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How a New Orleans community land trust is providing permanently affordable housing and supporting Black entrepreneurs

The “Rebirth of 1800 St. Bernard” took place last year on a chilly December day by New Orleans standards. Attendees wore protective masks and socially distanced—a difficult feat with at least 100 people present. That day represented more than a…

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By Julius E. Kimbrough, Jr.

The “Rebirth of 1800 St. Bernard” took place last year on a chilly December day by New Orleans standards. Attendees wore protective masks and socially distanced—a difficult feat with at least 100 people present. That day represented more than a groundbreaking for residents of New Orleans’ Seventh Ward; it promised the revival of a community anchor in the majority-Black neighborhood that had been decimated by Hurricane Katrina more than 15 years prior.

At the center of this rebirth was the Vaucresson Sausage Company: a small business on St. Bernard Avenue founded by a Black family in New Orleans 120 years ago. Vaucresson Sausage had been a long-standing community anchor in the Seventh Ward, but flooding caused by levee failures following Hurricane Katrina transformed the building from a lively commercial space to a derelict and blighted property. For the past 15 years, Vance Vaucresson, the third-generation owner of the business, had struggled to find funding and partners willing to assist in the redevelopment of the building—a challenge that many Black business owners face nationwide. As the years multiplied, the Seventh Ward lost more of its Black-owned businesses and began to experience the displacement of long-time residents.

It is with these challenges that the mission of the Crescent City Community Land Trust (CCCLT) intersects with Vance Vaucresson’s business goals and the Seventh Ward community. We saw the redevelopment of the sausage factory as not just about brick and mortar redevelopment, but as a pathway to restore Black businesses, stimulate economic development, reinvigorate culture, and provide permanently affordable housing.

Not your typical community land trust

CCCLT focuses on projects that promote racial equity, pro-active community stewardship, and permanently affordable commercial and rental spaces. We were founded in 2011 as a direct response to the city’s housing crisis: Katrina and the levee failures had almost overnight damaged or destroyed 70% of the city’s housing stock. More than five years later, there was little improvement—with housing prices skyrocketing and more and more families, especially Black families, becoming cost-burdened.

Black people developed the community land trust (CLT) model more than 50 years ago as a way to preserve and expand land holdings through collective ownership. Today there are at least 277 CLTs in the United States. Here’s how CLTs work for single family homes:

  • The CLT owns and develops the land and the trust is made up of community members.
  • A CLT purchaser buys the structure, and leases the land (at CCCLT, the lease is normally for 99 years).
  • Because the sales price is based on the structure and not the property, it is much more affordable than market-rate homes in the same area.
  • This allows for the family to build equity in the structure (i.e. generational wealth) and for the community to preserve affordability because when the home is resold, it’s done under a formula that splits the anticipated increase in property values to both the owner and the community as represented by the land trust.

Unlike the typical CLT, CCCLT recognizes the need not only for more affordable homeownership—but for subsidized apartments, incubator-like commercial spaces, community stewardship, and housing advocacy. For instance, our first major project was the co-development of the historic Pythian building in downtown New Orleans—which had been a mecca for Black-owned businesses, entertainment, and culture in the early part of the 20th century. We worked with co-developers to revitalize the building—which had fallen into disrepair—into 69 apartments, including 25 affordable workforce rate apartments. Unlike many affordable apartment projects that use tax credits and go back to market rate once their compliance time frame has passed, these 25 apartments are permanently affordable.

While the majority of CLTs are focused on single family housing, our equitable commercial developments give start-up entrepreneurs affordable leases, allowing the community to help preserve small family-owned businesses like Vaucresson. A recent Brookings report detailed the broad promise of commercial community ownership models, citing their ability to support the growth of local businesses and distribute wealth intergenerationally.

The importance of stewardship

For all the potential benefits, the redevelopment and co-ownership of brick and mortar buildings is inadequate without proactive community stewardship: intentional efforts to empower residents with information and tools to grow intergenerational wealth through higher incomes, asset appreciation, and entrepreneurship.

We recently completed the region’s first single-family CLT home community in the Lower Ninth (L9) Ward—where 90% percent of our buyers are Black, many are native to the neighborhood pre-Hurricane Katrina, and many are first-time homebuyers. The community stewardship with our future L9 buyers began long before these CLT homes were sold. Working with our partners, Home by Hand, Neighborhood Development Foundation, Capital One, HOPE Credit Union, and HomeBank, we trained prospective homebuyers on the CLT model of affordability, provided a 12-hour homebuying workshop, and direct counseling to improve credit issues. Research indicates that this third-party support and training can help residents withstand economic shock and retain homeownership.

