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New Study: More than 30 Percent of Massachusetts Communities Failing Housing Promises of Community Preservation Act Tufts Center for State Policy Analysis Finds Missed Opportunities to Address Housing Crisis

In the midst of a housing production crisis, more than a third of communities participating in the state’s Community Preservation Act are failing to meet the legal mandate that 10 percent of the assessment on -local property taxes be spent on housing, a new study from the Tufts Center for State Policy Analysis shows.

The report found that housing is receiving far less of the new funding than open space and recreation and historic preservation, which each have consistently drawn more than 40 percent of the funding, while housing projects consistently received less than 20 percent of all CPA funding.

“The Community Preservation Act can be a vital tool communities may use to increase housing production – they just need to fully use it,” Greg Vasil, CEO of the Greater Boston Real Estate Board, said. “We hope this analysis by Tufts and its recommendations shed light on ways that the CPA, a program we have supported since its inception, can be strengthened to create more housing and more meaningfully address the housing crisis.”

“Communities across Massachusetts must play their part in meeting affordable housing requirements and helping the state overcome the housing crisis,” said Kate Franco, Board Chair of the Greater Boston Real Estate Board. “By enforcing – and even strengthening – the CPA, the state has an opportunity to send a clear message that it is committed to making the Commonwealth of Massachusetts more affordable.”

The report, “Missed Opportunities: Funding Housing Through the Community Preservation Act,” analyzes how the 195 communities that have joined the CPA since it became law in 2000 are spending the program’s funds. The findings come as Massachusetts faces an unprecedented housing crisis that has contributed to the departure of more than 100,000 residents since the beginning of the COVID-19 pandemic, putting the long-term economic vitality of the region in jeopardy.

Under the program, municipalities may impose a surcharge on local property tax bills to fund – with the support of a partial state match – affordable housing, historic preservation, open space and recreation. Participating communities must commit to spend at least 10 percent of funding on each of those areas. The report found the program has worked to create affordable housing in urban and rural communities, but has been less successful in suburban areas, which have prioritized open space over housing development.

“Though the Community Preservation Act has proven incredibly popular across Massachusetts, our research reveals how serious gaps exist within the program that have dramatically impeded the creation and maintenance of affordable housing,” said Evan Horowitz, Executive Director of The Center for State Policy Analysis at Tufts University. “Our findings highlight how the state may improve the CPA to help the program reach its full potential, and make it a more pivotal tool in helping the state overcome the housing crisis.”

The report finds:

• Since the CPA took effect, less than 5 percent of projects have involved the creation of new housing, with funds primarily going towards unit upkeep and maintenance.
• When housing creation does occur, urban areas spend substantially more than suburban communities.
• Towns appear to occasionally double-count homes produced.

Dozens of communities that placed CPA funds in housing trusts - municipal bank accounts - have not reported how these funds were later used, even though they are required to do so.

To boost housing production, the report recommends:

• Offering additional state funds for cities and towns that commit at least 20 percent of their CPA dollars to affordable housing (or 10 percent to support new housing units). Municipalities meeting these higher thresholds could also be given priority access to state grants and subsidies.
• Ensuring that all municipalities are meeting the minimum requirement to devote at least 10 percent of CPA revenue to affordable housing. Cities and towns falling below this threshold may need to support additional “make-up” housing projects moving forward.
• Enforcing reporting requirements for housing trusts, including annual spending summaries and concrete project details.

The report is available for review at this new website, MAHousingsolutions.com which breaks down the findings and shows how participating communities are spending CPA funds.

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Article Courtesy of: Inman News
By: Lee Davenport

Prevent being canceled, fined or jailed by understanding fair housing laws and regulations and avoiding violations

As a real estate expert who works with homebuyers and sellers day in and day out, you may have innocently advised a client using the phrase, “If you were my daughter, I would suggest you look at _____ [fill in the blank] neighborhood(s).”

Harmless, right?

Not necessarily. If working in the real estate field were similar to various sports, I could see a referee immediately stepping in between you and your client saying “flag on the play” as soon as you’ve finished uttering those words.

Why?

There is an elephant in the room. That elephant is the looming threat of being canceled over a social media post, over what you thought was an innocent comment that was captured on a Ring doorbell camera or the like.

It’s time to get the elephant out of the room by doing this quick self-assessment as to whether or not your (or your agent’s) business is a walking red flag. The good thing is that nobody has to know your responses and you can make adjustments now before getting into hot water (not simply with an imaginary referee but) with your local and/or federal laws. 

As an added bonus, if fair housing courses become a requirement to renew our Realtor status every cycle, that becomes another opportunity to make adjustments without the stress of being penalized. 

Red flag quiz: Have you done any of these? 

