An L.A. County judge dismissed a lawsuit challenging L.A.’s “mansion tax” on Tuesday, marking the end of a months-long legal challenge from the luxury real estate community that looked to declare the measure unconstitutional.
The transfer tax known as Measure ULA was passed in November and took effect April 1, bringing a 4% charge on all residential and commercial real estate sales in the city above $5 million and a 5.5% charge on sales above $10 million, pumping millions into housing and homelessness-prevention efforts.
Los Angeles County Superior Court Judge Barbara Scheper issued a tentative ruling dismissing the challenge on Monday after hearing arguments from both sides, and she officially dismissed the lawsuit on Tuesday, according to court documents.
The ruling is a big win for housing activists, who say that L.A. desperately needs the money raised by the tax.
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“This is a great day for Los Angeles,” said Joe Donlin, who serves as director of the United to House LA coalition, which brought the measure onto the ballot in November. “The judge’s ruling confirms what we knew all along: ULA is the law of the land and it’s the will of the people. And it reminds us of the power of the people to shape our city’s future for the good.”
Donlin said he was surprised the ruling came out so soon.
“Before the hearing, we thought it might take weeks or months, but this was a positive sign that the judge didn’t feel compelled by the plaintiff’s arguments,” he said.
Greg Bonett, senior staff attorney for the Public Counsel who worked to defend the measure, applauded the decision, calling it “a resounding victory for the power of the people to initiate transformative solutions to address our city’s housing and homelessness crises.”
The judge’s ruling is a blow for many in the luxury real estate community, who claim that the transfer tax has frozen the market and stifled development.
Keith Fromm, an attorney for Newcastle Courtyards, one of two groups challenging the measure, said he plans to appeal the decision.
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“The order contains numerous errors of law which the appellate courts will hopefully recognize and correct,” Fromm said. “The ruling is simply one step in a very long journey to justice.”
The legal battle — which was headed by two main groups: Newcastle and Howard Jarvis Taxpayers Assn. — became a national conversation, as other cities looked to L.A. to see how it would implement such a tax.
Other cities such as San Francisco, New York City and Culver City have implemented transfer taxes, but L.A.’s is unique in scope and scale, not just taxing home sales but all property sales above $5 million.
Voters approved the measure with a 57% majority in November, and the tax became a hot-button issue immediately after.
Advocates argue that the tax is a way for luxury property owners to contribute to solving L.A.’s housing crisis, while opponents say it discourages development and pushes owners out of L.A. and into cities that don’t have the tax, such as Beverly Hills, West Hollywood or Santa Monica.
“With Measure ULA, we are now going to lose billions of dollars every year in economic development and property tax revenue in order to raise less than $500 million through the tax,” said Jason Oppenheim, a real estate agent with the Oppenheim Group and star of Netflix’s “Selling Sunset.”
The luxury real estate market froze in the months after the measure took effect, as many luxury homeowners looked to find loopholes to avoid paying the tax. Many hired accountants to find workarounds, such as dividing their homes into three parcels and selling them separately to stay under the $5-million threshold at which the tax kicks in.
Many homeowners held off on selling their homes, hoping the lawsuit would overturn the tax. As a result, funds raised by the tax have fallen dramatically short of original projections since sales have slowed.
In November, proponents of the tax estimated it would raise roughly $900 million a year. In March, a report from the city administrative officer lowered that number to $672 million. Then in April, Mayor Karen Bass’s first budget proposal, a $13.1-billion plan, included only $150 million in projected revenue from Measure ULA.
The number was chosen out of caution, as the city wanted to funnel as much money as possible toward housing and homelessness issues but not so much that it wouldn’t be able to pay it back if the measure were ruled unconstitutional.
But with the court’s latest ruling, spending will likely increase.
On Wednesday, the L.A. City Council’s budget, finance and innovation Committee will meet to discuss the implementation process, and the ULA coalition will propose that $12 million be reallocated to short-term emergency assistance for renters.
In August, the City Council passed a $150-million spending plan for funds raised by Measure ULA. It was the first time funds were specifically allocated since the tax was passed in November, and the plan sent money to six programs: short-term emergency rental assistance, eviction defense, tenant outreach and education, direct cash assistance for low-income seniors and people with disabilities, tenant protections and affordable housing production.
As Florida’s insurance crisis makes hurricane hardening more important than ever, consumer advocates have pressed to reign in a popular — but controversial — loan program that allows homeowners to pay for new roofs or impact windows through their property tax bills.
Some counties and tax collectors across the state have pushed for clearer disclosures for a program that has generated hundreds of complaints from people who say they were misled on costs or didn’t understand that the loan amounts to a long-term tax lien on their home.
Now, one agency that bankrolls construction projects for the Property Assessed Clean Energy program, known commonly as PACE, is pushing back — arguing that individual counties have no legal right to force it to follow additional rules or even decide where it can operate.
The fight has led to a high-stakes lawsuit that includes nearly half the counties in the state, several of which have blasted the continued operations of a single quasi-governmental agency in Northeast Florida as “an immediate danger to the health, safety or welfare” of residents. Tax collectors from Alachua County to Palm Beach have complained in emails and court records that the Florida PACE Funding Agency’s statewide expansion is “running roughshod” over local government rights. For now, Broward and Miami-Dade are staying out of it, but the outcome has big implications for two counties that lead the state in PACE contracts.
The case in Tallahassee shapes up as a major legal test for the few but hard-won consumer protections already in place across the state, including new ones in Miami-Dade County, and, perhaps, the future of Florida’s PACE program.
