Category Archives: Housing

NJ To Become Wasteland: 44% Of Residents Plan To Flee State

Thanks to the highest property taxes in the nation and an unsustainable cost of living, 44% of New Jersey residents plan to leave the state in the ‘no so distant future,’ according to a recent survey from the Garden State Initiative (GSI) and Fairleigh Dickenson University School of Public & Global Affairs.

Committing to a more solid time frame, 28% say they are planning to leave within five years, and 39% say they will do so over the next decade, according to Insider NJ.

Unsurprisingly, Property Taxes and the overall Cost of Living were cited as the main drivers. The results also debunk two issues frequently cited in anecdotal accounts of out migration, weather and public transportation, as they ranked 8th and 10th respectively, out of 11 factors offered.

The desire to leave the Garden State was reflected most strongly among young residents (18-29) with almost 40% anticipating leaving the state within the next five years. At the other end of the spectrum, a third (33%) of those nearing retirement (50-64) plan to leave within the next five years. –Insider NJ

These results should alarm every elected official and policymaker in New Jersey, said GSI’s president, former Chris Christie Chief of Staff Regina Egea. GSI focuses on providing “research-based answers to fiscal and economic issues” facing the state.

“We have a crisis of confidence in the ability of our leaders to address property taxes and the cost of living whether at the start of their career, in prime earning years, or re-positioning for retirement, New Jersey residents see greener pastures in other states.  This crisis presents a profound challenge to our state as we are faced with a generation of young residents looking elsewhere to build their careers, establish families and make investments like homeownership.”

After taxes and a high cost of living, government corruption and concerns about crime and drugs concerned citizens the most. Insider notes that there were no significant differences in responses across income levels.

Source: Garden State Initiative | ZeroHedge

“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

How Pricey Urban Meccas Become Crime-Ridden Ghost Towns

As the exodus gathers momentum, all the reasons people clung so rabidly to urban meccas decay.

The lifestyle you ordered is not just out of stock, the supplier closed down.

(Charles Huge Smith) If there is any trend that’s viewed as permanent, it’s the enduring attraction of coastal urban meccas: despite the insane rents and housing costs, that’s where the jobs, the opportunities and the desirable urban culture are.

Nice, but like many other things the status quo considers permanent, this could reverse very quickly, and all those pricey urban meccas could become crime-ridden ghost towns. How could such a reversal occur?

1. Those in the top 10% who can leave reach an inflection point and decide to leave. The top 1% who live in enclaves filled with politicians, celebrities and the uber-wealthy see no reason to leave, as the police make sure no human feces land on their doorstep.

It’s everyone who lives outside these protected enclaves, in neighborhoods exposed to exasperating (and increasingly dangerous) decay who will reach a point where the “urban lifestyle” is no longer worth the sacrifices and costs.

It might be needles and human feces on the sidewalk, it might be petty crime such as your mail being stolen for the umpteenth time, it might be soul-crushing commutes that finally do crush your soul, or in Berkeley, California, it might be getting a $300 ticket for not bringing your bicycle to a complete stop at every empty intersection on a city bikeway. (I’ve personally witnessed motorcycle officers nailing dozens of bicyclists with these $300 tickets.)

It might be something that shreds the flimsy facade of safety and security complacent urban dwellers have taken for granted, something that acts as the last grain of sand on the growing pile of reasons to get the heck out that triggers the decision.

Not everyone can move, but many in the top tier can, and will. Living in a decaying situation is not a necessity for these lucky few, it’s an option.

2. Those who have to leave when they lose their job. A funny thing happens in all economies, even those with central banks: credit-cycle / business-cycle recessions are inevitable, regardless of how many times financial pundits say, “the Fed has our back” and “don’t fight the Fed.”

As I’ve noted here numerous times, a great many small businesses in these pricey urban meccas are one tiny step from closing: one more rent increase, one more bad month, one more regulatory burden, one more health issue and they’re gone. They will move to greener pastures for the same reason as everyone else–they can’t afford to live in urban meccas.

Once enough of the top 10% leave (by choice or because they can no longer afford it), the food/beverage service industry implodes. Wait staff and bartending have been a major source of jobs in these urban meccas, and when hundreds of struggling establishments fold due to a 10% decline in their sales, thousands of these employees will lose their jobs and the prospects of getting hired elsewhere decline with every new closure.

The vast majority of these service employees are renters, paying sky-high rents that unemployment can’t cover. They will hang on for a few months and then cash in their chips and move to more affordable climes.