Red flags to watch out for in your real estate dealings include:

1. Taking clients only to certain neighborhoods where you believe they will ‘fit in’ instead of where they have asked you to tour

More than one-third  of those surveyed —including white, Hispanic/Latino/Latinx, Asian/Pacific Islander, and Black, not just people of color — in the 2021 Profile of Home Buyers and Sellers by the National Association of Realtors believe that had witnessed or experienced steering towards or away from particular neighborhoods.

The only acceptable reason to not take a client to a neighborhood they have asked to see is if it does not fit their budget, which we should explicitly state and have a paper trail to protect ourselves if there ever are allegations of unfair housing. Anything else may be interpreted as steering.

2. Giving advice based on your own preferences such as,  ‘If you were my daughter/son/niece/sister (or any other familial relationship), I would (not) want you to live here’ 

This may be interpreted as steering unless you give an explicit reason (please have a paper trail) that is tied to the property and not people.

For example: “The flood damage in the neighborhood has not been adequately repaired and impacts appreciation.” We should give statements of fact about the property, never the people.

3. Referencing only certain parts of a community/subdivision/complex/building for those like the client (especially if it refers to a protected class such as how many children they have, their gender, etc.)

This is another example of illegal steering.

4. Being willing and excited to work with a prospect over the phone or via email/direct message but reassigning them to another agent (or outright ignoring/ghosting them) after meeting them in person

Never ghost a prospect because they may be able to make the case that it was due to being part of a lawfully protected class.

There are numerous, valid reasons as to why you may not be able to work with a client at this time and need to refer them.  For example, perhaps you are struck with a sudden, verifiable illness or have documented travel plans that conflict with the prospect’s availability. As a courtesy, and to not be a walking red flag, explain it and follow up in writing.

5. Not being willing to market a listing with the same deliverables or on the same platforms where you market your other properties

It’s one thing if you have a pre-printed menu of services that distinguishes the type of marketing based on what package the seller chooses. It’s another thing (that looks like un-fair housing) when you “on the fly” deem you will not invest certain marketing resources in a particular listing.
In short, pre-plan your different listing packages (which may be at different price points), giving the option to the potential client to select instead of you picking and choosing in a way that may be deemed discriminatory. Offering the same services to everyone is critical to not being a walking red flag.

6. Saying you do not serve a particular neighborhood even though it’s similar to and nearer than other neighborhoods you normally promote

It’s one thing if you specialize in horse farms and this is a condo. But it’s another thing if you consider this the “bad” part of town. We know that such selectivity has cost some real estate firms millions.

7. Asking clients to hide any part of their identity (such as sexual orientation, religious affiliation, nationality, how many children they have, race, etc.), especially if they are part of a protected class

It is one thing if we are working with actual fair housing testers, but it is dehumanizing to ask clients to generally hide parts of themselves at the start of a real estate transaction. 

It’s also one thing to have a home staged for a prospective buyer, but we should never have to stage who lives in the home for an appraiser.
For instance, I do not encourage families to hide who they are (e.g. removing family photos, religious symbols, etc.) when an appraiser is scheduled. Instead, if our “spidey senses” are tingling because the valuation results seem to have been lowballed comparatively or impacted by one’s protected class, then we as real estate pros best help our clients by helping them to report it.

It’s less dehumanizing and, if there is an instance of un-fair housing, this particular instance will be documented (since housing discrimination is underreported, which allows it to fester). The specific violator can be identified, asked for restitution and, ideally, can learn to improve their practices for the betterment of our communities.

8. Not targeting communities least likely to apply

Targeting communities least likely to apply is a must for “properties subject to affirmative marketing requirements” but as  Fair Housing Decoders (what I call fair housing advocates), we can go the extra mile to reach more of our communities by pursuing those that are the least likely to apply in addition to our normal marketing challenges.

9. Partnering with vendors who are fair housing offenders (e.g. banks that are notorious for alleged unfair lending)

There is currently an initiative snowballing that says lenders may be on the hook for appraisers who discriminate. For the sake of this article’s topic, we will not get into the nuances of that but I have been asking all Fair Housing Decoders in the continuing education course I teach on fair housing advocacy to hold their vendor partners accountable for fair housing/lending.

That may mean eventually dropping these vendor partners if they are opposed to treating everyone in our community fairly in the home buying/selling/leasing process. I like the onus being voluntarily on us, but it looks like policies/laws may eventually force our hand. There is no time like today to cultivate this practice.

Do you see a theme in not being a red flag? 

It is to communicate as much as possible as early as possible with a paper trail. Thus, a lack of communication is often our biggest red flag that may cause us to deal with the headache of an investigation and/or penalty that could have been avoided by being more proactive in our communication, that again should always have a paper trail.

