Property Grunt

Monday, August 31, 2009


Disney to Pay $4 Billion for Comic Giant Marvel

Good, bad? I don't know. I know one thing, Disney will never let them go.

Reality bites when you need it bad

It is biting hard.

The New York Times has published two articles that reflect the current realities of the real estate market.

For Now, It’s All Yours

The New York Times give the rundown on the rise of furnished rentals.

Here are some key takeaways.

Leaving the furniture behind can be a good way to make it through tough financial times — the owner doesn’t have to spend money on storage and the tenant does not have to pay for furniture.

According to Halstead Property, the number of furnished apartments in its database — which includes rentals by co-op and condo owners, as well as sublets by other renters — jumped by more than 50 percent from the first six months of 2008 to the same period this year.

In my experience, furnished rentals are the worse type of rental to rent out. The fact is that everyone has different tastes of how their home should be decorated. If it is not to their liking, it does not feel like home.

And for the owner it is not all rays of sunshine.

“This is really weird!” she recalled saying to the man, whom she had found on Craigslist. “I don’t even know you, and I’m leaving my apartment in your hands.”

The apartment, yes. And also the books, the candles, the rugs, even the standing mixer in the kitchen. “All of that stayed,” she said. “I just took down my photos.”

The arrangement, for $3,000 a month, went well, though Ms. Rey found the month-to-month renewal process frustrating. When her first tenant cleared out in May, friends of her brother signed a one-month lease, and she started looking for her next tenant. She returned to Craigslist for a replacement. This time, her luck was not so good.

She rented the place to a dancer who agreed to stay for the summer. But at the beginning of August, the young woman moved out without paying for most of July. She still owes Ms. Rey $2,000.

Ms. Rey could have been easily solved the problem by simply holding onto a safety deposit of one month's rent.

Gary Malin, the president of the Citi Habitats, a New York brokerage, says few brokers spend much time on sublets, furnished or otherwise. Many of those transactions are conducted online on sites like Craigslist and

“It’s not as lucrative,” he said. “A lot of owners don’t price their apartments appropriately, and some want to do things outside of their board’s approval.”

Malin is correct that a lot of brokers shun furnished rentals. It is just too much of a hassle for a broker to deal with because the furnishings become an added variable to the situation. Even in a hot rental market, a furnishings presents difficulties in renting it out.

As owners not being able to price their apartments appropriately, as long as owners look at the latest rental data, they should be alright.

Also, for all you owners out there. Do not mess with your board. Obey the rules or they will crush you. If you want to get cute and try to skirt around them, you are asking for trouble. Boards are vicious as hell, especially in this economy when they are looking for any opportunity to charge fees. Make yourself a target and they will come a hunting.

Farnoosh Torabi’s studio apartment on West 80th Street has been listed for rent since the first week of July, but she has yet to receive a nibble. Earlier this month, she decided that she would pay the broker fee herself.

“I feel like listing it as a no-fee is going to help it a lot,” she said. “Whoever is looking at a studio doesn’t have a huge budget.”

Awhile back in Joyce Cohen's The Hunt, a broker claimed that a broker fee was a way to qualify rental tenant's which I strongly disagreed with.

Ms. Torabi is very aware of that, which is why she is kicking in for the full fee.

There is actually one particular client that is perfect for furnished rental, that is the foreign businessman. Back in the 1980's, there was a influx of Japanese salarymen who were living overseas. In the suburbs where I lived, what a lot of these Japanese companies would do would buy houses and use it for housing for their overseas employees and families. So there would be a rotation of families every couple of years from Japan.

What these furnished apartment landlords should do is make a concerted effort to seek out foreign nationals, particularly from countries that are flush with cash and have emerging markets that wish to expand into the North American market. Those are the people you want because they need a place to crash for an extended amount of time and need a home that is ready made.

After Century of Growth, Tide Turns in Florida

Choked by a record level of foreclosures and unemployment, along with a helping of disillusionment, the state’s population declined by 58,000 people from April 2008 to April 2009, according to the University of Florida’s Bureau of Economic and Business Research. Except for the years around World Wars I and II, it was the state’s first population loss since at least 1900.

“It’s dramatic,” said Stanley K. Smith, an economics professor at the University of Florida who compiled the report. “You have a state that was booming and has been a leader in population growth for the last 100 years that suddenly has seen a substantial shift.”

Fear not Florida. For your saviors are. The Chinese.

I have heard rumblings that Chinese people are pouring into the sunshine state. Why? For purely educational purposes. They learning everything they can in the tourism and hospitality business and bringing back their knowledge.

Thursday, August 27, 2009

This is not over

A long road indeed.

About 3 years ago when the walls of the real estate market , there was talk of a soft landing.

It appears that it was all wishful thinking. Now the media is doing the full court press raving about the real estate market making a recovery. That the light is at the end of the tunnel and the dawn is upon us. It is over.

I am here to tell you its not over. This recovery is a game of give and take, which amounts to giving us nothing and taking everything. The players of this game are unemployment, consumer spending and the reason why we are in this mess, real estate. If you want to be more specific, it is mortgages that are still crippling us.

