January 4, 2017
- In a paper titled, Theoretical Assessment of Effects on Taxation and Tax System on Property Market, discusses designing and implementing a system of taxation must determine reducing losses to producers and buyers. The intensity of the effects of the tax system on goods market is determined by elasticity of demand and offer. Assessment of the effects generated by a system of taxes on goods market balance is necessary for the partial equilibrium.
- This paper titled, Cultural Superstitutions and Residential Real Estate Prices: Transaction-Level Evidence from the US Housing Market, analyzes the relationship between the presence of 8s and 4s in addresses and single family home transaction prices in Seattle, Washington over the period 1990 to 2015.
January 3, 2017
Bloomberg quoted me in Wall Street, America’s New Landlord, Kicks Tenants to the Curb. It opens,
On a chilly December afternoon in Atlanta, a judge told Reiton Allen that he had seven days to leave his house or the marshals would kick his belongings to the curb. In the packed courtroom, the truck driver, his beard flecked with gray, stood up, cast his eyes downward and clutched his black baseball cap.
The 44-year-old father of two had rented a single-family house from a company called HavenBrook Homes, which is controlled by one of the world’s biggest money managers, Pacific Investment Management Co. Here in Fulton County, Georgia, such large institutional investors are up to twice as likely to file eviction notices as smaller owners, according to a new Atlanta Federal Reserve study.
“I’ve never been displaced like this,” said Allen, who said he fell behind because of unexpected childcare expenses as his rent rose above $900 a month. “I need to go home and regroup.”
Hedge funds, large investment firms and private equity companies helped the U.S. housing market recover after the crash in 2008 by turning empty foreclosures from Atlanta to Las Vegas into occupied rentals.
Now among America’s biggest landlords, some of these companies are leaving tenants like Allen in the cold. In a business long dominated by mom-and-pop landlords, large-scale investors are shifting collections conversations from front stoops to call centers and courtrooms as they try to maximize profits.
“My hope was that these private equity firms would provide a new kind of rental housing for people who couldn’t — or didn’t want to — buy during the housing recovery,” said Elora Raymond, the report’s lead author. “Instead, it seems like they’re contributing to housing instability in Atlanta, and possibly other places.”
American Homes 4 Rent, one of the nation’s largest operators, and HavenBrook filed eviction notices at a quarter of its houses, compared with an average 15 percent for all single-family home landlords, according to Ben Miller, a Georgia State University professor and co-author of the report. HavenBrook — owned by Allianz SE’s Newport Beach, California-based Pimco — and American Homes 4 Rent, based in Agoura Hills, California, declined to comment.
Colony Starwood Homes initiated proceedings on a third of its properties, the most of any large real estate firm. Tom Barrack, chairman of U.S. President-elect Donald Trump’s inauguration committee, and the company he founded, Colony Capital, are the largest shareholders of Colony Starwood, which declined to comment.
Diane Tomb, executive director of the National Rental Home Council, which represents institutional landlords, said her members offer flexible payment plans to residents who fall behind. The cost of eviction makes it “the last option,” Tomb said. The Fed examined notices, rather than completed evictions, which are rarer, she said.
“We’re in the business to house families — and no one wants to see people displaced,” Tomb said.
According to a report last year from the Harvard Joint Center for Housing Studies, a record 21.3 million renters spent more than a third of their income on housing costs in 2014, while 11.4 million spent more than half. With credit tightening, the homeownership rate has fallen close to a 51-year low.
In January 2012, then-Federal Reserve Chairman Ben Bernanke encouraged investors to use their cash to stabilize the housing market and rehabilitate the vacant single-family houses that damage neighborhoods and property values.
Now, the Atlanta Fed’s own research suggests that the eviction practices of big landlords may also be destabilizing. An eviction notice can ruin a family’s credit and make it more difficult to rent elsewhere or qualify for public assistance.
In Atlanta, evictions are much easier on landlords. They are cheap: about $85 in court fees and another $20 to have the tenant ejected, according to Michael Lucas, a co-author of the report and deputy director of the Atlanta Volunteer Lawyers Foundation. With few of the tenant protections of places like New York, a family can find itself homeless in less than a month.
In interviews and court filings, renters and housing advocates said that some investment firms are impersonal and unresponsive, slow to make necessary repairs and quick to evict tenants who withhold rent because of complaints about maintenance. The researchers said some landlords use an eviction notice as a “routine rent-collection strategy.”
