Situated along the Chesapeake Bay, Maryland is well-known for its scenic beauty, colonial heritage, close proximity to Washington, DC, and a mix of big cities, quaint coastal towns, and welcoming suburbs. If you’re currently living in Maryland or are considering moving to the state, then chances are you have a budget you’d like to stay under when it comes to renting or buying a home. As of August, the median home sale price in Maryland is $431,200.
If that number is out of your budget, don’t worry. We’ve got options to help you find a home. Redfin has collected a list of the 5 most affordable places to live in Maryland. And they all have a median home sale price under the state’s average. From Baltimore to Waldorf, learn what cities are in the top 5.
#1: Baltimore
Median home price: $224,900 Average sale price per square foot: $156 Average rent for a 1-bedroom apartment: $1,349 Median household income: $52,164 Baltimore, MD homes for sale Baltimore, MD apartments for rent
With a median home sale price of $224,900, Baltimore lands the number one spot on our list as the most affordable place to live in Maryland. There are about 585,700 residents living in this city. If you’re considering moving to Baltimore make sure to take a guided tour of Fort McHenry, visit the Walters Art Museum, explore the National Aquarium, hike around Patapsco Valley State Park, or take a boat ride around the Inner Harbor.
#2: Dundalk
Median home price: $225,000 Average sale price per square foot: $177 Average rent for a 1-bedroom apartment: $1,087 Median household income: $55,489 Nearest major metro: Baltimore (9 miles) Dundalk, MD homes for sale Dundalk, MD apartments for rent
Taking second place on our list of affordable cities to live in Maryland is Dundalk, just 9 miles east of Baltimore. When living in this city of 67,800 people, you can take in the picturesque views from one of the waterfront parks.
#3: Bel Air South
Median home price: $340,000 Average sale price per square foot: $185 Median household income: $100,824 Nearest major metro: Baltimore (30 miles) Bel Air South, MD homes for sale Bel Air South, MD apartments for rent
Next is the city of Bel Air South, which has about 57,600 residents. The median home sale price is $340,000 which is about $90K less than the median home sale price in Maryland. If you find yourself moving to the third most affordable place, make sure to visit Harford Glen Park or Winters Run Conservation Area, or check out the nearby Liriodendron Mansion.
#4: Glen Burnie
Median home price: $362,500 Average sale price per square foot: $226 Average rent for a 1-bedroom apartment: $1,522 Median household income: $55,489 Nearest major metro: Baltimore (10 miles) Glen Burnie, MD homes for sale Glen Burnie, MD apartments for rent
Only slightly more expensive than Bel Air South is the city of Glen Burnie. With a population close to 72,900, there’s still plenty to do in Glen Burnie such as checking out one of the parks in town or going shopping.
#5: Waldorf
Median home price: $419,500 Average sale price per square foot: $210 Average rent for a 1-bedroom apartment: $1,950 Median household income: $55,489 Nearest major metro: Alexandria, VA (22 miles) Waldorf, MD homes for sale Waldorf, MD apartments for rent
The final area on our list of affordable places to live in Maryland is Waldorf. With 81,400 residents, moving to this affordable city gives you the perks of city-life without living in a major metropolitan area. Living in Waldorf, you can explore the trails in the nearby Cedarville State Forest or grab a meal at a local restaurant.
Methodology: All cities must have over 50,000 residents per the US Census and have a median home sale price under the average median home sale price in Maryland. Median home sale price and median sale price per square foot from the Redfin Data Center during August 2023. Average rental data from Rent.com August 2023. Population and median household income data sourced from the United States Census Bureau.
It was bound to happen. Just as home builders began to feel more confident about attracting potential buyers, rising mortgage rates are proving too much for those customers.
After steadily rising for seven consecutive months, builder confidence retreated in August as rising mortgage rates nearing 7% (per Freddie Mac) and stubbornly high shelter inflation have further eroded housing affordability and put a damper on consumer demand.
Builder confidence in the market for newly built single-family homes in August fell six points to 50, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released August 15.
Home Builders Need Workers, Buildable Lots and Distribution Transformers
“Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment in August,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala.
Huey said that other factors are helping support the demand for new construction.
“But while this latest confidence reading is a reminder that housing affordability is an ongoing challenge, demand for new construction continues to be supported by a lack of resale inventory, as many homeowners elect to stay put because they are locked in at a low mortgage rate.”
Housing Affordability Compared to US Median Income
Rising home prices and interest rates coupled with elevated construction costs, low existing inventory and solid demand resulted in a significant decline in housing affordability during the second quarter of 2023.
According to the NAHB/Wells Fargo Housing Opportunity Index (HOI), 40.5% of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $96,300. This is down from 45.6% posted in the first quarter of this year, and the second-lowest reading since NAHB began tracking affordability on a consistent basis in 2012.
Where to Buy? Affordable Housing Markets Around the Country
The Housing Opportunity Index shows that the national median home price increased to $388,000 in the second quarter, up from $365,000 in the previous quarter. Meanwhile, average mortgage rates rose from 6.46% to 6.59% during this period.
The top five most affordable major housing markets in the second quarter of 2023 were:
Lansing-East Lansing, Mich.
Scranton-Wilkes-Barre, Pa.
Harrisburg-Carlisle, Pa.
Indianapolis-Carmel-Anderson, Ind.
Pittsburgh, Pa.
Top five least affordable major housing markets—all located in California:
Los Angeles-Long Beach-Glendale
Anaheim-Santa Ana-Irvine
San Diego-Chula Vista-Carlsbad
Oxnard-Thousand Oaks-Ventura
San Francisco-San Mateo-Redwood City
Meanwhile, Cumberland, Md.-W.Va., was rated the nation’s most affordable small market, with 95.5% of homes sold in the second quarter being affordable to families earning the median income of $89,900.
The top five least affordable small housing markets were also in the Golden State. Tied at the very bottom of the affordability chart were Salinas, Calif., and San Luis Obispo-Paso Robles, Calif., where 6.5% of all new and existing homes sold in the second quarter were affordable to families earning the area median income of $100,400 in Salinas and $113,100 in San Luis-Obispo-Paso Robles.
NAHB Chief Economist Robert Deitz Calls for Government Action
Deitz said that government policies aimed at helping builders could help the housing shortfall. He said the shortfall is currently about 1.5 million housing units.
“Declining customer traffic is a reminder of the larger challenge that shelter inflation is up 7.7% from a year ago and accounted for a striking 90% of the July Consumer Price Index reading of 3.2%,” said NAHB Chief Economist Robert Dietz. “The best way to bring housing inflation down and ease the housing affordability crisis is to enact policies at all levels of government that will allow builders to construct more homes to address a nationwide shortfall of approximately 1.5 million housing units.”
Builders Again Pressed Into Using Sales Incentives
The August HMI survey also revealed that rising mortgage rates are causing more builders to use sales incentives to attract home buyers.
