Tag Archives: housing

Affordable Housing in the De Blasio Era

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Mayoral candidate de Blasio’s position on affordable housing policy can be found here. The key points include:

  • Require developers to build some affordable housing when they build in neighborhoods that have been upzoned (mandatory inclusionary zoning)

  • Direct $1 billion in city pension funds to affordable housing construction

  • Apply the same tax rate to big, vacant lots as applies to commercial properties and earmark the increased revenues for affordable housing

  • Ensure that affordable housing subsidies meet the needs of lower-income families and are distributed equitably throughout the City

As I had mentioned previously, NYU’s Furman Center (and its Moelis Institute for Affordable Housing Policy) ran a great series of ten conversations on the big housing issues facing New York City’s mayor. Since then, the Furman Center has posted ten policy briefs about those issues.The ten issues are

  1. Should the next mayor commit to build or rehabilitate more units of affordable housing than the Bloomberg Administration has financed?

  2. Should the next mayor require developers to permanently maintain the affordability of units developed with public subsidies?

  3. Should the next mayor adopt a mandatory inclusionary zoning program that requires developers to build or preserve affordable housing whenever they build market-rate housing?

  4. Should the next mayor seek to expand the use of city pension funds to develop affordable housing?

  5. Should the next mayor provide a rental subsidy for moderate- and middle-income households?

  6. Should the next mayor permit more distant transfers of unused development rights to support the development of affordable housing?

  7. Should the next mayor support the New York City Housing Authority’s plan to lease its undeveloped land for the construction of market-rate rental housing?

  8. Should the next mayor allow homeless families to move to the top of the waiting list for housing vouchers or public housing?

  9. Should the next mayor offer to cap the property tax levy on 421-a rental properties in order to preserve the affordable units within those buildings?

  10. How should the next mayor prioritize the preservation of existing affordable housing units?

Mayor-Elect de Blasio and his team will have to struggle with all of these issues. There are few easy answers in New York City when it comes to housing policy.

Massachusetts Supreme Court Holds that Bank Lacks Standing to Bring SCRA Claim Against Homeowner

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In HSBC Bank USA, N.A. v. Matt, 464 Mass. 193 (2013), the Supreme Court of Massachusetts found that HSBC Bank USA, N.A. (HSBC) lacked standing to proceed with its claim against the homeowner in a servicemember proceeding. HSBC initially filed a complaint in the Land Court under the Massachusetts Soldiers’ and Sailors’ Civil Relief Act (Massachusetts Act) “to determine if [homeowner] was entitled to foreclosure protections under the Federal Servicemembers Civil Relief Act (Federal SCRA or SCRA).” The homeowner did not contest the fact that she was not entitled to protection under the SCRA. Instead, she disputed HSBC’s standing to bring a foreclosure action generally, arguing, “[HSBC] was not the clear holder of either her note or her mortgage.” Despite the fact that the homeowner “was not entitled to appear or be heard at the servicemember proceeding,” the court considered the standing question sua sponte.

The court held that in determining standing in servicemember proceedings, a bank must present evidence to prove their status as mortgagees, or else as agents of mortgagees. The court reversed the Land Courts decision holding that HSBC had standing because of a purported right to purchase the homeowner’s mortgage. However, the court noted that determinations of standing in servicemember proceedings do not establish (and thus do not eliminate) standing in foreclosure proceedings.

Ohio State Court of Appeals Holds that Bank has Standing to Foreclose

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In Deutsche Bank Natl. Trust Co. v. Traxler, 2010-Ohio-3940, the Court of Appeals, Ninth District of the State of Ohio held that the bank had standing to commence a foreclosure action against the homeowners. The homeowners argued that the bank lacked standing because the bank did not possess the mortgage and note at the time it commenced its action. The court rejected this argument, holding, “a bank need not possess a valid assignment at the time of filing suit so long as the bank procures the assignment in sufficient time to apprise the litigants and the court that the bank is the real party in interest.” The court looked at the assignments of the mortgage and note, and found that both were valid. Specifically, the court rejected the homeowner’s argument that MERS lacked authority to assign the mortgage. The court found that where MERS is designated as both the nominee and mortgagee of the mortgage, it has authority to assign the mortgage. However, the court went even further and stated, “assuming that MERS did not have the authority to assign the mortgage, however, we. . . conclude that the proper transfer of the promissory note, which the mortgage secured, amounted to an equitable assignment of the mortgage.” Thus, the court concluded that the homeowner’s arguments be rejected and the bank had standing to foreclose.

Rental Housing Market Trends — Growing Demand, Unsurprisingly

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The Bipartisan Policy Center has an interesting “infographic.”  I found the demographic information to be of particular note.  The Center says that Baby Boomers, Echo Boomers, Former Homeowners and Recent Immigrants will be driving demand.

Land Use Controls Caused The Financial Crisis?

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Respected Housng Economist Edwin Mills and co-author B.N. Jansen write in their article, “Distortions Resulting from Residential Land Use Controls in Metropolitan Areas”,

The strong conclusion of this paper is that stringent residential land use controls were a primary cause of the massive house price inflation from about 1992 to 2006 and possibly of the deflation that started in 2007.

Indeed, it is difficult to imagine another plausible cause of the 2008-2009 financial crisis.  Popular accounts simply refer to a speculative housing price bubble.  But productivity growth in housing construction is faster than in the economy as a whole [citation omitted] and the US has an aggressive and competitive housing construction sector.  In the absence of excessive controls, housing construction would quickly deflate a speculative housing price bubble.

A final comment is that there appears to be no interest at any level of government, or among the articulate population, in reducing the stringency of land use controls.  Indeed, recent trends are in the opposite direction. (200)

Jansen and Mills rely heavily on a dataset constructed by Joseph Gyourko and others to analyze local land use control stringency.  I am not in a position to evaluate the dataset or the model that they use, but their findings are consistent with those of Gyourko and Edward Glaeser in Rethinking Federal Homeownership Policy.

It seems to me that Jansen and Mills overstate their case quite a bit — stringent land use controls may have been a necessary condition for the bubble, but I can’t see how their argument demonstrates that it was sufficient unto itself.  That being said, I would agree wholeheartedly that this hypothesis is worthy of serious study.  The relationship between land use and housing policy is way more important than most members of the “articulate population” understand.