Monthly Archives: February 2015

How Does Homeownership Differ Around the Globe?

Fast Fact: Home ownership isn’t just an American dream. It’s a global one that’s unattainable to millions outside our borders, serving as a reminder we shouldn’t take it for granted.

The country a person calls ‘home’ can be a game changer when it comes to the ability to own a home. Not every government gives home ownership the same respect we give it here in the U.S.

Those that do, help boost home ownership much like we do — through legislation, tax policies, zoning rules, financial regulations, and funding subsidies.

Home ownership really gained momentum in the 1980s when the U.S. and Europe pushed for affordable housing programs, putting more people on the path to financial stability. The median net worth of an average homeowner in the U.S. is $195,400. Average renter? Only $5,400.


The World Bank and United Nations both measure housing affordability worldwide on a scale of 1 to 5; 1 being the most affordable and 5 the least.

Countries also provide their own definitions. In the U.S. and Canada, housing is considered affordable as long as its cost doesn’t exceed 30% of a homeowner’s gross income. In India, the rule is 40%.

Other examples:

  • Australia’s National Affordable Housing Summit Group defines affordable housing as that which is “…reasonably adequate in standard and location for lower and middle income households and does not cost so much that a household is unlikely to be able to meet other basic needs on a sustainable basis.”
  • In the United Kingdom, the definition includes “social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market.”
  • The U.S., the Department of Housing and Urban Development has established the goal of “a decent home and suitable living environment for all Americans.”


Think about this: as our economy becomes more global, how will that affect home ownership? Even though home values and markets are local in nature, around much of the world they’re inextricably connected. Miami prices respond to turmoil in Latin America. Vancouver home values react to Chinese populations across Asia. London prices reflect Russian and Eastern European economic highs and lows.

The recent drop in U.S. home sales reflects what’s happening in many cities around the world. Paris, Stockholm, Hong Kong, and Shanghai are all facing challenges with affordable housing. India, as a country, may be in the worst situation with an estimated 20-million deficit in affordable homes.

Plus the U.S. is losing its status as the poster child for home ownership. The rate of U.S. home ownership has fallen 6% in just a few short years.

Tell Congress to support initiatives that will help make home ownership affordable again for average Americans.

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Huntington Beach Realtors® Oppose Rent Control

When most people think of Orange County in Southern California, mobile home parks do not immediately come to mind. But in Huntington Beach, a seaside city with nearly 200,000 residents, mobile homes and their renter occupants are the norm. The city wanted to control their rents until the local Realtor® association stepped in.

The Huntington Beach City Council had voted in July 2014 to allow a ballot measure that would modify the city charter and impose rent control in mobile home parks. But the ballot initiative effort was quashed before it even got started. The Orange County Association of Realtors® joined forces with the Manufactured Housing Trust and residents to oppose the initiative, arguing that rent control would ruin property values. They also cited a failed attempt at rent control in the city in 2002.

The city council responded to those concerns in August 2014 by removing the issue from the November 2014 ballot. Instead, council members reached informal agreements with some mobile home park owners to work out leases with their residents that would stabilize rents. Council members also pointed residents to rental assistance programs that help low-income seniors, veterans, disabled persons and other renters to secure subsidies.

Huntington Beach has 18 mobile home parks, 10 of which are designated for seniors only. Many of those seniors complained to council members that their rents had increased 50% in 2014. Mobile homes have provided a much-needed housing alternative for retirees, veterans and seniors living on fixed incomes. Of the 78,000 residences in Huntington Beach, about 40% are rental properties.

Will Congress help or derail America’s commercial real estate recovery?

Fast Fact: Shopping centers, office buildings and other commercial real estate we count on every day have still not fully recovered from the economic crisis. Congress needs to ensure a full recovery.

When we talk about commercial real estate, we’re talking about the retail centers you shop in, the office buildings you or your loved ones work in, and the warehouses that create, store and distribute virtually everything you buy. Even rental apartments, hospitals, and hotels are part of the commercial real estate universe.

We all know how much our home values dropped when the real estate bubble burst, but did you know the value of commercial real estate also plummeted? And that, in many areas, commercial properties are still struggling to recover?

In 2007, U.S. commercial real estate sales totaled $576 billion dollars, but by 2009 that number had dropped to only $68 billion.

This year, sales are expected to reach over $400 billion, a big number, but still significantly less than before.

That’s partially because, in the years following the real estate crisis, it became difficult for owners, prospective buyers, and developers to find financing to build, buy, or renovate commercial properties. Maybe you’ve noticed less construction of new shopping centers and office buildings over the last few years?

The good news is that we expect more investment capital to flow into commercial real estate this year for several reasons, including:

Commercial real estate rents and vacancies are improving.
The slowdown in construction caused a pent-up need for more commercial real estate.
Stocks, bonds, and other non-real-estate investments have risen to heights some investors won’t pay so investors are re-entering the commercial real estate market.
Commercial mortgage-backed securities and lenders are also coming back.
Some policies are afloat in Washington that could ensure a full recovery. On the other hand, other proposals could cause serious setbacks for our nation’s commercial real estate recovery. You can help by telling Congress to:

Create a U.S. covered bond market, increase the cap on credit union member business lending (MBL), provide additional banking guidance related to commercial real estate loan term extensions, and improve credit availablility for small businesses. Many of these solutions already have a record of success in Europe and Canada.
Increase Small Business Administration (SBA) loan limits and refinancing for commercial real estate.
Avoid new lease accounting proposals that would reduce the borrowing capacity of many commercial real estate landlords and tenants alike.
You don’t have to be a commercial real estate investor to appreciate the contribution it makes to our economy and our lives. We all count on commercial real estate, one way or another, every day!

Let’s urge Congress to act now.

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