The president declares an end to the housing collapse and calls for shutting down Freddie Mac and Fannie Mae. The quasi-public entities have recently ran in the black and are paying off huge loans issued by the Treasury during the housing bust. Flaws in their accounting methods, however, mask billions of dollars in defaulted mortgages and bring forth questions of solvency.
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Obama: Time to turn the page on housing woes
Associated Press August 14, 2013
President Barack Obama says the housing market is healing, but it’s time to turn the page on the “bubble-and-bust mentality” that led to the market’s collapse.
In his weekly radio and Internet address, Obama calls on Congress to let all Americans refinance at current low rates. He wants more help for first-time homebuyers and expanded affordable rental housing. He’s proposing to phase out mortgage giants Fannie Mae and Freddie Mac so private capital can play a bigger role in mortgages.
At the same time, Obama says the U.S. must preserve access to popular 30-year mortgages.
In the Republican address, Sen. Tim Scott of South Carolina says Obama’s energy policies have failed. He says Republicans want government to get out of the way, including by approving the Keystone XL pipeline.
Fannie, Freddie should recognize bad loan costs immediately: watchdog
Reuters August 19, 2013
WASHINGTON – Fannie Mae and Freddie Mac are masking billions of dollars losses because of the level of delinquent home loans they carry, a federal watchdog said in an internal report, and it said the companies should be required immediately to recognize the costs of some bad mortgages.
The report, written by the inspector general for the Federal Housing Finance Agency and reviewed by Reuters, said the FHFA’s timeframe for mortgage finance companies Fannie and Freddie to have up to two years to recognize the cost of mortgages delinquent at least 180 days was “inordinately long.”
The change in the accounting treatment of these delinquent loans potentially could require Fannie and Freddie, which have rebounded to enormous profitability in the past two years as the housing market recovered, to “charge off billions of additional dollars related to loans,” the inspector general’s report stated.
FHA cuts mortgage wait times after hard times
US new home construction rises, buoyed by apartment boom
BBC August 16, 2013
The Commerce Department said new-home construction climbed by 5.9% from the prior month.
The annual rate was 896,000 new homes, below a recent peak of just over 1 million in March.
The rate of new single-family houses being built dropped by 2.2% – a sign that builders could be worried about rising mortgage rates.
Permits to build new homes rose 2.7% but missed analysts’ expectations.
The rate for a 30-year mortgage was 4.4% in July – a full percentage point higher than it had been in May, before the US Federal Reserve started hinting that it might begin to slow down its extraordinary efforts to prop up the US economy.
A spate of mixed economic data since then – including news that the US economy grew by 1.7% in the second quarter – has tempered fears of an end to stimulus.
In a separate report, US workers continue to grow more productive although the rate of productivity growth has slowed since 2009.
Productivity grew by 0.9% in the second quarter from the same period last year. Labour costs rose by 1.4%, reversing a drop of 4.2% in the prior quarter.
If productivity slows significantly, US companies might be forced to bring on more workers to make up for the slack.
Productivity growth has averaged 2% a year since 1947, although it has slowed in recent years.
End of story: http://www.bbc.co.uk/news/business-23731846
Report Finds a City Incentive Is Not Producing Enough Affordable Housing
By Mireya Navarro New York Times August 17, 2013
For years, New York City has tried to create more affordable housing by encouraging developers to include apartments for low- and middle-income households in return for being allowed to construct bigger buildings.
But a new report by the office of City Councilman Brad Lander, a Brooklyn Democrat and housing expert, says that that strategy is producing too few affordable units and that the city should require developers to build more of them.
The report, to be released on Friday by Mr. Lander and the Association for Neighborhood and Housing Development, which represents nonprofit groups that promote affordable housing, found that the optional program known as inclusionary zoning had generated about 2,700 permanently affordable units since 2005, or less than 2 percent of all apartments developed in the city during the same period.
L.A. gives final OK to ‘urban village’ as Jordan Downs replacement
The mixed-use project in Watts calls for up to 1,800 stylish apartments, as well as chain stores, park and garden. The size of the project depends on government grants.
By Jessica Garrison Los Angeles Times August 18, 2013
The Los Angeles City Council voted Wednesday to create an “urban village” of shops, town homes and a park and gardens to replace Jordan Downs, the notorious Watts housing project.
The unanimous vote gave final approval to a series of land use and planning laws years in the making. The move clears the way for an up to $1-billion transformation of one of the city’s most poverty-stricken and violent areas.
The idea is to turn the often-dangerous housing development of 700 derelict units into a mixed-income community of up to 1,800 stylish new apartments, along with chain stores and new streetscapes — all designed to attract higher-income people to move into the area and live alongside some of the city’s poorest.
To make it happen, city and housing authority officials last year hired a private development team, the for-profit Michaels Organization and the nonprofit Bridge Housing, to secure the funding, build the project and manage it when done. The retail portion will be handled by Primestor Development Inc., a Los Angeles company with a history of work in underserved areas.
