A report from WFLA in Florida. “Donald Delorme lived in his Pasco County home for more than seven years. Then, a salesman knocked at his door and offered something that sounded like a great deal. Delorme decided to sign up. ‘Because there were a few things that we needed to fix with the house,’ he said. Through a program offered in Pasco County known as the Florida Pace Funding Agency, he received new windows for his home and a new air conditioning unit. PACE is a program run through the state that is designed to help Florida residents strengthen their homes against storms. Delorme said he didn’t fully understand what was being offered and at what cost. ‘We had everything installed and that’s when we started getting the bills. It increased my taxes five fold. My taxes went from $500 a year to $2,500 a year,’ Delorme said.”
“Under the program, the loan from Florida Pace Funding Agency is attached to a homeowner’s tax bill. In Pasco County, records from the tax collector show nearly 300 people are behind on taxes because of PACE, and 24 people have lost their homes because of it. Delorme lost his home in 2020 because of back taxes. ‘I’m just a little guy here you know, I’ve lost everything,’ Delorme said.”
From CNN. “After the 2018 Camp Fire – the deadliest wildfire in California’s history – engulfed Michael and Kristy Daneau’s Paradise home, the couple and their four daughters were forced to move 30 miles away to find a home they could afford. They moved to Cohasset to buy a home with money they received through their insurance claim and their portion of an $11 billion settlement. Six years later, the family’s experiencing déjà vu: Their new home in the rocky region of northern California recently burned down to the studs in the 2024 Park Fire, the fourth largest fire in the state’s history.”
“But this time the Daneaus don’t have the safety net of insurance to help them rebuild their lives. When they moved to Cohasset, they were denied homeowners insurance from every company they contacted, citing wildfire concerns, and when they finally found an insurer that would offer them a plan, they couldn’t afford it. They were priced out – uninsured in a state prone to natural disasters. And now they are left with, essentially, nothing. ‘I’m personally so numb that I just can’t wrap my head around where we’re going to go, what we’re going to do. How do we go from here knowing that we’ve built a beautiful life for us and our kids, and now we have literally nothing,’ Michael Daneau said.”
Westword in Colorado. “Mayor Mike Johnston held another Community Conversation, this one focusing on affordability, in north Denver last week. Nita Gonzales told the mayor that she has been building an ADU for a year and a half, and it will be the only thing that keeps her in Denver. But the process has been pricey, and she wants the city to pour more resources into helping residents through it. ‘It is very difficult for me to get the refinancing to build an ADU that me and my husband will age in place in so that my daughter, who’s a teacher, can live in my house. That’s what we would like to do. That’s how we’re going to afford to stay in Denver,’ she said. ‘You’d better figure out how to use your bully pulpit to bring those finances to the table.’”
“In their comments on the Westword Facebook post, other residents have plenty to say about the city’s efforts regarding ADUs…and affordability in general. Responds John: ‘Oh, my, I overextended myself and my credit, I cant afford my house unless I rent. Sounds like a bad business plan to me. Or something is broken.’ Adds Leenie: ‘That is BS!! You already have the house — get a roommate or two if you want residual income. You don’t need to build a tiny home in your even tinier backyard. They are ugly and will remain unkempt. I personally would never buy a home with one.’ Counters Audrey: ‘Never mind housing prices have doubled (along with property taxes, homeowner’s insurance and building supplies) in less than a decade. Let’s just assume it’s people overextending their credit the mortgage company qualified them for instead.’ Notes Eric: ‘Wah! City of Denver! Fund me! Fund me! Give me some money!’”
The Daily Mail. “Brad Sumrok, aka the ‘Apartment King’, is all tan, smiles, and white teeth as he launches into a typical sales pitch. At one of his glitzy networking events in Dallas, he claims to have ‘created over 600 millionaires’ by coaching everyone from doctors to warehouse workers in how to invest in commercial real estate. Never, he adds, has he ‘lost anyone’s money.’ Sumrok, a 57-year-old salesman from Texas, has been credited with driving the business known as apartment syndication to new heights, creating a generation of landlords who now own tens of thousands of apartment buildings worth billions of dollars.”
