In late August, Gov. Andrew Cuomo and other top New York officials announced an unusual crackdown on landlords. Nearly 200 building owners were collecting big tax breaks under a program to spur housing, officials said, but hadn’t registered their apartments for rent stabilization as the law requires.
Is your rent legal? It might not be. Your landlord might be charging you too much, and we want your help figuring that out.
“We will not tolerate landlords who break the law and deny their tenants rent-regulated leases, plain and simple,” Cuomo said in a statement at the time. With Attorney General Eric Schneiderman, the governor announced a new enforcement effort to clean up such abuses.
But an investigation by ProPublica found that in reality, state and New York City officials have tolerated the problem for years—and ignored pleas to investigate. Nor is it limited to the building owners Cuomo and Schneiderman found—landlords have failed to register thousands of buildings for rent regulation, casting doubt on the legality of leases for about 50,000 apartments across the city.
That is the finding of an extensive analysis of government data covering nearly 15,000 rental buildings receiving the tax subsidies as of 2013. About 40%—or 5,500 buildings—weren’t listed as rent-stabilized, yet records show the owners are receiving more than $100 million in property tax reductions.
Stephen Werner, an analyst at the city’s Housing Preservation and Development Department (HPD), has been complaining to higher-ups about the missing registrations for decades. Werner said he first told his bosses 20 years ago they were “perpetrating a fraud” by counting too many apartments as rent-stabilized in the triennial surveys prepared for the City Council and the public.
Briefed on ProPublica’s analysis, Jumaane Williams, a city council member from Brooklyn who chairs the council’s housing and buildings committee, called for a “severe and swift response” to ensure that tenants are getting the rent protections they deserve.
“We have to fight and scrape for every last piece of affordable housing,” Williams said, “and here we are with thousands of units with people we’ve given money to and tax breaks to, and who’ve agreed to keep these units in rent stabilization, blatantly not doing it.”
ProPublica reported yesterday on a related abuse, where landlords do register for rent stabilization then collect bigger rent increases than allowed by the city’s Rent Guidelines Board. They do so in part by exploiting confusion about “preferential” rents and whether newer buildings are rent-stabilized.
Landlords who register properly for rent stabilization must do so annually with the state. Lists of buildings that have done so are published by the Rent Guidelines Board. To determine if a tax-advantaged building was registered, ProPublica cross-checked that data against a listing of properties receiving the tax breaks, known as 421-a and J51, published by the city’s Department of Finance.
Exactly what’s happening to tenants in the buildings is unclear. In some cases, tenants did have rent-stabilized leases because landlords skipped a year but had registered in others. In other cases, buildings had multiple addresses but registered only one. Others had opened only recently.
Despite that, three tenants reached by ProPublica said they had not been given rent-stabilized leases. “I knew that rent stabilization was something that existed, and I looked out for it and it definitely wasn’t present,” said Mark Ellison, a Crown Heights resident who lives in one unregistered building.
In 2013, Ellison said, his landlord proposed raising the rent $800 a month, or 40%. The landlord backed down when Ellison said it was unacceptable.
The implications go beyond rent. Tenants can only properly claim legal rights provided under a rent-stabilized lease—such as eviction protection and the right to timely repairs—if they are not in the dark about their building’s status and if the state has a record of it.
City officials acknowledged there is a problem with registrations but were unable to explain how such a large number of landlords could be out of compliance. They did not respond to a detailed accounting of ProPublica’s findings and methods or questions about why Werner’s complaints hadn’t been addressed.
A spokesperson for Mayor Bill de Blasio’s administration said in emails that officials “became cognizant” of the problem after de Blasio took office last year and “took action promptly to address it.” The matter is now the subject of a “multi-stage, multi-agency” enforcement effort, the spokesperson said.
“While we cannot disclose details on an ongoing investigation, we will not stop until every property is brought into compliance,” the de Blasio spokesperson said.
Announcing their August crackdown, Cuomo and Schneiderman said building owners who don’t register as rent-stabilized face serious legal consequences, including loss of their tax breaks, a rent freeze and paying triple the amount of overcharges any tenant might have received.
Instead of taking those steps, they sent owners of the 194 unregistered buildings a “one-time” opportunity to comply and informed tenants that they should expect their landlords to get into compliance sometime soon.
