Category Archives: California

California To Reopen Assault Weapon Registration Grace Period

() California will reopen its “assault weapons” registration process and pause unconstitutional prosecutions after settling with a gun group over accusations that the process hindered the Second Amendment rights of residents.

California will let gun owners file new registrations, avoid prosecutions of registration violations for at least seven months, and pay the Firearms Policy Coalition $151,821.42 for lawyers’ fees, according to the terms of the agreement. Once the court approves the settlement, California will start a campaign to inform the public of the new registration process and give owners of the banned AR-15 variants up to three months to register them.

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Newsom: CA State Wide Medical Martial Law Will Continue Until Latinos In Certain Zip Codes Meet Jab Quotas

(Victoria Taft) California Governor Gavin Newsom has completely changed his response to COVID – again – this time leveraging opening the state for all Californians on the backs of low-income Latinos living in the areas with allegedly higher rates of illness.

In the name of “equity,” Newsom announced Thursday that 40% of all the state’s available vaccines will go to Latino communities in the Central Valley and in pockets of Los Angels because Latinos have suffered the most death and illness from COVID.

And there’s a catch: Until Latinos in these areas take the vaccine in higher numbers, California will stay locked down.

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Los Angeles Schools To Launch 24/7 Tracking App And Weekly Virus Testing So Children Can Attend Classes

The Los Angeles Unified School District is launching a Microsoft-developed COVID-tracking app for children, which allows students to schedule and view the results of weekly COVID tests, post the results of off-campus COVID tests, and schedule vaccinations.

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CA Person Dies Within Hours Of Receiving The Jab

Multiple agencies are investigating the cause of death of an individual who died Thursday January 21st, hours after receiving the COVID-19 vaccine, the Placer County Sheriff’s Office announced on Saturday.

Full article

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CNA Nursing Home Whistleblower: Seniors Are DYING LIKE FLIES After COVID Injections!

Carlsbad, CA Says No More to Lockdowns

(John Tanmy) It’s been said off and on over the decades that California is a bellwether of sorts. What happens there is a preview of what’s going to happen elsewhere in the U.S.

“I’m not willing to give up without a fight — I’m just not.” – Annie Rammel, Carlsbad, CA restaurant owner.

In the late 1970s the passage of Proposition 13 foretold a national tax revolt. Californians used a referendum to limit the tax power of grasping politicians in the Golden State, and the push back eventually went national.

A different, more local revolt began last weekend in Carlsbad, CA, a town just north of San Diego. Its restaurant and bar owners decided they’re weren’t going to take it anymore. They’re no longer going to allow witless politicians to destroy what they’ve worked so long to build. They’re going to open their businesses to eager customers.

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CA EDD Fraud Estimate Balloons Over $8 (Billion)

(Michael Finney) The amount of unemployment funds stolen from California taxpayers in 2020 may total more than $8 billion — four times higher than estimated just one month ago. The numbers are staggering; the solutions elusive. As our sister station KGO-TV found out, even states credited with cracking down on fraud have had issues. Since the start of the pandemic, we’ve shared countless stories of struggling Californians desperate to get their unemployment benefits.

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CA Tax Revenue Windfall Creates Political Dilemma: What to do with it

California has an unexpected and welcome revenue windfall, but it creates a dilemma on what to do with it.

(Dan Walters) As Gov. Gavin Newsom makes the final decisions on writing a 2021-22 budget, he’s receiving some good revenue news from his bean counters.

During the first four months of the 2020-21 budget cycle, which began on July 1, state general fund revenues were more than $11 billion higher than the apocalyptic estimates on which the budget was based. Moreover, the windfall could easily double to $26 billion in the first months of 2021, according to the Legislature’s budget analyst, Gabe Petek.

What happened?

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San Francisco Sales Tax Revenue Plunge “Worst In The State” Amid COVID Exodus

ZeroHedge observed many times throughout the pandemic that the coronavirus-related lock downs, especially as impacting restaurants, bars, theaters and other night venues, have made living in already expensive big cities like New York much less attractive. 

It appears this trend of people ‘escaping’ the big cities as the prime lure of being there has largely evaporated — also after a summer of chaotic race and police shooting related protests and mayhem — is poised to hit San Francisco, despite it previously witnessing steady population growth over the past three decades. New tax numbers freshly out suggest a major exodus is already in progress.

But for the first time in recent history, and as the city’s large tech employers like Google, Facebook and Uber have kept their employees at home working remotely, city data shows that “Sales tax data shows San Francisco’s population likely declined during the coronavirus pandemic,” according the city’s chief economist Ted Egan.

The San Francisco Chronicle reports a whopping shortfall in revenue, detailing that “From April to June, the city’s sales tax revenue dropped to $30.8 million, down 43% from the prior year.” 

While this is the kind of thing other cities have naturally also experienced over the course of pandemic closures of venues, many have been able to close the gap given simultaneous growth in taxable online sales as households turned to Amazon, Wal Mart and other home delivery services. 

Not so with San Francisco, however, the report underscores:

San Francisco’s taxable online sales were up only 1% in that three-month period compared to the same period a year ago, while other California cities saw gains over 10% as people ordered more home deliveries. The modest increase likely shows that residents left the city entirely and weren’t at home to receive packages, Egan said.

“We’re the worst in the state,” he said. “That’s a sign to me that people aren’t here.”

No doubt compounding the trend is the past years of perhaps the most left-wing city policies in the country, a reflection of what conservatives derisively write off as “San Francisco values” and what even NPR has lately dubbed “San Francisco Squalor”.

After all, who really wants to pay a million dollars for some posh condominium in the city, only to walk out into needle and feces strewn streets?

Restaurant and bar sales were down 65% as indoor dining was prohibited, while food and drug store sales were down 8%. (Food staples at grocery stores aren’t taxed but prepared meals and other items are.)

Other metrics like falling apartment rents and busy moving companies suggest the population decline, though it’s too early to tell how many people have left, Egan said.

Considering too that major tech companies like Microsoft are using the pandemic to make dramatic changes like allowing most employees to work from home on a permanent basis, it doesn’t look like those making a recent ‘escape’ from San Francisco will be moving back anytime soon.

Source: ZeroHedge

San Francisco Rents Crash Most On Record Amid Mass Exodus

Smoky skies in San Francisco (Springfield News Sun)

A new report confirms what we’ve been talking about since the early days (read: here) of the virus pandemic, that is, an exodus out of major cities.

According to real estate analytics company Zumper, the exodus, out of San Francisco has been so great, that the median rent for a one-bedroom apartment collapsed more than 20% in September from a year ago to $2,830. Month over month, September rent for a one-bedroom apartment in the city fell by 7%.

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Pinterest Pays $89.5 Million To Abandon Pending Office Lease In San Francisco

Things are going so great in California that Pinterest just paid $89.5 million to cancel its 490,000-square-foot lease at the upcoming 88 Bluxome project in San Francisco. 

The company blames working from home as a result of the pandemic as the reason for abandoning the lease – but we’re sure the state’s rising taxes, impending real estate market crash and conversion of the property to a temporary homeless shelter in March likely helped contribute to the decision making.

Either way, Pinterest wanted out of the lease so badly they were willing to fork over a hefty sum to ensure they would not be held to it. The company’s total lease obligations for the property would have amounted to $440 million. 

Pinterest’s CFO told the San Francisco Chronicle: “As we analyze how our workplace will change in a post-COVID world, we are specifically rethinking where future employees could be based. A more distributed workforce will give us the opportunity to hire people from a wider range of backgrounds and experiences.”

Rendering of 88 Bluxome as it would exist years from now. Today, the city has converted the property to a homeless shelter.

Pinterest appears to be following in the steps of companies like Facebook, who has also embraced the idea of remote work for its staff. Facebook aims to have half of its company working remotely “within a decade”, CEO Mark Zuckerberg has said. 

To us, it appears to be more of a statement about San Francisco’s real estate market than about Pinterest. After all, the company was the first and only lease commitment “in San Francisco’s 230-acre Central South of Market district, where numerous large commercial and residential projects have been approved after the city raised height limits last year,” the Chronicle said.

They were to help contribute to 30,000 new jobs and 20,000 new residents in the district, which the city hoped would fuel more than $2 billion in public benefits. The project is “now in doubt”. The proposed 88 Bluxome project was supposed to start construction this year, but current plans for the project are now “unclear”. 

And in peak San Francisco fashion, the city converted the tennis club currently on the lot to a homeless shelter in March.

Source: ZeroHedge

Haunting Photos of San Francisco’s Desolate Financial District During Morning “Rush Hour”

(Wolf Richter) On Tuesday, August 18, during morning rush hour, I walked through and around the Financial District of San Francisco and took photos to document the spookiness of it all. Pedestrians used to rush to work on crowded sidewalks, balling up at red lights, then stream across the intersection, and disappear into the entries of office towers as they went, and cars used to be stuck in traffic, and thick throngs of people would pour out of the Montgomery BART and Muni Metro station.

I started taking photos at Columbus Street where it ends at Montgomery Street, and then turned south into Montgomery Street and walked through the Financial District to the Montgomery Station at Market Street. Then I zigzagged back through the Financial District.

What you will see are streets and sidewalks and entrances into office towers that were eerily deserted during what used to be “rush hour,” with just a sprinkling of pedestrians, a few cars, the occasional skateboarder, some guys working on construction projects, and curiosities where you might be tempted to think, “only in San Francisco.”

With hindsight, it was the last beautiful sunny morning before the thick acrid smoke from the wildfires moved into San Francisco.

The data of how work-from-home impacts office patterns in a city like San Francisco are grim. According to Kastle Systems – which provides access systems for 3,600 buildings and 41,000 businesses in 47 states, and therefore has a large sample of how many people are entering offices during the Pandemic – office occupancy in San Francisco was still only at 13.6% of where it had been at the beginning of March, meaning it was still down by 86.4%, just above New York City:

What is staring at us now is the haunting shift brought about by work-from-home.

The Financial District is an area of office buildings. There are also shops, cafes, restaurants, and service establishments, such as bank branches and barbers, that workers go to before, during, or after work. There isn’t much else. Other parts of the City are busy, and restaurants that are open (outside seating only) are hard to get into. But this is what office life looks like….

On Columbus Street, looking at the intersection with Montgomery Street, with the Transamerica Pyramid in the background. I’m standing in the middle of the street to take this photo. Why? Because I can:

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California Court System Lifts Eviction Moratorium After Lawsuit

(Matthew Vadum) Under legal pressure, the rule-making arm of California’s court system, the largest in the United States, has rescinded its pandemic-related emergency order that blocked the state’s courts from hearing eviction proceedings.

Landlords in California and across the country have reportedly been hard hit by emergency eviction moratoriums and by the inability of some of their tenants to pay rent in the troubled economy.

The Judicial Council of California voted 19–1 to scuttle emergency rules governing evictions and judicial foreclosures imposed by the body on April 6.

California Chief Justice Tani G. Cantil-Sakauye, who was appointed to her post in 2010 by then-Gov. Arnold Schwarzenegger, a Republican, acknowledged in a statement that the council had overreached.

“The judicial branch cannot usurp the responsibility of the other two branches on a long-term basis to deal with the myriad impacts of the pandemic,” she said. “The duty of the judicial branch is to resolve disputes under the law and not to legislate. I urge our sister branches to act expeditiously to resolve this looming crisis.”

The Judicial Council of California acted after it was sued June 15 by two small landlords in the Kern County branch of the Superior Court of California.

The landlords argued that by initiating a ban on evictions, the Judicial Council undermined the state’s separation of powers and seized policy making power from the legislature and governor to block landlords’ access to courts.

“Constitutional limitations on government are never more important than during an emergency,” said landlord lawyer Damien M. Schiff, a senior attorney at Pacific Legal Foundation, a public interest law firm headquartered in Sacramento, California.

“In this case, we challenged an eviction moratorium enacted not by the politically responsible branches of California’s government, but rather by the judiciary. Because it attempted to codify policy rather than merely regulate the practice of state courts, the rule exceeded the Judicial Council’s authority under the California Constitution. We are pleased not only that the Judicial Council has voted to rescind the rule, but also that the Council recognized” that its usurpation of legislative and executive powers to deal with the effects of the pandemic was improper.

The council took its lead from Gov. Gavin Newsom, a Democrat, who “ostensibly using his emergency powers, issued an executive order in March that essentially invited the Judicial Council to come up with some eviction moratorium plan, and the council responded by promulgating about a dozen what it called emergency rules of court.”

Newsom has urged the Trump administration to do more to prevent a potential wave of evictions and foreclosures after a four-month congressional moratorium protecting renters and homeowners during the current pandemic lapsed on July 24. The administration has responded that the president has done everything he’s legally allowed to do to halt evictions.

But even if you think an eviction moratorium is “a good idea, it’s not something that the judiciary is capable of doing constitutionally,” Schiff said in an interview.

“And the first of the rules, Emergency Rule 1, essentially imposed a blanket ban on the court-processing of eviction lawsuits,” he said.

The legal complaint stated that the rule “violates the fundamental rights of property owners by indefinitely suspending their right to initiate unlawful detainer actions [i.e., evictions] … [and] creates the perverse incentive for all tenants, whether they face financial hardship or not, to refuse to pay their rent during the crisis. And it immunizes from eviction even tenants who create nuisances, damage property, conduct illegal activity, or violate lease terms.”

The rule “effectively closes the courthouse doors to Petitioners and obstructs their right to re-enter their own property. It does so because the Judicial Council determined as a matter of policy that tenants should be immunized from eviction in virtually all cases. The rule therefore constitutes a legislative decision forbidden to the Judicial Council under the principle of separation of powers embodied in Article III, Section 3, of the California Constitution.”

“Eviction moratoriums don’t make sense,” Schiff said.

“There’s the more fundamental problem that, the government, sure, has the power to take reasonable action to protect the health, safety, and welfare of its citizens, but if it takes their rights or it takes their property it has to pay for it. And here you have essentially landlords’ property being commandeered into a larger governmental effort to slow the spread of the virus.”

Because the goal of the lawsuit has been accomplished, the legal action has been withdrawn, Schiff added.

Source: Citizen’s Journal

CAR on California July Housing: Sales up 6% YoY, Active Listings down 48% YoY

The CAR reported: California housing recovery continues in July as median home price sets another record high, C.A.R. reports

California’s housing market continued to recover as home sales climbed to their highest level in more than two and a half years in July, while setting another record-high median home price, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 437,890 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2020 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

July’s sales total climbed above the 400,000 level for the first time since February 2020, before the COVID-19 crisis depressed the housing market, and was the highest level in more than two and a half years. July sales rose 28.8 percent from 339,910 in June and were up 6.4 percent from a year ago, when 411,630 homes were sold on an annualized basis. July marked the first time in five months that home sales posted an annual gain.

Housing inventory continued to trend downward on a year-over-year basis, with active listings falling more than 25 percent for the eighth consecutive month. The year-over-year 48 percent decline was the biggest drop in active listings since January 2013. The continued recovery in closed escrow sales, combined with a sharp drop in active listings, led to a plunge in the Unsold Inventory Index (UII) to 2.1 months in July, down from 3.2 months a year ago. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales. The July UII was the lowest level since November 2004.

CR Note: Existing home sales are reported when the transaction closes, so this was mostly for contracts signed in May and June.   Sales-to-date, through July, are down 10% compared to the same period in 2019.

Source: Calculated Risk

Zillow Exposes Dramatic Exodus Out Of San Francisco Real Estate

With more people telecommuting than ever due to the COVID-19 pandemic, it appears that the allure of cramped, expensive urban housing, poo-covered sidewalks and homeless people shooting up in Starbucks has worn off.

San Francisco Street Poop Patrol

According to online real estate company Zillow, there is a mass exodus of people looking to get out of San Francisco real estate – as the housing market is on fire in the Bay Area suburbs, all the way to Lake Tahoe.

According to the company’s “2020 Urban-Suburban Market Report,” home prices in the city have fallen 4.9% year-over-year, while inventory has jumped 96% during the same period, as a flood of new listings hit the market. Zillow notes that they aren’t seeing the same trend in cities such as Miami, Los Angeles, Washington D.C. or Seattle.

Via Zillow:

When comparing the principal city to its surrounding suburbs, the San Francisco metro area does break the mold. Higher levels of inventory, up 96% YoY following a flood of new listings during the pandemic, are sitting on the market in the city proper, a significantly larger jump than the surrounding suburbs. Whereas in similar cities like Los Angeles, Miami, Boston, Seattle, and Washington, D.C., declining or flat inventory is a consistent trend within and outside the city limits. Relatively higher inventory has different causes by city, and is not clearly attributable to either supply or demand. In San Francisco, though, the softening is clear as sellers inundate the market and buyers have not changed their pace to match — newly pending sales in the city are up only 1.7% YoY. 

Meanwhile, both urban and suburban markets nationally are seeing homes sell more quickly than they were in February, while “most areas have seen price cuts decelerate relative to February, and slightly more so in the suburbs,” according to the report.

That said, Zillow is seeing about the same percentage of people searching for urban vs. suburban listings YoY, which would suggest that at least as of June, the ongoing BLM protests which have turned urban cities into Escape From [insert your big blue Democrat run city here].

Source: ZeroHedge

California Set To Pass The Nation’s First Wealth Tax

It was about about nine years ago when consulting company BCG first suggested that in a time of out of control spending and soaring debt loads, the only fiscally sustainable “solution” was to implement a wealth tax (see “There May Be Only Painful Ways Out Of The Crisis“).

While the idea was well ahead of its time in 2011, and was quickly shut down in the court of public opinion, several years later none other than the IMF resurrected the idea of a wealth tax, which has only gained momentum in recent months, and despite widespread grassroots push back, the concept of a “wealth tax” has moved front and center and most recently the chairman of Capital Economics, Roger Bootle, said that the world’s wealthiest could be subjected to higher tax rates as governments scramble to fund spending and repair their economies amid the coronavirus crisis.

Fast forward to today when the ultra-liberal state of California is now ready to take this “socialist” idea from concept to the implementation phase, with the SF Chronicle reporting that a group of CA state lawmakers on Thursday proposed a first-in-the-nation state wealth tax that would hit about 30,400 California residents and raise an estimated $7.5 billion for the general fund.

The proposed tax rate would be 0.4% of net worth (most likely ended up far higher), excluding directly held real estate, that exceeds $30 million for single and joint filers and $15 million for married filing separately.

Oakland Democrat Rob Bonta, who is the lead author of the wealth tax proposal AB2008, justified the wealth expropriation by saying that California is facing a big budget deficit because of the health and economic crisis brought on by the coronavirus, and “we can’t simply rely on austerity measures,” to close it. It wasn’t immediately clear why austerity doesn’t work considering that California has never actually tried it, but in any case the Democrat’s proposal was clear: “We must consider revenue generation.”

California State assembly member Rob Bonta, D-Okland, is the lead author of AB 2088, which would create a first–in-the-nation wealth tax

And in doing that, California will trigger an exodus of billionaires who will be the first to realize which way the wind is blowing, and end up hurting the state far more than helping it as hundreds of ultra wealthy taxpayers leave for places like Florida or – for that matter – any other place in the world.

Bonta said that the union-sponsored bill will not be heard before the Legislature adjourns Aug. 31, but “it can be reintroduced on day one of the next session.”

Now what most normal Americans (i.e. those not living in California) may not know, is that this would be the second wealth tax set to pass in California. Bonta said he would like to see a wealth tax passed in addition to the “millionaires tax” proposed in a bill introduced in late July. AB1253 would add surcharges of 1% to incomes (joint or single) between roughly $1 million and $2 million, 3% on income between $2 million and $5 million, and 3.5% on income greater than $5 million, bringing the top rate to 16.8%.

California’s top rate today, at 13.3%, is already the highest in the nation, and it’s only going higher.

There was some good news: “Directly held real property, and mortgages and other liabilities secured by directly held real property,” must be reported, but would not be considered in calculating the taxpayer’s worldwide net worth, the bill said. How wonderful… oh wait, someone realized that this would simply be double taxing the same assets: “Real estate would be exempt from the wealth tax because it’s already subject to property tax, at a higher rate”, Bonta said.

Among those handful of rational voices who call out this sheer idiocy for what it is was Jared Walczak, a vice president with the Tax Foundation, a think tank, who said that “it is far easier to call for a state-level wealth tax than it is to actually design an enforceable one.” Maybe that’s why no state has imposed one.

However now that California is on the verge of passing a wealth tax, every other insolvent state will follow suit, staring with New York.

“Some New York legislators are floating the idea, but Governor Cuomo has poured cold water on the notion, rightly concerned that it would lead to an exodus of high net worth individuals from the state,” Walczak said via email. Somehow California believes it is exempt from such an exodus. Spoiler alert: it isn’t, and the state’s wealthiest residents won’t think twice to up root and move their tax residence to a state which treats their wealth with respect.

There is of course the possibility that this idiotic idea will somehow die before it is enacted. Walczak said that implementing a wealth tax at the state level “would be extremely complex, with questions of how to value illiquid assets and whether residents’ out-of-state wealth — including their investment holdings — can be taxed.” He added that “any tax that is actually effective at taxing wealth, however, would be equally effective at driving wealth out of state.”

Emmanuel Saez, a UC Berkeley economics professor, i.e., a socialist, said income tax is not an effective way to tax the ultra-wealthy, because they can avoid the income tax as long as they don’t cash in their investments. Facebook CEO Mark Zuckerberg could avoid the income tax as long as he doesn’t sell his Facebook stock, and if he moved to Florida before realizing his gains, he may never owe tax to California, Saez said during a call announcing the bill.

Saez, like any other socialist who has a terminal inability of grasping who the world really works and that every idiotic action by the state will have an appropriate reaction by the population, said the bill would not deter startups because it would let entrepreneurs defer the wealth tax for a period of time. Brilliant.

“Liquidity-constrained taxpayers with ownership interests in hard-to-value assets and business entities, such as startup businesses, shall be able to elect for an unliquidated and deferred tax liability to be attached to these assets instead of the net value of these assets being assessed at the end of a tax year.” The taxpayer would have to sign a contract with the state specifying when the tax would be paid.

Well, Emmanuel, instead of signing a “contract” with the state when the tax will be paid, all those entrepreneurs that keep the state afloat will simply… leave. And guess what happens to the already dismal tax collections then.

None of this matters to the Berkeley socialist, and instead he pointed to a paper he co-authored, saying that California has 12% of the U.S. population but 17% of all U.S. millionaires and 25% of its billionaires. In 2011, California had only 15.5% of the nation’s millionaires and 21% of billionaires. The wealth tax, he said, would hit about 0.15% of California tax filers.

We can’t wait for the paper’s second edition published in 2025 when the “professor” finds that California has none of the US’ billionaires.

Until then, the rare voices of reason such as that of Robert Gutierres, president of the California Taxpayers Association, will become increasingly rare:

“The state approved $9.2 billion in business tax increases in the new budget, but Sacramento politicians and special interests continue to seek income tax increases, property tax increases, a ‘headcount tax’ on in-state employees, and this new annual tax on money that was left over after all the other taxes were paid,” Gutierrez said, adding that “a very small number of Californians pay the vast majority of state income taxes. When the constant drumbeat for outrageous tax hikes drives them away, who will pick up the tab?”

Why, the Fed of course.

Source: ZeroHedge

“Pent Up Supply” Floods San Francisco Housing Market

(Wolf Richter) There is a lot of discussion about the low levels of inventory for sale, as potential sellers have pulled their homes off the market or are not wanting to list their homes at the moment, waiting for the Pandemic to blow over, or waiting for more certainty or whatever; or their mortgage is now in forbearance and they don’t want to make a move.

These discussions cite buyers who, after being kept out of the housing market for a couple of months due to the lock downs, are now swarming around out there, stumbling all over each other, looking for homes to buy, jostling for position, and engaging in bidding wars with each other.

And then there is the widely reported move to the suburbs, or to small towns, and away from big densely populated cities, by those who have shifted to work-from-home, to work-from-anywhere, which blatantly contradicts some of the other stories of big cities being overrun by buyers engaging in bidding wars.

Those are some of the narratives we’re hearing, and they all make some intuitive sense. But this is not the case everywhere. So we’re going to look at San Francisco, one of the most expensive housing markets in the US, based on weekly data that was compiled by real-estate brokerage Redfin, from local multiple listing service (MLS) and Redfin’s own data, updated at the end of last week.

San Francisco is now flooded with homes for sale. “Active listings” surged to 1,344 homes in the week ended July 5, up 65% from the same week last year, and the highest number since the housing bust, amid a 145% year-over-year surge in “new listings.”

There normally is a seasonal surge in active listings after Labor Day that peaks in late October. But this month, the surge of active listings (1,344) has already blown by those peaks in October, including the multi-year peak of 1,296 in October 2019. This is “pent-up supply” coming on the market at the wrong time of the year when supply normally declines (chart via Redfin):

Redfin’s data doesn’t go back that far. But the 1,344 active listings would be the highest since 2011, during the final stretch of the San Francisco Housing Bust, based on MLS data provided by local real-estate site, SocketSite.

Supply of homes for sales has more than doubled, from 7.8 weeks last year at this time to 16.6 weeks now, at the current rate of sales. Note the spike of supply in May, a function of sales that had collapsed (chart via Redfin).

Homes are being pulled off the market again: 61 homes were delisted, over double the number in the same week last year. The chart below shows the spike in delisted homes that started in mid-March during the early phases of the lock down. It also shows the normal seasonal spike of delistings ahead of the holidays in December – yes, inventory is low because sellers pull their unsold property off the market. But now, with the flood of inventory for sale on the market, the surge in delisted homes has started again (chart via Redfin):

Pending sales lack pent-up demand. Pending sales had collapsed 77% by early April compared to the same time last year, but then started digging out of that trough. In early July, pending sales were still down 8% from last year and now are following the seasonal downtrend and appear to be back on track, just slightly lower.

In terms of the recovery, that was pretty good. But there is no sign of pent-up demand, and the home sales that didn’t happen during the collapse in March, April, and May have not created a surge in deals, and there is no sign of pent-up demand (chart via Redfin).

Buyers now have the largest choice of homes for sale since the Housing Bust nearly a decade ago. And there is no need to engage in bidding wars or other foolishness.

Sellers might be motivated, as they say. Among the sellers might be those who – given the issues of the Pandemic, or future Pandemics – are itching to leave the second most densely populated city in the US, and one of the most expensive, and head to cheaper pastures inland in California, or to other states, or to smaller towns with big price tags along the California coast.

There are lots of anecdotal reporting on these trends, including housing markets that have caught fire in places such as Carmel-by-the-Sea, a beach town on California’s Monterey Peninsula, on Highway 1, about 110 miles south of San Francisco and about 75 miles south of Silicon Valley.

And with work-from-home in place, it might be convenient too. It doesn’t take very long to drive to San Francisco and less long to Silicon Valley for the twice-a-month meeting, especially now, with work-from-home having cleared up some of the previously infernal congestion.

There are all kinds of anecdotal observations and theories people are spinning at the moment, trying to come to grips with the changes underway. But one thing we can now see: The sellers have come out of the woodwork in San Francisco. Just don’t look for the usual thicket of open-house signs on the sidewalk. The process has gone digital and by appointment only.

Source: by Wolf Richter | Wolf Street

San Francisco Rents Drop Most On Record As People Flee Medical Martial Laws For Suburbs

Source: RentSFNow

Readers may recall, as early as March, city dwellers in California fled to suburbs and remote areas to isolate from the virus pandemic. The proliferation of remote work arrangements has led this shift to become more permanent. 

At first, the exodus out of the city was due to virus-related lock downs, then social unrest, and now it appears a steady flow of folks are leaving the San Francisco Bay Area for rural communities as their flexible work environment (i.e., remote access) allows them to work from anywhere, more specifically, outside city centers where the cost of living is a whole lot cheaper.  

Bloomberg notes, citing a new report from rental website Zumper, the latest emigration trend out of the Bay Area has resulted in rents for a San Francisco one-bedroom apartment to plunge 12% in June compared with last year, which is one of the most significant monthly declines on record.

“Zumper has been tracking rent prices across the country for over five years but we have never seen the market fluctuate quite like this,” Zumper co-founder and CEO Anthemos Georgiades said. “For example, rent prices in San Francisco have historically only gone up and typically only incrementally, yet now we are seeing double-digit percent rent reductions. This is unprecedented for this generation of renters.”

Georgiades said the ability to work remotely led to the exodus of city dwellers: 

“The very real move of many mainly technology employers to a future of remote work, meaning millions of employees now looking outside of dense metropolitan areas for their next home now that their commute time is no longer a factor,” Georgiades said.

“Silicon Valley hubs such as Mountain View and Palo Alto also saw rents plunge — a sign residents of the tech-heavy region are taking advantage of remote work arrangements to flee to cheaper areas,” Bloomberg said.

“This is the strangest downturn I’ve ever seen,” J.J. Panzer with the Real Management Company told San Francisco KPIX 5.

Rental inventory in the Bay Area has increased since the pandemic began – allowing renters to renegotiate leases and ask for a 10-15% reduction in rents. 

