Category Archives: Westchester NY

Reducing California homelessness | Waccabuc Real Estate

Ben Carson leaves Union Rescue Mission on skid row

President Trump’s big idea for fixing California’s homelessness crisis should look familiar to many prominent Democrats: Eliminate layers of regulation to make it easier and cheaper to build more housing.

On the eve of a two-day swing through the state this week, Trump’s Council of Economic Advisers released a report blaming “decades of misguided and faulty policies” for putting too many restrictions on development and causing home prices to rise to unaffordable levels. It’s a continuation of a strategy that the president began in June, when he signed an executive order to establish a White House council to “confront the regulatory barriers to affordable housing development.”

“Harmful local government policies in select cities, along with ineffective federal government policies of prior administrations, have exaggerated the homelessness problem,” Tom Philipson, acting chairman of the Council of Economic Advisers,told reporters Monday.

But while the administration’s argument broadly mirrors what some Democratic lawmakers have been trying to do in California, easing rules on development, allowing fourplexes on land currently zoned for single-family homes or cutting some state environmental rules that restrict building, it’s too simple to link Trump’s approach with that of his liberal antagonists, several state lawmakers said.

Instead, they said, the president’s positions on homelessness are more about trolling California than attempting to find actual solutions. Some also argue that the administration’s report takes a common Republican tactic — deregulation — that often benefits the party’s deep-pocketed donors and slaps it on yet another subject — homelessness.

Democratic state Assemblyman Miguel Santiago, who represents skid row and other neighborhoods in downtown Los Angeles,is the author of recently passed legislation that would make it harder to use state environmental laws to block homeless housing and shelters in Los Angeles.

He said it was hard to take Trump’s ideas seriously when the president has also proposed cutting federal housing dollars and clawing back Obama-era rules that aimed to desegregate neighborhoods. Another proposed Trump administration policy would deny federal housing aid to households that include anyone living in the country illegally, even when other members are eligible for such aid as lawful residents or U.S. citizens.

“I think it’s politics at its worst where he is going to pick on a vulnerable community — no different than when he picked on immigrants — and he’s going to target them,” Santiago said. “We’re already hearing it: ‘Here’s West Coast liberals, not able to solve the problem.’ I think it’s a little cynical for someone who has done everything in their right mind to make it worse on the working poor.”

The Trump administration’s report says that the San Francisco and Los Angeles metropolitan areas could see huge reductions in homelessness if they were to unwind restrictions on development, estimating that the population of people living on the streets and in shelters would go down by more than half and 40%, respectively.

The report doesn’t cite any specific regulations that are increasing housing costs, nor recommendations on what regulations should be eliminated.

State Sen. Scott Wiener of San Francisco, who has made a name for himself arguing for the reduction of local zoning rules, said he disagreed with the Trump administration’s apparent pitch to cut back on all regulations and allow for more building of all types everywhere. Instead, his recently shelved Senate Bill 50 was designed to make it easier to build housing near existing job centers and mass transit specifically for affordability and environmental reasons.

Wiener also pointed to national Democrats, such as presidential candidates Elizabeth Warren of Massachusetts and Cory Booker of New Jersey, and former President Obama, who have pushed for stripping away some development rules as part of their plans to make housing more affordable.

“I don’t agree with the president’s view that we should be like Arizona because that would lead to sprawl,” Wiener said. “But I do agree with Elizabeth Warren, Cory Booker and Barack Obama that we should move away from restrictive housing policies because restrictive housing policies lead to more homelessness.”

In addition to deregulation, the Trump administration’s report also calls for using law enforcement to deal with homeless people and encampments, arguing that “more tolerable conditions for sleeping on the streets” increased the homeless population.

That argument has largely been panned by experts, who point to more complicated, intertwined causes of homelessness, including poverty, addiction and lack of affordable housing. Therefore, the recommendation to use police is wrongheaded as well, said Los Angeles Mayor Eric Garcetti.

“The White House report on homelessness treats this crisis like fodder for a cable news debate,” Garcetti said in a statement. “We don’t have time for that. If the president really cares about solving this crisis, he wouldn’t be talking about criminalization over housing. He’d be making dramatic increases in funding for this country’s housing safety net.”

In the past week, Trump’s advisers have toured homeless encampments and public housing projects in Los Angeles and San Francisco, but offered few solutions.

