Monthly Archives: January 2020

NAHB: Apartment Demand Will Fuel Multifamily in 2020

Apartment growth is back to pre-recession levels but demand still outweighs supply. NAHB projects rental rates to keep going up as condo builds remain fairly flat.

LAS VEGAS – Apartment production has returned to pre-recession levels, but vacancies are low – and the U.S. needs more apartments, according to experts who participated in a press conference recently at the National Association of Home Builders (NAHB) International Builders’ Show in Las Vegas.

“Research shows that 22% of young adults – ages 25 to 34 – still live with their parents, a trend that will continue to create a drag on household formation in 2020-2025,” said NAHB economist Danushka Nanayakkara-Skillington, associate vice president, forecasting and analysis. “That group’s challenges in looking for an apartment can be attributed to student debt, rising rents or even competition with seniors who opt to downsize to a smaller home or apartment.”

In 2018, multifamily housing starts leveled off – a response to higher building materials costs, the need to pay higher wages to attract and keep skilled workers and regulatory costs that make up a third of total multifamily building costs, according to NAHB.

Rents rose along with costs, resulting in more luxury communities and fewer affordable apartments.

Developers have responded to demand by building more apartments, predominately in urban areas. In 2017 and 2018, most rentals were communities with more than 50 units. In 2019, multifamily starts were at 116% of the national average.

While condominiums might seem to be a good response to demand, however, developers haven’t significantly ramped up condo production.

In spite of significant problems – building materials prices, a shortage of skilled labor and local and federal regulatory constraints – rental production should continue at near-present levels this year, NAHB says. It predicts a 1% increase in 2020 production and a 4% increase in 2021. The expected increase is due, in part, to an uptick in young people and retirees looking to apartment living as a more affordable, low-maintenance option – preferably in walkable neighborhoods with opportunities for entertainment, services and social activities.

“Apartment developers and designers are incorporating features into their communities like coffee bars, rooftop cafes and bars, bowling, indoor basketball and more,” said Sanford Steinberg, founding principal of the Steinberg Dicky Collaborative. “The goal is to attract and retain the renters and ‘renters-by-choice’ who prefer a stimulating lifestyle in a great apartment community (with) the amenities they are accustomed to (or strived) to obtain.”

While increasing numbers of millennials are purchasing single-family homes, pushing the homeownership rate back up to 64.8%, home prices continue to hinder some millennials who then opt to rent.

Though rental rates are growing more slowly thanks to supply increases, rents are still expected to continue rising in 2020, NAHB says.

© 2020 Florida Realtors®

Laws Could Change for Owners of Mobile Homes

The Florida Legislature is considering a series of proposals that might make it easier to evict the owners of mobile homes who rent the land the home sits on.

TALLAHASSEE, Fla. – Decades-old protections for mobile-home owners could be upended under a series of industry-backed proposals introduced this legislative session – and housing advocates warn they could result in more evictions for some of the state’s most vulnerable citizens.

The Florida Manufactured Housing Association, a trade group representing home builders and park owners that’s behind the proposals, says the purpose of the bills is to “make sure that manufactured housing is better positioned to be part of the affordable housing solution in Florida.” Sen. Ed Hooper, R-Clearwater, who introduced Senate Bill 818, said the changes are necessary to modernize the current statutes and will increase the availability of affordable and workforce housing.

A separate bill mirroring 818’s language was filed by Sen. Travis Hutson, R-Palm Coast, which also includes changes to affordable housing zoning and accessory dwelling units.

“A lot of us have received a lot of correspondence alleging that this is just a way to evict homeowners from their property. That’s the furthest from the truth,” Hooper said during a hearing before the Senate Committee on Innovation, Industry, and Technology earlier this month. “If I own a mobile home park, I know exactly how much rent an empty lot pays: It’s zero.”

However, opposing groups, including the Federation of Manufactured Homeowners of Florida, which represents a portion of the 2 million Floridians living in mobile home parks, fear the changes would strip homeowners of some of their basic rights and hinder their access to affordable housing.

“They’re trying to chip away at renters’ rights and make it easier to evict them – that’s pretty clear,” said Esther Sullivan, assistant professor at University of Colorado Denver.

Currently, manufactured housing is the country’s largest source of unsubsidized affordable housing, with about 1 in 10 Floridians living in manufactured housing communities, Sullivan said. The majority of homes in the United States priced below $125,000 are mobile homes, and for many, it’s the only way to be able to break into homeownership. It’s a housing option that’s particularly attractive for senior citizens who live off a fixed income, or those on disability and the working poor.

Margie Mathers, who lives in a manufactured home community in Fort Myers, traveled to Tallahassee on Wednesday with MHAction, a grassroots group of manufactured home residents. She said in the seven years she’s lived in Buccaneer Estates, she and her husband’s rent has gone from $625 to more than $800.

“If they would look at it through our eyes, it would open their eyes. It’s not just senior citizens, it’s people who rent, it’s veterans, it’s people on disability, it’s people on welfare,” Mathers said.

If passed, the bills would:

  • Make it so park owners no longer have to send eviction notices through certified mail, saving them money but also removing the ability to confirm the notices were received. Notices could instead be sent through the regular mail and be posted to front doors.
  • Lower the amount of sales tax that can be collected from the sales of mobile homes, a provision that will be weighed by the state’s revenue estimating conference. The bills would make it so sales tax can only be levied on 50% of a movable home’s sales price instead of the full price, and homes that are permanently affixed to the ground would be exempt entirely.
  • Halt the years-long practice in which a mobile-home buyer can take over the rental agreement from the seller, a move critics say could lead to higher rents and make it harder for low-income residents to sell their homes.
  • Allow only a five-person committee of park residents to meet with management during rent negotiations. It’s unclear if an attorney would also be allowed to represent tenants.
  • Allow mobile home parks damaged or destroyed by natural disasters to be rebuilt in the same location and at the same density levels, a move Sullivan said is important because local governments sought to roll up damaged parks after recent hurricanes.
  • Require tenants facing eviction for violations unrelated to missing rent to pay the court within five days or face immediate removal. Currently, mobile-home owners are only required to pay into the court registry if they are being evicted for skipping rent. Park owners are allowed to dip into the registry if they are in danger of losing the property “or other personal hardship,” however this proposal would remove that condition and make it so park owners can still pursue the eviction or civil action.

Most troubling, mobile-home owners advocates said, are the provisions that would eliminate the practice of sending eviction notices through certified mail and shake up the current eviction process.

“People can be evicted without ever seeing a judge,” said Alana Greer, co-director of the Community Justice Project, a Miami-based nonprofit that provides legal services for low-income communities.

In many cases in which mobile-home owners are evicted, they are forced to abandon their homes because they either can’t be moved or they can’t afford to transport them.

“Once these homes are placed on the lots, they’re taken off the wheels, they’re affixed to the land. If it’s like that for years, a lot of these homes cannot be lifted up and moved. They would be destroyed,” said Nejla Calvo, an attorney with Legal Services of Greater Miami, which provides free legal assistance to mobile-home owners in South Florida. “Let’s say you could even find a (park property) that can take your home and it won’t be destroyed in the move, it can cost $15,000 just to move your home.”

The proposals would radically change the state’s Mobile Home Act, a section of Florida law adopted in the 1980s that governs the state’s mobile home communities, including their eviction policies and rent negotiations. It was created to put in place protections for mobile-home owners, whose living situations differ greatly from those of traditional renters or homeowners.

“Living within a manufactured housing community, a mobile home park, is a completely distinct land tenure. You’re neither a traditional homeowner nor a renter. You own the home, but you rent the land. This puts manufactured housing community residents in a really unique position, so protections for traditional apartment renters actually might not be good for mobile home park residents,” said Esther Sullivan, an assistant professor at the University of Colorado Denver.

“Really, what we need is laws that treat them separately and acknowledge the unique place of mobile home parks.”

Jim Ayotte, executive director of FMHA, argued the Mobile Home Act must be brought up to date.

After hearing concerns about the bill’s language, Ayotte said it will most likely be amended to give homeowners more time to pay into the court and maintain the requirement to send eviction notices through certified mail.

Provisions that would have allowed park owners to add additional lots without consent from homeowners will also be amended to clarify that shared facilities and amenities must also be expanded. And FMHA may also drop the proposed requirement that buyers must agree to repair mobile homes prior to purchasing, after hearing concerns that it could make selling homes more challenging.

© 2020 The Orlando Sentinel (Orlando, Fla.), Caroline Glenn. Distributed by Tribune Content Agency, LLC.

Q&A: Can a Homeowner Do a Project that Falls Under the HOA?

What happens if an HOA fails to fix something under its control, in this case a mailbox? At what point can a homeowner step in and do it themselves?

FORT LAUDERDALE, Fla. – Question: We need to install a new mailbox in front of our house because ours is falling apart. Our homeowners association approved a budget item to install new mailboxes three years ago, but the work was never done. Can we install a new mailbox without being penalized? – Barb

Answer: When you live under a homeowners association, you may have to follow rules regarding the appearance of your home and property. These guidelines will be set out in your community documents. Some associations have a review process, typically run by a committee of homeowners, to review applications from homeowners looking to paint or make other changes to the appearance of their home.

Mailbox maintenance and replacement is usually the responsibility of the homeowner, although the style of the mailbox will be limited to maintain a consistent look throughout the neighborhood. In your community, it appears that your association is responsible for the mailboxes and approved replacement years ago with no results.

Understandably, you need a working mailbox and one that looks nice. Your first step is to reach out to your association to see what is going on. Start with a call and then follow up in writing. If you do not get a response, try a second time, again in writing, but this time by certified mail, return receipt requested. You should also attend the next board meeting and politely try to find out what is going on. Make sure to take good notes about all of the steps you have taken.

If none of this works, you should repair or replace your mailbox with a design and color as close to your existing one as you can find. Make sure not to spend too much on this, because yours will be replaced along with your neighbors when your community finally gets around to it.

While it is doubtful, considering the circumstances, that you’ll be questioned about the replacement, your documentation and notes will provide an excellent defense to any penalty.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.

© 2020 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC.

Beware: NAR Didn’t Call with a Health Insurance Offer

NAR issued a warning on Wednesday that members are receiving fraudulent phone calls purportedly selling health insurance offered by the association.

CHICAGO – The National Association of Realtors® (NAR) issued an alert to members urging them to “be vigilant against a fraudulent phone call surfacing that is purporting to be representing ‘NAR health insurance.’”

The call is coming from (240) 558-9209 but also other numbers.

“The association won’t make unsolicited calls to enroll you in an insurance program or otherwise solicit your personal information,” NAR wrote in its warning.

If in doubt about the legitimacy of a communication request from NAR, contact the Member Support team at (800) 874-6500 or via live chat or email. Insurance products offered to members through the Realtor Benefits® Program can be found online at

Source: National Association of Realtors®

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

Could Ditching Security Deposits Increase Rental Costs?

Nixing security deposits is a new rental trend, but some analysts think that efforts to encode it into law could wind up costing renters more money in the long run.

NEW YORK – A big trend in rentals has been to eliminate security deposits that require tenants to make a large payment upfront. But some housing analysts say that efforts to encode the practice into law could wind up costing renters more money in the long run.

