Saturday, July 24, 2004

Judge broadens class-action suit against law firm
Article Courtesy of the Sun Sentinel
By Joe Kollin
Posted Saturday, July 24, 2004
Some 1,176 owners of condos and homes in South Florida will be eligible to join a lawsuit seeking damages from a law firm that threatened them with foreclosure for not paying assessments to their associations.



California Pays Dearly for All That Borrowing
California has paid $230.7 million in fees to Wall Street investment firms over the last year — a largely hidden cost to taxpayers of the huge borrowings needed to keep state government afloat.

An examination of how officials managed the heaviest borrowing in state history shows that the fees and commissions California has paid were in some cases higher than those charged to other state governments.

On one massive loan, officials agreed to fees that were 42% higher per bond than Illinois had paid last year for a similarly large borrowing.

On another, California paid fees at a rate about 25% higher than Washington had paid in the mid-1980s while that state was being penalized for the costliest municipal bond default in U.S. history.

In all, California took on $27.4 billion in debt to cover past and present budget shortfalls. While about half of that amount has been repaid, the ultimate price for the financing could include as much as $8.9 billion in interest. And the state budget now awaiting action in Sacramento contemplates nearly $1 billion more borrowing later this year.


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In case you were feeling guilty about your credit card statement, this should put it in perspective. $27.4 billion borrowed. $8.9 billion in interest...a mere 32.48% of the principal. What a bargain. Think about that the next time you see one of these grinning California legislators on the tube. Tar and feathers, anyone?
Bookkeeper pleads guilty to $230,000 theft

Susan Spencer-Wendel
Friday, July 23, 2004



WEST PALM BEACH -- The bookkeeper was such a nice young man -- clean-cut, polite, all yes-sir-yes-ma'am, so likable -- the retirees invited him to Easter dinner.

Meanwhile, Todd Demartine, 32, was raiding their homeowner association accounts, withdrawing thousands of dollars, buying things such as a WaveRunner and a Tiffany diamond ring.

Thursday, Demartine pleaded guilty to stealing more than $230,000 from his employer, Hawk-Eye Management, and accounts it handled. He worked almost two years for the Boca Raton company, which employs 15 and handles finances for condo homeowner associations in southern Palm Beach County.
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Think of the possibilities. Here are the HOAs, run by volunteers who may or may not have any accounting or business background. Here's their money. Here sits the enterprising and perhaps dishonest bookkeeper or property manager. Who will notice if he or she takes a little off the top? There have been many reports of this sort of thing.

Tuesday, July 20, 2004

Las Vegas SUN: Redevelopment area could be expanded
Monica Caruso passed this along from Las Vegas. I wrote a paper that mentioned among other things the City of Las Vegas' use of a downtown redevelopment district to compete with the County for tax dollars. The new mega-casinos are on the Strip, which is outside the city limits in county jurisdiction, so that's where the tax dollars go. The redevelopment district is an effort to recapture some of that by using various mechanisms to attract money and rebuild the downtown casinos. Anyway, here's an article about what's underway--expanding the district.
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The Las Vegas City Council on Wednesday will consider a resolution to expand the Downtown Redevelopment District to include three large parcels near downtown.

The move would allow projects improving those areas to tap into redevelopment incentives through 2031 and, if necessary, seek the use of eminent domain to take property from the current owners at fair market value.

Here's something scary....
 
Deadly Fairfax Fire Shows Growing Peril
By Eric M. WeissWashington Post Staff WriterMonday, July 19, 2004; Page B01

A tiny flame from a candle touched papers that melted vinyl siding and set off a fire that raced unnoticed up three floors. The blaze torched 18 condominiums, left three people dead and forced a man on fire to leap from a third-floor balcony.
Beyond the devastating personal tragedy, the fire in Fairfax County last weekend also highlighted a little-known danger in the Washington region and across the county, fire safety officials say: Houses are built too close together. Radiant heat from the fire in the Kingstowne section of the county nearly set ablaze another building 34 feet away.
"It was about ready to go over there, very close," said Fairfax fire and rescue's Peter J. Michel, lead investigator in the fatal blaze. "I'm surprised we only lost the three the other day."
Michel and other fire officials fear that entire blocks of houses could erupt in flames in a serious fire. National building codes allow single-family houses to be built just six feet apart. Increasing development pressure and the scarcity of land in metropolitan areas are resulting in more -- and larger -- houses built to minimum spacing standards.
Building suburban-style houses at an urban density could cause conflagrations that could devastate whole neighborhoods, fire officials warn.

