Tag: Real Estate

Yeah, and He’s Mobbed Up Too

The good folks at ProPublica have looked at Donald Trump’s property tax filings and his statements to banks, and find conclusive evidence of fraud:

Documents obtained by ProPublica show stark differences in how Donald Trump’s businesses reported some expenses, profits and occupancy figures for two Manhattan buildings, giving a lender different figures than they provided to New York City tax authorities. The discrepancies made the buildings appear more profitable to the lender — and less profitable to the officials who set the buildings’ property tax.

For instance, Trump told the lender that he took in twice as much rent from one building as he reported to tax authorities during the same year, 2017. He also gave conflicting occupancy figures for one of his signature skyscrapers, located at 40 Wall Street.

Lenders like to see a rising occupancy level as a sign of what they call “leasing momentum.” Sure enough, the company told a lender that 40 Wall Street had been 58.9% leased on Dec. 31, 2012, and then rose to 95% a few years later. The company told tax officials the building was 81% rented as of Jan. 5, 2013.

A dozen real estate professionals told ProPublica they saw no clear explanation for multiple inconsistencies in the documents. The discrepancies are “versions of fraud,” said Nancy Wallace, a professor of finance and real estate at the Haas School of Business at the University of California-Berkeley. “This kind of stuff is not OK.”

New York City’s property tax forms state that the person signing them “affirms the truth of the statements made” and that “false filings are subject to all applicable civil and criminal penalties.”

The punishments for lying to tax officials, or to lenders, can be significant, ranging from fines to criminal fraud charges. Two former Trump associates, Michael Cohen and Paul Manafort, are serving prison time for offenses that include falsifying tax and bank records, some of them related to real estate.

This is the least surprising thing that I have heard in at least a month.

Even if he weren’t Donald Trump, we would find this going on, because this, and exploiting political connections for profit, is pretty much what all real estate developers do.

Completely Not a Surprise

Somehow or other, WeWork took a fairly standard real estate play, leasing long, and renting short, and, by adding Kombucha,* managed to sell itself as a high tech unicorn.

Now that the WeWork IPO is collapsing under the weight of mathematics and allegations of self dealing, maybe we should seriously consider a little more scrutiny of both the business plans and the business practices of startup companies:

Historically low interest rates and quantitative easing are supposed to encourage investors to take more risks, but even in this climate there are limits. WeWork is hitting one as investors conclude they’re wary of investing in Shanghai-on-the-Hudson.

That’s the main lesson of the slow-rolling deflation of the public-market listing of WeWork parent We Co., scheduled for this month but under threat of postponement. The company filed its paperwork last month hoping to achieve a valuation of $47 billion. Investors haven’t stopped laughing.

The skepticism is due in part to We’s attempts to pretend it’s a technology company that will “elevate the world’s consciousness.” It’s a real-estate company that leases office space for long terms and rents it to small businesses for short terms. Technophilia is a market staple. But We faces established—and old-fashioned—direct competitors such as IWG, owner of Regus business centers, which has traded publicly for years, is profitable unlike We, and sets a benchmark for realistic returns.

The bigger cause for We’s woes is the corporate-governance risk investors have decided they’re not willing to stomach. In this regard We resembles a Chinese more than American company, and investors have noticed.

Take WeWork’s name. The IPO listing documents revealed that company founder Adam Neumann had vested trademarks related to the “We” name in a separate company and then sold those rights to We Co. in exchange for shares worth nearly $6 million.

American investors squawked, but this sort of arrangement is almost routine in China. In one famous case, Chinese entrepreneur Huang Guangyu, jailed in 2010 for 14 years on questionable charges of illegal business dealings, held onto some of the logos and other intellectual property of his electronics retailing company and used them to establish a competing chain of stores from his jail cell. We Co. has since reversed its deal with Mr. Neumann.

