February 10, 2016
Making the Switch to Dirt Law
Lawyer & Statesman quoted me in Real Estate Lawyers in Demand about how lawyers can make the transition to a dirt law practice. It reads, in part,
Real estate is one of the most fickle industries around — hot when the economy is growing and cold when it is not. The good news is that real estate is growing again and that means more jobs for attorneys.
Robert Half Legal, a legal staffing agency, reports that the real estate lawyer is the third most in-demand legal position in the South Atlantic region. Real estate is the second-fastest-growing legal industry in the South Atlantic region and the fourth fastest in the Mountain and Pacific regions.
At Brooklyn Law School, real estate law has become the most popular specialization. Graduates are finding more jobs in the specialization’s niche areas such as cooperative and condominium representation, said Professor David Reiss, who also serves as the academic program director of the Center for Urban Business Entrepreneurship.
If you have the time and money, Reiss thinks additional training in real estate can certainly help attorneys specialize their experience in the law. Course and certificates seem to be the best option in regards to both time and money.
“Taking a few relevant courses might make sense for most people instead of devoting the time and money that an LL.M. in real estate would entail,” he said. “Certain kinds of certificates can also help you stand out from other candidates, like the Leadership in Energy and Environmental Design (LEED) certificate. It does not involve nearly as much time or money as an LL.M. degree would, but it does signal a level of knowledge and commitment to a particular practice area.”
Don’t worry about getting your real estate license (unless you already have one). Spreading yourself too thin will be more harmful than productive, Reiss said. Attorneys also need to consider the requirements and restrictions of their individual jurisdiction.
“In some jurisdictions, such as New York, members of the bar are exempt from the various requirements necessary to become a licensed real estate broker,” he said. “But in my experience, lawyers are better off doing one thing well — being good lawyers — rather than being a jack of all trades.”
As with a lot of specialized areas of the law, real estate law has plenty of niche areas in which lawyers can further delve into. This can make you more attractive to clients and employers.
“Specializing in areas of the law relating to real estate can make a lot of sense — co-ops, condos and HOAs; construction law; land use; finance; affordable housing; and foreign investment programs, to name a few,” Reiss said.
* * *
While real estate can be up and down, Reiss said real estate law could be a good field even during slower economic times.
“No matter what the economy as a whole is doing, clients are still buying and selling properties, financing and refinancing them, and entering into property leases,” he said.
To prepare for careers in real estate law, Brooklyn Law School encourages job applicants to have very focused resumes, which increases their marketability.
“We find that students with focused resumes can make a compelling case to a range of real estate employers, even if their overall GPA is not high,” Reiss said.
Participating in bar association committees is also highly recommended for networking and learning purposes. Reiss says it is important to notify your network that you are transitioning into a new specialization.
“A good word about your work ethic and ability to learn can help compensate for a lack of direct experience,” Reiss said.
All that said, Reiss recommends attorneys be sure of their specialization interests before getting too far into the field.
“You should keep in mind that once you specialize, many people will pigeonhole you in that area,” he said. “So you want to make sure that you like the practice area and that there is a sufficient flow of work to keep you busy.”
February 10, 2016 | Permalink | No Comments
Wednesday’s Academic Roundup
- Multiple Job Holding, Local Labor Markets, and the Business Cycle, Barry T. Hirsch, Muhammad M. Husain & John V. Winters, Andrew Young School of Policy Studies Research Paper Series No. 16-01.
- A Renter or Homeowner Nation?, Arthur Acolin, Laurie S. Goodman & Susan M. Wachter, Cityscape, Forthcoming.
- Borrowing Constrains and Homeownership, Arthur Acolin, Jesse Bricker, Paul S. Calem & Susan M. Wachter, American Economic Review: Papers and Proceedings, Forthcoming.
- Maximizing Capital Gains in Real Estate Transactions, Bradley T. Borden & James M. Lowy, N.Y.U. 73d Ins. Fed. Tax’n (2015); Brooklyn Law School, Legal Studies Paper No. 436.
- The Effect of Relisting on House Selling Price, Karen M. Gibler, Velma Zahirovic-Herbert & Patrick S. Smith, Journal of Real Estate and Economics, Vol. 52, No. 2, 2016.
