California Assembly Democrats Allow Continued Theft of Private Property by Government

A cop, with the authority of a District Attorney can seize your home, car, bank accounts—all without charging you with a crime. Then the police department and the DA’s office can SPEND your money, without permission—and never charge you with a crime. This is called asset forfeiture—legalized theft by government to augment their budgets. You can pay attorneys to try to get your money back—if you can find an attorney to work for free. In California the good news is there is a limit-$25,000 with no excuses. Feel good about government?

“Golden State cops teamed with prosecutors to sink the legislation once it became clear that the Senate vote had made it a viable threat to current forfeiture law, which permits law enforcement to keep confiscated property worth under $25,000 even if the former owner is not convicted of a crime. Through these so-called forfeitures, police departments across the country have been able to swell or cushion their budgets — sometimes substantially.”

Can we arrest the police chief or DA for theft? Why not.

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CA asset forfeiture reform fails

James Poulos, Calwatchdog, 9/30/15

After passing the state Senate overwhelmingly, California’s bipartisan attempt to reform asset forfeiture laws ran aground in the Assembly, victim of a powerful lobbying campaign conducted by law enforcement and its allies.

Golden State cops teamed with prosecutors to sink the legislation once it became clear that the Senate vote had made it a viable threat to current forfeiture law, which permits law enforcement to keep confiscated property worth under $25,000 even if the former owner is not convicted of a crime. Through these so-called forfeitures, police departments across the country have been able to swell or cushion their budgets — sometimes substantially.

A tide turned

But in spite of protections that have made California’s asset forfeiture rules more stringent than others, lawmakers in both parties zeroed in on the practice as excessive and sometimes unjustifiable. State Sen. Holly Mitchell, D-Los Angeles, and Assemblyman David Hadley, R-Torrance, advanced legislation that would have returned property valued at any amount without a conviction. But after the state Senate version, SB443, won in a 38-1 vote, bipartisan support for the bill began to dry up, despite efforts to scale it back in committee and dispel budgeting worries. “The bill was opposed by Republicans and some Democrats, and failed on a 24-41 vote in the Assembly. It could be revived on the floor in the future,” the Los Angeles Times noted, although this year, the deadline for passing new legislation itself has passed.

Adding to the uphill climb, the federal government did its own part to pressure the state to abandon reform. “Documents obtained by the Institute for Justice show that the California District Attorneys Association has been circulating emails from the Justice and Treasury Departments confirming that the current reforms proposed to California’s civil asset forfeiture laws would make the state ineligible to receive millions of dollars through the federal government’s Equitable Sharing Program,” according to the Daily Signal, a news site run by The Heritage Foundation.

Through that program, which gives a cut of seizures to agencies at the state and local level, California law enforcement netted nearly $90 million last year, the Daily Signal noted.

Other states advancing asset forfeiture reforms have also faced similar pressure to that inflicted on California. But they have met with mixed results. “The Departments of Justice and Treasury threatened New Mexico with ending it equitable sharing program if reforms were passed. In response, New Mexico not only passed asset forfeiture reform, but abolished it entirely,” observed Americans for Tax Reform. “In May of this year, Montana passed asset forfeiture reform that requires a criminal conviction prior to permanent forfeiture, as well as several other requirements that beef up protections for property owners. Other states making strides in asset forfeiture reform are Minnesota, North Carolina and Michigan.”

Looking ahead

So far, advocates for California forfeiture reform have not talked up the prospect of reintroducing a bill for next year’s legislative session. According to Reason, however, another option remained — a ballot initiative building on past successes with reducing some criminal penalties, paring down the so-called “three strikes” law, and encouraging treatment instead of jail time for lesser drug offenses. “But that’s a plan that would have some timing issues,” Reason noted, with organizers unlikely to get a measure before voters until the off-year election in 2018. Nevertheless, “if the polling is accurate, it’s certainly an option if they aren’t able to push legislation through by then.” According to Americans for Tax Reform, California respondents expressed hostility to asset forfeitures “by a massive 76 percent to 14 percent.” Despite the reform bill’s setback in Sacramento, little seemed likely to shift that imbalance in the months and years to come.

 

USDA Spent Housing Funds on Christmas Parties, Trips to Six Flags

Government in mismanaged, incompetent and corrupt. The United States Department of Agriculture is just greedy. “The inspector general found misuse of taxpayer funding in all 11 projects in its sample. The $27,718.66 unallowable expenses identified included $3,912.37 for a staff summer picnic at Six Flags America in 2013; $11,411.74 for a staff Christmas party in 2012; and $12,394.55 for a staff Christmas party in 2013.

“This occurred because RHS does not have adequate controls to identify the misuse of RRH funds,” the inspector general said. “Without proper oversight of management agent expenditures, RRH funds are vulnerable to misuse.”

Obama wants higher taxes and more spending. This is why you don’t give an extra dime to government—it goes to unions, crony capitalists and great parties! Anybody get fired? I bet not.