Other factors for the steep drop in rents is mainly because of the recession and high unemployment. People can no longer afford pricey rentals in San Francisco – must leave city centers for suburbs where rents are significantly less.

“As the pandemic persists on, the demand for rentals has continued to shift away from these pricey areas, and a significant amount of that demand seems to be moving toward neighboring, less expensive areas,” Zumper said on its blog.

“Your landlord, given the widespread nature of the job loss, actually does have an incentive to negotiate a lower rent with you,” said senior Zillow economist Skyler Olsen.

“Vacant units have no value coming upstream to pay their property taxes and their mortgage and that value as part of the system,” said Olsen. 

Financial blog Market Crumbs notes, “with the rise of remote work seemingly inevitable at this point, this trend should continue in San Francisco as well as other major cities in the years to come.”

Source: ZeroHedge

Lock Downs Have Pushed Government Pensions Over The Edge

Blog/Pension Crisis

Posted last day of Q2-Jun 30, 2020 by Martin Armstrong

COMMENT: Facing a vicious circle of conflicting demands and priorities, the California Public Employees Retirement System is turning to debt – a risky scheme to borrow billions of dollars in hopes of juicing its investment returns.

The California Public Employees Retirement System, the nation’s largest pension trust, benefited greatly from the run up in stocks and other investments during the last few years, topping $400 billion early this year.

CalPERS needed it because it was still reeling from a $100 billion decline in its investment portfolio during the previous decade’s Great Recession and was tapping state and local governments for ever-increasing, mandatory “contributions” to keep pensions flowing and reduce its immense “unfunded liability.” But it faced a backlash from local officials who said vital services were being cut to make their CalPERS payments.

Just when CalPERS appeared to be climbing out of its hole, the COVID-19 pandemic erupted early this year, sending the economy into a tailspin. Virtually overnight, the fund saw its value take a $69 billion hit as the stock market — CalPERS’ biggest investment sector — tanked. Stocks have since recovered, but CalPERS is still down about $13 billion from its high early this year.

Further investment erosions would, almost automatically, trigger even greater CalPERS demands for contributions from government employers, but the recession is also eating into their tax revenues, creating substantial budget deficits.

It underscores CalPERS’ vulnerability to capital market gyrations. Investments more immune to fluctuations would be safer but they offer very low returns and CalPERS could not safely meet its lofty earnings goal — an average of 7% a year.

It’s a vicious circle of conflicting demands and priorities, driven by an official policy of providing generous, inflation-adjusted pensions for government workers, bolstered by the political clout of public employee unions.

CalPERS desperately needs an escape route and has chosen the perilous path of debt.

It plans to borrow billions of dollars — as much as $80 billion — to fatten its investment portfolio in fingers-crossed hopes that earnings gains will outstrip borrowing costs. It mirrors the recent and risky practice of local governments borrowing heavily to pay their pension bills via “pension obligation bonds.”

“More assets refers to a plan to use leverage, or borrowing, to increase the base of the assets generating returns in the portfolio,” the system’s chief investment officer, Ben Meng, wrote in the Wall Street Journal recently. “Leverage allows CalPERS to take advantage of low-interest rates by borrowing and using those funds to acquire assets with potentially higher returns.”

What could possibly go wrong?

The new scheme is an implicit admission that CalPERS can’t meet its 7% mark without increasing its exposure to the vagaries of the market. “There are only a few asset classes with a long-term expected return clearing the 7% hurdle,” Meng wrote.

Perhaps, then, the real problem is the 7% goal, much higher than those of private industry pension plans.

CalPERS and other public systems use higher earnings projections because they need them to pay for the expensive pensions that politicians have awarded. Inferentially, if they fall short of the mark, they can tap employers — i.e. taxpayers — to close the gap. However, that option is pretty much maxed out, which may explain why the very risky borrow-and-invest approach is being adopted.

This is serious stuff, so risky that the Legislature should dump its informal hands-off policy toward CalPERS and order up a comprehensive and independent examination of the system’s assets, liabilities, and long-term prospects of meeting its pension obligations.

SB

REPLY: We are looking at state and local pension funds collapsing. There is not much they can do. This is the collapse of socialism of which I am referring to. This is why the 2020 election will be so critical. The left is determined to overthrow Trump because they are looking to raise taxes dramatically. The World Economic Forum is already suggesting a 400% increase in taxation in Europe. These people are insane. We have states raising property taxes between 30-40% because the lock downs have deprived them of revenues that are pushing pension funds over the edge. They are brain dead, for so many people live hand-to-mouth and cannot afford such drastic increases in taxation. The Democrats are really hoping to draft Hillary for they believe that is their best shot to beat Trump. This is the entire objective for career politicians who have no real business to return to and they will always exempt trusts and themselves. Trump would never agree to the agenda and this is the battle to the death here in 2020.

All Aboard The 2020 Recall Gavin Newsom Train Now

Governor Gavin Newsom Has Failed Californians

Reasons to Recall Gavin Newsom

  • Granting Clemency for Felons: Those who raped and murdered, even committed heinous crimes against children.
  • AB 5 – Affecting Truckers & Independent Contractors
  • Highest Homeless Rate in our Nation
  • Infringements of our 2nd Amendment Rights
  • Countless new Gun and Ammo Laws
  • Allowing undo influence by the CCP and Latin Cartels
  • Sanctuary State for Illegals and Criminals
  • Made it Legal for Illegal Aliens to sit on State Boards
  • Highest State Income Tax in our Nation
  • One of the Highest State Sales Tax
  • Prop 13 – Attempting to Restructure = Increased Property Tax
  • Highest Vehicle Registration Costs in our Nation
  • Highest Poverty Rate in the Nation
  • Vaccination Requirements for Children or be Fined
  • Water Tax
  • Children’s Medical Records Automatically Entered into Database
  • Mandatory Health Insurance or be Fined to Pay for Illegals Health Insurance
  • Prop 47: Reduces Felonies to Misdemeanors of Violent Criminals
  • Release of Violent Criminals
  • Constricting Ability for Law Enforcement to do their Jobs
  • No Longer Illegal NOT to Help an Officer in Need
  • Highest Gas Tax in our Nation BEFORE the Chinese Corona Virus
  • Teachers No Longer can Discipline Disruptive Students
  • Illegals are Given: Income Tax Refunds, Welfare, Medical Insurance, Housing, Education, Food Stamps, Cell Phones…. FREE!
  • Government Overreach – Example: Overruling Vote of the People to Reinstate the Death Penalty, and the list goes on!
  • Redirecting the Gas Tax – Not being used for Improving our Infrastructure: roads, dams, bridges
  • Funds for the Bullet Train to Nowhere!
  • Refusing to set up Water Claim System with Taxes Collected  to do just that!
  • Dismantled Death Chamber and Redistributed Death Row Inmates Through the System
  • PG&E Power Outages & Threatening to Take Over PG&E.
  • $20,000,000 of Your Tax Dollars Directed to Study Vaping
  • Seeking billions of dollars in collateralizd loans from China
  • Funding Illegal Alien owned businesses in the amount of $50 Million because CA received federal funding for the Communist Chinese Party (CCP) Virus [Covid-19/Corona]

Hold Gavin Newsom accountable. Gavin Newsom must go.

Follow instructions in this link to do your part now.

Second Version Of California Split Property Roll Tax Initiative Qualifies For November Ballot

On May 29, the office of California Secretary of State Alex Padilla announced that enough signatures were deemed valid for the second version of a ballot initiative to require commercial and industrial properties to be taxed based on their market value. In California, the proposal to assess taxes on commercial and industrial properties at market value, while continuing to assess taxes on residential properties based on purchase price, is known as split roll.

 

Proposition 13 (1978) requires that residential, commercial, and industrial properties be taxed based on their purchase price. The tax is limited to no more than 1 percent of the purchase price (at the time of purchase), with an annual adjustment equal to the rate of inflation or 2 percent, whichever is lower. According to the state Legislative Analyst’s Office, market values in California tend to increase faster than 2 percent per year, meaning the taxable value of commercial and industrial properties is often lower than the market value.

The first version of the split-roll tax ballot initiative qualified for the November 2020 ballot in October 2018. In August 2019, the campaign Schools and Communities First, which is behind the proposal, announced that signatures would be collected for a revised version of the ballot initiative. Tyler Law, a campaign spokesperson, said that the campaign would not withdraw the qualified initiative from the ballot until the revised initiative qualifies. Law said, “The committee’s got the money. We’re going to get it on the ballot.”

About 1.75 million signatures were filed for the second version on April 2, 2020. At least 997,139 (57.02 percent) of the signatures needed to be valid. Based on a random sample of submitted signatures, 74.60 percent were projected to be valid.

Both versions of the ballot initiative would create a process in the state constitution for distributing revenue from the revised tax on commercial and industrial properties. First, the revenue would be distributed to (a) the state to supplement decreases in revenue from the state’s personal income tax and corporation tax due to increased tax deductions and (b) counties to cover the costs of implementing the measure. Second, 60 percent of the remaining funds would be distributed to local governments and special districts, and 40 percent would be distributed to school districts and community colleges (via a new Local School and Community College Property Tax Fund).

Whereas the first version would have taxed property whose business owners have $2.00 million or more in holdings in California and operate on a majority of the property, the second version eliminated the majority-operation requirement and increased the threshold to $3.00 million.

The second version also redefined the exception for small businesses. The first version would have continued to tax businesses with 50 or fewer full-time employees based on purchase price. The second version would likewise define small businesses as those with 50 or fewer full-time employees but would also require businesses to be independently owned and operated and own real estate in California to be exempted from the change. Other changes involve replacing the state’s existing funding distribution formula for schools and colleges with a new formula for distributing the revenue from the ballot initiative. The second version would also give retail centers, whose occupants are 50 percent or more small businesses, more time before being taxed at market value.

Since the campaign Schools and Communities First will withdraw the first version of the ballot initiative, the qualification won’t change the number of measures on the ballot in California. As of May 31, six citizen-initiated measures have qualified for the ballot (excluding the first version of the split roll tax initiative). Three more ballot initiatives are pending signature verification. The verification deadline is June 25, 2020. June 25 is also the last day that the California State Legislature can place measures on the November ballot.

Source: by Ryan Bryne | Ballotpedia News

California Faces “Financial Collapse” As It Moves To Allow Businesses To Walk Away From Commercial Leases

One of the bedrocks of modern US capitalism – which is now mutating by the day if not hour as the Fed scrambles to preserve at any cost its the towering edifice after decades of malinvestment, even the nationalziation of the very capital markets that made America great – and one of the constants along with death and taxes, is that residential debt is non-recourse, meaning one can simply walk away from one’s mortgage if the bill is untenable, while commercial debt is recourse, or pledged by collateral that has to be handed over to the creditor if an event of default occurs.

However, in the aftermath of the sheer devastation unleashed upon countless small and medium commercial businesses which will be forced to file for bankruptcy by the thousands, this may all change soon.

As the Commercial Observer reports, last Friday, the California Senate Judiciary Committee advanced a bill that would allow small businesses — like cafes, restaurants and bars — to renegotiate and modify lease deals if they have been impacted by shelter-in-place orders and economic shutdowns. If an agreement isn’t reached after 30 days of negotiations, the tenant can break the lease with no penalty, effectively starting a revolution in the world of credit by retroactively transforming commercial loans into non-recourse debt.

Landlord advocates have, predictably, been mobilizing in opposition, arguing that the proposal is unconstitutional, and that it would “upend” leases around the state. Justin Thompson, a real estate partner with Nixon Peabody, told Commercial Observer that it was illuminating to see so many industry organizations come out “so vehemently opposed” in a short period of time. Having heard from industry groups all week, Thompson said the general consensus in the commercial real estate community is that the bill is “overly broad, overreaching, and it is a bit of a sledgehammer” when something less blunt would do.

“Everyone recognizes that restaurant tenants and smaller non-franchise retail tenants in particular really are in dire straits and in need of assistance,” Thompson said. “But I think the implications of SB 939 are really laying it at the feet of landlords, and putting them in the situation where, even if they have tenants that were going to make it through this, they might now rethink that and leave the landlord in the lurch.”

Senate Bill 939 was initially introduced as a statewide moratorium that would prohibit landlords from evicting businesses and nonprofits that can’t pay rent during the coronavirus emergency. But it was amended in the week to also give smaller businesses the ability to trigger re-negotiations if they have lost more than 40 percent of their revenue due to emergency government restrictions, and if they will be operating with stricter capacity limits due to continued social distancing mandates.

If the parties do not reach a “mutually satisfactory agreement” within 30 days after the landlord received the negotiation notice, then the tenant can terminate the lease without liability for future rent, fees, or costs that otherwise would have been due under the lease.

One of the bill’s authors, Sen. Scott Wiener, said during the hearing that the bill is focused on the hospitality sector, which has been most devastated. The renegotiation provision will not apply to publicly owned companies or their businesses. The law would be in effect until the end of 2021, or two months after the state of emergency ends, whichever is later.

Quoted by the Commercial Observer, Wiener argued that the state faces “a mass extinction event of small businesses and nonprofits in every neighborhood,” and the “very real prospect” of them permanently closing due to prolonged mandates that reduce capacity, “chopping in half someone’s business.”

“This would change the face of our state permanently,” he said. “It would severely hamper our ability to recover.”

So, the choice facing California is either a “mass extinction event of small businesses” or “financial collapse.” Sounds about right.

* * *

“This postponement of rents will cause … landlord’s financials to crumble and lead to lenders putting out cash calls to lower loan balance and foreclose when landlords cannot pay, and cripple landlords’ abilities to keep their properties open and maintained,” the letter read. CBPA also argued it is unconstitutional for a state to pass a law impairing the obligation to contracts, and warned it would “allow one party to unilaterally abrogate real estate leasing contracts.”

CBPA is the designated legislative advocate in California for the International Council of Shopping Centers, the California Chapters of the Commercial Real Estate Development Association, the Building Owners and Managers Association of California, the National Association of Real Estate Investment Trusts, AIR Commercial Real Estate Association, and others. Those groups also warned members and clients about the bill, and voiced opposition during the hearing on Friday.

Thompson added that the bill risks crushing foundational landlord-tenant relationships throughout the state. Worse, if it passes in California and is adopted in other states across the country, the very foundations of modern finance would be shaken resulting in catastrophic consequences.

“Everything we do, especially in real estate, runs on relationships,” he said. “I think that when you tip the balance so far in favor of the tenant the way that [SB 939] does, it certainly strikes at the heart of the idea that we are in this together. … This does not make it feel like landlords and tenants are in this together anymore.”

The law firm Buchalter, which has offices in L.A., Orange County, San Francisco and around the West Coast, warned clients that the bill sets a “terrible precedent” that will “upend all your leases.”

“The rights afforded under SB 939 would effectively rewrite every commercial lease in California”other than publicly traded companies, the firm said. It “negates all current commercial leases to the benefit of one business over another.” 

Instead, Buchalter said the state should provide assistance to tenants impacted by the stay-at-home orders, and pointed to the “more reasonable” renter relief proposals introduced by Senate Pro Tem Toni Atkins

Wiener said they are sensitive to the needs of property owners in terms of their loan obligations.

“It’s a complicated issue. We don’t want these property owners to default on their loans,” he said. “But we also need to be clear: these landlords aren’t going to be able to collect the pre-COVID rents from these restaurants, bars and cafes. That is not the reality. The choice is not between full rent and reduced rent. The choice is between reduced rent and no rent.”

He argued current leases negotiated before the pandemic reflect a “different financial reality.”

“Restaurants, bars, and cafes are expected, frankly, to just suck it up, and magically come up with the high rent that was obtained in pre-COVID circumstances,” he said. “This provision is not for leases to be terminated. It is to provide space and incentive to actually get the renegotiation done. … We know that overwhelmingly, these businesses don’t want to close down. This is their life’s work, they want to find a way to survive.”

Wiener said many commercial landlords are already working with renters, waiving back rents, and restructuring leases.

“It’s not in anyone’s interest where the landlord gets no revenue,” he said. “Sadly, on the other hand, all too many commercial landlords are refusing to renegotiate; are insisting that the pre-COVID, unrealistic rent be paid; are invoking lease-rent escalators; are imposing late fees on backrent. That is happening all over the state.”

During a press conference Thursday, Roberta Economidis, a partner with GE Law Group hospitality law practice, said that in order to survive, “hospitality-related businesses need long-term rent relief, not simply a deferral of high rents now that will become an insurmountable debt later.”

Governor Gavin Newsom already gave local governments authority to halt commercial evictions, and some cities like San Francisco and Los Angeles quickly did so. But SB 939 would cover all California businesses and nonprofits from eviction, whether their local jurisdictions have acted to do so or not.

SB 939 will be heard in the Senate Appropriations Committee this month; if passed it will trigger the next wave of devastation in the commercial real estate space.

Source: ZeroHedge

1 Million Students At California Universities To Stay Home Next Fall As Campuses Go ‘Online Only’

The California State University system, commonly recognized as the largest four-year university system in the country with 23 total campus, will not hold in-person classes through the fall semester for the majority of programs due to the coronavirus pandemic. 

Chancellor Timothy White informed a board meeting on Tuesday that “nearly all in-person classes” will be canceled, meaning the current remote learning online format will continue. 

And additionally concerning the other major system in the state, the University of California, a new statement this week said “it’s likely none of our campuses will fully re-open in fall,” according to a UC spokesman.

As multiple reports have underscored, this means a total of more than 770,000 students will not return to campus — which will no doubt be a huge blow to school finances, which often relies heavily for daily operations on campus-related fees such as housing, to say nothing of the coming likely massive drop in tuition and other crucial funds.

Considering other public and private colleges and universities in California are now likely to also go on-line only, we’re now talking a whopping one million students expected to stay home.

It further introduces the huge unknown of how many students will choose to forgo paying tuition for what many see as a sub-par online education as opposed to the holistic experience of a college campus. As we described before many especially incoming college freshmen are likely to take a ‘gap year’ as they’re not interested in dropping $50K plus for a semester sitting in their living room.

A California State University statement this week said: “First and foremost is the health, safety and welfare of our students, faculty and staff, and the evolving data surrounding the progression of Covid-19 — current and as forecast throughout the 2020-21 academic year,” according to CNN.

And the University of California announcement said it “will be exploring a mixed approach with some material delivered in classroom and labs settings while other classes will continue to be online.”

Apparently the few programs which will be deemed as essential to conduct in-person involve professions like nursing, bio-research, and medical related disciplines, where access to labs, medical equipment, and patient interaction are crucial. 

Schools across the nation are already losing tens of millions in campus and summer fees given shutdowns, not to mention sports programs being shuttered, also as the the question of whether in-person instruction will even happen next Fall remains the biggest anxiety-inducing huge unknown, potentially delivering a financial fatal blow to a number of already struggling schools.

Endowment values have plunged along with markets to boot. And then there’s a no doubt a greatly diminished incoming freshman class, and with that severely declining numbers of tuition checks coming in. Already faculty members are being furloughed in some cases, or salaries being cut.

Source: ZeroHedge

California Tenants Could Get 10 Years To Pay Back Rent Under This Democratic Plan

California Democrats want to give tenants who’ve lost their jobs or had wages cut during the coronavirus outbreak a decade to repay late rent.

The proposal is part of a broader strategy a handful of Senate Democrats announced Tuesday as a way to keep California afloat in the recession caused by COVID-19. It complements a separate proposal in the Assembly that would give mortgage relief for homeowners struggling with payments and another bill that would suspend evictions.

The rent stabilization proposal, said Sen. Steven Bradford, D-Gardena, would use state funds to purchase outstanding rents from tenants. They’d then have 10 years beginning in 2024 to repay the debt, interest free. Repayment plans would hinge on a tenant’s ability to pay and continued hardship can lead to full forgiveness.

Landlords would then receive a tax credit during the same time period to cover financial losses, depending on their commitment not to evict renters. They could also sell their credits.

Bradford said the rent assistance is not a “free ride.” But, he added, the assistance will help the estimated 2.3 million renting households affected by the COVID-19 economy.

“The last thing we want to do is increase our homeless population,” Bradford said. The assistance is “not for large corporate landlords,” he added, but for “mom and pop” property owners.

The recouped payments will fund “most” of the costs of the tax credits for the landlords, Bradford said, through “maximum flexibility” that keeps vulnerable Californians at the center of the state’s economic recovery plan.

Tom Bannon, CEO for the California Apartment Association, said the organization would work to “refine” the proposal with the Senate.

“During these unprecedented times, we appreciate the Senate Pro Tem’s creative effort to help tenants and rental property owners,” said Tom Bannon, chief executive officer for the association. “The California Apartment Association is committed to working with the Senate to refine this voluntary program to ensure tenants can stay in their homes and rental property owners – especially mom and pop owners – are able to continue to pay their bills and their employees.”

Separately, an Assembly proposal, written by Democrat Monique Limón, D-Santa Barbara, would allow financially burdened Californians for 180 days to seek relief from loans and mortgage payments. Another lawmaker has introduced a measure to place a temporary moratorium on evictions and foreclosure.

Nationally, 78 percent of tenants in 11.5 million units paid their rent by the sixth of April, according to data collected by the National Multifamily Housing Council. In May, about 80 percent had met that deadline.

Source: by Hannah Wiley | The Sacramento Bee

California Rents RVs And Hotel Rooms To Protect Homeless During Coronavirus Outbreak

  • Los Angeles’ homeless population will be sent to live in RVs as part of efforts to stem the spread of COVID-19
  • Anyone without a home in which to self-isolate will be provided with a hotel room or sent to live in an RV
  • Governor Gavin Newsom revealed up to 900 hotels were being prepared to house those with symptoms 
  • Coronavirus symptoms: what are they and should you see a doctor?

Holidaymakers have been asked to leave and others warned to avoid the area surrounding Dockweiler Beech RV site (pictured) in the city of El Segundo, California, amid preparation for the growing Coronavirus pandemic

Los Angeles’ homeless population could find themselves self-isolating inside a beachside RV in the coming months – as California frees up hundreds of motorhomes and hotel rooms for those in need.

Holidaymakers have been asked to leave and others warned to avoid the area surrounding Dockweiler Beech RV site in the city of El Segundo, California, amid preparation for the growing Coronavirus pandemic.

Hand washing stations have popped up in Los Angeles and San Francisco around large homeless populations and Governor Gavin Newsom revealed the state is acquiring around 900 hotels with tens of thousands of rooms to be converted for the use of both hospital patients and the homeless. 

In the next few weeks, dozens of camper vans parked along the beach front are expected to become home to vagrants ordered into quarantine.

California boasts a homeless population of more than 100,000 and with no way for them to wash their hands or maintain hygiene, it was a highly at-risk group – diseases already run rife with central LA’s Skid Row recently seeing outbreaks of typhus and Hepatitis A.

Continue reading →

California Provides Unemployment Insurance For Workers Unable To Work Due To Coronavirus

SANTA BARBARA, Calif. – The Employment Development Department (EDD) of California is providing workers who are unable to work because of the coronavirus with various insurance claims they may be eligible for.

Governor Gavin Newsom informed the public about these claims on Twitter Monday afternoon.

The Unemployment Insurance claim provides partial wage replacement benefit payments to workers who lose their job or have their hours reduced, through no fault of their own.

The department says workers must remain able and available and ready to work during their unemployment for each week of benefits claimed and meet all other eligibility criteria. Eligible individuals can receive benefits that range from $40-$450 per week.

The department is also reminding individuals that they can file a Disability Insurance claim if they become sick or quarantined with the coronavirus. This claim, which is available for non-work-related illness, injury or pregnancy, provides short-term benefit payments who are losing money due to their health condition.

In order to file for this claim, the worker’s claims must be certified by a medical professional. Benefit amounts are listed as being around 60-70 percent of wages (depending on income) and would range from $50-$1,300 a week.

Those who are unable to work because they are caring for someone sick with the coronavirus are able to file a Paid Family Leave claim. This claim provides up to six weeks of benefit payments to workers who are losing wages while caring for a family member with a serious illness.

The benefits from the Paid Family Leave claim would cover 60-70 perfect of the worker’s wages (depending on income) and would range from $50-$1,300 a week as well.

For more information from the EDD about potential insurance claims related to the coronavirus, you can visit their website here.

Source: by Jessica Brest | KEYT News

Happy New Year California Voters: Watch California Socialist Media Discuss Their New Water Usage Laws In Effect – 55 Gallons Per Day or $1,000 Fine…

Yikes.  According to new California laws on water use: you can take a shower or you can do a single load of laundry, but you cannot do both.  55 gal per day limit, or face $1k fine.

California Association Of Realtors, where are you? 

California Energy Situation Bad And Getting Worse

The energy situation in California is bad and likely to get worse. Ronald Stein, Founder and Ambassador for Energy & Infrastructure of PTS Advance, sounds the alarm. Via Watts Up With That:

California has not even been able to generate enough of its own electricity in-state and imported 29% of its needs in 2018. … California households are already paying 50% more, and industrial users are paying more than double the national average for electricity.

Do the communists running the state actually believe that carbon emissions are somehow harmful? Apparently not, or they would support zero-emission and low-emission energy sources. The state’s last nuclear plant and the last three natural gas plants in Southern California are all closing. Nuclear and natural gas are no good because they are economically efficient.

But there are no plans for industrial wind or solar projects either. This means California will have to import ever more energy — some from overseas.

California is the only state in the union that currently imports most of its crude oil energy from foreign countries. The California Energy Commission (CEC) data demonstrates that this dependency on foreign sources of oil requires expenditures of $60 million dollars EVERY DAY to oil rich foreign countries to support the 5th largest economy in the world for it’s military, aviation, cruise ships, and merchant ships, just to make up for the States’ choice to continue decreasing in-state production.

Not all of these countries are friendly to the USA or to California.

Governor Gavin Newsom’s solution is to take a bad situation and make it worse. His…

…latest moves to reduce production and require larger setbacks for existing production wells will further decrease production and require the State to increase its monthly imports resulting in expenditures approaching a whopping $90 million EVERY DAY for foreign countries to support our infrastructures.

By now everyone knows that Trump is not in cahoots with Vladimir Putin, regardless of what the Democrat Party/establishment media told us for years. Maybe someone should investigate Newsom instead:

Both [Putin and Newsom] support California being more and more dependent on imported foreign oil, and both support anti-fracking in California as a successful fracking enterprise would lessen the states’ dependency on that foreign oil.

No wonder most of the moving vans are heading out of instead of into California. As those who leave are displaced by still more needy immigrants from the less successful parts of the world, expect the politics to veer ever further to the left. The Democrat Death Spiral is not inducive to energy production.

Source: Moonbattery

Los Angeles Homelessness Czar to Resign After Homelessness Grows by 33%

Los Angeles’ head of homelessness announced on Tuesday, December 10, 2019 that he will be resigning after presiding over a 33 percent increase in homelessness during the last five years.

Peter Lynn, the head of the Los Angeles Homeless Service Authority, revealed that he would leave at the end of the year.

According to Paul Joseph Watson of Summit News, LAHSA reportedly spent $780 million with no effect.

The city’s homeless population grew even larger from 2018 to 2019, where it witnessed a 12 percent increase in that period.

Even with these unsavory facts in front of him, L.A. Mayor Eric Garcetti believed he did an amazing job and presided over “historic action.”

Lynn was apparently making $242,000 while homelessness went up along with cases of leprosy, typhoid fever, and even bubonic plague.

A few months ago, Dr. Drew Pinsky said L.A.’s public health infrastructure was a complete mess.

Source: by Jose Nino | Big League Politics

How California’s Government Plans To Make Wildfires Even Worse

(Ryan McMaken) Not every square inch of the planet earth is suitable for a housing development. Flood plains are not great places to build homes. A grove of trees adjacent to a tinder-dry national forest is not ideal for a dream home. And California’s chaparral ecosystems are risky places for neighborhoods.

This is nothing new. While people many Americans who live back East may imagine that something must be deeply wrong when they hear about fires out West, the fact is things are different in North America west of the hundredth meridian. The West is more prone to extreme temperatures, hundred-year droughts, and fires in the wilderness. Many of these ecosystems evolved with this fire risk. 

It’s also not enough to blame the growing devastation of recent wildfires solely on climate change, researchers said. While drier, warmer conditions have lengthened the fire season and likely increased the severity of the blazes, wildfires are only destroying more homes today than decades before because of rapid growth in rural areas.

It’s not that fires are more devastating in the natural sense. The problem is that human beings insist on putting their property in places where fires have long destroyed the landscape, over and over again.

The Bee continues:

[T]he fires aren’t getting closer to us — we’re getting closer to the fires. “We’re seeing wildfires that have always been a part of the landscape that are now interacting more and more with us…”

Strader studied wildfire history in the western United States going back three decades, then mapped population growth in areas where fire activity had ranged from medium to very high. His research determined there were 600,000 homes in fire prone areas in the West in 1940. Today, that number is around 7 million.

So, why do people keep building homes in these places? Part of it is natural populations growth, of course. But the manner and rapidity with which this development expands out into the fringes of metro areas is also partly due to government policy and infrastructure. 

