help property owners challenge this practice armed with legal precedent, home equity theft is still on the books in 12 states and D.C.
“Those states where home equity theft is still in effect must pass legislation that will protect the equity of property owners, particularly senior citizens and other members of the community who may be more vulnerable and facing foreclosure, and close all legal loopholes allowing the government to take more than what’s owed in property taxes,” said Colin Allen, The Alliance’s Executive Director.
Consumers agree—it’s time for action.
A survey was conducted by The Alliance from May 10-16, 2023, and has a margin of error of +/-3.1%. While nearly equal numbers of respondents in each jurisdiction where home equity theft is legal were surveyed, the findings from the survey are weighted to represent the actual population of each jurisdiction relative to the others. The survey found:
- 56% of respondents had never heard of the term “home equity theft,” and 54% of respondents were unaware that this practice legally exists where they live.
- 62% of respondents describe the policy of home equity theft as unethical.
- 77% of respondents agree that state law should be changed to end the practice of home equity theft, so that going forward, only the amount owed in property taxes, interest and penalties—and nothing more—could be collected by the government or private investor.
- 74% of respondents find it unfair that under the law where they live, when the government or a private investor takes a piece of property to get the unpaid property tax dollars owed to it, they are allowed to keep not just the amount owed, but the full equity value of the home.
- 60% of respondents support a prohibition on private debt collectors profiting from seizing then selling homes where very small amounts of property tax are due.
For more information on where home equity theft occurs and how to take action to end it,
visit The Alliance’s website.
CONTACT
Amber Hord
apoamedia@propertyownersalliance.org
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National Homeownership Month Event in Dallas
By: Colin Allen, Executive Director
Jun 15,
2020
The key to #UnlockingHomeownership for more Americans is prioritizing solutions that will put more affordable homes on the market.
Recently, The Alliance partnered with Axios to lead a conversation in Dallas on equity and affordability in the housing market.
Homebuyers across the country are facing historically low housing supply coupled with high prices and a competitive market. Our conversation with industry experts focused on solutions that will put more affordable homes on the market in Dallas and other metro areas that are grappling with acute housing shortages.
Some highlights from the event include:
🗝️
Benefits of Homeownership: during National Homeownership Month and always, we recognize the value of homeownership for building wealth and strengthening communities. As I noted in Dallas, “homeownership represents independence and financial stability.” The Alliance
supports a range of policies that can unlock more access to homeownership and more value for current owners.
🗝️
The Key to Improving Housing Affordability: solutions exist to put more affordable homes on the market to address housing supply and affordability challenges head-on. Bipartisan legislation like the Neighborhood Homes Investment Act would create 500,000 available homes to help close the supply-demand gap for moderately priced homes.
Take action to make this happen today.
🗝️
Ending Home Equity Theft: When an individual falls behind on their property taxes, no matter how small the debt, home equity theft allows state and local governments to seize the property and keep the full sale amount, beyond what they are owed in taxes, interest and penalties. The only way to end home equity theft is by changing the laws that allow this practice in the 12 states and D.C. where it remains legal—
learn more.
See the full breakdown of the conversation in Dallas and learn how we’re making strides for homeowners.
[rsnippet id="20" name="American Property Owners Alliance Section Only"]
Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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The Alliance and Axios Lead Critical Housing Discussion in Dallas
By: Colin Allen, Executive Director of the American Property Owners Alliance
Jun 13,
2020
On June 6, the American Property Owners Alliance led a discussion with Axios on housing affordability in Dallas. Guests joined in-person and virtually to hear conversations with local experts and leaders, including
David Noguera—the City of Dallas’ Director of Housing and Revitalization,
Linda McMahon—President and CEO of The Real Estate Council, and Texas State Representative
John Bryant.
I also had the pleasure of joining Axios on stage for a View from the Top segment examining barriers that prevent Americans from achieving homeownership and pro-housing solutions on the table that can address these challenges head-on.
Throughout the event, speakers discussed the lack of housing supply and the need for housing affordability in Dallas, as well as the wealth-building benefits of homeownership. With June being National Homeownership Month, there was no better time to have these conversations.
Dallas faces the challenge of effectively accommodating current residents as new ones rapidly move in—ensuring every household can not only find a home in this growing city but find one that meets their unique goals and financial needs.
The Dallas area isn’t the only area trying to navigate this obstacle as the current housing shortage impacts communities all throughout America.
According to a
survey by NerdWallet, nearly 28 million Americans began 2023 with a plan to purchase a home in the new year, yet only
about 1 million homes are available on the market today. What’s more, fluctuating mortgage rates are not only keeping buyers from entering the market, but they’re also preventing current owners from selling, limiting supply even more.
As we discussed in Dallas, prioritizing the policies that will invest in affordability and provide communities with the tools to increase supply is key to improving the path to homeownership for all.
Today, the low-income housing tax credit serves as a critical resource, providing an incentive to construct and rehabilitate affordable rental housing for low- and moderate-income households.
What’s more, on the table right now is the
Neighborhood Homes Investment Act, legislation that would renovate and rehabilitate homes in the communities most in need of investment, adding about 500,000 affordable homes to the market. On top of that, policymakers can further increase housing supply by passing the
Revitalizing Downtowns Act, legislation that would convert unused commercial and office buildings into residential and mixed-use spaces.
Those who joined us in Dallas know that homeownership is one of the most significant ways to build wealth in America—it is an investment in you, your family, your community and the country. Advancing the solutions that will both unlock more equitable access to homeownership and unlock more value for current homeowners is essential to protecting this investment for years to come. Though we discussed them in Dallas, these solutions can support all areas throughout the country facing housing shortages.
As we continue through National Homeownership Month and what’s proving to be a volatile year for the market, I look forward to seeing how the
Administration supports these policies and expands their efforts to improve homeownership in America.
[rsnippet id="20" name="American Property Owners Alliance Section Only"]
Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
[rsnippet id="19" name="2023_APOA_CEC_SIGNUPS"]
The American Property Owners Alliance Commends Supreme Court Decision in Tyler v. Hennepin County
By: American Property Owners Alliance
May 26,
2020
Washington D.C.—On May 25, the Supreme Court ruled in favor of the petitioner in Tyler v. Hennepin County, a case examining the practice of home equity theft. The Alliance applauds the Supreme Court for their unanimous decision to protect 94-year-old Geraldine Tyler from the unjust Minnesota tax foreclosure laws that took not only what Ms. Tyler owed in taxes but also all her equity.
Property ownership is one of the most significant paths to building equity and financial security in America. Homeowners’ entitlement to this equity is one of the most cherished property rights protected by law. If a homeowner unfortunately falls behind on their property taxes, they should not have to worry about the government taking more than what is owed.
In March, The Alliance joined the National Association of REALTORS® to file
an amicus brief in support of Tyler and the rights and interests of property owners everywhere. The Alliance supports property owners on their path to building equity, and we continue to work to protect that equity after it is accrued. Abolishing home equity theft everywhere it occurs will protect the most vulnerable and safeguard the rights of property ownership for years to come.
CONTACT
Amber Hord
apoamedia@propertyownersalliance.org
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Executive Director Newsletter Q2 2023
By: Colin Allen, Executive Director of the American Property Owners Alliance
May 18,
2020
The American Property Owners Alliance has spent the past few months calling on policymakers to protect property owner rights and make homeownership more accessible for Americans. We’re also focused on sharing information and resources to help home buyers position themselves for financial success throughout the homebuying process.
Read more about The Alliance’s recent involvement in the
home equity theft debate,
supporting legislation to increase the supply of affordable homes, and
educating homebuyers during Financial Literacy Month.
Combatting Home Equity Theft
Recently, The Alliance worked in conjunction with the National Association of REALTORS® to oppose home equity theft, a practice currently legal in 12 states and Washington D.C. On April 26, the Supreme Court heard oral arguments in Tyler v. Hennepin County, a Minnesota case examining the practice of
home equity theft.
The Alliance filed an
Amicus Brief emphasizing what is at stake for property owners in this case and the importance of ending an unethical practice. Where home equity theft is legal, the government can take more than what it is owed in property taxes in the instance of foreclosure. Home equity theft affects thousands of Americans each year as has a disproportionate impact on elderly populations. Pacific Legal Foundation—who is defending the petitioner in Tyler v. Hennepin County—found more than
$860 million in life savings has been lost to home equity theft in communities across the country.
Property ownership is an important path to build wealth and home equity theft leaves individuals at risk of losing the equity they’ve built over a lifetime.
We’re calling on policymakers to find solutions that will protect the equity that property owners have built by closing all loopholes that allow home equity theft. Read more about The Alliance’s involvement in the case and the path to end home equity theft.
Supporting Solutions to Put More Homes on the Market
America is facing a severe housing shortage that demands immediate solutions to increase the supply of available homes and curb rising home prices. Right now, there is bipartisan legislation that could expand access to homeownership in communities that need it most.
The
Neighborhood Homes Investment Act would create new incentives to develop and renovate family homes to address the severe shortage of middle-income housing. Homebuyers deserve a pathway to sustainable homeownership and neighborhood stability – and the NHIA will help achieve that.
It’s time for action, learn how policymakers can take action to increase available homes on the market.
Advocating for Financial Education During Financial Literacy Month
Purchasing a home is a significant financial decision that requires preparation, planning, and financial education. From financing resources to budgeting tools and guidance from licensed real estate agents, we’re bolstering financial education and advancing housing policy solutions to set up first-time buyers for success.
The American Property Owners Alliance recently partnered with the Douglass Leadership Institute to hold an event in Charlotte, NC gathering industry experts and residents for a conversation on building wealth and preparing for homeownership. We focused on building a positive credit history, strategies for building equity through homeownership, and how to protect the equity you’ve built. Preparing for homeownership begins long before you start looking for a home. Check out our
Financial Education Hub to see what free and low cost resources are available to help you achieve your financial goals and how we can increase support for first-time buyers.
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For more updates, news, and resources, follow me on
LinkedIn and
Twitter.
Thank you,
Colin Allen, Executive Director
[rsnippet id="20" name="American Property Owners Alliance Section Only"]
Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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Retirement Accounts You Should Consider
By: Rachel Hartman
May 04,
2020
Saving for retirement doesn't involve a one-size-fits-all plan. Since every situation is unique, it's important to look for the retirement account that best lines up with your personal job situation and future goals.
Here are some of the types of retirement accounts you might be eligible to use:
- 401(k).
- Solo 401(k).
- 403(b).
- 457(b).
- IRA.
- Roth IRA.
- Self-directed IRA.
- SIMPLE IRA.
- SEP IRA.
- HSA.
Here's a look at how each type of retirement plan works and how to make the most of these long-term savings vehicles.
Read the full article in US News
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The American Property Owners Alliance Statement on Implications of Tyler v. Hennepin County Decision
By: American Property Owners Alliance
Apr 26,
2020
Washington D.C.—On April 26, as the Supreme Court hears oral arguments in Tyler v. Hennepin County, a Minnesota case examining the practice of “home equity theft”, the American Property Owners Alliance (The Alliance) supports the petitioner and opposes home equity theft in the 12 states and D.C. where this practice is legal.
This follows the
Amicus Brief filed by National Association of Realtors® and The Alliance with the Supreme Court of the United States opposing property tax foreclosure laws which allow local governments to keep home equity beyond what may be owed in taxes, interest, and penalties.
Property ownership is a significant path to building wealth in America, yet home equity theft places individuals – particularly elderly populations – at risk of losing this investment. In addition to the 13 jurisdictions where this practice is legal, nine states allow for home equity theft in certain situations.
Regardless of the ruling in this case, we need legislative solutions that will protect the equity property owners have built by closing all loopholes that allow home equity theft.
When unexpected financial hardships occur, families and individuals should not lose the entirety of their home equity to aggressive government actions.
CONTACT
Amber Hord
apoamedia@propertyownersalliance.org
[rsnippet id="12" name="About APOA and Sign Up for Updates"]
Preparing for Homeownership: Financial Education
By: American Property Owners Alliance
Apr 25,
2020
Buying a home is a significant financial decision that requires careful preparation. Financial education is key to helping you make a property investment that will build your wealth for years to come. The American Property Owners Alliance helps prospective owners like you develop skills that will help you at every step of the home buying process, from determining what you can afford to saving for a downpayment and securing the best mortgage rate.
Here are some financial education resources available to you at low or no cost to set you up for financial success at every step of the home buying journey.
Managing Your Student Debt
Student debt is cited as one of the biggest barriers to homeownership. Understanding your student loan repayment options and the assistance available to you can help you avoid fees and excess interest, putting more money in your pocket for a down payment on a home. The Federal Student Aid
resource hub provides a one-stop shop to learn about student loan repayment based on where you are in the process.
Pre-Homeownership Counseling
There are U.S. Department of Housing and Urban Development approved counselors across the country that provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues at low or no cost to homeowners.
Learn more about these services and
find a housing counselor near you.
Guidance from REALTORS®
Realtors are licensed real estate agents who are held to a
higher ethical standard than other brokers or real estate agents. They are members of the National Association of REALTORS ® and have access to housing market insights and data that other agents may not. Once you’ve saved for your down payment and are ready to explore mortgage lending options, a REALTOR® can help you navigate this process and make a smart property investment that will put you in the best position to build wealth. You can use
this tool to find licensed REALTORS® in your area.
Join The Alliance
Americans already face growing barriers to homeownership, from low housing supply to rising mortgage rates. Homeownership is a major component of wealth building and upward mobility, and action must be taken now to improve equity in homeownership. This starts with bolstering financial education and advancing housing policy solutions to set up first-time buyers for success.
Join The American Property Owners Alliance and follow us on
Twitter and
Facebook to get ongoing support and updates, no matter where you are in your homeownership journey
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How to make your home more energy efficient — and get a tax break too
By: Erica Werner
Apr 17,
2020
The Inflation Reduction Act, or IRA, is the most ambitious legislation ever enacted in the United States to combat climate change. Starting this year, homeowners can get new tax credits and rebates for making their abodes better for the environment. The benefits apply to big changes like installing solar panels, or smaller ones like swapping a gas stove for an induction range.
The benefits vary depending on your income, and additional benefits may be available where you live, so it’s worth checking with a tax expert, a consumer guide or a credible source like the Congressional Research Service or the Bipartisan Policy Center.
Here are some of the ways you can outfit your environmentally smart dream home — often with help from the IRA.
Read the full article in The Washington Post
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Congress Has Another Chance to Pass the Neighborhood Homes Investment Act
By: American Property Owners Alliance
Apr 17,
2020
Today,
about 1.3 million homes are available on the market compared to the 4 million in 2007. America is facing a serious housing shortage that demands immediate solutions to increase the supply of available, affordable homes.
Right now, there is bipartisan legislation that, if passed, would expand access to homeownership in communities that need it most. Reintroduced this March and cosponsored by Sens. Todd Young (R-IN), Ron Wyden (D-OR), Jerry Moran (R-KS) and Sherrod Brown (D-OH), the
Neighborhood Homes Investment Act (NHIA) would create 500,000 available homes to help close the supply-demand gap for moderately-priced housing.
Last year, The Alliance amplified voices across America to put pressure on Congress to pass the NHIA in year-end legislation. Our campaign resulted in 1,086 individuals taking action, leading to a total of 4,170 interactions with members of Congress via an email or tweets. Though the NHIA did not pass in 2022, it is back on the table this year and we’re encouraging Americans once again to advocate for this crucial pro-housing policy.
What is the Neighborhood Homes Investment Act?
The NHIA would create new incentives to develop and renovate family homes—a critical solution to address the severe shortage of middle-income housing. This solution helps close the gap in housing supply and demand while also strengthening communities.
The passage of this solution will support multiple sectors of the economy by spurring billions of dollars in development activity, wages and salaries, and federal, state and local tax revenues. It also supports upwards of 33,000 construction- and construction-related jobs.
Why It’s Time for Action
Across the country, empty or poorly maintained homes contribute to declining property values. In many neighborhoods, it often costs more to build or renovate a house than what the property would sell for. Instead of abandoning these homes altogether, the NHIA would provide builders with the tools they need to bring more affordable homes to the market.
Homebuyers deserve a pathway to sustainable homeownership and neighborhood stability. By passing the NHIA, we are one step closer to achieving just that.
This pro-housing policy can help improve access to affordable homes in your community and across America. Right now, we can amplify our voices to make sure the new Congress hears us loud and clear.
The Alliance is here to help current and future homeowners access a property that meets their needs, and to help you navigate the decisions that are still on the table to do so.
As Americans face economic uncertainty, we must protect the rights of current property owners and ensure access to ownership opportunities for potential buyers.
Executive Director Newsletter Q1 2023
By: Colin Allen, Executive Director of the American Property Owners Alliance
Mar 17,
2020
Over the last two months, the housing market continues to shift. The current landscape poses challenges for buyers and sellers at all stages in the homeownership journey. With low availability of homes on the market coupled with rising mortgage rates, buyers face challenges. As the cost of living continues to rise, renters and homeowners alike are facing economic obstacles.
Read below for ways that The Alliance is involved in addressing the housing supply and affordability crisis, advocating on behalf of property owners, and restoring tax incentives for homeowners.
Tackling the Housing Supply & Affordability Crisis
The housing affordability crisis remains top of mind for buyers, housing providers, and current owners. Across the nation, there’s a missing middle of housing - or lack of diverse housing options beyond single family homes and large apartment buildings convenient to public transportation and other community services. The Alliance is working to make housing more affordable and accessible while protecting property rights and continuously advocating for policies that will alleviate the crisis.
Proposals like rent control ordinances decrease the supply of low- to mid-range housing units over time because developers are less likely to build in rent-controlled areas. Policies supporting rent control also place a large financial burden on small housing providers, creating additional challenges to maintain buildings and invest in updates on top of current inflation. The Alliance supports more effective and sustainable alternatives for closing the missing-middle gap such as modernizing zoning and creating new tax credits so builders can quickly increase housing stock and turn unused office spaces into residential units creating more affordable properties for renters and buyers.
From housing grants to new incentives to build and rehabilitate middle income homes,
solutions exist, and we’re committed to pushing for ways to make homes more affordable.
Read more about our thoughts on the rent control discussion and about
three solutions to increase access to homeownership and revitalize communities.
Advocating for Property Owners
As an alliance committed to protecting the interests of current and aspiring property owners, we recently joined the National Association of REALTORS® and a host of other organizations to oppose property tax foreclosure laws which allow local governments and private businesses to keep home equity beyond what is owed in taxes, interest, and penalties rather than returning that equity to the original owner.
Homeownership is one of the best tools to build equity and wealth. We denounce the unconstitutional practice of home equity theft, meaning the unfair collection of home equity above what is owed in unpaid property taxes as part of a foreclosure settlement, as it strips families of significant savings and wealth built through property ownership.
Property ownership strengthens our communities and boosts the economy.
Read more about our request to the Supreme Court to protect property owners and their financial security.
Coming Up: Tax Season
Tax season is here, and some policies to propose a national sales tax on the use or consumption of taxable property or services have been introduced through the Fair Tax Act of 2023.
The Fair Tax Act would restructure the nation’s tax system and significantly increase the national debt. While this bill would eliminate the IRS and the income tax, it would impose a 23%, or higher, tax on your home at the time of sale. As an alliance committed to protecting property owners’ rights, we have serious concerns with the potential impacts of this Act. Learn more about this
legislative proposal.
###
For more updates, news, and resources, follow me on
LinkedIn and
Twitter.
Thank you for your time,
Colin Allen, Executive Director
[rsnippet id="20" name="American Property Owners Alliance Section Only"]
Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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Addressing America’s Housing Crisis Requires Long-Term Solutions
By: Colin Allen, Executive Director of the American Property Owners Alliance
Mar 17,
2020
Throughout the country, a shortage of middle-income housing and affordable rentals is limiting Americans’ ability to build their savings and pursue property ownership. As inflation rises and large investors drive up rental prices for the sake of profit, America’s housing crisis will only continue to escalate if Congress doesn’t step in immediately.
With the 118
th Congress sworn in and eager to enact change, it is important to choose a sustainable path that will ensure home purchase and rental prices remain affordable for years to come. While many solutions are on the table, some are short-sighted and don’t address the heart of the issue—we need to build more housing.
Rent control has been proposed as a solution to curb the problem of housing affordability. However,
several case studies prove that rent control is an ineffective, band-aid solution that ultimately decreases the supply of affordable rentals over time and shifts the financial burden of lower rent to mom-and-pop housing providers.
The reality is, developers are reluctant to build in rent-controlled areas because of limited return on investment, which decreases the supply of low- to mid-range housing units. In areas where rent control is newly imposed, large-scale investors have proven likely to convert rentals to owner-occupied condominiums, further constraining rental supply.
In a
survey examining the effects of the 1994 rent control expansion in San Francisco, buildings where rent control was imposed were 8 percentage points more likely to be converted to higher-end, owner-occupied condominium housing than the non-rent controlled property control group. As a result of these high rental prices, fewer tenants lived in rent-controlled buildings, small multi-family housing decreased, and most rental supply catered to higher income households.
With a “this is the rent, take it or leave it” mentality, rent control and its supporters continue to reduce supply, heighten demand, undermine quality of life and limit property owners’ ability to make improvements. For example,
data spanning periods of change in rent control laws in Cambridge, Massachusetts, found rent control policies imposed about $2 billion in costs on local property owners, yet only $300 million of that cost was passed on to renters in the form of lower rent. The study indicates that rent controlled properties ultimately made the Cambridge housing market and nearby neighborhoods less desirable, and they continue to do so in cities throughout the country.
Today, we can achieve a more affordable, navigable housing market by implementing smart policies, unlike the short-sighted option of rent control. These solutions include:
- Creating tax credits to convert unused or outdated commercial and office buildings into residential and mixed-use space that will maximize the use of existing properties and create more housing units in urban areas.
- As builders have focused on high-end properties with a guaranteed return on investment, middle-income housing and affordable rentals become scarce. We should modernize zoning to remove barriers to different types of home-building.
- Increasing the low-income housing tax credit will provide states with more funding which they can then use to incentivize the construction and rehabilitation of affordable rental housing.
As an immediate measure, local governments should consider employing targeted assistance to renters and housing providers to protect the vulnerable when gaps between rising wages and rising rent occur.
By pushing forward these smart solutions, Americans can save money, support their households and move one step closer to building equity through property ownership.
The American Property Owners Alliance (The Alliance) advocates for the rights of current and future property owners. Our aim is to educate and mobilize citizens in understanding, promoting and influencing the policies that support property owner protections. We understand that we can’t close the property ownership gap overnight. What we can do is work together at the federal, state and local levels to push forward
creative, long-term solutions.
We’re playing our part in solving America’s housing crisis. It’s time for Congress to do the same.
[rsnippet id="20" name="American Property Owners Alliance Section Only"]
Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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NAR and The American Property Owners Alliance Oppose Home Equity Theft
By: American Property Owners Alliance
Mar 08,
2020
Washington D.C.—On March 6, National Association of Realtors® (NAR), the American Property Owners Alliance (The Alliance), filed an amicus brief with the Supreme Court of the United States opposing property tax foreclosure laws, which allow local governments to keep home equity beyond what may be owed in taxes, interest, and penalties. In Tyler v. Hennepin County, at issue is a Minnesota statute allowing the government to seize a homeowner’s property to satisfy a government debt and keep any surplus from the sale in excess of the debt owed as a windfall rather than rightfully returning it to the homeowner.
Stripping property owners’ equity interest is one of several troubling examples of government encroachment on private property rights that NAR and the Alliance defend against. Rent control measures, eviction moratoria, and tax-foreclosure laws, such as the one at issue in this case, illustrate the increase in government interventions depriving citizens of vested property interests without paying just compensation and why NAR and the Alliance are weighing in, in defense of property owners nationwide.
Property ownership remains one of the most significant ways to build financial security in America. When unexpected financial hardships occur, families and individuals should not lose the entirety of their home equity, no matter the size of the debt. In 14 states, including Minnesota, existing laws allow governments to take homes, land, and excess profits from foreclosures when property owners fall behind on their taxes, a practice known as home equity theft. This unjust, unconstitutional practice strips households of significant savings and wealth often built by individuals and families over a lifetime. In a brief to the Supreme Court, we request that the Court reverse the Eighth’s Circuit’s ruling and uphold constitutionally protected private property rights under the Fifth Amendment. The brief argues the Takings Clause does not permit the government to retain value in excess of an amount owed - taking away vested private property rights of individuals - without paying just compensation. We urge the Court to recognize this direct threat and the increase in government restrictions on private property nationwide by rejecting any attempts to divest property owners of longstanding property interests.
NAR and The Alliance support property owners on their path to building equity, and we continue to work to protect that equity after it is accrued. Abolishing home equity theft will protect the most vulnerable and improve property ownership for years to come.
Read the Amicus Brief.
CONTACT
Amber Hord
apoamedia@propertyownersalliance.org
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Homeowner Tax Deductions for 2023
By: American Property Owners Alliance
Mar 06,
2020
Tax incentives help current owners protect their investment and make homeownership more accessible for all. When filing this year, make sure you know about these new federal tax credits that will help make homes more energy efficient while reducing energy costs and demand.
Preserving and expanding tax benefits for property owners is a top priority for the American Property Owners Alliance.
Click here to see how you can advocate for tax policies that support homeowners and housing providers.
Sign up for updates and we’ll keep you informed on policy changes that impact your investment.
Click Here
[social_warfare]
5 Housing Market Myths Debunked
By: American Property Owners Alliance
Feb 23,
2020
Everchanging headlines, data and predictions make the housing market challenging to navigate. Unfortunately, misconceptions about buying, selling and owning a home remain for many Americans. The Alliance is here to dispel common myths and set the record straight on today’s housing market.
[social_warfare]
What Will The Alliance Accomplish in 2023?
By: American Property Owners Alliance
Jan 23,
2020
The American Property Owners Alliance (The Alliance) is a nonpartisan, nonprofit that was founded in 2020 to protect the interests of current and aspiring property owners. Property ownership strengthens our communities, boosts the national economy and remains one of the best tools to build wealth. Our grassroots network advances policies that ensure everyone can reap these benefits.
Last year was marked by incredible progress for The Alliance. From naming new leadership to growing our network of advocates, the successes of 2022 have strengthened our commitment to protecting and improving property ownership in America.
2022 Highlights
Colin Allen was named as The Alliance’s first executive director. With more than 17 years of policy and legislative experience, Colin brings a wealth of knowledge to this role, leading The Alliance in our mission to advance solutions that address the challenges that current and aspiring property owners face. Shortly after his appointment, Colin joined industry experts in Atlanta for
Movin’ On Up!: Preserving Affordability, Parity and Progress in Real Estate for Black Americans. There, he moderated a conversation on the policy changes that can improve access to homeownership.
2022 closed with a major push to pass the
Neighborhood Homes Investment Act (NHIA), a solution that would create new incentives for builders to develop and renovate family homes. The NHIA would address the severe shortage of middle-income housing to help close the gap in housing supply and strengthen communities throughout the country. The Alliance led a national campaign to empower individuals to unite their voices in support of the NHIA. This campaign resulted in
more than 4,000 emails and tweets sent to members of Congress urging them to pass this critical legislation.
While the NHIA did not make it into year-end legislation in 2022, we remain committed to
advocating for creative solutions that will address America’s growing housing supply and affordability crisis.
2023 Commitments
As we begin this new year, we’re building on the momentum of 2022 to influence policy changes that will protect property ownership across the U.S.
In 2023, we’re focused on growing our network of advocates and supporting creative solutions that will address America’s housing supply and affordability crisis, restore homeowner tax incentives, improve fair housing protections, and back smart infrastructure investments. Think: modernizing zoning to create more middle-income housing and converting unused office buildings into residential and mixed-use spaces.
We understand that different solutions may more effectively solve housing challenges in different areas of the country. That’s why we are facilitating discussions around these solutions, to explore which opportunities will not only increase the supply of available homes, but also ensure Americans can access and sustain housing that meets their needs and budget.
What’s more, The Alliance will continue to keep current and prospective owners informed on the policy decisions and news impacting their investment.
To get involved with The Alliance in 2023, you can
join our network and follow us on
Facebook,
Twitter and
LinkedIn.
Stay In-The-Know on Alliance Policy Initiatives: Sign up for The Alliance’s Executive Director newsletter.
Fill out the form below to receive quarterly email updates from Executive Director, Colin Allen, on areas of focus and progress in protecting property ownership.
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The rise of ‘Zoomtowns’ is going to make home prices and rents cheaper for everyone
By: James Rodriguez, Business Insider
Jan 10,
2020
It's easy to blame remote workers for the pandemic's chaotic housing market. Highly paid white-collar employees who exercised their newfound freedom and turned once cheap locales into expensive "Zoomtowns" make for vivid villains.
But a new analysis from the Economic Innovation Group, a bipartisan public-policy organization, argues that, eventually, the shift to working from home may turn into the antidote for the price spikes that we've seen. That's because the places where remote workers are flocking — the Sun Belt region in the Southern US and suburban areas outside big coastal cities — are exactly the kinds of locations that are best-equipped to build cheap housing to absorb the flood of newly remote workers.
Read the full article on Business Insider
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What Would It Take to Turn More Offices Into Housing?
By: Emma Goldberg, The New York Times
Jan 10,
2020
There’s about 998 million square feet of office real estate across the United States that’s available but in search of a tenant.
That’s thousands of old cubicles, conference rooms, pantries and cafeterias sitting in ghostly quiet. That’s a vast amount of empty space — nearly 13 percent of the market — that could be turned into two-bedroom apartments, big-box retailers, boutique hotels, community college classrooms or even studios for artists. At least that is what city governments and developers are discussing with more urgency, as researchers estimate that office value will plunge 39 percent from prepandemic levels.
What looks like a catastrophe to many building owners presents an opportunity, a possible catalyst for converting some older office spaces to new uses and transforming downtown neighborhoods into areas where people can also live, especially as the United States faces a deficit of
more than three million homes. City and business leaders from New York, Chicago, Philadelphia and Seattle last month began a series of meetings, convened by the Brookings Institution, where they will exchange ideas on re-envisioning the future of their downtown business districts.
Read the full article on The New York Times
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Guide to Low-Down-Payment Mortgages
By: Tara Siegel Bernard and Ron Lieber, The New York Times
Jan 10,
2020
It’s a perennial question for would-be home buyers: How can I possibly come up with such a huge down payment?
The short answer, usually, is you don’t have to.
Most first-time home buyers (and even many repeat buyers) don’t have the 20 percent down payment needed to qualify for the lowest mortgage rates and to avoid extra costs like mortgage insurance.
Even if you’ve managed to amass a reasonable sum, your down payment doesn’t buy you as much as it would have a year ago — mortgage rates are roughly double what they were then, and home prices haven’t deflated enough to offset those higher costs in many areas.
But it’s still possible to lock in your sale with a smaller sum, whether you’re searching for a modest home on a teacher’s salary or financing something with a hefty year-end bonus or gift. Many programs, supported in some fashion by the federal government, allow down payments as low as 3 percent or even no money down. They go by funny names and a collection of abbreviations — Fannie Mae, Freddie Mac, F.H.A., V.A. and U.S.D.A., to name a few.
Read the full article on The New York Times
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Congress Needs to Pass the Neighborhood Homes Investment Act
By: American Property Owners Alliance
Nov 21,
2020
Today, about one million homes are available on the market compared to the 4 million in 2007. America is facing a serious housing shortage that demands immediate solutions to increase the supply of available, affordable homes.
Right now, there is bipartisan legislation that, if passed, would expand access to homeownership in communities that need it most. The Neighborhood Homes Investment Act (NHIA) would create 500,000 available homes to help close the supply-demand gap for moderately-priced housing.
This pro-housing policy has over 120 bipartisan co-sponsors in the House and Senate, and there is still time for Congress to pass it before the end of the year. The Alliance is amplifying voices across America during this crucial period, putting pressure on policymakers to prioritize the passage of the NHIA.
What is the Neighborhood Homes Investment Act?
The NHIA would create new incentives to develop and renovate family homes—a critical solution to address the severe shortage of middle-income housing. This solution helps close the gap in housing supply and demand while also strengthening communities.
The passage of this solution will support multiple sectors of the economy by spurring billions of dollars in development activity, wages and salaries, and federal, state and local tax revenues. It also supports upwards of 33,000 construction- and construction-related jobs.
Why It’s Time for Action
Across the country, empty or poorly maintained homes contribute to declining property values. In many neighborhoods, it often costs more to build or renovate a house than what the property would sell for. Instead of abandoning these homes altogether, the NHIA would provide builders with the tools they need to bring more affordable homes to the market.
Homebuyers deserve a pathway to sustainable homeownership and neighborhood stability. By passing the NHIA, we are one step closer to achieving just that.
This pro-housing policy can help improve access to affordable homes in your community and across America. Right now, we can amplify our voices to make sure Congress hears us loud and clear. Before the new Congress takes office on January 3, let’s put pressure on current policymakers to prioritize housing supply.
Tell your member of Congress to prioritize the Neighborhood Homes Investment Act
The Alliance is here to help current and future homeowners access a property that meets their needs, and to help you navigate the decisions that are still on the table to do so.
As Americans face economic uncertainty, we must protect the rights of current property owners and ensure access to ownership opportunities for potential buyers.
Despite drop in new home sales, existing owners retain home values
By: Ahtra Elnashar | The National Desk
Nov 04,
2020
As soaring mortgage rates push potential homebuyers out of the market, new home sales in September
dropped by 10.9%, according to government data released Wednesday. But some industry experts say the market isn't poised for a crash yet.
Read the full article on The National Desk
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Top Housing Markets This Fall Are Those With Affordable Homes
By: Nicole Friedman | The Wall Street Journal
Nov 04,
2020
Home-buying demand remained robust in low-cost cities with strong local economies in the third quarter, helping lift Johnson City, Tenn., to the top of The Wall Street Journal/Realtor.com Emerging Housing Markets Index.
Rising mortgage rates
have made most home purchases less affordable and pushed many buyers out of the market.
Existing-home sales dropped for eight straight months through September. Homes are sitting on the market longer, and more sellers
are cutting prices.
Buyers’ focus on affordability benefited Johnson City. The metro area’s median listing price was $379,000 in September, up 27% from a year earlier, according to Realtor.com, while median list-price growth nationwide was 14%. Johnson City’s median listing price was $48,000 below the median listing price nationwide last month.
The index identifies the top metro areas for home buyers seeking an appreciating housing market, a strong local economy and appealing lifestyle amenities.
Read the full article on The Wall Street Journal
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Housing market first-timer? From contingency to foreclosure to housing market predictions, what you should know.
By: Terry Collins | USA Today
Oct 25,
2020
The U.S. housing market has gone from scorching to cooling within months as the momentum is also slowly shifting from a seller's market to one more favorable to buyers.
But some might be unfamiliar with the most commonly used terms in the industry.
"The more you know before you jump into either buying or selling a house, the easier it will be," said Kristina O'Donnell, a realtor with Realty One in the Philadelphia area.
Read the full article on USA Today
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How to Buy a House
By: Martha C. White | Wall Street Journal
Oct 25,
2020
Buying a home is a big accomplishment. It also requires a lot of planning, especially when it comes to your finances.
From figuring out how much you can spend to finding the perfect mortgage, making smart decisions upfront can save you thousands of dollars down the road. However, you can make the process a lot easier—and less stressful—by taking the time at the start to answer some of the most important questions you will face.
Buying a home is “the biggest expense most households will engage in,” says Mike Schenk, chief economist at the Credit Union National Association. “Before you even think about buying a house, you need to have your financial house in order.”
That’s why we’ve put together a three-step guide to buying a home. Read on, and we’ll walk you through the process from setting your budget to choosing a mortgage to actually bidding and closing on a home.
Read the full article on The Wall Street Journal
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American Property Owners Alliance Announces Executive Director Appointment
By: American Property Owners Alliance
Oct 04,
2020
Washington D.C.—The American Property Owners Alliance board has announced Colin Allen’s appointment as the first Executive Director for the organization.
The American Property Owners Alliance (The Alliance) is a nonprofit, nonpartisan organization that was launched in 2020 to protect and support property owners.
Colin will lead The Alliance in its mission to advance and promote solutions to property owners’ challenges. Colin will oversee efforts to educate property owners about federal issues and policies and mobilize a powerful collective of advocates to secure property owners’ rights and interests. His vision is to elevate the voices of Americans to safeguard the value of property ownership for families, communities and the country.
Colin Allen: “Voters of every background all across the country believe in our effort to protect and support property ownership. I look forward to helping current and aspiring property owners get involved in the political process and help them advocate for policies that create opportunity, build family wealth and protect their investment.”
Shannon McGahn: “Colin was an invaluable part of NAR for many years, and we are excited about his leadership of the APOA and his new role advocating for property owners and consumers. NAR and APOA align on many of the same goals and Colin understands the important role property ownership plays in building generational wealth for the American middle class. We look forward to continuing to work with the APOA as we advocate for our members, the real estate economy, consumers, and property owners.”
Colin brings more than 17 years of policy and legislative experience to the Alliance, which he will leverage to educate and mobilize property owners across the country. Prior to this appointment, Colin served as the Director of Government Advocacy and Policy Strategy at The National Association of REALTORS®. There he played a central role in the development and advocacy campaigns supporting homeownership and housing policy. His work focused on the legislative process, where he took an active role in the drafting and advocacy stages of legislation to reform insurance for home and commercial property owners, increase the availability of affordable ownership opportunities through Federal Housing Administration, and provide relief to independent contractors and small businesses.
CONTACT
Amber Hord
apoamedia@propertyownersalliance.org
###
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America Still Needs More Homes
By: Justin Lahard | The Wall Street Journal
Aug 08,
2020
The biggest problem for America’s housing market is that there aren’t enough homes available. The sales slowdown probably won’t do much to alleviate the situation and over time could make it even worse.
The National Association of Realtors on Wednesday said 5.12 million previously owned homes
were sold in June, at a seasonally adjusted annual rate, down from May’s 5.41 million. It was both the lowest level since the early months of the pandemic and below the prepandemic trend. It reflects just how much the affordability problem, driven by the sharp rise in mortgage rates and sky-high home prices, is weighing on sales.
What is needed is for housing to somehow become more affordable.
Read the full article on The Wall Street Journal
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Homeowner Assistance Fund
By: NCSHA
Jul 27,
2020
The Homeowner Assistance Fund (HAF) is a $9.961 billion federal program to help households who are behind on their mortgages and other housing-related expenses due to the impacts of COVID-19. The HAF program is overseen by the U.S. Treasury Department and administered by the states, territories, and tribes. Nearly every state and territory has launched their HAF programs, and the others are working diligently to get their programs approved and up and running quickly. To help homeowners sooner, some states have been administering pilot assistance programs while they finalize their full HAF programs.
