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Category Archive: ‘Local Government’

Democratic Platform – Housing

hilla

From the Democratic Platform:

https://www.demconvention.com/platform/

We must make sure that everyone has a fair shot at homeownership. We will keep the housing market robust and inclusive by supporting more first-time homebuyers and putting more Americans into the financial position to become sustainable homeowners; preserving the 30-year fixed rate mortgage; modernizing credit scoring; clarifying lending rules; expanding access to housing counseling; defending and strengthening the Fair Housing Act; and ensuring that regulators have the clear direction, resources, and authority to enforce those rules effectively.

We will prevent predatory lending by defending the Consumer Financial Protection Bureau (CFPB). These steps are especially important because over the next decade most new households will be formed by families in communities of color, which typically have less generational wealth and fewer resources to put towards a down payment.

All three of the housing planks are vague, and who really knows what any of the three would do once in office.  But I think I nailed it on their photos!

http://www.bubbleinfo.com/2016/07/20/republican-platform-housing/

http://www.bubbleinfo.com/2016/07/23/libertarian-platform-housing/

Posted by on Jul 26, 2016 in Jim's Take on the Market, Local Government, The Future | 0 comments

Libertarian Platform – Housing

gj

The Libertarian Party has the best chance ever to get more than their usual 1% of the vote in November.  Gary Johnson is looking like the middle-of-the-road candidate too, and here’s how he could win:

http://www.denverpost.com/2016/07/21/actually-libertarian-gary-johnson-could-win-the-presidency/

If no candidate wins an absolute majority in the Electoral College, the election is decided by the House of Representatives. Thus, if Johnson were to win, say, Colorado while Trump and Clinton split all other electoral votes 50-50, the House would pick the winner. Given that Trump and Clinton are the most unpopular candidates in recent history, a divided House might compromise by selecting Johnson, a former two-term governor of New Mexico.

If you do not like Trump and Clinton, you needn’t accept them. Johnson is a legitimate option, having recently garnered 13 percent in a CNN poll. At 15 percent, he would be in the debates. Then anything is possible.

From the Libertarian Party Platform about housing:

2.1 – As respect for property rights is fundamental to maintaining a free and prosperous society, it follows that the freedom to contract to obtain, retain, profit from, manage, or dispose of one’s property must also be upheld. Libertarians would free property owners from government restrictions on their rights to control and enjoy their property, as long as their choices do not harm or infringe on the rights of others. Eminent domain, civil asset forfeiture, governmental limits on profits, governmental production mandates, and governmental controls on prices of goods and services (including wages, rents, and interest) are abridgements of such fundamental rights. For voluntary dealings among private entities, parties should be free to choose with whom they trade and set whatever trade terms are mutually agreeable.

While a Libertarian president might mean bad news for Fannie/Freddie and other government-supported entities, there is one thing Johnson could do that would set the real estate market on fire.

He wants to abolish the IRS, and replace it with a federal consumption tax.  Because it would be the House of Representatives that gets Johnson into office, nobody would give him much chance of a second term – so he would have to work fast!

If it took him a year to abolish the IRS, it would give those long-time owners of rental properties the next three years to liquidate the portfolio without paying the federal 20% capital-gains tax – the main reason those owners don’t sell now.

A flood of supply – or at least more than a trickle – would help to calibrate the market, stimulate the economy, and provide opportunities for buyers to purchase well-located beach properties!

It would probably get screwed up by politicians who insist on a compromise in the consumption tax that would then penalize those sellers, but given the alternatives, it’s worth considering!

Posted by on Jul 23, 2016 in Jim's Take on the Market, Local Government | 3 comments

Solutions For The Non-Super-Rich

paloalto

Hat tip to Eddie89 for sending in this article – he also wondered when we’ll see this around here!

http://sanfrancisco.cbslocal.com/2016/03/22/250k-per-year-salary-could-qualify-for-subsidized-housing-under-new-palo-alto-plan/

Excerpts:

Palo Alto is seeking housing solutions for residents who are not among the Silicon Valley region’s super-rich, but who also earn more than the threshold to qualify for affordable housing programs.