Another symptom of this China syndrome is We’s extensive web of transactions with related parties. The company disclosed in its IPO filing that it leases four buildings that are owned by Mr. Neumann, and it also reportedly hired an executive’s parents to broker another of its leases. Then there’s the personal control, with Mr. Neumann’s wife Rebekah designated to pick his successor in the event injury or death prevents him from running the company. This again is characteristic of China, or a South Korean chaebol, where the goal is to keep the company all in the family.

Seriously, where are the prosecutions?

*As Anna Russell would say, “I’m not making this up, you know.”

We Are in Another Game of Musical Chairs

There is significant evidence that it is Wall Street speculation that is driving the recent home price increases.

This means two things:

  • The home affordability crisis is driven by speculation, and not from inherent value.
  • There is a crash coming, and you do not want to be left holding the bag when this happens, because eventually, they WILL run out of useful idiots.

We’re in another Tulip craze.

In a recent column, I focused on five key factors which indicate that housing markets may be topping out. Yet one other important factor may be the main reason why housing prices have not already deflated.

Investors have always played an important role in housing markets. I have written extensively about the crazy bubble years of 2004-06. Rampant speculation was one of the primary causes of the buying mania and subsequent collapse. A May 2005 Fortune magazine article described how speculators were descending on city after city in search of making a killing in real estate.

The chart below, from a 2011 study put out by the Federal Reserve Bank of New York, shows the percentage of homes purchased with a mortgage by investors in states where the bubble was most excessive. This chart breaks down investor mortgage borrowing by the number of first liens appearing on the credit report of these investors. Notice the substantial number of investors with three or more first liens:



The chart shows that in the bubble states, more than 40% of all new mortgage originations for purchases went to investors/speculators during the wildest years of 2006 and 2007. Another chart in this same study showed that nationwide, roughly 30% of all originations were for investors. If we include all-cash investor purchases, the percentage of homes purchased by speculators was even higher.

When home prices leveled off in the second half of 2006, nervous speculators in the hottest major metros began to sell in large numbers. This precipitated the price collapse which soon followed. By 2009, the foreclosure debacle was in full swing. For the next four years, investors focused on buying inexpensive repossessed properties. Most of these foreclosure sales were all-cash deals.

Contrary to a widely-held assumption, many of these investor-purchased homes were not bought by flippers. They were turned into rental units for a new type of renter — former homeowners whose house had been foreclosed.

………

Unlike the speculative housing bubble of 2004-07, the investment surge over the past six years has been largely driven by a purchase-and-rent strategy. This made a lot of sense. Rents have risen steadily as most home prices continued to climb. A report from CoreLogic stated that rents grew nationwide by an average of 3.2% in January 2019 from a year earlier. Another benefit was that the tenant retention rate of 70% was much higher than the 50%-53% retention rate for multi-family apartments, according to a recent Freddie Mac report.

………

Is there credible evidence that investor purchases of single-family homes have increased in recent years? Absolutely. Attom Data has provided previously unpublished data breaking down home purchases by owner-occupants and absentee owners, i.e., investors:



You can see in the table above that the percentage of homes purchased by absentee owners rises consistently from 2016 through the first half of 2019. According to these numbers, more than one-third of all home purchases in 2019 have been made by investors. Yet even with this increase in investor purchasing, the volume of home purchases in most major metros has been declining. That is a major red flag.

Indeed, had it not been for the aggressive buying by investors in the past two-and-a-half years, home prices would have already slumped in these metros. If you do not find this suggestion plausible, remember that it was the pullback by speculators/investors in 2006 and their dumping properties onto the market that started the housing collapse.

Look out below.

The NRA Doth Protest Too Much

The NRA argued that it was their ad firm, and not them, that was attempting this blatant effort at self dealing.

Well, the Wall Street Journal now has the $70,000 check from the National Rifle Association to a shell company that was to execute the purchase:

In May 2018, the National Rifle Association sent a $70,000 check to an obscure Delaware entity called WBB Investments LLC, which had been incorporated a week earlier.

The check, a copy of which was obtained by The Wall Street Journal, raises new questions about the NRA’s attempts to explain a tangled transaction involving its then-outside advertising agency and an abortive plan to purchase a $6 million Dallas mansion for NRA CEO Wayne LaPierre.

