06.22.23

Things Go Askew: How to Escalate Concerns in your Community

• As a follow-up to our new page dedicated to conflict, we’ve turned What to Do: When Things Go Askew into an escalation steps infographic.

Get HELP!

• We’ve created THE source for CIC accountability and enforcement resources in each state: Get Help!

  • Nearly 40 states offer no resources whatsoever.

    1. Want to do something about it?  Join HOA United.

State Statute Matrix

• Our new state statute matrix is a more concise alternative to our existing statute database (conveniently located on the same page). 

Follow us on Twitter

• Stay up to date in between newsletters!  Come tweet with us! 

Remembering Surfside

• June 24, 2021 will forever be associated with great loss of life due to a preventable building collapse.  We’ve collected a trove of Surfside coverage here.

Federal Surfside collapse probe points to pool deck as likely trigger

— Tim Craig | WaPo | June 15, 2023

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Rochester Towers is the latest in a series of condominiums with failing infrastructure (aka structural deficiencies).

Rochester Towers residents allowed back inside to get belongings — Sydney Zatz | KAAL TV | June 14, 2023

The question of who is going to pay for potentially $4 million to repair two or three columns in the troubled Rochester Towers haunts David Barnett, whose family owns five of the 94 condominium units in the downtown building.

Barnett, who lives separately in Rochester, owns two units in the building at 207 Fifth Ave. SW. His parents own two and his aunt also owns a unit. His parents are now living with him full-time, after being abruptly evacuated more than two weeks ago due to structural concerns about crumbling columns.

"We set this up as a retirement home in a good downtown spot for my parents, after their house burned down five years ago. Now we don't know what will happen," he said. "It is a frustrating time. The lack of information has been incredibly sad."

Who will pay for the possible millions in repairs at Rochester Towers? — Jeff Kiger | The Post Bulletin | June 15, 2023

Receivership

• Receivership is expensive: $200,000/month.  Apathy is the worst choice.

N.B. There’s a separate video at the bottom of the Hammocks receivership article discussing the 75 unit New World COA receivership due to lack of insurance for a property following a devastating fire in January 2023.  The property will be sold (and the association terminated) to provide proceeds to its owners.

Hammocks HOA receiver shares information every homeowner should know — Ivan Taylor | CBS Miami | April 07, 2023

Risky Business

• CAI and NAR continue lobbying against Fannie and Freddie’s heightened lender requirements for multi-unit complexes implemented beginning January 1, 2022.  

  • NAR’s “Condominium Resource Book” was “developed to demonstrate the need for changes in FHA’s condo policy.”  FHA’s policies finally relaxed in 2019 only to snap back in 2022 following the Surfside collapse.  

  • Below are two abstracts from NAR’s “FHA Condo Financing Issue Summary”

  • NAR Policy: Condominiums continue to be the most affordable homeownership option for many first time buyers, small families, single people, and older Americans.  NAR strongly supports loosening FHA’s condominium rules to ensure that more homeowners will be able to sell their units, and homebuyers will have more opportunities to buy affordable properties.

• Opposition Arguments: Opponents of NAR policy believe that condominium properties are more inherently risky than other residential real estate, and that the federal government should not be involved in that market.  They also believe that condo properties that include rental units are even more risky because the renters don’t have the investment and may not treat the property as well as owners.  Therefore, they think FHA’s restriction on the number of rental units reduces the risk.

• Looks like the “opposition” was right.

Your Reserve Study… Needs HELP

• Mister Rogers taught us long ago about what’s real and what’s pretend.  Most reserve studies pretend to be accurate and homeowners pay the price.  Special assessments to fund failing infrastructure offer a reality check, but why do associations ignore obvious errors for decades at a time?  Reserve Judgment from Issue #64 highlights one reason reserve studies aren’t accurate and The Myth of “Full Funding” includes 10 more.

Do you have volunteers involved in your reserve study update process?

Snapshot of a reserve study for a condominium in Seattle, WA.  

2021 data are as presented by the reserve study firm.  2023 data updated by a brief SMAARTE Group reserve study tune-up. 

• Replacing the fire control system will cost $330,000: over 300% more than the reserve study’s prior estimate of $107,000

• The reserve study excludes 10.5% sales tax

• The study woefully underestimates the cost of elevator modernization

• The study under-counts the total glazing (doors and windows) by about 90% and underestimates the replacement cost by 100% to 200% ($ millions)

• The study excludes the cost of a building-wide re-pipe

AI

• These cartoons are the best.

