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Owner Tests Appraisers, Finds Higher Value if White

After two appraisals, a Black owner removed ethnic art, asked a white male to act as her rep, and added $100K to her appraisal. “Comps” choices may have played a role.

INDIANAPOLIS – A Black Indianapolis homeowner has filed a housing discrimination complaint alleging that after she removed items that identified her race and asked a white male friend to sit in on an appraisal, the value of her home jumped more than $100,000.

Carlette Duffy filed the complaint in conjunction with the Fair Housing Center of Central Indiana (FHCCI). Last year, Duffy decided to jump in on the hot housing market and refinance her home, located in a historically Black neighborhood just outside downtown Indianapolis. Duffy planned to use her equity to purchase her grandparents’ home nearby.

After two home appraisals came back at or below the price she paid for the home in 2017, Duffy thought something was wrong.

“When I challenged it, it came back that the appraiser said they’re not changing it,” Duffy said.

After Duffy saw FHCCI Executive Director Amy Nelson speak to a community group about discrimination in housing appraisals, during which she pointed to a recent New York Times article about the issue, she decided to try her own test.

“I decided to do exactly what was done in the article,” Duffy said. “I took down every photo of my family from my house. I took every piece of ethnic artwork out. So any African artwork, I took it out. I displayed my degrees, I removed certain books.”

Duffy asked a white male friend to sit in on the home appraisal. In addition, she did not declare her race in her application or communications with the appraisal company. The new appraisal came back at more than double the first two, valuing her home more than $100,000 higher.

“I get choked up even thinking about it now because I was so excited and so happy, and then I was so angry that I had to go through all of that just to be treated fairly,” Duffy said.

In the two complaints, Duffy and FHCCI ask the U.S. Department of Housing and Urban Development to investigate the difference in the appraisals. In the first two appraisals, Nelson said comparable sales, or comps, were pulled from Black neighborhoods more than a mile from Duffy’s home rather than those nearby that were closer to the specifics of her house.

“Whether or not those comps were fairly selected is something that is the basis of the complaints that we have filed,” Nelson said.

Duffy was able to use the third appraisal to purchase her grandparents’ home. She hoped that her case would serve as a catalyst to examine discrimination and bias in the appraisal and housing industry to ensure a fair process.

“I’m doing this for my daughter and I’m doing this for my granddaughter so that when they come against obstacles, they will know that you can stand up, you can say that this is not right,” Duffy said.

“We think it’s happening a lot more than is being reported and we want to get the word out to know that we are here as a resource for individuals if they feel this may be happening to them,” Nelson said.

WXIN reached out to the appraisers and mortgage companies named in the complaints and did not receive any comment, though one appraiser did say by phone that he had not been made aware of the complaint.

Rodman Schley, president of The Appraisal Institute, which represents appraisers across the country, sent a statement, saying in part, “When we see even one story of a consumer who feels they were treated differently because of their race, it’s very concerning because that goes against everything we stand for. Appraisers take a lot of pride in being an objective source of real estate value information.”

He said a project team will be reviewing reports of “diversity, equity and inclusion in appraisal.” He added, however, that an appraisal is only “one piece of a larger ecosystem to look at when it comes to housing issues.”

“We don’t think there is any one solution to a problem rooted in hundreds of years of history,” he said. “We believe that overwhelmingly, there are more good people in this world than bad, including in the appraisal profession, and that today, more than ever, people are committed to listening, learning and changing. That said, it is widely accepted that unconscious bias is real, and no profession is immune from that.”

Schley encouraged anyone who thinks they have experienced housing discrimination to report it.

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The Real Estate Market Isn’t in a Bubble – It Just Isn’t

Rising home prices and recession memories have convinced some buyers that a bubble will pop and prices will drop. But it’s just too much demand and too little supply.

NEW YORK – The U.S. housing market is on a hot streak with double-digit annual gains in home prices, bidding wars and surging buyer demand. That type of soaring housing market is prompting more “bubble” fears in some corners, but economists say the housing market isn’t getting overinflated. A bubble won’t pop, thousands of homes won’t slide into foreclosure, and buyers who wait likely won’t be better off.

“We have strong conviction that we are not experiencing a bubble in U.S. housing,” Vishwanath Tirupattur, a Morgan Stanley strategist, wrote in a note to clients this week.

Lawrence Yun, chief economist of the National Association of Realtors®, agrees. He told Axios last month: “This is not a bubble. It is simply lack of supply.”

The rapid rise in prices may be concerning to home shoppers, however. The median selling price for a home is up $35,000 compared to a year ago, which is the fastest-paced increase since 2006, Tirupattur says.

But this isn’t 2006. Housing inventories are low, credit remains tight, and lenders aren’t issuing risky loans like they did back then. Product risk – such as from mortgages with introductory periods, teaser rates or balloon payments – comprised about 40% of the mortgage market between 2004 to 2006. Those factors are now at only 2% of the mortgage market, according to Morgan Stanley.

Also, the housing market has a record low number of homes available for sale, in part likely caused by the pandemic. At the end of March, there were 1.07 million homes available for sale, according to NAR data. For comparison, during the housing bubble, in July 2007, there were more than four times that – 4 million homes available for sale.

Still, while home prices won’t keep climbing at the current pace, they aren’t expected to fall either, economists say.

“We are not at all suggesting that home price appreciation will maintain its current torrid pace,” Tirupattur writes. “Home prices will continue to rise, but more gradually.”

Source: “Why Morgan Stanley Is Convinced the Housing Market Isn’t in a Bubble,” Yahoo! Finance (May 5, 2021) and “The Dispiriting Housing Boom,” Axios (April 11, 2021)

© Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Fla. Takes First Step to Launch Rental Assistance Program

DCF, the Fla. department charged with distributing $850M of federal funds to assist with rental assistance, introduced a dedicated website to get funds to landlords and utility companies. Applications should be available soon, and payments can be direct-deposited into business accounts.

ORLANDO, Fla. – Florida’s Department of Children and Families (DCF) took its first step to get $850 million in federal recovery funds into the hands of landlords and utility companies.

In a Thursday webinar, DCF announced the debut of a new website – OURFlorida.com (Opportunity for Utilities and Rental Assistance) – that will operate as a central hub for questions, auxiliary help and submitting relief applications, which are not available yet.

The website still has a number of “coming soon” options, but it does have a list of frequently asked questions (FAQs).

When will the website start to accept landlord applications for rental reimbursement? Officials did not offer a date, but Michael Williams, director of special projects for DCF, said in response to a question that they might be available within a week.

Notable items from DCF’s announcement

  • Landlords can receive funding as a direct deposit into their bank account – it won’t go through tenants.
  • Landlords can apply for lost-rent reimbursement only for time periods in which they did not receive county assistance – the two cannot overlap. However, if a lost rental period lasts for six months and they received county assistance for three months, they can apply for the three months not covered by the county.
  • Landlords apply through the OURFlorida.com website to receive funds.
  • OURFlorida.com visitors can sign up for an e-newsletter to get funding updates.

DCF asked webinar participants to promote the new website and upcoming application process – to “spread the word.” The website will include a toolkit (coming soon) with items that can be shared on social media and used in other ways.

© 2021 Florida Realtors®

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Regulators Scale Back Citizens Rate Hikes

A 3.2% increase for multi-peril policies was approved instead of a requested 6.2% hike; a request to charge actuarially sound rates for new customers was also rejected.

TALLAHASSEE, Fla. – Regulators have scaled back rate increases sought by Citizens Property Insurance Corp., dealing a blow to leaders of the state-backed insurer who argue it needs to charge more for coverage.

The Florida Office of Insurance Regulation released details Tuesday of rate increases that will take effect Aug. 1, including decisions that reduced amounts sought by Citizens.

As an example, Citizens requested an average 6.2% increase for homeowners’ multi-peril policies – the most common type of policies – but regulators approved a 3.2% increase.

Regulators also rejected a series of moves that Citizens proposed to boost rates. Perhaps the most far-reaching decision involved a proposal by Citizens to charge actuarially sound rates for new customers – a move that would have effectively led to many new customers paying more than current customers.

State law limits rate increases for existing customers to a maximum of 10% a year. Citizens officials contend that limit, dubbed a “glide path,” has led to many customers paying less for coverage than they should.

“Citizens’ recommended rates include a provision requiring that new business policyholders be charged the actuarially indicated rates, while renewing policyholders would be subject to the 10% statutory glide path. … The office finds the justification for this provision to be insufficient and that all policies, whether new or renewal, should be subject to the same capping,” an order signed by Insurance Commissioner David Altmaier said.

Similarly, the order rejected a proposal by Citizens to include what is described as a “risk factor” in its rates, which would have helped lead to larger increases.

“Citizens’ recommended rates include a provision described in the rate filings as an estimate of the amount extra Citizens should charge for the cost of catastrophic risk that Citizens is assuming,” the order said. “The office finds the justification for the provision to be insufficient and that it should be removed from the rate determination.”

