Billions hidden in $3.5 trillion bill to tilt election scale

 The Democrats’ $3.5 trillion social-engineering bill pushed by President Biden and Nancy Pelosi is called Build Back Better. It should be called Building a Political Scam. 

Buried in the 2,465 pages are numerous billion-dollar grants to unnamed community organizations for vague purposes like promoting “community engagement,” providing “support and advice,” and “creating equitable civic infrastructure.” 

Translation: Your taxpayer dollars will fund the payrolls of left-wing advocacy groups between elections. In return, they become the campaign army staffing phone banks, harvesting ballots, and escorting people to the polls on Election Day. 

The Build Back Better bill is pouring tens of billions of dollars — an unprecedented amount — into community organizations. That’s because congressional Democrats failed to ram through the two voting bills — HR 1 and HR 4 — that would change election rules to favor their party. Build Back Better is the party’s best shot at gaining an electoral advantage. 

The bill not only bankrolls nonprofit community organizations, it also enhances their clout by allowing them to hand out billions of dollars in seed money for local business startups. 

In a new twist, the Small Business Administration is distributing huge sums to nonprofits that will serve as “incubators,” disbursing funding to startup businesses in “underserved” areas. Curiously the SBA already has regional offices across the US to help startups, and could distribute the funds itself. But instead, it is empowering nonprofits by making them the middlemen. 

How some of the money would be spent in the proposed spending bill.

Ninety percent of startups fail. There is no riskier place to put taxpayer money. Yet the bill establishes no standards for which businesses get the funding, except that they have to be majority-owned by members of “underrepresented communities,” including residents of high poverty areas and the formerly incarcerated. One thing they can’t have is a track record. If they’ve been in business five years, they’re ­ineligible. 

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From an economic point of view, it’s taxpayer money down a rathole. Clearly the goal is political. It’s vote buying. 

All in all, nonprofits are eligible for as much as $90 billion to support their own activities or disseminate to pals under this bill, almost equivalent to the entire budget of the state of ­Florida. 

Historically, political machines that doled out benefits in exchange for votes were local, as in 19th century Boston, New York, and Kansas City. “All there is to it,” explained Kansas City boss James Pendergast, is “doing things for people, then later on they’ll do things for you.” 

The community organizer who became president, Barack Obama, was a master at machine politics. The Affordable Care Act — ObamaCare — outsourced the important job of health plan enrollment to community organizations, handsomely funding them and entrusting them to register people to vote at the same time. ObamaCare turned community organizations into a fifth estate with government funding but without government rules. 

Now, Build Back Better is funding an even wider array of organizations. It allocates a whopping $5.7 billion “for community-led projects to stabilize neighborhoods.” Translation: rallies and legal action to stop gentrification and “displacement.” 

There’s also $5 billion for climate-justice block grants to pay community organizations for, among other things, “facilitating engagement of disadvantaged communities in State and Federal processes.” Translation: organizing protests and demanding seats on zoning boards. 

Hundreds of millions of dollars target the higher mortality rates for black women giving birth, but even on such a serious issue, the bill requires community-based organizations get priority over accredited medical centers, teaching hospitals and schools of nursing. Politics first. 

For every left-wing community organization, there’s a grant in Build Back Better. The causes range from Growing and Diversifying the Doula Workforce to Anti-Discrimination and Bias Training. 

Republicans used to laugh about Obama’s work experience as a community organizer. But if Build Back Better is passed, Democrats will have the last laugh, shoveling big money into leftist community organizations to tilt the scale against a fair two-party system. 

Betsy McCaughey is a former lieutenant governor of New York. 

https://nypost.com/2021/09/28/billions-hidden-in-3-5-trillion-bill-to-tilt-election-scale/

FHFA Extends COVID-19 Multifamily Forbearance Indefinitely

 The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will continue to offer COVID-19 forbearance to qualifying multifamily property owners as needed, subject to the continued tenant protections FHFA has imposed during the pandemic. 

This is the fourth extension of the programs, which were set to expire Sept. 30, 2021. On October 1, 2021, FHFA will allow the Enterprises to continue offering COVID-19 forbearance to qualified multifamily owners, unless otherwise instructed by FHFA.