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USDA Spent Housing Funds on Christmas Parties, Trips to Six Flags

BY: Elizabeth Harrington, Washington Free Beacon, 9/30/15

Taxpayer funding intended to improve rural housing developments was spent on Christmas parties, alcohol, and trips to Six Flags, according to a new audit from the U.S. Department of Agriculture’s Office of Inspector General.

The audit found that two managers of apartment complexes in Maryland operated by the Rural Rental Housing (RRH) program spent nearly $30,000 on parties.

“Based on our data analytics, we found that [two] management agents charged unallowable expenses to 11 RRH projects in 2013,” the audit said. “These unallowable expenses included charges for staff Christmas parties, summer picnics, dinners, alcoholic beverages, and gifts to their staff.”

The program’s management handbook explicitly disallows using funds for parties and alcohol.

The inspector general found misuse of taxpayer funding in all 11 projects in its sample. The $27,718.66 unallowable expenses identified included $3,912.37 for a staff summer picnic at Six Flags America in 2013; $11,411.74 for a staff Christmas party in 2012; and $12,394.55 for a staff Christmas party in 2013.

“This occurred because RHS does not have adequate controls to identify the misuse of RRH funds,” the inspector general said. “Without proper oversight of management agent expenditures, RRH funds are vulnerable to misuse.”

The inspector general said that wasting housing funds on parties and staff retreats increased rent for elderly tenants.

“Consequently, the misuse of program funds by management agents jeopardizes the integrity of the RRH program, burdens low-income and elderly tenants with higher rents, and unnecessarily increases RHS’ RA payments.”

The inspector general suspects that hundreds of rural housing projects are misusing taxpayer funding. The audit sample was taken from a list of 546 projects with the highest operating expenses.

“Since we found that all 11 projects reviewed were charged for unallowable expenses by their respective management agents, we believe there is some probability that this condition also exists in the 535 projects we did not review,” the inspector general said.

The RHS provides low-income housing for individuals living in rural areas. The RRH program provides loans to build and operate apartment complexes, amounting to $1.1 billion per year in rental assistance.

Rental income is supposed to go towards operating and maintenance costs and upkeep of the buildings.

“Budgets must be reasonable and realistic,” the inspector general said. “Revenues and expenses must be consistent with past project budgets and comparable projects.”

The inspector general recommended that the USDA improve its oversight of the program by identifying projects that have higher than normal budgets, and recover the $28,000 in spending on parties and alcohol.

 

The Underbelly Of The California Drought

Though the Central Valley is a major victim of the lack of water policy by the confused Guv Brown, the Central Coast is the location with the biggest problem. Both need water from the State and Federal water projects. But the Central Valley has an aquifer—the Coast does not.

“In the meantime, few talk about the underbelly of the drought. There is a well-drilling craze from one end of the 400-mile long Central Valley to other. Prices-per-foot of well and casing have tripled and quadrupled.  Irony abounds. Valley farmers were the first to feel the drought when their contracted surface water was cut off years ago. But many of them will also be the last to survive, given the state’s aquifer is only deep in the state’s center and can be tapped for years more – if one has the money and clout to find a well rig to drill ever deeper than one’s neighbor.

This means as long as the Valley farmers have money to drill wells, they will have water. Just an added thought about the status of the California water crisis.

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The Underbelly Of The California Drought

by Victor Davis Hanson, Hoover Institute/Eureka/ 9/29/15

It is September in California, year four of a scorching drought. Forest fires are blackening the arid state, from Napa Valley to the Sierra Nevada Mountains. Fly over the High Sierra and about every tenth evergreen below appears dead. Even the high mountain lakes and reservoirs are about empty – and equally void of vacationers who have few places to boat, fish, and ski, and are unsure where the next forest fire will break out and force evacuations on often one-lane winding mountain roads.

Four years of warnings of the consequences of government culpability – from cancelling water projects to releasing millions of acre-feet of precious stored reservoir water in utopian efforts to restore 19th-century salmon runs in the San Joaquin River or to rebound a bait fish population in the San Joaquin-Sacramento River Delta – are no longer written off as shrill.

Only meteorologists offer hope. They reassure that the cause of the drought was never global warming, as the president and governor in demagogic fashion insisted. Rather, periodic fluctuations in oceanic temperatures, especially warming and cooling of the equatorial Pacific Ocean known as El Niño, determine whether northern winter storms skirt or hit California. Preliminary data now suggest that perhaps El Niño is finally back to change storm trajectories and that next year might see the end of the four-year absence of snow and rain.

In the meantime, few talk about the underbelly of the drought. There is a well-drilling craze from one end of the 400-mile long Central Valley to other. Prices-per-foot of well and casing have tripled and quadrupled.  Irony abounds. Valley farmers were the first to feel the drought when their contracted surface water was cut off years ago. But many of them will also be the last to survive, given the state’s aquifer is only deep in the state’s center and can be tapped for years more – if one has the money and clout to find a well rig to drill ever deeper than one’s neighbor.

