A pr i l 2 0 1 6 Vol. 03 | Issue 4
REAL ESTATE SUCCESS ISSUE: • FEATURING CONGRESSWOMAN LORETTA SANCHEZ - U.S REPRESENTATIVE FOR CALIFORNIA’S 46TH CONGRESSIONAL DISTRICT
• WHERE THE FAIR HOUSING ACT STANDS TODAY
We proudly welcome ZipRealty™ and its innovative technology platform to our family of real estate brands!
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Eric Lawrence Frazier, MBA President and CEO Office: (800) 401-8994 Ext. 703 Direct: (714) 361-2105 Eric.Frazier@ThePowerIsNow.com www.thepowerisnow.com www.blogtalkradio.com/thepowerisnow
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EDITORIAL TEAM Eric Lawrence Frazier MBA Editor in Chief (800) 401-8994 Ext. 703 Kristina Mari Managing Editor (800) 401-8994 ext. 723 kristina.mari@thepowerisnow.com Goldy Ponce Arratia Graphic Artist and Design Manager (800) 401-8994 ext. 711 goldy.ponce@thepowerisnow.com Andrej Jovanovic Graphic Designer (800) 401-8994 ext. 713 andrej.jovanovic@thepowerisnow.com Nicholas Clarkson Director of Technology (800) 401-8994 ext. 704 nicholas.clarkson@thepowerisnow.com Scocrates Ayala Online Radio & Media Manager (800) 401-8994 ext. 709 socrates.ayala@thepowerisnow.com
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CEO & Publisher Eric Lawrence Frazier, MBA 3739 6th Street, Riverside, CA 921506 Ph: (800) 401-8994 ext. 703 EDITORIAL Editor in Chief: Eric Lawrence Frazier MBA Managing Editor: Kristina Mari ONLINE Web Designer: Nicholas Clarkson DESIGN Art Director & Design Manager: Goldy Ponce ADMINISTRATIVE Administrative Assistant: Kendra Gedeon
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Issue... GREEN
YOU Policy of Condominiums 18 The Fairhousing Act - After Forty Years Has Discrimination Ended?
12 Energy Sector - Trends to Watch Out in 2016
TECHNOLOGY
LEGAL
Loretta Sanchez
Your Interests
Estate in North Carolina
16 Challenger of the “No-Rental”
ECONOMICS
32 Congresswoman
38 Showing Flexibility to Match
28 Year Round and Seasonal Real
MORTGAGE
REAL ESTATE
40 Green Homes on the Rise
OUR COVER
In This
44 Getting the Most Out of Social Media
24 Owner Financing - Turn Your Renters Into Owners
From the
Editor... Dear Readers, Spring is finally in full bloom and wow isn’t it beautiful? How can anyone say there is no God when we look at the beautiful flowers in the fields and mountains growing and glowing in all of their glory and bringing a smile to our faces? I love Spring, Summer and Fall. Winter is not my friend. I think Winter is God’s way showing he has a sense of humor. I would run from the snow and rain to the Sun and earthquakes in Southern California any day. I took a trip to Home Depot this week and got caught up in all the beautiful flowers and Spring fever and bought $500 dollars’ worth of flowers and planted them in back yard. I haven’t done that in 25 years. I need to spend more time in the Sun and the garden this Spring instead of being cooped up in my home office. March 20th marked the Vernal Equinox and the official start of the spring season. Our recent unseasonably warm temperatures have reminded us that spring is really here and that there is really only one season in California called Summer. Summer last 12 months in California and has many variations that make it appear to be other seasons when it really isn’t anything but another beautiful day of Summer. With the temperate weather comes thoughts of the traditional meanings of spring: rebirth, rejuvenation, and growth. The first quarter is over and it is time to reflect, measure, review, reset and go after our goals with even more focus than we had in the beginning of the year. It feels appropriate that Earth Day falls on April 22, during the springtime season. Just as spring emphasizes the idea of birth and rebirth, Earth
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Day prompts us to focus on preserving the Earth for future generations. For some people that mean buying an electric car and that is before they buy a home; which makes no sense at all. Everyone should buy a home before they buy and expensive car. Some of the most exciting advancements in technology are being harnessed in ways that will lessen the negative impact humans have on our planet. In this month’s issue, we will focus on eco-friendly homes and other eco-friendly innovations, in honor of spring and Earth Day. April is also Fair Housing Month. Since the Fair Housing Act was passed on April 11, 1968, the Office of Fair Housing and Equal Opportunity has celebrated April as Fair Housing Month. Every April, state and local governments as well as non-profit organizations hold events and conduct activities to celebrate the passing of the Fair Housing Act and recommit to that goal which inspired us in the aftermath of Rev. Dr. Martin Luther King Jr. assassination in 1968. The goal is to eliminate housing discrimination and create equal opportunity in every community. The Fair Housing Council of Riverside of which I serve on the board of directors is having their annual conference at the Riverside Convention center on April 20th. Please come and join us if you plan to be in Riverside that day. The country is yearning for a new direction in our next President. It can be clearly seen in the debates and rally’s that change is coming. Two candidates with ideas that are considered to be outside of the political mainstream are having large success in the primaries. Bernie Sanders,
