Home Equity Theft in Massachusetts

A new study suggests that homeowners in Massachusetts have lost nearly $100 million in equity over the last six years. The great home equity heist spans across thirty cities, according to the Pacific Legal Foundation, a California group committed to legal action on behalf of citizens.

The primary reason for these profound losses isn't due to nationwide policies. They're specific to Massachusetts, and twelve other states. The main culprit is the Massachusetts policy that states homeowners can be stripped of their home's equity in the case of tax lien foreclosures. Massachusetts, along with eleven other states, participate in this policy which paves the way for homeowners to lose everything down to the last bit of wealth they've built in owning property.

It can begin small, a simple tax debt perhaps, that can eventually expand into foreclosure. Upon the sale of the home, Massachusetts (or a third party assisting in the foreclosure) is entitled to keep all of the equity accrued without providing the homeowner any of the excess home sale value. In an extreme example, owing $50,000 in tax debts means losing your home valued at $200,000 entirely – a $150,000 profit for the state.

The Pacific Legal Foundation's report, titled Violating the Spirit of America: Home Equity Theft in Massachusetts, shows that 408 homeowners were victims in a six-year time span, making up the whopping $97 million figure. According to Pacific Legal Foundation, "on average, in the 31 municipalities covered in PLF's report, Massachusetts homeowners subjected to tax foreclosure lost 87% of their home equity—nearly $260,000 per home."

Pacific Legal Foundation argues the policy is unconstitutional because it violates a clause in the Fifth Amendment that states private property shall not be taken for public use without just compensation. As such, the Pacific Legal Foundation argues that the Commonwealth of Massachusetts and the eleven other states are participating in “home equity theft”.

While foreclosing on properties to cover debts is not uncommon in the US, the act of keeping the excess after debts are covered is not a regular practice. The benefits of owning a home and any upgrades made to it, have disappeared over debts as small as $2,000, according to the report’s authors. While residents may suspect that government cannot profit off of the sale of property used to cover liens, debts, and taxes, the policy has unjustly hurt those that can't afford to make tax payments and ultimately buries residents deeper in debt by stripping them of their biggest investment.

Several Massachusetts residents have already experienced this situation and the report highlights the lives and experiences of Neil and Mark Mucciaccio of Easton. The brothers, along with Mark's family, a wife, daughter, and two grandkids, live in the home they inherited from their parents. In 2016 when Mark fell behind on taxes, the City of Easton placed a lien on the property. Soon thereafter, Easton sold that tax lien to a third-party company investment firm, Tallage, who foreclosed on the home in 2019. In a matter of years, the Mucciaccios would lose their home and all equity along with it. The losses, combining the home itself and the land, are estimated to be $245,000.

According to Todd Kaplan with Greater Boston Legal Services, "[the problem] affects almost exclusively low-income people and elders who are house rich and cash poor. When we see the numbers of people who actually lost their homes, those are people that are vulnerable ... and that's why they lost their homes."

Some Massachusetts municipalities repeatedly pass liens onto third parties who subsequently chase down homeowners and attempt to foreclose when debts remain unsatisfied.

The Pacific Legal Foundation disputes the legality of this policy because private property is being seized without just compensation. The group has recently backed House Bill 3053, a potential remedy which would create a universal policy of returning excess funds to the homeowner after all debts have been paid. The bill requires an adjudication by the Massachusetts Land Court before any municipality may take a property for failure to pay taxes, and is being considered by the Joint Committee on Revenue.

For more information, please visit the Pacific Legal Foundation

Climate Change is Coming to New England Faster than Anywhere Else

A new study from Salem State University has found that New England states are warming at rates much faster than global averages. The warming is expected to continue at unprecedented rates in the coming years and the analysis shows that the impacts of climate change in New England will far outpace the rest of the planet.  

This comes on the heels of an announcement stating that last year was one of the top three hottest years in Massachusetts history. Similarly, it was discovered a few years ago that New England had lost an average of just over six days of snow covering the ground over a 17-year time span, beginning in 2001.

The study, conducted by Stephen and Joshua Young, focused on analyzing New England temperature data provided by the U.S. Historical Climatology Network. Comparing year-to-year data, there were four different findings overwhelmingly present in the study. The first was that New England states had warmed significantly between 1900 and 2020, both seasonally and annually. The second finding was that there is a cycle that New England states follow during their change – warming, cooling, and warming again.

