NYC City Council Members: Use Eminent Domain to Buy Back Underwater Mortgages

An idea that makes a lot of sense, in a lot of different ways, for a lot of different reasons:

"New York City Council members and housing advocacy groups called on Mayor Bill de Blasio on Wednesday to join them and help homeowners at risk of foreclosure, proposing the use of eminent domain to buy back underwater mortgages.
At a news conference, council members Donovan Richards, Mark Levine and I. Daneek Miller said eminent domain could be used to buy back mortgages from homeowners who owe more than their houses are worth. (continue reading)."

Here is a full-throated defense of the idea from Robert Hockett, a Professor of Law at Cornell Law School, published in the Daily News:

"The last time the U.S. experienced economic calamity and slow-motion recovery — from 1929 into the 1930s — the policy responses it adopted were profoundly innovative yet quintessentially American. This was largely because the President who took office in 1933, Franklin Roosevelt, had led New York — the nation’s center of creative dynamism in business, the arts and governance alike.
New York City should take inspiration from FDR’s ingenuity today by employing a home-foreclosure prevention tool that he pioneered."
* * *

The plan is necessary because the state of the city’s housing market — especially for its African-American and Latino communities — remains dire.

Manhattan fares reasonably well, but the other four boroughs do not. And as a new report issued by the City Council and the Mutual Housing Association of New York demonstrates, some 60,000 New York City homeowner families, disproportionately families of color, are in crisis.

Only the city’s power of eminent domain will help . . ."

The ending is perfect:

"There is what I like to call poetic justice in this plan.  In the recent past, eminent domain has been used to remove communities of color from their homes and their neighborhoods.  By “taking the loans, not the homes,” New York will be flipping that sordid history on its head — and benefitting itself and investors as well in the bargain." (link)

EEOC Settles ADA Leave Suit for $1.35 Million With Princeton Healthcare

The EEOC has settled another ADA leave as a reasonable accommodation case.

Princeton HealthCare System, which operates the University Medical Center of Princeton at Plainsboro and several other medical facilities, will pay $1.35 million and will undertake significant remedial measures to settle a disability discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission, the agency announced today.
The EEOC’s suit alleged that the hospital’s fixed leave policy failed to consider leave as a reasonable accommodation, in violation of the Americans with Disabilities Act. According to the EEOC, Princeton HealthCare’s leave policy merely tracked the requirements of the federal Family Medical Leave Act and employee leaves were limited to a maximum of 12 weeks. The policy meant that employees who were not eligible for leave were fired after being absent for a short time, and many more were fired once they were out more than 12 weeks.
The EEOC filed suit in U.S. District Court for the District of New Jersey after attempting to reach a pre-litigation settlement through its conciliation process.
Under the consent decree settling the suit, approved by U.S. Magistrate Judge Douglas E. Arpert, the hospital is prohibited from having a blanket policy that limits the amount of leave time an employee covered by the Americans with Disabilities Act may take.
. . .
Princeton HealthCare also agreed that it will not subject employees to progressive discipline for ADA-related absences, and will provide training on the Americans with Disabilities Act to its workforce. (link)

Haunted by The (Standing) Dead?: Zombie Homes Plaugue NYC

Is your neighborhood haunted by the (standing) dead?:

Brooklyn and Queens are plagued with “zombie” properties — homes abandoned by their owners and banks that fail to complete the foreclosure process.
New York currently has 807 of the deserted homes, which can waste away for years as lenders fail to maintain them.
. . . .

State Attorney General Eric Schneiderman pushed a bill that would force mortgage holders to care for the properties. It failed to pass this legislative session.

'Zombie homes are a drain on families and communities and place undue burden on thinly stretched municipal resources,' said Melissa Grace, an AG spokeswoman. 'We look forward to working with the legislature . . . next session.' (link)



Minimum Wage Hikes Gaining Steam

Great news regarding increasing the minimum wage with an increase from $8 to $11 an hour in Massachusetts signed into law by Governor Deval Patrick (fully effective by 2017) and, in the corporate sphere, with IKEA planning to raise it's average hourly wages to $10.76 an hour.