And it could also impact nearly 13,000 property owners across Florida who’ve recently signed agreements with Florida PACE Funding Agency for more than $500 million in home improvement projects — with no guarantee that the tax-lien arrangement they agreed to will stick. Potentially, they could be hit with big bills from contractors or lenders instead.
The Florida PACE Funding Agency, meanwhile, has launched its own public relations offensive, taken multiple tax collectors to court and vowed to take the case to Florida’s Supreme Court if the judge doesn’t rule its way.
Mike Moran, executive director of Florida PACE, strongly defends his agency’s actions as well as the industry itself. He argues his quasi-governmental agency has its own authority to levy property taxes. He paints the agency’s statewide expansion as a plus for the state and consumers, an opportunity for people who might not otherwise qualify for conventional loans to make crucial home repairs at a cheaper price (usually 9 to 11% interest) than a credit card.
“I can’t finance because you don’t like your kitchen counter top. It has to be a public purpose, home hardening and energy efficiency,” he said. “If you take this option away, they’re just going to put it on a 29% credit card.”
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Going rogue
Up until last year, the PACE program worked like this: groups like the Florida PACE Agency, which serve as middlemen between homeowners and loan companies like FortiFi and Home Run Financing, needed a county’s permission to work within its boundaries.
Unlike a traditional bank loan, which is based on credit and financial records, PACE agreements are based on home equity. In exchange for the cash to complete a construction project, PACE providers put a lien on the property and collect annual payments through the property tax bill, which is gathered by a county property tax collector.
The bump to the tax bill can be steep, in some cases a 200% to 300% rise, and unlike a loan from a bank, failing to pay a tax bill can lead to foreclosure.
As the program grew in popularity across Florida in the last decade, tax collectors started hearing complaints from residents who didn’t understand why their tax bills had risen so steeply, or believed they had been signed up for the program under false pretenses by contractors.
In response, several counties passed new consumer protections like limiting loans to the lifespan of the product, requiring recorded phone calls and more thorough disclosure forms. Others did nothing, leaving a patchwork of protections across the state.
Then, starting in January, the Florida PACE Funding Agency abruptly announced that it no longer had to follow any of those rules, thanks to a Leon County judge’s ruling.
A ruling changes landscape
It was supposed to be a routine hearing, the same kind PACE agencies across Florida regularly attend to ensure they’re checking the right financial boxes. But instead of just asking the judge if his bond documents were in order, Moran asked the judge to rule on whether Florida PACE needed permission from a local government to operate within its borders.
In his ruling, the judge said no, they didn’t need permission.
Moran said that gives Florida PACE Funding Agency the right to operate in any county in Florida, including those that have explicitly banned the program.
“We do all of those consumer protections. There’s not a single one that someone asked us to do that we aren’t doing,” he told the Miami Herald. In court records, however, Alachua County said Moran “vehemently” fought a new consumer protection it tried to enact in 2022, and Leon County said Moran negotiated with the county to tweak some of its proposed protections the same year.
Tax collectors stop collecting
Tax collectors across the state have fought Moran’s moves. They sent cease and desist letters, passed county commission resolutions and called in county attorneys and legislators. At least 30 tax collectors have joined a lawsuit against Florida PACE over the issue.
“What a judge did in Tallahassee should never have happened in a bond-type hearing,” said Mike Fasano, Pasco County’s tax collector and a longtime vocal critic of PACE. “That’s not what the Legislature had any intent of happening. There was always supposed to be this interlocal agreement.”
As the fight spread to new counties, Florida PACE continued to sign up thousands of homeowners in counties across the state without their permission, including Alachua, Hillsborough and Palm Beach.
In response, some tax collectors said they weren’t going to collect the PACE assessments tacked on to their residents’ tax bills.
“I believe the responsibility tax collectors have is we’re only going to collect what is proper and authorized on the tax rolls. As it stands right now, these assessments are not proper or authorized, so they’re not getting collected,” Rob Stoneburner, Collier County’s tax collector, told the Herald.
That left Florida PACE scrambling to recoup its investments and quell questions from its investors. In an October news release, Moran said bondholders and private investors withdrew funding from Florida.
“The consequences of this withdrawal are far-reaching, impacting tens of millions of dollars that were to be used to pay contractors who have recently completed or are currently working on renovation projects. Furthermore, many ongoing projects face uncertainty, potentially leaving homeowners in a precarious financial situation,” he wrote.
At that, Moran sued.
He took multiple tax collectors to court to force them to collect the assessments he insists are legally valid, based on the Leon County ruling. So far, judges have agreed with his argument in some counties, including Hernando and Sarasota, where he is chairperson of the county commission and is running for tax collector, and disagreed in others, including Alachua, Bradford and Hillsborough.
“We don’t do ‘mother may I’ to another governmental authority to tell them to put it on the tax bill, we are the governmental authority,” Moran said. “There are a billion dollars of bondholders on the street in Florida that need to be paid back, and property tax collectors need to put this on the tax bill. That is not a complicated discussion.”
What the courts say
Experts say this drama will end in two ways. Either a judge rules that Moran is right or wrong, or the Florida Legislature tweaks the rules of PACE to resolve the dispute.
Stoneburner, the tax collector from Collier, said tax collectors across the state need “a clear answer” on whether or not Florida PACE needs permission from a county to operate there.
“Either they’re right or they’re not right. If they’re right, OK, in my mind it’s going to be the Wild West because then all the other PACE providers will do the same type of thing, they’re going to operate however they want,” he said.
But Moran said that even if the Legislature moves to fix the issue in the upcoming session — or get rid of PACE entirely — he still wants the courts to weigh in.
“If that curtain went down and PACE is gone, you still have that billion dollars of bondholders that need to get paid back,” he said.
