Friday, November 30, 2012

Unusual trends in residential real estate

While these stories are not local, future trends in real estate have to start somewhere.

From Detroit (via Yahoo) comes the story of old cargo shipping containers being used to make multi-family condos:
 The first U.S. multi-family condo built of used shipping containers is slated to break ground in Detroit early next year.

Strong, durable and portable, shipping containers stack easily and link together like Legos. About 25 million of these 20-by-40 feet multicolored boxes move through U.S. container ports a year, hauling children's toys, flat-screen TVs, computers, car parts, sneakers and sweaters.

But so much travel takes its toll, and eventually the containers wear out and are retired. That's when architects and designers, especially those with a "green" bent, step in to turn these cast-off boxes into student housing in Amsterdam, artists' studios, emergency shelters, health clinics, office buildings.
In San Francisco (from CBS 5), supervisors have approved building code revisions that will allow the construction of apartment units as small as 220 square feet.

Tuesday, November 27, 2012

Mortgage interest deduction at risk in budget negotiations.

Nothing has been decided yet, but the New York Times reports that the mortgage interest deduction may be subject to negotiation in the upcoming budget talks in Washington. 

Any limitation on the mortgage interest deduction would place further downward pressure on the real estate market, resulting in increased difficulty selling underwater homes and further losses for lending institutions.
Update - the idea of limiting or eliminating the mortgage interest deduction appears to be a bargaining chip or ploy to help the administration get what it really wants - higher income tax rates. 

Monday, November 26, 2012

Progress against bed bugs; ivermectin

All property investors are aware of the danger that bed bugs pose to properties and residents. Bed bugs have spread throughout the United States - especially in the aftermath of federal bans on certain pesticides.

Newsweek carries the story of a new drug (ivermectin) and a new approach that may help fight bed bug infestation:
The investigators ingested a medication called ivermectin, approved decades ago to treat various parasites and worms, and then exposed themselves to a swarm of bedbugs. They knew of course that the bugs, like any frisky vampire, could not resist the offer of warm human flesh; after all, bedbugs live on our blood. Right on cue, the insects hurried to the arm, bit down, had a nice blood meal—and dropped dead. The medication in the research volunteer’s bloodstream, though too weak to affect the human, was more than strong enough to kill the ambushed bedbugs.

This drug may present limited direct usefulness to landlords or hotel owners, as it is unlikely that tenants or guests could be required to take such medication. But any use by the general population could slow the spread of these bugs and thus help investors avoid infestation in the first place. 

Sunday, November 25, 2012

Lower Allen Township property tax increase

Property owners in Lower Allen Township (Cumberland County) face a 20% property tax increase in 2013.  Pennlive has more details. Lower Allen Township commissioners will vote on the budget containing this increase in December.

Friday, November 23, 2012

Estate tax increase - effect on farmland

Federal estate tax rates are set to increase drastically at the beginning of 2013, unless the federal government acts before the first of the new year.  The effect of this increase will be to force certain large farms to be sold upon the death of their current owners.  Fox News explains further with some examples of the impact of this increase in estate taxes:

Two decades ago, Kester paid the IRS $2 million when he inherited a 22,000-acre cattle ranch from his grandfather. Come January, the tax burden on his children will be more than $13 million.

For supporters of a high estate tax, which is imposed on somebody's estate after death, Kester is the kind of person they rarely mention. He doesn't own a mansion. He's not the CEO of a multi-national. But because of his line of work, he owns a lot of property that would be subject to a lot of tax.
The consequences will be varied and long lasting.  More real estate will be slated for proposed subdivisions. More residential lots will be available for sale, resulting in downward pressure on real estate prices.  Farmland will be less plentiful, resulting in upward pressure on food prices. 

Thursday, November 22, 2012

Harrisburg nuisance ordinance

On Tuesday, November 13, 2012, Harrisburg City Council passed Ordinance 12-2012.  This ordinance allows the city to revoke a landlord's license if a tenant commits two acts considered to be a "nuisance" by the City codes officer.  The ordinance allows the City to force landlords to evict tenants under certain circumstances. 

Below is the coverage from ABC27 WHTM. 

This ordinance goes further than courts have allowed in previous cases in holding landlords responsible for the conduct of their tenants.

This ordinance comes a little more than a year after Harrisburg passed ordinances modifying the city's rental inspection program.  Conditions in the City continue to deteriorate as the City doubles down on its attempts to address the issues with more restrictive and expensive ordinances.