Visit the link to find help.
Read more
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Why homeownership is becoming incredibly tough for young people
By: Adam Barnes | The Hill
Jul 20,
2020
Homeownership remains a key benchmark for younger Americans, yet many encounter numerous hurdles immediately upon entering the market.
Some need help from their parents to meet basic down payments to qualify for a mortgage, while all enter right into a housing market where inventory is historically low.
First time homebuyers deal with these issues while facing rising inflation, growing interest rates, and a supply crunch that leaves them wading through an ultra-competitive market in search of housing suitably priced for first-time owners.
Despite the drastic changes in the housing market and the strains of inflation, recent polling shows most American adults view homebuying as a hallmark of the American dream. Around 65 percent of Millennials and 59 percent of those in Gen Z put homeownership as a fundamental marker of success.
But their main barrier is affordability, whether due to their own incomes or the cost of a home.
Read the full article on The Hill
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Something Old, Something New: Biden’s Housing Plan
By: Meir Rinde | ShelterForce
Jul 06,
2020
President Joe Biden released a far-reaching Housing Supply Action Plan in May that announces or proposes dozens of measures meant to sharply boost housing production. They include incentives for local zoning reform, new financing products from Freddie Mac and Fannie Mae, budget hikes for federal programs like HOME and LIHTC, efforts to promote manufactured housing and accessory dwelling units (ADUs), supply chain improvements, and increased recruitment of construction workers.
While many of the items would improve access to affordable housing for low-income people, the document is billed as a plan to spur home construction across the board.
Read the full article on ShelterForce
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3 ways rising property values are actually bad for homeowners
By: Holly Johnson | Business Insider
Jul 01,
2020
As the value of homes rise, many empty nesters are faced with a difficult financial dilemma: stay in a home that's too large and costly to maintain, or purchase a smaller — but just as expensive — home, on top of rising interest rates.
Learn why rising property values aren't always positive.
Read the full article on Business Insider
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3 Property Rights Worth Protecting
By: American Property Owners Alliance
Jun 28,
2020
Property ownership is an investment worth protecting. The constant flow of news makes it hard to stay up to date on the important policies and decisions that impact this investment. The American Property Owners Alliance is here to help.
The Alliance cares about the unique challenges current and aspiring property owners face and works to safeguard their interests by protecting the following rights.
Right to Improve Property
Owning property gives you the opportunity to design and decorate your space any way you like. The Alliance believes a property owner has the right to alter property, so long as you respect your neighbors, bring no harm to others and abide by the law. In keeping with local business codes, you have the right to use the floor plan, measurements, design tools and contractors of your choosing.
The Alliance recently
advocated for property owners in a
ruling jeopardizing their right to use their home’s floor plan to complete necessary repairs or that dream remodel they worked so hard for. This is just one of the ways in which The Alliance advocates for property owners’ rights.
Right to Pay Fair Share in Taxes
Taxes are meant to benefit property owners because they support
a range of community benefits—from supporting local infrastructure to making communities safer. Tax incentives also make property ownership more accessible and sustainable through mortgage interest deductions and state and local property tax deductions that make owning a home more affordable.
Tax incentives for homeowners have been chipped away in recent years, which means the tax burden on property owners has grown. The Alliance believes property owners are valuable to communities and the country and have the right to pay their fair share in taxes. We’re advocating to restore tax incentives for property owners in order to protect current and aspiring owners, and to ensure communities continue to reap the benefits of property ownership.
Right to be Informed
Americans have the right to be informed of policy changes impacting their investment or access to property ownership. This way, property owners can raise their collective voice and have a say in these decisions. The Alliance is committed to helping you do both.
Sign up for emails and bookmark our
News and Resources webpage to stay updated on policy changes and the topics you care about most: housing affordability, fair housing, taxes, infrastructure and more. Then,
sign our petition urging decision makers to prioritize support for property owners once again.
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A Proclamation on National Homeownership Month, 2022
By: The White House
Jun 21,
2020
For many Americans, a home is more than just a residence. It is a place that instills a sense of pride, security, and comfort that, no matter what challenges in life arise, they have somewhere to go and call their own. Whether owning or renting, a home is where we can live with dignity and watch our families grow. During National Homeownership Month, we recognize the importance of housing and reaffirm our commitment to ensuring that everyone has a place to call home.
Homeownership is a major source of generational wealth for many Americans — it is a central part of the American dream. But for too many Americans — especially Black and Brown Americans — homeownership and the opportunity to build and pass down wealth through it are unattainable. Longstanding inequities in the housing system, from disinvestment to redlining and mis-valuation of homes in communities of color, have locked out entire generations from the American dream and the opportunity to build generational wealth. Housing also opens up opportunities that are tied to where one lives, and it is our shared responsibility to ensure that everyone has equitable access to those opportunities — from education and stable employment to quality health care and healthy food.
As we mark National Homeownership Month, we recognize the importance of housing for all Americans. Whether owning, renting, or aspiring to do either, we renew our commitment to lowering costs and expanding access to safe, affordable homes that all Americans need and deserve. Together, we can ensure that every American has a safe place to call home.
Read the full article on WhiteHouse.gov
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The U.S. needs more homes, but builders may be slowing construction
By: Jacqueline Ganun | NPR
Jun 16,
2020
Rising interest rates and record home prices are making it impossible for many Americans to buy a house, and that's making builders less confident that if they build a home they'll be able to sell it.
A new poll conducted by the National Association of Home Builders shows builder confidence in the market for new single-family homes is at its lowest level since June 2020 after six straight months of decline, "a clear sign of a slowing housing market in a high inflation, slow growth economic environment," NAHB Chairman Jerry Konter said.
Read the full article on NPR
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The New Math of Reverse Mortgages for Retirees
By: Lori Ioannou | The Wall Street Journal
Jun 03,
2020
Reverse mortgages, maligned for years as loans of last resort for struggling seniors, have gotten a makeover.
For decades the industry’s image was tainted by horror stories about borrowers who faced foreclosure, and surviving spouses who were evicted. But today, these products—first introduced in 1961—have evolved into tools that, with federal insurance and oversight, often do what was originally intended: ease financial burdens for retired homeowners with limited incomes who want to stay in their homes until death.
Read the full article on The Wall Street Journal
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Skyrocketing Home Costs Spur Fed, State Aid to First-Time Buyers
By: Alex Wolf | Bloomberg Law
May 24,
2020
Federal officials and state lawmakers are looking at new ways to help prospective home buyers compete with investors for scarce housing in hot real estate markets.
Federal and state regulators are eyeing steps to make prospective first-time buyers better able to compete for homes. Lawmakers in California and New Jersey, among others, have proposed boosting down-payment assistance funds for first-time buyers, taxing investors who flip residential real estate, and giving owner-occupants greater leverage to purchase foreclosed homes.
Read the full article on Bloomberg Law
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Why it’s so hard to buy a home right now
By: Anna Bahney | CNN
Apr 28,
2020
Home prices have
skyrocketed by nearly 20% over the last year and
mortgage rates have risen faster over the past three months than they have in decades. But the high cost to buy a home is not the only obstacle prospective buyers are facing.
Other hurdles include a lack of available homes for sale that fit the buyer's criteria, bidding wars, and failing to have enough money for a down payment, according to a new study from the National Association of Realtors and Morning Consult.
Read the full article on CNN
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Property Ownership Benefits Us All
By: American Property Owners Alliance
Apr 19,
2020
Property ownership is an investment in yourself and your community — in more ways than you might realize. Property owner tax dollars invest in communities, but that’s only part of the story: research shows that property ownership provides a range of social benefits, including increased volunteerism, improved health, and less crime. These benefits are the reason The American Property Owners Alliance believes federal policies should do a better job of supporting property owners and incentivizing property ownership.
The positive impact of property ownership is far reaching. Learn how it benefits you, your community, and the economy — and why it’s worth protecting.
You
Owning property gives you the freedom to live comfortably in a space that meets your needs. Rather than making rental payments that don’t invest for yourself, owning property helps you build wealth. According to a study conducted by the National Association of Realtors, the typical homeowner accumulated $176,123 in home equity in a span of 10 years on a median-priced single-family home.1
Homes are more valuable now than they’ve been in a long time. A recent analysis by Zillow marked the first time that homeowners earned more from appreciation of their home than their jobs in 2021.2 Purchasing a home is a big investment, but it’s a smart one.
Your Community
The community benefits of homeownership are far-reaching. Homeowners directly invest in their community through property taxes, which contribute to local schools, first responders, public parks, infrastructure like roads and bridges, and more.
The value of a home is tied to the value of the neighborhood — which means homeowners are motivated to help improve their community. The National Association of Realtors found that homeowners are more likely to upkeep their homes and yards than renters, raising property values and improving the state of neighborhoods and communities.3 Homeowners also tend to volunteer more and are more likely to participate in local elections than renters.4
The Economy
The U.S. Census Bureau found that homeowners’ median wealth was nearly 89 times larger than the median wealth of renters.5 With more disposable income, homeowners purchase more local goods and rely on more services within their community, stimulating the economy where they live. This helps create jobs, improve public infrastructure, and helps your community’s economy operate independently of others. Plus, small businesses continue to be major drivers of the U.S. economy as a whole.6
The American Property Owners Alliance is an ally to property owners and works to advance public policies that support ownership throughout the United States. We serve as a trusted resource for property owners by providing timely, accurate information to help them safeguard their interests. We believe that the dream of homeownership is worth protecting. If you agree, we encourage you to
add your name to our petition.
Join The Alliance
As mortgage rates keep climbing, homes are more expensive for both renters and buyers
By: Mike Winters | CNBC
Apr 19,
2020
One of the advantages to buying a home is that mortgage payments can be cheaper than renting — provided you have enough money saved up to afford a down payment and other costs of being of a homeowner.
However, even though U.S. rent prices surged in the last year, that rent growth has been outpaced by rising mortgage payments in recent months as home prices continue to rise.
Read the full article on CNBC
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We All Play a Role in Achieving Fair Housing
By: American Property Owners Alliance
Apr 13,
2020
April is National Fair Housing Month, a time when we celebrate the passage of the Fair Housing Act in 1968 and recognize progress towards ending housing discrimination in America. It’s also a time to think about how we can work together to achieve our shared goal of fair housing—where we can all access the housing we desire in communities that welcome us. Keep reading to learn about four organizations that are making strides to improve housing access—and see how you can join the effort to achieve fair housing.
NeighborWorks America is a nonpartisan nonprofit that creates opportunities for people to live in affordable homes, improve their lives and strengthen their communities. NeighborWorks supports a network of nearly 250 organizations nationwide that help people access sustainable homeownership. Lee Anne Adams, Senior Vice President of National Initiatives at NeighborWorks America, explains, “To overcome the longstanding and growing inequities in our communities, we need to reach common goals and align resources across sectors to make an impact.” NeighborWorks’ network of organizations offers a range of services from financial coaching and pre-purchase counseling to homebuyer education, down payment assistance programs, and affordable first mortgage products. NeighborWorks’ impact nationally in 2021 includes its network investing more than $16.8 billion in their communities, creating and/or maintaining 49,000 jobs, and providing more than 470,000 housing and counseling services.
Louisiana Fair Housing Action Center (LaFHAC) is a nonprofit civil rights organization that has been fighting against discrimination in housing since 1995. LaFHAC provides free legal representation to people who have experienced discrimination and challenges discriminatory policies and practices in the housing market. When asked why equitable access to housing is so important, Cashauna Hill, Executive Director of the Louisiana Fair Housing Action Center, explains, “Where we live influences nearly every aspect of our lives. Our zip code determines everything from whether we have access to fresh food and produce to how long we’ll have to wait for public transit, to even how long we’ll live. Equitable access to housing is important because where we live determines how or whether we’ll have access to opportunity.”
The Fair Housing Justice Center (FHJC) is a nonprofit civil rights organization that serves all five boroughs of New York City and seven surrounding New York counties. FHJC works to eliminate housing discrimination by promoting policies that foster inclusive communities and strengthening the enforcement of fair housing laws. In addition to assisting people who file housing discrimination complaints, FHJC conducts proactive systemic testing investigations to identify patterns of housing discrimination that exist in the community. “Our investigations have led to legal challenges that have opened more than 70,000 housing units to previously excluded populations, recovered more than $53 million in damages and penalties, and changed the way many housing providers and government agencies do business,” explains Executive Director of the Fair Housing Justice Center, Elizabeth Grossman.
Fair Housing Center of Central Indiana (FHCCI) is a nonprofit fair housing organization that works to create equal housing opportunities in Central Indiana through advocacy, enforcement, education, and outreach. FHCCI was established in 2012 through a U.S. Department of Housing & Urban Development grant awarded to the National Fair Housing Alliance to establish a fair housing agency in central Indiana. When asked what the future of fair housing looks like, Amy Nelson, the Executive Director of Fair Housing Center of Central Indiana, explains, “Truly achieving fair housing requires the full attention and support of the federal government, the courts, and all of us. Fair housing laws have never had funding or the strength of will to truly address our nation’s history of discriminatory practices that still impact our neighborhoods and our country today. I remain hopeful we can achieve the vision of fair housing laws that allows each person to have equal housing opportunity.”
The American Property Owners Alliance (The Alliance) convenes current and aspiring property owners and housing organizations to create a unified voice for policymakers to hear. We take action to expand policies and programs that promote equitable access to homeownership.
Click here to sign-up for action alerts so you can advocate with us!
If you believe you have experienced discrimination in renting or buying a home, getting a mortgage, or other housing-related activities because of your race, color, national origin, religion, sex, familial status, or disability—click here to learn how to file a complaint with HUD. HUD will investigate your complaint for free.
With housing stock low and prices up, Black, white homeownership gap growing | Opinion
By: Ja’Ron Smith and Steve Benjamin, The Columbus Dispatch
Apr 07,
2020
A former Trump deputy assistant and the first Black mayor of Columbia S.C. say the gap between Black and white home ownership is larger now than when housing discrimination was legal.
For generations, owning a home — especially
a first home — was a rite of passage for many Americans.
The home you purchased was a place to raise a family, a sanctuary after a long day at work, and the backdrop to life’s most precious memories.
A home also served as a critical investment in creating generational wealth. It was and remains a source of pride and dignity for the American family.
Today, however, the possibility of owning a home is harder to come by, especially for Black Americans. The gap between Black and white Americans who own homes is
larger today than when
housing discrimination was legal — and it continues to grow.
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American Property Owners Alliance Supports Appeal of Ruling on Homeowners’ Use of Floor Plans
By: American Property Owners Alliance
Apr 05,
2020
Appellate Court ruling could prevent homeowners from using floor plans for appraisals, tax assessments
WASHINGTON (April 05, 2022) - The American Property Owners Alliance (The Alliance) supports the effort to appeal the Eighth Circuit Court of Appeals
ruling in Designworks Homes, Inc. v. Columbia House of Brokers Realty, Inc. to the U.S. Supreme Court.
The Appellate Court decision means homeowners may be found liable for copyright infringement for using a reproduction of the floor plan of their home —including a copy or even a sketch of the floor plan—without authorization from their architect.
This includes the use of floor plan reproductions or use of floor plan measurements in appraisals for mortgages, tax assessments, property evaluation documents, insurance documents, or home improvements.
“Property owners have the right to use the floor plan and measurements of their property as they see fit,” said American Property Owners Alliance President, Jim Imhoff. “The Eighth Circuit ruling is a direct threat to that right and we support giving the Supreme Court the opportunity to reverse the Appellate Court’s misguided decision.”
The Eighth Circuit Court ruling is deeply unpopular, according to an online survey of 1,029 homeowners who voted in the 2020 Presidential election. The survey was conducted by The Alliance from March 15-20, 2022 and has a margin of error +/- 3%. The survey found:
- 71% of respondents strongly agree you have the right to do what you want with your property, as long as you respect your neighbors, don’t harm others, or break the law.
- 85% of respondents strongly agree you have the right to remodel or renovate the inside of your home as you see fit, consistent with local building codes where applicable.
- 89% of respondents strongly agree homeowners should be able to create a floorplan of their home anytime they want, and select whomever they want to fulfill that task.
- 83% of respondents strongly agree the owner of a home has the right to use the measurements of the inside of that home, along with online design tools, to ensure that new furniture and appliances would fit before making those significant purchases.
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Mortgage rates rise above 4% for the first time since 2019
By: CNN
Apr 05,
2020
Mortgage rates climbed past 4% for the first time since May 2019. All these factors will continue to push mortgage rates higher in the months ahead. That means one of the main drivers of home sales over the past two years -- super low mortgage rates -- is drying up. At today's rates, the monthly mortgage for a buyer of a median-priced home will be more than $340 higher than it was a year ago.
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Planning to buy a home in the spring? Some new mortgage rules may affect your purchase
By: The Washington Post
Apr 05,
2020
Some adjustments have been made in response to such events as the pandemic-associated economic crisis. Here are the new rules that you should know about before applying for a loan.
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Homes Earned More for Owners Than Their Jobs Last Year
By: Wall Street Journal
Apr 05,
2020
Home values surged last year as low mortgage-interest rates stoked buyer demand and the number of homes on the market remained unusually low. Collectively, U.S. homeowners with mortgages gained more than $3.2 trillion in equity in 2021 compared with a year earlier, according to housing-data provider CoreLogic.
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4 Lesser-Known Tax Deductions for Landlords
By: American Property Owners Alliance
Mar 31,
2020
The Alliance is here to help housing providers take advantage of the tax benefits available to them when filing this year. Whether you own one rental property or dozens, these tax deductions can help you keep more money in your pocket. Most rental property owner deductions can be claimed in
Form 1040 and filed with your regular annual tax return.
Pass-Through Deduction
Certain landlords who are owners of sole proprietorships, partnerships, S corporations and certain trusts may deduct up to 20% of their net rental income from their income taxes if their rental activity rises to the level of a business instead of an investment. Owners of rental property who spend at least 250 hours per year on the property or properties may also qualify. This deduction is set to be available from 2018 through 2025—take advantage of it while you can!
Advertising Costs
Owners of rental property can deduct expenses that help you bring in new tenants and keep existing ones. This includes “For Rent” signs, newspaper ads, digital advertising and more.
Legal and Professional Services
Owners of rental property may deduct fees paid to attorneys, accountants, advisors, and other professionals incurred from buying and maintaining the property.
Travel and Transportation
Owners of rental property can deduct travel expenses incurred when traveling to their rental building to deal with a current tenant complaint or to locations related to maintaining the property — this includes the hardware store!
These 4 lesser-known deductions can help save you money this tax season, but don’t forget to claim deductions for utility, insurance, and repair costs when you file as well.
Preserving and expanding tax benefits for property owners is a top priority for the American Property Owners Alliance.
Sign our petition to advocate for tax policies that support homeowners.
Sign up for updates and we’ll keep you informed on policy changes that impact your investment.
Click Here
Homeowner Tax Deductions for 2022
By: American Property Owners Alliance
Mar 30,
2020
Tax incentives help current owners protect their investment and make homeownership more accessible for all. Here are some key tax provisions that you should be aware of when filing this year.
Preserving and expanding tax benefits for property owners is a top priority for the American Property Owners Alliance.
Click here to see how you can advocate for tax policies that support homeowners and housing providers.
Sign up for updates and we’ll keep you informed on policy changes that impact your investment.
Click Here
[social_warfare]
American Property Owners Alliance: Honoring Influential Women in Housing
By: American Property Owners Alliance
Mar 16,
2020
Throughout America’s history, influential women have shaped the housing opportunities, social services, and vibrant communities we have today. As we celebrate Women’s History Month, The American Property Owners Alliance (The Alliance) is recognizing three female leaders who took a stand to create essential resources for those in need and build diverse and resilient communities.
Catherine Bauer was an influential leader in the fight for affordable housing. Her forward-thinking approach to housing policy led her to be the primary author for America’s first affordable housing legislation — the U.S. Housing Act of 1937. Bauer influenced housing and urban planning strategies throughout the terms of three different United States presidents.1
Patricia Roberts Harris made history as the first African American woman to hold a cabinet position when she was appointed to Secretary of Housing and Urban Development (HUD) in 1977. As HUD Secretary, Harris brought aid to deteriorating neighborhoods and worked to bring business back to impoverished areas.2 Harris was known for her leadership in battling housing discrimination and rehabilitating neighborhoods.
Jane Jacobs was a writer and activist who championed a community-based approach to city planning. In Jacob’s 1961 treatise, The Death and Life of Great American Cities, she claimed, “Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.”3 Jacobs was known for her innovative approach to building vibrant communities that prioritized parks and public spaces that served the needs of residents.
These are just a few of the influential women who have or are improving America’s housing opportunities through advocacy and forward-thinking policy. It’s up to us to continue the mission to make housing more accessible and equitable. The Alliance is a nonpartisan, nonprofit that advocates for public policies that support property ownership and strengthen communities. If you’re interested in supporting this mission, join our efforts today.
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1 https://labgov.city/theurbanmedialab/catherine-bauer-wurster-hero-of-american-affordable-housing/
2 https://www.historicamerica.org/journal/2021/3/1/a-woman-of-firsts-patricia-roberts-harris
3 https://www.theatlantic.com/magazine/archive/2016/11/the-prophecies-of-jane-jacobs/501104/
Two-thirds of single women say they’re not waiting until marriage to become homeowners, study finds
By: Jason Lalljee, Business Insider
Mar 08,
2020
Single women are also quietly dominating the housing market. About 2 in 3 single women (65%) reported that they would rather not wait until they were married to buy homes, regardless of how old they were.
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New York City’s Property Taxes Are Crushing Homeowners
By: Donna Borak, Bloomberg
Mar 08,
2020
'Living Here is Getting More and More Difficult.' Homes are taxed as a function of their market value across much of the nation, but New York City's process is more complicated and problematic than most.
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Buying a First Home Is Tougher Than Ever in Today’s Market. Here’s What Experts Say It Takes to Be Successful
By: CNBC
Feb 14,
2020
Home inventory for people who typically qualify as first-time homeowners is at record lows. Still, despite the frustrations of buying your first home in a challenging market, now might be the time to lock in your mortgage payment, before interest rates increase.
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Homebuyers Confront an Abnormal Market for Yet Another Year
By: Yahoo
Feb 14,
2020
Home prices are going up, along with mortgage interest rates. Is now the time to buy — before conditions worsen?
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Homeowners Gain Nearly $225K in Equity Over the Past Decade
By: theMReport
Feb 08,
2020
Homeownership is seen as the largest source of wealth among families, with the median value of a primary residence worth nearly 10 times the median value of financial assets held by families.
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What Factors Are Holding Back Black Homeownership?
By: theMReport
Feb 08,
2020
Applying for a mortgage is one of the most important applications most will ever fill out in their lifetimes; getting denied because of simple omission can set the process back by weeks. According to a new report by Zillow, the rate at which Black applicants were denied mortgages is 84% higher than white applicants in 2020 (the latest year for which data is available). This is up from the 74% rate seen in 2019.
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Student Debt Getting in the Way of Millennial Homeownership
By: Axios
Feb 08,
2020
Millennial homeownership is on the rise — but student loan debt is still keeping millions of members of America's largest generation from owning a home. Buying a house remains the No. 1 way to build wealth in the U.S. Due to their sheer numbers, millennials are the largest group buying homes right now, but their rate of homeownership lags behind previous generations.
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Homeowner Assistance Fund Applications Are Now Being Accepted in Many States — Here’s How To Apply
By: GoBankingRates
Feb 08,
2020
Homeowners who need financial assistance with their mortgages and other housing-related expenses can apply for help via the Homeowner Assistance Fund (HAF), a federal program designed to help households who have fallen behind due to COVID-19.
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December Marks 3rd Straight Month of Growth for Us Builders
By: AP News
Feb 08,
2020
Construction of new homes in the U.S. rose for the third consecutive month in December and data released Wednesday suggests that the frantic pace of building will continue this year.
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What Will the 2022 Housing Market Look Like? It Could ‘Come Back Down to Sanity’
By: CNBC
Feb 08,
2020
The Covid-19 pandemic upended the home-buying process. Historically-low mortgage rates coupled with an inventory shortage created a red hot market with houses selling within hours of being listed, often for well over asking price.
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Understanding the Homeowner Assistance Fund (HAF)
By: DSNews
Jan 26,
2020
On or around August 2, 2021, the Treasury Department issued guidance for the Homeowner Assistance Fund (HAF), pursuant to section 3206 of the American Rescue Plan Act of 2021.
Under the Homeowner Assistance Fund, the Treasury Department will provide financial assistance in an aggregate amount of approximately $9.961 billion. The $9.961 billion will be distributed to the states and run at state level. Some states are using the funds that they have received to run pilot programs. As of today, approximately 18 states have pilot programs up and running.
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Millennials Are Supercharging the Housing Market
By: Wall Street Journal
Dec 15,
2020
Alex and Michelle Angert lived the last years of their 20s without a permanent address. They moved out of a small Manhattan apartment in 2018 to stay in short-term rentals around the U.S. before embarking on a yearlong honeymoon to travel the world, starting in the Philippines.
When the pandemic cut their travels short last year, Mr. Angert, 31, decided to take a job in public relations in Richmond, Va. He and Mrs. Angert, who is also 31 and works at a healthcare tech company, started house hunting this spring. After losing out on multiple offers, they raised their $400,000 budget. In July, they plunked down $635,000 on a three-bedroom ranch in a tree-filled lot near a Richmond country club.
“I would have had all of these regrets in life if I didn’t travel,” Mr. Angert said. “But it feels like the right time to settle down and put down some roots.”
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Financial Education Is Key To Smoothing The Home-Buying Process For First-Time Buyers
By: Forbes Magazine
Dec 10,
2020
Homeownership is the “American Dream” handed down from generation to generation, and millennials have taken the baton. In its annual homebuyers report, the National Association of Realtors stated millennials (those currently aged 22-40) have been the largest share of homebuyers since its 2014 report. Of homebuyers surveyed, they accounted for 37% of those who bought homes between July 2019 and June 2020.
However, a separate survey of about 2,650 U.S. adults found that 64% of millennial respondents who bought into homeownership regretted their decision. Their biggest regret was not being prepared for home maintenance costs.
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The Housing Affordability Crisis and the Solutions We Need Now
By: American Property Owners Alliance
Oct 20,
2020
Housing is a basic human need, yet affordable housing is increasingly difficult for Americans to attain. Why is there a shortage of affordable homes? And how we can work together to bring solutions that will make homes affordable and accessible?
How we got here
Two decades of underbuilding and underinvestment in housing
[1]—especially the construction of affordable homes—has created an enormous gap between housing supply and demand that will require a national effort to close.
There is now between 5 million to 6.8 million housing units missing from the housing inventory[2]. This supply-demand gap has driven a consistent and drastic rise in home prices that puts the dream of homeownership out of reach for many Americans. Without action on the federal level, the shortage of adequate affordable homes will continue to worsen and have a host of negative consequences for homebuyers and communities.
The effects of Covid on housing
The “perfect storm” of increased demand and low supply over the past year has created a competitive housing market. In areas like New York, Boston and the Bay Area, severe supply shortages have skyrocketed home prices leaving millions of low and middle-income families unable to afford centrally located homes.
The median price for a single-family home in San Francisco has reached $1.8 million
[3]; even with today’s low interest rates, that requires a monthly mortgage payment of roughly $7,500, assuming the family puts down the standard 20 percent.
The problem now even extends to rural areas across the country where many families are spending half or more of their income on housing
[4].
Americans should be able to afford homes that are close to work and meet their needs. In many regions across the U.S., this is extremely difficult—if not impossible—for homebuyers to find.
The state of housing today
Over the last few months, the hope of returning to normalcy has fueled an increase in consumer spending overall. The housing market has followed suit: low mortgage rates and positive consumer sentiment have sparked a sudden interest in homebuying
[5]. Housing prices are skyrocketing because the demand is so great, and the supply is so thin.
Here are some key statistics that illustrate the current state of the housing market:
- In September, the national average price for a home was $380,000, 8.6% higher than last year and 20.6% higher than 2019[6].
- The number of homes for sale right now is 22.2% below this time last year. The total number of homes actively available for sale is less than half of what we saw in 2019[7].
Looking ahead
There has been a small increase in new listings this year, which is optimistic for buyers. However, the gap in our nation’s housing supply will take a long-term national effort to close. Traditionally, the federal government’s housing policies have consisted of demand-side interventions like tax incentives for homeowners, which have been slashed in recent years and do little to help reduce the cost of housing. The biggest cause of surging home prices today is the low supply that existed before the pandemic and has been exaggerated by the pandemic. America needs supply-side interventions that will drastically increase the number of affordable homes on the market.
The American Property Owners Alliance supports federal policies that:
- Incentivize the construction and rehabilitation of homes for low and moderate-income families
- Offer incentives to convert unused or underutilized commercial properties into residential units
- Provide funding for state and local government to enact pro-housing policies at the local level
The Alliance’s 10 million advocates will be activating soon to pass federal legislation that can help close the housing supply gap. Sign up to receive alerts when there is an opportunity to take action to help make homes more affordable for Americans.
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[1] https://cdn.nar.realtor/sites/default/files/documents/Housing-is-Critical-Infrastructure-Social-and-Economic-Benefits-of-Building-More-Housing-6-15-2021.pdf
[2] https://cdn.nar.realtor/sites/default/files/documents/Housing-is-Critical-Infrastructure-Social-and-Economic-Benefits-of-Building-More-Housing-6-15-2021.pdf
[3] https://www.bayareamarketreports.com/trend/san-francisco-home-prices-market-trends-news
[4] https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2019/03/25/rural-america-faces-a-housing-cost-crunch
[5] https://www.forbes.com/sites/saibala/2021/04/27/the-covid-19-pandemic-has-fueled-a-crisis-in-the-housing-market/?sh=6ecd0b885928
[6] https://www.realtor.com/research/september-2021-data/
[7] https://www.realtor.com/research/september-2021-data/
To the chagrin of homebuyers, investors swarming in hot housing market
By: American Property Owners Alliance
Sep 03,
2020
Having a hard time buying a home? You aren’t alone in this crazy housing market where over-bid offers, homes being purchased sight unseen, and cash offers are crushing the chance of the average homebuyer from getting a sniff at the home they want.
But you know who isn’t struggling to buy a home?
Investors.
According to data from Redfin, investors purchased nearly 68,000 housing units in the second quarter alone – this included single-family homes, multi-family properties, townhouses and condominiums.
This was the largest number of investment purchases in one quarter since Redfin started collecting their data in the year 2000.
All told, those units cost $48.5 billion, which is also a record total, according to the report.
This also isn’t something that was brought about solely by the pandemic and record-low mortgage interest rates. Investors have already been more active in the residential real estate market prior to the COVID-19 outbreak. In the first quarter of 2020, about 16% of all residential sales were made to investors.
Soaring home prices have become an opportunity for investors – who are defined as a company or institution purchasing a home, instead of an individual – as the value of homes continues to increase, investors are practically guaranteed a strong return on their investment.
According to the report, investors are focusing on single-family homes more than they ever have before, buying them and turning them into rental properties. In the second quarter, 16% of single-family home sales went to investors, also an all-time high.
With so many Americans priced out of the homeownership market, investors are taking advantage, buying these homes, converting them to rentals, and turning a profit as housing providers.
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Will the Delta variant impact the housing market like its Alpha counterpart?
By: American Property Owners Alliance
Sep 02,
2020
Looking back, the COVID-19 pandemic had a strange and unexpected impact on the housing market in 2020 when the Alpha strain encompassed the United States.
While people were losing jobs, businesses were closing down and unemployment rates were soaring - it was hard to buy a home. Open houses were all but verboten. Would-be sellers felt the anxiety of the pandemic and either pulled their home off the market or never listed it to begin with out of fear it wouldn’t sell.
But then, something happened. After a brief slow down at the start of the pandemic, as the summer of 2020 approached, the housing market started to respond robustly and a housing boom that is still going strong more than a year later, was born.
“It’s hard to say how it’s going to affect the housing market,” Danielle Hale, chief economist for Realtor.com told their website. “The next couple of months are going to be pretty key to see which gear the housing market [shifts] into.”
Prices are unthinkably high. Buyers get into bidding wars with each other over the limited supply, often times winning their bids by going over list price, or by offering cash deals.
Now, COVID-19 is rearing its ugly head again. This time with the even more contagious Delta variant. Which begs the question, how will it impact the housing market this time?
It could completely flip the hot housing market on its ear again, or it could just be a passing phase that impacts data for a couple of months before things return to the new normal of demand far outweighing the supply.
There is a real debate among those in the housing community. Delta has brought back masks – even for vaccinated individuals - as a recommendation to help squash the virus once more. And with the return of masking recommendations, the country is again splitting on political divides, and it is leading to more economic uncertainty for the U.S. in the global economy and has also led to financial markets that are all over the place from one day to the next.
“It’s hard to say how it’s going to affect the housing market,” Danielle Hale, chief economist for
Realtor.com told their website. “The next couple of months are going to be pretty key to see which gear the housing market [shifts] into.”
The Delta variant has also led to the return of falling mortgage interest rates, just as they were starting to inch back up toward pre-pandemic levels.
If you combine this with the possibility of returning back to the country being shut down as it was in the Spring of 2020, this could bring more buyers to the market – looking to get a home with a locked in fixed mortgage interest that is near historical lows. But, this can also lead sellers to once again be scared to sell amidst a health crisis, reducing inventory even further, sending prices to unfathomable highs and pricing out most first-time homebuyers and even other middle income earners looking to upgrade their home.
Is another lockdown likely? No. But, it’s not out of the realm of possibility. How Americans will handle the anxiety or frustration that could come with that, or with simply the possibility of another stay-at-home order, could go both ways.
That’s because many Americans might be completely fed up with the pandemic, and are less fazed this time around, even if the variant of the virus is more contagious than the original. This will become even more evident if another lockdown is avoided.
Sellers, especially if they are vaccinated, may not care one iota about Delta, and still list their home for sale. And buyers, even if they are unsure about visiting strange homes in the midst of the pandemic, will still tour homes online and maybe bid on them sight unseen.
There’s also the notion that pandemic anxious buyers may have already gotten into a new home between the Alpha and Delta breakouts. Meanwhile, those waiting for prices to come down may still be doing that and those individuals who are actually returning to a workspace that isn’t in their home may now want to avoid getting into a new home that will make their work commute that much longer.
As such, Delta may not have a real impact on the housing market, unless quarantines and work and school shutdowns return.
Where Delta is having an impact is on mortgage rates.
According to Freddie Mac, in late July, the mortgage rates fell to 2.78% on a 30-year fixed-rate loan.
As such, if things continue to get worse with this fourth round of the pandemic, the rates will stay low or even sink lower.
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Housing affordability crisis will likely get worse before it gets better
By: American Property Owners Alliance
Sep 01,
2020
Housing experts have been warning us for years that there is a pending housing affordability crisis. It was already rearing its ugly head in certain parts of America before the COVID-19 pandemic. but, since the pandemic, it’s accelerated even faster.
Housing prices and rents are getting higher and higher, and it’s likely still going to get worse before we reach the tipping point.
It is estimated that in the next decade the U.S. will need to add about two million new housing units per year to make up for the 7.4 percent population increase that took place in the 2010s.
“The country has been underbuilding housing for two decades, leading to a shortfall of 6.8 million housing units.”
However, in 2020, there were only 1.3 million new housing units developed - a number that falls well short of what will be needed if 2021 and beyond bring about similar totals.
And there isn’t much room for optimism right now. The cost of housing development has skyrocketed. The red tape that is local zoning codes and restrictions is slow to cut through – if you can get through it at all. And thanks to the pandemic, there is an unexpected labor shortage that is also slowing development.
With all those things working against housing developers, it’s hard to imagine making up that chasm of 700,000 homes needed to start to slow the crisis. Builders would need to collectively boost their production by 60% each year, a goal that is likely too ambitious to reach.
According to a study by the National Association of REALTORS®, done in conjunction with the Rosen Consulting Group, the country has been underbuilding housing for two decades, leading to a shortfall of 6.8 million housing units, when adding in homes lost in that same time frame due to disasters or demolition.
What was hard to predict was that even with the economy being hit hard by the pandemic in 2020 and into 2021, the prices of homes and rents continued to increase. This was because historically low mortgage interest rates allowed more buyers to enter the housing market, making demand significantly outpace the supply.
It created bidding wars, and alternative purchasing methods – like all cash offers, corporations buying up housing stock, bids well above the list price and even the purchase of properties sight unseen – more normal.
This also forced potential buyers, who could not afford a home in the bidding war, to resort to seeking rentals. As such, housing providers increased the cost of rentals as they started to be swallowed up by the same supply vs. demand game.
This left many Americans, in the lower income threshold, without affordable housing options - a dangerous precedent that has led to more homelessness – and could see those numbers spike even more once the country figures out how to resolve the conundrum created between property owners and renters brought on by the eviction moratorium.
According to the National Low Income Housing Coalition, Wages of between $20 and $25 per hour are needed just to afford the rent of a one or two-bedroom unit. Their data, according to
Bisnow, also indicates that there are only 37 affordable housing unit available in America for every 100 extremely low-income renters.
The Senate recently passed a $1.2 trillion infrastructure bill that includes $213 billion in funds to preserve more than two million affordable housing units. And, while that’s a nice first step, it pales in comparison to the amount of time and money that would be needed to close the wound that has been festering for decades when it comes to housing affordability.
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CoreLogic: June home price increase the largest in 42 years
By: American Property Owners Alliance
Aug 30,
2020
Housing prices on the rise? Not a shocker. Housing prices jumping in one month by the largest percentage in 42 years? That one might catch even the most ardent real estate analyst off guard.
Just when you thought there was nothing else that could surprise you about the housing market…
This stems from data released by CoreLogic, a property analytics provider, that showed that home prices rose in June by 17.2% - the highest one-month growth since 1979.
It was no secret that the pressures of supply and demand during the pandemic are resulting in higher prices, but such a huge leap, month-over-month, is both rare and historical.
“Homes are on the market for the shortest period of time in history, averaging about two weeks – meaning half of the homes are selling faster than that.”
When you combine historically low mortgages and low inventory of homes for sale, that means there are going to be significantly more people who want to buy a home than the number of homes that are actually on the market.
This is what is creating a wild market with bids over the list price, all cash offers, and purchases being made sight unseen. This is why homes are on the market for the shortest period of time in history, averaging about two weeks – meaning half of the homes are selling faster than that.
This means affordability is going to remain a core problem on the hosing market in the near future, and maybe even longer.
