Sunday, July 25, 2021
Housing Crisis in San Diego?
The San Diego Union Tribune ran an editorial today asking of the "public willing to tackle the housing crisis?" I'm not sure the public is willing! I'm also not sure the situation is actually a "crisis." Why do we need to have lower cost housing in an area where land is most expensive? Where are the economists? Economics would say that the normal situation is for prices to rise naturally until supply and demand come into balance. In a normal situation, retirees or disabled would move to lower cost areas so they could stretch their income further. There are areas throughout California that are lower cost, and there are places all over the United States that are lower cost. As those people would move away, their housing would become available to workers in the area. Why wouldn't retirees want to move to the huge amounts of open spaces available for affordable housing in other states? Why must Southern California accomodate so many people?
The problem is that governmet policies have distorted the market in such a way that aggrivates the shortage. Some of them are:
1. Proposition 13 which keeps taxes on properties low. So many owners of properties keep the homes even though they rarely use them. Buildable lots remain empty because it doesn't cost the owner much for keeping it and hoping the values will go higher.
2. Capital Gains taxes. Even though long-term capital gains taxes are lower than taxes on current income or wages, it is still significantly high on properties that were purchased in the 1970s or earlier. Why sell and pay the tax, when we can hold the property and enjoy it?
3. The tax basis "step up" at death. Many owners of properties in San Diego, particularly in the coastal zone have signficant capital gains. If we wait for the owner to die, the heirs get the benefit of the "step up" of the basis to the value at death. This is a huge tax saving! So many people are simply keeping properties off the market and are using it just for short getaways waiting for that "step up" --
4. Affordable housing to most people means low rent. Investors would build homes, condos or apartments for rent, if they knew they had good opportunities to earn above-market rates of return. Why take the risk of building or buying a property when you can get returns on stock market investments with less risk? However the state, cities and counties have passed rent control laws that put significant caps on what could be earned. Even though the caps are not too tight, there are threats and attempts to tighten those caps -- particularly if we have significant inflation.
5. The recent changes in income tax laws have put caps on the SALT deduction which actually removes a benefit from first-time home buyers.
6. The Coastal Commission says they want to encourage affordable housing and much of San Diego County's housing stock is within the coastal zone. However their bureacracy has added another layer of paperwork, approvals, and risk involved in making those investments. The Commission puts restrictions on making minor improvements to coastal property. If an improvement is made, the property is no longer protected as "existing construction" prior to the Commission so basically loses important property rights. The commission is also pushing the concept called "Managed Retreat" for response to sea level rise. That concept prevents owners from defending their own property from sea level rise. So different from other parts of the country where, for example, the Army Corps builds levees to protect Louisiana homes.
7. The cost of buying a home in a PUD or Condo is usually less than a stand-alone single family home. The higher density, as described in the article is also considered desirable. However, the State and local governments make it very difficult for people to obtain mortgages in PUDs and Condos. The mortgage applications are subject to seemingly arbitrary standards concerning construction, insurance, association reserves, and rental occupancy. In addition, the state continues to make knee-jerk reactions to problems and passes laws which make it much more difficult for an association to be managed by volunteer boards.
All of these above constraints could easily be resolved by the government. But because each of them involve short-term pain for long-term gain, the sound-bites would tend to make those changes unpopular. Until we get legislatures with guts, integrity and technical understanding, the problem will continue.
Tuesday, November 17, 2020
Adaptation to the College Admission Scandal
For the past couple of years, the news has been full of the college admission scandal. Celebrities, brokers, coaches, and administrators were all guilty of various forms of cheating to get students into "big name" colleges and universities.
What were the real "crimes?" There clearly was lying, forgery, tax avoidance, tax cheating, identity theft, and other real, but minor crimes. To the general public, it was wealthy people using their affluence to cheat the system and get their kids into schools that they probably would not have been admitted to based upon their own merits. But the biggest "crime" was the secrecy involved. School administrators, alumni, boards, and sometimes even the students did not know that this was going on.
It is clear that wealthy parents are more than willing to pay to get their students into slots. It is also very clear that schools can use additional money from endowments to help with their infrastructure or to use for grants for students who are qualified to enter but do not have adequate funds to attend.
Why not put the two together? Why not allow schools to allow a very small number of freshman entry slots to be "bid" for by the parents. I could see a large university allocating 100 slots or a small college with 10 slots to be bid on. The students would complete their normal application process, and the parents would commit to paying the normal full tuition and room/board. However, the parents could then place "endowment bids" of tax-deductible amounts online. The school admissions panel could then take the top 10 bids and evaluate the student's application.
I think it is a "win-win" -- the school receives funding, and students get a chance. Someone could say that the wealthy student "displaced" a slot for someone better qualified. But the additional funding provided would help fund more students
Monday, November 2, 2020
The Busy Repairman? --Help from Youtube
I saw this article in today's Union-Tribune by Soo Youn from the Washington Post.: "The Busy Repairman:
Ovens, dishwashers and washing machines — all kinds of appliances —
are breaking down like never before, but there’s nobody to fix them"
The premise of the article is that because everyone is now at home much more, they are using their appliances more and they are failing. Repair technicians are in short supply and it is now taking longer for them to be able to obtain parts.
