Tuesday Report, December 21, 2010
Special to the Texas Low Income Housing Information Service
The US economy continues to slump into another year with housing sector as the major stagnant sector. Little hope in seen in the short term as a conservative Congress is expected to end tax deductions on mortgage interest. Tax cuts for new homebuyers in 2009 and 2010 created slight up-ticks in sales but the market remains flat.
The first reports from the 2010 Census show “integration” of African-Americans into white neighborhoods in metropolitan areas. The report thus far does not address possible gentrification pressures.
For a pdf version of the full articles, plus contextual stories in social, environmental and legal areas, contact Bo McCarver at firstname.lastname@example.org
An inconvenient housing sector
By Pedro Nicolaci da Costa Reuters December 20, 2010
Wall Street banks have been gripped by a certain euphoria in recent weeks, with their economists touting a modest improvement in U.S. data as an omen of more robust growth to come in 2011.
Housing figures next week may inject a dose of sobriety into these forecasts. Anticipation of a strong expansion, coupled with worries about the budget deficit following a new tax deal in Washington, have pushed Treasury bond yields that directly affect mortgage rates sharply higher.
This raises the concern that a still-struggling housing sector, the epicenter of the country’s worst financial crisis in generations, may yet see further deterioration.
With Europe still reeling from a debt crisis that just will not go away, another bump on the road for the U.S. economy might deprive the global recovery of not one but two key engines.
A report on Wednesday is expected to show existing U.S. home sales, which account for the bulk of the market, rose by about 300,000 units on an annualized basis to 4.71 million in November. That would mark a move further away from the 15-year low seen in the summer, but it would still be a far cry from record peaks over 7 million in 2005.
Full story at: http://www.reuters.com/article/idUSTRE6BI1VK20101219
Tax deduction for mortgage interest could be on the chopping block
It’s been around since 1913, but its time may be up. Such a change would generate billions of dollars in federal revenue that could be used to cut the deficit while inflicting little pain on most middle-class homeowners.
By Don Lee Los Angeles Times December 20, 2010
Reporting from Washington — Fifteen years ago, Carol Nietmann and her husband bought a spacious house in Maryland near Chesapeake Bay. And thanks to the time-honored tax deduction for mortgage interest, she said, their new place was a little bigger and a little nicer than they would otherwise have thought they could afford.
Much the same has been true for millions of Americans up and down the income scale. Perhaps the most sacred of all the sacred cows in the tax code, the home mortgage deduction has long been seen as crucial to a major element of the American dream — owning your own home.
It has also been a boon to home builders, construction workers, the financial services industry and local governments that benefited from fatter real estate tax revenue.
But nearly a century after coming into existence, the mortgage deduction may face a day of reckoning. Although out of the spotlight while the lame-duck Congress thrashes to an end, the mortgage deduction issue is likely to resurface next year when the new Congress — including a lot more deficit-hawk Republicans — takes over.
Location efficiency lowers mortgage defaults, researchers find
New Urban Network December 16, 2010
Mortgages are more likely to default as household car ownership rises and as Walk Score declines, researchers find.
The Journal of Sustainable Real Estate article, “Location Efficiency and Mortgage Default,” by Stephanie Y. Rauterkus, Grant I. Thrall, and Eric Hangen, looked at three geographically and economically diverse cities: Jacksonville, Florida; Chicago, Illinois; and San Francisco, California. San Francisco has double the average income of Jacksonville, while Chicago falls in between, the researchers note.
Dallas-Fort Worth home foreclosure filings down for January
By Steve Brown Dallas Morning News December 16, 2010
Home foreclosure filings for Dallas-Fort Worth are down for January, following a spike in postings for December.
Lenders scheduled foreclosure next month on 5,543 D-FW-area homes – 6 percent less than for January 2010.
December’s filings had been up by 16 percent from a year earlier, according to data from Foreclosure Listing Service Inc.
“While any decline is welcomed news, I must caution that this does not mean the foreclosure market has turned the corner,” said George Roddy, president of the Addison-based foreclosure tracking firm. “In fact, we are most likely far from a real recovery in the foreclosure arena.”
For all of 2010, lenders made almost 64,000 North Texas home foreclosure filings – a record high and 4 percent more than 2009’s total.
But there have been some signs that the worst increases are over.
Austin area home sales off 20 percent in November
Austin American-Statesman December 20, 2010
Austin-area existing home sales were down 20 percent in November compared to a year earlier, but the median price was up 3 percent, the Austin Board of Realtors reported.
A total of 1,247 homes sold in the area for a median price of $184,000. It took three months to sell a house, 17 percent more than the same month last year.
For the year to date, sales are down 6 percent from 2009, and the median price is up 3 percent.
This year’s real estate market has been affected by the extension, and then expiration in April, of federal tax credits for buyers, noted board Chairman John Horton. The credits were set to expire in November 2009, which caused a rush of sales that month, but were extended by last-minute congressional action.
