Mortgage rates haven’t move around a lot this week. In fact, we saw the average rate on a 30-year fixed rate moved a little lower in today’s Freddie Mac Primary Mortgage Market Survey. If you’re considering buying or refinancing, right now could be a great time to lock in a rate. Read on for more details.
[embedded content]
Market Outlook 4.30.17 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Rates continue to hold steady
The trend so far this week has been for mortgage rates to remain in a tight range.
There haven’t been any major news events to really rattle the markets into readjusting their positions.
The Federal Open Market Committee meeting ended yesterday without much commotion, to much surprise to no one.
The nation’s benchmark interest rate–the federal funds rate–was kept unchanged at a target range of 1.5% to 1.75%.
FOMC members did note that inflation is moving closer to their target of 2.0%, as well as some overall improvements to the economy, but that was hardly enough of a change to their written statement to cause a market reaction.
Rates slide in Freddie Mac Primary Mortgage Market Survey
Some good news for anyone looking to buy or refinance right now is that mortgage rates moved lower in the Freddie Mac PMMS this week. Here are the numbers:
The average rate on a 30-year fixed rate mortgage fell by three basis points to 4.55% (0.5 points)
The average rate on a 15-year fixed rate mortgage inched up one basis point to 4.03% (0.4 points)
The average rate on a 5/1-year adjustable rate mortgage fell five basis points to 3.69% (0.3 points)
Here is what the Freddie Mac Economic and Housing Research Group had to say about mortgage rates this week:
“After steadily rising in most of April, average mortgage rates dipped slightly over the past week.
The 30-year fixed mortgage rate declined three basis points to 4.55 percent in this week’s survey. While mortgage rates have increased by one-half of a percentage point so far this year, it has not impacted home purchase demand, which continues to grow this spring. The observed buyer resiliency in the face of higher rates reflects the healthy economy and strong consumer confidence, which are important drivers of home sales activity.
It’s also good news that first-time buyers appear to be having more success so far this year – despite higher borrowing costs and home prices. Our data through April show that first-timers represent 46 percent of purchase loans, up from 43 percent over the same period a year ago.”
Rate/Float Recommendation
Lock now before rates rise
Mortgage rates still look like they could make another decent move higher over the coming months. If you want to avoid the risk of locking in a higher rate, we recommend that you take action sooner rather than later.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
International Trade
The nation’s trade deficit narrowed sharply in March to $49.0 billion. The decline was largely anticipated by analysts.
Jobless Claims
Applications filed for unemployment benefits for the week of 4/28/18 moved up 2,000 to 211,000. That puts the four-week moving average at 221,500.
Productivity and Costs
Nonfarm productivity increased by 0.7% in the first quarter. Unit labor costs rose 2.7%.
PMI Services Index
The PMI services index hit a 54.6 for April.
Factory Orders
Factory orders ticked up 1.6% in March.
ISM Non-Mfg Index
The composite index came in at 56.8 for April.
Notable events this week:
Monday:
Personal Income and Outlays
Chicago PMI
Pending Home Sales Index
Dallas Fed Mfg Survey
Tuesday:
FOMC Meeting Begins
PMI Manufacturing Index
ISM Mfg Index
Construction Spending
Wednesday:
ADP Employment Report
EIA Petroleum Status Report
FOMC Meeting Ends
Thursday:
International Trade
Jobless Claims
Productivity and Costs
PMI Services Index
Factory Orders
ISM Non-Mfg Index
Friday:
Employment Situation
Fedspeak
*Terms and conditions apply.
Carter Wessman
Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.
Here we go with another week. We’re looking at a moderate economic calendar that has the potential to offer some movement for current mortgage rates.
Tuesday and Wednesday are the busiest on the surface, so stay tuned for what happens on those days.
In general, it looks like rates could return to a slow rise this week. Read on for more details.
Where are mortgage rates going?
Rates continue to move sideways as we head into the weekend
It’s a fairly slow start to the week with no significant economic reports scheduled for release today. We did, however, hear from Cleveland Fed President Loretta Mester, who was off giving a speech in Paris.