The intense growth is stalling the market not just for the potential buyers, but for sellers as well. The reason being is folks who want to sell their home are waiting to list because they are often unable to find their next home within their budget.
As bad as it is for current homeowners looking to move, first-time homebuyers are in an even worse situation, as they struggle to come up with a down payment for any home, regardless of price.
Detached properties grew the most, according to CoreLogic. Their rate of price growth was 19.1%, significantly higher than the growth for attached properties (10.7%).
This is a result of the COVID-19 pandemic as it increased the desire for less dense neighborhoods and more living space, both inside the home and outside it.
The markets that saw the largest growth were Twin Falls, Idaho (40.2%) and Bend, Oregon (35.4%). Overall, the states with the largest jumps in price were Idaho (34.2%) and Arizona (26.1%).
However, this trend does seem a bit unsustainable, and when the market finally stalls, the growth will take a hit as well. While the values aren’t expected to decrease, they should stabilize, with prices expected to increase only by about 3% by the same time next year.
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What’s in the $1.2 trillion Senate infrastructure package
By: Washington Post
Aug 12,
2020
The United States Senate just passed a $1.2 trillion infrastructure package, the largest upgrade to the country’s roads, bridges, pipes, ports and broadband in decades.
The package contains $550 billion in entirely new investments, including money for electric car charging stations and zero-emission school buses. The spending is mostly paid for — without raising taxes. The bulk of the funding comes from repurposing unspent coronavirus relief money and tightening enforcement on reporting gains from cryptocurrency investments. The bill would add about $256 billion to the debt, according to the Congressional Budget Office.
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“New” eviction moratorium looks a lot like the old one
By: American Property Owners Alliance
Aug 12,
2020
It was expected that once the national eviction moratorium came to an end, things would get messy.
However, having the applecart upset before that storm even hit was a bit unexpected, and yet – here we are.
Rental assistance money is not being handed out as quickly as it should. With a lot of renters in danger of being evicted from a home they insist they can’t pay for because of the pandemic, the Biden Administration, through the Centers for Disease Control and Prevention (CDC), once again extended the moratorium – this time through October 3. Despite saying at the time that the last extension, which expired July 31, would be the last time it was extended, this moratorium is being considered a “new” one.
“It is a national shame,” Susan Rice, the director of the Domestic Policy Council, told the Times, “That our state and local entities have not taken advantage of this substantial investment from Congress to prevent exactly what we are concerned about.”
It is a gamble by the administration and may be a move that comes off as a bit of “gamesmanship” on the part of the President.
When the last extension was enacted in June, the Supreme Court of the United States voted 5-4 to allow it to reach its conclusion but opined that the CDC had overstepped it’s bounds by continuing the moratorium for so long.
Although the Supreme Court slightly left the door open for interpretation as to what their next ruling would be if the moratorium was extended yet again, Justice Brett Kavanagh made it clear that he would vote against any further extensions, which could swing the vote if it happens to come before the Supreme Court again.
But there are other legal hurdles this latest extension would have to traverse before it gets back to the Supreme Court.
Trying to put an end to the moratorium
The Alabama and Georgia state REALTOR® associations—along with two housing providers and their property management companies—filed an emergency motion in federal court to block this latest action by the CDC.
Although the latest moratorium language was cleverly composed to be narrower in scope initially – saying it would only be extended in areas with high transmission of COVID-19, at the time it was ordered - it still covered about 90% of all renters in the U.S. And, with the continued spread of the Delta variant of the coronavirus, it likely could get back to covering 100 percent of all renters.
The new language was designed to circumvent the Supreme Court ruling which required Congressional approval of any new legislation that would allow for a moratorium to be created or extended. Despite a desperate plea from President Biden to Congress two days before the moratorium was set to expire in July, Congress could not pass any new legislation.
Biden was then pressured by those in his own party, including Speaker of the House Nancy Pelosi, to file an extension anyway and see what would happen.
The Alabama and Georgia REALTOR® associations are now asking a judge to uphold the Supreme Court’s interpretation, and that judge, U.S. District Court Judge from the District of Columbia, Dabney Friederich, is considering blocking the latest ban.
“Given that this order is almost identical to the CDC’s earlier order, as to the effect of it, it’s really hard … to conclude that there’s not a degree of gamesmanship going on,” Friedrich said, according to
Politico.
However, the Department of Justice (DOJ) has argued in court filings that this isn’t an extension of the previous moratorium, but rather a brand new one. They believe it is necessary to continue helping struggling renters as spread of the Delta variant explodes in the U.S.
If Friedrich does block the ban, the DOJ will almost certainly appeal the decision, which would keep the moratorium in effect while the appeals process plays out.
Ensuring people stay in their homes after the moratorium ends
But housing providers say the moratorium, which the CDC first put in place last September, has cost them more than $13 billion per month in unpaid rent, and they continue to urge for swift deployment of federal rental assistance as the solution.
Here’s the problem: according to a report in the
New York Times, the Department of Treasury disclosed on July 21 that $3billion out of $46 billion in Congressionally approved rental assistance money had been given to the renters who needed it, while the states and cities who got the funding have been sitting on the rest.
Throughout July, the Biden Administration tried to expedite the disbursement of the remaining dollars, money that would have allowed renters to pay their housing providers during the pandemic and make everyone whole. But their efforts were fruitless.
According to the
Times, logistical issues and concerns about potential fraud kept much of the money from flowing. Some cities required overly complicated application forms. Many renters did not hear about the program and simply didn’t sign up. In some states, the money remained frozen because of concerns about giving funds to people who didn’t really need it.
“It is a national shame,” Susan Rice, the director of the Domestic Policy Council, told the
Times, “That our state and local entities have not taken advantage of this substantial investment from Congress to prevent exactly what we are concerned about.”
Housing activists had been shouting at the tops of their lungs for months that once the moratorium expired, a large number of renters would suddenly be at high risk of becoming homeless.
The National Association of REALTORS® (NAR) has been pushing hard for the rental assistance money to be distributed and done so in a timely fashion.
“About half of all housing providers are mom-and-pop operators, and without rental income, they cannot pay their own bills or maintain their properties,” NAR President Charlie Oppler said in a statement. “NAR has always advocated that the best solution for all parties is rental assistance paid directly to housing providers to cover the rent and utilities of any vulnerable tenants during the pandemic. No housing provider wants to evict a tenant and considers it only as a last resort.”
When meeting with reporters after announcing the “new” moratorium, Biden admitted that the way he and his administration went about it was a risk and that it could be vulnerable in court, but that the appeals process would allow it to continue long enough to get more of the rental assistance money into the hands of the renters who need it.
“I went ahead and did it,” Biden said, according to the
Times. “But here’s the deal: I can’t guarantee you the court won’t rule if we don’t have that authority. But at least we’ll have the ability, if we have to appeal, to keep this going for a month at least — I hope longer than that.”
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Redfin: 51 percent of homes in U.S. selling above the list price
By: American Property Owners Alliance
Aug 10,
2020
It used to be that when you were selling your home you would list a price a little higher than the offer you were willing to accept – that way, as bids came in, you could determine which one you were willing to settle for.
The way things are going now, that concept is growing extinct.
That’s because more than half the homes being sold in America are being sold at above their list price.
With the housing stock dwindling, and the demand for homes increasing, prices are rising exponentially. As a result, the market has become uber-competitive, and home sales are now happening faster, for more money, sometimes sight unseen and even with cash offers.
According to a recent study by Redfin that looked at home sales in 400 Metropolitan markets, 51% of homes sold in the U.S. sold above the list price during a four-week period that ended in late May.
This was a whopping 26% increase over the same time period in 2020.
And although the pandemic put a crimp in home sales initially last Spring, the jump is still significant.
In addition, the study showed the median home sale price was $354,250, the average asking price for a single-family home was $361,875, and the average length of time a home lasted on the market was 17 days. All three of these data points are records.
Price growth usually doesn’t happen until later in the summer, but the skyrocketing prices haven’t just unhinged the door to alternative approaches toward buying a home, they’ve blown the door completely out of the way.
The housing market is expected to remain white-hot until mortgage rates increase, which likely won’t occur until after the summer months.
Until then, it’s going to be more of the same – buyers being forced to bid above a home’s list or maybe even higher than they budgeted to get a home.
The study also showed that the number of active listings are down 49% from the same time in 2019 – which was used as a measure so it could compare to pre-pandemic data.
That indicates a severe lack of housing available in general is driving home prices through the roof across the country and is pricing a lot of potential buyers out of the market.
The problem is, there are still active buyers who are able to traverse the turbulent waters and are willing to buy homes at these more exorbitant prices.
The study showed that of the 400 markets studied, 399 of them saw increases in home sales. The lone market that had a decrease was Rochester, N.Y. (-3%).
The largest gains were in markets like San Francisco (184%), San Jose (150%) and Miami (120%)
As for prices, they unsurprisingly increased in all 400 markets. Th largest price increases took place in Austin (42%), Oxnard, Calif. (26%) and Miami (26%). The smallest increase was in Honolulu (0.2%).
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Biden Administration offers more options to prevent foreclosures
By: American Property Owners Alliance
Aug 10,
2020
The foreclosure moratorium for federally-backed mortgages expired at the end of July, but the Biden Administration has come up with alternatives for borrowers to reduce their mortgage payments.
These new options, administered by the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA) and the Department of Agriculture (USDA), will provide options for homeowners that would allow them to lengthen the terms of their mortgages by reducing the monthly principal and monthly interest.
This would bring them “closer in alignment with the options for homeowners with mortgages backed by Fannie Mae and Freddie Mac,” according to a press release provided by the White House.
While the foreclosure ban expired on July 31, the enrollment period for forbearance on loans is still available through September 30.
“HUD will allow servicers to extend the mortgage term for those borrowers unable to make monthly payments after the foreclosure ban expired.”
According to
Housing Wire, about 1.75 million homes are still in forbearance. For those Americans who are ready to start paying their mortgages once again, the federal government will allow them to simply add on payments to the end of their current mortgage payment schedule to make up for the lost time.
However, many homeowners are going to need more help than just lengthening the mortgage payment schedule if they are to keep their current homes.
“In order to ensure a stable and equitable recovery from the disruptions of the COVID-19 pandemic and prepare for homeowners to exit mortgage forbearance, the Biden-Harris Administration is taking action to keep Americans in their homes and support a return to a more stable housing market,” the White House said in a statement.
HUD will allow servicers to extend the mortgage term for those borrowers unable to make monthly payments after the foreclosure ban expired. According to the release, some mortgage terms can be extended 360 months – or another 30 years – at the market rate, which would reduce their monthly payments by about 25%.
Additionally, borrowers can receive a partial claim, which is an interest-free second mortgage, of sorts, that isn’t due until the first mortgage is paid off in its entirety.
These partial claims will be offered by HUD to those borrowers who can start making their mortgage payments again.
The VA will buy a portion of the borrowers’ unpaid principal balance and arrears up to 30% and offer a partial claim that is interest free. Additionally, they can extend mortgages for as many as 40 years.
As for the USDA, their options are targeting a 20% reduction in monthly payments. These would include a term extension, like HUD, but also an interest rate reduction as well as an advance to help make up for past due payments. Borrowers would have the option to use these new alternatives either individually, separately, or combined.
Aside from these new options, the Homeowners Assistance Fund will provide $10 billion in relief for homeowners who were impacted by the pandemic. These funds can be used to pay mortgages, insurance on the home, even utility bills.
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Biden Announces Record Amount of Climate Resilience Funding
By: New York Times
Aug 06,
2020
The Biden administration announced on Thursday a record injection of money to help communities gird against the effects of climate change, as disasters continue to pummel the United States.
The new funds — $3.5 billion in grants to states to protect against floods, wildfires and other threats — mark a shift in United States disaster policy as climate change gets worse: Rather than smaller, more targeted investments, the government is throwing huge sums of money at disaster preparation as fast as it can.
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HUD attempts to fix its own mistake
By: American Property Owners Alliance
Aug 02,
2020
The Department will reinstitute an Obama-era rule and rescind one put in place by the Trump Administration to prevent confusion with housing discrimination issues
The U.S. Department of Housing and Urban Development (HUD) is trying to right its own perceived wrong.
In late June, HUD published a proposal to the Federal Register that would restore the Obama-era discriminatory effects rule (first published in 2013) and rescind the Trump-era disparate impact rule (first published in 2020), stating the “2013 rule is more consistent with decades of caselaw and better effectuates the (Fair Housing) Act’s broad remedial purpose of eradicating unnecessary discriminatory practices from the housing market.”
There was a strong belief that the 2020 update to the Act would have made it harder for those who were trying to seek fair housing justice to legally prove discrimination and that it complicated the assessment of discrimination by mandating new requirements of proof, new legal defenses, and changing the pleading requirements to cloud whether or not the Fair Housing Act was, in fact, violated.
“We must acknowledge that discrimination in housing continues today and that individuals, including people of color and those with disabilities, continue to be denied equal access to rental housing and homeownership.”
The 2020 rule never actually took effect because of a court injunction issued in the U.S. District Court for the District of Massachusetts as part of the
Massachusetts Fair Housing Center v. HUD court case.
HUD indicated that by reverting back to the 2013 rule, it would allow for more clear analysis.
“We must acknowledge that discrimination in housing continues today and that individuals, including people of color and those with disabilities, continue to be denied equal access to rental housing and homeownership,” HUD Secretary Marcia Fudge told
Housing Wire. “It is a new day at HUD-and our Department is working to lift barriers to housing and promote diverse, inclusive communities across the country.”
There has been a lot of consternation surrounding these rule modifications or potential rule changes. Former HUD Secretary Ben Carson issued guidelines that outlined a five-step approach that required regulators to identify intentional discrimination by lenders.
Under the 2013 rule, which HUD is looking to reinstate, housing providers and lenders could be liable for discrimination tactics even if it were unintentional.
But the Trump Administration began pushing for change as far back as the former president’s first year in office. In 2017, he asked the Department of the Treasury to urge HUD to change the disparate impact rule.
That got a lot of push back from other elected officials, as well as other civil rights groups and trade organizations including the National Association of REALTORS ®. These organizations banded together with one voice, expressing concern that the new rule would spur on additional housing discrimination through structured racism.
After the controversial changes were issued in 2020, a federal judge delivered a preliminary injunction in October to stop HUD from implementing the rule until the legal challenge was resolved.
President Biden issued a memorandum in the first week of his presidency ordering HUD to take all the necessary steps to ensure compliance with the Fair Housing Act
On January 26, 2021, President Biden issued a memorandum ordering HUD to “take all steps necessary” to examine the effects of the 2020 Rule, including the effect that amending the 2013 Rule has had on HUD’s statutory duty to ensure compliance with the Fair Housing Act.
According to the notice issued by HUD, those who wish to comment on the proposed rulemaking may do so through Aug. 24, 2021.
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New data, same story – home prices are on the rise again
By: American Property Owners Alliance
Jul 19,
2020
Home prices went up again in May. No, we aren’t surprised either.
According to data released by the National Association of REALTORS® (NAR), the median existing home price across all housing types reached a record high of $350,300 in May. This was an increase of a whopping 23.6% from the same time in 2020.
Overall, home prices rose across the entire country for the 111
th consecutive month, dating back to March 2012.
Sales of existing homes dropped for the fourth straight month, down 0.9 percent from April 2021. Still, existing home sales remain up 44.6% year over year.
“Home sales fell moderately in May and are now approaching pre-pandemic activity,” Lawrence Yun, Chief Economist for NAR, said in a statement. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.
“The market’s outlook, however, is encouraging. Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”
That increase in supply has already started to show. The total inventory, according to NAR, was 1.23 million units available, an increase of 7% from April, but still significantly less (20.6%) from May 2020.
“Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.”
While the overall supply of homes increased slightly from 2.4 months supply to 2.5 months from April, it is still dangerously low and pales in comparison to the 4.6 months supply from a year earlier.
Sales are happening fast and furious. NAR reported almost 90 percent of properties sold in May spent less than one month on the market. The average was 17 days, same as it was in April, but remains much more rapid than a year ago when the average was 26 days on the market.
Single family home sales also dipped by 1% from April, but the rate of those sales is still robust, clocking in at a 39.2% increase from the same time a year ago. The median existing single family home price increased again to $356,600, a 24.4% increase from last May.
There was no change in existing co-op and condo sales from April to May, but the adjusted annual rate of 720,000 units still marks a 100% increase from the same time in 2020. The median existing condo price is $306,000, a 21.5% increase from May 2020.
“NAR continues its advocacy efforts to find new, creative and effective ways to increase housing construction and supply,” NAR President Charlie Oppler said in the report. “The right policies will provide huge benefits to our nation’s economy, and our work to close this gap will be particularly impactful for lower-income households, households of color and first-time buyers.”
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New collaborative: Three million net new Black homeowners by 2030
By: American Property Owners Alliance
Jul 08,
2020
A new collaboration between industry and advocacy groups is determined to have three million net new Black homeowners by the year 2030.
They announced their formation on the Friday before Juneteenth, a day many businesses closed in recognition of the new Federal Holiday, at a press conference in Cleveland that featured Housing and Urban Development Secretary Marcia Fudge and Ohio Sen. Sherrod Brown.
The new group, known as the Black Homeownership Collaborative (BHC), unveiled their new website (
3by30.org) as well as a seven-point plan to accomplish this ambitious goal.
The genesis for the creation of this collaborative is that even today, 53 years after the signing of the Fair Housing Act, the Black Homeownership rate has reached levels not seen since housing segregation was legal in the United States.
When the housing market crashed in 2008, it created an era known as the Great Recession. In the decade since the end of that recession, Black homeownership has continued to decrease, while groups in other demographics have each seen a substantial recovery.
There are myriad reasons for this, including systemic racism and a continued lack of affordable housing in the country. Federal law suppressed homeownership among people of color which piled on top of more traditional hurdles facing first generation homebuyers - such as an inability to afford a down payment on the purchase of a home - and created the homeownership gap that exists today.
“The persistent gap in homeownership rates among Black and white Americans illustrates how racial inequality in our society translates into wealth inequality.”
According to the Federal Reserve Board, less than 20% of Blacks under the age of 35 own a home, a paltry number when compared with whites in the same demographic (41%). And while the gap closes in a little bit in the next age group (50% of Blacks aged 35-54 own a home compared to 70% of whites), five million additional Black homeowners would be needed to be on par with white homeowners.
According to the Urban Institute, if structural barriers aren’t addressed, by 2040 the Black homeownership rate will continue to fall, particularly for households in the 45-74 age demographic.
“The persistent gap in homeownership rates among Black and white Americans illustrates how racial inequality in our society translates into wealth inequality,” said Bryan Greene, vice president of policy advocacy at the National Association of REALTORS® (NAR) and a member of the BHC steering committee. “NAR is pleased to join this dedicated group of widely-respected organizations in the Black Homeownership Collaborative to pursue our shared goals.
“We look forward to continuing our work to secure federal and local-level policies which will raise Black homeownership levels, strengthen communities, and improve the American economy.”
The plan, set forth by the BHC, listed seven realistic steps that can make it possible to increase Black Homeownership by the target of 3 million net new homeowners by 2030.
These recommendations were put together by more than 100 housing leaders in both the industry and among housing advocacy groups over the past two years, including NAR.
They include:
- Homeownership counselling – This includes pre-purchase counseling, counselling borrowers who have been denied mortgage approval to turn a “no” into a “not yet”, and post-purchase counselling to sustain homeownership. This would also require additional funding for housing counselling agencies which, according to the BHC, are significantly underfunded.
- Down payment assistance – The legacy of historic denial of homeownership means that Black Americans are less likely to be able to rely on a loan from a family member or sale of an existing home to assist with down payment costs. Research from NAR has found that while almost four out of 10 white Americans – 37% – used the funds from the sale of their primary residence to serve as a down payment for a home, only 21% of Hispanic, 18% of Asian and 17% of Black Americans were able to do so. Black Americans and Hispanic Americans – 15% and 10% – were three and two times more likely, respectively, than white and Asian Americans – 5% each – to tap into their 401(k) or pension funds as a down payment source for a home purchase. As such, a sustainable and targeted down payment assistance program is needed.
- Housing Production – While housing supply shortages are a major problem across the country, the biggest area of need for housing is for lower -priced or entry-level priced homes that are affordable for first-time homebuyers or those re-entering the homebuying market after a hiatus. Local zoning restrictions, expensive permits, increased cost of lumber, and other price increases have led to a slowdown in production. Economic interventions in distressed communities, land use reforms, and public investment are needed to develop or rehabilitate more affordable homes.
- Credit and Lending – Black homebuyers have consistently struggled to build the credit necessary or be provided with the right loans to afford the purchase of a home as well as a monthly mortgage payment. Innovative mortgage credit scoring and mortgage products are essential for a successful strategy to get people the credit and lending they need. Not everyone is ready to own a home right away, but credit evaluators need to do a better job so they can refer those denied the necessary credit to housing counselors who can get them ready to buy in a short period of time. Additionally, mortgage products need to target populations that have not only been historically underserved by the mortgage finance system, they have been specifically excluded. Addressing these inequities requires direct interventions like special purpose credit programs (SPCP) and specified pools for mortgage securitization.
- Civil and Consumer Rights – Today’s homeownership gap was created by a dark legacy of credit access denials and lending discrimination to Black households and communities, which prevented them from building equity, and in turn, wealth. The federal government must ensure it enforces fair housing and consumer protection laws to prevent present-day discrimination from eroding what wealth Black Americans already possess.
- Homeownership Sustainability – According to the Urban Institute, Black homeowners have shorter spans of homeownership than white homeowners. While a lot of attention has been given to helping renters become homeowners, not as much has been paid to helping homeowners stay homeowners. According to the BHC, early intervention, ex-ante counseling, and COVID-19 related homeownership assistance are essential components of sustaining homeownership.
- Marketing and Outreach –According to Freddie Mac, prior to the COVID-19 pandemic there were at least three million Black households identified as mortgage-ready and more than two million were able to meet income requirements but didn’t have the requisite credit history for home loan requirements. As a result, it’s going to require strong marketing and outreach to let these households know they can become homeowners and start accruing equity and household wealth. According to the BHC, many factors contribute to the need for a sustained and targeted marketing push: the impact of mass foreclosures and predatory equity-stripping schemes in communities of color during the Great Recession; the multigenerational impact of racism on attitudes about the meaning of “the American Dream;” a lack of informed parental support and guidance available to first-generation homebuyers; and significantly higher levels of student debt despite high incomes.
The BHC believes that if their seven-step plan is followed, that the ambitious goal of three million new net Black homeowners by the end of the decade is both a realistic and exciting possibility.
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National eviction moratorium extended again; upheld by Supreme Court
By: American Property Owners Alliance
Jul 08,
2020
It’s safe to say when housing providers first decided to invest in rental properties, they never expected to have such disdain for the Centers for Disease Control and Prevention (CDC).
However, through the CDC, the Biden Administration extended the national eviction moratorium for a fourth time – this time through July 31, 2021 – although the CDC indicated this would be the final extension to the moratorium.
This is to the relief of many renters and the disdain of many housing providers who are continuing to pay the mortgage on properties that renters are not paying the rent for as a result of the financial burden brought on by the pandemic.
Hundreds of rental assistance and relief programs have been created in the past 15 months. But because of a lot of red tape surrounding the application process for that rental assistance, a large portion of the rent aid has not gone to the people who need it most.
So, the race against the clock is on to get the funds to the people who are truly struggling with paying the rent as a result of the pandemic, but these programs weren’t built to move with such alacrity.
Money is also available for the housing providers, but their acceptance of the relief comes with caveats.
According to the New York Times, the funding pays for as much as a year of unpaid rent and three months of future rent payments for eligible tenants.
Meanwhile, housing providers can also apply for the relief, and although the program doesn't mandate that they accept the money, those who do take the funds must agree to not evict the qualifying tenant for at least 12 months, with very few exceptions.
While housing providers can start the application process, tenants have to sign an online application, and an application cannot be saved and edited later, which has led to a lot of frustration for renter applicants.
Meanwhile, tenant rights groups had been lobbying for the moratorium to continue because without rental assistance funds being distributed, they feared a wave of evictions would soon follow.
According to the Times that concern, coupled with lagging vaccination rates in certain parts of the country, is what finally convinced the White House to approve the extension.
However, that wave may still be coming next month.
On the other side of the conversation were those fighting for the rights of the property owners, who have been left on the hook for monthly mortgage payments that were being covered by rent pre-pandemic, but they are now left making those payments without the income necessary to pay it.
However, these housing providers suffered a second blow when the Supreme Court voted 5-4 to uphold the CDC moratorium.
Justice Brett Kavanaugh seemed to cast the deciding vote. According to SCOTUS Blog, although Kavanagh agreed with the plaintiffs that the CDC exceeded its legal authority in issuing the national moratorium, he felt that since it is set to expire in a month and there will be no further extensions, it’s more pragmatic to just let the moratorium run its course at this stage. As such, he sided with Chief Justice John Roberts and justices, Elena Kagan, Sonia Sotomayor and Stephen Breyer.
However, like the CDC moratorium, many state and city eviction bans across the country are set to expire during the summer months, which will soon leave many renters in a precarious position.
Many renters have accrued insurmountable debt in the past year and won’t be able to make up the difference.
This could leave them without a roof over their heads. As for the housing providers, without the rent money being paid to them, some will pull their properties off the market until they can get themselves caught up on their mortgage payments, further jeopardizing the availability of affordable housing for all Americans.
According to the Times, the Biden administration is ramping up its efforts to stem the tide that is coming with likely eviction filings in August. There will be an affordable housing and evictions summit this month at the White House. Guidance will come from the Treasury Department on how to more efficiently and effectively distribute emergency aid to both renters and housing providers that were part of the pandemic relief bill. The Department will also implement better and more regular communication with state and local officials, as well as legal aid organizations, to try and limit evictions once the moratoriums end.
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Fannie Mae: Homebuyers weary of housing market
By: American Property Owners Alliance
Jun 25,
2020
When Russ Joy and his wife Nancy bought their starter home in 2016 in the town of Royersford, PA, the notion was that they would start a family, and in a few years, upgrade to a bigger home.
Now, with three young children, the time has come, but the plan that the Millennial couple had put together to make this happen has been unable to come to fruition.
That’s because the Joys - both of whom were public school teachers until Russ took a job in the writing/marketing field at the completion of the 2020-21 school year - have been unable to compete with the craziness of the housing market, even if they are to make about $50,000 on the sale of the home they are in right now.
“It’s bad enough that prices have already become inflated beyond what we expected,” Joy said. “It’s demoralizing to see so many properties going for tens of thousands of dollars over the asking price with cash offers.
“As a young family, trying to expand, there is no way to be competitive with all-cash offers.”
It’s not just the cash offers. Or bids coming in way above list. Or even some buyers being willing to buy the property sight unseen.
The Joys thought they had found their home in nearby Gilbertsville, but they were unable to even get to the table because the sellers and the selling agent pushed the envelope of ethics to deny them their bid – which was the lone bid on the home at the time.
Having the upper hand, the seller and their agent not only wanted a filing of the financial disclosures of the monetary assets of the Joys, but also the family who are in agreement to buy the Joys current home.
The Joys agent checked in with the ethics board to see if this was fair, and the Board deemed it was. But it’s not like they were outbid for the home, rather they were kept from making the purchase because they are a young family of five and the family buying the Joys current home is an FHA loan applicant.
“It’s like they are using our age and the fact that our buyers are potentially being backed by a Federal loan against us,” Joy said. “It’d be fine if a month or two from now we found out we were just outbid, but if they aren’t selling to us based on who we are, or who the people are that are buying our house seems really discriminatory to me.”
The Joys are not alone with their frustrations.
According to the latest Fannie Mae Home Purchase Sentiment Index (HPSI), only 35% of consumers believe now is a good time to buy a home, down from 47% in April. And those who believe it is a bad time to be a homebuyer increased to 56% from 48%.
“Consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment,” Doug Duncan, senior vice president and chief economist at Fannie Mae told Housing Wire. “However, despite the challenging buying conditions, consumers do appear more intent to purchase on their next move, a preference that may be supported by the expectation of continued low mortgage rates, as well as the elevated savings rate during the pandemic, which may have allowed many to afford a down payment.”
The lack of available homes, combined with the higher prices and cash offers or over-market bids, are discouraging homebuyers in the short-term. There are other factors, such as job creation or job stability, and a rebounding economy actually saw a bump in the HSPI index by one point (80) in May.
Still, because the housing market still favors the sellers, more than two-thirds of potential sellers surveyed by Fannie Mae in June said now is a prime time to list a home, which is no different than it was in May.
Likewise, the percentage of respondents who think home prices will continue to rise over the next 12 months decreased slightly, but insignificantly from 49% to 47%. That two percent difference shifted to those who feel prices will stay the same (up from 27% to 29%). A total of 17% of respondents feel prices will come down, and that number remained unchanged from May.
No matter how you slice it, it seems like the feelings of homebuyers aren’t going to be much different than what the Joys are experiencing for the remainder of the year, if not longer.
“It’s been emotionally draining,” Joy said. “And the joy of looking for a house has been taken from us.”
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Infrastructure: Crossing the Bridge to Better
By: American Property Owners Alliance
Jun 23,
2020
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How do we build the bridge to a more sustainable, equitable future for all property owners? Smart investments in infrastructure today. Click on a subject area below to learn more about infrastructure and what’s needed to cross the bridge to better communities.
Broadband
Currently, 19 million Americans do not have access to broadband at threshold speeds.1
When communities gain access to high-speed internet, businesses grow, jobs are created, and according to a recent study, property values are 6% higher.2 Return to top.
Waste and Water
Only 37% of the nation’s total water infrastructure capital needs were met with previous funding.3
There is a critical need to maintain and expand systems that deliver clean drinking water to property owners. We must invest in waste and water system improvements now to conserve water and keep communities safe and healthy. Return to top.
Roads and Bridges
More than 40% of our country’s road systems are in poor or mediocre condition, costing drivers over $1,000 every year in wasted time and fuel. 4
Roads play a critical role in the transfer of goods and services that fuel local economies. We must invest in roads and bridges now to support local economies, improve traffic congestion and road safety, and lower transportation costs for property owners. Return to top.
Mass Transit
45% of Americans do not have access to public transportation.5
It is time to invest in expanding access to mass transit so that people can more easily access healthcare, jobs, schools and more. Mass transit also raises property values and improves the quality of neighborhoods. Return to top.
Sign The American Property Owners Alliance petition to Congress urging them to them to support smart infrastructure investment.
Click Here
[social_warfare]
Most federal rental assistance money not being delivered to those in need
By: American Property Owners Alliance
Jun 21,
2020
The U.S. Government has allocated $45 billion for rent relief since December 2020, but that money has barely made an impact, and with the eviction moratorium about to run out, it’s likely this assistance money will never be used for its intended purpose.
States, cities, and smaller municipalities have created more than 340 new programs in the wake of the COVID-19 pandemic to help distribute federal rental assistance dollars. However, according to Vox Media, the state programs, which have received the lion’s share of the funding, have only distributed a small percentage of the money they have received.
The problem has been that while the notion of providing billions of dollars in much needed rental assistance, the devil was in the details to make sure the right people who actually needed the aid got it.
That created a whole mess of red tape, forcing renters to provide proof of need and identity, something that the people in the most dire of circumstances are unable to produce. Additional problems are that while these programs were created and existed, not enough grassroots work was done to let the people know who needed the assistance that they were available to help.
As such, only a small percentage of those in need of rent relief even knew relief was available to them.
According to the National Multifamily Housing Council, a large majority of American renters made at least a partial rent payment in May.
However, because most people consider their rent the most important bill they have to pay, they often eschew other required payments, or put themselves into a worse-off financial situation. Just because the rent has been paid, doesn’t mean money wasn’t borrowed, or credit card debt didn’t pile up, or valuable possessions weren’t sold - just to scrape by for another month.
The Centers for Disease Control and Prevention’s (CDC) eviction moratorium is set to expire at the end of June, barring another extension. With there being court cases across the country saying the CDC exceeded its authority by imposing the moratorium in the first place, another extension seems less likely.
This will force state and local governments to decide whether to keep their own moratoriums in place or have an onslaught of evictions begin as soon as July.
This appears to be a lose-lose situation for local governments. If they keep the moratoriums in place without the rental assistance money getting to the people who need it, more mom-and-pop property providers will fall behind on their mortgage payments without the rent coming in to supplement it. As such, many of these property owners will pull their property from being available to rent, trimming further an already slim inventory of affordable housing.
According to the Department of Housing and Urban Development, 41% of all rental units in America are owned by small business housing providers operating on very slim profit margins. These rentals tend to be less expensive than single family units or larger, corporate-owned, multi-family complexes.
If they choose not to keep the moratoriums in place, evictions will skyrocket, backlog, and create mayhem, all the while many low-income individuals and/or families will have to find somewhere to sleep or risk homelessness.
Either way, it’s not an ideal situation. Finding ways to streamline these rental assistance dollars - and quickly - is the best path to stemming the rent crisis and ensuring that everyone can have a roof over their head.
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Biden’s Neighborhood Homes Tax Credit aims at revitalizing low-income communities
By: American Property Owners Alliance
Jun 10,
2020
It’s not a surprise to learn there’s a housing shortage in America. There are countless stories out there talking about ways to combat that shortage.
The most common solution people support is building more homes. And while that is definitely a worthy strategy, it would take years to overcome the current shortages if that were the only plan of attack.
Another one that has cropped up, as part of the Biden Administration’s infrastructure plan, is the notion of rehabilitating existing homes that may be out of date and get them up to code so they can once again be livable.
According to the National Association of REALTORS®, there were 1.7 million older housing units that were demolished or taken out of stock in an eight-year span between 2009 and 2016. According to Freddie Mac, if those homes were renovated rather than demolished, the housing supply would have at least doubled, if not grown even larger, by 2017.
The Biden Administration wants to harness that notion and use it to help stop the housing shortage and make more homes available, especially for lower-to-middle income earners.
On June 1, Biden announced his plan for the
Neighborhood Homes Tax Credit, an initiative that would incentivize rehabilitation, rather than total demolition, of outdated homes.
Investors would be able to claim the credit on their federal tax returns if they sell the home and it is then occupied by an eligible buyer who makes no more than 140% of the area median income.
The credit would make up the difference between the costs of the rehabilitation and development, and the eventual sales price. However, there would be a cap on the final sales price that could not exceed four times the area median family income.
In addition, homes must be located in areas where there is a poverty rate of at least 130% of the area poverty rate, the median family income is below 80% of the area median, and median home values are lower than the area median in order to be eligible for the credit. The White House indicated that would cover approximately 25% of all census tracts.
According to a White House press release:
- Approximately 40 percent of U.S. housing stock is at least 50 years old, and more than 15 million properties are vacant even as families struggle to find affordable housing. In many neighborhoods, these properties make it difficult to attract or retain local homebuyers, reducing property values and community wealth.
- Modeled after the Low-Income Housing Tax Credit and the New Markets Tax Credit, state housing finance agencies would receive an annual allocation of Neighborhood Homes Tax Credits based on population.
- Each state’s housing finance agency would then award tax credits to project sponsors—developers, lenders, or local governments—through a competitive application process. Sponsors would use the credits to raise investment capital for their projects, and the investors could claim the credits against their federal income tax when the homes are sold and occupied by eligible homebuyers.
- As mentioned earlier, these tax credits would cover the difference between total development costs (including acquisition, rehabilitation, demolition, and construction) and the sales price. This would, for example, make it financially viable to spend $120,000 acquiring and rehabilitating a vacant property that would only sell for $100,000 on the open market by offering a $20,000 tax credit to cover the difference.
- The Tax Credit would bolster homeownership rates for low- and moderate-income homebuyers in underserved communities, while protecting against gentrification.
The U.S. is home to consistent disparities in homeownership and wealth. Across the country, just 49 percent of Hispanic Americans and 45 percent of Black Americans own their own homes, compared to 74 percent of White Americans.
As home prices rise, the proposed Tax Credit would make a generational investment in homeownership affordability, thus enabling low- and moderate-income buyers – including homebuyers of color – to purchase their own homes and build wealth.
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HUD budget to expand greatly if Biden plan approved
By: American Property Owners Alliance
Jun 09,
2020
The Department of Housing and Urban Development (HUD) could be in for a big financial boost, as part of President Biden’s proposed budget plan, that could make a huge impact on homeownership and housing in America.
Biden’s plan would appropriate about $150 billion to HUD that would also create tens of thousands of jobs for working-class families that do not require a college degree.
Recently, HUD secretary Marcia Fudge toured Kansas City with Mayor Quinton Lucas and Missouri Rep. Emanuel Cleaver. While there, she highlighted how Biden’s American Jobs Plan will resuscitate American housing infrastructure and, at the same time, combat the ever-growing affordable housing crisis in the country.
“Our homes can serve as a bridge to greater opportunities and a better life,” Fudge said in a press release. “The American Job Plan is a historic, once-in-a-generation investment in our nation’s infrastructure – including our housing infrastructure. If we want the United States to remain the greatest nation in the world, then we must first take care of home – in the most literal sense. To pass an infrastructure plan that fails to expand affordable housing and to revitalize our communities would be akin to building a road that leads to nowhere.”
The plan also calls for guaranteeing one million housing units to be dedicated for low-income families and addressing other long-suffering housing infrastructure needs, such as health and safety concerns.
The jobs that would be created with this plan would allow for the development, upgrading, and retrofitting homes in the same communities where the jobs would be created.
These new jobs would come with a requirement that employers pay workers competitive wages, have local workforce and hiring agreements, guaranteeing jobs to the people who live in the specific communities, and additionally use workers from labor training and apprenticeship programs.
Another facet of the proposal would require these employers to not interfere with their employees who try to organize a union so they could negotiate and collectively bargain employment contracts. This means the employers can not require their employees to undergo mandatory individual arbitration.
Specifically, the plan calls for a $5.4 billion expansion of housing vouchers to cover 200,000 additional families. Furthermore, homeless assistance grants would increase by $500 million, which would support another 100,000 additional households that includes victims of domestic violence and homeless youth.
Other specifics that are part of the plan include:
- Building affordable housing not just in big cities, but in small towns across the country.
- Incentivizing local governments to remove exclusionary zoning and restrictive land use policies.
- Investing $2 billion in HUD’s Section 202 Supportive Housing for the Elderly program to increase supply and enhance supporting services for affordable housing for low-income older Americans.
- Removing lead-based paint from approximately 175,000 housing units and, in the process, make multifamily homes more energy-efficient and create communities that are more resilient to harsher climates.
- Meet the housing needs of tribal communities.
These budget increases, as part of the plan, are likely a starting point for negotiation in Congress and likely will be trimmed down or have changes in some capacity to garner the bi-partisan support that will be needed to be approved.