Impact of ChatGPT  — Tom Fishburne | Marketoonist | April 07, 2023

Inspiration

• You might want to sign up to hear directly from Joan Garry.

“There is no way your organization will ever thrive without a high-functioning board.”

WHY?  It takes a high-functioning Board to delegate appropriately (and agree to fund necessary resource investments), supervise appropriately and understand the nuances between what the Board must do and what should be delegated. 

View past coverage:  1,  2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12.

Energy

• The Esbjerg heat pump project is the creation of the German engineering firm MAN Energy Solutions, which is installing the 60-megawatt setup for the local utility DIN Forsyning.

The heart of the system consists of a pair of supersized heat pumps, which are big enough to replace the town’s existing coal power plant and its waste-to-energy incinerator, to boot.

Giant Heat Pump Takes Over Entire Danish Town — Tina Casey | CleanTechnica | June 12, 2023

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The following story is a suburb addition to coverage of the challenges ahead for alternative energy sources and the US power grid.  Also see Renewable Struggles Getting to the Grid and Transmission Troubles.

America’s fragmented electric grid, which was largely built to accommodate coal and gas plants, is becoming a major obstacle to efforts to fight climate change.

Tapping into the nation’s vast supplies of wind and solar energy would be one of the cheapest ways to cut the emissions that are dangerously heating the planet, studies have found. That would mean building thousands of wind turbines across the gusty Great Plains and acres of solar arrays across the South, creating clean, low-cost electricity to power homes, vehicles and factories.

But many spots with the best sun and wind are far from cities and the existing grid. To make the plan work, the nation would need thousands of miles of new high-voltage transmission lines — large power lines that would span multiple grid regions.

To understand the scale of what’s needed, compare today’s renewable energy and transmission system to one estimate of what it would take to reach the Biden administration’s goal of 100 percent clean electricity generation by 2035. Transmission capacity would need to more than double in just over a decade…

Why the U.S. Electric Grid Isn’t Ready for the Energy Transition — Nadja Popovich and Brad Plumer | NYT | June 12, 2023

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There is nothing cool about window air conditioners.

They’re clunky, ugly and tend to be way too loud. Most of them are more or less identical and have been for a long time: same temperature, same efficiency, same fear of falling out the window during installation.

“There was no meaningful performance difference from unit to unit,” said Liam McCabe, a seasoned window-AC product reviewer. “Everything was a rectangular heavy box.”

At least until a sleeker, quieter, U-shaped AC came along that looked and sounded unlike any that had ever been made. It also produced less noise and required less energy, which solved the biggest problems of window air conditioners. These machines work if you turn them on and never have to think about them again. This one worked so well that it had the opposite effect. It made people completely obsessed with their air conditioning….

How Did the World’s Coolest Air Conditioner Get So Hot? — Environmental Science & Technology | June 15, 2023

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Solar panels on your balcony?  Absolutely!  N.B.  The solution below looks strikingly similar to this Ukrainian design. 

EcoFlow brings solar power to any home, even apartments and rentals — Thomas Ricker | The Verge | June 15, 2023

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US-made wind and solar components are now cheaper than imports — Michelle Lewis | Electrek | June 12, 2023

The Cost of Net Zero

• Potential harms of indoor fossil fuel use is still a burning topic.  View prior coverage.

Stanford scientists measured benzene from gas stoves in 87 California and Colorado homes in 2022 for the paper published in the journal Environmental Science and Technology. They found both natural gas and propane stoves "emitted detectable and repeatable levels of benzene that in some homes raised indoor benzene concentrations above well-established health benchmarks."

Gas stoves pollute homes with benzene, which is linked to cancer — Jeff Brady | NPR | June 16, 2023

Gas and Propane Combustion from Stoves Emits Benzene and Increases Indoor Air Pollution

— ACS Journal of Environmental Science & Technology | June 15, 2023

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“The project goal was to develop a nearly market-ready heat pump module which uses the climate-friendly refrigerant propane, does not exceed the 150-gram limit for indoor use, and yet still provides sufficient heat for single-family homes,” said Dr. Lena Schnabel, head of the heating and cooling department at Fraunhofer ISE. “We have now achieved this goal in cooperation with our industry partners and have given them the tools to develop a market-ready heat pump.”