There is little, if any clean hydroelectric power being generated, at precisely the time farmers are using their power-gulping pumps to keep their farms alive until canals and ditches flow again. Many of us have paid steep taxes for four years to local irrigation districts, but have not received a drop of water. Instead, the farm’s electric pumps go on in April and stay on until October. The aquifer plunges a foot or two per week. Few remember how holistic was the system of our grandfathers in which surface irrigation recharged the aquifer relegating pumping to back-up insurance rarely drawn upon.

Farmers survive the soaring electricity costs and the huge capital investments of new pumps and wells only through record commodity prices – nuts and fresh fruits especially – that will likely continue to climb as the drought cuts commodity production and the Asian consumer market grows. Another oddity: there is a land boom too, at least along a ten-mile radius of the 99 Freeway in the center of the state. There, an acre of farmland, with the water table still only 100 feet below, can go for between $30,000 and $40,000 per acre. Prices have climbed $10,000 an acre in just the last year.

Investors rightly see the narrow agricultural corridor as the last place in the populated central and southern part of the state that will go dry. Farms with a good aquifer thus represent a reasonable gamble that they will manage to produce crops that will bring in more cash than it will cost to irrigate them.

Meanwhile, farmers of the 3-million acre West Side of the Central Valley, nearer the I-5 interstate, have been mostly cut off from the California Water Project and Central Valley Project irrigation water from Northern California. Unfortunately, the aquifer is of little help on the West Side. Water is found only from 600 to 1,500 feet below the surface, and is usually of poor quality. Many larger conglomerates are hedging bets by leasing or buying eastern valley land, which in turn only adds to the anomaly of soaring land prices even as agriculture is declared doomed.

The two great population centers of the state – the Los Angeles Basin and the San Francisco Bay Area – have so far not been greatly affected by the drought given both areas have the best claims on the vast transfers of water from Northern California and the Sierra. Another of the ironies of the four-year crisis has been the resistance of these urban interests to building new reservoirs, raising dams, building the peripheral canal, and keeping reservoirs full – despite their complete reliance on such fossilized water infrastructure.

Advocacy for massive releases of stored water for fish restoration and river enhancement were pet projects of Bay Area progressives. Cynics would attribute such green politics to the fact that millions of urbanites could cut off the contracted water of distant others only because their own supplies were sacrosanct.

But that surety will disappear in 2016 should El Niño not reappear, the drought continues, and the last of California municipality-contracted water disappears. The back-up aquifers in these vast urban centers are inadequate to replace northern and Sierra transfers. When Hollywood and Google go dry, we may, too late, hear of the need to finish California’s water projects that were largely cancelled when the state’s population was 20, not the present-day 40, million people.

The solutions for the drought are simple: complete the envisioned reservoirs and dams of the California Water Project; cease releasing water from reservoirs for theoretic fish restoration; and lift government regulations on how water is bought and sold.

In the meantime, we pray for the long awaited Christmas-time return of El Niño – a divine gift of warmer ocean temperatures.

California Groundwater Aquifer

Typically 30% of the state’s water supply, California’s 450 groundwater aquifers store about 425,000 acre-feet of cost-effective and usable water.  California’s largest aquifer lies under the Central Valley, which collects water runoff from the Sierra Nevada Mountain range. During drought years, the aquifer can provide over 60% of the state’s water – even more for farmers. This depletes the supply, however, which can only be replenished via gradual Sierra Nevada runoff or surface water transfers for irrigation, which then seeps down into the aquifer to recharge it.

 

Study on California’s debt reveals state’s hidden nightmare

The total of the unfunded liabilities of the government pension plans in California, using Federal accounting criteria is about one trillion dollars. Now we have an accountant that found hidden debt, money allocated but not spent, of about $111 billion. So when the really confused Guv Brown claims we have a balanced budget, he is too confused to understand we have way over one trillion is debt and obligations—he forgot to put in the budget.

“In 2014, California’s hidden debt amounted to $111 billion. When news outlets omit important numbers such as pensions and retiree health care benefits, most of the public is not aware of how much the state owes.

In the chart below, created using government financial data from TIA’s State Data Lab, as the number of taxpayers remains practically the same, the spending increases, adding to the taxpayer burden.

“When sharing the information [on financial issues], many reporters think that the numbers are simply too boring, so they make the decision not to cover them,” Weinberg explained. “They think readers will be bored or they don’t quite grasp the concept of how pensions work, so they just have a tendency to ignore them.”

Photo courtesy of Freedom to Marry, flickr

Photo courtesy of Freedom to Marry, flickr

Study on California’s debt reveals state’s hidden nightmare

By Alice Salles, California Watchdog Arena, 9/21/15

YOU CAN’T HIDE: A new study using government financial data on California uncovers the true financial state of the state, and it’s not pretty.

When it comes to how the media covers California’s budget, accountant Sheila Weinberg can’t help but react with skepticism.

In June, right after California Gov. Jerry Brown released the state’s new spending proposal, the LA Times claimed the state budget was “flush with cash.”

