Monthly Archives: June 2019

Medical Research Drives Commercial Development in Philadelphia

In late 2017, Researchers at the Children’s Hospital of Philadelphia and the University of Pennsylvania received approvals from the Food and Drug Administration (FDA) for breakthrough processes of first of its kind gene and cell therapy.

Neither was related. Neither application was even submitted by the same company. Pharmaceutical giant Novartis submitted the application in cell therapy while Spark Therapeutics, then a fledgling startup, applied for approval in the gene therapy.

What does this have to do with real estate?

Well, with research in a new and exciting area of medicine, Philadelphia has staked its claim in the ground as the trailblazing city in this field, and as a result, billions of dollars of venture capital are being spent on developing commercial real estate in the area.

In the third quarter of 2018 alone, Philadelphia set a record for investment dollars brought into the city, according to data from the Philadelphia Commerce Department.

And it isn’t going to slow down any time soon.

Gene therapy and cell therapy are incredible breakthroughs in the medical community because they treat conditions with greater success than ever before. However, research in these fields takes time. Lots of time. Many years in fact. And, it requires a highly skilled and an incredibly specialized work force to conduct the research.

With the success of these two applications, the FDA anticipates a major influx of new proposals in these specialized fields to be coming in in the future.

And with the growth of this specialized area of medicine, and Philadelphia being considered the place to be for researchers world-wide, developers have been quick to draw up plans for multi-million-dollar properties to house the life science development community.

The Philadelphia Bulletin was the city’s longtime third newspaper, but it shuttered its doors in the 1980s. The iconic building that housed the Bulletin, however, still stands across from Amtrak’s 30th Street Station. Drexel University partnered with Brandywine Realty Trust to redevelop the building, calling it Schuylkill Yards, because it sits right alongside the Schuylkill River which flows through the heart of the city.

Spark is going to be the anchor tenant of this new project, which is expected to be completed in 2020.

Two other major developments within a mile of Schuylkill Yards are targeting gene and cell therapy tenants as Republic Properties Corp., based in Washington, is building an eight story life sciences building while the Wistar Institute has already agreed to be the anchor tenant at University Place 3.0, a cell and gene therapy-specific project.

A few miles away, down at the old Philadelphia Navy Yard, naval barracks have given way to massive commercial development. Wuxi Apptec, a Chinese manufacturer already has a complex at the Navy Yard, but now one of its clients, Iovance Biotherapeutics, a California-based company, is setting up bi-costal operations by jumping into the hot spot that is Philadelphia with a brand new, 136,000-square foot laboratory.

In Philly’s suburbs, the old GlaxoSmithKline headquarters in King of Prussia has been razed and The Discovery Labs is developing a massive 1.5 million-square-foot campus that is meant to be used as a co-working space for the life sciences.

“It’s breathtaking,” University Place Associates founder and CEO Scott Mazo told Bisnow. “As a developer and someone who lives in Philadelphia, life science right now seems like the opportunity that has been missed several times in the past.

“We’re getting calls from names all around the country, and we’re being considered as the top place in the country in terms of cancer and gene therapy research.”

Prior to all this new development, in a city not known for new development, most of the life science companies were finding themselves housed together at the University City Science Center as part of the UCity Square project.

But quarters are getting cramped with the recent addition of Amicus Therapeutics, a New Jersey-based company, placing their new research center there.

What’s down the road? That’s to be determined. The University City Science Center has a planned expansion and University Place Associates are already kicking off conversation about a potential University Place 4.0 before 3.0 has even come to fruition.

Drexel University and Brandywine Realty Trust identified at a ribbon-cutting ceremony that there will be greater demand for developing even more buildings for life sciences and then there is still more room to develop at the Navy Yard.

This kind of additional development may be a decade away, if not longer. But Philadelphia desperately needed to find a commercial real estate niche, and it certainly seems to have hit the lottery with gene and cell therapy research.

Information published in Bisnow was used in this report.