The advertising agency, Ackerman McQueen, recently turned over documents to the proposed house purchase to the New York attorney general’s office, which is probing Mr. LaPierre’s dealings with the agency as part of a broad investigation of the NRA.

When the Journal broke the story last week, the NRA initially said the plan to buy the mansion was hatched by Angus McQueen, the ad agency’s late co-CEO, as a kind of safe house for Mr. LaPierre. The NRA chief had concerns about his security in the wake of the February 2018 mass shooting at a high school in Parkland, Fla.

The NRA said the house was to be purchased by a company owned by senior Ackerman executives, and Mr. LaPierre shut down the transaction after discovering that the ad company intended to use NRA funds for the deal. “Not a cent of NRA money was ultimately spent,” the NRA said.



An NRA check for $70,000 to an obscure Delaware entity called WBB Investments is the most-direct evidence to have emerged of the flow of money in the aborted mansion deal.

Ackerman, for its part, says Mr. LaPierre had wanted the mansion, which it said was to be paid for by the NRA. According to Ackerman’s version of events, Mr. LaPierre had asked Ackerman to help facilitate the deal, and an Ackerman lawyer set up WBB Investments to buy the house so the LaPierre connection wouldn’t become public.

Mr. LaPierre and his wife, Susan, twice visited the house—a 10,000-square-foot residence in a gated golf community—and were preparing to put down $70,000 in earnest money to make an offer, according to people familiar with this version of the transaction.

Enter the check, dated May 25, 2018, and drawn on an NRA account at Wells Fargo . It is the most-direct evidence of the flow of money in the aborted deal to have emerged.

“If there’s a check from the NRA to an LLC, that doesn’t seem consistent with a story that Ackerman was going to pay for it,” said Elizabeth Kingsley, a Washington lawyer who specializes in nonprofit law. “Even if it’s just earnest money, the money is on the line and the check shows NRA money, not Ackerman funds.”

Indeed.

The NRA was laundering money for Wayne LaPierre’s personal benefit.

Nope, No Corruption Here

Charitable Organization, My Ass!

Click through for my pithy architectural critiques

Papers have revealed that the National Rifle Association was considering purchasing a 10,000 square foot mansion for its executive VP Wayne LaPierre.

I do not agree with the NRA’s current mission, but this is not about their lobbying for the firearms industry, it’s about the proper management of a not-for-profit organization.

I incorporated a not-for-profit, and shepherded its application for tax exempt status with the IRS about 30 years ago, so I have more than a passing familiarity with these issues, and this crosses a pretty bright red line.

What’s more, it appears that tey attempted to use kickbacks from a vendor to conceal this.

Here is hoping that the New York Attorney General with be on the organization like white on rice:

The chief executive of the National Rifle Association sought to have the nonprofit organization buy him a luxury mansion last year after a mass shooting at a Florida high school, selecting a French country-style estate in a gated Dallas-area golf club, according to multiple people familiar with the discussions.

Wayne LaPierre, the longtime head of the NRA, told associates he was worried about being targeted and needed a more secure place to live after 17 people were gunned down at Marjory Stoneman Douglas High School in Parkland, Fla., the people said.

LaPierre and his wife, Susan, were intensely involved in the selection of the property, rejecting an upscale high rise in Dallas with numerous security features in favor of a 10,000-square-foot estate with lakefront and golf course views in Westlake, Tex., on the market for about $6 million, according to emails and text messages described to The Washington Post.

Yea, right, “Security considerations.”

………

The discussions about the estate, which was not ultimately purchased, are under scrutiny by New York investigators. The transaction was slated to be made through a corporate entity that received a $70,000 wire from the NRA in 2018, according to the people, who spoke on the condition of anonymity because of the ongoing investigation.

The entity was created at ­Wayne LaPierre’s request by a law firm working for Ackerman McQueen, the NRA’s longtime ad agency, according to the people.