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I don't have a link to the whole story, but with the trend toward massive density (small lots) and the insistence on building as much house as possible in those little lots, the prospect for major fires is fairly obvious... 
Homebuilder goes deep into density - 2004-07-19 - Sacramento Business Journal
More evidence (see below) that builders go with condos and other CID housing because it allows higher density. And more evidence that the whole California housing market is so nuts that soon people will be paying a million bucks to live in a cardboard box.

John Laing Homes plans to increase its production by 52 percent next year by building most of its housing in projects that pack eight to 14 homes per acre.

Laing is Sacramento's No. 16 homebuilder, according to The Gregory Group, a company that studies the new-home market. The builder's move to erect 80 percent of its homes in such close-packed projects would make it among the first to commit so heavily to higher-density development, although Beazer Homes and KB Homes are also buying into the game.

The idea behind the move is to focus on those who want home ownership but can't afford today's price tags for a house on a big lot.

Laing's strategy is more evidence the market is changing in Sacramento. The region's days of ample and cheap land for building affordable homes with big yards are gone. Faced with a dwindling supply of land suitable for development, sold at skyrocketing prices, more builders will likely use Laing's approach.

Officials at Laing estimate they can slice as much as $50,000 from the price of a typical home by building in high-density projects that use less land. With revised home plans, most homes in the denser communities would sell for roughly $150,000 less than the average new-home price, pegged by The Gregory Group at $439,135 in Sacramento, Yolo, Placer, El Dorado, Yuba and Sutter counties.

Laing aims to increase its sales to 550 units next year from this year's estimated 360, said Kevin Carson, president of the company's Sacramento division.

The cost of elbow room: Traditionally, new homes in this region have been built at a density of five to six houses per acre. The average density in the four-county area is 5.7 lots per acre, about what it was in 2000, according to The Gregory Group.

But the price of land has doubled since 2000, noted Tom DeLucca, Laing's vice president of land development. That makes the old densities more expensive for builder and buyer alike.

Builders set to build record number of condos North County Times - North San Diego and Southwest Riverside County News
Fred Pilot sent this along. It is from north San Diego County, known locally as "north county." I lived there for quite a while, including a few years in Leucadia (now part of the city of Encinitas) and then my wife and I lived for three years in Cardiff-by-the-Sea, also now part of Encinitas. Anyway, it's one of the fastest growing parts of California, and that is saying something. Check out the condo construction in north county. It is a vast expanse of land, and there is room for lots and lots of new construction. The questions are, how on earth are these people going to be able to drive to work, given the traffic congestion that is looming? And where will their kids go to school? Little details like that...
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With prices for new houses rocketing far out of reach for most first-time buyers in North County, local builders have abruptly shifted into the condominium market, setting off a construction boom that's poised to dwarf the condo craze of the mid-1980s.

After several years of focusing on high-end, detached houses, builders are finding strong demand and record sales for attached homes, which can be packed onto lots at 30 homes per acre.

The average price of a new condo reached $473,000 countywide in the second quarter, up 21 percent from the previous three months, according to a report Monday by MarketPointe Realty Advisors, a research firm based in San Diego. Along the Highway 78 corridor from Oceanside to Fallbrook, new condos sold for an average $395,000, up 18 percent from the first quarter.


What's more, sales are likely to set a record this year, with 4,904 attached homes sold in the first half. As recently as 2002, builders were selling fewer than 300 condos in a three-month period. The industry is considered certain to build 9,000 or more this year, easily surpassing peak production of 6,164 units set in 1985.

"We're really seeing an explosion in the attached housing market," said Russ Valone, president of MarketPointe. The firm calculates a weighted average of new-home prices to reduce the statistical effects of a few very expensive or low-priced homes sold each quarter.

