PPCC: Pisitófilos Creditófagos. Primavera 2024

[Derby]

https://mishtalk.com/economics/one-of-every-five-new-york-city-hotels-is-now-a-migrant-shelter/

One of Every Five New York City Hotels is Now a Migrant Shelter

New York City hotel prices have never been higher. Illegal immigration is part of the reason why. Mayoral graft is another.



The New York Times explains Why N.Y.C. Hotel Rooms Are So Expensive Right Now*

In late 2022, as thousands of migrants began to arrive in New York City, city officials scrambled to find places to house them. They quickly found takers: hotels that were still struggling to recover from the pandemic-driven downturn in tourism.

Dozens of hotels, from once-grand facilities to more modest establishments, closed to tourists and began exclusively sheltering migrants, striking multimillion-dollar deals with the city. The humanitarian crisis became the hotel industry’s unexpected lifeline in New York; the hotels became a safe haven for tens of thousands of asylum seekers.

The average daily rate for a hotel stay in New York City increased to $301.61 in 2023, up 8.5 percent from $277.92 in 2022, according to CoStar, a leading provider of commercial real estate data and analysis. During the first three months of 2024, when prices traditionally dip, the average stay was still 6.7 percent higher than during the same time period last year: $230.79 a night, up from $216.38 in 2023.

The use of city hotels for migrants represents a loss of 16,532 hotel rooms, leaving 121,677 hotel rooms for travelers, according to data compiled by CoStar, a leading provider of commercial real estate data and analysis.

That’s 2,812 fewer hotel rooms than existed in the period just before the pandemic — a shortage that is being acutely felt.

About 65,000 migrants are being sheltered in hotels, tent dormitories and other shelters, in large part because of the city’s legal obligation to provide a bed to anyone who needs one. The city projects it will spend $10 billion over three fiscal years on the migrant crisis.

Other factors, including some driven by policies that Mayor Eric Adams and his predecessor, Bill de Blasio, supported, have also contributed to higher room rates.

In September, city officials began to enforce a new law meant to curb the proliferation of short-term rentals, such as those listed on Airbnb, which used to account for over 10 percent of all tourist accommodations in the city. The crackdown obliterated most short-term Airbnb listings — a phenomenon that some observers said might have had an even larger impact on hotel rates than the migrant crisis.

The number of Airbnb listings in New York City for short stays — under 30 days — plummeted by 83 percent to just 3,705 apartments in March 2024, down from 22,247 listings in August 2023, the month before the law went into effect, according to AirDNA, an unaffiliated company that collects data from short-term rental listings. Most of the remaining Airbnb listings in the city, about 90 percent, are only available for stays of over 30 days.

The law, Local Law 18, was aggressively backed by the hotel industry and the hotel workers union, both supporters of Mayor Adams.

Three Things

*Uncontrolled immigration
*An alleged right to shelter
*A corrupt mayor purposely removes listings to benefit a favored political group.

The cost to the city is $10 billions. Taxpayers are on the hook for the cost.

Where Do We Put 8 Million Illegal Immigrants?

On May 23, I noted Competing Forces on Rent, then asked Where Do We Put 8 Million Illegal Immigrants?**

Millions of immigrants keep pouring in. New residential construction has stalled and multi-family construction is in decline. Completions are rising, but is that enough housing?

We have at least a partial answer now.

*https://www.nytimes.com/2024/05/25/nyregion/hotels-prices-migrants-nyc.html
**https://mishtalk.com/economics/competing-forces-on-rent-where-do-we-put-millions-of-immigrants/

[Derby]

https://www.pymnts.com/cpi-posts/fbi-raids-corporate-landlord-in-major-rent-price-fixing-probe/

FBI Raids Corporate Landlord in Major Rent Price-Fixing Probe

The Federal Bureau of Investigations (FBI) conducted an unannounced raid on the Atlanta headquarters of Cortland Management on Wednesday, May 22, marking  a significant escalation in a criminal antitrust investigation by the U.S. Department of Justice (DOJ) into allegations of a nationwide conspiracy to artificially inflate apartment rents. The implications of this probe are far-reaching, potentially affecting millions of renters across the United States.

At the center of this investigation is RealPage, a software and consulting firm accused of helping orchestrate price-fixing among large corporate landlords. RealPage’s system, which provides rental price recommendations based on real-time data from landlords, is alleged to be a key tool in manipulating the rental market. The firm’s influence covers 70% of multifamily apartment buildings and impacts 16 million units nationwide.

The scheme purportedly operated by encouraging landlords to adopt RealPage’s pricing recommendations, a practice they follow 80-90% of the time. This coordinated approach reduces the availability of rental units, driving up prices. One of the architects of RealPage’s system reportedly stated that the aim is to prevent landlords from undervaluing their properties, ensuring consistently higher rents across the board.