Adjustable Mortgages Loom as Threat to Housing Recovery

Compared with subprime loans, option ARMs are fewer but tend to have larger balances. Resets on option ARMs in recent years have often doubled the payments.
“Everyone’s been focused on subprime, but we’re more concerned about this,” said Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”

First American CoreLogic anticipates 600,000 option ARMS will reset within four years.
Option ARMs, which lenders stopped offering last year, gave borrowers four payment options: less than the interest, which increases the balance every month; just the interest; the equivalent of a 30-year fixed-rate mortgage; and the equivalent of a 15-year fixed.

Three-quarters of borrowers take the minimum option, which usually expires after five years or when the balance reaches a cap, generally 110 percent to 125 percent of the original loan, according to the Mortgage Bankers Association.
Once the cap is reached, borrowers have to pay down a higher balance at a higher rate in a shorter period of time.

“This was a loan meant for sophisticated investors, or people who expected their cash flow to increase over time,” said Elena Warshawsky, a residential credit analyst with Barclays Capital, which expects 81 percent of the option ARMs originated in 2007 to default, with many ending in foreclosure.

Do you think any of these owners are going to want to stick around when they see their mortgage debt while the value of their homes drop and they are having a hard time to sell? Nope. They are going walk over to the bank and turn in their keys, just like what a lot of other people are doing.

For those of you are counting on Uncle Sugar’s milk money, I am here to say that teet is looking rather dry.

With Ted Kennedy’s passing, it appears that the Democrats are rallying together for health reform and Obama has recently announced that we are not f**ked. We are beyond f**ked.

In the new America, money is as tight as a performance America’s Best Dance Crew contestant. So when the real estate market gets re-shredded, do not expect any tape from the Federal Government.

Dangerous words on Wall Street

Do not be lulled into complacency because of the news you hear. Certain factions of Wall Street are still holding their breath. In fact what you should do is become more aggressive with your saving and examine other ways to cut costs and protect your assets.

Watch your backs folks. This is all far from over and if you are starting to experience some good times, I recommend that you take advantage of it and stock up on what you need.

I know you heard these words before and you are going to hear the again. Do not lower your guard.

Tuesday, August 25, 2009

Now don't this beat all.

You don't need to read Barry Ritzholtz to know that the rebound in the housing market is not a true rebound at all.

I got this ad in email.

The business transactions of hotels normally go through commercial brokers, even if a hotel is going into foreclosure. I have never seen it go to public auction.

Commercial brokers usually have a network of buyer and sellers in order to make a sale happen. But if they are going to these lengths to a sell a property of this magnitude, it just goes to show that no one has any money to even think of having a meeting of the minds.

Monday, August 24, 2009

Casting Call

This is a casting call for a new HGTV series that was emailed to me.

HGTV’s new series "Uprooted" is looking for high-energy home buyers
who are saying goodbye to their hometowns, totally picking-up, and
moving to a new place where everything is different. Whether they’re
moving from the mountains to the ocean, a major city to the country,
or making a move overseas, HGTV wants to hear your story.

In order to qualify:
• you must have begun the closing process on their new home or will be
closed mid September '09
• your old home must not immediately be occupied (unless current
residents would allow filming)
• you must not be moving because of retirement or military reasons.
• Price range must be between 400k to 1 million.

We are especially looking for families moving to or from one of the
following locations:
• California
• New York
• Hawaii
• Oregon
• Colorado
• New Mexico
• Texas

Candidates and realtors who are chosen for the show will receive compensation.

If you have the perfect clients and want to be on the show, e-mail

Please include
-your contact info
-where you are moving from
-where you are moving to
-when you are are moving

This is going to be an amazing show because right now due to foreclosures, unemployment and a horrible economy, there is a growing population making the decision to pull up roots. I think the fact they are offering compensation will have applicants coming in droves.

Historically, I think it is important to document this trend that is occurring in our society. I already heard of one story about a couple who left their home in Rye for greener pastures and now live in Colorado. Of course their house is still on the market waiting to get sold. And I have heard chatter of many people living in NYC who have to leave due unemployment and the cost of living rising against them.

So don't be surprised to see the topic of pulling up roots showing up in film and television. It will be part of the pop culture lexicon for quite awhile.

Friday, August 21, 2009

More salt in the wound

From today's New York Times,

Rise of the Super-Rich Hits a Sobering Wall

Here are some takeaways.

Few economists expect the country to return to the relatively flat income distribution of the 1950s and 1960s. Indeed, they say that inequality is likely to remain significantly greater than it was for most of the 20th century. The Obama administration has not proposed completely rewriting the rules for Wall Street or raising the top income-tax rate to anywhere near 70 percent, its level as recently as 1980. Market forces that have increased inequality, like globalization, are also not going away.

But economists say that the rich will probably not recover their losses immediately, as they did in the wake of the dot-com crash earlier this decade. That quick recovery came courtesy of a new bubble in stocks, which in 2007 were more expensive by some measures than they had been at any other point save the bull markets of the 1920s or 1990s. This time, analysts say, Wall Street seems unlikely to return soon to the extreme levels of borrowing that made such a bubble possible.

Like the real estate market, it is unlikely they will be making a comeback overnight.

But if the rich have done well in bubbles, they have taken enormous hits to their wealth during busts. A recent study by two Northwestern University economists found that the incomes of the affluent tend to fall more, in percentage terms, in recessions than the incomes of the middle class. The incomes of the very affluent — the top one ten-thousandth — fall the most.Over the last several years, Mr. McAfee began to put a large chunk of his fortune into real estate, often in remote locations. He bought the house in New Mexico as a playground for himself and fellow aerotrekkers, people who fly unlicensed, open-cockpit planes. On a 157-acre spread, he built a general store, a 35-seat movie theater and a cafe, and he bought vintage cars for his visitors to use.

