Posts Tagged ‘home ownership’

Real Estate: A Renter’s Market?

October 18, 2014

buy house

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RECENTLY OUR INVOLVEMENT IN REAL ESTATE MARKET DISCUSSIONS again witnessed the same persistent and lingering observation: Despite depressed prices, we hear a home sale in our area can be as rare as inheriting a rich uncle’s estate, which tends to contradict stories of a dwindling supply of houses to sell. Of course, sales may differ in various areas but sporadic and few sales appears to be the case in many locales, more or less.

While there are several efforts to identify the cause of slack sales, the one most curious to us is the sentiment that too many folks who otherwise would be likely potential purchasers now only seem interested in renting. Rent rather than buy? Why? Traditional thought usually gives home ownership a thumbs-up in terms of being a cornerstone for long-term financial benefit. Indeed,  many other positive aspects come with home ownership as well … for the homeowner and the community

So despite logic implying lower home prices should be spurring house purchases, not apartment rentals, for people who are looking for a home and can afford to buy. But this does not seem to be the case. Certainly negative local factors such as high property taxes, poor quality of schools, distant shopping and medical facilities all play a role.  Yet the apparent pervasiveness of the issue suggests one or more generalized causes for this circumstance, like the one we hear most frequently repeated: Lenders have become more demanding ― some may argue far more demanding ― in scrutinizing loan applications, resulting in too few approvals. In other words, loan application reviews are the polar opposite of those conducted less than ten years ago when mortgage qualification was far too easy.

To be sure, we’ve heard other theories and explanations too. Perhaps an uncertain economy produces would-be buyers who are overly cautious, which uncertainty and caution nudge them toward the transience and flexibility of renting. Or they may be extremely uncomfortable with the notion of committing to one of the biggest purchases of their lives until a nationally firm and reliable economic foothold is reestablished. Maybe they heard a horror story or two about rising costs for insurance, maintenance or property taxes. Could be they are too frightened to be tied to a mortgage and a property that could be difficult to sell in the current market, which inability to sell within a reasonable time is apt to prevent them from changing jobs or searching for one in another locale thereby reducing or eliminating their income. Then again, the lack luster economy might be pushing them to reevaluate all their financial priorities, spending habits and even lifestyle patterns, any of which just might point to a rental as a viable living arrangement that can be adjusted on relatively short notice as employment and/or other factors change.

Whatever actual perceptions or rationale exist in the market, we see housing moving with renters, not buyers. Although rentals certainly have a legitimate place in the housing arena, the need for the permanence of home ownership should not be taken lightly or shrugged off. Beyond financial considerations, home ownership has been shown to provide positive benefits for household members, a stakeholder interest in the neighborhood and a stabilizing factor to the overall community.

Consequently government and the private sector need to find cooperative methods to not only create and maintain sensible affordable housing opportunities, but also develop reasonable mortgage lending qualifications and review procedures.

 

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Need consulting, coaching or problem troubleshooting regarding this or other single-family or multi-family housing issues? We’ll be pleased to help you. Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation. Statements and/or opinions of guest authors may or may not reflect those of Inhouse Corporation.

Property Management: NY Sprinkler System Notices

September 18, 2014

2014-09-09 - Fire in Home

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A PROPERTY MANAGER MUST CONSTANTLY LOOKOUT for various obvious factors that may affect a rental property, particularly those that may lead to menacing or disastrous events, such as fire hazards and regulations that affect those situations.

In the realm of residential and multi-family properties there are a number of worrisome situations that can be nightmarish ― but a structure succumbing to flames can be one of the more frightening. Beyond losing a home, which is certainly bad enough, a resident frequently must deal with the loss of irreplaceable family pictures and sentimental personal items. Worse, for the resident and manager alike, are the injuries and lives lost in house fires. The collective result can be significant tolls on all those affected.

In 2012 alone there were about 364,500 residential fires that caused more than $6.5 billion in losses. And during the ten-year period of 2001 – 2010 house fires claimed an average of 3,843 lives each of those years. In other words, for every single day in that ten-year period a rough average of eleven people died in a house fire!

