Saturday, April 02, 2016

EDITORIAL: Who leaked details in the HOA probe? | Las Vegas Review-Journal

EDITORIAL: Who leaked details in the HOA probe? | Las Vegas Review-Journal

This just reeks--we have a Nevada Supreme Court Justice named as a leaker, reports of Department of Justice personnel leaking to the conspirators, and a federal judge who sealed it all up at the request of...the Department of Justice. As the Review-Journal says:



"The public obviously has a greater interest in learning whether the employees of their federal justice department engaged in misconduct that could have affected a massive public corruption case than those same employees have in keeping their personal indiscretions secret. The public has a right to know if a thorough and competent investigation of alleged wrongdoing was conducted, and why no one was ever held accountable for the alleged leaks."

Homeowners want changes to HOA transfer fees - 7NEWS Denver TheDenverChannel.com

Homeowners want changes to HOA transfer fees - 7NEWS Denver TheDenverChannel.com

Ka-ching, ka-ching, goes the cash register at the property management firm.

Bill Text - AB-1799 Common interest developments: association governance: elections.

Bill Text - AB-1799 Common interest developments: association governance: elections.



Yesterday I had a long phone conversation with Marjorie Murray of the Center for California Homeowner Association Law.  She told me about a new Assembly bill that is now in committee.  California has detailed statutes regarding procedures that HOA and condos must adopt for elections, to ensure that they aren't rigged, including independent election inspectors, handling and preservation of ballots, recounts, etc.  This bill, AB 1799, would create an exemption from that law for uncontested elections. This is a problem.  For example, boards could disqualify potential challenger candidates by charging them with rule violations, and in effect manufacture an uncontested election, which they could then rig with impunity.  They can also just discourage challengers by other means--"hey, why are you costing us all money by running for the board?" In any event, allowing any HOA or condo elections to operate outside the law is a terrible idea. I suppose the idea is that it is a waste of money to have an inspector for an uncontested election. But I would want to know how many ballots were cast anyway, and I don't like the idea of creating an incentive for associations to save money by not having contested elections.



The bill is sponsored by the Republican leader in the Assembly, Chad Mayes. The California legislature is run by Democrats and Jerry Brown is the Governor, so I hope this thing gets killed in committee. But please don't hesitate to send emails to the Committee.



Here is the operative language:



"(f) Directors shall not be required to be elected pursuant to this article if the governing documents provide that one member from each separate interest is a director, or if the election of directors is uncontested. For purposes of this subdivision, an election is uncontested if the number of candidates for election does not exceed the number of directors to be elected at that election."



The bill is in the Housing and Community Development Committee and will be heard on April 13, Marjorie tells me.

Friday, April 01, 2016

As Water Infrastructure Crumbles, Many Cities Seek Private Help

As Water Infrastructure Crumbles, Many Cities Seek Private Help

"More than 2,000 municipalities have entered public-private partnerships for all or part of their water supply systems, according to the National Association of Water Companies, which represents private water companies like Veolia North America and American Water. Partner municipalities include San Antonio; Akron, Ohio; and Washington, D.C. Miami-Dade County is considering partnerships for three water facilities, including one built in 1924. And Wichita, Kansas, is starting to study the issue."

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The problem is that voters don't want to pay taxes to maintain existing infrastructure. They can be more easily persuaded to approve bonds and borrow to build something new than to maintain what they already have. When it comes to boring old maintenance, they don't want to approve the borrowing and spending. So municipal infrastructure is in serious decline in this country, to the tune of at least $3.6 trillion needed by 2020. But of course people want top quality infrastructure--clean water, safe bridges and dams, smooth roads and highways--they just don't want to pay for it. And this is where PPPs (private-public partnerships) and investment banks come into the equation.  It's another way to say "privatization." And the record of bad, bad deals in the name of these complex arrangements is quite impressive.  There's always some cool way of financing the whole thing--investment banks, sovereign wealth funds, private equity firms, vendors, concessionaires, derivatives, interest rate swaps... The deals usually get negotiated in secret by the city mayor or chief executive of the county, then fast-tracked through city councils or county boards without sufficient study or any right to change it--up or down, now, or it's off--and foisted off on the public as brilliant ways to get something for nothing. Ask the people of Jefferson County, Alabama.  They got taken to the cleaners so badly using interest rate swaps to pay for a new sewer system that the county had to go bankrupt. J. P. Morgan took care of everything, don't you know.