Fraunhofer ISE develops propane heat pump using only 146 g of refrigerant — Beatriz Santos | PV Magazine | June 21, 2023

Environment

• Most residents of built urban environments can empathize with the brutal noise of jackhammers and leaf blowers.  That noise is hazardous to our health.

On a spring afternoon in Bankers Hill, San Diego, the soundscape is serene: Sea breeze rustles through the trees, and neighbors chat pleasantly across driveways.

Except for about every three minutes, when a jet blazes overhead with an ear-piercing roar.

A growing body of research shows that this kind of chronic noise — which rattles the neighborhood over 280 times a day, more than 105,000 each year — is not just annoying. It is a largely unrecognized health threat that is increasing the risk of hypertension, stroke and heart attacks worldwide, including for more than 100 million Americans…

Noise Could Take Years Off Your Life. Here Are the Health Impacts

— Emily Baumgaertner, Jason Kao, Eleanor Lutz, Josephine Sedgwick, Rumsey Taylor, Noah Throop and Josh Williams | NYT | June 09, 2023

LISTEN: Urban Noise

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The notion of a climate niche is based on work the researchers first published in the Proceedings of the National Academy of Sciences in 2020, which established that for the past 6,000 years humans have gravitated toward a narrow range of temperatures and precipitation levels that supported agriculture and, later, economic growth. That study warned that warming would make those conditions elusive for growing segments of humankind and found that while just 1% of the earth’s surface is now intolerably hot, nearly 20% could be by 2070.

Climate Crisis Is on Track to Push One-Third of Humanity Out of Its Most Livable Environment — Abraham Lustgarten | ProPublica | June 06, 2023

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Desalinization is one of the next logical steps since Arizona doesn’t have enough water for all planned new housing developments.

Fifty miles south of the U.S. border, at the edge of a city on the Gulf of California, a few acres of dusty shrubs could determine the future of Arizona.

As the state’s two major sources of water, groundwater and the Colorado River, dwindle from drought, climate change and overuse, officials are considering a hydrological Hail Mary: the construction of a plant in Mexico to suck salt out of seawater, then pipe that water hundreds of miles, much of it uphill, to Phoenix.

The idea of building a desalination plant in Mexico has been discussed in Arizona for years. But now, a $5 billion project proposed by an Israeli company is under serious consideration, an indication of how worries about water shortages are rattling policymakers in Arizona and across the American West…

It would flood the northern Gulf of California with waste brine, threatening one of Mexico’s most productive fisheries. It would carve a freeway-sized corridor through a U.S. national monument and UNESCO site, established to protect a fragile desert ecosystem. And the water it provided would cost roughly ten times more than water from the Colorado River…

Arizona, Low on Water, Weighs Taking It From the Sea. In Mexico. — Christopher Flavelle | NYT | June 10, 2023🤝

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A new study has found that humans pumped so much water out of the ground over 17 years that Earth has tilted nearly 3 feet to the east.

Humans have pumped enough groundwater to change Earth's spin — Emily Lefroy | New York Post | June 16, 2023

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The High Seas Treaty, Explained — Jackie Gu | Reuters | March 30, 2023

UN Adopts First-Ever International Treaty Protecting High Seas — Katherine Hamilton | Forbes | June 19, 2023

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NASA Shows What 30 Years of Rising Seas Feels Like in Chilling New Animation — Clare Watson | ScienceAlert | June 21, 2023

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More on plastic and greenwashing (AKA “net zero”).

Plastic production has soared some 30-fold since it came into widespread use in the 1960s. We now churn out about 430m tonnes a year, easily outweighing the combined mass of all 8 billion people alive. Left unabated, it continues to accelerate: plastic consumption is due to nearly double by 2050.

Now there is a chance that this huge growth will stop, even go into reverse. This month in Paris, the world’s governments agreed to draft a new treaty to control plastics. The UN says it could cut production by a massive 80% by 2040.

Such a treaty – scheduled for agreement next year – cannot come soon enough.

Whisper it, but the boom in plastic production could be about to come to a juddering halt — Geoffrey Lean | The Guardian | June 13, 2023

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The number of fossil fuel companies setting net-zero emissions targets has risen sharply over the past year, but most fail to address key concerns, making them "largely meaningless", a report showed on Monday.

Some 75 of the world's largest 112 fossil fuel companies have now committed to reaching net-zero - the point at which greenhouse gas emissions are negated by deep cuts in output elsewhere and methods to absorb atmospheric carbon dioxide.