That decision could come as soon as February, when the same Leon County judge whose ruling set off the crisis has agreed to revisit the discussion, after a legal push from at least 30 tax collectors across the state.
An eviction notice is a formal letter written by a landlord or property manager to the tenant asking them to comply with the terms of the lease or vacate the apartment they are renting. You’ll get an eviction notice if you fail to meet the terms of your rental agreement.
It may sound like a scary term, so we are going to break it down for you in detail.
Common reasons for an eviction
Renters have rights. Landlords cannot lock you out of your apartment or evict you without proper notice first. Legally, landlords must give you a standardized, written eviction notice first and follow state laws and procedures. Basically, you’ll get a formal letter that lists the reasons why you’re being evicted.
These are the most common reasons for eviction:
Failure to pay rent
Repeated late rent payments
Repeated bounced checks for rent payments
Damaged property
Violation of the lease
Unauthorized pets or additional occupants
Illegal activity
Disrupting other tenants or several complaints from other tenants
Holdover or lease expires and the tenant refuses to move out
What does an eviction notice look like?
You’ll probably have some questions if you receive an eviction letter. This is what the notice should include:
Your name and address
The landlord’s name and address
Your contact information
The lease information
Reasons for eviction
Resolutions to the problem, if applicable
When, if applicable, the problem needs resolving by
Date tenant must leave the property
Proof that the landlord served the eviction notice to the tenant
Here is a sample eviction notice that will give you a good idea of what one looks like if it ever shows up on your door.
Sample eviction notice
The layout and details may vary, but in general, eviction notices include the same information. Below is a sample eviction notice for reference:
Apartment Community ABC
John Doe
Apartment Community ABC Apartment #1
Dear John Doe,
On DATE, you received a formal written warning regarding your failure to pay rent.
Your lease, signed on DATE, clearly states that your “failure to pay rent on the 1st of the month” violates the lease.
Because of your failure to uphold the rental agreement and resolve the issue, Apartment Community ABC is now submitting this eviction notice on DATE.
You have seven days to vacate the premises. You can find state requirements about eviction below.
If you have questions regarding this eviction notice, please contact the rental office and ask to speak to me directly,
Sincerely,
Property Manager Name
What happens after an eviction notice is served?
Once an eviction notice makes its way to a tenant, there are a few things that can happen during the eviction process.
Once the eviction notice is with the tenant, the tenant has a specific amount of time (outlined in the eviction notice) to resolve the problem.
Next, the complaint is filed in court and the landlord and tenant will appear in court. The judge will come to a verdict ruling whether the tenant stays or goes.
Keep in mind that the format of eviction notices may vary state-to-state based on legal requirements.
Can I rent an apartment after being evicted?
You may worry about the odds of being able to rent again if you’ve received an eviction notice. Evictions indicate that you failed to comply with your lease — many landlords will see this as a red flag.
It is still possible to rent an apartment after an eviction. However, landlords will see the eviction on your record when they run a background check so it might be more difficult in some cases.
Finding apartments that accept evictions
If you’re looking for an apartment and you have an eviction notice on your record, here are a few tips that may help you find apartments that accept evictions.
Check whether or not the apartment complex requires a background check
Find a private owner who rents properties
Work with an apartment locator or rental realtor who can help navigate the situation
Have a co-signer or guarantor on your new lease
Work to build up your credit score
Provide several references
Tell the truth about what happened with the eviction
Pay rent upfront, if possible
Renting after an eviction
An eviction notice is a blip on your rental history, but it doesn’t mean you’ll never rent again. Understanding what is an eviction notice, how to deal with it and what to do after an eviction can help you navigate your next apartment rental.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Sage Singleton is a freelance writer with a passion for literature and words. She enjoys writing articles that will inspire, educate and influence readers. She loves that words have the power to create change and make a positive impact in the world. Some of her work has been featured on LendingTree, Venture Beat, Architectural Digest, Porch.com and Homes.com. In her free time, she loves traveling, reading and learning French.
Mortgage industry trade group Community Home Lenders of America (CHLA) is urging government agencies to begin to have conversations surrounding the impact of the jury verdict and potential court ruling in the Sitzer/Burnett commission lawsuit on lending practices.
In a letter submitted Thursday to Federal Housing Finance Agency Director Sandra Thompson, Federal Housing Administration Commissioner Julia Gordon, Rural Housing Service Administrator Joaquin Altoro, and Department of Veterans Affairs secretary Denis McDonough, the CHLA expressed concerns over how a shift of the payment of buyer’s agent commissions from home sellers to homebuyers could impact mortgage lending to “minorities, veterans, and other underserved homebuyers.“
The letter states that the CHLA believes this shift could have “profound negative impact on the ability of home buyers to pay for or finance those commissions and on loan appraisal loan to value (LTV) calculations and requirements.”
CHLA executive director Scott Olson said the group decided to reach out to the government agencies after members began reporting that they were seeing contracts that explicitly stated that the buyer would be responsible for paying for their own representation in the wake of the Sitzer/Burnett verdict.
“Regardless of how this finally shakes out, it is clear that people are going to have to start dealing with this now,” Olson said. “We don’t have specific solutions for everything, but we have worked to identify what we consider to be the main concerns and are asking all the major players to look at this and see if we can work together to find solutions.”
Under the practice of cooperative compensation, buyer’s agency fees are baked into the sale price of the home, making the cost for buyer’s representation fully financeable. However, if this no longer becomes the case, the CHLA is concerned that “first-time homebuyers, families with lower incomes, veterans, and minority homebuyers could be adversely affected in their ability to purchase a home because of obstacles and complications related to the need to fund the buyer’s broker commission.”
