Category Archives: News

Carson Plan: Deregulation to Promote Affordable Housing

Remember the old Point/Counterpoint segment on CBS’s 60 Minutes?  Two political commentators, a far right conservative
and an equally lefty liberal argued the merits or lack of a current
controversial issue.  Two recent articles
in the same issue of The National Review
were reminiscent of that feature – except this was two conservatives arguing
which parts of Ben Carson’s recent performance were more meritorious. They both
had their points, and both managed to entirely overlook a singularly important
one.  

The topic was the
Secretary of Housing and Urban Development’s recently announced plan to combat
the lack of affordable housing by taking on stringent local zoning and land-use
regulations.

The centerpiece article
is written by Michael Tanner, a senior fellow at the Cato Institute. He mentions
in passing some of Carson’s “missteps and misstatements” including the infamous
$31,000 dining table. But since then, Tanner says, “Carson has quietly pushed a number
of policy initiatives that could cement his legacy as one of Trump’s most
consequential cabinet members.”

These, the
writer says, include the elimination of Community Development Block Grants,
slashing some of HUD’s bureaucratic red tape, and showing a willingness to
adjust rents in public housing to “control the department’s ballooning
expenditures.” Tanner does not mention what the New York Times called the
Secretary’s attempt to scale back federal enforcement of fair housing laws, “freezing
enforcement actions against local governments and businesses, including
Facebook, while sidelining officials who have aggressively pursued civil rights
cases.”

But now Carson has set
his sights on local zoning and land-use laws, potentially, Tanner says, helping
millions of poor Americans.  “If
successful, Carson’s efforts could be some of the biggest boosts for the poor
and disadvantaged to come out of Washington in quite some time.”  

Tanner says these local laws were born largely out of racism
but have evolved into a tool for wealthy property owners to protect their
properties.  Laws that restrict the
supply of new housing drive up the cost of owning and renting beyond the reach
of many poor Americans.  “Studies show that such regulations
add as much as 20 percent to the cost of a home in Baltimore, Boston, and
Washington, 30 percent in Los Angeles and Oakland, and an astounding 50 percent
or more in cities such as San Francisco, New York, and San Jose”.

Traditionally HUD and other agencies
respond to increases in housing costs with higher subsidies. But this policy
mostly redounds to the benefit of landlords, Tanner says, so Carson has decided
to attack what he sees as the problem at its source.  He intends to link federal housing funds to
local officials’ willingness to reduce regulations that restrict affordable
housing.  This would ensure that, “if mayors and governors continue to pander
to wealthy special interests by enacting barriers to housing construction,
Washington will no longer bail them out.

Tanner says high housing costs are
an important factor in trapping millions of households in povertypreventing geographic mobility, and that zoning continues to be an important factor in
reinforcing racial segregation.  He credits
Carson with attempting to “strike a powerful blow on behalf of the poor and
vulnerable”

The counterpoint – titled Two Cheers for Ben Carson – is written
by regular National Review contributor
Robert VerBruggen. 
He characterizes Carson’s
intentions as joining the bipartisan YIMBY movement – saying “Yes, in my back
yard” as opposed to N(ot)IMBY, and calls that movement correct on the policy
merits.

Overly aggressive
zoning and land-use regulations, VerBruggen says, do immense damage to the economy
and make it more difficult to integrate neighborhoods, both economically and
racially.  He calls Carson’s regulation
far superior to the Obama-era plan he’s trying to replace, an effort to force
metro areas to directly engineer their neighborhoods’ racial balance.

There are
even some conservative arguments for the federal government to push better
policies, he says. As a political matter, federal subsidies for affordable
housing aren’t going anywhere and it makes little sense to subsidize affordable
housing in cities that are deliberately making housing unaffordable. “Just
as we ask welfare recipients to take steps to make themselves self-sufficient,
perhaps we might ask federal grant recipients to stop obstructing the purposes
of the grants they receive.”

But he also points out that the proposed
policy has some very unconservative aspects as well.  He says essentially the national government
is taking taxpayers’ money and refusing to give it back unless those taxpayers
support the right policies at another level of government, “thus overriding the
key distinctions of American federalism. “It’s one thing if those policies are
unconstitutional; it’s another when they’re just bad or have a disparate impact
on the poor.”

What both authors neglect to note is
that zoning and land-use regulations do not come about just from racism nor to
protect the property rights of the well-to-do. 
Many of them are sensible, contributing to the public health and safety
and protecting the environment.

To starve local governments into
eliminating them might benefit builders and investors instead.  They could allow high density development in
areas without the infrastructure to support it or permit builders to infringe
on wetlands.  While the National
Association of Home Builders cites similar numbers as Tanner’s regarding the
added costs builders face from regulations, there is no guarantee that deregulation
would mean building more affordable units.  Other incentives have long led them to build
larger and fancier.  