The Massachusetts law will give that state the highest minimum wage in the country.

From Governor Patrick - who appears to see this increase as just a first step:

"This minimum wage is great progress, but it's not a livable wage," Patrick said to applause from members of Raise Up Massachusetts, a coalition that had gathered more than 350,000 signatures in favor of a minimum wage hike.
"Keep looking ahead and above all, keep in mind that people for whom the American dream is still just a dream . . . deserve the chance for themselves and their families to dream along with the rest of us . . . ." (link)

President Obama, who recently signed an executive order increasing the wages of employees of federal contractors to $10.10 on future contracts (effective 2015) and has supported increasing the federal minimum wage (currently a measly $7.25 an hour) to $10.10, strongly praised Massachusetts lawmakers for the new law.

Long-Term Unemployed More Likely to be Highly Educated, Older, and Black

After all of that hard work getting a degree(s) - a report finds that the long-term unemployed are more likely than the short-term unemployed to be older, non-Hispanic black, and wait for it .... have higher levels of education than the short-term unemployed.

"The long-term unemployed are more likely than short-term unemployed to be older, have higher levels of education, and be non-Hispanic black." (link)

This report might give those considering entering higher education in the face of mounting student loan debt a moment of pause.

Of course, older unemployed black people will also probably find the report disheartening.

Foreclosure Poses Staggering Economic Risk to NYC Communities of Color

Is the foreclosure crisis a racial justice crisis?

A report from the office of State Senator Klein indicates that 80% of homeowners at risk of foreclosure are in communities of color:

"Of the 29,729 homeowners who have missed multiple mortgage payments as of last month, 10,308 are from Brooklyn, the report says.
New York State Senate Of the 29,729 homeowners who have missed multiple mortgage payments as of last month, 10,308 are from Brooklyn, the report says.
Another 10,060 live in Queens, 4,408 in the Bronx, 4,110 on Staten Island and 843 in Manhattan.
Klein’s report also finds that 80%, or almost 24,000, of those in preforeclosure are from minority communities across the city."  (link)

The report also notes the high cost of a foreclosure to surrounding homes nationally:

"This is an average rate of $23,157.89 in home equity lost for each surrounding property. An even higher rate was seen for [m]inority neighborhoods who lose an average of $40,297 of their property’s value." (link)

The report finds the potential lost tax revenue and home equity in NYC communities of color is staggering:

"Should the properties foreclose minority neighborhoods would experience losses of $64 million in property taxes and $13 billion in home equity." (link)

Below is an overview broken down by borough:

While the report somewhat overstates the numbers because its calculations assume that all those at risk of foreclosure will go into foreclosure, at a minimum, it underscores the urgent need to support (i.e. fund) counseling and legal representation for those at risk of foreclosure.

The full report can be found here.




Mandatory Foreclosure Conference Extension Bill Passes NY Legislature

The New York legislature has passed legislation extending important protections for New York homeowners in foreclosure for an additional five years past their February 2015 expiration date.  Many advocates (as covered here) had argued stridently for passage of this bill, which now awaits the signature or veto of Governor Cuomo.

As explained in an email blast from the the Empire Justice Center:

Dear Friends,
Empire Justice Center is thrilled to share the news that the  State Legislature has passed critical legislation that will ensure that New York homeowners have access to settlement conferences for another five years.  The conferences have been invaluable and have prevented thousands of New Yorkers from losing their homes once a foreclosure case is filed against them, as had previously been happening prior to the institution of the settlement conferences.