I have no reason to doubt Soo Youn's report. But It did surprise me. I had thought that the need for traditional repair services was dropping off rapidly. Yes, appliances are now made better and are more reliable. Yes, we can now get repair parts via eBay or Amazon within a day or so. But the biggest improvement is having youtube with detailed instructions for how to repair every type of problem with every different model of device done by multiple experts in every language. These youtube videos aren't just "available" -- they are heavily used! Some have had many millions of views. Just imagine how bad the "shortage" would be if we didn't have this new, wonderful youtube resource to help us repair stuff!
Friday, September 18, 2020
College Student work at Trump Troll Farm
Donald Trump presidential campaign is using teams of college students to spread disinformation over social media. See this article:
The article cites a team in Arizona doing it. But that probably is the only team that was caught or detected doing it. I suspect there are teams all over the country (and probably in Russia too) who are doing the same thing.
It sort of reminds me of Nov 1964 and I was a junior in college in Western Pennsylvania. A group of us volunteered to go to polls and stand a legal distance away and hand out matchbooks printed with the name of a Republican candidate for the Pennsylvania legislature. I still was not old enough to vote or drink at the time. But the candidate offered to pay us $20 for the day, and to come to a party at his big home in the evening for free beer! Of course, the beer was the big incentive! At the time, however, I don't believe any of us would have thought to spread misinformation about candidates.
Why does Donald Trump want a "Pro-American Curriculum?"
Today's Union-Tribune reported that Trump wants US School curricula to be "pro-American." -- See this link:
From the article, it appears that he does not want our schools to teach about the mistakes made by America, but only the supposed good things that were done. My elementary and high school education was in Maryland during the 1950s and 60s. I did not remember ever hearing about how the US abused the Native American Indians, Blacks, Women, Chinese, or Japanese. Many of these aspects of history were not even taught about in college history classes. I always wondered why that happened!
Now I think I understand! The victors get to write the history and do not want to be shamed. The so-called "religious right" throughout history has claimed that the groups that were being oppressed were "inferior" and that God made them that way. Of course, they were proven wrong time after time. They now want to bury that past!
Sunday, January 19, 2020
Medicare 3-day Rule seemingly a desperate attempt to control costs by cheating the unaware
Terry Savage's Column in Sunday January 19, 2020 issue of the San Diego Union Tribune cautions medicare recipients about a "trick" that Medicare and the hospitals try to play on patients in order to cut costs.
Medicare.gov website tries to explain the complex rules and procedures for determination of whether a patient is "admitted" to the hospital or being "observed" at the hospital. Try reading them at the link yourself and see what you think! The way it is worded is that there are complex, but vague rules that our Doctor and hospital must use in deciding whether the patient will be admitted or observed. I've been unable to find any clear guidelines. The appeal process that is mentioned says that some aspects can be appealed, but doesn't mention the admitted/observed decision. According to the Lexology website, it appears that Medicare has not been consistent in applying the rule, and supposedly has "overpaid" for services that should not have been approved under the 3-day rule.
Apparently Medicare is considering eliminating the rule and counting the three days in the hospital whether in observation or admitted status. Nobody seems to know how much has been saved in Skilled Nursing Facility costs to the Government due to this change. Patients, Doctors, and Hospitals can game the system. For example if a hip replacement patient is ready for discharge after 2 days, they can simply keep the patient for an additional day to allow qualification for Skilled Nursing Facility Coverage. Did that save the Government money? The costs for the additional day in the hospital may be much more expensive to the Government than the several days cost at the SNF.
When my wife went to a local Scripps Hospital for major foot surgery she had to sign a bunch of forms. One form did declare that she would be in "observation status" rather than being "admitted." Of course, being our first experience like this, we didn't know the difference! We were told that the treatment in either status was exactly the same, so it appeared to not matter. As it turned out, all went well, she stayed in the hospital overnight and did not need SNF. My daughter-in-law was able to take a few days off and help me help her during the critical first few days of recovery.
What gets me is that the hospital did not explain the trade-offs on the subtle difference between observe and admitted status. The surgery was planned many months in advance, so we had time to shop for a doctor and hospital that would have given her "admitted" status. But when completing the forms on the day of scheduled surgery it seems much too late.
If Medicare is actually saving money from the 3-day rule, it is making it from those patients who are less informed, or who arrive at a hospital in an emergency state and do not have the time to make an informed decision.
Medicare.gov website tries to explain the complex rules and procedures for determination of whether a patient is "admitted" to the hospital or being "observed" at the hospital. Try reading them at the link yourself and see what you think! The way it is worded is that there are complex, but vague rules that our Doctor and hospital must use in deciding whether the patient will be admitted or observed. I've been unable to find any clear guidelines. The appeal process that is mentioned says that some aspects can be appealed, but doesn't mention the admitted/observed decision. According to the Lexology website, it appears that Medicare has not been consistent in applying the rule, and supposedly has "overpaid" for services that should not have been approved under the 3-day rule.