That's up from just 51 a year ago, according to the assessment of publicly available data by Net Zero Tracker, run in part by the Britain-based Energy and Climate Intelligence Unit and the University of Oxford.

But most targets do not fully cover or lack transparency on Scope 3 emissions — which include the use of a company's products, the biggest source of emissions for fossil fuel companies — or don't include short-term reduction plans, the report added.

A study published last week in the journal Science found that about 90% of countries' net-zero targets were unlikely to be achieved.

Fossil-fuel company net zero plans 'largely meaningless,' report says — Gloria Dickie and Simon Jessop | Reuters | June 13, 2023

Credibility gap in net-zero climate targets leaves world at high risk — Journal of Science | June 09, 2023

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…Around the country — and the world — thousands of companies, households and cities buy renewable electricity credits to meet their climate targets and bolster their sustainability claims. There’s just one problem: Buying those credits, it turns out, doesn’t mean you are actually running on renewables. In fact, it doesn’t mean that at all…

Mark Dyson, managing director of carbon-free electricity at the energy think tank RMI, says an electricity grid is a bit like a giant swimming pool. When different types of power plants create electricity, it’s similar to pouring water from different colored glasses into the pool — they look different on the outside, but once in the pool the water can’t be separated out. A person, or electricity user, sitting on the other end of the pool sucking out water with a straw can’t tell where it came from.

That’s why renewable energy credits, also known as renewable energy certificates, or RECs, were invented. These credits play a kind of electricity shell game. Say a wind farm in Texas produces thousands of megawatt-hours of electricity in a given year. That wind farm can make money two ways: first, by selling that power to the local utility or second, by selling the “greenness” or “renewable-ness” of that power to companies and individuals — in the form of credits.

When a company says that it’s buying renewable energy, most of the time that means it’s buying renewable credits — not the electricity itself.

Buying renewable energy doesn’t mean what you think — Shannon Osaka and Hailey Haymond | WaPo | June 21, 2023

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CONSTRUCTION across its entire supply chain, is responsible for around 23% of all greenhouse gas emissions. Most originate in the creation of building materials (especially concrete and steel) or transporting them to where they’re needed. But around 5.5% of emissions  come directly from construction sites—predominantly through the burning of fossil fuels that power machinery and generators.

These emissions may balloon with the global population. Around 2.5 billion more people will live in cities by 2050, according to the United Nations. To accommodate them, urban environments the size of Singapore are being built every month. To expand sustainably requires a radical reshaping of how structures are built—and hard decisions as to whether they get built at all. Novelties like the project at Olav Vs gate will need to become the rule.

“We’re on the verge of a boom in global construction,” said Irene Domínguez, a policy analyst at Bellona, a nonprofit based in Oslo that seeks to combat global warming. “That’s why it’s important that we have solutions that are low carbon but also scalable.”

The Struggle to Electrify One of the World’s Dirtiest Industries — William Ralston | Bloomberg | June 08, 2023

Housing Affordability & Homelessness

• A hardening insurance market is driving premiums higher and playing an increasingly large factor in housing affordability.  Read more in Issue #67.

American International Group is planning curbs on home-insurance sales to affluent customers in some 200 ZIP Codes across the U.S. at high risk of floods or wildfires, people familiar with the matter said. The states affected include New York, Delaware, Florida, Colorado, Montana, Idaho and Wyoming, the people said. AIG has already restricted new business in California.

In a little-noticed pullback, Farmers Group earlier this year stopped offering new home-insurance policies in hurricane-prone Florida. A spokesman said that “with catastrophe costs at historically high levels and reconstruction costs continuing to climb,” the pause was designed to help Farmers more effectively manage its risk exposure.

State Farm and Allstate, meanwhile, are pulling back from California’s home-insurance market. The shift is making it hard for some home buyers to get insurance and is sparking fierce wrangling over what is most to blame: climate change, inflation or regulations…

Home Insurers Including AIG Curb New Policies in Risky Areas Nationally — Jean Eaglesham | WSJ | 06/08/23

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A team of researchers at the University of California, San Francisco Benioff Homelessness and Housing Initiative surveyed several thousand people experiencing homelessness in the Golden State and found 90% of them had lost their last permanent housing in California. What’s more, three-quarters of the study participants were living without housing in a county where they last had a home, and two-thirds of people said they were born in California.