He continued to invest in financial markets, sometimes borrowing money to increase the potential returns. He typically chose his investments based on suggestions from his financial advisers. One of their recommendations was to put millions of dollars into bonds tied to Lehman Brothers.

One of the key ways that the rich become richer is through OPM. In order to play in the big leagues, they have to bring big money. If they do not have the big money, they align themselves with someone who has deep pockets. It is a usually reliable system. But when it breaks down like it is right now, everyone gets hurt.

And the hits keep on coming.

This is not good.

In a nutshell what Karen Weaver is saying is the following:

Foreclosure rates in the U.S. remain near record highs. More than 13% of American homeowners with a mortgage are either behind on their payments or in foreclosure. The latest report from the Mortgage Bankers Association, released today, shows the percentage of loans that entered the foreclosure process dipped slightly to 1.36%, down from an all-time high of 1.37% in the first quarter.

However, that number may soon rise again as mortgage delinquency rates continued to climb in the second quarter.

That news is no surprise to Karen Weaver of Deutsche Bank. She startled everyone a few weeks ago when she predicted that, by 2011, nearly half of American mortgage holders would be underwater (meaning that they'll owe more on their mortgages than their houses were worth).

Here's the link to her report.

This is just further evidence that any talk to recovery is premature. In fact the next wave of foreclosures could be far more devastating since it will be accompanied by the credit card meltdown.

We also have to remember that there is a significant amount of inventory from houses to condo to dead malls that are remaining stagnant. Real estate and mortgages are going to have a crippling effect on our economy for quite sometime.

If you are not aggressive in your savings and frugality, this is the time to do it. That means reducing your expenses and looking for added value in all your purchases. So cut to the bone. I know I am. More on that later.

As for buying a place. I still think buyers are going to be in the driver's seat for a long time coming. So feel free to take your time. Sellers, if you need to take a hit, then take a hit on the price. If you have the financial and mental wherewithal to stick around then wait. But it will be a long wait my friends.

Wednesday, August 19, 2009

Roll Call: More and More of the Same

Break out the bowls because it looks like we are having ourselves a green shoots salad.

Frailty Lingers in Housing and Producer Price Reports

New figures showing a decline in wholesale prices and a drop in new-home construction highlighted how weak the economy remains, even as some optimists declare the recession to be over.

Producer prices fell more than expected in July as the costs of food and energy slipped, the Labor Department reported on Tuesday. The 0.9 percent monthly decline came after three months of increases, and suggested that demand was weak up and down the ladder of production, from consumer goods to intermediate goods like chemicals and rubber to raw materials.

Producer prices declined a record 6.8 percent from last July, when crude oil prices soared above $145 a barrel and pushed the costs of fuels, food and other products sharply higher, before they fell back amid the global financial crisis. The decline in the last 12 months is the largest drop in 60 years, since the government starting keeping such records.

So-called core prices excluding food and energy costs fell 0.1 percent, their second monthly decline of the year.

The figures offered more evidence that inflation remains a distant concern for the American economy, even as some investors speculate that higher oil prices, rising interest rates and a weaker dollar are in the pipeline, a result of the government’s enormous recovery programs.

On Friday, the government reported that consumer prices were unchanged in July from a month earlier and were down sharply from a year ago, reflecting the drop in gasoline and transportation costs. Economists say that there is still tremendous slack in the economy, and that wages are likely be flat over the next few months as unemployment ticks up.

“The economy remains weak and even as it begins to recover, the amount of excess capacity is high,” said Peter Kretzmer, senior economist at Bank of America.

The word delicate is probably an understatement. We are barely digging ourselves out of this mess. That is why whenever I heard people screaming that the recession is over and happy days are here again, I just want to scream.

So clip your coupons. Live frugally and save your money for the next cycle.

The New York Times published an article on how homeowners are put in the cobra clutch because of property taxes. What is happening now is that owners have are having to choose between paying the mortgage or their property taxes. And those who chose to pay their mortgages have tax liens filed against them.
Tax Bills Put Pressure on Struggling Homeowners

Hard times are causing more homeowners to fall behind on their property taxes. But in thousands of cases, they are not responsible to their local governments, but to private companies that charge double-digit interest and thousands of dollars in service fees.

This is because in recent years struggling cities and counties have sold their delinquent tax bills to the highest bidder. It seemed a painless way to turn old debts into cash to finance schools or public services.

But housing advocates say the private companies may be exacerbating the foreclosure crisis, pushing out homeowners faster than would governments, which are increasingly concerned about neighborhoods becoming wastelands of abandoned properties.

“In the beginning, you’re getting this immediate windfall of cash,” said Anita Lopez, the auditor of Lucas County, Ohio, which sold off more than 3,000 tax liens for $14.7 million. The county includes Toledo. “But when you think about abandoned properties, foreclosed properties — the cost to the community is far more expensive than the short-term benefits.”

Investors say the arrangement actually benefits everyone. School districts, fire departments and public parks get an infusion of cash. The investors take on a risky but potentially high-yielding investment. And taxpayers do not have to pick up the slack from scofflaw landlords or tax evaders.

