Home and Ownership

Today is tax day and across America we will be writing checks, filling in forms for both State and Federal taxes in which to ensure our role in the defining marker of equality and parity in American Democracy. Yeah that is working out great, right?

One of the ideas that is instilled in Americans is the dream of Home Ownership. And that has been peddled along with the idea that a College Degree is the key to success. And that is working out great, right?

Owning a home is perhaps the most daunting project one can take on. It is considered wealth building, provides economic security and builds a concept of community as one lives, builds a family, works and lives in a home for at least the term of the Mortgage (that usually 30 years) and in turn sends their Children to local schools, which are paid for through the taxes on said home. This like Meritocracy is a massive myth.

Home ownership MAY have been that at some point in the economic ladder but like Union jobs, decent wages, pension plans and other financial incentives such as supporting infrastructure that includes schools, public transportation, roads and all that align said roads, from crosswalks to street lighting, I suggest you take a trip to a Southern City and see how that fails in every stretch of the imagination. Even some larger cities that are appreciated for density fail in providing that equally across the board to all citizens as you can see in New York, Los Angeles, Seattle, San Francisco.

One book that deals with some of the failures of policy when it comes to issues regarding housing, especially affordable housing is a book called San Francisko. But there are other books that have covered the economic failures such as Evicted, Nickel and Dimed to name a few. The reality is that housing has always been a NIMBY issue by many regardless of their political and economic leanings. They may be for different reasons but the issue is the same when it comes to costs. And by that we mean Property Tax. This is the least transparent of tax systems and this article about how New York City demonstrates that the poorer homeowner often subsidizes the richer home owner when it comes to the way taxes are assessed.

And this is not just in New York, Colorado is facing a similar situation. And the move to remote work led many to find themselves relocating to cheaper environs in which to work and live and surprise they are not the Nirvana one imagines. As I can attest living in Nashville I experienced first hand the United States equivalent of third world country trying to navigate a city with lackluster public transportation, poor sidewalks, no crosswalks, high traffic fatalities, shitty infrastructure when it comes to weather issues and then the largest issue – the failures of the public school system. This article discusses the way these areas nickel and dime you to death when it comes to subsidizing the city when property and/or income taxes are low.

One of the major beliefs in home ownership which still mystifies me is a “starter home” that one buys and maintains to eventually leave and build up or move up. I had never heard of this until the arrival of HGTV and with that flipping also became a new moniker in which to convey they idea of buying properties that a dilapidated and in turn fixing them and turning them over to make a buck. I recall that may have been a factor in the crash of 2008 but again those were different times, right? True lower than lower mortgage rates, less down, shorter term loans and of course Realtors and Mortgage Brokers willing to find suckers, whoops I mean, clients willing to sign the contract. That worked out well, didn’t it?

I could get into a discussion about Real Estate and their MONOPOLY (the reality not the game on which irony that it is based) on selling and buying homes. The recent Missouri Case regarding the National Association of Realtors and that subject is best explained in this article from some of the actual Homeowners behind the case. It is shocking to realize how exploited and dependent we are on agents who have little to no business background, accounting or legal knowledge yet we hand over thousands of dollars to them to exchange property. A Lawyer could do it for a flat fee and so could any Agent, but that is not how it has been done. Okay then.

I have written often about how Real Estate Agents are one step above a Used Car Salesman and again Television has glorified it with varying reality shows that have them raking in the bucks and living the life. That is not the life of the “average” Real Estate Agent. This is one perspective I found that explains wages and incomes in varying markets. But like many other industries, this is industry that is not exempt from those that define corporate hierarchy, or is that Patriarchy? As the the story behind the such as this reason the NAR (irony that the acronym is so close to the NRA) head stepped down. Or this story about another Real Estate Agency, eXp, and their “issues” regarding harm. But just a review of a search in the NY Times brings article after article about the real estate industry and its many “issues.”

Aside from that industry that has contributed to housing costs, housing shortages and denting one’s savings via commissions and costs (come on do you really need to stage a home?) that ultimately come out of the seller’s pocket, there is little to no reason to believe that the equity you have built in your home for many will entitle them to a million dollar retirement. Again that is the reality of real estate, the rich stay richer, the poor stay well less poor in some cases if they have a hot house in a hot market.

But the real problems with home ownership other than maintenance which includes insurance, upkeep as those two factors with Climate problems of late are placing burdens on many, is the biggest check one will write – Property Taxes.

I have reprinted this editorial from the Times regarding this issue and it is something that we have to ask why? As I live in Jersey City the city mentioned in the article I can see firsthand what happened to this city and the aftermath of what it means for its residents, past.

It’s Time to End the Quiet Cruelty of Property Taxes

April 11, 2024 The New York Times Guest Essay

By Andrew W. Kahrl

Dr. Kahrl is a professor of history and African American studies at the University of Virginia and the author of “The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America.”

Property taxes, the lifeblood of local governments and school districts, are among the most powerful and stealthy engines of racism and wealth inequality our nation has ever produced. And while the Biden administration has offered many solutions for making the tax code fairer, it has yet to effectively tackle a problem that has resulted not only in the extraordinary overtaxation of Black and Latino homeowners but also in the worsening of disparities between wealthy and poorer communities. Fixing these problems requires nothing short of a fundamental re-examination of how taxes are distributed.

In theory, the property tax would seem to be an eminently fair one: The higher the value of your property, the more you pay. The problem with this system is that the tax is administered by local officials who enjoy a remarkable degree of autonomy and that tax rates are typically based on the collective wealth of a given community. This results in wealthy communities enjoying lower effective tax rates while generating more tax revenues; at the same time, poorer ones are forced to tax property at higher effective rates while generating less in return. As such, property assessments have been manipulated throughout our nation’s history to ensure that valuable property is taxed the least relative to its worth and that the wealthiest places will always have more resources than poorer ones.

Black people have paid the heaviest cost. Since they began acquiring property after emancipation, African Americans have been overtaxed by local governments. By the early 1900s, an acre of Black-owned land was valued, for tax purposes, higher than an acre of white-owned land in most of Virginia’s counties, according to my calculations, despite being worth about half as much. And for all the taxes Black people paid, they got little to nothing in return. Where Black neighborhoods began, paved streets, sidewalks and water and sewer lines often ended. Black taxpayers helped to pay for the better-resourced schools white children attended. Even as white supremacists treated “colored” schools as another of the white man’s burdens, the truth was that throughout the Jim Crow era, Black taxpayers subsidized white education.

Freedom from these kleptocratic regimes drove millions of African Americans to move to Northern and Midwestern states in the Great Migration from 1915 to 1970, but they were unable to escape racist assessments, which encompassed both the undervaluation of their property for sales purposes and the overvaluation of their property for taxation purposes. During those years, the nation’s real estate industry made white-owned property in white neighborhoods worth more because it was white. Since local tax revenue was tied to local real estate markets, newly formed suburbs had a fiscal incentive to exclude Black people, and cities had even more reason to keep Black people confined to urban ghettos.

As the postwar metropolis became a patchwork of local governments, each with its own tax base, the fiscal rationale for segregation intensified. Cities were fiscally incentivized to cater to the interests of white homeowners and provide better services for white neighborhoods, especially as middle-class white people began streaming into the suburbs, taking their tax dollars with them.

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One way to cater to wealthy and white homeowners’ interests is to intentionally conduct property assessments less often. The city of Boston did not conduct a citywide property reassessment between 1946 and 1977. Over that time, the values of properties in Black neighborhoods increased slowly when compared with the values in white neighborhoods or even fell, which led to property owners’ paying relatively more in taxes than their homes were worth. At the same time, owners of properties in white neighborhoods got an increasingly good tax deal as their neighborhoods increased in value.

As was the case in other American cities, Boston’s decision most likely derived from the fear that any updates would hasten the exodus of white homeowners and businesses to the suburbs. By the 1960s, assessments on residential properties in Boston’s poor neighborhoods were up to one and a half times as great as their actual values, while assessments in the city’s more affluent neighborhoods were, on average, 40 percent of market value.

Jersey City, N.J., did not conduct a citywide real estate reassessment between 1988 and 2018 as part of a larger strategy for promoting high-end real estate development. During that time, real estate prices along the city’s waterfront soared but their owners’ tax bills remained relatively steady. By 2015, a home in one of the city’s Black and Latino neighborhoods worth $175,000 received the same tax bill as a home in the city’s downtown worth $530,000.

These are hardly exceptions. Numerous studies conducted during those years found that assessments in predominantly Black neighborhoods of U.S. cities were grossly higher relative to value than those in white areas.

These problems persist. A recent report by the University of Chicago’s Harris School of Public Policy found that property assessments were regressive (meaning lower-valued properties were assessed higher relative to value than higher-valued ones) in 97.7 percent of U.S. counties. Black-owned homes and properties in Black neighborhoods continue to be devalued on the open market, making this regressive tax, in effect, a racist tax.

The overtaxation of Black homes and neighborhoods is also a symptom of a much larger problem in America’s federated fiscal structure. By design, this system produces winners and losers: localities with ample resources to provide the goods and services that we as a nation have entrusted to local governments and others that struggle to keep the lights on, the streets paved, the schools open and drinking water safe. Worse yet, it compels any fiscally disadvantaged locality seeking to improve its fortunes to do so by showering businesses and corporations with tax breaks and subsidies while cutting services and shifting tax burdens onto the poor and disadvantaged. A local tax on local real estate places Black people and cities with large Black populations at a permanent disadvantage. More than that, it gives middle-class white people strong incentives to preserve their relative advantages, fueling the zero-sum politics that keep Americans divided, accelerates the upward redistribution of wealth and impoverishes us all.

There are technical solutions. One, which requires local governments to adopt more accurate assessment models and regularly update assessment rolls, can help make property taxes fairer. But none of the proposed reforms being discussed can be applied nationally because local tax policies are the prerogative of the states and, often, local governments themselves. Given the variety and complexity of state and local property tax laws and procedures and how much local governments continue to rely on tax reductions and tax shifting to attract and retain certain people and businesses, we cannot expect them to fix these problems on their own.

The best way to make local property taxes fairer and more equitable is to make them less important. The federal government can do this by reinvesting in our cities, counties and school districts through a federal fiscal equity program, like those found in other advanced federated nations. Canada, Germany and Australia, among others, direct federal funds to lower units of government with lower capacities to raise revenue.

And what better way to pay for the program than to tap our wealthiest, who have benefited from our unjust taxation scheme for so long? President Biden is calling for a 25 percent tax on the incomes and annual increases in the values of the holdings of people claiming more than $100 million in assets, but we could accomplish far more by enacting a wealth tax on the 1 percent. Even a modest 4 percent wealth tax on people whose total assets exceed $50 million could generate upward of $400 billion in additional annual revenue, which should be more than enough to ensure that the needs of every city, county and public school system in America are met. By ensuring that localities have the resources they need, we can counteract the unequal outcomes and rank injustices that our current system generates.

Home Not So Sweet

It appears along with the bullshit Great Resignation, the Great Migration has also ended. During the pandemic when businesses had to shut down and many became at home workers, many many non-essential businesses shut. Many simply shut their doors to attempt to re-open and then close again due to staffing issues, supply chain issues, whatever issues one has when one owns a small business. The realty that many who should have gotten PPE loans and grants did not as they did not understand the needed paperwork and other requirements in which to access said funds. Did not stop the Gun Manufacturers, the one notably that made the gun used in the Uvalde Massacre, from accessing funding to keep the guns flowing. Everytown for Gun Safety noted that while it was also the most demand for guns in history, that did not prevent them from getting loans designed for businesses most in need, as they were shuttered during those early days. Fascinating isn’t it.

And with that we have more guns on the streets than ever before and record gun violence and shootings than in years prior. This from the Washington Post notes, Not a week has gone by this year without a mass shooting in the United States. An average of more than 40,000 Americans die each year in gun homicides, suicides or accidental shootings. That is more than 110 people each day. Before the gunman opened fire Thursday at St. Francis Hospital in Tulsa, there had already been 232 mass shootings, according to the Gun Violence Archive, which defines a mass shooting as one in which four or more people, not including the shooter, are injured or killed.

And with that bring me your poor, your huddled masses and your heavily armed. Americans are a scary bunch because they are always scared. If it is not Covid, its is some Political bogeyman, it is an intruder, a homeless or unhoused person, they are afraid of the Cops or not the Cops and are afraid of anything that moves including themselves. Fear is a common denominator and it is driving this equation.

I wonder if this family in Texas felt safe having a gun in the house when an escaped killer found his way to their door, killed them all and escaped in their car. So much for that you are safe in the burbs myth.