National Real Estate Investors Association COO Charles Tassell told Fox Business that several efforts by legislators around the country to do away with security deposits through “misguided feel-good” laws could have long-term implications on renters.

“Either the rents go up or the standards for renting go up, which means people on the margins are less likely to be able to rent,” Tassell says. “In short, what [owners] are going to do is … protect their assets.”

Lawmakers across the country increasingly eye security deposits. In Cincinnati, for example, a new law took effect that gives renters an option to pay with a cash alternative, split payments over six months or opt for security deposit insurance.

Landlords find alternatives to security deposits

Security deposit insurance may appeal to some renters because of their low initial payments, for example, but Tassell cautions against it.

Renters “don’t want to pay $500 up front, so they pay $3, $5, $10 every month,” he says. “And when they move out, the company is going to come back and say, ‘Hey, you need to pay for the $300 of damages.’”

Source: “Real Estate Ditching Security Deposits Can Drive Up Housing Costs: National Real Estate Investors COO,” FOX Business (Jan. 21, 2020)

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

NAR’s Code of Ethics Toughens Words, Changes Timing

An implicit antidiscrimination ban is now spelled out in NAR’s Code of Ethics, and the mandatory training cycle has been changed from every two years to every three. However, existing requirements won’t change until the next cycle, which starts on Jan. 1, 2022.

WASHINGTON – The National Association of Realtors® (NAR) took steps in November to boost the antidiscrimination language in its Code of Ethics, and in January 2020 incorporated those and other changes into the Realtor training it mandates every two – now every three – years.

Under the new training policy that applies to all Realtors nationwide, the current cycle for mandatory Realtor training has been extended to Dec. 31, 2021 – almost two years from now. The current cycle originally ended one year earlier on Dec. 31 of this year.

After Dec. 2021, ongoing mandatory Code of Ethics training will be required every three years.

Realtors who have already completed the mandatory Code of Ethics training or plan to do so within the next 23 months do not have to be concerned about the recent changes, according to Sharon Hoydich, Florida Realtors director of professional development. “Any class that you have previously accepted as fulfilling the NAR requirement remains the same until the end of Dec. 2021,” she says.

In some cases, members of Florida Realtors have taken classes that do double duty – they earn Continuing Education (CE) credit in preparation for their next state license renewal and also receive credit for fulfilling NAR’s Code of Ethics training requirements. While those rules and class courses may change based on NAR’s recent update, members don’t need to worry about them until the next Code of Ethics cycle begins on Jan. 1, 2022.

As part of the increased focus on non-discrimination, NAR says it will begin integrating fair housing into all conferences and engagements, form partnerships with fair housing advocates to pursue shared goals around accountability and training, plus add a number of other initiatives.

“NAR’s Code of Ethics and its adherence to fair housing are the cornerstone of our commitment as Realtors,” said NAR Chief Executive Bob Goldberg at a January meeting with Housing and Urban Development Secretary Ben Carson. “With this new plan, we will see more robust education focusing on core fair housing criteria, unconscious bias, and how the actions of Realtors impact communities. A partnership with government officials and fair housing advocates will allow us to further promote equality as we continue to work to diversify our industry.”

© 2020 Florida Realtors®

1 in 3 First-Time Buyers Turn to Their Family for Help

And 1 in 4 skips the in-between step of renting by living at home. They not only save money but are under less pressure to move quickly in a tight-inventory market.

CHICAGO – One-third of first-time buyers (27%) turned to family and friends for financial help in purchasing a home last year, according to data from the National Association of Realtors® (NAR).

“Using family as a source of down payment help is most common among younger millennial buyers (ages 20 to 28) compared to other generations, and is more common among unmarried couples,” writes Jessica Lautz, vice president of demographics and behavior insights at NAR. “Both sets of buyers have lower household incomes so may be less likely to scrape together the funds individually.”

But most first-timers (78%) also save money for a home that often gets combined with financial gifts from family and friends, the data shows.

For some adults, family financial help allows them to skip a traditional intermediate step – renting. Many are choosing to live at home and transition directly into homeownership. Nearly one-quarter of first-time buyers move directly from their parents, friends, or family’s home into homeownership, according to NAR. The percentage has grown from 12% in 1993 to 23% in the latest survey.

“This living arrangement provides a number of benefits: Not only can a first-time buyer save for a down payment without the cost of rent, but they can also pay down any debt and get their debt-to-income ratio in check,” Lautz says. “It may also be easier to navigate the tight housing market, as the buyer does not need to line up when a rental lease ends with the timing of purchasing a home. They are free to put down contracts on homes, which they may not get, with less pressure of where they will live if they lose out.”

Source: “Bank of Mom and Dad,” National Association of Realtors® Economists’ Outlook blog (Jan. 28, 2020)

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

Fed Keeps Rates Unchanged After Three Cuts Last Year

The Federal Reserve held interest rates steady Wed., following through on its vow late last year to stand pat barring a “material” change in its outlook.

WASHINGTON – The U.S. economy keeps chugging along but overseas risks such as the coronavirus continue to hover, and that’s helping keep the Fed in wait-and-see mode.

As widely expected, the Federal Reserve held interest rates steady Wednesday, following through on its vow late last year to stand pat barring a “material” change in its outlook.

In a statement after a two-day meeting, the Fed said it would leave its benchmark federal funds rate at a historically low range of 1.5% to 1.75% after cutting it by a quarter percentage point three times last year amid trade tensions and sluggish global growth that increased the risk of recession.

Fed Chair Jerome Powell has said the so-called insurance cuts kept the economy on solid footing and no further decreases were needed unless the outlook darkened.

“Uncertainties about the outlook remain, including those posed by the new coronavirus,” Powell said at a news conference Wednesday. “There is likely to be some disruption to activity in China and globally” from the virus.

But, he added, “It’s too early to say what the effect will be” in the U.S. “We are monitoring it carefully.”

Chinese authorities have confirmed 5,500 cases and 131 deaths from the virus. There have been five cases in the U.S.

In its statement, the Fed said “the labor market remains strong” and “economic activity has been rising at a moderate rate.” The central bank downgraded its view of consumer spending, describing the recent rise as “moderate,” rather than “strong,” as it said in December. Business investment it said, remains “weak.”

Since the Fed’s December meeting, consumer spending has slowed but continued to perform well while business investment remains sluggish. And although manufacturing has contracted for five straight months, industrial output has picked up somewhat and housing starts have increased sharply as a result of low mortgage rates.

Economists surveyed by Bloomberg expect the government on Thursday to report the economy grew at an annual rate of 2.2% in the fourth quarter. And those polled by Wolter Kluwer Blue Chip Economic Indicators predict 1.9% growth next year. Both estimates mark a slowdown from the nearly 3% gain in 2018 but are higher than prior forecasts.

At the same time, the Fed noted Wednesday that inflation remains below its 2% target. Powell has said it would take “a significant increase in inflation” for the Fed to raise rates.

Some of the risks that worried Fed officials last year have eased. The Trump administration has reached a “phase 1” trade agreement with China. Congress has passed a new trade deal with Mexico. And the odds of a chaotic British withdrawal from the European Union have dropped.

But new hazards have emerged, Barclays says. The coronavirus threatens to crimp growth in China and other parts of Asia and could jeopardize the U.S. economy if it spreads. U.S.-Iran tensions persist. Boeing has halted production of its 737 MAX at least until summer after two fatal crashes, a development that Moody’s Analytics says will trim nearly half a percentage point off growth in the current quarter. And there’s some question about whether China will fully honor its agreement to buy more American exports under the trade deal.

Meanwhile, President Trump is still waging broader trade battles with China and Europe. Although the partial trade deal with China seems to have boosted manufacturers, “There’s a bit of a wait-and-see attitude,” Powell said. “Is this going to be sustained?”

Powell also said the Fed plans to continue purchases of Treasury bonds and other assets at least until spring to pump cash into the financial system after a cash shortage last fall briefly pushed the federal funds rate above the Fed’s target range. The Fed has bought about $400 billion in the securities since October.

He said the central bank will then gradually reduce the purchases and stop them when it’s confident of maintaining at least $1.5 trillion of reserves in the system.

Copyright 2020,, USA TODAY, Paul Davidson

Even the British Like Fla.’s ‘New Urbanist’ Towns

Three cities designed for walkability – including Seaside used in “The Truman Show” movie – caught Prince Charles’ eye and have sister-cities developed in the U.K.

LONDON – Forty years ago, Miami architecture firm DPZ began developing three developments called Seaside, Rosemary Beach and Alys Beach. Located on the Emerald Coast of the Florida Panhandle, the idyllic neighborhoods feature “new urbanist” planning, which is built on the principle that homeowners should be able to walk to a shop instead of having to use a car.

The neighborhoods are densely packed and feature environmentally friendly features including native vegetation, cobbled or sloped streets to create natural drainage, and, in the case of Alys, hurricane-proof houses with bulletproof windows and thick walls.

Designer and DPZ founder Andres Duany says his goal is to make sure the town is “harmonious,” and he dismisses criticisms of his architecture by pointing to its massive popularity.

Seaside Community Realty agent Jacqueline Barker notes that there is a 20% premium on properties in Seaside, Rosemary Beach and Alys Beach compared to homes nearby, and only 15% of the homes’ owners live there full-time, with many renting out the properties for high prices. Seaside was used for the movie “The Truman Show” starring Jim Carrey.

Duany is unrepentant about gentrification, claiming the towns have been a boon to the local economy and that “urbanism distributes wealth,” although he has recently turned his attention to developing affordable housing units for service workers. Parking is a problem in Seaside, and most people work elsewhere and have to commute by car to reach the towns, so they are not pure eco-towns.

Duany believes he has won the argument for new urbanism, and his Florida communities have been highly influential, with 4,000 new urbanist communities in the works across the country.

Prince Charles of the United Kingdom has displayed an interest in Duany’s work, hiring him in 1993 to help plan a similar project in Britain called Poundbury, and Duany currently is working on three new urbanist projects in the U.K.

Source: The Times (London) (01/26/20) Graham, Hugh

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

Mortgage Rates Hit Second-Lowest Level in 3 Years

The 30-year FRM averaged 3.51% this week in Freddie Mac’s survey, down from last week’s 3.60%. The 15-year FRM average dropped to 3.0%.

WASHINGTON – U.S. long-term mortgage rates continued to fall this week, breaching already historically low levels and offering an incentive to potential homebuyers.

Mortgage buyer Freddie Mac said Thursday the average rate for a 30-year fixed-rate mortgage dropped to 3.51% from 3.60% last week. The benchmark rate stood at 4.46% a year ago.

The average rate on a 15-year mortgage declined to 3% from 3.04% last week.

Federal Reserve policymakers continued to hold interest rates low at their latest meeting this week. But the Fed chair warned that the viral outbreak in China poses a new threat to the strengthening global economy.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Fla.’s House and Senate at Odds Over Affordable Housing Money

While Gov. DeSantis and the Fla. Senate support using all money in the state’s affordable housing trust fund for its intended purpose, the House budget recommends sweeping $240M for other needs – but things change as the Legislature reconciles their differences.

