June 2, 2015
Tuesday’s Regulatory & Legislative Update
- Mayor Bill De Blasio’s new 10 year plan for New York City Housing Authority (NYCHA), entitled NexGeneration NYCHA, focuses on four goals to transform NYCHA: short-term financial stability and diversifying long-term funding; increased operational efficiency; rebuilding, expanding, and preserving the city’s public and affordable housing stock; and engaging residents in improved social services.
- Representatives in the House ( Turner – R Ohio & Fattah – D Penn.) join forces in a bi-partisan effort to urge Congress to reauthorize New Market Tax Credits (NMTC), which expired in 2014 (their letter here). The NMTC was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities. The NMTC Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). Legislation to permanently extend the NMTC is pending in both the House (H.R. 855) and Senate (S. 591).
June 2, 2015 | Permalink | No Comments
Saving on Utility Bills (en Español y Ingles)
Univision quoted me in Estrategias para Ahorrar Dinero Cada Mes (Strategies to Save Money Each Month). It reads, in part (in English),
Save water and energy. You can monitor your heat/air conditioning services in simple ways, for example, by acquiring a programmable thermostat, which will allow you to maintain your home at a comfortable temperature while you are home and turn in it “energy efficient” when you go out, suggests David Reiss, Research Director, Center for Urban Business Entrepreneurship (NY).
Has your water bill gone up in the last few years? Check your toilet and make sure it’s not running or that your sink is not leaking.
Repairing your bathroom fixtures and keeping them in good working order will help you save money, added the expert.
June 2, 2015 | Permalink | No Comments
June 1, 2015
Reiss on Lawsky Legacy
Law360 quoted me in Lawsky’s Aggressive Tactics Provided Model For Regulators (behind a paywall). It reads, in part,
New York Superintendent of Financial Services Benjamin Lawsky’s frequent, aggressive and often creative enforcement actions generated billions of dollars for the state and put his agency at the forefront in financial services regulation, and observers expect a similar approach from Lawsky’s successor when he leaves his post next month.
Confirmed to lead the New York Department of Financial Services in May 2011, few expected the new agency, which combined the state’s banking and insurance regulators, to make much of a mark. But after collecting $3.3 billion in penalties and forcing several traders and top executives out of their positions, Lawsky’s agency has proven to be a powerful enforcer.
“His biggest legacy is simply that he stood up a brand new regulator in one of the global financial centers and made it matter almost immediately,” said Matthew L. Schwartz, a partner at Boies Schiller & Flexner LLP and a former federal prosecutor. Lawsky, who announced his departure from the agency on May 20, established a name for himself and for the Department of Financial Services when he jumped ahead of federal banking regulators and prosecutors in announcing a $340 million settlement with British bank Standard Chartered PLC over its alleged violation of U.S. sanctions against Iran and other countries in August 2012.
That a newly formed state regulatory agency would move ahead with a stiff penalty and threaten to wield the most powerful of weapons — the pulling of Standard Chartered’s license to operate in New York state — reportedly rankled his federal counterparts
* * *
“He made clear that consumer protection is integral to the mission of the agency,” Brooklyn Law School professor David Reiss said.
Despite Lawsky’s frequent reminders that he works for New York Gov. Andrew Cuomo — for whom he has also served as chief of staff — and the superintendent’s constant praise for his staff, there is fear among some reformers that the DFS won’t be the same without Lawsky at the helm.
“Lawsky proves that the character of individual regulators can make a crucial difference more than the letter of the law itself,” said Bartlett Naylor of Public Citizen.
“Ideally, he’ll inspire his successor and other regulators that honor awaits the vigilant and opprobrium will fall upon the indolent. More practically, however, the problems of regulatory capture by an enormously influential industry reliant on government favor can prove overwhelming,” Naylor added.
Others are more confident that the agency Lawsky set up will continue its work even after his move to the private sector.
In part, that’s because the penalties the DFS has wracked up have been a boon to New York’s budget.
Cuomo, the state’s former attorney general, has an interest in many of the issues Lawsky acted on, as well.
“I have every reason to expect that Cuomo would want to have a very vigorous enforcer to replace Lawsky,” Reiss said.
June 1, 2015 | Permalink | No Comments
Monday’s Adjudication Roundup
- NY Federal Court ended the suit against US Bank and Bank of America brought by Blackrock and NCUA for failure to properly oversee residential mortgage-backed security trusts finding that most of the trusts fell under state law.
- Deutsche Bank, Morgan Stanley and UBS Securities have settled with Federal Home Loan Bank of Boston for misleading it to purchase $5.9 billion in bad mortgage-backed securities.
- Associated Bank agrees to $200 million, record-breaking settlement with US Department of Housing and Urban Development in discriminatory lending suit.
June 1, 2015 | Permalink | No Comments
May 29, 2015
Friday’s Government Reports
- According to the Commerce Department sales of new single-family houses in April 2015 were at a seasonally adjusted annual rate of 517,000 which is a 26% increase over last April and a 6.8% increase since March.
