Monday, August 15, 2011

A Primer on Title Insurance

Monday, August 8, 2011

Lamb, Wilk, & Seabrook on the Right to Fair Housing

Charles Lamb (SUNY Buffalo - Political Science), Eric Wilk and Nicholas Seabrook have posted The Right to Fair Housing: It's Development, Growth, and Enforcement on SSRN.  Here's the abstract:

The right to fair housing was initially created by the Thirteenth and Fourteenth Amendments and the Civil Rights Act of 1866. During the twentieth century, however, state governments adopted laws prohibiting various types of housing discrimination before Congress enacted the most important federal guarantee - the Fair Housing Act of 1968 (Title VIII of the Civil Rights Act of 1968). Indeed, not only did state governments precede the federal government in expanding the right to fair housing between the late 1930s and 1968, but state laws were usually broader than Title VIII in both their coverage and administrative enforcement provisions. Title VIII also strongly encouraged the expansion of fair housing rights at the state and local levels by requiring that subnational governments have the first opportunity to enforce the Fair Housing Act if they passed legislation substantially equivalent to Title VIII. This cooperative federalism requirement has dramatically influenced the growth and enforcement of fair housing rights. States and localities throughout most of the nation have significantly strengthened the right to fair housing since the early 1980s, increasingly enforcing Title VIII. To determine how well this cooperative federalism arrangement is working, we first compare the enforcement performance of HUD and state and local civil rights agencies along several dimensions by relying on two data sets obtained from HUD. Using one of these data sets, we then explore the extent to which federal, state, and local agencies provide outcomes favoring complainants in housing discrimination cases. We find that Title VIII enforcement at the state and local levels is often better than HUD enforcement. We further conclude that state civil rights agencies resolve complaints in favor of complainants nearly as often as HUD and that localities sometimes do so even more frequently. We address policy implications briefly in our conclusions.

Steve Clowney

August 8, 2011 in Home and Housing | Permalink | Comments (0) | TrackBack (0)

Monday, August 1, 2011

The Rent is Too Damn High: Israeli Edition


The Israeli government is currently facing massive, nation-wide protests over the high cost of housing.  On Saturday, 150,000 seemingly middle-class people took to the streets to demand socioeconomic change and "social justice." The anger has the Prime Minister Netanyahu so spooked that he's canceled a trip to Poland to deal with the situation. 

As the New Yorker reports, the protesters "aren’t saying they can’t afford to get by, just that they can’t afford to live in the city. And the protesters contend that Israel has no Brooklyn or Scarsdale equivalent. One of them, Shlomo Krauss, criticized the outskirts of Israel for “their dubious infrastructure, failing public transportation and zero employment opportunities” in a widely circulated op-ed laying out the protesters’ gripes, with the headline, “Don’t call us spoiled.”  Some sources estimate that the price of buying an apartment has gone up 55% over the five years, while rents have increased by 27% .

For me, the big surprise is how anti-market the protesters seem.  They're calling for the government to  "immediately get involved in the housing market.  [T]hey would like to see fair housing for all, achieved by the construction of public housing projects, in addition to government oversight over the rentals market."

From an outsiders perspective, the problem looks very, very different; If anything it seems like there's way too much government involvement in the housing market already.  The Israel Land Administration controls a huge chunk of the country's property, while the nation's planning bureaucracy moves at an infamously slow pace.  Free up more land for development and you'll get more apartments.  Moreover, there's clearly a title security problem that needs addressed (and no one seems to mention).  Who wants to invest in infrastructure anywhere near the border before a lasting peace has been established?

Steve Clowney

(image found with creative commons search)

August 1, 2011 in Home and Housing | Permalink | Comments (0) | TrackBack (0)

Friday, July 22, 2011

From Apartments to Vacation Rentals

Property owners in San Francisco are converting large numbers of rental apartments into short-term quarters for tourists.  Some are blaming the city's rent control laws for this "hotelization:"

Ms. Kelley predicted that more units would be turned into vacation rentals as landlords sought to avoid rent-control laws available to long-term tenants.

“The city has made its bed with restrictive rent-control laws,” she said, “but with a vacation rental you can avoid that.”

