Housing News Roundup: August 17, 2015
Accelerated Side Lot Sales Improving Blight in Detroit
Detroit is selling side lots to residents in an effort to reduce blight. Mayor Mike Duggan and his administration decided to launch the pilot program to make the process of purchasing vacant lots easier. Officials say the city is on track to have 3,000 vacant lots sold to residents by the end of the year, a ten-fold increase in such sales from last year. Detroit resident Linda Gadsden bought an overgrown, neglected lot next to her property for $100 at a Detroit Land Bank Authority side lot sale, and plans to use it as a garden—an improvement upon the dumping ground it had become. The sales are saving Detroit approximately $300,000 in mowing costs annually, as well as beautifying neighborhoods. Next on Mayor Mike Duggan’s list is a program to enable residents to lease vacant lots, which is expected to repurpose between 20,000 and 40,000 vacant lots.
Source: Detroit News
St. Petersburg Explores Permanent Housing Solutions for Homeless
Volunteers in St. Petersburg, Florida are tackling homelessness through building community. In conjunction with providing the area homeless with food, the nonprofit Celebrate Outreach is seeking to foster relationships between members of the community and its homeless residents. At the churches where Celebrate Outreach serves food, volunteers and community members discuss strategies for permanently housing the homeless. Currently, Celebrate Outreach has plans to build small homes for homeless veterans, and has acquired an apartment building for others, both to be opened in 2017. Amy Foster, St. Petersburg City Councilwoman, has studied housing strategies in other cities and believes the city will save money by investing in permanent housing rather than shelters, although shelter programs are largely credited with stemming the homelessness problem in the city in recent years.
Source: The St. Petersburg Tribune
Fervor over Minimum Wage Intensifies in Bay Area
Last month, Emeryville, CA imposed a minimum wage of $14.44 per hour, the highest minimum wage in the nation. The hike has driven Berkeley, which already increased its minimum wage to $12.53, to reopen discussions about adding paid sick days, cost of living increases, and wage hikes up to $19 in 2020. While the increases are critical to making ends meet for many workers, some local businesses argue that the minimum wages are not feasible for small, locally owned stores. Brian Hibbs, owner of Comix Experience in San Francisco, explains, “The problem is … your local bookstore, local burrito store, they are not a multinational corporation. Raising the minimum wage to $15 is essentially legislating that as a business you have to make X or else you’re not a real business. … It’ll mean there will be less jobs for people.”
Source: LA Times
Using Community Land Trusts to Stabilize Neighborhoods
The Dudley Street Neighborhood Initiative (DSNI) in the Dorchester neighborhood of Boston was in the vanguard of its time. In the 1980s, the group bought dozens of vacant lots—totaling over 30 acres—throughout the neighborhood and leased them out to developers with the requirement that they remain affordable. Residents of homes covered by the land trust own their homes, but the land beneath it is being leased from the land trust associated with DSNI, Dudley Neighbors. While the average rent in Boston is over $1,800 per month, Dorchester resident Evelyn Correa pays less than a thousand towards her mortgage on her three-bedroom house. Advocates of the community land trust system say it serves as protection against the sudden cost increases associated with gentrification, as well as a bulwark against foreclosure. Experts caution, however, that land trusts are not always feasible and depend on a lot of local factors.
Housing Data Ignites Wall Street
Wall Street has erased its earlier August losses largely due to positive housing data. The National Association of Home Builders said last week that more builders viewed market conditions favorably than did not, the most positive sentiment among builders in almost a decade. The good news appears to have sparked a bull market, and the timing of the data is especially significant given the ongoing speculation regarding whether the Fed will raise interest rates. Investors are using as much data as they can to help discern what the Federal Reserve will discuss during its next meeting on Wednesday. Terry Sandven, Chief equity strategist at U.S. Bank Wealth Management in Minneapolis says, “Investors are in pause mode leading up to the Fed minutes later this week.”