- The Federal Housing Finance Authority’s (FHFA) House Price Index for April 2015 shows a 1.3% increase nationwide.The top five states in annual appreciation: 1) Colorado – 11.2 percent 2) Nevada – 10.1 percent 3) Florida – 8.7 percent 4) Washington – 7.6 percent 5) California – 7.5 percent. Increases were greatest in Oakland-Hayward-Berkeley, CA (MSAD), where prices increased by 13.4 percent. Prices were weakest in the Greensboro-High Point, NC, where they fell 2.3 percent.
- The FHFA’s monthly interest rate survey finds that April’s average mortgage interest rate of 3.78% represents a decrease of 2 basis points since March.
- The Federal Reserve Bank of New York recently released its Survey of Consumer Expectations (SCE) – Housing Survey 2015 in which it reports a finding that, “households remain broadly optimistic about housing market” and that “most renters want to own.”
May 29, 2015 | Permalink | No Comments
Facts and Myths About Rent Regulation
Few topics are more fraught in NYC than rent regulation and stances about it are typically set by where people are financially and ideologically. It is always useful when someone tries to add some good old-fashioned facts to the debate in order to help craft good policies. That is particularly true now, given that NYC’s rent laws are supposed to expire on June 15th.
The Citizens Budget Commission has issued a report, 5 Myths About Rent Regulation in New York City. The CBC is hoping that that this report will inform the New York State legislature’s debates over the renewal of New York City’s rent laws (for those who don’t follow this carefully, NYS has jurisdiction over NYC’s rent regulation). Unfortunately, the report is ideologically skewed, which limits its usefulness for those trying to get their hands around this topic.
Here are the CBC’s five “Myths” and “Facts:”
Myth 1: A majority of tenant households in New York City are rent burdened.
Fact 1: 38 percent of tenant households in New York City are rent burdened.
Myth 2: Market-rate units in New York City are not affordable to most tenants.
Fact 2: In market-rate units, 54 percent of tenants have affordable rent.
Myth 3: A rent-regulated housing unit is an affordable unit.
Fact 3: Among tenants in rent-regulated units, 44 percent are rent-burdened.
Myth 4: Middle-income households cannot find affordable housing in New York City.
Fact 4: Outside of Manhattan, 96 percent of middle-income tenant households are not rent burdened.
Myth 5: The number of rent-regulated units is rapidly declining.
Fact 5: The number of rent-regulations is stabilizing.
The CBC claims that public officials and housing advocates are using “problematic” figures and characterizations. That is most certainly true in many cases, and par for the course for advocates. But the CBC does much the same, which should not be par for the course for a nonpartisan civic organization.
The second “Fact” is particularly laughable because CBC is doing exactly what it accuses advocates of doing — some form of rhetorical bait and switch. The second “Myth” is about tenants overall, while the second “Fact” is just about tenants who are currently in market-rate apartments. This is an apples to oranges comparison. Once you see the bait and switch, you see that CBC’s figures actually support the truth of this supposed second “Myth.” There are more problems contained in this document, but I leave it to you to find them for yourself.
I have no problem with CBC trying to make the debate over rent regulation more fact-based. But CBC should follow the wise advice of Polonius: “This above all: to thine own self be true.”
Picture: "Polonius" by https://www.oregonlink.com/elsinore/poveyglass/polonius.html.
May 29, 2015 | Permalink | No Comments
May 28, 2015
Dos And Don’ts of Mixed-Use Development
I was interviewed on Georgia Public Radio’s On Second Thought radio show about The Dos And Don’ts of Mixed-Use Developments. The segment was about John’s Creek,
an affluent suburb in northeast Atlanta. It’s fairly small — only about 80,000 people live there — but it has big dreams.
The city wants to transform some of its 728-acre office park into a town center with homes, shops and offices. John’s Creek mayor Michael Bodker calls the redevelopment project “The District,” referring to an area that would become the city’s downtown sector. Bodker believes this project will broaden the city’s tax base.
“John’s Creek does not have a healthy and sustainable tax digest,” Bodker said in his most recent State of the City address. “Homeowners are disproportionately supporting the load by covering 81 percent of the tax digest versus 19 percent for commercial.” Without doing something to change the current model, he says, there will be less money for public services like road repairs.
The segment was quite short, so it did not get to what I thought was the key issue — the appropriate role of mass transit in the design of urban centers. It appears that the mayor’s plan does not contemplate linking this new urban center to Atlanta-area mass transit. That seems like the kiss of death for what is supposed to be a walkable town center.
To be an attractive walkable environment, you need a critical mass of walkers. Mass transit brings walkers. Some walk by preference and some by necessity: young people without cars; senior citizens who have grown less comfortable driving; and people who might want to have a few drinks and enjoy the nightlife planned for The District. Moreover, many retail and service jobs pay relatively low wages, so many workers rely on public transportation to get to work. John’s Creek should take a fresh look at the principles of Transit-Oriented Design and New Urbanism before finalizing its plan.
On Second Thought’s website also discusses some of my other thoughts on planning such a big project.
May 28, 2015 | Permalink | No Comments