The office released the details amid a legislative debate about proposals to make changes in the state’s property insurance system, as the industry says carriers are sustaining financial losses. Private insurers during the past year have filed dozens of requests for large rate increases and have shed policies.

Many of those policies have ended up at Citizens, which was created as an insurer of last resort. As an indication of the growth, Citizens had 569,868 policies as of March 31, up from 446,327 policies a year earlier.

The growth has alarmed Citizens leaders and many lawmakers, at least in part because of concerns about financial risks if the state gets hit by a major hurricane or multiple hurricanes.

Citizens staff members initially proposed an average 3.7% increase in residential rates to take effect in August, but the Citizens Board of Governors in December requested that staff seek ways to increase rates more. That led to a series of changes proposed to the Office of Insurance Regulation, which has to sign off on any increases.

The office’s decisions will lead to varying increases for customers based on factors such as types and locations of homes or other structures. Along with approving an average 3.2% rate increase for homeowners’ multi-peril policies, regulators approved an average 5.1% hike for homeowners’ wind-only policies, down from a Citizens request for a 7% increase.

As another example, regulators approved an average 9% increase for mobile-home owners’ multi-peril policies, down from a Citizens request for a 9.3% hike.

News Service of Florida

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By the Numbers: COVID-19 Vaccinations in Florida

As of April 19, more than 8.14 million people in Florida had received at least one dose of COVID-19 vaccines. Of those, more than half (4.82M) are ages 55 to 84.

TALLAHASSEE, Fla. – As of April 19, more than 8.14 million people in Florida had received at least one dose of COVID-19 vaccines. Here is a breakdown by age groups:

*Ages 16 to 24: 395,449 people

*Ages 25 to 34: 612, 238 people

*Ages 35 to 44: 811,815 people

*Ages 45 to 54: 1,098,485 people

*Ages 55 to 64: 1,622,525 people

*Ages 65 to 74: 2,031,098 people

*Ages 75 to 84: 1,169,703 people

*Age 85 or older: 402,286 people

Source: Florida Department of Health

News Service of Florida

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U.S. Watchdog Cracks Down on Mortgage Servicers

Worried about foreclosures, the federal bureau is reviewing mortgage servicers’ compliance with pandemic relief programs and how they’re handling forbearance requests.

WASHINGTON – The Consumer Financial Protection Bureau (CFPB) is scrutinizing mortgage servicers’ compliance with pandemic relief programs amid concerns struggling homeowners are not getting the help they need to avoid foreclosures or are being discriminated against, according to sources.

The CFPB has sent data requests to mortgage servicers that process mortgage repayments and have asked for data on how they are handling mortgage holiday or “forbearance” programs and whether the temporary debt relief is likely to get borrowers back on their feet. The agency has opened probes into mortgage servicers over their handling of forbearance requests.

According to the six sources, the agency is examining a range of issues: how many and which borrowers are in forbearance; whether loan modifications will succeed in getting borrowers repaying; if servicers have been obstructing or delaying forbearance requests or granting only partial relief; and if some servicers have been discriminating against borrowers based on race or ethnicity, whether deliberately or inadvertently.

Reuters (04/19/21) Qing, Koh; Johnson, Katanga; Prentice, Chris

© Copyright 2021 INFORMATION, INC. Bethesda, MD (301) 215-4688

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5 Insights to Help You Start a Real Estate Business

Some of the steps to a real estate career may include: Write a business plan, get your license, create a strong brand identity and build your online presence.

NEW YORK – A real estate career, over the long-term, can be a lucrative small business. Let’s take a look at five steps you should take to start a real estate business:

1. Develop and refine your idea.

How do your natural strengths differentiate you from the other real estate businesses in the area?

Consider the following questions:

* What skills set me apart?
* What is the purpose of my business?
* Who am I providing a service or product to?
* What is the maximum figure I can safely spend on this real estate business?
* Do I need outside capital? How much
*What kind of work/life balance am I looking to achieve?
* What are my expectations for starting a real estate business?

Competition is hard enough – make it easier to stand out with a specialty when you start a real estate company.

Maybe you want to be the area expert in short sales, only focus on rental-property management, or perhaps you are the go-to resource for landlord/tenant laws for your state.

It’s important to find a niche. Choosing a niche will increase your chance of success.

2. Write a business plan.

A business plan defines your company’s objectives and then provides specific information that shows how your company will reach those goals.

Although a business plan isn’t mandatory, it can help you to crystallize your ideas. Keep your business plan short and concise and focus on the essential details. There are several great one-page business plan templates you can use.

3. Get a real estate license.

There are four necessary steps you need to complete to get your real estate license and start working as a realtor:

* Take the real estate pre-licensing course for your state. You’ll need to study the topics covered on the exam, including fair-housing laws, property-ownership types, fiduciary responsibilities, titles, deeds, contracts, and other necessary aspects of real estate law.

* Pass the real estate licensing exam. The exam length varies from about 1.5 hours to 3.5 hours, based on the state. In most states, you must answer 70% to 75% of the questions correctly to pass.

* Submit your license application to your state’s real estate board as soon as you pass your exam. Your state may require all real estate license applicants to submit their fingerprints for a criminal-background check.

* Find a real estate broker. Having your license associated with a licensed brokerage is required to start working as a real estate agent.

4. Create a strong brand identity.

Real estate agents and brokers often market their services on the strength of their brand and personality.

Crafting a memorable brand identity is a crucial element for any real estate professional.

Your brand identity represents how people know you and your business. It affects how customers perceive your reputation or the reputation of your company.

Ask yourself these essential questions:

* What identity/personality do I want my real estate brand to project?
* Who will want my products or services?
* What can clients get from my services that they can’t get anywhere else?
* What can clients get from working with me that they can’t get anywhere else?
* What are my brand values?
* What is the most critical part of my customers’ experience?

Your answers to these questions (and others like them) will build the core of your brand. All of your future branding and rebranding decisions should expand on these ideas. Your business name, logo, and website should all grow from the concepts you laid out here.

Far too many real estate companies have identical logos. Be sure your real estate logo is unique.

And don’t forget about real estate signage. Leave dull signs to others and instead, get real estate signs that sell.

Whenever you make personal appearances, be sure to carry business cards and brochures for people who want to learn more about your services.

Before you decide that you should delay building a strong brand identity for your real estate business because you might not have a considerable budget, rethink that plan. The truth is that you don’t have to spend thousands of dollars on building a strong brand identity.

5. Build an online presence.

Customers choose real estate services based on the brand, the real estate professional behind the brand, and that person’s reputation. Your website is often the first contact point between you and potential clients. Make that first impression a good one with a well-designed site.

According to a study on homebuyers, 90% start their search online, and 40% contact a real estate agent after researching the web.

You must be on the internet to compete in the real estate market. Ensure that your website design truly embodies your real estate brand. Visitors should understand who you are, the services you offer, and your qualifications and reputation.

Your real estate website design and marketing copy should project your personal or broker’s brand voice and identity. Here are some suggestions:

* If you work as a real estate agent, include a photo and bio. Homebuyers want to know the person behind the site.
* Be authentic and avoid marketing “happy talk.” Speak the same language as your customers.
* Include high-quality examples of sales you’ve closed, and make sure to include social proof wherever possible.
* Give site visitors an easy way to get in contact with you.

There’s a lot to think about when you’re starting your own real estate business, but with this guide, you have a proven step-by-step plan.

Ross Kimbarovsky is founder and CEO at crowdspring. He mentors entrepreneurs through TechStars and Founder Institute and has founded numerous other startups. Find the full guide: “How to Start a Real Estate Business: The Definitive Step-by-Step Guide.”

Copyright © 2021 Central New York Business Journal, Mar 8, 2021

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Potential First-Time Home Buyer Program Seeks Equity in Housing

Called the Down Payment Toward Equity Act of 2021, the draft legislation is directed at creating equity in the housing market. Eligible home buyers must be the first generation in their family to own a home; first-time buyers could receive as much as $25K under this proposal.

WASHINGTON – The possibility of a first-time home buyer tax credit of up to $15,000 was part of President Biden’s campaign proposal to boost the participation of first-time buyers in the housing market. But the first indication of a new program for first-time buyers is the Down Payment Toward Equity Act of 2021, a draft of legislation published and discussed at a hearing of the House Financial Services Committee on April 14.

The proposed legislation, which differs in several ways from the initial concept of a first-time buyer tax credit, is both narrower and broader than the earlier plans. While the amount that could be available for first-time buyers is as high as $25,000 in this proposal, the program is directed at creating equity in the housing market. To do that, eligible home buyers must be the first generation in their family to own a home.

The National Council of State Housing Agencies (NCSHA) explains key elements of this plan:

Borrowers must be first-time home buyers, defined by the federal government as those who have not owned a home in the previous three years.

Borrowers must meet income limits of 120% or less of area-median income of the location where the buyers live or where the home is being purchased. In high-cost housing markets, the income limit is increased to 180% of area-median income. In the D.C. region, median family income is $123,100 in 2021.

