Entries Tagged 'Low Income Housing' ↓

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This is a problem that faces landlords all over the country. How to handle a tenant on the sex offender registry.

The City of New York has an out though, they have a firm rule that housing for those who are on the sexual offender registry. They can not rent.

But as with any large bureaucracy, the slow and laborious process failed to do its job and now their are 112 sexual offenders living subsidized housing in New York City. The failure to catch this situation provides a two fold failure of the system. First, by missing these people you are placing their neighbors in jeopardy of a sexual attack, not to mention the future liability to the city. And you are also denying someone who is worthy of living in the housing from the opportunity.

Screening for these apartments takes months, it is a shame that the city will not do the job it is tasked with doing.

“I was obviously surprised and disappointed when this week we discovered there are over 100 sex offenders living illegally in public housing right now,” Mr. Gioia said in a telephone interview yesterday. “It’s illegal, it’s against federal law, it’s against city policy, and it’s simply wrong to have taxpayers subsidizing pedophiles and rapists in public housing.”
Federal law requires public housing authorities to reject any applicants who are on a lifetime sex offender registry. Residents of the city’s public housing pay a fraction of market rate rents. via The New York Sun.

Folks, if my political prognosticating hat is on correctly, our real estate industry is going to be front and center in the 2008 Presidential Race. The New York Times, the paper of record and the barometer for how the media covers things, has 2 big articles on foreclosures today as their top stories.

On one hand the article, McCain Warns Against Hasty Mortgage Bailout, they talk about how McCain, the Republican candidate, is coming out against a government intervention in the foreclosure crisis.

Drawing a sharp distinction between himself and the two Democratic presidential candidates, Senator John McCain of Arizona warned Tuesday against vigorous government action to solve the deepening mortgage crisis and the market turmoil it has caused, saying that “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.” via the NYT

Meanwhile the next story on their morning email news blast is the article, Swift Steps Help Avert Foreclosures in Baltimore, discussing how the evil mortgage companies are attacking and defrauding the poor and lower middle class.

When Wilbert and Patricia Savage missed two mortgage payments on their tidy row house here last fall, Mr. Savage, 75, despaired that they could ever catch up. Wilbert Savage outside his home in East Baltimore. He and his wife, Patricia, recently sought help when their loan payments rose.

But he remembered Roy Miller, a nonprofit housing counselor with a nearby storefront office who had helped other neighbors in trouble. The Savages visited Mr. Miller, and he called their lender and was able to work out a repayment plan for the missed payments, something Mr. Savage said he could never have managed on his own.

“Without Roy, we’d probably be out of the house or close to it,” he said. via the NYT

Now my years of blogging about politics on an old site tells me this, expect on your local news, national news channels, and human interest shows to grab onto the foreclosure story as a battle. One one side you have the beholden to corporate America Republicans. On the other side, the defenders of the embattled Democrats. The foreclosure crisis is going to morph from a story of irresponsible lending and borrowing into an epic struggle between the powerful and the downtrodden.

With Iraq off the table for the media, the economy and housing crisis is going to be center stage. Which also means that any improvement in the housing market will be drowned out in the cacophony of political rhetoric over the coming few months.

I am always in favor of real estate agents go the full measure to sell their clients homes. But there is a line between full measure and down right sleazy.

A real estate agent selling the home across the street from Tiger Woods on Jupiter Island has been reportedly contacting the tabloids as potential buyers. The thought of my agent selling my house so that someone else could be stalked and think that this is a reputable marketing strategy boggles the mind.

I could see marketing it that your neighbors include stars and celebrities, but not intentionally marketing it to the tabloids so they can infringe on a neighbor.

This sleazy behavior must drive other agents crazy as it really does impugn reputation of the profession.

TMZ got an unbelievable pitch from a big-time Florida realtor, and here it is, verbatim — “I have a FABULOUS piece of property for sale DIRECTLY across from Tiger Woods new property on Jupiter Island (Being built) When a tabloid pays JLO $6mil for photos of her first born, I would think that $4mil for a fabulous piece of property for unlimited photo opts of Tiger would be quite valuable!” via TMZ.com

The gold rush that was real estate investing has slowed to a crawl and now investors in some of the more exotic investments are seeing their investments fall apart. In Indianapolis the investment group run by Mehran “Nick” Valiyi convinced people to provide the down payment and credit to purchase low income homes to be remodeled and resold with his group splitting the profits.

When environmental concerns forced the EPA to shut down the project, it unraveled and now there may be almost 500 foreclosures hitting the Indianapolis market, many with underlying lead paint issues that will have to be resolved.

Lenders and homeowners are less than thrilled and I can see many lawsuits flying around in the aftermath of this fiasco.