who is running against Hillary Clinton to be the Democratic candidate for president, is going to be a tough competitor to the very end. Donald Trump to the surprise of many, continues to garner the wide support of Republican voters. No matter which candidate ultimately becomes president, the country is going to have to come together as a whole in order to achieve lasting change. Our new President has some big shoes to feel contrary to what the critics may say about President of Obama. I believe that history will be kind to President Obama and declare him to be one the most accomplished President’s since the founding of this great nation. But that is my just my humble opinion. Please share the magazine and read the great articles. I promise you will be happy you did. Thank you for supporting The Power Is Now Inc.
Eric Lawrence Frazier M.B.A Editor-in-Chief
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ECONOMICS
ENERGY SECTOR Trends to Watch Out in 2016 Gone are the days when the energy sector was an oligopoly, governed by a few strong and competitive players. The new era has seen the entry of a number of reputable names in this industry. An increase in the number of suppliers deteriorated the firmly established power of a few huge players.
Energy Market in 2016 – What to Watch Out For?
2016 is the year of alterations, especially economically. The world has seen massive economic fluctuations at the beginning of the year. It is also expected that the economies will confront some other surprises during this year. The major trends that the participants of energy The new energy market is now a fully competitive market will confront this year are: segment. The sellers are influenced by a number of internal and external factors. Similarly, Massive Declines in the Oil Prices turbulence in economic activities impact the energy market visibly. Oil prices have already hit their bottom in the
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ECONOMICS
In addition, the removal of sanctions gave an entry permit to Iran. Within a few days of its entry in the oil market Iran increased the supply of oil greatly. This has been one of the major causes of the turmoil in oil prices. This is also expected to continue for some time in future. The decline in oil and gas prices have badly hit the oil and gas companies in the power sector. The rate of default of these companies increased considerably in the year 2015. Around twenty five percent of the total 79 debt defaults in 2015 were from energy sector. The default rate of exploration companies was higher than that of the oil and gas companies.
year 2015, falling below the set level of $34 per barrel. It is expected that the oil prices will remain low during this year too. This is attributable to the decline in China’s demand and climate agreement signed in Paris. It is also expected that economies will reduce their reliance on fossil fuels. This will further reduce the demand for oil, causing the prices to decrease.
In addition, the fall in oil prices also cost a total of 200,000 jobs as well. The investors shall not expect to see oil prices increase during 2016. Most of the huge oil and gas companies are seen cutting down their budgets. These companies are making evident investments in other technologies, including software and big data. Even though the cut in oil prices has had deadly economic impacts, but it is expected that this will change the structure of
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the industry for better.
Decrease in US Production of Oil Along with the decline in oil prices, there has been a massive decline in the US oil production. In the year 2015 the oil production in US declined by 300,000 barrels per day. It is expected that this production will further decline by 0.5 million barrels per day in 2016.
Massive Growth in the Solar Energy Market The year 2015 saw the entry of solar energy market in attractive industries, such as US. This has caused this market to grow rapidly during the previous year. This growth was fuelled by low priced solar panels, and the development made in software, technology and financing facilities. It is expected that this market will hold a share of 35 percent in the total energy infrastructure in the coming 25 years. The solar energy market is an attractive investment target in the US, as the new tax credit will facilitate massive growth and development in this sector in 2016.