In an unhampered market, it would be very expensive to extend a new neighborhood out into ever-further-out regions near metro areas. In order to reach these places, housing developers would need to find a way to finance both the new housing construction and the roads that give access to them. Certainly, developers often provide part of the funding through development fees demanded by governments. But these roads are often also subsidized by state and local governments, especially in the form of ongoing maintenance. Once a road to a new semi-rural community is built, governments will often maintain it, while spreading the cost across all the jurisdiction’s taxpayers.

This system of subsidy allows more rapid and more dispersed development. Unsubsidized roads would tend to force more close-in and more dense development.

The federal development also subsidizes the construction of larger and more sprawling residential property through the FHA insurance programs and government-sponsored enterprises like Fannie Mae. By purchasing home loans on the secondary market, the GSEs push more liquidity into the home loan market, making loans cheaper, and pushing up demand for larger, sprawling developments.

Many conservatives often speak of density in residential and commercial development as if it were some kind of left-wing conspiracy. It is assumed that few people would opt for density were there not left-wing urban planners to force it on everyone.

But the reality is that in an unhampered market, density levels would be higher than they are now, because sprawl would be (all else remaining equal) much more costly to consumers than is now the case.

In light of the increasing fire danger to homes, many left-wing advocates favor changing California’s housing development patterns. But they can only point toward more restrictive government regulations. The Los Angeles Times editorial board, for example, complains that “Land-use decisions are made by local elected officials and they’ve proven themselves unwilling to say no to dangerous sprawl development …”

But government prohibitions aren’t necessary. If people insist on building and selling homes in fire-prone areas, let them be the ones to cover all the costs. This includes the cost of fire mitigation and rebuilding after fire. This in itself would limit development in these areas.

And yet, while California pundits are complaining that policymakers aren’t doing enough, California politicians are actively taking steps to keep the market from correcting the excessive building in fire-prone areas.

This week, California regulators prohibited insurance companies from dropping the homeowners’ insurance policies of homeowners in fire prone areas:

The state said its moratorium applies to about 800,000 homes, and more areas are expected to be added.

A state law passed last year allows the California Department of Insurance to require insurers to renew residential policies for one year in ZIP Codes that have been affected by declared wildfire disasters.

Previously, insurers had to renew policies for homeowners who suffered a total loss. The current law extends to all policyholders in an affected area, regardless of whether they experienced a loss.

Not surprisingly, many homeowners in fire-prone areas of the state are having problems finding fire insurance for their homes. And they often pay handsomely when they do find it. That’s too bad for the owners, but this fact doesn’t justify handing down state mandates that insurance companies continue to cover people who have taken on unacceptably high risk.

By stepping in to force insurance companies to cover these homeowners, California politicians are doing two things:

  1. They’re continuing the cycle of encouraging home buyers to buy homes in areas likely to fall victim to wildfires.
  2. At the same time, regulators are increasing the costs incurred by insurance companies, and this will likely have the effect of driving up the price of fire insurance for homeowners who more prudently declined to purchase a house in fire-prone areas.

At the macro level, the end result will be something akin to what we’ve seen in flood-prone areas in the United States.Thanks to federal regulations and subsidies, many property owners can avail themselves of flood insurance priced well below what would be available in an unhampered market. Legislation such as the National Flood Insurance Act of 1968 means builders and homeowners have been encouraged to place property where they’re likely to be flooded over and over again.

We’re now seeing a similar type of moral hazard at work in California.

In a more sane political environment, however, those who insist on living in the way of wildfires would have to assume the risk of doing so, rather than demanding politicians force the cost on insurance companies and taxpayers.

Source: by Ryan McMaken | ZeroHedge

PG&E Announces $13.5 Billion Settlement Of Claims Linked To California Wildfires

Seen in August 2019, the remains of a home destroyed in Northern California’s 2018 Camp Fire. Rich Pedroncelli/AP

Utility giant Pacific Gas and Electric announced a $13.5 billion settlement agreement to resolve all claims associated with several Northern California wildfires that killed dozens of people and destroyed thousands of businesses and homes. The wildfires have been tied to the company’s equipment.

“We want to help our customers, our neighbors and our friends in those impacted areas recover and rebuild after these tragic wildfires,” said PG&E Corp. CEO and President Bill Johnson in a statement released late Friday.

The settlement fund, if accepted by a bankruptcy judge, will go to victims who lost loved ones and/or property, as well as government agencies and attorneys who have pressed the claims.

PG&E declared bankruptcy in January, saying it faced potential liabilities of $30 billion. The company hopes that the settlement will improve its prospects for emerging from bankruptcy before a court-imposed deadline in June.

The settlement covers the Camp Fire in 2018; the Tubbs Fire in 2017; the Butte Fire in 2015; and the Ghost Ship Fire in Oakland in 2016.

Victims seeking compensation will have to file claims by the end of the year. The deadline had been extended because tens of thousands of eligible victims had failed to file amid reports that many were still unaware that they could seek payments.

Source: by Richard Gonzalez | NPR

CAR on California October Housing: Sales Up 1.9% YoY, Inventory Down 18%

The CAR reported: California housing market holds steady in October, C.A.R. reports

(Bill McBride) Shrinking inventory subdued California home sales and held home sales and prices steady in October, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. 

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 404,240 units in October, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

October’s sales figure was up 0.1 percent from the 404,030 level in September and up 1.9 percent from home sales in October 2018 of a revised 396,720. 

“The California housing market continued to see gradual improvement in recent months as the current mortgage environment remains favorable to those who want to buy a home. With interest rates remaining historically low for the foreseeable future, motivated buyers finding that homes are slightly more affordable may seize the opportunity and resume their home search,” said 2020 C.A.R. President Jeanne Radsick, a second-generation REALTOR® from Bakersfield, Calif. “Additionally, the condominium loan policies that went into effect mid-October could help buyers for whom single-family homes are out of reach.” 
…
After 15 straight months of year-over-year increases, active listings fell for the fourth straight month, dropping 18.0 percent from year ago. The decline was the largest since May 2013.

The Unsold Inventory Index (UII), which is a ratio of inventory over sales, was 3.0 months in October, down from 3.6 in both September 2019 and October 2018. It was the lowest level since June 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.

Source: by Bill McBride | Calculated Risk

“It’s Cozy” – Los Angeles Imports Are Paying $800/Month To ‘Live In Coffins

First it was the unaffordability of ‘real’ homes (combined with massive student loan debt) that spoiled the living-the-Dream narrative for America’s young people.

Remember this 350-square foot studio in NYC that cost $645,000?

Then it was a shift to “tiny homes” – which became popular with millennials since their standard of living has collapsed.

But while they could virtue signal with solar panels and wind power systems, an eco-friendly bathroom, and a kitchen with everything needed to make avocado and toast, living in with post-industrial feel using an old shipping container for $37,000 was too much for many…

So ‘podlife’ sprung up on the coasts – as the housing affordability crisis deepened on the West Coast, a new style of living, one that reminds millennials of their college dormitory days, sprang up in cities across California.

But, residents were upset by having to adhere to house rules, one being that lights go out at 10 pm each night, and no guests are allowed inside.

And so, as AFP reports, young Americans flocking to LA and NYC are now resorting to “Capsule Living” as the only affordable option…

Inspired by the famous hotels in Japan, each room contains up to six capsules, described by residents as “cozy,” containing a single bed, a bar for hanging clothes, a few compartments for storing shoes and other items and an air vent.

By most standards, the coffin-like accommodation is still not cheap – $750 per month plus taxes. That works out at around $800 and there are still rules… women and men sleep apart, and having sex is not an option.

For Dana Cuff, an architect and professor at the University of California, Los Angeles (UCLA), this type of community presents only a short-term solution.

“We basically need to be developing a huge range of options for the kinds of housing that are available,” she said.

“To me, co-living pods… are symptoms of this deep need for a much greater range of housing alternatives.”

Alejandro Chupina, 27, left home as a teenager because his parents did not support his career as an actor and musician.

“We have so many different amenities… for what we’re paying, I feel like we’re getting way more, in different ways,” said the young man with a handlebar mustache, who can recite the musical “Hamilton” by heart.

We give the final word to Kay Wilson, who packed up her life in a hurry and moved to Los Angeles… only to find that what she paid in Pennsylvania for a nice studio apartment would only get her a 2.9-square-meter box in California.

“I sold all my belongings and I moved here to be in this pod… I’m finding comfort in being uncomfortable,”

The American Dream indeed…

Source: ZeroHedge

The Great Exedous From California By Conservative Middle Class Is In Full Swing

California conservatives are fleeing the state in droves over what the LA Times describes as their “disenchantment with deep-blue California’s liberal political culture,” not to mention “high taxes, lukewarm support for local law enforcement, and policies they believe have thrown open the doors to illegal immigration.“

Just over half of California’s registered voters have considered leaving the state, according to a UC Berkeley Institute of Governmental Studies poll conducted for the Los Angeles Times. Republicans and conservative voters were nearly three times as likely as their Democratic or liberal counterparts to seriously have considered moving — 40% compared with 14%, the poll found. Conservatives mentioned taxes and California’s political culture as a reason for leaving more frequently than they cited the state’s soaring housing costs. –LA Times

Former Californians Richard and Judy Stark had no regrets as they left their Modesto home, towing a U-Haul trailer with their Volkswagen SUV 1,300 miles to Amarillo, Texas. After finding the website Conservative Move, the Starks put their home up for sale around six months ago and bought a newly constructed three-bedroom home in the suburb of McKinney for around $300,000. According to Stark, a similar home in California would cost around twice as much.

“We’re moving to redder pastures,” said the 71-year-old. “We’re getting with people who believe in the same political agenda that we do: America first, Americans first, law and order.“

According to new Census Bureau migration data for 2018, 691,145 Californians left for other states last year, according to the San Jose Mercury News.

Where they’re going (via the Mercury News)

• Top destinations: In raw terms of people moving, the top spot for Californians is Texas, which got 86,164 Californians in 2018. Next came Arizona (68,516), Washington (55,467), Nevada (50,707), and Oregon (43,058). All told, California had the most exits among the state and that wave grew by 4% in a year.

• Largest net gain: Texas also had the largest “net gain” from California — more ins than outs — with 48,354. Next was Arizona (34,846), Nevada (28,274), Oregon (19,008), and Washington (17,460).

• Greatest ratio of ins to outs: Or look at the comings and goings as a ratio of ins to outs.  Idaho wins this race with 497 arrivals from the Golden State for every 100 former Potato State residents who moved to California. Next was South Carolina (247 ins per 100 out); Texas (228); Nevada (226); and Arizona (203).

 

That said, the LA Times also notes that California is gaining people with higher incomes – most of whom have migrated to the Bay Area.

Over the last decade, the Legislative Analyst’s Office report said, the state added about 100,000 residents with household incomes of $120,000 or higher. About 85% of these higher-income earners moved to the Bay Area counties of Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara. –LA Times

The three-member Bailey family moved from California to Prosper, Texas in 2017 to get away from Southern California’s steep housing prices. Bailey and her husband Scott owned a home in Orange County, while renting in El Segundo to be closer to Scott’s work in Santa Monica.

“To buy a house there [El Segundo] is insane,” said Marie. “It’s like $1 million. Why are we working our butts off for a fixer-upper in El Segundo? We’re just working, working, working — and for what?”

Bailey launched a Facebook group for people struggling with the same problems – “Move to Texas From California!“, which boasts over 14,000 members. She says that most members are conservatives like her, though not all. As such, one of her rules is “no insulting or going overboard with political conversations.”

“I wouldn’t be one to put up a Trump sign, even here,” said the 40-year-old Bailey. “But in your town Facebook, people would be like, ‘We know who the Trump supporters are.’ I had friends who voted for Trump and went to work the next day and pretended they didn’t.”

Bailey says she helped around 40 families migrate to Texas over the last year.

“There are hundreds more who made the move who didn’t use my real estate services but are in the group,” she said. “Tons and tons of families are moving all the time. People are posting photos of their families waving goodbye.”

Nicole Rivers and her husband put their Clovis home on the market in April, and hope to close escrow soon. They plan on flying to Texas to look for a place to rent in the eastern part of the state, near Tyler, coming back to California and then driving to their new home.

Rivers, who recently quit her job as a medical assistant and phlebotomist, said the cost of living is so much lower in the Tyler area that she can afford to stop working and dedicate herself to being a stay-at-home mom.

Her husband works in the oil fields, she said, and was already splitting his time between his job in Pennsylvania and family in California. When he had the chance to transfer to Texas full time, they jumped on it.

The 37-year-old said she wants to live in a town where the family can save money and her husband can retire sooner.

“It’s just too expensive here in California,” said Rivers, a California native. The state’s politics have “really gotten out of hand,” she added. She doesn’t support the state’s restrictive gun laws, she said, or the controversial sex education framework California approved despite protests earlier this year. –LA Times

Between earthquakes, seasonal fires, high taxes, poo-covered streets, the worst homeless crisis in the nation, and transgender summer camp for children as young as four, what’s not to love?

… and, sentiment expressed in this article is not alone…

‘Get Your Act Together’: Trump Threatens To Pull Federal Support As California Fires Rage

California Governor Asks AG To Investigate High Gas Prices, But Not ‘Mystery State Surcharges’

California Is Teetering On The Edge Of Financial Ruin Again

Nearly Half Of America’s Homeless People Live In California

Large Swaths Of California Now Too Wildfire Prone To Insure

Courts Finally Force California To Repay $331 Million Stolen From Mortgage Relief For Homeowners

“California Is Being Overrun By Rodents” – And We’re Not Talking About The Politicians

Orange County California Q1 Home Sales Off To Coldest Start Since Great Recession

California’s Housing Bubble’s So Bad, 100s Forced To Live On Boats

Federal Railroad Administration Cancels $929 Million In California High Speed Rail Funds

Millions Of Californians Will “Plunge Into Darkness” As PG&E Commits To Cut Power During Wildfire Season

What Happened To The $1 Billion Tax Revenue Expected From Licensed Marijuana Sales In California?

Proposition 13 Is No Longer Off-Limits In California

Southern California Home Sales Plunge 12% In November As Prices Peak

California Faces Pension Showdown

C.A.R. Report: California Housing Market Sputtered In November

Home Builder Toll Brothers Shocks With 13% Plunge In Orders As California Falls A Staggering 39%

Yet Another Unfunded Trillion Dollar Liability, California Wildfire Damage

California Tops National Poverty Rate As Prime Tax Donkey Demographic Plans “Exodus” From State

Crisis Level: California’s Housing Affordability Plummets To 10-Year Low

California Gained Just 800 Jobs In June; Unemployment Remains At Record Low

Cesium-137 From Fukushima Found In California Wine

California Become 3rd Largest State with More People leaving than Migrating to the State

California Officials Avoid ‘p-word’ When Selling Higher Taxes to Voters

It’s Now Against The Law In California To Shower And Do Laundry On The Same Day

California Residents Flee, Chased Away By Soaring Home Prices And Cost Of Living

California University Tuition Going Up For Everyone EXCEPT Illegal Alien Students

Californians Flee The State In Droves Over Taxation And Housing Costs

California Law Makers Want Businesses To Hand Over Half Their Federal Tax Cut Savings

California Cities Spiking Taxes to Pay Spiking Pension Costs

California Moves One Step Closer To “Mileage Tax”; Could Require Tracking Your Cell Phone Movements

Required Pension Contributions of California Cities Will Double in Five Years says Policy Institute: Quadruple is More Likely

California Renter Apocalypse

Affordable Housing Plan Slaps Fee on California Property Owners

California Senate Bill 1: Expand Eminent Domain to Create “Sustainable Communities”.

CA Governor Newsom Blames Texas For CA Policies That Caused CA’s Homeless Crisis

Chief Investment Officer of Largest US Public Pension Fund Has Deep Ties to Chinese Regime

‘They Waited For Failure’: Report Exposes PG&E’s Inability To Replace Equipment That Sparked Deadly Wildfire

CA Voters Not Happy With Free Medical For Illegals

Developers Are Pulling Out All The Stops Amid Los Angeles’ Mega-Mansion Glut

Young Real Estate Flippers Get Their First Taste of Losing

Mapped: The Salary Needed To Buy A Home In 50 U.S. Metro Areas

Americans Can’t Afford To Buy A Home In 70% Of The Country

Guess How Much Americans Spend Drunk Shopping Online?

Source: ZeroHedge

‘Get Your Act Together’: Trump Threatens To Pull Federal Support As California Fires Rage

As Californians grapple with this year’s annual fire season, President Trump has a message for Democratic Governor Gavin Newsom; clean up your act.

“The Governor of California, @GavinNewsom, has done a terrible job of forest management. I told him from the first day we met that he must “clean” his forest floors regardless of what his bosses, the environmentalists, DEMAND of him,” Trump tweeted on Sunday.

Trump then threatened to withhold federal money, which California receives every time they declare a state of emergency.

“You don’t see close to the level of burn in other states…But our teams are working well together in putting these massive, and many, fires out. Great firefighters! Also, open up the ridiculously closed water lanes coming down from the North. Don’t pour it out into the Pacific Ocean. Should be done immediately. California desperately needs water, and you can have it now!”

California state Senator Mike McGuire tweeted “Total crap” in response to Trump, claiming that “Approx 57% of CA’s forest land is owned by the Fed Gov’t. Only 3% is owned by State/local gov’t. THE FEDS HAVE CUT their forest budget by hundreds of millions.”

After more than a week battling around a dozen blazes throughout the state, fire crews have most of the incidents over 70% contained, according to the California Department of Forestry and Fire Protection. That said, first responders have been slowed down by reports of drones being operated in their airspace.

Two separate instances of drone flights disrupted water-dropping helicopters from attempting structure protection in the nearby city of Santa Paula, Ventura County Fire Department spokesman Mike DesForges said.

“The helicopters had to set down for 30 to 40 minutes each time,” DesForges said. “The drones are difficult to see and they can be pushed by winds very easily. If they strike one of our helicopters, they could cause it to crash, and if not, we would still need to land that helicopter to perform repairs.” –NPR

On Thursday night, the Maria Fire broke out near the cities of Ventura and Oxnard to the north of Los Angeles. It is currently 50% contained after burning around 9,400 acres. Following the new blaze, Newsom expanded the state of emergency in Sonoma and Los Angeles.

Maria fire (circled)

To the north, the Kincade Fire in Sonoma County has burned over 77,000 acres and is 76% contained. Over 4,500 fire personnel battled the blaze east of Geyserville.

“They’re still doing a lot of work in those hot spots, and there are still a lot of utility workers in there trying to get services restored,” said Cal Fire spokesman Cleo Doss. “We’re trying to help the people who have already been released get back into the area.”

According to the San Francisco Chronicle, evacuation orders have been lifted for all but a few locations affecting 1,500 people. During the height of the fire, around 185,000 people were evacuated. The fire has destroyed 372 structures, including 175 homes. Four first responders sustained non-life threatening injuries.

California Governor Asks AG To Investigate High Gas Prices, But Not ‘Mystery State Surcharges’

In addition to earthquakes, wildfires, power outages and an army of pooping homeless people, California is known for ridiculously high gasoline prices – thanks in part to the state’s notoriously exorbitant taxes.

And in the wake of $6.00 gasoline in some parts of the state, Governor Gavin Newsom has asked Attorney General Xavier Becerra to investigate “If oil companies are engaging in false advertising or price fixing,” according to KCRA, after a new report suggests that big oil companies are overcharging customers by as much as $1 per gallon. 

Name brand retailers – including 76, Chevron and Shell – often charge more because they say their gasoline is of higher quality. But a new analysis from the California Energy Commission could not explain the price difference, concluding “there is no apparent difference in the quality of gasoline at retail outlets in the state.”

The commission said California drivers paid an average of 30 cents more per gallon in 2018, with the difference getting as high as $1 per gallon in April of this year. The result is California drivers paid an additional $11.6 billion at the pump over the last five years. –KCRA

That said, according to an April report in the Orange County Register, at $4 per gallon, approximately .98c of it is due to various taxes and fees. 

  • Federal excise tax — 18 cents
  • State excise tax — 42 cents
  • State and local sales tax — 8 cents
  • State underground storage tank fee — 2 cents*
  • Additional costs for compliance under Cap & Trade, as well as the Low Carbon Fuels Standard— 28 cents
  • Total — 98 cents

* Note: The state and local sales tax is calculated at an average state sales tax rate of 2.25% percent although actual sales tax rates vary throughout California.

That said, “Severin Borenstein, a professor at UC Berkeley’s Haas School of Business and faculty director of the Energy Institute at Haas, said his own tax calculations came within a penny of that total. But the mystery surcharge — an added expense that has yet to be identified — has averaged 28 per cents a gallon from January through March of this year. When added to the taxes, that brings the total to about $1.26 a gallon,” according to the report.

“In January, a group of 19 state legislators sent a letter to the California Attorney General’s Office saying, ‘We want you to investigate this,’” said Borenstein, who added. “They have never replied. They said they don’t make public statements about investigations. We don’t even know if they are investigating it.”

So while California’s AG has been asked to investigate false advertising and price fixing by the oil companies, Newsom’s letter is devoid of any request to look into the mystery surcharge found by Borenstein.

Source: ZeroHedge

California Is Teetering On The Edge Of Financial Ruin Again

For years, it had been speculated that California’s state-wide model of heavy regulation, expensive education, high taxes and bloated spending would eventually drive the state into financial ruin, according to a new Bloomberg Opinion piece. Over the last 15 years, the state also has had to deal with widespread blackouts and an unemployment rate that ballooned to 12% after the financial crisis.

After deficits exploded under Governor Schwarzenegger, the state eventually got back on track. Under Governor Jerry Brown, the state raised taxes again (surprise) and bumped up its sales tax. These tax hikes, combined with a recovery in housing and in the stock market, helped swing the state’s budget back into the black.

But now, the symptoms of larger problems in California are bubbling to the surface yet again. For instance, the recent “planned blackouts” by power provider PG&E to try and prevent wildfires are indicative of a crumbling energy infrastructure across the state.

Losses from recent wildfires in California have been “staggering”, totaling upwards of $400 billion in 2018. This figure represents about 1/7th of the state’s total GDP and is comprised of health costs, lost property, lost jobs and asset prices falling. It also takes into account migration out of the state. 

PG&E has said that the “safety” blackouts will continue, which means that the state isn’t going to have reliable year-round electricity. This will inevitably take its toll on property values and slow migration inflows into the state. 

While wildfires rage across the state, another issue is plaguing California: homelessness. The state’s homeless population has increased by 5.3% from 2010 to 2018. California is already home to almost half of the country’s homeless. We have documented, at length, the homelessness issues in areas like San Francisco, where the epidemic is reaching a fever pitch. 

At the same time, government pension costs are rising across the state; faster in California than in the rest of the nation. The cost saving measures being put in place to offset this problem are degrading the state’s education system. 

And so, the inevitable has happened: people are leaving the state.

In fact, a recent paper by economists Joshua Rauh and Ryan Shyu found that out-migration of top-bracket taxpayers accelerated after the state’s 2012 income tax hike. 

“Among top-bracket California taxpayers, outward migration and behavioral responses by stayers together eroded 45.2% of the windfall tax revenues from the reform,” the paper’s abstract says. 

With Democrats back in the saddle, holding a super majority in the state, California seems doomed to repeat its dysfunctional history from the early 2000’s. Making matters worse, an initiative called Proposition 13 is making it difficult for California to alleviate its burdens by raising property taxes, the op-ed notes:

But California’s political system is making it hard to respond to these pressures. Thanks to a 1978 ballot initiative called Proposition 13, California cities have stringent limits on raising revenue from local property taxes. That forces the state to provide many services, financing them with hefty income taxes. Those are inherently more unreliable than property taxes, since wealthy taxpayers can move away (while property can’t move), and since California’s income taxes fluctuate a lot because they depend so much on the profits residents earn on volatile stock prices.

“Proposition 13 must be repealed, and property taxes raised,” the piece continues, in order for the state to avoid what it calls another “dark path”. It also suggests that the state legislature pass bills to allow greater housing density and more construction throughout the state.

Only time will tell whether these proposed solutions, if implemented, would even work. But one thing is for sure: if California doesn’t do something soon, the state could become (further) living proof that creating a liberal utopia by hiking taxes and adding regulation is nothing more than a pipe dream, if not a full blown recipe for exactly how to drive an economy into the ground. 

Contrast with SoCal, early 1950’s…

Source: ZeroHedge

 

Pod People – The Future Of Housing In America’s ‘Sharing’ Economy

Urban millennials are shelling out half their income to inhabit pods in decaying mega cities.

For the low-low price of $1400/month, you can live in Venice Beach at a PodShare…

Away from the glossy PR, it doesn’t look so great…

No privacy, no pets, no family.

Cheek by jowel with other pod-dwellers on prison-style bunk beds.

Forced to live like ants in colonies because none of them can afford to buy a home anymore.

As Paul Joseph Watson explains in his inimitable way, millennials are “living the dream!“

*  *  *

Of course, images of ‘pod people’ sparked a large response from the twitterati as the scenes reminded them of horrors from the past…

 

Although it beats this…

Source: ZeroHedge

Nearly Half Of America’s Homeless People Live In California

Not only do nearly half of America’s homeless people live in California, but four of the five American cities with the greatest incidences of un-sheltered homelessness are in the Golden State.

As California becomes a mecca for socialism, their quality of life diminishes along with it in a characteristic dystopian decline.

San Francisco, Los Angeles, Santa Rosa, and San Jose are four of the five cities with the highest amount of homelessness. Seattle joins the California municipalities in the top five. According to Market Watch, the rates of homelessness are the highest in Washington D.C. The District of Columbia’s homeless rate is at 5.8 times the United States rate. New York is next, followed by Hawaii, Oregon, and California. These five states together comprise 20% of the overall U.S. population but 45% of the country’s homeless population.

All of these states are incredibly liberal with several already having instituted tight socialist policies.

A White House report teased out certain trends in homelessness across the country. Communities along both coasts have much larger homeless populations than those in the middle of the country. One driver of this trend is likely the more notable rise in housing prices along the coasts than in much of the Midwest.

The White House report identified local laws and policing practices as a potential differentiator. “Some [states] more than others engage in more stringent enforcement of quality of life issues like restrictions on the use of tents and encampments, loitering, and other related activities,” the report noted. –Market Watch

The Trump administration has floated plans to fix the homeless crisis in liberal areas by deregulation. Many states and municipalities have zoning rules regarding the construction of both single-family and multi-family homes. These laws have impeded the builders’ ability to meet the demand for housing resulting in scarcity which has driven up prices. Experts and politicians across the political spectrum have suggested that relaxing such regulations could provide a boost to building activity.

First Ever Triple Bubble in Stocks, Real Estate & Bonds – With Nick Barisheff

We are living in an age of records in the financial world. The stock market is in its longest bull market in history and near all-time highs.  The world has more debt than ever before while interest rates are near record lows, and some are negative in many countries for the first time ever.  Nick Barisheff, CEO of Bullion Management Group (BMG), is seeing a dark ending for the era of financial records. Barisheff explains,

“I have been in the business for 40 years, and this is the first time we have had a simultaneous triple bubble, a bubble in real estate, stocks and bonds all at the same time.  In 1999, it was a stock bubble. In 2007, it was a real estate bubble. This time, we’ve got a triple simultaneous bubble.  So, when we have the correction, it’s going to be massive. Value calculations on equities say it’s worse than 1999, and in some cases worse than 1929. The big problem is this triple bubble is sitting on a mountain of debt like never before.”

What is going to be the reaction to this record bubble in everything crashing?  Barisheff says, “I think you are going to be getting riots in the streets.  It’s already happening in California. CalPERS is the pension fund administrator for a lot of the pension funds in California. So, already retired teachers, firefighters and policemen that are sitting in retirement getting their pension checks all got letters saying sorry, your pension checks from now on are going to be reduced by 60%.  How do you get by then?”

What happens if the meltdown picks up speed and casualties?  Barisheff says,

“I think the only option will be for the government is to print more money and postpone the problem yet a little bit longer, but that leads to massive inflation and eventually hyperinflation.  Every fiat currency that has ever existed has always ended in hyperinflation, every single one.  Since 1800, there have been 56 hyper inflations. Hyperinflation is defined as 50% inflation per month.  That’s where we are going and what other choice is there?”

So, what do you do?  Barisheff says,

“In the U.S. dollar since 2000, gold is up an average of 9.4% per year. In some countries, it’s up 14% and so on.  If you take the overall average of all the countries, the average increase is 10% a year.  Every time Warren Buffett is on CNBC, he seems to go out of his way to disparage gold, but if you look at a chart of Berkshire Hathaway and gold, gold has outperformed Berkshire Hathaway. . .  Everybody worships Warren Buffett as the best investor in the world, and gold has outperformed his fund in U.S. dollars.  I would not disparage gold if I were him. I’d keep quiet about it.”

There is a first for Barisheff, too, in this financial environment.  He says for the first time ever, he’s “100% invested in gold” as a percentage of his portfolio.  He says the bottom “is in for gold,” and “the bottom is in for silver, too.”

Barisheff contends that with the record bubbles and the record debt, both gold and silver will be setting new all-time high records as well in the not-so-distant future.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with Nick Barisheff, CEO of BMG and the author of the popular book “$10,000 Gold.”

