Must Read: For fifty years, California has required cities and counties to submit plans for enough new housing units so that residents of various income levels can live affordably. However, many local governments have treated this planning exercise as something between a formality and a joke and have failed to approve anything close to enough units, thanks mainly to the fact that the state has no mechanism for enforcement. Those days may be coming to an end as new Governor Gavin Newsom is threatening to withhold state transportation revenue from cities and counties that did not meet their housing goals. That being said, if our new governor really wanted to mend California’s housing woes he should start on CEQA reform. However, to the best of my knowledge he has not yet mentioned it.
Diminishing Returns: It now requires increasingly higher levels of debt to generate the same level of growth.
Turnaround: How Japan defied demographics and revived its economy by encouraging the elderly and women to work and breaking longstanding taboos against immigration.
Subdued: Last week’s CPI report came in light, confirming exactly what the market has been indicating for a while now – inflation is not a problem.
External Risk: Why China- whose government’s novel credit directives are showing diminishing returns – is a bigger risk to the health of the global economy than the US is right now.
Spare a Dollar? Down-market discount stores like Dollar Tree and Family Dollar are looking overbuilt after being in expansion mode for several years.
A Bridge Too Far: Even VC sugar daddy Softbank is getting cold feet about investing in incredibly expensive, money-losing WeWork as big investors question whether or not the co-working company is actual a technology play (it’s not) or just an incredibly expensive real estate investment (it is).
No Longer a 3rd Rail: Proposition 13 is no longer off limits in California, at least when it comes to commercial property.
Concessions: As the housing market slows, builders are offering a growing list of buyer discounts.
High Hurdle: What happens to the country if the only young people who can buy houses are already wealthy? We’re about to find out.
Bright Spot: Newly built homes for rent are a bright spot for the increasingly struggling home building industry. See Also: Wall Street’s biggest landlords are so hungry for houses that they are building them.
A Better Way: Income Sharing Agreements are gaining the attention of higher education and Wall Street. One early success story is getting a boost from venture capital.
Falling Short: After one year of pot sales and California has nothing close to the bustling industry that it projected thanks to over-regulation.
Don’t Call It a Comeback: Why the west coast is (finally) beating the east coast when it comes to transportation.
Charts of the Day
This does not bode well…
How’d That Get There? A man who had syringes found in his rectum during an arrest and body cavity search claimed that they weren’t his because Florida.
You Want Fries with That? An unidentified man walked into a California McDonalds with a bloody, dead raccoon, leaving it on a table and causing the health department to shut the restaurant down. In an ironic twist, tests showed that the critter carcass was healthier to consume than anything on the menu.
Finger Lickin’ Good: A truck-full of chicken tenders crashed on a highway, and the sheriff’s office had to tell people not to eat them because Alabama.
Landmark Links – A candid look at the economy, real estate, and other things sometimes related.
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