Borrowers must be a first-generation home buyer, defined as any person whose parents or guardian never owned a home during the home buyer’s lifetime or lost the home to a foreclosure or short sale and do not own a home now. Anyone who lived in foster care also qualifies as a first-generation home buyer.

Minority first-time home buyers can get down payment help

Home buyer assistance is available up to $20,000 for eligible borrowers or up to $25,000 if the home buyer qualifies as a socially and economically disadvantaged individual. The economic disadvantage measure is met by income limits on the program.

According to the proposed bill, socially disadvantaged individuals are defined as those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. NCSHA’s summary says: Any individual identifying as Black, Hispanic, Asian American, Native American, or any combination thereof will be presumed to meet this definition.

Buyers can fund their purchase with any government-insured FHA or USDA loan or a loan that can be purchased by Freddie Mac or Fannie Mae.

Home buyer counseling is required to participate in the program.

The down payment assistance is a grant that does not need to be repaid if the buyers keep their home for five years. It must be repaid in full if the buyers stop occupying their home less than a year after they buy it. The amount that must be repaid decreases 20% each year they live in the home and is completely forgiven after five years in residence.

If the program passes into legislation, it would be administered by state housing finance agencies under the direction of the Department of Housing and Urban Development.

Copyright © 2021 Global Data Point; Financial Services Monitor Worldwide. Provided by SyndiGate Media Inc. All rights reserved.

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Share of Mortgage Loans in Forbearance Down to 4.50%

Anxious buyers who hope some homes in forbearance would be soon listed for sale may be disappointed as more owners start making their mortgage payments again.

WASHINGTON, D.C. – As of April 11, the total number of loans in forbearance decreased by 16 basis points – from 4.66% of servicers’ portfolio volume in the prior week to 4.50%, according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey.

Forbearance provides an economic lifeline to homeowners impacted by the COVID-19 pandemic, allowing them to postpone their monthly mortgage payments while the nation waits to get past the pandemic and people return to their jobs. They have a number of repayment options, but the simplest one tacks all missed payments onto the end of their loan. When their forbearance period ends, they simply start making the monthly payments again and pick up where they left off.

With a number of homeowners in trouble and a foreclosure ban in effect, many buyers hope the end of the pandemic might also bring a stronger inventory of homes for sale. While that might be true for homeowners who postponed a sale until the pandemic ended, it’s not clear how many homes in forbearance will actually be added to inventory.

“The share of loans in forbearance decreased for the seventh straight week and has now dropped 40 basis points in the last two weeks,” says Mike Fratantoni, MBA’s senior vice president and chief economist. “The forbearance share decreased for all three investor categories, with the rate for portfolio and PLS loans (private-label securities) decreasing by 31 basis points this past week – the largest drop across investor categories.”

Still, Fratantoni says more than 36% of borrowers in forbearance extensions have now exceeded the 12-month mark.

“We expect that the forbearance numbers will continue to decline in the months ahead as more individuals regain employment,” Fratantoni adds. “Homeowners who are still facing hardships and need to extend their forbearance term should contact their servicers.”

Key MBA forbearance findings: April 5 to April 11, 2021

  • Total loans in forbearance decreased from 4.66% to 4.50%.
  • Ginnie Mae loans in forbearance decreased from 6.33% to 6.16%.
  • Fannie Mae and Freddie Mac loans decreased from 2.52% to 2.44%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased from 8.65% to 8.34%.
  • 13.1% of total loans in forbearance are in the initial forbearance plan stage, while 82.1% are in a forbearance extension. The remaining 4.8% are forbearance re-entries.

Of the cumulative forbearance exits from June 1, 2020, through April 11, 2021:

  • 26.7% resulted in a loan deferral/partial claim.
  • 25.6% were borrowers who continued to make monthly payments during their forbearance period.
  • 14.6% were borrowers who did not make all of the monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 14.5% were reinstatements, in which past-due amounts were paid back when exiting.
  • 9.5% resulted in a loan modification or trial loan modification.
  • 7.4% resulted in loans paid off through either a refinance or by selling the home.
  • The remaining 1.6% resulted in repayment plans, short sales, deed-in-lieus or other reasons.

© 2021 Florida Realtors®

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Delayed Closings: The Most Common Reasons in Feb.

Most homes complete the sale on time, but of those that are delayed, almost 1 in 3 (29%) have a financing issue, and 1 in 4 (23%) confront an appraisal issue.

CHICAGO – Most home sale contracts settle on time, but one in four (26%) faced delays in February, while 6% were terminated completely, according to the latest Realtors® Confidence Index. The following chart shows the most common issues sparking a delay to closing.

Of the 6% terminated completely, the most common problems were related to:

  • Appraisal issues: 11%
  • Obtaining financing: 10%
  • Home inspection/environmental issues: 9%

Of contracts that closed but faced delays, the most common problems cited were:

  • Issues related to financing: 29%
  • Appraisal issues: 23%
  • Title or deed issues: 13%
  • Home inspection or environmental issues: 12%
  • Something related to a contract contingency: 5%
  • Issues in buying/selling a distressed property: 2%
  • Insurance-related issues: home, hazard or flood: 2%
  • Buyers who lost their job: 2%
  • Other issues: 13%

Nevertheless, the housing market remains competitive. Respondents to the Realtors Confidence Index report an average of four offers for every house sold. Homes also typically sold within 20 days – a record low since May 2011, when the National Association of Realtors® (NAR) started collecting such information. A year ago, homes typically sold within 36 days.

Source: “Realtors® Confidence Index Survey, February 2021,” National Association of Realtors®

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Legislature Passes, Gov. Signs Biz Rent Tax Reduction

A multifaceted bill will net Fla. $1B from internet sales and eventually lower the business rent tax from 5.5% to 2% – a major Florida Realtors legislative priority.

TALLAHASSEE, Fla. – Gov. Ron DeSantis signed a taxation bill (SB 50) into law on Monday. While the new law covers a number of taxation issues, one element lowers the business rent tax, which was a major Florida Realtors® priority this year and in previous years.

The bill should raise about $1 billion by collecting taxes on all internet sales. While Florida buyers were already required to pay sales tax on these online purchases, it was rarely done. However, SB 50 makes sure online retailers collect and remit the required sales tax on purchases made by Floridians.

Initially, the additional revenue will replenish Florida’s Unemployment Compensation Trust Fund, which was depleted by the record unemployment caused by the pandemic. Once that’s replenished, however, the additional revenue will be used to reduce the business rent tax from 5.5% to 2%.

Florida currently charges a 5.5% sales tax on businesses that rent commercial space – the only state in the nation to levy this tax. Municipalities and local governments may levy taxes on top of the state sales tax rate, which means that some businesses are paying more than 8 percent in sales tax on their business rent.

The 2017, 2018 and 2019 Florida Legislatures had lowered the tax rate from 6 percent down to 5.5 percent.

Reducing the Business Rent Tax gives businesses the ability to expand, hire more employees, improve benefits and raise salaries.

© 2021 Florida Realtors®

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Fla. Courts Handle 3 out of 4 U.S. Property Insurance Lawsuits

Of U.S. lawsuits filed over property insurance payments in 2019, Fla. had 76%, according to a state report – but it only had 8% of all property insurance claims.

ORLANDO, Fla. – Nearly three-quarters of all U.S. lawsuits filed by homeowners against their property insurance companies were made in Florida, a new report says, as state lawmakers consider reforms to the system.

The report suggests that litigation is driving higher insurance costs in a state that has seen insurers raise homeowners’ rates by 30% or more.

In 2019, Florida homeowners accounted for 76% of such suits, according to the report by the Florida Office of Insurance Regulation (OIR). The study also found that state residents filed just 8% of all property insurance claims in the nation that year.

OIR Commissioner David Altmaier put the new statistics in a letter dated April 2 to Rep. Blaise Ingoglia, R-Spring Hill, chairman of the House Commerce Committee, a document meant to supplement a report OIR sent to the committee in February.

Using data from the National Association of Insurance Commissioners of which Altmaier is also president, the agency found Florida to be responsible for more than 60% of property insurance litigation nationally since at least 2016. The letter did not provide any information about previous years, and 2019 was the most recent data available.

The report in February identified “costly litigation” as one of the primary drivers for rising insurance premiums in the state. Last year, OIR approved rate hikes of more than 30% for some insurance companies. Companies only need to ask for approval if seeking to raise rates by more than 15%.

Altmaier’s letter also said Florida’s ratio of claims closed without payment to lawsuits opened was 27%, eight times higher than the next state, Connecticut, where the ratio was 3.4%. That means more Florida homeowners filed lawsuits after not receiving a payment for their claim than in any other state by a margin of eight to one.

The rise in litigation in Florida has led many private insurers to drop policies along the coasts and in Central Florida, where industry leaders say contractors and other agents have been directly soliciting roof damage claims from homeowners.

The issue has led to an explosion in policies for the state-run Citizens Property Insurance, a situation that led Citizens CEO Barry Gilway last year to call Florida’s insurance market “unhealthy.”