And along with the idea that we are green and globally concerned that too is another myth as car sales went through the roof during the pandemic as more moved into the suburbs or the woods and/or refused to take public transport as the FEAR of Covid dominated the news and the thoughts and prayers of those afraid of contracting a disease that for whatever reason killed many, largely those already at risk and made many just sick. Wow just wow. And that fear is running the double edged sword of working at home and returning to the office. Now it is the double C for crime and Covid. Next week it will be what? The weather and the role of the changing climate that we completely ignored with our mass car purchases and taking to the air and the sea to rid ourselves of the covid fatigue, the new disease du jour. All while complaining about the price of gas, fares and hotels. Good to know that something has returned as normal. My favorite so far was a NYC “it” person upset that the prices of cocktails have gotten so high they cannot afford to make a night out and that it is denting their ability to connect and go clubbing. That is why I love New York Magazine, it tries hard to be both relevant and substantial at the same time.

As for housing that issue seems to have gone from the frustrated set who were always outbid, bought a lemon, overpaid to now staying put with numerous roommates and hoping the rent doesn’t get too damn high. I am not sure what was going on with this story in the NY Times but one of the profiles has Immigrants living in what is clearly an illegal if not unsafe unit. But if 20, 20-somethings want to live 6 to a shack and pose for Instagram have at it. That was normal in Manhattan in pre Covid days and again the Sex and the City “women” were exceptions, Friends the norm. Note all of them were over 30 they did however live in very expensive housing given their jobs and incomes but then again this was fantasy fiction. But the reality is more align with this story and how we are not migrating across the country we once used to and we are reassessing our thoughts about home ownership as a reality, and dreams are not reality.

And this brings me to the last bullshit gig, the house flippers. Along with Real Estate Agents and Mortgage Brokers we can add them to the reason why their is an affordable housing crisis. It was the Chips and Joanna’s, the Twins and the Flips and Floppers that made millions selling the dream of home flipping to America. They neglected to mention that they were cited for failing to permit Asbestos or Lead Paint Removal among other problems that arose during these miraculously six week renovations that came in on time and often on budget. Did they ever do ones with a Gun Storage Closet? I did when I bought one and immediately turned in into an electronic room, which was also filmed for a show. It was annoying as fuck and guess what? The property in Austin, 4 Green Lanes I sold to Natalie Maines of the Dixie Chicks. Most of the major changes she kept, added a pool and painted the exterior to the original color (I had it dark purple to match my Mercedes at the time. But what I love she remodeled the Garage Office/Bedroom on Trading Spaces complaining about the fixtures. Yeah I was over budget by then so I did it on the cheap. She still bought it at full asking which was 1.3 Million. She sold it just recently for slightly over the price she paid for it. Go figure. Divorce does that. I should know.

What Goes On Behind the Cameras at Home Makeover Shows?

Some homeowners said they were promised a dream house if a crew remade their homes for TV. The lawsuits they filed later told a different story.

By Debra Kamin The New York Times Published May 27, 2022

Millions of viewers, eager for a Cinderella story with real estate as the central character, watch televised home renovation shows to see troubled houses transformed into showstoppers.

Story lines on the popular programs vary, but they all sell the same aspirational yet inclusive fantasy: With the help of a team of expert contractors, any house can become beautiful, even with constraints of time and budget. The pandemic, in which both binge-watching and home renovation projects surged, gave these programs an additional boost.

And as the popularity of the shows has grown, so have whispers of incompetence, negligence and shoddy construction. A number of former contestants on such shows say they were promised a dream house, but ended up with a construction nightmare. Court documents reveal that at least a dozen lawsuits, their details shrouded by strict confidentiality agreements, have been settled out of court. Across social media platforms like Instagram, the number of public complaints made online is significantly higher.

In Las Vegas, Mindy and Paul King appeared on “Property Brothers” in 2019, and are currently suing the production company that creates the program for HGTV for fraud, misrepresentation and faulty workmanship, which they say left their home riddled with code violations as well as safety and health hazards.

In North Carolina, Deena Murphy and Tim Sullivan appeared on HGTV’s “Love It or List It” in 2016, then were also sued after suing the producer and contractor of that show, saying there was a breach of contract.

In Nevada, Billi Dunning and Brent Hawthorne, who appeared on “Flip or Flop Las Vegas” on HGTV, were countersued by the program’s hosts after taking the program to court.

And in Chicago, Sharon and Gary Rosier, who appeared on Fox’s “Renovate My Family” in 2004, still live in a home they said was renovated with “fraud” and “negligence,” according to a lawsuit filed in 2005 in Illinois, because, they say, they can’t afford to move elsewhere.

Ms. King, in Las Vegas, said she wanted to appear on “Property Brothers,” led by the twin brothers Drew and Jonathan Scott, because she and her husband were promised access to high-end fixtures and furnishings at bargain rates. But the couple, who are now suing Cineflix Media, the Canadian production company behind the program along with their contractor Villa Construction, said that what they got instead was a house riddled with structural and electrical issues, some of which, they said in court filings, are producing serious health concerns for Ms. King.

“I have not felt good since we started living in the house,” Ms. King said in an interview at her four-bedroom ranch-style house in Las Vegas.

In most cases, homeowners are required to foot the bill for their renovations, and in nearly every contract, they are informed that extra perks, such as free materials and access to experts, come at the discretion of the show’s producers. And if things go wrong, they usually aren’t allowed to publicly complain: Contracts bind homeowners to strict confidentiality, even preventing them (at least theoretically) from speaking about the show to friends or family.

Networks like HGTV purchase distribution rights from the production companies, and celebrity hosts often own a stake in their programs (the Scott brothers acquired brand and intellectual property rights to “Property Brothers” in 2019), but it is the production companies that call the shots on the ground.

As on most home renovation shows, the Kings were mostly kept at arm’s length while a crew worked, then brought back in for a final reveal. But they said that when they were shown the finished product, they immediately saw problems, and were nevertheless instructed to reshoot the ending of the show multiple times — at least four takes, Ms. King said — while they feigned excitement. (Four other former contestants on home renovation shows who have filed suits against production companies, and who were interviewed for this story, relayed similar stories of aggressive coaching.)

Some of the issues detailed in the Kings’ complaint were cosmetic, but others were more serious: Electrical work, their complaint says, was done without proper permitting, and the gas line of the stove was improperly installed. According to a second complaint, the family later learned the dishwasher had been installed without an air gap, which is what keeps contaminated water from seeping back into clean water during a wash cycle.

The Kings are now pursuing a Chapter 40 complaint, which is the first step required by Nevada state law in construction disputes, intended to avoid litigation by offering contractors a last chance to make repairs.

The Kings initially asked for $1,477,500 in reparations, and their complaint to the Nevada State Contractors Board listed more than 90 things wrong with their house. After investigating the house in September 2020, however, the contractors board identified only 10 problems, at an estimated repair cost of $94,672, which it ordered the contractor, Villa Construction, to correct. Cineflix maintains that the Kings then denied the contractor access to the home (the Kings dispute this), and in a statement emailed to The New York Times, said the couple were disseminating misleading information.

“This is an obvious attempt by the Kings to garner attention and financial gain while the matter is still before the courts,” their statement read. “Cineflix and Villa Construction are obligated to respond to the Chapter 40 Notice, which will dictate the next steps. While we dispute a number of the deficiencies, we remain committed to resolving the Chapter 40 claim.”

Drew and Jonathan Scott, who are not named in the Kings’ lawsuit, declined a request to comment.

On May 25, a judge ruled that the case will now proceed to litigation.

HGTV said they “want homeowners who are featured in our series to be happy,” declaring that homeowners are included in the planning process and made aware of who will participate in their renovation, in a statement emailed to The Times. “The business relationship and contractual agreements for the renovations are agreed upon by the homeowners and the contractors,” the statement went on. “When we learn of a business dispute, we encourage the contractors and homeowners to work together to resolve the issue.”

Some of the contestants who file suit discover that legal action can be a double-edged sword. The threat of countersuits hangs heavy.

Some plaintiffs, like Deena Murphy and Tim Sullivan, who appeared on HGTV’s “Love It or List It” in 2016, sued for breach of contract, saying that faulty workmanship had, according to their complaint, “irreparably damaged” their North Carolina home after they spent $140,000 of their own money. According to court documents, they settled, but not before being slapped with a lawsuit themselves, for libel, slander and product disparagement. The case, which went to the North Carolina Court of Appeals, was eventually dismissed. The settlement terms are confidential, and Mr. Sullivan declined a request to be interviewed.

Billi Dunning and Brent Hawthorne, a Nevada couple who settled in a 2018 suit against “Flip or Flop Las Vegas,” were also sued. According to court documents, lawyers for the program’s hosts, Bristol and Aubrey Marunde, said Ms. Dunning and Mr. Hawthorne violated the confidentiality provision of their settlement agreement, in which they were awarded $50,000 plus a repurchase price of about $284,000 for the home in question. Ms. Dunning and Mr. Hawthorne also declined to be interviewed.

In the complaint, in which Bristol and Aubrey Marunde appear as defendants, the Marundes wrote, “Due to the spiteful actions of Plaintiffs, Defendants have suffered irreparable economic and emotional harm to their personal, and professional lives and Plaintiffs have been unjustly enriched by the settlement proceeds paid by Defendants.” Their suit was dismissed by a judge in early March.

Nearly all contestants are required, when signing onto a program, to agree to a strict waiver that prevents them from speaking to the press or posting on social media, about not just the show itself, but also, according to one waiver reviewed by The New York Times, “any nonpublic information or trade secrets obtained or learned in connection with the program.”

“They put the fear of God in you when you do these shows,” Ms. King said.

When it comes to legal disputes between shows and their contestants, what’s promised or put on air is irrelevant, said Ryan Ellis, a lawyer for the Kings. It all comes down to the contract.

“A contract states that certain things are supposed to be done. And production or no production, if those things aren’t done, then we have an issue,” Mr. Ellis said.

Some contestants say they didn’t understand their contracts, however, and weren’t given ample time to review them before being required to sign.

Sharon and Gary Rosier, who appeared on “Renovate My Family,” a one-season Fox TV reality show in 2004, contended that “fraud, gross incompetence and negligence” were involved in the renovation work on their Chicago-area house, and that the contractor on their home, who was hired by the show’s producers, “breached its most basic obligations ensuring that work was done correct,” according to their complaint.

Ms. Rosier signed on to the show, she said, because she was promised an attached garage so that her son Steven, a quadriplegic, could be wheeled from the car directly into the house and avoid a snowy ramp during Chicago winters.

But Ms. Rosier, who works in collections for UPS, contends that she was sent the contract while at work and told she only had one hour to sign.

Her lawsuit alleges multiple problems with the construction. While filming the family’s episode, which aired in 2004, a crew from “Renovate My Family” leveled the family’s barn and backyard and created bedrooms for the family’s two daughters in the home’s basement, where they flooded when it rained. The new washing machine had no drain; oak cabinets were swapped for pressboard.

The lawsuit claims the family’s aboveground pool, with a wraparound deck built three years earlier by Mr. Rosier, was replaced by an in-ground pool the family couldn’t afford to heat. The crew also took a bulldozer and dug up the family’s pet cemetery where they had buried their animals.

According to the complaint, the attached garage for Steven was never built.

“When everything goes bad, they’re not there for you, and then they’re like, well, you signed the contract,” she said. “But we didn’t know what we were signing.”

The Rosiers’ lawsuit contended the home was left “virtually uninhabitable” and requiring repairs in excess of $250,000. It was settled for an undisclosed amount.

Devin McRae, a lawyer in Los Angeles who specializes in the entertainment industry, said that damages in most construction lawsuits are for whatever it would cost to make required repairs, and not much more. “You’re probably not talking about seven figures. The fight is probably in the low hundreds,” he said.

Rocket Science Laboratories, who were producers on the show and named in the suit, filed for Chapter 7 bankruptcy in 2009 and liquidated their assets. A representative from FOX Broadcasting declined a request for comment.

The Rosiers, who still live in that house, said they have yet to raise the required funds to fix the damage.

Mr. King, an executive recruiter, said he and his wife are fortunate to be able to afford the legal fees and other financial losses of their situation. But they believe their house is unsafe, and what they can’t do is move.

“We’re trapped. The house is packed full of code violations, so we can’t just bail,” he said. “What they did was build a really nice studio to shoot their show.”

Home Sweet Home?

Buying a home becomes more challenging with each passing day for many. There is the rising interest rates that along with the additional requirements/costs to buy simply puts a home purchase further out of reach for those who don’t have the requisite down payment so with that means added costs via mortgage insurance. Then there are homeowner fees or dues to an association which can contribute to financial obligations and penalty’s; and with this ProPublica discovered they can also force homeowners into Foreclosure.

With that there are unforseen or unpredictable costs that can lead to further debt or again forcing foreclosure or selling the property via a short sale. These can be issues regarding Property Taxes (they can rise without notice and do so often), unforeseen maintenance issues due to natural disasters (and with FEMA discontinuing subsidizing flood insurance this may be the biggest issue) or simply due to the lack of inspections and full disclosure of the age of property infrastructure and building materials. And lastly job losses or changes in the economy, Pandemic anyone? The NYT has been doing a series of articles on home ownership and the rising tides of both costs and now rates that has cooled a once hot market. But all home ownership is believed to be tied to personal wealth and building a legacy that accompanies said home ownership. And with this we have a new housing crisis that is not just about shortage but about wealth. And like all things now it also fuels economic inequality.