Olson added: “There are the people that are the most stressed and challenged by the run-up in mortgage rates in terms of affordability, buying a home and getting into the homeownership market, so it is just one more monkey wrench that could be thrown into the equation.”
Additionally, the CHLA stated that is encourages policies that would allow down payment assistance programs to pay the cost of the buyer’s agent fee if there is a problem.
Olson and the CHLA also addressed how a change in the commission structure could hamper VA buyers, who may be using a VA loan because it does not require a down payment. Under current regulations, VA buyers are not allowed to pay for buyer’s representation.
According to Olson, the CHLA wants to get ahead of any potential issues that may arise out of commission structure changes, which is why he is encouraging the government agencies to start engaging in these types of conversations.
“I think it is important that we stay a step ahead of this,” Olson said. “We are just trying to position ourselves so that when issues come about and we get roadblocks, we have hopefully already started the dialogue of how we solve things.”
More home sellers on the East Coast are getting in on the commission lawsuit action.
Plaintiffs in Florida and Pennsylvania filed lawsuits on Monday, accusing real estate industry players of allegedly colluding to artificially inflate real estate agent commissions. Both lawsuits are seeking class-action status.
Similar to the other commission lawsuits, the latest two take aim at the National Association of Realtors’ Participation Rule, which requires the listing broker to make a blanket offer of compensation to the buyer’s broker to list the property on the MLS.
The Florida commission lawsuit was filed by Parker Holding Group, a Panama City-based firm that sold homes in March and August 2021, in Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County.
Defendants in the lawsuit include the Florida Association of Realtors, the nation’s largest state Realtor group with 238,000 members, and 16 large local brokerages, with agent counts ranging from 655 to nearly 4,000. Brokerages named in the suit include The Keyes Company, LPT Realty, Charles Rutenberg Realty, Charles Rutenberg Realty-Orlando, United Realty Group, The K Company Realty, Florida Homes Realty & Mortgage, Dalton Wade, Avanti Way Realty, MVP Realty Associates, Florida Realty of Miami, Lifestyle International Realty, Watson Realty, Premiere Plus Realty, Future Home Realty and Michael Saunders & Company.
Like the other commission lawsuits, the Parker suit alleges that the defendants colluded “to impose, implement, and enforce anticompetitive restraints that cause home sellers in Florida to pay inflated commissions in connection with the sale of their homes.”
Because this is a state lawsuit, the complaint claims the alleged behavior is in violation of the Florida Antitrust Act of 1980 and the Florida Deceptive and Unfair Trade Practices Act, and not the Federal Sherman Antitrust Act.
The complaint names local Realtor associations, MLSs and the brokerages’ employees and agents as co-conspirators, accusing them of using their control over the state’s Realtor association-affiliated MLSs to impose rules from NAR that allegedly promote anticompetitive practices.
“In a raw demonstration of market power, the Florida Realtor MLSs overturn the natural order of a rational price system where home sellers and home buyers each separately bargain and pay for the services provided to each of them,” the complaint alleges.
The proposed class for the suit includes all Florida citizens who have sold a property through one of the state’s Realtor association-affiliated MLSs and paid a buyer broker commission between Dec. 4, 2019 and the present.
The plaintiffs are demanding a jury trial, treble damages, coverage of the cost of the suit and a permanent injunction “to permanently enjoin and restrain Defendants from establishing the same or similar rules, policies, or practices as those challenged in this action in the future.”
In an email, Florida Realtors’ general counsel Juana Watkins wrote that the group denies these allegations.
“Florida Realtors will defend against this action,” Watkins wrote. “Florida Realtors® stands by the value of the professional expertise that its members provide to their clients. Going forward, Florida Realtors® does not comment on pending litigation.”
Juan Baixeras, the broker/owner of family-run Florida Realty of Miami, said he is hopeful that the state Realtor association will help him out and offer guidance.
“These allegations are absurd. It’s just law firms trying to cash in on the previous success of the other lawsuit,” he wrote in an email. “We have never fixed prices. Our commission has always been negotiable. We are a 100% commission office, we get paid a flat fee of $355 no matter what commission comes in. So, price fixing commissions would not help us at all, we would still make $355.”
Another commission lawsuit in Pennsylvania was filed by Homesellers Spring Way Center, John and Nancy Moratis and Nancy Wehrheim in U.S. District Court for the Western District of Pennsylvania. Defendants in the suit include West Penn MLS, a local broker-owned MLS that is not affiliated with NAR, and eight local brokerages, including Berkshire Hathaway HomeServices The Preferred Realty, NRT Philadelphia LLC, Piatt Sotheby’s International Realty, NextHome PPM Realty, NextHome Dynamic, Realty One Group Gold Standard, Realty One Group Platinum and Realty One Group Horizon.
Despite not being affiliated with a Realtor association, West Penn MLS has adopted a rule similar to NAR’s Participation Rule.
The complaint alleges that the rule is anticompetitive because “it compels the seller to compensate the broker representing the purchaser even though that broker should be working for the purchaser, not the seller; it mandates a ‘blanket offer,’ meaning that the same compensation must be offered to every buyer’s broker, regardless of skill, experience, or the services provided; and it has the effect of encouraging ‘steering’ by buyer-brokers, because it incentivizes them to direct their clients to properties with higher commission offers.”
The Center suit complaint cites the Sitzer/Burnett case, stating that the defendants’ alleged practices “are not unique; rather, they are part and parcel of nation-wide collusion within the real estate industry to maintain inflated commissions.”
The lawsuit also names co-conspirators, including “local and state Realtor associations,” as well as “other brokerages within that geographic area.”