Altmaier’s letter concludes by suggesting solutions the Legislature may consider to bring down the number of cases. They include measures such as reducing attorneys’ fees to make lawsuits less attractive to lawyers and modifying laws to reduce the number of roof claims.

Some of these ideas appear in HB 305, introduced in January by Rep. Bob Rommel, R-Naples. The bill also seeks to stem practices by contractors and independent agents that experts say is causing the rise in roof claims.

But attorneys such as Mark Nation of Morgan & Morgan say that the measures in the bill will hurt homeowners by limiting access to the courts.

“You think there are a lot of denials now?” Nation said in a Sentinel interview last year. “Think about if people like me didn’t exist.”

In the House earlier this month, the bill went to the Commerce Committee, on which Rommel sits. A companion bill, SB 76, passed the Senate April 9.

© 2021 The Orlando Sentinel (Orlando, Fla.). Distributed by Tribune Content Agency, LLC.

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Cocktail Party Talking Points: Why Can’t I Find a House to Buy?

Florida Realtors economist: Cocktail parties – remember those? Once someone finds out you’re a Realtor, the conversation often turns to the current market. Here are suggested responses to a common question you’ll likely be asked at your next cocktail – or Zoom – party.

ORLANDO, Fla – Though it may be a distant memory, cocktail parties were once a staple of every professional’s social calendar. Since signs point to the return of these enjoyable networking opportunities very soon, dust off your fancy shoes and attire – you know, the stuff other than your yoga pants and slippers – and come up with a response to the question you will likely get asked as the best Realtor at the party.

Party guest question: Why can’t I find a house to buy? Seems really tough out there!

Your response: It’s the hold period, new construction and interest rates.

Hold period

According to the 2020 Profile of Home Buyers and Sellers from the National Association of Realtors® (NAR), the hold period of the home – the amount of time a buyer expects to stay in the home they just purchased – has been shifting in recent years. Today’s homeowners typically live in their homes for longer periods of time than in the past.

According to NAR’s study, in recent years, the typical hold period of a home in the U.S. – which historically has been six to seven years – expanded to 10 years and it remained at this historic high in 2020. In Florida, the median hold period is only slightly less (9 years).

With people holding onto their properties several years longer than they previously did, there is less “churn” in the market, meaning, there are fewer existing homes going onto the market. This has a significant impact on the amount of available inventory for first-time homebuyers.

At the national level, there are more real estate agents working in the U.S. housing market than the number of homes for sale. At the end of February 2021, the U.S. had 1.03 million homes for sale, down 29.5% from a year earlier and the lowest on record going back to 1982, according to NAR. In Florida, inventory across all property types was 73,434, down 47.2% year-over year.

New Construction

The obvious solution for a lack of homes going onto the market? New homes supplied by builders. But with output of new construction homes lagging behind delivery prior to the Great Financial Crisis, inventory continues to be limited here too. Since new construction has been relatively muted this cycle, it hasn’t helped offset the lower inventory of existing homes.

This wasn’t the case during the last cycle. During the 2000s, the supply spigot was wide open, and houses were going up at a breakneck pace. Normally a deluge of supply would drive prices down, as there is more on the market then there are buyers. But that wasn’t a normal time. Speculative buying, fueled in part by very lose lending practices, created an artificially high level of demand. The rampant demand quickly shut off as lending practices tightened, cheap money was elusive and people who lost their homes were now unable to qualify for new mortgages. With a smaller buying pool, there was a glut of market inventory from all that construction. Couple that with the wave of distressed properties that came on the market, and there was a lot of housing available.

This cycle, there hasn’t been nearly the same level of construction. Many builders didn’t survive the crash, and those who did were much more conservative. Some of this more muted approach is due to prudent investing decisions, but a lot of it is more practical: There is less land available, more regulations and less skilled labor.

Florida is also coming to terms with its age and history of rampant development – there are less wide-open spaces now than there were historically, so the pace may never be what it was before. This low supply creates a lot of competition among buyers for available homes.

Interest Rates

Interest rates have been hitting historic lows over the past 12 months, and while they are expected to go back up going forward, we’re still dealing with a very low cost of borrowing money. That has fueled a lot of people getting into the market to take advantage of these low rates, which is great, right? Yes – for today. But there is a dark cloud on the horizon.

If you purchased or refinanced your home recently and are enjoying an enviably low interest rate, you have strong purchasing power and the cost to carry that debt is low. But what happens in 10 years when you want to trade up to a new property? All of a sudden you’re in a different interest rate environment, which likely will not be as low as it is today. You will lose the rate you are currently enjoying today, which may dampen your desire to make the deal. As a result, you’ll consider renovating your existing home and make it work longer, rather than take on more expensive debt.

Of course, this scenario would not work for or apply to everyone, but many economists are concerned about the unintended consequences the current low interest rate environment will have on the future market. There will likely be a lower supply of existing homes on the market, which will crunch inventory even more.

So, there you have it – the quick (and easy?) explanation you can give your friends and colleagues when they ask you about why they can’t find a house to buy.

Jennifer Quinn is a Florida Realtors economist and Director of Economic Development

© 2021 Florida Realtors®

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The Unexpected Challenge to Home Repair: Electrical Wiring

New home buyers and remodelers sometimes find an expensive problem as they start to dig in: Old and faulty wiring that needs fixed or even completely replaced.

WASHINGTON – As remodeling surges and more first-time buyers opt for a fixer-upper, some owners discover an unexpected expense: old, faulty electrical wiring. It might not be just in older homes either. An apparent increase in electrical problems may be occurring due to remote work and school may be taxing on older fuse boxes and frayed wiring.

Electricians consider electrical systems older than 1980 most likely to experience problems, The Washington Post reports. But the cost to upgrade can mount quickly – about $25 to $30 an hour to replace a receptacle, for example, and homeowners could be charged about $200 to rewire an outlet and about $3,000 to rewire an electrical system.

Even if buyers discover faulty wiring during an inspection, they might not have the negotiating leverage to do anything about it in today’s seller’s market, either asking the seller to make repairs or negotiating a lower price.

“Buyers don’t have the luxury to reject an old house in this market,” says Catarina Bannier, a sales associate with Compass in Chevy Chase, Md. “With lean inventory and multiple offers, buyers aren’t taking the chance of losing competitiveness by adding contingencies, even ones as ordinary as an inspection clause. A few years ago, I had a buyer who walked away because of an electrical problem, but I doubt I’d see that now.”

Rebecca Weiner, who works in the same real estate office as Bannier, suggests that buyers get a pre-offer inspection – a less comprehensive inspection that’s scheduled by the buyer, with the consent of the seller, prior to submitting an offer on a home.

“A pre-offer inspection lets you know what you’re buying, what fixes you’ll have to make, and, generally, will make you feel more comfortable about the state of the house,” Weiner told the Post. “If you’re out a few hundred dollars, it’s a risk worth taking and the cost of doing the business of buying a house.”

Home inspectors say that during pre-inspections, they’ll determine the age of the furnace, air conditioners and water heater. But during the full inspection – which usually comes after an offer is submitted – they’ll verify circuit breakers are properly matched and corresponding to electric wire sizes and test wall outlets using handheld plug-in testers to check polarity and grounding.

Some of the most common electrical issues home inspectors see include the overloading of outlets and safety hazards from aluminum wiring, which is most often found in older homes. Electricians also say not enough homes use the safer three-prong outlets, referred to as “grounding.” Many older homes have two-prong outlets that could increase the risk of shock or fire if they malfunction.

Source: “How to Avoid Shocking Discoveries in Your Homes Electrical Systems,” The Washington Post (April 7, 2021)

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

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NAR Report: Marijuana and Real Estate: A Budding Issue

States with marijuana legalization laws have seen increased demand for warehouse space, and about half with pre-2016 legalization laws are seeing addendums added to leases that restrict on-site growing. One recent change: More properties are being bought rather than leased.

WASHINGTON – As more parts of the U.S. legalize marijuana – and as an increasing number of states grow, harvest, store, sell and allow consumption – the real estate industry has felt the effect.

According to a new 2021 report from the National Association of Realtors® (NAR), there has been a noticeable rise in demand for warehouses, land and store fronts used for marijuana. The survey, Marijuana and Real Estate: A Budding Issue, examines the legality of marijuana in terms of medical only, plus, legalized medical and recreational during and after 2016.

More than one-third of respondents in states where marijuana has been legalized the longest said inventory was tight for multiple reasons, and they cited the marijuana industry as one of the factors. This is also true for those in areas where marijuana was more recently legalized, and 23% of Realtors® also partially blamed the marijuana industry for the limited inventory.

“The dynamics of marijuana have been far-reaching over the past year, which is evident when you see how it has impacted real estate,” says Jessica Lautz, vice president of demographics and behavioral insights for NAR. “As the marijuana laws continue to evolve, Realtors have witnessed increased demand for commercial properties to store, grow and sell marijuana.”

Additionally, 29% of commercial members in states that legalized recreational marijuana during the past four years reported growth in property purchasing over leasing in the last year. Nearly half of those in states that had legal medical and recreational marijuana before 2016 have experienced addendums added to residential leases restricting growing on properties; in other states, it’s one quarter or less.

