Head of Service Tasks NIA to Develop Low Cost Housing For Nigerians

The federal government has called on the Nigerian Institute of Architects (NIA) to develop affordable housing solutions and design low cost housing using local content to address what it described as a huge housing deficit in the country. Acting Head of Civil Service of the Federation,  Folasade Yemi-Esan noted that architects have an enormous role to play in addressing housing deficit in the country by developing houses with low construction cost to make it affordable for the teeming Nigerian population, particularly civil servants. Yemi-Esan said this at the grand innauguration of Sonny Echono, permanent secretary, ministry of education as the 28th president of NIA and 2019-2021 programme unveiling of the institute in Abuja. The Vice President, Yemi Osinbajo who was represented by the deputy chief of staff to the president, Ade Ipaye also charged the newly elected executive council of the institute to remain committed to revolutionising the sector and upholding the core values of the institute. The Vice President also urged the institute to direct it’s new programme to helping the country achieve its sustainable national development and the United Nation’s Sustainable Development Goals (SDGs), which is only 10 years away. Also, Secretary to the Government of the Federation (SGF) Boss Mustapha, while delivering his Goodwill message noted that Nigeria has high expectations for architects in delivering housing solution and aiding the country in achieving sustainable development goals through their unique skills. “It’s the goal of this administration to put in place policies that will support all efforts to alleviate the lives of Nigerians  and set the country on a sustainable part of progress and development and we don’t have any other key partner than the Nigerian institutes of architects,” Mustapha said. Echono, the new NIA president in his innauguration speech, noted that Nigerian architects have been at the forefront of Socio-Economic and political development of the country. While expressing his appreciation to the institute and distinguished attendees he said, “I consider it a great honour to be called upon to lead our noble profession of architects at this uniquely challenging time. Today is about the opportunities that we have to surpass the enviable achievements recorded. We must reconnect with all our stakeholders, reform and rebrand our enterprise, redefine and aggressively promote the role of the architect in the society and make sustained efforts to bring down cost of construction in the country. “This, we can do by minimizing country risks, promoting greater efficiency in project management and eliminating loopholes and avenues for corruption.We shall areas our nets wide, pitch our tent in the right places and reach out to all potential partners including state governors and captains of industry. “May the collective aspiration of the Nigerian people for comfortable shelter as well as the upliftment of their standard of living be fulfilled in our life time,” the president said. Source: Businessday NG Read the full article

Damac Properties GM Reveals Plans for Saudi Expansion

Ali Sajwani also believes Dubai's real estate market is 'at the bottom' Dubai-based property developer Damac Properties is looking to expand into Saudi Arabia. Ali Sajwani, general manager of operations, who has a strategic overview of the UAE and international businesses, revealed in an interview with Saudi publication Arab News, that the kingdom is very much part of the company’s future plans. The 28-year-old said: “Over the next five years, under Mohammed bin Salman, it (Saudi) has all the right ingredients – a visionary leader pushing the country and opening it up to foreign investors.” He added: “We’re speaking to people all the time in Saudi Arabia – developers, the authorities and landowners. We’re actively exploring that market and visit there regularly.” International projects Sajwani also said the company is looking to continue investing in the UK, while other international projects include developing three lagoons in the Maldives, projects for Oman and Lebanon and a joint venture in Toronto, Canada, Damac’s first foray into the North American real estate market. Earlier this month, Damac Properties reported its first annual loss in a decade as sales and revenue fell significantly in 2019 compared to the previous year. While Sajwani conceded that there remained oversupply issues, coupled with weak demand, the former economics student remained positive. He said: “I think we’re at the bottom now in Dubai and we’ll see some slight improvement with Expo 2020. The hotel and retail sector will do well out of Expo, and there should be a big inflow of tourists. Hopefully some of them will decide to stay, and that could help drive property prices higher.” Source: Arabian Business Read the full article

Why Real Estate Practitioners Must Register with government, says Lagos official

The special adviser to the governor of Lagos State on Housing, Adetoke Benson-Awoyinka has said it is in the interest of the public and real estate practitioners, to register with the state government. Benson-Awoyinka spoke, weekend, at a forum with real estate practitioners and other stakeholders in the built sector on how to improve the in the 21st century, which held in Ikeja. According to her, the registration would protect accommodation seekers from falling prey to fraudulent practitioners and will also increase public confidence in genuine practitioners. She also declared as illegal practicing real estate business in Lagos without a valid Lagos State Real Estate Regulatory Authority (LASRERA) license. The special adviser further noted that beyond the aforementioned reasons, the need to protect the lives and property of all residents of the Lagos is a constitutional responsibility that the government cannot abdicate. This, she explained, has made it mandatory for the government to coordinate, regulate and register genuine practitioners in the real estate business. “Let me emphasise that engaging in real estate transactions without registering with the state government or obtaining necessary approval is a punishable offence under the law”. The special adviser, who pointed to several media reports about people who have felt victims of fraudulent real estate transactions, said the state government can no longer allow fraudulent practices to thrive. “Just recently, a physically challenged couple were duped in Mushin by a real estate agent while they were seeking for accommodation. This development which is becoming a daily occurrence in Lagos property market must be corrected and may not have happened at all if all parties involved are registered with the government”. The forum, she said, became imperative to allow the government and all stakeholders in the sector interact and brainstorm on best to protect accommodation seekers from scanners. “We must all join hands with this administration so that the unregistered practitioners and those with ulterior intentions would be identified and eliminated from the real estate business in Lagos,” said Benson-Awoyinka. She, however, appreciated the support of the stakeholders to the state government since the establishment of Lagos State Real Estate Transaction Department which has now been upgraded to the Lagos State Real Estate Regulatory Authority (LASRERA). She noted that under the LASRERA law, dissatisfied residents now have the right to forward their complaints to the agency and if the agency discovers that their rights have been violated, legal proceedings would be instituted against such practitioners according to the provisions of the law. Source: Businessday NG Read the full article

