October 4, 2016
Tuesday’s Regulatory & Legislative Roundup
- For tenants facing eviction, New York may guarantee a lawyer
- New York Democratic Gov. Andrew Cuomo on Tuesday said that the state’s Department of Financial Services has proposed a new regulation that will require banks and mortgage servicers to inspect delinquent properties and secure any so-called zombie properties that they find are abandoned.
October 4, 2016 | Permalink | No Comments
October 3, 2016
Historic Preservation and Affordable Housing
Lior Strahilevitz has posted Historic Preservation and Its Even Less Authentic Alternative to SSRN. The abstract reads,
Historic preservation regulations are costly, contentious, and – as best we can tell – tend to promote residential segregation. Preservation as practiced in the United States also tells historical tales in a way that is inevitably selective, often more attuned to contemporary needs than historical objectivity, and likely to signal current residents and visitors about whose stories aren’t worth commemorating. Yet historical preservation, even to its critics, can further desirable goals. This essay examines traditional historic preservation strategies while also considering two potential alternatives, neither of which has received much attention.
The first alternative to traditional historic preservation – fake history – is employed on a large scale in the fastest growing residential community in the United States. The essay provides a case study of the use of fake history and theming in The Villages, Florida, revealing both the strategy’s potential for generating low-cost cultural resonance and its pitfalls. The possible connections between The Villages’ omnipresent theming and its disturbingly homogenous demographics are explored. The essay suggests that The Villages’ alternative to historic preservation might be replicated elsewhere and speculates about the demographic results of efforts to create more inclusive fake historical narratives.
A second, and novel, alternative to traditional historic preservation would select sites for historic preservation restrictions at random within a given community. Many of the problems associated with the way historic preservation regulations are implemented in the United States stem from the arbitrary and occasionally ugly battles over what to preserve and what to erase. Historic preservation becomes a battlefield for cultural warfare. Compared with this alternative, the case for randomly preserving in each city a few blocks that date from each particular era, while letting market forces dictate what gets preserved or destroyed elsewhere, may be surprisingly strong.
While I do not like either of these novel alternatives, we would certainly benefit from fresh thinking about what we are trying to achieve with historic preservation. Historic preservation remains too much of a niche area of regulation dominated by the few who feel most strongly about it. It has slowly but surely increased its reach in cities like New York. But it has not been accompanied by much serious thinking by broader constituencies about the costs and benefits of each incremental step.
There are obvious trade-offs with landmarking that don’t just affect landowners and developers. By restricting new construction, landmarking tends to restrict the supply of new housing units. This might be okay, but we should certainly think through those costs before just letting preservation districts cover more and more of a city. I am not particularly interested in communities based on fake history, but others are welcome to them. For me though, I am concerned that our most important cities might end up like Paris — stunning historic playgrounds for the wealthy, encircled by high-rise ghettos for the poor.
October 3, 2016 | Permalink | No Comments
Monday’s Adjudication Roundup
- A federal judge on Thursday granted a motion for summary judgment to Fannie Mae and Freddie Mac and the Federal Housing Finance Agency in a suit seeking declaratory judgment that the city of Chicago cannot impose a transfer tax on the sale of homes
- A group of banks and financial services firms, including Deutsche Bank National Trust Co., on Thursday challenged Lehman Brothers’ attempt in New York bankruptcy court to nix billions of dollars in claims arising from the sale of residential mortgage-backed securities before Lehman’s 2008 collapse.
- Two U.S. Bank NA trusts and General Electric’s former loan originator have settled a 4-year-old suit accusing the ex-GE unit of not upholding guarantees it made regarding subprime residential mortgages it sold to UBS AG
October 3, 2016 | Permalink | No Comments
September 30, 2016
Airbnb’s Tourist Tenements
The New York State Independent Conference issued a report, Tourist Tenements in the Making. The report concludes,
New York City has long been at the forefront of ensuring that its housing stock is safe for residents. We have instituted laws such as the Multiple Dwelling Law, the Housing Maintenance Code, and the Fire Code to ensure that buildings are constructed to the right standards for their intended uses, and have passed laws to prohibit activities that endanger people’s lives. One such action is turning residential properties into illegal hotels hosting over a dozen guests.
Residential properties are not meant to host dozens of transient guests. The IDC’s investigation found over 100 ads featuring residential spaces for groups of more than a dozen people, some claiming to house over 30 people. This kind of behavior not only creates an inconvenience for neighbors, but creates real dangers to both residents of this city and those guests that may choose housing not knowing that it is an illegal posting, since they saw the ad on Airbnb. We should not wait for a tragedy to strike before taking actions to curb illegal rentals that create dangerous conditions.
