Tag Archives: Homeless

Theresa May Proposes Tax On Foreign Homebuyers As London Property Rout Worsens

Housing prices in the world’s premier markets – London, New York and Hong Kong, all of which were recently highlighted on the latest UBS ranking of cities with the largest housing bubble risk…

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…. have finally started to retreat after years of unprecedented growth (a trend that can be attributed both to the stupefying price-to-income ratios facing local buyers and the Chinese government’s crackdown on capital outflows, among other factors).

But these pullbacks, which have mostly manifested over the past year, have had little, if any, impact on rates of homelessness, which have jumped in most urban centers (just look at Seattle). Given the tremendous public pressure for the government to do something to alleviate financial burdens on renters and aspiring buyers, UK Prime Minister Theresa May on Sunday became the latest politician to declare that something must indeed be done.

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And that something, as Bloomberg and the Financial Times reported, is a proposed stamp tax on foreign buyers who don’t pay taxes in the UK, with the proceeds going to initiatives for rough sleepers (a slightly more dignified term for “the homeless”). The London proposal comes one week after officials in British Columbia promised a crack down on the “dirty money” (read Chinese buyers) that has helped make Vancouver’s housing market the most unaffordable in North America.

Meanwhile, in 2018 house prices in London declined more quickly than the broader UK market, a sign that property prices across high-end markets have peaked, and that homeowners are in for a punishing pullback.

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FTSE-listed home builder stocks including Berkeley, Barratt and Taylor Wimpey were among the biggest losers on the first trading day of the quarter since their operations are concentrated in London, one of the most popular markets for foreigners.

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Here’s the FT with more:

Speaking at the Conservative Party conference on Sunday, Mrs May announced plans for buyers of UK property who do not pay tax in Britain to be subject to a new stamp duty surcharge of up to 3 per cent, with the proceeds going towards a scheme for tackling rough sleeping. The proposed tax would be levied on both individuals and companies.

While London house prices have been falling this year, they have risen at a rapid clip in recent years. The high number of luxury housing developments and of homes bought as investments that stand empty, particularly in the capital but also elsewhere in the country, have prompted calls for the government to tackle what is seen as a UK-wide housing crisis and build more affordable housing to accommodate the rising population.

Mrs May said there was evidence that foreign buyers who do not pay UK taxes had helped push up prices and reduce the rate of home ownership in the UK. When she became prime minister in 2016, she made solving Britain’s housing crisis a priority.

Of course, housing costs aren’t the only factor contributing to homelessness in the UK (austerity-related cutbacks have also played a role). But some analysts worry that May’s tax might be ill-timed as Britain tries to signal to the world that it’s still “open” to foreigners as Brexit looms.

“This policy, with its uncomfortable echoes of blaming foreigners for every ill, may make good headlines, but it sends an uncomfortable message to the rest of the world and will do nothing to create more homes for those unable to buy or to rent today,” said Henry Pryor, a U.K.-based luxury real estate broker.

Back when he was mayor of London, Boris Johnson said it would be “nuts” to deter foreign ownership in London, warning that it could trigger a precipitous collapse in home prices.

Still, there’s no denying that policies to beat back foreign buyers who have helped inflate property prices are politically popular. And with May’s grip looking increasingly tenuous thanks to her “Chequers plan” and her European partners unwillingness to give an inch in their negotiations over a Brexit deal, the timing of this announcement is hardly surprising.

Moving forward, if London cracks down on foreign buyers, other property markets like New York City could feel the sting as foreigners worry that “progressive” mayors like Bill de Blasio, who has already pushed through new disclosure laws applying to foreign property buyers, could follow suit. Such measures could risk exacerbating this latest decline in luxury markets, turning it into a full-fledged selloff with echoes of 2007.

Source: ZeroHedge

The Number Of Americans Living In Their Vehicles “Explodes” As The Middle Class Collapses

If the U.S. economy is really doing so well, then why is homelessness rising so rapidly?

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As the gap between the rich and the poor continues to increase, the middle class is steadily eroding.  In fact, I recently gave my readers 15 signs that the middle class in America is being systematically destroyed.  More Americans are falling out of the middle class and into poverty with each passing day, and this is one of the big reasons why the number of homeless is surging.  For example, the number of people living on the street in L.A. has shot up 75 percent over the last 6 years.  But of course L.A. is far from alone.  Other major cities on the west coast are facing similar problems, and that includes Seattle.  It turns out that the Emerald City has seen a 46 percent rise in the number of people sleeping in their vehicles in just the past year

The number of people who live in their vehicles because they can’t find affordable housing is on the rise, even though the practice is illegal in many U.S. cities.

