A weekend topic starting with the Real Deal. “When long-standing rules for negotiating broker commissions were thrown up in the air, buyers were left hanging with questions on how mortgages will factor into the revamped process. Mortgage giants Fannie Mae and Freddie Mac are among those clarifying policies regarding how commissions could impact loans, Inman reported. While the seller side of a transaction is coming into focus, however, the new norms awaiting the buyer side remain elusive. Fannie and Freddie told lenders that sellers may continue to pay buyer agent commissions, as is standard, and that those payments won’t count against limits for ‘interested party contributions.’ Fannie and Freddie restrict IPCs, or concessions that may benefit interested parties if homes sell for especially high prices, to between 2 and 9 percent of the property’s value. That protects lenders vulnerable to buyers paying more than a home’s actual worth, as buyers with home equity are less likely to be foreclosed upon.”

“The Department of Housing and Urban Development appears to be in lockstep with Fannie and Freddie regarding FHA loans. HUD said sellers can pay buyer’s agent fees without that counting as a seller concession. One proposal on the table would see Fannie, Freddie and the FHA gain the power to guarantee loans slightly exceeding the appraised value of a home, so long as excess funds are used to pay non-recurring closing costs such as commissions.”

CBS Bay Area in California. “Sonoma County supervisors on Tuesday took the unusual step of voting to reduce taxes on cannabis production, recognizing that the industry has hit hard times. While the tax cut will help, legal weed growers argue if county legislators really wants pot cultivation businesses to survive, they shouldn’t be taxed at all. Erich Pearson ducks into his Glen Ellen cannabis nursery to examine the rows of potted plants used as growing stock for next season’s crop. When Erich Pearson’s company SPARC began operating, he figured officials were overestimating what the value of cannabis would be to Sonoma County. ‘The industry is not the pot of gold that they thought it was in 2016 when they began to contemplate these taxes,’ said Pearson.”

“‘I mean, originally, this was going to be a cash cow. And it’s not,’ said board chair David Rabbitt. ‘And that’s true for everyone. But be careful what you wish for, I guess.’”

The Los Angeles Times. “Times are getting increasingly tough for many of California’s wine grape growers. More recently, a tectonic shift in generational drinking habits has led to a global glut of wine. Here in the heart of San Joaquin County’s prized wine country, thousands of tons of unpicked grapes cling to abandoned vines, and piles of gnarled wood and wire mark vast, uprooted vineyards. Wine, once the height of boomer culture and conspicuous consumption, has lost its cool among young, more frugal and health-conscious potential customers, many of whom prefer cannabis over Cabernet, experts say. In France, the government is spending more than $200 million to destroy excess wine amid plummeting demand. In Australia, vineyards have been forced to stockpile two years’ worth of production due to lack of buyers.”

“Emergency requests for vineyard removals have exceeded the capacity of heavy equipment operators to complete them. ‘I have so many incoming work orders I’ll never get them done,’ said Donald Wortley, 80, a general contractor who has removed vines for growers in Lodi for 50 years. ‘The situation in Lodi wine country is tragic — almost every grape grower in the region is in trouble. Every vineyard you see that was not harvested means that the owner worked that year for nothing. I fear we will soon start seeing bankruptcies.’”

“Lodi Winegrape Commissioner Stuart Spencer claimed that every retailer and grocery he visited in the past few months had their shelves stocked with foreign-sourced bulk imports. ‘And all the while many retailers proudly proclaim their support for our local farms,’ Spencer said. ‘In no world does it make sense to ship bulk wine from across the globe to sit on a shelf in Lodi while thousands of tons of California wine grapes go unharvested and local growers remove family vineyards and take out loans to pay their farming bills.’”

“Greg Lauchland, 30, whose family has been growing wine grapes in the Lodi region for 104 years, described the situation as ‘a slap in the face.’ ‘It was a tough decision to make for longtime wine grape growers like us, but we planted 130 acres with almonds in October,’ he said. In March, Sacramento-based Blue Diamond Growers, a cooperative of almond growers, eliminated 38 corporate jobs as part of an effort to remain cost efficient amid challenges including an oversupply of almonds and shifts in consumer shopping patterns.”

