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Bye-Bye to Single-Family Zoning in California! Sep 24, 2021

Show notes

It's a big deal in a state where homeowners have fiercely fought any changes to single-family neighborhoods. California Governor Gavin Newsom is catching up on his "to do" list after the recall election, and just signed two important pieces of housing legislation. One is SB 9 which eliminates single-family zoning in most neighborhoods across the state. The other is SB 10 which makes it easier for cities to build multi-family apartment buildings in some areas. (1)

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Senate Bill 9 is especially significant after years of homeowner opposition to previous efforts to increase housing density in single-family neighborhoods. This bill allows for single-family parcels to be split in two, and duplexes to be built on each half, which allows for a total of four units on one lot. The other bill will streamline the approval process for the development of multi-family housing near transit and urban infill areas.

The Single-Family Mindset

The bill that ends single-family zoning is especially significant. It's a housing concept that is deeply entrenched in the minds of homeowners and housing codes across the U.S., not just California. The so-called "single-family neighborhood" has created the suburbs as we know them today.

Single-family zoning has also been used as a racial barrier for people who can't afford bigger homes with bigger yards. And with higher home prices, the gap is growing between those who can afford to buy homes and those who can't. In California, the median price for a home has gone up more than 21% in the past year to more than $700,000. That's according to Zillow. (2)

Those two bills along with Senate Bill 8 are part of Governor Newsom's California Comeback Plan. SB 8 extends the Housing Crisis Act of 2019 to jumpstart more housing production, and the Comeback Plan is a five-point plan to address major issues in a post-pandemic world.

California's Comeback Plan

The first leg of that plan is the state's effort to help people hit hard by COVID-19. Other parts of the plan include housing affordability and homelessness, upgrading schools as gateways for opportunity, addressing climate change and making the state more resilient against wildfires, and creating infrastructure that will take the state into the next century.

SB 9 and 10 are part of the housing affordability leg. As Newsom says: "The housing affordability crisis is undermining the California Dream for families across the state, and threatens our long-term growth and prosperity."

SB 9 Do's and Don'ts

So what does all this mean for you if you are a single-family homeowner?

Currently, the law allows two units on a single-family lot. You can have a stand-alone home along with an accessory dwelling unit no larger than 500 square feet. This new law will allow up to four units on the same amount of land. But there are plenty of guidelines.

For example, if someone wants to split their lot in two, each new lot must be at least 1,200 square feet. Properties that have been listed as historic landmarks cannot be altered by this law. Also, any new unit created under this law CANNOT be used as a short-term rental. That's defined as a unit that's rented for less than 30 days, so more than 30 days is okay. (3)

According to the Daily Democrat, anyone who wants to build a duplex or split their property to build two duplexes must also plan to live in one of the units for at least three years. That applies to both homeowners and landlords.

The law makes it difficult for local districts to deny a valid development application. Local officials can reject a proposal if the project would have a "specific adverse impact" on "public health and safety, or the physical environment" and there are no other options for eliminating that adverse impact. As for size and design, upzoning projects would still need to adhere to local standards.

Will It Solve the Housing Gap?

Will this make a huge difference in California's housing gap?

According to a recent study by the Terner Center for Housing Innovation at UC Berkeley, 5.4% of California's single-family lots could be developed under SB 9. That could potentially create an additional 714,000 homes. But that's still far short of the 3.5 million homes that Newsom wants to create in just another four years, by 2025.

If you'd like to read more about this legislation, check for links in the show notes at newsforinvestors.com.

You can also join RealWealth for free at our website. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://www.gov.ca.gov/2021/09/16/governor-newsom-signs-historic-legislation-to-boost-californias-housing-supply-and-fight-the-housing-crisis/

2 -https://www.zillow.com/ca/home-values/

3 -https://www.dailydemocrat.com/2021/09/18/what-californias-new-sb9-law-means-for-single-family-zoning-in-your-neighborhood/

The Real Estate News Brief: Inflation Eases, Rents & Building Materials Soar, Mortgage Rates Steady Sep 21, 2021

Show notes

In this Real Estate News Brief for the week ending September 18th, 2021… inflation eases up overall, but rents and building materials soar, while mortgage rates hold steady.

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Economic News

We begin with economic news from the past week. Concerns about inflation have eased up a bit. Prices rose at their slowest pace in August since about seven months ago. The consumer price index was up .3% which brought the annual rate down a tenth of a percent to 5.3%. The core rate, which strips out prices for food and gas, was only up .1% to an annual rate of 4%. That's down from 4.3% in June. MarketWatch economists say that could be a sign that the recent price surge is peaking. (1)

There's been a lot of debate about the risk of higher inflation and whether it will remain above the 2% mark. The Federal Reserve isn't worried. It expects prices to come back down toward that 2% level sometime next year.

Jobless claims rose last week because of Hurricane Ida, but they are still near a pandemic low. The U.S. Department of Labor says initial jobless claims for state benefits were up about 20,000 to 320,000. The pandemic low point is 318,000. Continuing claims also fell to a seasonally adjusted 2.67 million. That "is" a pandemic low. (2)

Consumers were spending money in August which is a sign of strength for the U.S. economy. The Census Bureau reports that retail sales were up .7%, although MarketWatch says that higher prices could account for at least part of that increase. (3) The numbers are not as strong as they were in the spring, but consumers are buying different things right now. In the spring, they were stocking up on goods. Now they are spending more on things like restaurants and travel. Retail sales numbers are 15% higher than August of last year.