The origins of the idea to buy the mansion, its proposed purpose and the reason the deal never went through are now being fiercely disputed by the NRA and Ackerman McQueen, which are locked in a bitter legal fight.

In a statement late Tuesday night, Ackerman McQueen said LaPierre had sought the ad firm’s assistance with the real estate transaction, a proposal it said alarmed company officials. “Actions in this regard led to Ackerman McQueen’s loss of faith in Mr. LaPierre’s decision-making,” the firm said.

It appears that this was a bridge too far for Ackerman McQueen, but the basic execution was for the NRA to overpay their ad agency, and then that the agency would kick back personal benefits to LaPierre.

This is thoroughly corrupt an completely illegal.

………

The New York attorney general’s office is now examining the plan for an NRA-financed mansion as part of its ongoing investigation into the gun lobby’s tax-exempt status, in which it has subpoenaed the group’s financial records, the people said.

Yeah, pretty much.

………

Angus McQueen, the now-deceased chief executive of the ad firm, had learned about the location of the property and was furious about LaPierre’s claim that he needed the property for security reasons, the people said.

“He said ‘The scales fell from my eyes,’ ” said one person familiar with the discussions. “They were buying a Taj Mahal on a golf course with a social membership.”

In a statement last month, Ackerman McQueen said it decided to stop paying a series of expenses for NRA executives, including LaPierre, in 2018 out of concern they were “suspicious” and their true nature was concealed from the NRA board and members.

No sympathy for Angus McQueen, or Ackerman McQueen. To quote Upton Sinclair, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Ackerman McQueen was complicit in looting the NRA, because it made them money.

Hopefully, there is a way for both of them to lose.

I’ve Seen This Movie Before, and It Does Not End Well


We Have Learned Nothing

We are repeating not particularly old, but remarkably destructive, patterns.

It appears that low and no money down mortgages are surging again:

What does the chart show?

It illustrates the growing proportion of UK mortgage lending at loan to value (LTV) ratios of 90 per cent or higher. Figures from the Bank of England last week found this type of lending had reached its highest level as a share of the total since the financial crisis, topping 18.7 per cent of all lending in the first three months of 2019.

The data appeared in a July report published by the BoE’s Financial Policy Committee, which monitors potential risks to the financial system. It is based on product sales data from the Financial Conduct Authority and the central bank’s own calculations.

Admittedly, this is the UK, which is a smaller real estate market, and is facing unique challenges **cough** Brexit **cough** at this time, so it may be an outlier, but this has unsettling echoes to the 2008 meltdown.

New York Realtors Has a Sad

Now that Republicans have, despite the best efforts of “Democrat” Andrew Cuomo, lost control of the New York State Senate, and with that, much of their political power.

They had used that power to restrict municipalities on things like rent control and eviction protections, and now some meaningful regulation looks set to pass, and they are upset.

F%$# them:

Less than a day after newly emboldened Democratic lawmakers announced bills that would significantly tighten tenant protections, prominent real estate developers got Gov. Andrew M. Cuomo on the phone to make a last-ditch plea to persuade him to block the measures.

………

They and their counterparts in the real estate industry have donated millions of dollars in campaign contributions to Mr. Cuomo and other state politicians in recent decades.

But on Wednesday, Mr. Cuomo rebuffed the developers, telling them that “they should call their legislators if they want to do something about it,” said a person briefed on the call, which lasted about 15 minutes.

The phone call capped a humiliating moment for an industry that had long reigned in the state capital.

………

The bills announced on Tuesday night by the Democratic leaders of the State Senate and the Assembly would abolish rules that let building owners deregulate apartments and close loopholes that permit them to raise rents.

The legislation would directly impact almost one million rent-regulated apartments in New York City, which account for more than 40 percent of the city’s rental stock, and allow other municipalities statewide beyond New York City and its suburbs to adopt their own regulations.

Real estate industry groups said the bills would do serious damage to housing in the city by reducing incentives for landlords to renovate existing apartments and to build affordable new ones.