On Wednesday morning, after meeting with LAPD Chief Michel Moore, Department of Housing and Urban Development Secretary Ben Carson visited skid row to tour the Union Rescue Mission. He didn’t offer much substance about the administration’s plans, but encouraged a greater focus on public-private partnerships.

Carson also indicated that HUD might start reserving housing grants to local governments that are willing to make changes to local zoning laws.

“We will get preference points to people who are willing to look at these things,” he said. “You know, we have so many archaic rules on the books all over the country.”

Later Wednesday, Carson rejected a request made earlier this week by Gov. Gavin Newsom and other elected officials for additional resources for homelessness, including 50,000 housing vouchers. In his written response, Carson echoed the report from Trump’s Council of Economic Advisers.

“Your letter seeks more federal dollars for California from hardworking American taxpayers, but fails to admit that your state and local policies have played a major role in creating the current crisis,” he wrote. “If California’s homeless population had held in line with overall population trends, America’s homeless rate would have decreased. Instead, the opposite has happened, as California’s unsheltered homelessness population has skyrocketed as a result of the state’s overregulated housing market, its inefficient allocation of resources and its policies that have weakened law enforcement.”

Dan O’Flaherty, a Columbia University economics professor whose work is cited more than a half-dozen times in the Trump administration’s report, said he agreed that loosening local homebuilding rules would decrease costs and lessen homelessness. But he said that the report vastly overstates the potential impact of doing so.

And even if the report is correct that deregulation would reduce Los Angeles’ current homeless population by 40%, it would still take decades for that to happen.

“You do 40% over 40 years?” O’Flaherty said. “Big whoopie.”

Overall, O’Flaherty said the report ignored well-regarded research that shows public subsidies can help homeless people find new homes, and instead asserted without evidence that simply increasing mental health and drug treatment programs without housing assistance would decrease the homeless population.

Margot Kushel, a professor of medicine at UC San Francisco who recently received a $30-million grant from Salesforce CEO Marc Benioff and his wife to study solutions to homelessness, panned the Trump administration’s report as being out of line with most research on the subject.

One notable lapse, she said, was that it argued permanent supportive housing, which attempts to house people who are chronically homeless and have disabilities in buildings that also have social services, was ineffectual. Multiple studies, she said, show that 85% or more of those receiving such housing stay there.

The success of permanent supportive housing, she said, “is not controversial and it has had broad bipartisan support because the evidence is so overwhelming.”

Like others, Heidi Marston, chief program officer for the Los Angeles Homeless Services Authority, questioned whether some in the Trump administration, including Carson, really understood the best practices being used to help homeless people.

For example, during his visit to skid row on Wednesday, Carson offered a somewhat muddled answer to a question about “housing first,” the widely accepted national model that prioritizes getting people off the streets and into permanent supportive housing, regardless of their sobriety or health status.

“When we talk about something like housing first, housing first is a good idea because it gets people off the street and it actually costs less money when you get them off the street,” he said. “But you can’t stop with housing first. You have to go with housing second, which means you diagnose the reason that they were there in the first place and housing third, which means you try to fix it.”

Marston would love to see the federal government offer more help on homelessness, and she was among those who met with Trump officials last week.

“We focused on educating them,” she said, “trying to help them understand why we practice a low-barrier approach and what housing first really means.”

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https://www.latimes.com/california/story/2019-09-18/trump-housing-homeless-ben-carson-california-deregulation

Property Taxes by Congressional District | Waccabuc Real Estate

Earlier this year, NAHB released 2017 property taxes by state as a blog post and as a longer special study. However, in light of changes made to the tax code by the Tax Cuts and Jobs Act (TCJA), further refining the statistics by congressional district is instructive to both members of Congress as well as their constituents.

Property Tax Payments, Effective Tax Rates, and Intrastate Comparisons

The highest average property tax bill was $11,389, paid by home owners residing in New York’s 17th district (Rockland County and portions of Westchester County). The smallest average annual real estate tax bill was $425, paid by home owners in Alabama’s fourth district (Franklin, Colbert, Marion, Lamar, Fayette, Walker, Winston, Cullman, Lawrence, Marshall, Etowah, and DeKalb Counties). The congressional districts in which homeowners pay the 20 largest and 20 smallest annual property tax bills are shown in Figure 1.

Figure 1

It is not surprising that many of the districts with the highest property tax rates are in states that impose the highest average property tax rates.  Figure 2 illustrates the geographic concentration of high- and low-tax congressional districts.