Investments in Nigeria Reduced by 204% in 2019 – NIPC

The total value of investments in Nigeria reduced by about 204 per cent in 2019 compared to 2018, the Nigeria Investment Promotion Commission (NIPC) has said. The commission said the total value of the investments in 2019 is $29.91 billion compared to $90.89 billion in 2018. It said it tracked no fewer than 76 new projects coming to Nigeria as investment announcements for 2019. The new projects valued at about $29.91 billion were contained in NIPC’s intelligence publication. The 76 projects were announced across 17 states of the federation, the Federal Capital Territory and Offshore Nigeria. The significant difference with the previous year’s valuation, the NIPC said, was attributed to the uncertainty in the economy in 2019, particularly as it was an election year. The commission said the uncertainty may have contributed to the perception of the economy by investors, which ultimately affected their sentiments about the country’s business environment. Details of the report showed that Lagos State recorded the largest number of projects (33), followed from a distance by Ogun (5), and Kaduna (3). About $19.8 billion valuation of the investments (66 per cent) were announced to be located offshore Nigeria; $2.6 billion (9 per cent) in Lagos, and $1 billion (4 per cent) in Ondo. Further analysis of the announcements by sector showed that the investors preferred mining & quarrying $21.5 billion (72 per cent), manufacturing $3.2 billion (11 per cent), electricity, gas & water supply $2.3 billion (8 per cent) and transportation & storage $2 billion (7 per cent). Domestic investors were the most active, with about 39 projects announcements valued at a total of $10.8 billion (36 per cent). Similarly, offshore projects showed the Netherlands had one project worth $10 billion (33 per cent); Canada, three projects worth $2.4 billion (8 per cent); Morocco, two projects worth $2.1 billion (7 per cent); Malaysia, two projects worth $1 billion, and Singapore one project worth $1 billion (3 per cent). The NIPC’s intelligence report is based only on investment announcements cited by the commission in a particular year between January and December. . Although the NIPC explained the report may not contain exhaustive information on all investment announcements in the country during the period, it however gives a sense of investors’ interest in the Nigerian economy. Source: Premium Times Ng Read the full article

Nigeria Endorses US $32m Jebba Hydropower Plant Turbine Rehab Project

The Federal Government of Nigeria has endorsed a US $32m turbine rehabilitation project by Mainstream Energy Solutions Limited (MESL) at its Jebba hydropower plant in Niger State. The Minister of State, Power, Mr Goddy Jeddy-Agba made the disclosure when he received a delegation from MESL, operators of the Kainji and Jebba hydropower plants, along with officials of Original Equipment Manufacturer (OEM) of the turbine, Andritz Hydro GmbH. The Minister also lauded the company for the turnaround experienced in the plant since it took over the operation in 2013. He further assured the delegates that the Federal government was ready for more partnerships and investments as MESL was striving to improve the plants without being prompted. “I want to assure you that the Federal Government will work to make the power sector viable and move forward,” he said. Eng. Lamu Audu, the Managing Director of Mainstream Energy Solutions Limited (MESL), in his remarks said that the Jebba Unit 2G6 turbine got burnt in 2009 under the defunct PHCN and that as part of their capacity recovery programme, they will be signing the agreement soonest to rehabilitate it as part of their mandate in the power sector privatisation. Added generation capacity According to him, the Jebba turbine project will cost US $32m in two years to add 96.4MW capacity to the plant. “We are sourcing for the funding through loans and again it will take about two years. The unit is supposed to come back to the grid in the second quarter of 2022.” he noted. Audu emphasised that MESL has recovered 468MW at Kainji and will be adding 80MW by October 2020 after ongoing recovery works on Unit 1G7 turbine. Combined with the Jebba capacity, MESL will reach over 1,000MW capacity out of the 1,338MW total installed capacity of both plants. “By the time we recover Unit 2G6, we will almost reach our limit and we will be focusing on expansion,” he added. Source: Construction Review Online Read the full article

US $124.2m Approved For Water Sector Reforms in Nigeria

US $124.2m loan has been approved by African Development Bank to finance the Urban Water Sector Reform and Akure Water Supply and Sanitation Project in Nigeria. Ebrima Faal, Senior Director at the Bank’s Nigeria Regional Office made the announcement and said that the amount includes an African Growing Together Fund (AGTF) loan of US $20m. Project details The project whose overall cost is US $223m is aimed to address bottlenecks in critical water supply services to households in the densely populated project area. The funds will also see installation of sanitation infrastructure for schools, hospitals, markets. It is scheduled to take five years for completion, upon which it will benefit the 1.3 million residents of Akure City and vicinity. At the Federal level, the project’s Urban Water Reform component will establish a water and sanitation investment program that would contribute to scaling up of the National WASH Action plan 2018-2030. The project, which combines “hard” water, sanitation and environmental protection infrastructure with “soft” analytical and institutional reform support, aligns with the Bank’s Ten-Year Strategy (TYS) and its High 5s priority areas, the Integrated Water Resources Management (IWRM) Policy. Poor access to improved water and sanitation “The project will particularly contribute to improving the living conditions of the communities in the project area. Involving these communities in the public awareness and marketing activities, will increase the project’s ownership and ensure they pay for the water supply and sanitation services,” said Ebrima Faal. Poor access to improved water and sanitation in Nigeria remains a major contributing factor to high morbidity and mortality rates among children under five. The use of contaminated drinking water and poor sanitary conditions result in increased vulnerability to water-borne diseases, including diarrhoea which leads to deaths of more than 70,000 children under five annually. Source: Construction Review Online Read the full article

