This week, “faster” was the FOMC’s buzzword as benchmark mortgage rates and inflation continue to accelerate. Meanwhile, a Jewish Community Campus sets its sights on the Nestle Dreyer office complex. The infamous K Street Flats become part of an emerging affordable housing strategy, momentum grows to tax vacant units, and other light reads.
Jewish Community Campus is proposed at Oakland Nestle Dreyer’s site
A Jewish Community campus complete with a school is being proposed to occupy the iconic ice cream company Nestle Dreyer’s office and retail complex. This is one of eight parcels in northern Oakland purchased for $41 million by Libitzky Property Cos. in 2019. The irregularly-shaped campus would front three busy streets in Oakland’s shopping and dining haven: Rockridge District. “The project goal is to create a Jewish Community Campus, a place for the Jewish Community Center of the East Bay to expand their educational and community services,” the planning documents state. (East Bay Times)
Benchmark Mortgage Rate Jumps Again, 39 Percent Higher YOY
The average rate for a benchmark 30-year mortgage jumped 23 basis points over the past week. It is now sitting at 3.92 percent, which is 39.5 percent higher than the average rate of 2.81 percent at this time last year and represents the highest average rate since May of 2019. Meanwhile, the average rate for a 5-year adjustable-rate mortgage spiked to 2.98 percent: 43 percent higher than at the same time last year, and the average rate for a 15-year fixed-rate mortgage jumped to 3.15 percent, which is over 50 percent higher than at the same time the previous year. This translates to less purchasing power for buyers, downward pressure on home values, and a tightening of credit, which shouldn’t take you by surprise. (SocketSite)
Site of Berkeley balcony collapse sold, with promise of affordable housing
Last fall, K Street Flats was silently purchased by an obscure and controversial Central Valley housing agency that owns several Bay Area apartment buildings. The 176-unit Berkeley apartment complex where six Irish students died in a 2015 balcony collapse is now part of an emerging affordable housing strategy. The company is called the California Community Housing Agency, or CalCHA. It uses municipal bonds to buy market-rate apartment buildings, then offers rent discounts to make their units affordable to tenants who fall into the “moderate” income range — which in Berkeley includes some who make upwards of $100,000 per year. (Berkeleyside)
Taxing vacant units: Momentum grows for empty-home penalties
Just when we thought we’d seen it all, a fun new trend is emerging across California: cities are considering measures that would tax property owners for keeping a unit vacant. Uninformed cities, counties, and tenant advocates have incorrectly asserted that owners purposely withhold rental units from the market, contributing to our state’s housing shortage. As of February, only a few cities have these kinds of taxes –– but Oakland is one of them. (CAA)
Key Inflation-Adjusted Tax Numbers for 2022
I’ll let the chart speak for itself.
FOMC Minutes: “Faster” is the Word
Bill McBride breaks down what you need to know from the most recent minutes of the Federal Market Committee. Here are two soundbites: participants suggested that a faster pace of increases in the target range for the federal funds rate than in the post-2015 period would likely be warranted. The majority also noted that if inflation does not move down as they expect, it would be appropriate for the Committee to remove policy accommodation faster than they currently anticipate.