In states where only medical marijuana is legal, two out of three (69%) commercial members said that no additional addendums were inserted into leases about growing marijuana plants. In states where both medical and recreational marijuana is legal, it’s 45% to 55%.

Perhaps to avoid landlord addendums, some business owners buy rather than lease. Business owners who purchase a property don’t have to adhere to marijuana rules or regulations that they may consider burdensome. This property-purchase trend was seen the most in states where marijuana is newly legal.

Respondents in states where recreational marijuana is legal more often said that homeowner associations regularly had policies or restrictions in place pertaining to smoking and growing the product in common areas or exposed areas. Nearly half of the homeowner associations opposed smoking in common areas, while about two-fifths prohibited growing in mutual open areas, such as a private yard without fences.

Those surveyed within states with only prescription marijuana said there often were not any homeowner association rules and regulations related to marijuana.

“We saw that a number of property owners at some point in the past had difficulty leasing their property after a previous tenant consumed marijuana there over an extended period,” says Lautz. “To avoid repeats of those issues, landlords have implemented various guidelines that place numerous restrictions on the use of marijuana.”

Lautz says property owners who have imposed constraints tend to reside or own property in states where marijuana has been legal the longest.

“As the marijuana industry evolves, both commercial and residential landlords are balancing efforts to profit from the progressions, while also ensuring that their property remains desirable and at a high value,” Lautz says.

© 2021 Florida Realtors®

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Fla. Releases $150M for 20 Infrastructure Projects in 15 Counties

Gov. DeSantis says the money from HUD will go to large-scale infrastructure projects that can make Fla. communities more resilient to future disasters.

LAKELAND, Fla. – About $150 million has been awarded to communities through the Florida Department of Economic Opportunity’s (DEO) Rebuild Florida Mitigation General Infrastructure Program. The program, administered by DEO, allows local governments to develop large-scale infrastructure projects to make communities more resilient to future disasters. Gov. Ron DeSantis announced the money recently while speaking in Lakeland.

“This transformational mitigation funding will go a long way in helping Florida’s communities invest in their futures through critical infrastructure improvements,” DeSantis said.

The U.S. Department of Housing and Urban Development’s (HUD) Community Development Block Grant – Mitigation (CDBG-MIT) program provides the funds, which were allocated to Florida. The program originally formed in response to the 2016 to 2017 presidentially declared disasters.

“The Rebuild Florida Mitigation General Infrastructure Program provides storm-impacted communities the opportunity to complete large, high-impact infrastructure projects that will pay dividends for future generations,” said DEO Executive Director Dane Eagle.

Funding from the Rebuild Florida Mitigation General Infrastructure Program

  • Broward County ($6,250,000) – to construct an interconnect between the Broward County Reuse Facility and the City of Pompano Beach’s OASIS Reuse facility.
  • City of Arcadia ($4,823,579) – to widen a stormwater tributary to provide additional storage during storm events to better control flood volume.
  • City of Avon Park ($670,623) – to improve the existing potable water system through replacement of asbestos pipes with PVC piping, adding additional bore to improve water pressure, and to install an upgraded chlorine system.
  • City of Doral ($1,000,000) – to reduce the frequency and severity of stormwater flooding by providing a positive-gravity drainage outfall discharging into the NW 58th Street canal.
  • City of Fort Lauderdale ($10,500,000) – to replace aging and undersized stormwater infrastructure with new systems that help neighborhood flooding issues and better water quality treatment before being released into the intracoastal waterway.
  • City of Key West ($3,099,159) – to install tide valves at 40 stormwater outfall points of discharge to address saltwater flooding of roadways, sidewalks and low-lying properties during high tides.
  • City of Key West ($6,336,165) – to design and construct a pump-assist injection well to address flooding in a low-lying area that collects significant runoff.
  • City of Lakeland ($42,986,390) – to establish a multi-component project in partnership with Bonnet Springs Park that focuses on increasing flood storage capacity to the drainage basin by improving the stormwater infrastructure and watershed quality.
  • City of Lauderhill ($3,125,215) – to complete water and sewer line improvement projects.
  • City of Miami ($13,497,843) – to retrofit portions of existing seawall, construct new sea wall sections, and other coastal resiliency improvements.
  • City of Miami ($1,216,963) – to implement roadway resiliency improvements to NW 17th Street, between NW 27th Avenue and NW 32nd Avenue. Improvements include the installation of a drainage system, exfiltration trench, storm inlets, accessibility ramps and swales.
  • City of North Miami Beach ($6,000,000) – to implement system-wide improvements to the sewer collection system.
  • City of North Miami Beach ($11,700,000) – to enhance the water transmission and distribution system to improve water quality, fire flow capacity, reliability and resiliency.
  • City of Orlando ($2,850,000) – to develop six resiliency hubs that will provide services to low- and moderate-income communities in the recovery phase of a disaster.
  • City of Sebring ($2,605,428) – to complete fire protection resiliency, water quality and water conservation infrastructure improvements.
  • City of Sebring ($3,515,580) – to harden facilities that are part of the cities sanitary sewer collection system.
  • City of West Palm Beach ($16,764,610) – to build resilient seawalls, improve storm water quality, and develop living shorelines, pedestrian hardscaping, and native landscaping.
  • DeSoto County ($3,757,012) – to replace decaying drainage system infrastructure to significantly increase service life and reduce the possibility of flooding.
  • DeSoto County ($3,273,575) – to repair a bridge used as an evacuation route during storms.
  • Osceola County ($4,689,320) – to modify and adapt existing drainage elements to substantially reduce repetitive flooding.

The Rebuild Florida Mitigation General Infrastructure Program has a total allocation of $475,000,000. There will be two additional rounds of funding in the future to communities designated by HUD or the state as Most Impacted and Distressed (MID) by Hurricanes Hermine, Matthew and Irma.

DEO is the state authority responsible for administering all U.S. Department of Housing and Urban Development (HUD) long-term recovery funds awarded to the state. Rebuild Florida uses federal funding for Florida’s long-term recovery efforts from the impacts of natural disasters.

© 2021 Florida Realtors®

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CFPB: Evicted Tenants Can Hold Debt Collectors Accountable

The bureau’s final rule says “debt collectors” must give written notice to tenants before an eviction, with prosecution and private lawsuits possible if they don’t.

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) issued an interim final rule in support of the Centers for Disease Control and Prevention (CDC)’s eviction moratorium.

The CFPB’s rule requires debt collectors to provide written notice to tenants of their rights under the eviction moratorium. It also prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium.

If a debt collector evicts tenants who may have rights under the moratorium without providing notice of the moratorium – or who misrepresent tenants’ rights under the moratorium – can be prosecuted by federal agencies and state attorneys general for violations of the Fair Debt Collection Practices Act (FDCPA), CFPB says. They’re also subject to private lawsuits by tenants.

“We will hold accountable those debt collectors who move forward with illegal evictions,” says CFPB Acting Director Dave Uejio. “We encourage debt collectors to work with tenants and landlords to find solutions that work for everyone.”

CDC moratorium

A temporary eviction moratorium ordered by the CDC has been extended through June 30, 2021. The CDC order generally prohibits landlords from evicting tenants for non-payment of rent if the tenant submits a written declaration saying they’re unable to afford full rental payments and would likely become homeless or have to move into a shared living setting.

This prohibition applies to an agent or attorney acting as a debt collector on behalf of a landlord or owner of the residential property.

According to a recent Government Accountability Office report, tenants facing eviction may be unaware of the moratorium or may not understand the steps they must take to act on its protections. Declarations can be submitted in languages other than English, and alternative forms are available online.

Reference papers released by CFPB

© 2021 Florida Realtors®

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Pres. Biden’s Proposed Budget Boosts Housing Programs

The fiscal year 2022 “Discretionary Funding Request” is a wish list, but it indicates priorities. The latest requests $68.7B for HUD, an increase of $9B over last year.

WASHINGTON – The Biden-Harris Administration submitted its “Discretionary Funding Request” to Congress, which is essentially a wish list of funding preferences it hopes Congress will include in the next budget. Total dollars and the balance in spending provide a look inside the new administration’s priorities.

For fiscal year 2022 (FY22), Biden requests a total of $68.7 billion for HUD, an increase of $9 billion over the 2021 enacted level, for key Department of Housing and Urban Development priorities (HUD).

According to HUD, it includes a sizable expansion of rental assistance for low-income households; funding for strategies to end homelessness; investments to address the shortage of affordable housing; improvements in the quality of affordable housing through investments in resiliency and energy efficiency; and strategic investments across multiple programs to strengthen communities facing underinvestment. It would also prevent and redress housing-related discrimination.

The “FY22 discretionary funding request turns the page on years of inadequate and harmful spending requests and instead empowers HUD to meet the housing needs of families and communities across the country,” says HUD Secretary Marcia L. Fudge. “I am particularly pleased that the request proposes more than $30 billion to expand housing vouchers to an additional 200,000 low-income families.”