After dropping steadily for four months (from 31% in March to 22% in July), the share of builders cutting prices to bolster sales rose again to 25% in August.
The average decline for builders reducing prices remained at 6%. And the share of builders using incentives to bolster sales was 55% in August, higher than in July (52%) but still lower than in December 2022 (62%).
Buying a home is a significant milestone filled with excitement and anticipation. However, the process can also be intricate and overwhelming, especially when it comes to understanding the nuances of home inspections.
If you’re looking to buy a home in Baltimore, MD, the significance of a comprehensive home inspection cannot be overstated. A thorough home inspection not only provides valuable insights into the condition of a property but also offers peace of mind, so you can make informed decisions. In this Redfin article, we will delve into the importance of getting a home inspection in Maryland. Plus, we’ve got insights straight from local home inspection experts who’ll be sharing their best advice on the subject. Let’s get started.
Why should you get a home inspection in Maryland?
A house is likely the most expensive purchase of your life, and getting an inspection is the only way to ensure that you are making a sound investment.
“A home inspection is crucial and valuable for many reasons,” says Austin Callahan of Callahan Inspection Services. “Not only will it allow you to fully discover the issues your home may have, but it can also uncover some serious safety hazards that may affect you and/or your loved ones. A home inspector can also let you know what kind of things require routine maintenance to extend the life and efficiency of the systems in your home.”
“A home inspection should be a requirement for the future homeowner’s protection,” says Chris Lord, owner of Invision Home Inspections. “Invest a couple of hundred dollars now to protect thousands in the future. You are buying peace of mind and sometimes training if you participate in the inspection.”
Are there any specialized inspections that Maryland buyers should consider?
“Lead paint is common in Maryland, especially in homes built before the 1950s,” says Matthew Schelberg of Shell Home Inspections. “Builders would often use paint from the shipyards. If a buyer expects to have young children in the home, it’s a good idea to consider a lead paint inspection. This can tell you what components have lead paint, so you can take proper measures during future renovations.”
In addition to testing for lead paint, Dimitrios Bitsanis of OBSERVE Home Inspections recommends inspections for radon and termites.
Are home inspections required in Maryland?
“It is not required to get a home inspection in Maryland, but some lenders may require it,” according to Patrick and Natasha Hammond of 360 Home Inspections. “A home inspection is highly recommended for the buyer to ensure that you are purchasing a property you are comfortable with and is not going to put you in financial distress, whether it is a pre-existing home or a new build.”
How much does a home inspection cost in Maryland?
“The cost of a home inspection typically varies based on the type and size of the home, foundation type, and age,” says John Stavlas of Stavlas Home Inspections. “Plan to spend $350-$400 for a condo and $450-$600 for a single-family detached home.”
Can you sell a house in Maryland without an inspection?
Yes, you can sell a house in Maryland without a home inspection. However, many buyers in Maryland opt to have one as part of their due diligence process to ensure they’re making an informed decision about the condition of the property.
Scott Donnelly of High Tech Inspections, Inc. adds, “Sellers do not need a pre-sale inspection in Maryland. However, having a pre-sale inspection allows you to address any major issues that may scare away a buyer. A thorough inspection report you can share with buyers may also help them feel more at ease and perhaps opt not to have their own independent inspection.”
Expert advice for Maryland buyers before they get a home inspection
“A good home inspection can be so thorough that you get cold feet when you review it,” says Daniel Sperling-Horowitz, CEO of OfferMarket. “That’s why we recommend reviewing the home inspection report with your real estate agent and a trusted contractor. We also encourage you to call the home inspector to go over any concerns. In a buyer’s market, the home inspection can also serve as leverage to request seller concessions to address legitimate concerns in the inspection report.”
For those who are unsure whether a full inspection is necessary, an inspector can do a basic walk-through of a home to identify any major red flags. “A walk-through is simply a one to two-hour visit to the property with the inspector, the client, and their agent,” says Neil Summers of Neil Summers Home Inspections. “This may be the only time the buyer can see the home through an inspector’s eyes before committing to purchase.” Summers stresses that even with a walk-through, buyers should always get a full home inspection.
Maryland home inspections: the bottom line
Buying a home is one of the biggest life decisions you can make. Before you finalize the purchase of your dream home, a Maryland home inspection will give you peace of mind before buying.
39 Northwestern Mutual Advisors Represent the Future of Financial Services in Forbes’ 2023 Top Next Gen Wealth Advisors Best-in-State List MILWAUKEE, Aug. 11, 2023 /PRNewswire/ — Northwestern Mutual is celebrating its 39 financial advisors honored on this year’s Forbes’ Top Next Gen Wealth Advisors Best-in-State list. The accolade recognizes the top advisors across the country building … [Read more…]
BIDEN-HARRIS ADMINISTRATION TO SAVE FHA HOMEBUYERS AVERAGE $800 ANNUALLY ON MORTGAGE PAYMENTS THROUGH PREMIUM REDUCTION
30 basis point reduction in FHA annual mortgage insurance premium supports Biden-Harris Administration goals to make homeownership more affordable and accessible for working families.
WASHINGTON – Today, the Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), announced a 30 basis point reduction to the annual mortgage insurance premiums (annual MIP) charged to homebuyers who obtain an FHA-insured mortgage. Vice President Kamala Harris and Secretary Marcia L. Fudge made this announcement in Bowie, MD. The premium will be reduced from 0.85 percent to 0.55 percent for most homebuyers seeking an FHA-insured mortgage, which could mean an estimated savings of $678 million for American families in aggregate by the end of 2023 alone. The reduction will benefit an estimated 850,000 borrowers over the coming year, saving these families an average of $800 annually.
“For this country to truly succeed, all Americans must have access to opportunity. That means expanding access to wealth-building and home ownership,” said HUD Secretary Marcia L. Fudge. “Today, we are building on the steps we’ve taken to make homeownership more affordable, and HUD is acting to ensure people feel comfortable purchasing a home as they build toward their future. As we reduce housing costs for people with FHA mortgages, we continue our work to address longstanding disparities in homeownership.”
This action supports the Biden-Harris Administration’s goals of making homeownership more accessible and affordable for the nation’s working families, particularly households of color for whom FHA-insured mortgages have been a cornerstone for access to homeownership. This action will help address historic disparities in homeownership, where homebuyers of color have been underrepresented.
