A new plan to expand federal involvement in housing, a deed thief gets arrested, and Home Depot pays for overcharging customers. From the wild and wooly world of real estate, here are our Hits and Misses for the week of Sept. 16-20.
Miss: AOC Talks Housing. This week, Rep. Alexandria Ocasio-Cortez (D-NY) called for the creation of a new federal entity to build “social housing” and then sell those properties agencies and organizations that would manage them in “permanent affordability.” Ocasio-Cortez, in a New York Times op-ed co-authored with Sen. Tina Smith (D-MN), previewed a new bill called the Homes Act, which would create a “federally backed development authority to finance and build homes in big cities and small towns across America. These homes would be built to last by union workers and then turned over to entities that agree to manage them for permanent affordability: public and tribal housing authorities, cooperatives, tenant unions, community land trusts, nonprofits and local governments.” Hmmm, does anyone remember what Ronald Reagan called the nine most terrifying words in the English language?
Miss: There Ought to Be a Law. Dawn Mangum was arrested this week for filing a fraudulent deed on a mansion in Raleigh, North Carolina, owned by Dr. Craig Adams, a dentist. Adams did not know Mangum and only learned what was happening when his homeowners’ association informed him that Mangum was trying to gain the access codes for the gated community where he lives. Mangum, who attempted to list Adams’ home for sale at $4 million and later claimed that she thought the house was abandoned. But North Carolina law does not allow the Register of Deeds to void Mangum’s fraudulent paperwork, which was approved without verification, and Adams needs to go through an expensive civil court process to correct the record and legally regain his deed. Maybe it is time for North Carolina lawmakers create some new laws designed to prevent this kind of mess from happening again.
Miss: What Took Him So Long? California Gov. Gavin Newsom signed a flurry of bills this week designed to address the state’s housing affordability crisis. The bills reflect a grab-bag of solutions that include a measure to enable duplexes in areas zoned for single-family homes and approval for the construction of accessory dwelling units on the same parcels as existing homes. Newsom also announced the release of guidance on up to $2.2 billion in funding for HomeKey+ permanent supportive housing, with half reserved for veterans, that will be made available ahead of schedule through Proposition 1. While this should be a Hit for addressing the state’s housing crisis, Newsom is presenting this as an example of his administration “taking action to fix the decades-long homelessness, housing, and mental health crises.” The problem is that he is in his fifth year as governor after eight years as lieutenant governor – yes, better late than never, but why was he late in the first place?
Miss: What Took Them So Long? The Federal Reserve announced a 50-basis point reduction on its benchmark federal funds rate, which stood at a 23-year high for the past 14 months. While you might assume this should be a Hit, it scores a Miss for three reasons: (1) Fed Chairman Jerome Powell’s initial diagnosis that Bidenomics-era inflation was “transitory,” which fueled much of the economic chaos; (2) the Fed’s actions came after the other major Western economy central banks had already cut their rates; and (3) the Fed’s oft-repeated insistence of no rate cuts before achieving a 2% inflation level proved to be phony.
Miss: Paying for Dishonesty. This week, Home Depot agreed to a settlement of a civil enforcement claim brought by prosecutors in six California counties that accused the retailer of overcharging consumers. Home Depot was alleged to have engaged in “scanner violations” where shoppers were charged more at the checkout line than what was printed on the item or shelf tag. While it did not admit wrongdoing, the company issued a statement that said, “To ensure consistency for our customers, we’ve updated the timing of our price changes.” It will also pay $1.7 million in civil penalties plus $277,251 as compensation for investigation costs – which may not seem jolting if you consider the company closed the 2023 fiscal year with roughly $22 billion in operating profit.
Hit: Start Spreading the News. Our sole Hit this week involves a generous offering by a certain real estate marketplace that will help the U.S. Department of Housing and Urban Development (HUD) promote awareness of housing counseling services. A HUD spokesperson told Weekly Real Estate News: “HUD is excited to partner with Zillow on its ‘Let’s Make Home the Goal’ consumer outreach campaign, which generates awareness of the benefits of pre-purchase housing counseling services to first-time homebuyers particularly those from communities of color. Through this partnership, Zillow is donating ad space on its digital platforms that will display ‘Let’s Make Home the Goal’ online advertisements at no cost to HUD. Given Zillow’s extensive reach, HUD intends to reach more than eight million prospective buyers through their platform.”
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
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