Recent Rulings and Findings

Archives
Due to the volume of entries in this section of our library recent rulings and finding are posted for 90 days then moved to our archives. You may research our archives by the following subjects:

• Affordable Housing
• Environmental Issues
• Fair Housing
• Financial Management
• Human Resources
• Rental Housing
• Technology

Carbon Monoxide Detectors Required in Massachusetts
"Nicole's Law," signed by Massachusetts state governor, Mitt Romney, on November 2 requires that all single-family and multifamily homes, hotels, motels and college dormitories have working carbon monoxide detectors. Housing units with enclosed parking, or heaters or boilers fueled by gas coal or wood must have a working carbon monoxide detector by March 31. Batteries or plug-in detectors are acceptable for most homes; however, buildings with multiple units must have hard-wired detectors. These buildings have until January 7, 2007 to be in compliance.
Information courtesy of Realtor.com, November 29, 2005.

Areas to Save $$$ on Energy
Here is a list of ways to save money on energy costs when replacing appliances and fixtures in a home:

• Buy energy-efficient appliances. Although they cost more upfront, in the long run consumers come out ahead with reduced energy bills. In addition, there are energy efficient mortgages, tax breaks from state and federal governments and some utility companies offer rebates. Look for comparison information on the tags.
• Use compact florescent bulbs (CFB) instead or conventional incandescent lighting. CFBs cut energy costs in half and last ten times longer than standard bulbs. The bulbs are smaller, cheaper and brighter than they once were and offer improved color quality.
• When the water heater is replaced, buy a higher-efficiency model. These use 10 to 50 percent less energy. Check the thermostat on your current model. It should be set no higher than 120 Fahrenheit.
• Use energy efficient heating and cooling devices and make sure that all heating and cooling ducts are properly insulated.

College Students Shrink Low-Income Housing Stock
The acute low-income housing shortage in America is being worsened by college students using Section 8 and other low-income housing to offset the high cost of college according to an article by the Des Moines Register. A spot check by the paper found that there were scores of students paying little or nothing to live in low-income housing in college towns across the nation. Students, like other tenants, are required to pay 30 percent of their income for rent; but under HUD guidelines designed to encourage Section 8 tenants to attend college financial aid does not count as income. This means that many students actually pay less rent than people who have children and work. If the students have not income outside of financial aid, the taxpayers foot the entire bill. Some students also live as roommates in larger apartments and save even more money on rent than students living alone. The article noted that although the Section 8 program did allow some students to attend college that would be otherwise unable to do so, it was being abused by others including scholarship athletes that already receive housing money. Under HUD's current guideline, virtually any student not claimed on their parents' tax returns qualifies for Section 8. Housing advocates feel that this practice pushes out those that the program was originally intended to benefit: low-income families with children, seniors and the disabled. HUD has promised to tighten eligibility requirements for students for the second time in two years. Information courtesy of the Des Moines Register, October 10, 2005.

"Affordable Housing" Being Offered to Middle-Class
In many areas the "hot" housing market has become increasingly unfriendly to middle-income, first-time homebuyers. Known as inclusionary, low-cost or workforce housing these homes are priced for those earning 80-120 percent of the area's median income. These affordable home buying programs are designed to keep key workers such as civil servants, law enforcement, firefighters, nurses and teachers living in the communities they work in - particularly in areas where only the wealthiest can afford to buy a home. These price breaks are achieved mostly cost-cutting strategies such as zoning changes for developers, providing land at reduced cost, expediting approvals and allowing the construction of larger more expensive homes elsewhere. Special lending programs are also used and more rarely, direct subsidies.
Information courtesy of the San Diego Union-Tribune, October 25, 2005.

