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Covid Pushes Real Estate Into the Future – The New York Times

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The coronavirus could be the crisis that finally propels the tech-averse real estate industry into the 21st century.

Location matters less, now that the office is the kitchen. Size matters more, now that everyone is at home. And the best way to justify exorbitant prices is no longer the building’s amenity package — it’s peace of mind walking from the lobby to the living room.

These are the touch points for a host of new or newly valuable technologies emerging in the post-Covid housing market, from rent-regulated apartments to luxury condos. They range from robotic furniture that reimagines itself inside our shrinking walls, to contactless apps designed to bring neighbors together. They are futuristic takes on prosaic features, like ultraviolet wands in air ducts, and “Ghostbusters”-inspired blasters to hose down Amazon boxes. Some may be passing fads.

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Still, the ones that stick could have long-term implications for a stubbornly analog industry, even as some critics have raised concerns about data collection and privacy. And it remains unclear whether these improvements will reach the workaday housing market, or remain a luxury niche.

Here are some of the products and ideas that could stay with us long after the pandemic.

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A shelf system that splits down the middle and reveals an office nook when it is open.CreditCredit…Stefano Ukmar for The New York Times

Transforming furniture is hardly new — consider the folding Murphy bed, patented more than a century ago. But housebound workers, cramped in overpriced studio apartments, might welcome an upgrade that not only saves floor space, but doubles as a tidy Zoom background.

Ori, a robotic furniture company short for “origami” that was founded in 2015, recently launched the pocket office: An almost 7-foot-tall sliding desk that, with the tap of an app, expands from a 30-inch-deep cabinet into a full-size desk with storageand library shelves. When sealed, it’s a sleek TV console with shelving and a Scandinavian aesthetic; when it opens, with the aid of a low-profile track system, it splits down the middle to create an office nook with a retractable desk on one wall and a bookcase and standing-desk setup on the other.

“People are expecting more from their space,” said Hasier Larrea, the company’s founder and chief executive, on a video call from his one-bedroom apartment in Williamsburg. “But square footage is the most expensive thing out there.”

A transforming “studio suite” at Ori’s design studio at the Brooklyn Navy Yard. Their Swiss Army-knife approach to furniture includes a sliding bed, desk space and storage.
Credit…Stefano Ukmar for The New York Times

That has always been true in big cities, but work-from-home policies and the uncertain prospect of a safe daily commute, even years after the virus recedes, has been a boon for the company, Mr. Larrea said.

“This is not only in New York, San Francisco, Boston — we’re seeing this from Boise, to Minneapolis, to Houston,” he said, noting that their bookings have “quadrupled” from last year, without specifying sales, and that clients have purchased the company’s furniture in over 15 cities, mostly in rental buildings.

Credit…Bumblebee Spaces

Bumblebee Spaces, a San Francisco-based company that creates modular beds and furniture that can be suspended from the ceiling with heavy duty straps to maximize floor space, has also seen growing interest, said Sankarshan Murthy, the chief executive and co-founder. The products also have software that can keep track of the items being stored.

“What changed is that people spend more time at home,” Mr. Murthy said, and they “realize that traditional architecture is broken.”

For the most part, the companies do not sell directly to consumers, but to property managers looking to maximize the use, and appeal, of studios, one-bedrooms, and sometimes bigger units. In a multi-unit deal with a property owner, an Ori assemblage costs between $5,000 to $10,000 per unit. Bumblebee Spaces sells its floating bed and a few storage units together for about $10,000 to $40,000, depending on the installation and product mix.

That could change as the companies ramp up efforts to sell to residents.

It can be a hefty commitment: Ori’s king-size “cloud bed,” a mechanical bed frame that can be raised into the air like a canopy to reveal a built-in sofa or desk, takes up 78 square feet, weighs about 1,140 pounds, and needs roughly eight-and-a-half-foot ceiling clearance. The retail price hasn’t been set, but for condo buyers, it could range from $10,000 to $20,000 — more than some midsize cars.

But in markets like Manhattan, where apartments cost an average $1,532 a square foot last quarter, and studios sold for a median price of $495,000, the company is betting the math will pay off.