Existing rent laws expire on Saturday. The rent regulation package, which is expected to be approved before the end of the week, is perhaps the most resonant symbol of the change in power in Albany since Democrats took complete control in November.

Republicans had dominated the State Senate for most of the last century and formed a close alliance with the New York City real estate industry, which donated heavily to Republican senators.

The elections in November not only brought Democrats to power in the State Senate, but also saw the rise of progressive lawmakers who fiercely opposed real estate interests.

These guys have been profiting through their political connections pretty much since the Donald Trump was in diapers.

It’s time for a change.

I Will Use Their Tears to Season My Supper

New York City real estate brokers, despondent over it becoming more for them to profit off money from drug dealer, despots, and corrupt businessmen are saying that the so called “Pied-a-Terre Tax” is “class warfare” on their clients:

High-end real estate brokers in New York worry that foreign second-home buyers are feeling under assault from all sides and may end up going elsewhere. Already wary of President Donald Trump’s anti-immigrant rhetoric, they now see a planned tax on absentee owners as a swipe from the political left.

“The international buyer has basically gone away over the past two years,” said real estate broker Martin Eiden at Compass, who sells about $50 million of residential property a year. “There’s only so much that people will take — they’ll either go somewhere else or they’ll just get a hotel room.”

The proposed tax would apply to properties above $5 million owned by non-residents. Governor Andrew Cuomo says the state needs it to pay for transit fixes. Mayor Bill de Blasio says the rich should pay more, especially those who pay no income taxes while full-time residents bear the costs of services that make New York City so attractive to foreigners and out-of-staters.

These people are paying enormous amounts of cash for properties where they spend a week a year because they are laundering money.

It makes no economic sense otherwise:

Properties over $5 million would be subject to the tax surcharge, starting at 0.5 percent of the home value to a maximum rate of 4 percent on homes above $25 million. A part-time owner of a $10 million unit, for example, would have to shell out an extra $45,000 a year.

These guys blow more money than that on a birthday party.

They object to the tax because they want to be worshiped, and taxes are antithetical to this.

F%$# them.

From the Department of “About F%$#ing Time”

They aren’t calling it that, of course, they are calling it a “Tax on non-resident owners,” but basically, it’s money laundering: (The London property market even more so)

Pressure to find revenue to finance a $40 billion fix for New York’s subways, buses and regional commuter rail has sparked renewed city and state interest in a tax on wealthy non-residents who own luxury city apartments.

New York Governor Andrew Cuomo’s budget director, Robert Mujica, jump-started the idea Wednesday in a statement that totaled up potential revenue sources for regional transit funding: $15 billion from congestion pricing, $5 billion from Internet sales, and $2 billion from yet-to-be-legalized cannabis. The so-called “pied-à-terre tax” on non-resident owners could raise as much as $9 billion, Mujica said.

………

Mayor Bill de Blasio has preferred a millionaires’ income tax on city residents. Since that proposal hasn’t received support in the legislature, the mayor said Thursday he could back the luxury-apartment tax.

………

The proposal has been opposed by the Real Estate Board of New York, the trade group for an industry that accounts for more than 30 percent of the city’s tax revenue. The board has said it would harm the city’s economy by suppressing investment, cutting jobs and lowering demand for high-priced apartment towers.

 Mandy Rice-Davies applies to the statement by the Real Estate Board of New York, “Well, they would say that, wouldn’t they?”

If there is a sure fire way to destroy your community, it is pandering to realtors, developers, and bankers.

Charming to the Last

Protesters who supposedly gathered to express outrage after Amazon dropped plans for a Queens headquarters included mercenary activists paid to turn up, according to video and some participants.

The crowd picketed outside the retail giant’s brick-and-mortar store on West 34th Street Feb. 15 in a protest spearheaded by Long Island City landlord Sammy Musovic, who said he’d borrowed money to renovate his four-story apartment building in anticipation of the company’s arrival.

Flanking Musovic was a group of about 10 men holding up signs reading “Boycott Amazon!” and “Amazon Left Us!”