FY22 discretionary request

  • Expands Housing Choice Vouchers to 200,000 additional families. The Housing Choice Voucher program currently helps 2.3 million low-income families obtain housing in the private market. The discretionary funding request proposes $30.4 billion, a $5.4 billion increase over the 2021 enacted level, allowing it to expand assistance to an additional 200,000 households, HUD’s outlines claims. It includes money for mobility-related support services to give low-income families who live in racially and ethnically concentrated areas of poverty with greater options to move to higher-opportunity neighborhoods.
  • Investments to end homelessness. The 2022 discretionary funding request provides $3.5 billion, an increase of $500 million over 2021 enacted levels, for Homeless Assistance Grants to support more than 100,000 additional households, including survivors of domestic violence and homeless youth. The resources would complement the $5 billion for emergency housing vouchers provided in the American Rescue Plan, which Congress previously passed.
  • Modernizes and improves energy efficiency, resilience and safety in HUD-Assisted Housing. HUD-supported rental properties collectively provide 2.3 million affordable homes to low-income families. The funding request fully funds the operating costs across that portfolio, and provides $800 million in new investments across HUD programs for energy efficiency and resilience to climate change impacts, such as increasingly frequent and severe wildfires and floods. In addition, the discretionary request includes $3.2 billion for public housing modernization grants, an increase of $435 million above the 2021 level.
  • Increases the Supply of Affordable Housing. The funding request provides a $500 million increase to the HOME Investment Partnerships Program, for a total of $1.9 billion, to construct and rehabilitate affordable rental housing, and to support other housing-related needs – the highest funding level for HOME since 2009. In addition, the proposal provides $180 million to support 2,000 units of new permanently affordable housing for the elderly and persons with disabilities.

© 2021 Florida Realtors®

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New Fla. Law Offers Some Protection Against COVID-19 Lawsuits

The Legislature passed and Gov. DeSantis signed a new law that raises the bar for consumers who allege they got infected by COVID-19 at a Fla. business. And businesses have new protections if they’ve made a good-faith effort to comply with government guidelines.

TALLAHASSEE, Fla. – On Friday, March 26, 2021, the Florida Legislature passed a comprehensive bill (SB 72) that severely limits businesses’ risk from COVID-19 lawsuits. Three days later, on Monday, March 29, Gov. Ron DeSantis signed it into law.

For Florida real estate brokers and commercial businesses – including the Mom-and-Pop operations that form the backbone of the state’s economy – a lawsuit alleging “I got COVID-19 from you” is a business threat. Before SB 72 became law, the cost of a court case hung over the head of every Florida business owner.

Under the new law, a lawsuit filed against a Florida business must:

  • Be filed with “particularity,” which generally means a detailed description of the allegation.
  • Include a physician’s affidavit submitted at the same time, stating that the physician believes the defendant (business owner) caused, through acts or omissions, the plaintiff’s damages, injury or death.

If a lawsuit doesn’t have these mandatory elements, a court must automatically dismiss the case. Plaintiffs don’t lose their right to refile, but if they do, they must include the mandatory elements listed. This portion of the law should cut down on frivolous lawsuits.

Even if a COVID-19 sufferer did contract the virus from a brokerage, the new law includes protections for business owners if the courts determine they’ve made a good-faith effort to substantially comply with government-issued health standards or guidance during the COVID-19 pandemic.

© 2021 Florida Realtors®

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5 Home Remodeling Trends to Watch in 2021

Open floor plans? Out. Dedicated spaces for work and learning? In. Walls are sporting bolder, repainted colors, and more yards are turning into entertainment spaces.

NEW YORK – After a year of spending more time at home due to the COVID-19 pandemic, many homeowners are looking for ways to make their homes fit their new realities. Open floor plans are out; dedicated spaces for remote work and learning are in. Yards are being transformed into entertainment spaces and walls are being repainted. At the same time, increased demand and safety concerns can make the remodeling process much longer than before.

Here are five trends to watch for this 2021 home-remodeling season.

1. A focus on dedicated spaces

At the start of 2020, “the most requested design concept was open space,” says Jimmy Dollman, principal of Dollman Construction in Roanoke, Virginia. “But now, we face a different set of design implications because everyone’s living conditions have changed.”

Dollman notes that remote workers and learners need privacy and quiet. “A year ago, it was rare for one family member to work from home,” he says. “Now, (parents) and kids find it difficult to get work done because of the noise in the open design.”

This year, expect to see homeowners spending less time knocking down walls to open up shared areas, and more time transforming spare rooms or nooks into dedicated spaces. That might mean adding a home office or home theater, for instance, or transforming a nook into a space for distance-learning.

2. Making room for home offices

To add home offices to residences, “homeowners aren’t adding square footage,” says Doug King, owner of King Contracting, a design-build firm in St. Petersburg, Florida, and president of the National Association of the Remodeling Industry. “Rather, they’re taking out rarely used closets, like in the hallway, and moving interior walls to make space.”

The home office trend isn’t going away anytime soon, he notes.

“Even when the pandemic is over,” King says, “there’ll be a lot of people still working from home.” He notes that because of this trend, use of home technology is also increasing as households install items such as ethernet cables for computer networks and Bluetooth speakers.

3. More outdoor living

One cure for that cooped-up feeling is outdoor living areas.

“People want their backyards to be their oasis,” King says. In his area, he says pools are the No. 1 thing being added to backyards. Outdoor kitchens and fire pits are the next most popular.

Homeowners spending more time at home may also start to seek out remodeling projects that bring beautiful outdoor views inside – for instance, by installing larger windows or glass doors that let in more natural light.

4. Longer wait times

Besides shifts in design trends, homeowners can expect a continued slow-down in the industry. In some cases, safety concerns have changed how contractors and workers approach projects. For example, Dollman has suspended all work in occupied residences to avoid exposure to COVID-19 “to protect the homeowners and our crews,” he says.

Getting permits can also take much longer than usual as demand increases and those who approve the permits adapt to new working conditions – for instance, working at home rather than in the office, or working with a limited staff.

5. Bold colors

For homebound do-it-yourselfers looking for affordable ways to make rooms more welcoming this year, adding a colorful fresh coat of paint will likely be high on their list.

A sign that bold colors and color combinations could be gaining favor: They featured prominently among Color of the Year winners for 2021. Sherwin Williams selected Urbane Bronze (a dark brownish-gray), for instance; Benjamin Moore selected an Aegean Teal (a blue-green color); Pantone selected a color duo: Ultimate Gray and Illuminating (a gray tone alongside a bright yellow color).

For homeowners, striking paint colors like these could be an appealing low-cost way to add depth, excitement and personality to a room without overwhelming it.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. This article originally appeared on the personal finance website NerdWallet. Carol J. Alexander is a contributing writer at NerdWallet.

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RE Q&A: What if Tenants in No-Dogs-Allowed Units Get a Dog?

A good renter got a dog during the term of his lease even though dogs aren’t allowed. What landlords can do is sometimes different than what they choose to do.

FORT LAUDERDALE, Fla. – Question: The tenants in our rental property have always paid on time and take good care of the property. We just discovered they got a dog, even though we were clear that we do not allow pets. What should we do? – Norman

Answer: Whenever you have to deal with an issue about a lease, your first step is to carefully review the agreement to see what it says about the situation.

If the lease says no pets are allowed, then your tenants are in breach of the contract. Before taking your next step, you need to consider a few other things.

Does your community association allow pets, and if so, do they allow this breed and size of dog? If your tenants are breaking community rules along with the lease, your options are much more limited. The pet will need to go, either with or without your tenants, before your association fines you.

Your first option is to speak with your tenant and let them know they are in breach of the lease. Most people know that not paying the rent will get them evicted, but less realize that breaking other, non-monetary, terms can also lead to eviction.

If they do not agree to remove the pet, your next step is to give them written notice that if they continue not to follow the lease, it will be terminated. The notice should follow the specific form and timing found in the landlord-tenant statute.

If the required time, typically seven days, goes by and their fur baby is still in residence, you can terminate the lease and start eviction proceedings.

Before you evict an otherwise great tenant, you should consider other alternatives. For example, you could speak to them about amending the lease to allow pets but require them to pay a pet deposit in case of damage and pay for the deep cleaning needed after they eventually move out.

These days most people have a pet, support or service animal, so I advise my landlord clients they should get used to the idea of tenants having furry friends and plan accordingly.

© 2021 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC

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Supreme Court: It’s OK to Market from Your Cellphone

Realtors can call or text a marketing message from their cellphone, providing it doesn’t have the ability to store or dial numbers automatically using a number generator.

WASHINGTON – It’s official: Real estate professionals can use their cell phones to make marketing calls and send marketing text messages. In a unanimous decision last Thursday, the U.S. Supreme Court held that the Telephone Consumer Protection Act only applies to devices with the capacity to store or dial numbers using a random or sequential number generator.

In other words, a cell phone that does not have an app that can randomly or sequentially dial numbers will not be considered an automated telephone dialing system and be subject to the restrictions of the act.