Credit…Stefano Ukmar for The New York Times
Credit…Stefano Ukmar for The New York Times

The most important changes in apartment buildings are likely to be the least appreciated: systems to sanitize surfaces, diffuse viruses and assuage resident fears.

There is an industrywide push to refine and better circulate the air in common areas, elevators and lobbies to reduce the spread of the virus, said Douglas Mass, the president of Cosentini Associates, a building systems engineering firm.

The aim is to raise the ventilation standard to MERV-13, an air-filter rating considered efficient, but not perfect, at capturing airborne viruses. By comparison, your typical window air-conditioner has a MERV-8 rating or lower, and hospitals use so-called HEPA filters above MERV-16. In all cases, most experts agree that there is no substitute for social distancing and face coverings.

Still, the majority of big-city housing stock is too old to support the higher filtration standard, because the thicker filters require more air flow, and only buildings completed in the last 20 years or so can easily make the upgrade, Mr. Mass said. Instead, many buildings are making incremental changes elsewhere, especially in the tight confines of elevators.

Credit…Stefano Ukmar for The New York Times

Thyssenkrupp Elevator, one of the largest elevator manufacturers, has begun installing air systems that pull in purified air straight from the elevator shaft. In another, the air is treated with ultraviolet light (passengers are not exposed) and hydrogen peroxide that neutralize bacteria, mold and viruses. One model introduces ionized particles into the cab to disinfect the air. The products range from $3,500 to $4,000 per elevator.

They have devised a smartphone app that lets users call an elevator without pressing a call button, and also sell a low-tech alternative: “toe to go,” a foot pedal in lieu of buttons at the base of the elevator.

“These were not on the radar whatsoever,” said Jon Clarine, the company’s head of digital services, noting that Covid accelerated the release of several products. But the speed at which some of these technologies were deployed demands more scrutiny, said William P. Bahnfleth, a professor of architectural engineering at Pennsylvania State University, and chair of the epidemic task force at the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

“It sounds more like marketing to me than science,” he said of some claims about ionization and other products. “The question is, ‘How much risk is there, and how much do these mitigate it?’”

They are nevertheless in demand. Adam Berenson, the vice president of Dermer Management, a property management company, just installed a similar ultraviolet-light system for $5,000 in the elevator of a prewar co-op in SoHo. Many of the loft apartments open directly to the elevator, and residents were concerned with lobby air seeping into their space.

“I don’t think Covid is going away anytime soon,” he said. “And I also don’t believe that this is going to be the last one.”

Credit…Stefano Ukmar for The New York Times

And don’t be surprised to see building staff donning what look like the proton packs from “Ghostbusters.” More commonly seen in hospital settings, building managers are beginning to use electrostatic sprayers, a battery-operated pack and fogger that positively charges the particles of a liquid disinfectant to coat surfaces more evenly.

Credit…Stefano Ukmar for The New York Times

Alex Elkin, the owner of Eastbound Construction based in TriBeCa, has begun using the foggers in high-traffic areas like package rooms, gyms and bike storage. It’s an incremental part of the new normal, he said, but he has reservations. Without regular maintenance or application, many of these additions are ineffective, he said, and even the best regimens should not instill absolute confidence.

Without proper precautions, he said, “the reality is none of these things is going to protect you if you’re sitting two feet away from someone.”

Credit…Stefano Ukmar for The New York Times

Developers have used deluxe amenities to help justify shrinking apartments and record prices in recent years, and now millions of square feet of residential spas, lounges and playrooms are collecting dust, because of state restrictions or resident trepidation.

“Post-pandemic, everything has changed,” said Rebeca Park, the lifestyle director with Extell, a prolific condo developer in New York.

At One Manhattan Square, an 815-unit skyscraper on the Lower East Side that lured buyers with over 100,000 square feet of amenities, Extell has begun using a reservations app to regulate timed visits to spaces like the private bowling alley, basketball and squash courts. (The hammam, whirlpool and several other perks remain closed, because of state restrictions.)

Several property managers said they have adopted similar apps to manage their communal spaces, but ongoing limitations on capacity could mean a shift in the types of perks that developers and residents prefer in a post-Covid world.