The historically hawkish Fed President struck a more tone today as she said the Fed should continue its gradual approach towards adjusting the federal funds rate. Here it is in her own words:
“In my view, the medium-run outlook supports the continued gradual removal of policy accommodation; it seems the best strategy for balancing the risks to both of our policy goals and avoiding a build-up of financial stability risks… We want to give inflation time to move back to goal… this argues against a steep path.”
Last week’s string of soft inflation data certainly didn’t play into the Fed hawks’ hands, making it more likely that there will only be two more quarter point increases in 2018.
One of those is widely expected to take place a month from now on June 14, at the upcoming Federal Open Market Committee Meeting.
According to the CME Group’s Fed Funds futures, there is a 95% chance that the federal funds rate will get bumped up to a target range of 1.75%-2.00%.
Mortgage rates aren’t directly tied to the federal funds rate but we do see rates adjust depending on the word out from the Fed.
We’ll hear from a handful of Fed officials this week and the more likely it looks like there will be an aggressive approach toward rate increases, the more upward pressure there will be on mortgage rates.
The yield on the 10-year Treasury note is the best market indicator of where mortgage rates are going. Right now, that yield is at 2.99%, which is two basis points above where it started the day.
That’s some slight upward momentum but not enough to really signal a notable rise for mortgage rates.
Looking ahead to the rest of the week, there are a few important economic reports scheduled for release that financial market participants will definitely have their eyes on.
The two that immediately pop out are Retail Sales and Industrial Production, on Tuesday and Wednesday, respectively.
If those reports show a healthy U.S. economy, mortgage rates could move higher.
Rate/Float Recommendation
Locking now is likely the smart move
The expectation for the coming weeks and months is for mortgage rates to steadily increase as the Fed follows through with its plan for multiple rate hikes.
Given this expectation, we believe it makes sense for anyone looking to buy a home or refinance their current mortgage to lock in a rate now in order to avoid the risk of a higher rate.
It only takes a quick phone call or a couple minutes online to get a free rate quote.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Fedspeak
Cleveland Fed President Loretta Mester at 2:45am
St. Louis Fed President James Bullard at 9:40am
Notable events this week:
Monday:
Tuesday:
Retail Sales
Empire State Mfg Survey
Business Inventories
Housing Market Index
Wednesday:
Housing Starts
Fedspeak
Industrial Production
Atlanta Fed Business Inflation Expectations
EIA Petroleum Status Report
Thursday:
Jobless Claims
Philadelphia Fed Business Outlook Survey
Bloomberg Consumer Comfort Index
Fedspeak
Friday:
*Terms and conditions apply.
Carter Wessman
Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.
There must be something in the water because we’ve been gravitating towards all things a little out of the ordinary lately. It could just be that we’re feeling ready for a little color ourselves these days baby. coming. any. day now!, but we have set our adoration for minimal white interiors aside. These over-the-top energy filled rooms are just feeling so right, right now. With statement pieces of art and in equally statement-making design decisions have our hearts beating double time – they’re exciting, adventurous! When going for a statement, there’s only one rule: go bold or go home, right?!
We love how the colorful modern piece above inspires you to have a strong point of view! The piece adds the perfect touch of playfulness to this masculine study.
A statement wall isn’t complete without statement art. One large piece on a striped wall would have been ballsy, but four fashionable portraits is even ballsier, and we like it!
We love how the art does all the talking in this otherwise muted space. We love it’s low horizon line and unusual off-centered placement.
Speaking of, this oversized piece looks like it barely fits between the molding. And we’re sure that somewhere there’s a design rule that says this “doesn’t work.” But we like it’s rebellious, pushing the boundaries or in this case, molding! placement!
The exaggerated doorway and bold colors below are the perfect match for this jumbo “5.” It makes us re-think where art should live – the answer is everywhere! – and for that we give this design choice a score of 10!