TALLAHASSEE, Fla. – Some lawmakers are poised to divert more funds intended for affordable housing programs this year, despite pleas from housing and homeless advocates, developers, unions and environmental groups to keep the funds intact amid a growing need for cheaper housing in Orlando and other areas of the state.

A state House panel on Tuesday released its initial budget recommendation, which includes $147 million for affordable housing programs but sweeps $240 million into other areas of the budget.

Orlando has the greatest shortage of affordable housing among the top 50 metro areas in the country, according to a report released last year by the National Low Income Housing Coalition.

House budget chairman Travis Cummings said he’s aware of the needs throughout the state but needed to sweep the funds to help pay for other large spending items, including a $500 million increase to boost teacher salaries, increase environmental spending, provide pay raises to prison guards and deal with rising health care costs.

“We’ve obviously advocated the sweep in terms of some really great needs … but we feel with the teacher raises and other issues, the environment, that we chose to come out with that position at this time,” said Cummings, R-Fleming Island.

The Senate’s initial spending plan keeps all $387 million in affordable housing funds for affordable housing programs, as did Gov. Ron DeSantis in his budget recommendations. But the process of budget negotiations between the House and Senate will likely lead to some portion of the funds being diverted, as the two sides attempt to meet in the middle.

“The Senate’s position is very strong on affordable housing,” said Sen. Travis Hutson, R-St. Augustine, top Senate budget writer for the economic development portion of the budget. “As the money goes into the higher allocations of the budget process with the budget chairs and the (House) Speaker and the (Senate) President, they usually find some common ground.”

The House’s plan would use $48.8 million for the State Apartment Incentive Loan program (SAIL), which gives low-interest loans to developers to build apartments for low-income households and $73.2 million for the State Housing Initiatives Partnership program (SHIP), which provides grants to local governments to aid eligible families with down payment assistance and repairs for existing homes. It also dedicates $25 million for remaining housing needs in the Panhandle areas still reeling from Hurricane Michael.

The Senate plan uses $119.8 million for SAIL and $267.2 million for SHIP.

Democrats have repeatedly pushed for full funding, and several rallied with liberal and progressive groups at the Capitol on Wednesday to also urge their GOP colleagues to take up bills designed to strengthen tenants’ rights.

Rep. Carlos Guillermo Smith, D-Orlando, is sponsoring SB 1852, which would install protections against evictions, but the bill hasn’t gotten a hearing in either chamber. He also called on DeSantis to veto any budget that transfers affordable housing funds to other parts of the budget.

“Two years after Hurricane Maria, climate evacuees from Puerto Rico are still fighting for affordable housing,” Smith said. “Yet still in a plan released by the House … just yesterday the House wants to raid another $240 million out of affordable housing programs.”

The Legislature has diverted more than $2.2 billion away from the affordable housing trust fund over the last 20 years. In lieu of more state funds, some local governments have looked to make up the difference using local funds.

Orange County commissioners on Tuesday set aside $10 million for the county’s own affordable housing trust fund, part of a plan to raise $160 million for the fund over the next 10 years.

Each chamber is scheduled to vote on their budgets in the next two weeks, setting the stage for formal negotiations. The legislative session is set to end March 13.

© 2020 The Orlando Sentinel (Orlando, Fla.), Gray Rohrer. Distributed by Tribune Content Agency, LLC.

Ransomware Scams Take Aim at Smaller Companies

Thousands of ransomware attacks – a computer freeze with a “ransom” demand – occur daily, and black-market software helps smaller criminals target smaller companies.

MILWAUKEE – The so-called ransomware attack that shut down a Milwaukee company recently shows the ever-present risk that now threatens all organizations.

Small businesses that have less sophisticated systems to protect their computer networks from being hacked can be particularly vulnerable, according to cybersecurity experts. But every business or organization – large corporations, health systems, universities – is at risk.

“We all run the risk every time we cross the street of getting hit by a car – no matter how cautious we are,” said Thomas Kaczmarek, director of the Center for Cyber Security Awareness and Cyber Defense at Marquette University.

“You have to be beyond cautious. You have to be defensive, and organizations are trying to be defensive. But it costs time and money and resources to do that.”

Ransomware is a type of software, known as malware, that locks down parts of a computer system – or, in the worst case, the entire system – and denies access to the system or data until a ransom is paid. The FBI estimates that several thousand ransomware attacks occur each day.

“Cyber hacking has become a business,” Kaczmarek said.

People don’t even have to be technical experts to become cybercriminals: They can buy kits that provide the needed software.

“There are very low barriers of entry to the marketplace,” Kaczmarek said. He likened it to becoming a franchisee. If perpetrators succeed in penetrating a computer system, they can sell the access – the rights – to another party in exchange for what would be considered a finder’s fee in the business world.

The ransomware that hit the Milwaukee company – vcpi, which provides information technology services to nursing homes and rehabilitation facilities – is well-known: It’s called Ryuk. The attack was launched in the early hours of Nov. 17 and affected clients’ email, electronic records for administering medications and, in some cases, electronic health records.

The company, formerly Virtual Care Provider, estimates that 20% of its servers were affected. It has been focused on restoring its system and declined to comment.

Most ransomware attacks are not publicly disclosed. But the fact that businesses can buy cybersecurity insurance shows the risk they face.

“The more you look into this, the more it scares you,” said Khaled Sabha, who teaches courses on computer hacking and forensics at the University of Wisconsin-Milwaukee. “It could happen to any person, even to me,” he said. “You have to be vigilant all the time.”

Sabha and other experts stressed that the first line of defense is awareness.

An estimated 90% of successful attacks are from phishing, in which someone clicks on a Word document, PDF file or link that contains “scripting,” or executable code.

The problem is the email can be sent under a false address.

The computer science department at UW-Madison this year was the target of so-called spearfishing – a type of phishing designed for a specific person or organization – under the name of the former department chair, said Barton Miller, a computer science professor.

No one fell for it.

But few people are computer scientists – and all it takes is a lapse by one employee for a computer system to be breached. Once the system is penetrated, the virus has a beachhead of sorts. The Emotet virus, for example, originally was designed to steal information, Miller said. But around 2018, a new version appeared that could bring in other software, such as Ryuk malware, as well as get into email contacts. The malware then will look for vulnerabilities, such as updates that haven’t been done or flaws in how the system is configured.

Computer networks are designed with firewalls and other protections to stop a virus or malware from getting beyond a certain point. Tools also have been developed to identify potential weaknesses.

“One of the primary principles of cybersecurity is defense in depth,” Kaczmarek said. Only authorized people, for instance, should be allowed access to certain parts of the network.

That’s partly why cybersecurity experts stressed the importance of complex passwords.

Viruses now exist that can capture keystrokes and in the process get passwords, Kaczmarek said. But so-called brute force attacks that try possible combinations are the most common. Using an upper and lower case letter doubles the complexity. Numbers and special characters make passwords even more complex.

One problem is people often use the same password for different accounts. And passwords also can be picked up when people use unsecured Wi-Fi.

The biggest concern is compromised credentials, such as a simple password or a password used for a number of different sites or accounts, said Brett Rehm, vice president of technical services team at Epic Systems.

Health care organizations and insurers have become inviting targets for cybercriminals. In a two-month period this year, eight health systems, hospitals or medical clinics were hit with ransomware attacks that in some cases caused them to shut down temporarily, according to Becker’s Hospital Review.

The most important defense is ensuring that so-called patches are installed regularly, Rehm said. Most malware attacks could be prevented by installing the latest version of security software.

Epic’s customers are large health systems and physician practices that have sophisticated computer networks. Smaller health providers, businesses and organizations don’t have the same resources.

The National Institute of Standards and Technology has put out a framework that consists of standards, guidelines and best practices for cybersecurity. A coalition also has worked to raise awareness with its “Stop. Think. Connect Campaign.

But even with that, organizations still are risk. For this reason, experts stress the importance of backing up their data – and regularly testing their backups.

Copyright 2020,, USA TODAY, Guy Boulton

Q&A: Can a Condo Board Make Renters Pay a Deposit?

While a condo board doesn’t own individual units, it can require renters to pay a security deposit in some cases. Also: A condo lobby and amenities need renovations, and owners are worried about repayment options. What’s the best way to finance an upgrade?

STUART, Fla. – Question: Our condominium board wants to renovate our lobby and amenities but the cost would require a loan. The owners are concerned about repayment options. Do you have any recommendations on how to borrow for this purpose? – C.B., Port St. Lucie

Answer: This is a frequent question and there are a few options.

The first question is always whether the board is able to borrow in its discretion, or whether the owners must first vote to authorize the borrowing. It is important to note that the Condominium Act does not directly address this issue and that Chapter 617 governing all not-for-profit corporations provides that the board can borrow subject to limitations in the governing documents.

In other words, you should first have your legal counsel review the governing documents to determine who must authorize borrowing. Because this fact can have a significant impact on how the renovation is pursued, you should address this first.

Next, if the loan is substantial, many lenders will require a dedicated special assessment to facilitate repayment of the loan. This makes sense because the lender will want a streamlined revenue source in the event of a default. Again, you should have your legal counsel provide an opinion on whether the board can levy a special assessment for this purpose and the minimum amount necessary in order to repay the loan. It is possible the board has the authority to borrow without a vote of the membership, but nevertheless the documents may require a vote to levy a special assessment to repay the loan.

Finally, even if there is a dedicated special assessment, some lenders will further require a lien, mortgage or other encumbrance of personal property, land or bank accounts. If this is true, then again you should have your legal counsel provide an opinion on whether the board can encumber property with or without a vote of the membership. The ability to borrow, special assess and encumber are distinct rights that may have different approval requirements under your governing documents.

Assuming you are able to navigate the above threshold issues to pursue a commitment letter from the lender, Florida law authorizes multiple repayment options. In my experience, many owners abhor paying interest of any kind. To accommodate these owners, Florida law allows the association to provide owners with the option of 1) paying the special assessment in a lump sum and avoid all costs associated with borrowing or b) paying over a period of time and paying the financing charges, origination fees, taxes and other charges associated with borrowing. You are not required to provide the option and some lenders will allow you to simply roll the repayments into the operating budget without a special assessment.

Question: We have a number of tenants in our condominium that do not take care of the property or amenities. Can we require a security deposit for damage to the gate, pool, clubhouse or other amenities? – M.M., Vero Beach

Answer: Possibly, yes. First, the statutes provide that the association may require a security deposit, but the authority must be in the declaration or the bylaws. If the documents do not expressly allow the deposit requirement, you may not require the deposit.

Second, the deposit is capped at one month’s rent amount.

Third, there are statutory requirements on how to hold the money and how to actually make a claim on the deposit when there is damage. As a result, I recommend you work with a Florida licensed attorney to adopt the appropriate procedures or amend your condominium documents if the documents are currently silent on this issue.

Steven J. Adamczyk Esq., is a shareholder of the law firm Goede, Adamczyk, DeBoest & Cross, PLLC. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisement

© 2020 Journal Media Group, Steven J. Adamczyk

Florida Realtors: Single-Family Sales Up 23.8% in Dec.

