Former President Jimmy Carter is calling for broad reform of the U.S. Department of Housing and Urban Development and advocates for voters to support candidates who promote affordable housing. Carter told CNBC that Trump administration is ignoring a national housing crisis. Although the housing market has broadly recovered from the 2008 financial crisis, low-income Americans are being abandoned. Carter believes that as land becomes very limited and the cost of homebuilding rises, the gap between rich and poor grows exponentially. Millions of low-income households pay 70 percent or more of their income towards housing and face a shortage of available affordable rental apartments.
Currently, the White House’s fiscal year 2019 budget proposal cuts down funding for HUD by $8.8 billion. HUD Secretary Ben Carson has proposed tripling the minimum rent paid by the poorest public-housing tenants to $150 a month and rolling back rent restrictions on 4.5 million households that participate in public housing programs. Carson elaborated that the goal is to reduce government assistance to combat what he believes to be a cycle of dependency for the poor.
Carter said this policy is misguided, stating instead, “I don’t think that making people self-sufficient who are already in desperate need and who have never had a decent place to live is a good approach to low-income housing.” He further commented, “You can make people suffer longer by depriving them of adequate help.”
In other real estate news:
- President Donald Trump told Bloomberg News in an interview that he is considering a capital gains tax break by issuing a regulation that would index gains to inflation. The break would modify the original purchase price for inflation, drastically reducing tax bills for investors when selling stock, real estate or other assets, with the attempt to catalyst job creation and economic growth. The tax break faces legal challenges as it is estimated by Penn Wharton Budget Model to be $102 billion with more than 63 percent of the benefit going to the top 0.1 percent of taxpayers who have real estate or stocks.
- Keller Williams aims to compete with Zillow and Redfin with use of technology through addition of Philadelphia start up SmarterAgent and a partnership with KUNGFU.AI, an artificial intelligence firm, HousingWire reports. The company also launched virtual brokerages aimed towards people looking to broaden their businesses beyond their personalized markets. The recent adjustments appear to be Keller Williams’ growing attempts to leverage technology in order to solidify a stronger presence and expand its contributions in the real estate listing space.
- Offerpad announced Gint Grabauskas as the company’s new chief technology officer. His responsibilities will include managing the company’s engineering and IT teams, quality assurance, as well as system development and technology-powered product enhancements, such as Offerpad’s Instant Access mobile app. “I am really excited to be part of the Offerpad team. Our technology stack is well-positioned to enable significant growth in the business,” Grabauskas said in a statement. “My goal will be to amplify this growth by focusing on a friction-less customer experience, and a world-class, scalable platform.”
- KB Home announced partnership with Google in the launch of the KB Smart Home System, a pre-installed feature in new home sales. The new feature will be in specific communities of Denver, Colorado; Las Vegas, Nevada; Jacksonville, Florida; and Orange County, California, as well as providing available options to KB homebuyers at the KB Home Design Studios. The system utilizes technology to provide homeowners components such as a Google Wifi “mesh” network, two smart speakers, Nest Hello Video Doorbell and the installation of interconnective devices through DISH Smart Home Services. KB Home is not the first residential developer to partner with tech companies, as earlier this year Pulte Homes announced that some of its newly completed homes will be furnished with smart technology, and Lennar and Amazon have partnered to implement Alexa-enabled smart homes in specific markets nationwide.
- Redfin announced the expansion of Redfin Mortgage into North Carolina. The company aims to provide easy mortgages to homebuyers with a 30-day closing guarantee. Redfin Mortgage is now available in eight states including the District of Columbia, Illinois, Minnesota, Pennsylvania, Texas, Virginia and Georgia, and plans to expand in eight more markets.
- Freddie Mac CEO Donald H. Layton announced his intention to retire in the second half of 2019. The company has named Executive Vice President and head of Freddie Mac Multifamily David Brickman as the president of Freddie Mac and current Senior Vice President of Multifamily Underwriting and Credit Deborah Jenkins will be promoted to executive vice president for the multifamily business. The CEO Succession Plan includes considering candidates from both inside and outside the company, and currently Freddie Mac has identified Brickman as an internal candidate.