The long-awaited opinion in the Facebook Inc. v. Duguid case reverses a decision by the Ninth Circuit Court of Appeals.

However, two concerns still apply when it comes to Realtor marketing via cellphone:

  1. The federal Do-Not-Call list and Florida Do-Not-Call list. Marketers cannot contact if the number appears on the list, subject to few exceptions. Realtors should check both federal and state DNC lists before proceeding with marketing calls.
  2. Third-party vendors. Businesses that contract with third-party vendors could be held responsible if that third-party vendor uses illegal telemarketing techniques.

“This is an important ruling for real estate professionals looking for ways to grow their business since it eliminates a handful of restrictive federal court holdings suggesting that any marketing call using a cellular phone required prior express written consent of the person being called,” says Jon Waclawski, senior political compliance counsel and director of legal affairs with the National Association of Realtors®.

“Now, real estate professionals may use their cellular phones to make marketing calls to numbers not on the Do-Not-Call list without prior consent.”

Still, he adds, callers must remember that the Do-Not-Call restrictions still apply and should continue to adhere to any applicable call laws. “This area of law will remain a moving target as Congress and potentially states consider making new laws affecting marketing calls,” Waclawski adds.

Source: National Association of Realtors® (NAR)

© 2021 Florida Realtors®

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JPMorgan CEO Foresees Post-Pandemic Boom

JPMorgan Chase CEO Jamie Dimon calls robust consumer savings and a $2T infrastructure plan the economic “Goldilocks scenario” for fast and sustained growth into 2023.

NEW YORK – JPMorgan Chase CEO Jamie Dimon said the U.S. economy is headed for a boom that could run well into 2023.

In his annual letter to shareholders Wednesday, Dimon said robust consumer savings, a successful vaccine rollout and the Biden administration’s proposed $2 trillion infrastructure plan could lead to an economic “Goldilocks scenario” of fast and sustained growth, tame inflation and a measured rise in interest rates.

“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE (quantitative easing), a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” Dimon said. “This boom could easily run into 2023 because all the spending could extend well into 2023.”

In his 65-page letter, Dimon said the long-term effects of the economic boom won’t be known for years because it will likely take time to see how government spending, including President Joe Biden’s proposed $2 trillion infrastructure bill, will boost economic growth.

The infrastructure plan, dubbed the American Jobs Plan, aims to rebuild the nation’s aging roads, bridges, transit and rail service, along with supporting electric vehicles, clean energy and building more than 2 million affordable homes. The White House said it would like to see the plan approved by Congress in the summer.

“The permanent effect of this boom will be fully known only when we see the quality, effectiveness and sustainability of the infrastructure and other government investments,” Dimon added. “I hope there is extraordinary discipline on how all of this money is spent. Spent wisely, it will create more economic opportunity for everyone.”

To be sure, a number of challenges could thwart the boom, Dimon said, including the risk of new COVID-19 variants and rising debt levels. A faster-than-expected rise in inflation could also lead the Federal Reserve to raise interest rates more quickly than Wall Street is expecting, which would threaten to weigh on economic growth.

Copyright 2021, USATODAY.com, USA TODAY

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Study: How Does Credit Scoring Impact Fair Lending?

A study released during an NAR virtual Fair Housing event finds new scoring models open doors and boost minority homeownership. Older credit-score models “raised the cost to borrow while limiting access … for minority populations and rural communities,” says NAR President Oppler.

WASHINGTON – New data to determine buyers’ creditworthiness will increase opportunities for homeownership among Black and Latino Americans, according to new research outlined at a virtual event hosted by the National Association of Realtors® (NAR). NAR is recognizing Fair Housing Month along with the rest of the nation this April, honoring the sacrifices made during the ongoing fight to expand equal access to homeownership and private property in America.

The paper, Tipping the SCALE: How Alternative Data in Credit Scoring Promote or Impede Fair Lending Goals, is authored by thought leaders Ann B. Schnare and Vanessa Gail Perry. It looks at recent credit bureau data and scoring model updates – which traditionally have excluded many common household expenditures, like rent and utility payments – to see if they now provide a more comprehensive view of a household’s credit performance and increase opportunities for property ownership.

“Minorities are far more likely to be ‘unscoreable’ or have relatively weak credit scores using traditional credit bureau data,” Dr. Schnare said Thursday. “Incorporating additional data into the credit evaluation process can open doors for many deserving borrowers and boost minority homeownership rates.”

Under the new proposal, each form of alternative data would be evaluated using a newly devised five-factor “SCALE” framework that incorporates important considerations in the data’s predictive power. These include:

  • Societal Values: Does it respect social and ethical norms like right to privacy?
  • Contextual Integrity: Regardless of predictive value, is it relevant to mortgages?
  • Accuracy: Does the data accurately reflect the household’s financial situation?
  • Legality: Would the use of the data have a disparate impact on protected classes?
  • Expanded Opportunity: Would the use of the data increase the number of qualified borrowers?

Dr. Schnare, currently president of her own consulting firm specializing in housing and mortgage finance, previously served as a senior vice president at Freddie Mac. Dr. Perry, a professor at the George Washington University School of Business, was a senior advisor to the U.S. Department of Housing and Urban Development during the Obama administration.

“The rise of big data greatly expands the options for credit scoring,” Dr. Perry noted. “However, predictability is not enough to justify the use of certain kinds of data. Their use must also be consistent with broader social and ethical values.”

Homeownership rates for Black and Latino Americans have lagged those of white Americans for decades, highlighting the need to review existing tools and identify new credit valuation processes.

“A borrower’s credit report and credit score are the gateway to a mortgage,” said NAR President Charlie Oppler. “But for too long, inaccurate credit reporting methods have raised the cost to borrow while limiting access to mortgage credit for prospective borrowers, particularly those from minority populations and rural communities. NAR is eager to apply this new research to help shape our policy positions and advocacy efforts in the future.”

© 2021 Florida Realtors®

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Moving Trends Called ‘the Great Reshuffling’

Buyers are moving to smaller cities and more affordable states: renters are buying or moving out of the city. The demographic changes will impact more than real estate.

WASHINGTON – Call it “the great reshuffling” – one in 10 Americans moved during the year of the pandemic, and with the health situation (hopefully) stabilizing through the widespread accessibility of vaccines, more may be on the way.

“Millions of additional households could enter the real estate market as a result of the pandemic,” predicted the real estate firm Zillow, which has been tracking changes in buyer preferences since the onset of the COVID crisis in March 2020.

The firm pegs the possible COVID-driven moves as upward of a possible 2.5 million, and those attempting to find the right home might find a less-constrained inventory than has been the case over the past year.

“Life and financial uncertainty are among the top reasons homeowners have not listed their home for sale during the pandemic,” analysts said. “The COVID-19 vaccine is likely to change that and prompt many more people to move.”

Zillow data finds a large majority of homeowners (70%) say they would be mostly or completely comfortable moving to a new home when there is widespread vaccine distribution.

Among those who have relocated over the past year, three-quarters (75%) say they moved for positive reasons, such as being closer to family or friends or living in an area they’ve always dreamed of. New flexibility to telework has opened up those opportunities for many, and new real estate technology has enabled prospective purchasers to get an immersive experience of a home from hundreds or thousands of miles away.

Phoenix, Charlotte and Austin saw the highest net inbound moves in the first 11 months of 2020, sought out by those eager for relative affordability and warmer weather. Those Sun Belt metros are expected to continue to surge in 2021.

Data from North American Van Lines also finds some of the country’s largest and most expensive housing markets saw the highest net outbound moves, including New York, Los Angeles, San Francisco and Chicago. Zillow saw for-sale inventory in these metros climb in the city, while inventory nationally hit new lows.

“The pandemic brought an acceleration of trends we were seeing in 2018 and 2019,” said Zillow senior economist Jeff Tucker. “More affordable, medium-sized metro areas across the Sun Belt saw significantly more people coming than going, especially from more expensive, larger cities farther north and on the coasts. The pandemic has catalyzed purchases by millennial first-time buyers, many of whom can now work from anywhere.”

Zillow’s survey found that nearly a third of recent movers (31%) say they had been dreaming about moving for a year or longer. More than three-quarters of recent movers (76%) say emotional factors had been holding them back from making their most recent move. Stress over not being financially prepared to make the move and the expectation that the moving process would be hard or stressful were the most commonly cited factors.

Nearly a quarter (23%) of recent movers say the concern that their move would cause stress for their child(ren) held them back from making their most recent move.

After their most recent move, more than half of Americans said they experienced happiness (54%) and relief (53%). A vast majority of recent movers (80%) say their most recent move was worth it.

Many recent movers say starting a new chapter in their life was among the most rewarding parts of moving to a new home. Nearly three in five (59%) say positive life events happened after their most recent move, most commonly citing that they fulfilled a dream or became passionate about something new.

© Arlington Sun Gazette © Copyright 2021, Sun Gazette Newspapers, Springfield, VA.

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HUD Announces $5B to Help Homeless; Fla. to Get $254M

Of the Fla. cities and counties allocated funds for fighting homelessness, Miami-Dade County tops the list with $17.6M, followed by Broward with $14M.