Consumers are expressing a slightly higher level of confidence in the U.S. economy than they did over the summer. The University of Michigan's consumer sentiment survey shows a reading of 71 for September. (4) In August, it was 70.3. MarketWatch says that people are still worried about their financial situations, including higher prices. They are also feeling pessimistic about the purchase of homes, vehicles, and large appliances, which are all in short supply.

Mortgage Rates

Mortgage rates haven't moved much for two months. According to Freddie Mac, the 30-year fixed-rate mortgage went down just 2 basis points to 2.86% this last week. The 15-year dropped a little more. It was down 7 basis points to 2.12%. (5) Freddie Mac says the holding pattern is the result of a slowdown in the economic recovery. But it says other factors are in play, such as increased migration, the remote work trend, the use of automation, and a focus on a more energy efficient economy, which, it says, will probably lead to increased economic growth.

In other news making headlines…

Rents Soaring in Cities Across the Country

It isn't just home prices that are shooting skyward. Rents are increasing even faster than home prices. A new Redfin report says that August rents hit a national year-over-year growth rate of 11.5%.

That's the first double-digit rate of rent growth ever and represents a median rent of $1,633, or about $169 more per month for renters. (6) If you look at apartments of different sizes, the median is $1,338 for a studio, $1,524 for a 1-bedroom, and $1,828 for a 2-bedroom.

Cities seeing the most rent growth are Tampa, Florida; Riverside, California; Miami, Florida, and Phoenix, Arizona. Rents in all four of those metros were more than 25% higher on a year-over-year basis.

Lumber Costs Lower, But Other Costs Rise

Builders are getting a break on lumber prices, but the cost for other materials is climbing. According to government data, home building materials have risen 19% in the past year. At one point last spring, lumber prices had topped $1,500 for a thousand board feet, but they have come back down and are now closer to $400. But there's a long list of materials that have gotten a lot more expensive. (7)

The National Association of Home Builders says that steel mill products have gone up the most, followed by building paper and building board mill products, asphalt, plastic water pipe, fertilizer materials, laminated veneer lumber, and other materials used frequently by the building industry. Prices for steel mill products are up 81% year-over-year.

Those price increases are pushing new home prices higher. In July, the median sales price of a home was $390,500. That's an 18.4% increase from July of last year.

That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!

You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://www.marketwatch.com/story/surge-in-u-s-consumer-prices-slows-in-august-cpi-shows-11631623600?mod=newsviewer_click_realtime&mod=article_inline

2 -https://www.marketwatch.com/story/u-s-jobless-claims-rise-in-latest-week-11631795929?mod=mw_latestnews

3 -https://www.marketwatch.com/story/retail-sales-surge-in-august-despite-spread-of-delta-signal-economy-is-still-strong-11631796054?mod=economic-report

4 -https://www.marketwatch.com/story/u-s-consumer-sentiment-mired-at-near-decade-lows-university-of-michigan-survey-finds-11631888208?mod=economy-politics

5 -http://www.freddiemac.com/pmms/

6 -https://www.realtor.com/news/trends/rental-prices-soar-as-pandemic-drags-on/

7 -https://magazine.realtor/daily-news/2021/09/10/building-material-costs-continue-to-surge

The Garage Takes on a New Role Among Electric Vehicle Owners Sep 16, 2021

Show notes

It wasn't too long ago that housing experts were predicting the demise of the garage, because of ride-sharing services like Uber and Lyft, and a desire to live "car free." Many people have also turned their garages into additional living space. But now, with electric vehicles becoming more popular, EV owners want a place to safely charge their cars overnight and that's making the garage, once again, a more indispensable part of our homes.

Hi I'm Kathy Fettke and this is Real Estate News for Investors.

Having an electric car is still an expensive purchase for many people, but for those who can afford one right now, it's important to have a convenient and secure way to charge it up. That's not going to be a charging station blocks or miles away. Most people will want a charging station at home, so the car can power-up while they are sleeping. The Wall Street Journal acknowledged this new trend in an article called "Electric-Car Charging Stations Give the Home Garage a Powerful Upgrade." (1)

Powerful At-Home Charging Stations

But it isn't just the importance of "having" a garage. Charging an electric vehicle quickly also requires high-powered outlets and outlets that can charge different kinds of electric vehicles. The Journal reports that EV-owners are installing charging stations that range from "simple, 200- or 240-volt outlets to... elaborate systems that incorporate solar panels and battery walls."

In one example, the Journal cited a bi-coastal family with a 220-volt outlet and charger in Massachusetts, and a Tesla roof tile solar system in California with a Tesla powerwall and 2-foot by 4-foot batteries in California. That's not typical, of course. People who own an all-electric vehicle are also in the minority.

Pew Research shows that only about 3% of vehicles in the U.S. are EVs, but we could see a big increase in green-energy vehicles in just the next eight years. An executive order signed by President Biden would increase the use of electric, hydrogen, and plug-in hybrids to 50% by 2030.

Nation Need Charging Station Network

The biggest obstacles to hitting that goal include the cost of e-vehicles and the lack of charging stations. Having a charging station in the garage is great for local trips, but the nation needs a more robust network of charging stations along public roads and highways.

As reported by Axios, the U.S. currently has 104,000 public charging "plugs" for electric vehicles. (2) But only 18% of those plugs will charge your vehicle in an hour or less. Those fast charging plugs are called "Level 3" or "DC Fast Chargers."