So why not applya bit more fearlessness and grandeur in your decor decisions moving forward? If you have a blank wall that could use a little, or in this case, BIG pick-me-up we say go for – make the big move! You can check out more boundry-pushing decor ideas here!
image 1 via Est Magazine // 2 via Greg Natale // 3 via // 4 via Interior Design// 5 via Red Architecture
Real estate professionals are increasingly opting for virtual house tours to show off their listings as the coronavirus outbreak continues to cause fear in the U.S.
The
move comes as Leonard Steinberg, chief evangelist and corporate
broker at Compass, called for a two-week moratorium on in-person home
showings. Meanwhile, Redfin’s CEO Glenn Kelman has said his
brokerage is canceling all open houses on its listings and limiting
in-person showings to no more than two clients at a time.
Virtual
tours are however proving to be a useful alternative to in-person
viewings, and more agents are turning to them. Some prefer to use
video call software such as FaceTime to walk buyers through their
properties.
“As a virtual tour provider in Washington, D.C., we are seeing an uptick in demand for video and more elaborate virtual tours so homeowners don’t need to have an open house,” Roman Caprano at Sky Blue Media told realtor.com. “In our market, homes sell in days, so any agents typically only invest in photos, but now they are purchasing more content.”
New
York City-based Ideal Properties Group last week launched a virtual
listing viewer called Showing on Demand.
Elsewhere,
the Washington Association of Realtors has announced that the
Northwest Multiple Listing Service has “made the difficult decision
to temporarily disable the public and broker open house feature in
the Matrix system,” its CEO Steve Francks said in a statement.
“Until
at least March 31, brokers will not be able to input, search, or view
public or broker open house information in Matrix,” he added. “Open
house information will not be available for display on member public
websites (IDX and VOW sites). NWMLS will separately contact all
listing brokers who have a scheduled open house to let them know it
has been removed from Matrix.”
Virtual tours used to be the domain of larger and more expensive homes when they first started becoming common, but Keller Williams salesperson David Kong told the New York Post that he’s now offering them to a much wider group of clients. While virtual tours can’t fully replace in-person showings, they do help prospective buyers to evaluate a property better when they can’t visit it physically.
“For
those that are concerned about the virus, this allows them to make a
more informed decision about the property and whether to get out and
go see it,” said Wes Jones, a managing broker with Keller Williams
in Bellevue, Washington, a Seattle suburb
Redfin
has also started posting interactive 3D scans of all of its listings,
so buyers can view them without any health risk. The service also
enables buyers to schedule a video chat tour with the listing agent
for homes sold by other brokerage. Redfin’s agents will discuss the
features of the home as they walk through it, and will respond to any
requests to pan the camera or zoom in on specific details.
As
for in-person home tours, Redfin has issued guidance to its
customers, asking them not to shake hands and practice “social
distancing”, which means staying at least six foot apart from
anyone else present during the tour.
“The reality is real estate is a contact sport,” said Cara Ameer, a real estate professional in California, to realtor.com. “And that means exposing yourself to a lot of potential germs from shaking hands, interacting at open houses, and touching all sorts of doorknobs and light switches multiple times a day. I think we need to adopt a new normal of practices during this period of time.”
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
Experts say the COVID-19 pandemic is forcing employers to reconsider their office layouts, and the open-office style layout may well get the chop.
“While many organizations prepared for employee safety in other ways, the workplace was not designed to mitigate the spread of disease,” Steelcase, a furniture maker, wrote in a newly published brochure called “The Post-COVID Workplace.”
The open office layout has grown more popular over the last couple of decades as it enables firms to squeeze more workers into their workspaces, but with social distancing protocols now the norm, some businesses are said to be reconsidering the lack of walls.
“I think office space is going to change, [and] we will go back to putting shields between people,” Carol Bartz, CEO of Autodesk, told MarketWatch. “I think people are going to want protection.”
As such, it could be that the office cubicle is going to make a comeback. An article in Wired.com recently said: “The cubicle is making a comeback. One of the most important innovations (to reduce transmission) may turn out to be cardboard or plastic dividers that turn open-plan offices into something more reminiscent of the 1980s.”
But not everyone believes a cubicle wall will be enough to prevent the spread of infections such as COVID-19.