Figure 2

For example, 17 of the 20 congressional districts with the highest property tax rates are in three states: New Jersey, New York, and Illinois (Figure 3).

Figure 3

Source: U.S. Census Bureau, 2017 American Community Survey

Congressional districts in New York State exhibited the most variability of effective property tax rates – equal to the percentage of the property value paid in taxes each year (see Figure 4). The difference between rates in the 25th and 13th districts was 2.43 percentage points in 2017, the largest such difference within a state. The average property tax rate in the 25th district (2.79%) is more than six times greater than that in the 13th (0.36%). The smallest differential within a state with five or congressional districts was in Washington, where the highest effective property tax rate is 1.04% (WA-10) and the lowest is 0.75% (WA-7).

Figure 4

Property Taxes and the Tax Cuts and Jobs Act

The state and local tax (SALT) deduction decreases federal tax liability by allowing taxpayers to deduct the total of property tax payments plus either sales or income taxes paid to state and local governments during the year.  Under prior law, this deduction was uncapped but disallowed for taxpayers forced to pay the alternative minimum tax (AMT).  However, the Tax Cuts and Jobs Act (TCJA) capped home owners’ SALT deduction at $10,000 per year (through 2025).

The value of a tax deduction is determined by the amount deducted from taxable income and the taxpayer’s top marginal tax rate at which the income would have been taxed.  Thus, under prior law, a taxpayer in the top tax bracket (39.6%) who paid $10,000 in state income taxes and $10,000 in property taxes could have decreased their federal tax liability by $7,920 [39.6% x ($10,000+$10,000)].

Until the TCJA-made change expires in 2026, that amount would be reduced to $3,700 (equal to the $10,000 cap multiplied by the new, top marginal tax rate of 37%). The effect of this change on after-tax income is obvious in certain high-tax congressional districts.  For example, the average yearly bill for property taxes alone exceeded $10,000 in six districts in 2017 (NY-17, NY-3, NJ-11, NJ-7, NY-4, and NJ-5).

But as AMT status affects a taxpayer’s possible SALT deduction, one must bear in mind the significant changes made to the AMT by the TCJA.  The most impactful of these changes was the increase of the income threshold at which the AMT exemption begins to phase out.  For a married couple filing jointly, the phaseout threshold went from $160,900 to $1 million in 2018.

As a result, the number of AMT-affected taxpayers is expected to fall 90%–from five million to 500,000—between tax years 2017 and 2018.  The taxpayers who no longer face the AMT may now be able to claim a $10,000 deduction that was previously unavailable to them, lowering their tax liability.

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Mortgage refinance activity surges | Waccabuc Real Estate

Data from the latest survey of the Mortgage Bankers Association’s Weekly Application Survey show small year-over-year gains in purchasing activity and larger year-over-year gains in refinancing activity. The Primary Market Mortgage Survey indicated no change in the 30-year fixed rate mortgage (FRM) from the previous week, at a non-seasonally adjusted rate of 3.8%. However, two weeks ago, the FRM decreased by 17 basis points from the week before, which was the largest week-to-week decline in over two months. A previous postreferred to trade disputes as a source of stagnating purchase activity for potential homeowners.

Year-over-year, the gains were strongest in refinance and far less pronounced in purchases, on a seasonally adjusted basis. The index for refinance increased by 79.5% while the index for purchase mortgages increased by 3.5%. The fixed-rate mortgage, however, has shown steady, year-over-year percentage declines since the start of 2019.

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Mortgage rates hit two year low | South Salem Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage rate fell to 3.82 percent, the sixth consecutive weekly decline and its lowest level since September 2017.

Sam Khater, Freddie Mac’s chief economist, says, “While the drop in mortgage rates is a good opportunity for consumers to save on their mortgage payment, our research indicates that there can be a wide dispersion among mortgage rate offers. By shopping around and getting a single additional mortgage rate quote, a borrower can save an average of $1,500.”

“These low rates are also good news for current homeowners. With rates dipping below four percent, there are over $2 trillion of outstanding conforming conventional mortgages eligible to be refinanced – meaning the majority of what was originated in 2018 is now eligible,” he says.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.82 percent with an average 0.5 point for the week ending June 6, 2019, down from last week when it averaged 3.99 percent. A year ago at this time, the 30-year FRM averaged 4.54 percent. 
  • 15-year FRM averaged 3.28 percent with an average 0.5 point, down from last week when it averaged 3.46 percent. A year ago at this time, the 15-year FRM averaged 4.01 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.52 percent with an average 0.4 point, down from last week when it averaged 3.60 percent. A year ago at this time, the 5-year ARM averaged 3.74 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Case Shiller prices up 2.7% annually | Waccabuc Real Estate

GS: New Home sales house for sale prospective buyers San Rafael Ca.