3. Once the stock market returns to historic norms, the gargantuan capital gains that supported local tax revenues and spending dry up. WeWork is the canary in the coal mine; from a $50 billion IPO to insolvency in six weeks.

Once tax revenues plummet (no more IPOs, hundreds of restaurants closing, etc.), cities and counties will have to trim their work forces to maintain their ballooning pension payments for retirees. This will leave fewer police and social workers available to deal with everyone with little motivation (or option) to leave: thieves, those getting public services and the homeless.

4. Housing prices and rents are sticky: sellers and landlords won’t believe the good times have ended, and so they will keep home prices and rents at nosebleed valuations even as vacancies soar and the market is flooded with listings.

Neighborhoods that had fewer than 100 homes for sale will suddenly have 500 and then 1,000, as sellers realize the boom has ended and they want out–but only at top-of-the-bubble prices.

Ironically, this stubborn attachment to boom-era prices for homes and rents accelerates the exodus. As incomes decline, costs remain sky-high, so the only option left is to move away, the sooner the better.

By the time sellers grudgingly reduce prices, it’s too late: the market has soured. The Kubler-Ross dynamic is in full display, as sellers go through the stages of denial, anger, bargaining and acceptance: they grudgingly drop the price of the $1.2 million bungalow or flat to $1.15 million, then after much anger and anguish, to $1.1 million, but the market has imploded while they processed a reversal they didn’t think possible: now sales have dried up, and prices are sub-$800,000 while they ponder dropping their asking price to $995,000.

Vacant apartments pile up, as the number of laid-off and downsized employees who can still afford high rents collapses. (Recall that tens of thousands of recent arrivals in urban meccas rely heavily on tips for their income, and as service and gig-economy business dries up, so do their tips.)

5. As the exodus gathers momentum, all the reasons people clung so rabidly to urban meccas decay: venues and cafes close, street life fades, job opportunities dry up, and yet prices for everything remain high: transport, rent, taxes, employees, etc.

Friends move away, favorite places close suddenly, streets that were safe now seem foreboding, and all the friction, crime, grime and dysfunction that was once tolerable becomes intolerable.

6. In response to deteriorating city and county finances, local government jacks up fees, tickets, permits and taxes, accelerating the exodus. How many $300 tickets, fees and penalties does it take to break the resolve to stick it out?

7. Those on the cusp cave in and abandon the mecca. Once those who had the option to leave have left, and those who can no longer afford to stay leave, the decay causes those on the cusp of bailing out to abandon ship.

Renters move out in the middle of the night, homeowners who have watched their equity vanish as prices went into free fall jingle-mail the keys to the house to the lender and small businesses that had clung on, hoping for a turn-around close their doors.

8. Each of these dynamics reinforce the others. Soaring taxes, decaying services, declining business, rising insecurity and stubbornly high costs all feed on each other.

And that’s how pricey urban meccas turn into ghost towns inhabited by those who can’t leave and those living on public services, i.e. those too poor to support the enormously costly infrastructure of public spending in the urban mecca.

Source: by Charles Hugh Smith | 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

The Rise of the New Left Urbanists

(City Journal) America’s big cities are, without exception, politically blue cities, with a new class of progressive politicians doing real damage to public order. When it comes to urban development, however, the blue monolith breaks down: socialists, city planners, cyclists, environmentalists, pragmatists, and social-justice activists are often at odds with one another. They might all support more housing, more density, and more public transportation, but they disagree sharply on the means for getting there.

In recent years, a new faction has emerged in city politics: what one might call the new Left urbanists. These activists believe that local governments must rebuild the urban environment—housing, transit, roads, and tolls—to produce a new era of city flourishing, characterized by social and racial justice and a net-zero carbon footprint. The urbanists rally around provocative slogans like “ban all cars,” “raze the suburbs,” and “single-family housing is white supremacy”—ironically, since they’re generally white, affluent, and educated themselves. They’re often employed in public or semipublic roles in urban planning, housing development, and social advocacy. They treat public housing, mass transit, and bicycle lanes as a kind of holy trinity—and they want to impose their religion on you.

Housing is the central political battleground for these progressive activists. As David Madden and Peter Marcuse write in their book, In Defense of Housing: “The residential is political—which is to say that the shape of the housing system is always the outcome of struggles between different groups and classes.” Their goal is not simply to get new housing built but to build new housing owned, operated, and controlled by the state. If they can dictate how cities construct new housing, their logic goes, they can dictate how people live—and set right society’s economic, social, and moral deficiencies.

