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#61
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My Bike Path in the News
On 2018-07-30 21:34, Frank Krygowski wrote:
On Monday, July 30, 2018 at 6:20:15 PM UTC-4, AMuzi wrote: On 7/30/2018 3:59 PM, Frank Krygowski wrote: On 7/30/2018 1:34 PM, Joerg wrote: Some people are fed up and the smart ones are moving to Texas. Lots of jobs, not quite as nice outdoors but it does cut the housing expenses in half. I haven't heard about you moving to Texas. So are you not part of the "smart ones"? I wouldn't know from smart but ten years ago Joerg could make that case easily. Texas and California are no longer the extreme examples: http://static5.businessinsider.com/i...-state-map.png I wasn't really doubting the direction of migration. I was just noting that the guy who claimed the smart ones are moving was not among those moving. Smart people look at the big picture. Moving is a major hassle whether it's 100 miles or 6000 miles. I have done both. If I'd be in the prime of my earning years I'd be long gone, probably in Southern Utah. Now that I am gradually retiring many of the leftist roadblocks no longer apply to us. So why would we give up a nice group of neighbors, friends, church congregation, mountain bike trails and so forth if the downsides of living in a leftist state have become less influential on us? That's what smart people think through before making such a decision. -- Regards, Joerg http://www.analogconsultants.com/ |
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#62
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My Bike Path in the News
On Tuesday, July 31, 2018 at 10:51:21 AM UTC-7, Joerg wrote:
snip An apartment building is not a commodity item like a house. The sale price of a building is determined based on its net cash flow which is related to building quality only to the extent that it increases rents and decreases expense, e.g. new building doesn't need a new roof, immediate maintenance, etc. Whether a building gets built depends on what net cash it will produce, ... Bingo! And that depends on the cost of construction. If it goes up for all developers, and with this mandate it does, then the market move up in price. That's where you go wrong. So, lets say construction costs are the same in Tulsa and Folsom. Why would you build a $5M 50 unit low-rise complex in Tulsa when you could build a $5M 50 unit in Folsom and get triple the rent. Even if the complex cost $6M in Folsom because of the solar hit, you're still earning more than you would in Tulsa -- land of cheap construction. The difference in construction cost is far outweighed by the market rents, potential for appreciation and the natural increase in rates with a rising local economy. Gentrification is a gold mine. Smart money goes to Folsom even though construction costs are higher. Rental rates are based on supply and demand and not cost of construction -- until those costs get so high that market rental rates don't produce an acceptable ROI. Then you don't get new construction, and there is potentially a supply shortage -- assuming there is a demand. Then rents go up, and then the new developers come. Hey, speaking of demand, you could buy an apartment building in Jeffrey City, Wyoming, for probably nothing. https://www.atlasobscura.com/places/...ity-ghost-town https://trib.com/news/state-and-regi...bcf887a.html#1 Or you could build! Imagine saving all those construction costs in Jeffrey City -- hell, you could build the place out of uranium and asbestos scraps. Skip the solar. Put in granite counter-tops and rent it for . . . nothing! But at least it was cheap to build because none of those liberal commie pinkos were making you put in solar panels. BTW, I rode through Jeffrey City on my bike in '81 as it was becoming a ghost town. It's right on the Trans Am trail. The help at the market openly derided all the bicyclists who were presumed liberal environmentalists -- basically the town's only revenue stream after the uranium mines went kaput. It made absolutely no sense to me. They should have been sucking up and selling glowing souvenirs. -- Jay Beattie. |
#63
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My Bike Path in the News
On 2018-07-31 13:07, jbeattie wrote:
On Tuesday, July 31, 2018 at 10:51:21 AM UTC-7, Joerg wrote: snip An apartment building is not a commodity item like a house. The sale price of a building is determined based on its net cash flow which is related to building quality only to the extent that it increases rents and decreases expense, e.g. new building doesn't need a new roof, immediate maintenance, etc. Whether a building gets built depends on what net cash it will produce, ... Bingo! And that depends on the cost of construction. If it goes up for all developers, and with this mandate it does, then the market move up in price. That's where you go wrong. Nope. The housing shortage is getting worse here and all those mandates, permit fees, et cetera is what developers say is driving that. So, lets say construction costs are the same in Tulsa and Folsom. Why would you build a $5M 50 unit low-rise complex in Tulsa when you could build a $5M 50 unit in Folsom and get triple the rent. Even if the complex cost $6M in Folsom because of the solar hit, you're still earning