Real estate agents arrive at a brokers tour showing a house for sale in San Rafael, California.Getty Images

National home prices rose 3.7% annually in March, down from 3.9% in February, according to the S&P CoreLogic Case-Shiller home price index.

Prices had been seeing double-digit annual gains, but they are gone. The largest annual gain was 8.2% in Las Vegas; one year ago, Seattle had a 13% gain a year ago but has dropped dramatically to just 1.6%. The 20-City Composite dropped from 6.7% to 2.7% annual gains over the last year.

“Given the broader economic picture, housing should be doing better,” David Blitzer, managing director and Chairman of the Index Committee at S&P Dow Jones Indices, wrote in the report. He noted that mortgage rates and unemployment were low, along with low inflation and moderate increases in real incomes.

“Measures of household debt service do not reveal any problems and consumer sentiment surveys are upbeat. The difficulty facing housing may be too-high price increases,” he added.

The 10-City Composite rose 2.3% annually, down from 2.5% in the previous month. The 20-City Composite gained 2.7%, down from 3.0% in the previous month.

Even with today’s smaller gains, prices are still rising almost twice as fast as inflation. In the last 12 months, the S&P Corelogic Case-Shiller National Index is up 3.7%, double the 1.9% inflation rate.

Prices are still higher annually in all of the 20 major cities measured by the indices, but some are getting very close to negative territory. Prices in Los Angeles, Seattle, Chicago, San Diego and San Francisco are just over 1% higher than March 2018.

Las Vegas, Tampa and Phoenix are seeing the biggest gains. These were the markets hit hardest during the housing crash and therefore still have the farthest to go to fully recover.

Other housing indicators are also weaker than expected this year. Existing home sales have been relatively flat all spring, despite falling mortgage rates.

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https://www.cnbc.com/2019/05/28/home-price-gains-weaken-yet-again-in-march-sp-case-shiller-index.html

Median rent reaches all-time high | Waccabuc Real Estate

Apartment for rent

Median asking rent has reached an all-time high, rising to a record $1,006 in the first quarter of 2019, according to recent data from the U.S. Census Bureau.

Rental properties that were lying vacant remained low at 7% in Q1, a factor that is driving up rental prices.

rent

Meanwhile, homeownership levels across the country were relatively flatfrom last year, the data revealed, reversing a trend of eight consecutive quarters of growth.

Rents rise as increased demand takes a bite out of homeownership

It appears a surge in renters is the cause. The number of renters has changed course, rising in Q1 after falling in six out of seven previous quarters.

Skylar Olsen, Zillow’s director of Economic Research, said the data suggests the younger generation is having trouble overcoming the hurdles they face in the path toward homeownership, including securing a down payment, finding an affordable home and qualifying for a loan.  

“These hurdles – combined with potential shifts in preferences and/or a simple delay in the many ‘adulting’ events like marriage and children that precipitate buying a home – can have the effect of keeping younger, would-be buyers in rental housing for a longer time,” Olsen said.

He added that the sheer size of the 20-and-30-something population is exacerbating the situation by creating competition that drives up rental prices.

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https://www.housingwire.com/articles/48891-median-rent-reaches-all-time-high?id=48891-median-rent-reaches-all-time-high&utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_source=hs_email&utm_medium=email&utm_content=72133183&_hsenc=p2ANqtz–UJ10g-blERYQowrIuE0apEhOELqrKPiq6ZfTaoudQUKAjt_2RBRCx8g27bpDIlIGC1c3fYmt44l4iOLOVC7kDeZ8d3g&_hsmi=72133183

Monthly Employment Growth Improved in March | Waccabuc Real Estate

Total payroll employment increased by 196,000 in March, while the unemployment rate was unchanged at 3.8%. Residential construction employment increased by 12,200 in March, after the decline of 8,100 jobs in February. The total construction industry (both residential and nonresidential) gained 16,000 jobs in March.