Stewardship is also at the heart of the 1800 St. Bernard project. Vaucresson Sausage had been a robust small business before Hurricane Katrina, but when the family tried to access capital and assistance to redevelop their property in the wake of devastation, they were shut out along with many other Black businesses in the post-Katrina world. The Vaucresson’s do not need CCCLT’s help to run their sausage making business, but what we bring to the table is pre-development capital; relationships with funders, financiers, and the local real estate community; knowledge of real estate development; and help in growing their brand—with the ultimate end goal of growing intergenerational wealth. Now, Vance Vaucresson has that same knowledge, and as his partner, CCCLT will be there in the long term. Because of this partnership, 1800 St. Bernard will open in early 2022— featuring Vaucresson Café Creole and two permanently affordable apartments.

The Community Land Trust 2.0

This idea of the “CLT 2.0”—including a focus on renters and commercial spaces, not just single family homes—is gaining popularity throughout the nation. Black communities and other marginalized groups are evolving CLTs and expanding community ownership in real estate to fight structural racism and produce opportunities for wealth generation. CCCLT is proud to be part of the new movement.

You cannot pass a good time in New Orleans without serving good food—even during a pandemic. There should be no surprise about what we served at the “Rebirth of 1800 of St. Bernard”: Vaucresson hot sausage po-boys and their Creole jambalaya—the best New Orleans has to offer. But as good as our city’s cuisine is, CCCLT wants New Orleans to be known for more than just food and good times. We want to be known for how our city solves its affordable housing crisis, how we assist emerging, often under-resourced entrepreneurs of color, and how we help families and those entrepreneurs move toward generational solutions and generational wealth.

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Economics

FT-IGM US Macroeconomists Survey for December

The FT-IGM US Macroeconomists survey is out (it was conducted over the weekend). The results are summarized here, and an FT article here (gated). Here’s some of the results. For GDP, assuming Q4 is as predicted in the November Survey of Professional…

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The FT-IGM US Macroeconomists survey is out (it was conducted over the weekend). The results are summarized here, and an FT article here (gated). Here’s some of the results.

For GDP, assuming Q4 is as predicted in the November Survey of Professional Forecasters, we have the following picture.

Figure 1: GDP (black), potential GDP (gray), November Survey of Professional Forecasters (red), November SPF subtracting 1.5ppts in Q1, 05ppts in Q2 (blue), FT-IGM December survey (sky blue squares), all on log scale. FT-IGM GDP level assumes 2021Q4 growth rate equals SPF November forecast. NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

In the figure above, I’ve used the SPF forecast of 4.6% SAAR in 2021Q4; the Atlanta Fed’s nowcast as of yesterday (12/7) was 8.6% SAAR. A new nowcast comes out tomorrow.

Interestingly, q4/q4 median forecasted growth equals that implied by the Survey of Professional Forecasters November survey (which was taken nearly a month before news of the omicron variant came out).

The q4/q4 forecast distribution for 2022 is skewed, with the 90th percentile at 5% growth, the 10th percentile at 2.5%, and median at 3.5%. I show the corresponding implied levels of GDP (once again assuming 2021Q4 growth equals the SPF ).

Figure 2: GDP (black), November Survey of Professional Forecasters (red), FT-IGM December survey (sky blue squares), 90th percentile and 10th percentile implied levels (light blue +), my median forecast (green triangle), all on log scale. FT-IGM GDP level assumes 2021Q4 growth rate equals SPF November forecast. NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

On unemployment, the median forecast is for a deceleration in recovery,

Figure 3: Unemployment rate (black), November Survey of Professional Forecasters (red), FT-IGM December survey (sky blue square), 90th percentile and 10th percentile implied levels (light blue +), my median forecast (green triangle). NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

The survey respondents also think that the participation rate will take a long time to return to pre-pandemic levels.

Source: FT-IGM, December 2021 survey.

On inflation, the median is higher than the November SPF mean estimate for 2022 of 2.3% (and Goldman Sachs’ current estimate).

Source: FT-IGM, December 2021 survey.

The entire survey results are here.

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Government

Over 170 companies delisted from major U.S. stock exchanges in 12 months

  Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies….

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Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies.

According to data acquired by Finbold, a total of 179 companies have been delisted from the major United States exchanges between 2020 and 2021. In 2021, the number of companies on Nasdaq and the New York Stock Exchange (NYSE) stands at 6,000, dropping 2.89% from last year’s figure of 6,179. In 2019, the listed companies stood at 5,454.