Axios cited an analysis by Mobilyze.ai which found that only about 10% of U.S. households have easy access to the plugs that are currently available. An easy access plug would be within a quarter mile from your home. The study counted 18.5 electric vehicles for every available plug. It suggests that one charger is needed for every 10 to 15 vehicles. The distribution of plugs is also uneven, with more plugs in wealthier areas.

As more people buy electric vehicles, more plugs will be needed across all communities. Biden's call for the use of electric vehicles also comes with a call for at least a half a million more plugs.

Minimum At-Home Charging Requirement

MyEV.com says that a garage isn't necessary for at-home charging, so long as you have a dedicated area to park, and an external electric outlet. (3) The outlet might be mounted to an outside wall of the building, or a pole. According to MyEv.com, installation could cost between 500 and $1,200. If it's a 240-volt plug, you'll get a Level 2 charge. Depending on the battery, that could give you a full charge in 8 to 24 hours. Some batteries might only take 4 hours, according to this source. A Level 1 charge would use your typical 100-volt house current, and of course, take much longer to charge.

The optimal system would be a Level 3 charge. MyEV.com says a Level 3 charger can bring an EV battery up to 80% of its capacity in just 30 minutes. While a Level 2 charge is still free in many places, a fast charge might cost you about 30-cents a minute. Joining a network could get you a discount. EVgo offers a 10% discount for members with a rate of 31-cents a minute. If you don't want to join a network, check out PlugShare.com for a map of charging stations.

Tesla also provides a global network of fast charging stations. (4) With more than 25,000 Superchargers, it claims to operate the largest global, fast charging network in the world.

You'll find links to more information in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!

You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://www.wsj.com/articles/electric-car-charging-stations-give-the-home-garage-a-powerful-upgrade-11629916313

2 -https://www.axios.com/electric-vehicle-charging-stations-equity-1b00f7a6-f87a-4125-9bc0-82399663b345.html

3 -https://www.myev.com/research/buyers-sellers-advice/what-if-you-want-to-drive-an-electric-vehicle-but-dont-have-a-garage

4 -https://www.tesla.com/supercharger

Construction Worker Shortage & Vaccine Balancing Act Sep 15, 2021

Show notes

Contractors have been struggling with a worker shortage that began with the Great Recession, and then was made worse by the pandemic. If one worker on the job site gets sick with the virus, the entire project can be stalled for at least 2 weeks. And now, things are becoming even more complicated as more clients are wanting all workers on their property to be vaccinated. But many available workers are pushing back.

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Getting the job done has been tough for contractors dealing with supply chain shortages, rising prices for the materials, and permitting issues. Add to it that the number of new coronavirus cases hit a 7-day daily average of 166,000 on September 1st. According to data in the New York Times, the case count has come down a bit since then but is still above 152,000. Some healthcare professionals are predicting another surge this month because of the Labor Day holiday and social gatherings, while others are saying that the Delta variant moves fast and furious and will be gone as quickly as it came.

Chicago-based developer, Josh Stark, told Construction Dive that worries about the high case count right now could further impact construction and the slow supply chain recovery that's been haunting the industry. He says that we're seeing suppliers come back online, but if those cases turn into more hospitalizations or deaths, then those businesses might have to shut down again.

Vaccine Hesitancy Among Construction Workers

While many different companies nationwide are mandating certain precautions for workers, including vaccinations for those who want to go back to work in the office, Construction Dive reports that more than 40% of construction workers say they will not get vaccinated.

A construction safety nonprofit out of Maryland called The Center for Construction Research and Training says that vaccine hesitancy among construction workers runs much higher than other occupations. A graph in the article shows most occupations are dealing with a vaccine hesitancy percentage of 15% which is about 25% less than the construction's 40%.

This is a problem for contractors who have clients demanding that anyone who steps foot on their property be vaccinated. Kyle Peacock of the San Francisco-based Peacock Construction says he started getting vaccine mandates from his customers in just the last few weeks. He says: "All of our healthcare clients are doing it, but we've also had a couple office tenants that said they're only going to let vaccinated people into their offices."

Job Site Mandates for Vaccinated Workers

There are some vaccinated workers who only want to work with other vaccinated employees, which is creating concerns about a labor shortage that could worsen in the coming months. Ken Simonson of the Associated General Contractors told Construction Dive that employment levels are already below their pre-pandemic peak in 36 states.

An opinion piece in Construction Dive by a New York-based contractor says the industry is already dealing with high prices for materials, appliances that are difficult to find, and a shortage of workers. And now, the construction industry has to add a Covid-problem-solving issue to his list.

He says: "Construction workers are, at their core, a hardy, headstrong, self-sufficient group." And he added that "They leave their homes daily and travel substantial distances, carpooling and ride-sharing. They stop at delis, lumber stores and home goods stores." That makes them more exposed to the potential of catching the virus and spreading it than those working from home.

Risk of Further Impact to Worker Shortage

There are many, many strong opinions as to why people should or should not get the vaccine, and why the do or don't want it. We won't go into those reasons here. What's important for real estate investors to understand is how this situation may affect our industry.

If 40% of construction workers are not planning to get vaccinated, will there be a further shortage of workers over the next few months or years if more job sites require it? Fewer workers would put more downward pressure on an already short supply because fewer homes could be completed without workers. If demand for housing continues, but supply stays low, prices will likely continue to rise.

