Housing News Roundup: July 27, 2017
Wall Street’s Takeover of Suburbia
Big investors are shaking up sales and rental markets throughout the country. During the financial crisis, investment firms switched their focus from large apartment buildings, offices spaces, and shopping centers to newly discounted homes, which they began buying, flipping, and renting for more than locals were used to. In Spring Hill, Tennessee, a suburb of Nashville, four large firms own nearly 700 houses, which is about 5 percent of all the houses in town and 75 percent of the homes available for rent. “The rental stigma has really subsided,” said Michael Cook, chief operations officer at Streetlane Homes, one of the four firms with this real estate investment in Spring Hill, owning 400 homes in the area. “People are realizing that houses are not necessarily the best places to store wealth.” Meanwhile a Wall Street Journal analysis of how rents charged by Spring Hill’s big four firms compared with monthly costs of owning a home found that rents averaged 32 percent more than the monthly ownership cost.
Source: The Wall Street Journal
Is Foreign Investment Distorting the US Housing Market?
Foreign investors could be an increasingly invisible yet influential power over the US housing market as affordability becomes less attainable (even for well-paid workers). In major cities, such as Miami and New York City, foreign buyers are looking for assets, not residences—so while housing shortages are getting worse, more homes are appearing vacant. Just how much are these foreign investors distorting the US housing market? The phenomenon is difficult to measure, but new data from the National Association of Realtors find that “foreigners (led by the Chinese) invested $153 billion in housing in the United States in the year that ended in March,” which was up 49 percent from the previous year. Data show that nonresident foreigners were responsible for half of that. “Without a doubt, foreigners are pushing up the prices in California and Florida,” said chief economist for National Association of Realtors, Lawrence Yun.
Source: New York Times
Why Is Sacramento Redeveloping an Entire Neighborhood?
In a new attempt deal with Sacramento’s systemic poverty and lack of housing for low-wage workers, the city’s housing agency is planning to tear down the socially and economically isolated Twin Rivers housing project and replace it with a dense, mixed-income village. The project will be funded by federal housing grants and is part of the US Department of Housing and Urban Development’s Choice Neighborhood program, which seeks to transform neighborhoods using a comprehensive approach. More than 200 units will be reserved for current Twin Rivers residents, and an additional 280 will be marketed to young workers and families who can pay a little more but cannot afford more expensive areas of town. Rolf Pendall, an Urban Institute center codirector, cautioned that cities should not assume that building housing will create a functioning community—that will take cooperation from city officials, police, and others. “But it is so much worse to have neighborhoods that are segregated than to have to deal with the problems of mixing” people of different income levels, he said. “Evidence suggests diversity is good.”
Source: Sacramento Bee
Creative Solutions to Address the Affordable Housing Crisis around the Country
Cities, governments, and nonprofits around the country are developing creative solutions to combat the widespread affordable housing shortage in the United States. In 2016, Denver launched a $10 million Revolving Loan Fund that expanded the capital available for affordable housing projects. The city’s resulting buy-down program will turn vacant high-end apartments into affordable units, using the housing fund to cover the difference between market rate and affordable rent. A development in Minneapolis created a 90-unit mixed-income apartments in a green, sustainable building that boasts high energy efficiency and a low-maintenance environment. Developers say the expensive building will produce high yields over time. An apartment complex in Philadelphia uniquely combines affordable units, close access to a transportation hub, and a center for healthy living, housing a health clinic, pharmacy, and other supportive services. “We do know what solutions and policies work,” said Giselle Routhier, policy director of the Coalition for the Homeless. “We just need the political will to make it happen.”
Why These Facebook Cafeteria Workers Live in a Garage
While Mark Zuckerberg travels the country and the globe speaking out against wealth inequality, some Facebook workers wonder whether he will ever think about them. Nicole and her husband, Victor, both work in Facebook’s cafeteria and live a few blocks away from its headquarters in Menlo Park. They live in a two-car garage with their three children, ages 9, 8, and 3. In a town where software engineers complain about trying to make ends meet, Nicole, who makes about a quarter of what the engineers make, says Zuckerberg “doesn’t have to go around the world. He should learn what’s happening in this city.” Although she and Victor make more than minimum wage, she said that Facebook moved in and made everything more expensive. “We barely make it,” says Victor. They were two of 500 Facebook cafeteria workers who chose to join the Unite Here Local 19 union, hoping to achieve a better standard of living.
Source: The Guardian