And Fla. condo-townhouse sales were up 17.7% year-to-year. The statewide median price for single-family homes rose 5.9% to $270K, and condo-townhouse prices were up 8.1% to $200K. Pending inventory and new pending sales also rose statewide in both categories.

ORLANDO, Fla. – The holiday season was a time of good cheer for Florida’s housing market, with more closed sales, higher median prices and increased pending sales, plus more pending inventory in December 2019 compared to a year ago, according to the latest housing data released by Florida Realtors®.

Sales of single-family homes statewide totaled 25,557 last month, up 23.8% from December 2018.

“Continued low interest rates are sparking buyer demand across Florida; however, a constrained supply and tight inventory of for-sale homes is putting pressure on home prices to rise,” says 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Sarabay Suncoast Realty Inc. in Bradenton. “Existing single-family homes had a 3.4 months’ supply of inventory in December, while condo-townhouse properties showed a 5.2 months’ supply. In a positive sign, new pending sales rose 11.9% for single-family existing homes last month and new pending sales for condo-townhouse units increased 8.3%.

“Buying or selling a home can be a complex process, but a local Realtor stands ready to help.”

Statewide median sales prices for both single-family homes and condo-townhouse properties in December rose year-over-year for 96 months in a row. The statewide median sales price for single-family existing homes was $270,000, up 5.9% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $200,000, up 8.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in November 2019 was $274,000, up 5.4% from the previous year; the national median existing condo price was $248,200. In California, the statewide median sales price for single-family existing homes in November was $589,770; in Massachusetts, it was $405,000; in Maryland, it was $301,000; and in New York, it was $280,000.

Looking at Florida’s condo-townhouse market in December, statewide closed sales totaled 9,605, up 17.7% from the level a year ago. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

Florida Realtors Chief Economist Dr. Brad O’Connor points out that Florida’s housing market this December showed very different data trends than the previous year. In December 2018, the state was experiencing weak existing home sales growth and rising inventory levels driven in part by higher interest rates, a troubled stock market and uneasiness generated by an impending shutdown of the federal government, according to O’Connor.

“Closed sales of existing single-family homes were up by nearly 24% compared to last December, while closings in the condo-townhouse category were up by almost 18%,” he says. “So why such a big jump? Well, part of it is explained by the fact that sales were unusually weak at the end of 2018, driven in part by a sharp increase in the average 30-year mortgage rate.

Of course, that doesn’t explain the entire increase in sales, he adds.

“The average 30-year mortgage rate spent the entire second half of 2019 in the range of 3.5% to 3.8%, flirting with historical lows,” O’Connor says. “And in the months since the mid-year yield curve scare that spooked the financial markets, the Federal Reserve has dropped the federal funds rate three times, restoring calm to the national economy. Here in Florida, we saw new pending sales for both property types begin surging in October, and now, with the December figures, we see a significant share of those deals successfully closed by year’s end.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.72% in December 2019, down from the 4.6% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors’ Statistics and Research section on Realtors also have access to local market stats (password protected) on Florida Realtors’ website.

© 2020 Florida Realtors

NAR: Existing-Home Sales Climb 3.6% in Dec.

Inventory continues to fall, but shoppers appear ready to buy what’s available. While sales rose at the end of 2019, total yearly sales were about equal to those in 2018.

WASHINGTON – Existing-home sales grew in December, bouncing back after a slight fall in November, according to the National Association of Realtors®. Although the Midwest saw sales decline, the other three major U.S. regions reported meaningful growth last month.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased 3.6% from November to a seasonally adjusted annual rate of 5.54 million in December. In a year-to-year comparison, the increase is even higher – up 10.8% compared to 5 million in December 2019.

For all of 2019, NAR says that home sales remained stable compared to 2018 but didn’t increase. On a full-year basis (not seasonally adjusted), total existing-home sales ended at 5.34 million – the same level as in 2018. Sales in the South region, which includes Florida, were up 2.2%, offsetting a 1.8% decline in the West and 1.6% drop in the Midwest. The Northeast remained unchanged.

Lawrence Yun, NAR’s chief economist, says home sales fluctuated a lot in 2019.

“I view 2019 as a neutral year for housing in terms of sales,” Yun says. “Home sellers are positioned well, but prospective buyers aren’t as fortunate. Low inventory remains a problem, with first-time buyers affected the most.”

The median existing-home price for all housing types in December was $274,500, up 7.8% from December 2018 ($254,700), as prices rose in every region. November’s price increase marks 94 straight months of year-over-year gains.

“Price appreciation has rapidly accelerated, and areas that are relatively unaffordable or declining in affordability are starting to experience slower job growth,” Yun says. “The hope is for (home) price appreciation to slow in line with wage growth, which is about 3%.”

Total U.S. housing inventory at the end of December was 1.40 million units, down 14.6% from November and 8.5% year-to-year. Unsold inventory sat at a 3.0-month supply at the current sales pace, down from the 3.7-month figure recorded in the month before and in December 2018.

Unsold inventory totals have dropped for seven consecutive months in year-to-year comparisons, taking a toll on home sales.

Properties typically remained on the market for 41 days in December, seasonally up from 38 days in November, but down from 46 days in December 2018. Forty-three percent of homes sold in December 2019 were on the market for less than a month.

First-time buyers were responsible for 31% of sales in December, moderately down from the 32% seen in both November and in December 2018. According to NAR’s 2019 Profile of Home Buyers and Sellers, the annual share of first-time buyers was 33%.

Individual investors or second-home buyers, who account for many cash sales, purchased 17% of homes in December 2019, up from 16% in November and 15% in December 2018. All-cash sales accounted for 20% of transactions in December, unchanged from November and down slightly from 22% in December 2018.

Distressed sales – foreclosures and short sales – represented 2% of sales in December, unchanged from both November 2019 and December 2018.

Yun says conditions for buying are favorable and expects that to continue in 2020.

“We saw the year come to a close with the economy churning out 2.3 million jobs, mortgage rates below 4% and housing starts ramp up to 1.6 million on an annual basis,” he says. “If these factors are sustained in 2020, we will see a notable pickup in home sales in 2020.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 3.72% in December, up from 3.70% in November. The average commitment rate across all of 2019 was 3.94%.

“NAR is expecting 2020 to be a great year for housing,” says NAR President Vince Malta. “Our leadership team is hard at work to secure policies that will keep our housing market moving in the right direction, like promoting infrastructure reform, strengthening fair housing protections and ensuring mortgage capital remains available to responsible, mortgage-ready Americans.

Single-family and condo/co-op sales: Single-family home sales sat at a seasonally-adjusted annual rate of 4.92 million in December, up from 4.79 million in November, and up 10.6% year-to-year. The median existing single-family home price was $276,900 in December 2019, up 8.0% from December 2018.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 620,000 units in December, up 10.7% from November and 12.7% year-to-year. The median existing condo price was $255,400 in December – an increase of 6.0% from a year ago.

Regional breakdown: Compared to last month, December sales increased in the Northeast, South and West regions, while year-over-year sales were up in each of the four regions. Median home prices in all regions increased from one year ago, with the Midwest region showing the strongest price gain.

  • December 2019 existing-home sales in the Northeast grew 5.7% to an annual rate of 740,000, up 8.8% from a year ago. The median price in the Northeast was $304,400, up 7.4% from December 2018.
  • Existing-home sales decreased 1.5% in the Midwest to an annual rate of 1.30 million, which is up 9.2% from a year ago. The median price in the Midwest was $208,500, a 9.2% jump from last December.
  • Existing-home sales in the South grew 5.4% to an annual rate of 2.36 million in December, up 12.4% from a year ago. The median price in the South was $240,500, a 6.7% increase from this time last year.
  • Existing-home sales in the West rose 4.6% to an annual rate of 1.14 million in December, a 10.7% increase from a year ago. The median price in the West was $411,800, up 8.1% from December 2018.

© 2020 Florida Realtors®

95-Year-Olds Still Qualify for 30-year Mortgages

Under the Equal Credit Opportunity Act, a loan applicant’s age doesn’t matter – even people who think, “There’s no way I’ll live long enough to pay this off.”

NEW YORK – Older Americans may not realize they can still qualify for a mortgage. Under the Equal Credit Opportunity Act, a loan applicant’s age doesn’t matter – even those who think “There’s no way I’ll live long enough to pay this off.”

Mary Babinski, a senior loan officer with Motto Mortgage Champions in Trinity, Fla., told The Wall Street Journal that when a 97-year-old applicant came in to inquire about a mortgage, he was surprised he could still qualify for a 30-year loan. But older borrowers are eligible for loans that will expire as late as their 130th birthdays.

In addition, more lenders are promoting loans to retirees that qualify with special lending programs geared to them.

Borrowers over the age of 65 comprise about 10% of all mortgages originated each year, according to the Federal Housing Finance Agency.

It’s not just about age. Without a full-time job in retirement, some older adults wonder how they’ll qualify with only limited monthly earnings. Still, lenders continue qualifying older adults for a mortgage based on their pensions, Social Security, dividends and the interest they have available. They’re also showing more willingness to work with retirees to help qualify them based on either their income, distributions or assets.

Jumbo mortgages aren’t off the table either. Richard Barenblatt, a mortgage specialist with GuardHill Financial in New York, was able to get an 83-year-old retired Manhattan co-op owner a $1 million, 10-year, interest-only adjustable-rate mortgage for a refinance at a “highly competitive rate.”

Source: “You’re Never Too Old to Apply for a Mortgage,” The Wall Street Journal (Jan. 16, 2020) [Log-in required.]

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

Judge Rejects Challenge on Underground Power Lines

Fla. remains on track to ease post-hurricane suffering by putting powerlines underground, but a court ruling makes it more likely rates will rise faster than hoped.

TALLAHASSEE – In a victory for state regulators and utilities, an administrative law judge Tuesday rejected a challenge to a plan for carrying out a new law that is expected to lead to more underground power lines in Florida.

Judge James H. Peterson III, in a 52-page order, turned down arguments raised by the state Office of Public Counsel, which represents consumers in utility cases, and the Florida Industrial Power Users Group, which includes large electricity customers.

They challenged proposed rules that the Florida Public Service Commission approved to carry out a 2019 law designed to help utilities add underground power lines and take other steps to better withstand hurricanes. Added costs for the projects are expected to be passed along to customers.

The challenge centered, in part, on a decision by the Public Service Commission to require utilities to provide detailed information only for projects in the first year. Information submitted initially for the second and third years would be broader, such as estimated numbers of projects and estimated costs. The utilities would then come back annually with detailed plans for the next year.

The Office of Public Counsel and other critics have contended that a lack of detail about projects in the second and third years could allow utilities to collect money under the new law for projects whose costs also are being passed on to customers through longer-term base rates.

But Peterson disputed that the Public Service Commission’s approach could open the door to “double recovery” of project costs from consumers.

“There is nothing confusing about the language used in the proposed rule – it forbids double recovery,” Peterson wrote. “Regulated utilities can readily understand its meaning – they may not recover costs through the (projects) clause that they are already recovering through base rates.”