New Legislation would Ban Restrictions on Short-term Rentals via Zoning Ordinances

Local governments in Michigan have begun fighting short-term rentals by adopting new zoning regulations that would categorize rentals of fewer than 28 days as a commercial transaction in a residential zone.

However, new legislation being considered in Lansing would prevent local municipalities from using zoning ordinances to prohibit short-term rentals.

The legislation, introduced recently by Rep. Jason Sheppard from Temperance, would ban restrictions on short-term rentals through zoning ordinances, suggesting that an abuse of zoning laws infringes upon private property rights and negatively impacts the local economy.

By boosting tourism into the state of Michigan and specifically into local communities, short-term rentals are a boon to local economies as more money is spent at local business by visitors.

Michigan’s economy is strongly supported by vacation rentals and the second home market – especially in the summer months when many small communities in the state rely on this tourist activity.

Sheppard’s legislation is the latest effort to address short-term housing bans at the capital.

In 2017, similar legislation was introduced in both the house and the senate, and although it didn’t pass, there was a lot of support. With turnovers both in the governor’s mansion and in the legislature since, there is a renewed interest in keeping the option of short-term rentals viable for Michigan property owners.

And why not? According to information from AirBnB obtained by The Detroit News, approximately 640,000 visitors used AirBnB alone in Michigan in 2018, providing the property owners with $78 million in supplemental income.

This doesn’t include other social media rental platforms like VRBO and HomeAway.

That means the amount of money spent into Michigan’s local economies in 2018 was likely in the nine-figure range.

About the Proposed Legislation

According to the Michigan REALTORS®, Sheppard’s legislation would:

  • provide Michigan homeowners the ability to maximize the value of their property through the use of short-term rental arrangements
  • provide clarity for and protect a practice that has long been permitted in Michigan and is essential to the viability of local resort economies
  • provide for uniform and fair treatment of residential properties in all residential zones.

What the legislation would not do is prevent local government from enforcing nuisance ordinances and housing codes that are in place to protect the quality of life of community residents, provide public safety and address discourteous behavior.

In total, a package of bills involving short-term rentals, listed as House Bills 4554-63, were introduced. The bills define a short-term rental as a property that is rented for 28 days or fewer.

These bills would allow for some local zoning regulation of short-term rentals but would list rentals of 14 days or less in the same calendar year as a residential use, rather than a commercial one.

Titled “The Michigan Short-Term Rental Promotion Act,” House Bill 4554 specifically would create a database of vacation rentals in Michigan and impose a bed tax, similar to those levied on traditional hospitality industry locations such as hotels and motels.

Earlier this year, the Michigan Supreme Court issued a decision that upheld the ability of local ordinances to ban short term rentals.

However, not all municipalities have gone down that path. So, for now, while the debate rages on, those looking to rent out their space should check their local ordinances first. If no laws are on the books then the city itself isn’t preventing it.

The city of Grand Rapids, for example, actually has very restrictive regulations on how and when people can rent their property on a short-term basis. Some of these regulations include:

  • a license is required
  • only one room can be rented at a time
  • the property owner must not only own the home but live there as well.
  • there is a limit of approximately 200 licenses per year

Regardless of how this turns legislative fight turns out, those considering renting out homes or spare rooms for travelers should keep insurance in mind.

Insurance companies only cover what the owners have disclosed. It is important to disclose all information to an insurance provider to ensure coverage for any liability.

Home Loans for Veterans No Longer Capped

Veterans who secure loans through the Department of Veteran’s Affairs (VA) Home Loan Guaranty Program will no longer have a capped amount on what they can borrow.

With the Senate unanimously passing H.R. 299 and President Trump signing it into law, previous caps on borrowing for veterans have officially been eliminated.

This was a part of the overall legislation, which is historic in context. It is called the Blue Water Navy Vietnam Veterans Act, which will finally give the same health benefits to military personnel who served off the coast of Vietnam in the water, as was afforded decades ago to the ground troops in Vietnam who were exposed to Agent Orange.

