Squeezing out the middle and lower class
From the Bergen Record:
The big squeeze
IT'S time New Jersey got serious about affordable housing. The state is one big boomtown for developers and owners of high-priced homes. Property values seem to rise every day. But residents on low or moderate incomes struggle to buy or even rent basic shelter.
Three decades after the state Supreme Court land use rulings were meant to deal with the problem, New Jersey has a persistent, structural shortfall of moderate-priced housing.
Under the so-called Mount Laurel rulings, communities could voluntarily agree to accept a "fair" number of affordable homes within their borders. The number is determined by the state Council on Affordable Housing. In return, participating local governments could stop a builder from using the courts to force an unwanted development on the community.
Yet many communities that opted to participate in the voluntary program have still to fulfill their Mount Laurel requirement; the state is well short of its goal of creating 118,000 units for people of moderate means.
...
Affordable housing has been built statewide at little or no detriment to communities, and it has helped make them more diverse. That's vital, considering that New Jersey is still one of the most segregated states in the nation.
Builders and communities need to get creative. They need to accept their responsibility to provide affordable housing, and work together – with affordable housing advocates - to ensure enough is built. They also need to ensure that the affordable units go to the needy, and not to those with political connections.
The big squeeze
IT'S time New Jersey got serious about affordable housing. The state is one big boomtown for developers and owners of high-priced homes. Property values seem to rise every day. But residents on low or moderate incomes struggle to buy or even rent basic shelter.
Three decades after the state Supreme Court land use rulings were meant to deal with the problem, New Jersey has a persistent, structural shortfall of moderate-priced housing.
Under the so-called Mount Laurel rulings, communities could voluntarily agree to accept a "fair" number of affordable homes within their borders. The number is determined by the state Council on Affordable Housing. In return, participating local governments could stop a builder from using the courts to force an unwanted development on the community.
Yet many communities that opted to participate in the voluntary program have still to fulfill their Mount Laurel requirement; the state is well short of its goal of creating 118,000 units for people of moderate means.
...
Affordable housing has been built statewide at little or no detriment to communities, and it has helped make them more diverse. That's vital, considering that New Jersey is still one of the most segregated states in the nation.
Builders and communities need to get creative. They need to accept their responsibility to provide affordable housing, and work together – with affordable housing advocates - to ensure enough is built. They also need to ensure that the affordable units go to the needy, and not to those with political connections.
19 Comments:
Why don't they stop the HELOC and 2nd home writeoffs. This for one would stop the subsidizing of speculators.
Demand tightened lending standards.
This would keep imbeciles out of the market and those most responsible for escalating prices.
Do not bid on a house at these prices. If so, bid alot less.
Do not look at houses.
Do no waste your time.
Do not write a letter to the seller staing why you want the house.
Buying a house is a business transaction...nothing else. Keep emotion out of the process.
I agree. The mortgage interest deduction on anything other than a primary residence should be eliminated.
Second, I feel that the home sales gain exclusion needs to be reigned in. Either drop the cap to $300-$400 thousand or increase the required residency timeframe (3-4 years in the past 5).
The way to make more affordable homes isn't to build them.
It's to eliminate the benfits that caused increased demand for 2nd homes. Eliminating those tax benfits will immediately reduce demand and keep prices in check.
As for requiring builders to build more affordable homes? It'll never work. It's almost impossible to keep those units from becoming 'market-rate'.
grim
is it the tax breaks or the easy credit backed by the derivitives market with what they claim is no risk and nobody is regulating this market.and also there is freddie and fannie. look how much these 2 have grown over the past 5 years.
I agree with re-working tax credits and capital gains to some formula that really benefits middle income households, but doesn't create windfalls for speculators and investors.
Second, I think for the low end we have several wonderful groups that work well at providing affordable housing, Habitat for Humanity for example. Why not hand over land to them instead of developers? They don't have profit as their goal, just affordable housing.
JM
The problem isn't just with taxes. The problem isn't just about purchasing a house.
Lack of affordable housing is at crisis levels in New Jersey. In the center of the state a 1 bedroom apartment averages rent of $1000 per month - $12,000 a year. Someone working full time in retail averages around $16,000 a year, making renting basic decent shelter unaffordable.
Before there are any NIMBY posts, just to make clear the income limits for purchasing affordable housing.
Varies by county but averages are as follows:
Low income - $40,000 year for a family of 4.
Moderate income - $70,000 year /4
Most people are worried about affordable housing in their districts because they think that they will be living next to/sharing schools with people on welfare, however the salary amounts are actually typical of young professionals and one income families with young kids.
No need to force developers to build them. Just require a minimum amount from each district and let them put them out to bid, someone will want the business.