Akwa Ibom State in Nigeria Rejects Proposal to Construct Nuclear Power Plant

The Akwa Ibom State House of Assembly, in Nigeria has rejected a proposal to construct a nuclear power plant in the state. The house vehemently rejected the proposal for the project which is to be located at Oku Iboku community in Itu council of the state; and urged the state government not to release any parcel of land for it. This is after a motion was tabled by Hon. Kufreabasi Edidem, a member representing Itu State Constituency, citing that the project was not in tandem with international standards guiding the implementation of civil nuclear programmes across the globe. According to him, despite warnings from the International Atomic Energy Agency (IAEA) that Nigeria lacks the technical competence to handle nuclear issues, the National Atomic Energy Commission (NAEC) has not relented in its decision to proceed with the nuclear project in Itu. Exploring other harmless sources “Furthermore, the 6th Akwa Ibom State House of Assembly through a motion moved by Rt. Hon. Nse Essien, Member representing Onna State Constituency, rejected the planned nuclear power plant, urging the Federal Government to instead of the dangerous venture, explore other available and harmless sources of power in the state, including increasing the capacity of the Ibom Power Plant, yet the regulatory body was still adamant on its establishment in the state,” he said. He further cited constant emission of radioactive radiations, discharge of non-biodegradable radioactive wastes, absorption into the ecosystem and food chain, as some dangers Akwa Ibom people would be exposed to if the nuclear power plant is indeed constructed in the state. The Speaker, Aniekan Bassey while responding to the motion, commend Hon. Edidem for the timeliness of the Motion and urged the Clerk to communicate the resolution of the House to the appropriate quarters. Source: Construction Review Online Read the full article

Rwanda To Receive US $12.5m Grant For Kigali Green City Project

Rwanda is set to receive a grant of US $12.5m from Kreditanstalt für Wiederaufbau (KfW) a German development agency, for the implementation of the Kigali Green City Project. The green city will be built on a 620 hectares of land, about 16km from the Rwandan capital, more precisely in Kinyinya, in the district of Gasabo. The sustainable city is expected to consist of 1,749 housing units built on 18 hectares. The specificity of these dwellings lies in the fact that they will be supplied with electricity produced from renewable sources such as solar energy. The houses will be connected to a wastewater and rainwater collection system. Effluent will be treated and reused. The government of Rwanda is also planning to build commercial establishments and offices to accommodate “innovative green enterprises”. The government has maintained that housing in the green city of Kigali will be affordable. The project aims to demonstrate that green building is a necessity, not a luxury, by working to change the stereotype that sustainability is expensive. Living in resource-efficient housing will significantly reduce electricity and water bills for a population that often spends up to 20% of its income on utilities. Financing the entire project The financing agreement was recently signed in Kigali by German envoy Thomas Kurz and Uzziel Ndagijimana, the Rwandan Minister of Finance and Economic Planning. This is the first part of German funding for this important sustainable development project in Rwanda. Berlin plans to inject a further US $26m for the development of the Kigali Green City project. The development of the ecological city of Kigali will require an investment of more than US $26bn from the Rwandan government. The implementation of the project has been entrusted to the Rwanda Green Fund (Fonerwa). It also receives support from the United Nations Green Climate Fund (GCF). Source: Construction Review Online Read the full article

Nigeria Begins Construction Of 1,000 Housing Units For Displaced Persons

Nigeria has commenced construction of 1,000 houses in Monguno to resettle persons displaced by Boko Haram insurgency. Borno State Governor, Babagana Zulum laid the foundation for the project. The project has been designed to facilitate resettlement of 89,000 displaced persons currently taking shelter in public schools in the area. Over 89 households were displaced from their homes in Monguno, Marte, Abadam, Kukawa, Guzamala and Nganzai areas of the state and fled to Monguno town, headquarters of Monguno Local Government in the wake of Boko Haram attacks. 1,000 housing scheme “The housing project when completed would facilitate resettlement of the displaced persons and re-opening of the schools for normal academic activities. We have also included in the project a higher Islamic institute and a vocational training centre. The closure of Islamic schools brought setback in Arabic and Islamic studies. On completion of the project, students from the area will have the opportunity to get the best education,” said Gov Zulum. “The housing estate, expected to cost over US $14m will be completed within six months while US $205,000 will be used on the school project with a completion period of three months. Qualified teachers, administrative personnel and modern teaching materials will be provided upon completion. The school will create opportunities for about 10,000 adults versed in Islamic knowledge to undergo formal school system to qualify for the award of diplomas,” he added. Other facilities that will also be included are; a market, Civilian JTF and vigilante hunters post, sport centre, roads and drainages, electricity and water management office, shopping complex, motor park and recreational centre. Source: Construction Review Online Read the full article

Ottawa Unveils New Mortgage Stress-test Rules That Will Make It Easier To Qualify