The culprit? A Boston Globe piece covering this study says, “The scientists attributed the warming in the Northeast to changes in atmospheric conditions as well as rising temperatures in coastal waters, such as the Gulf of Maine, which scientists say is among the fastest-warming bodies of water on the planet.”

With that, the third discovery was that winter was the season that saw the most warming of all. And finally, the study found that the minimum temperatures were rising more than the maximums. So while the highest temperatures aren’t necessarily rising, the thresholds for lows are rising. Figures for New England were a 1.83 degrees Celsius (3.29 degrees Fahrenheit) increase and 1.14 degrees Celsius increase for planet averages since 1900. Massachusetts was said to have had an even greater increase at 1.97 degrees Celsius (3.55 degrees Fahrenheit).

In a region known for its seasonality and delicate ecosystem, the shifts in weather are especially alarming. Effects of climate change can be seen in rising sea levels, ocean salinity affecting marine life, and harsher storms. Climate change and rising temperatures have long been cause for concern, but this vulnerable region is undeniably being impacted at unprecedented rates.

The rampant increase in New England has far outrun the figures set forth by the Paris Climate Accord, an agreement signed by hundreds of nations in an effort to limit warming temperatures to 1.5 degrees Celsius. The number was determined in order to avoid catastrophic issues relating to warming temperatures, but New England, especially Massachusetts, has surpassed the number in record time.

Figures are expected to continue rising and show no signs of slowing down despite innovative technology and New England citizens’ best efforts. According to the authors of the study, “the region should expect major disruptions to its economy, including coastal waters that will become increasingly inhospitable to iconic species such as cod and lobster; fewer days when skiing and other winter recreation will be possible; less maple syrup and other agricultural products produced, and a range of other consequences.”

For more on this important issue, please see the following links:

• https://www.bostonglobe.com/2021/12/30/science/new-england-is-warming-faster-than-rest-planet-new-study-finds/

• https://www.mdpi.com/2225-1154/9/12/176

• https://boston.cbslocal.com/2021/12/31/new-england-warming-climate-change-study-massachusetts/

Predictions for the Massachusetts Real Estate Market

Though the world is nearly shut down and public events, in-person learning, and the ability to go outside at all seem to be a relic of 2021, the heat being generated in the housing market shows no signs of cooling off in 2022.

According to new predictions, the real estate market is looking bright and expected to continue thriving given low inventory and high demand. Locally, Boston continues to be a hot market with record numbers and prolonged momentum as a result of the pandemic. Boston’s sale prices were up 11.1% in November 2021 compared to the year before, according to Redfin. The real estate giant also claims homes were reported to have closed after 23 days on the market versus 27 the year before. The number of homes sold rose from 462 to 502, showing that things are still trending upward in the area.

As one year ends and a new one begins, many organizations have attempted to predict what the hottest markets are for the new year. One prominent list is Fortune’s Best Places to Make Real Estate Investments in 2022 and the lists generally focus on places where housing prices are expected to continue rising.

This year’s list is a far cry from places that once were top picks in the past, excluding many bustling cities and tech hubs like New York City, Silicon Valley, and their well-heeled suburbs. Shying away from traditionally booming locations seems to be another side effect of the pandemic for new homeowners. With the realization that remote working is a way of life, and in many cases business can thrive under this arrangement, many people with the means to relocate are fanning out in favor of slower living and lower prices. Fortune’s predictions for 2022 include a town in Central Massachusetts, helping to put more of the state on the map.

Fortune’s top list of places to purchase include:

• Portland, Maine

• Providence, Rhode Island

• Salt Lake City, Utah

• Worcester, Massachusetts

• Boise, Idaho

Less than 50 miles east of Boston, Worcester is nestled in Central Massachusetts and major driver of the regional economy. It provides smaller scale living while remaining close to everything. In an autonomous, thriving city like this, it’s no wonder home prices in Worcester are expected to grow slightly above 8% next year. Though smaller than Boston, it is still the second most populated city in the state with over 200,000 residents. It offers a nice blend of Massachusetts living and was aptly named one of Realtor.com’s Top 20 Hottest Housing Markets as well.

