Tuesday Report, May 11, 2010
Special to the Texas Low Income Housing Information Service
Fannie Mae and Freddie Mac continue to suck down federal bailout funds as the housing market stays flat. Already a target of conservatives who would disband the quasi-governmental corporations, the latest losses renew criticism.
A new Brookings Institute study shows minorities are moving to the suburbs while whites move to the inner cities, a reversal of a trend dating back to post World War 2.
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Fannie Mae wants $8.4 billion more in federal aid
Fannie Mae announced a $11.5 billion quarterly loss Monday. The mortgage giant’s continued poor performance has added urgency to the question of how – or whether – it should be saved
By Mark Trumbull Christian Science Monitor May 10, 2010
One of America’s mortgage-market linchpins, Fannie Mae, announced a deep quarterly loss Monday and sought additional support from the federal government.
The loss of $11.5 billion for the first quarter of 2010 is a sign that troubles in the US housing markets continue – and a reminder that Congress still needs to sort out the future of the troubled “government sponsored enterprises” like Fannie Mae.
Fannie and its sibling organization, Freddie Mac, own or guarantee a large share of US mortgage loans. The question for the future is whether – or how – they can do that without putting US taxpayers at risk during market downturns.
A tax break that is breaking us
Mortgage deductions lure buyers to big, expensive, energy-wasting homes
By Edward L. Glaeser Boston Globe May 7, 2010
THE LATEST Case-Shiller housing data suggest that housing markets have now stabilized. Prices were higher in February 2010 than they were in February 2009, both for Boston and for Case-Shiller’s 20-city index. This stability makes it possible to move beyond stop-gap measures and to envision fundamental reforms that will make the next housing crisis less damaging. Lowering the $1 million cap on the home mortgage interest deduction is a good place to start.
The Case-Shiller index increased by 74 percent in real terms between 2000 and 2006, and then declined by more than a third. For every 10 percent that a city’s housing prices rose during the boom, the city’s prices fell by 7.6 percent during the bust. The astonishing 24.9 percent unemployment rate in the construction sector seems almost mild given that the country went from building more than 1.9 million new housing units in 2005 and 2006 to building fewer than 800,000 units in 2009. The great lesson from this episode is that prices go down as well as up and it is foolish to encourage excessive betting on housing.
Report: Few Dallas-area mortgage holders owe more than homes’ worth
By Steve Brown Dallas Morning News May 10, 2010
Fewer Dallas-area homeowners are underwater with their mortgages, the latest figures show.
Just under 15 percent of Dallas-area homeowners with a mortgage owed more than their property was worth at the end of the first quarter, researchers at CoreLogic reported Monday. That works out to about 110,000 homes.
That’s a big improvement from mid-2009, when an estimated 30 percent of Dallas-area mortgage holders were upside down in their homes.
Dallas-Fort Worth home resales surge 27 percent
By Steve Brown Dallas Morning News May 7, 2010
North Texas home sales surged by 27 percent in April from a year earlier.
The jump in pre-owned home sales was fueled by federal home buying tax credits.
The increase – along with an 11 percent rise in March – was enough to put home sales ahead 9 percent so far this year in North Texas.
Local real estate agents sold 7,017 pre-owned single-family homes last month, according to statistics released Friday by the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems.
Minorities exit cities, moving to suburbs
Study says whites have moved back to urban areas
By Hope Yen Associated Press May 9, 2010
WASHINGTON — White flight? In a reversal, America’s suburbs are now more likely to be home to minorities, the poor, and a rapidly growing older population as many younger, educated whites move to cities for jobs and shorter commutes.
An analysis of 2000-2008 Census data by the Brookings Institution highlights the demographic “tipping points’’ seen in the past decade and the looming problems in the 100 largest metropolitan areas, which represent two-thirds of the US population.
The findings could offer an important road map as political parties, including the Tea Party movement, seek to win support in suburban battlegrounds in the fall elections and beyond. In 2008, Barack Obama carried a substantial share of the suburbs, partly with the help of minorities and immigrants.