“Despite the fluctuations created by the tax credits in 2009 and 2010, Austin’s real estate market has remained stable,” he said.
The 12th of Never
The dispute over one Eastside housing proposal reflects a larger Austin conflict
By Wells Dunbar Austin Chronicle December 18, 2010
Along with the welcoming arch and mosaic mural greeting entrants coming off I-35, there are indicators that it has evolved in smaller ways as well. The Longbranch Inn, which first opened in 1934, is now a popular haunt for local hipsters. Where Planned Parenthood offices once stood – at the “five points” intersection of 11th, Navasota, and Rosewood – there is now a wine shop. Across the street on Rosewood is a holistic health store offering yoga and acupuncture; behind it, Roller Derby girls serve sno-cones out of a trailer.
All that growth – and accompanying gentrification – has required investment: buried utility lines, street and sidewalk repairs, and capital improvement projects like the towering Street-Jones building.
East 12th Street hasn’t changed as much.
There are different theories to explain the apparent contradiction. The 11th Street improvements have primarily applied to commercial properties; 12th Street is more residential. The city has direct stakes in several portions of 11th, making it easier for redevelopment to take place; the city owns just four tracts and a parking lot along 12th, and quite a few of the undeveloped and underdeveloped plots along the street belong to several different owners. You can factor all that in, along with our protracted recession, which is seeing to it that less dirt’s getting moved all over town.
On a recent trip, our columnist found a real gap between the city’s cultural values and its built environment.
By Karrie Jacobs Metropolis Dec. 3, 2010
A few months ago I wrote a column advancing the notion that American cities are rediscovering the importance of architectural and civic beauty. The next thing you know, I was invited to Austin to give a talk at the University of Texas called “The City Beautiful All Over Again.” Life is good. One small problem: as my host drove me into town from the airport, it dawned on me that Austin isn’t a beautiful city. Not in the way that I meant. It’s not a showcase of the best 21st-century architecture and urban design. The cityscape is still dominated by the state capitol, an 1888 model of Beaux Arts splendor. The red-granite Renaissance Revival temple, topped with a 310-foot-tall dome, serves as the city’s official wayfinding device, protected by view corridors. It’s a spectacular object. But overall, the city is the antithesis of my thesis. Since my last swing through Austin, nearly a decade ago, a collection of high-rise condos has cropped up along the stretch of the Color-ado River that runs through the heart of the city. Intended to inject some actual residents into the city center and built at odd intervals, those towers are not particularly distinguished (although the new W Hotel–condo complex, by Andersson-Wise, with its handsome matte-black facade, is easily the best of the bunch). But the building that truly upended my thesis both impinged on the primacy of the capitol dome and hogged the skyline. Frost Bank, a 33-story green-glass tower built in 2004 and topped with a sort of origami flower, was designed by Duda/Paine Architects, of Durham, North Carolina, and conceived to revitalize downtown in the wake of the first dot-com bust and 9/11.
Full story at: http://www.metropolismag.com/story/20101203/austin-now-what
Assisted-living facility made possible by tax-exempt bonds fell into ‘anarchy’
By Yamil Berard Fort Worth Star-Telegram December 20, 2010
FORT WORTH — A singing trio of brothers — known as McDuff — arrived in Fort Worth in the late 1990s with high hopes of creating assisted-living centers for some of the city’s most vulnerable residents.
With tens of millions of dollars in tax-exempt bonds issued by Tarrant County in 1998, the McDuffs, who were Baptist ministers, opened Westchester Retirement and sister facilities. “The preachers believed they were doing good,” said Jeff Bryant, of a property management firm.
Within two years, the bonds defaulted.
Today, the vocal evangelists John, Roger and Colman are gone, Westchester has a new owner, and conditions, at a slow and steady crumble for years, have hit rock bottom, even though Tarrant County, through one of its public corporations, issued more bonds to try to salvage the property.
“It’s been anarchy,” said Bryant, president of Phoenix Health Resources, which eventually took over for the McDuffs and still manages Westchester today.
The project is one example of the harm that can come when difficult, high-risk municipal bond projects fail.
Nation’s neighborhoods more integrated
Black-white segregation lessens, while Hispanics tend to cluster
Monterey County Herald December 15, 2010
WASHINGTON — America’s neighborhoods took large strides toward racial integration in the last decade as blacks and whites chose to live near each other at the highest levels in a century.
Still, segregation in many parts of the U.S. persisted, with Hispanics in particular turning away from whites.
A broad range of 2009 census data released Tuesday also found a mixed economic picture, with the poverty rate swinging wildly among counties from 4 percent to more than 40 percent as the nation grappled with a housing boom and bust. Just three U.S. localities reported median household income of more than $100,000, down from seven in 2000.
Segregation among blacks and whites increased in one-fourth of the nation’s 100 largest metropolitan areas, compared with nearly one-half for Hispanics.
The latest figures reflect new generations of middle-class blacks moving to prosperous, fast-growing cities, said William H. Frey, a demographer at Brookings Institution who reviewed the census data.