Other predictions for 2022 real estate in Commonwealth include surrounding towns in Central Massachusetts adapting to accommodate an uptick in home owners. Webster, Sturbridge, and Hudson have plans to invest in downtown areas to help draw new visitors and residents alike, effectively capitalizing off of Worcester’s newly found fame and the appeal of less-expensive living conditions when compared to other places along the East Coast. With this, Worcester Business Journal reports that investors from the Greater Boston area have been racing to build new residential housing in Central Mass to accommodate the demand. Pairing new residential complexes with the host of vacant lots, buildings, and mills in the area, there are numerous and diverse options for housing. By remodeling previously established buildings, housing providers are able to save on construction and material costs in some locations while enhancing a once overlooked area in th

The Boston Startup Ecosystem Combats Climate Change

The threat of climate change is more real than ever. With increased storm frequency and severity, rising oceans, salinity, and temperatures, the state of our climate is increasingly frightening. Luckily, a few bold companies right here in Massachusetts are working to combat climate change so humans can carry-on with less environmental impact, but more awareness of the earth’s conditions.

The Boston startup scene is no stranger to working hard in order to make a difference, even in the case of climate change. Nearly a decade ago, there was a major uptick in energy companies that weaved through the startup community trying to create cleaner power alternatives back when climate data showed a smaller risk than it does now. However a great many of those businesses didn’t get farther than initial concepting. Thinking too big and doing whatever it took to reach their goals made them vulnerable and ultimately their efforts suffered. A123 Systems, Bedford biofuels, Evergreen Solar and other successful local companies left a negative perspective of what local startups have to offer, but things are shifting now.

In this new decade, a new wave of startups and innovators are ready to create technology that combats climate change one again, hopeful that their efforts will stick for good this time. With a worsening planetary environment, the stakes are higher and the need for innovative, effective solutions are much higher.

The Boston Globe chatted with a representative from the Bill Gates umbrella company Breakthrough Energy Ventures, who says that the climate-soaked startup market is unlike anything he’s seen before. Sources include institutional investors, family foundation, philanthropies, and hedge funds. What are they looking for? Ambition, innovation, and strength, to name a few. The perfect combination of boldness and insight are what make startups stick out right now – the ability to dream big, but also to back up those aspirations with data and pathways to success.

Climate Change Startup Spotlight

Commonwealth Fusion Systems

This company is taking on the heavy feat of making nuclear fusion a reality rather than a crazy science experiment. Just in this last year, Commonwealth has already produced a viable figure for nuclear fusion tech that safely and effectively fuels power grids. They’re so confident, in fact, that they’re aiming for power centers to be in full effect in less than a decade. The company’s innovative power choice reduces emissions and therefore, does not contribute to the warming. To date, Commonwealth has acquired over $250 million in funding for their projects.

Form Energy

When it comes down to it, the place we pull energy from to fuel everything we need has a direct impact on climate change. Form Energy has developed an effective, affordable battery option that limits emissions and climate change effects, thanks to a little help from iron. When a location can’t benefit from hydroelectricity or wind turbines, these batteries make it possible to recharge with powerful batteries rather than waste precious resources.

These two companies are only the tip of the iceberg for clean energy solutions constantly spilling onto the market. More specifically, these efforts marks the distinct drive that Massachusetts’ start up community possesses as it continues to produce one-of-a-kind combatants for the climate crises. As more funding pours into these projects, making dreams and hopes a near-certain reality, mitigating climate change on a local, country, and world-wide level does not seem too far away.

A Cooling Housing Market with Sky-High Prices

It looks like college students and those suffering from pandemic-induced breakups forced to move back in with their parents will have to suffer for a bit longer. Despite the real estate market in Massachusetts slowly cooling down, prices continue to be exorbitant, which means the majority of those who are looking to purchase continue to be out of luck.

Housing trends are predictable for the most part. Every year, the fall and winter seasons cause slowing while spring and summer sales run rampant. This is evident as people scramble to get settled before it comes time to register their kids in a new school district, or they simply don’t want to pack up and move during snowstorms.

But the pandemic completely displaced the market and, more vulnerable communities are struggling. This includes historically marginalized groups and those who are leading financially stable lives but want a little more. Regardless, it seems that we are all out of luck these days.

The market may be slowing down as we head into the colder months, but that doesn’t mean prices will change much. Normally with lower demand, we see lower prices, but experts expect pricing to remain high and near the same rate as the last year.

In fact, prices are estimated to be up by nearly 30%, even now, according to The Warren Group. That can be as much as $100,000 for single-family residences in some cases. Very few people can afford that jump, so the new normal seems to be that buyers are willing to wait.

If prospective buyers love a home, but it’s priced out of their reach, they are willing to wait a week and see if it’s still on the market before making an offer at a lower price. Buyers are also slowing down on their willingness to waive all contingencies, including inspections. With less competition for winning contentious bidding wars, many sellers realize the hard way that overpricing their home and taking advantage of the market is no longer a right of passage in this market.