As Brown sold his financial plan to the public, he also warned that an economic downturn was “around the corner.” At the time, he may have claimed that the decline was only a matter of time, but according to the just-released 2015 Financial State of the States by Weinberg’s Truth in Accounting (TIA), his warning comes a little too late.

“The way it is now,” Weinberg told Watchdog Arena, “taxpayers can’t hold their elected officials accountable because they are getting more government than they are paying taxes for.”

“What we find is that the states, California included, are not listing all of the costs on their balanced budget calculation. They are telling you that the budget is balanced, or running a surplus, when the actual number is a lot higher.”

To the accountant and founder of TIA, this means that taxpayers are not aware of how much government costs, making it easy for government officials to stick to lower standards.

If figures are hidden, officials are able to use a “cash in, cash out” approach to the state accounting, a type of practice often criticized when employed by a corporation. Without more information on how much the state actually owes, the public is left with the impression that things are not as bad as they seem.

So while California claims to have cut spending from 2013 to 2014 by $6.6 billion, the real story is kicked to the curb.

“A lot of times, when government costs more than what taxpayers are paying, [government officials] just continue to increase and [leave] the bill to future taxpayers instead of really balancing the budget.”

According to TIA’s research, the overall improvement of the economy did nothing to put an end to the debt. As a result, states are still almost $1.3 trillion in the red, despite changes in budget requirements during the last fiscal year.

To Weinberg, California residents should begin thinking about how the state’s actions will unfold. Currently, California is among the top five “Sinkhole” western states. Meaning that its taxpayer burden is simply too high. But while the $20,900 each California taxpayer owes is an issue, it’s not the only one.

In 2014, California’s hidden debt amounted to $111 billion. When news outlets omit important numbers such as pensions and retiree health care benefits, most of the public is not aware of how much the state owes.

In the chart below, created using government financial data from TIA’s State Data Lab, as the number of taxpayers remains practically the same, the spending increases, adding to the taxpayer burden.

“When sharing the information [on financial issues], many reporters think that the numbers are simply too boring, so they make the decision not to cover them,” Weinberg explained. “They think readers will be bored or they don’t quite grasp the concept of how pensions work, so they just have a tendency to ignore them.”

But not all is lost. According to TIA’s founder, “taxpayers have two choices.” They must choose between paying more taxes or cutting spending. But until more Californians are made aware of how deeply indebted their state is, little can be done.

Some L.A. Times Staffers Eager to Exit

The value of the stock in the company that owns the L.A. Times has dropped by half since it was purchased. Ten years ago the circulation of the Times was one million—today they claim 376,000—including the freebies. Have you seen the physical size of the Times? They cut the size of the paper and cut the number of pages printed each day. This is the poster children for the newspaper industry. Even the workers are anxious to go.

““There’s an older core of people in that newsroom who believe this is finally the right time to leave and take the buyout,” said news industry analyst and author Ken Doctor. “Some of those veterans were intrigued by where Austin Beutner’s strategy as publisher was leading but after he was replaced earlier this month now feel it’s now time for them to go, too.”

Faced with a continuing decline in revenue, Times parent company Tribune Publishing is expected by staff to present a buyout package targeting longer tenured, less digital-savvy employees with the aim of running a younger, cheaper newsroom more attuned to the needs of online audiences. New digital-related hires, said Doctor, are part of the plan.

Cheaper newsroom? Minimum wage? Why not?

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Some L.A. Times Staffers Eager to Exit

By Sandro Monetti, LA Business Journal, 9/30/15

With an ax reportedly preparing to fall on jobs at the cash-strapped Los Angeles Times and the mood in the newsroom pitch black, at least some veteran staffers appear ready to leave.

A buyout package is widely expected to be presented to employees next week and is even eagerly awaited by some who are growing tired of corporate cutbacks and losing faith in the direction of the newspaper.

“There’s an older core of people in that newsroom who believe this is finally the right time to leave and take the buyout,” said news industry analyst and author Ken Doctor. “Some of those veterans were intrigued by where Austin Beutner’s strategy as publisher was leading but after he was replaced earlier this month now feel it’s now time for them to go, too.”

Faced with a continuing decline in revenue, Times parent company Tribune Publishing is expected by staff to present a buyout package targeting longer tenured, less digital-savvy employees with the aim of running a younger, cheaper newsroom more attuned to the needs of online audiences. New digital-related hires, said Doctor, are part of the plan.

“Such an approach is fairly typical as a cost-saving measure and buyout packages don’t usually include the newer employees,” said Jacqueline Breslin, director of human capital services at human resources solution company TriNet. She spoke generally; her company is not involved in the Times matter.

“Communicating with employees is really important at a time like this to make a transition easier for everyone,” she added.

But adding to the newsroom angst, said Doctor, is a lack of recent communication from Times editor Davan Maharaj, who has kept his office door closed all week and chosen not to address the staff about the uncertainty.