SAHA: Emphasis on “Authority,” not “Housing”
Reasonable Doubt (the court of public opinion)
By Aaron Haas San Antonio Current May 6, 2010
I am not an expert, but in four years and more than 500 cases, I have learned a few things about poverty. Being poor is tough. Life is a constant struggle for the basics, which come either not at all or in inferior form. Some end up homeless, while others end up in poor neighborhoods with high crime, bad schools, and indifferent landlords. Eviction and homelessness are never far away. Health insurance is not affordable or accessible. Chronic diseases are not treated and emerging health problems are not addressed. Work is hard to come by, and when a job is found, it is often menial, and underpaid. Poverty means a grueling life of sacrifices, tough choices, and unmet aspirations. Above and beyond the physical depredations, the mental strain of living on the edge is tremendous. The conditions that create poverty start early on in life — during adolescence — and if poor choices are made during this time, it is almost impossible to recover. Unlike many of the middle-class people reading this column, no one bails you out of your youthful mistakes. Once they’ve established a criminal record, dropped out of high school, or become single parents, the die has been cast. The punitive nature of our society makes it almost impossible to overcome these early barriers. If we are not going to address these causes early enough to make a difference, after-the-fact punishment is not preventative: It is only cruel, and only compounds the harshness of life for the chronically poor.
Full story at: http://www.sacurrent.com/news/story.asp?id=71138
Plan for flipping dead golf courses ends up in rough
By Mike Tolson Houston Chronicle May 9, 2010
Back in the midst of the real estate boom, when buyers were plentiful and any reasonable deal would find a taker, the idea must have seemed like a smart one. Find failing suburban golf courses that have outlived their appeal, get them at a big discount, quietly carve off a chunk of the most useful part of the real estate and flip it to a developer who saw the potential for a different use.
Just because the property was not worth much as a golf course did not mean it couldn’t be worth a lot for something — so went the reasonable argument. But what Mark Voltmann and his partners failed to fully appreciate, or so it seems, was the reluctance of homeowners to go along. Even people who wouldn’t know a 5-iron from a garden hoe got nervous at the prospect of condos, or something worse, looming over their back fence.
Better a dead golf course than a live shopping center. Or apartment complex. Or nursing home.
Voltmann’s Renaissance Golf Group, based in Ohio, bought three struggling courses in the Houston area, two in 2002 and another in 2007. Since then, however, the only thing they’ve gotten for their effort is an ever-mounting legal bill. The latest roadblock came with a jury verdict late last year that would prohibit the use of the land that once served as the Inwood Forest Country Club for any purpose other than a golf course.
Developer changes plans for downtown block
2 towers now planned for land west of post office: 1 residential, 1 office
By Shonda Novak Austin American-Statesman May 6, 2010
Developers are laying the groundwork to proceed with a project proposed for the block just west of the downtown post office, with revised plans calling for a 28-story condominium tower and a 16-story office tower, plus a restaurant, shops and a bank.
The 1.2-acre site is bounded by Fifth, Sixth, San Antonio and Nueces streets and is owned by the International Bank of Commerce-Laredo, according to an engineer’s letter submitted to the city as part of a request for approval for a site plan.
From homeless to home: Couple gets there one $10 text at a time
By Brian Gaar Austin American Statesman May 6, 2010
Danny Silver and his wife, Maggie, were shown their new digs Thursday after a fundraising campaign gathered enough donations to purchase a mobile home for the formerly homeless couple.
Over two days last week, Silver spent time perched on a billboard on Interstate 35 as part of the “I Am Here” campaign, a partnership between interactive advertising agency T3 and Mobile Loaves and Fishes, a nonprofit group that feeds the homeless. The campaign was designed to draw attention to Austin’s homeless population and to raise money.
Silver was also reunited with his daughter, Brittany, whom he hadn’t seen in more than 10 years.
Officials didn’t have a tally of how much has been raised in the campaign, but a spokeswoman said $12,000 — the amount needed to get a home for Silver — was collected in the first two days.
The billboard will remain up for about three more weeks.
Donations of $10 can still be made by texting “Danny” to 20222 to help provide refurbished mobile homes for other homeless people in Austin. [End of story: http://www.statesman.com/business/from-homeless-to-home-couple-gets-there-one-675313.html