Entries Tagged 'Affordable Housing' ↓

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A Connecticut Housing Official and her husband is now charged with stealing Section 8 housing money from the East Haven housing authority. The amount of 173 thousand dollars was taken through a debit card that Cassandra Ashe illegally obtained.

I do hope she gets what she and her husband deserve stealing our tax money that was designated for low income housing families.

The executive director of East Haven’s housing authority was arrested with her husband Tuesday and charged with stealing $173,000 of federal housing money that was supposed to help low-income town residents pay their rent.

Cassandra Ashe, 36, and her husband, Jonathan, 43, are accused of conspiracy and theft from a program receiving federal money. Cassandra Ashe earns $57,000 a year as executive director of the authority. Her husband, who works in the New London Housing Authority’s maintenance department, earns $12.20 an hour. They live in North Haven.

According to the arrest warrant affidavit, Cassandra Ashe, without approval from the East Haven Housing Authority, obtained a debit card in May 2007 that gave her access to the authority’s bank account containing low-income rental subsidies.  via the Courant.com.

The big boys are coming out to play as prices become more reasonable.

Canyon Capital Realty Partners are teaming with former basketball star Magic Johnson and former California State Treasurer Phil Angelides to put together a 2 billion dollar housing fund. The target is not fancy office buildings but instead a much more mundane group, workforce housing.

They plan on refurbishing lower to middle class housing and market it to the middle class workers who right now are facing long commutes to get affordable housing. The goal is to buy 10,000 apartments over the next few years.

“In high-cost areas like Los Angeles and Southern California, workforce housing is critically needed,” said Con Howe, managing director for CityView Los Angeles Fund, which finances construction of such housing and is not connected to Angelides.

Canyon-Johnson’s plan “adds the rental piece to what others are doing in for-sale product,” Howe said.

The fund expects to raise about $1 billion from pension funds, endowments and other institutional investors, said Bobby Turner, managing partner of Canyon Capital Realty Advisors, the Beverly Hills investment firm. That money will be used to leverage purchase of more than $2 billion worth of apartments with about 10,000 units starting this spring. via Los Angeles Times.

Eliot Spitzer has proposed a new fund for offering housing assistance to New Yorkers, especially those in New York City, to help offset the high housing costs. The 400 million dollar fund would be available to the poor and those with special needs.

Of course, the real issue is how they can fund this program since the state has a significant deficit for 2008 fiscal year. But if you are a landlord in New York and trying to find new avenues for revenue, refitting your property to accommodate the beneficiaries of this new program could provide a new source of income.

While some lawmakers lauded the proposal, others said they needed details about how the governor would pay for it, given an anticipated $4 billion deficit for the fiscal year that begins in April.
“When the governor said no new taxes, how do you get to achieve these goals with the economy softening, with revenue softening?” asked Senator John J. Bonacic, a Republican from Mount Hope and the chairman of the Senate’s Housing Committee.  via  New York Times.

The San Jose Mercury News today talks about pricing a home and the benefits of the $417,000 price point. For those who do not recognize the number, $417,000 is the limit of qualifying for a conforming loan that Freddie Mac or Fannie Mae will purchase. This limit is huge as once it is breached you are in the territory of Jumbo Loans that carry a higher burden of approval and higher interest rates.

Say you need to unload a home quickly that is in the mid $400,000  range quickly, what pricing strategy should you go after? If you really need to move it, pricing it at the $417,000 price point will open all of the buyers who can qualify for the conventional loan into the mix. Now the other alternative is to price it at 10 percent over the Conventional loan limit and market it as that, so buyers who have 10 percent saved will be able to qualify.

If I was selling a 500,000 plus dollar home and needed it to move I would reduce to $500,400 as this is the $417,000 limit plus 20 percent down payment, again bringing in the buyers that will qualify for a conventional loan.

Marketing the home is all about widening the pool of potential buyers and sacrificing a few dollars or aiming for a price point. With tightening credit standards and available credit the amount of folks that will qualify for a conventional loan is much greater than those who can be approved for a Jumbo loan. And I think few will argue that more potential buyers in a slow market is bad advice to a seller.

This will also get the buyer thinking in terms of long term savings which is a very smart strategy. For me, it is all about getting the buyer to think outside of the normal pitch and have them realize that even as a sellers agent you have their best interests at heart.