Add to the matter, the amount of housing stock being purchased by investment corporations and businesses that has lent to rising rents, a form of redlining with most of the purchases in Black and lower income areas and raising rents or flipping properties to be out of reach of the average income of the residents who once lived there. I do feel that again we can blame much of this on television shows on HGTV tha encourage house flipping Again watch these shows where they remodel and the endless discussion of resale value. Really? Is it always that which matters? The other is Million Dollar Listing and Selling Sunset with Real Estate Agents pushing up prices in which to make a higher commission not actually lending to real market values and worth to the area. The industry is awash in corruption and the the Devil is that they are always working in concert with the other assholes of this small equation, Mortgage Brokers, Appraisers, and Contractors, who often encourage both Buyers and Sellers to take on more debt for a purpose of increasing debt not wealth. And let us not forget how real estate is a money launders paradise.

Below is an article discussing the role of housing and the economic factors that lend to the anxiety of buying a home in today’s marketplace and the efforts to retain said home for lasting value and sense of legacy and building wealth.

I am done with the idea of owing a property and with that it was about cash in hand and what my long term plans and goals are. And that is not to fund a bank but I also have no children and no legacy. So it is your decision and a tough one in which to make. But all houses comes with a deed but do you really own it?

High inflation often translates to high anxiety, which is why many Americans are striving to lock in the cost of one of their most basic, most human needs: a home.

But with housing prices already at lofty levels and mortgage rates spiraling, many buyers may be tempted to jump in before they’re ready — or because they fear the situation will only get worse.

“There is this psychological pressure of everything being uncertain,” said Simon Blanchard, an associate professor at Georgetown University’s McDonough School of Business who studies consumers’ financial decision-making. That can make a necessity like housing feel concrete, he said.

“It might sound comforting to focus on the present and lock in this part of the budget,” he said. “The danger is you might be creating vulnerability by leaving insufficient flexibility for later.”

The national median price of existing homes was $375,300 in March, up 15 percent from $326,300 a year earlier, according to the National Association of Realtors. Rates on 30-year fixed mortgages were 5.10 percent for the week that ended Thursday, up from 2.98 percent a year ago, according to Freddie Mac.

That has seriously eroded how much would-be buyers can afford: With a down payment of 10 percent on the median home, the typical monthly mortgage payment is now $1,834, up 49 percent from $1,235 a year ago, taking both higher prices and rates into account. And that doesn’t include other nonnegotiables, like property taxes, homeowner’s insurance and mortgage insurance, which is often required on down payments of less than 20 percent.

With inflation at a 40-year high and the cost of just about everything rising, it’s easy to get caught up in the irrationality that has some buyers aggressively bidding up prices and skipping basic precautions, like a home inspection.

“There is a scarcity mind-set right now,” said Jake Northrup, a financial planner for young families in Bristol, R.I. He said he and his wife had decided to wait a year and save more before buying a home of their own.

Some prospective buyers are doing the same — mortgage applications have slowed lately — but the market remains deeply competitive because of the country’s chronically low supply of homes. That can lead to erroneous assumptions and bad judgment.

So before you hit the open-house circuit, it’s time to assess not just what you can spend but what you should spend — and the potential costs down the road.

Do a budget review.

Before you start scanning listings, it helps to have a solid understanding of what you can afford — and how different price points would affect your ability to save and spend elsewhere.

Some financial experts suggest working backward: Assume a minimum savings rate — say 15 or 20 percent for retirement, college savings and other goals — and account for all other recurring debts and expenses on a spreadsheet. Then play around with different home prices to see how they would influence everything else.

“The right mortgage amount isn’t what you get preapproved for but what you can afford,” said Mr. Northrup, the financial planner. “The No. 1 mistake I see when people buy a home is not fully understanding how other areas of their financial life will be impacted.”

What is affordable? The answer will obviously vary by household, income, family size and other factors.

Government housing authorities have long considered spending more than 30 percent of gross income on housing as burdensome — a figure that arose from “a week’s wages for a month’s rent,” which became a rule of thumb in the 1920s. That standard was later etched into national housing policy as a limit — low-income households would pay no more than a quarter of their income for public housing, a ceiling that was lifted to 30 percent in 1981.

Some financial planners may use a similar rough starting point: Spend no more than 28 percent of your gross income on all of your housing expenses — mortgage payments, property taxes, insurance — and an additional 1 to 2 percent allocated for repairs and maintenance.

That won’t work for everyone, though, especially in high-cost metropolitan areas where it’s often hard to find rentals within those strictures.

“Take all of your monthly expenses into account and truly decide how much you want to put toward housing,” said Tom Blower, a senior financial adviser with Fiduciary Financial Advisors. “I would never encourage a client to strictly follow a percentage of income to determine how much to spend each month. Rules of thumb are guidelines and something to consider, but not the end-all, be-all.”

Adjust your expectations.

The rise in interest rates means many people have had to rein in their price ranges — by a lot. A family earning $125,000 that wanted to put down 20 percent and dedicate no more than 28 percent of its gross income to housing — roughly $35,000 — could comfortably afford a $465,000 home when the interest rate was 3 percent. At 5 percent, that figure shrinks to $405,000, according to Eric Roberge, a financial planner and founder of Beyond Your Hammock in Boston. His calculation factored in property taxes, maintenance and insurance.

He generally suggests allocating a conservative share of household income — no more than about 23 percent — to housing, but acknowledged that’s difficult in many places. “Our calculation for affordability doesn’t change,” Mr. Roberge said. “However, the big jump in rates changes what is actually affordable.”

There are other considerations. With many Americans moving from cities to larger spaces in the suburbs, you’ll also need to consider how much more it will cost to run and furnish that home, for example, or how much extra you’ll need to spend on transportation.

Beware the fixer-upper and other hidden costs.

Properties in less-than-ideal shape are enticing to those hoping to save some money, but supply chain problems and other issues are making that much harder, experts said.

“I have clients who have recently tried to partially circumvent the affordability issue by purchasing homes that need significant improvements,” said Melissa Walsh, a financial planner and founder of Clarity Financial Design in Sarasota, Fla. “Because contractors are hard to come by and material prices have been increasing at a rapid rate, these clients are finding that purchasing a fixer-upper may not be the bargain that it was a few years ago.”

She suggests setting aside plenty of cash — she has had two clients spend more than twice their initial estimate for renovations this year.

Approach an adjustable-rate mortgage with caution.

Adjustable-rate mortgages generally carry lower rates than fixed-rate mortgages for a set period, often three or five years. After that, they reset to the prevailing rate, then change on a schedule, usually every year.

The average interest rate for a 5/1 adjustable-rate mortgage — fixed for the first five years and changing every year after — was 3.78 percent for the week that ended Thursday, according to Freddie Mac. It was 2.64 percent last year.

More buyers are considering adjustable-rate mortgages: They accounted for more than 9 percent of all mortgage applications for the week that ended April 22, double the share three months ago and the highest level since 2019, the Mortgage Bankers Association said.

But they’re definitely not for everyone. “The typical borrower is someone who does not anticipate being in the property for a long time,” said Kevin Iverson, president of Reed Mortgage in Denver.

If you know you’re going to sell before your mortgage rate adjusts, it may be a suitable loan. But there’s no telling what rates will look like in five years, and the sudden hit of higher rates pushed many borrowers to the brink during the financial crisis of 2008 (though today’s A.R.M.s are generally safer than products peddled back then).

Be even more wary of so-called alternative financing — contract-for-deed arrangements and “chattel” loans regularly used to buy manufactured homes — which often lack typical consumer protections.

Don’t forget everything else.

The cost of simply getting into a home may feel the most painful in the near term, but other expenses later can be just as thorny.

A recent paper by Fannie Mae economists analyzed costs typically incurred over a seven-year homeownership life cycle and found that the biggest contributors include just about everything but the mortgage. Other continuing expenditures — utilities, property taxes and home improvements — together account for roughly half a borrower’s costs, while transaction expenses were 20 percent, the economists found.

They used 2020 loan data in which the average first-time home buyer was 36 years old with monthly income of $7,453 and bought a home for $291,139 with an 11 percent down payment. The actual mortgage — excluding repayment of the principal loan amount — contributes about 30 percent to the total costs over that seven-year period.

Their takeaway: “Borrowing is a big piece of the cost of owning a home, but that cost often is overshadowed by utilities, property taxes, home repairs and one-time fees paid to various parties to buy and sell a home.”

The Gentry

I cannot recall in any of the Democratic debates a discussion on two major issues: Housing and Education.  These are the two most significant factors that contribute to Segregation and Income Inequality aka Meritocracy.  But hey we got to trash Trump to prove we can win.  Good to know that pugilism is the metric to measure a candidate.

And in turn that brings to mind the passing remarks by Bloomberg on the 2008 crisis that smacked of racism, which again stop and frisk do as well or his overall misogyny and sexism but hey that is one issue that they have no problem talking about.  Again there are many issues of import but housing is an essential issue and if you forget the dynamo ,Ben Carson is our current Secretary HUD.   His views on this subject to say the least are not that different from Bloomberg.  But his tastes run like his boss, Trump, clearly.

But there is a major crisis in California, which Trump has been quite vocal about, just not in a positive way but hey at least he actually knows about it.  First up this article:

‘It’s a cycle’: the disproportionate toll of homelessness on San Francisco’s African Americans
Broken dreams: inside California’s housing crisis

Vivian Ho in San Francisco
Guardian
Fri 21 Feb 2020 

When Tracey Mixon walks out her door in San Francisco’s Tenderloin neighborhood, she is more likely to meet another black person than in most places in the city.

The Tenderloin is where many of the city’s homeless services are centered, making it a hub for the unhoused as they seek help. In a city where the black population teeters between 5% and 6%, 37% of its growing homeless population is black. “They sleep outside of my building,” Mixon, 49, said.

“They’re people I’ve known for years. They went from having places to live to being out out there on the streets. With me living in the Tenderloin, I see a lot of these people all the time and it hurts for me to see so many black people out there.”

In a state where a housing crisis has given way to a surge in homelessness, a disproportionate number of those experiencing housing instability are black. In Los Angeles, 37.5% of the homeless population is black, while in Oakland, where 70% of the homeless population is black, whole homeless encampments are dedicated to black and Latinx people.

The disparity is reflected nationwide. Although black people made up 13.4% of the overall population, according to the latest US census data, 39.8% of all homeless people were black.

Mixon joined a group with the Coalition on Homelessness on Thursday, going from office to office in San Francisco City Hall to bring attention to this racial disparity during Black History Month. Just nine months ago, Mixon was homeless too, along with her nine-year-old daughter. For almost a year, she said, she and her daughter lived in shelters, hotel rooms and on the couches of family and friends.

“It was tough,” said Mixon, who is now a peer organizer for the Coalition on Homelessness. “I made sure she was in school every day. I made sure I was at work every day. Just because we were homeless, I didn’t want our routine to be stopped.”

More and more throughout California, the homeless find themselves in similar circumstances as Mixon and her daughter: holding down jobs, making a decent living, going to school – just not able to find an affordable place to live.

In the office of the San Francisco lawmaker Rafael Mandelman, Miquesha Willis broke down in tears talking about her current situation.

“It’s a cycle, and there’s nothing you can do about it,” she said in an interview. “My wages are OK, but it’s not enough for San Francisco. It’s not enough for market-rate rent. It’s too much for below market-rate rent. I’m still trying to increase my wages to beat homelessness here. It’s crazy.”

In cities like San Francisco, black communities are getting pushed out as rent prices get jacked up. Between the 2000 and 2010 censuses, the black population fell by 19% in San Francisco and almost 23% in Oakland. Black residents are forced to move farther inland to places where housing is cheaper, such as Antioch and Stockton – even though for many, their jobs remain in the city.

Willis tried moving to Antioch but couldn’t make the commute work. Her job required her to clock in before public transportation began running on some days, and her car broke down, making it impossible for her to get to work.

Like so many people her age, Willis is questioning what she wants to do for a living – if it would be worth it to finish college, to try starting her own business, to switch careers. San Francisco made its name this century as the hub for the latest tech boom, where anyone with a startup idea could come and achieve their dreams. But Willis has found that San Francisco is only a welcoming place only for some, for those who can afford the privilege to fail.

“There are people who are trying to make things happen for themselves and trying to grow in their career and make something happen for their families,” she said. “This is one of the highest-paying cities. Why are so many people struggling here?”

Next up Costs:

Why Does It Cost $750,000 to Build Affordable Housing in San Francisco?
As California’s governor vows to tackle the state’s homelessness crisis, housing “insanity” stands in the way.