Valone also had sobering news for buyers of new houses. The countywide average price for single-family, detached homes was a record $713,000 in the quarter ended June 30, up nearly 10 percent in a single quarter. The average size was 2,739 square feet.

In the north coastal region, which extends in the MarketPointe report from La Jolla through Carlsbad, the weighted average price for a new house was $975,000, up just 1 percent. In the Highway 78 corridor, the average was $662,000, up 13 percent from the first quarter.

Although prices shot higher, sales of new houses declined amid extremely tight supplies to 1,643 homes in the second quarter, or 37 percent of total home sales in the county.

Some builders say the prospect of rising mortgage rates prompted them a year or two ago to find ways to build more houses at lower costs to hedge against the possibility of crumbling demand for the high-end homes that have dominated the industry in recent years.

"I think that people are going to be buying less expensive housing and not more expensive housing if interest rates go up," said Greg Gallagher, vice president of land acquisition for Greystone Homes, the Carlsbad-based unit of industry giant Lennar Corp.



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There's more--read the whole thing.

Thursday, July 15, 2004

West Valley View:A sign of another time: ‘For Whites Only’

Just to remind people that this sort of thing still happens every now and then...

An official with the Arizona Attorney General’s Office said her department hadn’t encountered such a sight in 50 years.

The director of the federal Housing and Urban Development’s Phoenix field office said, “We’ve never seen anything like it. I’m amazed, just amazed.”

Both were reacting to a pair of signs placed in front of an upscale Waddell home.

The first reads: “For sale by owner.”

The second reads: “4 whites only.”
KPHO Phoenix - Glassel Convicted in Homeowners' Shooting Trial
Here is a report of the murder trial of Richard Glassel, who killed two people and wounded three more at a homeowner association meeting in Gilbert, Arizona, on April 19, 2000. 

There is something about HOA living that sends some people right off the deep end.  Shootings are the worst manifestation of that, but the crazy lawsuits and bitter personal feuds are all part of the same syndrome--condo rage.

From the past:  Another condo rage killing
The tragedy in Franklin Park was not the first condo rage killing.  Back in 1991, a man in Queens did something similar.  This is pre-internet, so there's nothing to link to, but here's the text courtesy of Lexis/Nexis:
 

The New York Times, May 16, 1991
SECTION: Section B; Page 3; Column 5; Metropolitan Desk
 