Governments, of course, can charge interest and penalties too, and they foreclose on properties for back taxes. But governments charge interest rates that are half what private investors charge — often offering no-interest payment plans — and are also more likely to be concerned about the long-term prospects of neighborhoods.

In the world distress properties, tax liens are a very lucrative industry. Private investors will swoop in and buy the liens and then take over payments from the homeowner while making money off the interest. Like mortgages, often these lines are packaged into some type of investment product and sold off or traded.

One of the key advantages of buying a tax lien is that the holder is the first in line when a property is auctioned off.

About two years ago before the s**t really hit the fan one developer who specializes in distressed properties told me that the banks in Florida were compiling a list of real estate developments and watching very closely because once they went into default, they were going to shopping. But now these lenders are freaking out because now they are the owners of these properties which is something they do not want.

The same goes for investors in tax liens. The last thing they want to is to become owners of the properties because it means they have to spend more money and time taking care of these properties. This is still a very lucrative industry, however you need to be very selective in where you invest.

Now for some really scary s**t

Bank Sells Woman's Home By Mistake

Apparently this was due to human error. Another reason why all homeowners should invest in an alarm system so you can prevent this type of stupidity. And a 12 gauge.

And I just got this from Recessionwire.

How hard is it to find a job in your city? Here's the number of unemployed per job posting for the 50 most populous metropolitan areas in the U.S.

It looks like DC is the place to go.

Tuesday, August 18, 2009

Sometimes you don't need the experts to tell you how bad things are.

Sometimes I think Garfield is genius in its simplicity.

Monday, August 17, 2009

"Guys with the guns are the worst. You never know what they are going to do."

You had no choice.

By now we all have heard about the store owner who had to use deadly force to protect himself and his employees from 4 robbers. The result was two dead robbers and two wounded robbers.

For more details go the links below.

2 Dead, 2 Injured: Harlem Biz Owner Shoots Suspected Robbers

Harlem Shop Owner On Shooting Robbers: "This Is Really Awful"

I strongly concur with Ray Kelly , Mr. Augusto was completely justifed in his actions. He was literally put in a position where it was himself and his employees or the robbers.

However, Gus takes no pleasure in the results.

"How would you feel? This is terrible. This is really awful. I can't imagine it. Some young kids are dead because they're stupid."

Awhile back I did an entry on firearms.

Crime: There is more to it than pulling the trigger.

What I find ironic is that many aspects of what I blogged about are issues that Mr. Augusto are dealing with and took the proper actions in acquiring and using his shotgun.

If you look at the comments I got reamed pretty badly for it. And I responded to those comments with this entry.

I Love You Man!

I want to get this very clear.



What is Gun Safety? In my opinion it is that all gun owners should be properly trained in the use of a firearm. They should also be educated in the laws pertaining to gun ownership, the psychological, emotional and mental trauma associated with using a firearm in self defense situation. They should also be aware of how to protect their finances in case the hostile parties involved with the situation decide to pursue legal action against them.

Whether a gun owner owns a .38 snub nose or a has a garage full of M-60s is their business. But they need to understand the responsibilities they are undertaking by owning a gun.

I am not a gun expert nor am I lawyer but in my opinion this was a text book righteous shoot. The hostile party entered his premise with the intention of causing harm. He pleaded for them to leave and gave them the option to walk away. They chose to escalate it by attacking one of his employees. His only response was to shoot.

Mr. Augusto was completely in the right for the following reasons.

1. The robbers announced and displayed their intention that they were committing a crime. They weren't just mouthing off, they were armed and made it clear they wanted rob the store.

2. The robbers entered Mr. Augusto's store when he shot them. Mr. Augusto did not shoot them outside his store. If he had done that, he would have been in the same jam as Mr. White.

3. Mr. Augusto actually asked them to leave. Even though they were brandishing a weapon, he would have been justified to whip his shotgun and start blasting.

4. He had a permit for his shotgun. Unlike Mr. White, Gus had a legal firearm.

5. Gus shot three times and only one of the robbers was armed. This was not excessive, in fact it was necessary. Only one gun was displayed, but there was a possibility that the others were armed but were concealing their weapons. Gus needed to be thorough.

From the all of the interviews I read, Gus had no desire to fire his weapon and was heart broken over what occurred. In fact he stated that he knows how it feels to lose a loved one to firearms because his son took his own life with a gun.

What also concerns me is that the family members of the robbers will decide to pursue legal action against Gus despite the fact this was a legal shoot and their boys were the ones at fault. I think it is highly unlikely this will occur because the backlash would be huge however it is a possibility so I hope Gus has consulted a lawyer in protecting his finances.

I think Winchester's sales have gone through the roof because the shotgun used was about 20 years old and probably the shells were the same age. If this is not the greatest advertisement for reliability, I don't know what is.

Shotguns are excellent firearms because you do not need to aim, all you have to do is point in the general direction of your target and the spread will hit them. Sometimes you do not even need to use it.

The pump action sound alone is enough to make criminals turn and walk away because there is no sound like it in the world.

There are some positive aspects to this incident. First of all criminals are now going to think twice about robbing stores because they have no idea what might be hiding behind the counter. Business owners, particularly those that deal with cash, will now have a better idea how to protect themselves and following the law in the use of deadly force.