The impact of such practices is particularly evident in Atlanta, where software-driven pricing affects 81% of multifamily rental units. Since 2016, rents in the city have surged by 80%, despite rising vacancy rates that would typically result in lower rents. The widespread adoption of RealPage’s pricing recommendations by several landlords between 2015 and 2017, followed by RealPage’s acquisition of its main rival, Lease Rent Option, in 2017, has given the company unprecedented control over rental pricing.

For renters, the implications of this investigation are significant. If the allegations are proven true, the artificially inflated rents have placed undue financial burdens on millions of tenants, with the findings of this probe possibly leading to changes in how rents are set and regulated.

[Derby]

https://www.bloomberg.com/news/articles/2024-06-04/two-thirds-of-middle-class-americans-face-hardship-in-poll

Majority of Middle-Class Americans Say They Struggle Financially

Majority of people feel financially insecure in survey
A third of respondents feel ‘extreme stress’ about paying debt

Almost two-thirds of Americans considered middle class said they are facing economic hardship and don’t anticipate a change for the rest of their lives, according to a poll commissioned by the National True Cost of Living Coalition.

By many traditional measures, the US economy is strong, with robust labor, housing and stock markets, as well as solid gross domestic product growth. But the data don’t capture the financial insecurity of millions of households who worry about their future and are unable to save, according to the group, created this year to come up with cost-of-living tools that help gauge economic well-being.

In the large poll of 2,500 adults, 65% of people who earn more than 200% of the federal poverty level — that’s at least $60,000 for a family of four, often considered middle class — said they are struggling financially.

A sizable share of higher-income Americans also feel financially insecure. The survey shows that a quarter of people making over five times the federal poverty level — an annual income of more than $150,000 for a family of four — worry about paying their bills.



Overall, regardless of the income level, almost 6 in 10 respondents feel that they are currently financially struggling.

“The economy is booming, and yet many Americans are still gasping for air financially,” said Jennifer Jones Austin, chief executive officer of the Federation of Protestant Welfare Agencies, an anti-poverty advocacy organization that is part of the team that commissioned the poll. “They simply don’t have the breathing room to plan beyond their present needs.”

About 40% of respondents were unable to plan beyond their next paycheck, and 46% didn’t have $500 saved. The February poll found that more than half said it’s at least somewhat difficult to manage current levels of debt.

The quick rise in interest rates, coupled with high levels of outstanding debt, helps explain the disconnect between economic indicators and how many Americans feel financially.

The poll, conducted by Seven Letter Insight, also highlights the divide between debt-free households who are sheltered from the impact of rising rates and families who are overwhelmed with ballooning loan and credit-card payments. One third of the respondents said they have no debt at all.



The responses on savings also show wide disparities. About one in five respondents have at least $10,000 saved, but 28% have no savings at all. Overall, one in six said they have to make tough decisions on which bill to pay first on a regular basis.

David Jones, co-chair of the National True Cost of Living Coalition, said the polling results crossed party lines.

“It was Republicans, Independents, Democrats expressing the same kinds of issues,” he said. “It’s not going away no matter who becomes president.”

Some of the findings tracked with the Federal Reserve’s annual survey of household economics and decisionmaking, published last month. In that poll, close to half of respondents could cover a $2,000 expense, but 18% of adults said the largest emergency cost they could handle right now using only savings was under $100, and 14% said they could afford an expense of $100 to $499.

[Derby]

https://www.ft.com/content/ad1442b9-0fba-47e6-ac9f-767da9a60021

Opinion FT Wealth
Investors bet on property for long-term despite bumpy ride since pandemic

The wealthy should stick with real estate as their favourite asset class


Commercial property values have been hit by rising interest rates and fears about the health of the office market © REUTERS

It has been a rocky ride for investors in some parts of the property market — the favourite asset class of the wealthy — since the coronavirus outbreak four years ago. The office sector has been the main casualty as people continue to work from home against a tough economic backdrop of higher interest rates. 

The slump has been global. Across Europe office valuations have tumbled more than 30 per cent in cities such as London, Brussels and Zurich since the end of 2019, according to real estate research group Green Street. In the US, the market has been savaged with vacancy rates at generational highs while visits to the office have plummeted. 

The falls in valuations have been particularly steep in San Francisco, where technology companies are more relaxed about working from home. Between March 2019 and March this year, visits to the office dropped 50 per cent in the Californian city, says location data group Placer.ai. Even in New York, where Wall Street banks have put pressure on staff to return to the office, visits are down 17 per cent. 

At first glance, this looks like bad news for the rich, who put about a third of their assets into property, rising to about a half in the Middle East and Latin America, and are big investors in commercial real estate, say wealth managers.





However, other parts of the commercial market have fared better. Prices in the US retail property sector have been buoyed by a lack of supply. New tracking footfall technology has also helped companies pick the best locations for business, with the most popular retail sites and malls attracting shoppers as worries about Covid-19 fade. 

In the industrial sector, which includes warehouses, the news has been upbeat. It was boosted by the pandemic as the ecommerce boom prompted online retailers such as Amazon to look for more space to store goods. Although checked by the rise in interest rates since the middle of 2022, the market is showing signs of recovery in big cities such as London, according to Green Street data.