NYSE recorded the highest delisting with companies on the platform, dropping 15.28% year-over-year from 2,873 to 2,434. Elsewhere, Nasdaq listed companies grew 7.86% from 3,306 to 3,566. Data on the number of listed companies on NASDAQ and NYSE is provided by The World Federation of Exchanges.

The delisting of the companies is potentially guided by basic factors such as violating listing regulations and failing to meet minimum financial standards like the inability to maintain a minimum share price, financial ratios, and sales levels. Additionally, some companies might opt for voluntary delisting motivated by the desire to trade on other exchanges.

Furthermore, the delisting on U.S. major exchanges might be due to the emergence of new alternative markets, especially in Asia. China and Hong Kong markets have become more appealing, with regulators making local listings more attractive. Over the years, exchanges in the region have strived to emerge as key players amid dominance by U.S. equity markets. As per a previous report, the U.S. controls 56% of the global stock market value.

A significant portion of the delisted companies also stems from the regulatory perspective pitting U.S. agencies and their Chinese counterparts. For instance, China Mobile Ltd, China Unicom, and China Telecom Corp announced their delisting from NYSE, citing investment restrictions dating from 2020.

Worth noting is that the delisting of firms was initiated due to strict measures put in place by the Trump administration. The current administration has left the regulations in place while proposing additional regulations. For instance, a recent regulation update by the Securities Exchange Commission requiring US-listed Chinese companies to disclose their ownership structure has led to the exit of cab-hailing company Didi from the NYSE.

Impact of pandemic on the listing of companies

The delisting also comes in the wake of the Covid-19 pandemic that resulted in economic turmoil. With the shutdown of the economy, most companies entered into bankruptcies as the stock market crashed to historical lows.

Lower stock prices translate to less wealth for businesses, pension funds, and individual investors, and listed companies could not get the much-needed funding for their normal operations.

At the same time, the focus on more companies going public over the last year can be highlighted by firms on the Nasdaq exchange. Worth noting is that in 2020, there was tremendous growth in special purpose acquisition companies (SPACs), mainly driven by the impact of the coronavirus pandemic. With the uncertainty of raising money through the traditional means, SPACs found a perfect role to inject more funds into capital-starving companies to go public.

From the data, foreign companies listing in the United States have grown steadily, with the business aiming to leverage the benefits of operating in the country. Notably, listing on U.S. exchanges guarantees companies liquidity and high potential to raise capital. Furthermore, listing on either NYSE or Nasdaq comes with the needed credibility to attract more investors. The companies are generally viewed as a home for established, respected, and successful global companies.

In general, over the past year, factors like the pandemic have altered the face of stock exchanges to some point threatening the continued dominance of major U.S. exchanges. Tensions between the US and China are contributing to the crisis which will eventually impact the number of listed companies.

 

Courtesy of Finbold.

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Economics

Stock futures open flat as Omicron concerns ease

Dow futures edged up 0.02%, while contracts on the Nasdaq Composite inched up 0.10%…
The post Stock futures open flat as Omicron concerns ease first appeared on Trading and Investment News.

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Dow futures edged up 0.02%, while contracts on the Nasdaq Composite inched up 0.10%

Stock futures opened relatively flat on Wednesday evening, though sustaining gains posted by a three-day recovery rally that was led by cooled investor concerns around the Omicron variant of the coronavirus.

Dow futures edged up 0.02%, while contracts on the tech-focused Nasdaq Composite inched up 0.10%. All major indexes closed up, with the S&P 500 adding 14.46 points to end the session at 4,701.21, just 0.5% short of the trading session on Nov. 24, a day before the latest COVID-19 variant was announced by the World Health Organization (WHO).

The moves were supported by eased virus fears after Pfizer Inc. and BioNTech reported that early lab studies show a third dose of their coronavirus vaccine mitigates the Omicron variant.

The vaccine makers had indicated the initial two doses may not be enough to protect against infection from Omicron. Shares of Pfizer (PFE) traded 0.62% lower on Wednesday, closing at $51.40.

With virus concerns diminishing, investors are pivoting their attention back to economic data, awaiting Consumer Price Index (CPI) figures on Friday to assess the extent inflationary pressures will persist.

If the Omicron variant was to lead to a resurgence in goods spending at the expense of services or to further complicate supply disruptions, there could be a clear inflationary impact, too, HSBC economist James Pomeroy wrote earlier this week in a research note to clients.

He stated: The inflation news in the past few weeks has been decidedly mixed — with upside surprises in both the U.S. and eurozone being offset by the possibility of some of the supply chain issues starting to alleviate, while energy prices have fallen sharply in recent days.

The post Stock futures open flat as Omicron concerns ease first appeared on Trading and Investment News.

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