Vermont Sen. Bernie Sanders, who chairs the Senate Budget Committee, praised the increases in funding for affordable housing through HUD, as well as other funding increases.
“At a time when over half of our people are living paycheck to paycheck, and millions of elderly people are experiencing poverty, this budget goes a long way in providing the help that so many Americans desperately need,” Sanders said in a statement, according to
Housing Wire.
Congress has to pass a budget before Oct. 1, the beginning of fiscal year 2022.
In his first year in office, Biden and his administration have taken a significant focus on affordable housing.
Separate from his budget proposal for HUD
, Biden’s $2 trillion infrastructure plan includes $213 billion to be allocated for housing, specifically for low-income homeowners and first-time homebuyers.
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Biden hoping for a home run to aid first-time homebuyers
By: American Property Owners Alliance
Jun 09,
2020
President Joe Biden wanted a tax credit for first-time homebuyers. He needed Congress to step up to the plate.
And while there’s still some work to do before hitting the ball out of the park, Congress at least gave him a line-drive base hit in its first at bat.
In April, U.S. Rep., Jimmy Panetta of California and Rep. Earl Blumenauer of Oregon introduced new legislation that is known as the “First-Time Homebuyer Act.” The new bill, being discussed in Congress, would provide a tax credit for first-time homebuyers that would equal 10% of the purchase price of the home, or $15,000.
Eligible buyers are those who have not owned a home or purchased a home in the three previous years.
Another condition of eligibility is that participants must not make more than 160% of the median income for the area and the purchase price of the home must be no more than 110% of the median purchase price of the area.
Borrowers will be able to claim the credit for any home purchased in 2021 or beyond.
The idea was to target those individuals who are low or middle-income earners, and they would have to use the home as a primary residence for at least four years. If not, a portion of the credit would be recovered through taxes.
This bill is not to be confused with different legislation that would provide down payment assistance via a closing grant to first-time, first generation homeowners. This bill - which part of Biden's infrastructure plan - should not be confused with different legislation that would provide down payment assistance via closing grant to first-time, first-generation homeowners, which is not affiliated with Biden’s plan.
That said, there’s a possibility that both see the light of day.
“This legislation is just one element of the big, bold housing agenda that we are promoting to combat the housing affordability crisis and address centuries of overtly racist and discriminatory housing policies that have left massive wealth, homeownership, and opportunity gaps between white communities and communities of color,” Blumenauer said in a statement provided to Housing Wire.
The legislation is designed to build wealth within communities that face systemic exclusions in the housing market.
This isn’t the first time that a first-time homebuyer tax credit is being considered in Congress. In fact, in 2008, Congress passed an overwhelmingly successful law that created a $7,500 tax credit for first-time homebuyers and 1.5 million homebuyers took advantage of the credit.
In 2009, the credit increased to $8,000.
Things went awry when it became obvious that the Internal Revenue Service wasn’t providing the proper oversight, and an IRS watchdog found more than 74,000 questionable claims for the tax credit that the IRS simply missed.
In those instances, there were individuals taking the credit who did not purchase a home. There were also borrowers under the age of 18 and there were those who received the credit who had, in fact, owned a home within the previous three years.
As much as first-time homebuyers would champion this legislation becoming law, with the way Congress moves, it might not be worth the wait.
In other words, if you are a first-time homebuyer, you might want to act now and not sit around and wait to see if Congress can pass this bill.
Properties are being gobbled up fast. Sometimes mere days after being listed. If you are waiting, home prices will continue to rise, the market will become more competitive, and you could be left standing there with the bat on your shoulder as strike three blows past you.
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Report: Single-Family home prices up year-over-year
By: The Title Report
May 14,
2020
ATTOM Data Solutions’ property tax analysis of around 87 million single-family homes around the country showed that $323 billion in property taxes were levied on single-family homes in 2020, up 5.4 percent from $306.4 billion in 2019.
The average property tax of $3,719 for a single-family home in 2020 rose 4.4 percent from $3,561 in 2019, while the effective property tax rate of 1.1 percent dipped from 1.14 percent in 2019.
“Homeowners across the United States in 2020 got hit with the largest average property tax hike in the last four years, a sign that the cost of running local governments and public school systems rose well past the rate of inflation. The increase was twice what it was in 2019,” ATTOM Data Solutions Chief Product Officer Todd Teta said in a release. “Fortunately for recent homebuyers, they have mortgages with super-low interest rates that somewhat contain the cost of homeownership. But the latest tax numbers speak loud and clear about the continuing pressure on both recent and longtime homeowners to support the rising cost of public services.”
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The results of homeowner tax reform are in: Americans are voting with their feet
By: Bankrate.com
May 14,
2020
Once upon a time, the federal tax benefits of homeownership were equal. The write-off you got in California or New York was the same as the break you received in Montana or New Mexico.
With the tax reform of 2017, however, that’s no longer the case. Changes in tax policy have caused homeowners to rethink their real estate options, a trend accelerated by the COVID-19 pandemic. The result? For some, it’s goodbye, New York. So long, San Francisco. Hello, Orlando. Howdy, Austin.
“For the past two years, I’ve felt like everyone is leaving Los Angeles, and that has intensified during the pandemic,” says Lindsay Katz, an agent at real estate brokerage Redfin in Los Angeles. “More than half of my sellers are moving to a different area. A lot of young families are moving back to their hometowns to be near their parents, moves they can now make because they’re working remotely.”
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Is the housing bubble going to burst? Don’t hold your breath
By: American Property Owners Alliance
May 14,
2020
If you are expecting the latest housing boom bubble to burst, don’t.
That’s because, as National Association of REALTORS® (NAR) chief economist Lawrence Yun said, “This (boom) is not a bubble. It’s simply a lack of supply.”
As basic as he makes that sound, it’s the reality. Housing is booming in America because of an historic low in housing stock on the market.
As a result, prices are going up, and in some places, buyers are buying homes above the list price just to ensure they win the bid.
All that’s doing is pricing out a lot of hard-working Americans from achieving the dream of homeownership.
And it’s not a good thing long-term, because if this isn’t a bubble, as Yun said, that means the prices aren’t going to plummet anytime soon, if much at all.
“This (boom) is not a bubble. It’s simply a lack of supply,” says NAR chief economist Lawrence Yun.
According to data from NAR, there are just 1.03 million homes available in America. In July 2007, there were four times as many homes on the market.
Prices are up 17.2% since March 2020 and the number of active listings in that same time period is down 54%.
Some cities are seeing a ridiculous jump in list prices. For example, the median price of a single-family home in Austin, Texas is now $520,000 – a 40% jump from the same time in 2020.
While mortgage rates are now back above 3% and likely not going to get any lower, that percentage is still appealing for buyers Combine affordable mortgages with a slowdown in housing development brought on by the COVID-19 pandemic; a flight toward bigger, suburban homes as people are finding they can effectively work from home; and a good stock market, allowing some individuals to have more money for a down payment, and it’s easy to see why prices are skyrocketing.
This is hurting the first-time homebuyer greatly, as they don’t have the personal wealth to compete with these individuals on the purchase of a home. Add in the fact that large corporations are buying up available homes and renting them, knowing the market is tough on Millennials and Generation Z, and the number of owner-occupied homes is drying up.
Some buyers are even gambling and willing waive the right to inspect a property or other financial contingencies before buying the property. Heck, some homes are selling sight unseen.
The one silver lining is rents seem to have stabilized, so people can find a way to get a roof over their heads. Albeit these are not always ideal circumstances as renting makes it harder to save to buy a home and start accumulating wealth.
But that’s only a small ray of sunlight. According to Yun, we are flirting with a dangerous situation where if rates remain low, demand picks up with new jobs, there's no increase in supply, and the only thing that moves is home prices, more and more people will get priced out.
“That would mean we are creating a divided society of haves and have-nots," he said.
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States with the highest property taxes
By: Yahoo.com
May 14,
2020
In some states, homes are cheap, property tax rates are less than half of 1% and the average property tax payment is just a few hundred bucks per year. In the most expensive states, however, rates soar over 2%, homes are pricey and average annual property tax bills routinely creep above $5,000 and beyond.
Using data from the Tax Foundation, GOBankingRates ranked the states with the highest property taxes in America, including the percentage rate, the average dollar amount paid and the average home value. The results are listed in ascending order from least expensive to most. For context, the national average effective property tax is 1.06%, the U.S. average home value is $263,351 and the average annual property tax bill is $2,787.
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Congress considers $15,000 first-time homebuyer credit
By: CPAPracticeAdvisor.com
May 14,
2020
A refundable, advanceable tax credit of up to $15,000 for first time homebuyers, being considered in future tax and economic stimulus legislation, could catapult millions of renter households into first-time homeownership, a
new Zillow analysis suggests.
While Congress has already passed billions in aid over the past year to provide homeowner and renter relief, housing will remain a key area of focus through 2021 — especially as Congress continues to grapple with decreasing affordability.
Zillow research found that with a 3.5% down payment on a 30-year mortgage with a 3% interest rate, about 9.3 million renter households in the U.S. (27.4%) would spend less than a third of their income on the monthly payment for the median home sold in their metro in 2020
. An advanceable tax credit would remove for them what two thirds of renters cite as the single biggest barrier to homeownership --
saving for a down payment. Other hurdles include qualifying for a mortgage and job security.
A tax credit could be even more beneficial to renters in relatively more affordable metros, like Pittsburgh (40.5% could afford a median mortgage), Cincinnati (39.7%), Cleveland (39.0%), and St. Louis (38.5%). Costly California metros like Los Angeles (10.1%) and San Jose (12.1%) have some of the smallest share of renters that could afford a mortgage, but the program would still significantly impact thousands in those regions.
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The U.S. is in the midst of a housing crisis. What can be done about it?
By: Philadelphia Inquirer
May 13,
2020
The nation is struggling with an affordable-housing crisis. There is not enough housing in communities across the country, including here in Philadelphia. This means families must pay more for their housing, renters have less to get by on at the end of the month, homeownership is out of reach for too many, and those of modest means are forced to live farther from decent jobs.
Homebuilding collapsed during the housing crash more than a decade ago and has been slow to recover. Construction of high-end homes and apartments recovered first, and there is now an oversupply in some urban areas across the country.
However, the construction of affordable housing — homes reasonably priced for lower-income households to rent or own — has only recently begun to increase and continues to lag demand. The shortfall is so large that it would take an extra year of construction at its current pace to close it.
The lion’s share of the undersupply is concentrated in areas that offer significant economic opportunity, driving up house prices and rents for low- and moderate-income families precisely where they want to live.
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Housing advocates want equity provisions in Biden’s proposed infrastructure bill
By: Roll Call
May 07,
2020
Witnesses urged senators to bake provisions to ensure equity into President Joe Biden’s proposed infrastructure package or they would risk repeating a history of public investments that locked African Americans and minorities out of buying homes and building wealth.
Federal policies, including provisions of the New Deal and a 1950s law to expand and build highways, worsened segregation and drove divestment from Black and minority communities, witnesses said Tuesday during a Senate Banking Committee hearing on racial discrimination in housing.
Senate Banking Chairman Sherrod Brown, D-Ohio, asked witnesses how to fairly implement future infrastructure packages, such as the one Biden introduced last month. Biden’s proposal includes $213 billion to build and rehabilitate affordable housing units.
Past infrastructure investments, including the creation of the Federal Housing Administration and construction of the federal highway system, created jobs and drove economic growth, but only for some communities, Brown said.
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How an infrastructure bill can help rural communities in the West
By: deseret.com
May 07,
2020
Kane Creek Road, a curving asphalt road nestled between the Colorado River and red rock cliffs, might not see much use were it not situated in Moab, Utah — a small town so inundated with visitors these days that City Manager Joel Linares says he’s never bored.
“We’re just getting overrun. We just cannot keep up,” Linares said.
The road, which leads to a popular off-roading route, is falling apart, according to Linares. The byway has turned into a kind of quilt with lines of asphalt zigzagging every way. “I don’t know that there’s a 6 foot by 6 foot square of asphalt left in the whole road. I mean, it’s just a big piece of patchwork.” he said.
Quick fixes just aren’t working anymore.
Deteriorating Kane Creek and other roads in this area of southeastern Utah are an example of how a small town of roughly 5,000 full-time residents must contend with big city infrastructure problems brought on by an average of 3 million visitors a year.
“All of our projects and everything is so geared towards meeting the market demand that’s being driven by overnight accommodations,” Linares said. “We never have time or money to go in and take care of our failing infrastructure that’s decades and decades and decades old.”
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Fair Housing Month Feature: Louisiana Fair Housing Action Center
By: American Property Owners Alliance
May 07,
2020
The American Property Owners Alliance (The Alliance) is deeply committed to improving fair housing protections to make property ownership accessible for all Americans. We know that a critical step to achieve equity in homeownership is to support organizations and advocates who are dedicated to protecting fair housing rights and expanding opportunity.
Meet Cashauna Hill, Executive Director of the Louisiana Fair Housing Action Center. Cashauna and her team work to end discriminatory housing policies and practices through litigation and policy advocacy, along with fair housing trainings and foreclosure prevention counseling. Prior to her role at LAFHAC, Cashauna successfully resolved fair housing and lending claims through administrative and court processes. She has been interviewed by CNN, NPR, and countless other national and local media outlets – and has even testified before the United States Congress as a fair housing expert.
Why is equitable access to housing so important
Cashauna: Where we live influences nearly every aspect of our lives. Our zip code determines everything from whether we have access to fresh food and produce to how long we’ll have to wait for public transit, to even how long we’ll live. Equitable access to housing is important because where we live determines how or whether we’ll have access to opportunity.
What are common obstacles and discrimination that people face when trying to rent or buy a home? You are welcome to provide specific examples.
Cashauna: It’s important to note that whether or not a home is even available to rent or purchase can be rooted in discriminatory housing policy. Zoning and land-use restrictions have, for generations, worked to limit the kinds of housing opportunities that may be available in certain communities. When homeseekers look for housing in a certain community, we know that they may encounter discriminatory actions from landlords, sales agents, and other real estate professionals.
How does your organization help individuals and families overcome the barriers to housing access to increase equity in housing?
Cashauna: LaFHAC provides free legal representation to people who have experienced discrimination, and works in concert with developers and other interested parties to challenge discriminatory policies and practices in the housing market through litigation. Additionally, LaFHAC provides free foreclosure prevention services to ensure that our neighbors can continue to build and retain generational wealth through homeownership, and provides fair housing training sessions and other educational opportunities to community members. LaFHAC also works at the state, local, and federal level to support passage of policies that advance equitable access to housing opportunity.
What does the future of fair housing look like?
Cashauna: The future of fair housing should look like families being able to choose the housing that works best for them, free of interference from discriminatory policies and practices. It sounds simple, but there has not yet been a time in this nation when this vision is reality.
About the American Property Owners Alliance
The American Property Owners Alliance (The Alliance) is a nonpartisan, non-profit organization created to protect and support property owners and pave the way for future property owners. Our mission is to educate property owners about federal issues, laws and policies; to advocate for owners’ rights and interests; and to mobilize, when necessary, to secure those rights and interests.
Sign The American Property Owners Alliance petition to Congress urging them to support property owners and remove barriers to more affordable housing.
[social_warfare]
Fair Housing Month Feature: Fair Housing Justice Center
By: American Property Owners Alliance
May 07,
2020
The American Property Owners Alliance (The Alliance) is deeply committed to strong fair housing protections that help make property ownership accessible for all Americans. We know that a critical step to achieve equity in homeownership is to support organizations and advocates who are dedicated to protecting fair housing rights and expanding opportunity.
Meet Fred Freiberg, the Executive Director of the Fair Housing Justice Center (FHJC), a nonprofit civil rights organization dedicated to eliminating housing discrimination, promoting policies that foster inclusive communities, and strengthening enforcement of fair housing laws. The FHJC serves all five boroughs of New York City and seven surrounding New York counties. FHJC Executive Director, Fred Freiberg, explains the overt and subtle housing discrimination that many people face, how FHJC is tackling discrimination head-on, and the role that stakeholders play in eliminating housing discrimination and creating inclusive communities.
Why is equitable access to housing so important?
Fred: Where one lives matters. Whether one has access to employment and educational opportunities, healthy food options, decent healthcare, as well as parks, recreational, and commercial amenities – nearly every aspect of our lives is affected by our zip code. Even one’s life expectancy is impacted by the neighborhood in which one resides.
Too often, housing opportunities in well-resourced areas are not equally available to all people because of persistent and pervasive discrimination in the housing market based on race, ethnicity, disability, and other protected characteristics.
More than 53 years after the passage of the federal Fair Housing Act, the housing choices of too many people are severely limited to areas with fewer resources and little or no ability to build the generational wealth that was the key to the growth of the white middle class. A recent Brookings Institution study revealed that the net worth of a typical white family is nearly ten times greater than that of a Black family, and much of that disparity is linked to residential segregation and racial discrimination
[1]. And sadly, much of the historical discrimination that occurred was at the hands of the organized real estate industry, which – from its very founding – worked hand in hand with government to create and reinforce racial segregation.
What are common obstacles and discrimination that people face when trying to rent or buy a home?
Fred: While the blatant in-your-face discrimination of the past – the “slammed door” – still occurs, it has been replaced today with more polite and courteous behavior often accompanied by a smile, a handshake, and any number of deceptive statements such as “the apartment was just rented,” “unfortunately there’s a waiting list right now,“ or “I think you would have better luck finding a home in your price range in another area” to name just a few. Consumers should think of it as more of a “revolving door” where people are politely and courteously escorted into, out of, and away from the desired housing.
Racial steering and other discriminatory conduct was outlawed by the Fair Housing Act over five decades ago, but as we saw in the
2019 Newsday story – and as we have seen in too many of our own testing investigations since 2005, illegal housing discrimination continues unabated in our metropolitan regions.
“The bottom line is that most victims of racial discrimination in the rental, sale, and financing of housing have no idea that discrimination has occurred because they have no way to compare their treatment against that of a person of a different race or national origin.”
As a result, much of the housing discrimination that occurs today goes unreported, no enforcement action is taken, and the cycle of discrimination and segregation continues. The FHJC recently detailed this reality in a new policy paper,
“Ending Racism in Residential Real Estate.”
How does your organization help individuals and families overcome the barriers to housing access to increase equity in housing?
Fred: The FHJC conducts investigations through our testing program to document unlawful housing discrimination. We assist people who file housing discrimination complaints by conducting covert testing investigations and gathering information that may help them meet their burden of proof in an administrative hearing or court of law. But we do not only test in response to complaints. We also conduct proactive systemic testing investigations to identify patterns of housing discrimination that exist in the community. We have successfully challenged illegal housing discrimination in rentals, real estate sales, mortgage lending, assisted living and nursing homes, government housing programs, and other parts of the housing market.
Our investigations have led to legal challenges that have opened more than 70,000 housing units to previously excluded populations, recovered more than $50 million in damages and penalties, and changed the way many housing providers and government agencies do business
[2]. We also do advocacy work on fair housing policy issues, and we engage in education and outreach to increase public awareness of fair housing rights. The FHJC is the only full-service fair housing organization based in New York City.
What does the future of fair housing look like?
Fred: An honest assessment of our history shows that our segregated housing patterns were the result of a massive, coordinated, intentional, and costly effort by the real estate industry and government over many decades. Undoing the damage will require an equal effort. Five decades after the sponsors of the Fair Housing Act assured Americans that the law was aimed at stopping illegal housing discrimination and replacing our segregated metropolitan regions with “truly integrated and balanced living patterns,” most of the country remains racially segregated and systemic housing discrimination still infects most housing markets.
There are some reasons for hope. The new administration is taking steps to restore regulations and rules that had been dismantled in the last administration. One would enable enforcement agencies to more easily utilize a legal theory called “disparate impact” to combat subtle forms of discrimination. Another would empower local and state governments and other recipients of federal funds to more fully implement their duty under the Fair Housing Act to “affirmatively further fair housing.” The
Newsday investigation prompted state legislators in New York to propose legislation that would provide ongoing annual funding for systemic testing throughout the State.
“The FHJC has been urging local, state, and federal governments to move away from a purely complaint-responsive enforcement paradigm to one that is more proactive and uses testing to document systemic housing discrimination. The burden of ending housing discrimination should not solely fall on victims of housing discrimination.”
We’re also encouraged that some of the leadership within the real estate industry are coming to terms with their history, working to change the culture of the real estate industry, and encouraging members to take anti-racist positions in their daily real estate practices. Toward that end, FHJC has launched a new social media campaign,
“Together We Can End Housing Discrimination,” aimed at enlisting allies in the fight. Unlike most outreach campaigns designed to reach direct victims, the new campaign is directed at people – including those in the real estate industry - who have credible information about discriminatory policies and practices. The agent who knows that a colleague is steering, the broker whose company refuses to do business in certain areas – anyone who’s unsure of what to do about the discrimination they have learned is occurring. Contact the FHJC (anonymously if you prefer) by visiting
https://www.fairhousingjustice.org/together-we-can-end-housing-discrimination , and we’ll take it from there.
Learn more about Fair Housing Justice Center.
About the American Property Owners Alliance
The American Property Owners Alliance (The Alliance) is a nonpartisan, non-profit organization created to protect and support property owners and pave the way for future property owners. Our mission is to educate property owners about federal issues, laws and policies; to advocate for owners’ rights and interests; and to mobilize, when necessary, to secure those rights and interests.
Sign The American Property Owners Alliance petition to Congress urging them to support property owners and remove barriers to more affordable housing.
[social_warfare]
[1] https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/
[2] Data provided by Fair Housing Justice Center
CDC eviction moratorium vacated by federal judge, appealed by DOJ
By: American Property Owners Alliance
May 07,
2020
Evictions have been banned for the past year because of the COVID-19 pandemic. That changed in a hurry. And just as quickly changed again.
On May 5, Federal Judge Dabney L. Friedrich vacated the eviction ban established by the Centers for Disease Control and Prevention (CDC).
This comes on the heels of a lengthy legal battle between the Alabama Association of REALTORS® and the U.S. Department of Health and Human Services.
However, the Justice Department is appealing the decision on behalf of the CDC and Friedrich’s ruling has been stayed pending the high-stakes appeal.
The ban was originally slated to expire June 30, but the CDC has extended the ban several times over the past year, meaning the June 30 date could have potentially moved even further into the future.
The Alabama Association of REALTORS® were joined by the Georgia Association of REALTORS®, and other plaintiffs, in filing a lawsuit after the CDC extended the moratorium in November 2020. That lawsuit came when the CDC expanded the reach of its ban to include properties outside of those that were receiving federal assistance.
The REALTORS® argued that more and more renters have been abusing these protections and have simply stopped paying rent.
The main argument though, and likely the most important thing that led to Judge Friedrich’s decision, was that the federal government went too far by extending the moratorium to include properties that were outside the purview of the federal government.
“It is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic,” Friedrich wrote in the memorandum opinion, according to Inman. “The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not.
“Because the plain language of the Public Health Service Act, 42 U.S.C. § 264(a), unambiguously forecloses the nationwide eviction moratorium, the Court must set aside the CDC Order, consistent with the Administrative Procedure Act and D.C. Circuit precedent. For the foregoing reasons, the plaintiffs’ motion for expedited summary judgment is granted and the Department’s motion for summary judgment and partial motion to dismiss are denied.”
The CDC extended the moratorium last summer, at Thanksgiving, and then again two days before it was set to expire in March.
“The COVID-19 pandemic has presented a historic threat to the nation’s public health,” CDC director Dr. Rochelle Walensky said in a statement to CNBC. “Keeping people in their homes and out of crowded or congregate settings — like homeless shelters — by preventing evictions is a key step in helping to stop the spread of COVID-19.”
According to a March report issued by the Center on Budget & Policy Priorities, 15% of adult renters in America, or roughly 1.6 million Americans, were behind in their rent.
Moody’s Analytical Report indicated that approximately $57 billion in back rent was owed in the month of January.
Congress tried to eliminate as much of that as possible with $25 billion in rental assistance in the December stimulus package and an additional $27 billion in Biden’s American Rescue Plan that passed in March.
On the local level, existing rental assistance programs are being bolstered and new programs are being launched. According to the National Low Income Housing Coalition, more than 200 of these programs are open and accepting applications.
CNN reported that tenants must meet an income requirement, show they've lost income during the pandemic and demonstrate a risk of homelessness in order to qualify for the money.
And while there is a stay in place and evictions aren’t going to start happening next week, whether the appeal overturns Friedrich’s decision or not will be determined by what judges are chosen for the panel.
"The underlying ruling in this case is pretty weak, in my opinion," Shamus Roller, executive director of the National Housing Law Project told NPR. "Congress in December extended the CDC order. So clearly Congress thinks that the CDC has this authority.
"It'll be a three judge panel that will review this. It will depend greatly on which three judges get selected."
The Trump administration put in place several conservative federal judges who, if chosen, might view this moratorium as an example of governmental overreach. This explains why Roller said the judges chosen for this panel will be so important.
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Is Biden’s grant program for affordable housing more carrot or more stick?
By: American Property Owners Alliance
May 05,
2020
President Joe Biden wants to use an historic amount of federal dollars to create more affordable housing in America. But to do so, he is going to have to find his way through a wall of seemingly impenetrable red tape so that federal money can influence local governance.
It’s not going to be easy, and some are doubting that he can make it happen. But Biden is going to give it a try by putting the wooden rabbit out in front of the Greyhound American Mayors and see if they’ll chase it.
Much of the cost of building new housing is determined at the local level. Almost 20% of the cost of building a single-family home comes from state and local regulations such as permitting and development fees, zoning rules and land-use restrictions.
With all of these costs, building affordable housing is next to impossible.
However, Biden wants to try to tackle the problem with a new competitive grant program. This would entice state and local governments to scale back costly zoning and land-use policies.
That’s a start, but is it enough?
“To say, ‘We’re not going to give you money for affordable housing if you don’t make it easier to build affordable housing, [which is hard] because you don’t want affordable housing,’ — it’s ridiculous,” David Dworkin, president and CEO of the National Housing Conference, an affordable housing advocacy group told Politico. “You need carrot and stick, not carrot or stick, to make it work.”
Dworkin added that if there was a serious effort to make a push to cut through some of the exclusionary zoning red tape, that it would tie federal transportation dollars to the elimination of these barriers, and that’s a much larger pot of gold at the end of the rainbow than is usually shared with states.
The reason the Biden Administration has dodged the notion of putting more pressure on local officials to change these regulations is because it puts the President in a boxing ring without any gloves against some haymaker throwing Mayors who have basically drawn a line in the sand about tying local regulations to federal dollars.
“All these places are reluctant to touch zoning, or it would have been done already,” Jim Parrott, a former housing adviser to the Obama White House, also told Politico. “(It) depends totally on how big the carrot is and whether they deploy sticks.”
Carrot and stick analogies aside, it’s not just housing folks who are wondering if Biden’s plan will ever come to fruition as outlined, or if it will require some more federal muscle.
Some Democrats have argued that there isn’t enough federal money to back this idea, meanwhile Republicans are arguing that infrastructure plan as a whole contains too much federal spending.
With there being pushback on both sides of the spectrum, as well as concern being expressed by housing advocates, it could make it hard for Biden to get this proposal across the goal line and make homes more affordable for many Americans.
Biden’s pitch calls for two million affordable housing units to be developed, preserved, or rehabilitated using a whopping $213 billion.
Homebuilders also have their doubts about Bien’s plan. After all, two million homes is a huge number. To make that happen, Congress is going to need to get creative – maybe take Biden’s plan and use it to spark something more appealing and realistic.
Biden wants to commit $40 billion to create more public housing. Progressive Democrats feel that’s not enough and want to see that number nearly double. Meanwhile Republicans feel building more public housing is taking a step backwards because of its dependency on the government.
Many experts believe that Biden’s infrastructure plan will pass through both the House and Senate, but not as currently proposed. The question is, when it’s done, will there be a boon or a bust for affordable housing in America? Only time will tell.
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Fair Housing Month Feature: Fair Housing Center of Central Indiana
By: American Property Owners Alliance
May 04,
2020
The American Property Owners Alliance (The Alliance) is deeply committed to improving fair housing protections to make property ownership accessible for all Americans. We know that a critical step to achieve equity in homeownership is to support organizations and advocates who are dedicated to protecting fair housing rights and expanding opportunity.
Meet Amy Nelson, the Executive Director of Fair Housing Center of Central Indiana (FHCCI), a nonprofit fair housing organization that works to create equal housing opportunities in Central Indiana by eliminating housing discrimination through advocacy, enforcement, education and outreach. The FHCCI was established through a U.S. Department of Housing & Urban Development grant awarded to the National Fair Housing Alliance to establish a fair housing agency in central Indiana. FHCCI Executive Director, Amy Nelson explains the impact of where you live on your life, why equitable access to housing is critical, and the role we all play in fighting housing discrimination and creating equal housing opportunities.
Why is equitable access to housing so important?
Amy: We can so often track where we live as the basis for so much in our lives. We see this in formerly redlined neighborhoods having higher rates of asthma and diabetes. How here in my city we have a staggering 17-year life expectancy rate difference simply due to where one lives
[1].
“It’s families suffering in substandard housing due to affordability barriers. It’s the growing number of studies showing us that with one’s zip code, researchers can predict if your child will finish high school, what their income will be, or whether they will be incarcerated. It’s children moving from school to school due to their family just being served an eviction, even if no fault of their own, and facing screening barriers. All based on where we live. Housing is critical.”
What are common obstacles and discrimination that people face when trying to rent or buy a home?
Amy: FHCCI specifically investigates allegations of housing discrimination received from the public as well as conducting systemic investigations. Unfortunately, housing discrimination happens far too often. Whether it is a recent client being sexually harassed by their landlord, or a lender refusing to make loans to a black family, or a mom with three kids being told she has too many kids for a two bedroom, or a recent client who had to “White wash” her home to get a fair appraisal for a refinance, housing discrimination is far too commonplace.
How does your organization help individuals and families overcome the barriers to housing access to increase equity in housing?
Amy: We have four main programs working toward our mission: Advocacy, Education, Inclusive Communities, and Public Policy. Through our Advocacy Program, we file enforcement actions to address violations of fair housing law. Our Education Program actively works to share information so everyone understands their rights and responsibilities under fair housing laws. Our Inclusive Communities Program gives back to the community and to those harmed by discriminatory practices. And finally, in our Public Policy Program, we work to advance strong housing laws with particular attention to fighting for those most at risk of housing loss and harm. Just this month, we released a new video through our Education Program,
History of Real Estate Sales Discrimination in Indianapolis that we premiered at our annual Fair Housing Conference last week. This is a companion to last year’s
History of Redlining video.
What does the future of fair housing look like?
Amy: Truly achieving fair housing requires the full attention and support of the federal government, the courts, and all of us. Fair housing laws have never had funding or the strength of will to truly address our nation’s history of discriminatory practices that still impact our neighborhoods and our country today. I remain hopeful we can achieve the vision of fair housing laws that allows each person to have equal housing opportunity. We need to demand such of our leaders and keep a focus on housing.
Learn more about Fair Housing Center of Central Indiana.
About the American Property Owners Alliance
The American Property Owners Alliance (The Alliance) is a nonpartisan, non-profit organization created to protect and support property owners and pave the way for future property owners. Our mission is to educate property owners about federal issues, laws and policies; to advocate for owners’ rights and interests; and to mobilize, when necessary, to secure those rights and interests.
Sign The American Property Owners Alliance petition to Congress urging them to support property owners and remove barriers to more affordable housing.
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Biden restores fair housing rules Trump gutted
By: eurweb.com
Apr 27,
2020
Although the month of April is annually observed as Fair Housing Month, the reality for Black America and other people of color is that housing has not significantly changed since the 1968 federal enactment of the Fair Housing Act. Its enactment came seven days after the assassination of Dr. Martin Luther King, Jr. who had strongly advocated fair and open housing.
But 53 years after an historic enactment, race and place remain the determining factors of who is allowed the opportunity to build wealth, as well as to share wealth’s financial advantages across family generations.
What makes this year’s observance more hopeful are renewed efforts by both President Biden and Congress to correct decades’ long denials of full access to the American Dream.
For the first time in more than four years, the nation’s President committed his Administration to the active pursuit of fair housing. Beginning with a memorandum coinciding with his inauguration on January 26th, President Biden directed the Secretary of Housing and Urban Development (HUD) to “as soon as practicable, take all steps necessary to examine the effects of” the Trump Administration’s 2020 repeal of two key housing rules issued by the Obama Administration: the 2013 Disparate Impact Standard and the 2015 Affirmatively Furthering Fair Housing.
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Two Keys To A 2021 Refresh: Bringing Fair Housing Into The 21st Century
By: Forbes
Apr 27,
2020
This April marks the 53rd anniversary of the Civil Rights Act of 1968 (also known as the Fair Housing Act), which “prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, [and] sex.” Brave individuals fought for something we often take for granted, like the Rev. Dr. Martin Luther King, Jr., whose assassination was a catalyst for the final passage of the act, and Senator Walter Mondale, the future Democratic Party’s presidential nominee who championed fair housing for years.
But perhaps a name you haven’t heard of is Senator Edward Brooke. Ed Brooke, the first African American popularly elected to the U.S. Senate, co-authored the amendment that would prohibit housing discrimination. Senator Brooke worked across the political divide with leaders like Senator Mondale to enact the Fair Housing Act as law.
I’ve recently wondered how these heroes of American history would view the state of “fair housing” today. Studies show that while overt discrimination has dropped over the decades, less obvious forms of discrimination persist. People of color, for instance, are shown significantly fewer, and less appealing, rental properties in blind studies. According to the Urban Institute, Black and Hispanic renters are shown 11.4% and 12.5% fewer rental units, respectively, than white renters. Housing has ramifications in other related aspects of life such as health, education and job security. For example, communities of color often grapple with poverty and subpar schools.
I believe that there are two ideas that a new generation of real estate leaders can pioneer to help build on the fair housing platform that Senator Brooke and others began.
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Supporting Fair Housing, Inclusivity in Your Community
By: MyMotherlode.com
Apr 27,
2020
Home and property ownership is a nearly universal part of the American dream. An unfortunate reality of our nation’s past and present, however, is that this dream has been much more difficult to achieve among minority groups.
April marks the 53rd anniversary of the passage of the landmark 1968 Fair Housing Act, the federal law that protects Americans against housing and property ownership discrimination on the basis of race, color, national origin, religion, sex, familial status or disability. But despite all the progress this nation has made over recent decades, people searching for a home today face many of the same challenges they did 53 years ago. Home and property ownership rates for Black Americans are nearly 30 percentage points lower than that of white Americans, and after decades of gain, the Black homeownership rate has now fallen back to where it was a half-century ago.
“During this time, we honor the sacrifices and tenacity shown by so many during the fight to expand equal access to housing and property in America,” said National Association of Realtors® President Charlie Oppler. “As the largest trade association in the world, NAR has a powerful voice, and we will continue to use that voice to champion efforts to build more inclusive communities throughout our nation.”
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Biden’s infrastructure plan includes $213 billion for affordable housing
By: American Property Owners Alliance
Apr 26,
2020
President Biden recently unveiled his infrastructure proposal, asking Congress to approve $2 trillion in spending.
And while much of that proposal involves basic repairs to roads and bridges, as well as upgrades to the electrical grid and expanding access to broadband internet, the plan calls for a whopping $213 billion to create more affordable housing.
Adding to the housing stock is a priority of the Biden administration, and the plan would build or rehabilitate more than 500,000 dwellings for low- and middle-income homebuyers, as well as retrofit more than two million commercial buildings and affordable housing units, to create more affordability in the marketplace.
Specifically, Biden is asking Congress to approve the Neighborhood Homes Investment Act - legislation that would provide an additional $20 billion in tax credits for affordable housing through 2026.
There are other incentives tied to affordable housing, such as creating a grant program for local jurisdictions that eliminate red tape that slows or prevents new housing development, like exclusionary zoning laws.
The big debate that will certainly take place in Congress is where this vast amount of funding will come from.
President Biden’s plan is to raise taxes on large and multinational corporations to offset the cost of his infrastructure goals. His Made in America Tax Plan would raise the corporate tax rate to 28% from the 21% rate that was put in place as part of former President Trump’s Tax Cuts and Jobs Act of 2017. The top corporate tax rate was 35% prior to 2017. The plan also provides an increase in taxes for the earnings American companies make outside of the U.S.
The Department of Transportation is certainly linked to this latest proposal as well, as prior to the unveiling of the plan it announced it was seeking applicants for the 2021 Infrastructure for Rebuilding America grant program, which provides $889 million to fund national and regional transportation projects.
This is important to the affordable housing piece of the plan as the department will consider whether a development project is in a federally designated community development zone or opportunity zone. If so, improvements in transportation in those areas could pique the interest of real estate developers to also take advantage of those opportunity zone incentives to build affordable housing close to new transportation hubs, or at least areas that have easy access to new transportation.
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Eviction moratorium extended through June, but is that a positive?
By: American Property Owners Alliance
Apr 26,
2020
Two days before it was set to expire, the Centers for Disease Control (CDC) announced that it was extending its nationwide eviction moratorium through the end of June.
This puts an additional 90 days onto the moratorium, which was supposed to expire at the end of March.
This moratorium, which was put in place in September 2020 as a way to try and assist renters who may have been financially impacted by the COVID-19 pandemic, has been challenged in courts throughout various states in the country.
This moratorium, while helpful in theory, has created unintended consequences in the months since it came into existence.
It has created a backlog of pending evictions because some renters aren’t paying their rent, and as soon as it is lifted, the courts will be deluged with eviction hearings. And secondly, it has thrust mom-and-pop landlords into a financial bind of their own, suddenly forced to make mortgage payments on properties in which they have not been receiving rent from their tenants. These properties also tend to have slim profit margins to begin with, meaning that after a couple months, the property owner is in danger of getting behind or even defaulting on the mortgage.
The National Association of REALTORS® (NAR), has been at the forefront of the challenges to the moratorium and has successfully lobbied for federal rental assistance in an effort to prevent the problems created by the moratorium becoming a crisis that hurts both the landlords and the tenants.
“NAR helped secure $25 billion in 2020 and another $21.55 billion (in March) in federal rental assistance funding, which can be paid directly to property owners,” said NAR chief advocacy officer Shannon McGahn in a press release. “This was critical to averting a multifamily real estate crisis, as many of our nation’s housing providers are mom-and-pop operations.
“Our focus now turns to ensuring there is not just enough funding but also a smooth implementation of rental assistance while the various challenges to eviction bans work their way through the courts.”