Credit…Stefano Ukmar for The New York Times

One likely beneficiary is touchless technology that uses key fobs or smartphones to unlock doors. In the third quarter, sales at Latch, the touchless door operating company, were 50 percent higher than the same time last year, said Luke Schoenfelder, the founder and chief executive.

“We’ve surpassed our expectations,” he said, noting that the company booked $100 million in sales last year, and is on track to exceed that. A new partnership with Google’s Nest thermostat will also allow residents or landlords to remotely change the temperature or unlock doors with the same app.

At the American Copper Buildings, a luxury rental project on the East Side of Manhattan completed in 2017, several tech-forward amenities, like keyless apartment entry and destination dispatch — in which the elevator is summoned from a panel outside of the car — could become more commonplace, said Marc Kotler, a senior vice president at FirstService Residential, which manages the building.

The virus has also reinforced the idea that some services should not be considered amenities, but utilities that are essential. Rachel Fee, the executive director of the New York Housing Conference, a housing policy and advocacy nonprofit, will ask the city to underwrite the cost of Wi-Fi in new affordable housing projects and public housing renovations.

“Think back to the spring, to everyone who needed access to unemployment benefits, and to remote learning,” she said.

Credit…Stefano Ukmar for The New York Times

Many of these new features will bring big data to bear on a typically pen-and-paper industry.

RXR Realty, a large development and management company, has created the RXO app, a concierge service and community forum for its residents that can be used to pay rent, request maintenance, book amenities, and chat with staff, among other things.

It was used to great effect at Harbor Landing, a luxury rental in Glen Cove, Long Island, where neighbors received an alert to sing happy birthday to a young boy having a socially distanced backyard gathering. It can also monitor the number of people registered to enter the gym, for instance, and restrict access to those who haven’t made reservations.

There are more practical applications for the industry. Scott Rechler, the chief executive of the firm, said that, based on dozens of criteria — how often you park your car, or check your mail, or receive guests — it can help predict, with 80 percent accuracy so far, whether you will renew your lease. The program is still in development, but is being tested in three rental buildings, with plans for a broader rollout next year.

Credit…Stefano Ukmar for The New York Times

“We’d been sort of flying blind as an industry for so long,” Mr. Rechler said, but this kind of data collection, which he said is anonymized, could cut costs and help anticipate residents’ needs.

Another program, called “computer vision,” that the company plans to launch this month, will use new technology to determine whether people observed on surveillance are wearing masks and social distancing in common areas, to help alert the staff about noncompliance. So far, it’s being tested in the company’s commercial properties.

Some worry that similar tech can overstep privacy boundaries, especially as it moves into lower-income developments. Last year, three congresswomen, including Yvette Clarke representing parts of central and south Brooklyn, proposed legislation that would ban the use of facial and biometric identification technology in public housing.

“I am in full support of innovative technologies, but we must work to ensure the proper research and testing goes behind it,” Ms. Clarke said in a statement. “We need to be very mindful of under-researched technology that can be harmful for vulnerable communities.”

For weekly email updates on residential real estate news, sign up here. Follow us on Twitter: @nytrealestate.

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Former HGTV star slapped with $10 million fine and jail time for real estate fraud – Fortune

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Back when mortgage rates and home prices were more reasonable and manageable, homeowners invested in fixer-upper properties and made them their own. Now these types of projects aren’t as popular. But in the early-to-mid-2010s, HGTV shows including Fixer Upper, Love It or List It, and Flip It to Win It were all the rage as viewers binge-watched dilapidated homes transform into dream properties.

But as it turns out, one former HGTV star’s house-flipping show was masking major real estate fraud. On Tuesday, Charles “Todd” Hill, was sentenced to four years in jail and ordered to pay back nearly $10 million to his victims following his conviction. Los Gatos, Calif.–based Hill, 58, was the star of HGTV show Flip It to Win It, which aired in 2013 and featured Hill and his team purchasing dilapidated homes and fixing them up. Hill then sold them for a profit.

“Some see the huge amount of money in Silicon Valley real estate as a business opportunity,” Santa Clara County District Attorney Jeff Rosen said in a statement. “Others, unfortunately, see it as a criminal opportunity—and we will hold those people strictly accountable.”