“Given the uncertain nature of this pandemic, FHFA is taking further action to protect renters, property owners, and the mortgage market,” said Acting Director Sandra L. Thompson.

Guidelines to Enter Modified Forbearance

Property owners with Government Sponsored Enterprise (GSE)-backed multifamily mortgages can enter a new or, if qualified, modified forbearance if they experience a financial hardship due to the COVID-19 emergency. 

Property owners who enter into a new or modified forbearance agreement must:

• Inform tenants in writing about tenant protections available during the property owner’s forbearance and repayment periods; and
• Agree not to evict tenants solely for the nonpayment of rent while the property is in forbearance.
• Additional tenant protections apply during the repayment periods. These protections include:
• Giving tenants at least a 30-day notice to vacate;
• Not charging tenants late fees or penalties for nonpayment of rent; and
• Allowing tenant flexibility in the repayment of back-rent over time, and not necessarily in a lump sum.

FHFA may extend or sunset its policies based on updated data and the impacts of COVID-19.

FHFA Issues Notice of Proposed Rulemaking

Separately, on Sept. 16, the FHFA issued a notice of proposed rulemaking to amend the Fannie Mae and Freddie Mac capital rules that were issued in December 2020. Specifically, the proposed rule would:

• Replace the fixed PLBA equal to 1.5 percent of an Enterprise’s adjusted total assets with a dynamic PLBA equal to 50 percent of the Enterprise’s stability capital buffer;
• replace the prudential floor of 10 percent on the risk weight assigned to any retained CRT exposure with a prudential floor of 5 percent on the risk weight assigned to any retained CRT exposure; and
• remove the requirement that an Enterprise must apply an overall effectiveness adjustment to its retained CRT (credit risk transfer) exposures in accordance with the ERCF’s securitization framework.

The new proposal would reduce the total retained capital held by the Enterprises to approximately three percent from four percent that is in the current rule. The result would reduce the combined capital held by the Enterprises from $294 billion to $220 billion. Importantly, the proposal also recognizes the value and importance in credit risk transfer and provides greater capital relief by removing the effectiveness adjustment to CRT exposures.

https://www.globest.com/2021/09/28/fhfa-extends-covid-19-multifamily-forbearance-indefinitely/

Boston, Texas, Florida Set Pace for US Office Recovery

 Top performing office space performance and recovery can be found in nearly every corner of the country, according to fresh reports from CBRE and National Association of Realtors.

Boston – keyed by the life sciences’ sector –was the U.S. leader in pandemic-era office market performance, ranking first in the recovery of office demand, according to CBRE’s monthly “Pulse of U.S Office Demand” report for August. 

“Demand for office space remained stable [in August] with life sciences tenants playing a major role,” said Nicole LaRusso, Senior Director of Research and Analysis, CBRE. “Despite a resurgence in new Covid infections, Boston was still the top-performing market in the country, something we believe will continue for the remainder of 2021.”

Meanwhile, half of NAR’s top performing commercial office markets are in Florida (Daytona Beach, Miami, Palm Beach) and Texas (Austin, San Antonio); with Boise, Chattanooga, Myrtle Beach, Omaha and Provo rounding out the list.

NAR: Occupied Spaces Remain Largely Void of Workers

NAR analyzed 390 commercial real estate markets and found a robust recovery with positive net absorption and strengthening rents across the multifamily, industrial and retail property markets as economic production rebounds to pre-pandemic levels. The apartment and industrial sectors, specifically, are reporting historically low vacancy rates, while retail has undergone a more gradual recovery as consumers continue their return to brick-and-mortar shopping.

The office sector, however, NAR said, continues to struggle. Absorption rates and rents have declined and many occupied spaces remain largely void of workers, it reported, while positive indicators have been noted in small- and medium-sized metropolitan areas, which are seeing increases in office occupancy rates that outperform most large cities and the national average.