From Stuck Living at Home to Giving Up on Having Children: Visualizing Economic Realities of Young Adults in America

With nearly 40% of young adults in California living with their parents and a $1.6 trillion student debt crisis taking more than just a little bite out of disposable income (and any hope of saving for many), economist Gary Kimbrough of the University of North Carolina at Greensboro has thrown together a ton of interesting data to answer the question: “What are the economic realities for young adults, and how have they changed from prior decades?“

While much of Kimbrough’s analysis was done in February, he’s revisited his work ahead of a January presentation on the topic of young adults living at home.

Living at home

What’s more, when broken down by categories “living with parents, household head or spouse of household head, living in group quarters (mostly prisons for these ages), and other arrangements like cohabiting and living with roommates,” it’s startling to watch how young adults have been living at home vs. starting their own families over time. 

Job switching

When it comes to “job hopping” – young adults are largely staying put – and “aren’t even switching jobs at anything close to the levels of those in their age groups before 2001” according to Kimbrough. 

Everyone has a degree

“In 1992, middle-aged men were significantly more likely to have a bachelor’s degree than women or younger men. Now members of every group age 25-34 are more likely to have degrees than those men were,” writes Kimbrough, adding “Women’s college degree rates have shot up significantly more than men’s.”

Men at (part time) work

Since the Great Recession, Kimbrough noticed that “the propensity to work part time is about the same for women as pre-recession, but is up quite a bit for men under 35. Men 25-29 are still more likely to work PT than any time pre-2009.”

Working women are up, marriages are down

As more women have chosen careers over homemaking, Kimbrough provides an illustration of prime-age employment as a percentage of population, by gender. What’s more, young adult marriages have declined markedly over the last decade, continuing a trend which began mid-century. 

Gaming overtakes TV time

While not an “economic reality” per-se, it’s interesting to note that young men have been swapping TV-watching time for gaming. 

Of note, and unsurprisingly – young men living at home constitute the bulk of gamers watching less TV.

Owned by rent

Using Census/ACS data, Kimbrough shows how young adults are “significantly more likely to live in rental housing than in prior decades.”

What about the children?

Also unsurprising, with lower marriage rates and higher female employment, women in their 20s are “significantly less likely to have a child than a decade ago,” while those over the age of 32 are slightly more likely to have a kid. 

In short:

Source: ZeroHedge

CA Governor Newsom Blames Texas For CA Policies That Caused CA’s Homeless Crisis

California Statist Supremacist and authoritarian governor, Gavin Newsom, recently blamed the state of Texas for California’s homeless crisis; rather than taking blame for long established policies California has instituted that stifle free enterprise with excessive regulation and taxation on those working hard to create private wealth. 

Newsom said many homeless people on the streets of San Francisco are from Texas, in an attempt to shift the blame from himself and the polices of socialists (who get rich peddling socialism to the masses as everyone else becomes impoverished.)

Former California assemblyman turned Texas resident Chuck DeVore reacted to Newsom pushing the blame onto others. The vice president of the Texas Public Policy Foundation, Chuck DeVore, said Wednesday that Gavin Newsom is “responsible for the policies that have created California’s homeless crisis,” in the wake of the governor blaming Texas for San Francisco’s homeless crisis. “What you’re seeing here are the words of a desperate man that we should almost feel sorry for,” DeVore, who served as a California assemblyman for six years, told “Fox & Friends.”

“Governor Gavin Newsom has been in office now for 22 straight years, starting at the San Francisco board of supervisors,” DeVore added. Homelessness has been rampant across the state of California in the past few years and merchants and homeowners have become increasingly vocal and incredibly irate at how things are going in the socialist dystopia.

Though San Francisco has more billionaires per capita than anywhere else in the world, its homeless problem has rivaled third-world nations, according to Fox News.  So much for all that “wealth inequality” the socialists are constantly pushing down the throats of the ignorant.  Government policies are the most to blame for San Francisco’s wealth inequality.

DeVore doubled down on this, saying that the government’s enslavement of the people of Californian is exactly why he left. He decided to leave California because of its “high cost of living [and] very burdensome regulations and taxes.”

“There’s more freedom in places like Texas, more opportunity to do what you want to do,” he said.

The sad truth is that socialism doesn’t work and it never has in all the times it’s been tried.  Humans are not meant to be slaves and eventually, they figure out that no one has a higher claim over their lives than they do.

Source: by Mac Slavo | SHTFplan

***

Owner Of Sacramento Business Destroyed By Homeless Pleads With CA Gov Newsom

The West Coast, Under Progressive Stewardship Is A Literal Toilet: 80% of coastal areas infected with toxic feces (biosludge), warns Dr. Drew

Large Swaths Of California Now Too Wildfire Prone To Insure

AP Photo / Marcio Jose Sanchez, File

(Nathanael Johnson) California is facing yet another real estate-related crisis, but we’re not talking about its sky-high home prices. According to newly released data, it’s simply become too risky to insure houses in big swaths of the wildfire-prone state.

Last winter when we wrote about home insurance rates possibly going up in the wake of California’s massive, deadly fires, the insurance industry representatives we interviewed were skeptical. They noted that the stories circulating in the media about people in forested areas losing their homeowners’ insurance was based on anecdotes, not data. But now, the data is in and it’s really happening: Insurance companies aren’t renewing policies areas climate scientists say are likely to burn in giant wildfires in coming years.

If governments don’t step in, that kills mortgages, so what comes next? Only all cash buys? Seller financing? And if property values in these areas decline, as they ought to, bye bye local government budgets.

Insurance companies dropped more than 340,000 homeowners from wildfire areas in just four years. Between 2015 and 2018, the 10 California counties with the most homes in flammable forests saw a 177 percent increase in homeowners turning to an expensive state-backed insurance program because they could not find private insurance.

In some ways, this news is not surprising. According to a recent survey of insurance actuaries (the people who calculate insurance risks and premiums based on available data), the industry ranked climate change as the top risk for 2019, beating out concerns over cyber damages, financial instability, and terrorism. While having insurance companies on board with climate science is a good thing for, say, requiring cities to invest in more sustainable infrastructure, it’s bad news for homeowners who can’t simply pick up their lodgings and move elsewhere.

“We are seeing an increasing trend across California where people at risk of wildfires are being non-renewed by their insurer,” said California Insurance Commissioner Ricardo Lara in a statement. “This data should be a wake-up call for state and local policymakers that without action to reduce the risk from extreme wildfires and preserve the insurance market we could see communities unraveling.”

A similar dynamic is likely unfolding across many other Western states, according to reporting from the New York Times.

To understand the data coming out of California we can use my own family as an example: A few months after Grist published a story about how my parent’s neighborhood is trying to fortify itself against future forest fires, my mom’s insurer informed her and my stepfather that they’d need to get home insurance elsewhere. For two months they called one insurer after another, but no company would take their premiums. So they turned to the state program as the insurer of last resort — which costs about three times more than they’d been spending under their previous, private insurer.

My folks have spent a lot of money clearing trees and brush from around their house. They’ve covered the walls in hard-to-burn cement panels, and the roof with metal. But insurance risk maps don’t adjust for these improvements. Instead, insurance companies seem to have made the call that the changing climate, along with years of fire suppression, have made houses in the midst of California’s dry forests a bad bet, and therefore uninsurable.

“For us, because we’ve done good financial planning and our house is paid off, it’s just an extra expense,” said my mom, Gail Johnson Vaughan. “But we have friends who have no choice but to leave.”

Source: by  Nathanael Johnson | Grist

Courts Finally Force California To Repay $331 Million Stolen From Mortgage Relief For Homeowners

(John Myers) Gov. Gavin Newsom’s administration said Friday it would begin work on transferring $331 million back into a special fund designed to help California homeowners hit hard by the recession-era mortgage crisis, money that the courts have ruled was wrongly used to help balance the state budget.

The California Supreme Court refused earlier this week to hear an appeal by the administration disputing lower court rulings that found the state mistakenly used a portion of the money — paid by large banks and lenders as part of a nationwide legal agreement in 2012 — to pay off housing bonds. In some cases, those bonds were enacted a decade before the mortgage settlement. In all, three years of state budget expenses were covered by a portion of what California received from the mortgage settlement.

The decision to use the money was championed by Newsom’s predecessor, former Gov. Jerry Brown. Legislators subsequently ratified the plan, and last year went even further: They passed legislation seeking to block a court ruling to repay more than $331 million into a fund originally designed for statewide homeowner assistance efforts. Groups that waged a five-year court battle over the funds expressed relief that the legal fight was finally over.

“Truth prevails,” said Faith Bautista, president and chief executive of the National Asian American Coalition. “They’re now facing the reality that the money belonged to the homeowners in distress.”

While the money in question was undoubtedly tempting at the time it was diverted — California’s budget was still reeling from successive years of back-to-back deficits — the state’s coffers are now overflowing. The budget signed by Newsom last month includes $19.2 billion in cash reserves, making the repayment of the mortgage settlement money limited only by how fast state leaders can take action. The Legislature will return next month for the final weeks of its 2019 session.

The money diverted to state budget needs was a small portion of what both California homeowners and the government received from the national settlement agreed to by 49 states in 2012. Those states, along with the federal government and the District of Columbia, had earlier filed suit against the nation’s five largest mortgage servicers: Ally (formerly known as GMAC), Bank of America, Citigroup, J.P. Morgan Chase and Wells Fargo. The legal action alleged a number of federal law violations, and the financial institutions agreed to pay more than $20 billion to homeowners affected by the mortgage crisis. The companies also agreed to pay the states a total of $2.5 billion.

California’s share of the state payments was $410 million, to be used for a variety of services directed by then-Atty. Gen. Kamala Harris. But most of the money was used instead for budget-balancing items which, while related to housing, were long-term costs that further shrank the funds available for basic government services. A coalition including representatives for Asian American and Latino communities sued the state in 2014 over its decision to use the money to help erase a projected budget deficit. A Sacramento judge ruled for the coalition in 2015 and the 3rd District Court of Appeal agreed with that ruling last year.

State leaders, however, refused to back down. At the end of the 2018 legislative session, lawmakers and Brown crafted a bill that said the money was used correctly, and the enacted law sought to give the Legislature the power to “abrogate,” or revoke, the appeals court order to replenish the spent money.

In April, the same appeals court again rebuked state officials.

“It is the judicial branch that has the constitutional authority to interpret statutes,” the three-judge panel wrote in its ruling, stating that the mortgage settlement “money was unlawfully diverted from a special fund in contravention of the purposes for which that special fund was established.”

On Wednesday, the California Supreme Court refused Newsom’s request to hear the case, allowing the appeals ruling to stand.

“Now that the Supreme Court has issued its decision in this matter, we will move forward to implement the ruling,” said H.D. Palmer, a spokesman for the California Department of Finance.

Bautista, whose Daly City-based group works with low-income communities of color across the state, said she hopes the $331 million will be supplemented by money from the nation’s leading lenders to offer services such as down payment assistance for those who went through foreclosure during the housing crisis and want to again own a home. She said other services, including financial literacy efforts and those helping Californians with low credit scores, should also be considered. And she urged Newsom to make such efforts part of his larger discussion about the state’s housing crisis.

“People are hurting in East L.A., Riverside, the Central Valley,” Bautista said. “Let’s pick what’s best and use the money wisely.”

Neil Barofsky, an attorney who represented the groups that fought the cash diversion in the courts, said it was disappointing that state officials spent so many years on “frivolous appeals,” culminating in what he called the “ginned- up legislative action” last year designed to block repayment of the money and the appeals court ruling.

“We understand it was a desperate time for the state when this happened,” he said. “But once we returned to surpluses, the idea that they would just keep fighting this has been breathtaking.”

Source: by John Myers | Los Angeles Times

“California Is Being Overrun By Rodents” – And We’re Not Talking About The Politicians

California is being hit by a “plague of rats”, and some commentators are suggesting that this is exactly what they deserve.  In fact, some have even gone so far as to suggest that the name of Los Angeles should be formally changed to “Los Ratas” because the rat problem is so severe there.  From Crescent City in the north all the way down to Chula Vista in the south, the rats are seemingly everywhere.  There are millions of them, and the more poison that people put out the more they seem to multiply.  The state of California has never seen anything like this before, and it is getting worse with each passing month.

At this point, things are already so bad that many are calling for Governor Newsom “to declare a public health emergency”…

Pest control and public health experts are calling on California Gov. Gavin Newsom to declare a public health emergency over what they say is a sharp rise in the state’s rodent population.

“California is being overrun by rodents – and without immediate emergency action by state and local government, we face significant economic costs and risk a public health crisis,” said Carl DeMaio, chairman of Reform California, at a news conference Tuesday at City Hall in downtown Los Angeles.

It would be difficult to overstate the severity of this crisis.  According to a recent survey of California pest control companies, rat service requests are up “as much as 60% in the last 12 months”.

If you have ever lived some place where you can literally hear rodents crawling in the walls and in the ceiling, then you know how deeply unsettling it can be.

And in some instances, rodents are literally starting to fall out of the ceilings in California.  Just consider this example…

Maggots and mice have fallen onto inmates’ dining tables at a California state prison where holes in the roof also allow rain and bird droppings to seep through and streak the walls, according to an inmate lawsuit that charges the state isn’t moving fast enough to repair deteriorating prisons.

California has committed $260 million over four years to repair leaking roofs and clear dangerous mold at more than two dozen deteriorating prisons where the cost of overdue maintenance is pegged at more than $1 billion.

A similar incident occurred at a Buffalo Wild Wings in Los Angeles last month while a customer was trying to order her dinner…

Customers at a Los Angeles, Calif., Buffalo Wild Wings were in for a stomach-churning incident when a rat reportedly fell from the ceiling and landed on a table.

Alisha Norman, who was visiting Los Angeles from Texas, was getting ready to order at the chain restaurant when she heard something crawling above her, she told FOX35. Soon after, a rat fell and landed on a menu on the table.

This isn’t some third world country that we are talking about.  The state of California is the wealthiest state in the entire country, and they are being absolutely overrun by rats.

Of course it certainly doesn’t help that many California cities have a major trash collection problem.  The following was published by NBC Los Angeles earlier this year…

Rat-infested piles of rotting garbage left uncollected by the city of Los Angeles, even after promises to clean it up, are fueling concerns about a new epidemic after last year’s record number of flea-borne typhus cases.

Even the city’s most notorious trash pile, located between downtown LA’s busy Fashion and Produce districts, continues to be a magnet for rats after it was cleaned up months ago. The rodents can carry typhus-infected fleas, which can spread the disease to humans through bacteria rubbed into the eyes or cuts and scrapes on the skin, resulting in severe flu-like symptoms.

As a result of all the trash and filth, even Los Angeles City Hall has become overrun by rats…

Officials at Los Angeles’ City Hall are considering ripping all of the building’s carpets up, as rats and fleas are said to be running riot in its halls.

A motion was filed by Council President Herb Wesson on Wednesday to enact the much needed makeover amid a typhus outbreak in the downtown area.

Wesson said a city employee had contracted the deadly bacterial disease at work, and now he’s urging officials to investigate the ‘scope’ of the long-running pest problem at the council building.

When there is a huge problem like this that gets national attention, it is inevitable that California legislators will throw a lot more money at the problem, but that hasn’t worked so well in other cases.

For instance, two years ago New York Mayor Bill de Blasio launched a 32 million dollar program to fight the rat problem in his city, but that didn’t help.  In fact, the number of rat complaints actually increased by 38 percent last year…

New York, like other metropolitan cities including Philadelphia and Chicago, faces a major rat problem.

According to the New York Times, rat complaints have risen from 12,617 in 2014 to 17,353 last year. That’s a 38% jump citywide — and comes even after Mayor Bill de Blasio allocated $32 million in 2017 to reduce the number of the rodents.

And things are particularly bad on the Upper West Side.  They may have mountains of money over there, but they just can’t seem to keep the rats away…

OpenTheBooks.com analyzed the number of calls for rats to 311 and found that, according to the Post, “the rats are running wild in this fancy area.”

A local publication called West Side Rag agreed that the Upper West Side has an extreme rat problem. “We’re like the Tom Brady of rats. All we do is win,” an article reads.

Despite all of our advanced technology, we cannot even handle the rats.

Somehow it seems fitting that the rat epidemic is most severe in the areas that are on the cutting edge of America’s social decline.  In life, you can try to run from the consequences of your actions, but they will catch up with you eventually.

As I have discussed previously, under ideal conditions rats can multiply very, very rapidly.  In fact, it has been estimated that two healthy rats could potentially become 482 million rats in just three years.

Perhaps Californians should just give up and let the rats take over.  After all, they couldn’t possibly do any worse than the politicians are currently doing.

Source: by Michael Snyder | ZeroHedge

Chief Investment Officer of Largest US Public Pension Fund Has Deep Ties to Chinese Regime

(Nathan Su) Newly discovered deep ties between the chief investment officer (CIO) of the California Public Employees Retirement System (CalPERS) and the Chinese government, along with CalPERS’s China investment holdings, have provoked controversy about the operations of the largest public retirement fund in the United States.

CalPERS manages more than $350 billion for public employees either retired from or currently working for most of the state and local public agencies in California.

The fund holds tens of millions of shares in equities of Chinese companies. Among other things, these companies develop advanced weapons for China’s People’s Liberation Army (PLA), and, according to one expert, are involved in unethical business practices and human rights abuses, including the concentration camps holding Uyghurs in Xinjiang.

According to a 2017 report by People’s Daily, the official mouthpiece of the Chinese Communist Party (CCP), CalPERS’s current CIO, Yu “Ben” Meng, as of 2015 was a participant in the Chinese government’s prestigious headhunting program called the Thousand Talents Plan (TTP).

Continue reading →

‘They Waited For Failure’: Report Exposes PG&E’s Inability To Replace Equipment That Sparked Deadly Wildfire

The now-bankrupt PG&E has put together a contingency plan that would plunge millions of unsuspecting Californians into rolling blackouts reminiscent of the early 2000s (when the utility was last pushed into bankruptcy protection thanks to the market-manipulation hijinx of Enron and other electricity brokers), but as WSJ revealed in an explosive report published Wednesday – a report that was probably the result of months of battles between the paper’s lawyers and California’s Freedom of Information Commission – PG&E’s long history of deterring maintenance on its lines and towers, a practice that directly contributed to causing the deadliest forest fire in California history.

The utility knew for years that hundreds of miles of high-voltage lines running in high-risk fire areas were at risk of failing and sparking a fire. And instead of acting swiftly to make the necessary upgrades, it appears the company routinely failed to identify the infrastructure most in need of maintenance.

Last year, a 100-year old line failed and sparked the Camp Fire, which eventually caused the deaths of 85 people.Documents obtained by WSJ – mostly internal emails and reports – revealed that the utility knew that 49 of the steel towers that carry the electrical line that failed needed to be replaced entirely.

For years, PG&E, which operates one of the oldest long-distance electricity transmission systems in the world, much of it having been built in the early 1900s, was able to get away with neglecting its lines and towers. But that changed in 2013, when California entered a punishing and prolonged drought.

It dried out much of the state, exponentially amplifying the risk of wildfires. In a 2017 internal presentation, PG&E said it needed a plan to replace towers and better manage lines to prevent “structure failure resulting [in] conductor on ground causing fire.” But inscrutably, the company opted instead to focus its efforts (and billions in capital) on upgrading substations, and instead labeled many of its transmission lines as low-risk projects.

Now, let’s look at the Caribou-Palermo line, the line that failed and caused the Camp Fire. PG&E delayed work on that line for more than five years, despite acknowledging that it, and dozens of aluminum lines and towers, needed urgent work “due to age.”

Similarly, PG&E’s regulators did nothing to change the company’s plans because no regulator keeps a close eye on these projects. PG&E told federal regulators it planned to overhaul the Caribou-Palermo line in 2013, yet no improvements had been made when a piece of hardware holding a high-voltage line failed last November, sending sparks into nearby dry grass and sparking the fire.

What’s worse, the company appears poised to make these same mistakes again as wildfire season progresses. PG&E has delayed maintenance work on several lines in Northern California’s highest-threat fire areas, including at least one near the Plumas National Forest, according to documents obtained by WSJ.

The company hasn’t detailed the scope of the work needed for each line, but it has disclosed that some require upgrades similar to those needed on the Caribou-Palermo line. Across northern California, WSJ able to identify dozens of lines in high-risk fire areas that were as old or older than Caribou-Palermo, and need similar types of maintenance.

One researcher at the University of Pittsburgh offered a damning assessment of their business model: “We have known for a long time that we are dealing with aging and antiquated infrastructure,” he said. “In a lot of cases, the business model was to wait for a failure and then respond.”

Unfortunately, forcing the company to make these repairs can be difficult without intense public scrutiny, given that none of the agency’s regulators has authority over the utility’s projects and maintenance work.

Whether this WSJ report spurs the state to act remains to be seen.

Source: ZeroHedge

CA Voters Not Happy With Free Medical For Illegals

Free health care for illegals may have Gov. Newsom and the Dems grinning as voters grimace…


(Authored by Sarah Cowgill via LibertyNation.com,)

As the California state legislature and Gov. Gavin Newsom dislocate their shoulders in the hearty backslapping of their self-congratulatory moment in American history, the rest of the nation is snarling and spitting over the lunacy of the left coast Democrats.  That is, according to the new Rasmussen Reports poll, which asked if illegal immigrants should receive free health care.

The answer was a resounding no.  No way, no how, nuh-uh, nada.

It was a brief two-question survey that spoke volumes: “Do you favor or oppose making health care benefits available to young low-income illegal immigrants in your state?  Is it offensive to refer to someone who has entered this country illegally as ‘an illegal immigrant?’”

Out of 1,000 online and telephone respondents, “31% of Likely U.S. Voters favor making health care benefits available to low-income illegal immigrants under the age of 26 in their state. Fifty-five percent (55%) are opposed, while 13% are not sure.”  One can only imagine the responses to question number two.

The only surprising statistic is that 13% had not yet picked a side in what might be the watershed issue for 2020 presidential candidates.

Force Fed Mandates Gag Americans

https://media.breitbart.com/media/2019/01/Border-Crossers-Released-640x480.jpg

Last week, Newsom’s quest for universal healthcare – including illegal residents – was passed by the legislature as part of a $215 billion budget.  He was self-assured and puffing in his peacock fashion, declaring, “We’re going to get it. We’re committed to universal health care. Universal health care means everybody…We will lead a massive expansion of health care, and that’s a major deviation from the past.’’

Laurel Lucia, health care program director at the University of California-Berkeley Labor Center, gushed excitement at expanding Medi-Cal to illegal immigrants while forcing taxpayers to foot the bill through individual-mandate penalties.  “The bigger reason to do this is about values,” says the woman who seems not to care about legal citizens in need of health care benefits.

And to boil it down in dollars, for those Californians who do not buy insurance, they will now be hit with a penalty of $695 or 2% of their household income, whichever figure is higher.

But Lucia went a tad over the top with “What kind of state do we want to live in?”

Funny you should ask. Many Californians – and other Americans, for that matter – are aghast that 130,000 plus people in the Golden State are homeless, living in undeniable squalor, and not only contracting highly contagious medieval diseases but spreading them to others. Perhaps the state should round up the unwashed American masses, clean them up, and give them free healthcare so the rest of the nation can avoid the Black Death.

Newsom’s Noose

https://media.breitbart.com/media/2017/05/Gavin-Newsom-Getty-640x480.jpg

Gov. Newsom campaigned in part on universal healthcare, and it’s no secret he has his sights on a national run in the future – perhaps president in 2024 depending on whether President Trump trumps the progressive left in the 2020 winner take all contest.  But protecting illegal aliens before addressing the most significant crisis his state faces – homelessness – is not going to help him avoid the political gallows.

The state’s current crisis of reality — highest poverty rate in the country, no affordable housing, taxpayers fleeing to points east, and vicious identity politics ranking California much further left of the nation as a whole — are becoming serious millstones for this progressive governor.

Add to the list of Newsom’s liabilities, the boilerplate individual health plan in California starts with premiums of more than $5,000 a year and annual deductibles can skyrocket to several thousand dollars each year.  Which means folks are going to have to decide to pay thousands for private health plans or be taxed in penalty thousands to pay for illegal aliens.

Perhaps the good governor should take stock of what Americans think about his plan to give aid to illegals as his fellow countrymen suffer on his once gold-paved streets.  He may find his holier-than-thou ideology could soon blow up on him — and signing this budget might be the match he strikes and regrets.

Source: ZeroHedge

Developers Are Pulling Out All The Stops Amid Los Angeles’ Mega-Mansion Glut

Builders and brokers are throwing blowout bashes and testing an array of marketing stunts amid the area’s spec home bubble

https://webassets.inman.com/wp-content/uploads/2015/11/trekandshoot_000058242750_Large-1984x880.jpg

Inman

(WSJ) Heavy duty vehicles line both sides of many of the winding two-way streets in the Hollywood Hills, making them treacherous single-lane thoroughfares. Construction workers wave stop signs as trucks laden with glass and steel back slowly out of driveways. Empty parcels of land all over Los Angeles’s poshest neighborhoods are being transformed into lavish mansions with price tags in the tens, or even hundreds, of millions.

“Every time I drive up there for any reason, if I return without getting my car dinged I breathe a sigh of relief,” says Andy Butler, a real-estate marketing consultant.

Real-estate experts estimate that there are about 50 ultra high-end spec houses under construction in the area, from Beverly Hills to Bel-Air and Brentwood.

The unprecedented wave of development has its roots in the heady days of 2014 and 2015, when foreign buyers poured into Los Angeles and luxury markets across the country logged record sales. A couple of local megawatt deals—including the $70 million sale of a Beverly Hills compound to billionaire Minecraft creator Markus Persson in 2014—inspired the construction of bigger and pricier homes, most of which were built as contemporary cubes. Some were built by inexperienced developers; many had price tags north of $20 million.

Now, there are simply too many, and not enough buyers to go around. “It’s created its own monster,” says Stephen Shapiro of Westside Estate Agency. “We have an enormous oversupply of these white boxes. There’s years of inventory out there.”

This Bel-Air home shaped like an airplane propeller is asking $56 million. A rendering of the home. Matthew Momberger

A review of the Los Angeles multiple listings service shows close to 100 homes on the market asking over $20 million in Los Angeles County, at least 35 of which could be classified as spec homes, and more are under construction. And those are just the listed ones: Appraiser Jonathan Miller says more than a third of homes in that price category are never entered in the MLS. Some of the city’s most expensive are notably absent.

The surplus mirrors a similar situation in New York, where high-end developers rushed to build pricey condos amid a market upswing, and are now faced with enormous competition for buyers.

But unlike New York, smaller, private lenders and wealthy individuals have provided much of the financing for the Los Angeles spec homes.

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Don Hankey, a California businessman known as the king of subprime car loans, says one of his companies has provided close to $300 million on high-end homes in the Los Angeles market, including on spec homes. Public records show Hankey Capital provided about $82.5 million in financing to “The One,” an almost-built megamansion by Los Angeles developer Nile Niami, who plans to list it for $500 million.

That asking price is more than twice the record paid for a home in the U.S., a record set earlier this year by hedge funder Ken Griffin’s purchase of a nearly $240 million penthouse in New York. The record price for a Los Angeles area home was set by the $110 million sale of a Malibu mansion in 2018.

“You have to be concerned,” Mr. Hankey says of the oversupply. “We’ve cut back. We’re not as aggressive in the financing.”

Other lenders on pricey spec homes include Axos Bank, formerly Bank of Internet, which financed a massive $180 million monolith built by plastic surgeon and newbie developer Raj Kanodia.

The debt load for developers can be substantial. “If I’m living in my house and I put it on the market for sale, I’m still living in my house,” Mr. Shapiro says. “These are empty houses, and the developer is spending a lot every month to keep them.”

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Andy Warhol’s 1974, two-toned, Rolls-Royce Shadow can be included in the deal for a new Trousdale spec home that’s branded around the artist. Photo: Darren Asay

In this environment, and amid signs that prices are falling, developers and their agents are going to extraordinary lengths to differentiate their listings from the pack. They are throwing themed bashes in lieu of traditional open houses, thinking up gimmicky new amenities and hiring marketing experts to reimagine homes as individual brands with their own names, logos and stories. Some developers are relisting plots of land, hoping to get their money out without sinking more money into construction.

“People come to us because they want to stand out,” says Alexander Ali, whose marketing and public relations firm the Society Group is finding a growing business in creating brands for megamansions. “There are so many new homes coming to the market every day.”

Mr. Ali’s latest exercise: Turning a roughly 7,600-square-foot contemporary home in Trousdale into “WARHOL 90210,” a property branded around artist Andy Warhol. Mr. Ali and the developer, Wystein Opportunity Fund, joined with a local gallery to display Warhol prints in the home. At a Warhol-themed disco to be held on site, a Warhol look-alike will be filmed striding through the party; the resulting video will be blasted out on social media. (The house has no connection to Mr. Warhol.)