The urbanists laid out their plans in a widely circulated report from the People’s Policy Project, a crowd-funded organization founded in 2017 that seeks to “fill the holes left by the current think tank landscape with a special focus on socialist and social democratic economic ideas.” They envision the construction of 10 million “municipal homes” over the next ten years. Under this proposal, government would become the nation’s largest landlord and residential construction firm, building more housing units than the entire private construction industry. The abysmal record of public housing in the United States, from the Cabrini-Green Homes in Chicago to the Foote Homes in Memphis, where crime and blight prevailed, makes no difference to these urbanists. They have simply rebranded “housing projects” to “municipal homes,” arguing that public housing has been “unjustly stigmatized” and that these new units will somehow avoid the fate of American public-housing ventures over the past half-century. They believe that the new “municipal homes” will resemble neighborhoods in Stockholm, Vienna, or Helsinki rather than in Detroit, Newark, or Oakland.

The question for the activists is not just how much new housing gets built but who builds it and who will live in it. That is, new developments must also tick off the boxes of identity politics. In cities like San Francisco, some activists have taken the hardline position of opposing all private housing construction, regardless of how it might reduce the cost of housing for middle-class residents. In an essay in the San Francisco Examiner, public-housing activists Andrew Szeto and Toshio Meronek called advocates for more private-market housing part of a “libertarian, anti-poor campaign to turn longtime sites of progressive organizing into rich-people-only zones” and compared them with alt-right white nationalists.

One might dismiss this as radical posturing in a local alt-weekly, but public-housing advocates have seized real power in city hall. They have learned how to use the zoning and permitting bureaucracy to achieve their goals of no new private development. In San Francisco’s Mission District, activists forced Laundromat owner Bob Tillman to spend $1.4 million and nearly five years to gain permission to convert his business into an apartment building. Activists and their enablers in city hall claimed that Tillman’s project would cause gentrification and displace minority residents, and forced him through a gauntlet of Kafkaesque legal proceedings. At one point, the planning commission even hired a “shadow consultant” to offer an expert opinion on whether the shadows cast by the proposed building would create social and racial inequities. To the new Left urbanists, housing isn’t just housing; it must be evaluated on social-justice standards. If it fails to measure up, it must go.

In New York City, progressive urbanists have seized on public transportation as a primary instrument of “social, environmental, immigrant, and economic justice.” New York’s subway system was designed in the early twentieth century to serve the practical needs of city residents, but today’s activists have come to see its tunnels and trains as grand mechanisms for cosmic justice. In its annual “Transportation and Equity” report, for example, the Straphangers Campaign argues that “the most vulnerable New Yorkers suffer disproportionately from high fares, long commutes, polluted air, and dangerous streets,” and therefore, “equity demands that state leaders prioritize transit in the public budget and policymaking process.”

The Straphangers estimate that an additional $30 billion in tax revenues would be needed to complete its desired overhaul of the mass-transit system, with a ten-year goal of upgrading 11 subway lines, building 130 new accessible subway stations, and purchasing 3,000 new subway cars and 5,000 new buses. While state and local leaders haven’t signed up for such an ambitious plan, they do support some of the Straphangers’ funding proposals to expand the transit system—including congestion pricing, a “millionaire’s tax,” marijuana tax, stock-transfer tax, and even a $3-per-package tax on Amazon deliveries.

Most New Yorkers would agree that investment in mass transit is a necessity, and there is a reasonable argument for congestion pricing in traffic-glutted Manhattan—but the activists don’t formulate their arguments on these practical grounds. A close reading of their reports reveals that the long-term vision involves elimination of the automobile, which remains a staple for middle-class residents in New York’s outer boroughs. In the Straphangers’ plan, activists want to restrict curbside space for cars dramatically by building “protected bike lanes on all major arterial streets across the five boroughs,” “giving developers incentives to contribute toward sustainable transportation over private vehicle usage,” and eliminating parking requirements for new housing projects. Activists deploy euphemisms like “transportation alternatives” and “transportation choices”; but at heart, their vision for mass transportation is not about choice but control. They want to remake the urban infrastructure in their own image: green, moral, healthy, just, and in solidarity with the masses—at least as those masses exist in their imagination.

The new Left urbanists’ fatal mistake is their failure to absorb the reality that cities are not just buildings, roads, tunnels, and bike lanes, but living entities. The urbanists can demolish and rebuild the physical environment, but they cannot pave over the people who make up our cities. Life in a metropolis is simply too complex, too variable, and too ephemeral—it will evade even the most careful planning. If we want better, more beautiful, cities, we must bring neighbors, developers, employers, and governments into the conversation. Our cities must be built through cooperation, not compulsion.