Steve Clowney

July 22, 2011 in Home and Housing, Landlord-Tenant | Permalink | Comments (1) | TrackBack (0)

Thursday, July 21, 2011

Sprankling on the Interaction Between the Fifth and Third Amendments

Thomas Sprakling (Columbia - student) has posted Does Five Equal Three? Reading the Takings Clause In Light of the Third Amendment's Protection of Houses (Columbia Law Review) on SSRN.  Here's the abstract:

The Supreme Court’s 5-4 decision in Kelo v. City of New London broke new ground by holding that the seizure of owner-occupied homes as part of a plan to foster economic development was a taking for “public use” under the Takings Clause of the Fifth Amendment. Kelo’s many critics have yet to advance a constitutionally-grounded rationale for why homes should receive special protection from condemnation. This Note argues that the Third Amendment’s solicitude for the home provides a constitutional basis for distinguishing between homes and the other forms of “private property” covered by the Takings Clause. The Amendment, which provides that “[n]o soldier shall, in time of peace be quartered in any house, without the consent of the owner, nor in time of war, but in a manner to be prescribed by law,” shares both historical and textual links with the Clause. These connections suggest the judiciary should apply a form of heightened scrutiny similar to the “meaningful” review standard proposed by Justice Kennedy’s concurring opinion in Kelo when determining whether the government’s seizure of an owner-occupied home is for “public use.”

Steve Clowney

July 21, 2011 in Home and Housing, Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 13, 2011

Marion Barry's Housing Shenanigans

For those that haven't kept up with the career of Marion Barry, you'll be happy to hear that the erstwhile crack smoking mayor of D.C. is back on the city council.  And not only is he back, he's proposing aggressively stupid legislation. Specifically, Barry plans to introduce a bill that would ban the construction of all new apartment buildings in his Ward (Here's a copy of the Bill's text).  Why???  Barry thinks this plan will encourage home-ownership and the renovation of the area's dilapidated housing. "The American dream is to own a home. And black people have not gotten the American dream as much as they need to," he says. "Somebody can rent for 20 years, and has no equity in their unit at all."

It's hard to see how this bill helps the people of Ward 8 in any way.  If anything D.C. in general, and Ward 8 in particular, needs denser & more affordable housing.  Right now, DC's population is exploding.  So any proposal to artificially limit the supply of available rentals seems likely to push (poor) long-term residents out of the neighborhood.  It's also tough to comprehend how this land use measure would help the folks of Ward 8 acquire the downpayments and credit history that are the normal barriers to home ownership.  

Perhaps the really interesting question here isn't about the policy but rather, why do people in D.C. keep voting for Barry? 

Steve Clowney

July 13, 2011 in Home and Housing, Land Use, Landlord-Tenant, Law Reform | Permalink | Comments (0) | TrackBack (0)

Friday, July 8, 2011

Rental Vacany Rate Falls

Across the country, apartment vacancies are dropping fast and rents are starting to creep up.  If you're looking for signs that the economy is about to turn around, this might be a good sign.  If buying a home becomes more attractive versus renting that should kick-start the construction sector of the economy, which will lower unemployment, which will allow more people to buy more homes...


Steve Clowney

(Graph from

July 8, 2011 in Home and Housing | Permalink | Comments (0) | TrackBack (0)

Thursday, June 9, 2011

Keep Me Off the Cover of US Weekly

Tuesday, June 7, 2011

Homeowner Forecloses on Bank of America Branch


Five months ago, Bank of America filed foreclosure papers on the home of Maurenn Nyergers.  The trouble for Bank of America is that Nyergers never had a mortgage - she paid cash for her house. 

The case eventually went to court and Nyergers was able to prove she didn't owe Bank of America a dime. In fact, the judge ordered Bank of America to pay Nyergers' legal fees.

But then, Nyergers said she waited more than five months for a check. So the family's lawyer, Todd Allen, moved to seize the bank branch's assets.  Allen instructed sheriff's deputies and movers to remove desks, computers, copiers, filing cabinets and any cash in the teller's drawers.

According to sources, bank employees were locked out of the branch and the bank's manager appeared "visibly shaken" and "bewildered."  Yet, within the hour, a fairy tale ending;  The bank manager handed over a check to the lawyer for the legal fees.

Steve Clowney

June 7, 2011 in Home and Housing, Mortgage Crisis | Permalink | Comments (1) | TrackBack (0)

Thursday, June 2, 2011

Is Buying Really for Chumps?