Coach’s call: I want to challenge you that if you are a night person, at the end of each day, follow up conversations in writing (email, text, DM, or even fax, if that floats your boat) to clarify and make sure all parties are on the same page. If you are a morning person, do itat the start of your day. If you are neither, then be sure to still schedule it daily, while your memory is fresh. This habit will save you in the long run.

As a former managing broker of a “big box” realty firm (I partly got a law degree to better navigate such legal issues as a managing broker), it never failed that the agents who were thorough in communicating via a paper trail were able to avoid fines and penalties. Most times they walked away with a pat on the back for being so detailed, whereas those who simply relied on the selective memory of a conversation often had to face penalties, including fines and/or a loss of their license.

You may even know some in our industry that faced jail time depending on the severity of the infraction.

As real estate experts, we should be our community’s resource for impartial data about the property, not about the people (nor our opinions of those people). Thus, if any part of your real estate dealings describes the people, please know your business is likely a walking red flag.

Lee Davenport is a licensed real estate broker, trainer and coach.

MAA Supplier Spotlight: VendorPM!

Read all about VendorPM, this month's Supplier Spotlight.

Article Courtesy of: Inman News
By: Darryl Davis

Overspending is a challenge that almost every real estate agent has to face. However, with the right strategies in place, you can rein in your spending and significantly grow your profits

Real estate agents have a lot of expenses to account for: Client dinners, marketing materials, office equipment, software, cell phone, training and even gas. It can be easy to overspend and break the bank, but thankfully, there are ways to rein it in without sacrificing quality or professionalism. Here are some tips and tricks for real estate agents to cut back on expenses and increase profitability.

Track expenses

The first step to reining in overspending is keeping track of your expenses and income. You can’t plug the leak if you don’t know where the hole is.

Separate your personal and business finances, and make sure to keep receipts and invoices for tax purposes. Once you have a clear picture of where your money is going, set a budget for each category of expenses, such as marketing, travel and office supplies. Taking time to do this every year will help you keep a clear picture of your finances and plan your spending accordingly. 

Set a budget 

We get it: You’re busy. From listing appointments to driving buyers around to ensuring closing tasks are on track, it can be easy to spend first and think later. When running a busy real estate business, it’s important to create a budget and stick to it. This will help you cut back on impulse buying and identify areas where you aren’t spending what you should.

Make a list of all your necessary expenses, like office rent, advertising expenses and administrative costs. Once you have established a budget, stick to it diligently. To ensure that you’re not overspending, compare your budget to your actual expenses on a monthly basis.

Work with a financial advisor

Working with a financial advisor is a great way to gain insights into money management. They can provide valuable advice on financial planning and how to spend wisely, tailored specifically to your needs.

A financial advisor can guide you toward investment opportunities that yield high returns, provide strategies to deal with debt and also help you save money on filing taxes. After all, you help your buyers and sellers connect with financial advisors to build their wealth; why wouldn’t you do the same for yourself?

Use free or low-cost marketing strategies

Marketing is essential for real estate agents, but it doesn’t have to be expensive. There are many free or low-cost marketing strategies that can be just as effective as traditional advertising.

For example, social media platforms like Facebook and Instagram can be used to showcase properties and connect with potential clients. Email marketing, blogging and search engine optimization (SEO) are also cost-effective ways to reach a wider audience. 

Before you spend money on advertising and marketing, always do a cost versus benefit analysis of your marketing expenses. Some marketing techniques are not worth your money, so it’s best to cut back on them. Another cost-saving strategy is to share office space with other agents or brokers. This way, you can split the rent and utilities and save money on amenities like printers and copiers.

Negotiate with vendors and service providers

Whether it’s office supplies, advertising, or software, there’s often room for negotiation when it comes to pricing. Don’t be afraid to ask vendors and service providers for discounts or deals. Research the market and compare prices to get a better idea of what’s reasonable, and be prepared to walk away if a vendor or service provider isn’t willing to negotiate. 

Before signing any contracts, make sure to review the terms and conditions carefully. You may be able to negotiate better rates or services based on your needs and budget constraints. As with electricity and the internet, take the time to regularly review your bills and negotiate for better rates with your service providers. You might be surprised at how many of them are willing to negotiate a good deal!

Use technology to increase efficiency

Real estate agents can save time and money by using technology to streamline their work processes. For example, customer relationship management (CRM) software can help organize client information, automate emails and track leads.

Online document signing platforms like DocuSign can eliminate printing and mailing costs for contracts and other documents. Point-of-sale (POS) systems can help efficiently manage transactions, inventory and sales data.

You can use free or low-cost tools like Google Docs, Trello or Asana for project management, communication and collaboration. Additionally, you can monitor your expenses with financial management tools that will provide insights into what areas to work on and which ones to prioritize.