The city council has voted to study a housing plan that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.

The plan would focus on building smaller, downtown units for people who live near transit and don’t own cars, along with mixed-use retail and residential developments.

“Prices have just gone through the roof, making it unaffordable for middle-class people, your firefighters, your teachers, and, frankly, some of your doctors,” Palo Alto Vice Mayor Greg Scharff said.

Scharff worries that losing middle-class workers will hurt the city. “What the council is proposing is that we work together to fund and subsidize, what is basically middle-class housing; which, traditionally, has not been subsidized,” Scharff said.

Bean can hardly believe it.

“We have people struggling to make it at a quarter-million dollars a year,” Bean said. “That’s a terrible thing.”

 

Posted by on Mar 23, 2016 in Bailout, Jim's Take on the Market, Local Government, Market Conditions | 6 comments

More Water, Not Enough Water Storage

desal

Hat tip to daytrip for sending in this article from the latimes.com – an excerpt:

The $1-billion desalination plant coming online next month in Carlsbad will fit right in with years of careful planning and investment in water supply in San Diego County.

It will also worsen a peculiar San Diego problem amid a multiyear drought: an oversupply of water.

Unlike other parts of California, San Diego has 99% of the water needed for normal usage. But statewide conservation mandates have applied equally to areas that have plenty of water and those that don’t, so the result here has been water piling up unused while local water agencies raise rates to make up for lost sales.

Carlsbad Mayor Matt Hall, a San Diego County Water Authority board member, said the situation is hard to explain to his constituents.

“It’s real hard to tell them, ‘You have to let your grass die,’ and in the same breath you have to tell them, ‘We have more water than we can use,'” he said.

Enter the desalination plant. The private venture kicked off a 30-day test period Nov. 9 and is expected to start producing water next month, enough to meet between 7% and 10% of the county’s demand. Water officials agreed in 2012 to buy the water whether they need it or not, to make the plant financially feasible.

The new supply is just one more reason local water officials are advocating for the state to ease conservation mandates for areas where supplies are ample, which would lessen the oversupply.

The desalinated water will be more expensive than the county’s current supplies, triggering $5 a month in increased water rates for most households. As the more expensive water arrives, it will have implications for the water authority, which recently has had to cut back on purchases of imported water it’s entitled to on a temporary basis.

Next year, the desalinated ocean water will cost San Diego water agencies at least $113.6 million — more than double the $45.2 million they would pay for the same amount of imported water, which remains available despite a statewide drought.

Even before that water comes online, San Diego has been running up against storage limits.

Read full article here:

http://www.latimes.com/local/lanow/la-me-drought-watch-20151125-story.html

Posted by on Nov 29, 2015 in Jim's Take on the Market, Local Flavor, Local Government | 1 comment

Supplemental Property Tax

tax man

When you buy a house, the county tax assessor sends you regular property-tax bills, which are based on what you paid for the house – usually around 1% of the purchase price per year.

But in almost all cases, the sellers paid a different amount of taxes, which were based on their purchase price.

Thus, the supplemental property tax makes up the difference.

The escrow company will pay taxes at the old rate, or give you a credit depending on the time of year. When you close a escrow during the period when taxes are due (November 1st – December 10th and February 1st – April 10th), the escrow company just pays the tax for the buyer – but at the seller’s old rate.

The county wants to collect every penny, so they pro-rate the difference between the old and new taxes due for the remainder of the tax period, and they send you a supplemental-tax bill.

We used to have to manually calculate the amount.  It is hard enough trying to explain what a supplemental tax bill is, let alone come up with the right amount.  Thankfully, the assessor has devised their own calculator, at this link – it is a great tool:

https://arcc.sdcounty.ca.gov/Pages/Tax-Calculator.aspx

Their FAQs are here:

http://www.sdtreastax.com/content/ttc/en/tax-collection/faqs-tax.html#stb3

Posted by on Nov 4, 2015 in Local Government, Thinking of Buying? | 1 comment

Nordstrom Project Approved

caruso

From the UT:

http://www.sandiegouniontribune.com/news/2015/aug/25/plan-for-carlsbad-strawberry-fields-plan-draws/

A costly, well-organized campaign to build a Nordstrom-anchored shopping, entertainment and open-space destination on the shore of a Carlsbad lagoon ended with the City Council’s unanimous approval late Tuesday night.