HUD and the Biden-Harris Administration have taken a range of steps to make homeownership a reality for more Americans. The Department changed FHA’s underwriting policies to allow lenders to use positive rental history in evaluating applicants’ creditworthiness for an FHA-insured mortgage – making it easier for first-time homebuyers to qualify. In addition, HUD expanded the tools for access to housing counseling so consumers can more easily find and seek assistance from more than 1,500 HUD-approved housing counseling agencies and the 4,000 HUD-certified housing counselors. HUD changed the way in which student loan debt is evaluated in FHA mortgage underwriting, enabling more borrowers making payments on student loans to qualify for an FHA-insured mortgage. Last year, the Property Appraisal and Valuation Equity Task Force (PAVE) announced more than 20 concrete agency actions to root out racial and ethnic bias in home valuations, including strengthening guardrails against unlawful discrimination in all stages of residential valuation, empowering consumers to take action, and building a well-trained, accessible, and diverse appraiser workforce. Find additional actions that HUD has taken here.
“At a time when budgets are tight and homeownership is out of reach for too many, FHA’s premium reduction will allow more households to access the stability and wealth creation of homeownership, particularly the first-time homebuyers and families of color who rely heavily on affordable FHA-insured mortgages,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “For many families, the savings will make the difference in their ability to purchase the home of their choice.”
Annual MIP Reduction Details
The 30 basis point annual MIP reduction will apply to almost all Single Family Title II forward mortgages insured by FHA. Further, the reduction applies to all eligible property types, including single family homes, condominiums, and manufactured homes, all eligible loan-to-value ratios, and all eligible base loan amounts.
The average FHA borrower purchasing a one-unit single family home with a $265,000 mortgage will save approximately $800 this year as a result of FHA’s premium reduction. For the same borrower with a mortgage of $467,700 – the national median home price as of December 2022 – FHA’s annual MIP reduction will save them more than $1,400 in the first year of their mortgage. In addition to providing overall savings to borrowers, a lower annual MIP can also help more people qualify for a mortgage.
The annual mortgage insurance premium reductions are noted in the table below and are effective for mortgages endorsed for insurance by FHA on or after March 20, 2023.
Annual Mortgage Insurance Premium (MIP)
Applies to all Mortgages except:
Streamline Refinance and Simple Refinance Mortgages used to refinance a previous FHA endorsed Mortgage on or before May 31, 2009
Hawaiian Home Lands (Section 247)
Hawaiian Home Lands (Section 247) do not require Annual MIP
Mortgage Term of More Than 15 Years
Base Loan Amount
LTV
New MIP (bps)
Previous MIP (bps)
Duration
Less than or equal to $726,200
≤ 90.00%
50
80
11 years
> 90.00% but ≤ 95.00%
50
80
Mortgage term
> 95.00%
55
85
Mortgage term
Greater than $726,200
≤ 90.00%
70
100
11 years
> 90.00% but ≤ 95.00%
70
100
Mortgage term
> 95.00%
75
105
Mortgage term
Mortgage Term of Less than or Equal to 15 Years
Base Loan Amount
LTV
New MIP (bps)
Previous MIP (bps)
Duration
Less than or equal to $726,200
≤ 90.00%
15
45
11 years
> 90.00%
40
70
Mortgage term
Greater than $726,200
≤ 78.00%
15
45
11 years
> 78.00% but ≤ 90.00%
40
70
11 years
> 90.00%
65
95
Mortgage term
About FHA’s Annual MIP
FHA’s annual MIP is calculated as a percentage of the outstanding loan balance. For example, an outstanding loan balance of $200,000 with a 50 basis point (0.5%) annual MIP, would yield an annual MIP amount of $1,000.
Lenders typically assess the annual MIP via 12 equal payments included in a borrower’s monthly mortgage payment. FHA mortgage insurance facilitates broader availability of mortgage financing for low-and moderate-income households by reimbursing lenders for losses when a loan defaults. The mortgage insurance premium revenues received by FHA offset mortgage insurance claims it pays to lenders, enabling the program to operate without government subsidy.
The MIP constitutes a portion of the costs considered in calculating a borrower’s debt-to-income ratio, which is a factor used in qualifying households for mortgage credit.
To find a housing counselor Search the Map or Search by Zipcode, or call HUD’s interactive voice system at: (800) 569-4287. Consumers can also contact a HUD Approved National Housing Counseling Intermediary or State Housing Finance Agency.
See the ‘Reduction of Federal Housing Administration (FHA) Annual Mortgage Insurance Premium (MIP) Rates’ mortgagee letter here.
Nestled in the heart of Western Maryland just East of the Appalachians, Hagerstown offers a blend of urban living and natural charm. With a rich historical legacy that stretches back to its founding in the 18th century, this city proudly showcases its heritage through preserved battlefields, museums, and historical landmarks.
But is Hagerstown, MD, a good place to live? Luckily, we’ve got you covered. If you’re looking at homes for sale in Hagerstown, apartments for rent, or are just curious about what the area has to offer, this Redfin guide is for you. To give you a taste, here are 10pros and cons to consider before moving to Hagerstown, MD.
5 pros of living in Hagerstown, MD
There’s a lot to love about living in Hagerstown, from natural beauty to rich history. Here are five of the best reasons to make the move.
1. Affordable cost of living
A great reason to move to Hagerstown is its low cost of living compared to other US cities, especially large metropolises. The median sale price in Hagerstown is $262,000, well below the national average of $425,000. Apartments are also much cheaper than average, with the standard one-bedroom unit costing around $1,164.
The city offers a range of housing options, including apartments for rent throughout the area. Property taxes and utility costs are generally lower than the national average, making Hagerstown a great option for those looking to live comfortably without the high costs associated with larger cities. Interestingly, however, nearby Baltimore is generally cheaper in every category, especially housing.
2. Location
Hagerstown’s strategic location at the crossroads of major highways offers convenient access to larger cities like Baltimore and Washington, D.C. This location can be beneficial for government commuters, travelers, and those looking to enjoy the amenities of nearby metropolitan areas. Hagerstown is also near the Appalachians and numerous state forests, making for a perfect suburban retreat located near large cities.
3. Cultural attractions
Hagerstown is rich in arts and culture. The Washington County Museum of Fine Arts offers an impressive collection of art pieces from around the world. If you enjoy music, the historic Maryland Theatre hosts performances ranging from plays to concerts, while the Big Funky Blues Fest celebrates music with local and national artists. These venues and events create a vibrant cultural scene that adds to the quality of life in the city.
4. Outdoor recreation
Hagerstown is surrounded by gorgeous natural landscapes, offering numerous opportunities for all types of recreation. The nearby Maryland section of the Appalachian Trail provides opportunities for long-distance hiking and historical sightseeing, while nearby Greenbrier State Park has shorter, family-friendly trails.
Hagerstown is also known for its water-based recreation, offering opportunities for fishing, kayaking, canoeing, and boating in the many lakes and rivers nearby. And if you’re in the mood for camping, there are plenty of places for you to unwind in nature.
5. Historical significance
Established in 1762 by Jonathan Hager, Hagerstown has a rich history and played a role in many conflicts. There are dozens of historical sites in the area, the most famous being Antietam National Battlefield, the site of a major Civil War battle.