Amid a surplus of luxury spec homes, developers and their agents are going to extraordinary lengths to differentiate their listings from the pack, like throwing themed bashes in lieu of traditional open houses. Photo: Joshua Bobrove

David Parnes, Mauricio Umansky and James Harris of The Agency, which threw the party. Photo: Joshua Bobrove

Mr. Ali convinced the agent that Mr. Warhol’s onetime car—a 1974, two-toned, Rolls-Royce Shadow—and the Warhol prints featured in the home should be included in the deal. “It defines the house as a collector’s dream,” Mr. Ali says. The whole package seeks $17.75 million. The house can be sold separately for $15.625 million.

In February, Mr. Niami threw an elaborate party inspired by Dutch artist Hieronymus Bosch’s painting “The Garden of Earthly Delights” in a home he is listing for $39.995 million. Its three levels were organized into heaven, earth and hell, and models in colorful tulle dresses swam in the property’s glass bottomed pool, said Mr. Ali, who organized the party.

There were actors posing as Adam and Eve while hosting a virtual reality game that allowed guests to enter a rendition of the Bosch painting. People drank whiskey infused with the body of a dead cobra, and dancing women dressed in leather, whips and chains. A camel stood at the entrance to greet guests.

Another performer floated on the surface of the pool in a transparent bubble. Photo: Joshua Bobrove

In Bel-Air, real-estate brokerage firm the Agency recently threw a “Great Gatsby” themed event to launch a $35.5 million spec house. A female performer in a bedazzled costume hung upside down from a trapeze to pour champagne for guests, while another floated on the pool in a transparent bubble.

Mr. Ali says developers will pay anywhere from $20,000 to hundreds of thousands to throw such events.

In addition to the parties, developers are always on the hunt for creative new amenities. “It’s about the wow factor,” says spec home developer Ramtin Ray Nosrati, whose under-construction mansion in Brentwood includes a secret room for growing and smoking marijuana.

The ventilated room, accessed by hitting a button hidden inside a living room bookcase, will have tinted windows that darken for privacy. The house, slated to ask between $30 million and $40 million, will also come with a budget for an employee to supervise growing and harvesting. Mr. Nosrati compared the amenity to “having your own vineyard.”

Despite all this, price cuts are the order of the day. Bruce Makowsky, a handbag designer-turned-developer who sold the Minecraft property, lowered the price of his latest project, a lavish Bel-Air house with a candy room and a helipad, to $150 million, down from its original $250 million asking price. Mr. Niami slashed the price of a sprawling 20,500-square-foot house known as Opus to $59.995 million, down from $100 million.

Developer Ario Fakheri has chopped the asking price for his Hollywood Hills home with a roughly 300-gallon indoor shark tank to $26.995 million from $35 million.

Sales are still happening: Approximately 11 deals have closed for more than $20 million in Los Angeles so far this year, and a Saudi buyer recently paid $45 million for a spec home built by diamond manufacturer Rafael Zakaria. But buyers know they have the upper hand. “People are making lowball offers,” says Mr. Shapiro of Westside Estate Agency. “They’re not being shy.”

Doug Barnes, the founder of Eyemart Express, sold a contemporary home in Beverly Hills for $34.65 million in April, or nearly 40% off its original $55 million asking price, records show. British restaurateur and Soho House co-owner Richard Caring is listing a home he bought in Beverly Hills for $29.995 million; he paid $33 million for it in 2016, records show.

As for “The One,” the $500 million property was originally slated to come on the market in 2017 but has yet to be listed. The developer blamed construction delays.

Corrections & Amplifications: Stephen Shapiro of Westside Estate Agency said buyers know they have the upper hand in negotiations to purchase high-end spec homes. An earlier version of this article incorrectly stated that sellers have the upper hand. (May 30, 2019)

Appeared in the May 31, 2019, print edition as ‘The Spec Home Bubble.’

Source: by Katherine Clarke | The Wall Street Journal via @kathieClarkeNYC

California’s Housing Bubble’s So Bad, 100s Forced To Live On Boats

California’s housing affordability crisis is getting worse. Affordability in San Francisco is now at 10-year lows, and only one in five households can afford to purchase a median-priced single-family home in the Bay Area. The crisis has driven many people onto the water, living on makeshift boats, outside marinas, and wealthy communities.

Sausalito officials and other agencies have been stepping up efforts to manage ‘anchor out’ mariners and floating debris in Richardson Bay. (Robert Tong/Marin Independent Journal)

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Garbage Rates Spike As Majority Of Recyclables End Up In Landfills

China phasing out imported waste is driving California recycling rates through the floor.

Carlos Guzman, operations manager at Republic Services, next to “The Pile” in Anaheim, CA, on Friday, May 17, 2019. The Pile is what they call the mound of recyclables waiting to be sorted. (Photo by Jeff Gritchen, Orange County Register/SCNG)

(Orange County Register) The market for recyclables is tumbling, the diversion rate of trash headed to dumps is shrinking and trash bills are going up as the cost of recycling increases.

“We used to pay haulers for recyclables,” said Bob Asgian, assistant department head of Los Angeles County’s recycling and landfill operations.

“Now, they’re paying us (to take them).”

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Federal Railroad Administration Cancels $929 Million In California High Speed Rail Funds

WASHINGTON (Reuters) – The Trump administration said on Thursday it was formally cancelling $929 million in previously awarded funding for California’s high-speed rail program after rejecting an appeal by the state.

FILE PHOTO – California Governor Jerry Brown’s name and others are pictured on a railroad rail after a ceremony for the California High Speed Rail in Fresno, California January 6, 2015. REUTERS/Robert Galbraith

The U.S. railway regulator, the Federal Railroad Administration (FRA), said on Thursday it had canceled the funding awarded in a 2010 agreement after it said the state had “repeatedly failed to comply” and “failed to make reasonable progress on the project.”

In a statement, the FRA said it was still considering “all options” on seeking the return of $2.5 billion in federal funds the state has already received.

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Millions Of Californians Will “Plunge Into Darkness” As PG&E Commits To Cut Power During Wildfire Season

As a result of a new plan to cut power on high wind days during wildfire season, millions of Californians could wind up unprepared and in darkness, according to Bloomberg.

Now bankrupt PG&E proposed the precautionary plan after a transmission line that snapped in windy weather likely started last year‘s Camp Fire – the deadliest wildfire in state history. The plan addresses the problem of wildfires, but creates another one in the process: blindsiding Californians with days of blackouts.

This has caused some California residents to turn to home battery systems and alternative means of power in their homes. However, the number of these systems in use is relatively small when compared to the 5.4 million customers PG&E currently services. Governor Gavin Newsom has said that he’s budgeting $75 million to help communities deal with the threat.

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Gavin Newsom Wants To Fix California’s Housing Crisis. So What Are His Options?

Gov. Gavin Newsom says California’s housing affordability crisis is so severe that he wants a bit of everything to solve it.

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California Governor Gavin Newsom and Megan Colbert compare notes on raising toddlers as she shares her struggles as a single parent while talking about affordable housing issues on Tuesday, March 26, 2019 in Sacramento. Newsom held a round table discussion to address housing affordability and rising rents. Renée C. Byer rbyer@sacbee.com

That means seeding construction for millions of new residences, opening the door to a new rent control law and finding ways to protect low-income families from eviction.

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Is This A Solution To California’s Housing Crisis, Or Threat To Single Family Homes?

Could this be the end of single-family zoning in California?

Changes to the comprehensive housing measure Senate Bill 50 – already hotly debated – allow property owners broad rights to turn single-family homes and vacant lots into two-, three- and four-unit homes and apartments.

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What Happened To The $1 Billion Tax Revenue Expected From Licensed Marijuana Sales In California?

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A customer shows his receipt for recreational marijuana in Berkeley (KTVU.com).

$1 billion: that’s how much California initially anticipated receiving in annual tax revenue by legalizing the sale of recreational marijuana. Here’s what actually happened:

  • CA will likely bring in just under $500 million in marijuana tax revenue this fiscal year.
  • That’s lower than the $630 million forecasted in former Governor Jerry Brown’s budget.
  • Current Governor Gavin Newsom’s new budget projects the state will generate $355 million in marijuana excise taxes by the end of June according to press accounts.

That is worse than underwhelming. Consider that Washington State received $319 million in legal marijuana taxes and license fees in fiscal year 2017, while Colorado collected $247 million in 2017. They have populations of just 7.5 million and 5.7 million respectively. California is the largest US state with nearly 40 million people.

Why is this important? There was a wave of Democratic gubernatorial candidates that ran on legalizing recreational marijuana to boost state tax revenue in the last midterm elections. Many of them won and are trying to pass a bill through their state legislatures as soon as this year. These include: New York, Illinois, Connecticut, Minnesota, New Mexico, and New Jersey.

If new states want to legalize retail cannabis sales and meet their respective tax revenue goals, they need to heed the lessons of California and public equity investors in the space likewise should understand the issue as they assess the size of the addressable market here. Marijuana legalization in the US is far more complex than either group likely realizes.

With that said, there’s three major issues at play in California:

#1 – The taxes are too high, allowing the black market to remain relevant. Fitch predicted this consequence in 2017: “California’s high cannabis taxes will encourage black market sales and limit potential local government revenues from this new market… Effective tax rates on nonmedical cannabis will be as high as 45% when accounting for both state and local levies… By comparison, Oregon taxes nonmedical cannabis at approximately 20% and Alaskan taxes range from 10% to 20%.”

The upshot: Colorado, Washington and Oregon all had to reduce their marijuana tax rates after legalization to better compete with the black market. California should follow suit, but other states should learn and get it right out of the gate.

#2 – California may have legalized the sale of retail cannabis, but most cities still prohibit it. Fewer than 20% of cities in the state allow stores to sell recreational marijuana (89 out of 482). For example, 93% of Los Angeles County’s 88 cities ban retail sales. One solution that’s supposed to go into effect: businesses will be allowed to deliver anywhere in the state aside from public land in the hopes that people use those services rather than buy from the black market in communities where they don’t have access to legal adult-use sales.

#3 – The regulations are too onerous and complicated. There are a lot of problems here, so we’ll just highlight a couple.

  • The Bureau of Cannabis Control has issued about 550 temporary and annual licenses to marijuana retail stores compared to initial projections of upwards of 6,000 in the first few years. To put this in perspective, the Los Angeles Times reports that “some 1,790 stores and dispensaries were paying taxes on medicinal pot sales before licenses were required starting Jan. 1.”
  • Why haven’t they issued more licenses? Marijuana businesses need a local license before getting one from the state. That’s tough to do when retail sales are banned in most cities. Obviously, this is not an issue for the black market, which is not restricted by location or burdened by regulatory and compliance costs.
  • Moreover, California’s marijuana market is still governed by a slew of emergency regulations. The Bureau of Cannabis Control, California Department of Public Health and California Department of Food and Agriculture have tweaked these regulatory provisions over the past year, and are still working on final non-emergency regulations to adopt. In the meantime, marijuana businesses have been left confused and forced to adapt to regulatory changes, such as different labeling requirements on marijuana products.

To sum up, we’ve covered the legal retail marijuana industry since its infancy five years ago and remain enthusiastic about its prospects. That said, California is a key example of how the same regulations that made the recreational cannabis market possible can also hurt its growth. The right deregulation will ultimately drive growth rates for the industry and valuations for public pot companies over time. This is why it is taking so long for New Jersey, for example, to legalize retail marijuana sales through its state legislature. Lawmakers have the benefit of learning from states like California that missed the mark, even with the tailwind of an entrenched medical market with existing infrastructure and a distribution pipeline.

The bottom line for investors in public pot stocks: pay attention to state and local tax rates and regulations as new markets open up because this under appreciated factor will profoundly affect the industry’s total addressable market.

Source: ZeroHedge

The “Failing Angels” Are Back

Lehman, WorldCom And Now PG&E

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(ZeroHedge) One week ago when we wrote that with PG&E facing a threat of an imminent bankruptcy (which we now know will soon be realized), the most bizarre development in this latest corporate fiasco was that until the first week of January, both S&P and Moody’s had rated the California utility with over $30 billion in debt as investment grade even as its bonds and stocks were cratering ahead of what investors deemed to be an imminent Chapter 11 filing.

And while we have extensively discussed the multi-trillion threat posed by “falling angel” companies, or those corporations rated BBB – the lowest investment grade equivalent rating – as they slide into junk territory, the recent events surrounding PG&E highlight an even greater blind spot in the corporate bond arsenal: that of the failing angel.

As Bank of America’s Hans Mikkelsen wrote in a recent research note, Investment Grade defaults – defined as defaults within one year of being rated IG – are “rare and unpredictable” (even if in the case of PG&E, its downfall was quite obvious to many) as globally in more than half of years historically there were no HG defaults at all.

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As such, Monday’s pre-announcement by The Pacific Gas and Electric Company (PCG) that it intends to file Chapter 11 by January 29th…

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… is a singular event and if the company follows through, it will become the third largest IG default since 1999, behind Lehman and Worldcom, with $17.5bn of index eligible debt.

The chart below lists all US index defaults since 1999 that occurred within one year of being included in ICE BofAML benchmark US high grade index. The three largest defaults in terms of index notional were Lehman ($34.9bn), WorldCom ($22.9bn) and CIT Group ($12.4bn).

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In fact, as BofA adds, if PG&E does file before the end of the month the company will become a member of a much more exclusive group of “Failing Angel”, formerly-IG companies consisting of Enron, Lehman and MF Global that defaulted directly out of IG, before making it into the HY index as Fallen Angels.

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Ironically, as Mikkelsen adds, until recently he had looked at PCG as set to become a large Fallen Angel from BBB accounting for 1.4% of the HY market. Now it appears the company plans to bypass the HY market, and proceed straight to default.

So as the world obsesses over the risk of “falling angels”, just how many other “failing angels” are hiding in the shadows, waiting for their moment to wipe out billions in stakeholder value as the economy continues to slowdown to what is now an inevitable recession, and just what will the knock-on effects of this “historic” default be? We will find out in less than two weeks.

Source: ZeroHedge

Proposition 13 Is No Longer Off-Limits In California

https://s.hdnux.com/photos/75/11/15/16028529/7/gallery_xlarge.jpgGov. Jerry Brown, left, with Proposition 13 co-author Howard Jarvis at a news conference in July 1978, one month after California voters passed the measure. Photo: ROBBINS / AP

Proposition 13 Is Untouchable.

(San Francisco Chronicle) That’s been the thinking for 40 years in California. Politicians have feared for their careers if they dared suggest changes to the measure that capped property taxes, took a scythe to government spending and spawned anti-tax initiatives across the country.

However, that is beginning to change. With Republican influence in California on the wane and ascendant Democrats making tax fairness an issue, advocates are confident that the time is right to take a run at some legacies of the 1978 measure.

High on their list: making businesses pay more and ending a sweetheart deal for people who inherit homes and their low tax bills, then turn a profit by renting them out.

Legislative Democrats hold so many seats that they don’t have to worry about the GOP blocking such ideas from going before voters. Gov.-elect Gavin Newsom has said that “everything would be on the table,” including Prop. 13, as he formulates a plan to reform the state’s tax structure.

Perhaps most important, Prop. 13’s age is becoming an advantage to would-be reformers: California’s voting demography is changing. The generation of homeowners that grew up with Prop. 13 is well into retirement now, and some younger Californians blame flaws in the measure for everything from the under funding of public schools to growing wealth inequality.

“For Californians who grew up in the public education system that came after Prop. 13, their education was robbed from them. They didn’t get the same education their parents did,” said Catherine Bracy, executive director of TechEquity Collaborative, which is trying to rally the tech community to support changes to the state’s tax structure.

Bracy, 38, moved to the state six years ago from Chicago. “For newcomers (to California) like me, who were born after Prop. 13, we want to experience the California dream, too,” she said. “But we don’t have the opportunity to, because all the goodies have been locked up by the older generations.”

Prop. 13 was a remedy for a side-effect of one of California’s first housing bubbles — spiking property taxes. Moved by their own tax bills and horror stories of longtime homeowners being forced to sell because of skyrocketing assessments, voters overwhelmingly passed the measure. It rolled back assessments for homes and businesses to 1976 levels and capped annual tax increases at 2 percent.

Jon Coupal is president of Prop. 13’s fiercest defender — the Howard Jarvis Taxpayers Association, named after the initiative’s co-author. He agreed that “the number of homeowners who were around in 1978 is shrinking. And many younger people don’t remember the fear and anger about losing your home.”

But Coupal said that “notwithstanding the leftward movement of politics in California,” his organization’s internal polling shows support for Prop. 13 remains strong. And a survey in March by a nonpartisan group unaffiliated with Coupal’s organization, the Public Policy Institute of California, found that 65 percent of likely voters surveyed said Prop. 13 “turned out to be mostly a good thing for the state.”

Under Prop. 13, residential and commercial property alike is reassessed only when it is sold. But while homes often change hands every few years, many large businesses remain in the same ownership for a long time. Some businesses are paying property taxes based on assessments that haven’t changed in 40 years.

That’s one main target of people who want to tweak Prop. 13. The League of Women Voters of California says it has gathered enough signatures for a 2020 ballot measure that would create a so-called split roll system, under which businesses’ property would be reassessed every three years. Agricultural land and businesses with 50 or fewer employees would be exempt. Residential property would not be affected.

The change could raise $11 billion in tax revenue statewide, including $2.4 billion for Alameda, Contra Costa, Marin, San Francisco and San Mateo counties, according to a January study by the USC Program for Environmental and Regional Equity. The study found that 56 percent of all Bay Area commercial properties had not been reassessed for 20 years, and 22 percent had assessments dating back to the 1970s.

Could a split-roll measure pass? It might be close. Forty-six percent of likely voters surveyed by the Public Policy Institute of California in January said they supported the idea, while 43 percent were against it. Support was far higher among likely voters under 35 (57 percent) than with those over 55 (41 percent).

However, the split-roll concept has actually been growing less popular over the years, the institute said: Six years ago, 60 percent of likely voters backed it.

Helen Hutchison, president of the League of Women Voters of California, acknowledged that changing the law will be difficult because “Prop. 13 still has some kind of magical pull. But we think the time is right to do this.”

https://s.hdnux.com/photos/77/52/12/16687798/5/940x940.jpgState Sen. Jerry Hill has introduced a ballot initiative that would limit a tax break for heirs of residential property. Photo: Max Whittaker / Getty Images 2009

So does state Sen. Jerry Hill, D-San Mateo. He has introduced a ballot initiative that would tweak a different part of Prop. 13’s legacy.

Hill’s proposal, Senate Constitutional Amendment 3, takes aim at Proposition 58, which voters approved in 1986. The measure allowed parents to give their residential property to their heirs without triggering a tax reassessment. The intent of the measure was to insulate children from absorbing a huge spike in property taxes and help them stay in the family home. California is the only state to offer this tax break.

Hill proposed the change after learning that many heirs are using their inherited properties as second homes or renting them out for many times more than what they’re paying in Prop. 13-controlled property taxes.

The proposed ballot measure would require people who inherit property in this way to move into the home within a year if they wanted the property tax break. The change would apply to future heirs, not those who have already inherited homes.

Getting this measure on the ballot in 2020 requires Hill to corral a two-thirds majority from both houses of the Legislature. If it makes it to the ballot, it could be passed by a simple majority of voters.

Hill is mindful of the politics around property taxes.

“We’re not touching Prop. 13. We’re touching Prop. 58,” Hill said. “The goal is to get people to pay their fair share.”

Coupal, head of the Howard Jarvis Taxpayers Association, doesn’t think Hill’s measure is the biggest threat to Californians concerned about taxes.

Source: by Joe Garofoli | San Francisco Chronicle

Southern California Home Sales Plunge 12% In November As Prices Peak

Southern California region home sales plunged in November from a year earlier, while year over year prices increased at the slowest pace in three years amid a housing market slowdown, reported Los Angeles Times.

The 12% decline in November sales from a year earlier was the fourth consecutive monthly drop for the eight southern counties, including Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura.

The decline in sales for 2018 is still less pronounced than in 2014. Across the eight counties, year over year, lagging median price is still rising — 3.5% from November 2017, to $522,750, but the trend is starting to plateau.

Some housing markets experts are not convinced that a housing bust is materializing. “The housing market is slowing, but… a slowdown does not mean the sky is falling,” said Aaron Terrazas, an economist with Zillow.

LA Times noted if volatility in the stock market and Washington significantly affects consumer confidence and business investment decisions in 2019, the housing market could be due for significant correction into 2020. However, for now, Terrazas and other economists believe the factors that have led to past housing market crashes in Southern California are not visible.

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While some economists do not expect a crash, Bank of America rang the proverbial bell on the broader US real estate market in September, warning existing home sales have peaked, reflecting declining affordability, greater price reductions and deteriorating housing sentiment. 

“Call your realtor,” the BofA note proclaimed: “We are calling it: existing home sales have peaked.”

Richard K. Green, director of the USC Lusk Center for Real Estate, told the LA Times, he is very pessimistic about the housing situation in Southern California.

Green warns prices could plunge 5% to 10% into 2020, even with the current level of economic growth. He argues a similar tune that was said in BofA’s recent housing note: the affordability crisis is topping out the market.

Here are other factors pushing homes further out of reach of Americans:  “The tax law President Trump signed last year limited the amount of deductions for property tax and mortgage interest. Meanwhile, mortgage rates are elevated. The average rate for a 30-year fixed mortgage was 4.55% this week, according to Freddie Mac. That’s down from a recent high of 4.94%, but it’s far higher than the 3.99% level of a year ago,” LA Times said.

There are signs across Southern California that suggest buyers are holding back. 

In Los Angeles County, the median time on the market increased from 41 days in November 2017 to 45 days last month, according to online brokerage Redfin. Moreover, the number of listings with price reductions jumped from 15.9% to 22.2%.

Real estate agents have said buyers have been concern about buying a home as many see the housing market shifting in real time. 

“People are sidelining themselves,” said San Fernando Valley real estate agent Jaswant Singh.

On Thursday, more evidence showed a downward shift in the market. Real estate firm CoreLogic reported a 12% decline in November sales, with the annual rise in the median price coming in at the slowest pace since 2015. 

Southern California median price slipped 0.4% from October and is now $14,250 below the all-time high reached from summer. Inventory is now flooding the market as S&P CoreLogic Case-Shiller index shows a sharp deceleration in price appreciation. 

These are the markings of a turning point in the Southern California real estate market. What comes next you might ask? Well, the start of downward momentum in prices – likely to start in 2019 as the US economy is expected to rapidly slow.

Source: ZeroHedge

California Faces Pension Showdown

Governor Jerry Brown, as he leaves office is warning that California and its public agencies are on the road to “fiscal oblivion” if pension benefits can’t be adjusted down.

The media have been celebrating Governor Brown’s management skills at reversing the $27-billion state deficit he inherited from in 2010 from his predecessor, Arnold Schwarzenegger, to leave office in January with an alleged $13.8-billion surplus and a $14.5-billion rainy-day fund balance.

But Brown recently told reporters that California will be financially distressed again if the California Supreme Court rules in a case titled Cal Fire Local 2881 v. California Public Employees’ Retirement System against Brown’s 2012 California’s Public Employees’ Pension Reform Act that stopped the state and local selling of “airtime” that allowed public employees to spike their pension benefits by purchasing up to five years of un-worked service credit seniority.

California drastically increased public employee pension benefits in the fall of 2003, when the state allowed employees to purchase “airtime.”  Prior to the pension spike, a 50-year-old fireman making $89,000 a year could retire at age 50 after 30 years of service and collect an $80,100-a-year pension with life expectancy of 76.3 years. 

But under “airtime,” the fireman could purchase extra years of seniority at a cost per of $0.18022 per year for every $1 of salary.  For $80,197.90, the fireman could increase his pension by $13,350 to $93,450.  Such an investment in “airtime” would return a spectacular income stream of $351,105 over the next 26.3 years of life expectancy.

With many California public employees purchasing “airtime” to retire at 50 and make more than when employed, Democrat Brown ended the practice in 2013 for new hires after criticism that the practice amounted to a “gift of public funds” to his union allies.

Stanford University’s Institute for Economic Policy Research found that despite the state terminating “airtime” for new employees in 2013, the annual cost of funding the California Public Employee Retirement System (CalPERS) rose by 400 percent from 2003 to 2018 and would be up by 704 percent by 2030.

With an estimated unfunded pension liability of $464.4 billion in 2015, Stanford researchers estimated that the average unfunded liability per California household jumped from $9,127 in 2008; jumped to $21,491 in 2015; and would be over $40,000 in 2030.

The California Supreme Court heard testimony in Cal Fire v. CalPERS on December 5 over claims by the union that a 1955 decision set a precedent, referred to as the “California Rule,” that bars state and local government from reducing any promised retirement benefits without equivalent new compensation. 

Lawyers for the state argued that the California Constitution is not a “straitjacket” and that making pension benefit changes should not be illegal under the California Constitution:

If the impairment is limited and does not meaningfully alter an employee’s right to a substantial or reasonable pension or if it is reasonable and necessary to serve an important public purpose, it may be permissible under the contract clause.

The biggest challenge for Brown’s effort to eliminate the California Rule is that he successfully lobbied the state legislature to pass collective bargaining for public employees in 1982, just as he was retiring from his second four-year term as governor.

The Bureau of Labor Statistics reported that average cost for the average private sector employee contribution for retirement and savings was 3.9 percent, and the average public-sector cost was 11.6 percent.

But even if the California’s Public Employees’ Pension Reform Act survives it Supreme Court appeal, CalPERS’ 2018 average cost for pensions as a percentage of worker compensation was 20.4 percent for State Industrial; 21.5 percent for State Safety; 43.5 percent for State Peace Officer/Fireman; and 55.2 percent for Highway Patrol.

The California Supreme Court is expected to release a decision regarding the California Rule in early 2019, just after Brown leaves office on January 7.

Source: by Chriss Street | American Thinker

C.A.R. Report: California Housing Market Sputtered In November

California Association Of Realtors Report, Absent Seasonal Adjustments

– Existing, single-family home sales totaled 381,400 in November on a seasonally adjusted annualized rate, down 3.9 percent from October and down 13.4 percent from November 2017.

– November’s statewide median home price was $554,760, down 3.0 percent from October and up 1.5 percent from November 2017.

– Statewide active listings rose for the eighth straight month, increasing 31 percent from the previous year.

– The statewide Unsold Inventory Index was 3.7 months in November, up from 3.6 months in October.

– As of November, year-to-date sales were down 4.6 percent.

 

LOS ANGELES (Dec. 18) – California home sales remained on a downward trend for the seventh consecutive month in November as prospective buyers continued to wait out the market, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).  

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 381,400 units in November, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLS’ statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

November’s sales figure was down 3.9 percent from the revised 397,060 level in October and down 13.4 percent from home sales in November 2017 of a revised 440,340. November marked the fourth month in a row that sales were below 400,000.

“While many home buyers continue to sit on the sidelines, serious buyers who are in a position to purchase should take advantage of this window of opportunity,” said C.A.R. President Jared Martin. “Now that interest rates have pulled back, home prices have tapered, and inventory has improved, home buyers’ prospects of getting into a home are more positive.”

The statewide median home price declined to $554,760 in November. The November statewide median price was down 3.0 percent from $572,000 in October and up 1.5 percent from a revised $546,820 in November 2017.

“The slowdown in price growth is occurring throughout the state, including regions that have strong economic fundamentals such as the San Francisco Bay Area,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The deceleration in home price appreciation should be a welcome sign for potential buyers who have struggled in recent years against low inventory and rapidly rising home prices.” 

Other key points from C.A.R.’s November 2018 resale housing report include:

  • On a region wide, non-seasonally adjusted basis, sales dropped double-digits on a year-over-year basis in the San Francisco Bay Area, the Central Coast, and the Southern California regions, while the Central Valley region experienced a relatively small sales dip of 3.9 percent.
  • Forty-one of the 51 counties reported by C.A.R. posted a sales decline in November with an average year-over-year sales decline of 16.8 percent. Twenty-six counties recorded double-digit sales drops on an annual basis.
  • Sales for the San Francisco Bay Area as a whole fell 11.5 percent from a year ago. All nine Bay Area counties recorded annual sales decreases, with Marin, San Francisco, San Mateo, and Sonoma counties posting double-digit annual declines.
  • The Los Angeles Metro region posted a year-over-year sales drop of 10.1 percent, as home sales fell 11.2 percent in Los Angeles County and 14.4 percent in Orange County.
  • Home sales in the Inland Empire decreased 6.7 percent from a year ago as Riverside and San Bernardino counties posted annual sales declines of 9.0 percent and 3.2 percent, respectively.
  • Home prices in the San Francisco Bay Area are no longer climbing at the double-digit pace that occurred throughout much of this year. On a year-over-year basis, the Bay Area median price ticked up 0.6 percent from November 2017. While home prices in Marin, San Francisco, San Mateo, and Santa Clara counties continued to remain above $1 million, all but San Mateo County recorded a year-over-year price decline.
  • Statewide active listings rose for the eighth consecutive month after nearly three straight years of declines, increasing 31 percent from the previous year. November’s listings increase was the largest since April 2014.
  • The unsold inventory index, which is a ratio of inventory over sales, increased year-to-year from 2.9 months in November 2017 to 3.7 months in November 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.
  • The median number of days it took to sell a California single-family home edged up from 22 days in November 2017 to 28 days in November 2018.
  • C.A.R.’s statewide sales price-to-list-price ratio* declined from a year ago at 98.9 percent in November 2017 to 97.9 percent in November 2018.
  • The average statewide price per square foot** for an existing, single-family home statewide was $282 in November 2018, up from $277 in November 2017.
  • The 30-year, fixed-mortgage interest rate averaged 4.87 percent in November, up from 3.92 percent in November 2017, according to Freddie Mac. The five-year, adjustable mortgage interest rate also increased in November to an average of 4.11 percent from 3.24 from November 2017.

