Real Estate – Complaint Hub

N Exactly IMBY

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Central Union Men’s Shelter is seeking to move from the current location they own and maintain at 14th and R Streets, NW. The current location houses an approximately 30,000 square foot men’s shelter containing 84 beds. The Mission is seeking the new facility on Georgia Avenue to be built at a whopping size 70,000-80,000 square feet and 200-250 beds – more than doubling their current size.

I’ve been meaning to look up this website ever since I ran past a few signs on 11th Street advertising it. It seems that, because 14th and R is such a sought-after location, they want to build condos there. And since Georgia Ave is still a little rough, they’ll put a giant homeless shelter there.

I have no idea how I feel about this. It does feel a little like the rich developer taking advantage of the poor residents of less gentrified area. On the other hand, the guy is probably just making a good business decision – take the prime real estate for condos, and move the homeless shelter to a cheaper neighborhood.

But it’s not exactly my neighborhood. The proposed site is not somewhere I pass by very often, if at all, even if it isn’t all that far from my house.

I think it’s kind of funny how the website I linked goes to great lengths to describe the fancy development in Alexandria where the head of the Mission lives. Although I do agree – I’m always somewhat annoyed when someone who lives in expensive Virginia suburbs tries to make rules for DC.

Anyway, I’m not sure where I stand on this. But I finally remembered to look at the website, so I thought I should mention it.

Bailouts are bad

Beware Bailouts: Financial Page: The New Yorker

Nine years later, it’s been another terrible August on Wall Street. The meltdown of the market in subprime loans, which over the past six months has led to the shuttering of many home lenders and mortgage brokers, has spilled over into the broader credit market.

The wife linked to this article in the comments of my earlier post, and I thought it was a good article. In fact, it’s the article I would have written if it weren’t much easier to just type up an uninformed rant because you don’t really know all the details.

The Fed’s decision to flood the system with cheap money will create a textbook case of what’s usually called moral hazard: insulating fund managers from the consequences of their errors will encourage similarly risky bets in the future.

All of these mortgage lenders SHOULD be going under. They took on too much risk, and it came back to bite them. That’s how risk works. If you balance it, you make money. If you take on too much, you go broke.

The article goes on to talk about how the subprime mortgage implosion may or may not hurt the broader economy. I would be more inclined to see government intervention to mitigate the adverse effects on the broader economy – we are innocent, and having the government help out because someone else screwed up the economy is much more palatable to economic conservatives such as myself.

Anyway, it’s an interesting article. Thanks to the wife for pointing it out.

Renovations to begin on Harvard Street

Construction is set to begin tomorrow, according to the contractor. They’re going to put a dumpster in our driveway for a couple of hours. While I’m not looking forward to the noise and mess and whatnot, it’s exciting that something’s going to happen to the house. I would much rather have a renovated house on the block than a boarded up one. It means we’re going to have to put up the blinds in our bedroom. Currently, the only way to see in is through a boarded up window, but that probably won’t be boarded up for long.

New construction on Harvard Street

There are two buildings on our street that have been abandoned since we moved in last February, and it looks like renovation has started on both. Work on the abandoned row house will begin this Monday, according to the developer. And there is a work permit hanging on the side of the apartment building, although I didn’t really read it because it was starting to rain.

I’m curious how the housing market is going to look in a year or so when these places are finished (hopefully). DC USA should be open by then, but so should the surrounding apartments and condos.

Still, it’s exciting that the eyesores will be going away. The first thing I would do with the row house, were I the developer, is paint over the profanity that someone has spray-painted on the front steps. I think that would go a long way towards making the place look a little nicer.

I’m going to take some pictures of the buildings this weekend so I can compare them to the finished product when construction is complete.

Go ahead, shoot the messenger

Techdirt: Tighter Lending Standards Make Credit-Piggybacking Services More Popular

This issue — whereby a person can “piggyback” on another’s credit report and gain benefit from it — is just one that’s fueling financial institutions’ unhappiness with FICO scores, and the company behind the system, Fair Isaac, says it’s making changes to eliminate the positive influence of piggybacking.

Well, not exactly shoot the messenger, but I couldn’t think of a more accurate yet still catchy title. What’s going on here is that people are using what amounts to a loophole in your FICO score that makes it beneficial to “rent” your good credit to some schmuck, allowing the schmuck to get a loan.

The proper response here, which is what Fair Isaac is doing, is to fix the FICO so that this doesn’t give the score lender a bump. It will all but eliminate the market for this stuff because no one will want to do it anymore.

The improper response is what the lenders will probably do instead, which is to move away from the industry standard and make up their own numbers.

I did financial analysis at a very large company in the mortgage field for about a year just out of college, and one of the things I learned is that a FICO score is a remarkably good predictor of loan performance. The company I worked for employed some very smart economists to try and come up with a better method (Or at least an in-house method so they could stop paying for FICO scores), and I don’t think they ever really improved on FICO.

And lately, lenders have shown that they really aren’t very good at predicting loan performance (See: subprime mortgage market implosion). So getting away from a score that may need a little tweaking, but has been really good for a long time, seems a little silly.