Slate argues that, "the American economy is making a significant shift from buying to renting, and that may ultimately be good news." More specifically, the piece makes the case that:

Contrary to the housing-bubble dogma that a mortgaged apartment or house provides a pathway straight to the American Dream—and contrary to the tax code, which encourages buyers and discourages renters with a huge break for mortgage interest—renting is better than owning for many Americans. Indeed, dozens of recent studies have shown that, excepting the go-go bubble years, houses tend not to make very good investments at all: A prospective homebuyer would have made more money taking her down payment, parking it in inflation-adjusted Treasury bonds, and renting.

This is all well and good (and true), but the author ignores a lot of the other, non-economic benefits of homeownership.  First, there's the security of knowing that, as long as you make the payment, no one can take the place away from you.  The landlord can't turn your dwelling into condos at the end of the year.  Second, there are real autonomy benefits to home ownership.  You have the freedom (and incentive) to install expensive window treatments, granite countertops, and the hot tub of your dreams.  Finally, other than wearing sweater-vests, there's just nothing else in our national culture that signals a person is mature, and trustworthy, and respectable like owning a home. 

A house may not be a good investment, but it is a terrific consumption good.

Steve Clowney

June 2, 2011 in Home and Housing | Permalink | Comments (5) | TrackBack (0)

Tuesday, May 31, 2011

Reiss on the Goals of Federal Housing Policy

Reiss_david David Reiss (Brooklyn) has posted Foundations of Federal Housing Policy (book chapter) on SSRN.  Here's the abstract:

Federal housing policy is heavily funded and made up of a morass of programs. This book chapter provides a taxonomy of goals for housing policy. The chapter first asks what the aim of housing policy is. In other words, what can a well-designed and executed housing policy achieve? The answer to this question is not at all clear-cut. Some argue that the aim of housing policy is to allow all Americans to live in safe, well-maintained and affordable housing. Others argue for a more modest aim – achieving an income transfer to low- and moderate-income families that mandates that the income transferred is consumed in increased housing. And yet others argue that the main aim is to create a nation of homeowner-citizens, a goal which hearkens back to Jefferson’s idealized “yeoman farmer” and continues through to George W. Bush’s "ownership society."

Beginning with these possibilities, I identify and categorize various "principles" of American housing policy. This is an important exercise because 80 plus years of housing policy; hundreds of billions of dollars; and literally hundreds of different housing programs have all conspired to confuse the essential aims of American housing policy. This chapter seeks to clarify debates surrounding American housing policy as the Obama Administration puts its own stamp on this field.

Steve Clowney

May 31, 2011 in Home and Housing, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, May 19, 2011

Will Mortgage Scammers Never Cease

One of the eye-opening aspects of blogging here is this: often, if one of us puts up a post that contains the word "mortgage," we get spam in the comments box.  I would not be in the least surprised to find a comment on this post tomorrow that reads something like this:

This is a very interesting discussion of will mortgage scammers never cease.  I like to read about will mortgage scammers never cease.  Will mortgage scammers never cease is very important.


Refi-now [at] lowestrates [dot] com

Since these usually come in response to a post about the latest mortgage industry outrage, it (frankly) pisses me off.

And just tonight, during dinner, I got a call from someone in Newport, CA, claiming to be working for Fannie Mae.  He told me my mortgage had "crossed his desk" and he wanted me to know, as a public service, that I could get a much lower rate, and he was prepared to tell me how.  I told him . . . well, I suppose this is a family blog, but I told him that I did not think highly of him.

I was naive enough to think that the mortgage crisis would have put, if not an end, at least dampener on this type of despicable activity.  This is exactly how so many people's lives were ruined, and exactly why the mortgage industry became such a chaotic, undisciplined, unethical nightmare that lenders can't even produce the note for mortgage loans on which they intend to foreclose. 

But if it wasn't apparent before, it should be apparent now that the mortgage crisis -- that is, the crisis of the mortgage industry -- is in the past.  Its particpants either walked away before the scam collapsed, or got bailed out if they were left holding the cards.   

Now they're back in action.  Want proof?  The front page of the on-line version of today's New York Times has an ad for "Orange Home Loans As Low as 3.05% APR."  Click on the link, and you get an offer for a 5 year fixed rate mortgage loan at 2.99% if you can put 20% down, but with monthly payments set as if the loan were a 30 year fixed rate.  In other words, when 5 years have gone, and you need to re-finance, you'll have built up no new equity in the home because you've been paying as if you had 30 years to pay it off, not 5.  You'll essentially have to purchase the home again, at a much higher rate.  And this isn't some fly-by-night company.  At least they require 20% down.