The new law will bring medical relief to approximately 90,000 veterans who were not given expedited treatment with medical issues that may have been or definitely were related to exposure to Agent Orange.

Part of getting the loan cap lifted involved the National Association of REALTORS® (NAR), as the trade organization worked with other interested housing industry representatives to negotiate a limit on proposed fee increases on home loans secured through the VA.

“This vital tool encourages private lenders to offer favorable home loan terms to qualified veterans and provides a much-needed resource to those who have sacrificed so much for this country.”

The idea behind increasing those fees was a way to try to offset the cost of guaranteeing the new $1.1 billion in medical benefits.

Several Housing industry trade organizations, including NAR, teamed up with some veterans’ affairs associations to work with Congress to find a way to extend veteran health benefits without increasing the VA home loan guarantee fees, something that was being considered even though the two are completely unrelated.

An agreement reached in 2018 set those fees for a buyer at $350 over the span of 10 years.

“As we aim to ensure our nation’s veterans have every possible opportunity to achieve the American Dream of homeownership, the National Association of REALTORS® has remained a strong supporter of the VA home loan guaranty program,” NAR President John Smaby said in a statement. “This vital tool encourages private lenders to offer favorable home loan terms to qualified veterans and provides a much-needed resource to those who have sacrificed so much for this country.”

Smaby added that the fees on VA loans should be based on risk, and not the cost of other benefits or programs offered by the VA.

The VA home loan guarantee program encourages private lenders to offer favorable home loan terms to qualified veterans without requiring a down payment. It has helped raise veteran homeownership rates to over 75% – much higher than the national average.

VA Home Loan Guaranty Program Hits Milestone

The Department of Veteran Affairs celebrated a pair of milestones in early June, recognizing the 75th Anniversary of the GI Bill and the backing of the 24 millionth home loan as part of the Bill’s VA Home Loan Guaranty Program.

Department of Housing and Urban Development Secretary Ben Carson delivered a keynote event at the National Press Club in Washington, D.C. commemorating the anniversary and landmark loan respectfully.

The GI Bill was originally signed into law by President Franklin Delano Roosevelt in 1944 and over the course of the past seven-and-a-half decades has provided the resources for American service members to own a home.

VA loans also give veterans with poor credit an opportunity to qualify for a mortgage when they other wise would not be able to from traditional lenders.

“Knowing the VA has our back and that we can enjoy the American dream is absolutely something special, and it’s been a relief to my family.”

In 2018, Veterans United issued more than 45,000 VA loans worth more than $10.4 billion. Quicken Loans had the second most VA loans issued coming in just over 35,000 and they were worth $9.1 billion.

“The GI Bill has positively impacted millions of men and women through education, medical funding and home loans,” Carson said, according to a press release. “It is through this area that HUD is proud to have made such a profound impact in the lives of our nation’s veterans. And while the tremendous debt we owe to our brothers and sisters in arms may never be fully repaid, we can and will do everything in our power to leverage the GI Bill and HUD’s programs to provide affordable housing for all Americans.”

Having this event kick off the month of June was a perfect fit for Homeownership Month and as such, the National Association of REALTORS® (NAR) was well-represented. Association President John Smaby attended the event and told the tale of one of his very first home sales to a Vietnam veteran 40 years ago which was purchased through the VA loan program.

NAR has long been strongly committed to the VA loan program, and Smaby reiterated that support.

“As we stand here and think about what 75 years of the VA loan means to Americans, I am reminded of that very special day,” Smaby said of his first experience with a VA loan. “It is also unbelievable what this bill does for our economy and what it means to REALTORS® across the country. There is no greater day for the agents in my office than when we see a veteran come through our doors after buying a home.”

Army Sergeant 1st Class William Kopf

Over the years, Army Sergeant 1st Class William Kopf was able to buy a home each time he relocated using the VA home loan program.