“The cubicle wall is not going to be a perfect barrier,” Peter Raynor, professor at the University of Minnesota’s Division of Environmental Health Sciences and director of the university’s industrial hygiene program, told Forbes.com. “It’s going to prevent those larger droplets from passing within six feet of the person in the next cubicle. From that standpoint, they’re good. Probably for the smaller aerosol droplets, the cubicle walls aren’t going to be much of a barrier. They don’t settle very fast, and they can remain airborne for long periods.”
Strangely though, separate offices and doors are not being considered by many businesses, even though they offer far more protection. Instead, more discussions are taking place about improving air circulation in office spaces.
“Generally, if you have more HVAC [heating, ventilation, and air conditioning], you’re going to tend to dilute the virus so there’s less of it to breathe on any given inhalation if it’s present in the first place,” Raynor told Forbes.com. He added that a higher proportion of air from outside, along with higher levels of filtration of recirculated air, could make transmission of the virus less likely.
“Planning paradigms of the past were driven by density and cost,” Steelcase’s COVID-19 brochure stated. “Going forward, they need to be based on the ability to adapt easily to possible economic, climate, and health disruptions. The reinvented office must be designed with an even deeper commitment to the well-being of people, recognizing that their physical, cognitive, and emotional states are inherently linked to their safety.”
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
California-based real estate investing platform PeerStreet, Inc. and 14 affiliated debtors filed for protection under Chapter 11 of the U.S. Bankruptcy Code in a court in Delaware on Monday, citing a challenging mortgage market and struggles to raise capital with venture capital funds.
“Through its bankruptcy filing, PeerStreet will seek to sell substantially all of its assets, including, but not limited to, its mortgage loan assets and technology platform, in a series of transactions intended to maximize value for all of Peer Street’s stakeholders,” the firm said in a statement.
Founded in 2013 by Brew Johnson, Brett Crosby and Alex Perelman, PeerStreet developed a marketplace connecting lenders and borrowers seeking capital to investors looking for real estate-related debt. The business attracted investor Michael Burry, one of the featured players in “The Big Short.”
The company sources loans for private lenders and brokers, which are offered for sale to institutional investors or posted on the company’s online platform. In addition, PeerStreet acts as a master servicer and manages loans on behalf of investors.
David Dunn of advisory firm Province, the chief restructuring officer for PeerStreet, cited in court filings that surging rates, reduced demand for mortgages, and declining institutional buyers’ appetite for below-current-market-rate loans led to the Chapter 11 case.
PeerStreet, which has a subsidiary mortgage lender and servicer, has originated only $5.4 million in mortgage loans in 2023, compared to $385 million in 2022 and $695.8 million in 2021, Dunn wrote. For the 12 months ending December 2022, PeerStreet and the other debtors had total revenue of approximately $37.4 million, down 23.2% from the year prior.
“In addition, in 2022, one of PeerStreet’s historic sources of funding – venture capital – declined markedly. As a result, PeerStreet was not able to access material funding to mitigate the loss of revenue caused by market conditions,” Dunn stated in court filings.
HousingWire reported that PeerStreet raised $30 million in 2018 and $60 million in 2019.
The company attracted big names among its investors, including Silicon Valley venture capital firm Andreessen Horowitz, which ledits Series A funding round of $15 million in 2016. Burry was one of PeerStreet’s first investors in 2015.
PeerStreet and the other debtors had 28 employees when it filed for Chapter 11 on Monday, compared to 281 at the end of May 2022. Its workforce was reduced through four rounds of furloughs and layoffs – May 2022, July 2022, October 2022 and February 2023.
The company asked the court to authorize the payment of $130,000 in unpaid wages and $100,000 to critical vendors, among other requests.
According to the court filings, PeerStreet has an estimated 100-199 creditors, and its assets and liabilities are between $50 million and $100 million. However, as of Monday, the group had $4.4 million in cash – in addition to $18.5 million in its mortgage business.
Piper Sandler will be the broker responsible for selling PeerStreet’s assets.