Nationwide Demographic Trends Affecting the Housing Market
Although housing markets are mostly locally driven, here are five nation-wide housing trends to watch:

• The Baby Boomers - This group (76 million people) is in the market for second homes. In addition, boomers are moving to "active adult communities" for those who are 55 and older, but not ready to retire.
• Minorities - Minorities are making economic progress (more are joining the middle class) and more are in a position to become homeowners.
• Immigrants - One million immigrants arrive in the U.S. each year. Household growth is expected to accelerate over the next ten years due to immigration and it is expected that immigration will account for one-third of household growth. Second-generation immigrants are expected to out-earn their parents, fueling housing growth for the next two decades.
• Single Females - According to the National Association of Realtors, single women purchased one-fifth of all homes in 2004. Single females are expected to be a source of increased housing demand over the next decade.
• Echo Boomers - This large demographic group aged 11 to 28 is expected to have a profound effect on the U.S. economy as they find jobs and purchase homes.

Growing Disparity Between Housing Prices & Wages
The median home price rose 20 percent while wages for key community workers remained stagnant during that last year and a half according to the Center for Housing Policy. The report, "Paycheck to Paycheck: Wages and the Cost of Housing in America" found that the cost of a median-priced home increased from $186,000 to $225,000 while the annual income needed to purchase a home grew from $54,855 to $71,354 or about 30 percent. Wages for key community workers such as elementary school teachers, police officers, licensed practical nurses, retail salespersons and janitors remained flat in the majority if U.S. cities and remains significantly below the amount need to purchase a home in some metropolitan areas. The report compared data for homeownership and rental affordability findings with median community wages for nearly 200 metropolitan areas and more than 60 occupations. The report found that based on median income that retail salespersons and janitors must pay an excessive proportion of their income in order to rent a one-or-two bedroom apartment. While most reports focus on the Northeastern and Western markets, "Paycheck to Paycheck," found that the growing disparity between wages and home prices is a nationwide trend.
Information courtesy of Novogradic & Company, LLP, October 2005.

What's in a Name?
"Bubble" has become a common term when describing the real estate market conditions; however, the meaning attached to the term can vary from positive to negative and can have connotations ranging from catastrophic to a gradual slowing of the market. Defining whether there is a "bubble" is complicated, not only because of linguistic confusion where everyone seems to define "bubble" to fit their own agendas, but also because real estate is less volatile than other commodities that have experienced "bubble" conditions. People do not trade real estate as frequently as stocks and real estate tends to face slow declines in value rather than the sharp, sudden drops experienced by stocks. The last decrease during the late 80s and early 90s rebounded by 2000. The data is contradictory - housing starts are up, but so is the number of existing homes for sale as is the time is takes to sell a home. Taken as a whole, data indicates that the hottest housing markets are cooling off, but whether it is a gradual slowing or a more serious drop remains to be seen.
Information courtesy of Corcoran.com, October 2005.

Renting Preferable in Some Markets
Approximately, 30 percent of the U.S. population rents. Not everyone who rents does so because they can't afford to buy. Renting a home is generally costs less per month than buying. Some, who believe that the real estate market may be shaky, choose to invest money in other areas. Others in particularly hot housing markets have found that the asking price is actually a starting price when bidding wars tend to drive up prices significantly. In many cases, the price to buy has climbed so significantly, that people find they have a better standard of living as renters. They can afford to rent (live) in a home that they would be unable to buy. Rents tend to lag behind the cost to buy (monthly mortgage rates) making renting - even in more expensive areas - a relative "bargain."
Information courtesy of Forbes Magazine, September 19, 2005

The Most Expensive Rental Markets
According to Forbes Magazine, these are the most expensive rental markets by square foot (note: the national average is $14.53 per square foot):