Market Place. “Something has happened to the film and television industry over the last two years: Many of the jobs it creates have moved from its traditional centers in Los Angeles and New York City to the rest of the country. According to Bureau of Labor Statistics data crunched by our partners at APM Research Lab, employment in ‘motion picture and sound recording’ has grown nationwide, but the share of workers in LA or New York went from just under half at the beginning of 2023 to just one-third earlier this year. Hollywood was in something of a production bubble. Chasing the success of Netflix, tons of companies set up streaming services in recent years, banking on demand from subscribers. To entice them, they filled their platforms with new shows and movies. All this activity peaked in 2022, when 600 original scripted shows were in production, according to the network FX. That gave lots of opportunities to everyone who makes a film shoot possible.”

“But it didn’t last. ‘When the beginning of 2023 happened, it seemed like there was this chill on production and making things and buying things,’ said Janie Haddad Tompkins, who describes herself as a ‘journeyman actor.’ Investors started feeling the effects of rising interest rates. ‘Wall Street just got significantly less patient with the spending by the studios on streaming platforms as soon as money started to be more expensive,’ explained Patrick Adler, an assistant professor at the University of Hong Kong and head of the consulting firm Westwood Economics.”

The Desert Sun. “The future of a long-delayed luxury resort in La Quinta called Talus is in doubt once again, as a major lender threatened this week to foreclose on parts of the property. And on Wednesday, following the lender’s sale notice, the city took steps to protect its interests and issued a notice of default against the developer, although city officials say the project could still get back on track. The city announced the default notice against the SilverRock Development Company, as well as project leader Robert Green, just a day after the council received an update on the project from City Manager Jon McMillen that largely focused on the company’s efforts to finalize the financing for the $600 million project by late May.”

“The default notice — which marks the third issued by the city against the development company — was issued the same day that Cypress Point Holdings, a corporate investment firm for Talus, recorded a notice of trustee’s sale against Green and his company and scheduled a foreclosure sale. While some of the standalone Montage-branded homes have been built at the site, construction has slowed significantly until the additional funding is finalized, with work on most of the buildings paused since late 2022. The project has also drawn criticism from neighboring residents, with more than 300 people recently signing an online petition that raises concerns about blowing dust coming from the project. Only one resident, Ron Holmes, spoke during the council’s discussion Tuesday, saying it ‘sounds like a leap of faith that a lender is going to come in and bail them out.’”

The San Francisco Standard. “With a $54 million loan from Bank of America coming due for its downtown San Francisco building at 115 Sansome St., the Vanbarton Group held a private auction last December to help the bank recoup whatever money it could get back. More than 20 bids came in for the restored 14-story beaux-arts building. But lo and behold, the winner of that auction ended up being none other than Vanbarton itself. The final price came in at around $35 million—nearly 40% off the original loan amount and 60% less than the New York investor’s original 2016 purchase price of $83 million.”

“Gary Kaplan, a partner at Farella Braun + Martel LLP who specializes in restructuring and bankruptcy issues, explained that in most cases, lenders are loath to take back and operate commercial buildings themselves. ‘They just want to get paid,’ Kaplan said of lenders, and because commercial deals are mostly transacted through limited liability companies, recouping value on the property is their only recourse. ‘The figures that borrowers and owners got [before the pandemic] are not as relevant anymore as the facts on the ground,’ Kaplan said. ‘Forget about the original money, it’s gone.’”

The San Francisco Chronicle. “A building in San Francisco’s SoMa neighborhood once known as a hotbed for tech startups just sold for around a fourth of its 2019 price. Once described as hosting a ‘start-up village,’ the four-story building at 410 Townsend St. near a Caltrain stop just sold for $22 million, according to real estate firm CBRE, which facilitated the sale. At that price, New York Life Real Estate Investors and investment firm Bridgeton purchased the building at nearly a fourth of the $86 million it fetched in 2019.”