The proposed class for the lawsuit includes all home sellers who used a listing agent or broker affiliated with or employed by one of the brokerage defendants in the sale of a home listed on the West Penn MLS, and who paid a commission to the buyer’s broker.
This suit also demands a jury trial, treble damages, coverage of the cost of the suit and a permanent injunction “enjoining Defendants from (1) requiring that sellers pay the buyer broker and (2) continuing to restrict competition among residential real estate brokers in the manner set forth above,” according to court records.
The two new commission lawsuits are just the latest in an ever-growing pile of copycat cases that have been filed since late October when a Missouri jury found the real estate industry liable for colluding to artificially inflate agent commissions in the Sitzer/Burnett trial. A motion for injunctive relief has yet to be filed in that lawsuit and a final ruling from the judge is not expected until spring 2024.
Editor’s note: HousingWire reached out to all of the defendants in the latest lawsuits for comment and will update this story as comments are returned.
“This case has now been pending for more than four and a half years, and we’re ready to move forward and towards trial,” he said on the call.
Ethan Glass of Cooley, an attorney for the National Association of Realtors (NAR), took a different view and urged Wood to not set a date just yet, stating that it is “way premature” as the court has yet to even take motions for summary judgment, “let alone decide them.”
Glass also asked if NAR could let the court know in a week or so if the trade group would like the court to extend its Dec. 19, 2023, deadline for submitting things like motions for summary judgment.
“We are still analyzing what the consequences of the [Sitzer/Burnett] jury verdict are,” Glass said.
A final ruling on the Sitzer/Burnett suit is not expected until April or May 2024, however, the plaintiff’s motion for injunctive relief must be filed before Jan. 8, 2024. The three defendants who were present at the trial, NAR, Keller Williams and HomeServices of America, have all vowed to appeal the verdict.
Glass added that NAR is unsure if there may or may not be reasons to extend the deadline, as the trade group and its counsel are still looking into things.
Braun argued that legal issues still playing out in the Sitzer/Burnett suit was not a reason to delay the trial in the Moehrl case.
Surprisingly, this view was supported by Timothy Ray of Holland & Knight, who is representing Keller Williams. Ray stated that he believes there were “serious errors” in the Sitzer/Burnett trial and that that trial should not be held up as a “standard for how we should go forward in Moehrl.” He added that Keller Williams would like to see the “Moehrl case to stand on its own consistent with the law” in its district and circuit.
Wood agreed with Ray’s view, stating: “I don’t think the fact that the other case has proceeded to trial and there are certain legal issues that will be challenged post-trial … affects what I need to do to keep the case moving here. It is a different case with some different issues, some overlapping issues, in a different circuit. So, I tend to agree with Mr. Ray’s point that this case should stand on its own.”
Looking ahead, Wood said she thought setting a trial date as soon as “it’s reasonable to do so makes sense.”
In the meantime, the parties have until Jan. 22, 2024, to submit a joint state report, in which they are to estimate the number of trial days and testimony hours they anticipate needing. Wood also instructed that the parties should take into account that Anywhere and RE/MAX are unlikely to participate in the trial if their settlements receive final court approval.
Filed in 2019, the Moehrl lawsuit, like the other commission lawsuits, take’s aim at NAR’s Participation Rule, which requires listing brokers to make a blanket offer of compensation to buyers’ brokers in order to list a property on the MLS.
The home seller plaintiffs allege that NAR and the corporate brokerage defendants have conspired to artificially inflate agent commissions, increasing the costs shouldered by home sellers. The suit received class-action status in March 2023.
To the native Wintu people it was Bohem Puyuik, the “Big Rise,” and no wonder. Mt. Shasta towered above everything else, her loins delivering the natural springs and snowmelt that birthed a great river.
The Sacramento River provided such an abundance of food that the Wintu and many neighboring tribes — the Pit River, Yana, Nomlaki and others — had little to fight over. They thrived in pre-colonial times, on waters that ran silver with salmon, forests thick with game and oaks heavy with acorns.
But centuries of disease, virtual enslavement and murder wrought by European and American invaders scrambled the harmony that once reigned along the Upper Sacramento River.
Today, three tribes here are locked in a bloodless war. At issue is a proposal by one Indigenous group to expand and relocate its casino and whether the flashy new gambling hall, hotel and entertainment center would honor — or desecrate — the past.
The casino envisioned by the Redding Rancheria and its 422 members would rise nine stories on 232 acresalong Interstate 5. The rancheria — home to descendants from three historic tribes — began planning the development nearly two decades ago, envisioning a regional magnet for tourists and gamblers.
But the proposal has been buffeted by influential opponents, including the city of Redding, neighborhood groups and the billionaire next door — who happens to be the largest private landowner in America. The naysayers list a cavalcade of complaints against the new Win-River casino complex, saying it would despoil prime farmland, exacerbate traffic, increase police and fire protection costs and threaten native fish in the Sacramento River.
Those complaints have helped stall, but not kill, the project, whose fate rests almost solely in the hands of the Bureau of Indian Affairs in Washington, D.C. And now the BIA’s obscure bureaucrats have been confronted with an explosive new charge from two neighboring tribes: that construction of the casino would desecrate what the tribes say should be hallowed ground — the site of an 1846 rampage by the U.S. Cavalry that historians say probably killed hundreds of Native people.
The Sacramento River massacre has not received the attention of other atrocities of America’s westward expansion, such as the one in 1890 at Wounded Knee, S.D., where U.S. troops killed as many as 300 Lakota people. Estimates of the carnage, recorded over the decades from witness accounts and oral tradition, range from 150 to 1,000 men, women and children slaughtered along the banks of the Sacramento River.
