Dia Cuatro...
In today's collaborated discussions we reviewed industrial markets, low income housing, taxes and governmental trends and issues.
An article discussed pertained to HUD community development block grants that are being awarded to the City of Dallas. Dallas is receiving millions in federal grant money for housing; however, Dallas is rejecting certain affordable housing development projects to limit the amount of affordable housing in downtown. Affordable housing developers are frustrated because they believe Dallas city hall is favoring a select number of developers which are building a mix of upscale developments with a minimum amount of affordable housing units. One developer in particular is very upset after losing millions of dollars due to their project not being awarded HUD funding which was required to make their project feasible. This developer believes Dallas officials are favoring upscale developments with minimum amount of affordable housing units for the downtown area. The article suggested that Dallas officials may want to portray an upscale scene for their downtown and this might be the reason why Dallas is rejecting development projects with a high count of affordable housing units in downtown.
Lack of diversity in communities was discussed and how it can affect its residents. A community needs diversity to provide a healthy environment to have a good level of interaction. Affordable housing is required for teachers, police men, fire fighters, nurses, cleaning and cooking personnel, etc.
We discussed if developers should be responsible for relocating others that are displaced from buying the low income land and building it up to be a nice place? The class consensus was yes, developers should have a responsibility to relocate these people. Relocation assistance should be required to move residents when a new development needs to be built.
The US is broke, so removing the capital gains tax of 15% and changing it to a 30% + tax rate is being proposed in order to generate more tax dollars. Hedge fund guys are making their money on trading funds whether it is hedge funds, real estate, etc. If real estate is taxed higher than liquid investments, why would you invest in real estate? Pension funds and other retirement funds invest indirectly and chasing really cheap real estate deals. If you take players out of the real estate market, you raise the cost of real estate financing. Congress can make this retroactive or not. Congress can back date this date a year or two. Real estate has been skewed by policy by transferring risk from individuals and corporations and lenders to society.
Restoring Neighborhoods
Developers diversify and improve neighborhoods. Gentrification is a good thing. However, the number one issue is that it will raise property taxes.
In order to generate more tax revenue, San Francisco city officials are imposing a commercial rent tax on San Francisco tenants. This rent tax will hurt small businesses and it may cause many tenants to leave San Francisco.
The U.S. government is a big commercial real estate player.
The GSA is an owner of large real estate such as courthouses, agencies, etc. In terms of employment, they are progressively the better ones to work for. They are market oriented and have savvy employees.
The average discount according to an USA today article is that you can buy a foreclosure for a discount of 30% than a non foreclosure property.
Cloud computing
A growing number of government entities are improving citizen engagement by using social networking tools to communicate with each other. I think this is a great idea.
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