Tag: housing

The Modern American Dream?

Popularised after the Second World War, the idea of the American Dream has long centred around the idea that anyone, from any background in the United States, can achieve prosperity and success.

For nearly 75 years, this idea has often been symbolically represented by a middle-class family with two dogs, two kids, an American-made car and a suburban home with a white picket fence. While the “Modern American Dream” continues to include pets and children (increasingly more pets than children) and an automobile (now more evenly split between American pickup trucks, electric vehicles, and various international brands), one piece of this dream is becoming increasingly unattainable for the average American: owning a home.

Supply/demand imbalances of housing stock in the US, exacerbated by an ageing population clinging to homes that they either own outright or with extremely low mortgage rates, combined with a large pullback from developers following the 2008 financial crisis, continue to ripple through the economy and the fixed income universe in unexpected and meaningful ways.

Where are we today?

Activity in the US housing market has ground to a halt, as older homeowners who have locked in low interest rates, or have paid off their homes altogether, are choosing to hold tight to significant amounts of housing inventory. Originations of mortgages in the US (which include new financing and refinancing) could hit two-decade lows, with the majority of transactions among the highest income (highest credit score) borrowers.

The median age of both first-time and repeat homebuyers continues to rise, as the combination of an undersupply of homes (both new and existing) and higher mortgage rates continues to keep younger buyers on the sidelines, with wages unable to keep up with parabolic increases in homeownership costs.

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Biden-Harris DOJ Aggressively Goes After Landlords That Use Criminal Background Checks to Screen Renters, Accuses Them of Race Discrimination

The Biden-Harris DOJ is aggressively pursuing landlords that use criminal background checks to screen renters.

“To keep with an Obama era housing rule that prohibits landlords from banning tenants with criminal records, the Biden administration is going after property owners that use background checks to screen perspective renters. Under the civil rights law known as the Fair Housing Act, housing discrimination is prohibited based on race or color, religion, sex, national origin, familial status or disability but Obama’s U.S. Department of Housing and Urban Development (HUD) issued an order in 2016 adding criminals to the protected class,” Judicial Watch reported.

Federal prosecutors argued in a lawsuit filed this month against the owners and managers of Suburban Heights Apartments in Kinloch, Missouri, that their criminal background checks discriminate against blacks because of racial disparities in incarceration rates.

The owners and managers of Suburban Heights Apartments, a residential property within proximity to UMSL, described itself as a “student village” and implemented criminal background checks to make living in the building safer for young renters.

However, the Biden-Harris DOJ is going after the landlord and accusing them of racial discrimination.

“The lawsuit seeks monetary damages to remedy the harms caused by the defendants’ policy, a civil penalty to vindicate the public interest and a court order barring future discrimination,” the DOJ said.

“It is well documented and known that there are statistical Black-White racial disparities in conviction and incarceration rates,” the DOJ lawsuit says.

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First look inside Maine apartments where migrants are getting free rent for up to 2 years

The Brunswick Landing apartments in Maine sparked controversy earlier this year when it was discovered that homeless migrants in the area were getting the opportunity to live in the units rent-free for up to two years. Migrants living in the apartments shared that not only is the rent-free, the utilities are paid and we got an inside look at the furnished apartments that would run the average American about $2,300 dollars. 

An inside look at the units at Brunswick Landing revealed that the apartments, which are currently set to house 60 migrant families, come fully furnished with migrants receiving a couch, table and chair, a flat-screen TV, and even photo frames on the walls for ambiance. “We don’t pay anything,” one woman from the Congo stated, “but after two years we have to pay the rent,” she finished. 

The city of Brunswick has allocated $3.5 million dollars toward paying the migrant’s rent and opened it back in February of 2024. The project, which was initially created for Maine residents, sparked outrage as the Maine residents deal with a housing crisis that according to the MaineHousing’s “Affordability Index,” left “79.1 percent of Maine families unable to afford a home in 2023,” according to the Maine Wire. 

While 60 migrant families are living across 5 buildings, it has been reported that Americans can rent out the units, which are marketed as “premiere apartments.” However, the average rent for a one-bedroom starts at $1,800 and a two-bedroom starts at $2,300.

The migrants living in the area shared that they were from places such as Angola, Haiti and the Congo expressing that living in the apartments is like “living in a palace.” 

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New Cory Booker Bill Would Prevent Housing Discrimination Against People Convicted Of Marijuana And Other Drug Offenses

Sen. Cory Booker (D-NJ) and Rep. Maxwell Alejandro Frost (D-FL) have filed a bill to repeal a decades-old federal statute that’s led to the denial of housing for millions of people with prior drug convictions.

The Fair Future Act would strike a section of the 1988 Fair Housing Amendments Act that the lawmakers say has prevented more than nine million people from accessing rental housing no matter how serious the offense was or how long it’s been since they’ve been convicted.

“No one should be permanently denied a place to live because of a prior drug conviction,” Booker said in a press release. “Right now, housing laws have denied people with prior drug convictions the ability to live in rental housing and in turn, denied them a fair chance at reentering society. The Fair Future Act will eliminate this discriminatory barrier to housing and help us put an end to our nation’s cycle of poverty and recidivism.”