Hammer, in an interview, said LRTB’s internal reports show it and Cooperative Action were involved in about 490 house purchases by dozens of investors. SMC originated loans totaling about $7.8 million on 121 of those houses, Hammer said.
Cooperative Action, known as CARE, also recruited an unspecified number of investors to buy, fix and sell run-down houses in the city, Hammer said.
The houses are in neighborhoods within three miles of Downtown.
The Indianapolis real estate market already is notorious for foreclosures that chip away at the tax base. LRTB’s deal stands out because it could trigger the city’s largest wave of foreclosures.
The state’s inquiry into LRTB comes as loan problems have emerged among U.S. lenders who poured money into residential real estate purchased by low-income buyers.
This is the way the LRTB deal was supposed to work:
LRTB would arrange the purchase of a house using the name and credit of an individual buyer, who then would receive a commission of up to $2,500 from LRTB. The house would be repaired by another Valiyi company, LRTB Services. Meanwhile, LRTB would find tenants for the home and, later, a new buyer.When the house was sold, LRTB and the original investor would split the profit.

But the project fell apart. Many houses were not fixed. via the IndyStar.com.

Earlier this month we talked about the benefits of buying into the student housing market, and now Marketplace has an interview on the benefits of owning off campus housing as a investor and landlord.

I still think this a good local investment if you are hands on and willing to get dirty. College students in some ways are hard on properties, but you will typically get paid and with the university budget crisis and high growth in students, demand is high.

SCOTT JAGOW: This morning, we’ll get the latest numbers on existing home sales. Probably yet another sign about the cooling housing market. Buying up a bunch of homes or several apartment buildings may no longer seem like a sure-fire investment. But we’re here to tell you about a place in the real estate market that’s fairly certain to pay off. Here’s Alex Cohen:

SANDY POPE: This is considered a loft, even though it has a separate bedroom, so when you come in your front door you’ve got your storage . . .
ALEX COHEN: Realtor Sandy Pope shows off a condo in Austin, Texas. This unit lists for $200,000 dollars even though it’s only 750 square feet.

But it’s perfect for students. It comes with a high-speed Internet connection, there’s a pizza place on the ground floor, a bus stop right outside and the University of Texas campus is just a few blocks away.  via Marketplace

Listen to the Interview (via Realplayer)

While the testimony that the National Association of Realtors addressed a Senate committee on banking how it opposes predatory lending, it does seem a bit disingenuous. There is a big difference now that the national consensus has turned against predatory lending instead of being in front of the issue while it was providing a boon to the organizations membership.

When housing prices were going up and interest rates were low, that was the time to warn consumers, and Congressman, about the risks of predatory lending with subprime loans. Not after the market had turned. There are some subdivisions in Southwest Atlanta that a friend of mine was a builder in that were built for the subprime market. As my friend said, if you had a pulse, you could buy a home there.

Now as the adjustable rates are resetting and the market has turned, these same subdivisions are turning over with panic selling and foreclosures. In reality, many of the people living there should not have bought. However, the dream of a new home and a mortgage that was less than renting was too big of a tease.

So the builders, Realtors, and lenders all sold these people down the river.

Now for the caveat. Most agents are not in the business of hurting buyers. But for the National Association of Realtors to come out after the party and tell everyone that we do not condone bad behavior when they watched it happen the night before not saying a word is disingenuous to me.

In testimony on “Preserving the American Dream: Predatory Lending
Practices and Home Foreclosures” presented to the U.S. Senate Committee on Banking, Housing and Urban Affairs, NAR said that abusive and predatory lending practices are putting our nation’s communities at risk. These practices can cause more families to lose their homes and savings through higher foreclosure rates. The vacancies that result can deflate the value of surrounding homes, as well.

“Predatory lending can be disastrous not only for the borrower and his
or her family, but also for the entire community,” said NAR President Pat Vredevoogd Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “High foreclosures of single-family homes are a serious threat to neighborhood stability and community well-being. Realtors(r) help families achieve the dream of homeownership, and NAR supports responsible lending with increased consumer protections to ensure that the ‘dream’ our members help fulfill does not turn into a family’s worst nightmare.”

“Real estate professionals have a strong stake in preventing predatory
lending,” said Combs. “We have to make sure that while addressing predatory lending, the legislative and regulatory responses to lending abuses do not go too far and inadvertently limit the availability of reasonable credit for prime as well as subprime borrowers.” via the NAR

A top Los Angeles developer is seeing slowing times, but instead of buckling under and locking the doors, he is using his assets to help others. While I am not a fan of the governmental monopoly over housing the indigent, I am a big fan of private – public efforts to help the less fortunate. And that is what Sonny Astani is doing in the skidrow district of downtown Los Angeles. He is donating 1.5 million that will finish off development of 115 apartments of the indigent.