Thursday, March 31, 2016

Donald Trump Made Up Stuff 71 Times In An Hour

Donald Trump Made Up Stuff 71 Times In An Hour:

"On Wednesday, The Huffington Post assigned five and a half reporters to look into a roughly 12,000-word transcript of Trump’s town hall event on CNN the night before. It took us hours, but in all, we found 71 separate instances in which Trump made a claim that was either inaccurate, misleading or deeply questionable. That’s basically one falsehood every 169 words (counting the words uttered by moderator Anderson Cooper), or 1.16 falsehoods every minute (the town hall lasted an hour, including commercial breaks)."



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Of course, this means nothing to his followers.

Larry J. Sabato's Crystal Ball » The Electoral College: The Only Thing That Matters

Larry J. Sabato's Crystal Ball » The Electoral College: The Only Thing That Matters:



Larry Sabato is the just about the best at this prediction business, and he has a Clinton-Trump matchup turning into a route: Clinton 347 electoral votes, Trump 191. Trump is toxic for the Republican Party, which is why they are trying to derail him in Wisconsin. With the RNC chair and the Speaker of the House both being from Wisconsin, with Trump's goon campaign manager being brought up on battery charges, and with Trump saying he wants to jail women who have abortions, it seems likely that he will lose Wisconsin. But we shall see what the voters have to say.




14 Million Americans Live in Extremely Poor Neighborhoods | FOX40

14 Million Americans Live in Extremely Poor Neighborhoods | FOX40:

"Suburban neighborhoods fell into deep poverty at more than double the rate of cities, according to Brookings. Almost three times as many people lived in concentrated suburban poverty in 2010-14 than in 2000. Also, a growing number of suburban neighborhoods are on the cusp of extreme poverty.

Lower income Americans have been flocking to the suburbs in recent years, following the jobs in construction, retail and restaurants that relocated there. But the suburbs lack the transportation, social services and affordable housing to help lift poor residents up the income ladder, Kneebone said. And those who lose their jobs become stuck in poverty there."




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Thanks to Fred Pilot for this link. Being poor is hard, but being poor and living in a neighborhood of concentrated poverty is much worse. And non-whites who are poor tend to be concentrated in poor neighborhoods:  "Whites make up 44 percent of the nation’s poor, but account for just 18 percent of the poor people living in concentrated poverty. Poor blacks are almost five times as likely to live in extremely poor neighborhoods as whites, and poor Hispanics are more than three times as likely."  Poor people have been "flocking to the suburbs" for several decades, moving to small municipalities where there is little or no government of non-profit support structure for poor people. This has created crisis conditions in a number of places here in the Chicago, including south-of-Chicago suburbs  such as Harvey, Dolton, Markham, and a number of others.

Driverless Taxi Pods to Come to Gurgaon, An Indian City Run by Private Industry - CityLab

Driverless Taxi Pods to Come to Gurgaon, An Indian City Run by Private Industry - CityLab

Libertarians are excited about this city because it grew like crazy and has virtually no government or public infrastructure, and no regulation--Privatopia, in other words. Unfortunately, it is an environmental hellhole, and that's only the beginning.  If you are rich and living in a luxury skyscraper, I guess life is pretty sweet. But if you are poor, not so much.

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"Gurgaon may be a bustling metropolis, but it lacks infrastructure, which means there’s no citywide system for water, electricity, or sewage. Private companies handle those, the economists write: Trucks that haul away waste dump it on public land, tap water is often delivered by private trucks, and reliable electricity often comes from diesel generators that pollute the environment."

Wednesday, March 30, 2016

Urban Revival? Not For Most Americans | Jed Kolko

Urban Revival? Not For Most Americans | Jed Kolko:

"In recent years, numerous studies and media reports have documented that college-educated young adults have been drawn to urban centers. At times some have claimed a broader demographic reversal in which cities grow faster than suburbs, and even the end of the suburbs.