A spokesman for Chicago’s Tribune Publishing Co. declined to comment. The company’s stock price has been cut by more than half since last April and closed at $7.84 on Wednesday.

Calif. Agency Receives Grant To Study Paid Family Leave Policies

Isn’t this a bit backwards. The State of California created a program mandating family leave. Now a few years later the Feds are providing money to study the affects of this policy. Wonder if they will check to see how many young women did not get hired because of this policy? How many men and women did not get promotions because of this policy? Will they determine how many jobs were not created because of this policy?

“According to DOL, paid leave policies have been found to:

  • Bolster earnings over time;
  • Improve employee retention and cut down on turnover, reducing training costs;
  • Improve health outcomes for children, seniors and sick adults; and
  • Keep employees attached to the labor force.

However, paid family leave policies are available to just 12% of private-sector employees.

If this was such a great policy, then why do only 12% of private firms use it? Because the Feds are lying—it is not a good idea—and when businesses have freedom they use policies that work—what does government bureaucrats know about running a successful, money making enterprise?

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Calif. Agency Receives Grant To Study Paid Family Leave Policies

California Healthline, 9/30/15

The U.S. Department of Labor’s Women’s Bureau has awarded grants to the California Employment Development Department and seven other organizations to research and analyze paid family leave policies, Bethesda Magazine reports (Kraut, Bethesda Magazine, 9/29).

Background on Paid Leave

According to DOL, paid leave policies have been found to:

  • Bolster earnings over time;
  • Improve employee retention and cut down on turnover, reducing training costs;
  • Improve health outcomes for children, seniors and sick adults; and
  • Keep employees attached to the labor force.

However, paid family leave policies are available to just 12% of private-sector employees.

The federal Family and Medical Leave Act guarantees that workers can take unpaid leave to care for newborns, newly adopted children, sick family members or their own health without losing their job. But according to DOL, many workers cannot afford to take unpaid leave (DOL release [1], 9/29).

Meanwhile, California, New Jersey and Rhode Island have implemented their own paid leave policies (Bethesda Magazine, 9/29).

According to DOL, California was the first state to implement a comprehensive paid family leave program, in 2004. The program offers partial wage replacement to eligible employees who take leave to care for a sick child, domestic partner, grandparent, parent, parent-in-law, sibling or spouse (DOL release [2], 9/29). The program is funded by employee insurance contributions (Bethesda Magazine, 9/29).

Details of Grants

This week, DOL’s Women’s Bureau awarded eight grants totaling $1.55 million to organizations across the country. The funding builds on $500,000 in grants that were awarded in 2014.

The state Employment Development Department will receive a $250,000 grant to study more than a decade of paid family leave data in the state and determine the economic and social effects of such policies.

U.S. Secretary of Labor Thomas Perez in a release said, “The United States is one of the few countries on Earth without national paid leave,” adding, “Fortunately, we have seen remarkable progress outside of Washington, where innovative state and local officials are designing paid-leave policies that work for their citizens.”

Perez said the studies funded by this week’s round of grants “will help further our understanding of the issue and design programs that work for our economy” (DOL release [1], 9/29).

In a conference call, Perez added, “While adopting paid leave policies has some costs, the status quo has a much greater cost. Research findings, statistics and the experience of America’s working families paints a very stark picture of all the benefits we forego and the negative impacts we experience without paid leave” (McGee, Tennessean, 9/29).

 

Middle Class Squeezed Out of California Housing: Homeless Explosion is Result

In San Fran you can buy a shack, 765 sq. ft, that needs to be demolished, for $350,000. The cost of homes and rentals in San Fran and LA are the highest in the nation. Even Oakland now rents apartments for over $2,000 on average. The bottom-line is that California is for the very rich, the poor and the illegal alien. The middle class is moving to Texas, Tennessee and other free States. As we speak the Guv is looking to raise the taxes on gasoline, not by a vote of the legislation but by rule making of the California Air Resources Board.

“.  Los Angeles leads the way in both of these categories.  The typical renter in Los Angeles spends nearly 50 percent of their income on paying the rent.  We are number one in this category.  The typical home buyer is spending roughly 40 percent of their income on mortgage payments.  We are in the top 3 in this category (San Francisco leads the way).  Of course many people can’t keep up.  Alternatives include the 2.3 million adults living at home with parents.  The other option is leaving the state to places like Texas.”

Why? Look for the union label and government polciies. The unions are electing folks to office that turn around and make union members poor, with higher taxes, fees, and regulations that kill jobs. The issue is not complex—we voted to kill the middle class.

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Los Angeles home to the largest population of homeless residents: The cost of Rental Armageddon leads to L.A. having 20,000 homeless residents.