more than you would in Tulsa -- land of cheap construction. That investor would neither got to Tulsa nor to Folsom. He'd go to Rochester, NY or Memphis, TN where rental returns are currently best. The difference in construction cost is far outweighed by the market rents, potential for appreciation and the natural increase in rates with a rising local economy. Gentrification is a gold mine. Smart money goes to Folsom even though construction costs are higher. Rental rates are based on supply and demand and not cost of construction -- until those costs get so high that market rental rates don't produce an acceptable ROI. That is what I am saying all the time. Not enough ROI - no new construction. Until rents consequently rise, then there wil be new construction. ... Then you don't get new construction, and there is potentially a supply shortage -- assuming there is a demand. Then rents go up, and then the new developers come. When rents go up enough to make a good ROI outlook apear solid enough there will be new construction. Else not. Hey, speaking of demand, you could buy an apartment building in Jeffrey City, Wyoming, for probably nothing. https://www.atlasobscura.com/places/...ity-ghost-town https://trib.com/news/state-and-regi...bcf887a.html#1 Or you could build! Imagine saving all those construction costs in Jeffrey City -- hell, you could build the place out of uranium and asbestos scraps. Skip the solar. Put in granite counter-tops and rent it for . . . nothing! But at least it was cheap to build because none of those liberal commie pinkos were making you put in solar panels. Ghost towns are everywhere. Heck, much of Detroit is a ghost town. https://drrichswier.com/wp-content/u...2612770257.jpg If I had my druthers I'd rather move and invest in Southern Utah: https://i1.wp.com/www.traipsingabout...ize=1030%2C773 My dream of a low maintenance back yard is a rock, some bare dirt, a cactus and maybe one manzanita bush. You can buy big homes there for less than half the Californian prices: https://activerain.com/blogsview/224...e-in-back-yard Heck, I could have one whole big room just for my brewery and the bikes would have their own garage. We'd look for a house sans pool though which would cost even less. Where we live not it's nice though. This week I'll be riding he https://www.youtube.com/watch?v=jvI1W7kmc4o It still has the buildings of an old Western movie set there, "Love Comes Softly". Not very schmaltzy and a pretty good family movie. I recognize almost all areas they show because I've ridden there. BTW, I rode through Jeffrey City on my bike in '81 as it was becoming a ghost town. It's right on the Trans Am trail. The help at the market openly derided all the bicyclists who were presumed liberal environmentalists -- basically the town's only revenue stream after the uranium mines went kaput. It made absolutely no sense to me. They should have been sucking up and selling glowing souvenirs. Or attract some other business. Some people aren't very smart. -- Regards, Joerg http://www.analogconsultants.com/ |
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My Bike Path in the News
On 7/31/2018 3:28 PM, Joerg wrote:
On 2018-07-30 21:34, Frank Krygowski wrote: On Monday, July 30, 2018 at 6:20:15 PM UTC-4, AMuzi wrote: On 7/30/2018 3:59 PM, Frank Krygowski wrote: On 7/30/2018 1:34 PM, Joerg wrote: Some people are fed up and the smart ones are moving to Texas. Lots of jobs, not quite as nice outdoors but it does cut the housing expenses in half. I haven't heard about you moving to Texas. So are you not part of the "smart ones"? I wouldn't know from smart but ten years ago Joerg could make that case easily. Texas and California are no longer the extreme examples: http://static5.businessinsider.com/i...-state-map.png I wasn't really doubting the direction of migration. I was just noting that the guy who claimed the smart ones are moving was not among those moving. Smart people look at the big picture. Moving is a major hassle whether it's 100 miles or 6000 miles. I have done both. If I'd be in the prime of my earning years I'd be long gone, probably in Southern Utah. Now that I am gradually retiring many of the leftist roadblocks no longer apply to us. So why would we give up a nice group of neighbors, friends, church congregation, mountain bike trails and so forth if the downsides of living in a leftist state have become less influential on us? That's what smart people think through before making such a decision. Hmm. Maybe it's just the ones who can't come up with excuses that are moving to Texas? Seems you should have qualified your "smart ones" remark. -- - Frank Krygowski |
#65
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My Bike Path in the News
On 2018-07-31 19:28, Frank Krygowski wrote:
On 7/31/2018 3:28 PM, Joerg wrote: On 2018-07-30 21:34, Frank Krygowski wrote: On Monday, July 30, 2018 at 6:20:15 PM UTC-4, AMuzi wrote: On 7/30/2018 3:59 PM, Frank Krygowski wrote: On 7/30/2018 1:34 PM, Joerg wrote: Some people are fed up and the smart ones are moving to Texas. Lots of jobs, not quite as nice outdoors but it does cut the housing expenses in half. I haven't heard about you moving to Texas. So are you not part of the "smart ones"? I wouldn't know from smart but ten years ago Joerg could make that case easily. Texas and California are no longer the extreme examples: http://static5.businessinsider.com/i...-state-map.png I wasn't really doubting the direction of migration. I was just noting that the guy who claimed the smart ones are moving was not among those moving. Smart people look at the big picture. Moving is a major hassle whether it's 100 miles or 6000 miles. I have done both. If I'd be in the prime of my earning years I'd be long gone, probably in Southern Utah. Now that I am gradually retiring many of the leftist roadblocks no longer apply to us. So why would we give up a nice group of neighbors, friends, church congregation, mountain bike trails and so forth if the downsides of living in a leftist state have become less influential on us? That's what smart people think through before making such a decision. Hmm. Maybe it's just the ones who can't come up with excuses that are moving to Texas? Seems you should have qualified your "smart ones" remark. You won't understand this. -- Regards, Joerg http://www.analogconsultants.com/ |
#66
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My Bike Path in the News
On 7/31/2018 2:49 PM, Joerg wrote:
On 2018-07-31 13:07, jbeattie wrote: On Tuesday, July 31, 2018 at 10:51:21 AM UTC-7, Joerg wrote: snip An apartment building is not a commodity item like a house. The sale price of a building is determined based on its net cash flow which is related to building quality only to the extent that it increases rents and decreases expense, e.g. new building doesn't need a new roof, immediate maintenance, etc. Whether a building gets built depends on what net cash it will produce, ... Bingo! And that depends on the cost of construction. If it goes up for all developers, and with this mandate it does, then the market move up in price. That's where you go wrong. Nope. The housing shortage is getting worse here and all those mandates, permit fees, et cetera is what developers say is driving that. That's what developers say, but it isn't necessarily true. In reality the fees are far too low. They don't cover the cost of adding water infrastructure, they don't cover the costs of new schools or expanding existing schools, they don't cover the costs of adding or widening roads to accommodate additional traffic, they don't cover the cost of more parks, etc.. All of those costs are externalized onto existing property owners or the costs are covered by increased fees and other taxes. In the Bay Area, there was a recent fee/tax increase that passed (or didn't pass depending on who you believe) that raises bridge tolls by $3 (actually more), to fund transportation projects unrelated to the bridges. This is currently being challenged in court because technically while votes on increased fees can pass with a simple majority, there must be a nexus between the "fee" and what the money is spent on. Since there is not such a nexus in this case, a 2/3 majority is required, according to the plaintiffs. The defendants are saying 'well if we buy more BART cars with this money then less people will drive over the bridges and hence there will be less congestion on the bridges," a real stretch but who knows what the courts will say. I was just at a meeting last Saturday where a developer was pitching a new development and the subject of solar came up. On a townhouse that will sell for probably $1.8 million, the cost of putting solar on the roof, at the time of construction, is lost in the noise. It would be about $2500 per unit if put in when the building is going up, but if each owner added solar on their own, and the building wasn't prepped for it, it would cost them at least $15K (after tax credits) for a relatively small, high-quality system with noncrystalline panels. The societal benefits of more solar on homes are so compelling that the state has a responsibility to act in the best interest of its citizens. Last night, at our City Council, we discussed putting on the ballot, a proposal to eliminate our per-square-foot based business license tax and to replace it with a per-employee based business tax (in California, this sort of change needs to go to voters). Some small companies would pay less under this change, most would see no increase or a minimal increase, but a very big fruit company in town would pay much more. We decided to not put in on the 2018 ballot, and come back in 2020 with a more complete proposal. This apparently was such big news that three TV stations showed up with satellite vans. I hope they didn't get my bald spot on camera. The problem cities are having is that companies are cramming far more workers into a building than in the past (used to be around 300 square feet per worker, now many tech companies are at less than 100 square feet per worker, as they've moved from offices, to smaller and smaller cubicles, to open offices, and now to big shared desks. This is aggravating housing issues and transportation issues. Mountain View has put such a business license tax change on the November 2018 ballot, with the agreement of their largest employer, Google. Many cities already do base their business license tax on number of employees rather than square feet of buildings. We agreed to put off until 2020 |
#67
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My Bike Path in the News
Tim McNamara, -That was refreshing.
