Government briefs

New FHA legislation passed to help developers

The House passed legislation last month to extend the Federal Housing Administration’s ability to guarantee loans, particularly in large, urban areas. Rep. Anthony Weiner of Brooklyn and Queens served as a co-sponsor on the legislation, which will raise the price limit on FHA-eligible loans for developments to $377,000 per unit, up from $184,000 per unit, and will raise the loan limits on high-rise elevator buildings up to 50 percent, from 10 percent. Weiner’s office estimated that the legislation will free up credit for the construction of 11,000 apartment units nationwide, including 2,088 in New York City.

Will housing market survive without tax credit?

As a Nov. 30 expiration date looms for the $8,000 first-time homebuyer tax credit, some financial analysts are wondering whether the housing market can continue to survive without it. The program will have cost the government an estimated $15 billion when all is said and done, according to the New York Times, with several hundred thousand home sales spurred on by the tax incentive. Mark Zandi, chief economist at Moody’s, believes that the tax credit has been so useful that it should be expanded to all homebuyers. “The risks of not doing something like this are too great,” Zandi said (see “New life for tax credit?”).

Sign Up for the undefined Newsletter

CityPoint tower approved for bailout funds

The CityPoint tower in Downtown Brooklyn was approved for a $20 million federal stimulus bailout last month. The nearly unanimous city panel vote allows the stalled project to restart, with the support of the tax-exempt bonds. Supporters of the project said that the development will create jobs in the area and provide affordable housing, while detractors have criticized the development’s use of expensive land, the Brooklyn Paper reported. John Tyus, a resident and member of Families United for Racial and Economic Equality, has criticized the developers for relying on public funds for a bailout.

Commercial rent control bill stalls

A City Council bill that would create a kind of commercial rent control has stalled at City Hall. The bill, introduced by Upper Manhattan Council member Robert Jackson, would require landlords and tenants to participate in mediation and arbitration if they can’t agree on a fair rent for a commercial space. The Small Business Survival Act has support from 33 council members. But Council Speaker Christine Quinn has said she will not bring the bill to a vote because she isn’t sure whether the proposed regulation is legal. Quinn’s critics say she isn’t supporting the bill because she does not want to regulate landlords who support her.

12 percent participation rate raises doubts over foreclosure prevention plan

The Obama administration’s mortgage foreclosure prevention program hasn’t caught on as some had hoped, according to a Treasury Department report released last month. Recent data shows that only 12 percent of eligible borrowers have begun trial loan modifications under the $75 billion plan. Concern over the program’s efficacy is mounting in the wake of this report, with some analysts raising doubts over whether the preventive measures will be enough to slow foreclosure rates. Even worse, Bob Caruso, Lender Processing Service’s executive vice president for strategy, said that many of those trial modifications might not be enough to rework troubled mortgages, the Wall Street Journal reported.