By Thomas Fuller  The New York Times Feb. 20, 2020

SAN FRANCISCO — The average home in the United States costs around $240,000. But in San Francisco, the world’s most expensive place for construction, a two-bedroom apartment of what passes for affordable housing costs around $750,000 just to build.
California’s staggering housing costs have become the most significant driver of inequality in the state. On Wednesday, California’s governor, Gavin Newsom, mentioned the issue 35 times during an impassioned speech, urging lawmakers to solve the state’s homelessness crisis by building more and faster.

But the vertiginous prices of housing in California show how difficult that will be.
Building affordable housing in California costs on average three times as much as Texas or Illinois, according to the federal government.

The reasons for California’s high costs, developers and housing experts say, begin with the price of land and labor in the state. In San Francisco a construction worker earns around $90 an hour on average, according to Turner & Townsend, a real estate consulting company.

Not taking into account the price of land, around one quarter of the cost of building affordable housing goes to government fees, permits and consulting companies, according to a 2014 study by the California Department of Housing and Community
For a building to be defined as affordable housing it typically obtains tax credits and subsidies. A single affordable housing project requires financing from an average of six different sources — federal, state and local agencies, said Carolina Reid, a researcher at the Terner Center at the University of California, Berkeley, and an author of a forthcoming analysis of affordable housing costs.

She called the process “death by a thousand cuts.”

Senator Brian Jones, a member of California’s State Senate, remembers laboring over an affordable housing project when he was on the City Council of Santee, Calif., near San Diego.

“It literally took us on the City Council six months to get all of our attorneys, all the developer’s attorneys, all the federal government’s attorneys, to agree on the paperwork. And that was just the financing,” Mr. Jones said.
“I walked away from that process and told the developer I cannot believe this project is going to employ more attorneys than construction workers to get built.”

Mr. Jones, who is head of the Republican caucus in the Senate, argues that California’s housing market is vastly overregulated, starting with California Environmental Quality Act.

California law permits anyone to object to a project under the act, which when it was signed by then Governor Ronald Reagan in 1970 was seen as a landmark effort to protect the environment from reckless development.

Today the law is often used as a legal battle ax by anyone who wants to slow a project down or scuttle it altogether, Mr. Jones and many developers and experts say.

“At very little cost one individual can take a project and tie it up in years of litigation,” said Douglas Abbey, a lecturer on real estate at the Stanford Graduate School of Business.

Environmental protection is cherished in California but there is also bipartisan agreement that housing prices are too high. Mr. Newsom has pushed through exemptions to the California Environmental Quality Act for homeless shelters, and he says the state should consider more exemptions.

Mr. Abbey, a former developer and real estate investor, says good intentions are backfiring. He argues that laws requiring developers to build a certain percentage of affordable housing as part of their market-rate projects are a hidden tax and a drag on overall housing construction

“What the state government and local governments need to recognize is that the housing shortage is purely a supply problem,” Mr. Abbey said. “There are burdens to introducing new housing.”

It’s not uncommon for a project in California to be mired for many years in paperwork over zoning or objections by other property owners before ground is broken.

Judson True, the director of a department in San Francisco city hall that seeks to speed up housing construction projects, says the process of building affordable housing is far too cumbersome.

“Nothing this important should take this long or be this hard,” he said.

Last year San Francisco broke ground on 767 subsidized affordable apartments.
“It’s nowhere near what we need,” Mr. True said.

San Francisco has the highest overall building costs in the world, according to a 2019 report by Turner & Townsend.

The average costs of construction in San Francisco are 13 percent higher than New York, 60 percent more expensive than Chicago and 75 percent more than in Houston, according to the report.

It costs seven times more to build in San Francisco, America’s hub of technology, than in India’s technology capital, Bangalore.

Mr. Newsom says he recognizes the threat that the high costs pose to efforts to get people off the streets.

The average cost of a single affordable housing unit is around $500,000 in Los Angeles and around $600,000 in Oakland, according to data by the Terner Center.

“One word insanity — it’s just insanity,” Mr. Newsom said in an interview last month.
If affordable housing cannot be built more cheaply, he said, “taxpayers aren’t going to support these bonds.”

Mr. Newsom’s budget this year calls for $6.8 billion in affordable housing funding including mortgage assistance for first-time buyers and bonds for veterans’ housing.
Mr. Newsom says he is counting on innovations in housing construction to help reduce costs.

But even with significant savings, housing experts say it would be impossible at current cost levels to build homes for the state’s entire homeless population.

It would cost somewhere around $70 billion to build housing for its current homeless population of 150,000.

Professor Reid at the Terner Center says she agrees with Mr. Newsom’s emergency efforts to get people off the streets and into shelters as well as preventing people who have homes from losing them.

But California, she says, does not have the resources to build enough housing for the state’s current homeless population, not to mention those who might become homeless in years to come.

“We are not going to solve the homelessness crisis if what people are expecting is that cities are going to build affordable housing for every one of those individuals,” Professor Reid said.

“It’s going to cost way too much.”

So we have lack of housing, cost to build housing and of course the biggest factor NIMBY.

BUILD BUILD BUILDWhen California’s housing crisis slammed into a wealthy suburb, one public servant became a convert to a radically simple doctrine.

By Conor Dougherty
The New York Times
Adapted from the Book:  GOLDEN GATES: Fighting for Housing in America.
Published Feb. 13, 2020

The City Council of Lafayette, Calif., met the public two Mondays a month, and Steve Falk liked to sit off by himself, near the fire exit of the auditorium, so that he could observe from the widest possible vantage. Trim, with a graying buzz cut, Mr. Falk was the city manager — basically the chief executive — of Lafayette, a wealthy suburb in the San Francisco Bay Area that is notoriously antagonistic to development.

With a population of just 25,000, Lafayette was wealthy because it was a small town next to a big town, and it maintained its status by keeping the big town out. Locals tended to react to new building projects with suspicion or even hostility, and over a series of Mondays in 2012 and 2013, Mr. Falk took his usual spot by the fire exit to watch several dozen of his fellow Lafayetters absolutely lose their minds.

A developer had proposed putting 315 apartments on a choice parcel along Deer Hill Road — close to a Bay Area Rapid Transit station, and smack in the view of a bunch of high-dollar properties. This wasn’t just big. The project, which the developer called the Terraces of Lafayette, would be the biggest development in the suburb’s history. Zoning rules allowed it, but neighbors seemed to feel that if their opposition was vehement enough, it could keep the Terraces unbuilt.

In letters to elected officials, and at the open microphone that Mr. Falk observed at the City Council meetings, residents said things like “too aggressive,” “not respectful,” “embarrassment,” “outraged,” “audacity,” “very urban,” “deeply upset,” “unsightly,” “monstrosity,” “inconceivable,” “simply outrageous,” “vehemently opposed,” “sheer scope,” “very wrong,” “blocking views,” “does not conform,” “property values will be destroyed,” and “will allow more crime to be committed.”

Mr. Falk could see where this was going. There would be years of hearings and design reviews and historical assessments and environmental reports. Voters would protest, the council would deny the project, the developer would sue. Lafayette would get mired in an expensive case that it would likely lose. As Mr. Falk saw it, anything he could do to prevent that fate would serve the public interest. So he called the developer, a man named Dennis O’Brien, and requested a meeting.

Mr. Falk had once taken a course on negotiation at Harvard, where he learned that people are supposed to be more reasonable when they bargain over food. He went to a deli and bought baguettes, a wheel of Brie and bunches of red grapes. He laid the spread on a conference room table and cut the bread into slices and put down little cheese spreaders and surrounded it with the grapes.

Mr. O’Brien was roughly the color of those grapes when he walked in with some aides, and Mr. Falk accepted that for the next few hours he would be the recipient of the developer’s frustrations. But before it got to that, he told everyone, he wanted them to eat.

The room was silent. Mr. Falk explained the whole deal about his negotiation class. The room remained silent. Mr. Falk looked at Mr. O’Brien and said, Dennis, look, I don’t even know you, but you have to eat something, even if it’s one grape, before I’ll talk to you. That at least got people laughing, and pretty soon everyone acceded to the bread and cheese and grapes.

America has a housing crisis. The homeownership rate for young adults is at a multidecade low, and about a quarter of renters send more than half their income to the landlord. Homelessness is resurgent, eviction displaces a million households a year, and about four million people spend at least three hours driving to and from work.

One need only look out an airplane window to see that this has nothing to do with a lack of space. It’s the concentration of opportunity and the rising cost of being near it. It says much about today’s winner-take-all economy that many of the cities with the most glaring epidemics of homelessness are growing centers of technology and finance. There is, simply put, a dire shortage of housing in places where people and companies want to live — and reactionary local politics that fight every effort to add more homes.

Nearly all of the biggest challenges in America are, at some level, a housing problem. Rising home costs are a major driver of segregation, inequality, and racial and generational wealth gaps. You can’t talk about education or the shrinking middle class without talking about how much it costs to live near good schools and high-paying jobs. Transportation accounts for about a third of the nation’s carbon dioxide emissions, so there’s no serious plan for climate change that doesn’t begin with a conversation about how to alter the urban landscape so that people can live closer to work.

Commuters at the Lafayette BART station.Credit…Ian C. Bates for The New York Times
Nowhere is this more evident than California. It’s true that the state is addressing facets of the mess, with efforts on rent control, subsidized housing and homelessness. But the hardest remedy to implement, it turns out, is the most obvious: Build more housing.

According to the McKinsey Global Institute, the state needs to create 3.5 million homes by 2025 — more than triple the current pace — to even dent its affordability problems. Hitting that number will require building more everything: Subsidized housing. Market-rate housing. Homes, apartments, condos and co-ops. Three hundred and fifteen apartments on prime parcels of towns like Lafayette.

Legislation is important, but history suggests it can do only so much. In the early 1980s, during another housing crisis, California passed a host of bills designed to streamline housing production and punish cities that didn’t comply. But the housing gap has persisted, and more recent efforts have also failed. In late January, the Legislature rejected S.B. 50, a bill that would have pushed cities to accept four- to five-story buildings in amenity-laden areas.

What this suggests is that the real solution will have to be sociological. People have to realize that homelessness is connected to housing prices. They have to accept it’s hypocritical to say that you don’t like density but are worried about climate change. They have to internalize the lesson that if they want their children to have a stable financial future, they have to make space. They are going to have to change.

Steve Falk changed. When he first heard about Dennis O’Brien’s project, he thought it was stupid: a case study, in ugly stucco, of runaway development. He believed the Bay Area needed more housing, but he was also a dyed-in-the-wool localist who thought cities should decide where and how it was built. Then that belief started to unravel.

Today, after eight years of struggle, his career with the city is over, the Deer Hill Road site is still just a mass of dirt and shrubs, and Mr. Falk has become an outspoken proponent of taking local control away from cities like the one he used to lead.

Although he didn’t know it at the time, Mr. Falk’s transformation began in 2015, with a phone call from a woman he’d never heard of, with a complaint he had never once fielded in his 25 years working for the city. Her name was Sonja Trauss, and she thought the Deer Hill Road project was too small.

Ms. Trauss was a lifelong rabble-rouser and former high school teacher, who’d recently become a full-time housing activist. She made her public debut a couple of years earlier, at a planning meeting at San Francisco City Hall. When it was time for public comment, she stepped to the microphone and addressed the commissioners, speaking in favor of a housing development. She returned to praise another one. And another. And another.

In backing every single project in the development pipeline that day, Ms. Trauss laid out a platform that would make her a celebrity of Bay Area politics: how expensive new housing today would become affordable old housing tomorrow, how San Francisco was blowing its chance to harness the energy of an economic boom to mass-build homes that generations of residents could enjoy. She didn’t care if a proposal was for apartments or condos or how much money its future residents had. It was a universal platform of more. Ms. Trauss was for anything and everything, so long as it was built tall and fast and had people living in it.

The data was on her side. From 2010 to 2015, Bay Area cities consistently added many more jobs than housing units — in some cases at a ratio of eight to one, way beyond the rate of one and a half jobs per housing unit that planners consider healthy. In essence, the policy was to enthusiastically encourage people to move there for work while equally enthusiastically discouraging developers from building places for those people to live, stoking a generational battle in which the rising cost of housing enriched people who already owned it and deterred anyone who wasn’t well paid or well off from showing up.

Ms. Trauss organized supporters into a group called the San Francisco Bay Area Renters Federation, or SF BARF, which was amateur even by local activist standards. But amateur was the point, part of Ms. Trauss’s knack for getting attention. She drove a glittery orange Crown Victoria, showed up to municipal meetings in leggings and white cowboy boots, and spoke in pop philosophical monologues, like declaring that the reason people don’t like new buildings is that it reminds them that they’re going to die.

Her aims were explicitly revolutionary. She told people that her goal wasn’t to enact any particular housing policy, but to alter social mores such that neighbors who fought development ceased being regarded as stewards of good taste and instead came to be viewed as selfish hoarders.

