Requests For Proposals ("RFP's") - Developers - Affordable Housing

In 1917 there was a transformative United States Supreme Court ruling. Buchanan v. Warley. Buchanan v. Warley substantively affected housing. And in a very positive way. Buchanan v. Warley was interesting, in that the Supreme Court ruling can be traced back to an early Twentieth Century real estate sale. 

Buchanan v. Warley was really about local ordinances, referred to as local "reforms". Buchanan v. Warley was centered upon how housing ordinances - i.e.: "reforms" - might create problematic barriers in housing choices. Thus, potentially prohibiting an otherwise qualified homebuyer from buying a home in the neighborhood of his or her choice. In this instance, a neighborhood in which a majority of the residents who live in the neighborhood would check off a different box for the U.S. Census Bureau in the "race" section. A different answer than the answer that would be provided to the U.S. Census Bureau by the homebuyer himself (or herself).

While such prohibitive ordinances were addressed by the Supreme Count in 1917, a Supreme Court ruling does not necessarily affect all things, everywhere, for all people, all the time.

So some neighborhoods (and neighborhood associations) had covenants. Covenants, which could be written so as to find an "allowable" alternative method, attaining the same restrictive outcome. An alternative method, different than a "reform". Different than an ordinance. Yet written, to sustain a neighborhood's existing make-up. If such a covenant was to exist, then that covenant could then prohibit an otherwise qualified homebuyer from moving into the neighborhood of his or her choice. 

Interestingly, some of the ungluing, then dismantling, of abhorrent structural segregation in housing started with one real estate sale in Lexington, Kentucky.

In Lexington, Kentucky, Buchanan - a White American - sued Warley - a Black American. History teaches us that Buchanan sued Warley so as to ensure the completion of a real estate sale. The sale of a house, in Lexington, Kentucky. Today, if a comparable circumstance occurred, one party to a real estate contract might hire a lawyer. At which time, the real estate lawyer may refer to this circumstance as "specific performance".

At the time, most of the homeowners who lived on Buchanan's block, were White. Warley was Black.

So, as the Buyer, Warley figured that he probably could not buy Buchanan's home. There was a restrictive local ordinance. Yet, in taking a college history course, one may recall learning about something called the Civil Rights Act of 1866. The year 1866, predates, the year 1917.

Buchanan - the Seller - was selling a home. Warley - the Buyer - was buying a home. History, progress, precedent, real estate. And in case, it ended up in front of the United States Supreme Court. The origin of the precedent was a real estate sale, in Lexington, Kentucky.

In 1948, real estate professionals should know that such covenants were pretty much done away with anyway. When the U.S. Supreme Court ruled on Shelley v. Kraemer. The year was 1948. 

In a real estate sale contract, each party to the contract is obligated to meet the terms established and set forth within the real estate sale contract. Taking into account, the obligations one has, to the other party, in the real estate sale contract.

In responding to a Newark RFP, a real estate developer may want to know that female-owned businesses and minority-owned businesses are encouraged to submit Responses to Newark. In conversations with developers, a question may arise which correlates to the proposed inclusion of a minority co-developer, and/or to the proposed inclusion of a female co-developer. In Newark. The question has been phrased to me as, "Why?".

Cities take steps to reduce structural inequalities. Reducing structural inequalities can be pursued through real estate development and through housing at the city level. A city-issued RFP is one vehicle through which a city could enact corrective measures.

On October 4, 2017 the City of Newark announced City Council's passing of a measure to encourage real estate developers to partner with Newark female-owned businesses and minority-owned businesses as co-developers. Applicable to real estate development and new home-builds which increase access to affordable housing options. By partnering with a minority-owned business or a female-owned business a real estate developer could receive a tax abatement.

National publications cite how rents in Newark are rising. A Forbes article in September - "Here Are The 10 Cities Experiencing The Highest Rent Increases In 2019" - has Newark as the city with the steepest rent increases. A February Star Ledger article - "Newark just might be the first N.J. city with quality, affordable housing for all" - speaks to the environment for real estate developers in Newark.

Rents in Newark increased by over 30%, year-over-year. A one-bedroom apartment in Newark rents for $2,004.73/month.

For real estate developers considering working with the City of Newark, maybe a quick history lesson, and a review of Newark ordinances. Then, the U.S. Census Bureau. In 2010 the median family income in Newark was $41,684. The average annual rent for a one-bedroom apartment in Newark is $24,056.76.

As per the 2010 U.S. Census Bureau, fifty-two per cent of Newark residents are Black/African-American. As per the inclusion of a real estate co-developer in Newark, a Black/African-American co-developer would be categorized as a "minority". Fifty-two per cent of Newark is Black/African-American. Several suitable co-developers to partner with as a developer already live in Newark.

As per the 2010 U.S. Census Bureau, for every one-hundred Newark women, there are ninety-eight Newark men. There are more females in Newark, than there are men. A woman would be classified as "female". Most of Newark is female. Several suitable co-developers to partner with as a developer already live in Newark.

As per the 2010 U.S. Census Bureau, about thirty-four per cent of Newark residents are Hispanic/Latino. As per the inclusion of a real estate co-developer in Newark, a Hispanic/Latino co-developer would be categorized as "minority". Thirty-four per-cent of Newark is Hispanic/Latino. Suitable and capable co-developers that businesses could partner with for development projects live in the City of Newark.

Over the past year, rents increased by over thirty per cent in Newark. Newark has incurred the highest rent increases in America. Newark has a population which exceeds 280,000...over 90,000 households.

Thinking through the October 2017 Newark announcement as per inclusion of female and minority businesses. Thinking through representing a real estate developer in Newark. Thinking about responsibilities to the developer. Accounting. Care. Confidentiality. Disclosure. Loyalty. Obedience. Honest and fair dealing. Disclosure of material facts. Representing a real estate developer in Newark, "a", "b", and "c".

a) Last year the steepest rent increases in the United States occurred in Newark;

b) The inclusion of female and minority businesses is important; and

c) Increase access to affordable houses in Newark.