“One of the biggest myths about homelessness in California is that there’s a mass influx of people from other states,” Dr. Tiana Moore, the co-author of the study and policy director at the Homelessness and Housing Initiative, wrote in an email to SFGATE. “People experiencing homelessness in California are Californians.”

The report released Tuesday is the “first large-scale representative study to use mixed methods” to examine homelessness in California in about 30 years. It was based on a “random sample of all adults who are homeless, whether or not they receive services,” explained Dr. Margot Kushel, co-author and director of the initiative, over email.

Thirty percent of the country's homeless population lives in California, even though the state accounts for only 12% of the U.S. population overall, the study said. Every day, an estimated 171,000 people experience homelessness in California; this is the largest homeless population in the country. With half as many homeless people, New York has the second-largest population, according to the 2022 Annual Homeless Assessment Report...

The most surprising findings in a new study on homelessness in California — Amy Graff | SFGATE | 06/20/23

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There’s a lot going on right now with the King County Regional Homelessness Authority — and there has been for a while.

Last week, the authority adopted its first long-term vision for the 2-year-old agency.

Last month, its CEO, Marc Dones, announced a June resignation after leaders in homelessness services put the authority on blast for not paying them on time.

That follows terse public exchanges over the amount of funding the authority has requested to end homelessness, as well as squabbles over strategy and politicking.

Overall, the agency has been in the news a lot more in the past year, although many King County residents might still not know it even exists.

What’s going on with the Regional Homelessness Authority? — Greg Kim | The Seattle Times | 06/08/23

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When people worry about the US economy these days, their focus is invariably too myopic. Forget about the battle with inflation: It will be won, perhaps at the cost of a painful recession, and the country will settle back into its previous trajectory.

The real problem is that trajectory. America is turning into an oligopolistic economy that marginalizes the vast majority of its inhabitants.  To get a sense of what I mean, consider a fairly conservative exercise: Take historical trends and extrapolate them for the next 25 years. The results are alarming.

Let’s start with income. By 2048, the top 1% of Americans will account for 22.5% of the nation’s total, the largest share since the peak of the stock bubble in 1928.

On current trends, the top 1% will receive 23% of all income by 2048.

Meanwhile, the middle will stagnate. The median annual income will rise a mere 0.3% a year in inflation-adjusted terms, from about $67,000 in 2021 to about $72,000 in 2048. The income of the poorest 10% will actually decline…

Forget Inflation. The US Economy Has Bigger Problems. — Kathryn A. Edwards | Bloomberg| 06/16/23

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Builders have been stymied since the pandemic by higher costs for materials and labor, stricter lending practices, rising interest rates and supply chain hiccups.

The uncertainty threatens to further slow the process of building affordable homes. So many developments have been sidetracked or delayed that some experts expect a “production cliff” to hit in a year or so, meaning fewer new homes coming onto the market.

“When I started my career 30 years ago, the topic of affordable housing was usually limited to really lower-income clientele, industries and jobs,” said Albert Milo, president of the affordable housing division of the Related Group, an urban developer. “Now, it’s diametrically different. Most areas of the country are talking about teachers, police officers, nurses, professionals struggling to find housing that is affordable for their income.”

Affordable Housing Woes Paint ‘Bleak Picture’ for Developers — Patrick Sission | NYT | 06/14/23

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While America’s resilient labor market gets the most attention, real estate shouldn’t get short shrift when it comes to analyses of inflation and the broader economy. From a housing shortage to the reshaping of the commercial real estate sector, there’s plenty to consider. 

Commercial property owners, particularly of office buildings, are struggling to pay debt as borrowing costs surge, leading to negotiations with lenders and defaults. The Federal Reserve is counting on falling rental prices to help drive disinflation over the rest of the year, but there are signs that might not happen as quickly as policymakers want. Howard Hughes, the Texas-based real estate developer, said 48 lenders rejected bidding on a new apartment project near Houston despite strong demand for rentals. 

For would-be home buyers, affording that goal can be out of reach because of an inventory shortage and mortgage rates that have more than doubled since the start of the pandemic. — Victoria Cavaliere and Ian Fisher | Bloomberg Weekend Reading | 06/10/23

Can I Afford a House: US Market is Missing 320,000 'Middle Income' Homes — Paulina Cacheron | Bloomberg | 06/09/23

Where Middle-Class Buyers Can Afford Homes the Most—and the Least — Clare Trapasso | SFGate | 06/11/23

Middle income home buyers in the United States are finding little on the market to buy, even if they can qualify and afford a mortgage. These would-be buyers face the most severe housing shortage of any other income bracket, according to a new analysis from the National Association of Realtors and Realtor.com that found the market is short more than 300,000 affordable homes for these buyers.