So the crisis of the mortgage industry is over.  Instead, what we have now is a foreclosure crisis.  A crisis that is rendering families homeless, destroying equity in homes, and in some places (here's looking at you, Florida) undermining the rule of law.

Soon we'll have a restitution crisis. 

If we get any spam in response to this post, I'll post it as an addendum here.

Mark A. Edwards

[comments are held for approval (and now you know why), so there will be some delay in posting] 

May 19, 2011 in Home and Housing, Mortgage Crisis | Permalink | Comments (1) | TrackBack (0)

Mayer et al. on Mortgage Modification and Strategic Behavior

Christopher J. Mayer (Columbia Business), Edward R. Morrison (Columbia Law), Tomasz Piskorski (Columbia Business) and Arpit Gupta (Columbia Business) have posted Mortgage Modification and Strategic Behavior: Evidence from a Legal Settlement with Countrywide on SSRN.  Here's the abstract:

We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers with subprime mortgages throughout the country. Using a difference-in-difference framework, we find that Countrywide's relative delinquency rate increased thirteen percent per month immediately after the program's announcement. The borrowers whose estimated default rates increased the most in response to the program were those who appear to have been the least likely to default otherwise, including those with substantial liquidity available through credit cards and relatively low combined loan-to-value ratios. These results suggest that strategic behavior should be an important consideration in designing mortgage modification programs.

Steve Clowney


May 19, 2011 in Home and Housing, Mortgage Crisis, Real Estate Finance, Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Monday, May 16, 2011

The Happiness of Staying in Place

As someone with a strong sense of place (I love love love my hometown) I was happy to see this article in the New York Times.  Constance Rosenblum discusses the joys (and some of the frustrations) of staying put in one home and one city for decades. 

People stay in one place for many reasons. Often the explanation is financial. In a city of ever-pricier housing, giving up even the tiniest rent-stabilized space can seem insane. If a personal or professional life doesn’t change much, there may be no incentive to move, and even if a life evolves, a space may be elastic enough to accommodate shifting needs. Sometimes it’s simply easier to stay than to go.

Steve Clowney

May 16, 2011 in Home and Housing | Permalink | Comments (0) | TrackBack (0)

Sunday, May 15, 2011

Washington Post Publishes Investigation of HUD, and it's not pretty

The Washington Post today published what appears to be the first in a series of investigative reports on wasteful spending by HUD, and the consequences of that waste for the poor.  According to the Post, it "analyzed a database of 5,100 open construction and renovation projects funded at $50,000 or more under the U.S Department and Housing and Urban Development’s HOME program."  It looked for projects that were:

launched more than five years ago that are still incomplete, projects that had not drawn money against their HUD accounts in at least 18 months or projects with other verified delays.

Overall, the newspaper identified an estimated 700 projects that were awarded $400 million; nearly 450 were launched in 2006 or earlier. In some cases, construction was completed, but the units are sitting vacant because housing agencies have not sold or leased them to a low-income family.

The Post also identified nearly 600 other projects that have never drawn any money despite being earmarked for a year or more, leaving $250 million languishing. HUD has begun canceling those projects.

Given that Congress is looking for areas to budget-cut, I suspect this series could be a game-changer for HUD.  That's unfortunate, because the need for affordable housing in the United States is enormous.  No doubt there is waste at HUD.  But I suspect that the committed and well-intentioned people at HUD are trapped by in a downward spiral: they aren't given enough resources to adequately oversee the projects they fund; with inadequate oversight, some of the projects they fund turn wasteful; when the waste is discovered, their resources are cut. 

The Post also has an interactive map of projects that are wasteful under its criteria.

It's investigative reporter, Debbie Cenziper, will answer questions from readers during a live chat at 1 p.m. Eastern, Monday May 16th.  You can post questions now.

It's well worth your time exploring the series.

Mark A. Edwards

{Comments are held for approval, so there will be some delay in posting]

May 15, 2011 in Home and Housing | Permalink | Comments (1) | TrackBack (0)

Wednesday, April 27, 2011

Hills and Schleicher on Zoning & the Supply of Land for Housing

Rick Hills (NYU) and David Schleicher (George Mason) have posted Balancing the 'Zoning Budget' (Case Western Law Review) on SSRN.  Here's the abstract:

The politics of urban land use frustrate even the best intentions. A number of cities have made strong political commitments to increasing their local housing supply in the face of a crisis of affordability and availability in urban housing. However, their decisions to engage in “up-zoning,” or increases in the areas in which new housing can be built, are often offset by even more “down-zoning” or laws that decrease the ability of residents in a designated area to build new housing as-of-right. The result is that housing availability does not increase by anywhere near the promises of elected officials.