“He and his ilk have been blamed for driving property prices out of reach of first time buyers. But now his bubble may be about to burst. Amid soaring interest rates, some of his students have overstretched themselves and cannot afford the massive loans they took out to finance their spending sprees. Millions of dollars of investors’ money has already been lost after buildings bought by Sumrok disciples fell into foreclosure. Sean Tate, a Dallas-based real-estate attorney who worked with dozens of Sumrok students to structure syndication deals, said bringing together so many inexperienced investors and was ‘a recipe for disaster for a lot of honest, hard-working people.’”
“Deals went south primarily because of market conditions, underprepared syndicators, inexperienced operators, and an over-eager lending market,’ he said. ‘It’s just about greed and wanting quick cash. That allure and temptation took over. Their noses were just sniffing green.’ As for Sumrok, he is already sniffing the next opportunity. ‘Get ready for distressed deals galore!’ read a post on his Instagram in May last year. He told his almost 14,000 followers: ‘There’s going to be a lot of distressed deals coming down the pipeline. A lot of people got into variable rate loans of 3 per cent, and now they’re 7 per cent. They didn’t budget for the rise in their debt payments. They didn’t budget for these short term loans becoming due and not being able to refinance.’”
The Wall Street Journal. “Kamala Harris on Friday floated a panoply of government subsidies to make housing more ‘affordable.’ The plan goes as follows: Subsidize Americans to take out bigger mortgages. If they can’t repay them, no worries—Ms. Harris will simply wave the payments away. The Biden administration is already doing this on the sly, which is a major reason housing prices have grown at more than twice the overall inflation rate since the start of the pandemic. About 70% of single-family mortgages are guaranteed by federal agencies or government-sponsored enterprises such as Fannie Mae and Freddie Mac, which are regulated by the Federal Housing Finance Agency. Ms. Harris wouldn’t need Congress to subsidize home buyers. The Obama and Biden administrations have done so merely by easing credit standards and reducing costs to borrowers for government-backed mortgages.”
“The Federal Housing Administration—which insures homes for lower-income and first-time buyers with down payments as low as 3.5%—cut mortgage premiums in 2015 and 2023. This increased buyers’ purchasing power by a combined 10.5%, according to the American Enterprise Institute’s Ed Pinto. It also pushed up home prices. The feds have also enabled riskier buyers to qualify for bigger mortgages. The Consumer Financial Protection Bureau in 2013 effectively barred lenders from issuing mortgages to those whose total debt payments would exceed 43% of income. Yet the CFPB rule exempted government-backed mortgages.”
“As home prices rose, lenders issued mortgages to buyers with increasingly more debt. About 70% of recent Federal Housing Administration loans and 40% of mortgages backed by Fannie and Freddie have debt ratios that the bureau considers risky. That’s up from 30% and 16%, respectively, in 2012, according to an analysis by Mr. Pinto. Meantime, Fannie and Freddie have allowed buyers to take out mortgages with down payments as low as 3%. Harking back to the bubble days of the mid-2000s, personal gifts, lender assistance and government grants can count toward the amount. Some lenders are letting buyers take out second mortgages to make down payments.”
“Now, however, many homeowners are struggling with high inflation and debt payments. Hence the Biden administration game of ‘extend and pretend,’ the suspect practice of modifying mortgages to avoid defaults and foreclosures. The FHA rolled out a ‘home retention’ plan last winter that covers the late payments of delinquent borrowers and up to 25% of the principal and interest on monthly payments for three years. Not to be outdone, the FHFA in May instructed Fannie and Freddie to extend the duration of mortgages and cut principal and interest payments by 20% for homeowners facing ‘hardships.’ According to Freddie, that includes ‘reduction in income,’ ‘unemployment’ and an ‘increase in housing expense due to circumstances outside the Borrower’s control (e.g., uninsured losses, increased property taxes, or an HOA special assessment).’ No documentation required.”
The Globe and Mail. “There are signs that first-time buyers are souring on condo living. Still, a condo is the only affordable option for many first-time buyers, particularly in Canada’s most expensive housing markets. The average square footage of a condo peaked in the mid-1990s at roughly 1,100 square feet; in 2022, the average was about 700 square feet, which is roughly the size of a large one-bedroom apartment. Rose Calvelo, a realtor with eXp Realty in Calgary, said many of the first-time buyers she works with are frequently worried about monthly condo fees and the risk of facing a special assessment, a charge all condo owners in a building must pay if there are unexpected repairs or a shortfall in the condo’s reserve fund.”