Loans of $417,000 and less are purchased by the Federal Home Loan Mortgage Corp. or Federal National Mortgage Association, two agencies, that, with the government’s help, provide a lower interest rate to home buyers. Loans of more than the conforming loan limit of $417,000 are called jumbo loans and usually have higher interest to absorb lenders’ perceived loan risk.
“Maximum conforming limit loans are where the money is,” said Jay Damato, a mortgage broker and owner of Elite Financial in Walnut Creek. “That’s where you can still do a zero-down — 80 percent first, 20 percent second.”
Damato said he wasn’t surprised agents are telling sellers to hit around the loan limit.
“Jumbo loans are more expensive and harder to qualify for,” he said.
In August, a cash crisis hit the lending industry, creating a huge chasm between those who could qualify for a conforming loan and those who could qualify for a jumbo loan. Because of the higher risk, some lenders increased jumbo interest rates more than 2 percent. San Jose Mercury News

If you work in the real estate industry you tend to stay in the echo chamber of conversations and topics. But when you get outside of it, there is a broad spectrum of beliefs that make the most incoherent of the bubble bloggers look tame. The typical bubble blogger has a foundation of beliefs in the marketplace but then steps outside of the mainstream conversation and to me that is healthy as it provides perspective. I may disagree but I respect their viewpoint, a great deal like politics.

But I came across this rant comparing homeownership to serfdom and it’s inclusion in the grand conspiracy political theories that I could not stop reading. It has all the trappings of the entrenched academic who comes out of the cloisters after years of study convinced that air travel is impossible as planes fly overhead. In this case it is done by Melinda Pillsbury-Foster, who claims to have spent 20 years studying the impact of politics on real estate, hating the man but insisting the world know that she is a progeny of one of the great industrialists.

I have included a snippet but check out the rest of the article. It is an amazing argument on how the world has devolved and the lurking political and socio-economic conspiracies that await us. You have been warned…

Welcome to the non-ownership homeowner club. In this world, the New World Order, so carefully planned for you, we call it the New Serfdom. Serfs were entitled to the use of their land; they were also tied down by their land, tightly restricted. Serfs could escape by fleeing to a free town, remaining there for a year and a day. No such luck now; No escape for you.If you were really renting, the owner would be responsible when the place, built unbeknownst to you with shoddy materials and workmanship to cut the real cost, started to fall apart. This way you are the one who pays all costs.

Continue reading →

If you are an investor in Section 8 housing or have some inventory that could fit this mold, the news coming out of the Democratic Congress may have some good stuff for you. Maxine Waters has introduced a bill called the Section 8 Voucher Reform Act which would create 100,000 new Section 8 vouchers over the next 5 years at a cost to the taxpayers of 2.4 billion dollars.

If this goes through, there will be a surge in demand for housing that caters to Section 8 renters and creates a nice little business for those who are willing to work with the government. This bill still needs to be passed and signed, but the chances of it getting passed are the greatest in the past 10 years.

The Washington Post ran an editorial in favor of the Section 8 Voucher Reform Act today, so the buzz in the beltway is gaining speed and it could be a hot topic in the coming days. As we all watch other issues in the housing market never forget to keep an eye on Washington as they have the ability to throw an amazing amount of money at a problem and create great opportunities for those willing to partake of them.

The good news is that for the first time in years, there is a prospect that Congress will address these needs. A bill passed by the House this month called the Section 8 Voucher Reform Act contains mostly technical, though helpful, provisions: It changes the formula for how funds are distributed to housing authorities to achieve greater efficiency (last year $1.4 billion in Section 8 vouchers went unused); it allows a family to use a voucher as a down payment on a first-time home purchase; and it simplifies procedures for safety inspections, rent calculations and other aspects of the housing program.
Perhaps most important, the bill is likely to reduce the Section 8 voucher waiting list. It does this by creating 100,000 new vouchers over five years — allowing a 5 percent boost in the nearly 2 million households now receiving assistance — and by increasing funding for the family self-sufficiency program, which essentially assigns case managers to help families attain long-term living wages. The bill also requires the Department of Housing and Urban Development to more stringently evaluate both the family self-sufficiency program and another program that deregulates certain housing authorities (including those in the District and Baltimore).via washingtonpost.com

The sale of Starrett City to real estate investor fell through this week as federal housing authorities rejected the 1.3 billion dollar offer for the 33 year old complex. Starrett City was built as a low income alternative housing system back in the 1970’s.

I remember driving by it as it rose out of the swamps and the Belt Parkway whenever we headed off Long Island. Starrett City was the first taste of New York City that you would see on the drive, the tall buildings isolated from the rest of the areas still low level building letting you know you were on the doorstep of New York City. An appetizer of bigger things to come.

This is the home of the waiters and the cab drivers that make Manhattan tick. And in this instance they have stopped a new owner and the changes that a new owner would bring. But to gain nearly 6,000 apartments for a price tag just over 1 billion dollars in New York, forgettaboutit, someone with the political juice is going to make this deal. My bet, David Bistricer did not do the groundwork to get this deal done and now pays the price of losing it. But another player in New York politics and real estate will grease the wheels and Starrett City will have a new owner in no time at all.