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ECONOMICS
Declining Inventories of Coal in Developed the year 2016, there is a possibility that the oil market will rebound. It is, therefore, expected Countries
that investors will see a number of mergers this Although there has been an increase in coal year, as the weak players will be scooped up by discoveries in India, the inventories of coal the stronger ones. in US have declined considerably. There has been a massive decline in coal jobs in US. The Tentative Rise in the Prices trend is expected to continue in the year 2016. Furthermore, the revenues of North American By its end, the year 2016 is expected to witness coal industry saw a decline of 25 percent. It is an increase in demand of crude oil. It is predicted also expected that more than one half of the total that the demand will increase by 1.8 million coal resources of the world will be rendered barrels per day. This increase in demand is likely to shoot up the prices a bit, by decreasing the unprofitable in the coming year. surplus supply. The prices may increase to $60 dollar per barrel by the end of this year. Mergers and Acquisitions The purchase of BG group by Shell in the year 2015 left most of the investors wondering if Shell overpaid for the transaction. By the end of
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LEGAL
Challenges of the “No-Rental” Policy on Condominiums
Condominiums or condos are popular housing units in urban areas in the United States. Their construction has continued to grow and outpaced some types of housing units. Condominiums are traditionally constructed to be sold as units once completed. However, there rose a tendency of people buying condos and later renting them out. The behavior forced the boards of most condos to come up with the infamous ‘No-Rental’ policy. The exact policy terms vary from one community to the other depending on the rules agreed upon by the condominium board and owners.
Origin of No-Rental Policy Owners renting out the condos presented other owners with many challenges; one of these are depreciation of the condo’s value. Renting a condo is much cheaper than buying one. It means that condo owners tend to be more financially well off than the people they rent their condos to. As more and more condo units in a community are rented out, the average lifestyle of the community goes down. The new residents who are not financially well off, therefore, will negatively affect the value of condo units in the neighborhood. The new residents may also introduce unhealthy social behaviors in the community. Some of them may be involved in criminal activities such as stealing from neighbors or selling illegal products. Whenever such behaviors pop up in a community, most condo owners will automatically try to get out of the
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LEGAL
neighborhood. Potential buyers will also keep condo. However, with the policy, it might not off the property, hence negatively affecting the be possible. Condo boards must review an value and prestige of the condos. individual’s situation to determine if they are facing hardship or not. Since individuals are The introduction of No-Rental policy has helped unique, one person’s hardship situation may not condo owners to protect themselves from these be another person’s. The board, based on their potential problems associated with renting out assessment, may deny them a chance to rent out the units. The regulation varies from totally no when they need it. renting out condos to renting out only a given number of condos at a particular time. If the After staying in their condo for a while, they rules allow a certain percentage of the units to may want to move to a larger home or a new be rented, condo owners who want to rent after neighborhood and sell their condo. However, the limit has been reached would have to wait they may fail to find the right buyer. As a result, until the rented units are returned back to their they may opt for renting out the condo. If the owners. The rules also specify how long a rental limit of units that can be rented out has already lease can last. It is important to note that any been reached, they will have no option but to let agreement made by condo board or members on the condo stay vacant. This problem is especially ‘No-Rental’ policy must be recorded with the common during hard financial times when most county’ recorder office. people do not have money to buy home.
Challenges Caused by ‘No-Rental’ policy
The main challenge condo owners face regarding ‘No Rental’ policy is the inability to rent out their condo during hardship. Financial hardship is not predictable. During such situation, as a condo owner, they may opt to rent out their
Discriminatory regulation is another problem associated with ‘No Rental’ policy. The problem is especially prevalent in communities that allow for only a certain percentage of the condo units to be leased. As a discriminated condo owner, this policy can be frustrating. Remember condo owners can always appeal against discriminatory policies successfully in a court of law. Condo owners also have the power to amend their NoRental policy so long as the amendment is voted for by the majority of owners. Owning a condo is an important achievement in one’s life. Although the No-Rental policy was introduced to protect the value of these housing units, it has led to the emergence of new challenges to the condo owners. The policy is however, not fixed and can be amended by condo owners as they deem fit.
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LEGAL
THE FAIR HOUSING ACT
After Forty Years Has
Discrimination Ended?