In the past three years, only two landlords have lost their tax breaks for not following the rent-stabilization rules, city officials have said.
The two tax-incentive programs at issue together provide almost $1.4 billion in property tax savings to New York City real estate owners, with most of the money flowing to multifamily apartment buildings.
Landlords who receive the 421-a and J51 tax benefits are supposed to submit all the units in their properties to rent stabilization for the duration of their tax breaks, which can span up to 34 years and significantly lower property tax burdens, in some instances by more than 90%.
The rent stabilization requirements are intended to help preserve affordability in places like Manhattan’s Stuyvesant Town and Peter Cooper Village, which receive a J51 tax break that subjects all of their 11,000 units to rent stabilization. A 2009 court decision involving Stuyvesant Town confirmed that, as long as such tax breaks are in place, landlords must provide tenants with rent-stabilized leases.
To make sure they are doing so, the state requires landlords to register their rent-stabilized apartments annually and report each unit’s rent. Tenant advocates say registration also creates an important protection for tenants, who are entitled to the rent history and can use it to prove overcharges.
“It’s incredibly important for tenants to be able to know that they’re rent-stabilized and also have the legal record of what the rent increases are,” said Katie Goldstein, executive director of Tenants & Neighbors, a statewide tenants’ rights group.
Landlords who didn’t register used to be ineligible for rent increases. But that changed in 1993, when the New York Legislature eliminated penalties for failing to register. “If they don’t do it, there are no repercussions,” Goldstein said.
Most of the buildings identified by ProPublica were repeat offenders: About 80% that didn’t register units in 2013 also didn’t do so from 2009 to 2012. Some appear to have never registered, according to searches against the state’s master directory of rent-stabilized buildings.
The noncompliant properties were mostly smaller buildings receiving 421-a benefits, including many three-family homes and four-to201310 unit apartment complexes. Among the five boroughs, Brooklyn and Queens had largest numbers of unregistered buildings.
In some corners of city government, the gap in registrations has been an open secret. Werner, the housing department analyst, first took notice in 1995.
Werner, 69 and still working at HPD, helps put together the city’s triennial housing survey. He collects data from the state showing all the apartments that have been registered for rent stabilization. The number never exceeded 800,000, he said, while the housing surveys routinely reported a higher number, now more than 1 million.
“The numbers never matched,” Werner said. He estimated the total shortage—beyond just properties receiving the tax breaks—at 200,000 apartments.
Werner said he raised the issue repeatedly with his superiors, but nothing was ever done about it besides occasional meetings and memos that went nowhere. In 2006, he emailed state regulators to inquire about the tax breaks, but no one there answered him, either.
The city denied ProPublica’s public records request for emails and memos about the registration gap.
Earlier this year, Werner took things into his own hands. Using publicly available data, he spent nights and weekends creating his own website where tenants can type in their address and see their building’s registration status and tax breaks. Then, out of frustration, he contacted ProPublica
read more…
http://www.crainsnewyork.com/article/20151106/REAL_ESTATE/151109917/some-50000-more-new-york-city-apartments-may-be-eligible-for-rent#utm_medium=email&utm_source=cnyb-realestate&utm_campaign=cnyb-realestate-20151106
Buying a home was at the most affordable level in two years in the first quarter of 2015, according to a recent report jointly released by RealtyTrac® and Clear Capital, which shows that homebuying is becoming more affordable, despite the average U.S. home price increasing at more than twice the pace of the average weekly wage nationwide over the past year.
“Although home prices continue to outpace wage growth in the majority of local markets, this analysis somewhat surprisingly shows that affordability is actually improving in most markets thanks to falling interest rates and slowing home price growth, which is allowing wage growth to catch up in some markets,” says Daren Blomquist, vice president at RealtyTrac.
“At the national level, buying an averagepriced home in the first quarter of 2015 was the most affordable it’s been in two years and nearly twice as affordable as it was in the second quarter of 2006—when affordability was its worst in the past 10 years.
At the local level, we’re seeing several bellwether markets where wage growth matched or even outpaced home price growth over the past year.” For the report, RealtyTrac analyzed recently released Q1 2015 average weekly wage data from the Bureau of Labor Statistics and average prices for singlefamily homes and condos derived from publicly recorded sales deed data collected by RealtyTrac in 582 U.S. counties with sufficient home price data.