We want to know your story of becoming a homeowner:

Posted by Home Ownership Matters on Sunday, July 28, 2019

Army Sgt. 1st Class William Kopf

In addition, the 24 millionth VA loan was given to Army Sgt. 1st Class William Kopf, an Active Guard Reserve Soldier, who moved to Northeastern Pennsylvania (near Scranton) from Salt Lake City, Utah after being reassigned.

It was the third loan Kopf has taken out through the VA, having previously used the program to buy homes in Salt Lake City and earlier in Columbus, Ohio.

“I’ve got more VA loans than Quaker has oats,” he told the Columbia Tribune. “When you’re deployed, you’re not thinking about your next life steps; you’re not worried about a loan, you’re not worried about a home. You’re worried about that day’s mission and the wellbeing of the troops.

“But when you are [back home] and you’re trying to make that transition to the next part of your life, that’s where the VA comes in – and that’s where you need them the most. Knowing the VA has our back and that we can enjoy the American dream is absolutely something special, and it’s been a relief to my family.”

About VA loans

VA loans do not require a down payment and has limited closing costs. More than three million loans are currently active through the VA with an average of 2,000 loans guaranteed each day.

In 2018, VA loans increased for the seventh consecutive year, which is an all-time high, and is likely a big part of the reason veteran homelessness decreased by 5.4 percent in 2018 and has been virtually cut in half since the start of the decade.

In 2009, VA loans made up only about 2 percent home mortgage market, but that has swelled to 12 percent today, Veterans United Education Director Chris Birk told the Tribune.

“This is arguably the most powerful home loan on the market,” Birk said. “It’s had a tremendous impact on the people in this country.”

Mortgage Rates Continue to Fall, Leading to More Home Sales

Mortgage rates at the end of May dipped below four percent for the first time in 16 months and have now dropped a full percentage point since November, according to data from Freddie Mac.

Pending home sales and new home sales were declining for a while which led to mortgage rates continuing to fall.
However, consumers finally identified a window of opportunity and decided to take it.

According to data released by the National Association of REALTORS® (NAR), existing home sales increased by 2.5 percent in May when compared to April.

Annually, home sales are still down 1.1 percent from this point in 2018, however homebuyers took advantage of the reduced mortgage rates.

“The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding,” said NAR chief economist Lawrence Yun.

Trade Wars

One of the reasons they are falling is the ongoing trade wars between the U.S. and China, among other countries.

Whiles farmers and U.S. manufacturers have suffered because of tariffs, mortgage rates have gone down, proving to be a benefit for those looking to buy a home.

The overall results aren’t there yet, as home sales still lag annually, but usually the impact of something like low mortgage rates happens down the line – and the rates have been falling for months and the month of May appeared to be the tipping point in favor of buyers.

However, despite the increase in existing home sales in May, the uncertainty of trade and tariffs might not lead to the huge rush of buyers that such low mortgage rates would otherwise indicate.

“It’s the residual effect that you are seeing coming from last year’s interest rate increases,” Marcus & Millichap CEO Hessam Nadji told Yahoo Finance. “We had a very aggressive Fed, interest rates were going up, and the housing market slowed substantially because of that. This year we’re seeing interest rates come down, but also the recession fears have heightened, there’s a lot of volatility regarding trade and a lot of noise in the market, so the buyers aren’t moving back in in droves.

“Also, there’s been a preference to rent, throughout this expansion. We’ve seen consumers choose to stay in rental homes a lot longer than they typically would before buying their first home. We’ve seen older adults and couples – empty nesters – come into the rental market and sell their homes. So, the demographics are shifting and the preference to rent is pretty profound around the country.”

Mortgage Rates

The average rate on 30-year fixed-rate mortgages dipped to 3.99% at the end of May which is quite a bargain for homebuyers.

In May of 2018, the average rate of a 30-year fixed-rate mortgage was 4.56%. This means that in the span of a year, the monthly mortgage payment dropped by about $59 per month from about $1,013 to about $954.