If you'd like to read more about this issue in the Construction Dive articles, check for links in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

1 -https://www.constructiondive.com/news/contractors-caught-between-vaccine-hesitancy-and-owner-mandates/605434/

2 -https://www.constructiondive.com/news/a-call-to-action-for-covid-19-vaccinations-in-construction/605720/

The Real Estate News Brief: Home Equity Rises, Zombie Foreclosures Fall, Flippers' Hunt for Homes Sep 11, 2021

Show notes

In this Real Estate News Brief for the week ending September 11th, 2021... a record high for home equity, a drop in Zombie foreclosures, and the house flippers' hunt for homes.

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Economic News

We begin with economic news from this past week. It was a short week because of Labor Day, with not much economic news after that. The weekly unemployment report shows that initial state claims fell to a new pandemic low of 310,000. The average number of claims before the pandemic was just 90,000 less, at 220,000 per week. (1)

Continuing claims were also down to almost 12 million for state benefits and 7 other state and federal programs. That number had risen above 30 million during the pandemic.

Last week was also the last full week for many of those benefits. Bank of the West chief economist estimates that 7.5 million people will drop off the unemployment list, and another 3 million will see their benefits cut by $300 a week.

Economists are watching to see if the loss of benefits sends more people back to work, and helps ease the worker shortage that many companies are experiencing. They are also expecting a possible rise in claims because of Hurricane Ida.

And there are plenty of jobs available. The Labor Department reported an all-time high of 10.9 million job openings in July. It's the fifth month in a row that job openings broke that record. (2)

Mortgage Rates

Mortgage rates are still idling below 3%. The average 30-year fixed-rate mortgage was up just 1 basis point last week, to 2.88%. The 15-year was also up 1 basis point, to 2.19%. Freddie Mac chief economist, Sam Khater, blames it on the current wave of new COVID cases. He says it led to "weaker employment, lower spending and declining consumer confidence." But he says that lower rates are also giving consumers "more time to find the homes they are looking to purchase." (3)

In other news making headlines...

New Home Equity Record

Homeowners are reaping the benefits of higher home values. Black Knight says that housing equity has hit a new record high after surging 40% compared to a year ago. It analyzes equity among mortgage holders, and says the average mortgage holder now has $173,000 in equity. That's up about $20,000 from the first quarter of this year. (4)

Black Knight Data Analyst, Ben Graboske, says recent growth is the strongest growth he's ever seen. He also says 98% of the homeowners who are in forbearance have at least 10% equity in their homes. That should help them avoid foreclosure, as foreclosure moratoriums are lifted.

Zombie Foreclosures Nearly Non-Existent

Higher levels of home equity, along with the moratoriums, have led to a big drop in zombie foreclosures. That's when a foreclosure process stalls after a homeowner defaults on mortgage payments and abandons the home. The house ends up sitting vacant, in foreclosure limbo. (5)

A report from ATTOM Data Solutions on third-quarter vacant properties and zombie foreclosures shows that 1.3 million homes are vacant in the U.S. That's about 1 in every 74 homes. The number of homes that have fallen into zombie status is just 1 in every 13,000 homes for a total of about 7,500 homes.

ATTOM'S chief product officer, Todd Teta, says: "Vacant properties in foreclosure, and the resulting potential for neighborhood decay, continue to be a non-issue overall in most of the country." He says: "But that could easily change over the coming months as lenders are now free to take back properties from delinquent homeowners." He says the foreclosure issue will depend on individual banks, and how aggressively they pursue foreclosures once the moratoriums are gone.

Fixer-Upper Homes Are Scarce

Will we see more inventory in the near future as the housing market adjusts to a post-pandemic economy? Right now, it's tough on house flippers and businesses that rely on renovating older homes and foreclosures. There's inventory out there but the competition is tough.

According to an ATTOM report, just 2.7% of homes sales were flips during the first quarter of this year. (6) That's the lowest percentage of flips in about 20 years. House renovator, Ed Stock, told the Wall Street Journal that he expects to do just 15 flips this year. In 2014, at the height of the foreclosure crisis, he did 53 flips. He says: "Investors like me, we're like ants on a sugar hill all fighting for the same projects."

It is possible to find inventory however. And it's a whole lot easier when you are part of an investing network, like RealWealth. As a member of our network, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. It's free to join at newsforinvestors.com, and free to make use of our resources.

That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://www.marketwatch.com/story/u-s-jobless-claims-fall-sharply-to-post-pandemic-low-of-310-000-11631191386?mod=the-conversation

2 -https://www.marketwatch.com/story/job-openings-hit-another-record-high-in-july-11631110730?mod=economic-report

3 -http://www.freddiemac.com/pmms/

4 -https://www.blackknightinc.com/black-knights-july-2021-mortgage-monitor/

5 -https://www.attomdata.com/news/market-trends/foreclosures/attom-q3-2021-vacant-property-and-zombie-foreclosure-report/

6 -https://magazine.realtor/daily-news/2021/09/08/flippers-struggle-to-find-enough-fixer-upper-houses

Los Angeles Reduces Green Energy Goal by a Decade Sep 10, 2021

Show notes

Los Angeles is fast-tracking its green energy plan. The City Council approved a plan for 100% renewable energy by 2035. That's inline with President Biden's goal, and a decade sooner than LA's previous plan. The City Council decision comes after a comprehensive study that looked at everything from greenhouse gas emissions, public health, and cost versus benefit analysis to electricity demand, rooftop solar, and other renewable energy options.