Ms. Trauss started to attract the attention of wealthy donors like Jeremy Stoppelman, the co-founder of Yelp, who had started to worry about housing costs crimping economic growth. And her tactics got more sophisticated. With a friend, Brian Hanlon, who worked a desk job at the United States Forest Service, she co-founded a nonprofit called the California Renters Legal Advocacy and Education Fund, or CARLA. Its mission: “Sue the suburbs.” After reading about an obscure 1982 California law called the Housing Accountability Act, Ms. Trauss decided to try to use it to force Lafayette to build Dennis O’Brien’s 315 apartments.

By then — 2015 — Mr. Falk had been working on the Deer Hill Road project for years. Through dozens of meetings with Mr. O’Brien, he’d hammered out a deal for a more modest development of 44 single-family homes, as well as an agreement to build the city a soccer field and dog park. Mr. Falk was a frequent user of the analogy about sausage-making, and this was definitely some sausage, but he walked out of his talks with Mr. O’Brien feeling like an A‑plus public servant who might have a second career in conflict resolution. When Ms. Trauss phoned him to say the 44-home approach was entirely inadequate, Mr. Falk tried to persuade her otherwise. Of course, he never had a chance.

At a City Council meeting a week later, Mr. Falk noticed a gaggle of BARFers, throbbing with the conspiratorial energy of teenagers before a prank. The microphone was already going to be crowded. Neighbors had formed a vociferous nonprofit called Save Lafayette, which opposed both the 315-apartment idea and the 44-house compromise on grounds from view-ruination to carcinogenic construction dust. Mr. Falk sat by the fire exit and watched as BARF and Save Lafayette collided at the podium, one side arguing the project was too small, and the other arguing it was too big.

“I’m somewhat disturbed by all these parties from outside my neighborhood telling me that I should accept this degradation to my quality of life,” said one Lafayette resident, Ian Kallen.

“No human being is a degradation,” retorted an SF BARF member named Armand Domalewski. “Let’s talk about the economic benefits of adding people instead of simply treating them as costs.”

When it was Ms. Trauss’s turn to speak, she argued that the entire notion of public comment on new construction was inherently flawed, because the beneficiaries — the people who would eventually live in the buildings — couldn’t argue their side.

“An ordinary political process like a sales tax — both sides have an opportunity to show up and say whether they’re for or against it,” she said. “But when you have a new project like this, where are the 700-plus people who would initially move in, much less the tens of thousands of people who would live in it over the lifetime of the project? Those people don’t know who they are yet.

Ms. Trauss sued a few months later. The great irony was that nobody was more unhappy about it than Mr. O’Brien. He had spent years and millions of dollars proposing two completely different projects. Now some activist group he’d never heard of was suing the city, and him, on behalf of his original project — in essence, suing him on behalf of him.

CARLA’s lawyer had the impossible job of trying to convince a judge that Lafayette had unfairly forced Mr. O’Brien to build 44 houses instead of 315 apartments, while Mr. O’Brien sat on the other side more or less going, No they didn’t. CARLA lost the argument, but after it threatened to appeal, Mr. O’Brien ended up agreeing to pay its legal fees. He had now argued, and paid for, both sides of the same case.

Other litigation continued. Members of Save Lafayette sued to force a referendum where residents could rescind the 44-home plan, and eventually, they succeeded. Ms. Trauss and her fellow insurrectionists moved on to other battles, filing more lawsuits for more housing until they started winning. Meanwhile, the movement she helped found — YIMBY, for Yes in My Back Yard — has become an international phenomenon, with supporters in dozens of housing-burdened regions including Seattle; Boulder, Colo.; Boston; Austin, Texas; London and Vancouver.

Development battles are fought hyperlocally, but the issues are resonating everywhere. In late 2018, Minneapolis became the first major city in America to effectively end single-family zoning. Oregon followed soon after. California and New York have significantly expanded protections for renters. And as more economists give credence to the notion that a housing crisis can materially harm G.D.P., by exacerbating inequality and reducing opportunity, all of the Democratic presidential candidates have put forth major housing proposals.

They run the gamut from tax breaks for renters, to calls for more affordable housing funds, to plans for bringing federal muscle to bear on zoning reform. These ideas share a central conflict: Can city leaders — who in theory know local conditions best — be trusted to build the housing we need? Or will they continue to pursue policies that pump up property values, perpetuate sprawl, and punish low-income renters?

Mr. Falk began his career on the local control side of that debate. But somewhere along the Deer Hill odyssey, he started to sympathize with his insurrectionist opponents. His son lived in San Francisco and paid a fortune to live with a pile of roommates. His daughter was a dancer in New York, where the housing crunch was just as bad. It was hard to watch his kids struggle with rent and not start to think that maybe Ms. Trauss had a point.

“I’m not sure individual cities, left to their own devices, are going to solve this,” he told me once. “They don’t have the incentive to do so, because local voters are always going to protect their own interests instead of looking out for people who don’t live there yet.”
So he started to rebel. When California’s governor at the time, Jerry Brown, threatened to override local control with a proposal to allow developers to build urban apartments “as of right” — bypassing most of the public process and hearings — Lafayette citizens were apoplectic. Mr. Falk, against his own interest, wrote a memo in favor of the idea.

“Cannot be trusted,” “ineptitude,” “disingenuously manipulating the City Council,” “should be publicly and explicitly reprimanded” — these were some of the things citizens said in response. His future was untenable. The City Council reprimanded him, and when it came time for his contract negotiation, members of Save Lafayette protested a clause that would guarantee him severance of 18 months of pay if he was ever fired; a few months later he forfeited the amount — close to half a million dollars — and resigned.

“A city manager has a choice: You can just sit there and be this kind of neutral policy implementer, or you can insert yourself,” Mr. Falk said. “Sitting in your office all day long, you have to ask the question, ‘Why am I here, why am I doing this work?’ At some point, I just think it’s natural that you start making recommendations that you think are in the best interest, not just for the community, but society.”

It’s hard to look at what happened in Lafayette and see a population that acted rationally. After the 44-home plan was derailed, Mr. O’Brien activated an insurance policy that few people knew about: The terms of his negotiation with Mr. Falk allowed him to return to his original plan for 315 apartments. When residents learned at a City Council meeting that their agitation might have brought them full circle, they got so angry that a sheriff offered to escort one of Mr. O’Brien’s employees to her car.

Mr. Falk, on the other hand, seems at peace. At the council meeting marking his departure, he sat, uncharacteristically, up front. The mayor gave him the honor of leading the room in the Pledge of Allegiance. Mr. Falk had a resignation letter in front of him, but told the audience that he was only going to read it in part.

The portion he read was polite. It was about how he loved the city and believed Lafayette was a model of civility and democratic engagement and had a brilliant and professional staff. Afterward, people said nice things and Mr. Falk nodded thank you. The paragraphs he didn’t read became public soon enough — and started making the rounds on Twitter.

“All cities — even small ones — have a responsibility to address the most significant challenges of our time: climate change, income inequality, and housing affordability,” Mr. Falk had written. “I believe that adding multifamily housing at the BART station is the best way for Lafayette to do its part, and it has therefore become increasingly difficult for me to support, advocate for, or implement policies that would thwart transit density. My conscience won’t allow it.”

I will say that permits, costs, labor and land are all factors in the urban sector why housing costs are high and when built apartments, condos and single family dwellings are ultimately expensive in proportion to wages and earnings.  The reality is that while many developers are getting low interest loans, often tax credits for building in opportunity zones or districts/areas labeled as such to encourage gentrification and in turn mixed building growth we also have dilapidated housing stock, homes on the edge still of foreclosure thanks to the 2008 crisis, a bizarre obsession with flipping houses as a type of business to bring both fame and riches thanks to Chip and Joanna (who no longer do said business) or Property Brothers who only do it for TV but there are many many more that litter the landscape of television and of course a still low interest rate that entice buyers to buy now as it may not last, the only difference is that banks are supposedly doing due diligence to verify income and ensuring that the loan, home value and costs are legally within the spectrum of bank and federal lending regulations.  Sure they are sure.   I personally heard two women with very low incomes tell others that they were pre-approved to buy a home. Really? One was a Waitress/Social Influencer, the other a clerk at a treatment center.  Both women lived in Nashville where wages have not come up to parity with the nation and in proportion to the cost of housing so let me know that banks’ name as they sound great to get money.  But in this case Nashville is not the exception it just is already shady and in turn they had not been hit in 2008 as the rest of the nation as its designation of an it city came after the flood of 2010 with it the rush to (re) build happened and the flux of cash from out of state buyers/investors resulted.  Then the 2018 tax bill that created in the urban core (where I lived) to be labeled an opportunity zone further pushed the gentrification and rise in costs to live in what was basically a train stop on an access road to the fairgrounds.  But then the permit to the stadium occurred and wow just wow an already over trafficked road will become more so and the rise of taxes, land and costs comes with it.  Again careful what you wish for.

And that is the reality behind housing and the costs the idea that homes are not dwellings in which to live more affordably and have better control of costs and well just own a home to have a sense of permanence and community it became the largest source of personal wealth and investment.

This is from an interview with the Author of the above book:

I think such an important point that often gets lost is the idea that housing went from being a place for somebody to live to an investment and a primary wealth builder. 

The book kind of talks about how that began in the 1970s, during the Great Inflation. It is a huge piece, because housing has kind of become our pension program, kind of become our inheritance program. 

Property has always had a lot of wealth and inheritance tied up in it. So that’s not exactly new. 

But in the Great Recession, there was a lot of talk about how people were using their home equity as an A.T.M. And so it’s really become this financial instrument. Not surprisingly, people defend that financial instrument the same way they defend themselves from higher taxes or whatnot.

You look at America today, and we have the housing crisis. We have a huge homeless problem. We have a huge rent burden problem. A quarter of renters spend more than half their income on rent. And so this uniquely American indicator of wealth has gone totally wrong.

An issue is the home owner tax credit and of course the concept of second and third homes, just ask Jeff Bezos about that.   There is no rental credit that could enable those like myself to find a return on renting if in fact it is over 50% of one’s income.  That we built into the tax system an enabler to force if not encourage home ownership  cannot be denied and the same could be for the marriage credit. Gosh what is the message there? Maybe I need a marriage of convenience or one of living apart together. 

That income tax write off being removed in the same 2017 tax bill as well as property taxes are large reasons why New York and New Jersey are finding themselves as the states with the most migration out in history followed by California again due to cost of housing and the decimation of region due to wildfires that did not help; However, again California like New York and the tri state region are still the magnets for the most educated and most well off in America.  So no shortage of housing here for those of the 1% and yet even a surplus of luxury housing that will take an estimate of seven years in which to be disbursed.

But this is region that has rental fees paid to brokers that can be from 1/3 of the rent to a full month rent(which does little to discourage negotiating).  Here in Jersey City it took me about two days working and by working I mean contacting and dealing with largely bullshit to find a rental to realize I was fine doing it on my own.  I was asked how I did so and it was fairly easy. First I got on light rail and go off each stop and walked within a five minutes radius, walked in asked if I could see a unit, get information or make an appointment.  No costs, no fees no hassles. And I found the Agents from the buildings were way more informative, helpful and followed up without effort.  Funny the agents who wanted me to pay them a fee equivalent to the months rent of my future home were total assholes. And all of those rentals were obtained via Zillow and yet they were utterly unhelpful, rude and half the time invisible.  Two I never met and another refused to even show me a unit unless I gave him my financials.   Here is the deal – you want me to pay you than do something for me not just text me an address, not show up, show up late, tell me about the unit and then walk off and text me another unit miles away that you could have taken me to, shown me and asked me my needs, ideal rent and show me a series of units that were in varying neighborhoods and be honest about the pros and cons.  They were my first introduction to Jersey City and I thought “Uh oh this is Nashville all over again” and then I had a convo with a Bartender who said you don’t have to pay a dime and once I got that bit of advice I was off on my own with a series of prospective units and the ability to negotiate directly with the Agent on site. Funny how that works out.

Funny that while liberals are often maligned in finding solutions, two former homes Berkeley and Seattle have tried to at least address if not find ways to resolve the problem. This is the rental opportunity plan devised in Berkeley and having lived there and Oakland I can tell you first hand that what was once cool is now another lost cause in the extension of Silicon Valley.  That is one large green valley and by green with money to throw at anyone to buy homes.  In Seattle the housing crisis is not unlike San Francisco with limited available housing largely due to incessant regulations and lack of build for decades but of late the mass exodus of residents lead again to an odd balancing out with  bidding wars coming to a close along with new apartment/condo buildings being constructed that ended some of this on its own. But what was quite controversial was the HALA program that came into existence in about 2015 and it changed the dynamics.   That program has been concluded but it does provide a through examination of what it takes to change a crisis into less of one.  Not perfect it has some pluses and minuses but again this is what it is like in Seattle, people do occasionally rise to the occasion.  This article discusses the HALA plan and this is well worth reading if you are not already on overload.  This subject is one that can seriously put one on overload given the history as well as the present information on the issue.

I would love to own a home of my own to have the furnishings and fixtures I pick, to have the ability to have something that is mine and mine alone.   I don’t love living in a big apartment building and this is my first time doing so and while it has many pluses it has equally as many negatives. That said as I age I have to think what that means with regards to maintenance and to upkeep and that is another issue that frankly many must face so here we are with most of the candidates well over 60 and I am hearing nothing about what it means to age in America.  But that is another post for another time.