In terms of real estate, that block has now become the safest block in Manhattan. Because of the reputation alone, no one will be stupid enough to f**k around in that area.

As for the robbers, I have no sympathy for them. These idiots were fully aware of what they were doing, they were given an out without any bloodshed and when they decided otherwise, their fates were sealed. I feel horrible for their families, because nobody wants that for their kin. But those robbers made the decision to walk the path of violence.

Friday, August 14, 2009

Les Paul

In high school when every kid seemed to be part of a garage band and wanted to be the next Guns and Roses or Metallica or the Traveling Willburys. The one common term among guitarists was Les Paul. The Les Paul was the holy grail amongst those musicians.

I forget where exactly but I believe somewhere near the East Village there was a club that advertised that Les Paul played there once a week. Being a jaded New Yorker, I would think about checking it out remembering how revered he was then forget about it.

Now I am really regretting never seeing him perform.

The Legendary Les Paul Dies at 94

Les Paul was a class act. Even when he was crippled with arthritis he figured out a way to play guitar without bending his fingers. And he was beloved by all.

Godspeed to you sir.

Wednesday, August 12, 2009

Honky Trek: Scarsdale?

I was actually trying to find the political cartoon Honky Trek: White Flight by Berkely Breathed. But this will do.

In the past year I have done copious amounts of coverage on Scarsdale.

Scarsdale passes gas

SCARSDALE IS F**KED!: Scarsdale launches the charm offensive.

Queens or Scarsdale Part 2: The Answer

Queens or Scarsdale Part 3: The Final Countdown

However this new development is huge because it impacts the future of Scarsdale.

Westchester Adds Housing to Desegregation Pact


Westchester County entered into a landmark desegregation agreement on Monday that would compel it to create hundreds of houses and apartments for moderate-income people in overwhelmingly white communities and aggressively market them to nonwhites in Westchester and New York City.

The agreement, if ratified by the county’s Board of Legislators, would settle a lawsuit filed by an antidiscrimination group and could become a template for increased scrutiny of local governments’ housing policies by the Obama administration.

“This is consistent with the president’s desire to see a fully integrated society,” said Ron Sims, the deputy secretary of housing and urban development, which helped broker the settlement along with the Justice Department. “Until now, we tended to lay dormant. This is historic, because we are going to hold people’s feet to the fire.”

Now before you start calling me insensitive or evil, I want to get something very clear. I am pro affordable housing. In fact I took a class on the subject of affordable housing credits and was strongly considering getting into that part of the real estate industry because not only was it quite profitable, it was an area that would make a huge difference in people's lives. There is a gaping crevasse between the haves and have nots that keeps getting bigger and bigger. Affordable Housing is one of the tools to fill that gap.

Affordable Housing has the unfortunate stigma for bringing those elements to light. And it is going to be a cause for alarm. The reality is that affordable housing is about helping the people that are the backbone of America which are the teachers, firefighters, policer officers and sanitation workers. These are the people that run our communities and affordable housing will provide them homes they need.

However, the transition for Westchester particularly for places like Scarsdale is going to be quite rocky.

Below is my analysis.

The agreement calls for the county to spend more than $50 million of its own money, in addition to other funds, to build or acquire 750 homes or apartments, 630 of which must be provided in towns and villages where black residents constitute 3 percent or less of the population and Hispanic residents make up less than 7 percent. The 120 other spaces must meet different criteria for cost and ethnic concentration.

The county, one of the nation’s wealthiest suburbs, has seven years to complete the construction or acquisition of the affordable housing.

Seven years goes by very quickly. And with this deadline these areas are going to be hard pressed to come up with a plan that satisfies everyone.

Affordable housing is defined by a complex formula, but generally it is meant to help working families keep from spending more than a third of their gross income on housing. A family of four could make up to $53,000 as a tenant and up to $75,000 as an owner and still qualify.

There is no minimum income level, “but it’s not going to be no-income,” said Craig Gurian, executive director of the Anti-Discrimination Center, which filed the lawsuit. “This agreement is not focused on facilitating housing for the poorest of the poor.” The center is a nonprofit anti-bias advocacy and litigation group based in New York City.

The reason why there is no minimum is that could be used as a way implement steerage and redlining. For instance, in Scarsdale the only qualification is money. Which means you have to a lot of it. Without a minimum, Scarsdale can't use money as a barrier to entry.

Mr. Gurian said that while black and Hispanic residents have a disproportionate need for affordable housing, “this is an opportunity-creating agreement, not a guarantee” that the homes would go to minority members.

“Residential segregation underlies virtually every racial disparity in America, from education to jobs to the delivery of health care,” said Mr. Gurian.

No communities have been chosen to receive the homes, officials said. But according to the Anti-Discrimination Center, more than two dozen predominantly white towns or villages are eligible, including Bedford, Bronxville, Eastchester, Hastings-on-Hudson, Harrison, Larchmont, Mamaroneck, New Castle, Pelham Manor, Rye and Scarsdale.

I want to get something clear. There are black people in Scarsdale. However, from what I understand, it can be somewhat of a unique experience for young African American men. I will put it this way. They make sure they have their ID on them whenever they are out at night.

A federal monitor, James E. Johnson, has been appointed to ensure that the county abides by the settlement. Given that 120,000 acres in the county meet the criteria, the monitor “should have no difficulty making sure that Westchester ends its policy of allowing affordable housing to be off-limits in the most highly white neighborhoods in the county,” Mr. Gurian said.