The CDC order has allowed for an eviction to be stayed if a renter declares that they have tried to make timely payments of their rent, meet certain employment and income requirements, and have pursued all appropriate government assistance.
With the announcement of the extension in March, the CDC expanded the order to include renters “who are confirmed to have, who have been exposed to, or who might have been exposed to COVID-19 and take reasonable precautions to spread the disease.”
And while this is a hit to the property owners, the housing providers can still evict tenants for non-financial reasons that would violate the landlord-tenant contract, including property damage and criminal activity.
“Rental assistance averted two crises—one for mom-and-pop property owners who did not have a reprieve from their bills and relied on their rental income and one for tenants who would have been responsible for months of back rent when the eviction moratoriums expired,” McGahn said. “We must continue to look for ways to protect tenants and property owners from further financial turmoil while ensuring housing in America remains safe and stable for decades to come.”
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Fair Housing Month Feature: NeighborWorks America
By: American Property Owners Alliance
Apr 23,
2020
The American Property Owners Alliance (The Alliance) is deeply committed to improving fair housing protections to make property ownership accessible for all Americans. We know that a critical step to achieve equity in homeownership is to support organizations and advocates who are dedicated to protecting fair housing rights and expanding opportunity.
Meet NeighborWorks America, a nonprofit with a network of nearly 250 organizations nationwide
[1] that creates opportunities for people to live in affordable homes, improve their lives and strengthen their communities. NeighborWorks America’s Senior Vice President Lee Anne Adams explains the common barriers people face in the homebuying process, how the NeighborWorks network helps people access sustainable homeownership, and what the future of fair housing looks like.
Why is equitable access to housing so important?
Lee Anne: Homeownership is a means to build long-term generational wealth. Passing on a home and land from one generation to the next creates a path to family wealth-building. That wealth also provides a means for families to invest in their children’s education or to start a business. Before the passing of the Fair Housing Act in 1968, black families were locked out of the chance to create generational wealth because they were denied mortgage loans and access to certain neighborhoods. Our 2020
Housing and Financial Capability Survey found that only 40% of black people own their home
[2]. In reality, the gap between black and white homeownership rates is wider now than it was prior to when race-based discrimination was legal. Homeownership is one of the most impactful ways to help address the racial wealth gap in our nation.
What are common obstacles and discrimination that people face when trying to rent or buy a home?
Lee Anne: Common obstacles people face when trying to rent or buy a home include lack of down payment or first month’s rent, access to affordable credit, lack of affordable supply and lack of knowledge about and/or resources to help with the process.
We recommend that potential homebuyers not go it alone. HUD-approved housing counselors are available at
NeighborWorks organizations across the country to help people seeking housing stability prepare for buying a home. This includes helping people understand the process, what to expect, how to set financial goals and improve their credit score and how to choose a first mortgage product.
How does your organization help individuals and families overcome the barriers to housing access to increase equity in housing?
Lee Anne: Our network of nearly 250 organizations nationwide helps people access sustainable homeownership by offering a range of services from financial coaching to pre-purchase counseling and homebuyer education to down payment assistance programs and affordable first mortgage products. Our network also owns and manages nearly 180,000 affordable rental homes for individuals and families
[3]. We are proud to have partnered with Wells Fargo since 2012 on the Let’s Invest for Tomorrow (LIFT) down payment assistance program, which has provided more than $330 million in down payment assistance and created more than 24,000 homeowners
[4], 63% of which are minorities
[5]. Over 40% of LIFT participants report that they pay less for housing than they did prior to closing
[6]. One borrower’s monthly housing costs decreased from $1,000 per month to about $700 once they became a homeowner.
What does the future of fair housing look like?
Lee Anne: Our industry must remain diligent in our work and exponentially expand opportunities and assistance for people to obtain and sustain affordable housing.
“To overcome the longstanding and growing inequities in our communities, we need to reach common goals and align resources across sectors to make impact.”
A variety of partners need to invest in down payment assistance programs, housing counseling, financial coaching and other services. Additionally, policies and financing that favor affordable single-family and multi-family development is critical. While the challenges are real, the possibilities are numerous. With investment to scale what works and new policy solutions, we can remove barriers and create opportunities for all people to access housing.
Learn more about NeighborWorks America.
About the American Property Owners Alliance
The American Property Owners Alliance (The Alliance) is a nonpartisan, non-profit organization created to protect and support property owners and pave the way for future property owners. Our mission is to educate property owners about federal issues, laws and policies; to advocate for owners’ rights and interests; and to mobilize, when necessary, to secure those rights and interests.
Sign The American Property Owners Alliance petition to Congress urging them to support property owners and remove barriers to more affordable housing.
[social_warfare]
Take Advantage of These Free Online Seminars and Videos for Fair Housing Month
By: American Property Owners Alliance
Apr 19,
2020
As we welcome Spring this April we also welcome Fair Housing Month. After such a tumultuous 2020, it’s a particularly important time to focus on this matter and put great efforts into providing equal and fair housing for everyone. The COVID-19 pandemic highlighted the firsthand connection between health and housing when many officials refused to view these as human rights, despite the
Universal Declaration of Human Rights. Millions of Americans lived in fear of losing their homes during these unforeseen hardships, and many did. Household Pulse reports that millions of residents still owe large housing payments – approximately
12.1 million adult renters as of mid-March. It’s apparent now more than ever that the country’s social safety net programs offer incompetent security.
Whether you’re a renter, landlord, investor, or simply hoping to educate yourself on the matter, there are a plethora of free seminars, workshops, Q+As, and films focusing on fair housing that you can take advantage of this month.
1. Jim Crow of the North Film and Panel Discussion / Thursday, April 22, 2021, 7:30 PM – 9:30 PM EDT
Jim Crow of the North is a compelling Twin Cities PBS documentary that examines the history of redlining in Minneapolis and systematic racism both then and today. The film shows how segregation has and continues, to construct cities.
In honor of Fair Housing Month, High Plains Fair Housing Center (FHC) will be hosting an online watch party and leading a discussion panel. Experts will talk about the film and engage on housing discrimination over the years and what it looks like today. They will also be discussing how others can help to put an end to housing discrimination and different ways to get involved, particularly in North Dakota, where High Plains FHC is based. The center is a non-profit organization working tirelessly to defeat housing discrimination.
For those who can’t make the watch party, you can watch the film
here and still catch the discussion at 9:30 PM on April 22nd.
2. Know Your Rights! Fair Housing & Tenant Skills Webinar / Monday, April 26, 2021, 11:00 AM – 12:30 PM EDT
Springfield Town Library of Vermont is hosting this workshop on fair housing, specifically in the state of Vermont but they will be discussing the fundamentals of tenant rights that apply to renters all over the country.
Wendy Rowe and Corrine Yonce of Champlain Valley Office of Economic Opportunity (CVOEO) will be taking the lead in this conversation, who specializes in housing advocacy programs. CVOEO works to bring issues of economic, social, and racial justice to light and help members of the community attain financial autonomy. This webinar will fill you in on the A-Zs of your rights as a tenant. From security deposits to the account of the Fair Housing Act, this workshop will cover it all and welcomes questions. Start your week off with this informative webinar on Monday, the 26th at 11 AM.
3. Fair Housing Friday: Going Forward / Friday, April 30, 2021, 12:00 PM – 1:00 PM EDT
This is another great webinar from High Plains FHC in North Dakota with a different approach. In this discussion, the team at High Plains FHC will reflect on the past year as a whole and what impactful changes have been made. Specifically, they will take a look at how
Bostock v. Clayton County finally labeled LGBTQ+ housing discrimination under sex discrimination. They will be discussing other recent White House developments on the matter as well, such as President Biden’s memorandum on housing discrimination.
This discussion will allow for impressions, criticisms, and most importantly, plotting what we can do moving forward to ensure every individual is receiving fair housing. Chime in on Friday, the 30th at noon.
4. Housing Segregation and Redlining in America: A Short History / 6 ½-minute video
This short video is an excellent refresher on the Fair Housing Act that’s easy to watch and understand. Code Switch, an NPR collective and podcast focusing on race, ethnicity, and culture, put this video together to express an important message – “Housing segregation is in everything.”
Folks cheered to the end of housing discrimination when the Civil Rights Act was passed in 1968, as the act made it illegal to do so. Although, this law certainly hasn’t stopped discrimination. Code Switch co-host Gene Demby uses this platform to point out why we still see so much segregation within housing and neighborhoods today. Demby elaborates on the impact government actions have had on communities.
5. America Divided: A House Divided / 44-minute video
America Divided is a documentary series that explores the inequality crisis by revealing America’s systemic issues. With exceptional production and noteworthy guests, their raw approach will offer powerful and motivational perspectives.
This episode follows Norman Lear, co-producer alongside Common and Shonda Rhimes, as he focuses on housing in NYC. Lear delves into the crisis of the unhoused community in the metropolis. Over the course of the episode, he chats with New Yorkers regarding housing to better understand the situation and examine the city’s affordability crisis. "This is our America. And it isn’t what we promised," Lear solemnly claims.
6. Seven Days / 9-minute video
This short film was released in 2018 by Nationwide, in partnership with the National Fair Housing Alliance, and recounts the seven days between Martin Luther King Jr.’s assassination and the signing of the Fair Housing Act. When President Johnson announced that MLK Jr. was shot, a nationwide upheaval broke out. Johnson clambered to keep the country together and accelerate the fair housing bill, which he managed to do in just seven days.
This 9-minute video does an excellent job narrating that week in 1968 and illustrating the gravity of the Civil Rights Act. President Johnson quotes in the documentary, “Few in the nation believed that fair housing would, in our time, become the unchallenged law of this land. And indeed this bill has had a long and stormy trip.” Johnson remarks on the struggles of passing this bill in 1968, and now, 53 years later, Americans are still fighting for equal rights.
7. The Basics of the Fair Housing Act / 90-minute video
Lastly, for those who are somewhat unfamiliar with the Fair Housing Act, or the Civil Rights Act of 1968, the U.S. Department of Housing and Urban Development (HUD) offers this in-depth video that was actually created as a training program, so you know all details will be covered. While this is an extensive training video, it was created for both housing providers and anyone interested in educating themselves and learning more about the Fair Housing Act.
The video includes all of the basics of the Fair Housing Act with a comprehensive commentary. When introducing the video, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, Anna Maria Farias, goes on to say, “But more importantly, today's training will help you gain a clearer understanding of the continued relevance of this landmarked law.” HUD is committed to spreading this information far and wide while continuing to work incessantly to stop discrimination. “Discrimination still exists. Each year, HUD and our many fair housing partners receive thousands of complaints from individuals and families alleging that their rights were violated, so our work isn’t done,” she continues.
Regardless of your living situation, taking advantage of these free resources during Fair Housing Month will benefit you, your community, and anyone you encounter down the road. As
Farias says, “Housing discrimination is not only wrong, it’s illegal, and in a country founded on the principles of justice and equality, housing discrimination is unacceptable.”
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Our Priorities: COVID-19
By: American Property Owners Alliance
Apr 07,
2020
The COVID-19 pandemic has greatly impacted every American for more than a year.
Housing has felt the brunt of that impact. Whether it’s a homeowner, a landlord, a renter or a person or family looking to buy their first home, COVID-19 has wreaked havoc on what we knew – or thought we knew – about the housing market.
That’s why the American Property Owners Alliance has put together this page: Our Priorities: COVID-19.
It’s a catch-all for what the new normal will look like when it comes to housing and how the ever-changing face of the housing world will be forever impacted by this pandemic.
Boston plan for shifting police funds a template to help affordable housing
By: American Property Owners Alliance
Apr 02,
2020
It was a rough 2020 for the police in the city of Boston.
Like every other police force in America, not only were they caught up in the social awakening in the aftermath of the death of George Floyd at the hands of Minneapolis officers, but the Boston PD had to deal with its own overtime pay scandal This only further separated the gap in trust between the force and the citizens of the city.
Amid the fervor, then-Mayor Martin Walsh and the City Council decided that the police overtime budget would be slashed by $12 million, and that the money would be used to help address racial disparities in Boston.
Recently, the city has put action behind those words, and it is helping marginalized people be able to buy a home.
In February, the Mayor’s office announced that it was earmarking $250,000 of those cut overtime funds, plus an additional $75,000 to create a matching-grant program that would help lower- and middle-income individuals or families to buy a home in Boston.
The grant program establishes $5,000 for each qualifying “first-generation” home buyer who was able to contribute $2,500 of their own money toward a down payment.
The grant program is part of a partnership with the Massachusetts Affordable Housing Alliance (MAHA), a non-profit organization that concentrates on helping families in need to prepare to buy a home in Boston.
At the time of the announcement, Walsh, who was confirmed as Secretary of Labor for President Biden’s administration in March, released a statement that, in part, said, “Now, more than ever in Boston, we must take steps to create equitable opportunities and access to resources for all Bostonians. Improving pathways to homeownership can help address disparities in wealth.”
Boston is no different than most large cities in America, where the wealth gap between whites and blacks is stark. The city is hoping that their new program can become a model for other cities nationwide to help close that gap and improve communities one new homeowner at a time.
Homeowners are more likely to have accumulated wealth than renters, thanks to home equity – which can help financially in many ways, whether its’s to start a small business, help pay for college education or simply to pass on to the next generation so they can buy their own home as well.
MAHA initially launched its program two years ago using multiple grants provided by Wells Fargo, Boston Children’s Hospital, and the Boston Real Estate Board to help these homebuyers – and they classify them as first-generation, not first-time, in order to include people whose parents didn’t own a home or who lost one in foreclosure.
According to the Boston Globe, MAHA had enrolled 168 people into classes they offer on homebuying preparations and of that group, 14 went on to actually buy a home. The hope is those numbers will grow with the assistance of the city’s partnership.
Improving homeownership, especially in Latino and Black communities, had been a top priority for Walsh and his administration. In his tenure, the city has approved the development of thousands of new apartments in an effort to increase supply and stabilize housing costs.
Kim Janey has taken over as acting mayor for now, but an election for the office will be coming in November, when housing advocates hope that homeownership and affordable housing are tops on the list of priorities for all candidates running for Mayor.
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Housing gap between white and black homeowners still isn’t closing
By: American Property Owners Alliance
Apr 02,
2020
Historically low mortgage rates made it so that the housing market was able to stay strong during the pandemic. Prices are high, homes are selling quickly. Things are moving along like clockwork.
But not for everybody.
It has been 53 years since the Fair Housing Act passed through Congress, and yet, the gap between white homeownership and Black homeownership is still just as wide.
This is according to data provided by the National Association of REALTORS® (NAR) as part of their second annual report that examined racial gaps in homeownership, both nationwide and state-to-state.
According to the Federal Reserve, the net worth of a homeowner was $255,000, which is 40 times that of a renter. If you combine that with the NAR data that in the last decade, Black Americans have seen the largest dip in home ownership rates, this paints a stark picture. As the wealth gains of homeowners increase, the number of Blacks owning homes has decreased.
It doesn’t help that financial institutions are denying mortgages to Black prospective home buyers 2 ½ times more than prospective white buyers, according to NAR.
Blacks also are more likely to have student loan debt, which impacts the ability to save enough money for a down payment.
With the rise in home prices, coupled with it becoming harder and harder for lower- and middle-income earners to be able to come up with that down payment, more potential buyers are being priced out of the market. And because of the wealth gap in America, potential Black homebuyers are making up a significant portion of the cohort who struggle to afford a home.
It is a vicious cycle that has been rotating for more than five decades now.
“We need to find solutions for everyone to have the same opportunities for home ownership,” Nadia Evangelou, senior economist and director of forecasting at NAR and one of the authors of the report told the Philadelphia Inquirer, recently.
The Biden administration is pushing for a tax credit of up to $15,0000 for first-time homebuyers to try and help make homes more affordable, but NAR also wants to push Congress to consider incentives for builders and developers to create more affordable housing units and increase the supply of homes available that is at critical lows nationwide.
In 2019, the white homeownership rate nationally was nearly 70%. South Carolina, Mississippi and Delaware had the highest rate of white home ownership at 78% each.
But even in states where the white homeownership was the lowest, the rate was still approximately 50%.
There was a stark difference for Black homeownership where, as nationally, the rate was just 42% in 2019. The highest rate of Black homeownership was in Puerto Rico (70%), indicating that decades old redlining of neighborhoods still impacts the 50 U.S. states, making it harder for Blacks to purchase homes outside of lower-income neighborhoods.
Maryland (52%) and South Carolina (52%) were the only states to cross the 50% plateau for black homeownership. And the states with the lowest rates of Black home ownership were North Dakota (5%), Wyoming (18%) and Montana (20%)
The national median price of existing homes was $309,800, a 40% increase from 2015, and while that number has gone up nationally, just 43% of Black Americans can afford to buy a home, compared to 63% of white Americans.
According to NAR, whites bought 81% of all homes purchased in 2019; Blacks bought just 7%.
And while other ethnic groups have also struggled at times to purchase homes, NAR found that during the pandemic, as mortgage rates plummeted, slightly more Asian, Latino, Hispanic and Pacific Islander buyers purchased homes than prior to the pandemic.
However, the share of Black homebuyers remained stagnant, even with the historically low mortgage interest rates.
"This data reinforces the need to implement key policy initiatives NAR developed in concert with the Urban Institute and the National Association of Real Estate Brokers to address the Black homeownership gap," NAR President Charlie Oppler, a REALTOR® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby's International said in a press release. "Specifically, this five-point plan developed in 2019 calls on the nation to: advance policy solutions at the local level; tackle housing supply constraints and affordability; promote an equitable and accessible housing finance system; provide further outreach and counseling initiatives for renters and mortgage-ready millennials; and focus on sustainable homeownership and preservation initiatives."
NAR used data from the U.S. Census Bureau’s American Community Survey to study homeownership and affordability by race. The REALTORS® also conducted a survey of 8,200 homebuyers from July 2019 through June 2020.
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6 Top Podcasts on Fair Housing
By: American Property Owners Alliance
Apr 01,
2020
At a time when it’s easy to feel isolated and lonely, podcasts offer a sense of comfort, almost as if we’re listening to a good friend. There are endless topics that experts can chat in our ear about, and that includes topics surrounding homeownership and fair housing.
The lack of affordable and fair housing in America has accelerated since the pandemic hit. As an analysis by the
NYU Furman Center found, those who are most likely to experience an “economic disruption” (i.e. losing a job or experiencing limited work hours) spent the majority of their income on housing. Even prior to the pandemic,
half of renters in the U.S. spent 30 percent of their income on housing and the most impoverished Americans spent
over half their income on rent, on average.
Whether you’re a homeowner, potential homeowner, or simply interested in learning more about fair housing and how you can help, these 6 podcasts are an excellent place to start. Pop on an episode while tidying the kitchen, brushing your teeth, or taking a long bike ride!
This fairly new podcast from
Offit Kurman Attorneys At Law focuses on the slew of convoluted questions and issues that circle the problems akin to fair housing. As they say, “For residents, housing free from unlawful discrimination is a right; for landlords, it’s the law.”
Join hosts John Raftery and Revée Walters as they discuss the matter and answer a variety of questions in order to ensure both landlords and property managers are well aware of the fundamentals of fair housing. The perspective from attorneys is a great resource for landlords and managers who want to support fair housing and help their tenants live comfortably and safely.
To no surprise, each episode of The Fair Housing Podcast centers around fair housing, but here are two recommended episodes to get started with:
Episode 12: Fair Housing Liability
This episode highlights accountability issues surrounding fair housing, specifically if you could be sued or not if you violate fair housing as a landlord or property manager.
Episode 10: Familial Status
This episode focuses on how to
not discriminate against families with children.
Shop Talk, brought to us by
The CE Shop, has the goal of bettering real estate agents. They interview industry experts, ask the tough questions, and chat about unique real estate related subjects. “Real estate’s a dynamic industry, and we know you have interesting stories to tell about it,” they announce.
While Shop Talk has some excellent episodes focusing on anything from 17-year-old real estate agents to haunted houses, this recent episode on fair housing is a great resource for real estate agents specifically:
Episode 48: Fair Housing
Real estate and equal opportunity for housing are forever intertwined, especially since the Fair Housing Act was enacted in 1968. This episode breaks down the most frequent fair housing violations, how and why those laws are so important, and how real estate agents can provide the best experience to everyone looking for a home.
Nicole Saunches’ podcast, Selling St Pete, is a one-stop-shop for anything real estate related in and around St. Petersburg, Florida. Nicole offers useful information for both current and potential homeowners, whether you’re on the buying or selling end of the process. Saunches works for Coastal Properties Group International, which has been one of Tampa Bay’s most successful real estate companies since they opened their doors in 2012. In 2019, they sold
145 homes that were over $1 million, so it’s safe to say Nicole’s advice when it comes to real estate is trustworthy.
Nicole covers topics ranging from new construction to hurricane preparation. But in one of her most recent episodes, fair housing is the star of the show:
Episode 32: Know Your Rights...A discussion about Fair Housing for all
In this episode, Nicole Saunches is joined by two members of the Pinellas County Office of Human Rights – Jeffrey Lorick and Paul Valenti. They chat about fair housing from A-Z while reflecting on a recent training with the Pinellas Realtor Organization. The training, which Nicole claims was “one of, if not the best, training I have experienced in my real estate career,” specifically aimed attention on how constant bias can have a huge impact on Fair Housing laws.
TenantCloud is an all-in-one software that assists landlords with all things property management, so they’re clearly pros when it comes to the rental industry. Their podcast covers real estate, investment, DIY tips, news/laws, and likely anything else rental industry connected that comes to mind!
With extremely useful information for landlords, such as insight into rental fraud and how the pandemic has shaped the real estate industry, it’s no wonder this podcast has nearly 5 stars. Each episode offers highly relevant advice for those who manage properties, but this episode from March 2020 clues landlords into specifics of the Fair Housing Act:
Season 2, Episode 9: What Landlords Are Excluded from the Federal Fair Housing Act?
Surprisingly enough, depending on the local, county and state laws, some landlords aren’t required to abide by the Federal Fair Housing Act. In this episode, TenantCloud discusses those specific scenarios and how crucial it is to follow Fair Housing laws, even if you may be absolved.
This bimonthly podcast brought to us by the
Richmond Association of REALTORS® follows different leaders in the Richmond area and the big decisions they make that directly affectrealtors and their clients. Host Joh Gehlbach, the Government Affairs Coordinator of Richmond Association of REALTORS®, chats with different directors and leaders of sorts in each episode to explore their recent accords in regard to the real estate industry.
All 14 episodes present valuable insight into how so many considerable choices made by people in power have an impact on those around them and their community. This most recent episode is particularly pertinent as it references a recent law:
Episode 14: Source of Income in the Virginia Fair Housing Act
In this episode, Gehlbach talks with the Director of Fair Housing at Housing Opportunities Made Equal of Virginia (HOME), Alex Guzmán. The two chat about source of income, as it is now a protected class in the Virginia Fair Housing Act as of July 1, 2020. Guzmán shares the relevance of this new law and how it broadens housing opportunities in Virginia.
This podcast is created by NACCED, the National Association for County Community and Economic Development. It focuses on the politics of housing which, of course, highlights affordable and fair housing consistently. Each episode features policymakers and program implementers who are involved in community and economic development, as well as affordable housing. The different high-profile guests on the podcast discuss their experience, goals, and solutions on topics ranging from workforce development to homelessness.
The hosts, Sarah and Laura, hope to show their audience how housing affects not only one’s quality of life, but the ability to lead a fruitful life. While this podcast is highly educational, it is also a hoot and the hosts offer some humor to help balance the seriousness of each topic.
Much like most of the podcasts on this list, each episode is relevant to fair housing, but this episode from March 12 of this year highlights NLHP, the National Housing Law Project:
Alt 137
In this episode, Noelle Porter, NLHP Director of Government Affairs, chats with Sarah and Laura about tenants’ rights. NLHP’s group of legal aid attorneys work every day to fight discrimination and support low-income renters that are facing eviction, which is especially significant now as so many tenants are struggling to pay their bills amidst the pandemic.
Whether you’re a homeowner, dreaming of becoming a homeowner or property owner, a renter, a landlord, or just looking for ways to help create fair housing opportunities in your area, these podcasts will educate you while entertaining you. If books aren’t your thing and you’re sick of sitting in front of a screen for hours on end, podcasts offer conversational intellect that will keep you in the know when it comes to fair housing in America.
These shows and episodes in particular do an exemplary job of breaking down some hard to digest information, allowing you to easily understand critical knowledge and materials that are necessary to understand whether you’re involved in the real estate industry, or simply curious about these trending topics.
Just as you dream of the perfect, comfortable home, others do as well across all walks of life and socioeconomic statuses (SES). Let’s do whatever we can to ensure all citizens receive fair housing and live a comfortable life.
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How will President Biden’s American Rescue Plan Affect You?
By: American Property Owners Alliance
Mar 09,
2020
President Biden signed the American Rescue Plan into law after narrow passages in both the House and Senate.
It’s an early policy victory for the President and his administration, and is the first prong of a two-part effort to boost the economy and help Americans who have felt the financial burden of the COVID-19 Pandemic for the past year.
It is one of the first and biggest initiatives President Biden and his administration promised to undertake after his inauguration. The President will also roll out part two – an economic recovery plan that would focus on job creation as well as climate change – later in 2021.
The American Rescue Plan will use $1.9 trillion to provide more aid for the unemployed, provide larger stimulus checks for Americans, find rental relief for renters facing eviction once moratoriums end, increase funding for vaccinations and testing for the coronavirus, and provide needed support for small businesses.
Learn more about the benefits of this plan below:
PAYMENTS TO INDIVIDUALS
Larger Stimulus Checks: The Plan calls for another $1,400 in stimulus money to be sent to eligible taxpayers. Unlike the first stimulus last summer, adult dependents will also receive a check, as will families with mixed immigration, as spouses of undocumented immigrants were left without a check last summer.
Greater Unemployment Assistance: Those without jobs will get a federal boost of $400 a week in their unemployment checks, an increase from the $300 boost approved by Congress in December. In addition, individuals in the Pandemic Unemployment Assistance Program and those in the Pandemic Emergency Unemployment Compensation Program who have ran out of state money, will be eligible for this weekly boost.
Aid for the Hungry: The Plan calls for the extension of the 15% food stamp benefit increase from June through September. Additionally, there is $3 billion in aid that would go to helping women, infants and children (WIC) purchase more food and an additional $1 billion in nutrition assistance for U.S. Territories. The Plan also calls for a public/private partnership between the federal government and restaurant owners to provide food for Americans in need and jobs for restaurant workers who have been laid off during the pandemic.
Child Care Assistance: The Plan earmarks Congress to create a $25 billion emergency fund and add $15 billion to an existing grant program to help childcare providers pay for rent, utilities, and payroll, and other increased costs associated with the pandemic such as personal protective equipment.
HOUSING
Rental Assistance: The Plan will allocate an additional $25 billion on top of the $25 billion approved in December, to provide funding for low- and moderate-income households who lost their jobs during the pandemic and who are struggling to pay the rent. Additionally, it will provide another $5 billion in funding to help renters-in-need to pay their utility bills and $5 billion to stop those on the brink of homelessness from losing their home.
Eviction Moratorium: The Plan extends the federal eviction moratorium through the end of September and allows for mortgage forbearance applications to be applied for through September 30 as well, as long as the mortgage is federally guaranteed.
TAXES
Increase in Child Tax credits: The Plan will increase the childcare tax credit for one year so that families will get back up to 50 percent of the money spent on childcare for any child under the age of 13. Additionally, there is going to be a temporary increase in the Child Tax Credit to $3,600 for children six-years-old or younger and $3,000 for children between the ages of six and 17 for one year. The credit is also fully refundable.
Increase to the Earned Income Tax Credit: The Plan raises the maximum Earned income Tax Credit to $1,500 for one year for adults without children, increase the income limit for the credit to $21,000 and expand the eligible age to help cover older workers.
HEALTH
Subsidize Health Insurance Premiums: The Plan compels Congress to subsidize the premiums for individuals who lost their work-based health insurance through the end of September. Additionally, it expands the premium subsidies of the Affordable Care Act where those enrolled wouldn’t have to pay more than 8.5% of their income for coverage. It also requires Congress to fund $4 billion for mental health and substance use disorder services while adding an additional $20 billion for veteran health care needs.
Bringing Back Emergency Paid Leave: The Plan is reinstating paid sick and family leave benefits that expired in December, through September 30. This benefit will also be extended to large businesses (more than 500 employees) and small businesses (fewer than 50) and add federal workers who were ineligible with the original program. The Plan provides 14 weeks of paid leave for individuals who are sick, quarantining, or caring for a child whose school is closed. Businesses with fewer than 500 employees would receive a 100 percent reimbursement from the government.
More support for vaccines and testing: The Plan provides a $20 billion investment in a national vaccination program that would create vaccination centers in communities across the country and provide mobile units in areas that are harder to reach. An additional investment of $50 billion will go toward testing, providing funds for rapid testing, expanded lab space and have regular testing implemented at schools so they can reopen sooner and safer. This should create 100,000 new public health jobs, which, if it comes to fruition, would practically triple the current workforce. This investment also expands community health centers and health services on tribal land and supports long-term care facilities and prisons to prevent outbreaks.
ECONOMY
Grants for Small Businesses: The Plan provides $15 billion to create a new grant program for small businesses that is separate from the Paycheck Protection Program. It also invests $35 billion in state, local, tribal and non-profit programs to provide low-interest loans and venture capital for those looking to start a business or invest in one.
Provide assistance for states and schools: The Plan will send $350 billion to state and local governments to keep frontline workers employed, distribute the vaccine more rapidly, continue to increase testing and get schools reopened. Additionally, $20 billion is be appropriated for hard-hit public transit agencies to prevent layoffs and route elimination. Meanwhile, $170 billion is earmarked for elementary, high schools and colleges and universities to help them reopen safely or continue to facilitate remote learning.
Increase Minimum Wage: The Plan will have Congress approve a minimum wage increase to $15 an hour, eliminate tipped minimum wage and the sub-minimum wage for individuals with disabilities.
Existing home prices increase in every tracked metropolitan area in the U.S.
By: American Property Owners Alliance
Mar 03,
2020
It’s hard to find silver linings related to the COVID-19 pandemic. But, if you are a homeowner who is looking to sell your home, you’re likely going to be able to sell your property and potentially make some money in the process.
That’s because home prices went up everywhere at the end of 2020. And when we say everywhere, we mean everywhere.
According to data from the National Association of REALTORS® (NAR), existing home prices rose in all 183 metropolitan areas that are tracked in the fourth quarter of 2020. And in 88 percent of those markets, there were double digit price gains.
BY comparison, 115 of the metropolitan areas saw price growth in the third quarter.
“The fourth quarter of 2020 presented circumstances ripe for home price increases,” Lawrence Yun, NAR chief economist told CNN. “Mortgage rates reached record lows, thereby driving up the demand. At the same time, inventory levels also reached record lows, leading to grim inventory conditions of insufficient supply in the fourth quarter.”
The national average mortgage payment on an existing single-family home increased by $20 per month from $1,020 to $1,040 from the fourth quarter of 2019. This means the national average family income needed to afford a home also increased by nearly $1,000, from $48,960 in the fourth quarter of 2019 to $49,908 in the fourth quarter of 2020.
The Metro areas that saw the biggest increase were mostly in the Northeast corridor of the country, as well as in Florida. Neither location is surprising, but there were also big gains in Washington and Idaho, which may be a little less expected.
Bridgeport, Conn. saw the biggest increase, with prices jumping 40% in one year. Pittsfield, Mass. (32%), Naples, Fla. and Atlantic City, N.J. (both 30%) were the others that jumped by such a large margin.
Increases between 24% and 29% were identified in Crestview, Fla. (29%), Barnstable, Mass (29%), Boise City, Idaho (27%), Spokane, Wash. (24%), Kingston, N.Y. (24%), and Binghamton, N.Y. (24%)
What’s noticeable about this list is it appears the attraction for the purchase of existing homes seems to be hottest in areas that are within driving distance to a major metropolitan area but may be far enough out to provide a more affordable option, or are part of a vacation destination, which could mean buyers are thinking of these homes as potential investment properties.
The other possibility, Yun said, is that with more and more companies allowing employees to work from home, either part-time or full-time, these locations are more desirable to own a home, as you can be away from the hustle and bustle and still do your job.
It’s a true have “your cake and eat it too” situation for homebuyers.
Not surprisingly, the most expensive areas of the county to live were in California, specifically the Silicon Valley. Here, the median home sale price in San Jose is $1.4 million. San Francisco was the only other city with a median price north of a million bucks ($1.14 million), but Anaheim is getting closer ($935,000).
Rounding out the top 10 most expensive metropolitan areas are Honolulu ($902,500), San Diego ($740,000), Los Angeles ($688,700), Boulder, Colo. ($661,300), Seattle ($614,700), Nassau County, N.Y., or the suburban part of Long Island ($591,600) and Boston ($579,100).
Boulder was the only Metro in the top 10 that didn’t see a double-digit percentage price increase.
While this has been a boon for those looking to sell, the tipping point for buyers might not be far off, and prices will have nowhere to go but down.
“The average, working family is struggling to contend with home prices that are rising much faster than income,” Yun told CNN. “This sidelines a consumer from becoming an actual buyer, causing them to miss out on accumulating wealth from homeownership.”
[social_warfare]
How Does the Affordable Housing Crisis Impact Our Communities? These 4 Documentaries Will Show You
By: American Property Owners Alliance
Feb 23,
2020
You can spend hours Googling how-to articles on homeownership, but we’ve rounded up these four documentaries on affordable housing to provide you with a one-stop-shop for all relevant information about homeownership.
Not only do these documentaries highlight affordable housing across the United States, they also have a large focus on ending the housing crisis across the globe and the homelessness calamity, particularly amongst America’s youth in VICE’s documentary ‘Shelter’.
Read on below to understand the focus of each of these recommended documentaries:
Transformation of Affordable Housing in Rural Areas of the U.S.
This short documentary produced by
Greystone focuses on how
USDA’s
Rural Development Division, and partners, have been working to conserve affordable housing for elderly and low-income residents in rural America. In the film, experts such as Robert Barolak of Greystone discuss the affordable housing preservation process. “There are still a great number of lower-income and elderly folks who live in rural America and who need affordable housing. But it’s aging. It’s deteriorating, and some of it deteriorating quite rapidly. It needs to be renovated and refreshed. It needs to be repositioned for the next 30 or 40 years,” Barolak shares. Greystone has taken that into account and made active changes both financially and in regard to redevelopment.
Greystone manages the repositioning and renovation of apartment complexes in small rural rental communities across the country, primarily in the southeastern states. As Tanya Eastwood, the president of Greystone Affordable Development, shares the company’s plans, “We came up with a creative innovative plan to preserve this much-needed housing. We basically pooled them together in a statewide portfolio type transaction and are able to have a major impact in their real estate schedules that they own.” Recently, Greystone was able to refurbish 1,362 apartments in
44 different communities across rural Georgia with $117 million in financing. In addition to USDA, Greystone actively worked with the Athens Housing Authority, Georgia Department of Community Affairs, and Fannie Mae to assemble the necessary financing.
Sold Out: Affordable Housing at Risk
This PBS documentary was produced with the MN Housing Partnership and shares numerous stories from tenants on how they pushed through the housing crisis to find affordable solutions. Ever-changing economic power and urban development have been closing in on low-income communities for ages, and in turn, negatively impacting the affordable housing market. With each passing day, low-income residents have fewer options when it comes to housing and once we see those families and residents move to more affordable areas, local businesses start to see the lack of patrons immediately and struggle to make ends meet. As shared in the documentary, “Folks at the bottom end of the income spectrum are losing out in this very competitive situation.”
One heart-wrenching example, tenants who had called their Richfield, MN apartment home for up to 15 years received 30-day notices that they had to leave, even after signing 12-month leases, once the complex was sold. The new owners of the huge apartment complex, Crossroads Apartments, immediately put in a set of policies designed to ultimately remake the tenant population, such as increasing rents 30% and stopping all involvement in any government programs.
This vicious cycle seems to be never ending, but ‘Sold Out: Affordable Housing at Risk’ shares solutions to the crisis and eviction scares. The short film also touches on communities of color, asking important questions such as “Is what’s wrong the concentration of communities of color, or is it the way in which we treat concentrations of communities of color?” As said in the documentary, “This issue of housing sits at the center of our wellbeing.”
SHELTER
VICE’s documentary ‘SHELTER’ focuses on America’s youth homelessness crisis specifically. The crew set off to New Orleans to chat with the staff and residents of America’s largest non-profit shelter –
Covenant House. The perspective from the alarmingly young residents and passionate staff in the documentary shines a light on the severity of the issue and ultimately prompts directors Brent and Craig Renaud (as well as viewers) to urgently address the plight of homeless youth.
The Covenant House has been protecting at-risk youths for over 40 years and has no plans of stopping. The documentary informs viewers of the day to day struggles the staff handles to keep vulnerable members of society safe and off the streets. With a large majority of these teens being survivors of sex trafficking, physical abuse, mental health issues, addiction, and abandonment, the Covenant House isn’t just a place to lay their head, but a home. Homelessness affects over half a million people in the U.S. and the number of unhoused people increased nationally for the
first time since 2010, based on data from the U.S. Department of Housing and Urban Development (HUD). In Louisiana specifically, where the short film is based, at least
3,000 unhoused people were reported in 2017.
High Quality and Affordable
This documentary from
Gaaleriie centers on affordable housing in Vienna, which is nearly a utopian community when it comes to social housing. Vienna currently has two systems of subsidized housing. One is social housing, owned by the city, where no new private units are built within this sector. The nonprofit sector has been greatly strengthened over the years by working with nonprofit developers such as this one. Roughly half of the population is living in this sector of public housing. Within this subsidized sector, there is a lot of experimentation allowing them to introduce new sustainable housing standards such as energy consumption and integration programs to assist immigrants in Vienna.
Another aspect of Vienna’s affordable housing, which makes them the star pupil of the world, is that every large new housing estate has to go through an in-depth competition process. A team consisting of a nonprofit developer, an architect, a landscape architect, and other experts have to present a “complete product” to the city. These extensive steps ensure that the appropriate amount of time, effort, and consideration has been put into the new development to guarantee it is a safe and beneficial home for those who are seeking affordable housing.
Each of these four documentaries highlight obstacles that the housing crisis puts on lower income populations. A lack of affordable housing doesn't only leave people unhoused, but it also has a huge impact on small businesses, schools, and the overall community. The U.S. can certainly take notes from Vienna's progressive affordable housing system, and with the right financial guidance and support, America can match up with some of Europe's public housing success.