If the higher estimates of the death toll are correct, it would rank as one of the largest single mass killings of Indigenous people in American history.
“In my heart, I find it hard to believe that there are Wintu people that are willing to build a casino on … the blood-soaked dirt of the massacre site,” Gary Rickard, chair of the Wintu Tribe of Northern California, told a state Assembly committee in August. “There are dozens of other places along the I-5 corridor and the Sacramento River.”
Redding Rancheria Chair Jack Potter Jr., himself part Wintu, called the claim that his tribe would build its casino on the massacre grounds “a slander that will not be easily forgotten.” He told state lawmakers that the real massacre site is miles away. Rancheria leaders said their opponents have manufactured the controversy for a less honorable reason: to block what would be a sparkling new competitor.
“Gaming in Indian country can be a tide that raises all of our canoes,” insisted Potter, who appeared at times to fight back tears as he spoke at the Sacramento hearing. “We should not battle against one another, in that spirit.”
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Friendships that go back decades and tribal ties of a century or more have been imperiled by the casino furor. Native people normally aligned against a hostile or indifferent U.S. government — “We’re all the children of genocide,” as one elder put it — have watched sadly as their conflicts turn inward.
It’s a dynamic that has played out before. Robbed of their ancestral lands, tribes now sometimes fight when one tries to claim new territory, often as a base for a lucrative modern endeavor: gambling.
The friction is exacerbated by the peculiar history of the Redding Rancheria — and by opponents’ eleventh-hour invocation of the Sacramento River massacre, 19 years after the rancheria began to assemble parcels for the project.
The Redding Rancheria refers to a nearly 31-acre stretch of land near the south end of Redding that the federal government bought in 1922 for “homeless Indians” who came to the area as seasonal workers for ranches and orchards. The rancheria sits in a relatively obscure location compared with the interstate-adjacent site of the proposed casino, more than three miles by car to the northeast.
In 1939, the Wintu, Pit River, Yana and other Indigenous peoples formed a rancheria government. It was recognized by the United States. But in 1958, an act of Congress “terminated” recognition of multiple California groups, including the Redding Rancheria, in an attempt to force Indians to disperse into the general population. It took a landmark 1983 court settlement to formally restore recognition of 17 rancherias, including the one in Redding.
The result is that there are Redding Rancheria members with Wintu blood, like Potter, 52, who firmly support the casino, while other Wintu descendants who are not descended from the original rancheria families, like Rickard, 78, adamantly oppose it. Rickard grew up with Jack Potter Sr. and has known his son since he was a boy.
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Cordiality prevails, at least outwardly, when Rickard and Potter meet today. But the bad blood between their groups has become fierce, exacerbated by the yawning wealth disparity between the rancheria and the Northern Wintu.
Rancheria members have thrived largely because of the success of their existing Win-River Resort & Casino, which operates 550 slot machines, a dozen table games, an 84-room hotel and an RV park.
The complex is the biggest income producer for the rancheria, which also owns a Hilton Garden Inn and a marijuana dispensary in Shasta County. Sources familiar with the tribe said each enrolled member receives a monthly “per capita” payment of at least $4,000 and perhaps as high as $6,000.
The rancheria’s chief executive, Pitt River descendant Tracy Edwards, 54, declined to discuss the amount of the payments.
That income, along with health clinics and other benefits, makes the Redding Rancheria members the envy of Indigenous groups with comparatively paltry assets. Rickard’s Northern Wintu claims roughly 560 certified members, but like many groups across America, the tribe has been laboring for years and still has not received formal recognition from the U.S. government. That means the tribe can’t put land into trust, a prerequisite to casino development and also a shield against federal, state and local taxes.
“We don’t have the resources in order to obtain the things we need,” said Shawna Garcia, the Northern Wintu’s cultural resources administrator. “We don’t have the revenue to assist our members with things like college, housing and other assistance.”
Historians and ethnographers say the Wintu were the predominant tribe around the site proposed for the casino complex, an expanse of meadow and scrubland that locals dub the Strawberry Fields because of its agricultural history. And Rickard questioned why the “pure-blood Wintu people” he represents have been left to struggle, while the rancheria — representing an amalgamation of tribal groups — stands poised to create an even bigger cash cow with its new casino.
Rancheria leaders like Edwards, a UC Davis-trained lawyer, have emphasized how the tribal group has supported Native and non-Native people, both as one of the largest employers in Shasta County and through its charitable foundation.
In just one year, 2018, the rancheria said it gave more than $1.2 million to community organizations, helping serve the homeless and victims of the Carr fire. During the early phase of the COVID-19 pandemic, the rancheria donated $5,000 each to 60 businesses struggling to stay afloat.
At a cost of $150 million, the rancheria’s new casino would feature 1,200 slot machines — more than double the number at its current casino — and with 250 rooms, the new casino hotel would be more than triple the size of the existing hotel. The tribal group has pledged to close its current Win-River casino when the new one opens.
The rancheria’s outsized community presence has created substantial goodwill around Redding, but a portion of residents have stepped forward — via petitions and ballot measures — to express disdain for large developments they feel could harm the rural character of their community.
Among the more powerful opponents is Archie Aldis “Red” Emmerson, president of logging giant Sierra Pacific Industries, whose sprawling estate looms along the Sacramento River, just south of the casino site.
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In 2020, an Emmerson-allied company purchased property from the city of Redding that included a portion of a road that would be the north entry to the casino site and created an easement that would have barred access to the rancheria land for all but agricultural purposes. The easement effectively would have thwarted the casino by blocking vehicle access to the development.
