Real Estate

Nashville Council to Again Consider Banning Short-Term Rentals in Residential Zones

The Metro Nashville Council will again consider new restrictions on short-term rental properties — such as Airbnbs — in residential areas, The Tennessean reports. Nashville moved to issue a similar ban last year; however, the General Assembly nixed it because of concerns regarding the rights of property owners. The council will consider the bill in its July 2 meeting.

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Shadow Banks Back in the Forefront of Lending

“Shadow” banks have made a comeback and now surpass regulated banks as the leading source of credit for businesses and consumers, The Washington Post reports. Considered the catalyst for the real estate market collapse in 2008, the shadow system uses money from investors in lieu of depositors and heavily relies on hedge funds, investment banks and private equity funds. Loans from these sources are popular with consumers because of lower credit stipulations, faster approval and more flexible terms than loans from a traditional bank; however, they make the general economy more susceptible to busts.

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NAR asks Judge to Dismiss Antitrust Lawsuit

The National Association of REALTORS (NAR) has filed a motion to dismiss in the class-action lawsuit regarding antitrust concerns, Forbes reports. The suit, filed by Minnesota homeowner Christopher Moehrl, contends that NAR conspired with major real brokerages to inflate commissions using its Multiple Listing Services and compensation policies. NAR argues that the complaint violates Section 1 of the Sherman Act in connection with NAR rules related to the Multiple Listing Service and therefore should be dismissed. RE/MAX, Keller Williams, HomeServices of America and Realogy Holdings were also named as defendants in the case.

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Is a Two-Sided Market Coming to Commercial Real Estate?

Forbes yesterday published a piece exploring a two-sided market approach to maintenance of commercial real and whether this may prove to soon be a reality. The essay expands on the practice of smart physical systems in buildings and predictive maintenance, detailing how this might be leveraged to create a new model for how vendors, overseers and the equipment itself intersect. You can view the article here

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Redfin to Introduce Direct Property Bids on Its Website

Redfin, a national real estate brokerage that allows homebuyers to purchase properties without representation, is launching a program to offer consumers the opportunity to bid on properties directly through its website, The New York Times reports. The initiative was recently tested in Boston with sellers paying a 2 percent commission fee, which is half the normal rate for the area. Out of 120 homes listed between late March and early May through Redfin with web-based offers accepted, five were bought with online bids.

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Zillow Class-Action Suit Regarding RESPA Violations to Proceed

The class-action lawsuit filed against Zillow regarding its “co-marketing” program and whether it violated federal anti-kickback laws will proceed as planned, The Washington Post reports. The suit, filed in September 2017, alleges that the company ran afoul of the Real Estate Settlement Procedures Act (RESPA) by allowing lenders share advertising fees with real estate agents — up to 90 percent initially — effectually allowing the lenders to receive leads on active buyers. The Consumer Financial Protection Bureau (CFPB) in 2017 notified Zillow that it was being investigated regarding the alleged violations, to which the company attempted to negotiate with the bureau; however, the case was dropped when the Trump Administration appointed its new CFPB director. Judge John C. Coughenour of the U.S. District Court in Seattle denied Zillow’s motion to dismiss saying: “the court can draw a reasonable inference that Zillow designed the co-marketing program to allow agents to provide referrals to lenders in violation of RESPA.” A trial date has not been set.

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Metro Nashville Government Releases Report on Tax Incentive Funding

The Metro Government of Nashville & Davidson County released its Tax Increment Financing Study & Formulating Committee Report, which examines Metro’s Tax Incentive Funding (TIF) used to promote redevelopment in blighted areas. Mayor David Briley signed ordinance BL2018-1315 creating the committee to formulate recommendations on implementation of and ensure more transparency regarding the municipalities use of TIF. In its report, the committee compiled a number of observations and 17 recommendations, formally asking the Mayor’s Office to provide Metro Council with a description of agencies or departments that will address the recommendations, including cost estimates for implementation. The committee was scheduled to present its recommendations to the Metro Council last week. 

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U.S. Department of the Treasury Releases Updated Rules Regarding Opportunity Zones

The U.S. Department of the Treasury on Wednesday released its second set of proposed regulations regarding the Opportunity Zones tax incentive, The New York Times reports. Introduced in the 2017 Tax Cuts and Jobs Act, the initiative is intended to encourage development in economically distressed communities by allowing investors to defer, reduce or eliminate taxes on some capital gains when the investments are held for at least 10 years. Critics argue that the incentives, as introduced, would benefit real estate developers, not small businesses, and speed up the displacement of low-income residents in gentrifying areas. The new rules seek to quell some of these concerns, also allowing long-vacant properties to immediately qualify for the tax breaks and provides investors incentives even if the business focuses on exported goods or services to markets outside of the zone, pending the money is reinvested in another qualifying business or asset.

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NYC Imposes Regulations on Greenhouse Gas Emitted by Buildings

New York City is taking a new step in its effort to combat climate change by imposing stricter limits on greenhouse gasses emitted by buildings, The New York Times reports. The plan is staunchly opposed by real estate executives because of associated costs for compliance, with estimates exceeding $4 billion. Some buildings will be exempted from the caps, including apartment complexes with rent-controlled units, places of worship and affordable housing communities, however, those buildings will still be required to take other energy-saving measures. This legislation is part of a group of bills passed yesterday known as the Climate Mobilization Act, which seeks a 40% decrease in emissions by the year 2030.

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Study Finds Same-Sex Couples Encounter More Denials, Higher Interest Rates for Mortgages

A just-released study from the Proceedings of the National Academy of Sciences shows that mortgage lenders are more likely to deny loans, or charge more on approved loans for same-sex couples, the Washington Post reports. National mortgage data from 1990 to 2015 shows that these couples were 73 percent more likely to be denied, and on average paid 0.2 percent more in interest and fees than heterosexual couples with comparable financial standing. Since mortgage applicants cannot be asked about sexual orientation, the study identified same-sex couples as co-applicants of the same gender in its model. The researchers involved cite the probe as evidence that sexual orientation should be added a protected class under federal lending laws.

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