“Even as the economy makes a steady recovery, the one sector still lagging behind has been the office market,” said NAR Chief Economist Lawrence Yun. “Work-from-home flexibility looks to be the defining shift of the new post-pandemic economy. Despite the overall challenges, however, some local markets are bucking the trend with more office occupancy and rising rents. A combination of strong in-migration and relatively lower cost of doing business is driving these growth markets.”

https://www.globest.com/2021/09/28/boston-texas-florida-set-pace-for-us-office-recovery/

NYPD Seize Illicit Camper Vans Used For Airbnb Rentals In Manhattan

 Authorities in Manhattan seized seven illegally documented camper vans that have served as Airbnb rentals for the last two years. 

According to NBC New York, deputies from the sheriff's office and NYPD officers jointly impounded seven of the vans last week. 

Sheriff Joseph Fucito said the vans were parked on streets throughout Chelsea and the East Village and used as Airbnb rentals. He said all vans had New Jersey license plates. Three vans had expired registration, while others had plates that didn't match the vehicle. The seventh van wasn't registered.

Fucito went on to say the investigation began when a YouTuber posted a video of his experience of sleeping in one of the vans overnight in the East Village. He didn't say which video was in focus, but we found a recent YouTuber who reviewed his stay in one van for $97 per night.

'I was shocked when I saw an RV show up on Airbnb during my trip to New York. I figured, I would try it. The price with fees and taxes was $97 per night to sleep in the van in East Village," YouTube handle "Uptin" said in the description of the video.

The van listing appears to be removed from the Airbnb platform, but one boasted about "glamping in a spacious camper Van in NYC." 

The one significant concern guests had was no bathroom accommodations were included in the stay, and they were told by the host to use facilities at local bars and restaurants. 

https://www.zerohedge.com/commodities/nypd-seize-illicit-camper-vans-used-airbnb-rentals-manhattan

Another China Company's Slide Leaves Unfinished U.S. Projects In Limbo

 The ripple effects of China Evergrande Group's stagger toward insolvency have reached American shores.

China Oceanwide Holdings Group, with $3.5B worth of unfinished developments in U.S. markets, is unsure about its ability to continue operations as it struggles to raise capital through refinancing or asset sales, Bloomberg reports. Work has stopped on its Oceanwide Plaza megaproject in Los Angeles, where two apartment buildings and a hotel topped out three years ago, and at Oceanwide Center in San Francisco, which is supposed to become the city's second-tallest building but remains a hole in the ground.

Oceanwide launched both of those projects, as well as plans for a skyscraper in the South Street Seaport area of Manhattan, before China cracked down on foreign investments by its country's companies in 2018. By 2019, it was marketing all three projects for sale, as well as properties on the Hawaiian island of Oahu, through brokerage firm JLL. A 1950s-era building still stands on the site of Oceanwide's New York proposal, Bloomberg reports.

Attempts to sell off its U.S. holdings have so far not borne fruit, even though a deal to sell Oceanwide Center in San Francisco for $1B made it as far as the due diligence phase before the coronavirus scuttled the deal, with another sale agreement falling apart at the due diligence phase months later, Bloomberg reports. Attempts to refinance debt on those projects have met only limited success, with some of its creditors agreeing to extend repayment deadlines into next year.

Oceanwide's U.S. projects could be completed by some of the country's biggest developers, such as Brookfield Asset Management, Related Cos. and Hines, but only Hines has acknowledged considering making a deal, Bloomberg reports. Complicating matters is the lack of confidence that capital markets have right now in the health of a Chinese real estate company, especially one that is highly leveraged.

Since President Xi Jinping set a policy ordering real estate companies in China to reduce their debt, Evergrande's longtime strategy of heavy borrowing put it between a rock and a hard place. The company had racked up $305B in debt with hundreds of projects under development across the country, and without the ability to borrow more, it doesn't have the requisite cash to pay back its vendors and meet payment deadlines on some of its loans and bonds.

Oceanwide and Evergrande have spent the past couple of decades expanding into more varied business lines, which in Evergrande's case increased the possibility that a collapse would impact enough other companies to cause a broader downturn. Evergrande's debt load alone amounts to 1.8% of China's economy, Real Money reports.

