Housing Policy

The C.A.R. sent out this paper that reviews the current housing dilemma, which boils down to having to improve zoning regulations to facilitate more/better infill projects because the more-mature cities are out of land for the most part. She also included this:

However, the paper also offers evidence that cities can use their control over the development process to limit access to housing, sometimes in problematic ways. The finding that less housing is built in cities with both higher homeownership rates and White populations is sadly consistent with existing research on NIMBY opposition to local housing development (Lewis & Baldassare, 2010; Scally & Tighe, 2015; Whittemore & BenDor, 2018). These studies examined opposition to building multifamily or affordable housing; it is striking that in this study cities with more homeowners and larger white populations had less single-family development. This finding serves as yet another warning that racial exclusion from White communities continues to limit housing opportunities for people of color.

Link to Full Report

Going to California?

For the first time in recent history – and probably the first time ever – the net migration out of California has not been offset by the international inflow.

The number of people leaving the state is 3x what it was just 4+ years ago!

But the state population is still growing….naturally.  Over the last eight years, there have been almost 2 million more births than deaths!

With baby boomers living longer, the birth/death balance should level out eventually, but all those young people need to live somewhere – and only the affluent will be able to purchase a home.  (click to enlarge)

https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk#

Newsom Estate

The Newsoms bought a home in December, and currently they are living at the Governor’s Mansion in Sacramento while work is being completed prior to move-in. Hat tip Ryan!

Gavin Newsom is the new governor of California and he just bought a $3.7M house in Fair Oaks. This price point isn’t much in many areas of the country, but it’s actually the fifth highest residential sale ever in Sacramento County. This home is said to have over 12,000 sq ft and it’s located on 8 acres. It’s near the American River, but not on the river. Now two of the top five sales in the county have a connection to a governor (the other was the mansion Ronald Reagan started to build in Carmichael in the 1970s).

Link to Sacramento Appraisal Blog

7640 Tobia Way | Fair Oaks CA | 95628 from TopNotch360 on Vimeo.

Real Estate After the Mueller Report

Home buyers and sellers might be concerned enough about the results of the Mueller report that it could impact their decision-making about real estate – as if they need one more reason to wait-and-see!

They expect that Mueller report to be filed within the first six months of 2019, but is could be a bit redundant as players are already being indicted and convicted of crimes.

I think we can count on this:

  1. It would take two-thirds of the Senate to confirm an impeachment, so it’s unlikely Trump will be removed from office.
  2. He ain’t going to quit.

No matter how bad the actual facts could be, will the hysteria be any worse than it is today?  Trump will declare it all a which hunt, and he might incite some vigorous protests by his followers.  The mainstream media will have a field day too.

But aren’t we numb to this already?

I think so, and while there will undoubtedly be some eye-popping events immediately after the report’s release, we’ll get back to business before too long.  For some, it might be a relief that sets them free to buy and sell, and for others it could make them want to hunker down even more!

The OJ trial last for 8+ months, and that’s about as long as our society could stay distracted.  You could also say that with the onslaught of multi-media we have today – which is far more intense and scattered than it was in 1995 – we won’t stay focused on any one thing for very long.

We had a good year for real estate locally during the OJ trial in 1995 – there wasn’t much, if any, impact.  The real estate market had just hit bottom, and began what was a 12-year run!

My biggest real estate concerns for 2019:

  1. Mortgage rates
  2. Do we have enough ready, willing, and able buyers?
  3. Are sellers motivated enough?
  4. Trump/Mueller
  5. Unforeseen factors (earthquakes, border riots, etc.)

The biggest impact on the early-2019 market could be the Chargers getting into the Super Bowl! The Patriots look vulnerable, and the Bolts’ victory on Thursday had to demoralize the Chiefs:

If the Chargers win the Super Bowl, everyone will be happy about real estate!

Manafort’s Forfeitures

Older news now but once the federal government seizes these homes and tries to resell them, they will find out that there isn’t much equity.

Paul Manafort’s prized possession — a 5,574-square-foot home in the Hamptons, which includes a putting green, pool house, pergola and “waterfall pond” and where hundreds of red and white flowers were planted in the shape of an M — will be owned by the U.S. government.

It’s one of five properties, bank accounts and a life insurance policy Donald Trump’s former campaign chairman agreed to turn over to the government as part of his plea deal, where he admitted to conspiracy against the U.S. and witness tampering.

(more…)

Defective Nuclear-Waste Storage

Are you looking for one more reason to move away? 

It sounds like if/when the Big One starts shaking, you will need to grab everything you own and move to Yuma.

The Nuclear Regulatory Commission (NRC) admits in their November 28, 2018 NRC Inspection Report and Notice of Violation, every Holtec canister downloaded into the storage holes is damaged due to inadequate clearance between the canister and the divider shell in the storage hole (vault).  The NRC states canister walls are already “worn”.  This results in cracks. Once cracks start, they continue to grow through the wall.

The NRC stated Southern California Edison (and Holtec) knew about this since January 2018, but continued to load 29 canisters anyway.  Edison’s August 24, 2018 press release states they plan to finish loading mid 2019.

The NRC states Edison must stop loading canisters until this issue is resolved.  However, there is no method to inspect or repair cracking canisters and the NRC knows this.

The NRC should require all San Onofre thin-wall canisters be replaced with thick-wall transportable storage casks.  These are the only proven dry storage systems that can be inspected, maintained, repaired and monitored in a manner to prevent major radiological releases and explosions.

California state agencies should revoke San Onofre permits and withhold Decommissioning Trust Funds until these issues are resolved.