California-based real estate investing platform PeerStreet, Inc. and 14 affiliated debtors filed for protection under Chapter 11 of the U.S. Bankruptcy Code in a court in Delaware on Monday, citing a challenging mortgage market and struggles to raise capital with venture capital funds.
“Through its bankruptcy filing, PeerStreet will seek to sell substantially all of its assets, including, but not limited to, its mortgage loan assets and technology platform, in a series of transactions intended to maximize value for all of Peer Street’s stakeholders,” the firm said in a statement.
Founded in 2013 by Brew Johnson, Brett Crosby and Alex Perelman, PeerStreet developed a marketplace connecting lenders and borrowers seeking capital to investors looking for real estate-related debt. The business attracted investor Michael Burry, one of the featured players in “The Big Short.”
The company sources loans for private lenders and brokers, which are offered for sale to institutional investors or posted on the company’s online platform. In addition, PeerStreet acts as a master servicer and manages loans on behalf of investors.
David Dunn of advisory firm Province, the chief restructuring officer for PeerStreet, cited in court filings that surging rates, reduced demand for mortgages, and declining institutional buyers’ appetite for below-current-market-rate loans led to the Chapter 11 case.
PeerStreet, which has a subsidiary mortgage lender and servicer, has originated only $5.4 million in mortgage loans in 2023, compared to $385 million in 2022 and $695.8 million in 2021, Dunn wrote. For the 12 months ending December 2022, PeerStreet and the other debtors had total revenue of approximately $37.4 million, down 23.2% from the year prior.
“In addition, in 2022, one of PeerStreet’s historic sources of funding – venture capital – declined markedly. As a result, PeerStreet was not able to access material funding to mitigate the loss of revenue caused by market conditions,” Dunn stated in court filings.
HousingWire reported that PeerStreet raised $30 million in 2018 and $60 million in 2019.
The company attracted big names among its investors, including Silicon Valley venture capital firm Andreessen Horowitz, which ledits Series A funding round of $15 million in 2016. Burry was one of PeerStreet’s first investors in 2015.
PeerStreet and the other debtors had 28 employees when it filed for Chapter 11 on Monday, compared to 281 at the end of May 2022. Its workforce was reduced through four rounds of furloughs and layoffs – May 2022, July 2022, October 2022 and February 2023.
The company asked the court to authorize the payment of $130,000 in unpaid wages and $100,000 to critical vendors, among other requests.
According to the court filings, PeerStreet has an estimated 100-199 creditors, and its assets and liabilities are between $50 million and $100 million. However, as of Monday, the group had $4.4 million in cash – in addition to $18.5 million in its mortgage business.
Piper Sandler will be the broker responsible for selling PeerStreet’s assets.
[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: FBS.]
An employee-owned company with 40 years of MLS experience, FBS serves MLS and real estate professionals with a product suite that includes Flexmls, FloPlan, Spark, and Flexmls IDX.
Flexmls is a fully mobile MLS system with over 274k active subscribers. FBS also provides the Flexmls Academy, a resource center to learn the ins and outs of the platform.
Each year, FBS hosts the FBS summit as an opportunity for MLS leaders to network, collaborate, and learn from discussions focused on the Flexmls platform and other FBS tech. This year’s summit will take place from July 20 – 22.
What we like: Being 100% employee owned is a unique differentiator in a landscape dominated by private equity and venture capital.
On Google Earth it looks like a stunning opportunity: six acres of vacant land surrounded by single-family homes in a West Valley neighborhood.
After being abandoned to shoulder-high weeds for nearly a decade, the former elementary school site in Woodland Hills is now a target for development.
But it’s not being scoped out for million-dollar homes like those around it. Instead, a group of prominent civic leaders has identified the parcel as a prime location for shelter or housing for homeless people.
It’s on a list commissioned by the Committee for Greater L.A. to prod City Hall to use surplus government land for homeless housing.
“If you talked to people in the city … they will argue that it is a myth, that all the land that is available is really not appropriate for this use,” said Miguel Santana, chairman of the committee, which is made up of leaders in philanthropy, business and government.