Ottawa is revamping the mortgage stress test to make it easier for borrowers to qualify for loans in a move that could add fuel to already hot housing markets. Finance Minister Bill Morneau announced Tuesday that a key benchmark rate set by the Bank of Canada will be replaced by a new rate when calculating stress tests for insured mortgages, which have a down payment of less than 20 per cent of the purchase price. Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, looks poised to follow suit with a proposal to apply the same new benchmark rate to stress tests on uninsured mortgages, for which borrowers make larger down payments. The current stress test, which was introduced 2016 and expanded in 2018, has drawn widespread criticism from mortgage professionals and would-be homebuyers, even as OSFI has staunchly defended it. As it stands, lenders are required to test whether borrowers could make their mortgage payments at an interest rate that is either two percentage points higher than their actual contract, or at the Bank of Canada’s benchmark five-year mortgage rate – whichever is higher. The new benchmark rate will be set by looking at the rates offered to customers applying for insurance on five-year fixed-rate mortgages. It will then take the median of those rates, and add two percentage points as a buffer against shocks such as rising interest rates or a borrower losing their job. Mr. Morneau said the aim is to make the stress test, which has drawn criticism for being onerous and inflexible, “more dynamic to market conditions,” while still keeping it intact. “We think these are positive moves to ensure that the approach remains effective for Canadians and that it also deals with changing market conditions,” Mr. Morneau told reporters on Tuesday. The proposed rule changes would make it easier for some borrowers to get bigger loans. That could ignite further activity in the Toronto region’s real estate market, which has already taken off this year as buyers compete with aggressive offers. Economists including Bank of Montreal’s Douglas Porter has warned against stimulative measures such as relaxing the stress test. The proposed benchmark for uninsured mortgages could “put further upward pressure on prices, especially in markets that are already leaning to a sellers market,” Mr. Porter said Tuesday. Federal officials had become concerned that the Bank of Canada rate, which stands at 5.19 per cent, was no longer tracking the market as well as it had. At that level, it sets the floor for the stress test at roughly 2.3 percentage points higher than the average five-year mortgage rate borrowers are actually paying. By contrast, the new median-based benchmark is currently lower at 4.89 per cent as of Tuesday, according to OSFI, although it could change weekly. And mortgages will still be stress tested at a minimum of two percentage points above the client’s contract rate, according to OSFI. Switching to the new benchmark rate would boost buying power by almost 3 per cent, depending on the borrower, according to Robert McLister, mortgage broker and founder of rate comparison website Ratespy.com. “That’s enough to trigger a meaningful demand increase this spring, particularly given the bullish psychological impact it’ll have,” Mr. McLister said. Ron Butler, a mortgage broker with Butler Mortgage Inc., estimated that the current difference between the two benchmark rates would allow a customer qualified for a $500,000 mortgage with a 5-per-cent down payment to spend $528,125. Mr. Morneau consulted with federal agencies, including OSFI and the Bank of Canada, after Prime Minister Justin Trudeau asked him to gather recommendations to make the stress test “more dynamic." OSFI is seeking feedback on the proposed changes until March 17, and plans to finalize the new rule by April 1. In late January, OSFI assistant superintendent Ben Gully said in a speech that the central bank’s benchmark “is not playing the role that we intended” in calculating the stress test, and has become "less responsive to market changes.” That benchmark is derived from posted mortgage rates at Canada’s largest banks, which are typically much higher than the rates most borrowers actually pay. That gap has widened as falling bond yields have driven down the cost of a mortgage, but posted mortgage rates – which are used to calculate penalties for borrowers who break their mortgages early – have stayed stubbornly high. Toronto-Dominion Bank slashed its posted five-year mortgage rate to 4.99 per cent from 5.34 per cent in early February, but other banks continue to offer posted rates of 5.19 per cent or more. By adopting a new benchmark, OSFI aims "to address the limitations of the current benchmark rate while preserving the integrity of the overall qualifying rate,” Mr. Gully said in a statement. Yet some mortgage brokers played down the impact of the new benchmark, and said the proposal gives no relief to borrowers who want to switch lenders at renewal time. "If the intent is to help buyers, they have failed,” said Elan Weintraub, a mortgage broker with Mortgageoutlet.ca. Paul Taylor, president of Mortgage Professionals Canada, an industry association for mortgage brokers, said even with the new benchmark the stress test will still be too onerous. While it is “very good” that Ottawa is swapping the Bank of Canada’s benchmark mortgage rate for a new standard, he said, his group thinks the test should be set at 0.75 percentage points above the actual mortgage rate, rather than two percentage points. Source: The Globe and Mail Read the full article

Edinburgh Slated For Biggest Ever Investment In Housing

The government of Scotland has announced a staggering increase in funds that will be allocated for the procurement of affordable housing across the region. Upon the adoption of the Scottish Budget, authorities announced a £17 million increase with a further £300 million committed for the 2021- 2022 period by the Communities Secretary in order to address the housing crisis in Scotland. In the Scottish capital of Edinburgh, plans to tackle homelessness are on track. Local authorities are committed to delivering 10,000 affordable homes by the year 2022. With 1,900 currently either completed or under construction, the City Council is well on its way towards delivering on its promise. Furthermore, they have pledged to invest a further £2.5 billion in housing by 2027, which would deliver another 20,000 affordable homes to locals.