What is being done? Since a property manager physically is unable to monitor fire safety in each dwelling at all times, management’s plan to lessen damage and injury usually involves other doable measures that are in addition to upgrades, repairs, maintenance and regulation compliance. Such actions typically include but are not limited to improved fire-retardant construction techniques where and when possible, clearly marked alternative escape routes, functional fire/ smoke detectors, operational fire extinguishers and heightened resident awareness.

To be sure, those said procedures are often mandated in various jurisdictions. Over the years they have become more well-known and as a practical matter they should be in use (contact your local fire department for tips and advice about fire safety and applicable laws). Such strategies appear to have led to a 21% reduction in the number of house fire related deaths. But in regard to residence fires, and perhaps less well known, is a soon to be effective newly enacted amendment to existing New York State law of which we became aware several weeks ago.

In essence the amended law seeks to require a more informed renter decision about a leased premises he/ she intends to occupy. After its effective date residential leases need to contain a bold-faced notice advising potential renters whether the premises being considered has or does not have a “maintained and operative sprinkler system” as such a fire sprinkler system is defined in section 155-a of New York State executive law.  Reportedly the amendment will be known as section 231-a of the New York State real property law and is expected to become effective on or about December 3, 2014.

The bottom line: If your residential rental property lies within New York State you should contact your attorney to learn how the amended law may apply to you and, if it does, inquire how your leases may need to be revised.

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Need consulting, coaching or problem troubleshooting regarding this or other single-family or multi-family housing issues? We’ll be pleased to help you. Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation. Statements and/or opinions of guest authors may or may not reflect those of Inhouse Corporation.

Affordable Housing: What’s the Big Deal?

September 11, 2014

14Sep08 New Pix

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DESPITE THE EFFORTS OF VARIOUS ARMS OF GOVERNMENT as well as an assortment of nonprofit and other groups to enlighten the public about affordable housing (also known as worker class housing, among other terms), some folks think they know what it is. But a municipal meeting we attended shows too many still don’t truly understand it or recognize the importance of its role. Mention it in an open forum, as happened at that meeting, and you may be confronted with mutterings of stereotypical misperceptions that affordable housing is just another name for absentee landlords, rundown tenements and slums.

Naturally, undesirable outcomes are possible. Yet they are possible in virtually any developed district. Should economic reversals, infrastructure deterioration and/or other troublesome conditions arise they are apt to detrimentally transform the value and character of any affected area … be it a commercial or industrial zone, worker class housing or an upscale neighborhood.

For this reason jumping to a conclusion that affordable housing is synonymous with rundown residences would be neither an accurate nor complete picture since many of those projects are attractive and properly maintained. Moreover, in some situations competent professional property management may be able to prevent or reverse the effects of harmful events when they are internal to the affordable facility, and it might be capable of slowing the effects of those that are external to the facility, such as the loss of major regional employers.

So if its not necessarily crumbling housing, what is affordable or worker class housing? While various groups and agencies may have differing spins on the definition, in general we see it as any type of legal and decent housing structure or dwelling that is an affordable option for a household earning no more than eighty percent (80%) of the median income for the area (often called “area median income” or “AMI”). Interestingly, as income disparities seem to widen, some entities appear to be giving more attention to housing opportunities for low income households earning no more than fifty percent (50%) AMI.

To be sure, our definition is likely no big surprise. But what may astonish many is the importance of affordable housing as an influential ingredient in the economic mix of a viable community. Not only does it provide housing opportunities to lower income workers, it also has been shown to encourage economic growth. Furthermore, the possibilities of affordable home purchases aid in the increase of the overall home ownership rate, which can, in turn, provide noteworthy benefits for the community, an often overlooked element in the discourse on home ownership.

The bottom line is affordable housing opportunities, particularly affordable home ownership, help produce stable communities; a belief we have consistently held for properly operated and maintained affordable home projects. And from our viewpoint, that is a big deal.

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Need consulting, coaching or problem troubleshooting regarding this or other single-family or multi-family housing issues? We’ll be pleased to help you. Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

***************************

Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation. Statements and/or opinions of guest authors may or may not reflect those of Inhouse Corporation.