BYLINE: By JAMES C. McKINLEY Jr.BODY:Mehmet Lijkovic was under a lot of pressure.He had been working seven days a week as a building porter on the Upper East Side of Manhattan to make up some of the money he lost in the strike that had left him without a paycheck for two weeks. At his home in Queens, neighbors were complaining that his children were too noisy. The condominium board was threatening legal action.On Tuesday night, the police said, Mr. Lijkovic finally broke. He went to the apartment of the board member he thought was behind the complaints about his children, the police said, and shot the 40-year-old furrier dead in front of the man's wife.The police gave the following account of how Mr. Lijkovic, 40, ended up charged with murder:When Mr. Lijkovic arrived home at Village Park Gardens at 64-17 72d Street in the middle-class neighborhood of Middle Village shortly before 7:30 P.M., he found a letter from the board that said he would "be held liable" for the noise being caused by his two children. Some residents also complained that the children had been unruly in the building and about graffiti linked to them. Shot 8 TimesMr. Lijkovic stormed upstairs to confront Warner Vanderhooft, the board member he thought was behind the letter. He took a 9-millimeter pistol with him. At first the two men began shoving each other in the hallway, each accusing the other of making trouble, said Sgt. George Zaroogian of the 104th Precinct detective squad.Mr. Lijkovic pulled the gun from his waistband, and, in a fury, shot the taller, stronger man eight times, killing him instantly, according to the police.Yesterday, neighbors in the five-year-old three-story apartment building and along the quiet residential street were trying to fathom how such a killing could have happened.Mr. Vanderhooft, who owned TNW Furs, at 307 Seventh Avenue, near 27th Street, in Manhattan, lived with his wife, Margaret Bussfeld, in Apartment 3A. The police said he had apparently complained several times in the past about noise the children were making.Mr. Lijkovic, who was raised in Yugoslavia, came to America about 20 years and worked for a long time as cook at a restaurant in New Jersey before taking a job as a porter seven years ago, friends and relatives said.Five years ago, he and his wife, Serveta, bought a two-bedroom apartment, one of 12 apartments in Village Park Gardens, for $170,000 when it was under construction. The couple have a daughter, 12, and a son, 11.Mr. Lijkovic was described by relatives and friends as a quiet, gentle person whom they would not expect to get into a fight. One relative, who did not want to be identified, said: "He was a good person staying out of trouble. I have known him for over 17 years and I was shocked when I came home from work and heard he had done this." She added, "It's unbelievable."Kola Cacaj, the superintendent of the apartment building at 340 East 74th Street in Manhattan, where Mr. Lijkovic was a porter for seven years, also described him as someone who kept to himself and rarely spoke. But Mr. Cacaj observed, "He had a hot temper."Mr. Cacaj said the suspect had been working seven days a week over the last two weeks since the building workers' strike ended. He described the porter as "very nervous from working too much" and angry that the building's owner had not hired another porter to help him. As a result, Mr. Lijkovic was threatening to quit, he said.Mr. Cacaj said that Mr. Lijkovic claimed to have a pistol permit and was very proud of it and that he often went to shoot at a pistol range. 'To Pay Him Back'Mr. Cacaj, who, like Mr. Lijkovic, is of Albanian descent, said that in Albania, "soon as a boy hits 14, you buy him a gun and tell him to protect himself -- when someone attacks you or hits you, you're supposed to pay him back."The police were unable to determine yesterday whether the handgun used in the killing was licensed. Mr. Lijkovic was arrested outside the building shortly after the shooting with the pistol in his hand.Some residents of the building said Mr. Lijkovic's two children had repeatedly caused problems, writing on people's doors, ringing doorbells and allowing other children into the building.But other residents said the children's behavior was not out of the ordinary for children of that age.Anthony Sorisi, who moved out of the building in February after living there for three years, said: "It was just kid stuff. The kids were just playing. Every once in a while they'd let other kids into the building. Nothing to shoot somebody over, you know what I mean?"

Wednesday, July 14, 2004

Chicago Tribune | Bond denied in condo rage shooting death
This tragic event took place in a Chicago suburb, not far from where we lived until recently. The man was evicted by his condo board for non-payment of assessments, according to press reports. Here in Illinois condo boards use forcible detainer proceedings to collect past due assessments. That means owners are treated like delinquent tenants, subject to eviction proceedings. This is faster than foreclosure (and we don't have non-judicial foreclosure at all here). From what I read, that's what they did here, and it's standard operating procedure in this state. But he came home and found his belongings on the street, confronted the association secretary, and flipped out.

Horrible as it is to say this, I expect more of this sort of thing. It is getting harder to live outside CIDs because of the tremendous market dominance of common interest housing in new construction. Of course, nothing a condo board does would ever justify or excuse this sort of violence, but they often do things--rightly or wrongly--that send people into a flat spin. With millions of people getting conscripted into a style of life they don't understand and accept, the law of averages says that conflict, and often serious conflict, will result. Most of the time it is just cold stares and lawsuits. Occasionally something like this happens.

Bond was denied today for a Franklin Park man charged with first-degree murder in the shooting death of his condominium association's secretary and the wounding of her roommate.

Zdzislaw "Wally" Kuchlewski, 67, who also has been charged with attempted murder, appeared this afternoon for a bond hearing in the Maywood branch of Cook County Circuit Court. He was ordered to be returned there Friday for a preliminary hearing in the Tuesday evening shootings.

The man had come home Tuesday to find his belongings on the front lawn of the building, in the 9100 block of West Grand Avenue, CLTV reported.

Kuchlewski's condominium association board had gone to court and obtained an eviction order against him because he had fallen nearly $4,000 behind on his association fees, police said.

Enraged, Kuchlewski waited in the building's parking lot for the first condominium board member to come home, police said. When the association's secretary, Rita A. Hohmeier, 75, drove up about 6:15 p.m., he confronted her.