Another disputed issue centered on whether utilities should be able to collect estimated costs for projects, with the Office of Public Counsel contending in its challenge that the “law permits only the recovery of “incurred” costs – historical, approved expenditures – following a proceeding where prudent costs are determined.”

But Peterson disagreed, noting that utilities already can collect estimated amounts of money to cover some other types of costs. In such situations, utilities go before the Public Service Commission after projects are completed to “true up” costs – a process that accounts for collecting too much, or not enough, money.

“The (Public Service) Commission currently administers a number of other cost recovery clauses, and all those cost recovery clauses operate in the same way – the commission establishes projected costs for the next year that are collected from customers in the next year when they are incurred through a factor on the customer’s bills,” the order said. “That factor also includes true-up adjustments for the current and previous year to adjust for overbillings or underbillings, so that customers never pay more (or less) than actual costs. The way the clause process works, costs are passed on to the customer in the same year that the costs are occurring.”

The commission voted in November to approve the proposed rules, months after the underlying law was passed by the Legislature and signed by Gov. Ron DeSantis.

A key part of the law changes the way such storm-protection projects are financed – and likely will lead to increased costs for consumers.

Under the law, utilities will be able to seek approval from the Public Service Commission each year to collect money from customers for storm-protection projects. In the past, such projects have generally been financed through base rates, which are set for a number of years and include a wide range of utility expenses.

Source: News Service of Florida, Jim Saunders

Court: Should Mortgage Profits Go to Taxpayers or Investors?

Fannie and Freddie back most mortgages, and after a recession bailout, now return most profits to taxpayers – but investors want the Supreme Court to rule that illegal.

NEW YORK – The U.S. Supreme Court could say as early as Friday whether it will intervene in a high-stakes fight over hundreds of billions of dollars in Fannie Mae and Freddie Mac profits that investors say the federal government has collected illegally.

The justices meet Friday to discuss whether they will review scores of cases, including appeals from each side on the so-called net-worth sweep, which has funneled more than $300 billion in Fannie and Freddie profits to the Treasury since 2013.

Together, the appeals could determine whether the sweep can continue, whether the shareholders have leverage to extract an expensive settlement, and even how much job security Federal Housing Finance Agency (FHFA) Director Mark Calabria will have. The dispute could also affect plans by President Donald Trump’s administration to end the government’s control of Fannie and Freddie.

The case “is of immense practical importance,” the administration told the justices in court papers.

Fannie Mae and Freddie Mac help keep the U.S. housing market humming by buying mortgages from lenders and packaging them into bonds that are sold to investors with guarantees of interest and principal.

After the housing market cratered in 2008, the companies were put into federal conservatorship and sustained by taxpayer aid. They have since returned to profitability and paid $115 billion more in dividends to the Treasury than they received in bailout funds. Since 2013, nearly all their profits have been sent to the Treasury under the net-worth sweep.

‘Cloud of uncertainty’

In their lawsuit, three investors contend the FHFA exceeded its authority when it set up the net-worth sweep in 2012. The administration counters that the 2008 law that established the FHFA precludes lawsuits over the arrangement.

A splintered federal appeals court rejected the administration’s contentions, saying the lawsuit could go forward.

Both sides now are asking the Supreme Court to review that conclusion. The suing shareholders say everyone would benefit from clarity.

“So long as there is a credible threat that litigation will invalidate the net-worth sweep, a cloud of uncertainty will hang over the companies’ capital structure,” the shareholders told the Supreme Court. “Investors will not be willing to supply the tens of billions of dollars in new capital that are essential to Treasury’s reform plan.“

Shares of Fannie and Freddie have surged over the past year on expectations that the courts may act and that the Trump administration will take steps to end U.S. control. A move to free the companies is expected to include an initial public offering or other event where Fannie and Freddie seek to raise new capital from investors.

The Trump administration told the high court that legal uncertainty “may frustrate the federal government’s proposed and ongoing efforts to reform the housing finance system and to end the ongoing conservatorships of the enterprises.”

Calabria’s appointment

Complicating matters is a second appeal, filed by the investors, that says Congress unconstitutionally limited the circumstances under which the president can fire the FHFA director. The investors say that violation of the Constitution’s appointments clause offers an additional ground for tossing out the net-worth sweep.

The Supreme Court is already set to consider whether Congress violated the appointments clause by insulating the director of the Consumer Financial Protection Bureau (CFPB) from being fired. Arguments are set for March 3 and a ruling is likely by the end of June. The court could defer acting on the Fannie and Freddie investors’ appeal until the CFPB case is resolved.

Ironically, that line of argument could undercut Calabria, a former chief economist to Vice President Mike Pence and champion of efforts to free Fannie and Freddie from government control.

Calabria just began a five-year term that could let him outlast Trump. Should the courts rule that the director was given too much job protection, and should a Democrat win the presidential election in November, Calabria would be vulnerable to being fired next year by the new president.

Ending the sweep

Calabria and Treasury Secretary Steve Mnuchin have said they plan to make additional changes to Fannie and Freddie’s bailout agreement and would eventually like to end the sweep.

They took a key step toward doing that in September when they let Fannie and Freddie retain more of their earnings than previously allowed. The deal essentially halted the net-worth sweep, and it will likely be more than a year before the companies will have to send additional earnings to Treasury.

Resolving legal issues surrounding Fannie and Freddie could be a crucial step if the companies are going to attract new investors, according to analysts. It could spur the administration to push ahead with its planned changes and perhaps even consider a settlement.

“The Supreme Court’s consideration of this case is significant insomuch as it impacts the administrative reform conversation,” said Isaac Boltansky, financial regulation analyst at Compass Point Research & Trading. “The shareholder cases are meaningful because they could conceivably force action or expedite timelines, but this is still predominantly about what the FHFA and Treasury Department can accomplish.”

The cases are Collins v. Mnuchin, 19-422, and Mnuchin v. Collins, 19-563.

© 2020 Bloomberg L.P.; © 2020 Penton Media, Greg Stohr, Elizabeth Dexheimer

Single-Family Starts Will Gain Little Ground in 2020

NAHB forecasts 2% more single-family homes will be built this year – but it’s not enough. Frustrated buyers want about 3.8M homes, mainly at the low-end of the market.

LAS VEGAS – Single-family starts should continue on a gradual, upward trajectory in 2020, fueled by solid job growth and low mortgage rates that will keep demand firm, according to economists speaking at the International Builders’ Show in Las Vegas.

“Low resale inventory, favorable mortgage rates, historically low unemployment and accelerating wage growth are driving builder sentiment and point to single-family production gains in 2020,” says NAHB Chief Economist Robert Dietz.

However, that’s not enough, according to a new report from It found that single- family home starts (per 1,000 households) grew from 4.6 in 2012 to 7.3 in 2019, making the eight-year average 6.2. And while that growth was needed, levels still remain well below the two-decade average. economists estimate that even with an above average pace of construction, it would take homebuilders four to five years to get back to equilibrium.

“The current inventory crisis and the need for 3.8 million new homes means a nearly insatiable appetite from potential buyers, especially in the lower end of the market,” says Javier Vivas, director of economic research for

 “Builders are still underbuilding as they continue to struggle with rising construction costs stemming from excessive regulations, a chronic shortage of workers and a lack of buildable lots,” says Dietz. “These affordability headwinds are impeding more robust construction growth.”

NAHB forecast

  • Total housing starts are expected to hit 1.3 million units in 2020, up more than 2% from last year. While that would mark the highest output since 2007, it’s still well below normal production levels that averaged 1.5 million units annually from 1960-2007.
  • Single-family starts are forecast to increase more than 3% from 2019 numbers to about 920,000 units – but that’s significantly less than the 1 million to 1.1 million units that demographics would support.
  • NAHB expects multifamily starts to hold relatively steady in 2020 at 383,000 units, a level it calls sustainable due to demographics and a balance between supply and demand. Currently, 93% of all multifamily units are built for rent vs. 7% that constructed for sale. The historical split is 80-20.
  • New-home sales are projected to total 708,000 in 2020, up 2.5% from last year. It would mark the first year sales surpass 700,000 since 2007.
  • Residential remodeling activity is expected to register a 1% gain this year over 2019 as existing home sales improve.

Some Florida cities hot markets for builders

The South and the West regions will lead new-home growth in the year ahead, according to Frank Nothaft, chief economist at CoreLogic. “Markets with good affordability, high employment and outdoor amenities have had the highest growth in new-home sales over the last year,” he says.

New-home sales are rising fastest in the South. Dallas and Houston led the way, averaging at least 30,000 new-home sales between Oct. 2018 and Sept. 2019. The two Texas cities were followed by Atlanta, Phoenix and Austin, which all averaged at least 15,000 sales in the same period.

Meanwhile, several metropolitan areas located predominantly in the South posted at least a 20% gain in new-home growth over the same 12-month period. Metros leading the way included Port St. Lucie, Fla; Warner Robins, Ga.; Ocala, Fla.; The Villages, Fla, and Sebastian, Fla.

Nothaft added that home prices and rents are expected to continue to outpace inflation in most areas, with nationwide home prices anticipated to rise 4.8% in 2020 and single-family rents up 3%.

“The housing market is entering the year with a great deal of momentum from 2019,” says Nothaft. “This is the first time in post-World War II history that unemployment and mortgage rates are both below 4%. That will help fuel demand.”

Low rates, low inventories

David Berson, senior vice president and chief economist at Nationwide Economics, says that mortgage rates are expected to remain low for the foreseeable future.

“Trend growth depends on productivity growth, and labor growth and productivity has not picked up,” says Berson, noting that GDP growth has averaged just 2% since the Great Recession.

At the same time, the nation has experienced a long period of slow labor growth, which slows real economic growth.

Other factors should also help keep interest rates lower: Treasury yields are still near 100-year lows, and inflation remains below the Fed’s long-term goal of 2%.

Meanwhile, existing home inventories remain at all-time low levels but the number of households has been growing strongly. Coupled with solid job gains and low mortgage rates, housing demand remains strong.

“Given the historically low number of homes for sale relative to the number of households, there is only one outlet to meet demand – new home construction,” says Berson. “So 2020 should be a good year for new home construction.”

© 2020 Florida Realtors®

Q&A: Why Pay More Agent Commission if a Tenant Opts to Buy?

A property owner pays an agent to manage his property, and the contract says an additional commission must be paid if his tenant eventually buys the property. Why?

FORT LAUDERDALE, Fla. – Question: My tenant wants to purchase the home he recently rented with the help of my real estate agent. I checked the listing agreement I signed with the agent and noticed that it states that if I sell the property to the tenant, I need to pay the agent an additional sales commission. I already paid the agent for the rental, and I do not understand why I have to pay again. Is this correct? – Paul

Answer: When you signed your listing agreement with your real estate agent, you agreed to its terms, so you will need to pay this commission too. Many listing agreements also require the payment of a commission if your tenant renews the lease for another year. This is yet another reason to read and understand anything you are asked to sign before you sign it.

All contracts are negotiable, and you should make sure that you are comfortable with the terms of any agreement you enter into. If a specific condition is important to you and the person you are negotiating with does not want to give in, you may need to walk away and find someone else to work with.

