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Cities across the country are enacting “upzoning” measures as a way to try to meet housing demand and curtail soaring housing costs that often make it nearly impossible for teachers, firefighters and other middle-class workers to find homes in the cities where they work, the Wall Street Journal reported. Metropolitan areas including Dallas, Boston, Northern Virginia, Minneapolis and Portland, Ore., are considering or have already changed zoning regulations to allow more density. Housing experts caution that the impact of zoning changes on affordability remains to be determined, and the challenge is balancing the need for increased supply while ensuring that it doesn’t actually result in escalating housing costs that displace low-income residents. Upzoning has been controversial in many places where it has been tried, often getting pushback from residents and advocacy groups. In Northern Virginia’s Arlington County, the elected county board earlier this year voted to allow up to six housing units per lot in areas previously reserved for detached, single-family homes. The goal is for more duplexes, triplexes and townhomes to boost so-called missing middle housing stock. The median sale price of a home in Arlington County was $712,500 last month, up 21.5% from November 2022, according to the Northern Virginia Association of Realtors.

Plans to restore a historic building in Charlotte’s Lockwood neighborhood appear to be dead in the water after its owner filed for bankruptcy protection earlier this month, the Charlotte Business Journal reported. Tara Ellerbe, under limited liability company The Optimus Building, on Dec. 7 filed a voluntary chapter 11 bankruptcy petition for 1024 N. Tryon St., according to records from the U.S. Bankruptcy Court for the Western District of North Carolina. Ellerbe had purchased The Optimus Building under the LLC in July 2019 for $875,000, according to Mecklenburg County real estate records. She filed a petition with the city of Charlotte that year to rezone the 0.33-acre parcel from industrial to mixed-use development.

China Aoyuan Group Ltd. filed for chapter 15 protection in New York on Wednesday, a move by the defaulted property developer to seek U.S. court recognition for its offshore debt restructuring and ward off litigation, Bloomberg News reported. The Guangzhou-based developer, which had about $6 billion of total offshore interest-bearing liabilities as of the end of 2022, is undergoing restructuring in Hong Kong, Cayman Islands and the British Virgin Islands after deciding last year to forgo paying debt. Its board has been counseled by its advisers to “seek recognition of the Hong Kong proceedings and related relief from the US Bankruptcy Court for the Southern District of New York,” according to a company filing with the court. Without U.S. court recognition, “there is litigation risk that dissenting holders of the existing public notes may file actions to enforce their claims in the U.S. courts even after the Hong Kong schemes are sanctioned by the Hong Kong court,” it said. Aoyuan joins a small but growing list of Chinese developers — as well as other non-U.S. debtors — to tap chapter 15 protection to more efficiently deal with offshore creditors or handle cross-border assets. China Evergrande Group, whose 2021 default accelerated the country’s property debt crisis, called the move a “normal procedure” since its dollar bonds are governed by New York law.

Insolvent European property company Signa is holding talks to potentially sell its stake in New York's Chrysler Building and is shedding its private jet, its administrator said on Tuesday, a significant development in the salvaging of founder Rene Benko's real estate empire, Reuters reported. The efforts, announced to Signa's creditors in Vienna, mark a first update by the court-appointed insolvency administrator on plans for Signa, the biggest casualty so far of Europe's property crisis. Insolvent European property company Signa is holding talks to potentially sell its stake in New York's Chrysler Building and is shedding its private jet, its administrator said on Tuesday, a significant development in the salvaging of founder Rene Benko's real estate empire. The efforts, announced to Signa's creditors in Vienna, mark a first update by the court-appointed insolvency administrator on plans for Signa, the biggest casualty so far of Europe's property crisis.

A long-awaited U.S. rule aimed at curbing money laundering in real estate has reached a key White House office for review, the final hurdle for it to clear before it can be formally proposed next year, Reuters reported. The rule, put forth by the Treasury Department's Financial Crimes Enforcement Network (FinCEN), reached the Office of Information and Regulatory Affairs on Monday, government records show. After a review by the office, the rule would open up for a two-month public comment period in February 2024, the records show. The rule is expected to require real estate professionals to report the identities of the beneficial owners of companies buying real estate in cash, ending a loophole that anti-corruption advocates say has allowed criminals to anonymously stash ill-gotten gains in U.S. property. The Treasury Department said earlier this month that FinCEN would propose the rule in early 2024. While banks have long been required to understand the source of customer funds and report suspicious transactions, no such rules exist nationwide for the real estate industry. FinCEN has since 2016 operated real estate purchase disclosure rules in a handful of cities including New York and Miami, but experts have said they are easy to skirt.

The U.S. Bankruptcy Court for the Southern District of Florida on Nov. 30 granted a motion by the USTP’s Miami office to extend the deadline for creditors to file claims in the chapter 11 bankruptcies of MV Realty PBC LLC and its nearly three dozen affiliates, according to a USTP press release. The court’s order extends the original Dec. 1 deadline to Feb. 1, 2024. The court also directed the MV Realty entities to serve — at their expense — copies of the order on all parties to the bankruptcies, including roughly 38,000 homeowners whom MV Realty listed as current contract holders but not as creditors. Additionally, the companies must provide claim forms to about 2,850 other consumers who may have been forced to pay damages after terminating their agreements; those consumers were neither listed as creditors nor notified of the bankruptcy cases. MV Realty opposed the USTP’s motion, citing the costs of additional service. Its objection was overruled. “This ruling protects the due process rights of thousands of people across the country who were affected by MV Realty’s business practices,” said Director Tara Twomey of the Executive Office for U.S. Trustees. MV Realty, which operates in 33 states, has been the subject of lawsuits by several state attorneys general alleging deceptive trade practices. In 2018, MV Realty began marketing homeowner benefit agreements (HBAs), under which consumers receive one-time payments of 0.3% of a property’s value in exchange for a 40-year exclusive right for MV Realty to market the property if the consumer decided to sell. Breaching an HBA — for example, by retaining a different real estate agent — could render a consumer liable for damages of up to 3% of the property value. In other words, consumers who received upfront payments of a few hundred dollars could end up owing thousands under an HBA. Additionally, MV Realty files liens or memoranda in the official records to encumber title to the properties.

Showfields is facing concerns over its bankruptcy financing. The landlord at its Brooklyn store in New York City on Dec. 5 filed an objection to the final approval of its debtor-in-possession financing, Retail Dive reported. The landlord in its filing said the proposed DIP financing transaction is “to be provided by an entity controlled by one or more insiders” at Showfields. A group of funders cited a similar concern in an objection filed at the end of November. The DIP Lender is listed as Showfields Investment LLC, with the loan agreement between the lender and Showfields for an amount of up to $2.5 million. “The motion does not disclose the identity of the insiders of [Showfields] who are members or owners of the DIP Lender,” the landlord’s objection says. “Without transparency, there remains the possibility that the true purpose of the DIP Financing (rather than obtaining financing from a different source) is to allow the DIP Lender to procure a roll-up of the DIP Lender’s prepetition debt, to the detriment of [Showfields’] estates and their creditors.” The landlord’s objection also alleges that Showfields did not “even attempt to satisfy their burden to demonstrate that the proposed DIP Financing” should be approved, such as not providing evidence to justify loan terms including the roll-up of over $1.6 million of the DIP Lender’s prepetition debt.