Rental Emergency 2023

California is facing two rental emergencies.

The first is the increase in rental costs. According to Multi-Housing News article dated September 7th, "_rent costs are up 1.5% year-to-year" and "single-family rents rose 0.5 percent year-over-year to $2,104._" We in the Riverside county area are seeing one-bedroom apartments is over $2000 a month.

California has attempted to relieve the rise in rental cost as well as the supply needs by approving Accessory Dwelling Units for typical residential properties but these are being rented for even more. More on these later.

The second emergency is the inflation that could cause layoffs causing even more financial woes for renters. The FED still looks to raise interest rates to slow down the present inflation so rental rates could continue to rise.

What about a recession. Many analysts, like Danielle DiMartino of Quill Intelligence, are warning of a major recession coming over the horizon resulting in job loss. If renters lose their jobs how will this affect them to maintain their rental units? Many who benefited from the moratorium allowing renters to not have to pay rent and not be evicted has ended in August so now back rent is due. According to USA Today article on August 1st, "_roughly 3.6 million people in the U.S. as of July 5 said they face eviction in the next two months, according to the U.S. Census Bureau's Household Pulse Survey_."

Is there an answer? We are finding many clients seeking to build an Accessory Dwelling Unit on their single family resident lot for their family. A low cost rental for mom and dad, for the son and his new wife, for the brother or uncle. Families are consolidating their resources and living conditions. The cost of building a 500 to 1200 square foot ADU is a potential saving response to the emergency but it is not without its challenges. Since covid shortages and increased construction costs in California have risen from $150 per/sf to over $200 per/sf. While construction has continued to grow it is behind the need, but it is also short of experienced contractors and sub-contractors. Contractors are finding it hard to find experienced workers so are unable to start projects. This then adds to the rise in construction costs.

The ADU is still a valid option if started today. We have standard plans that fit well with most residential properties. City permit process can take 2 to 6 weeks on average. This is because most departments are still experiencing post covid blues and are short handed. Low employee return under the high volume of submittals has extended the process. But if you find an available builder who can start once plans are approved, so you could move in within 9 months from when you start.

What re the other options? Selling your home to buy a larger home for the family? You could add on. This is less cost in construction and does add value and space to your home. We have seen an increase in addition projects adding a new bedroom and bath. There are some challenges in these projects but often can be worked out.

This is advisory, rental costs are going up, housing costs have been up and little chance of reducing, but the ADU or room addition is a responsible answer to the coming housing challenges for your family.

Home Market & Interest Rates - Reality check!

Photo by Tom Rumble on Unsplash

This is from a California perspective and it will vary on your location in the country and in your state. Being a realist I want you not to be scared from selling and buying a new home but to be aware and prepared if you do.

Interest rates: The Federal Reserve has raised the interest rates once again and it is expected to be raised another quarter percent twice before the end of the year. According to an August New York Times "U.S. Mortgage Rates Jump to Highest Level Since 2002." It is now over 7% for a thirty year fixed morgage loan (read Article). With the potential two rate increases rise to over 7.5%. Lets say a home owner has a low 2 3/4% interest, do they want to sell buy another home at 7.5%? This is favorable if you have a very large equity in the home you are selling to use as a down on the house you are being.

Small Inventory: You are ok with the interest rate but now its time to find a home. A home owner may seek to sell their home but the market has a limited inventory of houses for sale. This has, for a few years, made it a sellers market but a challenge for the buyers. A home owner places their three bedroom, two bath home on the market and will find themselves with a possible twenty to thirty offers with 50% being good solid offers. Several offers come with a bio of the family that wants to purchase hoping you will be emotionally touched by their stories. Others have already sold their home and the cash is ready in the bank but they are getting desperate as they are living with family or renting. Others offer more than your listing amount in an attempt to insure their purchase. This is a scenario my wife and I experienced selling my father's house in 2021. In speaking to my realtor, recently, this situation is a regular one today.

So you have sold your house and are now on the hunt for a new one with a swarm of competition. You are living with family as you hunt, or maybe the RV trailer you own. Your choices are few because you are looking to upgrade to a larger home in a nicer area. So is everyone else.