Frost said that people “who have served their time, repaid their debt to society, and are looking to re-enter our communities cannot do so when the deck is stacked against them.”

“Housing is the foundation of a safe and secure life–yet outdated housing laws and conflicting state laws on marijuana mean that someone could go to jail, serve time, and be denied housing in one state, while someone carrying the same amount of marijuana in another state is abiding by the law,” the congressman said. “It’s time we allow folks a fresh start and put an end to housing exclusion for folks who have paid for their crimes and are rebuilding their lives.”

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US Government Behind ‘Housing Crisis”

Make no mistake, the housing shortage is directly the responsibility of the US Federal government and Federal Reserve policies going back to the 1990s. Based on Governor Walz surprise revelation promise of three million new homes, and downpayment assistance, the problem is about to get worse should they be elected. As our great departed President Reagan once said, “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help. “. The questions are how did we get here, what is the solution, and how do we implement the solution?

Prior to 1934, homeowners purchased homes with cash or small bank loans that were underwritten by banks. Obviously, this limited homeownership to those with means and hence ownership was historically 46.5%. In 1934 President Roosevelt created the Federal Housing Administration. The objective was to help builders and developers, not necessarily homeowners. Homeownership rates grew to around 65%. In the 1990s, the government encouraged and created a lending environment, along with quasi-governmental agencies backing loans that were increasingly more likely to fail, but with a government backstop, there seemed to be no limit. Homeownership grew to 69% by 2004. The limit, however, was reached, as loans reached maturity, along with a recession in 2008, that led to one of the worse economic crises in US history.

The fallout of the 2008 housing crisis had far reaching consequences that most Americans who are not in building or developing understand. From the 1980s until the year 2000, annual single-family housing starts fluctuated from 750,000 to 1.2 million homes. The supply chain around those number of starts, the number of builders, even considering consolidation, was steady, lot acquisition and development, real estate companies, mortgage lenders, and construction workers all found equilibrium. But when products like 3-1 ARMs with low introductory rates, low rate construction loans, interest from Wall Street in monetizing construction, and fly by night mortgage brokers flipping loans to Freddie and Fannie began, the whole industry was thrown into chaos.

From 2000 to 2005, housing starts ramped from 1.2 million to 1.7 million. In order to supply products like lumber, engineered lumber, brick, mortar, windows, doors, roofing, plumbing materials and fixtures, electrical materials and fixtures, heating and air conditioning units, et cetera, industry invested in new facilities to match the “new normal” rate of construction. Land developers had to acquire and develop hundreds of thousands of new lots, and given rezoning and permitting, the lead time is around 18 months to 2 years. Large builders made up a lot of the slack, but new “builders” were leaving jobs in insurance, banking, landscaping, trades or whomever wanted to fulfill their American dream of owning a business. Small banks were being created out of thin air and lending to all these new, inexperienced builders with 100% financing. All was going well until the bottom fell out.

Beginning in 2007 and continuing through 2009, housing starts fell from 1.7 million to less than 500,000, where it remained until 2013. In 2014, the rate of new starts got back to the historic level of 700,000 homes annually, and remained in the historic band between 750,000 to 1.2 million. The trouble is the intervening years, the population continued to grow and the shortfall grew to 4.5 million homes where we stand today. In fact housing starts really grew rapidly until 2021, when the combined Covid scare and Federal Reserve rate increases caused another correction in the market.

For the long period of sub-3% mortgage interest rates, buyers again flooded the market to buy up all the existing inventory and any new homes being built. This had the combined effect of low supply and massive demand, leading to increased prices of homes. Everyone felt comfortable that we had weathered the worst of the post-2008 market, but unfortunately the Fed created yet another bubble. Once they raised rates well above the historic level, and mortgage rates skyrocketed to 7-8%, the market once again was stuck in a dilemma created by the government.

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“Kind Of Like Communist Housing Meets Corporate Housing”: Lennar Showcases New Texas Home-Builds

Lennar, one of the largest homebuilders in the US, showcases beautifully rendered images online of its new single-family homes in the Fort Worth, Texas, area. To prospective homeowners, the neighborhood appears picture-perfect for raising a family. 

However, Lance Lambert, the founder of the research firm ResiClub, pointed out on X that these tiny homes in the Risinger Court community are not as they appear online. 

Lambert shares a rendered image of one of the 763 sq ft homes, featuring two bedrooms and two bathrooms, side by side with an image of the same house in real life. 

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Gig Economy Company Launches Uber, But for Evicting People

“SINCE COVID-19 MANY AMERICANS FELL BEHIND IN ALL ASPECTS,” reads the website copy. The button below this statement is not for a GoFundMe, or a petition for calling for rent relief. Instead, it is the following call to action, from a company called Civvl: “Be hired as eviction crew.” 

During a time of great economic and general hardship, Civvl aims to be, essentially, Uber, but for evicting people. Seizing on a pandemic-driven nosedive in employment and huge uptick in number-of-people-who-can’t-pay-their-rent, Civvl aims to make it easy for landlords to hire process servers and eviction agents as gig workers.

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