But many tenants and politicians said that decision was only a temporary reprieve. The longtime owner of the complex, a group led by Disque D. Deane, has made clear its desire to sell, or to pull out of the state’s Mitchell-Lama program, which subsidizes middle-class housing, as a prelude to creating a more upscale project.
Indeed, some of the same investment firms and developers that have gobbled up everything from real estate trophies in Manhattan to brick tenements in the Bronx are still circling Starrett City.
“I think we should acknowledge that a sale is inevitable,” Marie Purnell, president of the Starrett Tenants Association, said at a Congressional hearing at the complex yesterday. “However, retention of all subsidy programs should be a priority.” via New York Times.

New York City has tremendous pressure on it’s housing inventory. The high end has been increasing in value significantly and the low end is becoming more and more expensive for the city’s poor and middle class. When it is difficult to find housing, tenants have to be very subservient to their landlords and the unscrupulous landlords will take advantage of this.

Reported violations of housing defects are up in the face of possible retribution and New York is looking at new legislation called the Safe Housing Act. While I do not like governmental initiatives, I can see the need for strict regulation of the housing inventory in a tight market like New York. The city can not turn into a sole enclave of the rich, it needs workers to do the necessary jobs.

In a soft market or with excess inventory, a bad landlord would get what he or she deserves, an empty building. But with apartments from The Bronx to Coney Island in short supply, these bad landlords can get away with creating an hazardous housing situation that tenants bound to a lease can not escape.

This legislation was recently introduced into the City Council by Council Speaker Christine Quinn and City Council Member Letitia James of Brooklyn. The bill was praised by both the Bloomberg Administration and the landlord lobby. Nonetheless, the Safe Housing Act is still far from law. There will be multiple public hearings on the legislation, and a vote by the full City Council. Until the legislation is passed by the Council and signed by Mayor Bloomberg, there is danger that the strong coalition of supporters will fall apart, or others will try to damage the bill’s chances of passing.
In recent years, housing conditions in New York City have been getting worse. According to the Furman Center, the number of serious code violations per 1,000 rental units in New York City increased by over fifty percent in just four years. In 2002, there were thirty-eight serious violations per 1000 rental units. In 2006, that figure skyrocketed by over 50%, to fifty-eight serious violations per 1000 rental units.
Bushwick, Brooklyn, where I have worked at Make the Road by Walking, a membership organization that organizes around housing issues and provides free legal services to tenants, has had the highest number of serious violations for the past ten years. There are an astounding 297 violations per 1,000 rental units. The number of dangerous apartments has close to doubled since 2002. via the  DMI Blog.

Forbes has come out with their list of the Top 10 Overpriced Housing Market for 2007. The list is definately screaming the coasts where all of the overpriced markets are located.

California leads the way with 5 cities out of the top 10, but the Washington to Boston corridor has 3 of the locations itself. Honolulu and Miami round out the list.

Top 10 Most Overprices Housing Markets in 2007

1. San Diego Housing Price Trend -4.5 percent
2. Miami -6.2 percent
3. Sacramento, Calif. -4.1 percent
4. San Francisco 2 percent
5. Washington, D.C. -4.1 percent
6. Honolulu Even
7. New York 2 percent
8. Los Angeles 3.2 percent
9. Boston -2.4 percent
10. San Jose, Calif. 2.7 percent

Other factors beyond the housing price trend that helped determine the rankings include median price, price per earnings, and affordability. These all helped determine the affordability of the housing markets for comparison purposes.

What happens when you take a inefficient government program, add a dash of corruption, and round it out with a private market? You get governmental programs that are abject failures and the money ends up in the hands of the smarter guys.

Miami dedicated 1.3 million to subsidize affordable housing in a development in the city. All well in good if you are a big government type. But then you are looking at a time when the Miami housing market is white hot. So the people who got the grants, some legitamitely, some as political favors as the campaign manager for the mayor recieved, turned around and immediately resold the homes for a good deal more than they paid.

And that is the trouble with government just giving away your tax money. There are many smart folks out there who are looking and waiting for the money to be dispursed. And they will always find a way to twist and pevert the intention to make themselves more money.

The building, Loft One, developed by Jorge Perez’s Related Group, had offered 102 moderately priced units. But of those, city auditors found only six units that had stayed in the same hands for more than a year and claimed a homestead exemption — signaling that they were occupied by people who planned on living there for a significant amount of time.
On sales applications, some people listed purchase reasons like ”business/real estate opportunity, rental, resale and investment property,” according to the draft audit by the city’s auditor general, Victor Igwe. Some buyers listed mailing addresses in Argentina, Ecuador and New York.
Igwe declined to comment on the report, saying it was ”unfortunate” that an unfinished audit had been leaked to the media.
The draft audit says 33 of the 102 affordable units — priced between $99,000 and $216,000 — were resold within a year of closing. The list of those who benefited includes Miami political strategist Al Lorenzo, who works as a lobbyist for City Hall and was the campaign manager for Mayor Manny Diaz. via the MiamiHerald.com.