Tract Home Purchase: But maybe you are looking for a new tract home to buy. This is possibly less stressful but even that market is small. Back in 2000 there was a recession and many home builders were caught with standing inventory or empty developed lots and no buyers. Sine then tract home builders builder smaller phases of less that 25 house instead of the 100 house phases they once did. Once those 12 to 25 house are sold they start another small phase. This then is also a challenge, however, it is simpler as it allows you to remain in your house while construction of your new house begins, allowing you to prepare for the selling of your old home and preparing for the future move when your new home is completed. However, the construction of a tract home, depending on the status of the house development project when you first contract with the builder, could be six months to a year.

Building a House: Building your dream house may be another direction you desire to take. You can go with a standard set of plans an architect or design firm may have or have the firm design you a fully custom house. A custom is more money for the plans and can become more expensive to build depending on the design. In either case you have a long process ahead. Let's approach this as if you do not own a lot to build on. Doing property searching may be as exasperating as purchasing a home. They are also few but the amount of purchasers are less as well.

Once you have your property there is time to design and draw the construction drawings, then plan submittal and permitting of the plans, if grading of the property is required then that triggers the needs for a civil engineer and surveying, soils testing is also required by a different engineering firm and maybe includes the need for a septic design depending on the location of the property. Time then from starting the design process to having a permit in your hands for a fully custom home could take as long as 1 -3 years. Banks loaning construction money typically will not sign contracts until plans are through this process. Also, banks like to see the property owned completely, though I have herd of some banks loaning money for the land purchase. So as you can see this is a much longer process and with the changing interest rates and economy can add further anxiety to your new home endeavor.

In closing. These are the major challenges in today's world of home buying and building. If you have quick questions or want to take further steps toward building your home you are welcome to contact me.

Bob Ybarra

California Fires: Steps to take when your home destroyed by the fire?

A friend posted this very valuable list of advice to those who lost their homes in the California wildfires. The loss of your home is a tragic one and is followed by a lot of confusion, uncertainty and fear. But having some knowledge and understanding of steps to take to rebuild is invaluable to assist you and build hope.

“I thought it could be helpful for those who have losses and don't know where to start. We are safe and trusting Jesus to be our comfort, hope and strength. Hope this helps some of you.”

Start with the small list:

1. Get a PO Box

2. Longer term rental search - include insurance on it so they pay directly for rental. Find a nice place that you like, don't settle.  You should be able to get a "Like Property" so insurance should cover a nice place for you to live while you work through all this.  You might be living here for 2 years, so choose wisely.

3. Find a place to buy some sturdy boots and gloves.  Get some shovels. 

4. Start working on the personal property list (this is not fun at all, be prepared to cry we sure did).  Write down the moment you remember – keep list on phone or pad of paper with you at all times.

5.  Save receipts.  Loss of use insurance will cover incidentals too – hairbrush, phone chargers, etc.

6.  As you buy things, tell the store owner your situation.  Most stores will give you some level of discount as their way of helping you.

7.  Let people do things for you.  Do you have a friend that you can send to the store to buy you some basic clothes or comfort foods?  Let them do it – they want to help and you don’t need to spend time doing these errands.   (The ‘fun’ of shopping is gone…it quickly becomes a chore because you don’t want a new shirt, you want the one that you always liked to wear but now it’s gone and you are sad/mad.)

The Big List:

1.    Register at the shelters, with Red Cross and any other agency there, california FEMA, etc.

a.    Most of the aid coming in will use these lists as a point of contact and will help to ensure that you don't get left out of anything.  

b.    This will be especially important should FEMA be activated, which in my opinion is very likely with the amount of devastation experienced.

2.    Call Homeowners/Rental insurance to trigger "Loss of Use" This typically will allow you to be in a "Like" property for x number of years and sometimes has a dollar limit attached and sometimes not, this is dependent on your policy.

a.    This coverage should also give you some immediate access to funds for essentials, clothes, toothbrushes, food, etc.

b.    This will also get the ball rolling for the insurance claim on your home and rebuilding/personal property Dollars.