But two of those participants told Patch they had responded to a Craigslist post recruiting people to hold signs for $30 an hour. A video obtained by Patch shows a man handing out cash to a group of protesters after the event.

………

Musovic denied any knowledge of the Craigslist post and the payments. “I don’t know anything about that,” he said by phone. “We were just trying to get Amazon back on the table.”

When a reporter described the video documenting the payments, Musovic repeated the denial and hung up.

I believe that the term for this is “Manufacturing Consent.”

Oh, You Delicate Flower

It appears that, since they are not being worshipped as Gods, Amazon has canceled its headquarters plans in New York City.

There wasn’t even a meaningful threat to the deal, it was just people saying bad things about them.

The best quote about his was from Senator Michael Gianaris, a high profile opponent of the deal:

“Like a petulant child, Amazon insists on getting its way or takes its ball and leaves,” said Mr. Gianaris, whose district includes Long Island City. “The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.

In related good news, the real estate speculators who bought property in anticipation of the project have lost their shirts:

Amazon.com Inc.’s announcement that it is ditching plans for a corporate headquarters in New York City stunned real-estate speculators, developers and renters who had rushed into the Long Island City neighborhood to be near the new HQ2.

Only three months ago, the prospect that the giant retailer would locate a headquarters in New York City and create 25,000 new jobs set off a real-estate frenzy that the borough of Queens had never experienced.

………

Amazon’s reversal could also hurt developers who had bought development sites or filed plans for new buildings in the area in recent months and were hoping that an influx of 25,000 new Amazon jobs could boost rents and property values.

………

Big publicly traded real-estate firms with exposure to New York City also felt Amazon’s sting. Shares of SL Green Realty Corp. and Vornado Realty Trust , two property owners with large and concentrated New York City portfolios, fell 1.4% and 0.9% respectively on Thursday, declining more than the broader market.

This is me doing a happy dance.

Finally, let me add the following, “#10PeopleOnTwitter“.

We Are Living in Bizarro World

It appears that gentrification in Oakland has dope dealers driving out tech startups.

That’s me watching this and golf clapping after reading these two tweets:

Hearing from tech startups getting priced out of Oakland warehouse space because of soaring demand for indoor hydroponic pot farms.

Yes, because it’s 2019 and everything is nuts *techies are being gentrified out of neighborhoods by drug dealers*

— Chris Anderson (@chr1sa) February 8, 2019

Same thing is happening with industrial space in LA/the valley

— Art Of Coop (@ARTofCOOP) February 9, 2019

Before you think that we have reached maximum weird, note that we are only (checks watch) 21 months from election day.

Stop the world, I want to get off this chicken sh%$ ride.

There is Nothing that Wall Street Cannot Make Worse

Case in point, the housing crisis, where not only did they create the crisis, profit from it, and then get bailed out, but then they used their bailout money to raise rents for the rest of us:

Wall Street firms drove up housing and rent prices while depressing homeownership rates after the financial crisis, according to a new study of economic data.

The analysis from researchers at the Philadelphia Federal Reserve found that after the collapse of the housing market a decade ago, institutional investors such as Blackstone, Cerberus Capital and Golden Tree seized on the opportunity to buy up homes and convert them into rental units.

In all, the researchers found that institutional investors’ purchases of residential properties represented nine percent of the overall housing price increases since the crisis — and 28 percent of the decline in homeownership rates.

We need to stop the looting and start prosecuting.

Look Out Below

Two of the most overheated real estate markets in the world are Manhattan, and Australia, and both of them appear to be trending downward, which looks an awful lot like 2007:

The median price of a Manhattan apartment has fallen below $1m for the first time in three years, according to a survey of sales in the final months of 2018, as real estate agents struggle to shift a glut of luxury properties and potential buyers worry about the outlook for the US economy.

The median price paid for co-operatives and condominiums in the prime borough of New York City — some of the most expensive properties in the US — fell 5.8 per cent to $999,000 according to research by Miller Samuel, a real estate appraiser, and Douglas Elliman, a real estate broker.