“The month of May ushered in the home sales upswing that we had been expecting,” said NAR President John Smaby. “Sales are strengthening in all regions while we see price appreciation for recent buyers.”

Still, it’s not tempting enough to attract an influx of borrowers, as the Mortgage Bankers association reported that the number of mortgage applications dropped 3.3 percent from the third week in May (when the mortgage rate was 4.09 percent) to the final week in May when it reached the 16-month low. Overall, applications for loans to buy homes dipped 1 percent, while loan refinancing plummeted 6 percent.

“The real estate market is very connected with the broader economy,” Nadji said. “So, if the worst-case scenario were to play out and we were to enter an all-out trade war, that would be terrible for the global economy, that would be terrible for the U.S. economy, and real estate is not immune from that.

“I would expect that is not going to happen, because nobody wins a trade war in the end, and I think everyone knows that. So, if you then play out the current scenario, with job growth still about 200,000 to 250,000 a month, where demand is being created … lower interest rates, really help lubricate the marketplace.”

Best Podcasts for Homeowners in 2019

When we scroll on our phones or tablets we often go at breakneck speed – absorbing as much information and entertainment as possible before moving on to the next part of our day. Our handheld devices are tiny escape hatches that contain an endless stream of information. But sometimes, the pace at which we use our devices can make it harder for us to dive deeper into the subjects that interest us.

But podcasts? The modulated voice of the podcast show’s host often sets a comfortable pace – one that can feel more conducive to absorbing the information they are laying down. Best of all, they can play in the background while we tend to other things.

It can be inspiring to listen to podcasts that align with the task that you’re working on while listening. If you’re a homeowner or prospective homeowner who is ready to tackle an overgrown garden, take on the repair jobs you’ve been side-eyeing all winter or are just focused on the topic of homeownership, the following podcasts are for you.

Best Podcast For First-Time Homeowners

Young House Love

Back in 2007, Sherry and John Petersik started a blog to chronicle the ups and downs of buying and renovating their first home. Since then, the couple has gone on to renovate a total of 5 homes, publish a book, create home products for major retailers like Home Depot and Target and start their own podcast.

They remodel with realistic, affordable materials and furniture (think Ikea) and have a sense of humor about the whole process. Their podcast has great guests and offers tips on purchasing your first home as well as coping when things go wrong after you buy.

Some great episodes to get started with are:

Best Podcast(s) For Home Improvement

It was too hard to pick just one podcast for this category, especially since homeownership is pretty much synonymous with home repairs. If you own a home, something is breaking or about to break at any given point. These two podcasts tell you how to do everything from removing squirrels from your attic to installing recessed lighting.

The Money Pit

This nationally syndicated radio show and podcast is hosted by the very pleasant Leslie Segrete and Tom Kraeutler. They are extremely knowledgeable and have a way of explaining repairs that instills confidence in the novice homeowner. The show has a call-in format, so the episodes are always full of unexpected home repair questions.

Some popular episodes to get started with are:

Fix It 101

This NPR podcast is well loved by both homeowners and professionals. It’s a great place to learn how to do some basic home repairs as well as determining if it’s time to call in outside help. The show is based in Mississippi but covers home repair topics relevant to homeowners across the US.

Some fan favorites to begin with are:

Homeowner Advocacy

The Holistic Housing Podcast

The Holistic Housing Podcast is created by the National Association for County Community and Economic Development (NACCED). Hosts Sarah and Laura have a great banter and aren’t afraid to inject humor into their episodes. Show topics include; urban revitalization, placemaking, the American Dream and more. The duo also bring on thought leaders and lawmakers to talk about how current policies affect homeowners and their communities.

Here are a couple of good episodes to get started with:

The REALTOR® Party Podcasts

The REALTOR® Party was created in order to promote the candidates and public policies that support homeowners and their property rights. Though their podcasts are not regularly scheduled, the episodes they have up are worth a listen as they cover policy issues relevant to homeowners.