According to the Employment Situation Summary for March, released by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 196,000. It was a big jump from the gain of 33,000 jobs in February, which was revised up from its original estimate of a 20,000 increase. Monthly employment growth has averaged 180,000 per month for the first three months of 2019, compared with the average monthly growth of 223,000 over all of 2018. Over the past twelve months, total nonfarm payroll employment rose by 2.5 million, with the average monthly growth of 211,000.

The unemployment rate was unchanged at 3.8% in March. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, declined by 0.2 percentage point in March, to 63.0%. The decrease in the number of total labor force reflected both a 201,000 decrease in the number of persons employed and a 24,000 decline in the number of persons unemployed over the month.

Additionally, monthly employment data released by the BLS Establishment Survey indicates that employment in the overall construction sector increased by 16,000 in March. The number of residential construction jobs rose by 12,200 in March, following an 8,100 decline in February.

Residential construction employment now stands at 2.9 million in March, broken down as 838,000 builders and 2.1 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction is 8,000 a month. Over the last 12 months, home builders and remodelers added 103,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 918,000 positions.

In March, the unemployment rate for construction workers decreased to 3.9% on a seasonally adjusted basis, from the 4.5% in February. The unemployment rate for construction workers dropped to the lowest rate since 2001, as shown in the figure above.

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New York’s new mansion tax | Waccabuc Real Estate

VIEW PHOTO IN GALLERY

220 Central Park South. Image via Vornado Realty Trust and Robert A.M. Stern Architects.

New York’s 2020 budget was revealed this weekend; among many other items, the proposed “pied-à-terre tax” went away, but a progressive “mansion tax,”–a one-time tax on properties valued from $1 million to $25 million or more–and an attendant transfer tax when those properties sell–will reportedly raise $365 million, according to The Real Deal. The money will head straight to the MTA. The new tax will top out at 4.15 percent.

According to Bloomberg, a series of graduated tax levies, paid by the buyer, starting at 1 percent, will be added to all New York City apartments selling for $1 million or more. That rate goes up at $2 million and reaches that 4.15 percent high on $25 million properties. The projected $365 million in revenue would mean $5 billion in bonds headed for mass transit. The last iteration of the mansion tax levied a flat 1 percent on apartments starting at $1 million.

Governor Cuomo said in a statement announcing the new budget “This has five or six major, difficult long-term issues that had to be dealt with, and it deals with them in a fiscally responsible way. This is the leading state in terms of being progressive. We’ve established that. I believe with this plan we also lead the nation in terms of innovation, and building, and reform.”

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Fed’s rate hikes causing deflation | Robert Paul Realtor

Inflation Rate in the United States is expected to be 2.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Inflation Rate in the United States to stand at 2.10 in 12 months time. In the long-term, the United States Inflation Rate is projected to trend around 2.10 percent in 2020, according to our econometric models.

Forecast Data Chart
CalendarGMTActualPreviousConsensusTEForecast
2018-12-1201:30 PMInflation Rate YoY2.2%2.5%2.2%2.4%
2019-01-1101:30 PMInflation Rate YoY1.9%2.2%1.9%2.2%
2019-02-1301:30 PMInflation Rate YoY1.6%1.9%1.5%1.9%
2019-03-1212:30 PMInflation Rate YoY1.5%1.6%1.6%1.6%
2019-04-1012:30 PMInflation Rate YoY2%
2019-05-1012:30 PMInflation Rate YoY1.9%
2019-06-1212:30 PMInflation Rate YoY1.9%

Mortgage rates average 4.35% | Waccabuc Real Estate

Freddie Mac today released the results of its Primary Mortgage Market Survey® , showing that mortgage rates continued on their downward pattern. 

Sam Khater, Freddie Mac’s chief economist, says, “Mortgage rates fell for the third consecutive week, continuing the general downward trend that began late last year. Wages are growing on par with home prices for the first time in years, and with more inventory available, spring home sales should help the market begin to recover from the malaise of the last few months.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.35 percent with an average 0.5 point for the week ending February 21, 2019, down from last week when it averaged 4.37 percent. A year ago at this time, the 30-year FRM averaged 4.40 percent.
  • 15-year FRM this week averaged 3.78 percent with an average 0.4 point, down from last week when it averaged 3.81 percent. A year ago at this time, the 15-year FRM averaged 3.85 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent with an average 0.3 point, down from last week when it averaged 3.88 percent. A year ago at this time, the 5-year ARM averaged 3.65 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.