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#68
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My Bike Path in the News
On Tuesday, July 31, 2018 at 2:49:04 PM UTC-7, Joerg wrote:
On 2018-07-31 13:07, jbeattie wrote: On Tuesday, July 31, 2018 at 10:51:21 AM UTC-7, Joerg wrote: snip An apartment building is not a commodity item like a house. The sale price of a building is determined based on its net cash flow which is related to building quality only to the extent that it increases rents and decreases expense, e.g. new building doesn't need a new roof, immediate maintenance, etc. Whether a building gets built depends on what net cash it will produce, ... Bingo! And that depends on the cost of construction. If it goes up for all developers, and with this mandate it does, then the market move up in price. That's where you go wrong. Nope. The housing shortage is getting worse here and all those mandates, permit fees, et cetera is what developers say is driving that. So, lets say construction costs are the same in Tulsa and Folsom. Why would you build a $5M 50 unit low-rise complex in Tulsa when you could build a $5M 50 unit in Folsom and get triple the rent. Even if the complex cost $6M in Folsom because of the solar hit, you're still earning more than you would in Tulsa -- land of cheap construction. That investor would neither got to Tulsa nor to Folsom. He'd go to Rochester, NY or Memphis, TN where rental returns are currently best. The difference in construction cost is far outweighed by the market rents, potential for appreciation and the natural increase in rates with a rising local economy. Gentrification is a gold mine. Smart money goes to Folsom even though construction costs are higher. Rental rates are based on supply and demand and not cost of construction -- until those costs get so high that market rental rates don't produce an acceptable ROI. That is what I am saying all the time. Not enough ROI - no new construction. Until rents consequently rise, then there wil be new construction. What I think is more worthy of complaint in California are development fees, which dwarf the cost of solar, particularly for an individual home in Fleamont! "Of the cities studied, Fremont proved the most expensive on a per-unit basis: 'Development fees for multifamily housing range from a low of $12,000 per unit in Los Angeles to $75,000 per unit in Fremont. Fees for single family housing range from $21 ,000 per home in Sacramento to $157,000 per home in Fremont, over five times as much.'” https://sf.curbed.com/2018/3/22/1715...ees-oakland-sf Again, those fees are not recouped over time like solar. OTOH, there are costs associated with development that should be recouped by cities and counties who have to build schools, roads, etc. to serve new citizens. But I would think that $157K a pop for a home in Fremont would cover those costs and then some. I could see that shutting down new home construction along with high labor and materials cost. snip Where we live not it's nice though. This week I'll be riding he https://www.youtube.com/watch?v=jvI1W7kmc4o I'm trying to get my son interested in a Bridge of the Gods ride on Saturday. https://www.youtube.com/watch?v=kr_cSccFePg The far side of the bridge is Washington. One of my favorite spots on the Washington side: https://www.youtube.com/watch?v=IjvEsJvQe5w You go east on the Washington side because it has a great shoulder on the eastbound lane and then west on the Oregon side. Some hipsters did a vlog: https://www.youtube.com/watch?v=kkouuwDDpaQ&t=167s West side starts at 3:10. The road was still closed at the falls a couple of weeks ago because of the fire, and I have to see if that has opened -- otherwise I have to ride a stretch of HWY 84, which sucks.. Good shoulder, just noisy. -- Jay Beattie. |
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My Bike Path in the News
On 8/1/2018 10:38 AM, jbeattie wrote:
snip Again, those fees are not recouped over time like solar. OTOH, there are costs associated with development that should be recouped by cities and counties who have to build schools, roads, etc. to serve new citizens. But I would think that $157K a pop for a home in Fremont would cover those costs and then some. I could see that shutting down new home construction along with high labor and materials cost. And you would be wrong. Fremont probably has the most new home construction of any south bay city. Part of the reason is the new Warm Springs BART station in southern Fremont. Part of the reason is the proximity to the Dumbarton Bridge with Facebook on the other side. When you're building million dollar condos or two million dollar houses, those fees are just part of the cost of doing business. |