Best Podcast For Homeowners On The Move:

Real Estate Today Radio

For most of us, our homes are the biggest investment we’ll ever make, so loading up a podcast that give homeowners a competitive edge is worth it. Real Estate Radio maintains fast pace and sticks to relevant and critical information. The host, Stephen Gasque, of the NATIONAL ASSOCIATION OF REALTORS® is well suited for the job with a background in both journalism and real estate.

Technically, this is a live radio show, but all the episodes are available podcast style as well. So it’s your preference.

Here are a couple of solid, past episodes to get you started:

Homeowner FinancesAfford Anything

While host Paula Pant has some great expert interviews, the best part of her podcasts is how actionable each of them are. She often breaks down the numbers that are put before her by callers who need help purchasing a home or getting out of debt.

For example, in her May 27, 2019 podcast she helps Amy decide whether or not she should downsize to a smaller home. She also helps Katherine create a budget so she can househack her duplex. (Househacking means buying a multi-unit property that you plan to live in as well as rent out.)

Here are a few of Pant’s podcasts that are most relevant to homeowners:

Homebuyers downsizing falls, those upsizing increases in Pennsylvania

The number of homebuyers looking to downsize from their current home is trending downwards, while those looking to upsize has increased, according to a recent Welcome Home survey conducted for the Pennsylvania Association of Realtors®. Homebuyers looking to downsize decreased to 8%, from a high of 18% in 2017, while those who wanted to upsize increased to 15% from a low of 7% in 2016.

“As fewer homeowners are downsizing, it’s making it harder for families to purchase larger homes,” said PAR President Bill McFalls Jr. “When one area of the market stalls or declines, it creates a ripple effect. The lack of larger homes in a market where there is an increased demand for them makes it harder for buyers to purchase the home they need for their families.”

For buyers, this may mean a faster-paced and more stressful homebuying experience. “Those surveyed said that the two greatest stressors when buying a new home were paperwork or selling a prior home,” McFalls noted. “That’s more than doubled in the last two years of the survey. It shows that buyers have to identify the house they want more quickly and if they already own a home, they have a shorter time to sell their previous home to avoid paying two mortgage payments.”

The survey also showed that use of the Federal Housing Administration loans is increasing among first-time homebuyers since the fourth quarter of 2016. The study again confirmed that the most popular financing tool continues to be the 30-year mortgage, with nearly 50% of homebuyers choosing it.

“The use of FHA loans has continued to increase for first-time homebuyers,” McFalls said. “These loans are designed for low-to-moderate income borrowers, require lower minimum down payments and lower credit scores than many conventional loans.”

For more information on the Welcome Home survey, visit

Legislature Promotes Housing Choice in Washington

Lawmakers in Olympia recently completed a landmark legislative session for housing in the state of Washington.

The legislature passed a series of bills that promise to make more housing options available at all income levels. These improvements will help stabilize home prices, promote workforce housing and expand choice for moderate income households.

Two major REALTOR®-supported bills will open the door to home ownership opportunities for consumers by creating a path for cities to build new housing and improving liability laws that were preventing new condominium construction.

HB 1923 gives the state more authority to address housing shortages and calls for an increase in residential building capacity. Cities that take action to create more housing are eligible for state planning grants of up to $100,000 and may also apply for funds to ensure that their land capacity matches their planned housing.

This bill struck a balance between local control of housing plans and the state-identified need for more action on housing supply. Cities are now encouraged to use a number of planning tools that make urban development easier and timelier.

Voluntary and innovative planning tools that are encouraged include:

  • Zoning for 50 housing units per acre around light rail stations and 25 housing units per acre around frequently used bus stops.
  • Allowing for duplexes, triplexes, accessory dwelling units and other “cluster” techniques in zones currently restricted to single-family homes.
  • Short plat subdivisions can be created up to the amount allowable by state law.
  • Setting a minimum density of six homes per acre in areas zoned residential.

