MReport March 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 59 of 70

58 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT Survey of U.S. Mayors Spotlights Housing Concerns High housing costs are one of the chief factors driving people away from certain cities. M ore than half of all mayors surveyed for the recent Menino Survey of Mayors by the Boston University Initiative on Cities said they believed rising housing costs were the top factor that could drive residents to move from their cities. At 51 percent, it was the only factor the majority of mayors aggreed on. The remaining factors cited, in descend - ing order, included: Jobs (45 percent), Schools (44 percent), Public Safety (28 per- cent), Taxes (27 percent), Nightlife/Food (22 percent), Transit (17 percent), Recreation/ Amenities (10 percent), Racial/Equity Concerns (9 percent), Beauty/Aesthetics (7 percent), and Cleanliness (5 percent). The survey contacted mayors of 467 American cities with populations of at least 75,000. Of the 115 mayors who responded, 65 percent were Democrats and 22 percent were Republicans. Breaking things down by region, 39 percent of responses came from cities in the West, 27 percent from the South, 25 percent from the Midwest, and 9 percent from the Northeast. The mayors were 74 percent male, 26 percent female, and predominant - ly White (85 percent, with 11 percent of respondents Black and 4 percent Latino). According to the survey, "Mayors were split, however, on whether to prioritize addressing problems in the rental or homeownership markets." Only 13 percent of mayors said the housing stock in their city fit their residents' needs "very well" or "extremely well." However, 57 percent said they believed their city's housing stock at least fit the needs of their constituents "moderately well." The survey found that housing concerns were most pronounced in Western states, and concerns about housing stocks were pronounced across cities with "vastly different median hous - ing prices." The survey reads in part, "Popular, but not universal, aspirations for changes to housing stock included more afford - able multibedroom units, increased home ownership, and upgrades to older housing. Other mayors cited priorities such as rental stability at one end of the spectrum and more high-end units at the other. The most commonly cited obstacles to improving housing access included a lack of government funding (especially for low- income residents); the challenges residents face obtaining bank financing or a lease; and the costs of upgrading older housing stock." Tax Reform Impact: JPMorgan Raising Wages, Opening New Branches The bank is investing the windfall from the tax reform bill into continuing growth. W hile the long-term impacts of the tax reform bill passed by Congress and signed into law by President Trump remain to be seen, at least one major corporation is investing some of their tax windfall into continuing growth. According to U.S. News & World Report, JPMor - gan is raising hourly employee wages, hiring thousands of new employees, and opening new branches around the country. The Tax Cuts and Jobs Act of was signed into law by President Trump on December 22, 2017, imple - menting sweeping changes to many parts of the tax code—and dropping the corporate tax rate from 35 percent to 21 percent. The theory is that this will inspire corpora - tions to invest more in the United States, to hire more people, and to pay those people higher wages. New York-based bank JPMorgan seems to be doing precisely that. JPMorgan has announced that it will increase hourly wages to a range of $15 to $18 per hour, up from the previous averages of be - tween $12 and $16.50 per hour. The bank also is planning to open 400 new branches, hire 4,000 new U.S. employees, and reduce medical plan deductibles for some employees. According to U.S. News, JPMorgan also plans to increase the number of "affordable" home loans it originates by 25 percent to $50 billion and increase philan - thropic donations by 40 percent to $1.75 billion. Chairman and CEO Jamie Dimon told U.S. News & World Report, "Having a healthy, strong company allows us to make these long-term, sustainable investments. We are excited about further investing in our outstanding workforce and expanding into new U.S. markets." The new branches will be rolled out over the next five years and in up to 20 new markets, according to U.S. News. JPMorgan operates in 23 different states, totaling more than 5,000 local branches. Although JPMorgan reported a 37 percent drop in profits during Q 4 2017, which it attributes to hav - ing to writing down the value of its tax-deferred assets after changes to the tax code, rising interest rates will allow the bank to charge higher rates on loans, which should increase net interest income. JPMorgan Chase's Q 3 2017 finan - cial reports, released in October 2017, showed the company reporting a revenue of $25.3 billion, with $6.7 bil- lion in net income for the quarter.

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport March 2018