Source: by Christopher F. Rufo | City Journal

(Australia) Banks Are Now Referring Borrowers to Foodbank to Help Keep Up On Mortgage Payments

Foodbank South Australia has been approached by banks wanting to refer their clients to the charity, in the hope it will prevent people from defaulting on mortgage payments.

It comes as a new report has shown mental distress is increasing in older Australians, with nearly half of all homeowners aged 55 to 64 still paying off a mortgage — up from just 14 per cent 30 years ago.

Foodbank South Australia is now working on a new agreement which would enable clients to access its food services directly, with a voucher funded by the major bank.

However, Foodbank South Australia chief executive Greg Pattinson told ABC Radio Adelaide it was still exploring how the program would work.

“That’s what we are exploring with some of the banks at the moment … it hasn’t started yet because we are still working through the process.

“We’ve never been approached by financial institutions in the past and the banks, to their credit, are doing the right thing in trying to find a way of keeping people in their houses.”

He said traditionally, Foodbank worked through charities and the welfare sector but it had seen an increase in the number of people who require food assistance that are working.

“Increasingly we are being approached now by organisations other than traditional charities, so schools for example, where the schools have identified the children of parents who are doing it tough,” he said.

“Each year we’ve seen an increase in South Australia of anywhere up to 20 per cent in the number of people seeking food assistance.”

‘Cost of living’ is causing a shift

Mr Pattinson said the stereotype of a person or family that required food assistance was diminishing.

He said more people must be suffering from mortgage stress because more of those needing help were from working families.

“We certainly do provide services to the unemployed and to people who are homeless,” he said.

“But we are seeing an increase in the numbers of working families and working Australians who are needing to seek food assistance because of cost of living increases.

“We see an increase in demand, for example every three months, when people get their electricity bills.

“It’s a case of those weeks where people are saying, ‘we’ll make sure the kids are fed, the roof is over our head but mum and dad don’t eat this week’.”

Trying to help clients ‘balance their budget’

Mr Pattinson said the fact it had been approached by the banks had shown a significant shift and Foodbank was working on a project to support those in need.

“We’re getting inquiries from schools, pastoral care workers, from principals at various schools around the state,” he said.

“And increasingly, we are now seeing inquiries from banks and financial institutions who are looking to try and find a way of helping their clients balance their budget.”

He said the program was still in its early stages, but he hoped Foodbank would have a concrete program in place within the next two to three months.

“It may even be as simple as the banks referring their clients to the Foodbank food hubs,” he said.

“But there would obviously be conditions to that which would have to be assessed by the bank to make sure those people … are genuinely in need of those services.

“We don’t want to shift the food away from people who are genuinely needing it.”

Source: by Brittany Evans | ABC.net.au

Walmart Sues Tesla Over Solar Panel Fires, Claims SolarCity Purchase Was A Bailout

Until now, the general public was only aware of the remarkable ability of Tesla cars to spontaneously combust, that is at least when they are not smashing into random things while on autopilot. It now appears that Tesla’s solar panels (some may be unaware that several years ago, Elon Musk tried to unsuccessfully pivot Tesla into a solar power company as well as that’s where a few billion in government subsidies were to be found) are just as combustible.

On Tuesday, Walmart sued Tesla, after its solar panels atop seven of the retailer’s stores allegedly caught fire, alleging breach of contract, gross negligence and failure to live up to industry standards. Walmart is asking Tesla to remove solar panels from more than 240 Walmart locations where they have been installed, and to pay damages related to all the fires Walmart says that Tesla caused.

Walmart said it had leased or licensed roof space on top of more than 240 stores to Tesla’s energy operations unit, formerly known as SolarCity (which was basically a bailout by Elon Musk for Elon Musk who was also the largest SolarCity shareholder), for the installation and operation of solar systems. But as of November, fires had broken out at no fewer than seven of the stores, forcing the disconnection of all the solar panel systems for the safety of the public.

The breach-of-contract suit by Walmart, which was filed in the state of New York, alleges that: “As of November 2018, no fewer than seven Walmart stores had experienced fires due to Tesla’s solar systems-including the four fires described above and three others that had occurred earlier.” The fires resulted in evacuations, damaged property and inventory.

Walmart’s inspectors additionally found that Tesla “had engaged in widespread, systemic negligence and had failed to abide by prudent industry practices in installing, operating and maintaining its solar systems.’

