|In California, Momentum Builds for Radical Action on Housing
Cities around the world are dealing with severe housing shortages and inflated housing costs. But nowhere is housing such a potent political issue as in California, whose unique geography, state policies, and activist culture have combined with a poorly distributed economic boom to create a “perfect storm”—the chosen words of multiple sources for this story.
California has more than one-fifth of the nation’s homeless people, and the numbers are continuing to grow. Los Angeles County saw its homeless population increase by 13,000 people last year, while Sacramento and Alameda counties both saw increases of 1,000 individuals. But the crisis extends well beyond the least fortunate. An astounding 54 percent of renter households and 39 percent of homeowners are considered “cost burdened,” paying more than 30 percent of their monthly income toward housing. A recent reportfound that nine of the nation’s 10 least affordable metros are in California.
Over the past several years, California has not only produced too little housing, but too little of the right kind of housing. Between 2009 and 2014, the state added 77,000 more households than housing units. The housing it has produced is often located far from jobs and transit, or is too expensive for low and sometimes even middle-income people to afford.
“According to data from Zillow,
two of the top 10, and 13 of the 20 most expensive housing markets are located in California; understandably the nation’s overall inventory and affordability issues are of great concern, but the problem there appears particularly stark,” says Tim Rood, Chairman of the Collingwood Group.
read more: City Lab
Not Dead Yet: Branches Remain Crucial to Banks’ Growth Plans
Who says branches are dead?
In recent weeks, two of the nation’s three largest retail banks have announced plans to open as many as 900 branches over the next few years.
JPMorgan Chase said it intends to build as many as 400 branches in Boston, Philadelphia and Washington, D.C., and other cities where it has no physical presence. Not to be outdone, Bank of America announced plans to add roughly 500 branches, also primarily in cities and states where it currently has no offices.
Many small banks, too, are expanding into adjacent markets by opening new branches.
If branch traffic is declining as consumers shift to mobile and online banking, why is there still an emphasis on building new branches?
Brian Moynihan, B of A’s chairman and CEO, says it’s because many consumers and business owners still have reason to visit branches. Speaking at at the Economic Club of Washington in mid-February, he said that most of the bank’s retail sales originate in the branch and that some 800,000 people visit Bank of America’s branches every day.
read more: American Banker
With Lumber in Short Supply, Record Wood Costs Are Set to Juice Home Prices
A lumber shortage has pushed prices to record highs as builders stock up for what is expected to be one of the busiest construction seasons in years.Builders in the U.S. say the higher lumber costs are making homes more expensive. Lumber prices started rising last year after fires destroyed prime forests and a trade dispute between the U.S. and Canada restricted supplies. Now a shortage of rail cars and trucks is forcing builders to pay even more.
read more: WSJ
In Supply-Starved Home Market, Can Wall Street Landlords Help?
Wall Street landlords own thousands of single-family homes in the U.S. Buyers are struggling to find houses they can afford in inventory-starved markets. Can they make a match?
That’s the hope of National Association of Realtors Chief Economist Lawrence Yun, who sees slowing rent growth as a potential catalyst for large-scale sales that could help ease the supply crunch.
“As new multifamily supply catches up with demand and slows rents, some large investors may begin putting their holdings of affordable single-family homes up for sale, which would be great news, particularly for first-time buyers,” Yun said.
The Realtors group on Wednesday said contracts to buy previously owned homes fell to their lowest level in more than three years in January, and low inventory was largely to blame. The number of homes listed for sale tumbled 9.5 percent from a year earlier to the fewest for any January on record.
read more: Bloomberg
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