“This project is compatible with my vision and my values,” said Councilwoman Lorraine Wood before the vote. “A true leader makes a decision based on what they feel is right.”

Several hundred people attended the Carlsbad City Council meeting, where more than 130 residents spoke before the council voted to approve the Caruso Affiliated-backed citizen initiative without changes. The only other choices for the council were to call a special election or take 30 days more to study the plan.

“You have my word that we will surpass your wildest expectations,” Rick Caruso, founder and CEO of the company, told the council as he explained his Agua Hedionda South Shore Specific Plan, also called the 85/15 plan, and presented a short video.

Carlsbad is the third Southern California city this year to see a citizen-led initiative backed by private financing power its way around the municipal development review process. The Carson City Council unanimously approved an initiative in April to allow construction of a stadium to be shared by the San Diego Chargers and Oakland Raiders, and Inglewood approved a similar one in hopes of getting the St. Louis Rams.

Caruso’s initiative has been a polarizing issue for many in Carlsbad. Some speakers Tuesday said it would be wonderful, “a crown jewel for the community” and “an incredible gift,” while others said it would bring much more traffic and pollution, that the publicity campaign was deceptive because it emphasized open space and not the shopping center, and that many people were misled to sign the petition in support of the initiative.

The Los Angeles-based developer and his staff have spent more than three years in Carlsbad, meeting with residents and business owners and hosting bus trips to his shopping center The Grove in Los Angeles. Caruso built a strong following for the project, and many of those residents came out in support of it Tuesday night.

Read full article here:

http://www.sandiegouniontribune.com/news/2015/aug/25/plan-for-carlsbad-strawberry-fields-plan-draws/

Posted by on Aug 26, 2015 in Carlsbad, Jim's Take on the Market, Local Flavor, Local Government | 10 comments

National Housing Policy

Embedded image permalink

I saw these questions from Ed DeMarco on Twitter. My answers:

1. Have the M.I.D. apply towards primary residence only (not second homes), and lower from $1,000,000 to $500,000.  Those buying in hopes of a bigger write off will still buy a house, and take the partial benefit – and be in it for the appreciation and to raise a family (make wifey happy).

2.  Have the mortgage interest deduction be in effect for the first ten years of ownership only.  It would encourage borrowers to pay off mortgages in the ten years, and not refinance every year.

3.  Require that only the buyers can pay for mortgage insurance (sellers can pay in full now).

4.  Redirect the disadvantaged folks to subsidized rentals until they aren’t disadvantaged. Only stable, secure, affluent people should buy a house – it’s too late for the rest, unless they drive to the suburbs/outer edge of town.

5.  There are several loan programs available to help the disadvantaged already.  NACA is still around, helping buyers purchase with no down payment and no closing costs (H/T daytrip):

https://www.naca.com/naca/purchase/purchase.aspx

6.  Lower the capital-gains tax for 1-2 years to incentivize those reluctant-but-motivated possible sellers to unload a rental property or two.  Cut federal rate to 10% for the first year (currently 20%), and then back to 15% in the second year.  The crotchety old guys still won’t sell, so there won’t be a flood.  But more inventory = more sales while stabilizing prices.

7.  Keep Fannie/Freddie the way they are for now. If they can keep operating in the black, let’s allow the mortgage industry to enjoy the fluidity. I attended a seminar today on the new loan disclosures coming on October 3rd, and it is clear that Fannie/Freddie will be extremely strict on compliance. It doesn’t mean tougher credit, it means the mortgage industry needs to submit the cleanest loan packages ever – which is good for the taxpayers.