Other attractions include the Hager House, home of Jonathan Hager, and South Mountain State Battlefield, site of a Union victory in the Civil War. History enthusiasts can explore these sites, learning about the city’s role in shaping US history and experiencing the preserved architecture.
5 cons of living in Hagerstown, MD
While Hagerstown has many positives, there are notable downsides as well. Here are five to keep in mind before making the move.
1. Weather
The weather in Hagerstown can be challenging for some, with cold, snowy winters and hot, humid summers. It is truly a four-season climate, and sometimes experiences extremes, including a stretch of nine days above 100 degrees Fahrenheit. The coldest month is January, where temperatures rarely reach 40 degrees, while the warmest is July, with temperatures near 90. Those who prefer milder weather conditions might find the climate less than ideal.
2. Limited public transportation
Hagerstown does have a public transportation system maintained by Washington County, with 12 routes that serve a majority of the city. However, there are very few buses in their fleet and not enough routes to serve everyone’s needs, especially for those who travel frequently. This is exacerbated if you live just outside of the city center. Because of this, having a car is almost a necessity in Hagerstown.
3. Limited nightlife
For those seeking a bustling nightlife, Hagerstown might fall short. Although there are dining and entertainment options, the choices are limited compared to larger cities, especially in the later evening and night. However, there are still a few options, including Broad Axe, Benny’s Pub, and Third Base Tavern.
4. Limited shopping options
While Hagerstown offers basic shopping facilities, it may lack the variety and high-end retail options found in larger cities. Those looking for diverse shopping experiences might need to travel to neighboring cities, which could be an inconvenience for regular shoppers or those seeking specific brands and stores.
5. Urban sprawl
Because of its convenient location and quality of living, Hagerstown’s population has grown consistently for decades. This has led to an increase in urban sprawl, which can lead to a loss of green spaces, increased infrastructure demands, and a potential reduction in the quality of life for some residents. This may be a downside for some who prefer a smaller town with more character.
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In 2022, the national average electric bill was $137 per month, and residents consumed an average of 907 kWh of energy monthly.
If you’re trying to save money, you may be examining your electric bill to see how much you’re spending each month. But how do you know if you’re overpaying and need to decrease your energy usage?
In this article, we take a closer look at the average electric bill in the U.S. and each state to help you determine how much to budget each month.
How Much Is the Average Electric Bill?
According to the U.S Energy Information Administration (EIA), the national average electric bill in 2022 was $137 per month, with residents consuming an average of 907 kWh of energy monthly. After adjusting for inflation, this is a 5% price increase and a 2% energy usage increase from the previous year.
As of the first three months of 2023, the monthly average electric bill was $133 per month, which is a 5% increase from the same time period last year.
Average Electric Bill by State
The average electric bill varies by state based on a number of factors, including local power plant costs, weather conditions, state regulations, electricity transmission and distribution systems, and fuel costs.
Utah has the lowest monthly bill, which costs residents $80.87 on average. Meanwhile, Hawaii has the highest bill, with an average of $177.78 per month, due in part to the cost of importing petroleum fuels.
Reference the chart below to see your state’s average monthly consumption, average unit price, and average monthly bill according to the EIA.
State
Average Monthly Consumption (kWh)
Average Price (cents/kWh)
Average Monthly Bill (Dollar and cents)
AK
594
22.55
133.89
AL
1,140
12.96
147.75
AR
1,098
11.27
123.69
AZ
1,048
12.54
131.35
CA
542
22.82
123.67
CO
704
13.07
91.96
CT
713
21.91
156.21
DE
950
12.52
118.85
FL
1,096
11.90
130.40
GA
1,072
12.51
134.11
HI
531
33.49
177.78
IA
861
12.73
109.63
ID
961
10.16
97.62
IL
728
13.18
95.86
IN
946
13.37
126.51
KS
890
12.98
115.53
KY
1,084
11.50
124.67
LA
1,192
11.02
131.37
MA
596
22.89
136.37
MD
973
13.12
127.62
ME
584
17.02
99.44
MI
670
17.54
117.57
MN
776
13.50
104.76
MO
1,039
11.41
118.55
MS
1,171
11.56
135.31
MT
872
11.22
97.84
NC
1,063
11.32
120.38
ND
1,041
10.85
112.93
NE
1,005
10.75
108.09
NH
631
19.85
125.24
NJ
687
16.35
112.39
NM
646
13.52
87.31
NV
959
11.49
110.17
NY
599
19.48
116.70
OH
879
12.77
112.21
OK
1,088
11.00
119.69
OR
936
11.37
106.49
PA
851
13.76
117.11
RI
585
22.30
130.40
SC
1,078
12.86
138.65
SD
1,019
12.22
124.50
TN
1,183
11.07
130.98
TX
1,094
12.11
132.40
UT
775
10.43
80.87
VA
1,094
11.96
130.92
VT
567
19.26
109.24
WA
984
10.11
99.45
WI
690
14.52
100.18
WV
1,066
12.15
129.61
WY
867
11.17
96.82
What Contributes to a High Electric Bill?
When examining your electric bill, you’ll likely see your charges grouped into two categories: supply and delivery charges.Knowing what these charges mean can help you understand what’s contributing to your high electric bill.
Supply Charges
Supply charges account for the cost of generating the energy you use. The total you are charged each month depends on the amount of energy you use and the cost per kWh of electricity. Your utility provider determines the unit rate (kWh) and should be noted in your contract.
It’s also important to check if you have a fixed-rate or variable-rate electric plan. With a fixed-rate electric plan, your unit rate will remain the same for a set duration. With a variable-rate plan, your unit rate will depend on the cost to supply electricity, which changes minute by minute depending on electricity demand. However, most customers pay a seasonal average rate (a type of variable rate), so they don’t experience these constant fluctuations.
Delivery Charges
Delivery charges are the costs associated with delivering electricity to your home. These charges are categorized into the following rates on your electric bill:
Distribution rate: This charge pays for distributing electricity to your home via power lines. This fee also includes metering services, billing services, and customer service.
Transition rate: This fee helps cover utility companies’ costs in building and maintaining power plants.
Transmission rate: This charge is controlled by the Federal Energy Regulatory Commission and helps cover the cost of the high-voltage power lines, which transport electricity from the power plants to the utility company.
How Can You Budget for Your Electric Bill?
While it can be difficult to pinpoint exactly how much your electric bill will cost each month, the National Foundation for Credit Counseling suggests spending no more than 10% of your monthly income on utilities. For example, if you earn $3,000 monthly, you shouldn’t be spending more than $300 on utilities each month.
If you’d prefer to take the guesswork out of budgeting for utilities, you can sign up for budget billing through your utility company, which involves paying a set amount for monthly utilities based on your average usage. Contact your utility company to learn more about budget billing.