"When she exited her car with another woman, a verbal fight ensued," said Franklin Park Police Chief Randy Peterson. "We got a call of people arguing. A short time later, we got a call of shots being fired, at which time the evictee had shot both women."

The man surrendered to police as soon as officers approached, witnesses said.

Hohmeier died from her wounds. The other woman sustained injuries to her mouth and liver and was taken in critical condition to Loyola University Medical Center, Maywood.

Tuesday, July 13, 2004

Residents, township, builder at odds over repairs (phillyBurbs.com)
Here's one Fred Pilot passed along. This is a real slice of life.
Northampton - The Ivygreene Community Association and Northampton officials have tried for a year to resolve two maintenance issues within the Ivygreene development.

Neither party believes it's responsible to repair and maintain deteriorating sidewalks and a detention basin that fills with debris after rain. Bond money from the developer is available until November but might not be enough to fix both problems, a township official said.
Metropolis IL Chamber of Commerce
Now, here's a city with pride and some entrepreneurial spirit. Bet they don't have to rely on new construction to make ends meet.
CNN.com - Eight more gored by Pamplona bulls - Jul 12, 2004

Just look at the photo. That's all I ask.
Great American beers - Jul. 2, 2004
Off topic? You be the judge.

Great American beers

The nation's small brewers prove that the revolutionary spirit is alive and well.
July 2, 2004: 4:45 PM EDT
By Gordon T. Anderson, CNN/Money staff writer
NEW YORK (CNN/Money) - As America toasts its founding, pause to consider beer's role in the history of the Republic. The Pilgrims, for example, chose to land at Plymouth Rock in part because they were out of beer, as John Alden noted in his log of the Mayflower. William Penn, George Washington and James Madison all brewed at home. Samuel Adams, famously, did it for a living. The Boston Tea Party was planned over beer at the Green Dragon tavern, and Thomas Jefferson composed the major parts of the Declaration of Independence at the Indian Queen tavern. And when the Constitution was being written in Philadelphia, the conventioneers adjourned nightly at the City Tavern, mindful of Benjamin Franklin's observation that "beer is proof that God loves us and wants us to be happy." If the Founders saw that beer could forge a revolution, modern Minutemen are forging a revolution in the beer itself. These days, small U.S. brewers are battling foreign and domestic foes -- with surprising success.





Monday, July 12, 2004

As BAD As It Gets
VIEW FROM THE RIGHT

Adam Sparks, Special to SF Gate


Imagine waking up to a science-fiction world in which voting involves no secret ballots -- the government knows how you voted -- no opposition statements are permitted, multiple votes can be legally cast by the same voter, only property owners vote, nongovernmental friends of the political power structure literally run the elections and voters can change their votes as many times as they like before election day. Is this a scenario for the next century, the voting pattern in Saudi Arabia or Saddam's Iraq or what? No, it's what voters are now facing in Contra Costa County, with mail-in ballots due July 27.

It all sounds nightmarish and hellishly bad, and it is. BAD is in this case both an acronym and an apt description. Benefit-assessment districts, or BADs, permitted under the California Constitution, are formed by groups of property owners who vote among themselves to create a special assessment district to finance local improvements to sidewalks, streets, landscaping and lighting and so on. BADs, however, need only be authorized by a local government and then validated by a vote among a small percentage of the population -- property owners -- to provide a very localized, finite and tangible capital improvement.

Historically, this system has worked well; it's been going on quietly for about 50 years now. But, in recent years, some cash-strapped governments have been looking to BADs to do an end run around Proposition 13, which requires that all bond measures for general improvements, such as school construction and park development, be approved by a two-thirds majority of the electorate. Proposition 13 concluded that bonds are essentially de facto property-tax increases and that it's reasonable they should have the overwhelming support of all those who will pay them.


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This is the same basic reason that cities across the country are mandating CID construction. They are getting around the need to raise money the old-fashioned way--by raising taxes or cutting existing services. Instead we have these pay-as-you-go arrangements with various kinds of special districts that impose specific tax burdens on this or that group of residents. With CIDs, it's the new owners.