Average interest rates on a 30year fixed rate mortgage came from the Freddie Mac Primary Mortgage Market Survey. Clear Capital analyzed data from its Home Data Index to determine counties at highest risk and lowest risk based on affordability and potential for price growth.
Average home price appreciation outpaced average wage growth between the first quarter of 2014 and the first quarter of 2015 in 397 out of 582 (68 percent) U.S. counties analyzed for the report. But during the same time period, the average interest rate on a 30year fixed rate mortgage dropped 57 basis points (13 percent), from 4.34 percent in the first quarter of 2014 to 3.77 percent in the first quarter of 2015.
The drop in interest rates—along with wage growth outpacing home price appreciation in 32 percent of counties—meant buying a home in the first quarter of 2015 required a smaller share of the average wage compared to a year ago in 339 of the 582 counties (58 percent).
Counties where wage growth outpaced home price growth Major markets where wage growth outpaced home price growth in the first quarter— counter to the national trend—included Cook County, Ill., in the Chicago metro area; Orange County, Calif., in the Los Angeles metro area; Brooklyn, N.Y.; Fairfax County, Va., in the Washington, D.C., metro area; and Riverside County in Southern Calif., where the average weekly wage in the first quarter was up 10 percent from a year ago, double the 5 percent growth in average home prices during the same time period.
Buying a home 48 percent more affordable than during 2006 housing bubble Assuming a 3 percent down payment, monthly payments on an averagepriced U.S. home —including property taxes, home insurance and private mortgage insurance (PMI)— required 36.5 percent of the average wage nationwide in the first quarter of 2015, down from 37.6 percent in the previous quarter and down from 37.4 percent in the first quarter of 2014 to the most affordable level since the first quarter of 2013, when affordability was 33.5 percent.
Buying a home nationwide was at the most affordable level in the last 10 years in the first quarter of 2012, when monthly house payments required 32 percent of average wages, while buying a home nationwide was at the least affordable level in the last 10 years in the second quarter of 2006, when monthly house payments required 70.7 percent of average wages.
Home price growth outpacing wage growth 3 to 1 during housing recovery Since bottoming out in the first quarter of 2012, the average U.S. home price has risen 24 percent while the average weekly wage nationwide has risen 7 percent during the same time period. The average interest rate on a 30year fixed rate mortgage has dropped 5 percent.
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http://rismedia.com/2015-10-01/
The average rate for a 30-year fixed-rate mortgage remained at 3.87% in the week that ended June 4, matching the prior week’s reading, which was the highest since the end of 2014, according to a Thursday report from federally controlled mortgage-buyer Freddie Mac.
A year ago, the 30-year rate was at 4.14%. A record low of 3.31% for the 30-year mortgage was hit in November 2012.
The average rate for the 15-year fixed-rate mortgage decreased to 3.08% in the latest week from 3.11% in the prior week.
Meanwhile, the rate for a 5-year Treasury-indexed hybrid adjustable-rate mortgage rose to 2.96% from 2.90%. The rate for a 1-year Treasury-indexed ARM jumped up to 2.59% from 2.50%.
read more…
http://www.marketwatch.com/story/30-year-mortgage-rate-remains-highest-since-late-2014-2015-06-04
A study to make home buyers realize that they could qualify for a free down payment without winning the lottery found that 87 percent U.S. of US homes qualify for down payment help.
“Many homebuyers, especially Millennials, haven’t fully investigated their home financing options because they are pessimistic about qualifying for a mortgage. Our Homeownership Program Index highlights the wide range and availability of down payment programs available to today’s homebuyers. In fact, 91 percent of the 2,290 programs in our registry have funds available to lend to eligible buyers. Plus, income limits vary depending on the market and programs extend beyond just first-time homebuyers,” said Rob Chrane, president and CEO of Down Payment Resource. “It’s important for buyers to research down payment programs as part of their loan shopping process.”
“Historically low homeownership rates across nearly every age demographic have led to a public policy push to lower the barrier to homeownership through down payments as low as 3 percent, but the fact is that the barrier to homeownership is often much lower than even that 3 percent for borrowers who take advantage of one of the myriad down payment help programs available across the country,” said Daren Blomquist, vice president at RealtyTrac. “Prospective buyers — or their agents — willing to put in a few minutes of time to find out what programs are available to them will put themselves in a much better position to successfully purchase a home.”