Improving Non-Subsidized Affordable Home Ownership

February 22, 2014

2014-02-22 - Home Affordability

Affordable Housing and Home Ownership   

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IN THE SLOWLY RECEDING WAKE OF FORECLOSURES, AFFORDABLE HOME OWNERSHIP continues to inch along an uneven path. The stubbornly sluggish economy and tighter lending practices have had many opting to rent rather than buy and its a situation that is more than just an interesting phenomenon in housing trends.

Most jurisdictions actively seek substantial levels of home ownership as one significant factor that helps stabilize neighborhoods. In fact, there are numerous benefits to folks owning their homes, not only for society in general but also for the homeowner and the homeowner’s household. In 2012 those benefits were documented through the research and reporting of the National Association of Realtors (http://www.realtor.org/sites/default/files/social-benefits-of-stable-housing-2012-04.pdf).

However, this blog article will not recount all the positive attributes of homeownership. And for now, at least, we’ll avoid any debates about taxpayer dollars subsidizing affordable housing (also known as worker class housing) or the bias some affluent neighborhoods may have against worker class housing. Instead, we’ll focus on and acknowledge the value of home ownership that has been and is formally demonstrated in specialized low-income state loan programs and municipal affordable housing projects that are underwritten with tax money in an effort to extend the American Dream to many folks of modest means.

With home ownership being important enough to warrant such governmental affordable home programs, rather than just relying on tax money, especially during anemic economic times, shouldn’t legislators take actions that better ensure private sector affordability whenever possible? It certainly seems the logical and fiscally prudent way to go. And it would free those funds for other needed purposes. Yet, for whatever reasons, some jurisdictions impose taxes and unique regulations on manufactured housing—a viable form of non-subsidized private sector affordable home ownership currently available (see our January 26, 2014 blog posting entitled Manufactured Housing: A Reputation Revisited). So let’s take a look at this situation in New York, our base state.

Manufactured homes here are technically categorized as personal property (chattel), as opposed to traditional “stick-built” housing being real property. The chattel category includes all personal items such as vehicles, boats, tools and all other objects not deemed real property (real estate, land). As chattel, obtaining long-term manufactured home purchase financing through conventional mortgages is a challenge, if possible at all.

Excluding modular homes from this discussion, the cost for a new manufactured home is often thirty percent (30%) to fifty-five percent (55%) less per square foot than traditional housing (depending on the actual location). Hence, for the most part they are inherently more affordable as a housing purchase option.

But that affordability is undermined. Like other chattel, a new manufactured home is subject to sales tax, but unlike other chattel, once the home is installed it is also subject to real property taxes as well. No other form of housing is known to be subjected to sales and property taxes, a factor that makes such housing less affordable.

Further, municipalities have been known to adopt restrictive zoning codes on manufactured homes that frequently prevent them being placed on private parcels. As a result most are placed in multi-family manufactured home communities, which in most cases yield an arrangement where the individual owns the manufactured home but rents (leases) the site upon which the home rests. Such communities are operated under municipal permits that require periodic renewals, sometimes as often as once per year. Each renewal usually entails payment of a fee. Again, other multi-family residences don’t have this requirement or expense, the cost of which is often proportionately passed along to the homeowner through site rent.

And then the entirety of manufactured home communities are subjected to annual health department inspections in order to obtain the required annual operating permit from that department. This permit is in addition to compliance with whatever conditions the building department  may impose in a particular municipality, it carries its own annual fee and yes, other multi-family properties don’t have this annual health department mandate or expense. This cost is also proportionately paid by the homeowners.

Comparatively, in many municipalities if an inspection is conducted in an apartment building the building department typically does it on a particular unit when a complaint is filed or, depending on the involved municipal code, before a new tenant moves into vacant unit.

In the end, the effect of such regulations and tax further reduce the limited purchasing power of folks with modest incomes thereby preventing or making more difficult their ability to be homeowners. In the case of manufactured housing, what should be a significant resource for non-subsidized private sector affordable housing and home ownership is rendered less so.

Considering the favorable aspects of home ownership, removing or restricting barriers to affordability would be a needed change for the better.

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Need coaching, training or problem troubleshooting regarding the foregoing or other housing issues? Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.