Despite the risks, Xi has indicated that no bailout of Evergrande is forthcoming, with the Chinese central government instead directing regional administrations to prepare for taking over unfinished projects and paying Evergrande's vendors, The Wall Street Journal reports. The government's hard-line stance against stabilizing even one of its largest companies likely means that Oceanwide is on its own in its fight to survive.

https://www.bisnow.com/national/news/commercial-real-estate/evergrande-no-bailout-china-oceanwide-spiraling-unfinished-us-projects-110297

NYC's Car Explosion Has Caused Pricing Surge At Garages

 Over the past nine months, as car ownership in New York City has spiked, soaring demand for parking in the country’s most walkable city has packed garages to the brim, driving a huge surge in pricing across the five boroughs.

Many of the players who own and operate these garages expect the shift to stick around and are planning accordingly.

Bisnow/Kelsey Neubauer

An Icon Parking garage in Manhattan.

“A percentage of the population that was forced to drive … a percentage of that is probably not going to go back, they’re just going to get used to driving, and that necessitates parking,” said John Petras, co-founder and managing partner of RockFarmer Properties, which owns 1,200 residential units and 1,000 parking spots across the city. “That’s a structural shift.”

The coronavirus pandemic prompted a car-buying frenzy around the country as people avoided public transportation. One EY survey found that at the end of 2020, 31% of the non-car-owning population said they planned to own a car in the near future, TechCrunch reported.  

As workers and residents left the city last year amid the worst of the pandemic, parking garages, like many retailers, were hit hard. Some operators said they saw less than half their normal business last summer. During that period, many cut their prices, garage owners told Bisnow. 

Despite the surge in activity over the past nine months, some operators have been accused of failing to pay rent — several landlords have sued Icon Parking for not paying any rent since the pandemic began. Some landlords have even pushed those not paying rent out and signed leases with new operators instead, brokers say. 

But the parking bust soon turned into a boom as New York residents who flocked to the suburbs and the Hamptons to escape the worst of the pandemic came back with cars. Between August and October 2020, car ownership rates across the city jumped nearly 40%, and for many, this is a new way to get around.

In June, New York City topped even Los Angeles as the most traffic-dense city in the country. This drove parking prices up across the city. 

Parking garages owners and developers who believe the trend will stick around for the foreseeable future are adjusting their plans accordingly, but others believe it is just a blip and worry that the city’s environmental and affordability goals will be thwarted if the rise in car use and parking continues. 

“You’re never going to solve [housing affordability and climate issues] if you don’t decrease car usage,” Slate Property Group principal David Schwartz said. “The cost on affordable housing, the cost on the climate, those things are so drastic that you have to do everything you can.”

Demand for parking across RockFarmer Properties has been unprecedented, Petras said. It has sold spots for $100K for the first time, and raised rental prices between 10% and 25% compared to September 2019, depending on the location. At The Rowan — RockFarmer’s 46-unit condo development in Astoria, Queens — 20% of prospective buyers said they wouldn't consider buying a property without on-site parking, he said. 

Bisnow/Kelsey Neubauer

Cars driving down Second Avenue in Manhattan

Most of the uptick is concentrated around residential areas, said Jeff Sanders, regional vice president for LAZ Parking, which has over 200 locations around the city, including the Port Authority Bus Terminal parking garage near Times Square and one in a heavily residential neighborhood in Battery Park. 

“I think you're seeing a very large pickup in monthly parking due to just car ownership rates going up in general,” Sanders said.

While monthly rentals in residential areas are up, they are down in office districts, as those who would get a monthly rate to go into the office five days of the week are now opting to pay on a daily basis. 

“We’re still getting that parker on the daily side, just not on the monthly side,” Sanders said.

ProPark Mobility, which owns about 130 garages in and around New York City, has seen an uptick of around 10% in monthly rental customers compared to September 2019 and an uptick of around 20% in daily customers compared to this time two years ago, said Executive Vice President Kristen Sokich, who helms the New York and New Jersey region for ProPark.