Rank	Market	Class A*	Class B**
1	New York, New York	$26.04	$17.19
2	Boston, Massachusetts	$24.33	$16.88
3	Honolulu, Hawaii	$23.27	$16.54
4	San Francisco, California	$22.48	$18.33
5	Northern New Jersey	$22.36	$15.16
6	Stamford, Connecticut	$21.76	$13.87
7	Nassau-Suffolk, New York	$21.05	$15.65
8	Los Angeles, California	$20.34	$16.89
9	San Jose, California	$20.23	$15.99
10	Orange County, California	$19.54	$16.53
11	San Diego, California	$19.19	$14.32
12	Oakland, California	$17.66	$16.06
13	Washington, D.C.	$17.54	$14.34
14	Central New Jersey	$16.54	$13.57
15	Philadelphia, Pennsylvania	$15.40	$11.30
16	Riverside-San Bernardino, California	$14.81	$12.35
17	Baltimore, Maryland	$13.91	$11.25
18	Chicago, Illinois	$13.57	$10.26
19	Miami, Florida	$13.49	$10.20
20	Sacramento, California	$13.16	$10.45

* These are very high-quality buildings that are beautifully maintained and managed.
** Not the best buildings, but decently maintained and managed.
Note: Many of these markets include surrounding areas and/or counties.

FBI Offers Reward for Tips on Ecoterrorists
The FBI and a building industry group will begin offering $100,000 rewards for tips leading to the arrest and conviction of ecoterrorists. The Earth Liberation Front (ELF) is the main target. ELF has claimed responsibility for setting fires in construction sites at housing developments. The group has been "fire-bombing neighborhoods and burning down apartment complexes," according to Lyle Fox, president of the Building Industry Association of Washington. He said that "increasingly brazen" attacks increase the likelihood that someone could be hurt or killed. According to the builders' group ecoterrorists have caused nearly $8 million in damage in Washington State, $53 million in damage in California and more than $3 million in damage in Oregon since 1996. In a recent statement, the Seattle office of the FBI said it was investigating several arsons and attempted arsons in Washington during the past year and a half that are apparently linked to ELF.
Information courtesy of the San Diego Union-Tribune, October 2, 2005.

Two Separate Discrimination Cases Settled for Just Over $20,000
A pair of Massachusetts owners and the property management company representing them have agreed to settle separate housing discrimination lawsuits against them for little more than $20,000. In both cases the owners and the property management company were accused of refusing to make their rentals "safe for children." In one case the apartment contained lead-paint; in the other the owner refused to make repairs called for in a pre-rental housing inspection for Section 8 tenants. According to the lawsuits, the owners did not make the necessary changes and the tenants were forced to find other housing. To settle the case each owner paid the respective family $10,000 and was required to attend fair housing training, but did not admit guilt. The property management company said that it was cheaper to settle than to go to trial even if they did win. According to the property management company, the first owner was taking steps to de-lead the apartment when the potential renter found other housing. In the other case, the owner was selling the apartment building and declined to make the $4,000 worth of repairs. The property management company representative said that the owner was advised against not making the repairs.
Information courtesy of The Republican, September 22, 2005.

More that Half of Employees Admit to Having at Least One Annoying Habit
A recent online survey of 2,200 employees showed that 54 percent confessed to having at least one annoying workplace habit. The survey conducted by TrueCareers in July, revealed that 18 percent of employees admit that they often talk to themselves and another 13 percent admit to yelling over cubicle partitions instead of using to phone or email to contact a colleague. Other bad habits included incessant whining, slamming the phone and cracking knuckles. Bad habits in the workplace can have serious repercussions - nearly 60 percent say that a co-worker's bad habits have hurt their working relationship and another 40 percent find the annoying habits so unbearable that they are searching for another job.
Information courtesy of the Detroit Free Press, September 12, 2005.

Many Renters Without Pets Would Keep Them if Allowed to
A recent study showed that 35% of renters without pets would keep them if their rental housing permitted animals. The study by the National Council of Pet Population and study also confirmed what many animal shelter workers have known for years - cat and dog owners often relinquish pets because their landlord does not allow pets. According to the study, if all rental housing permitted pets, 6.5 million animals could be placed with new owners.
Information courtesy of the Delta Society, August 30, 2005.