M
ore than 50 years ago, legal segregation within the United States of America officially came to an end. However, even with the end of legal segregation, throughout the USA there are still barriers faced by certain groups within society. Indeed, in many areas people of different races do not live in the same neighbourhoods. They also do not attend the same schools and in some cases, they are are unable to access the same essential services, such as health, education and emergency services.
and Baltimore highlight that racial segregation in one form or another is still very much in existence throughout the USA.
Social Integration Studies undertaken by the Brookings Institute identify that social integration is well below expected integration levels and that people of different races are failing to associate and effectively interact with other races. This is a key problem for full racial integration to be experienced – without differing
As we are progress through 2016, one thing that remains at the forefront is the issue of racial relations within the USA. In the years preceding 2016, the debate relating to racial relations has intensified with several killings of unarmed African Americans by law enforcement officials and even white citizens. These shootings and the racial tensions that are experienced in key cities such as Chicago, Ferguson
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races interacting, not only within cities, but also local neighbourhoods, there is little to no opportunity for discourse on effective integration to be entered into between the various groups and public officials. There is a very close correlation between racial and economic segregation throughout the USA. If you are an African American or a member of a minority group, there is evidence to suggest that you are more likely to live in an area that is littered with poverty. African Americans and minority groups do not choose to live in poverty or in poverty prone residential areas. In many instances these groups live in these areas through government and social policies that have implemented social and urban design practices.
LEGAL
Historical housing policies throughout the USA were designed to ensure that African American and other minority groups did not live within white neighbourhoods. Steps have been taken to overcome the discrimination stemming from these historical housing policies, such as the implementation of the Fair Housing Act. Unfortunately, a status quo has been established where social and racial groups were confined to particular geographical locations. Geographical segregation was initially created through the institutionalized practices of the US government during the 1930’s. During this period policies were developed by the government that restricted African American and minority ethnic groups from obtaining property in certain geographical locations. At the same time, the US government was undertaking steps to boost the federal economy by underwriting home loans. There were strict lending criteria which highlighted the areas in which home loans would be granted. Unfortunately, areas where African American and minority groups predominantly lived were considered to be high risk
under the USA governments lending criteria. Therefore, these families where effectively denied the rights to purchase their own properties through this government initiative.
Redlining
The practice restricting home loan lending to certain neighbourhoods and geographical regions became known as “Redlining”. The term as its name suggests, was introduced as red ink. It was used on maps to highlight areas known for poverty and areas that African American and other minority groups lived. Redlining government policies officially continued until the 1960’s and effectively prevented minority groups from
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being able to take the necessary steps to break the poverty cycle by obtaining ownership to their own homes. This policy created an economical gap between the white community and other minority communities.
The public policy of redlining was made official made illegal in the 1970’s however, unofficially there is widespread evidence that the practice of redlining continues today. One only needs to look at banks and other lending institutions and their lending criteria. The banks argue that their lending criteria protect the business interests of their operations by reducing financial risk. Essentially, their policies prevent those living in African American and minority
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LEGAL
neighbourhoods from gaining access to home loans. This issue was highlighted in 2015 by Deputy Assistant Attorney General, Vanita Gupta, of the Department of Justice. Vanita Gupta identified a hard-line stance against banks and lending institutions engaging in discriminatory lending practices. There have been a number of highlighted cases being brought by the Department of Justice against banks and other financial institutions for discriminatory lending practices through the use of redlining. However, the impact of the action the Department of Justice has taken is still in its infancy. With that, it is too early to identify whether the banks and lending institutions stopped discriminatory lending policies or merely adopted policies of redlining through subterfuge.
Racial Covenants and other Discriminatory Practices
Redlining is not the only discriminatory policy that has prevented African American and minority groups accessing home ownership. Until 1958, there were laws in existence throughout the USA that allowed African American and other minority groups the opportunity to buy and even live in a house of property. The covenants were drawn into housing contracts and effectively created affluent suburbs that were purely populated by white middle to upper income families. These suburbs continued to grow in popularity throughout the USA and the development of these neighbourhoods became known as the “White Flight�. Another practice similar to Racial Covenants was known as blockbusting, where developers and real estate agents transformed neighbourhoods that had been traditionally white into neighbourhoods for African American and minority groups. Blockbusting was nother prime example of legalised segregation in the USA.