Apparently Medicare is considering eliminating the rule and counting the three days in the hospital whether in observation or admitted status. Nobody seems to know how much has been saved in Skilled Nursing Facility costs to the Government due to this change. Patients, Doctors, and Hospitals can game the system. For example if a hip replacement patient is ready for discharge after 2 days, they can simply keep the patient for an additional day to allow qualification for Skilled Nursing Facility Coverage. Did that save the Government money? The costs for the additional day in the hospital may be much more expensive to the Government than the several days cost at the SNF.
When my wife went to a local Scripps Hospital for major foot surgery she had to sign a bunch of forms. One form did declare that she would be in "observation status" rather than being "admitted." Of course, being our first experience like this, we didn't know the difference! We were told that the treatment in either status was exactly the same, so it appeared to not matter. As it turned out, all went well, she stayed in the hospital overnight and did not need SNF. My daughter-in-law was able to take a few days off and help me help her during the critical first few days of recovery.
What gets me is that the hospital did not explain the trade-offs on the subtle difference between observe and admitted status. The surgery was planned many months in advance, so we had time to shop for a doctor and hospital that would have given her "admitted" status. But when completing the forms on the day of scheduled surgery it seems much too late.
If Medicare is actually saving money from the 3-day rule, it is making it from those patients who are less informed, or who arrive at a hospital in an emergency state and do not have the time to make an informed decision.
Saturday, November 9, 2019
Work Shorter Hours
I saw this opinion item by Noah Smith in the San Diego Union Tribune, originally from Bloomberg. The article points out that when people work fewer days they appear to be more productive, and maybe happier. I think this could have some public policy implications.
Working shorter hours may be able to improve productivity in some jobs. But other jobs required people to be in their position. For example, a security guard or a retail clerk needs to be at their position. Also, this article seems to ignore the possibility that the increase in productivity was due to the "Hawthorne Effect" where workers productivity improved when lighting was decreased, and it also increased when light was increased. It was then determined that the benefit was because the workers felt management was paying attention to their welfare.
In reality, many low-paying, boring, repetitive jobs are being replaced by technology. Jobs like librarian, music stores, book stores, key punch operators, bank check sorter/filers, newspaper delivery etc have been mostly replaced by technology. During the next decade, we expect that self-driving cars and trucks might eliminate those jobs. A lot of "fast food" ordering and production may be replaced by machinery and electronics.
As jobs are eliminated, it is likely that they will be replaced by other new jobs that we haven't even thought of yet. But I have the feeling that there might not be enough new jobs to absorb all of the labor that will be released by automation. If that does happen, the world has the choice of simply having many people sit idly by unemployed or find something for them to do. Another option would be to shorten the work week such that more people work, but they each work shorter hours.
The French achieved the first 12 hr day law in 1848, and the idea of a 10-hour day was raised in 1810. But the 8-hour work day, 40 hour/week concept became an international standard in 1919, and was gradually adopted throughout the world. Now 100 years later not much has changed! The definition of a work-week and "full time employment" affects how other employment benefits are distributed. Typically full-time employees receive medical, retirement and vacation benefits.
I propose that the US lead the way in passing legislation that lays out a plan for gradual reduction of the workweek definition. Hours beyond the limit would be compensated by overtime pay. Businesses need to be able to plan for the future. They make capital improvement plans, design facilities, and plan shift schedules based upon laws. Below is my proposal
Working shorter hours may be able to improve productivity in some jobs. But other jobs required people to be in their position. For example, a security guard or a retail clerk needs to be at their position. Also, this article seems to ignore the possibility that the increase in productivity was due to the "Hawthorne Effect" where workers productivity improved when lighting was decreased, and it also increased when light was increased. It was then determined that the benefit was because the workers felt management was paying attention to their welfare.
In reality, many low-paying, boring, repetitive jobs are being replaced by technology. Jobs like librarian, music stores, book stores, key punch operators, bank check sorter/filers, newspaper delivery etc have been mostly replaced by technology. During the next decade, we expect that self-driving cars and trucks might eliminate those jobs. A lot of "fast food" ordering and production may be replaced by machinery and electronics.
As jobs are eliminated, it is likely that they will be replaced by other new jobs that we haven't even thought of yet. But I have the feeling that there might not be enough new jobs to absorb all of the labor that will be released by automation. If that does happen, the world has the choice of simply having many people sit idly by unemployed or find something for them to do. Another option would be to shorten the work week such that more people work, but they each work shorter hours.
The French achieved the first 12 hr day law in 1848, and the idea of a 10-hour day was raised in 1810. But the 8-hour work day, 40 hour/week concept became an international standard in 1919, and was gradually adopted throughout the world. Now 100 years later not much has changed! The definition of a work-week and "full time employment" affects how other employment benefits are distributed. Typically full-time employees receive medical, retirement and vacation benefits.
I propose that the US lead the way in passing legislation that lays out a plan for gradual reduction of the workweek definition. Hours beyond the limit would be compensated by overtime pay. Businesses need to be able to plan for the future. They make capital improvement plans, design facilities, and plan shift schedules based upon laws. Below is my proposal
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