In releasing a database of 126 proposed sites online, the committee sought to keep up pressure on Mayor Karen Bass to follow through on her campaign pledge to build 1,000 beds on public land in her first year in office.
The study‘s authors said they identified more than enough usable parcels to support 1,000 beds of shelter and permanent housing, and proposed a timeline to produce the housing within six months.
Bass has acknowledged the committee’s work but said she has her own list of properties and her own timeline. And the timeline is longer.
In an open letter, Bass, whose third executive order required the city administrative officer to compile an inventory of city-owned land suitable for housing, said her staff is poring over a list of more than 3,300 parcels and has had preliminary discussions with City Council members to gauge their reaction to specific sites.
She said they have identified sites to accommodate 500 interim housing beds and have submitted them to the state to be part of Gov. Gavin Newsom’s emergency small-homes program. If approved, she said, they could be built by July 2024.
But Bass said she wants to rethink the city’s approach to permanent housing on its lands to develop a “bigger and bolder” program. She set a goal of January 2025 to come up with standards for identifying suitable land, community engagement strategies, provisions for infrastructure investments, new financing methods and innovative approaches to construction.
Advertisement
“My focus over the remainder of my first term in office will be to make the disposition and development of City owned land faster, cheaper, and more streamlined, and to innovate in the financing and delivery of affordable housing without reliance on traditional subsidy methods,” Bass wrote.
While working primarily from the city’s own list, Bass said, she will use the committee’s study to advance her goal of incorporating surplus land owned by regional and state agencies.
The study, conducted by the nonprofit Center for Pacific Urbanism, analyzed variables including slope, zoning and proximity to utilities to winnow down 65,000 parcels owned by city, county, state, federal and other agencies such as Metro and the Los Angeles Unified School District.
Dario Rodman-Alvarez, an architect whose firm Pacific Urbanism founded the nonprofit, said he and his staff then reviewed each of the nearly 2,900 survivors to verify that it would be suitable for a model development consisting of 36 units interspersed with community gardens.
From those, they hand-picked 121 to give officials “enough options to make decisions but not be overwhelmed by the sheer number of options.”
A Times spot check of sites on that list, however, showed how frequently political impediments can confound even the best analysis.
Advertisement
The former Oso Elementary property in the West Valley, for example, has long been a point of community contention. Residents of the area, called Carlton Terrace, said that they want something done with the eyesore — most suggested a park — but that homeless housing would be unacceptable.
“It’s never going to happen,” said Darryl Lutz, a 20-year resident across from one corner of the vacant land. “The homeowners here are heavily involved in local government.”
Joyce Norman, an emergency room physician, said she would not oppose a shelter except that she doubted it would come with adequate services, especially transportation. The nearest shopping is downhill a half-mile away.
“If I were a homeless person, I would want to live near a street with stores,” she said.
Not to mention, the Los Angeles Unified School District may have its own plans for the property. It was included in a 2020 proposal to evaluate 10 properties for development as housing for district employees.
A district spokesperson would not give an update on that proposal, instead providing a statement that the district “is currently evaluating our underutilized properties to help develop a plan that most effectively addresses the needs of our district and the communities that we serve.”
Advertisement
To sidestep possible roadblocks caused by differing governmental agendas, the committee study identified 46 sites, all owned by the city, as highest priority.
But those were not free of roadblocks either.
One — 2.1 acres of vacant land in Sylmar surrounded by a neighborhood of single-family homes, condos and apartments — is already slated for affordable housing, but the first developer chosen by the city backed out, and the Los Angeles Housing Department is again preparing a request for proposals.
“We have been working urgently to ensure this property is used for housing and are exploring options for the best site use with the least amount of downtime possible,” Councilwoman Monica Rodriguez said.
That’s the bureaucratic maze that Bass must cut through.
Her program will not only identify sites but also hand them to developers ready to go, said Jenna Hornstock, Bass’ housing deputy.
