Monday Morning Cup of Coffee takes a look at news coming across the HousingWire weekend desk, with more coverage to come on bigger issues.
Breaking news! It’s crazy expensive to live in San Francisco.
Hang on…I’m receiving some late-breaking news in my imaginary earpiece. Oh, right, everyone knows that. It’s only something we’ve covered here at HousingWire a million times (not actually a million, but you get the idea).
Every week, it seems like there’s another example of people (or companies) going to extremes to secure housing in the Bay Area. And last week was no different.
This particular headline caught my eye: “San Francisco rent is so expensive that a law firm bought a $3 million plane to fly its people in from Texas instead of having them live there”
The article, from Business Insider, details how one Houston law firm found that it was cheaper to buy a plane and fly its employees back and forth to the Bay Area than it would have been to hire lawyers in the area.
From the article:
Though the jet cost $3 million, the Houston Chronicle's L.M. Sixel reports, it's cheaper than hiring local lawyers, and even less expensive than relocating the Texas lawyers with business in Silicon Valley to the area.
"The young people that we want to hire out there have high expectations that are hard to meet," Bruce Patterson, a partner at the firm, told The New York Times. "Rent is so high they can't even afford a car."
And it’s not just law firms that seem to be having a hard time finding housing for their employees in the Bay Area. Some of the world’s largest tech companies are also struggling to find affordable housing for their workers.
Earlier this year, Facebook and Google both announced plans to build new, affordable housing in Silicon Valley.
Facebook’s plan, for example, would bring 1,500 new housing units to the area. Of those, 15% are slated to be “affordable,” meaning priced below the market rate. Facebook’s project will be available to employees and non-employees, alike.
But Facebook and Google aren’t the only tech giants that are investing in affordable housing in Silicon Valley.
LinkedIn is joining in too.
LinkedIn recently invested $10 million into an initiative started by Housing Trust Silicon Valley, a nonprofit community loan fund based that works to increase affordable housing options in Silicon Valley.
LinkedIn’s money went to the TECH Fund, a program started by Housing Trust Silicon Valley that aims to get more high-tech organizations, large employers and philanthropists involved with creating affordable housing in the Bay Area.
According to details provided by Housing Trust Silicon Valley, TECH Fund was created to “help developers with short-term capital needs to compete more effectively with market-rate developers and purchase property faster.”
The nonprofit also said LinkedIn is the first company to “use their investment in the TECH Fund to make additional voluntary contributions to benefit their community.”
With LinkedIn’s $10 million, the total investment in the TECH Fund is now $30 million, the nonprofit said.
“We see TECH Fund and LinkedIn’s investment as new way to lead change in the affordable housing landscape,” said Kevin Zwick, CEO of Housing Trust Silicon Valley. “We’re happy to create a way for affordable housing developers to access land acquisitions funds quickly, and we thank LinkedIn for being a committed ally to do so.”
And it appears that some of LinkedIn’s money is already being put to good use.
According to Housing Trust Silicon Valley, a portion of LinkedIn’s investment was used to purchase a site in Mountain View, California that is to be used to build 70 new affordable apartments, with 20 homes dedicated to permanent supportive housing.
“We must all take ownership of the affordable housing crisis in the Bay Area, and invest in compassionate solutions,” said Katie Ferrick, head of community affairs at LinkedIn. “This partnership with Housing Trust through the TECH Fund is a creative way to make community impact investing a viable way for companies to address the need for housing.”
Meanwhile, over in vastly different section of the finance industry, there’s controversy at the Federal Agricultural Mortgage Corporation, otherwise known as Farmer Mac.
The company, which functions as a secondary market for agricultural credit, abruptly fired its president and CEO, Timothy Buzby, late last week.
According to an announcement from the company, Buzby was terminated by the company’s board “solely on the basis of violations of company policies.” But, the company did not provide any more information on what those violations actually were.
The company also said that Buzby’s termination was not due to the company’s financial or business performance.
Taking over on an interim basis is Lowell Junkins, who becomes acting president and chief executive officer.
Junkins has served as Farmer Mac’s chairman of the board since late 2010 and has been a board member since 1996.
“My job, as acting CEO, is to make sure nothing gets in the way of this organization’s stellar leadership team and staff and the excellent work they do every single day,” Junkins said. “As our third quarter results demonstrate, we have been performing extraordinarily well and look forward to that continuing without a hitch.”
The company said that its board will launch an “immediate and thorough” search to find a new president and CEO and will consider both internal and external candidates.
And finally, some news from ACES Risk Management, also known as ARMCO.
The company, which provides financial quality control and compliance software, announced Monday morning that it is releasing a new technology for mortgage lenders and servicers that improves data validation in the quality control process.
The new data validation tool adds advanced process automation functionality to the company’s ACES Audit Technology, which enables the software to automatically identify missing data within the loan file.
“We created this feature to help our clients relieve a critical pain point of validating system data. Data integrity issues compromise loan quality, create extra work, and most importantly, increase lenders’ risk when they’re not caught and corrected,” Phil McCall, president of ARMCO, said.
“Manually searching for data related errors can be extremely difficult given the amount of data contained in a loan file,” McCall added. “That’s why automation stands to make a major difference in lenders’ success in identifying and correcting one of the most frequent causes of critical defects.”
According to the company, the upgrade became available over the weekend.
And with that, have a great week everyone!