Continuing Segregation After the abolition of slavery in the US, many African American families fled north from southern cities and geographical locations, to start fresh lives. However, in 1970, the US saw its greatest peak ever in residential segregation. For unexplained reasons, large numbers of African American families started moving back into cities in the south of the USA and suburban areas of the USA. With the move by African American and minority group families into these areas, there was a growing concern from the white population that property values would decline. This saw an exodus of white
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LEGAL
families from the suburban areas that African American and minority groups were relocating to predominantly white neighbourhoods. Hence the continuation of residential segregation throughout the USA based on race and “socioeconomic” factors.
It is no secret that the act has been ineffective through the lack of enforcement and in 2015, President Obama made an undertaking to American citizens, that he would implement new rules that would strengthen the Fair Housing Act.
Even today, research undertaken by the Department of Housing and Urban Development has uncovered empirical evidence that identifies that real estate agents encourage African American and minority groups to live in so “black” neighbourhoods. Further evidence obtained by the Department of Housing and Urban Development, also identified that Real Estate Agents showed African American and members of the minority community a limited number of properties as opposed to white members of society. Essentially, the continued practice of Real Estate Agents is effectively locking African American and minority groups out of affluent white neighbourhoods. This in turn prevents African American and minority groups from breaking free of the poverty cycle and racial discrimination.
The result of President Obama’s commitment has now seen a shift of policy that only allows government finances to be used for new housing projects once proven that the project will foster community integration between the white populace and African American and minority groups. While this policy of president Obama has made effective inroads towards community integration for public housing, it does not impact upon private property developers. As a result housing discrimination is able to continue unabated. The policy that was designed to ensure fair housing is limited in scope.
The Fair Housing Act More than 40 years ago, the US government passed legislation to prevent housing discrimination for all minority groups. This legislation became known as the Fair Housing Act. The objectives of the act are to sound and prevent housing discrimination. However, the lack of enforcement of the Fair Housing Act by the Department of Housing and Urban Development and also the Department of Justice has essentially see the act become ineffective.
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LEGAL
The Present Housing Situation Throughout 2015 and the beginning months of 2016, the Department of Justice has been actively identifying discriminatory housing practices, whether those practices be through lending, urban development or the rental and sale of housing and other residential properties. The Department of Justice has been successful in prosecuting many housing discrimination matters under the guise of reducing poverty and ensuring racial integration throughout the USA.
are showing a strong commitment to eliminating housing discrimination, the challenges of eradicating discrimination are to great. A grass roots approach needs to be taken to end discrimination as opposed to tough political rhetoric – actions speak louder than words. Once dedicated actions and policies are put in place, not only through enforcement but also through education, we may then see a reduction in the level of housing discrimination.
Unfortunately, even with increased enforcement and prosecution resulting from housing discrimination, discrimination still continues. Public perception and historical ideologies have prevented discrimination from being a thing of the past within the USA housing. The problem remains, that even in the decades that have passed since the civil rights movement, the white population of the USA simply does not intermingle with the African American and minority communities. It is an issue that even with the Fair Housing Act is going to continue for some time to come and until such time as all Americans mix freely together. Without some form of integration taking place, there is no opportunity for discourse and understanding between racial groups. Until greater understanding and acceptance between the racial groups is established throughout the USA housing discrimination will continue to flourish. While the US government and President Obama
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MORTGAGE
OWNER FINANCING TURN YOUR RENTERS INTO OWNERS There is no doubt, that rental prices in most metropolitan cities and regional areas throughout the USA are speedily moving upwards. But even with these escalating rental prices, many renters fail to take advantage of the benefits of home ownership. Purchasing a home makes better economical sense for people with increasing rental costs. However, increasing rental prices prevent many of those renting from having the opportunity to save the necessary down payment. This challenge for renters provides an interesting opportunity for property investors to increase the profit margin on their rental property.
by allowing them to break free from the rental roller coaster.
What is Owner Financing? Owner financing is exactly that - the home owner finances the home loan. Traditionally someone looking to buy a property is forced to obtain their financing through a bank or another lending institution. However, with the owner financing the property, the owner directly loans the renter the money to purchase the property. All without having to directly transfer money or otherwise impact upon their cash assets.
