HUD’s new priorities, Gavin Newsom’s financial benefactors and a pair of high-profile acquisition stories – one genuine, one not. From the wild and wooly world of real estate, here are our Hits and Misses for the week of March 10-14.
Hit: DEI is DOA. Kudos to Housing and Urban Development (HUD) Secretary Scott Turner for his tough love approach to the City of Asheville, North Carolina, which submitted a plan for distributing Hurricane Helene disaster relief funds that prioritized assistance to minority- and women-owned businesses. Turner rejected the request and faulted the city for creating a “draft action plan incorporated DEI criteria to prioritize some impacted residents over others, which was unacceptable.” The city got the hint and is creating a new plan, while Turner declared, “Once again, let me be clear DEI is dead at HUD.”
Hit: The Right Call. HUD is also reportedly planning to end the $1 billion Biden-era Green and Resilient Retrofit Program that provides grants and loans to owners of affordable housing to cover the replacement and repair of heating and cooling systems, leaky roofs, aging insulation or windows, and the undertaking of floodproofing. HUD has yet to confirm this story, which was first reported by the Associated Press with the wildly incorrect headline “Affordable housing threatened as Trump halts $1 billion slated for extending life of aging buildings.” Of course, there is no threat to affordable housing – property owners that need to finance these projects can choose from any number of banks, CDFIs or fintechs that will be happy to provide loans. Thankfully, HUD will no longer act as an ATM where anyone can push a few buttons and receive a load of cash.
Hit: A Book Worth Reading. Susan Crabtree and Jedd McFatter’s new book “Fool’s Gold: The Radicals, Con Artists, and Traitors Who Killed the California Dream and Now Threaten Us All” offers some unpleasant insight regarding why California Gov. Gavin Newsom never went after Pacific Gas & Electric (PG&E) after the utility’s negligence led to the November 2018 Camp Fire that burned over 153,000 acres, destroyed 13,500 homes and killed 85 people. The authors stated the Newsom and his filmmaker wife “have accepted at least $700,000 in donations from PG&E. The funds went to Newsom’s many campaign coffers and his wife’s gender-justice films, at least one of which was screened in PG&E’s corporate San Francisco skyscraper in 2011.” The governor opted to sue oil and gas companies by declaring they bore responsibility for the wildfires due to their alleged role in climate change. Let’s hope more people read Crabtree and McFatter’s book, which was published this week.
Hit or Miss: Redfin into Rocket. This week, Rocket Companies announced its acquisition of the brokerage Redfin for $1.75 billion. Rocket CEO Varun Krishna claimed the combined companies “will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers.” Whether this is a genius move or the wrong union for Rocket remains to be seen – Redfin hasn’t been the epitome of financial health and strength for some time. Nonetheless, real estate professionals and mortgage lenders may need to rethink their marketing in the face of a newly behemothic competitor.
Miss: Fact Check, Please. Perhaps the strangest story of the week involved the Wall Street Journal’s article that Compass was reportedly negotiating for the acquisition of Berkshire Hathaway’s Homes Services of America, part of the Warren Buffett corporate empire. It was certainly a jolting news item, coming on the heels of the Rocket Companies-Redfin deal. However, HomeServices President and CEO Gino Blefari stated the Journal’s coverage was wrong. “No such sale is being contemplated,” said Blefari in a message to his franchisees. We reached out for a comment from Journal reporters Nicole Friedman and Lauren Thomas, who broke the story yesterday, but we have not heard back from them.
Miss: Condoning Violence. A big thumbs down to MSNBC host Alicia Menendez for misreporting destructive vandalism against Tesla dealerships, automobiles and charging stations as benign acts of “protest” against Elon Musk and the Department of Government Efficiency. On Tuesday’s broadcast of “MSNBC Prime,” Menendez took umbrage at President Trump’s suggestion that the violence directed at the company, its property and its clients could be considered as domestic terrorism. Said Menendez: “So, just to be clear, you protest a private company, you are labeled by this administration a domestic terrorist.” Uh, setting fires, breaking windows, damaging vehicles and spray-painting swastikas on commercial properties because you don’t like the politics of the company’s chief executive are not examples of a “protest.” It’s no wonder MSNBC’s relevance has been deteriorating.
Phil Hall is editor of Weekly Real Estate News. He can be reached at phil@wrenews.com.
Photo: Kevin Baird / Flickr Creative Commons