But in 2022, a Shasta County Superior Court judge voided the deal, saying that in selling the land (for just $3,000 to the billionaire) the city had violated its “own processes, procedures and the relevant law.” The ruling nullified the easement, preserving the rancheria’s unrestricted access to the property.
The Redding City Council and neighboring homeowners have maintained their opposition to the project for years, while a new conservative majority on the Shasta County Board of Supervisors recently reversed the county’s earlier objections. The supervisors supported the casino, despite admonitions from the sheriff, fire chief and county counsel that the agreement with the rancheria did not provide sufficient compensation to cover the increased costs of serving the big development.
The rancheria agreed to make one-time payments totaling $3.6 million to support Shasta County, the Sheriff’s Department and fire and emergency services. That initial infusion would be supplemented by recurring payments: $1,000 for each police service call and $10,000 for each fire/emergency service call.
No issue has unsettled intra-tribal relations, though, like the debate flowing out of the terrible events along the Sacramento River 177 years ago.
Oral histories of the Wintu and neighboring tribes recall how Native families and elders had gathered along the river known as the Big Water each year in early April for the spring salmon run. Traditionally, the season signaled rebirth.
But Capt. John C. Fremont had other ideas.
Fremont diverted his men from their ordered assignment: completing land surveys in the Rocky Mountains. The Americans instead went adventuring to California, where, in the spring of 1846, they responded to sketchy claims from settlers that they were endangered.
About 70 buckskin-clad white men set upon the Native people, the locals far outgunned by the invaders, each toting a Hawken rifle, two pistols and a butcher knife, according to UCLA historian Benjamin Madley‘s detailed account of the massacre.
The horsemen completed their grisly work with such evident pride that legendary frontiersman Kit Carson later bragged that the coordinated assault had been “a perfect butchery.”
The massacre marked the beginning of “a transitional period between the Hispanic tradition of assimilating and exploiting Indigenous peoples and the Anglo-American pattern of killing or removing them,” according to Madley’s “An American Genocide: The United States and the California Indian Catastrophe.”
Fremont (later a U.S. senator from California and a Republican presidential candidate) would say that his party attacked the natives because of reports of an “imminent attack” upon settlers. But the “battle” was one-sided, with the federal troops suffering no known casualties. Afterward, according to Madley’s account, Fremont’s men feasted on the Native people’s larder of fresh salmon.
In the nearly two centuries since, the tragedy would be more forgotten than remembered. There is no historical marker around Redding noting the event.
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The Wintu people believed to have been the principal victims have preserved memories of the mass killing in their oral history. But no ceremony marks the atrocity. And at the Wintu cultural resource center in Shasta Lake City, a wall-size timeline of the group’s history makes no mention of the 1846 bloodshed.
There’s also the now-pressing question — pushed to the fore by the casino feud — about precisely where the massacre occurred. The Northern Wintu and another outspoken opponent, the Paskenta Band of Nomlaki Indians, insist that the Strawberry Fields property was a key location in the atrocity.
The Paskenta commissioned a study by a retired anthropologist from Cal State Sacramento that drew on research from the late 1800s by a linguist from the Smithsonian Institution who, in turn, got much of his information from a Wintu elder who survived the massacre. The report, by Dorothea Theodoratus and a colleague, said that the “center” of the massacre was “opposite the mouth of Clear Creek” in the Sacramento River, a point roughly two miles south of the proposed casino location.
But other accounts from participants and witnesses said Fremont’s soldiers chased down victims after the initial assault, leaving the exact range of the bloodshed unknown. The Theodoratus report says that six villages, including two on the proposed casino property, were so thoroughly intermingled that all “would have had some direct involvement with that massacre.”
Andrew Alejandre, chair of the Paskenta Band, told the Assembly Governmental Organization Committee in August that his tribe is seeking to have the state and federal governments designate the Strawberry Fields a sacred site, off-limits to development. Alejandre, 35, said his tribe vehemently opposes building a casino “on top of men, women, children and elders. The spirit of these ancestors … Let them rest!”
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In rebuttal, Potter and rancheria CEO Edwards note that during the many years that they and others have pursued developments in the region, the rival tribes never mentioned the massacre. Divisive fights over a proposed auto mall and a sports complex (both scrapped) came and went without any discussion about desecration of a mass grave site.
“I would never disrespect the remains of my ancestors,” Potter said.
Fifty miles south of Redding in rural Corning, the 288-member Paskenta Band opened the Rolling Hills Casino and Resort two decades ago. The luxe gaming hall is just one part of an economic surge by the tribe, which has also opened an equestrian complex, an 18–hole golf course, a 1,400-acre gun and hunting center and a 3,000-person amphitheater, where Snoop Dogg performed in May.
Potter charged that the fight over the historic massacre is really a ploy by the flourishing Paskenta to squelch the Redding Rancheria’s hopes for a shimmering destination casino “because of the mistaken belief that it … will cut into the profits of their gaming facilities.”
Paskenta’s Alejandre, a designer who once ran a clothing company, denied that is the case.
While representatives for the Paskenta and Northern Wintu tribes bashed the casino proposal at the August hearing, representatives of at least eightother California tribes argued in support of the Redding Rancheria. One said the Redding group had proved itself a good steward of cultural resources.
Another speaker at the hearing was Miranda Edwards, the 28-year-old daughter of the rancheria CEO. The Stanford-educated Edwards and her mother spoke about the importance of moving the tribal group forward for the “Seventh Generation,” future descendants whose livelihoods must be planned for today.
“We work hard every day to provide for this rural community and make it the best that we can for everyone that lives there,” Miranda Edwards told legislators. “It’s disheartening to hear from those that choose not to see that. But it will not stop our work.”
Potter, the rancheria’s chairman, had a sardonic take on the dispute.