The residential sector is also in recovery mode. US house prices are back at the highs, having bounced off recent lows at the start of 2023, says the S&P CoreLogic Case-Shiller index. The biggest support is a lack of housing stock, with owners reluctant to move and lose low mortgage rate deals agreed before monetary tightening. “In markets with very long fixed rates, the US in particular, this has meant the stock of property for sale has fallen by about 30 per cent compared with normal market levels,” says Liam Bailey, global head of research at property agent Knight Frank. “Relatively strong investment returns and wage growth has helped demand remain healthy. This imbalance in supply and demand has helped push prices higher,” he adds. And it is not just in the US where the market is on the up. From Toronto to Singapore and Sydney valuations are mostly rising, according to Knight Frank research. 

More positive news can be found in the market for listed real estate investment trusts, Reits — widely used by wealthy investors because of their liquidity. They have on occasion outperformed the wider stock market in the US in recent weeks, while their private cousins, where performance remains patchy, are expected to start offering better returns. 



Of course, the property market’s health depends on the US Federal Reserve and the central banks that decide monetary policy. With interest rates expected to stay at record 23-year highs of 5.25 per cent to 5.5 per cent in the US for longer than expected, investors and buyers may hold back from big purchases. 

Still, the path for rates is downwards and investors are largely confident inflation can be contained. As Matthew Morgan, head of fixed income at Jupiter Asset Management, put it recently: “We are facing the last hurdle in the killing of inflation, particularly in the US. But in the longer term, I think inflation will be defeated and there will be a soft landing for the US economy.” 

The outlook on the high street in many countries is also positive or at least more positive than it was a year or 18 months ago, which is crucial for a property market that relies on the real economy to drive demand for offices, factories and houses. This is why investors are betting that valuations across the property sectors will rise over the next five years as lower interest rates and a shortage of supply propel them higher. 

It has been a difficult time for property as the pandemic, wars in Ukraine and the Middle East and most critically higher interest rates have arrested valuations in parts of the market around the world. But for the long-term investor, which includes the ultra rich and the family offices that serve them, the attraction of bricks and mortar remains compelling. Although the past is not always a good guide to investments and the direction of a market, the historic upwards trend in property is unlikely to be broken.

It means wealthy investors should stick with real estate as their favourite asset class.

David Oakley is acting editor, FT Wealth. Follow him on X

[Derby]

https://www.bloomberg.com/news/articles/2024-06-04/ecb-to-demand-more-cre-loan-provisions-from-some-german-banks

ECB to Seek More CRE Loan Provisions From Some German Banks

Regulator has been reviewing exposures for three years
German lenders among those most affected by ECB’s demands

The European Central Bank will soon push several German lenders to build up higher reserves against property loan defaults, in a move that would cut into their profits.

Banks with large portfolios of commercial real estate loans such as Deutsche Pfandbriefbank AG and some regional lenders jointly known as Landesbanken are one focus of the ECB’s effort, though it’s not clear which will ultimately face demands for higher provisions, people familiar with the matter said.

The review is focused on firms that are heavily exposed to commercial real estate, rather than the country’s top banks, which have broader business models. The ECB has also scrutinized banks from other countries but German lenders will be among those most affected, the people said, asking to remain unnamed as the watchdog’s deliberations are private.



An ECB spokesperson declined to comment, as did a spokesman for Deutsche Pfandbriefbank.(...)

[Derby]

https://www.statista.com/chart/32015/contributors-to-the-sp500-return

Nvidia Carries the World (and the S&P 500) on its Shoulders

[puede ser]

https://elpais.com/ideas/2024-06-02/por-que-cada-vez-menos-gente-se-siente-clase-trabajadora.html
(...)

Muy bueno.
En el imaginario popular-capitalista:
- Clase alta: trabajan para vivir (bien)
- Clase baja: sobreviven para trabajar.
- Clase media: subsisten para no trabajar (Pymer = pequeños y medianos rentistas)

[Urederra]

[Cadavre Exquis]

https://elpais.com/ideas/2024-06-02/por-que-cada-vez-menos-gente-se-siente-clase-trabajadora.html
(...)

Muy bueno.
En el imaginario popular-capitalista:
- Clase alta: trabajan para vivir (bien)
- Clase baja: sobreviven para trabajar.
- Clase media: subsisten para no trabajar (Pymer = pequeños y medianos rentistas)

https://elpais.com/ideas/2024-06-02/por-que-cada-vez-menos-gente-se-siente-clase-trabajadora.html

Saludos.

[Cadavre Exquis]

https://x.com/rafapachecocom/status/1797378221178032629

Saludos.

[Cadavre Exquis]

https://x.com/sninobecerra/status/1797992700308033983

Saludos.

[Cadavre Exquis]

https://x.com/KobeissiLetter/status/1797975642883215513

Saludos.

[Saturio]

Yo, mi, me, conmigo.

[sudden and sharp]