Hope At Last for LA Skid Row Residents

HOPE At LAst fOR L.A. skId ROw REsIdEnts!

but… tHERE’s A PRObLEm

At last, Skid Row residents have something to smile about- a home! After so long, their dreams can finally be! But there’s a problem. The judge ordered the entire Skid Row population to be housed by mid-October, and while that is a bold move, how do you move such a huge population in homes in a county with housing challenges? Where do you put all these people? Who will pay for it? How will it solve the homelessness crisis in L.A.? Chances are, due to the mental health issues in most of these residents, they may relocate to another neighborhood. How do you prevent that from happening?

THE RULING.

According to the ruling by Judge David O. Carter, L.A. city and county wrongly paid more attention to permanent housing at the expense of more temporary shelter, “knowing that massive development delays were likely while people died in the streets.” In 2020 alone, more than 1300 homeless people died in L.A. County.

“All of the rhetoric, promises, plans, and budgeting cannot obscure the shameful reality of this crisis — that year after year, there are more homeless Angelenos, and year after year, more homeless Angelenos die

on the streets,” Carter wrote in the ruling.

Carter further indicated that once enough shelter has been offered to the homeless people in Skid Row, he would allow the city to enforce laws that keep streets and sidewalks free of tents only if they remain consistent with previous legal rulings that have restrained the enforcement of such rulings.

Judge Carter also directed the county to offer ”support services to all homeless residents who accept the offer of housing”,

including placements in ”appropriate emergency, interim, or permanent housing and treatment services,” adding that the costs would be split between the city and the county.

Earlier on, the county had requested to be withdrawn from the case, arguing the situation was about the city, adding that the county was aggressively combating homelessness without any court directions. The county cited efforts that included putting hundreds of millions of dollars annually in programs such as the Measure H sale tax and developing innovative strategies like Project Roomkey in response to the ongoing pandemic.

THE BUDGET.

Judge Carter’s ruling came on the same day that Mayor Eric Garcetti released his budget for the next fiscal year, including an allocation of about $1 billion to combat homelessness. Carter then directed that the “$1 billion, as represented by Mayor Garcetti, will be placed in escrow forthwith.”

Of the $1 billion allocation to homelessness by the Mayor, more than a third would come from Proposition HHH. The Mayor’s aides indicated their expectations that the city would be developing 89 HHH projects over the next fiscal year, representing a total of 5,651 housing units.

Moreover, Carter directed that a report of every developer receiving the funds from HHH be submitted to him in 90 days, together with new directives to “limit the possibility of funds being wasted.”

DISCRIMINATION.

The ruling could not be comprehensive without addressing the issue of racial discrimination in housing matters in the area. In the ruling, Carter outlined historic forms of discrimination that had locked People of Color out of housing opportunities, including redlining, segregated systems of assistance during the Great Depression, highway construction that displaced AfricanAmerican families, and criminalization that has disproportionately affected members of the African-American community.

Judge Carter pointed out that inequalities based on one’s race “continue to color government handling of the crisis”, opining that current city and county policies “compound and perpetuate structural racism, threatening the integrity of Black families in Los Angeles and forcing a disproportionate number of Black families to go unhoused.”

WHAT ExPERTS AND CONCERNED PARTIES SAY.

“This is exactly the kind of aggressive emergency action that we think is necessary on the issue of homelessness in Los Angeles,” said Matthew Umhofer, an attorney representing the plaintiffs, the L.A. Alliance for Human Rights.

Councilman Kevin de León, whose district includes skid row, welcomed the judge’s decision. “It’s a strong shot across the bow — and he is expecting action,” de León said. “Not continued negotiations or studying everything to death.”

Moreover, Pete White, executive director of the skid row-based Los Angeles Community Action Network, expressed his concerns that politicians are using “this litigation to justify investment in emergency shelters instead of housing.”

“We all know that shelters won’t solve our housing crisis, and they definitely won’t address the structural racism that got us here in the first place.”

Elsewhere, Laurie Levenson, a professor at Loyola Law School, referred to Carter’s ruling as a “deep dive into the problems of homelessness in Los Angeles and an expression of Carter’s frustration with how the city and county have responded to this crisis.”

While we’re still unsure of how a higher court might rule if the case gets appealed, Judge Carter’s ruling is already a landmark decision that has shed light on the people of Skid Row and L.A. at large. There is high hope of eliminating homelessness in the U.S., just one neighborhood at a time.