Fresh funding from central authorities

The increase in funding declared in the Scottish budget also means that local authorities in Edinburgh will be receiving the largest-ever investment in housing in the city’s history. Councillor Kate Campbell, Edinburgh's Housing, Homelessness and Fair Work Convener, stated that “We were expecting to receive around £45 million from the Scottish Government for social housing but today's commitment confirms this will, in fact, to rise to over £48 million. This is the single biggest investment towards our housing on record for a starting budget and will support our own ambitious programme to deliver thousands of new and better homes for our residents. This announcement is to be welcomed and we will continue to work with the Scottish Government, locally and as a regional housing partnership, to secure as much grant funding as possible.” Edinburgh authorities are already hard at work at delivering on their affordable housing pledges – as well as working on other vital priorities within the city, including the construction new schools and medical centres as well as the reinvigoration of key urban areas. Source: The Mayor. Read the full article

How To Make A Housing Crisis

For most of American history, cities grew along a familiar pattern. Once a suburban community grew large enough, the neighboring big city would loosen its borders and swallow it up through annexation. Then in the 1950s, the developers of Lakewood, California—sometimes described as the “Levittown of the West Coast”—invented a new “municipal technology” to avoid this fate. By contracting out vital municipal services like police, fire and sanitation to the county or private entities, the 17,500-home subdivision just outside of Long Beach was able to incorporate as a city at a significantly lower population than it otherwise would have needed. Copycat contract cities became hugely popular in the ensuing decades, forming concentric circles around old urban centers and providing suburban homeowners with the solace that, safely within their incorporated entities, they would be protected from what might euphemistically be called big-city ills. Contract cities aren’t the first thing that come to mind for most people when they think of the affordable housing crisis that many American cities now face—these suburban communities tend not to have many homeless people or renters at risk of eviction. But in desirable regions like coastal California, contract cities have played a huge role in exacerbating housing problems outside their borders. For over half a century, they’ve been all too successful at implementing their founding mandates: preserving their physical and demographic character, and delivering consistently rising home values to homeowners. “One of the main reasons it worked was that these cities effectively opted out of paying for expensive social services by zoning out poorer people,” New York Times economics reporter Conor Dougherty writes in Golden Gates: Fighting for Housing in America. Dougherty’s new book provides a comprehensive account of the origins of California’s housing crisis, illuminating the many places where it hides in plain sight—in contract cities, in tax law, in shifting cultural trends, in structural economic transformations, as well as in the annals of policy and planning. Dougherty applies a similarly wide lens to the diverse activists who have emerged to challenge the housing status quo, leaving readers hopeful for the future of a broader housing movement—if perhaps also a bit overwhelmed by it. “There’s a lot layered on to this that has nothing to do with housing, but it’s manifesting in housing fights because of the seriousness of this issue,” he tells CityLab in a phone interview. Golden Gates is at its best as a history, whose breadth demonstrates the impossibility of silver-bullet housing solutions. One of many counterintuitive origin points for California’s current crisis was San Francisco’s freeway revolts that began in the 1950s, when grassroots neighborhood activists successfully prevented highways from being constructed throughout most (but not all) of the city. The revolts marked the beginning of the state’s anti-growth movement, which challenged California’s longstanding growth-for-growth’s sake philosophy. That doctrine had brought “urban renewal” projects that transformed minority neighborhoods into bombed-out shells of their former selves and inspired proposals to fill in nearly the entire San Francisco Bay. Anti-growth activism began as a close cousin of the state’s environmentalism, but as time went on, “the good intention of stopping sprawl soon became cover for stopping everything,” Dougherty writes. The broad language of the California Environmental Quality Act enabled this conceptual fudging, granting ordinary citizens the power to halt coastal subdivisions and green urban infill projects alike. As land use and planning power devolved to neighborhood groups, city governments followed their lead by “downzoning” large swaths of their land to preserve the existing urban landscape, as if it were a pristine old-growth forest. San Francisco has gone from having a housing crisis to being a housing-crisis meme.The infamous Proposition 13, a 1978 ballot initiative that capped property taxes, meant that new housing could cost cities more in services than it would bring in through taxes. In response, cities privileged much more lucrative commercial development—setting the stage for the state’s severe jobs/housing imbalance—and tacked hefty fees on new housing construction. Combine that with flatlining productivity in the construction industry and a persistent labor shortage following the Great Recession and you get construction costs that ensure new housing is by definition luxury housing. Meanwhile, in the depths of the 2008 foreclosure crisis, giant private equity firms snapped up tens of thousands of homes, creating a new category of renter households living month-to-month at the whim of Wall Street bottom lines. By that point, California’s once-robust tenant movement was already hobbled by laws from the 1980s and ’90s that severely limited rent control and expanded landlords’ power to evict tenants. These historical factors, and many more, bore down on the Bay Area right as it became the “burning-hot nucleus of some of the most epochal forces in human history” during the recent tech boom. San Francisco has gone from having a housing crisis to being a housing-crisis meme: the supercommuters, the homeless teachers, the poop on the sidewalk, not to mention the proxy housing battles over shadows, office construction, and gentrifier watering holes. This is where Dougherty’s history crashes into the lived realities