Article source: http://www.mortgagenewsdaily.com/10232018_hud_affordable_housing.asp

MBS RECAP: Uneventful Start; Consolidation Continues

As of October 16th, we’d been tracking the most recent consolidation in bond yields (and stocks for that matter) waiting for a breakout to suggest the next dose of momentum.  Stocks broke higher with conviction while bonds merely trickled sideways.  Still, they’d technically broken the consolidation, thus implying more momentum toward higher rates.  By the end of the following day, it showed up as 10yr yields moved back over 3.2%.

That began a 2nd, bigger, broader consolidation pattern–the one we’re currently tracking (discussed in the Day Ahead).  Much like the previous pattern, the current consolidation is set to run out of room no later than Wednesday of this week.  It took an exceptionally calm day today in order for bonds to remain inside the lines.

If there’s an indication of underlying bias, we might consider that yields and rates were holding fairly close together earlier this morning, but when stocks suggested 10yr yields move below the 3.18% pivot point, bonds refused to rally any further.  This is far from conclusive, but anecdotal evidence is the best we can manage today.  

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/880849.aspx

The internet industry is suing California over its net neutrality law

Google CEO: Net neutrality 'a principle we all need to fight for'

The internet industry is suing the state of California over its days-old net neutrality law.

The lawsuit, filed on Wednesday by major trade groups representing broadband companies, is the second major lawsuit filed against the state over the law — the first was brought by the Justice Department.

On Sunday evening, California Governor Jerry Brown signed what is considered to be the strictest net neutrality law in the country. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.

Hours later, the federal government filed a lawsuit in which it alleged that California was “attempting to subvert the Federal Government’s deregulatory approach” to the internet. The DOJ argues states can’t pass their own laws governing internet companies, because broadband services cross state lines. It is fighting the state over a clause in the 2017 order repealing Obama-era federal net neutrality protections. In that order, the FCC said it could pre-empt state-level net neutrality laws.

The impending legal battle could drag on for many months if not longer, Daniel Lyons, an associate professor at Boston College Law School who specializes in telecommunications and Internet regulation, told CNN.

A lot is riding on the outcome. The California law is considered the most thorough state-level net neutrality legislation yet passed, and other states are expected to use it as a blueprint for their own laws.

If California wins in court, it would open the door for those other states to take similar actions. However, the FCC could try to come back with an order to block their efforts again, Lyons said.

California will likely claim that the pre-emption provision is invalid, Lyons said, while the federal government will attempt to get an injunction to stop the law from taking effect. in doing so, it will claim that the law will cause harm if allowed to take effect.

“These attempts at getting a preliminary injunction seem weak and are likely to fail for the same reasons that the Internet Service Provider [ISP] industry was unable to obtain a stay of the FCC’s former net neutrality rules in 2015,” said telecommunications attorney Pantelis Michalopoulos, a partner at Steptoe Johnson LLP who has argued net neutrality cases. “The Internet Service Providers offer speculative theories about why they will suffer irreparable injury. These theories do not appear to satisfy the test for a preliminary injunction.”

The industry groups taking part in the new lawsuit represent major companies including ATT, Comcast and Verizon, as well as other cable companies and wireless providers across the US. The groups had previously lobbied against the state law. (CNN is owned by ATT.)

“We oppose California’s action to regulate internet access because it threatens to negatively affect services for millions of consumers and harm new investment and economic growth. Republican and Democratic administrations, time and again, have embraced the notion that actions like this are preempted by federal law,” the trade groups USTelecom, CTIA — The Wireless Association, The Internet Television Association, and the American Cable Association said in a statement. “We will continue our work to ensure Congress adopts bipartisan legislation to create a permanent framework for protecting the open internet that consumers expect and deserve.”

In a statement Wednesday afternoon, Attorney General Xavier Becerra indicated the state would fight to protect its new law.

“This suit was brought by power brokers who have an obvious financial interest in maintaining their stronghold on the public’s access to online content. California, the country’s economic engine, has the right to exercise its sovereign powers under the Constitution and we will do everything we can to protect the right of our 40 million consumers to access information by defending a free and open Internet,” Becerra said in a statement.

State Senator Scott Wiener, a co-author of the bill, previously told CNN he expected the ISPs to sue over the law.

“The internet service providers have every right to sue California, just like California has every right—indeed an obligation—to protect our residents’ access to an open internet,” Wiener said after the trade groups filed their suit.

Article source: http://rss.cnn.com/~r/rss/money_topstories/~3/SjtVyLlXRHA/index.html

Bunk Beds