The number of people residing in campers and other vehicles surged 46 percent over the past year, a recent homeless census in Seattle’s King County, Washington found. The problem is “exploding” in cities with expensive housing markets, including Los Angeles, Portland and San Francisco, according to Governing magazine.

Amazon, Microsoft and other big tech companies are in the Seattle area.  It is a region that is supposedly “prospering”, and yet this is going on.

Sadly, it isn’t just major urban areas that are seeing more people sleeping in their vehicles.  Over in Sioux Falls, South Dakota, many of the homeless sleep in their vehicles even in the middle of winter

Stephanie Monroe, managing director of Children Youth & Family Services at Volunteers of America, Dakotas, tells a similar story. At least 25 percent of the non-profit’s Sioux Falls clients have lived in their vehicles at some point, even during winter’s sub-freezing temperatures.

“Many of our communities don’t have formal shelter services,” she said in an interview. “It can lead to individuals resorting to living in their cars or other vehicles.”

It is time to admit that we have a problem.  The number of homeless in this country is surging, and we need to start coming up with some better solutions.

But instead, many communities are simply passing laws that make it illegal for people to sleep in their vehicles…

A recent survey by the National Law Center on Homelessness and Poverty (NLCHP), which tracks policies in 187 cities, found the number of prohibitions against vehicle residency has more than doubled during the last decade.

Those laws aren’t going to solve anything.

At best, they will just encourage some of the homeless to go somewhere else.

And if our homelessness crisis is escalating this dramatically while the economy is supposedly “growing”, how bad are things going to be once the next recession officially begins?

We live at a time when the cost of living is soaring but our paychecks are not.  As a result, middle class families are being squeezed like never before.

A recent Marketwatch article highlighted the plight of California history teacher Matt Barry and his wife Nicole…

Barry’s wife, Nicole, teaches as well — they each earn $69,000, a combined salary that not long ago was enough to afford a comfortable family life. But due to the astronomical costs in his area, including real estate — a 1,500-square-foot “starter home” costs $680,000 — driving for Uber was a necessity.

“Teachers are killing themselves,” Barry says in Alissa Quart’s new book, “Squeezed: Why Our Families Can’t Afford America” (Ecco), out Tuesday. “I shouldn’t be having to drive Uber at eight o’clock at night on a weekday. I just shut down from the mental toll: grading papers between rides, thinking of what I could be doing instead of driving — like creating a curriculum.”

Home prices are completely out of control, but that bubble should soon burst.

However, other elements of our cost of living are only going to become even more painful.  Health care costs rise much faster than the rate of inflation every year, food prices are becoming incredibly ridiculous, and the cost of a college education is off the charts.  According to author Alissa Quart, living a middle class life is “30% more expensive” than it was two decades ago…

“Middle-class life is now 30% more expensive than it was 20 years ago,” Quart writes, citing the costs of housing, education, health care and child care in particular. “In some cases the cost of daily life over the last 20 years has doubled.”

And thanks to the trade war, prices are going to start going up more rapidly than we have seen in a very long time.

On Tuesday, we learned that diaper and toilet paper prices are rising again

Procter & Gamble said on Tuesday that it was in the process of raising Pampers’ prices in North America by 4%. P&G also began notifying retailers this week that it would increase the average prices of Bounty, Charmin, and Puffs by 5%.

P&G is raising prices because commodity and transportation cost pressures are intensifying. The hikes to Bounty and Charmin will go into effect in late October, and Puffs will become more expensive beginning early next year.

I wish that I had better news for you, but I don’t.  We are all going to have to work harder, smarter and more efficiently.  And we are definitely going to have to tighten our belts.

Many middle class families are relying on debt to get them from month to month, and consumer debt in the United States has surged to an all-time high.  But eventually a day of reckoning comes, and we all understand that.

The U.S. economy is not going to be getting any better than it is right now.  So it is time to be a lean, mean saving machine, because it will be important to have a financial cushion for the hard times that are ahead of us.

Source: ZeroHedge