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

LA hopes to "set the stage for the country" and the rest of the world with LA100. (1) The transition would create about 9,500 clean energy jobs and cost between 57 and $87 billion, but according to LADWP General Manager Martin Adams, much of the investment would also coincide with infrastructure replacement that is already on the city's "to do" list.

He says: "When this study started three-and-a-half years ago… the idea was to be where we want to be by 2045. So we have now shaved a decade off that timetable and we know we have a roadmap that will get us to 100% clean energy by 2035."

Adams says the city is going to "take this very seriously and make this happen." And Councilman Mitch O'Farrell says that "LA100 is not a utopian gesture. It is a work plan for a world in trouble."

Code Red for Humanity

This comes as California firefighters are once again battling three massive wildfires, and just a few weeks after the Intergovernmental Panel on Climate Change published a report called "Code Red for Humanity." (2) The report states that global warming is "unequivocally caused by human activities" and warns that the average world temperature will likely hit a dangerous threshold within the next 20 years.

That threshold is about 2.7 degrees Fahrenheit hotter than a pre-industrial average and is generally viewed as the hottest that humanity could handle. Climate scientists say average temperatures are already 2 degrees hotter, and we are already seeing the impact of that with more extreme weather-related events and wildfires.

LA100 Renewable Energy Study

Los Angeles partnered with the National Renewable Energy Laboratory to complete the study. (3) It shows that LA can hit an 84 to 100% clean energy goal by 2035 with a 76 to 100% decline in greenhouse gases. Results show the economic disruption would be minimal compared to the creation of jobs, economic output, public health benefits, and greenhouse gas reductions. The transition will require the shutting down of gas-operated power plants, and the massive adoption of solar and wind energy along with measures to improve energy efficiency, and energy storage.

One big change will be the need for rooftop solar on homes and multi-unit buildings. The report says that the city has more than 13 gigawatts of solar rooftop potential. Private homes and multi-family buildings account for more than half of that potential, but off-site green energy production and energy storage will be needed to supply enough electricity to multi-unit buildings.

LA100 Equity Strategies

Another aspect of the plan is to make sure that everyone shares in the benefits, despite income levels. Policy officials say that will require "intentionally designed policies and programs" to ensure a fair distribution of the green energy benefits. A study on "Equity Strategies" was launched in July. (4) It looks at:

1 - Access to these green energy programs

2 - Local power grid upgrades

3 - Assistance for renter participation in these programs

4 - Charging stations for electric vehicles, and

5 - Impacts to housing and transportation, among several other issues.

Adams says: "As LADWP expands these programs and adds many more, we must ensure that customers who are impacted by poor air quality, and have the least ability to afford higher electric bills, are able to benefit from the clean energy transformation."

The announcement puts Los Angeles in the forefront of a nationwide effort to address climate change. The LA County website has a chart that shows how many days a year the county hits temperatures over 95 degrees, and a forecast for an increase in those ultra-hot days if we don't take action to slow climate change now. (5)

If you'd like to read more about this, check for links in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 - https://www.dailynews.com/2021/09/01/la-votes-for-100-renewable-energy-by-2035-a-decade-sooner-than-planned/

2 - https://www.reuters.com/business/environment/un-sounds-clarion-call-over-irreversible-climate-impacts-by-humans-2021-08-09/

3 - https://www.nrel.gov/docs/fy21osti/79444-ES.pdf

4 - https://www.ladwpnews.com/ladwp-launches-groundbreaking-la100-equity-strategies-initiative/

5 - http://publichealth.lacounty.gov/eh/climatechange/ExtremeHeatNClimateChange.htm

The Real Estate News Brief: New Foreclosure Bidding Rules, What's a "Normal" Market?, & Renters Who Will Rent Forever Sep 09, 2021

Show notes

In this Real Estate News Brief for the week ending September 4th, 2021... new FHFA rules on the foreclosure bidding process, the for-sale homes needed for a "normal" market, and the renters who don't think they will ever be homeowners.

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Economic News

We begin with economic news from this past week. The number of people applying for unemployment has dropped again. The Department of Labor reported that 340,000 people filed for state claims last week. That's a decline of 14,000 from the week before and the lowest it's been since the start of the pandemic. Continuing claims are also down, to a total of 2.75 million, and the total for all 8 state and federal programs is 12.2 million. That's down from 30 million at the peak of the pandemic. (1)

More disappointing is the August report on hiring. The Wall Street Journal had estimated an additional 720,000 jobs, but the Bureau of Labor Statistics reported a disappointing 235,000 new jobs. That's the lowest number we've seen in more than a half a year. Job growth suffered the biggest decline in the retail sector. New government jobs were also down, along with jobs in the construction industry. The official unemployment rate is currently 5.2%, but of course that doesn't include people who are not looking for a job. (2)

Meanwhile, home prices recorded a third month of record-high price growth. The latest S&P CoreLogic Case-Shiller Home Price Index is up 18.6% in June, on an annual basis. The 20-city index is ever higher, at 19.1%. S&P DJI investing strategist Craig Lazzara says the data is consistent with the hypothesis that the pandemic drove buyers from urban areas to the suburbs. (3)

Pending home sales dipped a little in July. The National Association of Realtors says they were down 1.8%. MarketWatch economists had expected a slight increase. NAR's chief economist Lawrence Yun says: "The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand." (4)

Consumers are also feeling more anxious about the economy. The Conference Board says that consumer confidence fell to a six-month low of 113.8 in August. The worry list includes inflation and the spread of the Delta variant, although there's some evidence that Covid caseloads have peaked in some of the hardest hit areas. (5)

Mortgage Rates

Mortgage rates are holding steady. Freddie Mac says the 30-year fixed-rate mortgage stayed the same this last week at 2.87%. The 15-year was up one basis point to 2.18%. (6)

In other news making headlines…

New Rules on Foreclosure Bidding Process

Owner-occupants are getting more time to buy foreclosures before investors are allowed to big on them. The Federal Housing Finance Agency announced that it is extending the amount of time that owners have to view and buy foreclosures from 20 days to 30 days. It's part of the First Look Program first launched in 2009 to help promote owner occupancy and stabilize neighborhoods.