The reality is that there is no longer a crystal ball and no way rely on past price increases to sell a home at the top of the market. It seems as though we are heading into a calmer season that may reap major benefits for buyers who were previously left out of the blazing market. While you may not find substantially lower prices, you may find peace of mind in not having to wave every contingency to simply find a place to settle down.

While, there’s certainly no shame in moving back in with parents or crashing on a friend’s couch as you wait for things to blow over, but recent data shows that we might be headed in a more favorable direction. So don’t unpack your blender and rock collection just yet!

In the meantime, you might also consider townhomes or condos that have a lower markup rate than a single-family standalone. Or, wait until later this year when traditional trends take hold and see if there is a break in your favor. The market might be correcting and it may advantage patient buyers.

Massachusetts Startups Seeing Major VC Success

Venture capital investment has seen an uptick as business leaders still try to grasp where America is headed next. With significant changes in the economy in the last year, many VCs have adapted their spending strategies and, as a result, more funding than ever has been funneled into startups promising innovation and brighter, better futures.

As for Massachusetts? The Commonwealth ranks third in the entire country for venture capital investment, falling behind only New York and California. 

This year, Bay State startups have received more funding in the past six months than they have in the entire year of 2020 - totaling an incredible $17.4 billion to a core group of Massachusetts-based startups.

While COVID-19 negatively impacted many businesses, the overwhelming characteristics for companies who score funding is either a thriving business despite COVID-19, or a direct capitalization on the pandemic’s ill-effects. That is to say, the services they offer were more in demand during the pandemic than they were before, or their value and success have scaled so much that it’s led to a sharp increase in VC interest. Companies garnering funding include biotech, cybersecurity, and e-commerce institutions,  earning Massachusetts the well-deserved number three spot overall in the country for VC investment. 

Unsurprisingly, the healthcare industry has boomed during the pandemic, which explains the increase. And successful biotech companies, such as Adagio Therapeutics and Affinivax, have been just two of the more recent companies that benefited from the increase in VC funding.  With the race toward the COVID vaccine and the demand for adaptable, high-tech healthcare systems and technology, VCs have rapidly shifted their attention to startups like these. As a result, it’s more important than ever that these enterprises continue their research and development momentum to ensure that they can keep up with demand.

Cybersecurity firms Snyk and Aura also received a hefty amount of funding. The world has been turning increasingly virtual this last decade but nothing quite  propelled the space like the onset of COVID.  Consumers turned online to conduct business, shop, and socialize - leading to a concurrent increase in demand for quality cybersecurity systems. Similarly, Boston-based high-tech company, Circle, raised $440 million in May alone, cementing its position as one of the top cryptocurrency brands to take over the market. 

While the investment in cybersecurity and biotech is impressive, none fared as well as online sales and marketplaces. Perch, a Massachusetts-based e-commerce brand, landed $775 million during the first six months of 2021. Deemed the largest 2021 deal in Bay State, Perch’s substantial funding is entirely on par with a post-pandemic world leaning into online sales.

Each of these companies puts the Commonwealth on a hopeful path toward a recuperating, post-pandemic economy. We can expect the trend to continue through the second half of 2021 with hot spots including green tech, software, cybersecurity, biotech, and e-commerce spheres, all promising futures for investment groups. 

Massachusetts is the only New England state to rank in the top ten venture capital-backed states. Though Connecticut sits 14th with a total of $1.4 billion in funding raised, Massachusetts far outweighs its neighbor.

Massachusetts Transportation Bill Set to Improve Quality of Life

Better roads, bridges, sidewalks, and commutes are on their way to the Commonwealth, all in the hope of creating safer, sustainable, and more accessible transportation and infrastructure. The Massachusetts House has unanimously approved a transportation bill that would improve roads and infrastructure across the state via the state’s Chapter 90 grants. The bill currently awaits Senate approval before it will officially be written into law.

Who is Funding the Improvements?

All funds are allotted through the state’s Chapter 90 grant program -  a state-wide reimbursement program that pays cities back for work performed on pre-approved projects. On a base level, these projects must actively preserve or improve capital projects or their longevity. The formula used to determine what the state, or more specifically, the Department of Transportation will cover, depends on the number of residents in a municipality, the extent of repairs needed, and the length of the road, bridge, or other structure targeted for improvement. From the standpoint of Massachusetts’ municipalities, Chapter 90 projects are typically 100% reimbursable – making them an important source of local aid for much needed repairs  

How Are Funds Allocated?