Of course, if what you are asking for is unreasonable, you may not get anyone to help you, so remember that any successful relationship involves some give and take.

In your situation, you should remember that your agent found the person who is now looking to buy your home. I can assure you from many years of dealing with real estate agents that it is a tough industry, and the people in it work long and inconvenient hours to earn their living in a very competitive environment. It would be unfair to your agent to find you a buyer for your home and only collect the much smaller rental commission.

Before you try to sneak around the listing agreement to avoid paying the commission, be aware that most listing agreements require the loser to pay the winner’s legal fees if your agent has to enforce it in court.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.

© 2020 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC.

SW Fla.: Housing Demand Spurs Big Real Estate Deals

Multifamily and “mammoth” mansion sales are strong. One investor predicts it’s the end of a cycle before large-scale land acquisition and development starts up again.

NAPLES, Fla. – Hordes of new residents flocking to Southwest Florida are driving demand for housing and other real estate. That demand is also fueling some high returns and huge deals.

Many of the priciest real estate sales of last year were based around investments in housing, and specifically in Lee County apartment complexes. The boom of multifamily is evident in the area with six of the top 10 sales of 2019 consisting of complexes changing hands for big numbers.

According to Stan Stouder, a founding partner of real estate firm CRE Consultants, this is no surprise. He said that in four out of the last five years, at least five of the top 10 sales have been multifamily transactions.

“There’s clearly a demand for multifamily,” he said. “Investors are looking for return on investment, and multifamily is very favorable right now. For the kind of return you get, the risk, as compared to investing in other items, is not as high.”

He said that investors can often count on the reliability of these properties due to the “real estate rudiments” in Southwest Florida being strong. He cited the consistent arrival of new residents from states that are “tax-burdensome,” the “organic growth” inside the state and favorable weather.

Paige Rausch, a real estate consultant with Aslan Realty Advisors, agreed that apartments are attractive investments for Southwest Florida buyers.

“It’s a stable return,” she said. She mentioned that newly developed complexes can often be attractive for investors, but large-scale purchases have also been seen recently for older apartment homes.

Rausch said that “C” complexes in “A” locations can be seen as a decent investment for investors that can update the units and bump up rent. She mentioned Iona Lakes Apartments in Fort Myers, which was purchased last year for $54 million after being bought for less than half of that in 2013. The complex was built in 1986, but it is in a prime location, she said. The housing units are surrounded by higher-end communities and homes and in close proximity to Sanibel Island and Fort Myers Beach.

“The reason you are seeing so much multifamily activity is because we are creating jobs fast, and we are growing the population fast,” said Gary Tasman, the CEO of Cushman and Wakefield in Fort Myers. “None of our markets, generally speaking, are in a state of oversupply. We are going to continue to see appreciating rents and appreciating sales value.”

Notable home sales edge out commercial in Naples area

While the No. 2 spot in Collier’s top 10 sales went to an apartment complex, the county does have something that Lee does not: Mammoth mansion sales. The luxury real estate market in the Fort Myers area does not reach nearly as high as the $20 million to $40 million homes and higher that break records in the Naples area. Due to this, three of the top 10 sales in Collier are single-family residential homes, while the Lee list is entirely made up of commercial sales.

“I think it is very telling that Collier County is different from almost any county across the country,” said Bill Earls, a John R. Wood agent that is involved in many of the high-end, luxury sales in the Naples area.

Earls said the difference between the counties makes sense, as the “titans of industry” that purchase these upscale mansions “come to Naples because of the lack of industrial, commercial activity that is here.”

“This is a place they want to call home,” he said.

He cited the appealing weather, the cleanliness of the area, the way the public amenities are maintained and the low crime rate as reasons that wealthy individuals gravitate to the area.

“Collier County is very easy living,” he said. “There’s Florida and then there’s Naples. And there’s none other like Naples in the state of Florida.”

What’s next?

According to Tasman, 2019 was one of the last years in a cycle that has been marked by the exchanging of already developed properties, rather than sales of land that has yet to be developed.

He said that this cycle represented the selling of “improved, stabilized assets to the investor market.” Now that the cycle is nearing its end, large-scale land acquisition and new development will start up again.

“What you are seeing this year is the completion of the last land cycle and the beginning of the land-sale cycle,” Tasman said.

© 2020 Journal Media Group, Andrew Wigdor

Fed’s SALT Cap Fuels Wealth Exodus from High-Tax States

Bank of America Global Research: In 2018, low- and lower-tax states, which includes Fla., gained $32B more in adjusted gross income than higher tax states. The four states with highest average SALT deductions lost about 455K people compared to 408.5K the year before.

NEW YORK – Some of the hardest evidence yet indicates that the 2017 Republican tax law is pushing money and people from high-tax U.S. states like New York and New Jersey and into low-tax states including Florida.

In 2018, low- and lower-tax states gained $32 billion more in adjusted gross income than higher tax states, according to a Bank of America Global Research analysis of income migration data. The net gain – almost $2 billion more than in 2017 – was nearly twice the average over the last 13 years. The Republican overhaul capped state and local deductions at $10,000, making it harder for people to shield as much income from taxes as they could before.

At the same time, states like Florida and Texas, which don’t have an income tax, are seeing more and more people move there. New York, California, Connecticut and New Jersey – the states that had the highest average SALT deductions – lost about 455,000 people between July 1, 2018 and July 1, 2019, compared with 408,500 the prior year, according to U.S. Census data. Most of the increase came from people leaving California.

“The implication would be, at the very least, people are sensitive to large changes in federal tax policy,” said Ian Rogow, a municipal strategist at Bank of America who analyzed the data.

Almost half of income taxes paid to California, New York and New Jersey come from the wealthiest 1% of households. If they were to move in large enough numbers, those states could be in trouble. So far, however, the federal tax overhaul – which broadened the tax base – and steady economy growth has led to higher-tax state revenue overall. States collected $327.7 billion in income tax revenue in the first three quarters of 2019, about 6% more than the same period in 2018, according to the Census Bureau.

To be sure, people move for a variety of reasons: jobs, housing costs and the weather among them. Despite having the third-highest personal income tax rate, Oregon was the second-most popular moving destination in the U.S., according to United Van Lines Annual Movers Study. The survey found that job changes and retirement were the two biggest reasons for leaving the northeast.

The Republicans’ 2017 tax law capped the SALT deduction as a way to help pay for $1.5 trillion in corporate and personal income tax cuts. Governors in Democratic-led states most affected by the new limit, including New York and New Jersey, accused Republicans of targeting them to pay for the cut. In October a federal judge ruled against New York, New Jersey, Connecticut and Maryland, which had sued to overturn the cap, arguing it was unconstitutional. The states are appealing.

The SALT limit significantly raised the effective taxes for wealthy residents of blue states. In 2017, about 140,000 tax filers in Manhattan with adjusted gross income of $200,000 or more paid $21 billion in state and local income taxes, or $150,000 on average, according to IRS data. About 83,000 of these filers paid an average $25,000 in property taxes. In Westchester, home to the nation’s highest property taxes, the wealthiest residents paid about an average $65,000 in state and local income taxes and $28,000 in real estate taxes.

In the fourth quarter of 2019, Westchester homeowners cut an average of 4.1% from their last asking price to sell their homes, according to a report last week, a sign that sellers have to slash prices to attract buyers. The price cuts were the most for any three-month period since the end of 2014, according to a report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

New York Governor Andrew Cuomo who has called the SALT limits “politically diabolical,” has warned that capping the deduction encourages high-income New Yorkers to leave.

“Tax the rich, tax the rich, tax the rich. We did. Now, God forbid the rich leave,” Cuomo said last year.

Copyright © Missoulian Jan 15, 2020, Martin Z Braun

Florida Legislature Kicks Off 60-Day 2020 Session

How will lawmakers change the Fla. real estate business? Here’s the current status of bills focused on vacation rentals, affordable housing and emotional support animals.

Be part of the Rally in Tally. Gather at the State Capitol during Great American Realtor Days and make a difference — because when Realtors talk, legislators listen.

TALLAHASSEE, Fla. – How will lawmakers change the Fla. real estate business?

The 2020 legislative session officially began on Tuesday, Jan. 14, 2020, with a State of the State speech from Florida Gov. Ron DeSantis, who said the Legislature has “much more to do.” DeSantis also continued his focus on environmental funding.

Florida Realtors has a number of key issues that it’s following via its advocacy arm, and its Tallahassee office offered information on three of those initiatives in the latest “Weekly Legislative Update.” A complete roster of bills that Florida Realtors follows is available through its Legislative Tracker.

Private property rights/vacation rentals

  • SB 1128 – Pre-empts the regulation of vacation rentals to the state and strikes a balance between addressing community concerns and preserving private property rights.
    Current status: Passed Innovation, Industry and Technology Committee on an 8-2 vote. It’s now waiting to be placed on the Commerce and Tourism Committee agenda.
  • HB 1011 – Companion bill to SB 1128.
    Current status: On the Workforce Development and Tourism Subcommittee agenda for Jan. 21, 2020, at 3:00 p.m.

Affordable housing

  • SB 998 – Allows local governments to approve affordable housing development on any property zoned residential, commercial or industrial. It also provides additional accountability and training for Affordable Housing Advisory Committees and Local Housing Assistance Plans.
    Current status: Passed Community Affairs Committee on a unanimous vote. It’s now waiting to be placed on the Infrastructure and Security Committee agenda.
  • HB 1339 – Companion bill to SB 998
    Current status: It’s waiting to be placed on the Local, Federal, & Veterans Affairs Subcommittee agenda.

Emotional support animals (ESA)

  • HB 209 – Helps curb the abuse of ESA certificates related to housing. The bill does not address restaurants, airplanes or other public places.
    Current status: Passed the Civil Justice Subcommittee on Tuesday and the Children, Families & Seniors Subcommittee on Thursday with unanimous votes. It’s now waiting to be placed on the agenda of its last committee stop, the Judiciary Committee.
  • SB 1084 – Companion bill to HB 209.
    Current status: Passed the Agriculture Committee on Tuesday on a 4-1 vote. It’s now waiting to be placed on the Innovation, Industry, and Technology Committee agenda.

© 2020 Florida Realtors®

HUD Proposes New Rule for Affordable Housing Construction

If local governments follow the standards of certain specified building codes, they’ll get “safe harbor” status under Fair Housing Act accessibility requirements.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today announced a proposed rule that would recognize additional sets of standards and model building code editions that, when followed in the design and construction of new multifamily housing, will ensure compliance with the accessibility requirements of the Fair Housing Act.

“Adopting a model building code that HUD recognizes as a safe harbor is one very powerful way for states and local governments to deliver housing opportunities to people with disabilities,” says HUD’s Assistant Secretary for Fair Housing and Equal Opportunity Anna María Farías. If the proposed rule becomes official, “it will be easier than ever for states and local governments to step up to the plate and do their part to support people in their communities who need homes with accessible features.”

The Fair Housing Act requires that multifamily housing built after March 1991 contain accessible features for people with disabilities. Requirements include accessible common areas in buildings and developments, usable bathrooms and kitchens, wider doors and environmental controls that can be reached by persons who use wheelchairs. The failure to include these features in buildings constructed after March 1991 violates federal law and makes a property difficult or impossible for persons with disabilities to use.