Sunday, July 11, 2004

HOA rules still dog homeowners
A "nightmare" that began almost two years ago has East Valley resident Rob Zaruba wondering who’s in charge of homeowners associations.

His homeowners association and Gilbert gave him written permission to build a $20,000 detached garage — only to have a neighbor complain that the structure violated association rules.

He called the mayor.

He contacted East Valley legislators. He talked to board members, property managers and attorneys connected to his home owners association.

Earlier this year, a mediator decided the garage did violate home owners association rules, must be removed and Zaruba should be com pensated for his trouble.

Zaruba’s ordeal illus trates the web of confu sion over the power, structure and oversight of homeowners associa- tions, which are mandated by some municipalities, created by developers and ruled by homeowners. There’s no oversight on the local or state level, and it’s often easier to change homeowners association rules by passing a state law rather than what’s needed to revise individual homeowners association covenants, conditions and restrictions.

"There’s confusion of who is in control, absolutely," said Rep. Eddie Farnsworth, RGilbert, who supported a number of homeowners association reform bills during this year’s legislative session. "People call cities and legislators. They aren’t sure what to do once a HOA board says it isn’t going to listen to you or go after you."


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And you also get an exchange of quotes between arch-enemies Pat Haruff and Scott Carpenter, to wit:
"It’s a failed experiment, totally failed," said Pat Haruff, a Mesa homeowner activist.

Not so, says homeowners association attorney Scott Carpenter, a member of the top homeowners association lobbying and education group, Community Associations Institute.

"The existence of use restrictions (in the covenants, conditions and restrictions) is market-driven," he said. "The homebuyer wants them."

Monterey County Herald | 07/06/2004 | Las Palmas couple fight homeowners group
Amid rolling, golden hills and curving, rock-walled roads bordered by freshly mown grass, life in a spacious, five-bedroom home in the upper reaches of the Las Palmas subdivision near Salinas would appear to be comfortable if not idyllic.

That's what attracted Angie and Loyde Inlow, a health consultant and doctor who bought their 3,700-square foot home about three years ago on a canyon hillside in the Prestancia Ranch section of Las Palmas. But the past few months have been anything but stress-free for the Inlows. They've butted heads with the development's homeowners association over planting a strip of fresh sod behind their fence and, since March, over plans to add a second, two-car garage and second-floor game room to their two-story home. "People on the board are very controlling. They believe what they say goes, period," Loyde Inlow said, sitting in the living room while his wife held their 6-month old daughter, Sierra. "Not everyone has been following the rules. It's very hypocritical." They tell stories of aerial photos being taken of the offending strip of sod, of keeping an eye on neighbors with binoculars, of rules being changed arbitrarily, of hard feelings among neighbors on the block overlooking the Salinas Valley. They've hired a lawyer...

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Who hasn't?
But here we go again. The story continues...
Israel News : Jerusalem Post Internet Edition: Israeli Security Fence battle moves to United Nations

With the US promising to veto possible sanctions against Israel and the Palestinians vowing to fight for them, the international battle over Israel's security fence moves to the United Nations, which could debate the matter as early as this week. Arab nations plan to ask the UN General Assembly to condemn Israel and force the destruction of its fence based on the advisory opinion issued Friday by the International Court of Justice in The Hague, which said that its construction in the territories and in east Jerusalem is illegal and must be stopped.


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This promises to be a high-stakes conflict over the ultimate in gated communities. The wall seems to have contributed to a reduction in suicide bombings, according to some knowledgeable observers. But with the Hague weighing in on the side of the Palestinians, and the US promising to veto anything that condemns Israel, the scope of the conflict has been greatly enlarged.
L.A. Daily News - Priced out of a house? Affordability index hits lowest level since 1989

With prices and interest rates trending higher, only 19 percent of California households could afford the median-price home in May -- the lowest affordability rate since the previous housing boom, near its peak in 1989, a real estate group reported Thursday.


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It just gets worse and worse. In Los Angeles County, "It would take an income of about $110,000 to afford a median-price home costing about $465,000," according to the article. Ouch.