news digest | Aug 22, 2023 |
A major ruling on AI, the D&D Building’s billionaire landlord is behind on bills and more

Though wildly popular in the 1970s, colors like “avocado green” and “harvest gold” quickly became untouchable interior hues—but now, contemporary designers are returning to the shades for a hint of earthy charm. Stay in the know with our weekly roundup of headlines, launches, events, recommended reading and more.

Business News

Mortgage rates reached their highest level in more than two decades last week, NPR reports, as the Federal Reserve ramps up its efforts to tamp inflation. The average interest rate on a 30-year, fixed-rate mortgage jumped to 7.09 percent, putting increased pressure on homebuyers in a market that has seen mortgage rates more than double in the past two years. As a result, sellers have also been holding on to their properties, leading to less available stock and pushing sales of existing homes down 18.9 percent in June from a year ago.

In related news, builders are creating more affordable properties for homebuyers addled by high mortgage rates—and addressing their own increasingly high labor and construction costs—by reducing the size of new single-family homes. As The Wall Street Journal reports, the average unit size for new housing starts has decreased 10 percent nationally to 2,420 square feet since 2018. Plus, according to a recent Zillow report, overall construction starts for new single-family homes declined in 2022—but starts for homes with less than three bedrooms increased over the same period, by 9.5 percent. The reductions typically involve doing away with dining areas, bathtubs and separate bedrooms, while increasing the size of multiuse rooms like kitchens and great rooms. In response, retailers are seeing an increase in demand for multifunctional items like sleeper sofas, drop-leaf dining tables and kitchen islands with hidden storage.

A federal judge rejected an individual’s attempt to copyright an AI-generated artwork. As The New York Times reports, the case originated with inventor Stephen Thaler, who listed his computer system as the creator of his artwork titled “A Recent Entrance to Paradise,” and argued that a copyright should be issued and transferred to him as the machine’s owner. In turn, the U.S. Copyright Office rejected his request, prompting Thaler to sue the agency’s director, Shira Perlmutter. In response to the judge’s decision, Thaler’s lawyer said he plans to appeal the ruling. The case comes at a time when the agency is in the midst of its own reckoning around such issues—this year, it established an initiative to examine copyright law and policy issues around AI, and released guidance for submitting creations derived from AI-generated work. Meanwhile, companies like OpenAI, Meta and GitHub are facing their own lawsuits, with artists and writers accusing the companies of using their work to train the algorithms without their permission.

Charles Cohen, the head of Cohen Brothers Realty Corporation, is at least 30 days late on half a billion dollars in loans collateralized by five major New York office buildings, including the Decoration & Design Building at 979 Third Avenue, The Real Deal reports. In the wake of the pandemic’s impact on remote and hybrid work habits, the billionaire landlord’s portfolio has faced the same decreased occupancy and lagging revenue now characteristic of the office building industry. Across Cohen’s five properties with delinquent loans, occupancy averaged 62 percent. With several of the building’s leases ending in the coming years, Cohen will be forced to shore up more capital or surrender the buildings back to lenders.

Klaussner Home Furnishings is facing a class-action civil lawsuit filed by a former employee, Furniture Today reports, alleging that the company violated the federal Worker Adjustment and Retraining Notification Act, known as WARN, when it abruptly ceased operations earlier this month. Filed in the U.S. District Court in Delaware, the suit claims that Klaussner Home Furnishings failed to provide employees with the required 60 days advance written notice of termination ahead of the business’s shutdown, instead sending in its WARN filing on the same day the company announced it was closing. The plaintiff, Trey Chavis, is seeking collection of unpaid wages and benefits for that time period on behalf of himself and other employees.

