Tag: legislation

Fannie Mae was sued back in 2016 under allegations of fair housing violations, and the organization decided to settle in February of this year. The settlement amount was $53 million. Fannie Mae had acquired a large number of properties in the wake of the subprime mortgage crisis, and thus became responsible for their maintenance until they were sold. But fair housing organizations started to notice a trend: only the ones in predominantly white neighborhoods were being adequately maintained.

The settlement agreement was the first to determine that foreclosed properties, like the ones Fannie Mae holds, are also subject to fair housing laws. This was not officially determined prior. Also, it’s possible that they were in worse conditions to begin with, but that doesn’t absolve Fannie Mae of their responsibilities. Their argument was that their intentions were not discriminatory. Perhaps they simply were not able to maintain the homes as well since they were in worse shape. But they were unable to reject the claim that regardless of their intentions, the impact was obvious. This is what led to Fannie Mae needing to settle.

Photo by matthew Feeney on Unsplash

More: https://journal.firsttuesday.us/fannie-mae-settles-fair-housing-lawsuit-for-50-million/83351/

Under California’s Regional Housing Needs Allocation (RHNA) laws, each local government is required to work with the state government to establish what is called a housing element. The housing element identifies sites that can be redeveloped to meet regional housing needs, within an eight year timeframe. If the city can’t find a usable site under their current zoning laws, the zoning laws need to be modified. In Southern California, the housing element deadline was October 15, 2021. The deadline for Northern California is later this year.

Five cities — Bradbury, La Habra Heights, Laguna Hills, South Pasadena, and Vernon — failed to submit a housing element altogether prior to the deadline, and a sixth, Manhattan Beach, submitted a plan that indicated a site that could not be redeveloped in a reasonable timeframe. The site indicated was the Manhattan Country Club, which was purchased in 2017 and the City of Manhattan Beach cannot guarantee its availability by 2029. Without the 149 units provided by this redevelopment, Manhattan Beach fails to meet its regional housing needs. In response, the nonprofit organization Californians for Homeownership has sued all six of these cities.

Photo by Romson Preechawit on Unsplash

More: https://www.car.org/aboutus/mediacenter/newsreleases/2022releases/ca4housingelements

A California law allowing duplexes to be built on lots zoned for single-family residences, SB 9, passed in 2021. However, the law doesn’t have much in the way of enforcement. Cities are finding it relatively easy to avoid this with local ordinances that make it effectively impossible, since they can’t legally ban it. The same sort of thing happened with the struggles with building ADUs, which actually became legal nationwide in 1982, but weren’t feasible in most states prior to 2016.

One example is the town of Woodside claiming that the entire town is a mountain lion habitat, and is therefore excluded from the requirement because it’s a habitat for a protected species. Once this reached the news, Attorney General Rob Bonta got on their case and forced them to reverse the decision. All the AG’s office needs is proof that municipalities are attempting to skirt the requirement, and then they can take action. Without an enforcement agency, though, they’re reliant on the spread of information through media, including social media.

Photo by Taneli Lahtinen on Unsplash

More: https://calmatters.org/housing/2022/04/california-duplex-housing/

Many people are still delinquent on rent payments as a result of the recent recession. Some relief came in the form of emergency rental assistance (ERA), which also required landlords take additional steps before being able to evict for nonpayment. The additional protections were set to expire on March 31st, but there was a last minute change to the law.

Under the new regulations, while the protection will still only apply to delinquencies on rent payments owed before March 31st, it will now continue to apply to those delinquencies through July 30th if the ERA application is still being processed. Tenants will still owe rent for April and subsequent months, even if their ERA application for earlier payments is still being processed.

Photo by Sheldon Kennedy on Unsplash

More: https://journal.firsttuesday.us/covid-19-eviction-noticing-rules-extended-for-era-applicants/82649/

In response to the pandemic, California launched a program to help a segment of the homeless population acquire temporary housing via hotel conversions. This initial project, called Project Roomkey, applied only to those 65 or older or who had underlying conditions, and would only be active during the pandemic. Seeing its success, California has launched a new, more expansive project, which they’ve called Project Homekey.

Project Homekey seeks to expand conversions to include several different types of properties, not just hotels. In addition, the project is designed to create both temporary and permanent homeless housing. This is made possible by the recent changes to zoning and land use laws, and currently has an $846 million acquisition budget. Unfortunately, managing such large projects requires specialized knowledge that isn’t in large supply. In addition, there has been pushback from local opposition that doesn’t want to see low-density housing converted into high-density homeless housing.

Photo by the blowup on Unsplash

More: https://journal.firsttuesday.us/californias-homelessness-crisis-vacant-hotels-can-house-the-unhoused/81717/

The Federal Housing Finance Agency (FHFA) established the First Look Program back in 2009, aimed at promoting neighborhood stability by facilitating occupation of real estate owned (REO) properties by owners. The program created a special time period during which prospective owner occupants, public entities, and nonprofits would have exclusive rights to purchase properties owned by Fannie Mae or Freddie Mac, before investors would have access. Until now, this time period was 20 days. On September 1st, the FHFA extended this period to 30 days. They deemed this move essential during a period of low supply, to reduce the level of competition prospective owner occupants have to contend with.

Photo by Mael BALLAND on Unsplash

More: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Extends-the-Enterprises-REO-First-Look-Period-to-30-Days.aspx

The US Senate has now passed a bipartisan bill aimed at improving infrastructure. The bill details budget investments for repairs, updating, new construction, and weatherproofing. Much of the money is aimed at roads and bridges, and various different budget plans all focus on clean environmental efforts, such as clean water, clean energy, and electric vehicle chargers. The bill doesn’t have many provisions that explicitly focus on housing, but improving infrastructure will have an indirect impact.

The most significant impact on the housing industry will be in job creation. While some of the positions that are being funded already exist, others don’t and will need to be created. This means more people will need to be hired. The slow recovery of the job market is the primary reason our recovery from the recession has been so drawn out. The infrastructure bill will hopefully not only establish a better infrastructure for the future, but also create more jobs now to speed up recovery. With a recovery of the job market, housing market stability will soon follow.

Photo by CHUTTERSNAP on Unsplash

More: https://journal.firsttuesday.us/how-the-infrastructure-bill-supports-housing/79580/ [Note: The article states that the House has yet to vote on the bill. In fact, the House voted on and passed the bill before the Senate voted.]

California is proposing a plan to start the “California Dream Fund,” which is intended to allow the state to subsidize purchases by first-time homebuyers without any tax increases. They hope to achieve this by allowing investors to use their money to subsidize the purchase, in exchange for an equivalent share of ownership. This will be limited to 45% to prevent the investors from owning a majority share.

The plan is still in the works, but there are already a few criticisms. Currently, there is no indication of who is liable if the property goes into default. Is it only the buyer? Do the investors have a stake, since they have an ownership share? Is the state liable since they’re the ones providing the subsidy program? Perhaps these questions will be answered later, but if the answer is simply as existing law, the program is no different from a state matchmaking program between investors and prospective homebuyers. Furthermore, subsidizing home purchases does nothing to address the real problem — the fact that home prices are so exorbitantly high in the first place that the plan is being discussed to begin with. Subsidies will increase demand, but demand is already high; it’s the low supply that needs to be addressed.

Photo by Andre Taissin on Unsplash

More: https://journal.firsttuesday.us/proposed-plan-seeks-to-subsidize-nearly-half-the-price-of-a-first-home/78445/