And from the land down under:

In its latest report on Australia, the OECD focuses to a disturbing extend on housing, household debt, what the current housing downturn might do to the otherwise healthy economy, and what the risks are that this housing downturn will lead to a financial crisis for the big four Australian banks, an eventuality that it says “authorities” should make “contingency plans” for.

The big four banks are huge in relation to the Australian stock market and the overall economy: Their combined market capitalization, at A$341 billion, even after today’s sell-off following the OECD report – accounts for 26% of Australia’s total stock market capitalization.

………

But then there’s the housing bubble, household debt, and the banks that have funded this bubble and that households owe this debt to.

The charts below are from the report. The first chart compares inflation-adjusted house prices of the two most magnificent housing bubbles, Australia (red) and Canada (green), Spain (ESP), and the US. The index measures changes in price levels, adjusted for inflation. Clearly, Australia and Canada are in a world of their own, but Spain, whose bubble collapsed disastrously and led to numerous bank resolutions and bailouts, got close:

It took more than 40 years for us to forget the lessons of the Great Depression.

This time around, the lessons were ignored from day 1, or more accurately from January 20, 2009 on, and it looks like we are going to head down the same road all over again.

I Wish I Could Talk to My Dad about This


Before the Demolition

Developers in the Bay Area have a trick: They historically significant properties, and get permission to renovate them

They then demolish the buildings, and rebuild them as urban mansions, and then they resell the properties to overpaid Silicon Valley executives for millions of dollars in profits.

It is a plague on the Fog City, andthe City Planning Commission has just opened up a can of whup-ass on a developer who did this:

A property owner who illegally demolished a 1936 Twin Peaks house designed by a renowned modernist must rebuild an exact replica of the home rather than the much larger structure the property owner had proposed replacing it with, the City Planning Commission ruled this week.

………

In a unanimous 5-0 vote late Thursday night, the commission also ordered that the property owner — Ross Johnston, through his 49 Hopkins LLC — include a sidewalk plaque telling the story of the original house designed by architect Richard Neutra, the demolition and the replica.

The commission directive, unprecedented in San Francisco, comes more than a year after the home at 49 Hopkins Ave., known as the Largent House, was almost entirely knocked down. All that remained of the white, two-story redwood-and-concrete-block home was a garage door and frame.

Johnston had received planning permission only to remodel with a design that would have largely kept the first floor of the existing home intact.

………

The case attracted attention because Neutra is considered one of the most important modern architects and because it highlighted the trend of speculators illegally razing modest homes with the intention of replacing them with mega-homes. The new houses can fetch upward of $5 million, double or triple the price of an average house in already expensive San Francisco.

Planning Commissioner Dennis Richards said he hopes the commission’s action in the 49 Hopkins case will send a message to speculators accustomed to ignoring city planning and building laws with few or no repercussions. 

My dad spent his professional career as a city planner, and it was sh%$ like this that made him tremendously cynical about his chosen profession.

I think that he would have pleased and surprised, as well as a bit dubious about the final outcome, at this news, but I’ll never know.

When this Goes Nationwide, Look Out Below

Expanding a program already in place in New York City and Miami, the US Treasury will be requiring full purchaser information on all cash real-estate transactions.

It’s called Geographic Targeting Orders (GTOs), and it has been expanded to include Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle (US Treasury link).

I do not know how much real estate in these areas is criminals and despots trying to conceal their ill gotten gains, but my guess is that, at least at the high end, it is quite a lot.

Assuming that the GTO regime is relatively strict, and given the vicissitudes of the Treasury, and the fact that the current President almost certainly laundered money for Russian oligarchs, I have my doubts.

This Does Not Sound Like Progress


Tennessee Ernie Ford says it all

Elon Musk’s latest “disruptive innovation” is to return to the days of the company town and the company store, where if you lose your job, they kick you out of your house:

Tesla’s Nevada-based Gigafactory could be undergoing a massive expansion which has the potential to include on-site accommodations for employees, reports the Las Vegas Review Journal. In a recent conversation with Nevada Governor Brian Sandoval at the state’s first annual technology summit, CEO Elon Musk discussed the automaker’s plans to hire more than 20,000 new workers for its manufacturing facility.