RealtyTrac looked at 2,290 down payment programs from Down Payment Resource’s Homeownership Program Index and found that out of more than 78 million U.S. single family homes and condos in 1,792 counties with sufficient home value data, more than 68 million (87 percent) would qualify for a down payment program available in the county where they are located based on the maximum price requirements for those programs and the estimated value of the properties.
read more..
http://www.realestateeconomywatch.com/2015/02/down-payment-assistance-available-to-most-buyers/
Ben S. Bernanke, former chairman of the U.S. Federal Reserve.
Ben S. Bernanke said the mortgage market is so tight that even he is having a hard time refinancing his own home loan.
The former Federal Reserve chairman, speaking at a conference in Chicago yesterday, told moderator Mark Zandi of Moody’s Analytics Inc. — “just between the two of us” — that “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”
When the audience laughed, Bernanke said, “I’m not making that up.”
“I think it’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” he said.
Bernanke, addressing a conference of the National Investment Center for Seniors Housing and Care in Chicago yesterday, said that the first-time home buyer market is “not what it should be” as the economy in general strengthens.
“The housing area is one area where regulation has not yet got it right,” Bernanke said. “I think the tightness of mortgage credit, lending is still probably excessive.”
read more….
http://www.bloomberg.com/news/2014-10-02/you-know-it-s-a-tough-market-when-ben-bernanke-can-t-refinance.html
Let’s call it cause for optimism. After one of the worst housing collapses in history seven years ago, price declines have pretty much halted across every major metropolitan area in the U.S. Alas, these 10 U.S. Census metro areas with population of more than 250,000 still had small drops (-0.71 percent to -4 percent) in existing single-family home prices for the year ending June 30. Prices come from CoreLogic, a data and analytics company.
In many of these cities, the housing markets never really boomed nor busted. Most of them have ample supply of homes and relatively cheap prices, which should favor buyers. But many also have low wage bases, or declining or aging populations. Others rely on an employment sector that hasn’t fully recovered from the recession. A couple of them are still burdened by a large share of distressed sales.
Benchmark statistics nationally (all are medians): One-year change in home prices: 7.5 percent. Median home price: $185,038. Change in price since 2006 peak: -12.9 percent. Months’ supply of homes: 5.5 months. Unemployment rate: 6.1 percent (seasonally adjusted), 6.3 percent (non-adjusted). City-specific unemployment rates that follow are non-adjusted. Rate of job growth: 1.8 percent. Distressed sales: 15.5 percent.
read more…
http://realestate.msn.com/10-places-where-home-prices-have-fallen-the-most
All photos by Julia Leeb courtesy of teNeues
Ballsy German photojournalist Julia Leeb has just dropped a stunning collection of photographic work exploring one of the most restricted places on earth. The book, North Korea: Anonymous Country, documents Leeb’s travels, peeling back the shroud that covers the country and stealing moments to take testimony for the rest of the world. Because architecture is so often used and commissioned as a symbol of wealth and power, the buildings of North Korea, a state founded in the aftermath of World War II, tell the story of dystopia—one filled with icons of dictators, dizzying towers of communal housing, and a hotel that, despite once being in the running for world’s tallest building, remains nothing but an empty shell.
In many ways, North Korea is a time capsule of former era, both as one of the last remaining Communist strongholds and as an utterly isolated territory.
After Japanese occupation during World War II, the Soviet Union installed a new dictatorial government in 1946, and red nations across the globe helped rebuild the bombed-out capital city of Pyongyang. Monumental architecture presents a united front for the government’s public image; museums dot the city featuring falsified exhibits that proclaim the dominance of the country’s innovation and industry. That elaborate artifice is exactly what makes Leeb’s book so fascinating. Intrigued?
read more….
http://curbed.com/archives/2014/09/18/north-korea-architecture.php
In my post last Friday, I expanded upon Peter Miller’s article titled “Would you bank with Google or Amazon?” where we looked at the stretch of a tech giant entering the mortgage space, which then led me to touch on what we could learn from them around customer experiences.