Whoever owns those 120,000 is sitting on the catbird seat. Anyone who lives next to those acres is screwed. Anyone who knows those acres will milk their position for what it is worth. They will grab as many tax credits, grants and benefits they qualify. They will do everything they can squeeze out as much profit of those acres. They will sell those tax credits and they are also in a position of power when dealing with the town government. In fact if the town is smart they will take ownership of the land in order control the process as much as possible.

This affordable housing settlement is also a boon for real estate developers in Westchester, particularly those who have a ton of inventory that is sitting on the market. The smart real estate developer will do what they can to qualify for the Affordable Housing Settlement in order to sell off their inventory. This is especially bad for Scarsdale because there is real estate developer who has a condo development that specializes in Senior Housing. He also owns key buildings in the village and was planning to turn those into condos but with the housing crash, those plans are now put on hold. What do you think he is doing now? He is most likely switching gears and looking into affordable housing.

The lawsuit, filed under the federal False Claims Act, argued that when Westchester applied for federal Community Development Block Grants for affordable housing and other projects, county officials treated part of the application as boilerplate — lying when they claimed to have complied with mandates to encourage fair housing.

A Westchester official originally dismissed the suit as “garbage.” But the county was largely repudiated in February when Judge Denise L. Cote ruled in Federal District Court that between 2000 and 2006 it had misrepresented its efforts to desegregate overwhelmingly white communities when it applied for the federal housing funds.

Judge Cote concluded that Westchester had made little or no effort to find out where low-income housing was being placed, or to finance homes and apartments in communities that opposed affordable housing.

When you take money from Uncle Sugar, no strings are attached, just a very long detonation cord that will blow up in your face if you do not play by their rules. Awhile back I wrote about Scarsdale taking stimulus money it did not need.

Stimulated Scarsdale

I have not doubt that will also bite Scarsdale in the ass.

As part of Monday’s agreement, the county admitted that it has the authority to challenge zoning rules in villages and towns that in many cases implicitly discourage affordable housing by setting minimum lot sizes, discouraging higher-density developments or appropriating vacant property for other purposes. Westchester agreed to “take legal action to compel compliance if municipalities hinder or impede the county” in complying with the agreement.

It was unclear Monday to what extent localities could thwart the agreement, if any chose to do so. Mary Beth Murphy, the town supervisor of Somers, which is among the possible locales for new housing, said that while she was unaware of the agreement, “we certainly are committed to affordable housing and have amended our zoning legislation in recent years to create more opportunities.”

I do not envy the people who are part of these local governments. The next 7 years is going to be absolute hell. They are not only going to be heavily scrutinized by the federal government but they are also going to get a full body cavity by their constituents.

The agreement could spark challenges to suburban county governments across the country that have resisted pressure to undo decades of residential segregation.

Andrew J. Spano, the Westchester County executive, attributed the settlement to “a historic shift of philosophy” by federal housing officials. He said he had signed the agreement to avoid further litigation and possible penalties.

The county admitted no wrongdoing, attributed the judge’s ruling to a technicality and argued that since it had previously invested in affordable housing, “what is different is the locations where the housing must be built.”

“We are settling the lawsuit because we have no choice,” Mr. Spano said.

The suit by the Anti-Discrimination Center applied to towns and villages in Westchester. The federal government deals directly with the county’s larger cities, among them Yonkers, which nearly went bankrupt before capitulating in a housing segregation case that began in 1980 and dragged on for years. That city, which had concentrated public housing in its southwest, was forced to build on the east side, where more whites lived.

The agreement is subject to approval within 45 days by the county’s Board of Legislators, which is also required to approve a $32.9 million bond sale to help finance the housing. Without legislative approval, the litigation would resume and the county would be faced with having to prove at trial that it did not knowingly file false claims.

Spano has no choice but to settle. First of all money is tight and by settling they at least have some measure of control over the situation. Lawsuits are like fighting matches. The last thing you want to do is have it go to decision.

Most of the homes would be new construction, although some existing houses and apartments could qualify if the county made them permanently affordable.

As I stated before, an enterprising real estate developer can make a lot of money from this statement. Scarsdale is getting hit just as hard as the rest of the real estate market. They are sellers out there dying to get out. A smart real estate developer will buy out as many cheap houses they can find and create an assemblage. Knock them down and build multi-families. Where are they going to get the money? No worries. We are living in Obama's world. Uncle Sugar will provide milk money straight from the teet.

Of course expect outrage amongst Scarsdale residents who live in areas like Edgewood which is often referred to as the ghetto/Bronx/Harlem of Scarsdale. They are the most likely place where affordable housing will take root.

Now in this article they focus on these particular towns.

Bedford, Bronxville, Eastchester, Hastings-on-Hudson, Harrison, Larchmont, Mamaroneck, New Castle, Pelham Manor, Rye and Scarsdale.

They do not mention Edgemont? Why? Because it is part of the town of Greenburgh.

Look at the graphic below.

Because they are part of the town of Greenburgh. And there are areas of Greenburgh that already fit the qualifications of affordable housing. Yet, Edgemont is far enough away from those areas that it does not impact property values. Word of advice for you Edgemont kids. It might be in your best interest to shut the f**k up about saying you are from Scarsdale because it might attract unwanted attention.

