Wednesday, April 20, 2011
Tuesday, July 13, 2010
This NY Times opinion piece by Paul Reyes left a bad taste in my mouth. What Mr. Reyes seems to be missing is his own point. Alan, the savior of neighborhoods, is simply continuing a streak of predatory lending and crap renovations. The result will be owners with limited incomes who will need to make major repairs down the road. Guess what? These homes have no equity so these new homeowners will have to pay out of pocket or get more questionable lending to make these repairs. It seems the cycle continues on and on.
From the article:
True, the very speculators who helped lead this economy into a crisis are becoming an increasing part of the solution, especially as banks continue to shy away from financing, preferring instead to work with “all cash” offers. But if banks persist in their financial stubbornness, you could very well see such investors filling the financing void for a portion of the housing market — a longstanding trend known as “owner financing.”
Here’s how it works: Alan buys property on the cheap — he sets his threshold at $50,000; other investors I’ve met set theirs even lower. He makes a few repairs (or not, depending on the condition of the property) and puts out a sign to attract a buyer.
In many cases, in poor and blue-collar neighborhoods especially, the would-be homeowner has trouble getting traditional financing from the bank. And this is where Alan and others fill the void left by the banks, financing a mortgage or even leasing with an option to buy. In the past, Alan had success financing mortgages to new buyers for a low down payment (around $5,000) and a reasonable rate of interest (around 10 percent). To protect himself — and to give him a return on his money so he could reinvest it — he’d set a balloon rate, in which the new buyer was given three to five years to find a conventional mortgage before the entire sum on the house was due.
I firmly believe we don't have a housing market currently. We have not bottomed out and new buyers looking at rehab of foreclosures are going to loose out in the end. We need some national leadership right now and a program to support it. More tax credits for first time home buyers are not the answer.
Monday, July 12, 2010
When neighborhoods, cities, and regions become to successful that people want to move there in droves it can sometimes have the impact that is not what that city had intended. Many places are the victim of their own success and it seems Portland these days is having that struggle about keeping its identity, while being on the national and international spot light.
Portland ranks high nationally for its rate of entrepreneurship, as measured by things like self-employment and the number of small businesses. Even during the recession, some local independent restaurants and manufacturers have increased sales and opened new outlets.
While other states lost workers, Oregon’s labor force grew because people kept coming. The livability crowd led the way: young, white, well-educated people drawn to an outdoor — and local — lifestyle.
“We get people who self-select,” said Joe Cortright, a longtime economist here. “And there’s no fervor like the converted.”
That does not mean the local economy has figured out how to absorb the stream of newcomers: the Portland area’s unemployment rate was 10.2 percent in May, compared with 9.7 percent nationally.
As the city’s corner coffee shops, indie bands and handmade bicycles have gained national and international renown, becoming — gasp — brand names, cries of corporatism have followed them.
Friday, July 9, 2010
Thursday, July 8, 2010
Two articles this week have proven that what we need in this country is not a fight of urban vs suburban and ultimately which is better. The NY Times article profiled this couple who had to move from the city to the suburbs to get what they wanted at the price point they could afford.
Ultimately, deciding which lifestyle best suits you — and where to buy — comes down to personal preferences. But if the deciding factor is the relative cost of each, the answer is quantifiable, even if it not immediately obvious given the different tax rates and other variables.
So we set out to do the math, based on an apartment and a house in the New York metropolitan area. Here’s what we found: a suburban lifestyle costs about 18 percent more than living in the city. Even a house in the suburbs with a price tag substantially lower than an urban apartment will, on a monthly basis, often cost more to keep running. And then there’s the higher cost of commuting from the suburbs, or the expense of buying a car (or two) and paying the insurance.
The NY Times math is very fuzzy and doesn't really prove much at all. Urban living can be quit costly, but so can the suburbs. The choices you make in regards to both is what really dictates costs. With the unaffordability of homes in NYC these folks decided to go to the suburbs. A clear lack of housing choice that is affordable for all.
In this post Joe Kotkin blasts Richard Florida for pushing a "back to the city" theme when that is not what is really happening. He blames the over abundance of downtown condos as one reason people aren't excited about the city. He clearly believes that the Amercian Dream is a singly family home. Kotkin states:
But the great migration back to the city hasn't occurred. Over the past decade the percentage of Americans living in suburbs and single-family homes has increased. Meanwhile, demographer Wendell Cox's analysis of census figures show that a much-celebrated rise in the percentage of multifamily housing peaked at 40% of all new housing permits in 2008, and it has since fallen to below 20% of the total, slightly lower than in 2000.
The problem again is that we deem suburbs single family homes on large lots and cities are high rise condo buildings. This simply is not the truth when it comes to many urban and suburban neighborhoods. Actually many places have a decent amount of mixed housing (single family, duplex, apartments, condos, ect.) so I am not sure why we have drawn this line in the sand.
What we need to discuss is how to provide housing opportunity for all people regardless of where they want to live. Not everyone in the suburbs wants a single family home and not all city dwellers want to live with 40 other units. Housing choice needs to be a key factor and the cost of that housing. I find all these arguments wrong because there are suburbs, long island for example, that are denser than some of our biggest cities. What we need to do is find a way to integrate these different housing typologies so that we can accommodate all our current and future residents.