“This is a great day for Watts,” said Councilman Joe Buscaino, who represents the area. He called the plan “game-changing” and “life-changing” for the residents living in the 1940s- and 50s-era stucco buildings.
Some residents agreed.
“This is our opportunity to have our community built into a paradise,” said Socorro Diaz. “We have been promised and promised … it’s time to take the next step.”
But there are still many hurdles before construction can begin. Chief among them is money. The city and the developers are counting on winning a $30-million federal grant, as well as millions of dollars available from the state.
The Passive House: Sealed for Freshness
By Sandy Keenan New York Times August 16, 2013
SEATTLE — When you visit Sloan and Jennifer Ritchie’s new passive house in the Madison Park neighborhood here, it takes a while to notice all the things you’re not hearing.
Look out the living room windows and you can see a gardener wielding one of those ear-piercing leaf blowers in the yard, but you would never know it inside.
There is no furnace or air-conditioner clicking on or off, no whir of forced air, and yet the climate is a perfect 72 degrees, despite the chilly air outside.
Then there are the things you’re not feeling. In one of the most humid cities in the country, you aren’t sticky or irritable, and the joints that sometimes bother you are mysteriously pain-free.
The air inside the house feels so fresh, you can almost taste its sweetness.
On paper, at least, the Ritchies’ home sounds too good to be true: an environmentally responsible house without traditional heating and air-conditioning systems that will be an airy 70 to 74 degrees on the coldest day of winter and the hottest day of summer, but use only a fraction of the energy consumed by a typical house.
And yet it’s not some experiment or futuristic dream. Nearly 30,000 of these houses have already been built in Europe. In Germany, an entire neighborhood with 5,000 of these super-insulated, low-energy homes is under construction, and the City of Brussels is rewriting its building code to reflect passive standards.
But in the United States, since the first passive house went up 10 years ago, in Urbana, Ill., only about 90 have been certified. Why aren’t they catching on here?
Part of the problem is the cost. Higher fuel prices and energy taxes in Europe provide a major incentive to embrace passive standards, which are complicated and make construction more expensive. In this country, it could be a decade or more before the energy savings someone like Don Freas enjoys in his 1,150-square-foot passive house in Olympia, Wash., offsets the extra $30,000 or so it cost to build.
MISD seeks housing assistance for support staff
District submits application for $1M grant, Warren tells employees
By Meridith Moriak Midland Reporter August 17, 2013
Housing assistance may soon become a reality for non-teaching employees in Midland ISD.
Superintendent Ryder Warren announced Friday morning at convocation that a $1 million grant application was submitted to a local foundation in hopes of providing support staff employees with housing assistance.
“Support staff, I know you’re hurting. (On Thursday) we signed off on a grant application and have asked another charitable foundation in town, not the Scharbaurer Foundation, for $1 million to provide some monthly rental assistance to support staff. They could say no, but we’re asking,” Warren said.
MISD announced in mid-July a $3.3 million grant from the Scharbauer Foundation to provide up to 300 teachers with rental assistance of either $500 or 40 percent of the contracted lease or rental rate. Support staff, administrators and teachers not teaching core subject areas were not permitted to apply for these grants.
Developer gets $1.5 million to tear down aging Arlington apartments
By Susan Schrock Fort Worth Star-Telegram August 18, 2013
ARLINGTON — City leaders have agreed to give $1.5 million to a developer in exchange for tearing down two aging north Arlington apartment complexes within a year.
JCKPL proposes to invest about $160 million over several years to redevelop the 31-acre area along East Lamar Boulevard between the Rolling Hills Country Club and Lincoln Drive.
The plan is to tear down four existing apartment complexes — Huntington Chase, Pointe of North Arlington, Countrywood and Water Chase apartments — and replace them with higher-quality, high-density apartments.
In June, the Arlington City Council approved a multimillion-dollar economic development package to help make the deal happen.
HUD grants provide emergency aid for Tarrant homeless
By Elizabeth Campbell Fort Worth Star-Telegram August 17, 2013
Francia Patino has spent the past two years living with friends and relatives after leaving her abusive husband.
As a single mother raising two children, Patino realized that she needed a place of her own, but didn’t have money for rent and other household expenses.
“I ran away from my husband’s house. I’m struggling, but I’m getting a place and a stable job, finally,” she said.
To help Patino reach her goal of a stable lifestyle, she is working with the YWCA in downtown Fort Worth, one of several agencies that is participating in a new initiative from the U.S. Department of Housing and Urban Development called “rapid re-housing.”
HUD created the program to provide financial assistance and other services that will hopefully prevent individuals and families from becoming homeless and help those who already are to be quickly re-housed and stabilized.
Nationally, statistics indicate that specialized help is needed.
A 2012 estimate of the homeless population in the U.S. — based on a count from one night in January of that year — there were 633,782 homeless, similar to numbers gathered the previous year. But within that data, HUD saw a sharp increase in the number of homeless families with children.