8.  The new compliance crunch will virtually eliminate mortgage brokers – wholesale lenders won’t want to take a chance on them. Yes, we still have room for you over here to be a realtor – there’s only 11,000 of us chasing 3,500 sales each month.

9.  Encourage a private jumbo-MBS market without subsidizing it.  Eventually, a private MBS marketplace could help shift the burden from Fannie/Freddie.

10. Run a tight ship.  We can handle it.

The powers-that-be have made some great moves to get us this far, now bow out gracefully and let free enterprise take care of the rest.

Posted by on Aug 20, 2015 in Bailout, Housing Tax Credit, Interest Rates/Loan Limits, Loan Mods, Local Government, Mortgage News, Mortgage Qualifying | 0 comments

Caruso and the City Council

 

85-15 plan

The developer of the 85/15 plan (that hopes to bring a Nordstrom-anchored shopping center to Carlsbad) is using a new angle to get project approval – read the VOSD story, click HERE for link.

An excerpt:

One of the country’s largest mall developers, Caruso Affiliated, is pushing through a plan for a shopping center near coastal wetlands in Carlsbad using a novel method that could allow it to bypass many of the state’s environmental protection rules.

A California Supreme Court decision last August ruled that if a project gets enough signatures to put it on the ballot, a city council can approve it without going to voters and without a California Environmental Quality Act review, the state’s landmark environmental law that sets mandates for big projects to disclose their environmental impacts and reduce as many of them as possible. Two proposed football stadiums in Inglewood and Carson used voter initiatives to leapfrog CEQA, and Caruso is trying to make it happen for the first time locally.

Caruso only needed to collect 15 percent of registered Carlsbad voters’ signatures to qualify the measure for a vote – it submitted twice the number of signatures they needed in early July – and now it only needs to lobby the City Council for the three votes necessary to pass the measure in the next Council meeting on Aug. 25.

Read full story HERE.

What will the Carlsbad City Council do?  They’re not saying publically, but opponents think there are conflicts:

Posted by on Aug 11, 2015 in Carlsbad, Jim's Take on the Market, Local Flavor, Local Government | 4 comments

85/15

85-15-Plan

There has been vocal opposition to the Nordstrom development proposed for Carlsbad, and it’s only right that people have a chance to review the project.  Here is your chance:

A group supporting a proposal to create a 26-acre development near Agua Hedionda Lagoon is inviting Carlsbad residents to learn more.

Open space tours will be held July 18, Aug. 1 and Aug. 15 from 10 a.m. to 1 p.m. so that attendees can learn more about the “85/15 Plan.”

Onsite transportation, food and drinks will be provided.

Tours start at the Carlsbad Strawberry Company parking lot, located at 1050 Cannon Road.  Interested attendees can sign up at  www.openspacetherightway.com/tours/.

85-15 plan

Posted by on Jul 17, 2015 in Carlsbad, Local Flavor, Local Government | 6 comments

Good Neighbor Fence Act of 2013

2015-05-02 07.29.35

It is California law that neighbors share the cost of a new fence – hat tip DV:

http://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml

Section 841

(a) Adjoining landowners shall share equally in the responsibility for maintaining the boundaries and monuments between them.

(b) (1) Adjoining landowners are presumed to share an equal benefit from any fence dividing their properties and, unless otherwise agreed to by the parties in a written agreement, shall be presumed to be equally responsible for the reasonable costs of construction, maintenance, or necessary replacement of the fence.

(2) Where a landowner intends to incur costs for a fence described in paragraph (1), the landowner shall give 30 days’ prior written notice to each affected adjoining landowner. The notice shall include notification of the presumption of equal responsibility for the reasonable costs of construction, maintenance, or necessary replacement of the fence. The notice shall include a description of the nature of the problem facing the shared fence, the proposed solution for addressing the problem, the estimated construction or maintenance costs involved to address the problem, the proposed cost sharing approach, and the proposed timeline for getting the problem addressed.

Posted by on May 2, 2015 in Local Government | 0 comments