Aaron Kuney, HavenBrook’s former executive director of acquisitions, said the companies would rather keep their existing tenants as long as possible to avoid turnover costs.
But “they want to get them out quickly if they can’t pay,” said Kuney, now chief executive officer of Piedmont Asset Management, a private equity landlord in Atlanta. “Finding people these days to rent your homes is not a problem.”
The Atlanta Fed research, based on 2015 court records, marks an early look at Wall Street’s role in evictions since investment firms snapped up hundreds of thousands of homes in hard-hit markets across the U.S.
Researchers found that evictions for all kinds of landlords are concentrated in poor, mostly black neighborhoods southwest of the city. But the study found that the big investors evicted at higher rates even after accounting for the demographics of the community where homes were situated.
Tomb, of the National Rental Home Council, said institutional investors at times buy large blocks of homes from other landlords and inherit tenants who can’t afford to pay rent. They also buy foreclosed homes whose occupants may refuse to sign leases or leave.
Those cases make the eviction rates appear higher than for smaller landlords, according to Tomb, whose group represents Colony Starwood, American Homes 4 Rent and Invitation Homes. The largest firms send notices at rates similar to apartment buildings, which house the majority of Atlanta renters.
Not all investment firms file evictions at higher rates. Invitation Homes, a unit of private equity giant Blackstone Group LP that is planning an initial public offering this year, sent notices on 14 percent of homes, about the same as smaller landlords, records show. In Fulton County, Invitation Homes works with residents to resolve 85 percent of cases, and less than 4 percent result in forced departures, according to spokeswoman Claire Parker.
The Fed research doesn’t say why many institutional investors evict at higher rates. It could be because their size enables them to negotiate less expensive legal rates and replace renters more quickly than mom-and-pop operators.
“Lots of small landlords, when they have good tenants who don’t cause trouble, they’ll work with someone who has lost a job or can’t pay for the short term,” said David Reiss, a Brooklyn Law School professor who specializes in residential real estate.
- Voucher holders’ options for housing may soon broaden if Maryland lawmakers reintroduce and pass the Home Act in the upcoming 2017 legislative session. The state legislation is intended to stop discrimination in real estate based on source of income.
- The D.C. Council gave final approval Tuesday to a plan that will provide private-sector workers some of the nation’s most generous family and medical leave benefits, fighting off a last-minute revolt by the city’s business establishment and Mayor Muriel E. Bowser.
- As part of the Obama Administration’s effort to prevent and end homelessness, the U.S. Department of Housing and Urban Development today awarded a record $1.95 billion in grants to nearly 7,600 homeless assistance programs across throughout the nation, including Puerto Rico, Guam, and the U.S. Virgin Islands.
January 2, 2017
- The Justice Department on Thursday sued Barclays PLC, alleging that the British bank and two of its former employees made false statements about the quality of mortgages packaged into around $31 billion worth of residential mortgage-backed securities prior to the financial crisis.
- Bank of America Corp., Countrywide Financial Corp. and appraisal firm LandSafe Inc. urged a California federal court Wednesday to toss a proposed class action accusing them of conducting phony appraisals in an attempt to secure more loans.
December 23, 2016
- Homeless U.S. veterans in rural areas are receiving help from the state of Virginia and the federal government. This is in an effort to ensure veterans receive stable housing as well as maintain housing on their own.
- The U.S. Department of Housing and Urban Development recently awarded approximately 2 billion dollars to help mitigate some of the housing issues striking many homeless people throughout the country.
- The Department of Justice (DOJ) is continuing to seek out banks that did not exhibit appropriate conduct during the mortgage crisis years ago. DOJ is suing Barclays for allegedly misleading investors in regards to mortgage-backed securities.
December 22, 2016
- The Federal Reserve Board recently increased the interests rates for short term mortgage loans. Many are now worry about how the increase will affect home renovation loans. A study by Hermit Baker hypothesizes that the number of home renovation loans will likely increase.
- The economy has a made a shift towards the better. Unemployment rates are the lowest in decades and home prices have increased significantly. However, single family home construction is continuing to decline which is impeding total economic recovery.
- Los Angeles is experiencing higher rents and higher homeless rates. More than half of Los Angeles’ renters are “cost burdened.” In 2014, UCLA reported that Los Angeles had the least affordable rent in the nation. Meanwhile politicians have stood by with uttering much on the subject.