[social_warfare]
Housing Affordability Weakens in August 2020 as Home Prices Rose Faster than Median Family Incomes
By: National Association or Realtors
Oct 09,
2020
Read the original article by Michael Hyman from NAR
At the national level, housing affordability declined in August 2020 compared to a year ago and fell compared to July, according to NAR’s Housing Affordability Index. Affordability dipped in August compared to August as the median family income rose by 2.2% while the median home prices rose by 11.7%. The effective 30-year fixed mortgage rate1 fell to 3.00% this August from 3.08% in July. Mortgage rates are at all-time lows compared to a year ago at 3.66%.
As of August 2020, the national and regional indices were all above 100, meaning that a family with the median income had more than the income required to afford a median-priced home. The income required to afford a mortgage, or the qualifying income, is the income needed so that mortgage payments make up no more than 25% of family income. The most affordable region was the Midwest, with an index value of 197.3 (median family income of $79,570 which is almost more than twice the qualifying income of $40,320). The least affordable region remained the West, where the index was 115.5(median family income of $86,744 and the qualifying income of $75,072). For comparison, the index was 167.1 in the South (median family income of $74,666 and the qualifying income of $44,688) and 161.7 in the Northeast (median family income of $92,605 with a qualifying income of $57,264).
While homes are typically affordable, housing affordability2 declined from a year ago in all regions, except in the Midwest where there was no change. The Northeast HAI had a modest decline of 0.1% followed by the South HAI with a dip of 0.8%. The West HAI had the biggest drop of 1.0%.
Affordability is down in all of the four regions from last month. The South HAI had a decline of 1.2% followed by the West HAI with a dip of 1.3%. The Midwest HAI had a decline of 1.7% followed by the Northeast HAI with the biggest drop of 5.8%.
Nationally, mortgage rates were down 66 basis points from one year ago (one percentage point equals 100 basis points). The median sales price for a single-family home sold in August in the US was $315,000 up 11.7% from a year ago, while median family incomes rose 2.2 % in 2020 from one year ago.
Even with lower mortgage rates compared to one year ago, the payment as a percentage of income rose modestly to 15.7% this August from 15.6% from a year ago. Regionally, the West has the highest mortgage payment to income share at 21.6% of income. The Northeast had the second highest share at 15.5% followed by the South with their share at 15.0%. The Midwest had the lowest mortgage payment as a percentage of income at 12.7%. Mortgage payments are not burdensome if they are no more than 25% of income.3
This week the Mortgage Bankers Association reported that for the week ending October 2, mortgage applications increased 4.6 from the week prior. Inventory levels are extremely low so more housing supply is needed to help tame price growth. New home sales are on the rise. Consumers can still take advantage of borrowing while rates are historically low.
What does housing affordability look like in your market? View the full data release.
The Housing Affordability Index calculation assumes a 20% down payment and a 25% qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation.
1 Starting in May 2019, FHFA discontinued the release of several mortgage rates and only published an adjustable-rate mortgage called PMMS+ based on Freddie Mac Primary Mortgage Market Survey. With these changes, NAR discontinued the release of the HAI Composite Index (based on 30-year fixed-rate and ARM) and starting in May 2019 only releases the HAI based on a 30-year mortgage. NAR calculates the 30-year effective fixed rate based on Freddie Mac's 30-year fixed mortgage contract rate, 30-year fixed mortgage points and fees, and a median loan value based on the NAR median price and a 20% down payment.
2 A Home Affordability Index (HAI) value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index of 120 signifies that a family earning the median income has 20 percent more than the level of income needed pay the mortgage on a median-priced home, assuming a 20% down payment so that the monthly payment and interest will not exceed 25% of this level of income (qualifying income).
3 Total housing costs that include mortgage payment, property taxes, maintenance, insurance, utilities are not considered burdensome if they account for no more than 30% of income.
REDLINING IMPACT REARS ITS UGLY HEAD AGAIN THANKS TO COVID-19
Aug 14,
2020
Low-income communities hit hardest by both virus and economic struggles
BY ANTHONY SANFILIPPO
The COVID-19 pandemic has changed the American way of life as we knew it and has negatively impacted millions.
But no one group has felt a greater negative impact from the coronavirus than Black Americans.
Since the pandemic first forced the country to shut down last March, Black Americans have faced job loss, wage reduction, small business closures and community infections at a greater rate than any other race or ethnicity.
This has had a trickle-down effect on housing, as Black property owners and Black renters have struggled to make the financial payments necessary to keep roofs over their heads.
The struggle is real for Black developers as well, who after years of building their companies from the ground up on the shoulders of the need for affordable housing, are likely going to find themselves either shutting down operations or, in a best-case-scenario, starting all over again.
According to an article published by Bisnow, although 92.2 percent of market-rate apartment renters paid rent in June, nearly 25 percent of rent-stabilized units in New York did not.
This is an indicator that the nearly eight percent of renters in this country that aren’t able to afford their rent now because of the pandemic, are likely concentrated in specific areas of the country. And likelier still, into specific neighborhoods, or sections of major markets.
This is the result of ages old discrimination that the government tried to curb more than 50 years ago but is still impacting Black Americans today.
Redlining, which was a post-World-War II government mapping practice that basically segregated communities and allowed banks to discriminate against residents of predominantly Black neighborhoods when it came time to approve loans, was outlawed with the birth of the Fair Housing Act, signed into law in 1968.
However, while redlining doesn’t exist today, the effects of its impact on society more than a half century ago can still be felt, much like the aftershock of an earthquake.
Developers of color told Bisnow they still have hurdles to traverse today when getting loans to fund their projects. This often gets lost in the shuffle because there is a racial disparity when it comes to developers.
More than 13 percent of the country identifies as Black, only 1.3 percent of senior executives in commercial real estate are Black men and less than one percent are black women, according to a 2016 study from Florida A&M University.
Many Black developers have been able to build their business by either purchasing or building affordable housing. The draw toward affordable housing for Black developers is the result of the gap in wealth and equity that exists in America between whites and Blacks.
According to a report from the Brookings Institution in February, the average net worth of a white family is 10 times that of a Black family.
This disparity is largely the result of the housing policies that existed during pre- and post-World War II America.
Redlining, the practice of rating neighborhoods from most desirable to least desirable, ended up segregating Americans predominantly by race.
It became nearly impossible for people to get loans for the less desirable neighborhoods, and Black Americans were especially discriminated against, and couldn’t even become property owners in their own, segregated neighborhoods.
The Fair Housing Act of 1968 banned redlining, but the long-lasting impact of it is still felt more than 70 years later.
The homeownership gap in the United States between whites and Blacks is worse in 2020 than it was in 1968.
Add in the impact of COVID-19, and Black Americans are bearing the brunt of the damage economic damage being caused by the pandemic.
Not only were Black Americans more likely to be infected by the coronavirus and die from it, especially in major metropolitan areas where people live in much closer proximity to one another than in suburbs or even rural communities, but the neighborhoods that were hit hardest economically by the shutdown that occurred as the country tried to flatten the curve were in lower-income Black communities.
ACCORDING TO A REPORT FROM THE BROOKINGS INSTITUTION IN FEBRUARY, THE AVERAGE NET WORTH OF A WHITE FAMILY IS 10 TIMES THAT OF A BLACK FAMILY.
According to the Urban Institute, layoffs and furloughs from companies during the shutdown, adversely affected Black (and Latinx) workers, leading to more housing instability because these workers were more likely to be living paycheck-to-paycheck before the pandemic gripped the country.
In a city like New York, where whites are actually a minority, making up only 42.7 percent of the population, all of the city’s major developers and property owners are companies run by whites.
“I definitely think that COVID has shone a light on the lack of Black property ownership in the Black community,” Harlem-based Lemor Realty Corp. President Kenneth Morrison told Bisnow. “I live in the community my buildings are in, so when I walk the streets, I am walking by my property.
“There’s a difference when you don’t have that. It shows.”
Some developers are pushing for public funding that would help Black developers climb out of any financial hardships that are the result of the pandemic, but there is also hope brewing that the racial awakening America is currently experiencing may shed light on the inequalities in real estate – especially when it comes to developing commercial properties, and will effectuate needed change.
“I think folks are now recognizing what Black Americans have been going through,” Morrison said. “It’s not just prejudices at work, it is a system, and it is all coming to light. We’re seeing the economic conversations happen that should be happening.”
New Model: Nearly Six Million More U.S. Homes in Flood Danger
Jul 28,
2020
Independent analysis shows greater risk than FEMA maps indicate
BY ANTHONY SANFILIPPO
July 2020
Assessing the risk of a flood is a herculean undertaking. Trying to predict long-term weather patterns, the impact on the rise of water in a certain area, as well as changes in the topography of land over time from natural or man-made changes, makes identifying the risk a constant struggle.
That unenviable task falls under the purview of the Federal Emergency Management Administration (FEMA) which makes the best of limited resources to produce the highest quality maps to support community safety regulations for as much of the country as possible. Nevertheless, a recent analysis has found that by not including all sources of flooding (e.g., heavy rainfall) and being updated frequently, the federal flood maps have underestimated the flood risk to almost six million homes or structures in the United States.
The analysis was conducted by the First Street Foundation, a non-profit that created a consortium of scientists, researchers and engineers from Rutgers University, the University of California at Berkley and George Mason University, as well as researchers from the Rhodium Group and flood analysts from Fathom. They took on the ambitious task of extending FEMA maps to every home in America except for Alaska and Hawaii.
“SIGNIFICANT GAPS EXIST IN CALIFORNIA, PENNSYLVANIA, TEXAS, NEW YORK, AND TENNESSEE, MOSTLY DRIVEN BY AREAS THAT YOU WOULDN’T THINK OF AS HIGH FLOOD-RISK LOCATIONS, LIKE CHATTANOOGA OR PHILADELPHIA.”
While FEMA maps are generally very expensive, labor intensive and time consuming, First Street was able to leverage advances in catastrophe modeling and remote sensing technologies – like LiDAR from airplanes – in order to overcome the mapping challenges and generate a nationwide model that measured flood assessment to high degree of accuracy and precision.
It was major step forward in educating the nation’s property owners about flood risk and protecting the U.S. taxpayer in the process.
The group’s modeling is “exactly what we need to be doing,” Kerry Emmanuel, a professor of atmospheric science at MIT who serves on First Street’s advisory board, told USA Today. “Until recently we didn’t have people putting all these little pieces together. We had really good people working on that little piece of the problem and good people working on another little corner.”
The new model identified roughly 14.6 million American homes – or about 1 of every 10 homes in the country – have an annual risk of flooding of at least one percent, which is the threshold the federal government uses to assess which homeowners are required to purchase flood insurance. This is contrary to FEMA’s list, which is about 40% lower, at 8.7 million properties in the floodplain.
First Street’s model didn’t just identify blind spots in the FEMA maps, but also made 30-year projections. According to their data, an additional 1.6 million properties will reach that one percent risk plateau by 2050.
While one percent might not seem high – it’s about the same risk you take driving 70 MPH on the highway – if you extrapolate that over the length of a 30-year mortgage on a property, the odds of a home flooding before a mortgage is paid off is about 1-in-4, or 26 percent.
Many of the largest discrepancies between FEMA and First Street maps were in states and cities not typically considered at high-risk for flooding.
Significant gaps exist in California, Pennsylvania, Texas, New York, and Tennessee, mostly driven by areas that you wouldn’t think of as high flood-risk locations, like Chattanooga or Philadelphia.
According to First Street, another big city – Chicago – has an additional 76,000 properties that should be on the FEMA floodplain, but aren’t.
And it’s not just large urban settings like Chicago where FEMA appears to underestimating homes in the floodplain. First Street identified West Virginia as the state with the greatest discrepancy and having even more homes at-risk than Louisiana or Florida.REPEATEDLY FLOODED HOMES ALSO ON THE RISE
While First Street’s research is the most comprehensive to date, it is not the only chink the nation’s armor against flooding that was recently identified.
The U.S. Government Accountability Office (GAO) found that programs designed to move homes out of floodplains or provide fortification of homes by elevating them – or flood proofing – are not keeping pace with the number of properties with repeated flooding.
GAO found that there was a 43 percent increase in the amount of repeatedly flooded properties in the U.S. climbing from 150,000 in 2009 to 214,000 by 2018.
In a changing climate when storms appear to be intensifying and coming more frequently, the GAO expects that number to continue to rise.
Most flood experts agree that FEMA must modernize to stay ahead of the curve, especially in inland areas where urban flooding due to heavy rainfall clears the one percent line of demarcation but is not currently included on the maps.
Even with those limitations, FEMA’s methods, which were developed decades ago, assesses only riverine and storm surge flood risks using historical data and without accounting for projected sea level rise along much of the coast
According to USA Today, FEMA and local officials don’t always see eye-to-eye.
Grover Fugate, former executive director of Rhode Island’s Coastal Resources Management Council, noted that FEMA revamped its flood maps along the state’s coast a few years ago, and actually lowered storm-surge estimates by up to five feet.
Concerned that the agency was using a 50-year-old model to predict the way a storm surge would begin moving over the land, Fugate and his team created their own flood maps and found that FEMA underestimated wave heights in severe storms by as many as 16 feet.IMPACT ON FLOOD INSURANCE
Meanwhile, with this new data, the ever-struggling National Flood Insurance Program (NFIP) now faces another financial crisis.
The NFIP has not been able to be a self-sustaining entity ever since Hurricane Katrina in 2005, and GAO has listed the NFIP as “high-risk” and in need of a complete overhaul.
Some lawmakers have suggested that the NFIP could move back into the black by mitigating properties that have repeated flood claims either by buying them out, or through flood-proofing.
However, current mitigation efforts are not keeping up with the growth of the repetitive-loss properties and by itself, will not solve the problem.
“Mitigation alone will not be sufficient to resolve NFIP’s financial challenges,” GAO wrote in a June 2020 report. “A more comprehensive approach is necessary to address the program’s fiscal exposure.”
Combine the new data from First Street with GAO’s findings and suddenly, Congress may not have a choice but to consider allowing flood insurance premiums to rise.
The GAO report identified approximately 1 million NFIP policies with premiums that are artificially low and do not reflect the property’s actual flood risk.
GAO suggested that affordability can be addressed by bringing the hidden subsides out into the open and removing them, except for the lowest-income property owners.
“Assigning full-risk premium rates to all policies would remove subsidies from those who do not need them, helping improve solvency. It would also more accurately signal the true flood risk,” GAO wrote.THERE’S AN APP FOR THAT
First Street has also released a tool and website called “Flood Factor.” It’s a downloadable application for a phone in which homeowners and buyers can evaluate any property’s flood risk. It also allows for a historical search on the flooding of a property.
“This sounds like a CARFAX for homes,” Larry Bartlett, the property appraiser for Volusia County, Fla. told USA Today. “If I was a lender, I’d want to know if the property I was lending money on stood a good chance of being underwater in 30 years.”
Along with USA Today, information from Climatewire was also used in this report.
Want to learn more about how to be prepared for a flood? Check out these links below:
Be Prepared for a Flood
Factsheet on how to stay safe before, during, and after a flood.
Flood Social Media Toolkit
Website with social media resources.
12 Ways to Prepare
A postcard with 12 steps you can take to be more prepared.
Document and Insure Your Property
Document outlining specific steps you can take to document and insure your valuables before a disaster.
New Model: Nearly Six Milion More U.S. Homes in Flood Danger
Jul 15,
2020
Independent analysis shows greater risk than FEMA maps indicate
BY ANTHONY SANFILIPPO
Assessing the risk of a flood is a herculean undertaking. Trying to predict long-term weather patterns, the impact on the rise of water in a certain area, as well as changes in the topography of land over time from natural or man-made changes, makes identifying the risk a constant struggle.
That unenviable task falls under the purview of the Federal Emergency Management Administration (FEMA) which makes the best of limited resources to produce the highest quality maps to support community safety regulations for as much of the country as possible. Nevertheless, a recent analysis has found that by not including all sources of flooding (e.g., heavy rainfall) and being updated frequently, the federal flood maps have underestimated the flood risk to almost six million homes or structures in the United States.
The analysis was conducted by the First Street Foundation, a non-profit that created a consortium of scientists, researchers and engineers from Rutgers University, the University of California at Berkley and George Mason University, as well as researchers from the Rhodium Group and flood analysts from Fathom. They took on the ambitious task of extending FEMA maps to every home in America except for Alaska and Hawaii.
“SIGNIFICANT GAPS EXIST IN CALIFORNIA, PENNSYLVANIA, TEXAS, NEW YORK, AND TENNESSEE, MOSTLY DRIVEN BY AREAS THAT YOU WOULDN’T THINK OF AS HIGH FLOOD-RISK LOCATIONS, LIKE CHATTANOOGA OR PHILADELPHIA.”
While FEMA maps are generally very expensive, labor intensive and time consuming, First Street was able to leverage advances in catastrophe modeling and remote sensing technologies – like LiDAR from airplanes – in order to overcome the mapping challenges and generate a nationwide model that measured flood assessment to high degree of accuracy and precision.
It was major step forward in educating the nation’s property owners about flood risk and protecting the U.S. taxpayer in the process.
The group’s modeling is “exactly what we need to be doing,” Kerry Emmanuel, a professor of atmospheric science at MIT who serves on First Street’s advisory board, told USA Today. “Until recently we didn’t have people putting all these little pieces together. We had really good people working on that little piece of the problem and good people working on another little corner.”
The new model identified roughly 14.6 million American homes – or about 1 of every 10 homes in the country – have an annual risk of flooding of at least one percent, which is the threshold the federal government uses to assess which homeowners are required to purchase flood insurance. This is contrary to FEMA’s list, which is about 40% lower, at 8.7 million properties in the floodplain.
First Street’s model didn’t just identify blind spots in the FEMA maps, but also made 30-year projections. According to their data, an additional 1.6 million properties will reach that one percent risk plateau by 2050.
While one percent might not seem high – it’s about the same risk you take driving 70 MPH on the highway – if you extrapolate that over the length of a 30-year mortgage on a property, the odds of a home flooding before a mortgage is paid off is about 1-in-4, or 26 percent.
Many of the largest discrepancies between FEMA and First Street maps were in states and cities not typically considered at high-risk for flooding.
Significant gaps exist in California, Pennsylvania, Texas, New York, and Tennessee, mostly driven by areas that you wouldn’t think of as high flood-risk locations, like Chattanooga or Philadelphia.
According to First Street, another big city – Chicago – has an additional 76,000 properties that should be on the FEMA floodplain, but aren’t.
And it’s not just large urban settings like Chicago where FEMA appears to underestimating homes in the floodplain. First Street identified West Virginia as the state with the greatest discrepancy and having even more homes at-risk than Louisiana or Florida.REPEATEDLY FLOODED HOMES ALSO ON THE RISE
While First Street’s research is the most comprehensive to date, it is not the only chink the nation’s armor against flooding that was recently identified.
The U.S. Government Accountability Office (GAO) found that programs designed to move homes out of floodplains or provide fortification of homes by elevating them – or flood proofing – are not keeping pace with the number of properties with repeated flooding.
GAO found that there was a 43 percent increase in the amount of repeatedly flooded properties in the U.S. climbing from 150,000 in 2009 to 214,000 by 2018.
In a changing climate when storms appear to be intensifying and coming more frequently, the GAO expects that number to continue to rise.
Most flood experts agree that FEMA must modernize to stay ahead of the curve, especially in inland areas where urban flooding due to heavy rainfall clears the one percent line of demarcation but is not currently included on the maps.
Even with those limitations, FEMA’s methods, which were developed decades ago, assesses only riverine and storm surge flood risks using historical data and without accounting for projected sea level rise along much of the coast
According to USA Today, FEMA and local officials don’t always see eye-to-eye.
Grover Fugate, former executive director of Rhode Island’s Coastal Resources Management Council, noted that FEMA revamped its flood maps along the state’s coast a few years ago, and actually lowered storm-surge estimates by up to five feet.
Concerned that the agency was using a 50-year-old model to predict the way a storm surge would begin moving over the land, Fugate and his team created their own flood maps and found that FEMA underestimated wave heights in severe storms by as many as 16 feet.IMPACT ON FLOOD INSURANCE
Meanwhile, with this new data, the ever-struggling National Flood Insurance Program (NFIP) now faces another financial crisis.
The NFIP has not been able to be a self-sustaining entity ever since Hurricane Katrina in 2005, and GAO has listed the NFIP as “high-risk” and in need of a complete overhaul.
Some lawmakers have suggested that the NFIP could move back into the black by mitigating properties that have repeated flood claims either by buying them out, or through flood-proofing.
However, current mitigation efforts are not keeping up with the growth of the repetitive-loss properties and by itself, will not solve the problem.
“Mitigation alone will not be sufficient to resolve NFIP’s financial challenges,” GAO wrote in a June 2020 report. “A more comprehensive approach is necessary to address the program’s fiscal exposure.”
Combine the new data from First Street with GAO’s findings and suddenly, Congress may not have a choice but to consider allowing flood insurance premiums to rise.
The GAO report identified approximately 1 million NFIP policies with premiums that are artificially low and do not reflect the property’s actual flood risk.
GAO suggested that affordability can be addressed by bringing the hidden subsides out into the open and removing them, except for the lowest-income property owners.
“Assigning full-risk premium rates to all policies would remove subsidies from those who do not need them, helping improve solvency. It would also more accurately signal the true flood risk,” GAO wrote.THERE’S AN APP FOR THAT
First Street has also released a tool and website called “Flood Factor.” It’s a downloadable application for a phone in which homeowners and buyers can evaluate any property’s flood risk. It also allows for a historical search on the flooding of a property.
“This sounds like a CARFAX for homes,” Larry Bartlett, the property appraiser for Volusia County, Fla. told USA Today. “If I was a lender, I’d want to know if the property I was lending money on stood a good chance of being underwater in 30 years.”
Along with USA Today, information from Climatewire was also used in this report.
Want to learn more about how to be prepared for a flood? Check out these links below:
Be Prepared for a Flood
Factsheet on how to stay safe before, during, and after a flood.
Flood Social Media Toolkit
Website with social media resources.
12 Ways to Prepare
A postcard with 12 steps you can take to be more prepared.
Document and Insure Your Property
Document outlining specific steps you can take to document and insure your valuables before a disaster.
Opportunity Zone Investment Finally Buzzing Despite Pandemic
Jul 08,
2020
BY ANTHONY SANFILIPPO
Like every other business and industry, development in opportunity zones sat out the first couple months of the COVID-19 pandemic.
But, in the past month, investors have shrugged the novel coronavirus aside and have been quite active in the opportunity zone real estate market.
Deals are being closed. New projects are under way. And evidence that this program, that was created to pump billions of dollars into underserved communities around the country, might be the first to show signs of economic recovery as the pandemic panic slowly dissipates.
But was it COVID-19 that seemed to light this spark? Or was it the quick drop in the economy?
“THERE HAS BEEN AN UPTICK IN ACTIVITY BOTH FROM [OPPORTUNITY ZONE] FUNDS RAISING CAPITAL AS WELL AS TRANSACTIONS OCCURRING SINCE MID-APRIL, WHERE IT SEEMS LIKE SOME OF THE MOMENTUM THAT HAD BEEN BUILT IN Q3 AND Q4 IS COMING TO FRUITION.”
Several experts believe that the pause in the stock market and the subsequent economic downturn made people look at their investments for the first time in awhile, after a long period of growth, and made them start to wonder what they should do with their capital gains.
“There has been an uptick in activity both from [opportunity zone] funds raising capital as well as transactions occurring since mid-April, where it seems like some of the momentum that had been built in Q3 and Q4 is coming to fruition,” Economic Innovation Group Director of Impact Strategy Rachel Reilly told Bisnow.
With the market being so volatile during the pandemic, investors pulled their money out of the market and were looking for places to put it – and a popular landing spot was opportunity zone funds.
A bevy of opportunity zone deals that were in the works prior to the virus quarantine either closed on their financing or put the first shovels in the ground since the April showers turned to May flowers.
That’s because development investors believe that affordable housing in emerging areas will succeed, regardless of the economic situation.
Plus, this money is a long-term investment, meaning it’s a good gamble that the economy will be better off down the road than it is now – meaning there will be rewards to be reaped for these investors as these communities start to flourish.
Investors must hold onto their asset for 10 years in order to realize the full benefits of opportunity zones. Although there is always a bit of a gamble with any investment, these projects are likely to appreciate well, making the investment worthwhile when the time comes to sell in a decade.
In Washington D.C. alone, at least four separate opportunity zone projects have begun construction since the lockdown began. Similar projects are beginning or are already under way in Chicago, Tampa, and Los Angeles.
Part of the reason opportunity zone investment and funding is starting to hit its stride now is because the rules have been clarified. The department of the Treasury finalized the guidance for the program last December after what amounted to a two-year question-and-answer session with potential stakeholders.
Bridge Opportunity Zone Strategy Chief Investment Officer, David Coelho, told Bisnow that last year, his company deployed $950M into 21 opportunity zone transactions and hopes to be just as active in 2020 especially because of the down market.
Land prices have dropped. So have construction costs. With most developments taking a year, or longer to build, this economic downturn has been a boon for investors.
“A lot more deals are coming back our way,” he said. “A lot of deals had capital lined up and that capital has fallen out. I think that trend will continue. It’s good for our strategy and for opportunity zones in general as non-opportunity zone capital decides to sit on the sidelines and consider whether there will be distressed opportunities, I think they’ll be less focused on development.”
All of this good news aside, most of the momentum is in development that is residential. The retail and hospitality industries are among the hardest hit by the pandemic and as such, investment in those assets has dried up.
But, the long view suggests that investing in opportunity zones now is a hedge against the unknown of what the future holds. With so many state and city budgets in shambles and with all the government spending that has and still is taking place, it’s likely a sure bet that taxes are going to go up in the near future.
By investing in opportunity zones, by holding onto the investment for 10 years, any profits are not taxed. That’s incredibly valuable, especially in the middle of this virus outbreak.
And if investors are smart enough to see that and sustain it for a decade, it can be a win-win situation not just for them financially, but also for the community they are dumping their money into after being underserved for so long.
Refinancing During The Pandemic is Possible, It Just Looks A Little Different
Jun 16,
2020
BY TANYA SVOBODA
Mortgage rates continue to fall to record lows, spurring many homeowners to begin refinancing their home loans. On May 18th The Mortgage Reports stated, “Mortgage rates in the 2s are here. And we’re not talking about a one-time instance of 2.99%, either. We’re talking about real, 30-year, fixed-rate mortgages starting at 2.5% from multiple lenders.”
Homeowners interested in moving forward with a refinance need to understand that the process looks a little different than it did prior to the pandemic.
YOUR REFINANCE MIGHT TAKE LONGER
If you want to refinance, you’ll have to wait in line because the rush to refinance has created a considerable backlog. USA Today reports that “During the first week of March, refinancing applications reached their highest level in nearly 11 years, and jumped 79% week over week, the largest leap since November 2008.” The rush to refinance has created a backlog that’s overwhelming lenders.
With the Federal Reserve cutting borrowing costs to near-zero, you can expect the refinancing backlog to continue. Homeowners that want to take advantage of low rates shouldn’t wait to start the process since many banks are trying to process loan applications in the order that they came in.
THE REFINANCING PROCESS HAS ADAPTED TO COMPLY WITH PANDEMIC GUIDELINES
The four main areas of the refinancing process that face pandemic related changes are title searches, the application process, the appraisal process, and the closing process. Note that the differences you’ll experience with the refinancing process will vary geographically.
TITLE SEARCHES
Title searches are done by lenders as a way to ensure their investment. A title search allows your lender to verify no liens or judgments have been placed against you since the time you received your original loan.
WHAT ARE THE COVID RELATED CHANGES?
- The search process gets complicated: Some government offices are closed making the title search process challenging. Many of the closed jurisdictions are allowing titles up until the date of their closure to be searched online but other jurisdictions without access to electronic searches cannot offer title searches at all, meaning the borrower cannot refinance.
- Notarization moves online: A notary public is needed to authenticate signatures as a part of a standard title search. Several states are allowing Remote Online Notarization (RON) either by way of legislation or emergency orders. The process is completed entirely online and requires no direct contact. After verifying the signer’s identity, electronic signatures are obtained, the document is notarized remotely, and returned to the signer.
In cases where using RON is not possible, title companies are obtaining signatures with limited contact. Joe Gentile, president of Federal Title & Escrow Company, told WTOP News, “We’ll leave [the document] on their doorstep and step back to our car, and have them come outside and sign it so we can see them sign it. Then we have them leave it outside and we grab the document, having witnessed the signature so we can notarize it.”
THE APPLICATION PROCESS
Typically, when you apply for a loan, the potential lender will check your credit score and your employment status to protect themselves against the possibility of loan default. In normal times, these procedures are pretty straight forward, but in the uncertain financial times of COVID-19, the procedures have become stricter.
WHAT ARE THE COVID RELATED CHANGES?
- Credit score minimums have risen: FICO scores help lenders determine how likely it is for a borrower to return a loan. Typically speaking, the higher the FICO score, the lower the risk to the lender and the more likely the borrower is to receive a loan. FICO scores range from 300-850; with 800 and above considered exceptional and 579 or less considered poor.
Normally, to qualify for a conventional mortgage, lenders require a FICO score of about 620. The article Mortgage Standards Get Tougher as Banks Face Greater Risks notes, “What has changed is that investors, in the face of epic uncertainty, have put pressure on banks to restrict their loans to only the most creditworthy borrowers.”
The Bank of America and JP Morgan both now require credit scores in the 700’s. And homeowners refinancing to pull cash from their equity will find, in addition to needing a higher credit score, that some banks’ loan-to-value ratio has been reduced by 5% compared to pre-COVID-19 ratios. This is due, in part, because of the strain mortgage companies are experiencing as a result of government relief programs granting homeowners forbearance as a result of COVID related financial hardship.
- Employment verification: The surge in unemployment since March has resulted in lenders taking extra steps to verify current work status for potential borrowers including homeowners looking to refinance. While lenders are accepting verbal verification of employment, this can often be difficult to obtain because many offices and businesses are closed.
If verbal verification can’t be obtained, some lenders are accepting emails from the employer’s work address along with pay stubs for the year to date of the pay period directly preceding the employers note.
Once verification has been obtained the application process can move forward. However, borrowers should expect a reverification just before their closing date.
- Length of the process: Although the length of the refinancing process varies by lender and in relation to each borrower’s unique situation, a typical refinancing takes between 20-45 days. You can expect the entire refinancing journey during COVID-19 to take a bit longer than usual given the additional challenges at nearly every step of the process.
THE APPRAISAL PROCESS
Appraisals are completed by an independent licensed or certified professional to determine your home’s value, to protect the bank from lending more than your home is worth. Typically, appraisals are determined by a combination of the value comparable homes in the area and an onsite inspection of your home. The onsite assessment of the home is providing unique challenges to the refinancing processes during
COVID-19.WHAT ARE THE COVID RELATED CHANGES?
- Appraisal waivers are possible: For low loan-to-value refis, Fannie Mae and Freddie Mac offer appraisal waivers, referred to respectively as Property Inspector Waivers and Automated Collateral Evaluation.
- Desktop appraisals can be completed remotely: Your lender can tell you if you qualify for a desktop appraisal. If you do, your appraiser will use comparables, basic research, MLS listings and public records to determine the value of your home. These appraisals may also include video conference interviews with you to virtually tour your home.
- Exterior appraisals may also be completed: Your lender can tell you if you qualify for an exterior appraisal, although relying on this alone is rare. More likely, your appraiser will use an exterior appraisal in conjunction with their desktop research. As you might expect, exterior appraisals, also referred to as “drive by appraisals” involve the appraiser viewing the exterior of your home from the street or sidewalk.
THE CLOSING PROCESS
The closing process for a refi usually involves a lender representative, yourself and occasionally a notary public. During the meeting you are presented with the final documents and terms for the loan and provide your signature to indicate your agreement to those terms. Understandably, closing proceedings have been forced to change due to
COVID-19.WHAT ARE THE COVID RELATED CHANGES?
- Closings involve less people and less contact: Similar to the title search process, lenders are using Remote Online Notarization to complete the notarization portion of the closing process. Your lender will have information about whether in person or online closing procedures are possible for you in your area.
When closing does have to be done in person, it is typical for the proceeding to happen at your home. Lending companies should be following CDC guidelines for social distancing and the use of personal protective equipment (PPE). You can expect to forego handshakes and plan to use your own pens to limit contact between you and the lender’s representative.
- Clean closing rooms may be an option: Some lenders, recognizing that homeowners may be uncomfortable hosting strangers in their homes during these unique times, have created “clean rooms.” For the Williston Financial Group that means using a room in their offices, which are otherwise closed, for the sole purpose of closings. They’re referred to as single-use clean closing rooms and are disinfected between each use.
The housing market will bounce back. But not everyone will be able to benefit
By: CNN Business
Jun 16,
2020
Read the original article by Lawrence Yun on CNN Business
The US housing market has been hit hard by the pandemic. The visible impact of the lockdown has been clear, with millions of Americans out of work and few doing any shopping, including major purchases like buying a home. There has just been too much uncertainty about the economy and the potential deadly consequences of the coronavirus.
In April, pending home sales reached their lowest mark in nearly two decades. As a result, we expect actual closing activity, which follows contract signings, will have reached a trough in May
.However, as more Americans get back to work, we are starting to see both buyers and sellers returning to the market, creating the beginnings of what we believe is a V-shaped recovery in the housing sector. Over the past several weeks, purchase activity has been 13% higher than it was during the same period a year ago. Listed homes are under contract within about 30 days, indicating a very swift market.
But not everyone who wants to buy a home will be able to participate in this recovery.
Realtors across the country are saying there are not enough homes for sale compared to the number of buyers in the marketplace. For first-time homebuyers, the market looks especially tough.
Pent-up housing demand has intensified for several years due to natural population growth. And the low interest rate environment further enlarged the pool of eligible home buyers.
On the supply side, for the past decade or so, homebuilders simply were not building a sufficient number of homes to match the rising housing demand. In my estimation, we were short by 5 to 6 million housing units. That's why home prices have been increasing for so many years.
In the early weeks of the lockdown, the total listings of homes for sale fell significantly, as some listings were pulled off the market because homeowners did not want strangers coming into their homes and some would-be listings that typically show up in spring did not. The housing shortage worsened. That is why, even with buyers taking a pause, home prices continued to rise in March, April and May.
The homeownership rate is naturally higher for those with above median income compared to those with incomes that are below the median (78.8% vs. 51.8%) given their financial resources. Ownership rates are also higher among older households compared to younger ones (over 70% for those aged 45 and over compared to 61.5% for those 35 to 44 and 37.3% for those under 35 years old). But a stark contrast also exists among whites vs. the non-Hispanic population and minority households (nearly 74% for whites, 44% for black households, 48.9% for Hispanics and 59.1% for Asians, Native, Hawaiian and Pacific Islanders). That means that the wealth disparity remains large and will persist at a time of a housing market boom. It is therefore critical to consider measures to boost opportunity or else the howeownership wealth gap will widen even further.
Being able to afford a down payment has consistently been a major hurdle for first-time homebuyers. Our data at NAR shows more family members are assisting with down payments for their children. For those less fortunate to have a wealthy family member, a down payment assistance program or a home buyer tax credit can go a long way to help start up the ladder of ownership and wealth building.
The demand for assistance in itself, however, will not significantly chip away at the gap in ownership and wealth. We also need a huge boost in housing supply, which will relieve the housing shortage and tame the current fast-rising home prices. All barriers to homebuilding, including regulatory burdens — like long and uncertain housing permit approval processes — and zoning laws, need to be seriously reexamined and modified. Based on current conditions, perhaps even offering real estate investors incentives to unload properties onto the market will improve inventory and give more chances at ownership for first-time buyers. A capital gains tax relief for selling investor properties will also certainly help move the dial.
America is an unmatched economic superpower. However, not everyone has participated in the progress. The explicit discrimination of the past and the hidden unconscious biases of today have prevented equal opportunities for minority households. Let's ensure homeownership and the accompanying wealth build-up are open to more Americans.
Small Business Landlords Drowning In The Wake Of COVID-19 Renter Protections
Jun 09,
2020
Often forgotten when thinking about the effect of COVID-19 on small business owners, private landlords are really feeling the economic crunch on their properties.
Take Maribeth Shields for example.
Bloomberg featured her in a recent article as someone who is struggling to pay her mortgages because rental properties are her small business.
Shields owns 27 apartments in and around the city of West Haven, Conn. A majority of these apartments are low-income and because of the coronavirus outbreak, more than half of her tenants aren’t paying their rent.
Yes, the tenants are being protected – Connecticut put a moratorium on evictions until July because of the pandemic – but no such protection was put in place for private landlords like Shields, who told Bloomberg she is behind on $1.2 million in mortgages.
“No one is advocating for mass evictions. There are no winners here and everyone is hurting. But landlords have no (legal) remedies"
She isn’t alone. Individual landlords across the country are facing the same dilemma, and with no resolution insight, once these bans on evictions are lifted, chaos is bound to ensue.
Landlords will want their money to try and come out from under their crushing debt and avoid foreclosure. Renters will appeal their evictions, buying themselves at least another month to either come up with the cash or find a new place to live.
And neither situation is good for housing in America.
Yes, the federal CARES act that passed in March did allot for mortgage protection for homeowners with government-backed mortgages, allowing for them to defer payments for up to year. But that only encompasses about half of the mortgages nationwide on rental properties.
The other half have to pay up, or risk losing their properties altogether.
The federal government did not offer relief for renters though, leaving that up to the states in the form of these eviction bans. The notion was that although unemployment was climbing at an alarming rate, stimulus checks from the government and additional dollars being handed out in unemployment would make up for the lost wages and allow renters to pay their bills.
Except, that hasn’t happened.
Instead, renters are showing their landlords empty pockets, who in turn are begging their lenders for more time to pay their mortgages and the end result is a major crimp on property tax revenue.
And there’s no bail out on property taxes. Instead, there will be mounting penalties and late fees, and likely an increase in liens, that will wreak havoc with credit scores and make landlords – who operate on slim profit margins to begin with –end up in just as bad a situation, if not worse, then their renters who currently aren’t paying the rent.
It’s a vicious cycle. And it’s not getting any better.
Because of the pandemic, there’s a lot of activism on the tenant side as well. Rent strikes are being organized. Efforts like the “Right to Cure” ordinance in San Antonio – which would have granted an additional 30-day grace period for renters once the moratoriums are lifted before they had to pay rent – was defeated by a narrow margin in City Council (6-5) because the council recognized there are concerns for property owners that were not addressed in this bill.
Read More: What will happen to property taxes in your area and nationally when the country returns to business as usual following the coronavirus pandemic?