Sokich said ProPark is thinking strategically about the new pandemic-induced cultural dynamics by expanding in areas where demand is high, and possibly pulling back where it’s not, such as commuter lots in suburban locations. Recently, ProPark took over a garage owned by Columbia University as part of that strategy, he said.

This is one of many garages to change hands recently. As the parking garage market began to stabilize early this year, landlords and tenants have been increasingly signing new leases, said Newmark Vice Chairman Brian Ezratty, who has brokered over 160 garage deals over the past 30 years. 

“Deal flow now is actually pretty busy because there have been a lot of locations where landlords are taking back garages because the operators haven't been able to pay the rent or don't want to pay the rent,” he said. 

While many are preparing to cash in on the trend, not everyone in real estate thinks the boom will last; creating more parking goes against crucial sustainability and affordability goals.

PxFuel

“Nationwide, with zoning, they are realizing that if we see the two biggest issues that we have are housing affordability and climate change, eliminating parking helps with both of those, so I don’t see how it doesn’t happen,” said Schwartz, whose Slate Property Group owns about 3,000 units around the city. 

Buildings with on-site parking charge about 17% more rent per unit, despite the parking only catering to a portion of renters, according to an Urban Land Institute report. On-site parking also pushes affordable housing development farther away from urban cores — surface parking is cheaper than structured garages — propelling further inequality in cities, ULI’s research shows. 

“I think quite frankly, it remains to be seen how long-lasting this increase in demand for private car ownership is,” ULI Building Healthy Places Director Matt Norris said. “Developers are taking stock of the trends and the reaction to the pandemic, there’s a sentiment that the trend that predated the pandemic, a decrease in demand for parking, is likely to continue in the long run.” 

Schwartz said that, while ultra-luxury developments will likely lean more into on-site parking, he is certain the boom will fizzle out, and quickly. As the city grows its public bike infrastructure and residents feel more safe to get back on the subway, the surge will prove to be a blip, he said. 

“In general, car ownership is gonna go down, parking is gonna go down,” Schwartz said. “It’s crucial … We can’t grow and add so much population and rely on cars, because that’s the whole point of being in New York.”

Across the country, there are 2 billion parking spots and about 250 million cars, according to Norris. While ULI doesn’t have New York City-specific data, transit data analysis expert Jehiah Czebotar, who advocates for less parking, estimates there are 5.4 million parking spots across the five boroughs. There were about 1.32 million cars registered in New York City as of last month, art and culture news outlet Untapped New York reports. 

“Even with an increase in car ownership or driving, I think the real important thing is to be more efficient in allocating the parking spaces that we already have,” Norris said. 

https://www.bisnow.com/new-york/news/commercial-real-estate/nycs-pandemic-car-ownership-surge-has-driven-up-demand-and-pricing-at-garages-across-the-city-110305

Real-Life Stories: Navigating the Renter Assistance Program

 Apartment owners’ efforts to manage the eviction moratorium and the administration of the complex federal renter assistance programs has taken several twists and turns as deadlines approach and so much rent remains unpaid.

“Owners don’t want to evict unless they have to,” Caitlin Sugrue Walter, Ph.D., Vice President of Research, National Multifamily Housing Council (NMHC) shared during a recent session at the MFE Conference in Las Vegas. “Some apartment company CEOs are fully engaged in this process, and they know of the very specific details or individual cases of their renters and why they aren’t able to pay rent.”

While 92 percent of operators conduct outreach to residents via email and 88 percent by phone, according to an August operator survey conducted by NMHC, it’s the face-to-face conversations that are making the most difference.

“Meeting person-to-person with our residents and smothering them with compassion had led to the best outcomes,” Mary Hollands, Third Party Business Development/Operations, Gables, said. “Our associates who are doing this successfully are sharing their stories with our other associates in other regions so they can learn from it.”

Companies are diverting untold hours of staff time toward monitoring the situation, which has included revised or abandoned government and agency policies at the national and state level and numerous court rulings at many levels of the justice system.

“The federal government allotted about $50 billion toward renter assistance, but we don’t know right now if that was the right amount to resolve this issue; will it meet the demand?” Sugrue Walter said.