The FHFA's acting director, Sandra Thompson says: "Extending the amount of time owner-occupants have to bid on an REO property, without competition, is especially important for neighborhood preservation while the supply of homes for sale is severely limited."

Housing Gap is 1.5 Homes Short of Normal

The housing market needs another 1.5 million for-sale homes to help fill the inventory gap. Analysts at Morgan Stanley say that would get us back to a housing market "normal." That applies to both the resale market and the building market. (7)

Morgan Stanley strategists say that inventory is lagging about three years behind demand. And the number of homes needed could be as high as 5 million, depending on how you add it all up.

That imbalance is reflected in the rate of home price growth, although DataTrek analyst Nicholas Colas says: "While house prices are certainly trending above long-run growth rates, they are not yet as elevated as 2005 on an 8-year trailing appreciation basis."

Renters Who Say They'll Always Be Renters

Many renters hope to someday buy their own homes, but according to a LendingTree survey, half of them don't think that will ever happen. (8) LendingTree surveyed 2,500 people and 83% said they'd prefer to own their own homes, but 48% said they have doubts about their ability to buy.

So what's keeping them from buying a home?

More than half said they can't afford a down payment. About a third said home prices are too high or their credit scores are not good enough. A quarter of them said they don't have a stable job right now or they are not sure "where" to settle down. Some of the other reasons include student loan debt and plans to get married first.

That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 - https://www.marketwatch.com/story/u-s-jobless-claims-fall-to-new-pandemic-low-of-340-000-despite-delta-surge-11630586480?mod=economic-report

2 - https://www.marketwatch.com/story/u-s-adds-just-235-000-jobs-in-august-as-delta-dents-hiring-11630672922?mod=economy-politics

3 - https://www.marketwatch.com/story/home-prices-see-record-growth-for-third-straight-month-but-relief-is-in-sight-for-home-buyers-11630416326?mod=economic-report

4 - https://www.marketwatch.com/story/pending-home-sales-slide-for-second-month-in-a-row-11630333300?mod=economy-politics

5 - https://www.marketwatch.com/story/consumer-confidence-in-the-u-s-sinks-to-7-month-low-on-delta-anxiety-11630419114?mod=economic-report

6 - http://www.freddiemac.com/pmms/

7 - https://magazine.realtor/daily-news/2021/09/03/fhfa-gives-buyers-wider-advantage-over-investors

8 - https://news.yahoo.com/housing-market-needs-15-million-more-homes-on-sale-to-get-back-to-normal-morgan-stanley-211442251.html

9 - https://magazine.realtor/daily-news/2021/09/01/survey-nearly-half-of-renters-fear-they-ll-never-own

Free Airbnb Housing for Afghan Refugees Sep 04, 2021

Show notes

Airbnb is stepping in to help Afghan refugees now pouring into the U.S. It's offering free housing to 20,000 of them with the help of Airbnb hosts. The temporary lodging will be paid for by Airbnb's non-profit arm, Airbnb.org, along with contributions from Airbnb co-founder Brian Chesky and donations made to Airbnb.org's Refugee Fund. (1)

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Airbnb has been helping disaster victims since Hurricane Sandy hit New York City in 2012. Sandy was one of the worst hurricanes in history and displaced thousands of people. At the time, an Airbnb host asked the company if she could offer her place for free to a few of the victims. The idea was well received, and Airbnb quickly coordinated an effort to get other hosts to do the same. More than 1,000 hosts helped out.

Housing Help for Disaster Victims

Since then, Airbnb says that hosts have provided temporary accommodations to more than 75,000 people, including victims and relief workers. In 2015, Airbnb helped victims of the Nepal earthquake. In 2016, it was Pulse nightclub shooting victims in Florida.

In 2017, Airbnb made its disaster housing help official with the Open Homes program. During that same year, it offered help to victims Hurricane Harvey, Hurricane Irma, Hurricane Maria, and the Mexico City earthquake. In 2018, it began helping people traveling long distances for medical treatment, and provided housing for victims of the Camp and Woolsey Wildfires in California.

In 2019, victims of the Australia bushfires received help. And in 2020, Airbnb made it possible for hosts to provide housing for COVID-19 healthcare workers and first responders. It was in December of last year that Airbnb announced the formation of the non-profit Airbnb.org. (2)

Chesky Mobilizes Help on Twitter

This year, Airbnb is mobilizing to help Afghan refugees. Brian Chesky appealed for help from hosts on Twitter. He said in a tweet on August 24th: "Starting today, Airbnb will begin housing 20,000 Afghan refugees globally for free." He also acknowledged hosts by saying: "While we will be paying for these stays, we could not do this without the generosity of our Hosts." He didn't say how long Airbnb would pay for these stays. An article in Time suggested it would be one to two weeks, while housing organizations find longer-term accommodations for refugees. (3)

One of those organizations is HIAS, which stands for Hebrew Immigrant Aid Society. It's a Jewish American non-profit that was founded in 1881 to help Jewish refugees, but has evolved over time. It now provides help to refugees of all faiths and ethnicities worldwide who fear for their lives because of war, persecution, or violence. (4)

Cathryn Miller-Wilson of HIAS Pennsylvania told Time that her organization gets a stipend from the U.S. government to get refugees into housing right away. When Airbnb hosts help out, the organization can save some of that stipend and use it to pay for longer-term rentals.