Currently, the manufacturing facility, coined Gigafactory 1, employs around 7,000 workers and produces the bulk of battery cells and packs found in Tesla vehicles. Despite producing an annual energy storage capacity output of 20 GWh, Tesla has acknowledged the need for batteries is virtually insatiable in order to meet the increasing demand for electric vehicles.

………

“The biggest constraint on growth here is housing and infrastructure.” said Musk according to the Review, “We’re looking at creating a housing compound on site at the Gigafactory, using kind of high-quality mobile homes.”

So, you live in a company town, and if you try to unionize, you get tossed out, and end up homeless, and your kid is kicked out of the company school, etc., just like in the 1890s.

Why does the Silicon Valley model of “Innovation” sound so much like the worst excess of the Gilded Age?

Corrupt

The California NAACP came out against an initiative that would make implementing rent control easier.

Days later, it’s president got a 6 figure consulting contract from the realtors opposing the initiative:

The president of the California NAACP has long resisted criticism that she melds the group’s interests with those of her political consulting firm, which takes in large fees for working on campaigns that the civil rights organization backs.

Critics say Alice Huffman is doing it again on what is shaping up to be one of the most bitterly contested measures on the November ballot Proposition 10, which would repeal a state law that limits cities’ ability to impose rent control.

The state NAACP’s 28-member executive committee voted in May to oppose Prop. 10. Huffman said the group agreed with arguments that allowing stricter forms of rent control would discourage housing construction and therefore hurt low-income tenants.

A month after the NAACP voted, Huffman said, her AC Public Affairs political consulting firm in Sacramento signed a deal to be a lead consultant on the opposition’s $800,000 campaign targeting African American voters through mailers and workers who will go door-to-door.

Apparently Ms. Huffman saw Delray Mckesson’s Patagonia vest endorsement deal, and thought, “Here, hold my beer.”

She claims that she does not accept contracts from companies that oppose the state NAACP positions, but she is the president of the organization, so she is in a position to move the group in a way that benefits her financially, as she did when the NAACP, and AC Public, played both sides of the street regarding cigarette taxes in 2006 and 2016.

America, where no good deed goes uncorrupted.

Missing the Bigger Picture


The Baddies Do Love Their iPhones

For all the allegations of treason swirling around Donald Trump, people are something right in front of their face, that Trump, and the Trump companies, have been laundering money from the Russian mob for at least a decade.

It’s why they are now paying cash for projects.

Case in point, a Russian Pimp running a prostitution ring from a Trump property:

At first blush, it just looks like the bust of another Russian human trafficking operation, run by a husband-and-wife team with two kids and a pricey Miami condo.

And then you look a little closer and it’s a Manhattan Russian criminal enterprise run remotely from Trump Tower III in Miami.

The husband and wife team, Yevgen Rizanov and Ksenia Khodukina, both 29, flew women from Russia to New York as part of a “sophisticated long-term operation promoting prostitution,” according to New York Assistant District Attorney James Lynch.

………

I’m sure the link to Trump properties is just a coincidence, too, though. Right? It’s not like a lot of Russian criminal enterprises run out of Trump properties, right?

Wrong. FT reports:

An alleged Kazakh money-laundering network channelled millions through apartment sales at the Trump SoHo; a Russian oligarch bought a Palm Beach estate from Trump in 2008 for $95m, more than double what Trump had paid for it four years earlier; in Florida, 63 Russians, some with political connections, spent $100m buying property at seven Trump-branded luxury towers, Reuters established. The money was not exclusively from the former Soviet Union: at the Trump Panama, some of it allegedly belonged to Latin American drug traffickers.

 Seriously, how did the august representatives of 4th estate miss this?

This man has been mobbed up as f%$# for decades.