The Latest Edition of reiaSENSE

The Latest Edition of reiaSENSE

Fee what?: The Pacific Legal Foundation in yet another Constitutional victory for property owners and businesses alike, won a groundbreaking case at the U.S. Supreme Court. The case focused on impact fees and the conditional approval of a fee in order to receive a building permit. The 9-0 case set a clear precedent that municipalities are definitely restricted from this behavior. While SCOTUS has not ruled against rent control issues, this ruling on the doctrine of unconstitutional conditions may help set a more specific principle focused on the nexus of impact, restrictions, and property rights. After all, when a 4-plex is required to limit rents by $2,000 per month per unit under the market, isn’t that the equivalent of paying $8K/month in fees? SCOTUS hasn’t given in yet on that being a taking, but with the property owner held hostage over the price, is sure seems similar! Click here to learn more.

To sue or not to sue, that is the question: FinCEN’s proposed new rule on corporate transparency has caught the attention of many different groups. Even as NREIA has been reporting on the proposed regulation since last year, more and more groups are moving toward joining into a lawsuit against the rule. The Corporate Transparency Act requires the registration of beneficial owners, thereby creating a federal database of all ownership in the US. An Alabama-based federal suit has already prevailed and will be appealed – the question is who all will join? It is quite possible that numerous private and public (state AGs) could join the suit. Click here to learn more.

Take up the slack: Single family housing sales are up overall, depending on the region of the country, as well as new construction having one of its best months in a year. Meanwhile, small owners are taking up the slack from the reduction in acquiring by large private equity groups and regaining their historic percentage of purchases of single family homes. While lumber is holding close to steady, drywall prices continue to climb – a possible reflection on increased remodeling for homes that increased in value, because as we see the Baby-boomers doing, people are staying put in their house for longer!

On the federal front, if you aren’t a foreign nation embroiled in a difficult situation, no money for you! However, the funds from the transportation bill last year are filtering down to states and municipalities, which means plenty of orange barrels coming to an area near you soon!

Strike while the iron is hot: TNumerous states’ legislators are getting on the anti-squatter bandwagon (Florida, Georgia and soon Tennessee), and while some of it may be rolled in to an anti-illegal immigrant effort, the response has been bipartisan with even U.S. Senator John Fetterman (D-Pennsylvania) stating “squatters have no rights.” Drawing on his time as a mayor, the senator reflected on the necessity to support property-owner rights. We echo that sentiment and encourage members to engage with local and state elected officials on the need to support property-owner rights – which may mean educating the police on proper process, before an issue arises. Click here to read more.

Will it be soft?: “It’ll be a soft landing with a minor to almost no recession.” Something about that contrasts sharply with the change in the Fed announcing that any rate cuts in 2024 may occur late in the year, if at all, as inflation has been more “sticky” and persistent than initially thought. Interest rates have climbed back up, further dampening demand in many markets and impacting overall valuations. Several commentators have said the summer will tell if this truly is a turning point, or if the impact from series of rate increases and loose fiscal policy will catch up with the dollar.

That deal, may not be a deal: Be sure to check the price of insurance on any purchases. The recent increases in pricing for insurance have had major impact on single family sales as well as RE investor portfolios. Numerous insurance companies have signaled that they are exiting various markets due to flooding, winds, and fires reducing options and increasing costs with fewer remaining options. If selling single-family, make sure the insurance question is answered early in the process, as rates are killing a substantial percentage of deals in Florida and California.

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