Reading List 06/28/25
Fannie and Freddie’s mortgage blacklist, the air traffic controller shortage, the largest landowners in the US, a blended wing airliner, and more.
Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure and industrial technology. This week we look at Fannie and Freddie’s mortgage blacklist, the air traffic controller shortage, the largest landowners in the US, a blended wing airliner, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.
My essay “Why Are Homes So Expensive In Western States” made use of the USDA’s Natural Amenities Scale. Because the original index used temperature data from 1941-1970, I recalculated it using more recent temperature data from 2010-2024. I’ve made the recalculated scale available on Github here for those who are interested.
Car carrier sinks in the Pacific
The Morning Midas, a car carrier transporting 3000 cars, sank off the coast of Alaska this week after it had been abandoned when a fire broke out. From CNN:
A cargo ship that had been delivering new vehicles to Mexico sank in the North Pacific Ocean, weeks after crew members abandoned ship when they couldn’t extinguish an onboard fire that left the carrier dead in the water.
The Morning Midas sank Monday in international waters off Alaska’s Aleutian Islands chain, the ship’s management company, London-based Zodiac Maritime, said in a statement…
Fire damage compounded by bad weather and water seepage caused the carrier to sink in waters about 16,404 feet (5,000 meters) deep and about 415 miles (770 kilometers) from land, the statement said.
The ship was loaded with about 3,000 new vehicles intended for a major Pacific port in Mexico.
Ships sinking is apparently a lot more common than I thought (though it’s a small fraction of the roughly 100,000 commercial oceangoing ships in operation). Every year a few dozen oceangoing ships are lost at sea. Most of them are smaller vessels, but some of them will be larger ships like the Morning Midas.
The rate seems roughly constant for the last 15 years, though thankfully the rate of crew losses seems to have dramatically decreased.
Mortgage blacklist
This week I learned about the Fannie Mae and Freddie Mac “mortgage blacklist”, a list of condo developments that don’t meet Fannie and Freddie requirements, are ineligible to be guaranteed by them, and thus have extreme difficulty getting conventional mortgages. From Themortgagereports.com:
Fannie Mae, the government-sponsored enterprise that guarantees mortgages, maintains a list of condo and co-op projects that fail to meet its lending criteria. Properties on this list are ineligible for conventional loans backed by Fannie Mae, which significantly reduces financing options for buyers and owners looking to refinance.
Condo developments may be blacklisted for several reasons, including:
Structural or safety concerns that remain unaddressed
Insufficient reserves to cover maintenance and repairs
Pending litigation that could pose financial risks
High investor ownership, making the property less appealing to lenders
Insurance issues that fail to meet Fannie Mae’s requirements
Once a condo is on the list, obtaining financing through traditional lenders becomes extremely difficult, often forcing buyers into cash-only purchases or high-interest alternative loans.
Herold Law has some more information on the blacklist, particularly on the role of insurance. As insurance has gotten more expensive, it’s gotten harder for condo developments to meet Fannie and Freddie’s requirements:
Fannie Mae and its counterpart Freddie Mac do not issue loans but purchase roughly half of the nation’s home loans to package and resell to investors, guaranteeing payments. Loans meeting their underwriting criteria, known as conforming loans, can be less expensive and require lower down payments than bespoke mortgages. Properties that fail to qualify face a major disadvantage in the real estate market….
Fannie Mae and Freddie Mac require a minimum level of insurance. The firms issued new guidelines last year that have prompted lenders to take a stricter line on insurance requirements, according to lenders, real estate agents, and insurers.
Fannie Mae and Freddie Mac require a specific level of insurance coverage for home loans they are willing to buy to ensure the debt can be repaid should the property be damaged or destroyed. However, rising claims from natural disasters have led insurers to raise premiums, limit coverage, and impose higher deductibles, often beyond what Fannie Mae and Freddie Mac permit. One particularly contentious issue is that many insurers now only cover the depreciated value of damaged roofs rather than full replacement costs, a practice neither Fannie Mae nor Freddie Mac accept.
As a result, many condominium associations are struggling to secure insurance policies that meet such strict standards. Some are opting for reduced coverage, even if it means their properties become ineligible for Fannie Mae-backed loans, which makes it difficult for homeowners to sell their units.
Air traffic controller shortage
The National Academies released a 286-page long report investigating the extents and causes of the shortage of air traffic controllers in the US. It found that 30% of facilities are understaffed by 10% or more, and that at many of the highest-traffic facilities staffing shortages exceed 15%.
Primarily as a result of hiring fewer controllers than those lost to attrition, 19 of the largest facilities have fallen 15% below their staffing targets as estimated with the traditional approach. These large, understaffed facilities serving the 30 largest airports account for about 6% of facilities, 27% of commercial operations, 40% of all delays, and 45% of other delays, which include those that are staffing-related. (See Chapters 2 and 8.)
Although FAA has been increasing hiring as directed by Congress in FY 2024, it can only hire as many new staff as it can train expeditiously due to constraints on training capacity at the FAA Academy and individual facilities. The principal constraint has been the shortage of former FAA controllers willing to serve as classroom trainers at the Academy and facilities. Through its National Training Initiative (NTI), FAA is working diligently to address this constraint. FAA is currently confident it has addressed this issue at the Academy. Attracting former controllers to serve as trainers at individual facilities is a long-standing problem in specific locations, typically those with high costs of living. Expanded and improved training is needed to rectify declining training success rates and increasing time required for new hires to fully certify at the largest facilities. Without further improvements in hiring and training, it would take an average of at least 4.8 years from tentative hire offers to reach CPC status in En Route Centers. For CPCs required at the largest Terminals, the bulk of which require transfers from a smaller facility, it would take an average of 5.5 years for new hires to reach CPC status. (See Chapter 6.)
Jones Act 2.0
The Jones Act is the widely detested law that requires cargo shipped between US ports to be carried on US-built ships. Because the US builds so few ships (and because the ones it does build are extremely expensive), the Jones Act has been blamed for driving up the costs and complexities every service that requires shipping between US ports (such as transporting goods to Hawaii, and installing offshore wind turbines).
Now a new, similar bill, requiring any cargo used for transportation projects to be carried on US-built ships, has passed the House. Via Judge Glock on Twitter:
96%(!) of the House voted in favor of the bill.
Policy-minded folks are often extremely critical of the Jones Act and advocate for it’s removal or reform, but with such enormous bipartisan support for similar laws its hard to imagine this being a tractable cause at the moment.