Tips to Lower Your Electric Bill
If you’re spending too much on your electric bill, try incorporating these tips to save money:
Unplug appliances you don’t use: Walk around your house and unplug anything you don’t frequently use. For example, if you only make a smoothie once a week, you don’t need to leave the blender plugged in 24/7.
Get smart power strips: Smart power strips work by automatically shutting down the power to devices not in use. This is a great option if you frequently forget to unplug your devices.
Switch to LED light bulbs: LED bulbs use approximately 75% less energy than incandescent lighting, according to Energy.gov.
Limit your hot water usage: Heating water requires a lot of energy, so avoid washing your clothes or running the dishwasher using hot water. You could also try taking cooler showers, too.
Avoid running appliances until they’re full: When it comes to doing laundry or running the dishwasher, hold off until you have a full load.
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Regularly change your air filters: According to the Department of Energy, replacing a dirty air filter can lower your AC’s energy usage by up to 15%.
Get an energy audit: An energy audit involves a professional reviewing your electric bills and assessing your home to provide specific recommendations on how to lower your energy costs.
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The Jefferson Avenue commercial district in Buffalo, New York, is anchored by a supermarket.
There are dozens of other businesses and services along the 12-block corridor — a couple of bank branches, a library, a coffee shop, gas stations, a small plaza with a dollar store and a primary care clinic and a business incubator for entrepreneurs of color.
But Tops Friendly Markets, the only grocery store on Buffalo’s vast East Side, is the center of activity. More than just a place to buy food, pick up medications and use an ATM, the store is a communal gathering space in a predominantly Black neighborhood that, for generations, has been segregated, isolated and disenfranchised from the wealthier — and whiter — parts of the city.
Which explains how it came to be the site of a mass shooting on a spring day in May of last year. On that Saturday, a gunman, who lived 200 miles away in another part of the state, drove to Jefferson Avenue and went into Tops, and in just a few minutes killed 10 people, injured three and inflicted mass trauma across the community.
It is a scenario that has sadly, and repeatedly, played out in other parts of the country that have experienced mass shootings. But this one came with a twist: The gunman’s intention was to kill as many Black people as possible.
To achieve that, he specifically targeted a ZIP code with one of the highest percentages of Black residents in New York state. All 10 who died that day were Black.
“The mere fact that someone can research, ‘Where will the greatest number of Black people be … on a Saturday morning,’ that’s not by chance,” said Franchelle Parker, a community organizer and executive director of Open Buffalo, a nonprofit focused on racial, economic and ecological justice. “That’s not a mistake. It’s a community that’s been deeply segregated for decades.”
The day of the shooting, Parker, who grew up in nearby Niagara Falls, was driving to Tops, where she planned to buy a donut and an unsweetened iced tea before heading into the Open Buffalo office, which is located a block away from Tops. The mother of two had intended to complete the mundane task of cleaning up her desk — “old coffee cups and stuff” — after a busy week.
She saw the news on Twitter and didn’t know if she should keep driving to Jefferson Avenue or turn around and go back home. She eventually picked the latter.
When she showed up the next day, there were thousands of people grieving in the streets. “The only way that I could explain my feeling, it was almost like watching an old war movie when a bomb had gone off and someone’s in, like, shell shock. That’s how it felt,” said Parker, vividly recounting the community’s collective trauma in a meeting room tucked inside of Open Buffalo’s second-story office on Jefferson Avenue.
Almost immediately following the May 14, 2022, massacre, which was the second-deadliest mass shooting in the United States last year, conversations locally and nationally turned to the harsh realities of the East Side and how long-standing factors that affect the daily life of residents — racism, poverty and inequity — made the community an ideal target for a white supremacist.
Now, more than a year after the tragedy, there is growing concern that not enough is being done fast enough to begin to dismantle those factors. And amid those conversations, there are mounting calls for the banking industry — whose historical policies and practices helped cement the racial segregation and disinvestment that ultimately shaped the East Side — to leverage its collective power and influence to band together in an effort to create systemic change.
The ideas about how banks should support the East Side and better embed themselves in the neighborhood vary by people and organizations. But the basic argument is the same: Banks, in their role as financiers and because of the industry’s history of lending discrimination, are obligated to bring forth economic prosperity in disinvested communities like the East Side.
I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.
Chiwuike Owunwanne, corporate responsibility officer at KeyBank
“Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that,” said The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity, a four-year-old enterprise focused on racial, geographic and economic health disparities. “But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.”
To be sure, banks’ ability to reverse the course of the community isn’t guaranteed — and there is no formula to determine how much accountability they should hold to fix deeply entrenched problems like racism. Several Buffalo-area bankers said that while the Tops shooting heightened the urgency to help the East Side, the industry itself cannot be the sole driver of change.
“There are a lot of institutions … that can certainly play a part in reversing the challenges that we see today,” said Chiwuike “Chi-Chi” Owunwanne, a corporate responsibility officer at KeyBank, the second-largest bank by deposits in Buffalo. “I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.”
A long history of segregation
How the East Side — and the Tops store on Jefferson Avenue — became the destination for a racially motivated mass murderer is a story about racism, segregation and disinvestment.
Even as it bears the nickname “the city of good neighbors,” Buffalo has long been one of the most racially segregated cities in the United States. Of the 114,965 residents who live on the East Side, 59% are Black, according to data from the 2021 U.S. Census American Community Survey. The percentage is even higher in the 14208 ZIP code, where the Tops store is located. In that ZIP code, among 11,029 total residents, nearly 76% are Black, the census data shows.
The city’s path toward racial segregation started in the early 20th century when a small number of job-seeking Black Americans migrated north to Buffalo, a former steel and auto manufacturing hub at the far northwestern end of New York state. Initially, they moved into the same neighborhoods as many of the city’s poorer immigrants and lived just east of what is today the city’s downtown district. As the number of Blacks arriving in Buffalo swelled in the 1940s, they were increasingly confronted with various housing challenges, including racist zoning laws and restrictive deed covenants that kept them from buying homes in more affluent white areas.
Black Buffalonians also faced housing discrimination in the form of redlining, the practice of restricting the flow of capital into minority communities. In 1933, as the Great Depression roiled the economy, a temporary federal agency known as the Home Owners’ Loan Corporation used government bonds to buy out and refinance mortgages of properties that were facing or already in foreclosure. The point was to try to stabilize the nation’s real estate market.
As part of its program, HOLC created maps of American cities, including Buffalo, that used a color coding scheme — green, blue, yellow and red — to convey the perceived riskiness of making loans in certain neighborhoods. Green was considered minimally risky; other areas that were largely populated by immigrant, Black or Latino residents were labeled red and thus determined to be “hazardous.”