Rent’s Due

Seattle is now at that number.  The reality is that 3/4 of my check goes to rent forcing me on food stamps, food banks and no extras or options at all. Lose the cable bill, the gym membership, the flexibility of having a life.

I ended up negotiating with my landlord to pay the remainder of my rent for the year in cash. I got a cash advance from a credit card, the way many Americans did and paid him about half of what I would normally.  In cash.  I did not sign a lease or rental agreement and he agreed that if I let the place on Air BnB I was responsible for any and all damages and costs and they could not stay over 30 days – consecutively.

This is the new nation.  We can’t afford to live here and we can’t live anywhere there are not jobs and jobs that pay enough to pay the rent. Raise the rent, raise the pay and not give me time off, free ping pong or a gym membership.  Okay that last one I could use. But do you think I could share it with my landlord?

The cities where Americans are most likely to spend more than half of their paycheck on rent

By Jonnelle Marte
The Washington

July 15 2015

More than a third of renters in Miami spend more than 50 percent of their income on housing. 

More people than ever are renting instead of buying homes, but being a renter isn’t getting any easier.
For many households, the monthly rent check is so big that it eats up the majority of their paycheck — and the burden is growing. Some 20.7 million rental households — or about half of all renters– spent more than 30 percent of their income on housing in 2013, according to a report from the Harvard Joint Center for Housing Studies. About 11 million of those households spent more than half of their paycheck on rent and utilities, up 37 percent from 2003, the study found. (Financial advisers typically recommend that people spend less than a third of their pay on housing costs.)

As the map below shows, renters in cities that people expect to be expensive, like New York City, San Francisco and Washington, D.C. aren’t the only ones struggling to pay the bills. “The rental housing crisis is everywhere,” says Angela Boyd, vice president of advocacy at Enterprise Community Partners, an organization that advocates for affordable housing.

Take Miami, where close to 36 percent of renters spent more than half of their pay on rent and utilities in 2013, the highest of the 100 metro areas studied in the report. Someone earning the median household income of $32,000 and paying the median monthly rent bill of $1,100 would spend 39 percent of their pay on housing.

The share of households where people spend more than 30 percent of their income on housing. Click here for an interactive version of the map. (Credit: Harvard Joint Center for Housing Studies)

In some cities where housing is less expensive, wages are still not high enough to make the rents there affordable.

In New Orleans, for instance, 35 percent of renters dedicate more than half of their pay to housing, the second highest share for the cities studied. Many people working in tourism and hospitality, a major industry for the area, might have low-paying jobs that make it harder for them to afford the median rent bill of $900, Boyd says.

About a third of the renters in cities that have lower-than-average housing costs, like Rochester, N.Y. and Fresno, Calif., also spend at least half of their paycheck on rent.

Middle class families are among those struggling the most. The number of people making between $45,000 and $75,000 who spent more than 50 percent of their income on housing increased by 72 percent between 2013 and 2003. For people making between $30,000 and $45,000, the number of renters in that position increased by 69 percent.

The cheapest apartments are being snapped up quickly. The number of available units that cost less than $800 a month fell by 12 percent in 2014 from the year before, according to the report. In many metro areas like Washington, D.C., much of the rental housing being created consists of luxury apartments, which come with an unexpectedly higher price tag, Boyd says.

Those higher rent costs are making the process of saving for a down payment very, very difficult, Boyd points out. “You’re looking around and saying I cant afford to buy a home, and I also can’t afford to rent one of these luxury apartment buildings,” she says.

But for people with sufficient savings, it’s a great time to be a homeowner. About 19 million homeowners  — about one in four — spent more than 30 percent of their income on housing in 2013, the lowest share in a decade.

(Source: Harvard Joint Center for Housing Studies)

The Costs of Work

“To see what is in front of one’s nose needs a constant struggle.”  

                               – George Orwell 

To paraphrase Bill Clinton’s great catch phrase (coined by James Carville) in the run up to the 1992 presidential election, “It’s the private sector, stupid.”

Beginning in the 1980’s, the private sector began an effort that continues to this day to reduce the proportion of the cost of selling goods and services attributed to labor This takes many forms, including driving down salaries and wages, outsourcing, union busting, sending jobs overseas, transferring jobs to right-to-work states, increasing the ratio of part-time to full-time employees, not translating workplace productivity gains into wage increases, shifting more health care costs to employees, ending defined benefit pensions, reducing employer contributions to defined contribution pensions and switching to once-a-year lump sum contributions, forcing employees to work unpaid overtime, classifying employees as independent contractors to avoid paying benefits and workingman’s compensation contributions, increasing the number of unpaid internships, hiring new workers through temp agencies, requiring employees to sign non-compete agreements, offering only one-off bonuses and other rewards instead of annual pay raises, and layoffs, not only during recessions, but also after mergers and acquisitions. Non-cyclical layoffs have become a permanent feature of the new economy.

Economic marginalization of ordinary working Americans in the private sector is once again a core organizing principle of American conservatism

That was in the quote section of the below article.  I have already written about the current state of he 1% in Life at the Top, who don’t seem to have the same problems facing the lower tier. CNBC the network for those doddering douches of the upper 1% had this story on CEO pay.  And of course it is not going lower, would it ever actually?  The average pay is $22M for a CEO, the average pay for the average worker in 2013 made slightly above $51K.

Now that is the average. The median, a better reflective note on what is actually earned as it reflects the number that is in fact more realistic puts CEO pay at 10M.  That data was from 2014 and the article shows how compensation is determined.  So when they say “average” they are including all the benefits, stocks and salary actually paid. And when you say median and average they are not the same thing and yet are often thought of as such. 

To understand how this is calculated you can use the Census data collected here which provides a larger picture of income and wages.   But again you must understand how these figures are determined. 

As Forbes explains:

The answer, which we all know if we think about it, is found in the first week of statistics class where we learned about the three measures of average—the mean, the median, and the mode. By average, we usually implicitly mean the mean, which you get by adding up the various numbers and dividing the total by the number of observations. The average, or mean, income thus rises proportionally with the total. An economy growing 2 percent per year will generate average (mean) incomes that are growing 2 percent per year.
The median divides the numbers in half. Half the people or families earn less than the median income and half earn more than the median. The mode in our example is where the incomes seem to be clustered—the most common income. Now, let’s forget about the mode. 

The simple answer to the paradox is that the rise in mean incomes benefits disproportionately from those with higher incomes. We all know that incomes in the upper income brackets have been rising faster than incomes in the lower income brackets. Even the simple fact of compounding contributes to that since large numbers grow faster than small numbers. So, mean incomes rise even if only a small number at the top are responsible for that rise. At the same time, the median income falls fallen as part of the same phenomenon. There are more people experiencing the fall in the median income than are experiencing the larger increases. Hence, the perception is the reality for those that have it.

So there you have it, the perception vs the reality. When your income rises 13% or more the lower tier is presumed to rise at the same proportion. Uh no. 

We also have the belief that the rise in the wages of the fast food worker means across the board $15/hour for similar service jobs and that would be uh no.  So home health care workers, child minders, cleaners, stock boys,  and other minimum wage jobs will remain at the lowest standard set in their state often linked to the federal minimum.  And that discrepancy and in turn division further confuses workers and employers.  

But as we know it is a confusing battleground as no one is actually making $15/hour anywhere – yet. That is being phased in and has no adjustment for inflation or cost of living in an area that is higher than its surrounding communities. So the 15/hr worker in New York needs it but the one in Albany they may get by on less but that would require actual math and stuff so let’s not do that and there is a downside to not taking that into account.  Catherine Rampell  of the Washington Post discusses that in this article. 

So we have wage stagnation, wage misinformation, wages with regards to overtime and salary works, wage theft,  wage discrepancies and regardless of the unemployment levels and job growth, the continuing decline of wages as noted in the LA Times. 

Then I read Builder Magazine which is trying to validate or make reason out of this sudden push for density, which used to be the mantra of the sustainable movement ( the green build still exists but the push and pull of that is now very much give or take and pick and choose), is now under the mantra of affordability.  The millennials are the new boomers and the builders want them to come out from under the basement and buy homes and go into more debt.   So the debate finally resonated with this group the issue of stagnant incomes, student debt, tight credit/mortgage qualifications, land and production costs rising faster than incomes, not enough skilled labor and wage costs for skilled labor; those horrible regulations/restrictions, and the lack of available homes and land in cities and locations where people want to both live/work.   

The issues really center on income inequality.  And where the jobs are are happening are  in cities already well established, with less room to grow, such as San Francisco a city with strong ordinances and people who live there either protected by home ownership, rent control or other laws including preservation ones that offer limited flexibility in both land and choice. So you are seeing the sudden growth in cities like mine that are building dense, changing zoning and adding more multi family options than in the past.  And then what?  You still are building buildings that people cannot afford or do so by sacrificing other options such a car ownership, living alone, eating, medical care, extra education, and entertainment and having homes with yards and larger spaces with fewer people shoved into cell pods or overly priced condos that have been built on a dime with crappy workmanship and materials. 

You cannot get blood from a stone and they are bleeding them regardless of that fact. Why are wages not rising to enable a more fluid economy? We  now might have the reason –  fake perks. Dear god the Silicon Alley ping pong table and free food has evolved to a new level of idiocy. And of course the millennial worker sips at that trough without realizing that it is a form of wage theft.   

So when your landlord raises the rent or the payment on the loan is due and things are tight, tell them to have a chill pill and offer a massage in exchange. That will work out great.

Companies have found something to give their workers instead of raises
By Ylan Q. Mui
The Washington Post
July 28 2015

Once a staple of the American workplace, the annual raise is turning into a relic of the pre-crisis economy as companies turn to creative — and cheaper — ways to compensate their employees.

More businesses are upping their spending on benefits such as one-time bonuses, health care and paid time off, according to recent survey data. Many are rolling out perks such as free gym membership, commuting subsidies, even pet health insurance.

But often, those benefits are being provided in lieu of higher salaries. Government data shows the growth in spending on benefits is outpacing gains in wages. Companies say the structure caters to the growing workforce of finicky millennials who prize flexibility over stability and allows them to reward star employees without increasing fixed costs.

“There’s been this seismic shift,” said Gary Burnison, chief executive of Korn Ferry, an executive search and talent management firm. “And I think one of those is that the raise has gone the way of the gold watch.”

The decline of the raise could help explain one of the most frustrating puzzles of the America’s lumbering economic recovery: stagnant wages. Wage growth has been stuck at about 2 percent for the past five years despite a rapid drop in unemployment and a surge in hiring since 2014. Without a bigger bump in their paychecks, many workers feel the recovery remains elusive.

But some economists say the focus on wages is short-sighted. Bonuses and other awards have spiked to the highest level in more than three decades, according to an analysis by Aon Hewitt. A survey this summer by a human resources industry group found about 35 percent of companies increased spending on benefits, up 7 percentage points from the previous year. That included health care, bonuses, vacation time and tuition reimbursement — making up about a third of workers’ total compensation.

“Wages tell you almost nothing,” said John Silvia, chief economist at Wells Fargo. “It has changed over the last 20 to 30 years as companies try to compensate workers in a way that matches their lifestyle.”

When Ashley Chandler went beyond the call of duty at her sales job, she was rewarded not with a bigger paycheck but with something she said was just as valuable: time.

The 25-year-old spent weeks poring over paperwork at the flooring installation company where she works in North Carolina to help one of the managers close some complicated projects on time — the type of dedication that a generation ago might have placed Chandler first in line for a big raise at the end of the year.

At a human resources payments firm Justworks in Manhattan, that means eschewing the standard matching contribution to employee’s 401(k) retirement plans in favor of paid gym membership and pre-tax commuter benefits for its millennial employees. Across the country, standard raises at Los Angeles-based Korn Ferry run about 3 percent, but the company is considering doubling its maternity leave. And at MonMan, which manufactures and installs high-tech floors, Chandler received three extra days of paid time off.

“Would I like to make more? I think everybody would like to make more,” she said. “But for me, what I liked most about it was the flexibility.”

Of course, the growth in benefits has only occurred at businesses that offer them in the first place, many of them in white-collar industries where salaries are more generous. For many low-skilled workers, the paycheck is the end of the story. In industries such as retail and fast food, labor groups are pushing to raise the minimum wage to $15 an hour. And even in jobs that have enjoyed bigger benefits, financial experts warn that workers often don’t always come out ahead if they sacrifice dollars for other forms of compensation.

The shift toward bigger benefits and smaller salary increases accelerated as firms tightened their belts following the financial crisis, experts say, but it is rooted in broader demographic changes in the nation’s workforce. Millennials say they prize the freedom to work away from their cubicles, while businesses have learned that flexible compensation can help the bottom line.