The report defined a middle-income home buyer as someone in a household earning up to $75,000 a year, the median household income in the United States. Given that income, these buyers can purchase homes valued up to $256,000 without being overburdened with housing costs.

And there are a lot fewer homes in this category than a few years ago.

Middle-income buyers can afford to buy less than a quarter — only 23% — of listings that are currently on the market. Five years ago, this income group could afford to buy half of all available homes, according to the report…

Middle-income buyers face the most severe housing shortage — Anna Bahney | CNN Business | 06/08/23

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WA renters need to earn twice the minimum wage to afford rent — Heidi Groover | The Seattle Times | 06/14/23

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You’re not imagining it — costs in Seattle rose faster than San Francisco — Alison Saldanha | The Seattle Times | 06/20/23

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The World’s Most Expensive Cities for Luxury Life Has Singapore at Top — Denise Wee | Bloomberg | 06/19/23

Housing Market

• The dream of owning a home has become more elusive than ever. Over the past decade, U.S. house prices have increased by nearly 4.7% per year above the rate of inflation while the median household income in the U.S. has only grown by 1.5% per year (above inflation) over the same time period. Coupled with the highest mortgage rates since 2008, we might be in one of the most unaffordable housing markets ever. Given this rapid increase in home prices, it raises the question: “Why are houses so expensive?” Why Are Houses So Expensive? — Nick Maggiulli | Of Dollars and Data | 06/13/23

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"It will be appropriate to cut rates at such time as inflation is coming down really significantly," Powell said, according to CNBC. "And again, we're talking about a couple of years out… As anyone can see, not a single person on the committee wrote down a rate cut this year, nor do I think it is at all likely to be appropriate."

Housing Market Nightmare Is About to Get Worse — Nick Mordowanec | Newsweek | 06/14/23

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Capital Economics: Pause in home price declines to 'prove temporary'' — Lance Lambert | Fortune | 06/13/23

Built Environment

• Learn more about what’s being built:

Multifamily Market Survey (MMS) — National Association of Home Builders | 05/18/23

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“How do I” depends on your jurisdiction.  See Caveat Emptor from Issue #61.

Surprising as it may seem, a developer doesn’t need to finish the common areas in a building to get a temporary certificate of occupancy and start selling apartments… How Do I Force a Developer to Finish Construction Work in My Building? — Ronda Kaysen | NYT | 06/10/23

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The Bay Area’s 545-foot-tall Millennium Tower has only continued to tilt further and sink deeper west in spite of architects’ best efforts to steady the ritzy building…

San Francisco's Millennium Tower's tilt deepens as engineers rush to reverse lean — Katherine Donlevy | New York Post | 06/11/23

BUT: On Monday, project engineer Ronald Hamburger said the engineering upgrade to stop the building from tilting and sinking has “succeeded” after the 18 piles were sent 275 feet below the street.

Hamburger said the analysis of the foundation shows recovery of nearly 1 inch of tilt following the final load transfer. He said he expects the building will “continue to experience significant recovery of the tilting that has occurred following the final load transfer.”

“We will be monitoring it continually for the next 10 years,” said Hamburger. 

Millennium Tower Condo Association President Howard Dickstein said he is confident the “engineering upgrade will restore our building’s reputation and the value of condominiums while putting to rest any lingering questions about the Tower’s stability.”

Millennium Tower: Engineer says $100 million fix has improved S.F. building's famous lean — J.K. Dineen | San Francisco Chronicle | 06/21/23

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Developer Unveils Luxury Condo on Site of Deadly Surfside Collapse — Julia Echikson | Commercial Observer | 06/12/23

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💡NEAT: A curvaceous facade = neighboring buildings keep more of their views.

Kengo Kuma unveils "sculptural and iconic" skyscraper in Vancouver — Ben Dreith | Dezeen | 06/20/23

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Condos in Jacob & Co.’s Bonkers 100-Story Crystal Skyscraper in Dubai are now for Sale — Abby Montanez | Yahoo! Life | 06/20/23

Condo Connection's financial coverage is indexed to our Dollar$ and $ense page dedicated to all things CIC finance.

Inflation and Monetary Policy

• While the FOMC pressed ‘pause’ on further rate hikes in June, the ECB and other central banks around the world continued their upward trajectory.