Less than a week later, Google publishes some information on 6 key trends of homebuyers, backed by some interesting stats. Now, I’m not trying to reinforce the concept of Google-going-mortgage. Rather, I’ve been watching the Think with Google site for a while now, hoping that they would share some insights relative to the housing industry, something everyone knows they’ve had stored in all those rows and rows of servers, along with the rest of the internet…LOL. If you’re not familiar with this site, it’s a digital candy store for analytics and trends junkies, where they’ve cleverly packaged content and their product offerings in an easy-to-consume format (kind of like that consumer experience thing I previously mentioned…).
For those who don’t wish to go through the article (although it’s a fairly quick read with some great charts and stats), here are Google’s six keys to unlocking opportunities with today’s homebuyers:
1. Every year, searches for real estate-related terms peak in July — a sign that people are out house hunting. Be there to meet this seasonal rise in demand. Remind them throughout the long process with remarketing.
2. Millennials are likely to make their long-awaited entrance into market soon. Understand what this audience cares about and appeal to them with relevant messaging.
3. More people (especially millennials) are relying on mobile devices throughout the process — from finding a home to financing it. Help them find what they’re looking for through mobile ads and extensions such as location and click-to-call.
4. Small and mobile homes are becoming an appealing option, even for high-income buyers. Think about ways you can address this new, growing market. Explore Search data to learn what else interests these consumers and use it to shape co-marketing opportunities, cross-promotions, creative executions and media buys.
5. While they’re looking for homes, people are also looking for interior design ideas, often turning to video for inspiration. Post home-tour videos to YouTube to make it easy for them to get an in-depth look at listings.
6. Vintage is all the rage in interior design. Help people get that retro, one-of-a-kind look with the products you offer and the content you create.
read more…
http://www.housingwire.com/blogs/5-closing-call/post/31206-apply-googles-6-key-trends-for-homebuyers
A reverse mortgage is a loan that is available for senior homeowners age 62 and older that allows them to access a portion of their home’s equity. The loan generally does not become due until the last surviving homeowner permanently moves out of the property or passes away. The funds from a reverse mortgage loan can be used however the borrower chooses.
The U.S Department of Housing and Urban Development states that reverse mortgage loans “are a special type of home loan that lets a homeowner convert the equity in his/her home into cash. They can give older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more.” Because the Federal Housing Administration (FHA) insures the loan, the property must meet specific FHA standards. The borrower must also continue paying required property taxes, homeowner’s and flood insurance and maintain the home according to FHA requirements. It is also a requirement of the loan to meet with a HUD approved reverse mortgage loan counselor. During this meeting, the counselor will explain the benefits and risks of the loan, the borrower’s expectations and answer any questions the borrower may have.
Eligibility
• The youngest borrower on title must be at least 62 years old
• The home must be owned free and clear or must be paid off with funds from the reverse mortgage loan
• Generally there are no credit score requirements
• Borrower(s) must meet financial eligibility criteria as established by HUD
Obligations of a Reverse Mortgage Loan
• At least one homeowner must live in the home as their primary residence
• Maintain the home in accordance with FHA requirements
• Continue to pay property taxes and homeowner’s insurance
Repaying the Loan
• In the event of death or in the event that the home ceases to be the primary residence for more than 12 months, the homeowner’s estate or heirs can choose to repay the reverse mortgage loan or sell the home
• If the equity in the home is higher than the balance of the loan, the remaining equity belongs to the estate
• If the sale of the home is not enough to pay off the reverse mortgage loan, the heirs will not be responsible for the difference
• No other assets are affected by a reverse mortgage loan. For example, investments, second homes, cars, and other valuable possessions cannot be taken from the estate to pay off the reverse mortgage loan
Loan Limits
The amount available for a Reverse Mortgage loan depends on:
• Age
• Current interest rates
• The lesser of the home’s appraised value, or sale price up to the maximum lending limit
Distribution of Proceeds from a Reverse Mortgage Loan
• Lump Sum- Receive a lump sum amount at closing (only available for fixed-rate loans)
• Tenure – equal monthly payments as long as the homeowner lives in the home
• Term – equal monthly payments for a fixed number of months
• Line of Credit – draw any amount at any time until the line of credit is exhausted
• Any combination of those listed above
AARP summarizes reverse mortgage loans on their website, “Before entering into a reverse mortgage agreement educate yourself, consult with trusted advisors and understand the pros and cons”. As with any major financial decision, it is highly encouraged that you discuss your current financial situation and goals with a financial advisor. For more information about how much you may receive, use our reverse mortgage calculator at the top of this page.