Planning & Zoning. Enforcement. Investors in the Housing Market.
FROM ORDINANCE TO ENFORCEMENT
Community members have told us about reported code violations that go uncorrected and retaliation from STR owners and guests. Without active enforcement by the City government, bad actors will violate laws and intimidate residents into silence. FBGNC has been working with the city government and elected officials to repair a broken enforcement apparatus. Challenges include the recent turnover among the city staff (City Manager and Director of City Development Services), a substantial increase in the number of STRs, difficulty with the implementation of a new STR-management software, troubles with housing for potential hires, and a culture of non-enforcement. We applaud and support the efforts of Mayor Jeryl Hoover and the City Council, who are actively working to correct this situation.
PLANNING & ZONING COMMISSION
The Planning & Zoning Commission governs the application of and exceptions to the zoning ordinances. The majority of the current commissioners work in the real estate and tourism industry, including STR owners and operators. FBGNC would like to see a wider range of interests represented on the Commission, including commissioners who live in the neighborhoods and have the interests of residents in their hearts. Are you such a person? If so, now is your opportunity to serve your community and represent the interests of your neighborhood. Please apply to serve on the Planning & Zoning Commission.
WALL STREET'S NEIGHBORHOODS
Nearly a third of all homes sold in Texas last year went to a company or corporation that paid in cash, according to a report from the National Association of Realtors. Investors, like BlackRock, are buying up homes identified as investment opportunities by algorithms. The homes are then rented out as long-term or short-term rentals at high rates, which creates enormous profits. However, your average citizen is unable to compete with the cash and legal staff of Wall Street. This leaves families renting homes for a high percentage of their take home income and putting them at risk of living paycheck-to-paycheck with no slack for emergencies. Those who can’t afford a home are pushed into homelessness. As society, it is important to prevent shelter from being utterly commoditized.
The percentage of homes purchased by investors in these Texas counties:
Tarrant County 52%
Johnson County 48%
Rockwall County 45%
Midland County 44%
Dallas County 43%
Travis County 41%
Denton County 39%
Harris County 38%
Kaufman County 38%
Williamson County 37%
Data for Gillespie County was not available.
THE AIRBNB BUBBLE
Americans Are Building Vacation-Home Empires With Easy-Money Loans
Selling risky mortgages based on volatile per-night Airbnb income could end badly for communities, borrowers, and investors.
"A special kind of business loan is fueling the boom. It lets borrowers, including the self-employed, qualify based not on their salaries but on the projected future income of the property they’re buying. … Last year investment-property loans without taxpayer backing totaled $9.9 billion, an eightfold increase since 2018, according to industry publication Inside Mortgage Finance’s analysis of mortgage bond offerings. The vast majority qualified because of rental income. … Over the past year, more lenders have started letting borrowers qualify based on what they expect to charge per night for stays booked on sites such as Airbnb and Vrbo, a unit of travel company Expedia Group Inc. Real estate buyers can generate much more income renting a property out for hundreds of dollars a night than they could through a lease to a long-term tenant, at least for now.
"Over the past year, Wall Street firms such as Credit Suisse Group AG and Barclays Plc have helped package and market hundreds of millions of dollars in mortgage-backed securities sold to institutional investors that included loans from these three companies. Some were rated investment grade; others, below. Credit Suisse and Barclays declined to comment. It’s unclear how many of the Airbnb-style loans are making their way into these offerings—or even how many have been sold overall—because no one has a full accounting. But reports from rating companies note that the securities include mortgages on properties either without leases or with those shorter than 90 days."
Doesn’t this sound a lot like the circumstances that lead to the crash of mortgage-backed securities in 2007 and 2008?