Many property investors have limited knowledge of the financial rewards they are missing out How Owner Financing Works? on through owner-financing options. Not only does this rarely used financing option allow There are a number of legal matters that need high rewards with minimal risk to the property to be considered prior to establishing owner investor, it also gives the property investor financing for your tenant. For this reason it is the opportunity to reward his or her tenants considered essential that you seek legal and
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MORTGAGE
financial advice. This will ensure that all legal that the buyer is paying. Owner financing also and financial issues are covered for your own allows property owners to sell their property unique circumstances. sooner, especially when the real estate market is down or not at its full potential. The main As general information, you as the property benefit for property owners is the profit that is seller have a promissory note drafted by your acquired through the interest rate payments. This lawyer. The promissory note is a contract which is above and beyond the profit made through has the details of the interest rate and repayment the sale price for the property. For many years schedule that you want for the loan you are banks have become profitable through the use of providing. The promissory note will also stress interest on loans. the consequences your tenant/property buyer faces if they breach the owner financing contract. The Next Steps - Turning Your The benefits for the property owner is that they Renters into Owners can set the interest rate at a higher than bank interest, equalling to more profit, as the renter is likely to have difficulty in obtaining traditional financing. Another benefit for the property owner is that at any stage, they have an option to sell the loan to another party if they need quick access to cash assets. In most instances, owner financing contracts are only short term loans for a maximum period of five years with a balloon payment due once the contract period ends. At this time it would be expected that the renter or buyer will have established sufficient equity in the property to obtain traditional financing for the remainder of Assuming you have good tenants with a good the property value. rental payment history, chances are they would probably buy a house, but simply lack the The Benefits of Offering Owner financial resources and knowledge to obtain Financing traditional lending sources. Approaching your tenant and asking, “Would become a property Most people think that owner financing is owner and stop renting?� Is an approach that you something that is geared towards helping the will find that in the majority of instances your buyer, in reality, owner financing offers the tenants would be extremely appreciative of the property owner many more benefits. Owner idea. From here you simply have to explain the financing allows the property owner the benefit process of owner financing and start establishing to pay down their own debts quickly because the terms of the contract that are both profitable they have access to not only the principal loan to you and achievable for your tenants. payment options, but also the additional interest
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MORTGAGE
Another option is to advertise your rental properties as “Rent to own”. With a rent to own structure, instead of advertising for tenants for your property, you advertise for people who want to use their regular rent payments as down payments on the purchase price of your property. It is essentially another form of owner financing. Rent to own structures do have more risks as you will have limited financial knowledge of your new tenants, your lawyer will be able to undertake the necessary credit checks to reduce the risk involved.
relatively risk free so as long as you undertake your diligence before entering into any contractual arrangements. This is where it is essential to consult with a lawyer and a financial advisor to ensure that you have minimized any potential risks. All in all, owner financing is an innovative investment strategy which not only financially benefits you as the property owner, but also provides an opportunity for you to help those trapped in the rental roller coaster.
“Rent to own” structures also provide you with a unique investment strategy where you can make an extensive return on your investment by offering prospective tenants the opportunity to purchase the property of their dreams. This involves advertising your “rent to own” structure so that people who are looking to purchase their own property can contact you directly, cutting out the middlemen such as real estate agents. This in turn reduces any costs you may incur. While owner financing is not a common investment strategy, it is a strategy that is
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Frazier Group Realty, Inc. As you venture into the World of Real Estate, we can help you put the pieces together and Naviagate you into Home Ownership
Ruby L. Frazier President License #01751773
Briana M. Frazier Broker License # 01751473
Jessica E. Frazier License # 01817312
Erica L. Frazier License# 01791095
Frazier Group Realty is the right place. Our Navigators are available to give you personalized service and answer any questions you may have. You can call, email or visit us and we will be there ready to help you every step of the way. Wether you are a first time home buyer or an experienced real estate investor, here at Frazier Group Realty you gain useful information about how to choose the “right” property, and everything involved in making an informed decision in today’s real estate market.