Work cited.

https://www.latimes.com/homeless-housing/story/2021-04-20/ judge-carter-la-city-county-shelter-skid-row-homeless-fall.

tHE LEndIng LAndsCAPE mIgHt dRAstICALLy CHAngE In 2021. HERE’s wHy.

Most economists and mortgage experts agree that 2021 will be the year when we start seeing some drastic changes regarding lending in the country. This comes despite the fact that this might also be the year when we experience the highest delinquency rates. Overall, this scenario creates a rift where one group is struggling to make ends meet, and on the other hand, we have another group that is more suited to take up the properties that will become available.

Should this happen, it would create a dramatic contrast to the scenario that we had in 2008-10, where lenders were forced to tighten the lending standards. But are we ready for the consequences? This article’s main theme will be to bring out the consequences of easing the lending standards in 2021 and what that could do to the property market.

THE FED SURvEY

The Fed earlier this year issued a survey of opinions from senior loan officers at banks and other lending institutions aimed at gauging their attitudes. The survey was split up into three different categories, each with a set of questions regarding a distinct area of study as follows;

• Lending to Businesses • Lending to Households • Questions on Banks’ Outlook for 2021 “Bank loan officers are anticipating easing standards on consumer loans this year, despite expecting rising delinquencies,” said NAFCU Chief Economist and Vice President of Research Curt Long. “That outcome would contrast with the financial crisis, where the tightening cycle lasted from 2007 through 2010.

“Nevertheless, the fact that high-income households have fared so much better than low-income ones over the past year means that there may still be a lack of access to credit for low-income households even if underwriting standards do ease somewhat this year,” Long added.

Below is a summary of the key findings of the survey based on the categories mentioned earlier:

1. LENDING TO BUSINESSES

COMMERCIAL AND INDUSTRIAL OR C&I

LOANS

• banks reported tightened standards for C&I loans to firms of all sizes. • On net, modest shares of large banks eased standards to large and middle-market firms. • Moderate shares of small banks reported tightening their C&I lending standards to firms of all sizes. • banks either tightened or left unchanged all lending terms on balance; • a moderate net share of banks reported weaker demand for C&I loans to firms of all sizes.

• Significant net shares of banks reported a decrease in customers’ merger or acquisition financing needs as an important reason for weaker demand.

RESIDENTIAL REAL ESTATE (RRE)

• banks left lending standards unchanged for most mortgage loan categories and for revolving home equity lines of credit (HELOCs), with important differences across bank sizes; • modest shares of large banks eased standards for government-sponsored enterprise (GSE)-eligible mortgages —which make up the majority of bank mortgage originations—for qualified mortgage (QM) jumbo loans, and for QM non-jumbo, non-GSE-eligible residential mortgages while leaving standards unchanged for the remaining categories of RRE loans; and • large banks reported unchanged demand across all mortgage categories.

2. LENDING TO HOUSEHOLDS

• a moderate net share of banks reported easing standards for credit card loans, and modest net shares eased standards for auto loans and for other consumer loans; • banks also increased credit limits for credit card accounts and narrowed the rate spreads charged on outstanding balances over their cost of funds for auto loans and other consumer loans, respectively; and • a moderate net share of large banks reported stronger demand for credit card and other consumer loans, while a modest net share of large banks experienced weaker demand for auto loans.

3. BANK’S OUTLOOK FOR 2021.

Many banks reported anticipating weaker a drop in demand for most types of residential mortgages, while most lenders expect stronger demand for consumer loans. Lenders also expect loan performance on existing consumer loans to sink for most types of borrowers.

• IMPACT ON BORROWERS.

When banks ease lending standards, that can lead to consequences like lower interest rates, more access to loans, a lower credit score requirement, and lower down payments required. This will come as a relief to many borrowers, and many will be in a position to afford the loans and mortgages.

• IMPACT ON POTENTIAL

HOME BUYERS AND

SELLERS.

Softening residential lending standards comes with positive impacts on both home buyers and sellers. Relaxed residential lending standards make it easier to get a home loan. Ease to get home loans means more people can qualify, which will get more people looking for new homes. When more people are hunting for homes, the real estate market gains strength, and it becomes easier to sell a home. On the other hand, the real estate market becomes more competitive as many buyers flood the market looking for homes.

The bottom line is that both the home buyers and sellers will win should lending standards ease, but the sellers win more.

Work cited.

https://www.federalreserve.gov/data/ sloos/sloos-202101.htm. https://mint.intuit.com/blog/mortgages/ what-to-know-about-mortgage-lendingstandards-easing-in-2021/.