Since 2010, lenders and homeowners in all residential home loan cases have been required to meet to see if the parties can reach a mutually agreeable resolution, such as a loan modification or other workout, to avoid loss of the home.  Unfortunately, the numbers project record high foreclosures still to come in New York.  The continuation of the settlement conferences, as well as continuation of an early warning notice to homeowners in default and a notice to tenants in buildings being foreclosed upon, are vital consumer protections that will remain in place.  We especially want to thank Senator Jeff Klein and Assemblymember Helene Weinstein, for sponsoring and championing these vital consumer protections five years ago and ensuring their continuation this year.

Kudos to them, to the NYS legislature, and to the many consumer advocacy groups that worked to support the passage of this bill.

In solidarity,
Kirsten E. Keefe, Senior Attorney

Additional coverage by the Daily News here:

"Senate Co-Leader Jeffrey Klein (D-Bronx/Westchester) announced Wednesday that the State Senate voted 56 - 1 in favor of his legislation that would extend vital foreclosure prevention measures and homeowner protections for an additional five years beyond the February 2015 expiration date. These protections include extending the requirement for lenders to provide 90 notice of foreclosure and mandatory settlement conferences for all home loans. An expiration of these protections would have meant that tens of thousands of New York homeowners in pre-foreclosure were in serious danger of losing their homes. The State Assembly passed the legislation on June 2nd. The legislation now awaits New York Governor Andrew Cuomo’s signature to become law."


 


Teacher Employee Rights and Student Equal Protection Rights Collide: California Teacher Tenure Laws Ruled Unconstitutional

At one point quoting Brown v. Board of Education, a California state court judge found that California's teacher tenure rules violated the state constitutional right to education and the equal protection rights of minority and/or poor students.

"LOS ANGELES — A Los Angeles Superior Court judge ruled Tuesday that teacher tenure laws deprive students of their constitutional right to an education, a decision that hands teachers’ unions a major defeat in a landmark case that overturns several California laws that govern the way teachers are hired and fired.

'Substantial evidence presented makes it clear to this court that the challenged statutes disproportionately affect poor and/or minority students,”'Judge Rolf M. Treu wrote in the ruling. 'The evidence is compelling. Indeed, it shocks the conscience.”'

The ruling, which declared the laws governing how teachers are hired and fired in California to be unconstitutional, is likely to set off a slew of legal fights here and in other states, where many education reform advocates are eager to change similar laws. 

***

The plaintiffs argued that California’s current laws made it impossible to get rid of low-performing and incompetent teachers, who were disproportionately assigned to schools filled with poor students. The result, they insisted, amounted to a violation of students’ constitutional rights to an education."  (link)

The decision cites a study that calculates the cost of a single year of teaching by a "grossly ineffective" teacher was $1.4 million in students' lifetime earnings per classroom.  Another cited study calculates there are between 2,750 and 8,250 "grossly ineffective"  teachers in California classrooms.

Importantly, many other states, including New York, also have a state constitutional right to education that will likely provide a basis for similar challenges to teacher tenure rules.

ABA: A Dual Perspective on City-Mandated Paid Sick Leave Policies

From the American Bar Association Section of Labor and Employment Law - a point counterpoint on paid sick time laws:

A Dual Perspective on City-Mandated Paid Sick Leave Policies

Since 2006, several cities have enacted ordinances requiring employers to provide a specified number of paid sick days per year to employees who have some level of work activity in those cities. To date, San Francisco; Seattle; Portland, OR; Long Beach, CA;1 New York City, Jersey City and Newark,2 NJ; Philadelphia;3 and Washington, D.C., plus the state of Connecticut have passed mandatory paid sick leave laws. Although these laws vary--some apply only to larger employers, or require the provision of unpaid, rather than paid sick days for smaller employers--they generally provide anywhere from five to fourteen paid sick days per year for employees to care for themselves or a dependent family member.

At the same time, ten states (Georgia, Wisconsin, Louisiana, North Carolina, Tennessee, Massachusetts, Kansas, Indiana, Florida, and Arizona) have adopted laws that prohibit local governments from passing paid sick leave laws. Fourteen other states are considering similar bans.  (continue reading)