Under the proposed rule, HUD will incorporate more recent editions of currently recognized safe harbor standards and model building codes. HUD will amend its regulations to include the 2009 edition standards of the American National Standards Institute (ANSI), as well as the 2009, 2012, 2015, and 2018 editions of the International Building Code, as safe harbors for compliance with the accessibility requirements of the Fair Housing Act.

States and local communities across the nation often adopt or adapt model building codes for enforcement within their jurisdictions to ensure up-to-date, sound standards for construction. When fully adopting one of HUD’s “safe harbors,” state and local communities are assured that their building codes incorporate the requirements for accessible features in new multifamily housing buildings under the Fair Housing Act.

“Designers and builders of multifamily housing developments have an obligation to comply with the Fair Housing Act, particularly as it relates to accessibility,” says Paul Compton, HUD’s general counsel. “The rule we are proposing will greatly assist them in meeting that requirement while giving state and local governments the opportunity to reduce regulatory burdens that can arise when federal, state, and local laws differ.”

© 2020 Florida Realtors®

For Sale: $1 Palm Beach County Condos – But with a Catch

In some golf communities, the additional buy-in fee can be more than $80K with annual fees as much as $30K, so the cost of amenities overrides the cost of real estate.

BOYTON BEACH, Fla. – Jon Leiberman rarely plays the lottery but he felt like he won it this past June.

That’s when he became aware of $1 condos for sale at Hunters Run Country Club in Boynton Beach. Without ever seeing it, he bought a two-bedroom, two-bath, 1,400 square-foot condo. His Realtor, Elaine Perlmutter of Lang Realty, face-timed him pictures.

“I got the steal of the century,” Leiberman said.

He actually paid $1,500 but the condo came fully furnished and was in move-in condition. “It came with sheets and silverware. They even left tennis racquets.”

Leiberman, 44, who works in marketing and lives outside New Haven, Conn., got a free golf membership for the first year as part of a new Hunters Run program to attract younger buyers, a savings of $12,000. Leiberman said buying the condo was the best investment he ever made. He comes down every two months or so with his 12-year old son. His parents use it whenever they want.

The phenomenon of giveaway condos in Palm Beach County at places like Hunters Run and Boca West caught the attention of the New York Post last year. That is how Leiberman learned about them.

But why would anyone want to sell a piece of real estate in Palm Beach County for $1?

The biggest impediment to country club sales of small condos is that buyers have to pay one-time buy-in fees that can be more than $80,000. Other reasons include:

  • Golf is not as popular as it once was.
  • Annual carrying costs can be as high as $30,000.
  • More condos are on the market at the 30-year-old plus country clubs as owners have passed or moved into assisted-living facilities.
  • Some condo owners upgraded into single-family homes, and do not want to carry two units.
  • Some condos need major upgrades.

Sellers at Boca West and Hunters Run receive back 30% to 40% of their original buy-in fee when they sell. At Hunters Run, the refund is about $30,000. But savvy buyers often want some of that money as an enticement to buy.

At Boca West, a seller is willing to do just that. A $100 listing tells buyers to get their apartment “for free” with the seller offering to pay $10,000 toward the $70,000 buy-in. Five other condos at Boca West are listed for under $5,000; one is listed for $1.

But $1 sales aren’t going to be popping up at other country clubs. Some of them do not have condos and those that do have condos that are larger than those at Hunters Run and Boca West.

As for the expensive buy-in fees, Leiberman was fine with it. He recognizes the club needs the money to maintain and upgrade its amenities.

But for Patrick Niestzche of Arlington, Va., those buy-in fees were a deal breaker. At an auction three years ago, he paid $17,650 to Kingdom First Properties of Tampa to buy a Boca West condo. He claims Kingdom never told him about the $70,000 buy-in fee and when he learned about it, he refused to go through with the purchase.

A nasty lawsuit ensued between Niestzche, Kingdom, Boca West and Wells Fargo, the bank that auctioned off the condo. Now, Niestzche wants his money back. Boca West wants its buy-in. And Kingdom wants Niestzche to take the condo off its hands.

Niestzche’s lawyers claim Kingdom never disclosed the buy-in, a violation of state law. Kingdom blames Wells Fargo for not disclosing it at the auction. Kingdom took title to the condo but refused to pay the buy-in. Boca West recently obtained a judgment against Kingdom for nearly $154,000, and is expected to foreclose on the property.

Meanwhile, back at Hunters Run, Paul Ware of Brockton, Mass. agreed with his Realtor to list for $1.

“It is sad that it has come to this,” said Ware. “I have yet to receive an offer, and it has been nearly a year.”

Ware paid $64,000 for a second-floor unit in 2004. He said he stopped using the unit three years ago. He pays for a social membership but his annual carrying costs still total $27,000 a year. Those carrying costs include property taxes, homeowner association fees and a minimum that must be spent at restaurants.

“It is like throwing money down the drain,” he said. But Ware is not prepared to give back part of his buy-in fee to facilitate a sale. “If they do not want it for a buck, then so be it. I will just hold onto it.”

Carolyn Liss of Hunters Signature Real Estate said one of her clients recently had to give back money to sell her Hunters Run condo. She joked she “inherited her mother’s debt.” Perlmutter, the Lang Realtor who worked with Lieberman, said she often feels like “the bearer of bad news” bringing lowball offers on giveaway condos.

Ben Schachter, president of Boca Raton-based Signature Real Estate companies, said buyers have a great opportunity to get into a quality country club at an amazing price but there are not enough buyers who are willing to undertake a remodeling project on a small condo, especially when the buy-in fee is considered.

Joel Schreiber, a buyer at Hunters Run, negotiated a deal that resulted in him being paid $6,000 to purchase his condo in May 2013. Records show he paid $4,000 but the sellers gave him $10,000 of the $30,000 they recovered from their buy-in fee.

Schreiber knew he was going to have to put a lot of money into the unit and it’s why he negotiated the deal he did. He installed hurricane-impact windows, bought new appliances, replaced the flooring and put in new bathrooms, lighting and air conditioning. His has a pristine view of the golf course.

“We made it into something that we are very happy with,” Schreiber said. “We love it here. We get the same amenities as does someone who bought for $1 million.” Those Hunters Run amenities include three golf courses, 21 Har-Tru tennis courts, a state-of-the art fitness club, a large community pool and seven restaurants.

Schreiber had lived in South Florida for some time before he bought at Hunters Run. “We were looking for a lifestyle, and we found it here,” he said. He plays cards several times a week, regularly uses the fitness center and often frequents the restaurants.

Like Leiberman, he supports the mandatory membership fee. It is needed to maintain the golf courses and all of amenities, Schreiber said, claiming that clubs without mandatory memberships are falling apart.

Hunters Run has recently adopted a renovation program to address the $1 sales. The club takes title to distressed units and then works with contractors to renovate the unit. The buy-in fee is either partially or completely waived depending on how quickly the contractor is able to sell it, according to Jack Gorny, president of the Hunters Run Property Association. And the buy-in fee for someone who purchases through the program is $25,000 versus $60,000. The buyer, though, gets nothing back when the unit is sold. But the lower buy-in has helped Hunters Run sell 10 renovated units in the past year, Gorny said, with some of them selling for more than $80,000.

Boca West also has a similar renovator program. Efforts to obtain comment from Boca West were unsuccessful.

Gorny said the low-end sales at Hunters Run are pretty much restricted to second-floor condos with no elevators that have had little, if anything, done to them since they were built nearly 40 years ago. Owners have stopped using the unit and just want to move on, he said.

Susan and Arnold Rosenfeld’s condo fell into that category. They bought it in 1986 for $86,000. Two years ago, Susan sold it for $1. The family lawyer said Susan had stopped using it after her husband passed in 2016. “We needed to stop the hemorrhaging,” the lawyer said.

“Overall, Hunters Run sales have been very strong in recent years as a result of more than $13 million in improvements we have made,” Gorny said, noting that there have been 130 sales in the past 12 months, the most in a decade. Some of those sales were in excess of $500,000. He called the $1 sales an anomaly. Some of the single-family homes have appreciated more than 40% in the past three years, he said.

Meanwhile, Leiberman may be bringing buyers into Hunters Run. He said some of his friends from Connecticut are interested.

“These $1 sales will be gone someday,” he tells them. “I want them to come down so we can all retire together.”

© 2020 The Palm Beach Post (West Palm Beach, Fla.), Mike Diamond. Distributed by Tribune Content Agency, LLC.

New-Home Starts Jumped 16.9% Higher in Dec.

It’s the highest level in 13 years as the single-family home-start component rose 11.2%. For all of 2019, builders broke ground on 1.29M homes – the most since 2007.

WASHINGTON (AP) – Construction of new homes surged in December to the highest level in 13 years, capping a year in which falling mortgage rates and a strong labor market helped lift the prospects of the housing industry.

The Commerce Department reported Friday that builders started construction on 1.61 million homes at a seasonally adjusted annual rate in December, up 16.9% from the November pace of home building.

Housing construction has been rising since July, helped by falling mortgage rates and increased demand as the unemployment rate approached a half-century low. For the year, builders started work on a total of 1.29 million homes, the best showing since 2007.

The December building rate was the strongest number since December 2006 during the last housing boom.

Applications for building permits, considered a good sign of future activity, fell 3.9% in December to an annual rate of 1.42 million but remained well above the pace in July.

Construction of single-family homes rose 11.2% to an annual rate of 1.06 million homes last month while apartment construction fell 9.6%.

The 1.29 million units constructed for all of 2019 was up 3.2% from the previous year and the best showing since 1.36 million homes were built in 2007. As the housing boom was reaching its peak, construction was started on a total of 2.07 million homes in 2005, the highest total for any year in that boom.

By region, construction was up 25.5% in the Northeast, 37.3% in the Midwest, 9.3% in the South and 19.8% in the West.

Copyright 2020 The Associated Press, Martin Crutsinger. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

What Should the Army Corps of Engineers Fix in Fla.?

Fla. Senators Marco Rubio and Rick Scott sent a letter to the Army Corps that requests funding for Fla. environmental projects. The list includes 70 items with impacts across the state, from the Atlantic Intracoastal Waterway in South Fla. to Pensacola Harbor.

WASHINGTON – The U.S. Army Corps of Engineers is finalizing their Fiscal Year 2020 work plan, to ensure that, “all proposed and ongoing projects in Florida receive full and fair consideration of their value to local communities, our state, and our nation.”

Florida has a lengthy roster of public projects that fall under the Army Corps of Engineers, and its two U.S. senators – Sens. Marco Rubio and Rick Scott – sent a letter outlining each one to the Assistant Secretary of the Army – Civil Works.

Overriding goals, the senators said, include “maintaining record progress towards the restoration of Florida’s Everglades through projects like the Central Everglades Planning Project and Everglades Agricultural Area Storage Reservoir.”