of contemporary Californians, and their fight for a better housing future. Each character or group of characters Dougherty introduces represents a possible solution to the multifaceted crisis he has laid out. Among them is Stephanie Gutierrez, a 15-year-old from Redwood City who organizes her building against a 50% rent hike. The strikers win some significant concessions, but Gutierrez and her family are ultimately forced to leave anyway, leading her into a serious bout of depression. Multiply Gutierrez’s experience by a million and you have an entire generation of Californians whose childhoods have been shaped by housing insecurity. If Gutierrez represents tenant power—and tenant despair—Sister Christina Heltsley, whose community land trust buys market-rate housing and keeps it permanently affordable, represents the movement to get housing off of the private market. Rick Holliday, a developer who hopes to make construction more affordable by building apartments in a factory and stacking them together on site, embodies yet another solution. And then there are the YIMBYs, the “Yes In My Backyard” activists fighting to lower zoning and regulatory barriers to all kinds of housing—“so long as it was built tall and fast and had people living in it.” This group emerged in San Francisco in 2014, when an economics Ph.D. dropout named Sonja Trauss formed the San Francisco Bay Area Renter’s Federation (SFBARF). Using a combination of performance art-style provocations and Twitter activism, she brought legions of young, nerdy, white-collar San Franciscans to testify in favor of new housing at bone-dry planning meetings. In just a few years, the YIMBYs grew to be a powerful political movement, led by San Francisco’s state senator, Scott Wiener, who has thrice tried (and failed) to pass comprehensive statewide zoning reform. “The YIMBY movement and all the problems they were encountering—that complexity is the issue. That’s the story.”What’s unprecedented about the YIMBYs is not their ideology, but their political power. As early as the 1970s, MIT urban planning professor Bernard Frieden made the argument that California’s growth controls, applied to wildlands and existing neighborhoods alike, would only make housing progressively more expensive. In more recent years, economist Edward Glaeser, journalist Matthew Yglesias, and others took up these ideas in light of the 21st century “urban revival,” which saw big coastal cities boom without adding commensurate housing, thus locking people out of America’s greatest engines of opportunity. “What was interesting to me was that they were trying to create some kind of constituency around this,” Dougherty says of the YIMBYs. They upended Frieden’s notion that, unlike tenants or homeowners, the people zoned out of the housing market were “unorganized and probably unorganizable.” Close observers of the YIMBY movement will find plenty of gossipy tidbits in Golden Gates, like the fact that Yelp CEO Jeremy Stoppelman reached out to then-journalist Kim-Mai Cutler about starting a pro-housing political organization after reading her legendary TechCrunch manifesto, “How Burrowing Owls Lead to Vomiting Anarchists.” Cutler refused, so Stoppelman ended up giving Trauss $10,000 to “keep doing what she was doing”—seeding the YIMBY movement with capital in much the same manner that he once received his first venture funding. The YIMBY movement’s rapid rise an ability to gain lucrative institutional backing—especially from the tech industry—has turned out to be its biggest political liability. “Encoded in that ascent was an age-old American message, which was that problems are only problems when they affect white people,” Dougherty writes. This perception issue was on vivid display when the Moms for Housing activists, a group of African-American women who drew national media attention for their occupation of a vacant home in Oakland, showed up to protest the unveiling of the latest version of SB50, Wiener’s unsuccessful zoning reform bill. A great deal of Golden Gates is spent parsing the divide between the YIMBYs and more traditional tenant activists. It’s a divide that plays out in dramatic fashion on Twitter, and, more substantively, helps illustrate the differing priorities of people in need of immediate relief from skyrocketing rents and those fighting to address California’s extreme housing shortage. Even for those versed in the minutia of housing Twitter, it can be difficult to follow the contours of this debate across the book’s many characters and scenes. And Golden Gates’s focus on YIMBY drama takes oxygen away from other types of housing activists, namely environmentalists and urban planners, who think about housing in the context of reducing carbon emissions and congestion, protecting open space from sprawl, and redressing historic inequities between neighborhoods. But Dougherty sees the thrust and parry of the Bay Area housing debate as the best way to dramatize a problem that resists straightforward fixes. “I thought the YIMBY movement and all the problems they were encountering—that complexity is the issue, that’s the story,” he says. Dougherty also sees a broader housing movement coalescing out of this scrum, offering “mixed solutions” that take pieces from both sides. “Building more housing does nothing for renters being evicted today. Rent control does,” Dougherty writes. “Capping rent prices does nothing to solve the underlying problem of a housing shortage that is the root cause of displacement. Building housing does.” Dougherty sees this logic reflected in the mixed housing solutions offered by nearly all the Democratic presidential candidates, as well as recent zoning reform victories in Oregon and Minneapolis, and new rent caps in California and New York. Even as housing becomes a more prominent national issue, and more cities across the country start encountering California-style housing problems, the Golden State is sure to remain the epicenter of the housing movement. The next few years are likely to contain enough drama for Dougherty to write a sequel. Some of the activists he follows are beginning to chip away at Prop 13 and California’s longstanding rent control restrictions. And as for those contract cities and other exclusive suburbs, Scott Wiener and his army of YIMBY activists are gearing up for round four. “This is ultimately a book about people who show up,” Dougherty said. “Apathy is a bigger problem than somebody trying to propose a solution, getting some blowback, and altering their platform. Maybe that’s the process working.” Source: City Lab Read the full article

Trillions Of Dollars, Millions Of Affordable Homes: How Presidential Candidates Would Fight California’s Housing Crisis