In this essay, we argue that the difficulty cities face in increasing local housing supply is a result of the seriatim nature of local land use decisions. Because each down-zoning decision has only a small effect on the housing supply, citywide forces spend little political capital fighting them, leaving the field to neighborhood groups who care deeply. Further, because down-zoning decisions are made in advance of any proposed new development, the most active interest group in favor of new housing – developers – takes a pass on lobbying. The result is an uneven playing field in favor of down-zoning.

Drawing on examples of “extra-congressional procedure” like federal base closing commissions and the Reciprocal Trade Act of 1933, we argue that local governments can solve this problem by changing the procedure by which they consider zoning decisions. Specifically, they should pass laws that require the city to create a local “zoning budget” each year. All deviations downward from planned growth in housing supply expressed in the budget should have to be offset by corresponding increases elsewhere in buildable as-of-right land. This would reduce the degree to which universal logrolling coalitions can form among anti-development neighborhood groups and would create incentives for pro-development forces to lobby against down-zonings in which they currently have little interest. The result should be housing policy that more closely tracks local preferences on housing development.

Steve Clowney

April 27, 2011 in Home and Housing, Land Use, Law Reform, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 26, 2011

From the Department of Disastrous Timing . . . Housing Counseling Funds Eliminated

Funding for HUD's housing counseling program has been eliminated.  Not to worry: not many people need housing counseling these days.

The counseling program cost $88M, or approximately 1.25 C-130J long-range military transport planes. 

Also from the same Department: Law Professor's laptop goes belly up during finals week; dog's leg is paralyzed, wife's back goes out.  I apologize for the lack of posts lately, but it''s been a wild two weeks.

Mark A. Edwards

[comments are held for approval, so there will be some delay in posting]

April 26, 2011 in Home and Housing, Mortgage Crisis | Permalink | Comments (0) | TrackBack (0)

Thursday, April 21, 2011

A New Urbanist Call to Arms

New Urbanist heavyweight, Andres Duany, has come out swinging in the recent issue of Metropolis Magazine.  Duany has penned a pretty stirring defense of New Urbanism's accomplishments, and makes time to attack the "postmodernists," "architecture students from elite schools," and members of the "avant-garde," that have poo-pooed the movement.

The New Urbanism is in reality an expanding web of ideas, techniques, projects, and people. The Congress for the New Urbanism (CNU) is an institution chartered 18 years ago with a budget, a board, and a staff. . . .New Urbanists wrote HUD’s HOPE VI standards and are thereby responsible for about 111,000 new and renovated units of affordable housing—virtually the entire supply of the last 15 years, with a good proportion designed by CNU members. . . . A diverse array of techniques has been rescued from oblivion and tested in hundreds of built projects. New Urbanist architecture’s visible “nostalgia” is easily dismissed by critics, but its power is really in software and other methods . . .

Steve Clowney

April 21, 2011 in Articles, Home and Housing, Land Use | Permalink | Comments (1) | TrackBack (0)

Friday, April 8, 2011

Renting While Deaf

This is troubling:

In a year-long test conducted by the Fair Housing Partnership of Greater Pittsburgh, researchers found 28 percent of landlords contacted by deaf people either hung up the phone, gave false information or used some other illegal means to deny the deaf person a place to live.

Test reviewers found 11 violations were so severe they filed complaints against the landlords with the U.S. Department of Housing and Urban Development, and the Pennsylvania Human Relations Commission. Seven of those cases have been settled and those landlords have undergone training in fair housing law. The other cases are pending.

Steve Clowney

April 8, 2011 in Home and Housing, Landlord-Tenant | Permalink | Comments (0) | TrackBack (0)

America's Most Segregated Cities

The Huffington Post has a slideshow about the most segregated places in the country. 

Using 2010 Census data, professors John Logan of Brown University and Brian Stults of Florida State examined the racial make-up of America's cities. The researchers found that progress toward integration has been uneven. In some large metro areas integration has improved dramatically; Kansas City experienced a 7.4 percent decrease in residential segregation over the last decade.  In contrast, New York declined only 1.7 percent, and in Miami segregation actually got worse.

Steve Clowney

April 8, 2011 in Home and Housing | Permalink | Comments (0) | TrackBack (0)