There was a snafu in the rush to sign the tax reform bill:
“The Senate parliamentarian determined two minor provisions do not have budgetary impacts and had to be removed from the bill,” the representative told Business Insider. “The Senate will still vote tonight, and the House will vote tomorrow to send the final bill to the president’s desk.”
Republicans are using a process known as budget reconciliation to pass the bill without being subject to a Democratic filibuster. But that also means the legislation must comply with the Byrd rule, which stipulates that it must not be projected to add to the federal debt outside of 10 years and that all its provisions must deal with the budget.
The parliamentarian, a sort of umpire for Senate rules, determined that three elements of the bill violated the Byrd rule:
The name. The short name of the bill, the Tax Cuts and Jobs Act, appears to be placed incorrectly in the legislation.
Changes to the so-called 529 savings plan. The bill would have allowed money in the college-savings accounts to be used for homeschooling supplies.
The exemption for small colleges from a new excise tax. The bill had proposed a tax on college and university endowments exceeding $500,000 for every student enrolled, but it included a provision that would have exempted those with fewer than 500 tuition-paying students. The parliamentarian struck only the words “tuition-paying,” the Ways and Means representative said.
Even with the delay, the bill is expected to make it to President Donald Trump’s desk before the GOP’s self-imposed Christmas deadline.
We will wait patiently for Congress, and in the meantime find some good news in the Sandicor resolution, published today. This isn’t much progress, but at least they are agreeing to something.
The two renegade associations will join the vastly superior CRMLS, and concede Sandicor to the only people who want it, the Greater San Diego Assocition of Realtors.
We’ve heard some pretty delusional ways to describe architectural features over the years. There are always certain less-than-desirable elements to any home and it makes sense to soften the bad things by lying… er—circumventing the truth. So what are the most common euphemisms we’ve come across? Read on:
“Cozy”
Nice try, this means tiny.
“Old world”
Means just old.
“Garden level”
Don’t be fooled, this means basement.
“Charming”
Small/weird.
“Shabby chic”
Usually more shabby, less chic.
“Open concept”
This is a studio where your bed is in the living room.
“Flooded with light”
It’s a nine-story walk up (you’re up so high though!).
“Full of character”
There’s a toilet in the kitchen.
“Funky”
On a good day, funky means interesting and cool or it might just mean super smelly.
“One of a kind”
Maybe there’s a reason they only made one?
“Rustic”
Run down
“Eclectic”
Random, haphazard layout and finishes.
“Comfortable”
This means worn in (if you’re lucky) or (more likely) nearly threadbare.
Here we have three different real-estate-industry opinions on the effects of the final tax reform. 1) The demand will increase due to more spendable income, pushing home prices higher; 2) The demand will drop, due to less spendable income because middle-class families will have higher taxes, and 3) Congress did the right thing and should be applauded:
The Republican party’s self-imposed Christmas deadline for the widely debated tax bill is fast approaching. Last week, Republican lawmakers announced they had the votes necessary to pass the converged Tax Cuts and Jobs Act bill. As the process moves forward, details are changing quickly, and, now, a couple of steadfast voters may not cast their ballots.
It’s now been widely reported – and Rob Dawg agrees – that Congress did not change the two-out-of-five-year requirement for home sellers to receive up to $500,000 in net proceeds, tax-free.
The only two changes in the final tax reform bill are 1) Lowering the mortgage cap from $1,000,000 to $750,000 for future buyers, and 2) capping the state, local, and property taxes deductions to a max of $10,000.
This is a win for the real estate industry, yes? After all, they were considering lowering the cap to $500,000, no SALT deductions, and changing the capital-gains exemption to five-out-of-eight years.
Yet, last night the California Association of Realtors sent out their second email since Friday’s final bill was published, and declared that it ‘Dramatically Weakens Homeownership Incentives’.
Why aren’t realtors forming victory parades, instead of complaining?
Should I just be happy that they stopped including the scare tactic of home values declining if the bill passes?
P.S. It is mortgage principal, not principle.
Now that N.A.R. and C.A.R. have been saying for weeks that home values will be plunging, here’s an example of how it is being reported (H/T to Susie for sending this in from the NYT):
The legislation preserves the deductions for mortgage interest and charitable giving, though it lowers the cap on the mortgage deduction from $1 million to $750,000.