Walmart also claimed that “Tesla routinely deployed individuals to inspect the solar systems who lacked basic solar training and knowledge and also alleged that Tesla failed to ground its solar and electrical systems properly, and that Tesla-installed solar panels on-site at Walmart stores contained a high number of defects that were visible to the naked eye, including loose and hanging wires at several locations, and which Tesla should have found and repaired before they led to fires.

It gets better: according to the suit, Tesla’s own inspection reports revealed “improper wire management, including abraded and hanging wires,” as well as “poor grounding” and “solar panel modules that were broken or contained dangerous hot spots.”

To state the obvious, properly designed, installed, inspected and maintained solar systems do not spontaneously combust, and the occurrence of multiple fires involving Tesla’s solar systems is but one unmistakable sign of negligence by Tesla,” Walmart said in the suit. “To this day, Tesla has not provided Walmart with the complete set of final ‘root cause’ analyses needed to identify the precise defects in its systems that caused all of the fires described above.”

Walmart said the first fire broke out at a store in Beavercreek, Ohio, a suburb of Dayton, in March 2018, and two more fires occurred at stores in California and Maryland in May of that year. While Tesla disconnected the panels at Walmart’s request that same month, it wasn’t enough to stop fires from occurring, and another blaze broke out in November at a store in Yuba City, California.

Ironically, the lawsuit comes at a time when Tesla has been trying to salvage its collapsing solar business; on Sunday, Elon Musk announced in a string of tweets which reeked of desperation that customers in some states can now rent Tesla’s residential, solar rooftop systems without a contract. The offer is available in six states, and will cost customers at least $50 a month (or $65 a month in California). And although Musk touted the ease of cancelling a rented roof at anytime, CNBC noted that the fine print on Tesla’s website mentions a $1,500 fee to take out the solar panels and restore the customer’s roof.

There is a reason why Tesla is basically giving the spontaneously combustible solar panels away: In the second quarter, Tesla installed a mere 29 megawatts of solar, a record low for the company in a single quarter. In its heyday, Tesla’s solar division (formerly SolarCity) installed over 200 megawatts in a single quarter.

But wait there is more.

As if allegations of shoddy quality control, dismal workmanship and overall blatant lack of professionalism weren’t enough, Walmart also “went there” and in the “explosive”, pun not intended 114-page lawsuit, piled onto a long-running controversy according to which Tesla bailed out a failing SolarCity in 2016 when it purchased the company for $2.6 billion (Elon Musk was also the biggest shareholder of SolarCity at the time, while Tesla’s Elon Musk bought out SolarCity in a gross conflict of interest), with WalMart highlighting the familial ties between Tesla and SolarCity as the underpinnings of a flawed merger that allegedly produced shoddy craftsmanship and led to fires at seven Walmart stores.

“On information and belief, when Tesla purchased SolarCity to bail out the flailing company (whose executives included two of Tesla CEO Elon Musk’s first cousins), Tesla failed to correct SolarCity’s chaotic installation practices or to adopt adequate maintenance protocols, which would have been particularly important in light of the improper installation practices,” Walmart claimed in a suit that is sure to draw regulators attention to the 2016 deal that should never have been allowed. As shown in the diagram above, SolarCity co-founders Lyndon Rive and Peter Rive are Musk’s cousins, while Musk was the largest shareholder of both companies.

So already facing a slumping stock price from dozens of lawsuits and investigations, store closings, delayed loan repayments and the departure of key executives, CNBC notes that the Walmart suit lands at a particularly difficult time for Tesla and Musk. Specifically in regards to SolarCity, Musk was slated to be deposed earlier this month in a complaint brought by shareholders over the deal.

The name “SolarCity” shows up 46 times in the lawsuit, which alleges the company had a failed business model, stemming from a goal to speed up revenue growth at all costs.

“Walmart’s experience bears out Tesla, Inc.’s and Tesla’s inability to turn around and bail out the solar panel operations acquired from SolarCity,” the suit says.

* * *

Walmart is asking a judge to declare Tesla in breach of contract, order the company to remove the solar panels from all of its stores and award damages equal to its costs and consulting fees in connection with the fires.

Tesla shares fell as much as 1.7% to $222.70 as of 6:45 p.m. in after hours trading. The stock is down 32% this year.

The case is Walmart Inc. v. Tesla Energy Operations, New York State Supreme Court, New York County; Index No.  654765/2019.

The full lawsuit is below

Source: ZeroHedge