Home prices rising slower in ‘Opportunity Zones’
In the third quarter of 2020 median home prices increased in 74% of the census tracts designated as Opportunity Zones by the Internal Revenue Service, compared to a year ago, according to ATTOM Data Solutions. Quarter-over-quarter prices increased in 60% of the zones in Q3 2020.
Home prices rose more than 10% in 890, or slightly more than half, of the Opportunity Zones, established by Congress in the Tax Cuts and Jobs act of 2017 to spur affordable housing and redevelopment in lower-income communities through tax credits.
The Q3 2020 price gains show housing markets in Opportunity Zones continued improving despite COVID-19 even though the pandemic “generally hit hardest in lower-income communities that include most of the zones targeted for tax breaks,” the report notes.
“Home prices in Opportunity Zones around the country continued rising in the third quarter of 2020, riding the wave of a nationwide boom that has defied the economic damage from the widespread Coronavirus pandemic,” said Todd Teta, chief product officer with ATTOM Data Solutions. “The increases point toward signs that some of the country’s most distressed communities have great potential for revival.”
The property data as a service provider analyzed 1,737 qualified Opportunity Zones with at least five home sales in Q3 2020, of which 1,670 had enough data for both 2019 and 2020.
In 76% of the zones, median home prices in Q3 2020 were less than the national median of $283,813, and roughly the same percentage as in Q2 2020.
Of all 1,737 zones in the report, in Q3 2020 629 or 36% had a median price less than $150,000; 18% had median prices from $150,000 to $199,999; 22% from $200,000 to the national median price of $283,813 and 24% more than $283,813.
At 58%, the Midwest continued to have the highest portion of Opportunity Zone tracts with a median home price of less than $150,000; followed by the South with 48%, the Northeast with 41% and the West with 8%.
Despite improvements however, price gains in Opportunity Zones fell below the pace of improvements in broader metropolitan statistical areas, the report notes.
Prices remain depressed in Opportunity Zones, explained Teta, as “a notable number actually dropped in the third quarter – a potentially very troubling indicator. Those dueling trends will be important to watch over the coming months amid a highly uncertain economic outlook.”
Habitat’s $2.62B ripple effect in fiscal 2019
Over the past year, the Habitat for Humanity International U.S. affiliates and state support organizations nationwide collectively invested $1.55 billion in homebuilding and repair operations – helping over 33,000 individuals achieve homeownership and directly employed 18,062 staff members.
Habitat’s investment created over $2.62 billion of total economic activity, across multiple economic sectors of their local economies, according to Beyond the House, a recent Habitat for Humanity analysis of the socio-economic effect of affordable housing development across the nation.
The outcome includes supporting 29,168 jobs and $1.14 billion in labor income. Every dollar invested by the Habitat network injected an additional 69 cents into the local economy, a consequential return on investment that indicates affordable housing is an equitable business for all parties involved.
“At a time when the U.S. grapples with the economic fallout tied to the COVID-19 pandemic and the response to it, it is important to underscore the multiplier effect of investments in housing and how they may help accelerate our economic recovery. Habitat’s ripple effect across local and regional economies is significant,” the report notes, in addition to the benefits stable housing brings to families and communities.
Residential construction is a proven catalyst for economic activity and jobs. Building a single-family home generates 3.9 jobs, according to the National Association of Home Builders.
The report analyzed financial data to quantify the economic impact of Habitat’s affordable housing investments. It found during fiscal year 2019 the U.S. Habitat network created $1.53 billion in value added “a measure of contribution to gross domestic product.”
In addition, federal, state and local governments benefited from the tax revenue produced from construction and house repairs including from Social Security taxes for employees, sales, motor vehicle licenses, and federal corporate profits. State, local and federal tax revenue equaled $91.9 million.
Given total affiliate spending, it amounts to a return on investment of $1.69, according to the report, “every dollar invested by the Habitat network injected an additional 69 cents into the local economy. Each house constructed or repaired also created 2.48 jobs.”
Partners include small businesses and some of the nation’s largest lenders.
In one example, Habitat’s Greater Memphis affiliate is currently building 27 new homes on vacant and abandoned lots, often assisted by volunteers, and worked with local businesses, through the Wells Fargo Urban LIFT Community Grant Program, to help owners make repairs and improve their facades.
The Greater Fox Cities Area affiliate builds about 17 homes annually in partnership with families and contractors. “It’s not just about price and location,” says John Weyenberg, CEO and president of the affiliate. “We are often awarded grants by the state and must complete the work in 30 days. It would be difficult to approach our contractors with such a tight deadline if we had not already built those relationships.”
Even before the pandemic, more than 18 million households in the U.S. were spending more than half their income on housing. The economic impact of COVID-19 has made things substantially worse. “The pandemic may have spread us apart physically, but we have never been more united it our work to build strength through shelter,” said Jonathan T.M. Reckford, CEO of Habitat for Humanity International.
Reggora welcomes Paul Deeley and Emma Brudner
Appraisal software company Reggora announced that it has appointed mortgage industry veteran Paul Deeley its new chief financial officer, “overseeing all financial, legal, operational, and human resource functions.”
In addition, Regorra has named Emma Brudner, who joined the company last week, its head of people strategy. Brudner will scale people operations and culture as Reggora continues to expand operations and staff due to growing demand.
“Paul’s expertise in not only finance, but also corporate operations and leadership will be vital as we continue to grow even faster in 2021,” said CEO Brian Zitin. “Emma’s experience in people strategy and development will help us create optimal growth and work experiences for our people—our most important asset.”
Deeley, a CPA, brings to Reggora twenty-five years of extensive finance, administration, and operational experience in technology and services industries. Previously he was chief financial officer at Validity, a data quality, software company he helped scale to support significant growth, and served in leadership roles at Bullhorn, Constant Contact, Nokia, and Hill Holiday.
“Reggora has a talented team and tremendous potential,” said Deeley. “I look forward to putting my background and skills to work to help the company scale and realize its goals.”
Brudner built her extensive expertise in people operations, startup marketing and culture working at several successful Boston-based startups, including HubSpot, Lola.com, and Klaviyo. She will focus on fostering Reggora’s culture as the company continues to grow and welcome new talent.
“Company culture is more important than ever before. I’m thrilled to join the passionate and fast-growing team at Reggora and look forward to building a fulfilling, inclusive, and innovative culture together,” said Brudner.
To date Reggora reportedly has received over $15 million in funding, including a Series-A round in January. With the addition of Deeley and Brudner, the company now has more than 70 employees.