Dr. Housing Bubble, 9/30/15

 

The high cost of housing has bigger consequences than simply seeing $700,000 crap shacks littering the landscape.  People are spending large portions of their money on rents and also mortgage payments.  Los Angeles leads the way in both of these categories.  The typical renter in Los Angeles spends nearly 50 percent of their income on paying the rent.  We are number one in this category.  The typical home buyer is spending roughly 40 percent of their income on mortgage payments.  We are in the top 3 in this category (San Francisco leads the way).  Of course many people can’t keep up.  Alternatives include the 2.3 million adults living at home with parents.  The other option is leaving the state to places like Texas.  And for others, you simply fall through the gentrification cracks.  Los Angeles leads the nation with the highest homeless population.  The problem is only getting worse.  Since 2013 as home values went up, the sheer number of people living on the streets has increased by 10 percent.  The mayor even declared a state of emergency and announced a $100 million plan for dealing with the problem.  That is a drop in the bucket unfortunately.  The housing crisis has wider problems than merely overpriced stucco boxes.

The homeless population in Los Angeles

Many people think of the homeless in Los Angeles as being confined merely to Skid Row.  Skid Row is the designated area in Downtown Los Angeles populated by many homeless residents.  However, there is now growing homeless populations in Venice, Studio City, Highland Park, and Santa Monica.  The challenge of course is the reality that rents are outpacing any real income gains.

There is some interesting data to look at.  For example, in the 1960s on Skid Row there were 10,000 affordable housing units, SROs (single-room occupancy hotels).  By the 1980s there were only 6,700 units.  Today, there is only 3,600 SRO units.  Part of this has come with the gentrifying of Downtown Los Angeles.

Skid Row is made up of 50 city blocks or 0.4 square miles.  The area is east of the Downtown Historic Core and the high-rise district of Bunker Hill.  But this is only one part of where the homeless problem is hitting.  Take a look at Studio City:

“(Studio City Patch) Studio City is a lovely community. I have been a resident of Studio City for 20 years. The neighborhood has changed quite a bit with construction always going on but the city remains a community.

The homeless residents of Studio City are on the rise. Many of the people have had bad luck with the unstable economy. Others are common homeless people we have all seen.

The important thing to remember is they are still human beings. We can close our eyes and ignore the problem or we can be kind and open our hearts somehow.

It has been brought to my attention a homeless man was evicted from his Studio City rental home of 19 years. The city took possession of his belongings and he now walks around with a cart trying to survive each day.”

According to Zillow, the typical home price for Studio City is $849,250.  The big challenge of course is coming from rising rents:

In the last four years alone, rents are up 30 percent in Studio City.  How are people affording this?  Well the answer is that Angelinos spend the largest amount of income on rentals.  It would be one thing if incomes were keeping up with rent increases but they are not.  Some say “well something has to give” but that is already happening.  We’ve been highlighting the changes over many years:

-People doubling and tripling up living like sardines

-Adults moving back home with mom and dad (2.3 million and growing)

-People are leaving the state to cheaper places like Texas for over a decade

-Wealthy foreigners are buying up large amounts of property in highly desirable areas (i.e., San Marino, San Francisco, etc)

-People are spending a larger amount of their net stagnant income on rents and mortgage payments

-Low interest rates keep home values artificially high

-People are on the edge obviously with the homeless population now reaching a record

-Tech/stock money boosting prices (we’ve been on a 6-year bull run – although 2015 is slowing down)

In sharp contrast, you have other folks renting out gorgeous homes for rent and turning them into party locations:

“(Beverly Press) A neighbor’s house near Sandy Martin’s home on Mulholland Drive turned into a veritable gambling casino for more than three months. People arrived late, played into the early morning and there was full “military security,” she said.

They brought hookers, who were very nice, and they would leave in the morning by limo,” Martin said. “But the noise at the house at night is too loud. They open up all the doors and everyone can hear it. I don’t care if they have a party, but if it’s after 11 p.m. or midnight, they wake me up with the noise.”

“They’re running a business in the neighborhood — this is a business,” she said. “My neighbor gets $15,000 or $20,000 a week. Does he pay taxes [on that]? What does he do with the money? He’s making a business.”

This is the end result of squeezing out of the middle class for the state.  Welcome to the new face of SoCal housing.

Is Housing Bubble Hitting San Fran Bay Area? Yup

Is it really about to happen again? In San Fran you can get 1323 sq. tf. Two bedroom, one bath home for one million dollars. In Oakland the only market priced project built in 2015 has apartment going for $4100 a month. The cost of housing in California is running 30-50% of peoples income. The middle class is being squeezed out. Now the prices look like they are stabilizing, the prices may even be going down.

Zillow predicts the pace of home-value appreciation will drop by more than half over the next 12 months in the San Francisco metro area.

The city of San Jose is expected to chalk up appreciation of just 3.1 percent in the year to August 2016, with projected 3.6 percent pace for the San Jose metro area to August 2016.

The implications could be profound in the Bay Area, which has enjoyed one of the nation’s hottest housing markets over the past several years and where homeowners have come to expect beefy annual gains as a matter of course.

Watch housing—this is where we will see the first signs of an economic collapse in California.

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Zillow expects pace of Bay Area home-value appreciation to fall sharply: Should you sell now?

