High Stakes Deal Turns Precarious

In 2006, Shelterforce reported on the $5.4 billion sale of two colossal apartment complexes—Stuyvesant Town and Peter Cooper Village—on Manhattan’s east side, representing the biggest real estate deal in U.S. history, as well as an era of loose credit and speculation. The deal was a triumph for the highest bidder, Tishman Speyer Properties, and ushered in an era of insecurity for the residents of the 11,232 apartments (more than half of which are rent regulated) that compose what is considered one of the last remaining middle class enclaves in Manhattan. The sale, residents worried, would continue a citywide erosion of rent regulations.

But now, Tishman is at risk of default, with the 80-acre property having lost more than half its value. Tenants are unlikely to face rent increases or evictions, according to The New York Times, but they could face a protracted period of reduced maintenance.

One other note: the New York State Supreme Court ruled in October that the owners of Stuy Town and Cooper Village had illegally raised rent and deregulated thousands of apartments. According to NYT, A rent-stabilized 2BR is roughly $1,300 a month, whereas the average market-rate two-bedroom apartment there can fetch $3,179.

Tough Love for TARP

The Congressional Oversight Panel assembled a year ago when TARP was enacted in order to review the regulatory system and financial markets offered some encouraging words, but an overall sobering analysis in October in examining the state of the administration’s efforts to stem foreclosures:

Make your policies work for the crisis as it currently exists, and not as it existed six months ago.

Specifically, the report gives an updated analysis of Making Home Affordable, which comprises the Home Affordable Refinance Program (HARP), aimed at helping homeowners refinance more affordable mortgages, and the larger Home Affordable Modification Program (HAMP), that aims to reduce mortgage payments to keep people in their homes. Those programs, according to the panel’s Elizabeth Warren, have helped “at least temporarily,” and could continue to help in the long term, but, she added, “three major concerns” still haunt the market, as one in eight mortgages is now in default, and foreclosures could rise as high as 12 million in the months to come.

The report documents concerns about the scope and scale of Making Home Affordable, as well as asking if it’s solving the problem, or simply dragging it out. Most worrisome, however, is Warren’s assertion that Making Home Affordable is simply anachronistic at this point, addressing a foreclosure crisis as it existed in March 2009, pointing out that HAMP only helps certainly types of borrowers, like subprime borrowers, but not other foreclosures, like those caused by unemployment—one of the biggest drivers of foreclosure.

Warren also expresses concern about the speed of the programs, saying that foreclosures are expected to outpace modifications by about two to one.

Somewhat softening the blow, however, was data released by the administration the same week as the COP report announcing that its goal of reaching 500,000 trial loan modifications was achieved almost a month ahead of schedule, but with foreclosure filings up 23 percent from a year ago, according to RealtyTrac, that’s hardly reason to cheer, in fact, “the picture’s gotten worse,” Warren said.

Ruling A Step Toward A "Fully Integrated Society"

In August, New York State’s Westchester County entered an agreement that could result in dozens of towns and villages within its borders to aggressively promote fair housing.

The agreement, the result of a suit filed by the Anti-Discrimination Center, was brokered in part by the U.S. Department of Housing and Urban Development, stipulates that the county spend $50 million to get towns to build 750 housing units for low-and-moderate-income residents. Initially, the county claimed getting its towns to change zoning ordinances would be difficult, thus making it even more daunting of a task to build workforce and affordable housing, but the agreement was signed, emphasizing the lack of housing in small Westchester towns for blacks and Latinos. The agreement represents a sea change in philosophy, according to Ron Sims, the deputy secretary at HUD, who told The New York Times that the agreement was “consistent with the president’s desire to see a fully integrated society.”

Livin' Tiny in Texas

At this point, it’s a good thing that we’re getting used to the greening trend in development, as well as in land-use planning, that encourages more energy and economically efficient ways of living. But normally when we think of that, we think of more dense regions, where existing infrastructure, namely transportation, lends itself to increased efficiency. Not so in Texas: a big state where some folks are thinking little.

The Luling, Texas-based Tiny Texas Houses takes a “Salvage Building” concept and creates, well, really little houses, ranging anywhere from 12-foot by 16-foot to 12-foot by 28-foot. Our question is, with those little houses, is placing a shed on your property considered a subdivision?

The Nitpicker’s Guide to Foreclosure Mitigation

First, it was judges like Justice Arthur M. Schack of the New York Supreme Court, who made waves by tossing foreclosure motions because he found a rising level of errors in bank paperwork, largely due to banks’ slicing and dicing nature of selling mortgage loans to outside investors. But now, it’s the homeowner that has made it hard on the bank trying to foreclose. In a semi rebellion known as “show me the note,” banks are being challenged, ever so slightly, when they find themselves legally required to prove that they hold the original mortgage documents before taking possession of a home.

However, it’s basically a means to buy some time. “I am encouraging [homeowners] to stay in their homes [and] go through the court proceedings until the institution in question can produce [the] note,” Ohio Rep. Marcy Kaptur told the Huffington Post in September. Further, there are only a handful of states, including Florida and New York, that require foreclosures to go before a judge.