As I stated before, this transition will not be smooth. There is going to be a lot of tension amongst these towns. Expect to hear a lot about this in the news. Especially a place like Rye. That community has a reputation of keeping to themselves, even if it means not enjoying their own public parks.The simple reason why people move to these towns is get away, and thre is no way I can say this without sounding like a douchebag, from certain elements. But that is the primary motivation of why people move to the suburbs. And honestly, it is not race thing. It is an economic thing.

There will be those who will join the white flight which will actually raise the property values in places like Edgemont because it will not be effected by the Affordable Housing program but will still retain its prominence.

I have no idea how this will effect the school systems. If the AT program does not pick up the pace, I would not be surprised that Scarsdale reverts back to Advanced Placement since it is already an established and it will be easier to implement in order to deal with the influx of new students.

There is also potential of further polarizing the residents of Scarsdale from their new neighbors. They might want to ensure their enclave status by taking measures that their children get a better education in the same institution that is shared by the affordable housing population. While being labeled as living in affordable housing could be a stigma. In other words, separate but equal. If it is ever proven that students from affordable housing are not given the same opportunities as their more richer brethren, Justice Soto-Mayor will lay the smack down when the case lands in the Supreme Court.

Or being part of affordable housing could actually a badge of honor and prove to be an advantage when applying to colleges.

I could go on and on with my analysis which may or may not come true. However there are two things that I know for sure. This will impact property values in Scarsdale and there will be an upward tick of white flight.

Tuesday, August 11, 2009

Dawn of a new age

I read this from those wacky Curbed people.

Related Cos. touts paperless lease process

I have been talking this for years.

Outsourcing rental brokers

Roll Call: What lies ahead

I stand corrected... on somethings

Rose Associates is already doing this.

The paperless application is going to be more prevalent even amongst smaller owners. In the near future there will be turnkey solutions that will many owners will run to in droves. It is simple really. Paper, although is cheap after awhile it takes up a lot of space. Go to any landlord's office and you will see file cabinets everywhere. Some landlords have to rent storage space for their records. The paperless application reduces all of that to one small server. And daily backups prevent any loss of data.

As I stated before, this is bad for brokers because one of the key rolesthey play is in preparing the leases for execution. If that is replaced by a website, what is the point of going to a broker? Eventually some enterprising individual is going to figure out how to adapt the paperless solution to condo and co-op board packages and people will be able to do them on their blackberries. This is also a bad thing for brokers.

More evidence that we are not out of the woods yet.

Bad Assets May Need More Support

Key takeaways


"No one has a good handle how much is out there," Warren said. "Here we are 10 months into this crisis...and we can't tell you what the dollar value is."

Estimates are that "somewhere between $600 billion and $1.5 trillion in toxic assets (is) spread across the balance sheets of the small and the large banks," Warren said, adding: "That's a lot."


The Congressional Oversight Panel said, however, that smaller U.S. banks faced billions of dollars in losses from delinquent commercial property loans and were far less able to raise capital and absorb losses than their larger counterparts.

An analysis done by the panel showed that under a scenario 20 percent worse than assumptions used in the Federal Reserve's stress tests, about 719 banks with assets between $600 million and $100 billion would need to raise some $21 billion in new capital to offset loan losses.

"Treasury must be prepared to turn its attention to small banks in crafting solutions to the growing problem of troubled whole loans," the panel said, adding that it should consider using similar stress tests -- along with pledges for additional capital -- on smaller institutions.

Brave New World indeed.

Friday, August 07, 2009

All Hands for Building Collapse

Breaking: Unstable Walls At 2 Fifth Avenue

Some wire reports about 2 Fifth Avenue, the post-war building just north of Washington Square Park (on the west side of Fifth): "10-12 FLOOR WALLS ARE BULGING" and "BRICKS ARE PULLING AWAY FROM THE 17TH AND 18TH FLOORS." Yikes! Apparently the Department of Building was called and authorities are preparing for a possible "minor collapse." And here's some history about the 20-story, 391-unit building—did you know there were originally 11 brownstones on the property—built by William Rhinelander for his family—between Washington Square Park North and 8th Street? When plans for this apartment building were released, there was a "Save Rhinelander" campaign. UPDATE: Now it's an "all hands" situation for a wall collapse

I am sure Brown Harris Stevens is freaking out. They have an office right next door. The city is going to take good care of this building since Ed Koch lives there.

Forget about the GIJoe movie but don't forget about John Hughes

This is what the GIJoe movie should have been.

As many of you know, the inspiration for the name of this blog came from a childhood comic book of mine, GIJoe. I still hold that comic and the cartoon in high regard. I have even met the great Larry Hama twice who took pictures with me and signed my comics.

Which is why I am not paying money to see the movie.

I had problems with the movie from the git go when they hired Stephen Sommers to direct it. I have read the background information, the spoilers and the comic book movie adaptation which confirm my worst fears for the film which is that they show very little respect for the source material.

Paramount already knows this movie sucks ass after word leaked about the test audience scores being the lowest in history and Stephen Sommers being let go and rehired. So they have waged a hearts and minds campaign by drafting critics sympathetic to their cause to spread the word of mouth that this is an awesome movie.


If you want to do something really constructive with your time. Rent a bunch of John Hughes films. Breakfast Club, sixteen Candles, Planes, Trains and Automobiles.