“So rather than put out these sites and say, ‘Now go out and entitle them and compete for money,’ it’s, ‘Here’s the site. We either have entitlement or a path to entitlement and here is a financing plan that we will commit to,’ ” Hornstock said.
The idea of using surplus government land to speed up and lower the cost of homeless housing goes back to 2016 when committee Chairman Santana, who was then the city administrative officer, included it in an ambitious plan to address homelessness.
Santana’s office examined more than 500 city-owned properties that found 129 sites potentially large enough and in suitable zones for homeless housing. All but 10 were city-owned parking lots.
Few of them worked out.
Advertisement
When then-City Controller Ron Galperin reviewed the topic in a 2022 report critical of the city’s “fragmented” management of surplus land, he found that 11 of the city’s bridge home shelters and 16 projects in development under the city’s $1.2-billion HHH housing bond were on city-owned land.
Bass, in her letter, said 14 more are in design or negotiation, but concurred that it was not enough.
Galperin highlighted 26 city-owned properties that he considered suitable for shelter projects, either bridge housing, safe parking, safe sleeping villages or tiny home villages. But like the earlier study, it was heavily weighted with parking lots.
Public parking lots, which also make up slightly more than half of the committee’s priority list, are often problematic because they serve local businesses and generate revenue for the city.
One parking lot on the list is in the business core of Leimert Park. Converting it to housing would only exacerbate a lack of adequate parking in the “Mecca of Black culture in Los Angeles,” a spokesman for Councilwoman Heather Hutt said in an email reply to The Times.
“Councilwoman Hutt cannot support homeless housing on these parking lots because the community will never support it,” the statement said. “The residents have demonstrated a strong commitment to preserving the authenticity and character of Leimert Park, and the parking lots serve that authenticity and character.”
Advertisement
At the other extreme, a city parking lot on 87th Street a block east of Broadway has no current value to the depressed business district where several vacant lots and abandoned buildings are owned by an investor who has held them since the 1990s and rebuffed all suitors.
Councilmember Marqueece Harris-Dawson, who said he rejected all the other sites the mayor suggested, would like to put housing on that lot, and another one west of Broadway, but only if the city would seize the adjacent privately owned properties to provide space for more units.
After years of unsuccessful overtures to the property owners, Harris-Dawson said he is ready to reconsider the city’s long-standing reluctance to use eminent domain.
“You could make a village there,” he said.
With a district dotted with privately owned vacant lots, Harris-Dawson said he thinks there are far more appropriate options than the few government parcels.
The Pacific Urbanism study acknowledged the potential of privately held land and included five examples, including the parking lot at Hebrew Union College and the expanse of parking around Dodger Stadium.
Some organizations, such as churches, may be open to using their land for purposes that align with their mission, it said, but made no mention of eminent domain.
Advertisement
“For every public lot that’s vacant, I can take you to two privately held lots that are as good or better for housing,” Harris-Dawson said. “We literally have people living in the streets. Maybe after 35 years we intervene and help you find a different investment to make.”
By publishing its study, the Committee for Greater L.A. intends to force public officials to be more transparent, said committee member Sarah Dusseault, a former commissioner of the Los Angeles Homeless Services Authority.
“If you want to keep this surface parking lot as a surface parking lot because it earns $20,000 a year, God bless,” Dusseault said.
“But you should be transparent about that as a policy choice instead of the policy choices being in the dark.”
A few weeks back, I wrote about having a financial health day at work. With the help of some of my Foolish colleagues, we’ve created a PDF that outlines how to host your own financial health day at work, including a checklist of what to consider accomplishing during the day.
As you’ll read, a key component of the financial health day was classes taught by experts we invited to Fool HQ, including several fee-only financial advisors from the Garrett Planning Network. Which brings us to the topic of today’s post: how to pay for help from a financial professional. It all begins with my experience as one myself.
My Short Life as a Stockbroker
Way back when (in those crazy, hazy, dot-com-zy days of the 1990s), I put on a suit every workday and headed to the offices of Prudential Securities, where I was a (very junior) member of team that managed $200 million. I started off as essentially an office gopher, and ended up being a licensed broker in a span of about two years (at which point I left to join The Motley Fool).