“The goal was to free up mortgage capital by going to cities and giving banks a way to unload mortgages, so they could turn around and make more mortgage loans,” said Jason Richardson, senior director of research at the National Community Reinvestment Coalition, an association of more than 750 community-based organizations that advocates for fair lending. “It was kind of a radical concept and it has evolved over the decades into our modern mortgage finance system.”
The Federal Housing Administration, which was established as a permanent agency in 1934, used similar methods to map urban areas and labeled neighborhoods from “A” to “D,” with “A” considered to be the most financially stable and “D” considered the least. Neighborhoods that were largely Black, even relatively stable ones, were put in the “D” category.
The result was that banks, which wanted to be able to sell mortgage loans to the FHA, were largely dissuaded from making loans in “risky” areas. And Buffalo’s East Side, where the majority of Blacks were settling, was deemed risky. Unable to get loans, Blacks couldn’t buy homes, start businesses or build equity. At the same time, large industrial factories on the East Side were closing or moving away, limiting job opportunities and contributing to rising poverty levels.
“Today what we’re left with is the residue of this process where we’ve enshrined … a pattern of economic segregation that favors neighborhoods that had fewer Black people in them and generally ignores neighborhoods that had African Americans living in them,” Richardson said.
Case in point: Research by the National Community Reinvestment Coalition shows that three-quarters of neighborhoods that were once redlined are low- to moderate-income neighborhoods today, and two-thirds of them are majority minority communities.
Adding to the division between Blacks and whites in Buffalo was the construction of a highway called the Kensington Expressway. Built during the 1960s, the below-grade, limited-access highway proved to be a speedy way for suburban workers to get to their downtown jobs. But its construction cut off the already-segregated East Side even more from other parts of the city, displacing residents, devaluing houses and destroying neighborhoods and small businesses.
As a result of those factors and more, many Black residents have become “trapped” on the East Side, according to Dr. Henry Louis Taylor Jr., a professor of urban and regional planning at the University at Buffalo. In 1987, Taylor founded the UB Center for Urban Studies, a research, neighborhood planning and community development institute that works on eliminating inequality in cities and metropolitan regions. In September 2021, eight months before the Tops shooting, the Center for Urban Studies published a report that compared the state of Black Buffalo in 1990 to present-day conditions. The conclusion: Nothing had changed for Blacks over 31 years.
As of 2019, the Black unemployment rate was 11%, the average household income was $42,000 and about 35% of Blacks had incomes that fell below the poverty line, the report said. It also noted that just 32% of Blacks own their homes and that most Blacks in the area live on the East Side.
“Those figures remain virtually unchanged while the actual, physical conditions that existed inside of the community worsened,” Taylor told American Banker in an interview in his sun-filled office at the center, located on the University at Buffalo’s city campus. “When we looked upstream to see what was causing it, it was clear: It was systemic, structural racism.”
Banks’ moral obligations
As the East Side struggled over the decades with rampant poverty, dilapidated housing, vacant lots and disintegrating infrastructure, banks kept a physical presence in the community, albeit a shrinking one. In mid-2000, there were at least 20 bank branches scattered across the East Side, but by mid-2022, the number had fallen to around 14, according to the Federal Deposit Insurance Corp.’s deposit market share data. The 14 include four new branches that have opened since early 2019 — Northwest Bank, KeyBank, Evans Bank and BankOnBuffalo.
The first two branches, operated by Northwest in Columbus, Ohio, and KeyBank, the banking subsidiary of KeyCorp in Cleveland, were requirements of community benefits agreements negotiated between each bank and the National Community Reinvestment Coalition. In both cases, Northwest and KeyBank agreed to open an office in an underserved community.
Evans Bank opened its first East Side branch in the fall of 2021. The office is located in the basement of an $84 million affordable senior housing building that was financed by Evans, a $2.1 billion-asset community bank headquartered south of Buffalo in Angola, New York.
Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that. But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.
The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity
On the community and economic development front, banks have had varying levels of participation. Buffalo-based M&T Bank, which holds a whopping 64% of all deposits in the Buffalo market and is one of the largest private employers in the region, has made consistent investments in the East Side by supporting Westminster Community Charter School, a kindergarten through eighth-grade school, and the Buffalo Promise Neighborhood, a nonprofit organization focused on improving access to education in the city’s 14215 ZIP code.
Currently, Buffalo Promise Neighborhood operates four schools. In addition to Westminster, it runs Highgate Heights Elementary, also K-8, as well as two academies that serve children ages six weeks through pre-kindergarten. Twelve M&T employees are dedicated to the program, according to the Buffalo Promise Neighborhood website. The bank has invested $31.5 million into the program since its 2010 launch, a spokesperson said.
Other banks are making contributions in other ways. In addition to the Jefferson Avenue branch and as part of its community benefits plan, Northwest Bank, a $14.2 billion-asset bank, supports a financial education center through a partnership with Belmont Housing Resources of Western New York. Meanwhile, the $198 billion-asset KeyBank gave $30 million for bridge and construction financing for Northland Workforce Training Center, a $100 million redevelopment project at a former manufacturing complex on the East Side that was partially funded by the state.
BankOnBuffalo’s East Side branch is located inside the center, which offers KeyBank training in advanced manufacturing and clean energy technology careers. A subsidiary of $5.6 billion-asset CNB Financial in Clearfield, Pennsylvania, BankOnBuffalo’s office opened a month after the shooting. The timing was coincidental, but important, said Michael Noah, president of BankOnBuffalo.
“I think it just cemented the point that this is a place we need to be, to be able to be part of these communities and this community specifically, and be able to build this community up,” Noah said.
In terms of public-private collaboration, some banks have been involved in a deeper way. In 2019, New York state, which had already been pouring $1 billion into Buffalo to help revitalize the economy, announced a $65 million economic development fund for the East Side. The initiative is focused on stabilizing neighborhoods, increasing homeownership, redeveloping commercial corridors including Jefferson Avenue, improving historical assets, expanding workforce training and development and supporting small businesses and entrepreneurship.
In conjunction with the funding, a public-private partnership called East Side Avenues was created to provide capital and organizational support to the projects happening along four East Side commercial corridors. Six banks — Charlotte, North Carolina-based Bank of America, the second-largest bank in the nation with $2.5 trillion of assets; M&T, which has $203 billion of assets; KeyBank; Warsaw, New York-based Five Star Bank, which has about $6 billion of assets; Northwest and Evans — are among the 14 private and philanthropic organizations that pledged a combined $8.4 million to pay for five years’ worth of operational support, governance and finance, fundraising and technical assistance to support the nonprofits doing the work.
Laura Quebral, director of the University at Buffalo Regional Institute, which is managing East Side Avenues, said the banks were the first corporations to step up to the request for help, and since then have provided loans and other products and education to keep the program moving.
Their participation “is a signal to the community that banks cared and were invested and were willing to collaborate around something,” Quebral said. “Being at the table was so meaningful.”