Los Angeles’ largest downtown residential developer Monday donated $1.5 million that will allow the Skid Row Housing Trust to complete 115 efficiency apartments for the homeless mentally ill.

The donation by Sonny Astani will enable the completion of the Abbey Apartments on San Pedro Street.

“Sonny’s gift means we will be able to finish a critical project that provides the opportunity for 115 extremely vulnerable people who have been living on the street to move into well constructed efficiency apartments,” said Mike Alvidrez, executive director of the Skid Row Housing Trust, created in 1989 by a group of community leaders and activists concerned about the disappearance of single-room-occupancy hotels.

The trust has developed and restored 19 hotel properties, which include almost 1,200 units of affordable housing. The latest apartments will have on-site access to social, medical and mental health services.

A housing conference on Long Island, NY has geared developers to focus on building affordable housing. With prices depressing and building materials coming down in price, builders can build affordable housing during this lull in the market. Homes aimed at this demographic are guaranteed to sell and developers can be assured of keeping their employees working and income coming in the door.

With home prices dipping in some areas and builders complaining about a slowdown in business, a new effort to construct affordable housing on Long Island may be under way - although there are still plenty of roadblocks.

As real estate agents, mortgage bankers, builders, housing advocates and public officials discussed the state of Long Island housing during a conference called Real Estate Next, some indicated the softening of the market might open a door for new affordable developments or additional affordable components to existing projects.

“It’s good work in a slow market because affordable housing sells and there’s always demand for it,” said builder Michael Dubb, who heads the Beechwood Organization in Jericho,which is getting approvals now for an affordable project in Queens called Edgemere. via Newsday

The past 5 years have seen housing prices soar in the city of Chicago as in many parts of the country. When that happens, governments are beseiged by housing rights activists trying to get governments to subsidize housing for the poor. These advocates look to to government to use its power to coerce developers to add low income housing to their developments.

Chicago is at least more ethical than most. They only try to influence city properties that are sold under market value to developers. Many cities try to do much more than that. Of course, Chicago also defines a low income family of 4 as those earning under $74,000 a year.

Currently, developers who get bargain-rate financing with the city’s help or who buy city-owned land at a discount are required to offer up to 20 percent of their units at affordable prices.

Daley’s new proposal would broaden the definition of city assistance. In projects of 10 units or more, 10 percent would have to be moderately priced if any city land is acquired; if zoning is changed to permit residential use; or if residential zoning is changed to increase the number of apartment and condominium units that can be built.

The Preckwinkle plan would enact a 15 percent set-aside for developments of 10 or more units, applying to all new construction in the city. Daley contends that a citywide mandatory set-aside would discourage development. And a mandatory approach “automatically would [produce] a lawsuit,” he said. via the Chicago Tribune

I am not a proponent of cities dictating what developers can do with their own property, and to be honest I never have been a big fan of Mayor Daley either, but I think his plan has some merit. If you are going to get a discount buying land from the city, then you have to give something back. That is a normal negotiating posture.

This Preckwinkle character fails to offer anything constructive to developers, instead rams the power of the government down their throats by forcing all new projects to set aside low income housing in their projects. That is the wrong use of government.

When we first got word that Peter Cooper and Stuyvesant Town were being considered for sale by Met Life, the asking price was 3 billion and Met Life was not sure that they could get that price. Peter Cooper and Stuy Town have a high percentage of rent controlled units so getting top dollar was considered out of the question.

But it looks like there is much more demand than originally thought and now these landmark middle class communities owned by Met Life may now reach the 5 billion dollar mark. If I was living at Peter Cooper or Stuyvesant Town and had a  rent controlled apartment, I would be very nervous. It looks like between Met Life and the new owners, everything possible will be done to get rid of all the rent control tenants that have the slightest violation to their lease before a possible sale.

Behind the scenes, the sale has already drawn interest from dozens of prospective buyers, including New York’s top real estate families, pension funds, international investment banks and investors from Dubai, according to real estate executives, even though the marketing book will not be released to bidders until next week.
The deal is likely to lead to profound changes for many of the 25,000 residents of the two complexes, where two-thirds of the apartments have regulated rents at roughly half the market rate. Any new owner paying the equivalent of $450,000 per apartment is going to be eager to create a money-making luxury enclave, real estate executives say.
The sale would only add to the seismic cultural shifts already under way in New York City and especially in Manhattan, where soaring housing costs have made the borough increasingly inhospitable to working-class and middle-class residents. It would be another challenge to Mayor Michael R. Bloomberg’s effort to stabilize and expand the number of affordable apartments in the city.

via FT.com