At MonMan, Chandler’s boss, Ryan Hulland, used to give employees 6 percent or 7 percent raises, no questions asked. But that was before the 2008 financial crisis, when the boom in high-tech construction that drove sales of the company’s specialty flooring began to drop off. In downtown Charlotte, Hulland saw work grind to a halt on the gleaming skyscraper Wachovia Bank once planned to use as its corporate headquarters. The bank was taken over by Wells Fargo, and Hulland was determined that his company would not meet a similar fate.

“I don’t want to be caught in a double dip recession,” Hulland said. “I don’t want to be caught in a position where we have overextended ourselves.”

So he slashed raises to 3 percent and began searching for other ways to reward his best employees. Hulland started by giving out $100 gift cards and was taken aback by how excited workers were to receive them. Encouraged by the response, Hulland began offering an intangible reward: extra paid time off.

Though the dollar amount didn’t make up for the smaller raises, human resources experts say such rewards provide a more immediate psychological boost, particularly when times are tight.

“That’s why we give people gifts at Christmas and not just bags of money,” said Andrew Chamberlain, an economist at job search firm Glassdoor. “They can build a relationship that goes beyond a paycheck.”

When Korn Ferry reached a major milestone this summer of a record $1 billion in annual sales, the company’s chief executive wanted to thank the employees. But instead of giving everyone more money, Burnison opted to make them work less: The company will be closed the Friday before Labor Day and the week between Christmas and New Year’s.

“Given the demanding world in which we operate, I know we are all pulled in many directions and never seem to have enough quality time with family and friends,” he wrote. “This year, we would like to take a small step to improve that situation and demonstrate our appreciation for your dedication and commitment with the gift of time.”

Home Yet?

Yesterday a new PCC market opened in our neighborhood. Expensive, organic and long past actually being a co-op but one in name only (it is actually owned by a corporation but still “sells” membership) but has a wealth of organic and in turn gourmet food. The neighborhoods that surround are a mixed bag themselves, largely gentrifying just a few blocks on either side are truly troubled with high crime that veers from home break ins to shootings. But the idea is that build it they will come. And by they we mean Amazonians.

After yesterday’s announcement that Amazon finally turned a profit and are now the country’s biggest retailer over WalMart the hubris, the arrogance and the domination to turn Seattle into a full company town is now near completion. The belief that all of the building, all of the bike lanes, the laws to change neighborhoods to include more bars and other businesses that cater solely to the young, the primarily male, the H1BI visa holders and the large amount of transient population that comes with the belief that they offer high paying jobs, in a city of $15/hr wage and legal pot brings.

Adjacent to each luxury build are doorways that house the gypsy camps, the freeway on ramps have tent towns with more coming (some however are not official but still dot the highways), there is not a park that doesn’t have a person or two living in them and the cities idea is to make smoking illegal but guns not a problem (you can thank King County Superior Court Judge Catherine Shaffer for that one – a total bitch). Yes we have the most growth around real estate with many of the “tech” crowd moving here as they believe it is cheaper and can poach from each other and not have to meet the salary demands the bay area requires. Irony this is now the bay area only on a sound.

The infrastructure demands, the issues of schools, roads and water are not dealt with at all. Well these are not people who have any long term interest and add that they don’t vote it turns cities into the future Detroit and yes I believe that when you rely on a single industry and a single type of income you are eventually going to bust out all over. It can’t happen to a nicer city and again I cannot wait to leave.

I say in jest or not, that this is a city that would be happy to see me dead in the streets. It nearly happened yet no one helped me then and I survived and that seems to be the mantra of the Courts, the Lawyers and others whom I asked why no one would. It is the same response you hear from those who have been incarcerated and released after being found innocent on re-examination. They are set free and yet crickets.  This city truly exemplifies the Seattle Freeze and like the Borg you best assimilate to survive.

This is what comes from a patriarchal society. The belief that you are still standing with bootstraps you can pull yourself up and that is enough.

I wonder when Jeff Bezos gets his dreams of robots to package, drones to deliver and ways to eliminate any type of phone service, while fighting off more lawsuits and investigations by writers, businesses and others who have realized that you don’t become a Walmart without bodies stomped along the way and what happens if and when they ever need to readjust. Remember Microsoft has realized that and while they are still a major business here, the layoffs have not resonated with anyone at this stage of the game and that may be a good thing or not to those laid off. But hey Google, Facebook are moving in! Just don’t be over 40, be a woman or a person of color (unless Asian and holding a Visa, not the card)

So as we have a building boon and rent increases that are stratospheric one wonders when it will end. Well the nice thing is that the banks are back lending just not as aggressively as they did in the past (or maybe not as they were busy with inflated car loans of late). So you have a 75K job at Amazon with a turnover of every 4 years, good enough. And given our current market we are selling homes in less than a week with a median price of 500K. So huzzah if you are buying to live there that means those luxury apartments above PCC now renting at a minimum of 1,500 for a studio, 3,200 for a 2 bedroom will come down in price or do what they did before when this happened – go Condo.

If there is one thing Developers are flexible on are ways to make sure their bottom line is met. House wins just not yours.

As more Americans buy homes, will it ease the strain on renters?

Existing home sales rose 3.2 percent to a 5.49 million annualized pace in June as stable job prospects and a much-improved economy encouraged buyers. But thanks to shifting demographics and the lingering effects of the housing crash, more Americans are still renting than they have in decades.

By Schuyler Velasco, Staff writer
The Christian Science Monitor
July 22, 2015

After a long stretch of cautious, respectable gains, the housing market finally got a little crazy in June. Existing home sales rose 3.2 percent last month to a 5.49 million annualized pace, according to data released Wednesday by the National Association of Realtors (NAR). That’s much better than the 5.4 million pace analysts were expecting and a 9.6 percent increase year-over-year.

It was the fastest pace for home sales since February 2007, and prices continued to climb: the median single family home sold for $236,400 last month, a 6.6 percent increase above June 2014, and higher than the previous home price peak set in 2006.

“Buyers have come back in force,” NAR chief economist Lawrence Yun said in the report’s release. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”
Recommended: Can you guess the home prices? Take our real estate quiz!

Strong sales activity for housing is a good thing for many reasons, but here’s a huge one: If more and more Americans take the leap and buy homes, it could finally ease the strain on renters, who, thanks to a combination of demographic and economic factors, are seeing their housing costs balloon and their ranks become more crowded than they have been in decades.
Test your knowledge Can you guess the home prices? Take our real estate quiz!
Photos of the Day Photos of the day 07/22

Rental nation

Where the ownership side of the housing market had been locked in a steady crawl until recent months, the rental side has been in a full-out sprint. Nationwide, rental prices have increased 4 percent since April 2014, outpacing the growth of home sale prices, according to a May report from Zillow. Several major cities saw much larger rent increases, led by a 14.9 percent hike in San Francisco and a 12.9 percent rise in nearby San Jose, Calif. Twenty-four major metros, from Dallas to Denver to Tampa, Fla., saw their rents rise at a faster rate than the national average.

The rental market is also more crowded than it’s been in two decades: according to the Census Bureau, the national vacancy rate for rented homes hit 7 percent in 2015, its lowest level in at least 20 years and a drop from about 12 percent in 2009. The home ownership rate, meanwhile, fell to 63.7 percent in early 2015 – its lowest level in 25 years according to the Census Bureau.

“A gap persists between the median monthly rent and the median monthly mortgage payment: rentals are more expensive,” IHS Global Insight economists Patrick Newport and Stephanie Karol write in an e-mailed analysis of the NAR’s report. “This suggests the presence of substantial barriers preventing current renters from becoming owners.”

Millennials, but also …

As with many things economy-watchers fret over, part of the issue is Millennials, who are finally striking out on their own but delaying life benchmarks, like marriage and children, which typically lead to home ownership.

Growth in the housing market is closely tied to what economists call “household formation,” or when a person leaves his or her family home and becomes a separate unit, says Mark Fleming, chief housing economist for the insurance firm First American. Since the recession, he notes, household formation by Millennials has ramped up, but virtually all of those new households are renting.

“We’ve created barely any new owned households,” he says, but that makes sense with the priorities of most young adults. “One of the primary reasons is mobility. When you’re younger, you’re not sure where you want to live yet, and it’s more expensive to sell a house than to [end a rental agreement].”

Renting is expanding beyond the typical college grad with his first job and three roommates, however. The share of single-family homes in the rental space is rising, from 9 percent a decade ago to 13 percent in 2005, according to a recent report from Moody’s Analytics. That suggests that many families who lost their homes during the housing crisis still haven’t built up their savings and credit enough to get back into the market, says Rolf Pendall, Director of the Metropolitan Housing Communities and Policy Center at the Urban Institute, a Washington think tank.

Baby Boomers, too, have potential to squeeze the rental market from the other end as their income levels drop and they transition out of homeownership. A recent Urban Institute report suggests that the share of Boomers in the rental market will more than double by 2030.

Both Mr. Fleming and Mr. Pendall argue that on its own, a nation of renters isn’t cause for alarm (unless you’re a certain type of real estate developer). But it is a problem, Pendall says, if rental demand is driving prices up to the point where people can no longer find affordable housing in the areas they want to live and work.

“There’s an inability of the economy right now to deliver jobs at wages that pay enough money so that people can afford their rent,” he says. “As rents go up, more families will be at risk for homelessness,” a problem that disproportionately affects poor African American and, to a lesser extent, Latino communities.

Relief ahead?

Still, if home sales continue to accelerate and the economy continues to improve, it should help ease the strain on the rental market in the long-term. As young adults age and settle down in larger numbers, Boomers will eventually pass away, loosening a still-tight inventory of homes available for purchase. “[Millennials are] a bigger generation than the Baby Boomers, so anything they do en masse is really going to swing the market,” Fleming says.

But in the meantime, both he and Pendall say that measures should be taken to make both renting and buying, if people so choose, less of a burden, including better accessibility to affordable mortgages and further loosening of credit standards. On the rental side, Pendall says, one possible solution is easing the zoning rules for areas that are dominated by owner-occupied homes to allow homeowners to build additional units on their lots. “The biggest segment of growth is people over 65,” he says.

“They want to age in place, but they may need extra income an support for someone nearby. Allowing property owners to build second units if they want to, and providing support financially so they can do it more easily, is a great medium to longer term rental strategy – taking neighborhoods that are all owner-occupied and giving them the means to mix rental and owner.”

Is it cheaper to buy?

Rent vs Own

Right now in the “desirable” cities rents are exploding. Mine has been raised $200/mo. By the time all utilities are paid it puts my rent at $2K a month for an old ill designed dump in a “gentrifying” hood. We are putting in housing units in the area that will put residential increases at over 1K without proportional infrastructure adjustments. So in the long range there are real problems coming down the pike. I would move but as I plan on leaving the state I figure I will adjust my own costs to accommodate then leave.

And as I have mentioned some of the investors/buyers are selling as costs are now exceeding expenditures. I was speaking to a woman today who had problems grasping that concept but then again I may specialize in conversations with idiots. I found this in Washington Post and while he is speaking about Washington D.C. the parallels to my market and other desirable locations are duly noted.

I think the idea of owning properties to rent are great but it is increasingly becoming a rich man’s game. You cannot do this without understanding the long term issues that property owning requires. And again, living in a State and City that generates income largely via property and sales taxes this is something that has to be considered if one undertakes this as a source of income. And that is understanding the property, the location and the type of renter you wish to attract and the income on average for same professionals. This is not easy and can be quite misleading on both ends.

I overheard my landlord at coffee shop aspiring his ambitions in this field and frankly he has no idea. I can’t wait to leave and I will leave it better than I found it. There will be natural damages that need repairs but he will never find tenant who will remain as long as I have nor as diligent with maintenance as I. These units were so badly built and designed for I am unsure, duos or singles as they are so awkward in which to move I am amazed at the ones who have children who remain. The design/build of these units are so horrific and challenging I would never have bought one. I am not sure why anyone would buy these for any reason. Well that is the dilemma of the owner vs renter.

What you need to know before converting your home into a rental
By Justin Pierce
The Washington Post
July 13 2015

I just recently had two clients contact me because they know I’m an active investor and a real estate agent. They are government employees who expect to live in the homes they are buying for just two to four years. After that, they would like to hold the homes as investment properties.

Buying your home like an investor is an extremely powerful wealth-building strategy. By living in the home first, you get premium financing terms. You get the best rates and the lowest down-payment requirements. It also helps you to be extremely practical in your property selection. Keeping the end in mind helps you to rein in any tendencies to overindulge or overpay. It helps you focus directly on the financial and separate your needs from your wants.

If you obtain a lower-rate mortgage under the conditions of being an owner-occupant, then it’s important that you actually live in the home and not rent it out initially. You can get into big trouble — including charged with fraud and possibly be forced to pay the mortgage balance in full — if your lender discovers that you never lived there and that the property is being rented out.

It’s best to live in the property at least a year and then contact the lender to let them know that the property is no longer your primary residence. However, your lender will probably not have a problem with your renting out the property if your job suddenly moves you out of town.