Mark Calvey, San Francisco Business Times, 9/30/15

Zillow predicts the pace of home-value appreciation will drop by more than half over the next 12 months in the San Francisco metro area.

The city of San Jose is expected to chalk up appreciation of just 3.1 percent in the year to August 2016, with projected 3.6 percent pace for the San Jose metro area to August 2016.

The implications could be profound in the Bay Area, which has enjoyed one of the nation’s hottest housing markets over the past several years and where homeowners have come to expect beefy annual gains as a matter of course.

Zillow’s projections are that home values in the San Francisco metro area will rise 4.3 percent in the year to August 2016, vs. 12 percent for August 2014 to last month. Home values in the city of San Francisco fare a bit better, rising 5.2 percent next August, while home values in popular Palo Alto are expected to rise at a 6 percent pace next August.

By comparison, the pace of home-value appreciation nationally last month was 3.3 percent, and Zillow expects that pace to slow to 2.2 percent in August 2016. That means home prices in many markets, including the Bay Area, will still be rising almost a year from now.

Zillow Chief Economist Svenja Gudell said the company’s number crunching takes into account employment data, the current trend in home values and interest-rate expectations. She expects the Fed to boost by year-end a key interest rate by a quarter percentage point, which would impact the 10-year Treasury rate, which closely tracks 30-year fixed-rate mortgages.

The slower pace of home appreciation in the Bay Area will be “startling,” given the double-digit pace of appreciation in recent months, Gudell said. “You’ll see less speculation and investor interest in flipping properties.”

In polite circles it’s often advised to avoid conversations turning to religion and politics. In California, that list includes talk of real estate, at least if the topic of conversation is anything other than home prices are heading rapidly higher. That reflects how much a typical California homeowner has tied up in the housing market, emotionally as well as financially.

When Zillow said last month that it had detected a cooling housing market, even in the Bay Area, some took issue with the analysis. This week Zillow (NASDAQ: ZG) was adamant that a slowdown is underway.

“We’ve been noticing a slowing trend, and it was only a matter of time before some markets went negative,” she said of the national housing market. “San Francisco will still see 4 to 5 percent home value appreciation, which is significant.”

But troubling anecdotal evidence is emerging among the Bay Area’s wealthy that some are deciding now’s the time to sell. (Of course that means others are on the other side of the table, buying.)

Earlier this month, Andrew Greenwell, CEO of Pleasanton-based Venture Sotheby’s International Realty and one of the stars of Bravo’s “Million Dollar Listing San Francisco,” said that some of his financially savvy clients are selling their homes with plans to become renters for a year or so. (That’s not surprising, given that cash is king amid rising deflationary pressures around the globe.)

This week, a Bay Area resident and long-time investor in residential real estate along the California coast sold one property and is considering “liquidating” other real estate and hard assets. She counts herself among those who see deflation as a greater economic threat than inflation.

Zillow’s (NASDAQ: Z) Gudell said she’s seeing people sell in pricey San Francisco to buy in less expensive markets, relatively speaking, such as Seattle and Portland, Ore.

Asked what advice she has for Bay Area homeowners who wonder whether they should sell now, Gudell said, “It’s really an extremely personal decision. But you shouldn’t think of your own home as an investment vehicle. It’s a place to live.”

 

Federal Reserve LOW Interest Rates Saves Californians $121.7 Million in Interest Costs on Bonds

While watching the Federal Reserve dither on raising interests rates—even by half a point—it is difficult to understand how this affects us. Yesterday the California State Treasurer announced he had sold bonds and saved $121.7 million on interest charges over the life of the bonds. That is real money.

“This is a great result,” Chiang said. “It reflects continuing improvement in the State’s fiscal condition and growing confidence in the State’s bond issues by the national rating agencies. The total savings to taxpayers will be nearly $122 million over the remaining life of the bonds.”

Then we have this, “The bonds are expected to close on October 13, 2015. The overall true interest cost on the bond issue was approximately 2.49 percent and total savings over time will be $121.7 million.” Wow, 2.49%!! Wish I could get that rate.

Photo courtesy of 401(K) 2013, Flickr

Photo courtesy of 401(K) 2013, Flickr

Chiang Sells $548.2 Million of State Public Works Board (SPWB) Bonds Saving Taxpayers Nearly $122 Million

Treasurer John Chaing, 9/30/15

SACRAMENTO – State Treasurer John Chiang today announced that the State Public Works Board of the State of California (SPWB) sold $548.2 million of Lease Revenue Refunding Bonds. The sale included $431.9 million in 2015 Series F (Department of General Services, Various State Office Buildings) and $116.3 million in 2015 Series G (Department of Public Health, Richmond Laboratory). The bonds were rated A1 by Moody’s, A by Fitch, and A+ by S&P.

“This is a great result,” Chiang said. “It reflects continuing improvement in the State’s fiscal condition and growing confidence in the State’s bond issues by the national rating agencies. The total savings to taxpayers will be nearly $122 million over the remaining life of the bonds.”