Not sure if Grim already posted this...
From Cherry Hill NJ's Courier Post:
SURVEY SAYS: Lenders predict real estate slide
Tuesday, April 11, 2006
Two-thirds of lenders nationwide believe a real estate bubble exists in the United States and half of them believe it has already begun to burst or will burst in the next six months, according to results of this quarter's Phoenix Management "Lending Climate in America" survey.
A significant 93 percent of lenders surveyed expect an anticipated housing correction to result in real estate prices declining 10 to 20 percent across the country.
Among the 92 lenders who participated in this quarter's survey, only 9 percent said they did not believe a housing bubble existed. When asked which area of the country was likely to be most affected by a housing correction, 30 percent of respondents named the Northeast, followed closely by 27 percent who predicted the West Coast. Fourteen percent named the Southeast.
http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20060411/BUSINESS01/604110329/1003/BUSINESS
"Two-thirds of lenders nationwide believe a real estate bubble exists.."
Troops in the field say bubble.
RUN FOR THE EXITS.
Low Balls Galore.
BOOOOYAAAAAAA!!!!!!
Bob
“Rhonda is in a panic. The two-year introductory rate on her adjustable mortgage is about to expire and send her payments soaring. She thought she could refinance to a more-affordable loan, but the rates she’s being quoted are just as high.”
“‘So I then decided I would just sell the house and get out of it,’ Rhonda wrote. ‘WRONG! The houses in my area are selling for around $20,000 less than what I owe!’”
“Nearly one in 10 households with a mortgage had zero or negative equity in their homes as of September 2005. The study of 26 million homes in 36 states and the District of Columbia found that one in 20 home borrowers was upside-down by 10% or more. The situation is even grimmer for recent borrowers. Of those who bought or refinanced homes in 2005, 29% had zero or negative equity, and 15.2% were underwater by 10% or more.”
“Homeowners with no equity and adjustable-rate mortgages face additional risks from the loans themselves, since their payments could rise 50% or more in coming years as interest rates reset to higher levels.”
DO NOT BUY A HOUSE NOW ESPECIALLY IF YOU HAVE TO USE A RUISKY LOAN.
“Real estate agents in the Panama City Beach area say some banks are putting fresh limits on pre-construction sales in hopes of avoiding investors’ becoming overextended. Projects have been halted. Motels or other businesses that were closed after they were sold to make way for development sit vacant.”
“Says Janet Roan, a local real estate agent, ‘Now is the time to buy. It’s a buyer’s market.’ But she offers a caveat. ‘If you are looking to buy something to flip it, don’t even try it right now.’”
“Zepponi advises condo owners to avoid putting their units on the market now if they can avoid it. ‘If people would stop this panic, things would turn around sooner,’ she says.”
HAHAHA A typical realtor response. The godsakes the downturn has JUST started!
DO NOT BUY A HOUSE AT THESE INFLATED PRICES.
PATIENCE.
PRICES ARE TUMBLING AND IT WILL BE WONDERFUL TO DEAL WITH ACCOMODATING SELLERS KISSING OUR @$$e$.
"If people would stop this panic, things would turn around sooner"
Priceless. If people would continue to pay 50% of their salary for a home, things would 'turn around' sooner, and they can then pay 60% of their salary.
I have heard anecdotal reports that some NJ buyers who have made recent "trade-up" home purchases are starting to panic as they realize they are not going to get what they expected in selling their existing homes, and are seeking to find ways to void their pending purchase contracts prior to closing.
Anyone out there hear of any situations like this? What is the likelihood that such purchasers can successfully get out of having to follow through with closing their transcations?
The Panic begins.
See FSBO signs everywhere. NOT included in housing inventory.
Once the johnny come latelies start to get panicky watch out.
NO BID will be too low. Or the insulting lowball will be contemplated.
LOL!!
Also saw many houses on the market 120 days + pull realtor signs and go FSBO.
Good Luck suckas!
This FSBO has been on the market for over 90 days:
http://www.forsalebyowner.com/show-listing.php?currentlySearching=1&iListingID=20586724
They started at "$975,000 Firm" and are now at "$919,500 Willing to negotiate."
They paid $585,000 in March 2003.
'Willing to negotiate"?
HAHAHAHA!!!!!
Forget it suckas....
$585k will be a loss in 2 years. If they have to sell it and are stubborn while riding it down.
$919K. Hope they get pricked for being so greedy.
Buyers are drying up and saying NO MAAS!
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Hint #12 for . Harmonize The Elements: FM radio or stereo on softly, TV off. All lights on, day or night. Drapes open in the daytime, closed at night. If it's hot, cool it!
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