Richard Hamister is Northwest’s New York regional president and former co-chair of East Side Avenues. Hamister, who is based in Buffalo, said banks are a “community asset” that have a responsibility to lift up all communities, including those where conditions have arisen that allow it to be a target of racism like the East Side.
“We operate under federal charters, so we have an obligation to the community to not only provide products and services they need but also support when you go through a tragedy like that,” Hamister said. “We also have a moral obligation to try to help when things are broken … and to do what we can. We can’t fix everything, but we’ve got to fix our piece and try to help where we can.”
In the wake of a tragedy
After the massacre, there was a flurry of activity within banks and other organizations, local and out-of-town, to respond to the immediate needs of East Side residents. With the community’s only supermarket closed indefinitely, much of the response centered around food collection and distribution. Three of M&T’s five East Side branches, including the Jefferson Avenue branch across the street from Tops, became food distribution sites for weeks after the shooting. On two consecutive Fridays, Northwest provided around 200 free lunches to the community, using a neighborhood caterer who is also the bank’s customer. And BankOnBuffalo collected employee donations that amounted to more than 20 boxes of toiletries and other items that were distributed to a nonprofit.
At the same time, M&T, KeyBank and other banks began financial donations to organizations that could support the immediate needs of the community. KeyBank provided a van that delivered food and took people to nearby grocery stores. Providence, Rhode Island-based Citizens Financial Group, whose ATM inside Tops was inaccessible during the store’s temporary closure, installed a fee-free ATM near a community center located about a half-mile north of Tops, and later put a permanent ATM inside the center that remains there today. And M&T rolled out a short-term loan program to provide capital to East Side small-business owners.
One of the funds that benefited from banks’ support was the Buffalo Together Community Response Fund, which has raised $6.2 million to address the long-term needs of the East Side.
Bank of America and Evans Bank each donated $100,000 to the fund, whose list of major sponsors includes four other banks — JPMorgan Chase, Citigroup, M&T and KeyBank. Thomas Beauford Jr., a former banker who is co-chair of the response fund, said banks, by and large, directed their resources into organizations where the dollars would have an immediate impact.
“Banks said, ‘Hey, you know … it doesn’t make sense for us to try to build something right now. … We will fund you in the work you’re doing,'” said Beauford, who has been president and CEO of the Buffalo Urban League since the fall of 2020. “I would say banks showed up in a big way.”
Fourteen months later, banks say they are committed to playing a positive role on the East Side. For the second year, KeyBank is sponsoring a farmers’ market on the East Side, an attempt to help fill the food desert in the community. Last fall, BankOnBuffalo launched a mobile “bank on wheels” truck that’s stationed on the East Side every Wednesday. The 34-foot-long truck, which is staffed by two people and includes an ATM and a printer to make debit cards, was in the works before the shooting, and will eventually make four stops per week around the Buffalo area.
Evans has partnered with the city of Buffalo to construct seven market-rate single family homes on vacant lots on the East Side. The relationship with the city is an example of how banks can pair up with other entities to create something meaningful and lasting, more than they might be able to do on their own, said Evans President and CEO David Nasca.
The bank has “picked areas” where it can use its resources to make a difference, Nasca said.
“I don’t think the root causes can be ameliorated” by banks alone, he said. “We can’t just grant money. It has to be within our construct of a financial institution that invests and supports the public-private partnership. … All the oars [need to be] pulling together or this doesn’t work.”
‘Little or no engagement with minorities’
All of these efforts are, of course, welcomed by the community, but there is still criticism that banks haven’t done enough to make up for their past contributions to segregating the city. And perhaps more importantly, some of that criticism centers on banks failing to do their most basic function in society — provide credit.
In 2021, the New York State Department of Financial Services issued a report about redlining in Buffalo. The regulator looked at banks and nonbank lenders and found that loans made to minorities in the Buffalo metro area made up 9.74% of total loans in Buffalo. Overall, Black residents comprise about 33% of Buffalo’s total population of more than 276,000, census data shows.
The department said its investigation showed the lower percentage was not due to “excessive denials of loan applications based on race or ethnicity,” but rather that “these companies had little or no engagement with minorities and generally made scant effort to do so.”
“The unsurprising result of this has been that few minority customers or individuals seeking homes in majority-minority neighborhoods have made loan applications … in the first instance.”
Furthermore, accusations of redlining persist today, even though the practice of discriminating in housing based on race was outlawed by the Fair Housing Act of 1968.
In 2014, Evans was accused of redlining by the New York State Attorney General, which said the community bank was specifically avoiding making mortgage loans on the East Side. The bank, which at the time had $874 million of assets, agreed to pay $825,000 to settle the case, but Nasca maintains that the charges were unfounded. He points to the fact that the bank never had a fair lending or fair housing violation, no specific incidents were ever claimed and that the bank’s Community Reinvestment Act exam never found evidence of discriminatory or illegal credit practices.
The bank has a greater presence on the East Side today, but that’s because it has grown in size, not because it is trying to make up for previous accusations of redlining, he said.
“Ten years ago, our involvement [on the East Side] certainly wasn’t what you’re seeing today,” Nasca said. “We were looking to participate more, but we were participating within our means and our reach. As we have grown, we have built more resources to be able to do more.”
Shortly after accusations were made against Evans, Five Star Bank, the banking arm of Financial Institutions in Warsaw, New York, was also accused of redlining by the state Attorney General. Five Star, which has been growing its presence in the Buffalo market for several years, wound up settling the charges for $900,000 and agreeing to open two branches in the city of Rochester.
KeyBank is currently being accused of redlining by the National Community Reinvestment Coalition. In a 2022 report, the group said that KeyBank is engaging in systemic redlining by making very few home purchase loans in certain neighborhoods where the majority of residents are Black. Buffalo is one of several cities where the bank’s mortgage lending “effectively wall[ed] out Black neighborhoods,” especially parts of the East Side, the report said.
KeyBank denied the allegations. In March, the coalition asked regulators to investigate the bank’s mortgage lending practices.
Beyond providing more credit, some community members believe that banks should be playing a larger role in addressing other needs on the East Side. And the list of needs runs the gamut from more grocery stores to safe, affordable housing to infrastructure improvements such as street and sidewalk repairs.
Alexander Wright is founder of the African Heritage Food Co-op, an initiative launched in 2016 to address the dearth of grocery store options on the East Side, where he grew up. Wright said that while banks’ philanthropic efforts are important, banks in general “need to be in a place of remediation” to fix underlying issues that the industry, as a whole, helped create. (After publication of this story, Wright left his job as CEO of the African Heritage Food Co-Op.)
Aside from charitable donations, banks should be finding more ways to work directly with East Side business owners and entrepreneurs, helping them with capital-building support along the way, Wright said. One place to start would be technical assistance by way of bank volunteers.