Seeking to win over House Republicans from high-tax states, the conference committee legislation caps the state and local tax deduction at $10,000, with filers allowed to deduct property taxes and state and local income and sales taxes.
Those aren’t quite as generous as before, but a happy compromise.
What about the change from owning your home for two out of the last five years to get up to $500,000 tax-free profits? Both the House and the Senate wanted to change the time period to owning five out of the last eight years.
I’m not a lawyer, and could be a little woozy after scrolling 600+ pages, but I think they threw it out altogether! Before I get too excited, can an attorney tell us that ‘No provision’ means nothing was included in the final bill?
If the two-out-of-five-years is still the law, then the realtor spokespeople better be running to the microphone to declare total victory, and assuring everyone that property values won’t be going down 5% to 15% now!
We see these stories regularly now, but nothing is changing. Even if we had another housing crash and prices retreated by 10% or 20%, homes would still not be affordable for most. Hat tip to Richard!
For all of its claims of being an economic paradise, California is a failure when it comes to housing.
Not just low-income, affordable housing, but middle-income, working-class housing for teachers, firemen and long-time residents hoping to live anywhere near work.
“California has a housing crisis. We can’t provide housing to our citizens,” said Rita Brandin, with San Diego developer Newland Communities. “In Georgia, Texas and Florida, it can take a year and a half from concept to permits. In California, just the process from concept to approvals, is five years – that does not include the environmental lawsuits faced by 90 percent of projects.”
Numbers tell the story of California’s housing crisis.
* 75 percent of Southern Californians can’t afford to buy a home, according to the state realtors association.
* 16 of the 25 least affordable communities in the US are in California, according to 24/7 Wall Street.
* Officials this year declared a homeless emergency in San Francisco, Los Angeles, San Diego and Orange counties.
* 56 percent of state voters say they may have to move because of a lack of affordable housing. One in four say they will relocate out of state, according to University of California Berkeley’s Institute of Governmental Studies.
* A median price home in the Golden State is $561,000, according to the realtors association. A household would need to earn $115,000 a year to reasonably afford a home at that price, assuming a 20 percent down payment. Yet, two thirds of Californians earns less $80,000, according to the U.S. Census Bureau.
* The household income needed to afford a median-priced home in the Silicon Valley town of Palo Alto is $450,000.
* In San Francisco, a median priced home is $1.5 million, according to the Paragon Real Estate Group.
* Home prices in California are twice the national average, and 70 percent can’t afford to buy a home, according to state figures.
* Median household income in L.A. is $64,000. That’s half what is necessary to buy a home.
*1 in 10 residents are considering leaving because they can’t afford a place to live, according to a state legislative study, while US Census figures show 2 million residents, 25 and older, have already left the state since 2010.
* In 2016, 30 percent of California tenants put more than 50 percent of their income toward rent and utilities, according to the California Budget & Policy Center. Economists consider 30 percent the limit.
* California needs to double the number of homes built each year to keep prices from rising faster than the national average, according to the Legislative Analyst’s Office.
“The biggest tragedy of California is we have stopped building houses for the middle class,” said Borre Winkle with the Building Industry Association of San Diego. “Think of California’s housing market as a martini class. We’re building some affordable housing at the low end. Absolutely nothing in the middle and the top end is high-income housing, which subsidizes low-income housing. So that is a broken system.”
In 2016, the cities of Houston and Dallas built more homes, 63,000, than the entire Golden State, which built 50,000, according to US Census Bureau figures.
“Supply and demands works,” said USC real estate professor Richard Green. “People want to be here and we’re not accommodating them with new housing and so the cost of the housing goes up.”
Read full article here (blaming building fees and NIMBYs):
Congress is expected to vote on the final version of the Tax Reform Bill next week. The terms being bandied about:
The mortgage-interest deduction will remain, but only for loans up to $750,000 for future buyers, instead of $1,000,000.
State and local income and property taxes can be deducted, up to $10K.
Home sellers who have lived in their home for five out of the last eight years can exclude up to $500,000 in profits, tax-free.
What I haven’t seen is the date when the five-out-of-eight requirement begins – the House and Senate each had different versions. If you see or hear how they decided to resolve it, let us know!
Republican lawmakers are trying to release the text of a compromise bill by Friday in order to hold votes in the House and Senate early next week, said Senator John Thune, the chamber’s third-ranking Republican.