WASHINGTON – U.S. Department of Housing and Urban Development (HUD) Secretary Marcia L. Fudge announced that nearly $5 billion in American Rescue Plan (ARP) funds will go toward affordable housing and services for people currently homeless or at risk of becoming so.

In Florida, 38 counties or cities will share about $254 million. The largest dollar amount goes to Miami-Dade County at $17,686,235. The smallest allocation goes to North Miami at $1,088,181. The supplemental funding is allocated through HUD’s HOME Investment Partnerships Program to 651 grantees, including states, insular areas, and local governments.

“Homelessness in the United States was increasing even before COVID-19, and we know the pandemic has only made the crisis worse,” says Fudge. “With this strong funding, communities across the country will have the resources needed to give homes to the people who have had to endure the COVID-19 pandemic without one.”

The $4.925 billion in HOME-ARP funding gives states flexibility to meet the people’s needs, including through development of affordable housing, tenant-based rental assistance, supportive services, and acquisition and development of non-congregate shelter units. Funds must be spent by 2030.

Florida county-metro allocations for homelessness relief

  1. Clearwater – $1,637,567
  2. Daytona Beach – $1,405,829
  3. Ft Lauderdale – $2,589,019
  4. Gainesville – $1,968,639
  5. Hialeah FL $5,388,586
  6. Hollywood – $1,915,134
  7. Lakeland – $1,401,459
  8. Miami – $12,720,427
  9. Miami Beach – $2,245,387
  10. North Miami – $1,088,181
  11. Orlando – $4,787,204
  12. Pompano Beach – $1,639,319
  13. St Petersburg – $3,036,659
  14. Tallahassee – $3,412,463
  15. Tampa – $6,335,438
  16. West Palm Beach – $1,734,257
  17. Collier County – $2,729,078
  18. Jacksonville-Duval County – $12,060,074
  19. Hillsborough County – $10,374,531
  20. Lake County – $2,060,197
  21. Lee County – $3,802,106
  22. Manatee County – $2,362,768
  23. Miami-Dade County – $17,686,235
  24. Orange County – $10,554,916
  25. Palm Beach County – $8,768,012
  26. Polk County – $5,105,519
  27. Seminole County – $3,046,438
  28. Volusia County – $2,665,311
  29. Non Entitlement (outside county/metro) – $71,903,340
  30. Pinellas County – $4,794,571
  31. Brevard County – $4,524,586
  32. Sarasota City – $3,170,598
  33. Escambia County – $4,135,750
  34. Broward County – $13,987,207
  35. Marion County – $3,217,585
  36. St. Lucie County – $3,480,403
  37. Pasco County – $4,455,673
  38. Osceola County – $3,478,510

Florida total: $253,677,973

© 2021 Florida Realtors®

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NAR: Florida Realtors Passes Calif. as Largest State Association

Realtor membership fluctuates year-to-year and even week-to-week, but NAR’s membership report on March 31 finds 5,118 more Realtors in Fla. than in No. 2 Calif.

ORLANDO, Fla. – According to the March 31, 2021, membership report released by the National Association of Realtors® (NAR), Florida Realtors moved into the lead for total number of Realtor® members, passing California in size.

Realtor member counts are an inexact science, in part because members phase in and out of the profession throughout the year. However, NAR’s point-in-time look at the end of March found that Florida had 5,118 more Realtor members (199,239) than California (194,121).

It’s the first time the Sunshine State found itself with more members than any other state or territory in the U.S.

Nationally, the U.S. had 1,463,806 Realtors on March 31, NAR says – a year-to-year increase of 1.09%. In Florida, the number of Realtors was up 1.84% compared to March 31, 2020.

Membership numbers rose in most states, though five states saw a decline: Texas (down 0.17%), Maryland (down 0.14%), Massachusetts (down 3.71%), Washington State (down 5.54%) and Alabama (down 0.76%). The total number of members also declined in Washington, D.C., Puerto Rico and Guam.

© 2021 Florida Realtors®

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Appeals Court Ruling Casts Doubt on ADA Compliant Websites

While brokers should still strive to make websites accessible for disabled users, an appeals court ruling suggests that until wording of the current law is changed, websites are not places of public accommodation. The issue remains fluid, but it may bring relief to brokers facing ADA website accessibility lawsuits.

WASHINGTON – Must a business’s website be accessible to people with disabilities under the U.S. Americans with Disabilities Act (ADA)? A South Florida court said that it did, but on appeal, the appeals court issued a ruling raising doubts about that decision.

In the case, a visually impaired Floridian sued the Winn-Dixie supermarket chain because he couldn’t access the prescription refill system and coupon rewards since Winn-Dixie’s website wasn’t compatible with his screen reader software. The South Florida court ruled against Winn-Dixie, finding it violated Title III of the ADA.

The appeals court ruling “vacated and remanded” the issue back to the South Florida court to reconsider its original decision. The ruling was based on the appeals court’s finding that websites are not a “place of public accommodation,” since websites are not on the list of places defined as such in Title III of the ADA.

Furthermore, the appeals court found that Winn-Dixie’s website incompatibility with the plaintiff’s software wasn’t an “intangible barrier” because it did not bar “equal access to the services, privileges, and advantages of Winn-Dixie’s physical stores,” otherwise violating Title III of the ADA. This prong of the analysis is fact specific, which is noteworthy. Future determinations of a Title III violation will depend upon a disabled person’s equal access to that business.

“This doesn’t mean Realtors  should  stop trying to ensure  their website is  accessible to the disabled,” says Meredith Caruso, Florida Realtors® associate general counsel. “However, it does provide a bit of a breather as the South Florida court reconsiders this matter.”

© 2021 Florida Realtors®

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Lawmakers OK Trust Funds Cut, Now On to Budget Reconciliation

The Legislature permanently cut affordable housing trust funds 50%, up from the 66% initially proposed. Florida Realtors will advocate for more during budget reconciliation.

TALLAHASSEE, Fla. – The Florida House approved a bill (SB 2512) that the Senate previously passed – a proposal that will allocate about 50% of the money in the state’s affordable housing trust funds to affordable housing. The Legislature’s initial plan was to permanently cut affordable housing dollars by 66%, but following advocacy efforts by Florida Realtors® the number was reduced to 50%.

It’s also not the final word. The House and Senate budgets must now be reconciled, and changes could still occur. During reconciliation, a select group of lawmakers from both the House and Senate looks at each chamber’s budget proposal and negotiates a final budget that must be approved by the entire Legislature and signed by Gov. Ron DeSantis. During this reconciliation period, Florida Realtors will continue to advocate for more than 50% of the money in the housing trust funds to be used for workforce housing.

“The good news is the power of the Realtor® voice is stronger than ever,” says Florida Realtors President Cheryl Lambert. “As soon as we found out about the proposed 66% cut to affordable housing dollars, we ramped up our advocacy efforts, which eventually led to a Call for Action that asked all members to contact their personal representatives. Lawmakers said they increased the share dedicated to workforce housing from 33% to 50% after they received feedback from housing advocates.”

Still, Lambert says the association has always advocated for all money in the affordable housing trust funds to be used for affordable housing, and that belief has not changed.

“Hundreds of thousands of Floridians – many of them teachers, firefighters, first responders and other essential workers – have used these funds to help purchase a home,” she said when the Florida Legislature first proposed the change. She also said it was a “priority for the elderly on fixed incomes.”

© 2021 Florida Realtors®

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Mortgage Rates Dip – First Time Since January

The 30-year mortgage rate dropped to 3.13% this week from 3.18% last week; it was 3.33% a year ago. High prices and limited supplies continue to impact buyers.

McLEAN, Va. (AP) – Mortgage rates fell for the first time in more than two months as buyers continue to be stifled by high prices and limited supply.

Mortgage buyer Freddie Mac reported Thursday that the benchmark 30-year loan rate dipped to 3.13% this week from 3.18% last week. At this time last year, the long-term rate was 3.33%.

The rate for a 15-year loan, popular among those looking to refinance, fell to 2.42% from 2.45% last week. One year ago it was 2.77%.

Mortgage rates have been historically low for years, but strong demand and low inventory have pushed prices higher.

Last week the National Association of Realtors® reported that its index of pending home sales tumbled 10.6% to 110.3 in February, its lowest level since May of 2020. Contract signings are now slightly behind where they were last year after eight straight months of year-over-year gains.

Meanwhile, U.S. home prices rose at the fastest pace in seven years in January, according to the S&P CoreLogic Case-Shiller 20-city home price index. The pandemic has fueled demand for single-family homes as people look for more space.

Economists expect home loan rates to remain low as the Federal Reserve says it intends to keep its main borrowing rate near zero until the economy recovers from the coronavirus pandemic.

Also Thursday, the Labor Department reported that the number of Americans applying for unemployment benefits rose last week to 744,000, signaling that many employers are still cutting jobs even as more people are vaccinated against COVID-19 and state and local governments lift virus restrictions.

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