Study Says It's Unlikely that a Bust Will Follow Housing Boom
Doomsday investors shouldn't hold their breath. A recent study found that a "bust" rarely follows a "boom" housing market. The study by the Federal Deposit Insurance Corp. analyzed housing trends in 54 markets in 46 areas between 1978 and 1998 that had enjoyed booms and 21 markets that had suffered busts. By examining the data experts noted that housing busts very rarely followed booms. What was far more likely was a period of stagnation that allowed incomes to catch up with home prices. What usually causes local housing markets to collapse? Usually it's a severe local recession that cause people to move away to find jobs causing home prices tank because there are far more homes on the market than buyers. Researchers caution however, that this may be an imperfect guide to the current situation. The nationwide housing boom is unprecedented and in addition there is an unusually high percentage of buyers with subprime mortgages (10% of all outstanding mortgage loans). In addition, it has also become more common to borrow more than 80 percent of the home's purchase price often using multiple loans.
Information courtesy of the San Diego Union-Tribune, September 7, 2005.

Cities of Duluth, MN and Superior, WI Enforce "Troubled Building" Laws
City officials in Superior are planning to enforce and strengthen an old ordinance that allows them to fine landlords if their residents are convicted of a crime committed at their properties. Homeowners are also subject to the fines. Under the ordinance, owners of "troubled buildings" whose residents have been convicted of two or more crimes within a year can be fined $500. Residents of Superior feel that a similar ordinance in Duluth has driven trouble-makers in their direction. Most residents are positive about the ordinance, although advocates for victims of domestic violence feel that it may be harder for women to find housing if they admit that they are fleeing an abuser.
Information of the Duluth News Tribune, August 30, 2005.

EPA To Test New Method of Asbestos Removal
The Environmental Protection Agency announced its plans to test a new method for demolishing asbestos-containing buildings at an old military base in Arkansas. Asbestos has been linked to cancer when inhaled. The new method involves wetting down the asbestos before a building is demolished. Current regulations require extensive shielding before a building containing asbestos is demolished including wrapping the building in plastic and vacuuming all the air out. It is estimated, is successful, that the new method could save 30 to 60 percent on demolition costs.
Information courtesy of the San Diego Union-Tribune, August 8, 2005.

Eminent Domain Decision Produces National Backlash
The Supreme Court's decision to expand eminent domain to give cities the right to seize private property for "public purpose" including selling it to private developers who promise to increase revenue or create job growth has created a backlash in of reactionary measures in the state and federal governments. At the federal level the House of Representatives adopted a resolution 365-33 deploring the court's ruling. The House also 231-189 for a bill that would prohibit the use of federal housing, transportation or treasury funds to enforce the judgment of the Supreme Court case Kelo v. the City of New London. If the bill passes the Senate it means that the city of New London will be unable to use federal funding in any way, directly or indirectly, to move the project forward. In the Senate, bi-partisan support is building for a bill that would prohibit the seizing of private properties for any reason other than true public purposes (public use as defined by the Fifth Amendment) not private economic development. Several state legislatures are voting to clarify or rein in eminent domain statutes. Some opponents of the decision are taking more direct action. A California-based group is trying to convince the town of Weare, New Hampshire where Supreme Court Justice David H. Souter owns land, to condemn the property so that developers can build a hotel and restaurant there which would raise town revenues and create employment. Souter voted with the majority in the Supreme Court case.
Information courtesy of the San Diego Union-Tribune, July 24, 2005.