Nearly $300 million in funds will be funneled through the Department of Transportation to cities and towns for a significant increase in projects over the course of the next fiscal year:

· $95 million will go toward Massachusetts’s municipal small bridge program, focused on repairing or constructing new bridges that are not reimbursable from other government funding sources .

· Another $50 million will be awarded to the mass transit fund, double the initially proposed amount of $25 million.

· $25 million will go directly to the Massachusetts Department of Transportation

· $25 million will go towards traffic congestion issues, particularly in densely populated areas

· $25 million will be funneled into electric vehicle infrastructure, including charging stations for the ever-growing line of electric cars.

· $25 million is committed to transit infrastructure that supports pre-existing major transit, including adding additional bus stops and lanes.

· The remaining funding is held for local municipalities that need help with projects that would make it easier for residents to use the already established transit options and stations.  

Who Does it Help?

In addition to better roadways, bridges, and transportation for residents, including workers and commuters, this program is also expected to promote equity, especially when accessing public transit,  heavily travelled routes, and other major traffic corridors. Adding connections will expand the transportation network to reach residents previously excluded and easing the burden on families sending their children to school or decreasing commute times to high-paying jobs if they do not access to a car or cannot drive.

Keep your eye out in the coming weeks for more information from this as the Senate debates. If you’re curious about how this new transportation bill may affect you, check out: https://landline.media/massachusetts-house-approves-boost-to-local-road-bridge-funds/ and https://www.bostonherald.com/2021/07/02/massachusetts-senate-passes-300-million-transportation-infrastructure-bill/ for more details.

How Cannabis Home Delivery is Bridging a Racial and Socioeconomic Gap

On the heels of marijuana legalization in Massachusetts, it was only a matter of time until home delivery became the new normal. And thanks to passionate groups like Massachusetts Cannabis Association for Delivery, the day has come; recreational marijuana has been cleared for delivery across the state. As a result, many are rightfully wondering what its short- and long-term implications will be, including how it intends to mend the failed policies of the War on Drugs.

 The Massachusetts Cannabis Control Commission (CCC) has announced that they have approved eleven companies for the licenses necessary to distribute marijuana to homes. Of the near dozen, three of them have already begun operations. Two of those brands include Drizly’s sister company Lantern, which plans to serve Boston, and Your Green Package, which serves Northampton. The third business is Freshly Baked, a veteran-owned and operated business based in Taunton, and credited with the very first delivery in the state.

How do businesses become eligible for delivery?

The process to be approved for delivery is relatively straightforward, beginning with obtaining a license from the CCC. Of course, there are some that find the requirements for licensing to be a bit difficult and tedious, even though such regulation is all for a good reason. Because Massachusetts is endorsing and facilitating recreational home delivery, it requires care and precision in order to maintain a regulated market, especially one that whose stated goal is to remedy the negative impacts of the Failed War on Drugs.

Requirements include a strict delivery process where all transactions are recorded by a body camera and  delivery vehicles must be equipped with GPS for constant monitoring. Additionally, two delivery staff will be present in the vehicle and all customers are required to provide identification to receive their order.  The CCC has also established  only two license types   cannabis delivery. The first is for retailers  with preexisting storefronts, which can begin to license their products for delivery via in-house staff or through a service similar to the restaurant’s DoorDash and Uber Eats.

The second option is for those who are entirely independent of a preexisting physical business. Instead, these businesses may purchase their supplies from a mass producer and sell those products directly to customers. Again, both are legal and viable options, but each has its own set of advantages and drawbacks . Regardless, many have praised the policy for being inclusive, rather than gatekeeping certain businesses by only allowing physical retail locations to participate.There is hope that more disadvantaged populations, particularly people of color through well-established economic empowerment applicant process, will thrive with the new delivery business.

Bridging a Racial and Socioeconomic Gap Via Delivery

 The Commonwealth is also making some much needed  strides in closing a long-seeded gap in its history. Most notable is the announcement that delivery  licenses will only be available to those who participate in the economic empowerment program for the first three years after home delivery was approved. This program is dedicated to introducing more people of color to the cannabis industry, allowing them to prosper as entrepreneurs without the traditional hurdles. Massachusetts creating licensure and programs that aid rather than inhibit minority-owned businesses is a step in the right direction of a long, overdue fight toward elevating people of color.

https://www.news10.com/news/marijuana-home-delivery-services-launch-in-massachusetts/