Thursday Breakfast Roundup: Another Councilwoman, Another Real Estate Embarrassment

  • Posted at 9:46, July 18, 2014
  • By QuidnuncRE Staff

Here's what we are pondering to start our Thursday:

  • There’s going to be plenty of long and maybe even lecherous looks at the East New York residential development deal that the Daily News describes in the Thursday edition, because the prospect of a deal is mostly irresistible.  But it really comes down to the long community struggle described in the story’s last lines, in the words of newly inaugurated City Councilwoman Inez Barron. "We’re asking developers to realize the median area income is $30,000, and we’re asking for tax breaks so the people who live here can stay here," the article quotes Barron as saying.  The incredible, jaw-dropping real estate opportunity goes hand-in-hand with the socio-economic implications of the area’s notorious crime problem.  The best news isn't the opportunity, but the change.  Barron says that the Brooklyn neighborhood "has the greatest retention and growth of people moving into the community," adding, “We’re getting a grip on crime. Crime is going down.” You can read the article about the potential renovation and the potential challenges in “Spacious, affordable properties could put some home buyers in an East New York state of mind,” HERE.
  • Now that Melissa Mark-Viverito has been elected City Council speaker, it’s time to move off of her failure to disclose her real estate development project’s rental income, which she has promised to correct.  Besides, the Daily News has found another:  Now, Harlem City Councilwoman Inez Dickens has been revealed to declare almost no income from three rental apartment buildings. In at least one, the article says that there are tenants who refuse to pay their monthlys because the place is not kept up—to the point where one vacant apartment has squatters. And the NYC Department of Housing, Preservation, & Development has sent inspectors to assess the conditions in two other buildings, where the article records a no-heat complaint. The bottom line is that the buildings are a family-managed business that has a history of bad doings, which include being cited as one of Manhattan’s worst landlords--by a former Public Advocate who is now a new mayor. It's another councilwoman with a real estate development problem that needs fixing. Read “Harlem Councilwoman Inez Dickens’ tenants declare rent strike, while ethics experts question how the pol reports her income as a landlord,” in the Daily News, HERE. (And, again, a link to QuidnunceRE background on the real estate doings of the new council speaker, HERE.)
  • Reuters reports that Mel Watt, who was sworn in Monday as director of the Federal Housing Finance Agency, will set aside planned increases on fees, to take effect this year, that Fannie Mae and Freddie Mac charge lenders for guaranteeing mortgages. Lenders decried the fees, but the impact would have landed on borrowers in the form of higher closing costs and mortgage rates.  The price changes were announced last month, but Watt reversed course at the FHFA, which regulates the two government-dominated mortgage finance companies, and he asked for further study on how much the fees would affect borrowers. The article is HERE.
  • Meantime, a Wall Street Journal blog reports that three Republican House members have written a letter asking Watt and the FHFA to proceed with the fees to prevent unfair subsidies of riskier borrowers, or give Fannie Mae and Freddie Mac unfair market advantages.  Two of the three House members, the WSJ blog reports, also are on a reverse course:  They had joined in on a 2010 letter to the FHFA asking it to avoid such fees.  HERE.
  • The trouble with homeowner associations is that people buy and move in without reading their agreements, and don’t understand or even know the covenants.  That’s when the problems—foreclosure, litigation, and, heavens, dog DNA tests—begin. "Insight: Underfunded U.S. homeowner associations get heavy," posted on Wednesday by Reuters, HERE.
  • The Mortgage Bankers Association said its seasonally adjusted mortgage application activity index rose 2.6% in the week ended Jan. 3, up from its lowest reading in 12 years a week earlier.  The measure includes both refinancing and home purchase applications. Details at Mortage News Daily, HERE.
  • Bloomberg News just posted data from a new report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate that says Manhattan rents are falling.  The median monthly rent last month dropped 1.6% from December 2012, to $3,100.  Offers of rental incentives—for example, a free month on a two-year lease–-rose to 13% of new December rental agreements in December.  That’s up from 4.3% from the year-earlier month, and the highest proportion of rental incentives since March 2011.  The article appears HERE.  It’s in the Wall Street Journal too, for subscribers, HERE.
  • Bloomberg News also has posted a report released today by RealtyTrac that says people are regaining equity in their homes.  The share of owners whose homes are worth at least 50% more than they owe on their mortgages rose to 18% in 2013’s fourth quarter, up from 16% in the previous quarter, according to a report today by the Irvine, Calif.-based real estate data firm. The result, the article says, is more consumer spending.  Details HERE
  • To spur companies to move to the Garden State, New Jersey has revamped a tax break program.  New York and Pennsylvania are fighting back. Details in the New York Times, HERE, and
  • The Landmarks Preservation Commission slams the caretaking of a once-regal Grand Concourse building which probably must be demolished, soon, for safety reasons. The surprising landlord target:  New York City itself. In Thursday’s New York Times, HERE.
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