The Navy should consider revoking the San Onofre Camp Pendleton lease until Edison agrees to replace thin-wall canisters with proven thick-wall transportable storage casks.  This is a national security issue. If the NRC cannot do their job, maybe it’s time to bring in the Marines. The Navy has nuclear experts.

The current storage system puts the public at risk. Nuclear waste stored in thin-wall steel canisters (only 5/8? thick) cannot be inspected, repaired or safely transported. Thin-wall canisters crack, but technology does not exist to inspect for cracks or repair cracks once canisters are filled with highly radioactive nuclear fuel waste.

The President of Holtec has stated a through-wall crack will release millions of curies of radionuclides and it’s not practical to repair them, even if you could find the cracks.

Yet, they have no plan in place  to stop or contain a cracking, radiation-leaking, and potentially exploding canister.

Each canister contains roughly a Chernobyl nuclear disaster.  Once canisters explode, the radionuclides will travel with the wind, similar to how smoke traveled with the California Camp Fire.

San Onofre will have 73 canisters stored on-site by mid 2019.

Link to Article

Two Out Of Five, For Now

This is a real estate blog, not political, but legislation gets passed that affects real estate decision-making.

Here is what the HW said we can expect from the new HofR:

https://www.housingwire.com/articles/47337-mba-lobbyist-heres-what-a-democrat-led-house-means-to-us

But let’s go back to the tax reform passed in December.

Nobody has brought this up yet, so I’m just speculating.

The original proposal was to change the 2-out-of-5-year residency requirement to five out of the last eight years in order to get up to $500,000 tax-free profit.

This provision was conceded, and all the talk centered around the lowering of the MID and the limits on the SALT deductions.

But when the final bill was passed, they didn’t change the residency requirement to the five-out-of-eight version.  It is still the two-out-of-five requirement today.

If the Democrat-led House of Representatives decides to re-visit the tax reform, there will be a lot of yelling and screaming.  But if they cut deals in the end to pacify everyone, it’s the five-out-of-eight requirement could be one of the concessions – because there wasn’t any resistance to the change last time.

It won’t matter to long-time homeowners, but for those who purchased in the last 2-3 years and were thinking of moving up or out with tax-free profit, this could hamper the plan.

Thinking of selling now, just in case?  Contact Jim the Realtor!

Prop 5 Defeated

Prop 5, the project of the California Association of Realtors, was soundly defeated – but it won’t be the last time we hear about the issue.  The supporters only spent half the money raised:

California voters have rejected a ballot measure to expand a property tax break for older homeowners who move, sparing schools and local governments a major revenue loss.

With 5 million ballots counted early Wednesday, Proposition 5 was behind 57 percent to 43 percent.

Under current law, seniors and near-seniors can transfer tax assessments if their new homes are worth the same or less than the ones they sell, and they can only do it only once. Current law also limits out-of-county transfers.

Proposition 5, backed by the California Association of Realtors, would have allowed over-55 homeowners to transfer their assessments to any new home — no matter what it costs — anywhere in the state and as many times as they wish.

It was a low-key campaign with high stakes.

“Today’s decisive defeat sends a strong message to the California Association of Realtors that voters won’t tolerate self-interested initiatives that attack the critical local services that strengthen our communities,” Graham Knaus, executive director of the California State Association of Counties, one of the main backers of the No on Prop 5 campaign, said late Tuesday.

The Legislative Analyst’s Office concluded that schools and local governments would each probably lose more than $100 million in property tax revenue a year initially and that, over time, those losses would reach about $1 billion a year for each. About 85,000 homeowners over 55 who move every year without the tax break would pay much less.

Current law requires the state to provide more funding to most schools to cover property tax losses. Not so for local governments.

Supporters said passage would end a “moving penalty” on older people and encourage more to sell, helping alleviate California’s housing shortage. The Legislative Analyst’s Office estimated home sales would increase by tens of thousands a year.

The Realtors funded a consultant’s report that contended Proposition 5 would have much less impact on state and local governments, resulting in annual losses of $120 million to annual gains of $200 million.

Opponents challenged the assertion that Proposition 5 would spur construction and warned about a hit to public services.

As a result of Proposition 13 passed in 1978, a home is typically taxed at 1.1 percent of the purchase price and increases no more than 2 percent a year. Prices have risen much more, sticking many homeowners with much higher taxes when they move.

Supporters raised $13.2 million as of Oct. 23, mostly from the Realtors, whose benefit from sales commissions. But the campaign only spent about half of what it raised and didn’t engage in television advertising or direct mailers.

Opponents raised $2.8 million, largely from the Service Employees International Union and California Teachers Association.

The Realtors recently filed notice with authorities that it would try again on the November 2020 ballot if Tuesday’s measure failed. Chris Carlisle, its legislative advocate, said it was “just to signal to our opponent we are not going away. If we lose this time, we will be back in 2020.”

https://ktla.com/2018/11/07/prop-5-california-rejects-measure-to-expand-property-tax-break-for-seniors/

If you are thinking of moving and want to go where the political climate is suitable for you, here’s how the country stacks up today (click to enlarge):

Hometainers

I love this idea – but $140,000 each? Hat tip Eddie89!

The region’s first housing project made from shipping containers could open as soon as April, providing homes for 21 formerly homeless veterans and possibly paving the way for hundreds of new affordable and median-priced homes in the near future.

The units are planned for a vacant lot at 2941 Imperial Ave. in Logan Heights.  Each 320-square-foot unit would have its own patio, kitchen and bathroom. While the units will be built from metal shipping containers, they will be insulated and have interior drywalls.

(more…)

Pin It on Pinterest