Hosts Offer Homes at Charitable Rates

Airbnb bookings are made by that host organization after hosts volunteer their properties. They can offer their homes for free, or they can choose charitable rates which are paid for by Airbnb, Chesky, and the Refugee Fund. Airbnb also waives its service fee.

Time reports that Uber and Lyft are also helping refugees by donating ride credits to the International Rescue Committee or IRC. Uncommon Goods is also donating $2 each time a shopper chooses IRC when they are checking out. That money will be used to pay for other kinds of support that the refugees may need.

If you'd like to learn more about this charitable effort, look for links in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 - https://news.airbnb.com/afghan-refugees/

2 - https://www.airbnb.org/about

3 - https://time.com/6093393/airbnb-afghanistan-refugees/

4 - https://www.hias.org/who/history

Eviction Moratorium Roller Coaster Sep 03, 2021

Show notes

The eviction moratorium roller coaster continues. The U.S. Supreme Court ruled against the moratorium, saying: "it is up to Congress, not the CDC, to decide whether the public interest merits further action here." And now, three federal agencies are asking state and local governments to implement eviction moratoriums or extend the ones they currently have.

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

The Supreme Court issued an eight-page ruling on August 26th. (1) Realtor associations and landlords in Alabama and Georgia had sued, saying the CDC had gone beyond the reach of its authority.

Scotus Rules Against Moratorium

In the ruling, the justices said: "The moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Despite the CDC's determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude." (2)

But they went beyond that saying that rental assistance funding has been made available but very little of it has been distributed. So what's the problem? According to the ruling: "The Government has had three additional months to distribute rental-assistance funds to help ease the transition away from the moratorium." Congress has also had time to put together new legislation, but has failed to do so. And now the moratorium is set to expire on October 3rd.

Where Are the Rental Relief Funds?

Why have emergency rental funds not already been distributed as landlords suffer the brunt of the moratorium? We reached out to Director of Business Intelligence, Doug Ressler, at Yardi Matrix about the delay. He told us:

"In most of the country: As of Aug. 26, state and local programs had (received) a little more than $5 billion of more than $46 billion in federal rent relief money out the door. Only about 10% of that money has reached renters and landlords. It's slowed from the federal government to states and counties and cities. There are over 500 different State and City programs and procedures. Some are doing a good job. They've gotten more than half the first round of money out the door. Others are having issues and have provided less than 5% of the monies available."

States, Cities Asked to Implement Moratoriums

Now, there's a call for moratoriums at the state, city, and local court levels. (3) The Secretary of Housing and Urban Development, Marcia Fudge, the Secretary of the Treasury, Janet Yellen, and Attorney General, Justice Merrick Garland sent a letter to state and local governments about the eviction moratorium. They say they are working together and with other agencies to "make rental assistance available to households in need." And they are asking for help in several ways. They want state and local governments to:

1 - Enact eviction moratoriums for the rest of the health emergency.

2 - Encourage local courts to make it a requirement that landlords apply for Emergency Rental Assistance before they begin eviction proceedings.

3 - Prevent eviction proceedings to continue while the ERAs are being considered.

4 - Use ERA and other emergency funding to pay for tenant legal representation and eviction-diversion strategies.

5 - Help tenants through this whole process.

California has already extended its moratorium. According to the Rental Housing Journal, some judges are "slow-walking" eviction cases, while this situation plays out.

In a perfect world, rental relief funds would be coming through at a much faster pace, and both tenants and landlords would be getting relief, right now. Evictions are never something a landlord wants to do. But the moratorium strategy is not working -- for landlords. Something else needs to be done to address the issue of back-rent, and continued lack of rent payments from some tenants.

It's Time for a New Rent Relief Strategy

President of the California Rental Association, Christine Kevane LaMarca, feels that legislators are not recognizing the financial burden that's crushing some housing providers. In reference to the extension of California's eviction moratorium, she told the Rental Housing Journal: "The state continues to extend the eviction moratorium with no distinction between residents who cannot afford to pay due to the pandemic and residents who can afford to pay their rent but are using the moratorium to violate their rental agreements." (4)

These moratoriums have been going on for close to a year-and-a-half. President of the National Apartment Association, Bob Pinnegar, told the Journal: "The government must move past failed policies and begin to seriously address the nation's debt tsunami, which is crippling both renters and housing providers alike."

For many landlords, this isn't a problem. They have tenants that are paying rents, especially those with single-family rentals. But for those who are, something needs to be done to make them whole.

If you'd like to read more about this, check for links in the show notes at newsforinvestors.com

And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 - https://www.supremecourt.gov/opinions/20pdf/21a23_ap6c.pdf

2 - https://rentalhousingjournal.com/u-s-supreme-court-ends-nation-wide-eviction-moratorium/

3 - https://rentalhousingjournal.com/governors-mayors-courts-urged-to-stop-evictions-until-emergency-rental-assistance-is-processed/

4 - https://rentalhousingjournal.com/california-rental-housing-association-sues-state-over-eviction-moratorium/

The Real Estate News Brief: Mortgage Payments in BITCOIN, Loan DISCOUNTS for the VACCINATED, & Patio Popularity Aug 30, 2021

Show notes

In this Real Estate News Brief for the week ending August 28th, 2021... which lender will let you pay in Bitcoin, why a Covid-19 vaccine will get you a discount on closing costs, and the rising popularity of patios, for outdoor living.