Pause, not stop. That’s the message from the US Federal Reserve, which as widely predicted (thanks to a dollop of foreshadowing by Fed officials) shelved its 15-month rate-hiking campaign for now. 

With inflation cooling and America’s employment picture remaining robust, the game is watch and see how it all shakes out over the next month. The Fed is hoping to bring the post-pandemic US economy in for a gentle landing, but said it wants to take time to assess. Simultaneously, the central bank went out of its way to make sure everyone knows it may raise rates down the line, predicting inflation will still be a problem. But this month the Fed “judged it prudent” to hold rates steady given how quickly they have risen, Powell said, adding that the pause is a continuation of its moderating pace of policy measures. “We’ve covered a lot of ground, and the full effects of our tightening have yet to be felt,” the Fed chief said. 

But according to Bloomberg Economics, the threat of inflation going forward is somewhat less than the Fed would have us believe: “Inflation will likely be lower than these projections by year-end, and ultimately the Fed will hike less than what the new dot plot indicates.” 

— David E. Rovella | Bloomberg Evening Briefing | 06/14/23

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Federal Reserve Chair Jerome Powell said policymakers expect interest rates will need to move higher to reduce US growth to below its long-term trend and contain price pressures. When that happens, however, will depend on the data. 

“My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal,” Powell said in remarks prepared for the House Financial Services Committee. “We will continue to make our decisions meeting-by-meeting, based on the totality of incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks.” The Federal Open Market Committee paused its series of interest-rate hikes last week for the first time in 15 months, leaving rates in a range of 5% to 5.25%. But Fed officials estimated rates would rise to 5.6% by the end of the year, according to their median projection, implying two additional quarter-point hikes to wrestle with slowing-but-sticky inflation and a strong US labor-market.

— Natasha Solo-Lyons | Bloomberg Evening Briefing | 06/21/23 

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For the Fed, officials can breathe a sigh of relief at the beginning of a two-day policy meeting that Tuesday’s data came in as expected. While they will acknowledge that inflation remains well above their 2% target, the US central bank is still on track to skip a rate increase on Wednesday after 10 straight hikes, a decision which may very well turn into an extended pause.

“This CPI report is everything the Fed needs to pause — there is deflation and/or disinflation in every category,” Jamie Cox, managing partner at Harris Financial Group, said in a note. “If this trajectory holds in June, the need for further tightening is behind us.”

Investors marked down the odds of a rate hike this week after the report and stocks rose, though the probability of another increase in July remained a bit above 50%, according to overnight index swap prices.

Core inflation — a measure excluding food and energy items, which the Fed views as a better gauge of underlying price pressures — has been persistently elevated. Those prices rose 0.4% for a third-straight month, according to the data from the Bureau of Labor Statistics, which is roughly double the pre-pandemic pace…

US Inflation Report Suggests Fed Rate Pause Will Become a Full Stop — Molly Smith | Bloomberg | 06/13/23

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“We expect a hawkish pause at the June FOMC meeting, with the FOMC choosing not to hike, but signaling an expectation of additional hiking through the SEP,” said Nomura Securities economists Aichi Amemiya, Jeremy Schwartz and Jacob Meyer, in a survey response.

Fed Seen Ending Its 15-Month Hiking Campaign in Economist Survey — Steve Matthews and Kyungjin Yoo | Bloomberg | 06/09/23

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Federal Reserve Chair Jerome Powell finds himself in a place no central banker wants to be: working to avert a credit crunch, which calls for looser monetary policy, while fighting high inflation, which demands the opposite.

The Fed and Jerome Powell’s Big Problem Just Got Even More Complicated — Nick Timiraos | WSJ | 06/12/23

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Headline inflation in the US might have been cut in half since peaking last year, but two Federal Reserve officials say more interest-rate hikes may be needed to tame price pressures.

Fed Governor Christopher Waller notes prices excluding food and energy have barely budged over the last eight or nine months. “That’s the disturbing thing to me,” he said.

Richmond Fed President Thomas Barkin described inflation as “stubbornly persistent.” He said he’s “comfortable doing more” to ensure it falls to the central bank’s 2% target.