Housing has long been an afterthought on the national political stage, but as skyrocketing housing costs and staggering homelessness have struck cities in California and across the country, the Democratic presidential contenders are finding the issue harder to ignore. Many of the 2020 White House hopefuls have rolled out sweeping and expensive plans to deal with the problem, which would go farther than anything the federal government has done on housing in generations. Experts say that building more affordable housing is key to lowering housing costs in places like California, where demand has driven up prices — and several candidates would invest huge federal sums to do so. Sen. Bernie Sanders would go the furthest, proposing an investment of $2.5 trillion over 10 years to build and rehabilitate nearly 10 million affordable homes over the next decade. That’s a staggering amount, considering the U.S. is building about 1.3 million housing units a year — period. Sen. Elizabeth Warren would invest $500 billion, in what the accounting firm Moody’s found would create more than 3 million new affordable housing units and reduce rents by 10 percent. And former hedge fund chief Tom Steyer would spend $470 billion. “The solutions and numbers may feel very big, and even overwhelming, but this is the scale of the problem,” said David Zisser, the associate director of the affordable housing advocacy group Housing California. “I suspect that $2.5 trillion (that Sanders is proposing) is probably about right.” Not surprisingly, the party’s most progressive candidates would fund their fix by taxing the rich. Warren would expand the estate tax, while Sanders would use a wealth tax on the richest 0.1 percent of Americans. His plan also calls for a 25 percent house-flipping tax on non-owner-occupied property sold within five years of purchase, and a 2 percent tax on the value of vacant homes. Sanders, Warren, and Steyer also call for repealing the Faircloth Amendment, which prevents the federal government from funding the construction of most new public housing units. Other candidates would increase housing supply through other methods. Bloomberg, Buttigieg and Klobuchar would expand tax credits that encourage developers to build affordable housing, giving them more incentive to build. Experts warn throwing money at affordable housing won’t go that far without also changing local zoning rules that limit where apartment buildings can be built. Warren, Steyer and former New York City Mayor Michael Bloomberg would give grants to cities that reform those zoning practices, while South Bend Mayor Pete Buttigieg and Sanders would use a stick instead of a carrot, making federal housing or transportation funds to cities contingent on zoning reform. Meanwhile, other candidates take a different tack by focusing on renters, with proposals from Sen. Amy Klobuchar, Bloomberg, Buttigieg, Sanders and others to greatly increase the availability of housing vouchers — federal funding helping low-income people pay their rent. That would fight do more to help renters in the short term, as it would take years for new funding to build more housing units to actually lead to new homes being constructed. Stephen Levy, an economist and the director of the Palo Alto-based Center for Continuing Study of the California Economy, said he thought that reforming local zoning laws and expanding housing vouchers were more realistic proposals than the idea of spending billions or trillions of taxpayer dollars on new construction. “Money is only one piece of why housing is not getting built,” Levy said. “Even if you had a lot more funding, you’d have to wait years to go through the approval process for construction to start.” Multiple candidates have also endorsed policies that California has already passed and want to take them nationwide.  Warren, Bloomberg, Sanders, and Steyer have called for banning landlords from discriminating against tenants who use government housing vouchers, and Sanders and Warren would ban landlords from evicting tenants without cause and guarantee the right to legal counsel in housing disputes. Both are already illegal in the Golden State. In one of the most drastic proposals, Sanders has called for a national rent-control law capping annual rent increases at 3 percent or 1.5 times the rate of inflation — more stringent than a similar California law passed last year — even though some experts warn that would stifle new housing construction. None of the other candidates support that idea. But they do offer a variety of unique proposals. Buttigieg and Sanders have endorsed a program in which the federal government would give grants to cities to purchase abandoned or foreclosed homes and give them to low-income people who live in historically redlined or racially segregated areas. After 10 years of living in the home as their primary residence, the “homesteader” would fully own the property. Former Vice President Joe Biden — who has the least fleshed-out housing proposals — would focus on policies that get homeless people into homes as quickly as possible instead of making shelter a condition of staying sober or participating in other programs. And Warren would deny federal grants to police departments that arrest homeless people for living on the streets. Source:  Mercury News Read the full article

City Will Convert 14 Apartment Buildings Into Housing For Homeless

The city has taken the next step in converting over a dozen Manhattan and Bronx apartment buildings into housing for hundreds of homeless New Yorkers. The Neighborhood Restore Housing Development Fund Corp., a nonprofit that partners with the city on affordable housing projects, paid $74 million for the 14 buildings, property records show. The seller was landlord Mark Irgang, according to records. The city provided about $80 million to finance the purchase. “Through this latest transaction, we are immediately providing permanent affordable housing to approximately 600 additional New Yorkers experiencing homelessness,” Department of Social Services Commissioner Steven Banks said in a statement. Banks added that the buildings will be upgraded “to guarantee rent-stabilized leases and regulatory protections for these families.” Five of the properties are in the Bronx, with most on East 138th Street. The rest are in Manhattan, such as 148 West 124th Street and 79 East 125th Street. The city announced in November its plan to scoop up 14 cluster-site properties — those in which the city pays the landlords to rent out units to house homeless families — and convert them into permanent affordable housing for homeless families. The city could spend at least $41 million for the buildings, according to the Daily News, which found that current residents live in squalor, from caved-in ceilings to bug infestations. “These buildings were renovated completely to beautiful condition at the time they entered the cluster program,” Irgang said. He noted that the properties were managed by the Acacia Network, whose responsibilities included maintenance and repairs, including pest control and hiring security services. Acacia called the mismanagement allegations “simply untrue.” “Acacia Network is proud of the impeccable care taken in managing these buildings for more than 15 years,” the firm said in a statement. Neighborhood Restore did not immediately return a request for comment. The Neighborhood Restore purchase, which will provide housing for 224 households with permanent housing, is part of the city’s plan to end the Giuliani-era cluster program. Since January 2016, the city has phased out about 70 percent of cluster units. Neighborhood Restore, MHANY Management and Samaritan Village will operate the buildings. The city’s Law Department hired Metropolitan Valuation Services to appraise the buildings, and the firm’s valuation was $60.1 million. The final price was determined by what the city would have paid if they had sought to acquire the property through eminent domain, which would tack on extra costs and time. Source: The Real Deal Read the full article