“Ms. Calvelo says small units are coming to the Calgary market, a function of a drastic increase in the cost of development. ‘Developers are building matchboxes and charging a lot per square footage, and the quality is not the same,’ she said. Sean Miller, a realtor with Property.ca in Toronto, said the first-time buyers he works with are much more hesitant to buy. ‘Anything was selling [before] – a unit facing a brick wall, or the garbage dump, or a train track, with a terrible layout, no room to put your couch, and it was selling instantaneously. And now those aren’t really selling,’ he said.”
The Peterborough Examiner in Canada. “Residents of Burnham Meadows are caught in the middle of a multi-front battle over responsibility for unfinished roads and bylaw enforcement in the partially completed subdivision. Between the developers, township councillors, and the pigeons and rats who have made their homes in the unfinished structures on nearby lots — and feast upon the uncollected trash in dumpsters allegedly left behind by the developer Safe Harbour Inc. — the human residents of the development seem always to be on the losing side as they await answers.”
“When Mike Heffernan moved into his home on Veterans Road in 2021, before his home was even completed, he and his family began to notice something was desperately wrong. He now contends there are approximately 100 families being affected to some extent by the alleged financial mismanagement that has left many in limbo as they await further negotiations between the township and lenders. After discovering mould in late 2022, Heffernan moved his family out of the house for six and a half weeks while it was almost completely rebuilt, he recalled. ‘Our insulation was found to be poisonous and illegal, so they had to rip that out,’ he said, adding that the roof and the floor joints of his new home were also found to be unsuitable and that the plans for the homes did not end up matching the final designs.”
“As the process of selling the unused lots works its way out through the necessary channels, Heffernan and his neighbours feel they have been left holding the bag. This includes paying full taxes while not receiving municipal services beyond garbage pickup. Anything beyond that basic service, including general road maintenance, snow removal, and yard waste pickup is not currently being undertaken by the township.”
Radio New Zealand. “There are growing calls for regulation on Waiheke Island to ensure there is affordable rental housing for long-term residents, as increasing numbers of homeowners instead rent their properties to short-stay tourists. The island in the Hauraki Gulf has the fourth highest homeless population of any local board in the Auckland region, despite having one of the lowest overall populations.Dr Pam Oliver, an independent social researcher and long-term Waiheke Island resident, said other popular destinations had effectively mitigated similar issues in recent years without destroying their tourism industry.”
“‘We’re not saying we want tourists all go away. The issue is that there is a massive oversupply of short-stay accommodation and there are places remaining empty all of the time,’ she told Checkpoint. ‘Communities can’t survive without the ability for people to rent. The survival of the local community [depends on] people’s ability to live somewhere close to where they work. In 2018 in the last census, 38 percent of Waiheke Island homes were unoccupied and the number has almost certainly risen since then,’ Oliver said. ‘In April this year, our local newspaper the Gulf News did a review of homes to let on the island that found there were only nine places available for people who wanted long-stay accommodation, and there were 698 Airbnb listings. [The nine] houses that were available weren’t affordable.’”
News.com.au in Australia. “Frustrated home seekers have been thrown a lifeline following an unusually large jump in property listings over July, with the greater choice of housing set to ease buyer competition and moderate prices. PropTrack director of research Cameron Kusher said both Sydney and Melbourne were now becoming ‘buyer’s markets’ – the former after being an extreme ‘seller’s market’ for much of 2023. Melbourne was a particularly good market for buyers, he said. ‘It’s probably the easiest (capital city) market to buy in at the moment,’ he said.”
“Mr Kusher attributed the rise in national listings partly to the Reserve Bank’s decision to delay an interest-rate cut. This ‘forced the hand’ of struggling homeowners who had been waiting for some repayment relief, encouraging them to sell, he said. ‘There was an expectation that rates would be cut this year and some homeowners were probably waiting that out,’ Mr Kusher said. ‘Now that a cut looks more likely next year there are homeowners who can’t hold on any longer and they’re choosing to sell. Most homeowners will try to sell their home or divest before they get into arrears.’”