Key Graphics (click links to open):

Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage.  A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property.  It is calculated as the sale price of the home divided by the number of finished square feet.  C.A.R. currently tracks price-per-square foot statistics for 50 counties.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

# # #

November 2018 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

November 2018 Median Sold Price of Existing Single-Family Homes Sales
State/Region/County Nov.

2018

 Oct.

2018

   Nov.

2017

   Price MTM% Chg Price YTY% Chg Sales MTM% Chg Sales YTY% Chg
Calif. Single-family home $554,760 $572,000   $546,820   -3.0% 1.5% -3.9% -13.4%
Calif. Condo/Townhome $465,770 $476,440   $451,250   -2.2% 3.2% -19.1% -17.4%
Los Angeles Metro Area $512,000 $516,000   $500,500   -0.8% 2.3% -14.0% -10.1%
Central Coast $672,500 $669,500   $685,000   0.4% -1.8% -15.9% -18.0%
Central Valley $320,000 $320,000   $310,000   0.0% 3.2% -11.7% -3.9%
Inland Empire $363,620 $359,000   $340,000   1.3% 6.9% -12.2% -6.7%
San Francisco Bay Area $905,000 $958,800   $900,000 r -5.6% 0.6% -12.7% -11.5%
                   
San Francisco Bay Area                  
Alameda $900,000 $900,000   $880,000   0.0% 2.3% -10.9% -6.7%
Contra Costa $641,000 $657,000   $615,000   -2.4% 4.2% -5.8% -8.0%
Marin $1,172,940 $1,450,000   $1,230,000   -19.1% -4.6% -25.7% -26.8%
Napa $683,500 $709,500   $682,000   -3.7% 0.2% -11.5% -6.1%
San Francisco $1,442,500 $1,600,000   $1,500,000   -9.8% -3.8% -14.0% -12.2%
San Mateo $1,500,000 $1,588,000   $1,486,000   -5.5% 0.9% -22.1% -13.7%
Santa Clara $1,250,000 $1,290,000   $1,282,500   -3.1% -2.5% -10.9% -9.9%
Solano $450,000 $430,000   $410,000   4.7% 9.8% -2.7% -3.6%
Sonoma $612,500 $650,000   $655,000   -5.8% -6.5% -25.5% -29.1%
Southern California                  
Los Angeles $553,940 $614,500   $530,920   -9.9% 4.3% -17.5% -11.2%
Orange $795,000 $810,000   $785,000   -1.9% 1.3% -7.5% -14.4%
Riverside $400,000 $400,000   $383,000   0.0% 4.4% -14.8% -9.0%
San Bernardino $299,450 $289,000   $280,000   3.6% 6.9% -8.0% -3.2%
San Diego $626,000 $635,500   $619,900   -1.5% 1.0% -8.4% -11.0%
Ventura $643,740 $650,000   $640,000   -1.0% 0.6% -18.8% -11.7%
Central Coast                  
Monterey $630,000 $620,000   $618,120   1.6% 1.9% -6.1% -11.2%
San Luis Obispo $624,000 $586,000   $615,000   6.5% 1.5% -14.4% -17.5%
Santa Barbara $550,000 $659,000   $742,000   -16.5% -25.9% -20.3% -18.8%
Santa Cruz $862,500 $885,000   $870,000   -2.5% -0.9% -24.0% -26.1%
Central Valley                  
Fresno $265,750 $272,000   $264,000   -2.3% 0.7% -6.4% -2.9%
Glenn $225,000 $253,000   $232,000   -11.1% -3.0% 12.5% -5.3%
Kern $235,250 $240,000   $235,000   -2.0% 0.1% -14.8% -1.8%
Kings $222,000 $229,000   $230,000   -3.1% -3.5% -3.4% 6.3%
Madera $265,000 $254,950   $245,000   3.9% 8.2% 2.1% -2.0%
Merced $261,930 $271,850 r $255,000   -3.6% 2.7% -22.5% -13.0%
Placer $461,000 $470,000   $450,000   -1.9% 2.4% -5.1% -13.6%
Sacramento $365,000 $360,000   $349,900   1.4% 4.3% -10.2% -7.1%
San Benito $583,200 $597,000   $649,880   -2.3% -10.3% -4.3% 10.0%
San Joaquin $365,000 $369,200   $360,500   -1.1% 1.2% -20.1% 17.5%
Stanislaus $310,000 $319,000   $298,750   -2.8% 3.8% -17.2% -9.2%
Tulare $237,400 $232,000   $215,000   2.3% 10.4% -16.2% -2.5%
Other Calif. Counties                  
Amador NA NA   $348,950   NA NA NA NA
Butte $326,940 $318,000   $315,000   2.8% 3.8% -7.1% 8.3%
Calaveras $325,000 $302,500   $318,000   7.4% 2.2% -33.6% -31.9%
Del Norte $250,000 $223,000   $214,000   12.1% 16.8% -20.0% -42.9%
El Dorado $461,750 $500,000   $470,000   -7.7% -1.8% -28.6% -27.5%
Humboldt $310,000 $315,000   $310,000   -1.6% 0.0% -24.0% 3.2%
Lake $255,000 $265,250   $262,000   -3.9% -2.7% -11.4% -23.5%
Lassen $184,000 $148,000   $189,000   24.3% -2.6% -40.0% -48.3%
Mariposa $355,000 $305,500   $250,000   16.2% 42.0% -12.5% 180.0%
Mendocino $414,000 $420,000   $374,500   -1.4% 10.5% -13.1% 6.0%
Mono $725,000 $599,900   $400,000   20.9% 81.3% -47.1% -35.7%
Nevada $399,000 $401,500   $405,750   -0.6% -1.7% -30.6% -13.9%
Plumas $289,500 $310,000   $302,000   -6.6% -4.1% -44.7% -42.2%
Shasta $283,000 $261,000   $250,000   8.4% 13.2% -17.2% 7.1%
Siskiyou $226,000 $181,500   $189,500   24.5% 19.3% -19.6% -15.9%
Sutter $296,000 $290,000   $270,000   2.1% 9.6% -16.9% -14.7%
Tehama $199,000 $233,250   $224,500   -14.7% -11.4% -38.1% -46.9%
Tuolumne $288,500 $304,000   $325,000   -5.1% -11.2% -15.4% -9.6%
Yolo $429,500 $443,750   $440,000   -3.2% -2.4% -12.5% -26.3%
Yuba $263,000 $282,000   $285,000   -6.7% -7.7% -1.3% 14.5%

r = revised
NA = not available

November 2018 County Unsold Inventory and Days on Market
(Regional and condo sales data not seasonally adjusted)

November 2018 Unsold Inventory Index Median Time on Market
State/Region/County Nov. 2018 Oct. 2018   Nov. 2017   Nov. 2018 Oct. 2018   Nov. 2017  
Calif. Single-family home 3.7 3.6   2.9   28.0 26.0   22.0  
Calif. Condo/Townhome 3.4 3.1   2.2   25.0 21.0   17.0  
Los Angeles Metro Area 4.2 4.0 3.3   32.0 30.0   27.0  
Central Coast 4.4 4.1   3.4   34.0 30.0   30.0  
Central Valley 3.3 3.3   2.9   25.0 21.0   18.0  
Inland Empire 4.7 4.3   3.9   37.0 35.0   31.0  
San Francisco Bay Area 2.3 2.5   1.5   23.0 19.0   15.0  
                     
San Francisco Bay Area                    
Alameda 1.9 2.1   1.2   17.0 15.0   13.0  
Contra Costa 2.2 2.6   1.7   19.0 16.0   14.0  
Marin 3.0 3.0   1.6   35.0 22.0   36.0  
Napa 4.6 5.0   3.8   49.0 41.0   57.5  
San Francisco 1.7 1.9   1.1   16.5 15.0   16.0  
San Mateo 1.9 1.9   1.2   16.0 12.0   12.0  
Santa Clara 2.1 2.4   1.2   18.0 14.0   9.0  
Solano 3.0 3.4   2.4   41.0 39.0   32.5  
Sonoma 3.8 3.3   1.7   49.0 47.5   44.0  
Southern California                    
Los Angeles 3.9 3.7   2.9   27.0 25.0   22.0 r
Orange 3.9 4.1   2.8   28.0 29.0   24.0  
Riverside 4.9 4.3   3.9   36.0 34.0   29.0  
San Bernardino 4.3 4.3   3.9   42.0 35.0   34.0  
San Diego 3.9 3.9   2.7   22.0 24.0   17.0  
Ventura 5.4 5.1   4.4   53.0 51.0   51.0  
Central Coast                    
Monterey 4.3 4.4   3.8   25.0 25.0   28.0  
San Luis Obispo 4.6 4.3   3.7   40.0 29.0   30.0  
Santa Barbara 5.2 4.5   3.7   41.0 40.0   35.0  
Santa Cruz 3.2 3.1   2.2   30.5 21.0   22.5  
Central Valley                    
Fresno 3.5 3.6 r 3.0   19.0 19.0   18.0  
Glenn 4.8 4.9   3.8   73.5 22.5   45.0  
Kern 3.1 2.9   3.3   26.0 21.0   25.0  
Kings 3.5 3.8   3.5   23.5 26.0   16.0  
Madera 5.1 5.7 r 4.4 r 34.0 30.0   28.0  
Merced 4.8 3.7   3.6   23.0 22.0   25.0  
Placer 3.0 3.4   2.3   27.0 25.0   17.0  
Sacramento 2.7 2.8   2.3   24.0 19.0   17.0  
San Benito 3.1 3.6   4.1   41.5 23.0   23.5  
San Joaquin 3.6 3.1   2.9   24.0 22.0   14.0  
Stanislaus 3.3 3.1   2.6   25.0 21.0   18.0  
Tulare 4.1 3.6   3.9   35.0 28.0   29.5  
Other Counties in California                    
Amador NA NA   5.4   NA NA   69.0  
Butte 2.9 3.3   2.8   24.0 21.0   18.0  
Calaveras 6.5 4.7   4.3   53.0 43.5   60.0  
Del Norte 5.6 5.0   4.0   110.0 95.0   111.0  
El Dorado 4.4 3.6   2.7   41.5 48.0   40.0  
Humboldt 5.8 4.9   5.3   24.5 27.0   28.0  
Lake 7.0 6.7   4.7   60.5 51.0   54.0  
Lassen 8.6 6.1   5.0   110.0 109.0   85.0  
Mariposa 4.8 4.6   12.2   147.0 24.0   6.0  
Mendocino 7.9 7.3   5.7   66.0 87.0   63.5  
Mono 8.4 4.8   4.9   127.0 115.0   153.5  
Nevada 5.7 4.3   3.9   41.0 40.5   33.0  
Plumas 9.8 6.1   5.1   152.0 87.0   143.0  
Shasta 4.4 3.9   4.3   26.5 34.5   33.0  
Siskiyou 7.1 6.6   5.5   60.5 20.0   60.5  
Sutter 2.9 3.1   3.0   29.5 34.0   32.0  
Tehama 9.2 5.4   4.0   49.5 48.5   63.0  
Tuolumne 5.8 5.6   3.9   58.5 47.0   42.0  
Yolo 3.7 3.7   1.9   27.0 22.0   22.0  
Yuba 2.9 3.0   3.4   30.0 33.0   17.0  

r = revised
NA = not available

Source: California Association Of Realtors

Home Builder Toll Brothers Shocks With 13% Plunge In Orders As California Falls A Staggering 39%

Toll Brothers announced its fourth quarter results on Tuesday, unleashing a fresh flood of concerns about the state of the housing market after it disclosed its first drop in orders since 2014. Orders were down 13% from the year prior, missing the analyst estimate of a 5% increase in dramatic fashion.

The company focuses much of its business on the California high-end home segment, which – as a result of the housing bubble in most west coast cities and rising rates, is facing an “affordability crisis” coupled with a sharp drop in overseas demand. According to the company, orders for the state were down an astounding 39%.

https://www.zerohedge.com/sites/default/files/inline-images/toll%20orders.jpg?itok=fju7d_NC

The company blamed rising rates for the drop off in buyer demand, as well as sinking stock prices. What is odd is that stock prices haven’t really “sunk” – unless the company was referring to its own stock…

https://www.zerohedge.com/sites/default/files/inline-images/toll%2012.4.jpg?itok=IMfGjqZK

... with the CEO blaming “the effect on buyer sentiment of well-publicized reports of a housing slowdown” for the plunge in orders. You see, it’s not the housing market that is slowing: it is perceptions about the market slowing, that is hitting the company.

That said, “perceptions” are correct: as we noted last week, new home sales crashed in October, suffering the biggest plunge since 2011.

https://www.zerohedge.com/sites/default/files/inline-images/2018-11-28_7-01-59.jpg

Even so, the atrocious quarter didn’t deter all analysts, who promptly defended the stock. Drew Reading, Bloomberg Intelligence analyst stated that “there are many positive factors underpinning the economy that we believe are supportive of the housing sector longer-term, and our affluent markets particularly.”

Tolls dismal results follows signs that we have been discussing for much of the past year, which have confirmed that the luxury housing market is cooling off across the country.

Recently, we profiled a mansion in Chicago that was taken off the market after being listed for $50 million and only being assessed for $19.4 million. United Automobile Insurance Chairman and CEO Richard Parrillo constructed the 25,000 sq ft Lincoln Park mansion a decade ago, after buying the property in 2005 for $12.5 million from the Infant Welfare Society.

After two years on the market, Parrillo and his wife held firm at $50 million, a record for the region, their original listing agent told the Chicago Tribune. The agent said the couple plowed more than $65 million into the estate, including land cost.

https://www.zerohedge.com/sites/default/files/inline-images/mansion_0.jpg?itok=jN4nFo9W
$50 million Lincoln Park mansion — Chicagoland’s priciest listing — taken off the market

Cook County Assessor’s Office reports shows the mansion’s $50 million asking price was hugely overinflated versus its most recent estimated market value, which stood some 60% lower, at $19.4 million. The report notes the 2018 property value is significantly higher from the assessor’s $14 million estimated market value for the mansion in 2017, due to a quick burst in high-end home sales in the last several years that had since cooled.

Source: ZeroHedge

Bubble Trouble: Silicon Valley & San Francisco Housing Markets Head South

The underlying dynamics changed in August and have worsened since. And, this is still the tech boom.

It’s high time to unload houses and condos in Silicon Valley and San Francisco, one of the most expensive housing markets in the US. Sellers are now flooding the market with properties. Inventory listed for sale in those three counties that make up the area – San Francisco, San Mateo, and Santa Clara – surged by 102% in November compared to November last year, to 3,931 listings.

In each of the past three months, the number of active listings (new listings plus old listings that have not sold yet but haven’t been pulled from the market) was the highest since August 2014. The chart below shows the year-over-year percentage change in active listings. The red bars in the chart mark the beginning of bubble trouble in this housing market (all data via the National Association of Realtors at realtor.com):

https://wolfstreet.com/wp-content/uploads/2018/12/US-Silicon-Valley-San-Francisco-active-listings-percent-change-2018-11.png

When inventories are piling up because sales are slowing, sellers have to figure out where the market is, and the market is where the buyers are, but buyers have become listless and refuse to participate in bidding wars. They see the prices and they do the math with higher mortgage rates, and they walk. So, motivated sellers have to do something to move the properties. And they started cutting prices.

In November, the number of properties on the market with price cuts, at 1,038, skyrocketed by over 400% year over year.

The chart of the year-over-year percentage changes in price cuts in Silicon Valley and San Francisco shows that the change of direction in the market occurred around August. By September, price cuts hit the highest level since Housing Bust 1:

https://wolfstreet.com/wp-content/uploads/2018/12/US-Silicon-Valley-San-Francisco-price-reductions-percent-2018-11-.png

The median asking price for the three counties had peaked in May at $1,369,200 and has since fallen by $132,100 or by nearly 10% from the peak, to 1,237,100. Median asking price means half are listed for more and half are listed for less. It differs from the median selling price at which homes are actually sold. Compared to November last year, the median asking price dropped by $71,200 or 5.4%:

https://wolfstreet.com/wp-content/uploads/2018/12/US-Silicon-Valley-San-Francisco-median-asking-price-2018-11.png

The chart below shows the percentage change of median asking prices, which clarifies further the underlying dynamics in the market:

https://wolfstreet.com/wp-content/uploads/2018/12/US-Silicon-Valley-San-Francisco-median-asking-price-yoy-change-2018-11-.png

After years of blaming the surging home prices in the area on a shortage of inventory for sale, the industry is suddenly faced with all kinds of inventory coming out of the woodwork, just as sales are slowing and as mortgage rates are rising, while the affordability crisis bites the market.

Buyers have lost their blind enthusiasm. They’re still buying, but at lower prices, and they’re taking their time.

Yet the hiring slowdowns – or worse, layoffs – at area tech companies and the broad wind-down of countless and hopelessly cash-burning start-ups – both a prominent feature of every tech downturn here – haven’t even started yet. The area is still booming and companies are still hiring, and this housing downturn is starting during the tech boom, and not as a consequence of a tech meltdown. Though share prices of local companies such as Google, Apple, Facebook, and many others have taken a big hit since the summer, we’re still far from a classic tech meltdown. That is yet to come.

The Case-Shiller home price index lags by about three months, but it too is now picking up the changes in the market: Seattle home prices dropped at fastest pace since Housing Bust 1, while the first price declines cropped in San Francisco, Denver, Portland, and other markets. Read…  The Most Splendid Housing Bubbles in America Deflate

Source: by Wolf Richter | Wolf Street

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New-Home Prices Drop Nearly 7%, Supply Spikes to Highest since Housing Bust 1

Home builders not amused.

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Update on the Housing Bust in Sydney & Melbourne, Australia

This is not exactly slow motion anymore.

2018 Will End With Too Many SoCal Homes For House Hunters To Choose From

(Ben Jones) A report from the Orange County Register in California. “When 2018 started, the housing buzz was ‘where’s the supply?’ Now with the year almost complete, the industry now wonders ‘where did all the buyers go?’ Ponder that in housing-starved Southern California, builders have the largest standing supply of completed homes to sell in six years. Yes, newly constructed residences are a pricey niche that’s not for everyone. Still, the change of momentum is remarkable.”

“Housing tracker MetroStudy reports that at the end of the third quarter, 3,401 new homes were finished but unsold in the four-county region covered by the Southern California News Group. That’s up 428 homes in 12 months, or 14 percent, and was the highest inventory level since 2012’s second quarter.”

“But this year, house hunters have pulled back — for both new and existing residences. If you need a stark measurement of the buyer reluctance, look at this: CoreLogic reported Southern California home sales of all types in September suffered their largest year-over-year decline in nearly eight years.”

“It adds up to a situation where not too long ago local builders had many buyers waiting months for homes to be completed. Today, most housing projects offer new homes ready for immediate occupancy — with special pricing, no less.”

“Look at the market upheaval in Orange County. It’s got the region’s biggest boost in new-home supply, according to MetroStudy. As of Sept. 30, O.C. had 1,074 finished residences for sale, up 277 or 35 percent in a year. It’s O.C.’s largest new-home inventory in nearly 12 years.”

“Builders, faced with their own industry competition, also are up against homeowners in the region who rushed to list their homes. As that new-home supply swelled in the third quarter, Southern California owners averaged 35,333 listings, according to ReportsOnHousing. That’s 4,568 more existing homes on the market than a year earlier — or 10 times the growth of unsold new homes.”

“Yet this is an autumn period when many owners typically take homes off the market. Who knew that 2018 would be the year when house hunters had too many homes to choose from?”

From Curbed Los Angeles. “The number of homes for sale in the Los Angeles area climbed more than 30 percent in October, according to Zillow. That suggests the region’s sky-high home prices could continue to fall, as they did in September.”

“During the month of October, inventory (the total number of houses and condos on the market) in Los Angeles and Orange counties jumped nearly 32 percent above levels recorded in October of last year. A bump in the number of homes available for sale often corresponds with falling prices, since sellers have more competition when listing their homes and are less likely to be overwhelmed with offers above asking price.”

“The spike in the number of homes available for purchase mirrors—and far exceeds—a nationwide trend. Across the country, inventory went up 3 percent since last year, marking the first yearly increase since 2014.”

“‘This is a phenomenon we’re seeing in several pricey markets throughout the country,’ says Zillow economist Aaron Terrazas. He points out that inventory has also risen by double digit percentages in San Francisco, Seattle, and San Jose.”

“Terrazas tells Curbed that much of the inventory growth in LA and other markets is driven by homes that take longer to sell, suggesting that buyers may be less willing to pay bloated prices.”

“‘This is a reflection of how poor affordability is in those areas,’ says Terrazas. ‘Buyers are starting to pull back a little bit from where they were a year ago.’”

Source: Ben Jones The Housing Bubble Blog

Yet Another Unfunded Trillion Dollar Liability, California Wildfire Damage

( John Rubio-DollarCollapse) Yesterday an entire California town burned down. Paridise, CA has (had) 27,000 residents and over 1,000 buildings, and now it’s pretty much gone. A fire started nearby on a windy day and within hours everything was ash and cinders.

That fire and several others are still expanding across the state, threatening tens of thousands of homes. The sets of the TV show WestWorld are gone. Malibu has been evacuated. And dry, windy conditions persist, so the story is nowhere near over.

If this sounds familiar, it’s because massive, sometimes uncontrollable California wildfires are now an annual occurrence, due in part to gradual warming and persistent drought which combine to suck the moisture out of vegetation and turn the landscape into a tinderbox. Here’s a chart showing the recent take-off in the number of fires reported in the state (2013 was most recent year I could find, but the trend is clear – and since then the number of fires has apparently soared).

https://www.zerohedge.com/sites/default/files/inline-images/California-wild-fires.jpg?itok=0gvK61MZ

The reason this rates coverage in a financial blog is population. We’ve been moving millions of people into a place that has always had and always will have wildfires. California’s population is now about four times what it was in 1950, and the influx continues.

https://www.zerohedge.com/sites/default/files/inline-images/California-population.jpg?itok=LGv98-Gl

Fire is a crucial part of that and many other ecosystems, clearing out dead plants to make room for living. But add 40 million humans along with their buildings and vehicles, and a healthy, resilient semi-desert becomes a hellscape.

A very expensive hellscape. What does it cost to rebuild a town of 27,000 people from scratch? A back-of-the-envelope calculation (1,000 buildings at $100,000 a pop, 15,000 cars at $25,000 per, $10,000 per person for roads, sewers, landscaping, etc) yields several hundred million dollars. For one little town.

Is California budgeting for this? Are the insurance companies? Is Washington? All probably say they are, but only the insurance companies actually are – and even they are probably under-reserved for the past few years’ natural disasters.

This is a massive public planning failure, and yet another unfunded liability – that is, a future cost incurred but not saved for – to go alongside public pensions, government debt and multiplying environmental time bombs.

The result: A future of unpleasant surprises, in which governments are constantly saying “Oops, there’s this huge new expense that no one could have foreseen, and we’re all going to have to tighten our belts to cover it, sorry about the bad roads and closed libraries” – or – “Oops, there’s a huge unforeseen expense and we’re going to have to create a trillion new dollars to cover it, sorry about the inflation.”

But isn’t this mostly a private sector issue, between homeowner and insurance company, you ask? In many cases that’s true. But insurance companies have to make a profit, which means homeowner policy premiums have to be high enough to cover expected losses. As the latter rise, so necessarily do the former. Which means the part of our cost of living that’s devoted to insurance will soar as a direct result of California’s asleep-at-the-switch population management policy.

Are California wildfires as big an unfunded liability as the one resulting from the Right Coast’s soaring Hurricane Alley population? Probably not, because fires, even big ones, are smaller than tropical storms. Still, it could easily exceed a trillion dollars (let’s see what today’s fires end up costing) which – hitting a state that’s already overburdened with unfunded pensions and crumbling infrastructure – will probably end up being added to the federal government’s balance sheet via some kind of bail-out.

All of which makes a currency reset that much more likely in the not too distant future. Paying off this mountain of debts, promises and “guaranteed surprises” with current dollars is mathematically impossible. But after a 70% devaluation the numbers might work.

Source: ZeroHedge

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SoCal Fire May Have Ejected “Incredibly Dangerous” Radioactive Particles Into The Atmosphere

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Nearby resident: “Every person on our street has had cancer“

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California Utilities Implode, Lose A Third Of Their Value In 2 Days On Massive Fire Damages

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With the two giant wildfires in northern and southern California projected to result in $25 billion in damages, the shares of California’s two largest utility owners have crashed the most in nearly two decades.

 

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California Wildfires Set For $25 Billion In Damages As Death Toll Hits 31; Suspected Looters Arrested

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California Wildfires: Cars Filled with Dead Bodies – Burnt Skeletons

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Fire Swept Through Santa Susana Nuclear Testing Site In California

SF Bay Area Realtor Caters To Mass Exodus Out Of The Region

A real estate brokerage near San Francisco is capitalizing on the mass exodus out of the Bay Area. 

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According to an April report by a Bay Area advocacy group, 46% of locals say they want to move out of the area within the next few years, citing the high cost of living and skyrocketing housing prices as main reasons for wanting out. In February, CBS San Francisco reported that the number of people packing up and leaving the Bay Area has reached its highest level in more than a decade. And fo the first time in ages, the number of people leaving are outnumbering the people coming in.

Meanwhile, a statewide poll conducted by UC Berkeley last year revealed that 56 percent of voters have considered moving due to the housing crisis – and 1 in 4 of those residents said they’d leave the state.

Some are already making good on that promise. Data from earlier this year confirms that Sacramento is experiencing its highest rate of domestic migration in over a decade.

https://www.zerohedge.com/sites/default/files/inline-images/state-migration_2_0.png?itok=Vaz6Zi9a

Catering to the exodus

To serve the real estate needs of soon-to-be former Bay Area residents, East-Bay broker Scott Fuller – a real estate broker of 18 years, launched LeavingTheBayArea.com, which helps clients design a relocation strategy. After helping clients sell their home “within a timeframe that works for you,” Fuller will “partner you up with a real estate specialist” in the desired destination city in order to perform an “in-depth needs analysis” in order to coordinate the move.

https://www.zerohedge.com/sites/default/files/inline-images/exodus%20chart.png?itok=iuMQFTpJ

Fuller says that the majority of his clientele are retirees looking to cash out and move to cheaper pastures in areas such as Portland, Las Vegas, Reno, Dallas, Austin and cities in Arizona. Those looking to remain in California have been moving to Folsom and El Dorado Hills.

Source: ZeroHedge

California Democrat Congressional Candidate Caught Listing Maryland Home As Primary Residence

It wasn’t a case of flagrant carpetbagging – it was just an honest mistake!

That’s the excuse that one Democratic Congressional candidate in California has offered to justify the fact that he claimed a home in Bethesda Maryland as his primary residence, as the Fresno Bee reported on Tuesday.

Spokesmen for the campaign of TJ Cox – the candidate in question – said last week that the claim was the result of an “honest mistake” and blamed an error by the state for the “oversight.” Cox has offered to repay a roughly $700 tax credit that he received by claiming the home.

Cox owns several businesses in the central San Joaquin Valley and is running against Republican Rep. David Valadao for California’s 21st Congressional District seat.

https://www.zerohedge.com/sites/default/files/inline-images/2018.10.03cox.JPG?itok=RS117Q_A

The Bee had previously reported that Cox owned a three-bedroom, four-bathroom house in Bethesda and had claimed the nearly $1 million home as his principal residence. Cox also claimed a Fresno home as his principal residence, however, federal tax laws prohibit claiming more than one home.

Asked why Cox didn’t notice the oversight, his campaign spokesperson said that Cox’s family was living there.

“It was an honest mistake that he filled out the principal residence not knowing the legal definitions. His family was living there,” said Campaign Spokesman Phillip Vander Klay.

“That’s just kind of the situation,” Vander Klay added. “We are working to get this fixed.”

Cox had reportedly purchased the Bethesda home for his family to live in while his wife, Dr. Kathleen Murphy, studied public health policy at Johns Hopkins University. Cox lived and worked in Fresno while his family lived in Maryland.

Though Cox’s campaign tried to construe the tax credit claim as a mistake on the state of Maryland’s part, the Fresno Bee found that it had been coded as Cox’s principal residence when he first bought the home – meaning that the credit claim was an oversight on Cox’s part.

But we’re sure that Cox’s inability to keep track of basic tax-related upkeep will have no bearing on his ability to properly allocate how the tax dollars of his constituents are spent.