But, in fact, the U.S. continues to suburbanize. The share of Americans living in urban neighborhoods dropped by 7%, from 21.7% in 2000 to 20.1% in 2014. Even looking at only the densest urban neighborhoods where about one-third of the urban population lives, the share of Americans living in these neighborhoods fell by 5%, from 7.4% in 2000 to 7.0% in 2014. (See note at end of post for details on data, methodology, and definitions.) Headlines about educated young adults flocking to Brooklyn and San Francisco aren’t wrong – but they are far from the whole story and are unrepresentative of broader trends. Other demographic groups are suburbanizing faster than the young and rich are piling in to cities.

This post looks at the change in urban living for detailed demographic groups, using individual-level data from the Census. The findings are consistent with analyses of the most recent county data and of detailed neighborhood data, both of which confirm that the American population overall continues to suburbanize. What’s new is that individual-level data show us how skewed the urban revival is toward rich, young, educated Whites without school-age kids."




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That whole "middle class returning to the city" thing kind of flopped.  Young rich people are doing it, but when they have kids it is off to the suburbs even for them. The people who predicted the end of the suburbs couldn't have been more wrong.

Monday, March 28, 2016

Crack down on condo association abuses | Miami Herald

Crack down on condo association abuses | Miami Herald

This is unintentionally hilarious. They "revealed" this in the sense that Columbus "discovered" America. In both cases, there were a lot of people there ahead of them.



"Allegations of fraud by condominium associations in South Florida is nothing new, but the latest case to come to light is shocking in its scope. And it reveals something else: That investigation into such abuses by local authorities is too infrequent, and many condo residents are left frustrated without the help of the agencies created to protect them."




Condo owners face financial losses under receivers’ watch | Miami Herald

Condo owners face financial losses under receivers’ watch | Miami Herald

"Tropical Point is one of many Miami-Dade condos whose directors went to court to request the appointment of a receiver to help them regain their financial stability. In theory, the receivers take over units that are vacant or have defaulted on their mortgages, rent them and pass the income to the owners' association to make up for the owners who are not paying their maintenance fees. In exchange, the receiver is allowed to pocket a set percentage of the rent. During the 18 months that Caridad Alina Ortega, the receiver appointed by Judge José Rodríguez, was in charge of Tropical Point, some of the owners paid thousands of dollars for maintenance and their debts, as well as special assessments. But conditions never improved, according to the testimony of several residents of the complex, which also faced a lien by the city of Miami. The electricity and water bills were not paid, and elevators and fire alarm and sprinklers were not repaired."

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The Miami Herald is discovering that a whole lot of people are profiting from bad governance and inadequate capitalization of condominiums.

State must improve policing of condo fraud | Miami Herald

State must improve policing of condo fraud | Miami Herald

Gee--do you think?  Actually there are about 50 states that should improve their policing of condo and HOA fraud. But perhaps a person could be pardoned for being a bit skeptical about any state or local government's intention to actually do something about it. Local governments have been using CIDs as cash cows for decades, and the profits come from collecting property taxes and not providing services. Criminal investigations and prosecutions for white collar crime are expensive. Got to the police or prosecutors with a condo fraud issue and they tell you it's a civil matter.

Multiple South Florida condos under state investigation for election fraud | Miami Herald

Multiple South Florida condos under state investigation for election fraud | Miami Herald

"Frustrated condo residents say they have few options. Local police agencies say that most of the complaints do not involve criminal activities and can be handled in civil courts. Prosecutors say police or the DBPR are responsible for enforcing the laws, but the state agency argues that it cannot investigate complaints about actions that fall outside its jurisdiction or that lack sufficient evidence. After receiving several complaints in recent months from residents alleging financial mismanagement, lack of transparency and electoral fraud in condominiums, el Nuevo Herald and Univisión 23 launched an investigation. Their findings included at least 84 fraudulent signatures on ballots for the board of directors at The Beach Club. From the more than 500 complaints filed with the DBPR by condo owners in Miami-Dade in 2015, the investigative team focused on the 81 cases still under state investigation. Of those, 27 involved alleged irregularities in elections to boards of directors — people who approve lucrative contracts for the condos and 31 involved a lack of access to information that owners have a right to obtain under state laws. Another nine cases involved allegations of financial mismanagement. The rest involved the unauthorized use of reserve funds, disputes over fines and other issues."