#70
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My Bike Path in the News
On 2018-08-01 10:38, jbeattie wrote:
On Tuesday, July 31, 2018 at 2:49:04 PM UTC-7, Joerg wrote: On 2018-07-31 13:07, jbeattie wrote: On Tuesday, July 31, 2018 at 10:51:21 AM UTC-7, Joerg wrote: snip An apartment building is not a commodity item like a house. The sale price of a building is determined based on its net cash flow which is related to building quality only to the extent that it increases rents and decreases expense, e.g. new building doesn't need a new roof, immediate maintenance, etc. Whether a building gets built depends on what net cash it will produce, ... Bingo! And that depends on the cost of construction. If it goes up for all developers, and with this mandate it does, then the market move up in price. That's where you go wrong. Nope. The housing shortage is getting worse here and all those mandates, permit fees, et cetera is what developers say is driving that. So, lets say construction costs are the same in Tulsa and Folsom. Why would you build a $5M 50 unit low-rise complex in Tulsa when you could build a $5M 50 unit in Folsom and get triple the rent. Even if the complex cost $6M in Folsom because of the solar hit, you're still earning more than you would in Tulsa -- land of cheap construction. That investor would neither got to Tulsa nor to Folsom. He'd go to Rochester, NY or Memphis, TN where rental returns are currently best. The difference in construction cost is far outweighed by the market rents, potential for appreciation and the natural increase in rates with a rising local economy. Gentrification is a gold mine. Smart money goes to Folsom even though construction costs are higher. Rental rates are based on supply and demand and not cost of construction -- until those costs get so high that market rental rates don't produce an acceptable ROI. That is what I am saying all the time. Not enough ROI - no new construction. Until rents consequently rise, then there wil be new construction. What I think is more worthy of complaint in California are development fees, which dwarf the cost of solar, particularly for an individual home in Fleamont! "Of the cities studied, Fremont proved the most expensive on a per-unit basis: 'Development fees for multifamily housing range from a low of $12,000 per unit in Los Angeles to $75,000 per unit in Fremont. Fees for single family housing range from $21 ,000 per home in Sacramento to $157,000 per home in Fremont, over five times as much.'” https://sf.curbed.com/2018/3/22/1715...ees-oakland-sf Again, those fees are not recouped over time like solar. OTOH, there are costs associated with development that should be recouped by cities and counties who have to build schools, roads, etc. to serve new citizens. But I would think that $157K a pop for a home in Fremont would cover those costs and then some. I could see that shutting down new home construction along with high labor and materials cost. Fees are a serious problem here but everything you add makes things worse. $21k fees plus $10k for solar is $31k. That's obviously worse than $21k. snip Where we live not it's nice though. This week I'll be riding he https://www.youtube.com/watch?v=jvI1W7kmc4o I'm trying to get my son interested in a Bridge of the Gods ride on Saturday. https://www.youtube.com/watch?v=kr_cSccFePg The far side of the bridge is Washington. One of my favorite spots on the Washington side: https://www.youtube.com/watch?v=IjvEsJvQe5w You go east on the Washington side because it has a great shoulder on the eastbound lane and then west on the Oregon side. Some hipsters did a vlog: https://www.youtube.com/watch?v=kkouuwDDpaQ&t=167s West side starts at 3:10. The road was still closed at the falls a couple of weeks ago because of the fire, and I have to see if that has opened -- otherwise I have to ride a stretch of HWY 84, which sucks. Good shoulder, just noisy. Not my kind of riding, I do not like roads. My kind of riding is this, I just came back from there a few minutes ago, drenched in sweat but happy: https://www.youtube.com/watch?v=TH--6YiJcwU The MTB is all grimy and dusty now. I crashed only ones in a sharp turn but it was a slow crash, no big deal. -- Regards, Joerg http://www.analogconsultants.com/ |
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