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What did Hill do?

According to the indictment shared with Fortune, the accusations against Hill happened between 2012 and 2014, around the time his show (which lasted just one season) began. The indictment shows 10 counts of grand theft of personal property exceeding $950,000; three counts of embezzlement; and one count of diversion of construction funds. Hill could not be reached by Fortune to comment on the indictment, conviction, or sentencing.

Hill was convicted last year of the multiple fraud schemes, including scams that happened before his show aired. This included a Ponzi scheme with evidence showing that Hill had spent laundered money on a rented apartment in San Francisco, hotels, vacations, and luxury cars, according to a press release from the Santa Clara County District Attorney’s Office. HGTV did not respond to requests for comment from Fortune ahead of publication.

“To hide the theft, he created false balance sheets and got loans using fraudulent information,” according to the district attorney’s office. In another case, Hill diverted construction money for personal use. But one of the strangest accounts came from an investor who had poured $250,000 into a property he wanted Hill to remodel. 

Instead, during a tour of the home, the investor “found it to be a burnt-down shell with no work done on it.”

After the district attorney’s investigation, Hill was indicted in November 2019 and in September 2023 admitted his guilt and was convicted by plea of grand theft against all of his victims. He’ll have to pay restitution of more than $9.4 million and serve 10 years on probation.

Victims who spoke at Tuesday’s hearing said they’re still reeling from the financial and professional damages from the fraud, according to the district attorney’s office.

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Botched home sale costs Winnipeg man his right to sell real estate in Manitoba – CBC.ca

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A Winnipeg man’s registration as a real estate salesman has been cancelled after a family vacated their home on a tight deadline for a sale that never went through, then changed brokerages and, months later, got $60,000 less for their house than what they expected when they moved out.

A Manitoba Securities Commission panel found Reginald Wayne Kehler engaged in professional misconduct and conduct unbecoming a registrant when he signed a document on behalf of sellers without their knowledge, reduced the listing price of a home without their approval, and didn’t tell them for nearly a month that a potential buyer hadn’t paid a promised $100,000 deposit.

The sellers, identified as D.R. and P.R. in the panel decision released Wednesday, were awarded $10,394 from the real estate reimbursement fund. Kehler was ordered to pay $12,075 to cover costs of the investigation and hearing.

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The sellers were a military family who had to move in 2020 after the husband was posted to Ottawa.

They chose Kehler as their listing agent, because he had helped them find the home when they moved to Winnipeg in 2018, and they had a good relationship with him, the panel’s decision says.

They  listed their house in May and on June 15, 2020, accepted an offer of $570,000 with possession on July 15. A deposit of $100,000 was to be paid within 72 hours of acceptance of the offer.

Kehler was the salesperson for both the buyer and the sellers — but the sellers say he never told them that.

A form that indicated the sellers knew he was also representing the buyer, dated June 15, 2020, was filed.

While it appeared to be signed with the sellers’ names, they said they didn’t see it until March 2021. One of the two wasn’t even in Winnipeg on June 15.

“Kehler, in his interview with commission staff, acknowledges that the sellers never signed this document — we note that the purported signatures on the form look nothing like the actual signatures of the sellers on other documents,” the decision says.

Kehler told commission staff he’d been authorized to sign on the sellers’ behalf, which they denied. The panel found them more believable.

Once the deal was made, the sellers, believing they had just a month before the buyer would take possession of their home, quickly packed up and prepared to move with their two young children.

Buyer never made deposit

Meanwhile, the buyer hadn’t made the $100,000 deposit before the deadline — but Kehler didn’t tell the sellers.

Kehler told commission staff that was because he thought the deposit was still coming, and he didn’t want to cause more stress for the sellers.

On July 10, just five days before the buyer was to take possession and the day before the family was leaving Winnipeg, the sellers spoke to Kehler — but he still didn’t tell them the deposit hadn’t been paid.

Kehler “said everything was fine,” according to the decision.

It wasn’t until the evening of July 13, when the family arrived in Toronto on their way to Ottawa and just 36 hours before the scheduled closing, that Kehler told them he’d never received the deposit.