Sunday, March 27, 2016

Deposition says HOA fraud figure was warned about FBI raids by State Supreme Court Justice Saitta | Las Vegas Review-Journal

Deposition says HOA fraud figure was warned about FBI raids by State Supreme Court Justice Saitta | Las Vegas Review-Journal



"Nevada Supreme Court Justice Nancy Saitta “tipped off” a key government target to FBI-led raids in an investigation of massive homeowners association fraud, according to a sworn deposition obtained by the Las Vegas Review-Journal. In the deposition, Lisa Kim, who ran a company that managed HOAs linked to the long-running investigation, testified that the FBI’s target, the late lawyer Nancy Quon, told her about the tip on Sept. 24, 2008, the first of two days of court-approved law enforcement searches across the valley...Saitta, who was first elected to the Supreme Court in 2006, presided over construction defect cases while she was a Clark County District Court judge. Quon often appeared before her."

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Ever since the news of this investigation broke, there were stories about alleged connections between judges and prosecutors and the HOA fraud ring, especially construction defect attorney Nancy Quon. Some stories suggested that such connections explained why the Nevada US Attorney's Office was kicked off the case, which was taken over by a special white collar crime unit from Washington, DC. All the documents on that, though, are tippy-top, hush-hush, secret.   To wit:  "The epic federal case wrapped up in January with more than 40 convictions, but the government continues to keep a lid on a super-secret investigation into the leak allegations that did not result in any criminal charges. Kim, who pleaded guilty and cooperated with prosecutors, said in the June 9 deposition that Quon also told her a member of the U.S. attorney’s office had tipped her to the investigation months before the raids. Quon did not identify her source at the office, which then was overseeing the high-profile prosecution...Quon told Kim she was warned by a government source to watch her back. “She said that someone in the U.S. attorney’s office had told her that there’s this big HOA thing going on and that things were going to be bad really soon … and that I don’t know what you’re doing with Benzer, but just be really careful,” Kim testified."



Jeff German of the Las Vegas Review-Journal has done an incredible job on this case for several years. This story is a blockbuster, and I strongly urge you to follow the link and read the whole thing.






Why the system of rail privatisation in the UK has been a disaster | British Politics and Policy at LSE

Why the system of rail privatisation in the UK has been a disaster | British Politics and Policy at LSE

Why? Because these infrastructure privatization schemes in Britain and the US are set up as gigantic ripoffs of the public sector and taxpayers that enrich private investors. All the significant risks are borne by the taxpayers, while the investors get the profits and can walk away any time they want.



"Some of the problems of the privatised rail system are well known. Perhaps best known is the systematic gaming of the train operating franchise system. Franchisees – as in the catastrophic case of the East Coast Line – can walk away from the franchise without serious penalties when the ludicrously unreal projections that won the contract in the first place turned out to be fantasies. Less known, and systematically documented in the CRESC report, is the extent to which the train operators have been able to manipulate the licensing system so that they effectively pay dividends to shareholders from direct public subsidy; between 1997 and 2012 on the West Coast Mainline, Virgin Trains paid out a total of £500 million in dividends and received a direct subsidy of £2.5 billion. Worse still, the report highlights the large, hidden and indirect subsidies to train operating companies which have completely wrecked the balance sheet of the quasi-public Network Rail company that provides infrastructure."

Why Reston, Virginia, Still Inspires Planners 50 Years Later - CityLab

Why Reston, Virginia, Still Inspires Planners 50 Years Later - CityLab



Reston is one of the original New Towns that inspired many imitators, most of them on a much smaller scale.  For those who don't like CIDs, you may reflexively hate the idea that anybody would admire Reston.  The ideas--his own and those of others--that he implemented at Reston have shaped suburban development ever since.  Private planning, private funding, private government, mixed use development...and on and on.  But Simon, who I met years ago, was something of a utopian visionary who sincerely wanted to create the ideal place to live. He reminded me of Ebenezer Howard, who invented the whole "Garden City" idea back in 1897, with his plans to build entirely new cities on undeveloped land.  Few developers try to build Reston-sized communities these days, because the risk is so enormous. Reston, Columbia, Radburn, Rancho Bernardo, and a few other huge private communities are still around after many decades.