Owners Missing Out on Millions

Jeff Jerden, COO, Veritas Investments, said residents in his 7,000-unit portfolio based in San Francisco have missed “many millions” of dollars in rent from the eviction moratorium. “California has done a really poor job of allocating its federal funds,” he said. “As a result, we at Veritas have extended a voluntary eviction moratorium to our residents until the end of the year so that the rent relief process can fully play out.”

He said he’s had about 150 residents who have ‘ghosted’ his team, having not responded in any way, shape or form to his various outreach efforts. 

“We’ve taken steps to apply on their behalf, but it’s a two-way process and they must be a part of it,” Jerden said.

NMHC’s survey showed that of actions taken by owners to assist renters:

• 78% offered deferred payments
• 26% waived rent
• 8% created its own rental assistance fund
• 95% waived late fees
• 100% offered payment plans
• 50% dropped fees for credit card payments
• 54% offered cash for keys
• 58% modified lease terms

Sugrue Walter said that U.S. Census Bureau data from Aug. 4 to Aug. 16 show a lack of participation could pose obstacles. Of those not current on their rent payment:

• 6% applied and received it
• 21% applied for assistance and are waiting for response
• 9% applied for assistance and were denied
• 64% Did not apply for assistance
• Majority of renters who are not current on rent payments are one or two months behind.

Jerden said California has alerted him that about 20 percent of their assistance applications have been approved. He is awarding its associates a $500 bonus if they lead residents through the process and are approved. That is one of several creative approaches Veritas and Gables have taken in the past 12 months.

Renter Advocacy Groups Helping Owners, Too

Veritas has partnered with an advocacy group and asked them to help their residents with the application process. 

“This way, our renters are being assisted by someone other than the operator, which can lead to them being more willing to participate in the program,” Jerden said. “It doesn’t make it look like we’re telling them what to do. Many did not even realize they were eligible.”

Veritas also has a dedicated team of associates who are “laser-focused” on monitoring this renter assistance program every day, he said. 

“Through our technology team, we have created an automated process that is designed to help expedite the process by being programmed to provide some of the basic, common questions about what’s going on with the federal relief plan in terms of updates on rules or regulations changes,” Jerden said.

Nonetheless, it comes back to the residents’ mindset.

“We have heard from our residents that the apartment owner (and not the federal government) is obligated to release them from this financial burden,” Jerden said. “We see it as the legislators who are at fault in this situation, in part, because they rushed to get something passed to address this need, without perhaps considering how the situation could be abused.”

Renters Roughly 2 or 3 Months Behind on Rent

Hollands said she saw decreases in evictions in her Florida (especially North Florida) and Denver markets in 2020 compared to 2019, “but consider,” she said, “evictions in those markets are typical quite high.

“Some renters are simply holding out to see if they will get more financial relief, but we believe, in the end, they will make good on this. On average, they are about two or three months behind on their rent payments.

She has posted full details about the renter assistance program and how to apply on her on the Gables company website, including in the area where residents make online rental payments.

Although the panel said this is on the minds of apartment operators, “We’ve not heard of reports or residents pocketing the cash relief they receive, but it is something we are watching,” Hollands said.

She said the funds were distributed evenly among the states, “but some are doing a better job than others. I’d say Florida, Texas and Washington, D.C., have done the best administration job. We see that the renters in D.C. are very savvy and have found every way they can to take advantage of the program.”

Paying the Rent No. 1 Reason for Move-Outs

Hollands said the pandemic has upped her annual move-out rate to about 63 percent. “Right now, rent increase is the No. 1 reason we’re seeing for moveouts; whereas before it was COVID-19,” Hollands said.

Jerden said that most of the residents who are late on rent at Veritas are ones who moved in recently.

“We saw a lot of renters move out of San Francisco, but stay in the Bay Area,” Jerden said. “Now, a lot of those are moving back to the city so they can take advantage of the falling rent, and because we’re a rent control market, they know that their rent will only be allowed to be raised by a few percent, so they want to take advantage of that price deal.”

https://www.globest.com/2021/09/23/real-life-stories-navigating-the-renter-assistance-program-application-process/