- Certifications Matters: Is Green Talk Cheap Talk?, Shaun A. Bond & Avis Devine, Journal of Real Estate Finance and Economics, Vol. 52, No. 2, 2016.
- Green Buildings: Similar to Other Premium Buildings?, Spenser J. Robinson & Andrew Sanderford, Journal of Real Estate Finance and Economics, Vol. 52, No. 2, 2016.
- Infrastructural Entitlements and the Civil Right to Technology, Sonia Katyal, UC Berkeley Public Law Research Paper No. 2716368.
- Zoning and Market Externalities, Amnon Lehavi.
February 10, 2016 | Permalink | No Comments
February 9, 2016
Bold New Housing Plan?
Wanderer Above the Sea of Fog by Caspar David Friedrich
Enterprise Community Partners has released An Investment in Opportunity: A Bold New Vision for Housing Policy in the U.S. I thought it would be useful to highlight its specific proposals to make rental housing affordable for low-income households:
I. ENSURE BROAD ACCESS TO HIGH-OPPORTUNITY NEIGHBORHOODS
- Improve the Section 8 program and expand regional mobility programs to help more families with rental assistance vouchers access high-opportunity neighborhoods
- Establish state and local laws banning “source of income” discrimination by landlords and property owners
- Balance the allocation of Low-Income Housing Tax Credits and other federal subsidies to both high-opportunity neighborhoods and low-income communities, while creating more opportunities for mixed-income developments
- Establish inclusionary zoning rules at the state and local levels
- Establish state and local regulations that encourage innovation and promote the cost-effective development of multifamily housing
- Incorporate affordable housing considerations into local and regional transportation planning through equitable transit-oriented development
II. PROMOTE COMPREHENSIVE PUBLIC AND PRIVATE INVESTMENTS IN LOW-INCOME NEIGHBORHOODS
- Make the public and private investments necessary to preserve existing affordable housing while creating mixed-income communities
- Build capacity of public, private and philanthropic organizations at the local level to pursue cross-sector solutions to the problems facing low-income communities
- Create state and local land banks and other entities to return vacant and abandoned properties to productive use
- Make permanent and significantly expand the New Markets Tax Credit
- Create a new federal tax credit for private investments in community development financial institutions and other community development entities
- Establish federal regulations that encourage “impact investments” in low-income communities by individual and institutional investors
III. RECALIBRATE OUR PRIORITIES IN HOUSING POLICY TO TARGET SCARCE SUBSIDY DOLLARS WHERE THEY’RE NEEDED MOST
- Reform the Mortgage Interest Deduction and other federal homeownership subsidies to ensure that scarce resources are targeted to the families who are most in need of assistance
- Gradually double annual allocations of Low-Income Housing Tax Credits and provide additional gap financing to support the expansion
- Significantly expand funding to Section 8 vouchers to ensure that the most vulnerable households in the U.S. have access to some form of rental assistance
- Expand funding to the Housing Trust Fund and the Capital Magnet Fund as part of any effort to reform America’s mortgage finance system
- Break down funding silos to encourage public investments in healthy and affordable housing for recipients of Medicaid
- Create permanent funding sources at the state and local level to support affordable housing
IV. IMPROVE THE OVERALL FINANCIAL STABILITY OF LOW-INCOME HOUSEHOLDS
- Establish minimum wages at the federal, state and local levels that reflect the reasonable cost of living for each community
- Expand the Earned Income Tax Credit, the Child Tax Credit and other essential income supports to America’s low-wage workers
- Create a new federal fund to help test and scale innovative financial products that encourage low-income households to save, with a primary focus on unrestricted emergency savings
- Help more low-income families build strong credit histories
- Establish strong protections against predatory financial products
Not sure if I could really categorize this as “bold.” “Unrealistic” seems more apt in today’s political environment. Indeed, it reads like a wishlist drafted by a committee.
That being said, I think that Enterprise’s vision is helpful in a variety of ways. First, it offers a pretty comprehensive list of policies and programs that that can be used to make housing more affordable. Second, it recognizes income inequality is a big part of the problem for low-income households. Third, it acknowledges that current federal housing policy favors wealthy households (cf. mortgage interest deduction) over the poor. Finally, it acknowledges that restrictive local land use policies inflate the cost of housing.