Making Clients for Life
3739 6th Street, Riverside, CA 92501 Office: (951) 686-5261 Fax: (951) 686-5264 www.fraziergrouprealty.com
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Our Cover
OUR COVER
Congresswoman
Loretta Sanchez There was no shortage of stories to grip Californians’ attention in 2014. A recordbreaking drought made national headlines and policymakers were forced to set differences aside to move new water-related regulations forward. A Superior Court judge ruled that California’s teacher tenure rules violated students’ constitutional rights to equal protection. And speculation swirled that Governor Jerry Brown’s statewide ban on plastic bags may actually be illegal. Something that managed to fall under the media’s radar: In 2014, Latinos surpassed white, non-Hispanics as the largest racial group in California. It is no wonder, then, that U.S. Representative Loretta Sanchez (D-California) resonates so strongly with voters. The Orange County politician is herself the descendant of Mexican immigrants. Her mother was a secretary and her father a unionized machinist. Sanchez, the second of seven children, barely spoke English as a child; she has pointed to the Head Start program as a critical resource in preparing her academically. Eventually, Sanchez would go on to study economics at Chapman College and get her MBA from American University—but she has not forgotten about Latinos’ struggles along the way.
Congressional District with pride. One needs to look no further than Sanchez’s positions on housing policy as evidence. When the subprime mortgage crisis started to take its toll, Sanchez was an early advocate for stronger consumer protection laws that would establish licensing and registration requirements for residential mortgage originators. As the effects of the housing crisis started to be felt throughout the country, Sanchez was a staunch supporter of the Neighborhood Stabilization Program (NSP) and Home Affordable Modification Program (HAMP) – programs that helped hundreds of thousands of Americans stay in their homes coming out of the Great Recession.
After squeezing out a narrow victory in her 1996 bid to unseat the incumbent, Sanchez has served the minorities in California’s 46th
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OUR COVER
Owning your own home for almost everybody in our country is the first rung of the ladder of wealth creation
Sanchez voted against H.R. 861 which would have effectively eliminated funding for NSP, and she refused to let her colleagues in the House terminate the HAMP program without attaching legislation to encourage banks to provide loan modifications and foreclosure prevention counseling for underwater homeowners.
Program, Sanchez offered a creative solution: using the balance of the program funds to launch a program that would allow eligible homeowners to refinance into a 30-year mortgage at a 4 percent rate.
“Due to the economic crisis, many of my constituents have either lost or are on the brink “With the recovery just beginning to take hold, of losing their homes,” said Sanchez. “And, I Republicans should not cut off a lifeline to understand their concerns.” responsible homeowners struggling to keep up with their mortgage payments,” said Sanchez Indeed, those concerns were real. at the time. “Even though I do not agree with the elimination of the home loan modification by A study by the Center for Responsible Lending Republicans, I am hopeful that my amendment found that nearly half of all loans foreclosed shows the importance of both the private and upon in California were owned by Latinos, public sectors in finding a solution to help despite Latinos comprising just one-third of even more families in Orange County.” Said the state’s borrowers between 2004 and 2008, amendment to H.R. 839 was eventually approved the time period in which most delinquent loans by the House majority. were originated. That same study specifically called out the need for Spanish-language loan When lawmakers tried to dismantle the Federal counselors and legal-aid providers to help Housing Administration (FHA) Refinance Hispanic borrowers avoid foreclosure – the type
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OUR COVER
of services Rep. Sanchez pushed for through two decades. After the June 7 primary, Sanchez legislative action. will mostly likely find herself in the ring with Kamala Harris, California’s Attorney General. Just as she’s trying to protect homeowners, Rep. Most consider Harris to be the frontrunner, but Sanchez has advocated for programs and policies Sanchez – who is considered to be the more that help low- and middle-income Americans moderate of the two Democrats – is showing access homeownership for the first time. impressive gains in recent months. “Owning your own home for almost everybody in our country is the first rung of the ladder of Winning the election will require Sanchez to wealth creation,” says Sanchez. “And yet today, appeal to the Latino and minority crowd she that dream – and it is a dream for many of our has represented so diligently since first taking citizens, particularly those in the Latino and public office twenty years ago. During a recent minority communities – is just that: a dream.” speech, Sanchez appealed to this demographic, noting that “30, 40 percent of the population” Despite her staunch support for policies that is Latino and “[Harris] can’t talk to them…. protect and encourage homeownership, Sanchez Understanding the Latino community is quite is perhaps best known for being an outspoken important.” Just like she’s fought to keep member of the House Homeland Security minorities in their homes, Sanchez now promises Committee. She voted against the War in Iraq to protect their families through preservation and against the Patriot Act – but that doesn’t of the Affordable Care Act and through federal mean she doesn’t support America’s troops. In immigration reform. fact, it’s just the opposite: Sanchez has fought to curb military sexual assault, expand woman’s After all, had her own parents not immigrated combat roles and (surprise, surprise!) fund many years ago, the U.S. would not have found programs to eliminate veteran homelessness. one of its most dedicated public servants. Representative Loretta Sanchez proves time and Today, Sanchez finds herself in a battle of again that no matter how promising her career her own. She’s considered one of the top trajectory, the concerns of Latino and minority two contenders vying for Barbara Boxer’s families will always remain one of her top U.S. Senate seat. Boxer’s retirement creates priorities. California’s first open Senate seat in more than
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GREEN
GREEN HOMES ON THE RISE Incessant campaigns on going green have been in place for a long time, but it is not until in the recent years that it got more attention. New projects and processes in different sectors have been launched and rules have been implemented to support this advocacy. Looking at the current trend, it has also finally taken root in the real estate industry, thanks to various consumer awareness programs and some supportive government policies.