Invest in professional development

Investing in professional development can often lead to long-term financial benefits. Attend real estate workshops, seminars and conferences to stay up-to-date on industry trends and best practices. Networking with other industry professionals can also lead to potential leads and referrals. Also, seek out certification courses to enhance skills and knowledge, which can increase credibility and income potential. 

Avoid unnecessary expenses

Real estate agents often purchase expensive cars, clothing and travel business class for work, believing that appearing affluent will bring more money in. What buyers and sellers really care about, however, is competence and integrity, and they want to find an agent they can connect with and relate to. So, instead of spending money on these unnecessary things, focus on the long-term ROI rather than fleeting pleasures. 

Open a separate account for your operating expenses

If you haven’t already done so, separating your personal and business finances is essential to remaining financially stable. Open a separate account specifically for your work-related expenses. This account can hold funds for all office-related costs and taxes.

You can transfer your “paycheck” wirelessly so that you can keep your personal money and your business money separate, making it easier to stay within the spending limits you set for yourself. This not only helps to identify where the money is being spent in the business, but it also helps with tax filing. 

Stay disciplined and accountable

Finally, to curb overspending, you must stay disciplined and accountable. This means that you should stick to your budget, resist the temptation to make impulse purchases and log every expense for easy tracking later on.

You can also get an accountability partner or join mastermind groups where everyone commits to creating and sticking to their budget. When you know that someone is going to ask, it becomes easier to stay on the mark.

The takeaway

Overspending is a significant challenge that almost every real estate agent has to face. However, with the right strategies and practices in place, you can rein in your spending and significantly grow your profits. By creating a budget, adopting cost-saving measures, utilizing technology, reviewing your contracts, and staying disciplined and accountable, you’re guaranteed to decrease expenses and increase revenue, which will benefit your personal and professional lives. Keep these tips in mind as you continue on your journey to success as a real estate agent. 

Remember, every little bit counts, and small changes can lead to big results. 

Darryl Davis is the CEO of Darryl Davis Seminars.

Article Courtesy of: Inman News
By: Andrea Brambila

At the Realtors Legislative Meetings' Residential Economic Issues and Trends Forum, Lawrence Yun predicted total home sales would bottom out this year before ticking up in 2024

National Association of Realtors Chief Economist Lawrence Yun started off his much-anticipated presentation on housing market trends Tuesday morning with a dig at the Federal Reserve for its latest interest rate increase aiming to curb inflation.

“They should not have done that,” Yun told attendees of the Residential Economic Issues and Trends Forum at the Realtors Legislative Meetings, NAR’s midyear conference in Washington, D.C.

“The latest figure is that inflation is at 5 percent — not yet 2 percent, but moving in the right direction,” especially compared to a 9 percent peak last summer, he added.

Rent is one of the biggest drivers of inflation and that 5 percent inflation is coming at a time when rental rates are still accelerating — but not for much longer, according to Yun. Rents will come down because of “very, very robust” apartment construction, which is at a 40-year high.

“Therefore in my view the Fed made a mistake,” Yun said.

Yun noted that existing-home sales are currently below their pre-COVID rates, but may be stabilizing.

“We have to stop the bleeding before the improvement can take place,” Yun said.

On the other hand, new-home sales are back to their pre-COVID levels, according to Yun.

He attributed the difference to inventory: While existing homes on the market are about 40 percent below what they were in 2019, new-home inventory is higher than it has been for years.

The lack of existing-home inventory means that there’s no home-price collapse coming, according to Yun. Sixty percent of listings currently sell within a month and 28 percent are attracting multiple offers, he said.

“Seventy percent of the country is seeing positive gains [in home prices], 30 percent negative,” Yun added.

Demographics will continue to drive housing demand as the population grows and life events trigger home sales, according to Yun.

While he made jokes throughout his presentation, his loudest laugh line came when he predicted that when divorce data came out for 2022, it would be lower than in 2021.

“Why? You hate your spouse, but you realize you love your 3 percent mortgage rate,” he said, prompting guffaws from the audience.

He predicted that total home sales would bottom this year before ticking up next year as mortgage rates decline and job growth continues.

Robert Dietz, chief economist for the National Association of Home Builders (NAHB), also spoke at the forum and, not surprisingly, stressed the need to build more housing units to both boost inventory and reduce inflation, the latter of which he said could only be addressed by building “attainable affordable housing.”

According to Dietz, the primary obstacles to homebuilding include the cost of building materials, which are still hindered by supply chain issues, such as tariffs on Canadian lumber, regulations that can add up to $200,000 to the cost of a home in a high-cost market like California and a labor shortage of about 100,000 workers.

“The long-term labor shortage in the industry is going to remain with us,” Dietz said.

He said the country would need to build more than 1.1 million single-family homes a year to meaningfully reduce the inventory shortage, and the NAHB doesn’t expect that figure to rise above 1 million until 2025.