Source: ZeroHedge

California Tops National Poverty Rate As Prime Tax Donkey Demographic Plans “Exodus” From State

Despite efforts by state legislators at creating a socialist utopia, California still has the highest poverty rate in the nation at 19%, despite a 1.4% decrease from last year according to the Census Bureau. 

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Poverty and income figures released Wednesday reveal that over 7 million Californians are struggling to get by in the second most expensive state to live in, according to the Council for Community and Economic Research‘s 2017 Annual Cost of Living Index. 

And while California has a “vigorous economy and a number of safety net programs to aid needy residents,” according to the Sacramento Bee, one out of every five residents is suffering economic hardship – which is fueled in large part by sky-high housing costs, according to Caroline Danielson, policy director at the Public Policy Institute of California. 

“We do have a housing crisis in many parts of the state and our poverty rate is highest in Los Angeles County,” she said, adding that cost of living and poverty is often highest in the state’s coastal counties. “When you factor that in we struggle.”

Silicon Valley residents in particular are leaving in droves – more so than any other part of the state. Nearby San Mateo County which is home to Facebook came in Second, while Los Angeles County came in third.

“They’re looking for affordability and not finding it in Santa Clara County,” said Danielle Hale, chief economist for realtor.com.

It’s not just housing prices driving the exodus, of course. Punitive taxes – more than twice as much as some other states, are eating away at disposable income. Nearby Arizona’s income tax rate is 4.54% vs. California’s 9.3%, while the new tax bill may accelerate the exodus.

As Michael Snyder of the Economic Collapse Blog pointed out in May…

Reasons for the mass exodus include rising crime, the worst traffic in the western world, a growing homelessness epidemic, wildfires, earthquakes and crazy politicians that do some of the stupidest things imaginable.  But for most families, the decision to leave California comes down to one basic factor…

Money.

Mass Exodus

https://www.zerohedge.com/sites/default/files/inline-images/exodus%20pic.jpg?itok=GDY4lm8A

As you may or may not be aware, we’ve mentioned the flood of various types of Californians fleeing the state for various reasons; be it wealthy families who want to keep more of their income safe from the tax man, or poor residents leaving the Golden State because they are being crushed by the high cost of living. 

To that end, the Orange County Register notes a significant out migration of people in their child-raising years – as the largest group leaving the state, some 28%, are those aged 35 to 44. 

According to IRS data from 2015-2016, the latest available, roughly half of those leaving the state make less than $50,000 per year, while roughly 25% of those leaving make over $100,000. 

What did the OC register conclude?

Thanks to unaffordable housing, California’s moderate wage earners are going to have to leave the state, while only the wealthy and the impoverished residents will remain. 

But the big enchilada in California — by far the largest source of distortion in living costs — is housing. Over 90 percent of the difference in costs between California’s coastal metropolises and the country derives from housing. Coastal California is affordable for roughly 15 percent of residents, down from 30 percent in 2000 and 30 percent in the interior, from nearly 60 percent in 2000. In the country as a whole, affordability hovers at roughly 60 percent.

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Over time these factors — along with prospects of reduced immigration — will impact severely the state’s future. California is already seeing its population aged 6 to 17 decline. This reflects a continued drop in fertility in comparison to less regulated, and less costly, states such as Utah, Texas and Tennessee. These areas are generally those experiencing the biggest surge in millennial populations. –OC Register

And according to ULI, 74% of California millennials are considering an exodus. 

Where to? 

As we noted in June, these are the top 10 California counties that people are leaving, and where they’re headed (via the Mercury News): 

1. Santa Clara County

Out of state destinations: Arizona, Nevada, Texas and Idaho

In state destinations: Alameda, Sacramento, San Joaquin, Santa Cruz and Placer counties

2. San Mateo County

Out of state destinations: Arizona, Nevada, Texas and Washington

In state destinations: Alameda, Contra Costa, Santa Clara, Sacramento, and San Francisco counties

3. Los Angeles County

Out of state destinations: Nevada, Arizona, and Idaho

In state destinations: San Bernardino, Riverside, Ventura and Kern counties

4. Napa County

Out of state destinations: Arizona, Idaho, Nevada, Florida and Oregon

In state destinations: Solano, Sonoma, Sacramento, Lake and El Dorado counties

5. Monterey County

Out of state destinations: Arizona, Nevada, and Idaho

In state destinations: San Luis Obispo, Fresno, Santa Cruz, Sacramento and San Diego counties

6. Alameda County

Out of state destinations: Arizona, Nevada, Idaho, and Hawaii.

In state destinations: Contra Costa, San Joaquin, Sacramento, Placer, and El Dorado counties

7. Marin County

Out of state destinations: Nevada, Arizona, Oregon and Idaho.

In state destinations: Sonoma, Contra Costa, Solano and San Francisco counties

8. Orange County

Out of state destinations: Arizona, Nevada and Idaho

In state destinations: Riverside, Los Angeles, San Bernardino, San Diego and San Luis Obispo

9. Santa Barbara County

Out of state destinations: Arizona, Nevada and Idaho.

In state destinations: San Luis Obispo, Ventura, Los Angeles, Riverside and Kern counties

10. San Diego County

Out of state destinations: Arizona and Nevada

In state destinations: Riverside, San Bernardino, Imperial, Orange County and Los Angeles

Source: ZeroHedge

California Gained Just 800 Jobs In June; Unemployment Remains At Record Low

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Employers in California’s trade, transportation and utilities sector cut jobs in June. Above, the Port of Long Beach.

California’s economic engine paused in June, as employers added a meager 800 new jobs. The unemployment rate held steady at a record low of 4.2%, according to data released Friday by the state’s Employment Development Department.

The June numbers represent a pullback from May, when the Golden State added 7,200 jobs. And the gains in May were much smaller than April, when employers boosted payrolls by nearly 26,000.

The slowdown could signal that California is simply reaching full employment. Employers are struggling to find workers. Or it could be a sign of sagging confidence among executives. A growing trade war with China, for example, has unnerved companies in California’s logistics industry and beyond.

Economists, however, cautioned against reading too much into one or two months of data.

Lynn Reaser, chief economist of the Fermanian Business and Economic Institute at Point Loma Nazarene University, said June’s disappointing figures “warrant attention” and could be a sign of uncertainty around trade. But they are not cause for “undue alarm at this point.”

“June’s weak performance could be temporary,” she said in an email.

Others said it was too early to see effects from the tariffs the Trump administration has placed on Chinese goods. An initial levy on $34 billion of Chinese goods, along with countermeasures by China, took effect in July following months of tariff threats and saber-rattling between the world’s two largest economies. More tariffs have been threatened.

Michael Bernick, an attorney with Duane Morris and a former director of the Employment Development Department, said the slowdown was expected after a sustained stretch of job growth, noting that the current economic expansion is now the second longest in the post-World War II period.

“California has a broad and diverse economy, and we’re now in our 99th month of employment expansion,” he said in an email.

Last month, employers in four of California’s 11 industry sectors added jobs.

The education and health services sector gained the most, growing by 8,000 jobs. The information sector, which includes tech companies and Hollywood studios, grew by 4,600 jobs.

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Employers in the government sector and the professional and business services sector also added jobs.

The other seven sectors saw job losses. Leisure and hospitality cut 4,000 jobs. The construction sector shrank by 2,900. Trade, transportation and utilities lost 2,600 jobs. Employers in manufacturing, finance, mining and logging and “other services” also trimmed payrolls.

Wages, meanwhile, rose 2.6% in California from the previous year, to $30.42 an hour, according to the federal Bureau of Labor Statistics, barely keeping up with the national increase in consumer prices. (The agency does not publish consumer inflation data for individual states.)

The number of jobs in Los Angeles County rose by 8,800. Employers in San Bernardino and Riverside counties added 3,400 jobs, while San Diego County employers cut 5,400. The number of jobs in Ventura County fell by 300. Orange County lost 100 jobs.

Across Los Angeles and Orange counties, wages rose 4.8%, to $29.39 an hour, though inflation took out a chunk of those gains.

So-called core inflation — consumer prices minus volatile food and energy costs — rose 3.5% in Los Angeles and Orange counties.

Sung Won Sohn, chief economist with Los Angeles consulting firm SS Economics, blamed June’s poor jobs figures partly on sky-high housing costs that make it difficult for employers to recruit and retain workers.

He noted that the number of people in the labor force — either those employed or looking for work — has been falling in recent months.

Dave Smith, an economist at the Pepperdine University Graziadio Business School, said that absent an increase in immigration, “we are just not at a capacity to add a lot more jobs.”

Bernick and others said that the economy appears mostly healthy despite the poor June numbers. But Bernick said federal trade policy could hamper further job growth.

“A widening trade war is the main threat to California’s continued employment expansion,” he said.

Source: by Andrew Khouri | Los Angeles Times

If California Is Split Into 3, What New State Will Have The Hottest Housing?

https://www.mercurynews.com/wp-content/uploads/2018/07/0715-BUS-SPLIT-CA-01.jpg?w=842In this June 18, 2018, photo, venture capitalist Tim Draper points to a computer screen at his offices in San Mateo, showing an initiative to split California into three states qualified for the ballot. Opponents of an initiative are asking the state Supreme Court to pull the measure from the ballot. (AP Photo/Haven Daley)

Voters will decide in November on a proposition that calls for California to be split into three new and separate states.

This column isn’t the place to debate the merits of the idea. Nor will I ponder its odds at the ballot box. And I’ll leave to other pundits the vast legal, political and operational impacts of such a historic change — and that’s only if the breakup ever got all the necessary approvals after a winning vote.

We are here to talk one thing: What might these three new state housing markets look like based on historical trends. Geographically speaking, the plan creates new state borders along county lines.

There’s the retooled “California,” essentially the coastal counties from Los Angeles to Monterey. There’s the oddly named “Southern California” combining Orange, San Diego, Riverside and San Bernardino counties up through the interior to Lake Tahoe. And there’s “Northern California,” everything else or basically the Bay Area plus everything up to Oregon.

Knowing the new county lineup, I filled my trusty spreadsheet with historical housing data provided by Attom Data Solutions. Looking at stats from 2000 through 2018’s first quarter, here are 10 things you should know about the housing markets within each of the new proposed states.

1. Price tags: When you shuffle the counties into three states, what does a sales-weighted median for 2018’s first-quarter selling prices for all properties look like? It’s no surprise that it would cost the most to buy in Northern California at $580,200. Next was the new coastal California at $571,900. Southern California was most affordable — remember all the cheaper inland properties are in this new state — at $426,000.

2. Best bet: Where was the best performance this century, as measured by growth in median selling prices for all properties, 2000 through this year? Well, seaside property rocks. The Pacific-hugging new California’s 181 percent gain was tops vs. Southern California at 148 percent and Northern California’s 120 percent.

3. Most pain: Split or not, don’t forget the pain of housing’s bubble bursting! What new state’s housing market would have fared the worst in the 2006-2011 downturn? Northern California’s 46 percent price drop was the largest loss and a shade ahead of Southern California’s fall of 45.6 percent and new California’s 41.4 percent tumble.

4. Top recovery: Where was the post-recession rebound the best, measured by the 2011-2018 selling price upswing? Northern California produced 108 percent in gains in seven years vs. Southern California at 84 percent and new California’s 83 percent.

5. Predictability: Split the state into three, expect the same crazy real estate. Just peek at the nearly uniform best and worst 12-month periods since 2000! New California’s best was up 30 percent vs. its worst of down 35 percent; Southern California ran from up 29 percent to down 37 percent; and Northern California ranged from up 29 percent to down 42 percent.

6. Big sellers: Ponder the size of these markets, in terms of purchase transactions closed in the past 18 years. Most sales activity in 2000-2018 was Southern California’s 3.2 million sales followed by Northern California’s 2.9 million and new California’s 2 million.

7. Sales dips: Home buying is down since the turn of the century as homeowners choose to move less and ownership is less affordable. New California’s sales pace is down 19 percent since 2000; Northern California is off 10 percent; Southern California is down 4.5 percent.

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8. Home sweet home: Now let’s think about single-family homes under the proposed three-way split. Southern California would have 2.77 million single-family homes worth a combined $1.44 trillion. New California gets 1.84 million single-family homes worth $1.41 trillion. Northern California is home to 2.87 million homes worth $2.18 trillion.

9. Price extremes: Where’s the budget-busting housing in the proposed new states  … and where are the bargains? Southern California’s priciest single-family homes are in Orange County at an average value of $871,635 vs. the cheapest county, Kings, at $202,699. New California’s priciest is Santa Barbara County at $804,942 vs. San Benito County’s $541,434 low. Of course, Northern California has an insane gap: the highest prices are in San Mateo County at $1.61 million vs. the cheapest county, Modoc, at $89,158.

10. Tax bite: Ownership equals property taxes. How would that cost for single-family homes slice up among the three proposed states? Southern California’s 2017 tax collections for single-family homes ran $12.13 billion or $4,372 per average taxpayer. Northern California property taxes totaled $15.53 billion or $5,419 per average taxpayer. And the biggest individual tax bills were in the new California where $10.38 billion in collections translates to an average $5,636 per property.

Source: by Johnathan Lansner | Mercury News

California Become 3rd Largest State with More People leaving than Migrating to the State

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California has beaten Illinois for net out-migration from the state. California has become one state that there are more people trying to get out than moving into it. So while California wants to protect illegal aliens and fight with the Federal government over sanctuary cities contrary to the Constitutional Supremacy Clause, according to a November report from the U.S Census Bureau, the Golden State has had 142,932 residents exit the state. This domestic out-migration has been the second largest outflow in the USA behind only New York and New Jersey. The net out-migration from California jumped up 11% compared to 2015.

Source: Armstrong Economics

Proposal To Split California Into Three States Earns Spot On November Ballot

3 Californias? Billionaire’s Plan to Split California Into 3 Separate States Clears First Hurdle

California’s 168-year run as a single entity, hugging the continent’s edge for hundreds of miles and sprawling east across mountains and desert, could come to an end next year — as a controversial plan to split the Golden State into three new jurisdictions qualified Tuesday for the Nov. 6 ballot.

If a majority of voters who cast ballots agree, a long and contentious process would begin for three separate states to take the place of California, with one primarily centered around Los Angeles and the other two divvying up the counties to the north and south. Completion of the radical plan — far from certain, given its many hurdles at judicial, state and federal levels — would make history.

It would be the first division of an existing U.S. state since the creation of West Virginia in 1863.

“Three states will get us better infrastructure, better education and lower taxes,” Tim Draper, the Silicon Valley billionaire venture capitalist who sponsored the ballot measure, said in an email to The Times last summer when he formally submitted the proposal. “States will be more accountable to us and can cooperate and compete for citizens.”

Source: by John Myers | Los Angeles Times

California Officials Avoid ‘p-word’ When Selling Higher Taxes to Voters

Why are officials so unwilling to tell their voters (tax donkeys) that pension costs are the underlying factor in their requests for tax increases?

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While public and media attention to this week’s primary election focused – understandably so – on contests for governor, U.S. senator and a handful of congressional seats, there were other important issues on Californians’ ballots.

One, which received scant attention at best, was another flurry of local government and school tax and bond proposals.

The California Taxpayers Association counted 98 proposals to raise local taxes directly, or indirectly through issuance of bonds that would require higher property taxes to repay.

The proposed taxes on legal marijuana sales and other retail sales and “parcel taxes” on pieces of real estate were particularly noteworthy for how they were presented to voters.

Most followed the playbook that highly paid strategists peddle to local officials, advising them to promise improvements in popular services, such as police and fire protection and parks, and avoid any mention of the most important factor in deteriorating fiscal circumstances – the soaring cost of public employee pensions.

City, county and school district officials howl constantly, albeit mostly in private, that ever-increasing, mandatory payments to the California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) are driving some entities to the brink of insolvency.

However, those officials are just as consistently unwilling to tell their voters that pension costs are the basic underlying factor in their requests for tax increases.

Why?

Tying tax increases to pensions, rather than popular services, not only would make voters less likely to vote for them but make public employee unions less willing to pony up campaign funds to sell the tax increases to voters. It is, in effect, a conspiracy of silence.

This week’s local tax and bond measures are just a tuneup for what will likely be a much larger batch on the November ballot.

It’s a well-established axiom of California politics that low-turnout elections, such as a non-presidential primary in June, are not as friendly to tax proposals as higher-turnout general elections, such as the one in November. Primaries tend to draw older white voters who often shun taxes, while general elections have younger and more ethnically diverse electorates easily conditioned through social media to believing they might receive a few crumbs from voting in favor of socialist wealth transfer tax schemes.

As local officials make plans to place those proposals on the November ballot, a bill making its way through the Legislature could skew local tax politics even more.

Senate Bill 958 would allow one school district, Davis Unified, to exempt its own employees from paying the $620 per year parcel tax that its voters approved two years ago.

The Senate approved SB 958 on a 24-19 vote last month, sending it to the Assembly. It’s being carried by Sen. Bill Dodd, a Napa Democrat whose district includes Davis.

The bill’s rationale is that housing is so expensive in Davis that teachers and other school employees cannot afford to live there, and that exempting them from the parcel tax would, at least in theory, make housing more affordable.

However, if SB 958 becomes law, it would set a dangerous precedent. It doesn’t take much imagination to see local government and school unions throughout the state demanding similar exemptions from new taxes with the threat, explicit or implicit, that they would refuse to finance tax measure campaigns.

The very people who benefit most from additional taxes by receiving higher salaries and/or better fringe benefits thus would be able to avoid paying those taxes themselves.

Source: The Mercury News

 

California Primary: Voters Recall Democrat Josh Newman over Gas Tax Vote

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Photo Attribute: Rich Pedroncelli / Associated Press

Voters in California’s 29th State Senate district recalled freshman Democrat Josh Newman in Tuesdy’s California primary over his vote for Governor Jerry Brown’s 12-cent-per-gallon gas tax hike, replacing him with Republican Ling Ling Chang and definitively denying Democrats a super majority in the upper house.

Election results showed Newman being recalled by a margin of 59.5% to 40.5%, despite the fact that saving his seat was the top priority of California Democrats on Tuesday.

Newman was, of course, not the only state senator to vote for the gas tax hike. He was, however, the most vulnerable, and Republicans targeted him in an effort to undo the Democrats’ super majority.

That super majority no longer existed by the time of the recall election, thanks to several “#metoo” resignations of Democrats who had been accused of sexual harassment.

However, the recall effort pressed ahead, and is an early barometer of voter outrage at the gas tax, amidst higher prices at the pump.

Republicans have likely managed to place a repeal of the gas tax on the November ballot, hoping to tap into a statewide majority that favors repealing the tax, and to motivate conservative voters to turn out — a task that has been made even easier by the somewhat unexpected second-place finish of Republican businessman John Cox in the primary for governor.

Newman’s recall is a hopeful sign for Republicans, who will need strong statewide turnout to defend several vulnerable congressional seats. Conversely, it is a bitter disappointment for Democrats, who now fear that the highly-anticipated “blue wave” may not materialize in California after all.

Avoid the ‘blue wave’. It’s a trap.

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Source: by Joel B. Pollak | Breitbart

It’s Now Against The Law In California To Shower And Do Laundry On The Same Day

A vintage postcard shows the brilliantly lit California State Capitol fountain at night.

Governor Jerry Brown is retiring but not before he passes a few draconian laws as parting gifts for California. Two bills were signed into law on Thursday of last week to “help California be better prepared for future droughts and the effects of climate change.”

The mandatory water conservation standards will be permanent, according to their wording, and not just for use in times of crisis. To make a long story short, now that these bills are law, it’s illegal to take a shower and do a load of laundry in the same day because you’ll exceed your “ration.”

Here’s the wording of the new laws.

Senate Bill 606 establishes a “governing body” to oversee all water suppliers, both private and public and will require extensive paperwork from those utility companies.

Assembly Bill 1668 is where it gets personal.  This establishes limits on indoor water usage for every person in California and the amount allowed will decrease even further over the next 12 years.

The bill, until January 1, 2025, would establish 55 gallons per capita daily as the standard for indoor residential water use, beginning January 1, 2025, would establish the greater of 52.5 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use, and beginning January 1, 2030, would establish the greater of 50 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use. The bill would impose civil liability for a violation of an order or regulation issued pursuant to these provisions, as specified.

If you’re wondering how the government would know how much water your family is using, the utility providers will be obligated to rat you out of face massive fines. And they’re encouraged to spy in all sorts of creative ways. They “shall use satellite imagery, site visits, or other best available technology to develop an accurate estimate of landscaped areas.”

Some analysis

Now, if you’re wondering where I get my assertion that you can’t shower and do laundry on the same day, here’s some math:

  • An 8-minute shower uses about 17 gallons of water
  • A load of laundry uses about 40 gallons of water
  • A bathtub holds 80 to 100 gallons of water
  • A dishwasher uses 6 gallons of water

There are also standards to be established for outdoor use such as landscaping, caring for livestock, and gardening, but those numbers don’t seem to be available at this time. Maybe Californians just get to wait in suspense to see if their chickens are allowed to have water on the same day as their vegetables. Back when I lived in California, we were only “allowed” to water our gardens two times per week, which, in that heat, as you can imagine, didn’t lead to very productive gardens.

Farmers on a larger scale will have to jump through numerous hoops and create water management plans which must then be approved by the people in suits because obviously, they’ll know more about the needs of crops and livestock than the farmers will

Oh, and don’t worry, rich people. There will be “provisions for swimming pools, spas, and other water features.” So you can still have your pretty fountains and pools while the rest of the peons take 2 showers a week. One might wonder if ‘variances” will apply to the wealthy for their landscaping needs.

“The State Water Resources Control Board, which will oversee local agencies’ progress, will also consider possible “variances” for some districts that need additional allowances due to specific local circumstances.” (source)

Both Brown and his most-likely successor, Gavin Newsom, want to spend $17 billion to build a tunnel that will bring water from resource-rich Northern California down to bone-dry Southern California. This means, even the parts of California that DO have water will be restricted in its use.

What if you don’t comply?

If you don’t plan to comply it’s going to be way cheaper to move. Here are the fines Californians will be looking at – and it’s not a typo – these fines are PER DAY.

(1) If the violation occurs in a critically dry year immediately preceded by two or more consecutive below normal, dry, or critically dry years or during a period for which the Governor has issued a proclamation of a state of emergency under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code) based on drought conditions, ten thousand dollars ($10,000) for each day in which the violation occurs.

(2) For all violations other than those described in paragraph (1), one thousand dollars ($1,000) for each day in which the violation occurs.

It’s important to note that your usage is only tracked if you have municipal water. If you have a well, at this point, you will probably be okay. Back when I lived there, the idea of metering private wells and billing the owners for use had been floated around, but most people resisted and it wasn’t enforced. If you truck your water in, you can also use as much as you need to.

For years it was illegal to use greywater systems in California, despite the epic droughts. Those regulations have been loosened, however, compliance is still extremely onerous. (Get the details here.) And rainwater catchment is not only legal, it’s encouraged. In fact, there’s a ballot on the table that is a “measure to allow rainwater capture systems to be installed without counting as new construction for the purposes of reassessing property taxes.”

Don’t think this only affects California

Not only are Californians fleeing the state in droves, but there are other ways these restrictive laws can affect the rest of us directly.

  • These stringent measures set a dangerous precedent for the rest of the country.
  • There could be a shortage of food coming out of California because there isn’t enough water to produce it.
  • The food we do get from there will cost a lot more.

It’s important to pay attention to stuff like this and not shrug it off because “I don’t live in California.” In an economy such as ours, we’re all interlinked. A draconian law that gains a footing in one part of the country is much easier to pass in other parts.

Source: ZeroHedge

Government Howls Over Proposed California Property Tax Break

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Some months ago (October-November, 2017) we wrote that the directors of the California Association of REALTORS® (CAR) had voted to support a signature drive with the intention of placing a CAR-sponsored initiative on the November 2018 California ballot.

The initiative, if passed, would allow “individuals 55 years of age and older to transfer their property tax basis to any home in the state, to purchase any price home, and to transfer their basis as many times as they wish.”

To appreciate the significance of this, it is necessary to have some idea of California’s property tax system. Property tax valuations are based on purchase price. You buy a house for $700,000, the assessor will value it at $700,000. After that, increases in property tax value are severely limited by formula. A home that was purchased for $500,000 five years ago could still be valued, for tax purposes, in the $500,000 range, even if its actual market value had increased to $700,000.

If you have lived in the same home for 15 — 20 years or more, you are probably enjoying relatively low property taxes because they are based on your low tax valuation. When contemplating a move, one of the things you have to think about is what your new property taxes might be, as they will be based on the purchase price of your new home. The effect of this has been to discourage people from moving down, e.g. from the 4-bedroom family home to a new 2-bedroom in a senior community, because the latter might result in significantly higher property taxes.

Californians sought to solve this problem in 1986 with the passage of Proposition 60. It allowed seniors to keep their property tax base assessment when they moved within the same county. However, in 1988, Proposition 90 was passed which allowed each individual county the option of participating in this tax base transfer by seniors who move from one county to another. This had great significance, because many retirees move to a different county (e.g. in the mountains, or desert) than the ones in which they had lived.

Only eleven of California’s 58 counties will allow a senior from another county to transfer his or her old property tax base to a newly-acquired home in that county. It is estimated that 75% of California homeowners over the age 55 are still living in the same home they lived in since the year 2000. That is not because they still love living there. It is because of the tax consequences.

Suppose that Mr. and Mrs. Baby Boomer bought a home in 2001 for $400,000. It was taxed on a value of $400,000 the first year. Its value for property tax purposes could only increase 2% per year. So now it might have a taxable value of $560,000. At a Proposition 13 tax rate of 1%, that is $5,600, even though the house might now have a market value of $900,000.

If Mr. and Mrs. Boomer sought to move down in size, they might buy a nice (not fantastic) two-bedroom which could cost them $700,000. Under current law their taxes would increase by $1,400 to $7,000.

However, if the CAR tax initiative were in effect, their tax value would be proportionately the same to actual value as with their previous home. In this case, it would be 62%, and their property tax would be $4,340. It would be $2,660 less than it would under current law.

No wonder the initiative garnered more than one million signatures to put it on the ballot (585,407 was the required number). It’s the best idea since sliced bread, right? Well, no; not in everyone’s eyes.

Ballot initiatives are accompanied by a report of the Legislative Analyst’s Office (LAO). In this case the LAO painted a bleak picture of the initiative’s impact on tax revenues. According to one briefing paper, the initiative would result in a $150 million loss for cities and counties and special districts, and another $150 million loss for school districts in the first years. Ultimately, it would grow to a total of $2 billion in losses.

It now appears that the LAO analysis has generated significant opposition to the initiative by city and county governments as well as teacher unions and firefighter associations.

CAR argues that the LAO analysis is flawed because it looks at the potential revenue lost because of the tax savings, but it doesn’t account for the revenue gained as a result of the senior’s home now having a new, increased tax base. It is a “static” analysis rather than a dynamic one.

Now, all of this could be sorted out through an extensive educational campaign; but that costs money, lots of money. It has been estimated that strong opposition could push the costs of backing the initiative into the $90 million range. Frankly, CAR doesn’t have that kind of money lying around.

At their recent meetings (Sacramento, May 2 — 5), CAR directors voted to pursue an alternative to the ballot initiative as well. It would be to seek support to have the legislature place the issue on the ballot in 2020. By seeking such legislative support, CAR would be able to free up resources to address other crucial issues in 2018. Whether this alternative will be possible won’t be known until late June. Stay tuned.

Source: by Bob Hunt | Realty Times

It’s Not What You Know But Who You’re Related To In The CA Dept of Tax and Fee Administration

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A California tax department where almost a third of managers are related to another employee is unwinding nepotistic chains of supervision six months after a state audit revealed a problematic concentration of personal relationships among staff.

California Department of Tax and Fee Administration Director Nicolas Maduros reported on Thursday that 141 of his department’s 484 managers has a familial or other close personal relationship to another employee.

A handful of those relationships appear to violate the department’s new anti-nepotism policy. Maduros said the department has corrective action plans for 17 of the managers whose relationships present conflicts for the organization.

“We are still working through this,” he told the State Personnel Board.

His department defines nepotism as “any relationship so personal that other CDTFA employees may reasonably perceive that one of the employees may be motivated to treat the other one more favorably than other employees. That includes, but is not limited to, any familial relationship established by blood, adoption, marriage, or registered domestic partnership.” It also includes roommates.

The State Personnel Board released an audit in November that found more than 800 of the 4,200 employees at the tax department has a familial relationship to someone else at the Board of Equalization.

The report drew attention to several instances in which job applicants appeared to receive a hiring advantage because they were related to someone at the department, and it questioned the hiring of a group of employees in December 2012 just before a law took effect that would have limited their potential retirement income.

Maduros’ presentation was intended to follow up on the audit’s findings.

“You all have stepped up. You have done a great job,” State Personnel Board member Richard Costigan told him.

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The nepotism audit was among the last in a series of critical reports on the Board of Equalization that resulted in the Legislature gutting the tax-collecting agency and creating the new California Department of Tax and Fee Administration.