[A little lie on mortgage application can cost you big]

I love the idea of always having multiple exit strategies for any real estate purchase. There are a lot of accidental landlords in our area. I know too many people who couldn’t sell their homes so they had to rent them out when they outgrew them or relocated.

The problem is that attributes of a good rental property are often at odds with what a buyer wants and needs for his or her family residence.

People take pride in their home. They want a home that is impressive to their friends and family. They want comforts and amenities. They would like high-end appliances and finishes.

The best rental properties, however, are simple, durable and easy to rent and to maintain.

For example: A family might really want a five-bedroom home. In some areas, a five-bedroom home may cost significantly more than a four-bedroom home but bring in virtually no extra income as a rental.

From a strictly practical perspective, every additional amenity is an added potential maintenance expense that won’t necessarily bring in more rental income. For instance, a jetted bathtub is highly desirable to some people, but it will probably not bring in any additional rent. It will, however, create significant repair costs if it is not properly maintained.

Balancing these two very different buying strategies is a real challenge, and many buyers in the end cave to their wants and then cram those wants into the rental equation. They often don’t balance.

The first step in buying any rental is to determine the income and expenses and then placing that criteria at the top of your buying priorities. Most people, including real estate agents, drastically underestimate expenses. They believe that they take their rental income, deduct their mortgage payment and the amount left over will be their income. They may account for management. Here’s what most people think a rental income expense ledger looks like:

Rent: $2,000 per month

Mortgage payment: $1,600 per month (This includes a tax and insurance escrow.)

Management: $200 per month

Profit: $200 per month

In reality, most landlords anticipate that their expenses will average about 40 to 45 percent of their monthly income, not including their principal and interest payments.

There are other real expenses that you will commonly incur and you can average out an estimate of those expenses:

• Vacancy: You will have vacancy, and it will cost you. This will be based primarily on the turnover rate for your area. If you have a starter home in a fairly transient area like ours, you can count on your tenant moving out after a year. Even if you have a really desirable rental, it will probably take you a month to prep the property and get your next tenant in place. That equals one month of vacancy for every 13 months or about 7.8 percent vacancy rate. You can round that down to 7 percent on an annual basis.

• Maintenance and repair: Maintenance and repairs will depend on several factors. For instance, if your home is 15 years old and all the appliances, furnace, AC and water heater are original, then you can anticipate having to replace all of those in the next five to 10 years. If the costs for all of those are estimated at $10,000, then you can divide that by 10 years (for easy math) and find you should be setting aside about $1,000 per year for these repairs. I also like to put in at least $300 to $500 per year for the occasional leaking faucet. So that’s $1,500 per year, or about 6.25 percent of your monthly income.

• Management: Management is typically 8 to 10 percent of your gross monthly rate, but your manager will probably take at least half or maybe all of your first month’s rent to pay for finding a tenant and paying Realtor commissions. So the cost to you is not 10 percent per month. If you anticipate having to find a new tenant every year, then your management costs will be closer to 11.5 percent of your anticipated income.

You can manage your property yourself, but there is a real-time expense here that you should account for. I never recommend leaving out management. You need to be paid for your time, and there is always a chance that your circumstances will change and you’ll need to bring in a manager at a later date.

Here’s how I generally initially estimate my expenses on a rental property:

• Management: 11 percent

• Vacancy: 7 percent

• Taxes and insurance (for Virginia): 13 percent

• Maintenance and repairs: 6 percent

• Total expenses: 37 percent

This is typically on the low end, but it gives you a good starting point to quickly evaluate a property. If a property passes this quick back-of-the-envelope accounting, then you can delve more deeply into the specific costs you can expect for a given home in its given location.

Looking back at our original income analysis and applying our new general expenses, you’d get something closer to this:

• Rental income: $2,000 per month

• Mortgage payment: $1,600 per month (This includes a tax and insurance escrow.)

• Expenses above 23 percent: $480 per month

• Monthly loss: $80 per month

This still may not be a bad deal if you got the home for no money or little money down and you consider the fact that a tenant is paying down the principal on your loan and the many tax benefits. You just need to know the facts ahead of time.

Knowing your expenses is the first and most important step in finding any rental property. Once you know that, you can then determine your wants and needs and evaluate those items that will make a good rental property. Buying your home like a rental often requires you to forgo many of your wants and to think simple. This is easy if you plan to live in a home only for a couple of years. It is difficult if you have very specific wants.

The two clients I had closed on their purchases last month. Client one already had four rental properties. He started out with a budget and was willing to settle for a smaller, more modest home. He stuck pretty well to his plan, and we found him a nice little single-family home in Fairfax that should rent out nicely for a good return.

Client 2 started out looking for an 1,800-square-foot home for about $250,000 in Stafford. As we looked at homes, he decided he wanted to be in a specific school district, which isn’t bad and can be very helpful with renting out a home. But then he started looking at bigger and fancier homes. He ended up buying a home that was nearly 4,000 square feet and close to $400,000.

It will still rent, and the fact that it’s a nice home in a great school district will really help him retain good renters. But the likely rental income on the home is pretty tight, and I’m afraid the maintenance will be a nagging headache for him in the future.

Buying a home like a rental is a great idea but often hard to do. Regardless, everyone should keep in mind that their home now is a major investment. You should be highly focused on the investment aspect of your purchase to ensure that your home is truly an asset to your family and not a burden.

Costs vs Values

An interesting “in” today was an article by Sam Rashkin a well known advocate of energy efficiency and affordability when it comes to home building. The Government used to have Energy Star workshops back in the day and many of the well known scientists of build would gather and banter and share their wisdoms with the great unwashed of the construction and building industry. Then we quit having such education and information exchanges and now you pay big bucks to big consultants to learn how to do something that should be easily and cheaply accessible. That among the rampant sexism is why I finally hung up my hammer and no longer have any interest in the industry other than bystander. And when I think of costs vs value I recall his discussion about building energy efficient homes and the payback costs for miscellaneous additions that have little or no overall value in both costs and energy efficiency. My favorite was the HRV/ERV debate with the assholes from Building Science (it might have been Listurbek – for the record the man is smart and interesting he is still however an asshole) Ah men and their bullshit which is why they are assholes as it is where shit is released.

When I read the study to which Mr. Rashkin referred I busted out laughing. It was a study commissioned by the NAHB and was over a year old and seemed to be regional in data. It had nothing to do with costs of building and the reality that the MEllinneal generation is not buying homes it was about more government busting and commiserating of the costs of fees and fines associated with building. This from the same group that charges builders fees to advocate and learn about green building. Not one mention of the costs associated as well as time added when a builder decides to pick his shade of green and add that to the overall costs. Things that make you go hmmm.

New NAHB Study: How Fees Force Buyers Out of the Market
August 4, 2014 •

Each $1,000 increase in the cost of a new home price forces 206,000 prospective buyers out of the marketplace, according to a new study from NAHB Economics.

The number of households affected varies across states and metro areas and largely depends on their population, income distribution and new home prices.

Among the states, the number of households that would no longer be eligible to qualify for a mortgage based on a $1,000 increase to a median-priced home ranges from a low of 313 in Wyoming to a high of 18,250 in Texas.

“This study highlights the real effects that building regulations have on housing affordability,” said NAHB Chairman Kevin Kelly.

“Local, state and federal government officials need to know that higher regulatory costs have real consequences for working American families. These regulations end up pushing the price of housing beyond the means of many teachers, police officers, firefighters and other middle-class workers.”

Based on national mortgage underwriting standards and incorporating the latest income distribution data from the American Community Survey and HUD, the report contains detailed results for more than 300 metro areas.

The analysis found that every $833 increase in fees paid during the construction process – such as the cost to pull a permit or an impact fee – adds an additional $1,000 to the final price of the home.

Measured by local metro areas, the number of households who would be priced out based on a $1,000 increase range from a low of 19 in Napa, Calif. to a high of 5,742 in the New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. area.

Looking at affordable metro areas, where roughly 50% or more of households can afford new homes, the priced-out effects are typically large and can often disqualify thousands of new home buyers, as in the case of Houston-Sugar Land-Baytown, Texas (4,234); Atlanta-Sandy Springs-Marietta, Ga. (4,135); and Las Vegas-Paradise, Nev. (2,044)

.

**Oddly the links to provide the study and full breakdown of how $1000 adds to the cost was not working, things that make you go hmmm…**

So to understand the logic of both Mr. Rashkin’s convoluted and strange thoughts (seriously I had no idea what he was comparing home buying to – Uber or IPhones? Really?) and the NAHB’s complaints that its gubmint that is causing the problems and the reason costs and those regulations that are being added and in turn killing their profit margins (another unmentionable) causing costs to rise and fewer buyers to meet those costs. Funny, there seems to be no shortage of home buying, building and growth in many urban areas. There is in fact a boon again. So what does that mean? Well it appears that single family dwellings are the hardest hits. That multi family units are in vogue right now, the semi-detached quasi condo is a big one here in the Seattle area and the fact that young people are delaying the American dream that the forefathers of America had in mind when the wrote the Constitution or something like that.

When does buying a home become a better choice over renting one. Costs vs value. We get it. And I still wouldn’t own a home. As home ownership, much like all those fees and fines are ways that states and municipalities earn revenue. As you decry “taxes” you get revenue in other areas – sales taxes, fees, fines, licensing costs and the steady eddy of income – property taxes. I can manage to avoid as many as I can and owning property is one massive way in which to do so.

So really that is the problem the ways that mean Government that they despise continues to find ways to support itself. Earn more you pay less or pay the equivalent of one who earns less. Tabs and licensing, property taxes on second homes, deductions for REIT’s which is one way wealthy obscure home ownership, mortgage deductions, and of course sales taxes. These are all regressive ways in which monies are avoided to pay for the operation of our schools, our infrastructure, our leadership. So please tell me why I should overpay for a home when the taxes are also tied to that. Here in Seattle the “MEDIAN” price of a home is now at 500K. Is the median wage at that as well? My rent went up 200/mo did my wages do so as well?

There comes a point where the cost vs value has to be considered. My landlord once I move out will raise the rent again and then the ceiling may have been reached as why anyone would pay to rent these dumps when they could either rent something newer and better for the same price or even buy a dump of their own is going to be truth he may have to deal with. The adjacent property which was a rental income property is now being sold as that owner realized that the cost vs value could no longer provide her with income. She is a single woman not a wealthy individual with the ability to understand the nuances of REIT’s and how to run properties at a profit. Sorry but my landlord is not much different.

And in the same issue was Zillow’s price breakdown of how many years it would take to break even buying over renting. And again this is Zillow a real estate firm whose studies take into account the business of selling real estate. I have no respect for that industry as their role in the 2008 collapse cannot be ignored. So it is information that is worth what you pay for it – and mine is with a grain of salt.

I expect more businesses to own properties in the future and less moms and pops as they simple can’t afford it either. Its all lose-lose once again in the hot market of real estate.

Rent vs Buy

As a Renter you are penalized from the moment you sign the lease. You are charged enormous fees and many are not refundable. My new favorite is pet rent. Apparently your pet that provides no income is charged an additional occupancy fee. For what exactly? Do they charge a roommate fee too? Isn’t that what a pet deposit or security deposit for? That any damage by human and/or animal is covered. I can understand breed restrictions and in fact concerns about pets being alone all day and safety and security of the building as they probably don’t want to be responsible if an emergency in the building requires someone to enter the unit or in the case of an incident evacuation.

But then renters also face a stigma as deadbeats. I have lived in the same house for 7 years. As the shit falls down around me I usually repair it without complaint. I either pay upfront or later in rent raises so this way I can shop for the best buy and I simply fix it and shut my mouth about it. Major incidents I do speak to the Landlord but that is again about liability.

As for decor that is mine and I will leave a fresh coat of primer and clean the property and any broken bits fixed upon exit. They would have to paint and clean and again I can find the best buy for the money and so my deposit has no reason to be withheld and that refund can cover well what I spent.

I would not live in a dump and I choose to rent for many reasons. There is nothing wrong about that.

But why are owners of homes given tax credits and other benefits that renters are not? There is an active discussion at the New York Times about this.

Should Housing Policy Support Renters More?

Introduction
DESCRIPTION Jimmy McMillan ran in 2010 for governor of New York on a platform of rents being too high in the city.

Katie Orlinsky for The New York Times

In many of the nation’s largest metropolitan areas, buying a home again looks like a risky investment, and in places like Boston, Miami and Washington prices have risen enough that buying is no longer the bargain it seemed to be a few years ago. That perhaps explains why the American public is now divided on whether homeownership is a good long-term investment, and a majority now see homeownership as less appealing than it once was.

Should housing policy be more balanced, supporting rental housing and homeownership on a more equal footing?

I think this is a useful if not overdue discussion as rents are too damn high in many cities and are driving away the working class man and woman. Should I not live where I work and I work for the Public Schools of the City. I should be living in the community that I work with.

But we are doing nothing to define the concept of sustainable communities other than planting gardens and advocating energy efficiency. Uh there is a little more to it.