The 2015 Series F Bonds are being issued to refinance the following four SPWB bond issues to achieve interest rate savings:

  • SPWB Lease Revenue Bonds (Department of General Services) 2002 Series A (Capitol East End Complex – Blocks 171-174 & 225)
  • SPWB Lease Revenue Bonds (Department of General Services) 2002 Series C (Mission Valley State Office Building)
  • SPWB Lease Revenue Bonds (Department of General Services) 2003 Series D (Butterfield State Office Complex)
  • SPWB Lease Revenue Bonds (Department of General Services) 2005 Series A (Butterfield State Office Complex)

The 2015 Series G Bonds are being issued to refinance the following two SPWB bond issues:

  • SPWB Lease Revenue Bonds (Department of Health Services) 2005 Series B (Richmond Laboratory, Phase III Office Building)
  • SPWB Lease Revenue Refunding Bonds (Department of Health Services) 2005 Series K (Richmond Laboratory Project)

The bonds are expected to close on October 13, 2015. The overall true interest cost on the bond issue was approximately 2.49 percent and total savings over time will be $121.7 million.

The SPWB consists of the Director of the Department of Finance, who serves as the chair, the Director of the Department of Transportation, and the Director of the Department of General Services. The State Treasurer and the State Controller are also members of the SPWB for the purpose of hearing and deciding upon matters relating to the issuance of bonds, and the State Treasurer serves as agent for sale for all SPWB bond issues.

The State Treasurer has broad responsibilities and authority in the areas of public investment and finance. In particular, he oversees the issuance of State debt and is responsible for crafting best practices for the sale of debt and the investment of public funds for California’s more than 4,000 local bond issuers, including the State, school districts, cities, counties, and special districts.

Los Angeles Trying to Rid Itself of Third World Image

Go to Mexico, Thailand or any Third World country and you will note that street vendors are everywhere. No health department checks on the food sold, you know the items sold or either third rate or knock-offs—never the real thing. Go to downtown areas and East Los Angeles, into Hollywood, you will find street vendors—and the numbers of growing. Los Angeles has the look of a Third World County. On Third World beaches iced pineapples and drinks are sold. The same on the LA beaches—illegally, sold by illegal aliens.

“A ban on unpermitted vending in Los Angeles’ public parks and beaches went back into effect on Tuesday.

The LA City Council voted to reinstate the ban on vending in July, but it didn’t go into effect until this week.

The ban makes it so that if a vendor is caught selling foods, goods, or services without a permit, they could face escalating fines or even misdemeanor charges.

Fines and misdemeanor charges are a joke. These are mostly illegal aliens—they will not show up for a hearing—they refuse to attend deportation hearings, why attend a hearing to be fined? Once again the denizens of City Hall are playing at making changes—good press releases instead of real enforcement. That starts with the enforcement of our immigration laws—and Los Angeles is a sanctuary city.

http://www.dreamstime.com/-image19890499

L.A. Reinstates Ban On Vending In Public Parks And Beaches

The ban makes it so that if a vendor is caught selling foods, goods, or services without a permit, they could face escalating fines or even misdemeanor charges.

By Scott Cook, Annenberg Media Center/USC, 9/29/15

A ban on unpermitted vending in Los Angeles’ public parks and beaches went back into effect on Tuesday.

The LA City Council voted to reinstate the ban on vending in July, but it didn’t go into effect until this week.

The ban makes it so that if a vendor is caught selling foods, goods, or services without a permit, they could face escalating fines or even misdemeanor charges.

Councilman Mitch O’Farrell told the L.A. Times in July that without this ban, “It’s anything goes, essentially, in our parks.”

Just outside of MacArthur Park, vendor Oscar Rogel feels differently.

“It’s very wrong because that’s the only way [vendors] can survive. Most of them are people who don’t have legal papers, so the only way they can survive is by vending like that in the street,” Rogel said.

Another vendor, Ivan Law, has been able to rebound from homelessness thanks to vending in MacArthur Park.

“If it hadn’t been for my ability to come here and sell my stuff, I would be homeless,” Law recounts.

“Instead of begging for change, being a drug dealer, being a robber or a mugger, I decided I’d buy me some inventory and buy and sell. I started out real small, I grew, and I’m no longer homeless,” Law said.

Success stories like Law’s make it difficult to justify the ban. However, lawmakers agree the ban could help small businesses in the areas surrounding local parks and beaches, by promoting consumers to buy from them instead of street vendors.

Christina Rodarte is the manager of ‘More 4 Less’ bargain store located across the street from MacArthur Park. The top sellers at Rodarte’s store are small electronic devices and toiletries, two of the most commonly vended items in MacArthur Park.

When asked if she thinks business will be driven up as a result of the vending ban, Rodarte said no, because her store usually sells items at a lower cost than park vendors.

Across LA, authorities will be cracking down on all vendors that don’t have proper permits.

Janet Favela of the East LA Community Corporation told NBC LA, “[Vendors] could be warned. They could possibly be ticketed. And depending on how many times they’ve been cited, they could end up in jail.”