ABC 7 San Francisco. “The taxi industry in San Francisco continues to experience hardship even after the pandemic. The closures of downtown businesses and fewer conventions have aggravated the situation even further. Taxi medallions look like a mini license plate. Once worth tens of thousands of dollars like fool’s gold, today they are a nearly worthless investment after ride sharing companies came online. ‘They took all of our business and our business is dead completely 100%. We don’t have any business and most of the drivers leave the taxi business because they don’t make money,’ expressed Wahab Al hindawi, a medallion holder.”

“Taxi drivers who paid for their medallions had taken out loans. But with business down and a worthless medallion, many stopped paying, damaging their credit. ‘It’s safe to estimate that about 300 of those medallions sold through the program have been foreclosed on,’ revealed Marcelo Fonseca, who also owns a medallion. Ibrar Ahmed is one of those medallion owners who dished out $250,000. Today, he is still trying to pay off his loan while struggling to meet ends meet. ‘They don’t think we are human beings. If they spend $1 billion on the homeless, they should give us a break on the medallion price,’ added Ahmed.”

The Union Tribune. “March was the 24th consecutive month the number of homeless residents connected to housing was eclipsed by the number of people who lost a place to stay for the first time, according to a new report from the Regional Task Force on Homelessness. There were 1,226 people housed, while 1,337 became newly homeless. ‘There’s just not enough housing at a price point that people can afford,’ said Jennifer Nations, managing director of the Homelessness Hub research lab at UC San Diego. ‘This is especially evident in the numbers of first-time homeless,’ she added, many of whom are older adults.”

“A growing body of research has found that areas with high costs of living tend to have more people on the street, and the city of San Diego recently logged some of the highest rents and the biggest jump in home prices nationwide. Combine that with addiction and mental health struggles — a survey last year found around a fifth of those without shelter had a substance use disorder and more than a quarter reported serious mental health diagnoses — and the ripple effects are profound.”

“‘It’s horrible,’ Moe Girton, owner of the Hillcrest restaurants Gossip Grill and Barrel & Board, said about nearby encampments. Sidewalks were stained with feces. Needles could be found by asphalt. A man had recently tried to burn down one of her buildings, she added. Stefan Chicote, general manager of the nearby restaurant Baja Betty’s, said confrontations with unstable passersby had led him to hand out pepper spray to staff. ‘It feels like nobody’s on our side.’”

“Perhaps no recent case better embodies the ways living outside can intersect with crime than the death of a 41-year-old earlier this month in El Cajon. Police said both the victim, a man found with ‘blunt force trauma,’ and the alleged killer, a 37-year-old arrested last week, were homeless. People are dying from fentanyl and hypothermia and heart disease. A decade ago, around 150 homeless individuals died annually, according to the county medical examiner. Last year, the toll was 624, an average of one person every 14 hours.”

The Mercury News. “On the heels of a new state audit that found California has failed to consistently track and assess the effectiveness of its billions of dollars in homelessness spending, Gov. Gavin Newsom on Thursday announced a plan to ensure cities and counties are doing their part to solve the crisis. The announcement is the latest example of Newsom’s calling for more accountability from local governments as California’s unhoused population has ballooned to an estimated 181,000 people despite more than $24 billion in state funds spent over the past five years to combat homelessness. ‘I’m not interested in funding failure any longer,’ Newsom said during a virtual news conference on Thursday.”

The New York Post. “Swimsuit model Kristen Louelle Gaffney is fed up with California — and she’s leaving. Gaffney, 34, blasted California’s homeless and drug crises as a reason she and her 2-time Super Bowl champion husband, Tyler Gaffney, took their three kids and fled to Nashville, Tennessee. Gaffney, a San Diego native, told Fox News she was fed up with policies created by President Biden, Gov. Gavin Newsom and city governments that have fueled the problems. ‘The more we claim, and I use the word claim very strongly, that we’re helping these people, it seems like the situation is getting worse,’ Gaffney said.”

“Gaffney said she was ‘constantly giving money’ but wasn’t seeing the results of the donations especially when it came from homeless families cared by single mothers, veterans and the elderly, who should be the first recipients of free housing. ‘Drug addicts should be last on the list,’ she said. ‘We should be focusing on the people that need help.’”