Most of the affordable housing in America is owned by small companies or individual landlords. If they can’t afford their mortgages and are forced to sell the properties they own or even abandon them in some instances, those properties will likely be gobbled up by Wall Street firms with a lot more capital, who would likely turn them from affordable to unaffordable for most renters.
“No one is advocating for mass evictions,” Matthew Paletz, CEO of Paletz Law, a Troy, Mich.-based firm that represents landlords and property owners, told the Detroit Free Press. “There are no winners here and everyone is hurting. But landlords have no (legal) remedies” during the moratorium.
According to the National Multifamily Housing Council, 88 percent of apartment tenants made a full or partial rent payment in May by May 13. That was down two percent from the same time a year ago, but it was also down four percent from April. While those numbers are better than expected, it’s still a number going in the wrong direction with uncertainty remaining for the rest of 2020.
Compounding that data is the fact that it doesn’t include information on apartments rented by smaller or individual landlords, and it doesn’t include units that are considered affordable housing. This is the area where financial strain is more likely.
“No property owner can withstand that revenue loss,” Tim Thorland, executive director of Southwest Housing Solutions told the Detroit Free Press. “There’s a misconception of real estate industry that it’s flush with cash and prepared to weather any storm. The fact of the matter is it’s a thin margin industry and you can be successful if things go as expected.”
New Fair Housing Requirements In New York Part Of Industry Reform
May 23,
2020
The New York State Board of Real Estate adopted new state rules requiring all real estate agents and brokers to notify all buyers, sellers and renters about anti-discrimination laws.
Additionally, they must prominently display information about how customers can file complaints. It was also mandated that both audio and video recordings of classes, for those groups that provide fair housing training, is required.
The Board, which writes the rules and regulations for the real estate industry, announced these rules go into effect beginning June 20.
According to a report in Newsday, a spokesperson for the New York Department of State indicated that the regulations “will help combat discriminatory actions and ensure New Yorkers understand their rights.”
WHY NEW RULES?
Widespread racial bias by real estate agents and brokers on Long Island unearthed by a Newsday investigation led to the crafting of these new rules.
As a result, with these new regulations, the state can now issue fines or even suspend or revoke the licenses of agents and brokers who violate the rules.
Gov. Andrew Cuomo proposed these new rules in December, they were adopted in April, and officially entered into the state register in May.
“I think it’s important from the beginning of the relationship,” Neil Garfinkel, broker counsel for the Real Estate Board of New York told Newsday. “And then it’s a great way to – should a conversation, you know, slip over the line or whatever the case may be – to then say, ‘Hey, remember, we talked about this? This is why I can’t do that.’”
ABOUT THE NEW RULES
Not only do the agents and brokers have to share the fair housing disclosures with potential clients, but they have to retain proof that the disclosure was shared for three years.
The sharing of the disclosure can be done verbally, or on a printed form. However, the proof of the shared disclosure must include either a signed document from the customer, or an email, text or fax from the customer acknowledging receipt of the fair housing regulations.
If a customer refuses to sign off on receipt of these rules, the agent or broker must fill out a form immediately stating the provided the disclosure and the customer refused to sign it.
As for posting notices that instruct customers how to file complaints with the state, agents and brokers must post them at their offices, when hosting open houses, and on their websites.
The new rules both inform customers and protect them at the same time, and with this new empowerment serves as a reminder to both brokers and agents that they should avoid any actions that can simply be viewed as discriminatory.
"New rules in New York are requiring real estate agents and brokers to be more direct and transparent with anti-discrimination laws for their clients."
The audio and video recordings of fair housing classes must be kept by brokerages for a minimum of one year. State law requires agents to take 22.5 hours of continuing education every two years, three of which have to be dedicated to fair housing, in order for their real estate licenses to renew.
This was also a result of the Newsday investigation which found that some classes offered on Long Island by the Board of REALTORS® (LIBOR) were not meeting that standard.
LIBOR postponed their classes, and completely overhauled their continuing education program, which included hiring new trainers.
“If the brokers are trained properly [then] this is the best tool since sliced bread,” Andrew Lieb, an attorney and fair housing trainer told Newsday. “Don’t you want a broker that knows how to protect you?”
How Will COVID-19 Impact Your Property Taxes
May 02,
2020
America has changed drastically over the past month due to the spread of COVID-19. Unemployment rates are up, many businesses are closed, and most kids are doing e-learning at home. In response to these changes state and national agencies have issued stimulus checks and relief funds in an attempt to soften the economic blow on individuals and our nation as a whole.
However, there’s been little discussion about what will happen to property taxes when the country reopens. While some sources speculate that property taxes may, in fact, prove to be the silver lining in all of this and drop when the nation reopens, others worry homeowners won’t see the decrease reflected in their assessments for 3 – 4 years.
WHAT TYPICALLY MAKES YOUR PROPERTY TAX BILL SMALLER AND HOW COULD COVID19 IMPACT THAT?
Your property taxes are largely based on your home’s value, although local government and state officials also have a say in what determines your final property tax rate. So, let’s take a look at how COVID-19 might impact your property tax bill based on those factors.
YOUR HOME’S VALUE DURING COVID-19
The value of your home is determined by an assessor that’s hired by your local government. When the assessment goes up, so do your property taxes – and vice versa. That’s why the first thing many property owners do after a larger property tax bill is appeal their assessment if they feel it was unfairly inflated.
COVID-19 has disrupted the U.S. housing market, created higher unemployment rates and an uncertain outlook for many businesses – all of which are likely to create a temporary recession. Historically, home values drop during recessions which should result in lower property taxes.
However, whether or not your home’s value is reassessed is up to your local government. So it’s important homeowners keep up-to-date on their home’s value so they can appeal their home assessment if needed. Financial website fool.com gives a great example:
“What happens if your home values decline as a result of COVID-19 so that your home is only worth $275,000 a year from now? Suddenly, you’re looking at a tax bill of $5,500, provided your home is reassessed. And if your home is not reassessed automatically by your town but home prices in your area clearly decline, you can appeal your property tax bill and potentially lower that burden yourself.”
Property tax assessments in some areas might not take 2020 home value declines into consideration. Kendall County (IL) Assessor, Andy Nicoletti, told the Northwest Herald, “Property tax assessments as of the beginning of this year are based on a three-year sales average, meaning current assessments are being made using 2017, 2018 and 2019 data.”
If you feel that your new tax bill isn’t reflective of the drop your home value incurred due the financial impact COVID-19 had on the economy, Realtor.com explains how to begin the process of appealing. “Your property tax assessment should have an explanation of how to make an appeal on the form you received in the mail.” The article goes on to say, “You can also search for your county or state’s assessment appeals board or department of taxation and finance online. Start by searching for your county plus ‘assessment appeals’.”
YOUR STATE AND LOCAL GOVERNMENT’S DECISION TO PROVIDE PROPERTY TAX RELIEF DURING COVID-19
To recap, your property taxes are based on a combination of your home’s assessed value and the needs of your local government – with the state laying down the guidelines your local government must abide by. For example, the state of California passed Proposition 13 in 1978 capping property taxes at 1%. Prior to that, the average property tax in the state was 2.67%
Many states and localities have put property tax relief in place. Thomson Reuters has an in-depth guide called, “Tax Relief Offered by States and Localities in Response to COVID-19” that can help homeowners to find out if there is property tax relief available to them.
For example, the guide shares that “The State of Indiana ordered all property taxes to remain due on May 11, 2020, however, counties must waive penalties on payments after May 11, 2020 for a period of 60 days.”
IS THE FEDERAL GOVERNMENT OFFERING PROPERTY TAX RELIEF DURING COVID-19?
The federal government is bringing relief to homeowners, but not in the form of property taxes. Instead the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on Friday, March 27, 2020 by President Trump, offers a different kind of relief.
The CARES Act helps homeowners who are unable to pay their mortgage due to COVID-19 related financial troubles, foreclosure moratoriums or mortgage forbearances.
A Foreclosure Moratorium suspends or stops your lender from foreclosing (taking ownership back) on your property. A foreclosure typically occurs when you are unable to make the required payments on your mortgage. Foreclosure specifics vary by state.
A Mortgage Forbearance allows you to pause, and sometimes reduce, your mortgage payments for a limited time. A mortgage forbearance does not eliminate your need to repay the missed or reduced payments.
As homeowners, it is prudent to understand what might happen to property taxes in your area and nationally when the country returns to business as usual. And while lower property taxes benefit homeowners in the short term, we should also remember the money collected from property taxes serves as the base of many community initiatives, meaning lower property taxes might be better for the individual but not necessarily for the community.
COVID-19 Causing Greater Affordable Housing Crisis Now
Apr 20,
2020
But, could provide a development boon in the future.
BY ANTHONY SANFILIPPO
Even during the time of COVID-19, there remains a glaring need for affordable housing. Sure, demand is down right now, and with that prices may fall a little bit. But the reality is, an economic recession in the near term will only slow the development of more affordable housing moving forward.
Many local governments have tried to stimulate the development of affordable housing by providing increased funding. However, as a result of the impact of COVID-19, there is a real risk that those same governments might not be able to adequately support such measures – either to build more or to preserve existing affordable housing.
“For the commercial developers who would build the needed affordable housing units, finding the financing necessary - especially from cautious lenders during a time of uncertainty - may be a lot harder to come by.”
In California, where the affordable housing crisis was worse than every other state prior to the pandemic, Gov. Gavin Newsom announced the state will have to significantly slow spending as a result of the response to COVID-19. Specifically, in San Francisco, where low- and middle-income earners rarely find housing they can afford, a budget deficit of more than $1.5 billion is expected.
As for the commercial developers who would build the needed affordable housing units, finding the financing necessary – especially from cautious lenders during a time of uncertainty – may be a lot harder to come by.
Below-market rate debt that comes from government lenders, such as Fannie Mae or Freddie Mac, is likely to become less available. Similarly, the market will make it harder to get the kind of equity desired from low income housing tax credits, which are used in a vast majority of affordable housing projects. This is because they afford tax credits to owners in exchange for financing a residential unit that charges a rent at 60 percent or lower of the median income for a specific area.
Like the lenders, investors are also leery because of the uncertainty of how owners of affordable housing developments are going to manage the shortfall that is sure to come from renters being unable to afford rents during the pandemic.
Federally backed mortgages are allowing for mortgage forbearance for up to six months for these owners/landlords, but that only accounts for about 40 percent of owned multi-family units in the country.
Not only that, owners/landlords are dealing with increased costs because a predominance of residents are staying-at-home through the pandemic. As such, increased trash and higher use of utilities are happening.
But there is a glimmer of hope once COVID-19 is under control.
Affordable housing development could stabilize quickly once there is a return to normal because unlike market-rate housing, the rents in affordable housing are generally below market, meaning the operation risk of managing these properties wouldn’t be as high during a recession.
“With interest rates low and expected to remain that way until the economy rebounds, developers may be able to take advantage and borrow the money they needed to break ground on new multifamily projects."
Additionally, because demand for affordable housing is likely to grow as more Americans lose income, more investors could line up to develop affordable housing once the pandemic passes. Couple that with banks being incentivized by government regulations to process loans for housing in areas deemed low or middle income, and the market for affordable housing could quickly rebound, even during an overall economic downturn.
With interest rates low and expected to remain that way until the economy rebounds, developers may be able to take advantage and borrow the money needed to break ground on new, multifamily projects. The recession may actually lower the cost of land and even make construction costs drop.
Overall, the immediate pipeline for funding of affordable housing is definitely a concern. But once the pandemic passes, the market very well may course correct and in the next 18 to 24 months, a much-needed uptick in this kind of housing could come to pass.
Smart Homes are Saving Homeowners a Chunk of Change
By: American Property Owners Alliance
Apr 13,
2020
Once you’ve settled into your new home, after signing a slew of checks to cover moving expenses and whatnot, you’re likely dreading seeing your name on the top of yet another bill. With the help of a variety of home automation services, you can cut your utility bills nearly in half while enjoying the conveniences of a smart home—a true win-win. Some common smart home features are smart thermostats, sensors, power strips, and water systems. Pairing all these features together essentially gears your house up with a crew of robots to care for your home, so it’s a surprise to hear that these amenities actually save you money.
Why Smart Appliances?
These “smart” appliances allow you to prep your home exactly the way you like it before you even pull into your driveway. With common features that support home energy efficiency such as detecting when a room is empty and powering off all devices, also known as “energy vampires,” and smart utility meters that read a house’s energy usage daily without having to be prompted, you can rest easy that you’re not using any unnecessary energy. By using less energy, you’re in turn helping the environment and saving money on your bills. A home automation system can help save you a great deal of money, help regulate energy use, and solve a variety of day to day annoyances.
Considering it’s quite an investment to turn your not-so-smart home into a genius, it’s natural to assume companies may be trying to trick you into dishing out lots of funds with false promises of savings in the end. When smart homes just began trending around 5 years ago, it could cost upwards of $3,500 for a complete home revamp with all the smart appliances, but today we can expect to pay much less, perhaps even under $500. It’s important to remember that smart homes are an investment, and while you’ll be paying 30% or so more for these smart appliances, you’ll start to see the benefits (in your wallet) overtime. Typically, investments just involve a grueling waiting period, but one huge advantage with this investment is that you can at least begin enjoying the perks and conveniences right away.
Without smart appliances, it’s hard to see how much energy you’re using in your home. Sure, you can look through your gas and electricity bill for details, but the tough part is knowing when energy is being used during an unnecessary time. Such as the aforementioned energy vampires, which use up electricity even when they are turned off. These appliances and electronics are responsible for 10% of the energy used in an average home, according to the Department of Energy, which also shares that “an appliance constantly taking in 1 watt of electrical current is equivalent to 9kWh per year, adding up to $1 in annual costs (basically $1/watt/annual). Considering how many appliances are used in an average household, costs can quickly add up to $100-200 a year.”
Smart Appliances are Making a Difference.
There are many components that impact the amount of energy a home uses, such as location, climate, number of household members, and the size of the home, but as of 2018, the average American home consumed about 914 kWh of electricity per month. Electricity is used in just about every home and accounted for 44% of household energy consumption in 2017, while natural gas—which is used in 58% of homes—accounted for 43% of household energy consumption in the same year. This average energy use per household is consistently declining, and it seems that it’s no coincidence with the rise of smart homes. Overall, 3 of 4 American homes use two or more energy sources and chances are if they’re not using smart devices, they’re using too much energy and paying too much.
Electric companies are a bit sneaky and offer “time-of-use pricing,” which charges more for electricity during peak times during the day. With the help of smart appliances, they can help do the work for you during off-hours while saving you a bit of money here and there—which adds up. As Dan DiClerico of HomeAdvisor says, “Smart appliances make it easy for homeowners to control when their appliances are using electricity. For example, the dishwasher and dryer can be programmed to run late at night. Or the refrigerator can be set to go into energy-intensive defrost mode only on weekend mornings, when electricity rates are very low.” These are the small factors that are often looked over by homeowners who simply skim their utility bills before making the payment.
There continues to be greater advantages than just saving money when it comes to smart gadgets. Smart lighting, for example, offers a sense of security with the ability to control your lights remotely. Let’s say you forgot to hit the lights before taking off on vacation, or maybe you’d like to have the lights on when you get home late one evening—with smart lighting this can all be done with the press of a button.
By 2021, the market penetration for smart home technologies is expected to reach 38.7%, which is quite the jump from 8.2% in 2016. Clearly, homeowners are catching on to the potential massive savings a smart home will create. According to Energy Star, the average homeowner spends more than $2,000 on utility bills per year. After switching to a smart home lifestyle, one can expect to save between 20%-30% on their energy bills.
Smart Appliances are Connected.
As far as conveniences go, smart home technology may rank number one. With voice assistants like Alexa or Google Home, you can simply announce that you’d like your favorite song played, the lights dimmed, and the heat set to the perfect temperature. You can even set yourself reminders, check the weather, and restart your router when the internet is acting up, all without lifting a finger. These amenities are adored by everyone, but especially children and those with disabilities that might find it harder to reach certain places.
Between the dozens of technology-driven appliances, you can save approximately $996 a year. There are enough stressors in our lives already, do we really want to add our energy bills to that list?
Scientists Recommend These 10 Methods To Disinfect Your Home
By: American Property Owners Alliance
Apr 10,
2020
This time of year has everyone stocking up on vitamin C, cold medicine, chicken noodle soup, and anything else to help ease any potential sickness, and now specifically the Coronavirus. While you may keep your home squeaky clean, it is all too easy to bring germs back into your home from the outside world, and there are dozens of nooks and crannies where said germs can hide out. Unexpected areas and objects such as your television remote, towels, your computer keyboard, and even your faucet are a favorite refuge for a variety of germs.
As Google searches indicate, the keyword Coronavirus has skyrocketed in the past several weeks as citizens prepare for the pandemic and research the best ways to stay protected. However, medical care professionals agree that simple precautions taken continuously can drastically help combat the Coronavirus, as well as any germs in general. Aside from getting a yearly flu shot and washing your hands, various medical reports and health care professionals have shared the easiest ways to fight off the common flu as well as COVID-19.
Here are the top 10 easiest ways to keep your family and yourself happy and healthy not just through the height of flu season and the COVID-19 pandemic, but also throughout the whole year.
Carefully Read Cleaning Product Claims
Shopping for cleaning products can be overwhelming. With shelves jam-packed with a variety of options, it’s tough to find the right product for you and your home. Many products proudly exclaim they are “anti-bacterial”, although that doesn’t necessarily mean they disinfect surfaces properly. The EPA — the Environmental Protection Agency — has compiled a list of 500 products that they guarantee will disinfect all areas against viruses such as the Coronavirus. When stocking up on cleaning supplies, look for labels that the EPA has tested and approved with words “disinfect” and “sanitize.” If you prefer to steer clear of chemicals, there are an abundance of all-natural products that kill microbes, such as tea tree oil, lemon juice, and vinegar. While these products will certainly help eliminate germs from your home, they work much slower than their chemical counterparts. Microbiologist Charles Gerba of the University of Arizona explains that these options kill fewer microorganisms than those that have been approved by the EPA.
Increase Humidity
Increasing the humidity in your home can not only help you breathe with more ease during the harsher winter months, but it can also make it more difficult for bacteria and COVID-19 to grow and develop. Creating an environment that doesn’t allow germs to thrive will create a safer home for yourself and protect you from the dreadful Coronavirus. Humidifiers can also aid symptoms if you’ve unfortunately already been hit with a cold or COVID-19. With that being said, it’s also very important to keep your humidifier clean. This is one household item that is often overlooked once cleaning day comes around. As humidifiers add moisture to the air, they can also quickly generate bacteria. The president of Building Wellness Consultancy, Barney Burroughs, advises residents to regularly clean individual humidifiers and the whole house system should be serviced once a year, preferably when they aren’t in use in the warmer seasons.
Replace Your Sponges
As NPR says, sponges are a “bacteria hotbed”. Regularly replacing your sponges is a small task that goes a long way. Kitchen sponges hold a tremendous amount of bacteria, although it’s easy to let that slip your mind as you’re constantly using a sponge with soap and hot water. Every couple of weeks, be sure to replace your sponge to ensure no bacteria is lingering around your sink and dishes.
If you’re short on cash, an alternative option is to toss your sponge in the dishwasher or microwave it for one minute. These two options will certainly reduce the bacteria living in your sponge and heat targets the most dangerous bacteria, although it cannot kill all of the billions of types of bacteria hiding in your sponge. As a food microbiologist at Drexel University, Jennifer Quinlan explains, “It doesn’t sterilize the sponge…but remember, the bacteria we want to kill are the ones that will make you sick.”
Don't Just Push Germs Around, Eliminate Them
Many cleaning tools give the impression that they are killing germs and cleaning your home when in reality they are simply spreading germs to other more hidden areas of your home. The only way to avoid this is by sanitizing these cleaning tools, such as mops, dusters, and dishrags between uses or they will continue to spread bacteria around your house. This issue often goes unnoticed, as some of the most sparkling clean homes can be saturated with bacteria while other untidier homes are tested low for germs because said germs sit still rather than spreading from wall to wall. Dishrags and other non-disposable towels are an excellent environmentally conscious tool as opposed to paper towels, but only if they are continuously washed at high temperatures to kill pesky germs. The co-author of The Germ Freak’s Guide to Outwitting Colds and Flu, Charles Gerba, expresses, “It’s a free ride for the virus.”
Sanitize Surfaces That are Touched on the Regular
When relaxing at home, there are a handful of surfaces you touch constantly, such as doorknobs, light switches, remotes, fridge handles and more. Flu viruses can live for two to eight hours on these hard surfaces, so it’s crucial for your health to frequently disinfect these areas. Any cleaning wipes or products that say “sanitizing” on the label will work fine to catch those vexatious germs.
Stock Up on Tissues
For many people, tissues aren’t a go-to purchase at the market unless you’ve been hit with a cold that has left your nose craving some comfort. With the flu season upon us and the fear of the Coronavirus, stocking up on tissues is a great idea for not only contentment but to keep your home germ-free. One sneeze can spray an assortment of germs up to 6 feet, which is likely to linger in your home for hours if not days after. Research from the University of Bristol shows that the “average sneeze or cough can send around 100,000 contagious germs into the air at speeds up to 100 miles per hour.” Using a handy tissue to sneeze or blow your nose will confine your germs and keep them where they belong — in the trash.
Wash Your Linens
Sure, you likely wash your towels, sheets, and dish rags every now and then, but our guess is: not often enough. As soon as you step out of the shower and dry off with your towel, you’re spreading thousands of germs and bacteria onto yourself. While your towel hangs in your bathroom, persistent germs latch onto your linens and grow — even droplets from your toilet. Gulp. While these microbes aren’t guaranteed to get you sick, they rapidly multiply. NYU School of Medicine microbiologist, Philip Tierno claims explains that a damp towel has growing bacteria and “Wherever there is odor, there are microbes growing, so it should be washed.”
Not only are your bath towels a breeding ground for germs, but your bedsheets are as well, and may even be worse. From lint to skin cells, your sheets are covered in a variety of germs and allergens that can negatively impact your health. Tierno recommends washing your bed sheets at least once a week to avoid the growth of these microbes.
Stop Abiding by the "3 Second Rule"
We all remember the socially acceptable rule we learned in elementary school — the “3-second rule” — that made everyone feel better about eating food off the floor. Not too much of a surprise here, but the floor is swarming with viruses and bacteria and you should not eat anything that touches it. As microbiologist Tierno puts it, “If you drop some food stuff there [on the floor], don’t eat it…a lot of people do stupid stuff, and they have the three second rule, which is nonsense.” Unless you’re sanitizing your floor every few minutes, eating any food that has touched it is clearly a bad idea. When you pick a chip up off the floor, for example, you may believe you’re only taking in your own germs and will probably think something along the lines of, I just mopped the other day, my floors are clean. Although, anything that has hit the floor will become covered in germs that have been tracked in from the outside world. Another important factor to remember: just because you don’t see germs, doesn’t mean they aren’t there.
Deep Clean Your Floors and Carpets Regularly
It’s rather easy to center your deep cleaning around times when things become visibly dirty, but by putting that cleaning off you’re allowing germs to multiply. Rather than waiting until a big spill hits your hardwood floor, practice steaming your wooden floors and deep cleaning your rugs/carpets about every month. Hardwood floors harbor any bacteria from outside which idle until the area is properly disinfected. Floors in or near your kitchen are especially important to focus on, as germs from food (raw chicken is the #1 worst culprit) are dangerous.
As studies from Clemson University’s Department of Food Science and Human Nutrition have found, hazardous pathogens that have the potential to cause severe internal infections such as E. coli, campylobacter, and salmonella can survive on hard surfaces for days, so better safe than sorry. As for rugs and carpets, they should be cleaned regularly as they attract and hold a great deal of detritus. Carpets can contain up to 200,000 bacteria for every square inch, making it “4,000 times grosser than your toilet,” as writer Heather Barnett states.
Splurge on Germ-Fighting Appliances
If you’ve been in the market for a new dishwasher or washing machine, take some time to research appliances that have been cited by The Public Health and Safety Organization, NSF. This organization has certified a great number of appliances that focus on fighting germs and keeping your home healthy and safe. Their Home Product Certification Program aids consumers in identifying the safest products for their home. NSF’s extensive testing is specific to home use and balances the product’s performance, quality, and food contact material regulations.
Germs are all around us, and they’re certainly not going anywhere, so it’s important to protect ourselves as much as possible. Then again, being too clean isn’t going to be anyone’s saving grace. Not all germs are harmful, so there is no need to turn into a full-blown germaphobe.
By taking simple actions to keep yourself healthy and happy, you’ll likely never cross paths with the COVID-19, or even the common flu again. These methods to stay Coronavirus-free this season are very effective and will barely alter your day to day lifestyle. As Tierno says, “You’ve just got to be wise, be aware, and understand your surroundings. It’s not brain surgery.”
“Guidelines and protocol surrounding COVID-19 are changing quickly. For the most up-to-date information we recommend visiting the CDC, WHO, and your local health departmentwebsites.”
How COVID-19 Could Impact the Real Estate Market
By: American Property Owners Alliance
Apr 08,
2020
Update (April 8): Each state has determined whether real estate services are considered essential or non-essential and have a variety of guidances and restrictions related to it. Click here to find out what the protocol is in your state.
Update (March 26, 2020): Mortgage rates are ever-changing, especially during the uncertainty of the coronavirus crisis. Since this article was first published, they have fluctuated, and as of March 25, they are slightly higher. It is recommended that you go to Realtor.com to get mortgage rates that are updated daily.
Covid-19, or coronavirus, is all that everyone is talking about. And there are dozens of questions related to it. Is it preventable? How fast is it spreading? How dangerous is it? Will a treatment or even a cure be found in time?
All those questions are fair, and from a public health standpoint, should be asked and answered by those who are tasked to answer them – like the Centers for Disease Control.
However, this global pandemic, while terrifying millions around the world, is also having an impact on global financial markets and likely will impact the U.S. Real Estate market soon.
“U.S. MORTGAGE RATES HIT AN ALL-TIME LOW IN EARLY MARCH, WITH THE AVERAGE RATE OF THE 30-YEAR FIXED-RATE MORTGAGE DROPPING TO A STAGGERING 3.29%.”
Mortgage interest rates are plummeting, and according to a report on CNBC in early March, they could fall as low as zero percent, and even then, the Fed could go even farther.
“We certainly think the Fed would be prepared to do more,” said Michael Gapen, head of U.S. Economics at Barclay’s in an interview with CNBC. “There’s a lot of volatility in markets, and the Fed is very concerned about market functioning and keeping liquidity free flowing and credit available.”
In addition to the plummeting mortgage interest, an already slow real estate market will be impacted by a lack of Chinese buyers.
“China has been the most important source of foreign demand for real estate,” Lawrence Yun, chief economist at the National Association of Realtors®(NAR) told Realtor.com. “The upper-end market can expect to be softer as a result.”
That’s because wealthy Chinese buyers often purchase luxury properties in places like California and New York.
According to NAR’s most recent data about foreign buyers, Chinese buyers spent $13.4 billion on U.S. homes between April 2018 and May 2019 – which is a 56% drop from the previous 12-month span.
While some of that drop can be attributed to more strict rules by the Chinese government on international spending combined with tougher immigration rules in the U.S., even those Chinese buyers who would still come to America to buy real estate have been put on ice based on travel restrictions, flight cancellations and required quarantines and self-isolations.
This takes away the incentive to buy real estate because when a potential buyer can see the property remains unknown.
The Mortgage Interest-Free Fall
U.S. Mortgage rates hit an all-time low in early March, with the average rate of the 30-year fixed-rate mortgage dropping to a staggering 3.29% according to Freddie Mac, eclipsing the previous low set back in 2012. Just a year ago, though, mortgage rates were hovering in the mid-4% range after almost touching 5% at the end of 2018.
However, some experts, like Jay Farner, CEO of Quicken Loans, sees this as an opportunity for current homeowners to refinance their mortgages and pay down the loan even faster.
“So, 30-year mortgage rates have dropped quite a bit to the low-to-mid three percent range on a 30-year fixed-rate, and we’re now below three percent on a 15-year fixed,” Farner told MarketWatch “ So, I’d say for the vast majority of Americans, they’re now in a position where they can save money by refinancing. So, they should be doing something.
“THE ONE POTENTIAL CONUNDRUM FOR LOWER MORTGAGE INTEREST RATES IS THAT IT COULD CREATE A SLIPPERY SLOPE WHERE MORE BUYERS ENTER THE MARKET TRYING TO GET A GOOD DEAL, ALLOWING SELLERS TO JACK UP THEIR PRICES.”
“Interestingly, one of the things we’re talking a lot about is people moving from a 30-year to a lower term, a 20-year or 15-year, because rates are so low, they can get a payment today at a 15-year that is similar to a payment they would have made four or five years ago on 30-year when rates were in the fives, yet they could pay their home off in 15 years for far less interest.”
Farner added though that we shouldn’t expect to see the 30-year fixed rate mortgage to drop below three percent. Uncertainty creates volatility in the market, which impacts interest rates. However, once there is certainty, either positively or negatively regarding coronavirus, it would cause interest rates to be on the rise again.
“Even if they come out and say maybe the coronavirus will be a little bit worse than we thought that would bring certainty. If it makes sense, you can save money, you got to lock your interest rates. Take advantage of the savings. And if I were a betting man, I’d say there’s a higher probability rates will rise in the (near future).”
The one potential conundrum for lower mortgage interest rates is that it could create a slippery slope where more buyers enter the market trying to get a good deal, allowing sellers to jack up their prices at a time when home prices are increasing exponentially even without the impact of a global pandemic.
Getting back to China, where Covid-19 originated, considering China has the World’s second-largest economy and it also has a worldwide supply chain. Limits on that supply chain impact businesses around the world. This can slow development even further as developers will need to wait longer than usual to get the supplies necessary to build.
The last time a health risk had this kind of impact on the global economy was in 2003 during the outbreak of severe acute respiratory syndrome, or SARS. Mortgage interest rates also dipped during that outbreak, but the impact on real estate was minimal, if at all.
That’s because Chinese investors weren’t as interested in the U.S. market at the time. Considering how much Chinese interest there is now, it leaves a lot of uncertainty as the Covid-19 virus spreads.
Luxury Homes Could See a Boost Long-Term
Wealthy buyers from China seem to be more interested in U.S. properties after negative stories emerge from their own country.
For example, there was a spike in Chinese purchases of property in the U.S. after the 2019 anti-government protests in Hong Kong.
Covid-19 could bring the same rush from China to the U.S. market as these Chinese buyers see the U.S. as a safer option than at home because of the civil unrest.
“[Chinese] people who are wealthy may feel tired of the perception of China as being a third-world country,” Yun said. “They want to park their money in a first-class world economy, which is Australia, Canada, and the U.S. Hence, we may see greater demand from Chinese, wealthy households.”
Closing Delays
While real estate is not usually subject to volatile swings in the stock market, which has been impacted by the spread of Covid-19 and the uncertainty of its real impact on public health in America, the reality is, it’s hard, and potentially impossible to close a deal on a real estate transaction of travel restrictions are put in place.
Whether a sale is contingent upon the buyer seeing the property before signing the dotted line, or due diligence is required before closing an ongoing deal, the impact of Covid-19 could cause a delay in closing, or potentially even put a kibosh on the deal in total.
Travel restrictions that are being put in place, as well as recommendations of self-isolation and the general fear of the unknown could have people sheltering themselves in their current homes and not venturing out until necessary. These kinds of actions, even if done in the minority, could create a real estate transaction slowdown, albeit temporarily.
On the commercial real estate market, transactions had started slowing long before Covid-19 was a thing. According to Bisnow, in New York City, there was a 31 percent drop in the sale of investment-grade real estate from 2018 to 2019.
“The market was soft before the news of the virus hit,” Compass Vice Chair and commercial investment sales broker Adelaide Polsinelli wrote in an email to Bisnow. “If you aren’t afraid to do business in real estate in New York City, you aren’t afraid of coronavirus.”
She added that there is a positive outcome that is running parallel to the slowdown, because some investors are seeing the drop off in competition for real estate as a golden opportunity to lock down a deal.
“This is the perfect storm for buyers,” she said. “Competition has slowed down, sellers are nervous, interest rates are low and opportunities are increasing.”
Is Real Estate Considered an Essential Business in Your State?
Each state is operating under its own set of rules to determine which businesses are, and which aren’t, considered essential to remain operating during the COVID-19 pandemic.
Depending on the state, buying or selling a home can have a unique set of rules during this uncertain time. It is important not only for those who work in real estate to understand these rules, but also those consumers who wish to buy or sell a property.
Below is a list of each state with data gathered by the National Association of REALTORS® and is current as of April 7, 2020. For the most up to date information for your state, please check with your local government offices.
Essential States
Real Estate is considered an essential business in each of the following states. Yet in each one, social distancing is strongly encouraged, as well as other practices to help stop the spread of COVID-19.
- Alabama – mandated the shutdown of certain non-essential businesses. Real Estate is not listed.
- Alaska – relies on the Department of Homeland Security (DHS) recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28. Congregations of more than 10 people are prohibited.
- Arizona – individuals may leave their place of residence to participate in an essential function. Real estate, appraisal and title services are included in essential functions.
- California – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- Connecticut – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- District of Columbia – notary publics are essential businesses, but only when necessary to assist in compliance with legally mandated activities, essential business or essential government functions. This originally did not include real estate services, but the DHS guidance from March 28 included real estate services as essential.
- Florida – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- Georgia – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28. Critical infrastructure with continued in-person operation must implement mitigation measures as described in the order.
- Hawaii – real estate services, including appraisal and title services, are considered essential.
- Iowa – mandated the closure of non-essential businesses. Real estate is not on the non-essential list.
- Idaho – commercial construction, and the transfer and selling thereof, and construction of housing, and the transfer and selling thereof, are essential. Gatherings of any size are prohibited unless related to an essential business.
- Illinois – professional services including legal, accounting, tax, payroll, real estate and property management services are essential. Essential businesses should promote telecommuting where possible and comply with social distancing requirements. Open houses are prohibited. Showing of vacant or owner-occupied units are permitted if necessary and scheduled in advance (virtual showings are preferred), but limited to no more than four people.
- Indiana – real estate services, including appraisal and title services, are considered essential. However, real estate services should be conducted virtually or via telephone whenever reasonably possible and any face-to-face encounters should be postponed unless a failure to meet in person will have a significant and adverse impact on the client’s financial or legal position.
- Kentucky – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28. However, real estate services must implement telecommuting and remote work to the fullest extent possible.
- Kansas – real estate services are essential but must use telework capabilities to avoid meeting in person to the extent possible without significant disruption to essential functions.
- Louisiana – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- Maryland – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- Maine – real estate agencies are essential as of March 25, however no live open houses are to be hosted.
- Minnesota – work that facilitates or finances real estate transactions and real estate services (including appraisals and title services) are essential. However, all workers who can work from home must do so, even essential businesses. Open Houses are strongly discouraged, and showings should only occur once a buyer has viewed the property virtually.
- Missouri – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28. However, gatherings of more than 10 people remain prohibited. The order does not close non-essential businesses but requires them to comply with gathering limitations and social distancing.
- Mississippi – real estate services, including appraisal and title services, are listed as essential businesses and may remain operational provided they adhere to the ban on large gatherings.
- Montana – banks, realtors or others providing real estate services and title companies are essential.
- North Carolina – real estate, brokerage, appraisal, title, construction and moving and relocation services are essential.
- North Dakota – mandated the closure of certain non-essential businesses. Real estate was not listed.
- New Mexico – real estate services, including brokers, title companies and related services are essential.
- Nevada – professional or technical services including legal, accounting, tax, payroll, real estate and property management services are essential.
- Ohio – real estate services are considered essential. As of March 25, state legislature included language in a COVID-19 bill to ensure county recording offices stay open to effectuate property transfers and title searches. Local health departments may order closure of specific businesses for a limited period of time.
- Oklahoma – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- South Carolina – only closed businesses of three categories – entertainment venues, athletic facilities and close contact service providers. Real estate is not affected.
- Tennessee – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- Texas – relies on the DHS recommended “critical infrastructure” workers which includes residential and commercial real estate services as of March 28.
- Wisconsin – real estate services, including appraisers, inspectors and title companies, are essential but should, to the greatest extent possible, use technology to avoid meeting in person. They must also meet social distancing requirements promulgated by DHS and the Centers for Disease Control.
- West Virginia – real estate services, including title companies and appraisers, are essential.
- Wyoming – forced closure of certain businesses, of which real estate services are not listed. However, gatherings of 10 or more people are prohibited.
Limited States
In these states, real estate business can still be conducted, but with limitations. The limitations for each state are listed.
- Colorado – real estate appraisals and transactions are considered essential. However, per the state attorney general, real estate marketing services such as showings and open houses are not essential and not exempt from the stay-at-home order. Social distancing still required.
- Massachusetts – open houses are not prohibited but are subject to the Commonwealth’s order limiting gatherings to 10 people. Closings can continue, with social distancing required for all in-person transactions. Meetings with clients cannot take place at the agent’s bricks-and-mortar place of business, but can take place remotely with social distancing, or by phone or video.
- New Hampshire – amended on March 27 to say real estate is an essential business. However there can be no open houses, no meetings in broker offices and that social distancing is required for in-person showings, appraisals, inspections and closings.
- New York – real estate is essential, however there are several caveats. Residential and commercial showings can only be done virtually. Agents can visit a property only to conduct a virtual showing. They can oversee transactions and signings at their offices as long as social distancing protocols are followed. Appraisal and home inspection services are essential, but businesses should implement telecommuting to the maximum extent possible.
- Oregon – in-person meetings should only be done if telework options are not available. If in-person meetings are required, social distancing policies must be employed.
- Virginia – in-person meetings should only be done if telework options are not available. If in-person meetings are required, social distancing policies must be employed. All public and private in-person gatherings of 10 or more individuals are prohibited. Open houses are strongly discouraged.
- Washington – previews and showings are allowed by appointment only. The creation of virtual tours, inspections, appraisals, buyer walk-throughs and providing keys to the buyer at closing are allowed if proper sanitary and social distancing protocols are followed in each case. No other in-person real estate brokerage activities are permitted.
Non-Essential States
In these states, all real estate business must be conducted virtually or through other non-traditional means while stay-at-home orders and social distancing mandates are in effect.
- Delaware – real estate is considered non-essential. However, showings are allowed, but no open houses. Necessary actions to complete any sales or rentals that were in progress prior to March 24 are allowed.
- Michigan – no in person client contact, showings or open houses. However, appraisal and title services continue to operate to allow closings to occur. Realtors/Real estate agents can only participate in the closing remotely.