Fed Officials Say Rates May Need to Go Higher to Tame Inflation — Jonnelle Marte and Steve Matthews | Bloomberg | 06/16/23

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Treasury Yields Rebound After Fed Signals Higher Rates Ahead — Sam Goldfarb | WSJ | 06/14/23

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Housing is perhaps the most consequential category in the consumer price index, a key inflation barometer… 

WATCH: Why Housing Can Skew Inflation Numbers

Why economists say it's a near certainty that housing inflation will soon fall — Greg Iacurci | CNBC | 06/14/23

Cashing Out

• Depositors took action for their accounts in excess of $250,000 per bank…

Uninsured deposits at U.S. banks fell by $597 billion in Q1 2023: Chart of the Day — Jonnelle Marte and Steve Matthews | Yahoo! Finance | 06/16/23 

Snoop Dog?  Nah!  Nuisances Revisited

• Smoking within the confines of a unit in a multifamily residential unit – even if expressly allowed by the governing documents – can easily become a nuisance.

We last covered this topic in Issue #57.  Washington, DC: Judge Ebony Scott ruled [on June 5] that while Josefa Ippolito-Shepherd could not prove she is entitled to damages, she successfully made the case that the smell is a private nuisance, and Scott ordered Thomas Cackett to stop smoking. Scott said that Cackett is licensed to buy marijuana but “he does not possess a license to disrupt the full use and enjoyment of one’s land.” … Cackett is banned from smoking at his address or within 25 feet of Ippolito-Shepherd’s address.

“Indeed, the public interest is best served by eliminating the smoking nuisance and the toxins that it deposits into the air, toxins that involuntary smokers have no choice but to inhale,” Scott wrote in her decision.

J.P. Szymkowicz, an attorney representing complaining neighbors in a similar ongoing case, said Ippolito-Shepherd’s legal win does not set a legal precedent as an appellate decision would.

“If you’re faced with the neighbor that has a smoking problem and it’s coming into your house, you can go to them and say ‘Look we can do this the easy way or the hard way. If we go to court, it’s going to take money, it’s going to take time and eventually I’m going to win,’” said Szymkowicz, who is also an advisory neighborhood commissioner. “That’s the persuasive value.”

Bothered by pot smell, she sued her neighbor to stop smoking — and won — Meryl Kornfield and Kim Bellware | WaPo | 06/06/23

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In January 2017 the Novato City Council passed a 100% Smoke-Free Housing Ordinance that prohibits smoking of all tobacco products, marijuana in all multi-unit housing.  Property managers had until January 24, 2018 to update leases and HOA CC&Rs to reflect the new law that includes the interior of all duplexes, apartments, condos and townhouses, their porches, balconies, patios and a 20 foot buffer around each building.

California state law prohibits marijuana smoking and electronic smoking devices wherever tobacco smoking is banned, so combustible flammable marijuana may not be used in Novato’s multi-unit housing properties or in public places where smoking is not allowed.

New Smoking Law Gets Complicated by Prop 64 — Novato Chamber | 01/30/18

REQUIRED Corporate Reporting

• The Corporate Transparency Act (CTA) of 2020 is part of the National Defense Authorization Act (NDAA) HR 6395 ratified on January 1, 2021 (see Sec. 1261).  The stated purpose of the law is to combat money laundering and the concealment of illicit money through shell companies in the United States.

Your community association is a business (yep!) and must meet the reporting requirements established by FinCEN beginning January 1, 2024. 

This FinCEN webpage about beneficial ownership information reporting includes several helpful links and perhaps this YouTube video with an invigorating soundtrack.

• CORPORATE ENTITY REPORTING:

  1. Business Name and Trade Name(s) and/or DBAs

  2. Business Address

  3. Formation Jurisdiction

  4. IRS Taxpayer ID

• BENEFICIAL OWNERS REPORTING:

  1. Name

  2. Birthdate

  3. Address

  4. A unique government-issued identifier (passport, driver’s license, etc.)

Get Ready for the Corporate Transparency Act — Matthew Erskine | Forbes | 01/17/23

What is the Corporate Transparency Act?

Want to read an overly complex attempt to convince your association to seek legal help complying with the CTA?  Be our guest!

Legislation

• REMINDER!  Newly effective CIC-specific statutory requirements. 

  • California and Texas

  • Florida

  • Montgomery County, Maryland via Bill 28-22

    1. Periodic Board member training

    2. Clarification about registration, voting and dispute resolution procedures.

    3. Clarification of jurisdiction for the CCOC

  • Washington State (click to expand the section)

Visit our Legislation Page

Please contact us if you’re aware of legislation to feature from YOUR state!

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