Having these tools in place will encourage the creation of more home options and maximize housing choice for consumers.

In addition to these important planning tools, the adoption of condominium liability reform, SB 5334, creates the promise of many more “middle market” housing options.

The new condo law maintains consumer protections while removing the barriers that made condo construction too expensive and risky. With relief from additional financial and insurance risk, housing entrepreneurs will get back to the business of building more mid-priced condos, creating more housing options for consumers.

All of this new legislation, plus many other affordable housing proposals that are still in the works, sets up Washington to take even greater steps to tackling the affordable housing crisis and the need for more homes next year.

Jefferson Parish Voters Agree to Raise Property Taxes to Increase Teacher Wages, Improve Schools

Jefferson Parish schools were once some of the best in the New Orleans metropolitan area. But a rapid decline in recent years has seen the academic performance plummet to a C grade school district, and a loss of quality educators.

But voters are hoping a decision they made in May will turn that around quickly.

Voters overwhelmingly agreed to raise property taxes for public education by $28.8 million over the span of 10 years. A whopping 72.2 percent of voters approved this increase just 18 months after a similar tax increase narrowly failed in the school district.

With the election of new school board members and the hiring of a new superintendent of schools, a plan was put in place to return the Jefferson Parish schools to prominence and improve the academic performance from a C grade to an A grade in just five years.

The plan earned endorsements from a wide array of groups and organizations including the Jefferson Federation of Teachers, the New Orleans Metro Association of REALTORS®, the Chamber of Commerce, the Jefferson Business Council and even the Bureau of Governmental Research, a non-partisan research group which outwardly opposed the 2017 tax increase.

Part of that strategy included significant raises for teachers in the school district – an average of approximately $3,400 annually.

“Since 2016, 30 percent of veteran teachers and 40 percent of first-year teachers have left their job in Jefferson Parish at the end of each school year.”

Teacher salaries in Jefferson Parish ranked eighth out of nine surrounding school districts in the New Orleans area. This raise, which will bring the average starting salary to approximately $46,000 – an increase of about $5,000 – will vault Jefferson Parish to second-best among those same school districts.

Jefferson Parish administrators said it had lost a whopping 1,500 teachers in the past three years.

An additional $5 million in savings for the school district will come from the elimination of 15 jobs in the school district’s central office. Ten were cut in the summer of 2018 and an additional five are being eliminated in the summer of 2019.

New superintendent Cade Brumley, who took over in March of 2018, has won over the support of the residents of Jefferson Parish with his aggressive plan to improve the city’s schools.

Jefferson Parish schools are the largest public school system in Louisiana with nearly 50,000 students. However, it ranks low – 47th state-wide out of 71 schools – in performance, and many believe low teacher pay has been a primary reason for that.

Since 2016, 30 percent of veteran teachers and 40 percent of first-year teachers have left their job in Jefferson Parish at the end of each school year.

The tax approved by voters would add an additional $117.71 annually to the average sales price of a home in Jefferson Parish, which is a property valued at $224,000.

“This vote is validation of the bold steps we have taken and the ambitious course we have set for our children,” said new superintendent Cade Brumley.

Commercial properties worth about $500,000 would see an increase of $592.50 a year.

“I’m grateful Jefferson Parish came together to make an investment in the future of our parish through our workforce,” Brumley told the New Orleans Advocate. “This vote is validation of the bold steps we have taken and the ambitious course we have set for our children.”

Brumley also said that a successful public education system benefits everyone in the community, even indirectly.

It lowers the crime rate, increases property values, brings good workers to local businesses and increases the accessibility to better health care.

Wisconsin Could Help Potential First-Time Homebuyers Save

Saving for a down payment and closing costs to buy a home is a difficult endeavor for some in today’s economy.

It’s especially hard for those trying to purchase a home for the first time.

With many potential first-time homebuyers dealing with crushing student loan debt, coupled with the rising costs of housing, housing decisions are being severely impacted.