- Pennsylvania
- Vermont
No State Mandates Issued on Essential / Non - Essential Businesses
The following states have not issued mandates about essential and non-essential businesses within their borders. As such, business can go on as usual in these states for the time being, although social distancing is still strongly encouraged.
- Arkansas
- Nebraska
- South Dakota
- Utah – remote work is encouraged.
States With Uncertainties
- New Jersey – real estate offices are open, but a guidance is being sought for interaction with clients.
- Rhode Island – the state issued an order closing all “non-critical” businesses and allowed for “critical” businesses to continue to operate. However, real estate services weren’t listed on either list.
“Guidelines and protocol surrounding COVID-19 are changing quickly. For the most up-to-date information we recommend visiting the CDC, WHO, and your local health departmentwebsites.”
Disparity Between White, Black Homeowners as Great Today as 1968
Mar 19,
2020
More than 50 years have passed since the enactment of the Fair Housing Act, and yet the homeownership rate gap between white and black Americans is comparable to the gap at the time when the Act first passed.
This is according to speakers at the National Association of REALTORS® second-annual Policy Forum held in February, where data collected at the end of 2019 showed that the percentage of whites (73.7 percent) who owned homes was nearly 30 percentage points higher than the percentage of blacks who owned homes (44 percent) in the United States.
“In 2020, there is still a persistent gap in homeownership rates between whites, African Americans, Hispanic Americans and Asian Americans,” said Bryan Greene, NAR’s director of fair housing policy. “On one hand, you might expect there to be a lower homeownership rate among minority Americans, as a history of discrimination in this country has left many with lower incomes … and less generational wealth to pass on for down payments and the like.”
“I think many of us would have expected rates to have risen more. We did see that happen for a period from the early 90s to the early part of this century; but dramatically, at least for African Americans, we started to see that homeownership rate decline – so much so that last year the homeownership rate for African Americans dipped below the rate in 1968 when the Fair Housing Act was passed.”A GOAL OF BOLSTERING AFRICAN AMERICAN HOMEOWNERSHIP RATES
Last year, NAR, The National Association of Real Estate Brokers and the Urban Institute held a joint roundtable discussion focused on this goal of bolstering African American homeownership rates.
A five-point framework that can be applied across all minority communities emerged from last year’s conversations and continues to be expanded upon in 2020 as the groups continue to work together to tackle the issue.
“The fact that homeownership rates for African Americans have regressed in spite of the presence of fair housing laws makes clear that various institutional challenges still must be faced and defeated,” said NAR President Vince Malta. “By strengthening post-purchase counseling, funding programs to prevent foreclosure for low- and moderate-income and vulnerable families of color, and building tools that help create early-warning displacement triggers, we can ensure first-time homebuyers have the knowledge and resources to remain homeowners for the rest of their lives.”
It is likely that ongoing discrimination in the real estate market also contributes to the ongoing homeownership gap. An investigation by New York Newsday published in November 2019 alleged that real estate companies responsible for 50% of the home sales on Long Island, discriminated against African-Americans, Hispanics, and Asian Americans in 40% of transactions, on average.
To address this ongoing problem, in January, the NAR Leadership Team unanimously passed a Fair Housing Action Plan called ACT, which stands for Accountability, Culture change, and Training.
ACT specifically commits NAR to:
- Promote minimum, core fair-housing training requirements for all states
- Promote state licensing laws that ensures real estate agents who violate fair housing laws are held accountable
- Launch a public-service announcement campaign that reaffirms NAR’s commitment to fair housing and tells consumers how to report problems
- Integrate fair housing into all Realtor conferences and engagements
- Explore the creation of a voluntary self-testing program in partnership with a fair housing organization that brokers and others can use as a resource. It would include confidential reports on agent practices so problems can be addressed
- Create robust fair housing education that includes implicit-bias training and education on how the Realtors’ actions shape communities
- Conduct a national study to determine what factors motivate discrimination in sales markets
- Profile leaders who exemplify fair housing practices and workplace diversity
- Develop materials that helps Realtors provide information on schools in a way that avoids fair housing pitfalls
“NAR has been active in our pursuit of innovative new policies and partnerships that will help us preserve the fundamental right of housing in America,” Malta said, upon the NAR leadership team’s approval of the ACT! initiative. “While we have long been a champion of the Fair Housing Act, recent incidents have underscored the progress our nation must still make. That’s why I am proud to announce that our association’s Leadership Team has voted today to approve an action that will directly ramp up and reinvigorate NAR’s fair housing commitment.”
NAR re-organized last summer to create a new Fair Housing Policy Committee to more effectively advocate on national fair housing policy and hired Bryan Greene as NAR director of fair housing policy. Greene previously served at HUD for 29 years as the top career official overseeing enforcement of the federal Fair Housing Act.EVIDENCE OF A TURNAROUND?
Despite the year-end numbers presented at the Policy Forum, there were some signs of optimism that showed that the worm may have turned and home ownership among minorities is trending in the right direction.
According to data from the housing website Zillow, the homeownership rate for black households jumped 3.4 percentage points over the second half of 2019, bringing it from a three-decade low to back near historic averages.
A closer look at the data also revealed that some metro areas across the U.S. had a black homeownership rate that was higher than other large metros with similarly sized African American populations.
Across the country, the black homeownership rate lags behind that of non-black households in each of the 45 largest metropolitan areas. However, it is now above the mid-decade average in more than half of those markets.
The biggest increases have been seen in Sacramento (7.8 percent), Phoenix (5.4), Orlando (5.3), San Francisco (4.4) and Portland (3.9).
And in some cases, the rate of growth in the black homeownership rate has exceeded that of all other households since mid-decade – which means the deficit is shrinking. That gap has been closed the most in Sacramento (6.5 percent), Orlando (4.1) and Cincinnati (3.2).
Metropolitan markets with a higher share of African American residents tend to have a higher homeownership rate.
Atlanta has the third highest share of African American residents of any market in the country and its black homeownership rate is 48.2 percent. Richmond, Va. ranks fifth in percentage of black residents and has a homeownership rate of 49.9 percent. Birmingham ranks seventh and has the highest home ownership rate of any major metro at 52.2 percent. Washington D.C. is second-best at 51.4 percent, and they rank eighth in the percentage share of black residents. [This needs to be explained Why aren’t the cities with the higher percentages of black homeowners ranked higher than those with lower percentage of black homeowners? Why is Atlanta higher than those that exceed 50%?]
Some of these metro markets are outperforming expectations when it comes to black homeownership. For example, of the top 45 markets, San Antonio ranks 37th in share of black residents, but its black homeownership rate of 42.9 percent ranks 14th. Orlando (6th highest homeownership rate, 24th in share of residents), Riverside, Calif. (15th and 35th, respectfully) and Sacramento (23rd and 39th, respectfully) also outperform.HOMEOWNERSHIP RATES
The black homeownership rate has been like a roller coaster ride for the past 50 years. The rate of homeownership for black households rose from 41.6% in 1970 to a peak of 46.5% in 2007.
However, the recession followed, and homeowners of color suffered the most, with the homeownership rate falling below 1970 levels by 2016. The 44 percent homeownership rate in 2019 is an increase from that bottoming out at 41percent three years earlier, but it’s still below the 2007 rate.
But help is on the way in the way of an influx of $40 million in grant money provided recently by HUD to assist fair housing organizations efforts to ensure that fair housing protocols are being followed, to investigate potential claims and file more claims and continue the fight to finally end housing discrimination.
With these newly funded efforts and with continued education, there is hope that the black home ownership rate will exceed that 2007 peak in the not too distant future and continue to close that racial gap until it becomes inconsequential or is eliminated entirely.
Resources for Homeowners and Homebuyers in the Time of COVID-19
Mar 16,
2020
Just because you are stuck inside and can’t go anywhere because of the COVID-19 (coronavirus) pandemic, doesn’t mean that there aren’t resources out there for you if you need help.
That’s right, although it might seem like the country is completely shut down, it’s not and if you are a property owner and you are uncertain of what assistance there might be for you during this uncertain time, then look no further.
Courtesy of the National Association of REALTORS®, all the links below can be resourceful tools for you to seek aid or assistance for yourself and your property while waiting for the coronavirus outbreak to subside.
Click on a link below to navigate to specific topic:
Title and Settlement Companies
Banks
Your Credit
Drinking Water
Foreclosures and Evictions
Taxes
Student Loans
Veterans
TITLE AND SETTLEMENT COMPANIES
Are you worried about closing on the sale of a property during the pandemic? According to the American Land Title Association (ALTA), title and settlement companies are unified in enacting the following protocols to ensure these property transactions can still take place at a time when social distancing remains paramount:
- When arriving at closing: guests are encouraged to use hand sanitizer and/or wash their hands.
- Symptomatic Clients: Any guest who exhibits symptoms that may be like coronavirus, even if it’s not coronavirus – fever, cough, shortness of breath, for example – should notify staff upon arrival and they will immediately be taken to a private closing room.
- Post-Closing: After each closing, the entire room will be disinfected – including the chairs, table and door handle – and will be wiped down with disinfecting wipes or bleach solution.
- At the closing table: Any extraneous materials will be removed. Pens used for signing documents will be disposable and one-time use only.
- Lobby Items: Anything that is non-essential that could be re-usable by guests – such as reading materials or coffee mugs – will be removed.
- Children’s Play Areas: Games and toys for children meant to provide a distraction while business is process have been removed.
- Hand Sanitizer: While supplies last, hand sanitizer is being provided in closing spaces and common areas.
- Social Distancing: Even in the closing room, the practice of staying approximately six feet from others will be in effect and done to the best of everyone’s ability.
- Workforce Dispersion: Only necessary personnel will be on the premises to conduct business while others will be working remotely to ensure service continuity but also public health safety.
The National Notary Association has created health screening forms for both the signing agent and the borrower to fill out to protect all parties during a closing.
ALTA is tracking the operating status of every recording jurisdiction in America by county. They are maintaining it in a Google spreadsheet where you can check and see what your county’s operation status is, and if it has been modified, how so.
BANKS OFFERING HELP TO HOMEOWNERS
Bank regulators, like the Federal Deposit Insurance Corporation (FDIC) and the Board of Governors of the Federal Reserve System (Fed) have all put out their own guidance for banks and servicers to be more proactive in extending help to homeowners who need it during a struggling economy created by the pandemic.
The FDIC has information for both bankers and consumers on its homepage.
The Fed has daily updates on its homepage regarding COVID-19 and its impact on the interest rate, among other economic impacts to consumers.
Meanwhile, the banks have posted their own policies and ways for consumers to contact them for assistance:
Outside of the banks, servicers who act as an intermediary between banks or investors and the consumers – such as Mr. Cooper and Flagstar Bank are also providing important information for homebuyers who are in need of assistance as they try to purchase a home during this trying time.
In addition, the mortgage insurer Genworth is providing information on how servicers can help consumers.
Mortgage Insurers are also providing information on how servicers can help consumers:PROTECTING YOUR CREDIT
The Consumer Financial Protection Bureau (CFPB) is urging consumers to protect their credit during the pandemic.
They have outlined the following steps as ones all consumers should take, especially those who are feeling the crunch financially as a result of COVID-19’s impact on the economy.
Get a copy of your credit report
If you haven’t requested your free annual credit reports, you can get copies at AnnualCreditReport.com. Each of the three nationwide credit reporting agencies (also known as credit reporting companies) – Equifax, TransUnion, and Experian – allow you to get your report for free once every twelve months. You can request additional reports for a small fee if you’ve already received your free report. Be sure to check your reports for errors and dispute any inaccurate information.
In addition to your free annual credit reports, all U.S. consumers are entitled to six free credit reports every 12 months from Equifax through December 2026. All you have to do is get a “myEquifax” account or call Equifax at 866-349-5191.
If you can’t make payments, contact your lenders
Many lenders have announced proactive measures to help borrowers impacted by COVID-19. As with other natural disasters and emergencies, they may be willing to provide forbearance, loan extensions, a reduction in interest rates, and/or other flexibilities for repayment. Some lenders are also saying they will not report late payments to credit reporting agencies or are waiving late fees for borrowers in forbearance due to this pandemic.
If you feel you cannot make payments, contact your lenders to explain your situation and be sure to get confirmation of any agreements in writing.
The CFPB has resources to help you discuss the impact of COVID-19 on your financial situation with your lenders.
Routinely check your reports
If you’re working with lenders on payment assistance programs or forbearance, routinely check your credit reports to make sure they are accurate and reflect your agreements. For example, if your lender agreed to let you skip one month’s payment, make sure they didn’t report it as delinquent or a missed payment.
There are other reports you may want to check too, such as reports that monitor your bank and checking account history, among others. The CFPB has a list of consumer reporting companies where you can learn more about which reports might be important to you, depending on your specific situation.
Report and dispute inaccurate information
If you find inaccurate information on your credit reports, use the CFPB’s step-by-step guide to dispute that information with the credit reporting agency and the company that provided that information to them, also known as a furnisher.
If an investigation doesn’t resolve your dispute with the credit reporting company, you can ask that a brief statement of the dispute be included in your file and included or summarized in future reports. You can also submit a complaint to the CFPB.
Protect Yourself Financially: The CFPB has a number of resources focused on financial protection, both short and long term, such as paying bills, income loss, and scam targeting. Resources include contacts for housing and credit counselors, debt collectors, and state unemployment services.TAP WATER IS STILL SAFE
According to the Environmental Protection Agency (EPA), Americans can continue to use and drink water from their tap as usual. The EPA has provided important information about COVID-19 as it relates to drinking water and wastewater to provide clarity to the public. The COVID-19 virus has not been detected in drinking-water supplies. Based on current evidence, the risk to water supplies is low.FORECLOSURE AND EVICTIONS RELIEF FOR HOMEOWNERS
The U.S. Department of Housing and Urban Development (HUD) has authorized the Federal Housing Administration (FHA) to implement an immediate foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages.
The FHA is also continuing to run single family business operations and has created a Q&A form available on their website to keep interested parties updated on their procedures during the COVID-19 crisis.
The Federal Housing Finance Agency (FHFA) has instructed Fannie Mae, Freddie Mac and their servicers to be proactive in providing assistance to homeowners including forbearance. In addition, FHFA imposed a moratorium on eviction and foreclosures on mortgages backed by the GSEs.
Fannie Mae and Freddie Mac have issued similar guidance:
- Homeowners who are adversely impacted by this national emergency may request mortgage assistance by contacting their mortgage servicer
- Foreclosure sales and evictions of borrowers are suspended for 60 days
- Homeowners impacted by this national emergency are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months
- Credit bureau reporting of past due payments of borrowers in a forbearance plan as a result of hardships attributable to this national emergency is suspended
- Homeowners in a forbearance plan will not incur late fees
- After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification
Fannie and Freddie have also created pages with additional information for consumers.YOU HAVE MORE TIME TO DO YOUR TAXES
The Internal Revenue Service (IRS) has extended the income tax filing and payment deadline in light of COVID-19 crisis. On March 21st, an announcement was made that extended the income tax payment deadline for individual returns (as well as all other entities) until July 15, 2020. Two days later, the IRS also extended the tax filing deadline to July 15, 2020. Additional forms do not need to be filed to qualify for these extensions.
Rural Property Owners getting much needed relief
The U.S. Department of Agriculture (USDA) has informed lenders of a foreclosure and eviction moratorium for all USDA Single Family Housing Guaranteed Loans Program (SFHGLP) loans, in connection with the Presidentially declared COVID-19 National Emergency. Additionally:
- Rural development (RD) will continue to provide loans and grants to rural communities across all of their programs.
- ReConnect applications will continue to be accepted with a March 31st deadline, and RD will then begin the review and award process.
- RD has granted authority to lenders that participate in their Single-Family Housing Guaranteed program so that these lenders can work with borrowers to ensure that homeowners will stay in their houses if they are having difficulty making payments.
- RD will issue guidance to their Single-Family Housing Direct borrowers to ensure they can also seek payment assistance if needed.
STUDENT DEBT RELIEF AVAILABLE
The Department of Education announced that it will allow forbearance on federally-backed student loans beginning on March 13, 2020. Likewise, all interest on student loans has been waived for this same time period. You must contact your loan servicer to bring a forbearance.
Servicers are sharing information how borrowers can seek remedies.
PROTECTING VETERANS AND THEIR HOMES DURING THE PANDEMIC
The Department of Veterans Affairs (VA) is providing information to keep Veterans and stakeholders safe while continuing the mission of the VA Home Loan Program.
THE 2020 CENSUS IS HERE. WHAT DOES IT MEAN?
Feb 21,
2020
BY ANTHONY SANFILIPPO
The 2020 Census is practically upon us.
It is a vast undertaking that takes place once a decade and in a lot of ways requires an all-hands-on-deck approach to get it right.
That means it’s not just the United States Census Bureau that tackles the Herculean task of breaking down the country’s population. No, the Bureau leans on the help of various national organizations to provide outreach to all citizens of the country to make sure the participation level is as high as it can be.
The Census is more than just a headcount. It’s vastly important to determine a lot of things over the course of the next 10 years in America.“APPROXIMATELY $1.5 TRILLION IN FEDERAL DOLLARS IS ALLOCATED TO STATES AND SPECIFIC COMMUNITIES EACH YEAR BASED PURELY ON CENSUS RESULTS.”
It helps to determine accurate Congressional representation in the House of Representatives as well as the number of delegates offered to a state for Presidential elections.
But perhaps more importantly, federal funding allocated to states often relies on the accuracy of the most recent Census. Whether it’s funding to improve infrastructure projects like roads and hospitals or funding for schools or even the allocation of money for federal student loans or government-funded housing – how to spread that money around appropriately results from the Census count.
Among the organizations, the Bureau is enlisting to support the outreach for the Census is the National Association of REALTORS® (NAR).
“NAR is able to provide tremendous value to our members because of the research we produce examining trends in communities across this country,” NAR President Vince Malta, a broker at Malta & Co., Inc., in San Francisco, said in a statement. “But the usefulness of that information relies on current, accurate data from the federal government. Full participation in the Census is in many ways the only way to ensure that data is correct.”
According to NAR, approximately $1.5 trillion in federal dollars is allocated to states and specific communities each year based purely on Census results.
In 2020 alone, the Census will influence the allocation of $93.5 billion in Federal Direct Student Loans, $19.3 billion in Section 8 Housing Choice vouchers and $12 billion for the National School Lunch Program.
NAR will ask each of its 1.4 million members to share promotional materials about the Census with clients, potential clients, neighbors and events that gather communities together.
Notices about the 2020 Census will be mailed in mid-March, and the Bureau will offer a guide in roughly 60 different languages. This year will mark the first time the questionnaire can be completed online, while options to respond over the phone and through the mail will still be available.
Last month, the House Oversight and Government Reform Committee reviewed some of the challenges associated with accurately securing this information at its hearing, Reaching Hard-to-Count Communities in the 2020 Census. And states are taking different measures to try to reach hard-to-count communities or simply to provide reminders for people to participate in more populated areas.EFFORTS AT THE STATE LEVEL
In Nevada, stickers on produce at supermarkets and catchy jingles on video screens while pumping gas are being considered to get people to participate and to boost their participation rate from the 71 percent it was in 2010.
In Alaska, the Alaska Public Interest Research Group helped to translate the Census into four Native Alaska languages that are unique specifically to their state, to boost participation. American Indians and Alaska Natives have been historically underrepresented in the Census, with an estimated undercount of 4.9 percent in 2010. Also, Alaska gets an early start on the Census, as it has been underway since January since it is easier to reach some of the state’s more remote villages during the winter freeze than after it starts to thaw out in the Spring.
In New York, the City’s Census office has a target to educate 10,000 New Yorkers directly and recruit 7,500 volunteers for Neighborhood Organizing Census Committees, to conduct “Get Out the Count” efforts across the city including through phone-banking, text-banking and on-the-ground canvassing.
The city has also pressed into service the City University of New York, a range of city agencies that regularly interact with the public, and 110 branches of the city’s three library systems. They are also being aided by a host of labor unions, business groups, faith leaders and houses of worship.
New York’s participation percentage of 62 percent in 2010 lagged far behind the national average of 75 percent.
One of the reasons some people choose not to participate in the Census is because there is a mistrust in the government about what it will do with the data collected through the Census. However, the Census Bureau will never ask for bank account or social security numbers, donations or anything on behalf of a political party, and strict federal law protects the confidentiality of Census responses.
A lot can change in a decade. The last time the Census was done in 2010, selfies on your iPhone wasn’t even a thing. And while 10 years-worth of photos on America’s smart phones are not on the Bureau’s radar, it is important for the government to track changes that occurred in the past decade as to where people live, who got married, had children, and how that impacts federal money to be appropriated into each state and specifically into individual communities.
It’s important to be counted.
There are three ways to take part in the 2020 Census:
- BY MAIL: Available in both English and Spanish, the paper form will arrive via mail in April and can be mailed back to the U.S. Census Bureau.
- ONLINE: For the first time ever, the census can be completed online. It will be available in 13 different languages (English, Arabic, Chinese, French, Haitian Creole, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Tagalog and Vietnamese). The website is census.gov
- BY PHONE: Call 1-800-923-8282 and provide answers over the phone. All 13 languages listed above are also available on the phone as well as the Telecommunication Device for the Deaf.
So Long Traditional Retirement Homes
Feb 20,
2020
Retirees are Seeking Alternative Lifestyle and Housing Options
As the baby boomer generation is reaching retirement, they have something different in mind when it comes to housing options.
Rather than following in their elders’ footsteps of settling into a traditional retirement home, they’re looking into alternative lifestyles and both more urban and rural options. A demographics researcher for the University of Virginia, Hamilton Lombard, shares that the nation’s 65+ population is expected to grow up to 90% by 2040, and in some regions, the majority of the population growth will stem directly from this community. This rapidly growing population is having a huge effect on the housing market across the country, including rentals.
WHAT ABOUT NURSING HOMES?
The reason nursing homes often follow retirement is self-explanatory; as those living alone or with partners born around the same time begin to age, safety concerns arise. Nursing homes ensure that there is someone to help whenever you need it while placing yourself in a community with shared values. Seemingly, baby boomers aren’t physically aging at the same rate as the previous generation and are proving to live longer, healthier lives. With home renovations such as widening doorways, grab bars in bathrooms, and slip-resistant floors, these retirees can continue living on their own for much longer. With a healthier lifestyle, many baby boomers are still very active and are looking to continue aging in a community that shares those ideals while offering fun activities you may not expect grandpa to be indulging in, such as water sports or interactive classes.
TODAY’S RETIREES ARE MORE FINANCIALLY SOUND
One of the largest factors for this generation of retirees is that they can afford this variety of options. Those who are over 65 are shown to have the lowest poverty rate of any population group in the U.S, based on a U.S. Census Bureau report. Not only are they financially sound, but 81% of that age group also own their homes. If retirement is on your horizon and you’re set on aging in place, there are a handful of options to consider. If renovations in your current home seem like too much of a headache, you may be considering a new location, perhaps downsizing to a smaller home that is affordable and more convenient to inhabit, potentially eliminating stairs.
There are many reasons to downsize your home, especially as your immediate family shrinks and you simply don’t need the extra space anymore. Even if your mortgage is entirely paid off, larger homes cost more in a variety of ways; utilities such as heating, cooling, and electricity, upkeep, property taxes, etc. By downsizing to a smaller home, you’ll likely make a profit from your home sale and cut your monthly expenses down substantially. The average homeowner spends between 1 and 4 percent of their property’s value just on home upkeep, so cutting down your home’s square footage will cut your bills down as well. Money aside, maintaining a smaller home is much easier and will allow you more time to spend with family, friends, and maybe even on discovering new hobbies.
If an active adult community interests you more than renovating your home or purchasing a new smaller abode, you may not know where to begin your search. Communities such as Epcon, with locations in 18 different states across the country, NoHo Senior Arts Colony for the creative types in North Hollywood, CA, and Evergreen Real Estate Group’s multiple senior rental apartment complexes in Illinois with technology-focused amenities are just a few associations that have jumped on the wagon to appeal to today’s retirees, not last generations.
“Developers are taking advantage of the urban living demand for seniors by focusing on new development projects in existing, established communities."
As for the senior rental market, according to a 2017 analysis of U.S. Census Bureau data, between 2009 and 2015 the number of renters over 55 hiked up 28 percent, which is drastic in comparison to the 3 percent increase in renters under the age of 34. Developers and real estate agents are certainly taking notice of this growing population and trending idea of alternative retirement options. With nearly 80 million people reaching retirement age, there are boundless opportunities for those offering housing options, whether they are building new complexes or selling homes. A real estate firm, JLL, recently released an industry report sharing that more developers are taking advantage of the urban living demand for seniors by focusing on new development projects in existing, established communities.
It is a classic pattern that often falls under the umbrella of the American dream; leave the city for the suburbs to buy a home and start your family. But once the kids are out the door starting families of their own, the daydreams of convenient city life will likely begin to flood back into your head. As the director of development at Evergreen shares, “It’s part of a broader move in real-estate development that says the way we built cities, with commercial space below and then we lived ‘above the store,’ so to speak, well, there’s a certain amount of wisdom in that.”
RETIREES SEEK WALKABILITY, ENTERTAINMENT AND AFFORDABILITY
In the past, visions of retirement are often relaxing in a lawn chair somewhere warm, quiet, and maybe even a bit isolated. The upcoming retirement population sees things a bit differently. It turns out baby boomers have a similar checklist of their ideal neighborhood to Millennials; convenience, walkability, entertainment, and affordability. Denser suburbs and cities offer these things and help promote an active lifestyle. A survey conducted by architecture firm Perkins Eastman showed “26% of client firms that build and redevelop properties for seniors says they believe boomers will be most concerned with living in proximity to an urban location or town center, up from 19% in 2017.”
On the other side of things, those retirees who aren’t interested in more urban living are choosing rural areas to settle down in due to extreme affordability. When the word retirement comes to mind, Florida is probably to follow. While Florida has still managed to reach number one on Wallet Hub’s 2019 Best & Worst Places to Retire, there are plenty of states that are coming up as a close second. In fact, Moneywise’s similar list of The Best States for Retirement in 2019 has ranked South Dakota number one with Florida as the runner up. The Wall Street Journal shared the research of a University of Virginia demographer, Hamilton Lombard, “Census data show that from 2010 to 2017, net migration to retirement-destination counties in Appalachian regions of Georgia, North Carolina, and Tennessee increased 169%, the same percentage of growth for retirement destinations in Florida.”
RURAL RETIREMENT IS BECOMING POPULAR
Rural retirement is becoming more and more popular as retirees prioritize a lower cost of living, tax breaks, and respectable hospitals over other conveniences of more popular retirement locations and nursing homes. South Dakota, for example, is America’s best retirement state “hands down” in Moneywise’s opinion, due to excellent outdoor activities such as hunting, fishing, hiking, and camping. For those seeking a quiet lifestyle that is equally as active, rural states such as SD are the way to go. Not to mention, of course, the very low cost of living (a one-bedroom in the town center is on average $765 a month) and the fact that the state’s sales tax is 4.5 percent and there is no income tax or inheritance tax.
We’ve been shadowing Millennials to keep up with the real estate trends, but it looks like it may be time to switch our direction towards the baby boomer generation. Retiring is infinitely exciting if you’ve planned accordingly and explored all options to find the right fit for yourself. Whether that be a small home in Georgia or a lively city apartment above a library and community center, one thing is for sure—this generation nearing retirement is going to be living a lively and inspiring life.
Take Inventory of Your Belongings Before a Disaster Strikes
Sep 07,
2020
As a homeowner, your abode is your pride and joy, and considering how hard you’ve worked to get to this point, how couldn’t it be? After spending countless months—let’s be honest, years—decorating and curating your home, you want to be sure everything is accounted for in case a disaster occurs. Surprisingly, only around half of homeowners have a home inventory, based on a poll from the Insurance Information Institute. This rate has stayed rather stagnant over the past decade, and it’s time for that to change.
Disasters don’t give us a warning. Without a home inventory, you would have to file every single one of your possessions immediately after experiencing something truly awful. Not to mention any forgotten items will be gone forever. Public insurance adjuster David Moore offers some insight when sharing, “You can lose thousands of dollars because you didn’t include everything.”
Documenting all of your belongings certainly may seem like an intimidating undertaking, but with the right assistance and resources it can be totally manageable. As of March 2019, natural catastrophes caused an estimated $52.3 billion in losses in the U.S. With only half of Americans proactively taking inventory, that is a lot of sentimental possessions being unaccounted for. So, if you’re wondering if it’s worth it to make a home inventory list—the answer is yes.
Sure, you may have a good idea of what you own, but are you aware of the value of all your assets? It can be difficult to put a price on everything you have accumulated over your lifetime, which is exactly why documenting everything is so essential to be fairly reimbursed if you suffer losses from any natural or man-made disasters. A woman who lost her home after the devastating Tubbs Fire, Alice Plichcik, shares, “You don’t realize how much you have lost until you try to replace everything.”
Here are six steps to help make the process of inventorying your belongings as easy as possible.
1. HANDLE ONE ROOM AT A TIME
Baby steps are key here. On the bright side, this process may give you the push you need to declutter a bit. When beginning to take inventory, choose one room or a section of your house at a time. Starting this process is the biggest step, so take your time! Try focusing on one area of your home a day, or even a week, to make it seem less stressful and overwhelming in the long run.
2. START WITH BIGGER ITEMS AND WORK YOUR WAY TO SMALLER ITEMS
As cherished as your bookshelves and crammed closets are, starting with your more expensive and larger items will make this task more tolerable. Your big ticket items will need the most amount of attention and time, so it’s best to get those out of the way first so the remaining items seem more approachable to catalogue.
3. ORGANIZE YOUR LIST BY CATEGORY
Keeping this list organized is crucial. It is hard to comprehend how many items you own until you’re writing them down and all of a sudden your list has reached page 20. In order to keep this inventory document as organized as possible, try listing your valuables by categories such as electronics, furniture, etc.
4. GET A LITTLE HELP FROM YOUR PHONE
You’re not alone here, and becomes very clear when you start to look into the variety of apps created to help homeowners take inventory of their belongings. If you’re looking to speed things up, give Encircle a try. With this app you’ll focus on one room at a time by quickly snapping some photos of your space and then going back to add details on individual items. Another noteworthy app is Nest Egg, which will cost you $4 for the full version, but is well worth it. While it will take you longer to enter in all of the details of your things, it offers benefits such as giving you a heads up that a warranty is nearing expiration, or that something on loan is due back soon. Both of these apps, and most that are offered, are password protected so there is no need to fear your private information getting out.
5. USE PHOTO +/ VIDEO
A video is actually an excellent option if you are worried about how tedious this process will be. Taking a detailed video of each room in your home will help jog your memory if there is anything you’ve missed. Additional details such as serial numbers and/or model numbers for expensive pieces is important to jot down but a video is a great start, or alternatively you could take a more in depth video and get a close-up shot of these details on your items. If you hung onto a receipt for an item, you can even get that on the video as well to be reimbursed for the exact price. Many insurance companies accept this type of recording during a claim—some even prefer it. If you’re choosing this route, just double check that your insurance company accepts a video, like State Farm does for example. Photos are also very helpful in keeping things cohesive when putting together a list. Many apps previously mentioned allow you to insert photos along with the details of the object to help keep things organized.
6. KEEP A COPY (SOMEWHERE SAFE!)
One advantage to using an app or a Google Doc rather than a list is that it is secure in the cloud or your drive. If making a list on another program on your computer, be sure to put a copy on an external hard drive and keep it in a safe spot.
Life happens, and unfortunately, disasters do as well. If you’re responsible and proactive when it comes to your beloved possessions, then there is no reason to live in fear of potential damage. Whether you’ve lived in your home for 50 years or are just beginning your homeownership journey, you can start your home inventory list today and prepare for your future. As the director of insurance for the Consumer Federation of America, Robert Hunter, says, “The whole idea of insurance is to make you whole, not under-pay you or over-pay you.” Your home inventory is something you will continue to work on as you obtain more belongings. Once you get started, the rest will come easily. Anytime you splurge on a new electronic, or upgrade a worn out appliance, just be sure to update your list so you’re always prepared for the worst. Don’t put off a task now that you’ll certainly regret later.
How the New Tax Law Affects Homeowners
Dec 19,
2020
It’s been a full year since the tax reform bill was passed by Congress and it is now starting to have impacts across the country, especially on homeowners.
While many homeowners, homebuyers and real estate investors will see benefits from this legislation, some markets may still see diminished tax benefits and adverse impacts to the real estate market.
While final data for 2018 is still not available, the National Association of REALTORS® (NAR) projected slower growth in home prices – between 1 and 3 percent – for the year. The continued growth is likely from the demand still being higher than the supply nationally, but in some local markets, specifically those in high cost, higher tax areas, price declines are expected because of restriction on mortgage interest and state and local taxes that were part of the new legislation.
“MOST PEOPLE AREN’T EVEN AWARE YET THAT THIS TAX CHANGE TOOK PLACE, EITHER BECAUSE THEY HAVEN’T ADJUSTED THEIR WITHHOLDING OR THEY HAVEN’T FILED A TAX RETURN YET.”
“Most people aren’t even aware yet that this tax change took place, either because they haven’t adjusted their withholding or they haven’t filed a tax return yet,” said Evan Liddiard, CPA, Director of Tax Policy for NAR. “If you wait until after April 15, 2019, it will change because it will give people time to look at what the effect will be.”
But they’re about to.
The new legislation reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after Dec. 14, 2017. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
Homeowners may refinance mortgage debts existing on the aforementioned date up to $1 million and still deduct the interest, as long as the new loan does not exceed the amount of the mortgage being refinanced.
The legislation also repeals the deduction for interest paid on home equity debt through the end of 2025. Interest is still deductible on home equity loans or second mortgages if the proceeds are used to substantially improve the residence.
Interest remains deductible on second homes, but it is subject to the limits listed above.
Also, part of the reform legislation caps an itemized deduction at $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit, also known as a SALT cap, applies for both single and married filers and is not indexed for inflation.
A higher standard deduction of $12,000 for single individuals and $24,000 for joint returns was also part of the new tax law. Nearly doubling the previous standard deduction, the effect of the increase is that the value of the mortgage interest and property tax deductions as tax incentives for homeownership has been reduced.
Estimates indicate that between 12-13% of filers will now be eligible to claim these deductions by itemizing – down from 31% in 2017 – meaning there will be no tax differential between renting and owning for nearly 90% of taxpayers.
Impact on Homeowners, Home Buyers and Sellers
So, how would this affect you as a homeowner or a potential homebuyer?
“For most of the year we had high inventory and prices were going up and it’s true that some areas of the country have a lot more of this happening, but it’s also true that every state and every city will have some homes affected,” Liddiard said. “It may not be as high a factor everywhere, but go to New Jersey and almost every middle-income-and-up home is likely to have a problem. Whereas if you go to somewhere like Tennessee or Utah, it’s only going to be the most exclusive neighborhoods that may have property taxes and income taxes that exceed $10,000.
“When I was in Tennessee earlier this year, the folks I talked with didn’t think the $10,000 cap was going to be a problem at all. Their property taxes are low and there isn’t any income tax at all, so hardly anybody is going to be affected – likely only the wealthiest 10 percent. But in New Jersey or New York, all they want to talk about is this so-called SALT cap.”
Consider this example that NAR provided:
A single person we’ll call Barbara making $58,000 annually and who rents is looking to buy a home for the first time. Barbara pays state income tax of $2,900 and makes charitable contributions of $2,088, but the total of these is lower than the standard deduction, so the standard deduction is claimed.
But had Barbara purchased a home costing $205,000, using a 30-year fixed rate mortgage at 4% interest, and putting down 3.5%, she would pay first-year mortgage interest totaling $7,856 and property taxes of $2,050, adding to her itemized deductions.
As a homeowner, Barbara could itemize deductions under both the old and new law, because they total more than the standard deduction. But the old tax rules rewarded her for owning a home vs. renting one by lowering her tax bill by $2,100. The new rules still give her a tax subsidy for owning, but the amount is reduced to just $637, or $53 per month.
Another way of looking at it is that as a renter, Barbara would receive a tax cut from the new changes of almost $1,500. But had she bought the home, her taxes would actually go up by $30.
In other words, before the reform, Barbara would have had a strong tax incentive to become a homeowner. While that incentive still exits, it is only a small portion of what it used to be and it is not very compelling.
Still, Liddiard thinks a single person looking to buy a home is better off than a married couple because the cost of purchasing a home for a single person is much higher per capita than for a couple.
“Single people are going to find it easier to get tax subsidies to buy a home than married folks,” he said. “A couple can live in a house the same size as a single person. Yet, a married couple has a $24,000 standard deduction and would have to have that much in itemized deductions to begin to get the tax benefit, whereas a single person would only have a $12,000 threshold and they can exceed this number a lot easier with the property tax and with their mortgage interest than someone who is married can exceed $24,000.”
An Unexpected Consequence
Millennials are trying to find loopholes to this, and one of them is to skip out on tying the knot.
“People just aren’t marrying as much anymore,” Liddiard said. “They may still live together but they aren’t getting married. Now you have two single people, earning the same money as a married couple, but they’re each buying half a house. They each get a $750,000 limit and they each get a $10,000 cap and they each have only a $12,000 standard deduction threshold.
“So, they can buy the house, they can each pay for half the house, be co-owners of the house and still get big tax benefits, whereas if they were actually married they wouldn’t get nearly as much or none at all. The new law created a huge marriage penalty and discourages people from marrying. I don’t think that was intended, but that’s the effect of it.”
In the end, the real impact of this tax reform won’t be felt by homeowners for several years, but without additional reforms, it’s going to put a real financial squeeze on most homeowners in the not-too-distant future.
“It depends on how far ahead you are looking, but the longer ahead you look the more negative the impact,” Liddiard said. “Keep in mind the SALT cap and the $750,000 limit are not indexed for inflation, so every year they are going to pinch a little bit more. It doesn’t look like much if you just look at the next few years, but look ahead 15-20-25 years, if Congress doesn’t change it again – and it took 31 years to change it this time – most of the country is going to be severely impacted in a negative way.
“No longer can a married couple with two kids making $65,000 a year buy a house worth $130,000 and get help from the tax code. Under the old law, they could get about a $100 per month subsidy from the tax code. No longer is that going to be the case. The 12-13% who are going to get a tax benefit from owning a home are largely going to be folks in the top 10 percent of earners who have a large mortgage, who pay a lot in state and local taxes and max out at $10,000 and also make charitable contributions. Those will be the ones who have enough itemized deductions to see the tax law incentivizing home ownership.”