Maduros released an anti-nepotism policy for the new department while the personnel audit was underway. The new policy forbids tax department employees from intervening to help anyone they know get a job there.

His latest report on nepotism disclosed the number of managers and supervisors who have relatives on staff. The department is addressing those conflicts first, and could later move to address close relationships among rank-and-file workers.

The department also is considering whether a job or promotion candidate has a relative on staff when it makes personnel decisions.

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“It’s going to take us time,” he said.

At least one investigation into the former Board of Equalization might still be underway.

Gov. Jerry Brown last year asked Attorney General Xavier Becerra to investigate the tax agency. Staff members from the Board of Equalization told The Bee that they were interviewed by Department of Justice agents.

Neither Brown nor Becerra has released a report. The Attorney General’s Office last month rejected a Public Records Act request from The Sacramento Bee seeking the document. The denial said the review was not complete.

It also said the document would not be releasable through the Public Records Act when it is complete. It said the documents would be exempt because they are “attorney-client privileged records.” The governor is the client.

Source: by Adam Ashton | The Sacramento Bee

California Residents Flee, Chased Away By Soaring Home Prices And Cost Of Living

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Last month, a Wall Street Journal op-ed posited that the new tax bill could create a mass exodus of roughly 800,000 residents from the state of California who will flee the state for low-tax red states. 

“In the years to come, millions of people, thousands of businesses, and tens of billions of dollars of net income will flee high-tax blue states for low-tax red states. This migration has been happening for years. But the Trump tax bill’s cap on the deduction for state and local taxes, or SALT, will accelerate the pace. The losers will be most of the Northeast, along with California. The winners are likely to be states like Arizona, Nevada, Tennessee, Texas and Utah.” –WSJ

Taxes aside, a new report by Next 10 and Beacon Economics suggests the California exodus may get a lot worse, as new housing construction since the Great Recession has been tepid at best, and as a result, California faces a housing backlog of 3.4 million units by 2025 if the trend continues – and 2.8 million units at the current rate of construction. 

From 2007 to 2017, only 24.7 housing permits were filed for every 100 new residents in California – much lower than the U.S. average of 43.1 permits.

By 2025, California would have a housing backlog of 3.4 million units if the trend continues. At the current pace of construction, California would add just a minimal amount of new housing – about 600,000 new housing units (net of housing unit losses due to demolition and other causes) – leaving the state with a housing gap of 2.8 million units by 2025. –Next10

“California’s current housing supply is not able to support its growing population,” the report concludes, and as such “the low levels of construction will likely result in further increases in home prices, such that fewer and fewer California residents will be able to afford homes.“

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According to the report, California lost over a million residents in the decade between 2006 and 2016, due primarily to the high cost of housing disproportionately hurting lower income households. Over 20% of those who moved over that decade did so in 2006 – at the height of the housing bubble.

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And since American consumers are genetically predisposed to never learning from their mistakes, median home prices in California are once again gapping well above the national average in a very similar pattern, making housing once again prohibitively expensive:

https://www.zerohedge.com/sites/default/files/inline-images/median_0.JPG?itok=alf7aXdP

Meanwhile, migration out of California is mostly tied to income, as most of those leaving the state earn less than $30,000 per year.

Those migration patterns are shaped by socioeconomics. Most people leaving the state earn less than $30,000 per year, even as those who can afford higher housing costs are still arriving. As the report noted, California was also a net importer of highly skilled professionals from the information, professional and technical services, and arts and entertainment industries. On the other hand, California saw the largest exodus of workers in accommodation, construction, manufacturing and retail trade industries. –MarketWatch

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Crunched California homeowners spent an average of 21.9% of their income on housing expenses in 2016, while home ownership rates are terrible at just 53.6% of homes owner-occupied; the 49th worst in the nation on both counts. California renters meanwhile come in 48th in the nation when it comes to percentage of income spent on housing at 32.8%.

And how are Californians coping with the skyrocketing costs of housing? One strategy is doubling up – as nearly 14% of renters have more than one person per bedroom, making it the state with the highest percentage of overcroweded renter households. 

Another solution? 

Leaving. 

In a separate analysis noted by MarketWatch‘s Andrea Riquier, “Realtor.com found that the number of people searching real estate listings in the 16 top California markets compared to people living there and searching elsewhere was more than double that of other areas — and growing.”

Searches for homes in pricey California towns – primarily Santa Clara, San Mateo and Los Angeles – experienced virtually no increase over the past year, while views of listings in other parts of the country were up 15%. 

So where do most broke Californians move? Texas, Arizona, Nevada, Oregon and Washington . 

Read the report below: 

Source: ZeroHedge

Home Prices In 80% Of US Cities Grew 2x Faster Than Wages… And Then There Is San Francisco

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The housing market is starting to overheat. Again.

According to the latest BLS data, average hourly wages for all US workers in November rose at a relatively brisk 2.7% relative to the previous year, if below the Fed’s “target” of 3.5-4.5% as countless economists are unable to explain how 4.1% unemployment, and “no slack” in the economy fails to boost wage growth. Another problem with tepid wage growth, in addition to crushing the Fed’s credibility, is that it keeps a lid on how much overall price levels can rise by, i.e. inflation. Meanwhile, with record global debt, it has been the Fed’s imperative to boost inflation at any cost to inflate away the debt overhang, however weak wages have made this impossible.

Well, not really.

Because a quick look at US housing shows that while wages may be growing at roughly 2.7%, according to the latest Case Shiller data, 18 of 20 metro areas in the US saw home prices grow at a higher pace, while 16 of 20 major U.S. cities experienced home price growth of 5.4% or higher, double the average wage growth, and something which even the NAR has been complaining about with its chief economist Larry Yun warning that as the disconnect between prices and wages becomes wider, homes become increasingly unaffordable for most Americans.

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Confirming the recent jump in home prices, at the national level in February home prices for the Top 20 metro areas soared 6.8% YoY according to Case Shiller, the fastest rate since June 2014…

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… and hitting a new all time high nationwide.

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And while this should not come as a surprise – considering we have pointed it out on numerous occasions in the past – one look at the chart below confirms that something very troubling is taking place in San Francisco, which has either become “Vancouver South” when it comes to Chinese hot money laundering, or the second housing bubble has finally arrived on the West Coast. And while according to Case-Shiller data, home prices in San Francisco rose “only” 10.1% Y/Y, a more accurate breakdown of San Fran housing prices from Paragon Real Estate indicates a record 24% annual increase in San Francisco home prices, which increased by $110,000 in just the past quarter.

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Behold: a housing bubble…

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Also worth keeping an eye on: price appreciation in Sin City has quietly surged in recent months, and in February home prices jumped 11.6% Y/Y, the highest annual increase in years. Considering Las Vegas was the epicenter of the last housing bubble when prices exploded higher only to crash, it may be a good idea to keep a close eye on price tendencies in this metro area for a broader confirmation of the second housing bubble, than just the microcosm that is San Francisco.

* * *

Meanwhile, for those looking to buy for the first time, conditions have never been worse. Growth in property values is outpacing wage gains and limiting affordability, representing a major headwind for first-time buyers, and the broader market.

Finally, putting the above data in context, here are two charts courtesy of real-estate expert Mark Hanson, the first of which shows how much household income increase is needed to buy the median priced home in key US cities…

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… while the next chart shows the divergence between actual household income, and the income needed to buy the median priced house.

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Source: ZeroHedge

California’s Most Controversial Housing Bill In Years Just Died With A Thud

Listen to an excellent podcast at the end of this article.https://calmatters.org/wp-content/uploads/ThinkstockPhotos-468601463-1280x800.jpg?x74105Dense housing makes San Francisco one of the most compact cities in America. Photo via Thinkstock

The most controversial state housing bill in recent memory died with a pretty resounding thud.

Senate Bill 827, which would have forced cities to allow taller, denser development around public transit, got only four votes on the 13-member Senate Committee on Transportation and Housing. Both Democrat and Republican lawmakers voted against the bill.

Authored by state Sen. Scott Wiener, Democrat from San Francisco, the bill would have allowed developers to build five-story apartment buildings near major public transit stops, including neighborhoods previously zoned for single family homes. The bill received a ton of media attention, including a fairly flattering write-up on the front page of the New York Times.

The most controversial state housing bill in recent memory died with a pretty resounding thud.

Senate Bill 827, which would have forced cities to allow taller, denser development around public transit, got only four votes on the 13-member Senate Committee on Transportation and Housing. Both Democrat and Republican lawmakers voted against the bill.

Authored by state Sen. Scott Wiener, Democrat from San Francisco, the bill would have allowed developers to build five-story apartment buildings near major public transit stops, including neighborhoods previously zoned for single family homes. The bill received a ton of media att

Urbanist “Yes In My Backyard” (YIMBY) groups mourned the bill’s death as yet another roadblock to building the new housing the state so desperately needs. Cities and anti-gentrification groups cheered the demise of what they viewed as an unprecedented inroad on local control.

What to make of all the hubbub? Some key takeaways:

Enemies, enemies, got a lot of enemies

It’s tough for anyone to take on cities and counties, who wield enormous power in Sacramento and to whom state legislators often give considerable deference. It’s tough for anyone to take on the construction trades’ union, a major source of campaign contributions for Democratic lawmakers. It’s tough for anyone to take on equity and social justice groups, who can bend the ear of progressive legislators.

It’s really tough to take on all three at the same time. That likely wasn’t Sen. Wiener’s strategy when he first introduced SB 827, but that’s ultimately what helped doom the bill. The support of realtors, developers, YIMBYs and a handful of affordable housing advocates couldn’t muster the votes he needed.

Supporters of the bill arguably made a misstep in not courting social justice groups early enough. A flurry of amendments to protect renters from being displaced and to force developers to include units reserved for lower-income tenants failed to calm their concerns.

Last year, Wiener was able to push through a bill that stripped local control over some housing developments by getting labor and affordability advocates on his side. That bill was also part of a larger package of housing legislation that had something for everyone, including a new revenue source. Gov. Jerry Brown was a driving force behind that package.

None of that that happened this time.

The bill did spark a statewide debate on whether to up density to help remedy our housing crisis

https://calmatters.org/wp-content/uploads/IMG_0577-600x357.jpg?x74105Opponents came from San Francisco and its environs to lobby against the bill—and the gentrification they feared it would bring. Photo by Matt Levin for CALmatters

What Wiener was attempting was truly revolutionary. You can debate how dramatically the character of a city would change by building a five-story apartment building next to a single family home. But taking away the power of local governments to block those types of developments was a pretty radical step—a step that a growing number of Californians think is necessary to prevent cities from obstructing new housing.

The bill received a ton of media attention, both in California and nationally. It garnered support from prominent urban planners, environmentalists and civil rights advocates. It’s both cliche and premature to say it shifted the needle on the housing debate. But it certainly framed the conversation squarely around the state’s role in compelling cities to build.

Expect something like this to come back soon.  

Nearly every Democratic legislator who voted against SB 827 caveated their opposition by praising the bill’s vision and audacity. Sen. Jim Beall, Democrat from San Jose and chair of the housing committee, said at the hearing that while he couldn’t support the bill in its current form, he was eager to work on something like it in the months ahead.

Could SB 827 ever rise from the dead? Well for his part, Wiener has vowed to re-introduce something like it in the future. Combining his push for density around transit stations with a broader mix of tenant protections and new funding for affordable housing could make it more palatable to the interest groups Wiener needs to succeed.

Source: By Matt Levin | Cal Matters

 

California Bill Would Create Health Care Price Controls

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But, but…I thought Obamacare was suppose to reduce the cost of health care?

From Sacramento Bee: California’s government would set prices for hospital stays, doctor visits and other health care services under legislation introduced Monday, vastly remaking the industry in a bid to lower health care costs.

The proposal, which drew swift opposition from the health care industry, comes amid a fierce debate in California as activists on the left push aggressively for a system that would provide government-funded insurance for everyone in the state.

Across the country, rising health care costs have put the industry, lawmaker and employers and consumers at odds.

The proposal in California would affect private health plans, including those offered by employers and purchased by individuals. A nine-member commission appointed by the governor and legislative leaders would set prices for everything from a physical exam to an allergy test to heart bypass surgery. No other state has such a requirement.

“If we do not act now, I’m concerned that health care prices will become unsustainable,” Assemblyman Ash Kalra, a freshman Democrat from San Jose who wrote the legislation, said in a news conference in Sacramento.

The measure faces an uphill battle in the Legislature, where lawmakers are generally cautious about making drastic changes to the health care system and are already juggling a wide range of ambitious proposals.

The proposal is backed by influential unions including the Service Employees International Union, Unite Here and the Teamsters. The unions are frustrated that health care costs are gobbling an increasing share of employee compensation.

“Every dollar that we spend on rising health care prices is a dollar that comes out of a worker’s pocket,” said Sara Flocks, policy coordinator for the California Labor Federation, a union coalition. “This is something that is eating up our wages and it is increasing income inequality. This is a fundamental question of fairness.”

Health care providers say price controls would encourage doctors to move out of state or retire, making it harder for people to see a physician when they’re sick, and force hospitals to lay off staff or, in some cases, close their doors.

The California Medical Association, which represents physicians, called the proposal “radical” and warned that it would reduce choices for consumers.

“No state in America has ever attempted such an unproven policy of inflexible, government-managed price caps across every health care service,” Dr. Theodore Mazer, the CMA president, said in a statement.

Under Kalra’s bill, prices would be tied to Medicare’s rate for a particular service or procedure, with that price as a floor. There would be a process for doctors or hospitals to argue that their unique circumstances warrant payments higher than the state’s standard rate.

Paying hospitals 125 percent of Medicare’s rate would cut $18 billion in revenue and force them to trim nurses and other support staff, said Dietmar Grellman, senior vice president of the California Hospital Association. Private insurers make up for the low payments from government-funded health care, which doesn’t cover the full cost of care, he said.

“That’s why their bill is such an empty promise,” Grellman said. “They take money out of the system with rate regulation, but then they don’t address the huge gaping hole that’s created by Medicare and Medicaid.”

In recent decades health care spending has risen faster than inflation and wages while employers and health plans have shifted more of the costs onto consumers through higher premiums, deductibles and co-pays. Americans spend more per capita on health care than other developed countries.

Meanwhile, a wave of consolidation by hospitals, physician groups and insurance companies has given industry players more power to demand higher rates.

Source: Fellowship Of The Minds

Median San Francisco Home Price Soars By Over $100,000 In One Quarter To Record $1.6 Million

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In San Francisco, a boom is always associated with its essential – and subsequent counterpart – the bust. They’re as typical to the city as sun and fog. And currently, judging by the insatiable appetite of home buyers in the city’s red-hot real estate market who appear completely unfazed stock-market volatility, tax-law changes, and tech sector gyrations, the city is in one heck of a housing boom, perhaps the biggest one ever, and national indices don’t do justice to how over-the-top mind-blowing crazy the situation has gotten.

Take for example, the S&P/Case-Shiller Home price index which covers not just the city (or county) of San Francisco but includes four other Bay Area counties: Alameda, Contra Costa, Marin, and San Mateo. There are more counties in the Bay Area, but they’re not included in the index. In terms of home prices, the five-county Case-Shiller index for “San Francisco,” though showing a significant, double digit annual gain of just over 10%, waters down the insanity happening every day on the streets of San Francisco.

To get a far more accurate, and granular neighborhood-by-neighborhood data for San Francisco itself, we go to Paragon Real Estate Group’s March-April 2018 report, and what we find are vertigo-inducing price increases that have now beautifully spiked.

During the prior nationwide housing bubble that blew up with such fanfare, helped take down the world financial system, and caused central banks and governments to instigate the largest bail-out schemes the world has ever seen – from banks to entire countries – well, during that bubble, while it was still going on, homes in San Francisco reached what afterward were called totally crazy valuations, with the median price topping out in November 2007 at a mind-boggling $895,000. People were shaking their heads at the time. But after the boom came the inevitable bust. By January 2012, the median home price had plunged 31% to $615,000.

By then, however, the tsunami of money that global central bankers had unleashed was already washing over San Francisco from multiple directions: a stock-market and startup boom that the city is so dependent on, a tourist boom from around the world, wave after wave of Chinese, Russian and Petro-oligarchs desperate to park their ill-gotten cash in real estate, and of course, the veritable flood of nearly free funding. Everything came perfectly together. Then, over the course of just a little over three years, the median home price about doubled to $1,225,000, and we duly noted the unprecedented surge in prices back in the spring of 2015.

It turns out, that was just the start, because according to the latest Paragon report, the median sale price of a house in the city has since soared to a record $1.6 million in the first quarter, a 24% jump from a year earlier, and more than double the annual price increase reported by Case-Shiller. Q1 also rose above the previous high set in the fourth quarter of 2017 by $100,000.

This is what a real boom looks like.

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As the report’s authors observe, prices in the city have been soaring for several years, as “feverish” demand far outstrips supply. Putting the recent price explosion in context, the median home price is now 80% above the prior-bubble completely mind-boggling median price that afterwards everyone admitted had been based on totally crazy valuations.  Surely, this time is be different?

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When compared to either California or the US, San Francisco houses and condos are in a world of their own: the median SF house sales price in 2017 was $1,420,000 (up from $1,325,000 in 2016), and for condos, it was $1,150,000 (up from $1,095,000). Looking just at the 4th quarter, median prices were $1,500,000 for houses (up from $1,350,000 in Q4 2016) and $1,185,000 for condos (up from $1,078,000) respectively.

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On a neighborhood-by-neighborhood basis, the differences in median home prices are enormous. In the table below, the median house prices range from $960,000 in Bayview, one of the more troubled neighborhoods, to over $5 million in Pacific Heights. It is in this exclusive, gorgeous, and groomed neighborhood, endowed with breathtaking views of the Bay, where you find the humble abode of the champion of the poor, former Speaker of the House Nancy Pelosi.

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How much bigger can this bubble get?

As the report’s authors write, “it is still very early in the year to come to definitive conclusions about where the year is going, but right now, in most market segments, buyer demand is competing ferociously for a limited supply of listings. Indeed, by some standard statistical measures of supply and demand – days on market, months supply of inventory, absorption rate – the SF market is about as heated now as it has been at any time in the past 10 years. This is especially true in the more affordable home segments, and particularly for house listings.”

The situation is somewhat more complicated in the highest price ranges, especially in the luxury condo segment where supply has been rapidly increasing. Of course, whatever the property type or price segment, it all ultimately depends on the specific property, and its location, appeal, preparation, marketing and pricing, although if there is a place where the bubble will pop, it will be in the ultra luxury segment, where the supply is off the charts:

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The rest of the market, however, remains incredibly tight: only about 2% of house owners are putting their homes on the market each year, which is incredibly low by historical measures – and why should they? For many owners, the house doubles as a real-estate piggy bank where funds are parked for the indefinite future. Meanwhile, about 5% of condo owners sell their homes each year, plus the new-construction condos that come on the market. This dynamic has made houses into the scarce commodity, and has fueled dramatic house price appreciation.

Looking at the charts above, one thing is clear: the dynamics of the housing market in San Francisco have put the 2005-2007 bubble to shame – what is taking place is unprecedented, much the same as parallel events in capital markets. However, just like in the stock market, so among San Francisco housing what the catalyst will be that punctures this appreciation utopia, is still very much unknown.

Historic: A 1906 “video-enhanced” film of an original taken more than a hundred years ago on Market Street in San Francisco, with sounds representative of that time and location. Interesting to note that the average life expectancy in 1906 was 47 years; there were only 8,000 cars on the road in America; only 144 miles of paved roads; and the maximum speed limit was 10 mph. 1906 most popular songs can also be heard as you’re traveling down Market Street. To see the “Raw” film footage from which this enhanced version came from (with a detailed, scene-by-scene description) go to this site: The Library of Congress: https://www.loc.gov/item/00694408

Source: ZeroHedge

California University Tuition Going Up For Everyone EXCEPT Illegal Alien Students

 

The University of California system voted in March to raise tuition for out-of-state students by nearly $1,000, a hike that will not apply to illegal alien students.

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The system’s board of regents approved the proposal to increase out-of-state tuition by $978 by a 12-3 vote, reported The College Fix, but California law allows illegal alien students to evade this charge by enrolling as in-state students.

“All students — regardless of immigration status — are subject to the same tuition and fee structures, based on their residency status,” UC spokeswoman Clair Doan told the Fix.

California assembly bill 540 mandates that illegal alien students can obtain in-state tuition if they attend high school in the state for a minimum of three years and earn a California high school diploma.

While colleges do not ask students for their immigration status, public schools are constitutionally prohibited from denying K-12 students free public education on the basis of their immigration status, according to the 1982 Supreme Court decision “UC does not ask its students nor applicants for their immigration status,” Doan explained. But the spokeswoman speculated that the UC system enrolled approximately 3,700 illegal alien students.

Doan may have arrived at this number by identifying illegal alien students via the students’ usage of taxpayer ID numbers and not social security numbers, according to Mehlman.

The University of California system educates nearly a quarter of a million students. UC’s board of regents will vote on increasing base tuition by $348 for all students in May, but its members promised to revoke the hike if the state legislature provides the system with more funding. UC regent chair George Kieffer reported that UC students have 31 percent less funding each in 2018 when compared with their 2000 counterparts.

“California is perpetually broke,” Mehlman told TheDCNF. “And yet they manage to come up with services for illegal aliens.”

The immigration advocacy spokesman elaborated on services the state provides to illegal aliens, such as grants, public housing, as well as various other state and local services.

Mehlman postulated that about half of illegal aliens work “off the books” and the other half use “bogus social security numbers.” The demographic costs California taxpayers over $25 billion per year, according to FAIR.

TheDCNF reached out to the California Immigrant Policy Center for comment but received none in time for press.

Source: By Rob Shimshook | The Daily Caller

Intolerant California Woman Refuses To Sell Her House To Trump Supporters

A Sacramento, California woman selling a house which has been in her family for half a century will sell to just about anyone – unless they’re a Trump supporter.

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The homeowner, who declined to give her name, told CBS Sacramento “I told her [the realtor] that I didn’t want her to sell it to a Trump supporter.”

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The woman’s realtor, Elizabeth Weintraub, says that the “no Trump supporter” caveat is a first for her. “We can ask somebody how they voted, but they don’t have to tell us,” said Weintraub.

But is it actually legal? Attorney Allen Sawyer thinks not: “That’s an unlawful contractual term that infringes the freedom of association and first amendment rights,” said Sawyer.

According to the Fair Housing Act, political party affiliation doesn’t fall into one of the seven protected classes. They include race, religion, color, disability. National origin, sex and familial status. –CBS Sacramento

“People have a right to believe what they want to believe and they shouldn’t be restricted from purchasing property based on that,” said Sawyer.

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Either way – the seller is clearly limiting the buying pool according to certified appraiser Ryan Lundquist – who notes that “39 percent of voters voted for Donald Trump in the Sacramento region. That’s an absolute fact.”

The homeowner doesn’t care: “When you’re talking about principals, morals, and ethics, it’s very very deep,” she said.

Source: ZeroHedge

Californians Flee The State In Droves Over Taxation And Housing Costs

Californians are bailing on the Golden State in droves as the tax burden and housing costs make the price of living unbearable for far too many. Many of those fleeing are the hearty middle-class who are being pushed into poverty by the socialist policies forced on them by the state’s elites.

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The trend is a symptom of the state’s housing crunch and the ever increasing taxation. Census Bureau data show California lost just over 138,000 people to domestic migration in the 12 months ended in July 2017. Lower-cost states such as Arizona, Texas, and Nevada are popular destinations for relocating Californians.

Housing costs and the tax burden is far less impactful in pretty much any place outside of California, whose socialist policies drive up poverty and continuously erode the middle class leaving only the extremely wealthy and those in abject poverty.

The surging number of those working in Silicon Valley and still unable to afford adequate housing should be a warning about big government, but it sure doesn’t seem like anyone is taking notice as their taxes continue to rise. As governments creep toward socialism though, poverty becomes the norm, not the exception. Silicon Valley has the highest median income in the nation. But a soaring tax burden and expensive regulations have caused housing prices to increase which has also caused homelessness to surge. –SHTFPlan

“There’s nowhere in the United States that you can find better weather than here,” said Dave Senser, who lives on a fixed income near San Luis Obispo, California, and now plans to move to Las Vegas.

“Rents here are crazy if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada, they don’t have a state income tax. And every little bit helps.”

Senser added that he previously lived in the east San Francisco Bay region, and said…

…housing costs and gas prices are “significantly lower in Las Vegas. The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.”

A USC Dornsife/Los Angeles Times Poll of Californians last fall found that the high cost of living, including housing, was the most important issue facing the state. It also found more than half of Californians wanted to repeal the state’s new gas tax, which raised fees by a whopping 40 percent further burdening those already living paycheck to paycheck.

During the 12-month period that ended in July of 2017, California saw a net loss of just over 138,000 people, while Texas had a net increase of more than 79,000 people. Arizona gained more than 63,000 residents, and Nevada gained more than 38,000.

“You can literally have a lot of buying power for the dollar in Southern Nevada versus Southern California,” said Christopher Bishop, president of the Greater Las Vegas Association of Realtors.

“So it has been a major trend over the year, year and a half, and we’re seeing it increase.”

Source: ZeroHedge

What CalPERS On The Brink Of Insolvency Means

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The largest public pension fund in the United States is the California Public Employees Retirement System (CalPERS) for civil servants. California is in a state of very serious insolvency. We (Martin Armstrong) strongly advise our clients to get out before it is too late. I have been warning that CalPERS was on the verge of insolvency. I have warned that they were secretly lobbying Congress to seize all 401K private pensions and hand it to them to be managed. Mingling private money with the public would enable them to hold off insolvency a bit longer. Of course, CalPERS cannot manage the money they do have so why should anyone expect them to score a different performance with private money? Indeed, they would just rob private citizens to pay the pensions of state employees and politicians.

CalPERS has been making reckless investments with retiree capital to be politically correct with the environment rather than looking at projects that are economically based. Then, CalPERS has been desperate to cover this and other facts up to deny the public any transparency. Then, because stocks they thought were overpriced last year, they moved to bonds buying right into the Bond Bubble. Clearly, California’s economy peaked right on target and ever since there has been a steady migration of residents out of the state.

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Meanwhile, Governor Jerry Brown has been more concerned about bucking the trend with Trump effectively threatening treason against the Constitution. The insolvency at CalPERS has exceeded $100,000 owed by every private citizen in California to government employees. It was $93,000 that every Californian owed back in 2016 for their state employees. In January 2017, Jerry Brown wanted a 42% increase in gas taxes to bailout CalPERS. California is an extremely liberal state – but that means they are also LIBERAL in spending the FUTURE earning of residents on public employees.

The pension crisis at CalPERS is getting worse by the day. The State looks to be totally bankrupt by 2021-2022. CalPERS has just decided to increase the contribution of local governments and cities to their fund. The cities say they are approaching bankruptcy because of rising subsidies, but CalPERS itself is approaching insolvency. The problem is that there really is no honest reform in sight. The choice is clear – CUT pension benefits of government employees or RAISE TAXES! 

CalPERS simply needs a bailout and very soon. It looks like they are hunting for it by sharply increasing taxes where ever they can get away with it, for state employees to grab whatever they can of your future income for themselves. This is a trend that will bring down Western society as a whole – a Sovereign Debt Crisis of untold proportions.

Board Member Steve Westly even told The Mercury News that a bailout was needed and soon. Currently, CalPERS manages approximately $350 billion of future pension claims of its members. Recently, CalPERS passed an amendment to the statutes, which resulted in higher contributions for the California municipalities. The amount of contributions has been increased several times over the past few years and this time the cities do not appear to be able to handle the increased costs. With the Trump tax reform, the real incompetence of local government is coming to a head.

Once CalPERS was 100% funded with assets under management. In fact, they had a surplus in the good old days before Quantitative Easing. Right now, the system no longer has more than two-thirds of future claims covered. CalPERS itself expects an annual return of 7% on its financial investments when it needs 8% minimum. Most pension funds run by the States are insolvent or on the brink of financial disaster. This is what I have been warning about that the Quantitative Easing set the stage for the next crisis – the Pension Crisis. The Illinois Pension Fund needs to borrow up to $107 billion to meet its payment obligations with no prayer of repayment. Promises to state employees are over the top and off the charts. This is why Janet Yellen at the Fed kept trying to raise rates stating that interest rates had to be “normalized” for this was the crisis she knew was coming. And guess what – Europe is even worse and Draghi will not raise rates for fear that government will be unable to fund themselves. The ECB is creating a vast European Pension Crisis while trying to keep member state governments on life-support. It has purchased 40% of all sovereign debt and appears trapped and cannot reverse this process. The choice is pensions collapse or state collapse.

There is NO WAY OUT of this crisis. The portfolio would have to be completely restructured and benefits reduced. Lame Duck Jerry Brown will do everything in his power to raise taxes and fees to try to hold CalPERS together. That is by no means a long-term solution. If you can transfer to one of the 7 states without state income tax – do it NOW before it is too late.

Source: Martin Armstrong | Armstrong Economics