Homeownership levels are down, especially in Wisconsin. Many people feel their only path to having a roof over their heads is to rent.

Even then, it’s a vicious cycle for renters. Approximately 12 percent of renters have zero savings or retirement accounts and the median value of assets for the remainder of renters is a mere $3,000.

With a median-priced home in Wisconsin requiring $9,250 for a five percent down payment, it’s crystal clear as to why it’s such a hurdle for renters to buy a home for the first time.

But help could be on the way.

First-Time Homebuyer’s Savings Accounts

The Wisconsin legislature is considering a bill that would create a First-Time Homebuyer’s Savings Account – a tax-free savings account for individuals or couples trying to buy their first home in Wisconsin.

This concept has already been adopted in several other states (Alabama, Colorado, Iowa, Minnesota, Mississippi, Missouri, Montana, Oregon and Virginia) and is designed to not only help Wisconsinites purchase a home, but it will also stimulate the state economy.

If people can afford to live in Wisconsin, then they are more likely to stay in-state or move into the state for a job opportunity that makes sense financially.

More homeowners also means more investment into communities and neighborhoods, which in turn increases the tax base and allows for more school funding, better safety, and more infrastructure improvements.

Every state that has adopted this savings account is structured a little bit differently, but the purpose is the same – to allow people the opportunity to save what’s needed to buy a home without being subjected to taxes.

In Wisconsin, the plan currently would allow any individual or couple who has never owned a home or those who have not owned a home in the previous three years to open an account at any financial institution that cannot be taxed by the state, nor can any of the interest or capital gains be taxed. This money can stay in the account for up to 10 years and must be used toward the purchase of a home.

Individuals will be allowed to deduct up to $5,000, or $10,000 if filing a joint income tax return, each year to a maximum of $50,000.

Anyone can contribute to the savings account – so parents and grandparents, for example, can contribute money for their children or grandchildren, but only contributions made by the prospective homebuyer(s) are eligible for the tax deduction.

To guarantee that the money is spent to purchase a home, once the savings account is opened, a home must be purchased within 10 years. Failure to do so will result in the closing of the account and the money returned to the prospective homebuyers.

Much like withdrawals from other savings or retirement accounts, any withdrawal from the account for any purpose other than a down payment on a home results in a 10 percent penalty plus capital gains on the amount withdrawn.

“Wisconsin is experiencing all-time lows with its housing inventory while median home prices continue to increase, and rents are increasing faster than wages.”

This savings account is also designed to address the workforce housing shortage in Wisconsin.

Some individuals in Wisconsin can’t afford to live close to their place of employment, making for longer commutes, creating unnecessary traffic and after frustration mounts, creating a problem for employers to retain talent.

Having this account will ease that burden by making it easier for these Wisconsin workers to find affordable housing options.

Wisconsin is experiencing all-time lows with its housing inventory while median home prices continue to increase, and rents are increasing faster than wages.

While the First-Time Homebuyer Savings Account won’t correct this workforce housing dilemma all by itself, it can begin the process of reversing the negative trends that the state is facing.

It will certainly create a boost in home sales and new construction, which is always a boon for any economy, but it will also create jobs, increase revenues and create economic stimulation across the state.

According to data from the Wisconsin REALTORS® Association:

  • Real estate is the second largest industry sector in Wisconsin, accounting for 15.8 percent of the gross state product, 380,000 jobs, and producing approximately $18 billion in personal earnings in 2017.
  • New residential construction alone employs 126,000 people and generates $5.6 billion in earnings, which account for 5.1 percent of the employment and 4.8 percent of the earnings in Wisconsin.
  • Every new single-family home built creates three jobs and generates $89,000 in federal, state and local revenues.
  • For every home sold in Wisconsin, $16,443 of income is generated from real estate-related industries — such as brokerage, mortgage lending, title insurance and appraisal — and one job is created for every two homes sold.
  • With every new home purchased, owners spend approximately $5,171 on average on furniture, appliances, lawn care equipment or services.