“Banks are always looking to volunteer. ‘Hey, want to come out and paint a fence? Want to come out and do a garden?'” Wright said. “No. Come out here and help Keshia with bookkeeping. Come out here and do QuickBooks classes for folks. Bring out tax experts. Because these are things that befuddle a lot of small businesses. Who is your marketing person? Bring that person out here. Because those are the things that are going to build the business to self-sufficiency.
“Anything short of the capacity-building … that will allow folks to rise to the occasion and be self-sufficient I think is almost a waste,” Wright added. “We don’t need them to lead the plan. What we need them to do is be in the community and [be] hearing the plan and supporting it.”
Parker, of Open Buffalo, has similar thoughts about the role that banks should play. One day, soon after the massacre, an ATM appeared down the street from Tops, next to the library that sits across the street from Parker’s office. Soon after the ATM was installed, Parker began fielding questions from area residents who were skeptical of the machine and wanted to know if it was legitimate. But Parker didn’t have any information to share with them. “There was no outreach. There was no community engagement. So I’m like, ‘Let me investigate,'” she said. “I think that’s a symptom of how investment is done in Black communities, even though it may be well-intentioned.”
As it turns out, the temporary ATM belonged to JPMorgan Chase. The megabank has had a commercial banking presence in Buffalo for years, but it didn’t operate a retail branch in the region until last year. Today it has four branches in operation and plans to open another two by the end of the year, a spokesperson said.
After the Tops shooting, the governor’s office reached out to Chase asking if the bank could help in some way, the spokesperson said in response to the skepticism. The spokesperson said that while the Chase retail brand is new to the Buffalo region, the company has been active in the market for decades by way of commercial banking, private banking, credit card lending, home lending and other businesses.
In addition to the ATM, the bank provided funding to local organizations including FeedMore Western New York, which distributes food throughout the region.
“We are committed to continuing our support for Buffalo and helping the community increase access to opportunities that build wealth and economic empowerment,” the spokesperson said in an email.
In the year since the massacre, there has been some progress by banks in terms of their interest in listening to the East Side community and learning about its needs, said Nicholas. But he hasn’t felt an air of urgency from the banking community to tackle the issues right now.
“I do experience banks being a little more open to figuring out what their role is, but it’s slow. It’s slow,” said Nicholas. The senior pastor of the Lincoln Memorial United Methodist Church, located about a mile north from Tops, Nicholas is part of a 13-member local advisory committee for the New York arm of Local Initiatives Support Coalition, or LISC. The group is focused on mobilizing resources, including banks, to address affordable housing in Western New York, specifically in the inner city, as well as training minority developers and connecting them to potential investors, Nicholas said.
Of the 13 members, seven are from banks — one each from M&T, Bank of America, BankOnBuffalo, Evans and KeyBank, and two members from Citizens Financial Group. One of the priorities of LISC NY is health equity, and the fact that banks are becoming more engaged in looking at health disparities is promising, Nicholas said. Still, they have more work to do, he said.
“I need them to think more on how to strengthen and build the economy on the East Side and provide leadership around that, not only to provide charitable things, but using sound business and banking and community development principles to say, ‘OK, if we’re going to invest in this community, these are the types of things that need to happen in this community,’ and then encourage their partners and other people they work with … to come fully in on the East Side.”
Some bankers agree with the community activists.
“Putting a branch in is great. Having a bank on wheels is great,” said Noah of BankOnBuffalo. “But if you’re not embedded in the community, listening to the community and trying to improve it, you’re not creating that wealth and creating a better lifestyle for everyone.”
What could make a substantial difference in terms of banks’ impact on the community is a combination of collaboration and leadership, said Taylor. He supports the idea of banks leading the charge on the creation of a comprehensive redevelopment and reinvestment plan for the East Side, and then investing accordingly and collaboratively through their charitable foundations.
“All of them have these foundations,” Taylor said. “You can either spend that money in a strategic and intentional way designed to develop a community for the existing population, or you can spend that money alone in piecemeal, siloed, sectorial fashion that will look good on an annual report, but won’t generate transformational and generational changes inside a community.”
Banks might be incentivized to work together because it could mean two things for them, according to Taylor: First, they’d have an opportunity to spend money in a way that would have maximum impact on the East Side, and second, if done right, the city and the banks could become a model of the way to create high levels of diversity, equity and inclusion in an urban area.
“If you prove how to do that, all that does is open up other markets of consumption all over the country because people want to figure out how to do that same thing,” Taylor said.
Some of that is already happening, at least on a bank-by-bank case, said KeyBank’s Owunwanne. Through the KeyBank Foundation, the company is able to leverage different relationships that connect nonprofits to other entities and corporations that can provide help.
“I see this as an opportunity for us to make not just incremental changes, but monumental changes … as part of a larger group,” Owunwanne said “Again, I say that not to absolve the bank of any responsibility, but just as a larger group.”
Downstairs from Parker’s office, Golden Cup Coffee, a roastery and cafe run by a husband and wife team, and some other Jefferson Avenue businesses are trying to build up a business association for existing and potential Jefferson-area businesses. Parker imagined what the group could accomplish if one of the banks could provide someone on a part-time basis to facilitate conversations, provide administrative support and coordinate marketing efforts.
“In the grand scheme of things, when we’re talking about a multimillion dollar [bank], a part-time employee specifically dedicated to relationship-building and building out coalitions, it sounds like a small thing,” Parker said. “But that’s transformational.”
An old tool is back as mortgage rates rise: Seller financing often occurs when buyers hope to save on closing costs and sellers want top dollar for their home.
NEW YORK – Real estate professionals report an increasing interest in seller financing for transactions involving residential properties after the rise in interest rates.
Seller financing was almost nonexistent when mortgage rates hit record lows, but it’s not a new tool. It’s used most often when buyers seek to increase their purchasing power by saving on closing costs or paying lower interest rates – and, at the same time, by sellers who want buyers to make a full-price or higher offer on the home.
However, sellers who give buyers the title upfront face significant risk if they provide financing.
David Dweck, a private investor from Boca Raton whose portfolio consists of single-family homes in Florida and North Carolina, says he carefully vets his buyers when he agrees to provide financing.
“I underwrite it as if I’m a bank,” he says. “I want to have a reasonable expectation that the borrower will pay me back.”
Dweck requires a down payment of at least 20% and will only consider seller financing if the buyer pays full price or above.
Danny Hertzberg, an agent with The Jills Zeder Group at Coldwell Banker in Miami Beach, says that while owner financing is often discussed between buyers and sellers, it is rarely consummated. He noted its most likely to occur when the house has either been languishing on the market without any offers, or the offers come in too low.
“There has to be some carrot for the seller to consider it,” he said. “Usually that carrot is a buyer offering full asking price or close to it.”
Source: Wall Street Journal (07/26/23) Friedman, Robyn