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Economic News

We have economic news from this past week, but first, big news on the latest federal eviction moratorium. If you haven't heard, the U.S. Supreme Court blocked that mandate after a new legal challenge by the Alabama Association of Realtors and a group of landlords. The plaintiffs argued that the CDC doesn't have the authority to issue this kind of mandate. The justices agreed, saying the policy should've come from lawmakers, and not the CDC. (1) As Newsweek reports, progressive members of Congress are now considering legislation that would reinstate the moratorium, as the nation continues to deal with the pandemic. (2) So the battle continues.

Members of the Federal Reserve met virtually for their annual Jackson Hole Symposium, and discussed the need to pull in the reigns on its bond-buying policy. (3) After the meeting, Fed Chair Jerome Powell said a majority of Fed officials, including himself, believe that tapering should begin this year. He has been saying that the economy needs to make "substantial further progress" before the Fed would cut back on its stimulus policy, and he said for the first time in his speech, that that test has now been met. An announcement on "when" tapering might begin is expected in September.

Meantime, the inflation rate has now hit a 30-year high, according to the PCE Index. That stands for Personal Consumption Expenditure index. It's the one that the Fed pays close attention to. It was up .04% in July and brings the annual rate of inflation to 4.2%. (4) That's lower than the Consumer Price Index or CPI, which shows an annual rate of 5.4%. (5) Both are much higher than the Fed's 2% inflation target.

A revised report on second quarter GDP shows the economy grew at an annualized rate of 6.6%. That's up from 6.5%. (6)

The number of new weekly jobless claims rose for the first time in more than a month. The Labor Department says they were up 4,000 to about 353,000 for last week. Claims have been falling overall but have still not returned to pre-pandemic levels of about 220,000 per week. If you add all the people with ongoing claims, the total is about 12 million. That's down from a high of 30 million toward the beginning of the pandemic. (7)

On to real estate: New home sales reversed a three-month decline, with a 1% increase for July. If that rate continued for an entire year, the sales total would hit 708,000. Currently, the median price for a home is $390,500. (8)

Existing home sales are also higher in July. The National Association of Realtors says they were up 2% to a seasonally-adjusted annual rate of 5.99 million homes. The increase in sales is being attributed to an increase in inventory. The median price for an existing home is now $359,900, or 17.9% more than it was a year ago. (9)

Mortgage Rates

Mortgage rates are still idling below the 3% level. Freddie Mac says the 30-year fixed-rate mortgage was up 1 basis point to 2.87%. The 15-year was also up just one basis point to 2.17%. (10)

In other news making headlines…

Paying Home Loans with Bitcoin

United Wholesale Mortgage made a big announcement about Bitcoin. It says that it will begin accepting cryptocurrency payments for home loans. UWM is the 2nd-largest lender in the U.S. The plan to accept crypto for payments is the first for the national mortgage industry. (11)

Lender Discount for the Vaccinated

What appears to be another industry first, is an announcement by Neat Loans to offer a discount to borrowers who are vaccinated against Covid-19. It would apply to $500 on closing costs for residential and refinancing loans.

The concern is that an unvaccinated person would be more likely to get sick and be out of work, making it difficult to keep up with mortgage payments. Borrowers who are unable to get the vaccine for health or religious reasons, would also qualify for the discount. (12)

Patio Popularity is Skyrocketing

New data shows that the popularity of patios jumped another notch higher in 2020. The National Association of Homebuilders reports that the share of new homes with patios rose to 61.4%. It's the first time that number has ever been higher than 60%. At the beginning of the Great Recession, it got as low as 44.8%, but has been continually increasing since then, with a big jump in 2020. It rose from 59.6% to the current 61.4%. You'll also find more homes with patios in warmer Western and Southern states. (13)

That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 - https://www.inman.com/2021/08/27/supreme-court-shoots-down-latest-eviction-moratorium/

2 - https://www.newsweek.com/whats-next-eviction-moratorium-progressives-eye-legislation-after-scotus-ruling-1623686

3 - https://www.marketwatch.com/story/fed-chair-powell-says-he-supports-starting-to-taper-bond-purchases-this-year-11630072826?mod=federal-reserve

4 - https://www.marketwatch.com/story/inflation-rate-hits-30-year-high-pce-shows-as-u-s-confronts-major-shortages-11630068319?mod=economic-report

5 - https://www.cnbc.com/2021/08/11/cpi-report-july-2021.html

6 - https://www.marketwatch.com/story/u-s-economy-grew-slightly-faster-6-6-pace-in-second-quarter-new-gdp-figures-show-11629982344?mod=economic-report

7 - https://www.marketwatch.com/story/jobless-claims-rise-for-first-time-in-five-weeks-to-353-000-but-still-near-pandemic-low-11629981525?mod=economic-report

8 - https://www.marketwatch.com/story/new-home-sales-rebound-despite-prices-hitting-record-high-11629814766?mod=economy-politics

9 - https://www.marketwatch.com/story/new-home-sales-rebound-despite-prices-hitting-record-high-11629814766?mod=economy-politics