The federal lawsuit filed against mattress brand Avocado—in which two consumers alleged the company was responsible for greenwashing, fraud and false advertising—has been dismissed, Furniture Today reports. The suit was originally filed in the U.S. District Court for the Northern District of California in June by Akeem Pina and Richard Roberts, who claimed that the brand’s products included the presence of chemicals that may cause birth defects and reproductive harm, along with eye, skin and respiratory irritation, based on a mattress sample they independently sent for lab testing. Further details around the case’s dismissal have not been released, though Avocado shared a statement with FT stating that the brand was “glad to put this issue behind us.”

The Annie Selke Companies laid off dozens of employees last month after at least one division of the company was acquired by Cranbury, New Jersey–based online retailer Rugs USA, The Berkshire Eagle reports. According to sources who spoke under the condition of anonymity, the layoffs occurred around mid-July, and affected between 40 and 50 employees of the company’s Pittsfield, Massachusetts, warehouse, which is expected to be moved to New Jersey.

HL Home Furnishings, a subsidiary of logistics provider Alto Systems Inc., acquired furnishings and decor company Handy Living from parent company Handy Button Machine Company, reports Home News Now. The terms of the deal were not disclosed, though a company representative told HNN that the funds from the sale will be funneled into Handy Button Machine Company’s furniture hardware division, The Handy Kenlin Group.

Coastal case goods company Sea Winds Trading Co. acquired North Carolina–based Lux Lighting, Furniture Today reports—the terms of the deal were not disclosed. The purchase represents a new product category for Sea Wings, which plans to circulate a closeout list of Lux Lighting products that will no longer be available moving forward before debuting a new website and catalog later this year. Following the acquisition, Lux Lighting will maintain its independent branding, while handing over billing, back-office and administrative functions to Sea Winds.

Launches & Collaborations

Eater, Vox Media’s food- and restaurant-focused publication, has debuted a new cookware line in collaboration with home brand Heritage Steel, Modern Retail reports. The resulting assortment spans frying pans, saucepans and pots, and, according to the company, marks Eater’s ongoing expansion of product offerings in the home goods category.

Ohio-based interior product brand Koroseal tapped designer Roger Thomas to create its latest collaborative design—a wallcovering called On Water. The pattern draws inspiration from the rippling surface of the Grand Canal in Venice and is available in eight different colorways, ranging from soft blue Winter River to the neutral gray Rip Tide.

Recommended Reading

When it comes to design, what defines the work of a master? That question is at the center of an ongoing debate in the town of Scarsdale, New York, where a midcentury modern home designed in 1949 by architect Simon B. Zelnick is caught between two factions: the property’s owners, who want to demolish it and build a sprawling estate, and local townspeople who want to preserve the home. Local historic-preservation code in Scarsdale—which was last year named America’s second-richest town—dictates that the latter group must prove that the home’s architect was not just good, but masterful, in order to win. For The Wall Street Journal, Kris Frieswick profiles the case that has made it all the way to the Westchester County Supreme Court, hinging almost entirely on the architect’s disputed legacy.

Thanks to a pandemic-era surge of interest in passive income sources and real estate investment, a new class of online gurus has sprung up to sing the praises of “house-hacking,” a practice that involves buying a house or multiunit building, living in one part of the space and renting out the rest to tenants in order to pay the monthly mortgage. As James Rodriguez writes for Insider, the idea of becoming a live-in landlord is nothing new, but internet fervor has transformed it into a get-rich-quick scheme that many dive into with reckless abandon—glossing over the sometimes harsh realities and risks involved with being a landlord, as well as claims from critics that the house-hacking practice can be exploitative.

Cue the Applause

Interior Design announced the inductees of its 2023 Hall of Fame Awards, recognizing industry members who strive for excellence across commercial, residential, hospitality and product design. This year’s honorees include Carlos M. Martínez Flórez, managing director and principal of Gensler; Joshua Aidlin and David Darling, founders of Aidlin Darling Design; textile designer and weaver Suzanne Tick; and David Rockwell, founder and president of Rockwell Group, who will also receive the debut Icon Award.

Homepage image: The ‘On Water’ pattern designed by Roger Thomas for Koroseal. | Courtesy of Koroseal

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