It is important that the State government take steps to protect our residents and tourists visiting New York from this kind of irresponsible behavior. As such, the Executive should act and sign into law the recent bill passed by the Legislature that will impose fines on individuals advertising illegal short term rentals and the Legislature should examine additional steps necessary to make sure that illegal short term rentals are handled not only in multi-family buildings but in private homes as well and that hosting websites be made responsible for the content they profit from. (11)
While the sharing economy is here to stay, it is hard to imagine that it will not face some form of increased regulation after reports like these come out. One Airbnb rental highlighted in the report advertises space for 16 people in a two-family house and another claims that it can house 32 people. The pictures in the report tell a thousand words each — bunk beds, beds in the kitchen, air mattresses lined up one next to the other.
This report shows some extreme examples of what can happen when the free market for residential space goes unfettered in a high-cost city. But, as the report notes, the government has a legitimate interest in protecting the health and safety of its residents and visitors. New York first regulated tenements over a hundred years ago. No doubt, they will soon act on this 21st century version of them, hopefully before a Triangle Factory Fire-type event strikes.
September 30, 2016 | Permalink | No Comments
Friday’s Government Report Roundup
- The Federal Open Market Committee were unable to raise the interests rates in September 2016. This is the lowest rates to surface in ten weeks.
- The Federal Housing Administration is proposing a new regulation for the approval of process of condominiums. Part of this proposal will be to shift the two year renewal certification requirement to a three year renewal requirement.
- The Office of Policy Development and Research completed a report regarding the affect of homeowners receiving prepurchase counseling. The report determined that individuals that receive counseling are 1/3 less likely to become delinquent within the first two years of their home ownership.
September 30, 2016 | Permalink | No Comments
September 29, 2016
Banned from Their Land
Realtor.com quoted me in Family Told They Can’t Live on Their Own Land (and You Won’t Believe Why). It opens,
One of the best perks of owning property—in fact, the main perk—is that you get to live on it. Or so we thought until we learned of a homeowner in Colorado who was told flat-out that her family can’t live on their own land. What’s going on?
Here’s the backstory: In June, an electrical fire left the Lafayette house of 70-year-old Marilyn Minor uninhabitable. Minor began repairs to her home so it would pass city inspections. But lacking the cash for a hotel or other accommodations, she and her home’s other residents—her son Wayne, daughter Charity, and Charity’s two kids—had nowhere to live. So they moved into their van, parked on their own land. It sounds reasonable enough, right?
Wrong.
Their living situation didn’t sit well with some neighbors, who alerted Lafayette city officials, who came back to Minor and told her that vacating her home wasn’t enough. Nope, until her place passed all inspections, the Minor family weren’t allowed to live anywhere on her property at all.
Why? That’s a question Minor is dying to get answered.
“Why can’t I live on the property that I pay taxes for and where I pay the mortgage?” she asked during an interview with Denver7. “I’ll go down fighting. This is my home.”
Although Minor anticipates her house will be fixed up in a few weeks, she’ll be dragged back into housing court next week and could face substantial fines if she remains on her property. And while some of her neighbors clearly disapprove, others are sympathetic.
“They shouldn’t have to be anywhere else,” one neighbor told Denver7. “This is their house.”
True, it’s their house, their land, their home. But according to experts we spoke to, that doesn’t mean they can live there however they please.
“Until the modern era, the common law was based on the understanding that, in many ways, every man’s home was his castle,” says David Reiss, a professor of law at Brooklyn Law School and academic program director at the Center for Urban Business Entrepreneurship.
“But for well over 100 years now, courts have acknowledged that governments have many legitimate reasons to restrict how property owners use their property. For instance, local governments regulate fire safety and sanitation issues, among other things, for the benefit of property owners themselves as well as their neighbors and the broader community.”
September 29, 2016 | Permalink | No Comments
Thursday’s Advocacy & Think Tank Roundup
- NYU’s Furman Center studied the trends and effects of gentrification in the New York City area. They found there was a significant shift in the demographics in gentrified neighborhoods since the 1990s.
- Representatives across the U.S. are seeking to decrease the administrative burdens on public housing regulations; however, doing so may cause detriment rather than help those in need.
September 29, 2016 | Permalink | No Comments