“We always talk about crabs in a pot,” Potter said. “We are like all these crabs, stuck in a pot. When one tries to get out of the pot, all the others reach up and pull him back in.”
Will arguments about the Sacramento River massacre sway the final outcome of the Redding Rancheria’s casino quest? A BIA spokesman said only that “these issues are under review.” Nearly two centuries after representatives of the U.S. military decimated a civilization here, the federal government still retains ultimate authority over the fate of Native people.
Watch L.A. Times Today at 7 p.m. on Spectrum News 1 on Channel 1 or live stream on the Spectrum News App. Palos Verdes Peninsula and Orange County viewers can watch on Cox Systems on channel 99.
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Under the law, the bureau receives funding from the Federal Reserve. This structure has been described as different from other federal agencies, which typically receive funding through congressional appropriations processes, a CBS News report said. In fiscal year 2022, the CFPB received around $641.5 million in funding from the Fed, below the inflation-adjusted cap of … [Read more…]
LAS VEGAS – With mortgage rates headed to 8%, the current housing slump is unlikely to reverse course until 2025, due to the Federal Reserve’s continued ratcheting up of interest rates, mortgage experts said at a conference in Las Vegas.
Analysts continue to warn about overcapacity in the industry with too many lenders and employees to support current origination volumes.
Federal Reserve Chair Jerome Powell signaled last week that interest rates need to stay higher for longer to tame inflation and that it could raise interest rates once more this year. The Fed’s policies have hit potential homebuyers the hardest as mortgage rates approach their highest levels in 23 years, analysts said.
“If the Fed keeps rates where they are today, then I think you’re going to easily see 8% mortgages because the survivors in the mortgage market — once we get rid of another 50% of capacity — are going to want to make money and that’s how they’re going to do it,” said Christopher Whalen, chairman of Whalen Global Advisors, on Tuesday at the National Mortgage News Digital Mortgage conference in Las Vegas.
Whalen was joined by Mark Calabria, a senior advisor at the Cato Institute and the former director of the Federal Housing Finance Agency, in a debate about current public policy and its effect on the mortgage market.
Calabria said the main obstacle to buying a home is finding a house that is affordable. He questioned the Biden administration’s public policy approach, which is focused primarily on providing access to credit to low and moderate-income communities at a time when mortgage rates are above 7% and home prices are still rising due to a lack of inventory.
“There’s just too much tension in Washington where the sense is that we’re going to make the mortgage market and mortgage policy the answer to all these other unrelated things which are real — there are very real social injustices we should fix — but the mortgage market is not the solution for all of them,” Calabria said. “I worry that mortgage policy is bearing the weight of trying to fix a number of things that really have very little to do with the mortgage markets.”
Calabria, the author of “Shelter from the Storm: How a COVID mortgage meltdown was averted,” described how he resisted repeated calls for a bailout of mortgage servicers early in the pandemic. The Federal Reserve had stepped in with a broad array of actions including lowering interest rates, sparking a massive refinance boom in 2020 and 2021. Calabria then applied an adverse market fee to refinances but exempted lower-income borrowers.
Julian Hebron, founder of the Basis Point, a consulting firm, and veteran mortgage executive, questioned whether the FHFA should be setting pricing in the mortgage market and asked whether it’s “appropriate for GSEs to raise fees to build capital to prepare for downturns.”
Calabria said the government-sponsored enterprises should be charging so-called g-fees for guaranteeing the timely payment of principal and interest on mortgage-backed securities because doing so covers projected credit losses from borrower defaults over the life of a loan.
“Ultimately, I don’t think the regulator should be driving prices,” Calabria said.
He also said Fannie Mae and Freddie Mac will remain in conservatorship for the foreseeable future but also envisions a way out of government control — by having the GSEs raise fees.
“If you’re a CEO of one of these companies, it sucks being micromanaged, and I know that as somebody who micromanaged the CEOs,” he said. “If I was the CEO of one of these companies and I had the freedom to do it, I would jack up G-fees so I can build capital and get out two or three years earlier than I would otherwise. Because again, it sucks being in conservatorship for these companies, at least at the top.”
Calabria took office in 2019 and sought to end government control over Fannie Mae and Freddie Mac, which guarantee 70% of the roughly $12 trillion U.S. mortgage market. Though Calabria was confirmed by the Senate to a five-year term, he was fired in 2021 by President Biden following a Supreme Court ruling. Biden named Sandra Thompson as Calabria’s successor.
Whalen laid the blame for the current high interest rate environment squarely on the Fed and its actions in dropping rates in response to the pandemic. Roughly 90% of homeowners currently are locked in to mortgage rates below 6% and many are paying less than 4% on loans that were refinanced when the Fed held interest rates near zero. As a result, homeowners are not selling their properties, resulting in record-low inventory and a general gumming up of the mortgage market in a high-rate environment.
“The trouble is that the Fed’s actions through COVID distortéd the market so much that lenders are losing 200 to 250 basis points on every loan they make,” said Whalen. “Even though the agencies and the FHA subsidize the cost of mortgages, that’s really what they do, it’s not about getting a mortgage, it’s about how much does it cost every month, which goes across every product in America.”
Many forecasts that are well-founded in data have been upended by major events, such as COVID or a bank failure. Whalen said that the only way mortgage rates could get down to 6% or 6.5% in the near-term is if there is another bank failure.
“If we see another surprise in the banking market, the Fed is going to be forced to back off,” said Whalen, adding that he is concerned that interest rates are making asset prices go down. “If we see another failure, they are going to probably have to turn to the Treasury for support or tax the industry to raise cash because there won’t be three or four buyers out in the room.”