Projects with “significant momentum towards completion”

  • C&SF Project Flood Control Restudy* – Proposed to improve the efficacy and cost-effectiveness of South Florida’s aging water management infrastructure in concert with concurrent efforts to enhance the region’s water management and resilience, including through CERP, LOSOM, and the South Atlantic Coastal Study.
  • C&SF Upper St. Johns River Basin* – S252 construction repairs and project close out activities
  • Caño Martín Peña, PR – New start required for an urgently needed ecosystem restoration project with flood control benefits.
  • Collier County, Beach Erosion Control*
  • Dade County, Beach Erosion Control and Hurricane Protection Project* – Incorporate Key Biscayne Shore Damage Mitigation, Key Biscayne, as part of this project.
  • Daytona Beach Flood Protection Project*
  • Florida Keys Water Quality Improvements
  • Fort Pierce Beach*
  • Jacksonville Harbor Deepening
  • Jacksonville Harbor, Mile Point, – Payments owed to non-federal sponsor
  • Lee County, Beach Erosion Control*
  • Lido Key, Shore Protection Project*
  • Manatee County Improvements,
  • Miami Back Bay Study*
  • Miami Harbor Channel – Payments owed to non-federal sponsor.
  • Miami Harbor Improvements
  • Monroe County, Shore Protection Project*
  • Okaloosa County, Shore Protection Project*
  • Panama City Harbor
  • Pinellas County, Shore Protection Project*
  • Port Everglades Harbor Deepening, – New start required.
  • Putnam County Comprehensive Water Supply Infrastructure Modernization Project (Palatka)
  • South Atlantic Coastal Study*
  • South Dade Flood Protection Project* – Study, design, and construction of a comprehensive seepage management solution along the boundary of the eastern Everglades to maintain current levels of flood protection service for landowners subjected to a rising water table
  • South Florida Ecosystem Restoration, – To include: Bird Drive Basin Conveyance, Seepage Collection, and Recharge – Biscayne Bay Coastal Wetlands – Broward County Water Preserve Areas – C-111 South Dade – C-111 Spreader Canal – Central Everglades Planning Project – Indian River Lagoon-South (C-44 Reservoir and Stormwater Treatment Area, C-23/C-24 Reservoirs) – Kissimmee River Restoration – Lake Okeechobee Watershed Restoration – Loxahatchee River Watershed Restoration – Picayune Strand – Western Everglades Restoration
  • St. Augustine Back Bay Study*
  • St. Johns County, Shore Protection Project* – Feasibility study for potential North Ponte Vedra Beach segment
  • Tampa Harbor Improvements, – General Re-evaluation Report to support improved channel navigability and reduce increasing annual O&M needs

*Denotes those projects with expressed feasibility, PED, or construction capabilities in FY20 that could be fulfilled via otherwise unallocated disaster supplemental funds provided by division B, title IV of the Bipartisan Budget Act of 2018 or title IV of the Additional Supplemental Appropriations for Disaster Relief Act, 2019.

Continuing Authorities Program (CAP) projects critical to local communities

  • Alligator Creek, Starke, (Sec. 205)
  • Big Fishweir Creek, Jacksonville, (Sec. 206)
  • Ft. George Inlet, Jacksonville, (Sec. 111)
  • Lake Toho Restoration, Osceola County, (Sec. 1135)
  • Lake Worth Lagoon, Palm Beach County, (Sec. 1135)
  • Pahokee Restoration, Pahokee, (Sec. 1135)
  • Porpoise Point Shoreline Restoration Project, St. Johns County, (Se. 103)
  • St. Francis Barracks Seawall, St. Augustine, (Sec. 14)

Operation and maintenance funding with legally obligated outstanding payments

  • Atlantic Intracoastal Waterway – Includes the Fernandina to St. Johns River, St. Johns River to Miami, and Miami to Key West segments
  • Anclote River, – Project requires immediate restoration of funding for dredging activities lost via emergency reallocation in the aftermath of 2018 disasters.
  • Apalachicola, Chattahoochee and Flint Rivers, GA, AL & FL
  • Apalachicola Bay
  • Canaveral Harbor
  • Central & Southern Florida
  • East Pass Channel, Destin,
  • Escambia and Conecuh Rivers
  • Fernandina Harbor – Kings Bay
  • Fort Myers Beach
  • Fort Pierce Harbor
  • Gulf Intracoastal Waterway – Includes the Florida portion of the Northern Gulf Intracoastal Waterway and the Western Gulf Intracoastal Waterway (Caloosahatchee River to Anclote River)
  • Inspection of Completed Works
  • Jacksonville Harbor
  • Jim Woodruff Lock and Dam, Lake Seminole,, AL & GA – Includes need for shoreline management activities and enhanced aquatic plant control
  • Lake Okeechobee System Operating Manual revision
  • Manatee Harbor, – Includes need for reimbursements as directed in Senate Report 116-102 and additional funding for the Port Manatee Dredged Material Disposal Area.
  • Miami Harbor
  • Naples to Big Marco Pass, Collier County
  • Okeechobee Waterway
  • Palm Beach Harbor
  • Panama City Harbor
  • Pensacola Harbor
  • Port Everglades Harbor
  • Port St. Joe Harbor
  • Project Condition Surveys
  • Removal of Aquatic Growth
  • St. Augustine Harbor
  • St. Johns River
  • Suwannee River
  • Scheduling Reservoir Operations
  • South Florida Ecosystem Restoration – Includes payments owed to the South Florida Water Management District and the Seminole Tribe of Florida for work performed by local project sponsors
  • Tampa Harbor – Includes need for advanced maintenance funds to ensure short-term navigability of federal channel for post-Panamax vessels
  • Water/Environmental Certification

© 2020 Florida Realtors®

Financially Troubled Fla. Insurers Agree to Takeovers

Two Fla. property insurers with about 67K policies – Anchor Property & Casualty and Centauri Specialty Insurance Co. – will be folded into larger, more stable companies.

TALLAHASSEE, Fla. – Two financially troubled Florida-based property insurers with about 67,000 policies statewide have agreed to be taken over by larger, more stable companies.

The absorption of 43,000 homeowner policies from Anchor Property & Casualty by HCI Holdings, and the takeover of Centauri Specialty Insurance Co. and its 24,000 policies by Avatar Partners LP, follows warnings that up to 18 Florida-based insurers soon could lose their top financial stability ratings.

Joe Petrelli, president of ratings agency Demotech Inc., had warned recently that two to four Florida-based companies would be downgraded from A-Exceptional by mid-January. Downgrades, while not necessarily a mark of insolvency, can be problematic for policyholders with federally backed lenders that require insurance only from A-rated carriers.

Demotech on Tuesday announced it had downgraded Anchor’s rating from A-Exceptional to M-Moderate. But that won’t matter to Anchor’s customers, including more than 11,000 in South Florida, after Tampa-based HCI Group finalizes its agreement for its subsidiary Homeowners Choice Property & Casualty Insurance Co. to acquire the Anchor policies. Anchor is based in St. Petersburg.

Demotech announced that Sarasota-based Centauri Specialty Insurance Co., which has more than 24,000 customers in Florida and 9,826 in South Florida, would retain its A rating after agreeing to be acquired by Avatar Partners LP, parent of Tampa-based Avatar Property & Casualty.

Financial terms were not disclosed for either deal. Prior to the announcement, Homeowners Choice was one of the 20 largest insurance companies in the state with more than 108,000 policies. It will likely move into the top 10 after the deal is complete. Avatar, meanwhile, had about 57,000 policies, according to a tally by the state Office of Insurance Regulation.

Decisions about other companies likely will take place in February and March, in conjunction with deadlines for those companies to file their year-end financial statements, Petrelli said.

The Florida Office of Insurance Regulation “is working with the companies to ensure consumers have seamless access to coverage,” agency spokeswoman Alexis Bakofsky said by email. HCI’s takeover of Anchor should be finalized by mid-February, she said. Avatar did not respond to requests for comment Thursday.

The Centauri acquisition must be approved by the agency, but it has not yet received a formal proposal, Bakofsky said.

The potential for ratings downgrades for up to 18 companies stems from the convergence of numerous pressures in Florida’s marketplace, Petrelli said this week, including heavier than projected claims activities from recent hurricanes and other extreme weather events, a failure to seek regulators’ approval for rate increases at levels high enough to fund incoming claims, plus numerous years of escalating rates of litigation.

Remedies suggested by Demotech for companies that want to retain their A financial stability ratings include increasing annual rates more than 15%.

© 2020 the Sun Sentinel (Fort Lauderdale, Fla.), Ron Hurtibise. Distributed by Tribune Content Agency, LLC.

Flood History Website Could Give Buyers a New Tool

A research partnership working with eight universities says its online tool, searchable by address, will offer flood histories and future risk estimates by mid-2020.

NEW YORK – On Jan. 13, First Street Foundation launched Flood Lab, a research partnership that provides eight universities with its model that maps previous instances of flooding as well as future risks.

Using the dataset, the Wharton Business School at the University of Pennsylvania, the Massachusetts Institute of Technology, Johns Hopkins University and others will quantify the impacts of flooding on the U.S. economy.

The data will be made available to the public in the first half of 2020 in an online database searchable by home address. Matthew Eby, executive director of First Street Foundation, says the move could put pressure on prices of homes, municipal bonds and mortgage-backed securities linked to real estate in risk-prone areas.

Currently, insurers, mortgage lenders and investment firms obtain flood risk information from risk modeling firms like AIR Worldwide, CoreLogic and Risk Management Solutions. Verisk estimates that about 62 million American homes have a moderate to severe risk of flooding.

But Carolyn Kousky, executive director of the Wharton Risk Center, says Flood Lab could become disruptive in that it would provide data to the average homeowner to help them make the right decision for themselves.

Source: Reuters (01/14/20) Duguid, Kate

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RealPage: 50% More Apartments Arriving This Year

2020 will mark a 40-year high for new apartments – but 80% are luxury, a niche with light demand, and a smaller percentage will appeal to lower-income families.

NEW YORK – Builders are on the path to complete more new apartments in 2020 than in the past 40 years. In that feat, they’re increasingly targeting the luxury sector for adding new apartments.

About 371,000 new rental units are set to arrive across the country this year, a 50% increase over the number of new units that were completed last year, according to an analysis from RealPage. About 80% of that new supply is expected to come from luxury developments.

“A lot of these properties are competing for a small group of renters,” Greg Willett, RealPage chief economist, told The Wall Street Journal. “A typical renter can’t afford this brand-new product.”

Developers say that the rising costs of land and construction have forced them to cater to more affluent renters to maximize their profits. “It’s very difficult financially to make sense of building a cheaper product,” says Cyrus Bahrami, a managing director of Alliance Residential, a Houston developer.

Some housing analysts, however, believe the focus on the luxury sector of apartment construction isn’t necessarily a bad thing for lower-income renters. The analysts say that the additional units may encourage more renters to move up to better apartments and, therefore, free up some more affordable apartments in the market.

High-end buildings (or what the industry refers to as “Class A” properties) are about $500 higher than just one lower class down for rentals, WSJ reports. That gap is about $300 higher than a decade ago.

Source: “Aiming at Wealthy Renters, Developers Build More Luxury Apartments Than They Have in Decades,” The Wall Street Journal (Jan. 15, 2020) [Log-in required.]

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