New Incentives for Mass Housing Builders

The Iranian Barter Market will see sales of construction materials on credit to real-estate developers introduced by the Ministry of Roads and Urban Development as per the memorandum of understanding signed on Tuesday. Builders who work in partnership with the ministry under the government-backed housing development project, the so-called “National Housing Initiative,” will get construction materials at a 15-30% discount on credit that could be repaid in three-year installments from the Iranian Barter Market. According to Mahmoud Mahmoudzadeh, the head of the housing division of Roads and Urban Development Ministry, suppliers will receive a 5% commission on sales annually. CEO of Iranian Barter Market Alaeddin Khataei said the mechanism will help factories, which are now operating at half their capacity, to increase their output and employment.   Source: Financial Tribune Read the full article

Easier Mortgage Rules Are No Fix for Canada’s Housing Crisis

Mortgage rule changes introduced by the finance department this week aren’t sufficient to address the affordability crisis faced by many Canadians, according to two of the nation’s largest banks. The finance department unveiled a new benchmark interest rate on Tuesday as part of stress tests that determine whether people qualify for insured mortgages. This comes after criticism that the policy was too tight and unfairly kept younger, first-time buyers out the market. The gap between the old qualifying rate and the new rate is about 30 basis points, which will allow the median household in Canada to buy C$13,500 ($9,800) in extra real estate, according to CIBC’s Benjamin Tal. That equates to less than a 3% improvement in purchasing power, the bank’s deputy chief economist wrote Friday in a note to clients. “It’s becoming more and more apparent that, short of drastic measures, it’s impossible to fight supply issues with demand tools,” Tal said. “Increased supply (rental or otherwise) is the only reasonable solution to the housing affordability crisis that many Canadians are facing.” While the existing qualification rule, introduced in 2016 for insured mortgages and extended in 2018 to the uninsured space, were effective in restoring balance to a market that seemed to be escalating out of control, a rebound in Canadian housing is underway. Home prices in some of the country’s largest cities such as Toronto climbed to fresh records recently, driven higher by dwindling inventories.

Tal’s comments were echoed by Neil McLaughlin, group head of personal and commercial banking at Royal Bank of Canada, who said Friday on a conference call with analysts the stress test change will have “quite a minimal impact.” “Our analysis so far looks like it would be about 25 to 30 basis points reduction in the qualifying rate,” McLaughlin said. “That would really translate into a fairly small increase in purchasing power for the average borrower, probably in the neighborhood of about C$20,000, C$25,000 on an average mortgage.” He also agrees with Tal on what’s needed to address the affordability issue. “The lack of supply in the major urban markets is still the real focus for where the policy needs to go,” he said. Source: Bloomberg Read the full article

White House Slams Big Cities On Housing, Sees GDP Growth Below 2.5 Percent

The report takes aim at cities including San Francisco, Los Angeles, Washington, Denver and Baltimore. The Trump administration on Thursday warned that affordable housing constraints are a potential threat to U.S. economic growth, blasting New York and 10 other metropolitan areas for excessive regulations that are driving up costs and fueling homelessness. In the annual report of the White House Council of Economic Advisers, the administration highlighted housing alongside issues such as the opioid crisis as key policy challenges that needed to be addressed to extend the nation's record economic expansion. The report takes aim at cities including San Francisco, Los Angeles, Washington, Denver and Baltimore, arguing that the inability to build enough housing to meet demand in those areas has driven home prices far beyond construction costs. "The housing affordability problem shows no signs of subsiding in certain markets, as housing construction fails to keep up with demand, putting upward pressure on home prices and rents," officials said in the report. In its overall economic outlook, White House economists projected gross domestic product this year would grow less than 2.5 percent if current policies remained in place — another year in which the economy would fall short of the 3 percent growth touted by President Donald Trump but not yet achieved during his time in office. The White House said growth could break 3 percent this year if Trump's full economic agenda were implemented. Administration officials said in the report that a manufacturing downturn was at the heart of a recent slowing of global economic growth. The White House acknowledged that uncertainty about trade policy was an "often-cited culprit," in particular Trump's trade negotiations with China. Other factors include a change in European automobile emission standards and slowing growth in China, according to the report. But housing was singled out as among the biggest roadblocks to growth. At issue for the administration are regulations imposed by state and local governments including zoning and rent controls, building codes, environmental regulations and historic preservation requirements. The White House described a cascading set of problems from affordable housing constraints in those areas: less-attainable homeownership; pressure on rental markets and federal rental housing assistance; limits on parents' access to certain neighborhoods for their children, and longer commutes that affect the environment and worker productivity. The administration claimed that homelessness would fall in those areas if the regulations were relaxed. On a call with reporters, Council of Economic Advisers acting Chairman Tomas Philipson said the administration was still analyzing the potential economic effects of the coronavirus, after White House economic adviser Larry Kudlow said the impact would be minimal. "The administration is taking a bit of a wait-and-see in terms of the economic analysis," Philipson said. Source: Politico Read the full article