Pay tribute to the man who played a key role the teen movie experience in the 1980's.

God Bless you John Hughes.

Thursday, August 06, 2009

Another Douchebag

You think your life sucks? Watch this and answer the question.

I am beyond livid right now over this piece of trash that went on that shooting spree in PA. I have skimmed his words, which as far as I am concerned does not count as a blog. It is a website. If you want further details go to Gawker. I am not going to quote him, I am not even going to mention his name.

What really angers me is that the stuff he gripes about is bulls**t we all deal with. He talks about how he hates his job, that he hasn't gotten laid since last century, no woman wants to go out with him, he's lonely, he has no friends and he is completely unsatisfied with his station in life and feels that his life is one big zero.

So he figures by shooting some innocent people he will at least have a place in history.

This guy was actually the luckiest in the world and I will prove it to you.

He hates his job. First of all at least he has a job and a house which is more than most people have especially in the world we live in now.

He hasn't gotten laid since Thriller was first released and he is unmarried. There is actually an upside to this. He has never contracted a sexually transmitted disease and does not have to deal with unwanted pregnancies. Remember, like Kanye West says:

"18 years, 18 years. She got one of yo kids got you for 18 years"

Also dating costs money. The benefit of not dating was that he was able to save up for a house.

If he had wife and kids he would be freaking out right now because he has to deal with the fact he has mouths to feed while the sword of Damocles hangs above his head.

He feels insignificant in his lack of accomplishments. Accomplishments are a pain in the ass. There is always a price for each great achievement which require work and effort. The scary thing is even if you do your best the result is jack squat. There is nothing wrong with settling. At least you know what you are getting.

Surrounded by idiots. Dude. They are everywhere.

Friends suck. Friends can be wonderful but they also be a pain in the ass because you have deal with their bulls**t too. Especially if you have friends who are complete douchebags and treat you like crap.

He has an over domineering mother. All mothers are over domineering. That is what mothers are supposed to do. It is from this domination that children are developed for better or for worse.

He has an older brother who was a a$$hole. All older brothers are a$$holes. I think it is important to have an older sibling who is an a$$hole because then younger siblings are able to develop the proper skill sets to endure and navigate under an oppressive regime.

The future holds nothing for him. The future is what you make of it. You have no control over anything but yourself. So whatever is thrown your way, you have to make do with what is given.

All the things he rants are problems that are easily solved.

Has no girlfriend or wife? There are a ton of internet dating sites out there where he could have found a mate. And if he did not want to spend the money there is always craigslist. If you got the money, get yourself a mail order bride. When all else fails, there is always porn

Idiots and a f**ked up family. Part of our life's work is learning how to deal with family members that we do not like and dealing with the a$$holes. These are elements we are never free of. This can be simply solved by avoiding all family gatherings and not dealing with people in general. That means becoming a hermit. Or trying to adapt to these type of people.

That void of feeling completely useless or not amounting to anything could have been filled by volunteering or engaging in some type of charitable work. Helping others provides great meaning to one's life. If he wanted fame or fortune, there is plenty of opportunities online. From making porn to doing something stupid. Look at those people who made that wedding dance video. Nothing special about that. Just a bunch of young people dancing down the aisle. But they got on the Today Show. He could have gotten his 15 minutes without killing innocent people.

Yeah. He was 48 years old but he still had a lot of years ahead of him and being single and unattached meant he had complete freedom. He was actually the master of his own fate because he had not other obligations other than to himself. He could have left the country, traveled, find a job overseas and begin a new life.

Maybe if he had traveled and saw what real human suffering was, what real anger and hate was. Maybe he would have realized that he was acting like an idiot.

And even after that, if he was still unable to shake what he felt the need to express himself through violence, then he should have gone for professional help. If that did not work than he should just done himself in first. At least some innocent people would have been alive.

Monday, August 03, 2009

Just waiting to bite us in the ass

Awhile back there was a building I was doing an open house in and while waiting for buyers and I was talking shop with the super of the building. We were discussing the new development that had opened up around the corner and with a smile he shook his head saying that he would never buy into that development. Before becoming a super he was in construction and from what he saw of that new development it was a disaster waiting to happen.

Which brings me to this article.

New York Faces Huge Backlog in Retests of Concrete

Nearly a year after New York City said it had a plan to retest the concrete in an untold number of buildings because a testing company was suspected of failing to perform required tests or falsifying results on scores of projects, only a handful of buildings have been retested.

The City Department of Buildings first learned of the allegations against the company, Testwell Laboratories, in June 2008, and two months later, an official said that the agency had developed a plan to begin the required retesting. In October 2008, when several company officials and employees were charged in the case — accusations that involved some of the city’s highest-profile construction projects — the Buildings Department received a formal list of the affected buildings.

One of the many words of wisdom that Mama Grunt bestowed upon her brood was to never buy a home that was recently built or was built that had never been inhabited before. Always buy a home that has a record of habitation.

During the last boom, building materials were in high demand due to the fact there was a ginormous construction going on in China. There were lots of rumors about developers cutting corners to keep down costs. Which makes this situation so f**king scary.

There is a huge possibility that New York City has a number of potential collapsing time bombs. It may not happen today, it may not happen tomorrow, it may not happen for the next ten years. But if the NYC government has dropped the ball on quality control, we may be looking at this in the near future.