HUD Survey of Chicago Finds Discrimination Against the Disabled Common
A new federal study found that wheelchair users and hearing impaired potential residents have more difficulty finding a home to rent. Hearing impaired people face discrimination about 50 percent of the time when trying to inquire about a property using the TTY relay system. Wheelchair users faced discrimination about a third of the time when visiting properties. A spokesperson for HUD said, HUD would strictly enforce federal housing laws, which prohibit any kind of discrimination, and step up efforts to educate consumers and landlords about the issue. The study was based on 100 contacts between disabled testers and landlords. Paired testing was used to determine whether discrimination had taken place. The study also found that about one-third of the properties in the Chicago area were not wheelchair accessible and that nearly 20 percent of providers with onsite parking refused to designate an accessible parking space for a wheelchair user.
Information courtesy of the Associated Press, July 25, 2005.

Public Health Organizations Intend to Sue EPA Over Delayed Lead Paint Rules
Several public health organizations, including Public Employees for Environmental Responsibility, announced their intent to sue the Environmental Protection Agency over its nine-year delay in adopting rules and regulations to ensure older public housing is lead safe.
Information courtesy if Environmental News Link, July 25, 2005.

Some Agents in Major Cities Continue to Practice Steering
A newly published study found that steering is practiced by some real estate agents in major cities. Twenty major U.S. cities including San Diego, Los Angeles, New York and Chicago were tested. During the study, a white couple and a mixed-race couple were sent to real estate agent's offices to buy a house. In some cities the study found that whites were given more information through an agent's "editorial comments" an average of 12 percent to 15 percent more often than the mixed-race couple. Those comments included encouragement for the whites to buy in areas with a larger white population and fewer poor households. Fair housing training seemed to have little impact on whether steering occurred - in most cases the agent revealed fair housing training, but then violated it anyway. There were no individual results for cities such as San Diego, because the statistic per city are too small. Fred Underwood, the senior policy writer for the National Association of Realtors, said that discrimination complaints have dropped overall, but that the study did show a slight increase in steering. Underwood said, "This is a matter of concern that we have to look at. If someone is being directed to a neighborhood because of race, we as an industry find that unacceptable." The National Association of Realtors has said that training procedures to eliminate discrimination are ongoing, but "we can't change people who don't want to change. We can only hope they're not in the industry much longer." The entire report is available here (PDF format).
Information courtesy of the San Diego Union-Tribune, July 18, 2005.

EPA Seeks Cash Penalties Against Landlord For Failure to Warn About Lead
A large Massachusetts landlord, Dr. Anthony Ping Zuo and his company, Great Wall Properties, has been charged by the EPA with 64 violations of the Federal Lead Disclosure rule for failing the warn inform residents about lead hazards or give out the appropriate pamphlets and information. The violations are punishable by civil fines of up to $11,000. Federal law requires owners of pre-1978 housing to appropriately warn residents about lead-hazards.
Information courtesy of Providence Business News, July 6, 2005.

Apartment to Condo Conversions Increase Ten-Fold in 2004
The number of apartments converted into condos increased ten-fold from 7,800 in 2002 to 78,000 in 2004 according to Real Capital Analytics. As of June 1, 43,900 units have been sold to redevelopers this year according to the firm. The trend is particularly strong in Southern California, Northern Virginia, Las Vegas and Miami. These condo conversions are seen by many as an opportunity for renters normally priced out of the housing market. In San Diego County such condos sell for $250,000 less than the median priced home. El Cajon mayor, Mark Lewis said, "We take people normally collecting rental receipts in shoe boxes and make them homeowners." Currently 1,000 units are being converted in El Cajon. There is concern about the diminishing stock of available rentals on the market, although some real estate analysts say the stock of apartments has not been significantly depleted.
Information courtesy of the Arizona Republic, July 6, 2005.

Maine Passes New Lead Paint Law
Lead paint warnings will be required to be in large, bold letters and easy-to-read language in every rental and home-buying contract at part of the State of Maine's goal to eliminate lead-poisoning by 2010. The law also requires sellers and renters to disclose whether a building has lead paint. The initial intent of the law was to hold landlords and property owners responsible for children who suffered from lead poisoning, but that provision was eliminated during the legislative process.
Information courtesy of the Portsmouth Herald Maine News, July 13, 2005.

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