I wonder if a bolder plan would be just to fully fund Section 8 so that all low-income households were able to afford a safe and well-maintained home. Probably just as unrealistic as Enterprise’s vision, but it has the virtue of being simple to understand and execute.
February 9, 2016 | Permalink | No Comments
Tuesday’s Regulatory & Legislative Roundup
- The Housing Opportunity Through Modernization Act of 2015 (R. 3700) received unanimous bipartisan approval in the House of Representatives. It aims to reform existing rental assistance programs.
- HUD would like public comment on a new rule it is considering that would ensure that families in public housing, whose incomes increase over time, actually need public housing.
February 9, 2016 | Permalink | No Comments
February 8, 2016
GSE Reform, by Stealth?
The Urban Institute’s Housing Finance Policy Center has issued its January 2016 Housing Finance at a Glance Chartbook. It opens by noting,
February 8, 2016 | Permalink | No Comments
Monday’s Adjudication Roundup
- Bank of America settles for $6.2 million in notice class actions suit, in which class members accuse the bank of systematically failing to give timely mortgage satisfaction notices.
- Morgan Stanley will pay $63 million to the FDIC in state and federal claims that it misrepresented residential mortgage-backed securities.
- Deutsche Bank National Trust Co. will not escape the entire $3.1 billion Royal Park Investments class action suit. A NY federal judge dismissed only the derivative claims.
- Wells Fargo settles for $1.2 billion in suit for defrauding the FHA.
- HSBC settled, in multiple settlements, for $601 million with state and federal regulators and enforcement agencies in suits related to mortgage origination, servicing and foreclosure activities.
February 8, 2016 | Permalink | No Comments
February 5, 2016
Movin’ on up with TJ’s and Whole Foods?
TheStreet.com quoted me in Houses Near Trader Joe’s or Whole Foods Reap Better Property Value Returns. It opens,
The internal debate for people who are shopping for a home is never an easy one, as the location and potential for the property value to rise might outrank the appearance of the brick and mortar edifice. But new research from Zillow has reiterated beliefs that resale value should remain the higher priority.
Even first-time home buyers are aware of the importance and value of determining the resale value of a condo or house.
After examining 17 years of housing data from 1997 to 2014, Zillow, the Seattle-based real estate website, determined that homeowners realized greater gains when they were in close proximity to Trader Joe’s and Whole Foods, the national grocery store chains. The analysis included examining the values of condos, co-ops and houses within a mile of 451 Trader Joe and 375 Whole Foods locations, totaling nearly 3 million homes. The median value of these homes was compared to the median values of all homes during the same time period.
“These grocery stores are doing a great job of identifying places ready for quick home value appreciation,” said Svenja Gudell, chief economist of Zillow. “A Whole Foods or Trader Joe’s opening is a signal for home shoppers or homeowners that this is likely to be an up-and-coming location.”
One emerging trend is the desire of homebuyers to live in neighborhoods where walking to local stores and restaurants remain a feasible option.
“As more people are priced out of city centers and head to the suburbs, homebuyers still want amenity-rich neighborhoods and a more urban feel,” she said. “These stores are definitely among those amenities that are attractive to buyers.”
Other Amenities Sought
These two grocery stores resonate highly with consumers, and their preference has increased to the point where they have asked specifically if either one is within walking distance at showings of homes, said Samantha DeBianchi, CEO of DeBianchi Real Estate, a Fort Lauderdale, Fla. real estate firm.
“The old adage ‘location, location, location’ is really true,” she said.
The research conducted by Zillow revealed that through 2014, the homes located a mile of either Whole Foods or Trader Joe’s were valued at more than twice as much as the median home throughout the U.S.
Since these two grocery stores are always constructed in neighborhoods where the gross income is higher than the average salary, whether this phenomenon is simply a self-fulling prophecy is anybody’s guess.
Zillow contends that the stores provide the inertia to push up home prices, even in neighborhoods where the prices were falling behind those in the city itself. They also examined the effect of the construction of the stores on the property value three years before and after the opening of 40 Trader Joe’s locations and 40 Whole Foods stores. After a store opens, the prices of homes start to exceed those in the city overall.
“I am still skeptical of the claim when it comes to those two stores, but I would say that when you buy near a major amenity when it is under construction, you often see a bump when it is complete,” said David Reiss, a law professor at Brooklyn Law School.
February 5, 2016 | Permalink | No Comments