The term “broker” is important; it means I earned commissions for sales of stocks and mutual funds. I also was a licensed insurance agent, and earned commissions for selling insurance products such as annuities.
Now, the fellows I worked work were smart and ethical, and I’d trust them with my own money. And they’re not the only good brokers in the industry; I know plenty of them. But I saw enough to know that this is an industry driven, first and foremost, by people who want to make a lot of money for themselves. That money doesn’t materialize out of thin air; it comes straight from their clients’ accounts and into their own.
As part of my training, I spent three weeks in New York City. During the day, we heard from various representatives of the firm’s departments — the bond desk, the equity analysts, etc. We weren’t being taught how to choose better investments for our clients; it was more of an introduction to how the firm worked. Then, we’d learn sales techniques. At night, we practiced them by making cold calls while instructors listened in, giving us advice after the call on how to provide more “sizzle.”
When I joined the firm, I thought I’d be getting “the keys to the kingdom” in terms identifying the best investments. After all, this is a big-name Wall Street firm; they surely knew how to beat the market. Alas, it was not true. I learned more about investing from reading a collection of good books than I did from Prudential’s training. What I did learn was that recommending certain investment products resulted in a bigger payday for the broker than recommending others — regardless of what was best for the client — and that many brokers weren’t able to overcome (and loath to disclose) this conflict of interest.
The Fee-Only Way
Is there a way to get financial help without this conflict interest? Yes, there is — by hiring a fee-only financial advisor. Such an advisor gets paid by the hour, by the project, or — if they will be managing your money — as a percentage of the assets under management. These folks have just one incentive: provide good advice. You know they will recommend what they really think is the best course of action, because they get paid the same no matter what they recommend.
Here are a few other reasons why I like fee-only planners:
If you walk into your local Merrill Lynch, Morgan Stanley, or some other brokerage, the advisor you speak with will care mainly about your investments, and maybe your insurance, because that’s how they get paid. (Don’t expect much guidance on the money in your 401(k), because they can’t get paid for providing advice about that.) Fee-only advisors, on the other hand, take a look at the whole picture, from debt to cash flow to employee benefits to estate planning.
Many fee-only planners will work on an as-need basis. Perhaps you just need help answering one or two questions, such as whether you’re saving enough for retirement. Or you’d like to continue handling your own finances, but you want an objective second opinion to make sure you’re on track. An hourly fee-only advisor can help you. It’s not exactly cheap — approximately $150 to $200 an hour. But not spending that money can be hundreds-wise but thousands-foolish.
Fee-only planners tend to have professional designations, such as Certified Financial Planner or Chartered Financial Analyst. Plenty of brokers have those designations, too, but not as many, percentage-wise. Such a designation doesn’t guarantee good behavior or perfect advice, but it does mean the advisor knows enough to pass very rigorous exams and fulfill continuing education credits, including classes in ethics.
Most fee-only planners are fiduciaries, which means they are legally obligated to put their clients’ interests first. Surprisingly, and appallingly, the typical broker is not a fiduciary, and is held to a lower standard. I won’t bore you with all the legalese, but it has been in the news lately since it’s a part of the debate about financial reform. Just know that it’s a topic you should research and bring up with any financial advisor you consider hiring.
Where do you find such a fee-only planner? The Garrett Planning Network is a start. Visit their locate an advisor page and click on your state to see if there’s an advisor in your area. (In the interest of full disclosure, and revealing my own conflicts of interest, The Motley Fool has a partnership with Garrett, but no money has changed hands. It’s more of a “we like each other, so let’s spread the good word about each other” type of arrangement.) Another option is the National Association of Personal Financial Advisors, or NAPFA. Finally, you can use the PlannerSearch tool of the Financial Planning Association, and specify “Fee Only” under the “How Planners Charge” link.
Fee-only advisors are independent, and have their own ways of doing business. So not every fee-only advisor will manage money, and not every one will work on an hourly basis. Determine what you need, and find an advisor who will work on your terms — and put your interests first.