Eventually, they received $4,000 of the deposit, but the sale of the house never closed. The sellers scrambled to extend the insurance on their old home and make sure they continued to pay the utility bills, the decision says.

Home relisted

Kehler then recommended they relist the home, and it went back on the market at $574,900.

On Aug. 10, 2020, Kehler recommended the price be reduced to $569,900. Instead, the seller said he should reduce the price to $567,900.

But when the seller looked at the online listing on Aug. 22, it was listed at $564,900.

The sellers also asked Kehler about maintaining the property, since they were no longer in Winnipeg. He agreed he would, but friends ended up going and mowing the lawn, the decision says.

The sellers asked Kehler and his brokerage about what could be done to “make things right,” the decision says, but they never received any responses.

On Sept. 5, they hired a new brokerage to sell the home. Under the new real estate salesman, they accepted an offer on Dec. 13, and closed the deal Jan. 2, 2021, receiving $507,500 for the home.

Kehler’s actions were “contrary to the best interests of the public” and undermined “public confidence in the real estate industry,” the decision says.

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Dr. Phil left speechless after real estate agent claims that squatting is justified by colonization – New York Post

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Dr. Phil spoke with property owners about how squatters are using legal loopholes to occupy properties, but one real estate agent argued it can be justified because of a history of “colonization.”

Wednesday’s episode of “Dr. Phil Primetime” featured one guest named Kristine, a real estate agent who “doesn’t think adverse possession is immoral,” but believes that “people with no housing dying from the elements is immoral.” According to the Legal Information Institute, adverse possession is where a “person in possession of land owned by someone else may acquire valid title to it, so long as certain requirements are met, and the adverse possessor is in possession for a sufficient period of time.” The requirements and period of time vary by state and city.

In her introduction on the show, Kristine argued that there are “multi-million dollar projects, and they’re just abandoned.” She added that she believes the land of those abandoned projects can be reclaimed.

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She also noted she is working with a client who is “trying to occupy a property” that’s around 300 or 500 acres.

“It’s something that’s so large that you wouldn’t even notice what 2 acres is compared to how many acres are on there,” she said. “Adverse possession is a law that’s left over from both Spanish and English colonization, it is how they took the land from the native people, and it’s a process we can use to take that land back.”


Dr. Phil
Dr. Phil’s guest explained that adverse possession is a law that’s left over from colonization. Youtube/Merit Street Media

“You said that if I’ve got 100 acres or 1,000 acres and somebody goes and gets in a corner of it and adversely possesses 5 acres of it, I’m not gonna miss it, I’ve got 1,000 acres anyway?” Dr. Phil asked Kristine.

“Well, yeah,” she responded. “Can you tell me, if you’re looking at 1,000 acres, could you tell me what 5 acres was?”

Dr. Phil’s jaw dropped, and he said, “Hell yes.”


Real estate agent Kristine
The real estate agent asked Dr. Phil he could pick 5 acres out of 1000. Youtube/Merit Street Media

A landlord named Tony argued with Kristine about how she believes the manner in which people inherit property should be taken into account when it comes to adverse possession.

“We’re not in 1776, we’re in 2024,” Tony said, sparking a wave of applause from the audience.

“Do you think that a corporation that makes over a billion dollars a year is injured by someone taking 5 acres of land?,” Kristine argued.

Another guest quickly interjected with “somebody is.”

Another guest named Patti confronted Kristine by arguing she does not use her car 24-hours-a-day.

“Playing out your scenario, then theoretically anyone on the street should be able to boost your car and drive it, because that car is just sitting around unused,” Patti said, sparking applause from the audience.

“I don’t have a billion-dollar net worth,” Kristine argued, which made Barry ask if having a billion dollars is where Kristine draws the line.

Dr. Phil concluded the episode by commending Kristine for her willingness to defend her beliefs, but said he “100%” disagreed with her.

“It is a lawful thing to do if you do it in the right way, I 100% disagree with your philosophy, but your facts are correct,” he said. “She’s not suggesting people go squat in someone’s home when they go on vacation, she’s talking about something completely different, at another level, and if you’re not a billionaire, she isn’t targeting you.”

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