A New Opportunity In a study published by McGraw-Hill Construction in 2014, an encouraging statistics show that builders and homeowners have slowly recognized the value of going green. Around 70 percent of residential builders say that majority of the market now prefers green homes. The feedback shows that homebuyers expect new homes to be highperforming, especially in energy conservation. Based on the current forecast, McGraw-Hill Construction predicted that the market for green single family homes alone can comprise 26 to 33 percent of the total market, which can be translated
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to an $80 billion to $100 billion opportunity.
Green Home Incentives and Market Performance Aside from the direct benefits homeowners can get from having a green home—reduced operating costs, improved health and comfort, improved productivity, protecting the environment, and creating a market for green materials—these extend to other incentives. The government is beginning to notice the environmental impact of residential units, which is responsible for about 15 percent of the greenhouse gas emissions of the country and consumes nearly a quarter of the nation’s energy. To aid these pressing problems, tax credits have been offered by many states and localities to encourage people to adhere to green building standards. Fees that usually come with the permitting processes are also reduced or even waived by some localities. When it comes to resale performance on the market, green homes also get sold 30 percent more and have higher
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GREEN
resale value than conventional homes. For newly green homes constructed green homes, they sell 3.5 percent come from more than houses without green features. homeowners age 55 and older, Busting the Price Myth not from the younger generation as the majority The most common misconception about green might expect. The data suggested that the homes is that it cost more. Some builders and greater the experience and involvement in home homeowners may agree to this, saying it initially features—which comes from maintenance and cost a lot but buyers can save much more in the repair cost spent, renovation, and overall user long run. However, experts in green building experience—lead to giving more attention to showed that green homes can be built with the the home performance and sustainability. With same cost as traditional homes. more involvement on the green advocacy, it is expected that millennials will create an even The US Green Building Council reported that there stronger demand for green homes when their time are nearly 206,000 residential units registered for to venture to home ownership comes. LEED for Homes; and 93,000 of these are already certified as of January 2016. Nearly half of these Green Building: The Future of Real homes belong to affordable housing sector.
Estate
David Johnson, consultant of the US Department of Solar Energy Program and was one of the members of US Green Building Council who launched LEED-NC, said that the greatest factor in affecting the cost of a green home is the experience of the builders and architects, which affects the design, how energy-efficient the team wants the house to be, and sourcing the materials. For example, for the design, passive solar heating, or having majority of the windows of a house face south following the sun’s movement to warm the house during winter, can effectively reduce energy up to 50 percent without additional cost. Shadings system or overhangs can cool these houses in summer. Of course, some designs, like vegetated roofs may cost more because additional systems are needed to be installed, but there are other more cost-effective alternatives builders and homeowners can choose from.
Age Demographics
Housing developers have been active in educating homeowners and buyers on the benefits of efficient, healthy, and low-impact homes. Homes that save energy and water mean more money for other more important things, like food and transportation. Improved human health and productivity help occupants do more things for self-improvement or for the community. With even more stronger campaigns for sustainable development and nature protection and preservation, green building is the only way of the future. There is a growing understanding on the connection between building an infrastructure and the impact it has on the environment, which will reinforce social responsibility. Government agencies, real estate corporations, universities, and property developers around the world are now incorporating green features in their designs that it is predicted to be the norm in the very near future.
It is interesting to note that strong advocates of
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