3.    Get a PO Box and forward all mail to the Box.  Use this PO Box as the mailing address on all forms you begin to fill out.

4.    Start Searching for a Long term rental. Coordinate with your insurance company so that payments can be made directly from them using your “Loss of Use” money.

a.    Plan on renting 1-2 years, but do not necessarily sign a lease for a full two years as circumstances can change.

5.    Itemized List of belongings - (This is very hard but very necessary for your claim) I would organize by room and list everything that was there with a replacement cost. (you will cry a lot doing this and that is ok)

a.    Replacement Cost should be what it would cost to replace not on sale from pottery barn, it should not be the price you paid for it with that 50% off coupon.

b.    Make sure you list everything, even if it is above and beyond your policy limit.  This is very important because everything above and beyond the policy limit is considered a Loss and can be claimed as such on your taxes - See #9

6.    Call all of your utilities and either freeze or cancel service. Electric, Gas, TV, Land Line phone

a.    Newspaper delivery, either cancel or update to PO Box.

7.    Call the rest of your insurance points as needed. Car insurance

a.    Any specialty insurance for unique items

8.    Permits - An unfortunate necessity. Debris Removal - as things wind down it will be necessary to remove the debris, this requires a permit usually. (This should be covered by your insurance, we had to force the issue but ask repeatedly.)

a.    Erosion Control - If you are on any kind of hill or have sloped property you will need to put some sort of erosion control measures in place, again this will need some sort of permit.  

b.    Temporary Power Pole/Trailer on site Permit - Getting this earlier on can prove helpful in both the rebuilding process.

(My comments: The county and/or city will possibly respond to the cleanup and demolition of debris from your property. This hasty be done with care as there are many toxic and environmentally dangerous contents in the debris. Refer to local website as they will be posting information or personally go to your local Building and Safety office.)

9.    Taxes. You will be able to claim the monetary loss of the value of all your items minus what you receive from your insurance company.  I’m unfamiliar with the exact laws, but I believe that we were able to carry our losses back 2-5 years and received most of the money that we had paid in taxes back in a nice large check.

10.  Network with others.  You will learn so much from others as you go through the rebuilding process.  We all have our strengths so share yours and use others.  The amount of time that you will spend on the rebuild, insurance, recovery process is staggering so you need to use all your resources.

I will be posting more advice soon.

iphone 10 year aniversary

I can't take credit for all the following documentation.  It comes from a longtime friend who introduced me to my first Macintosh computer in 1987.  Steve Carl is an Apple consultant under the professional identification of Dr. Billy. 

Bob Ybarra

Folks…

iPhone is ten years old, today. So I wax-nostalgic. This is the original “reveal” announcement. It’s only 3 minutes long.  You should watch it – it’s awesome to hear the crowd’s reaction to things we take for granted, today... https://www.youtube.com/watch?v=wGoM_wVrwng

The reaction to this announcement by the industry, was as follows...

• “[iPhone] just doesn’t matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It’s no longer a novelty.” – Eamon Hoey, Hoey and Associates, April 30, 2008

• “We are not at all worried. We think we’ve got the one mobile platform you’ll use for the rest of your life. [Apple] are not going to catch up.” – Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008

• “Microsoft, with Windows Mobile/ActiveSync, Nokia with Intellisync, and Motorola with Good Technology have all fared poorly in the enterprise. We have no reason to expect otherwise from Apple.” – Peter Misek, Canaccord Adams analyst, March 07, 2008

• “[Apple should sell 7.9 million iPhones in 2008]… Apple’s goal of selling 10 million iPhones this year is optimistic.” – Toni Sacconaghi, Bernstein Research analyst, February 22, 2008

• “What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.” – Laura Goldman, LSG Capital, May 21, 2007

• Motorola’s then-Chairman and then-CEO Ed Zander said his company was ready for competition from Apple’s iPhone, due out the following month. “How do you deal with that?” Zander was asked at the Software 2007 conference. Zander quickly retorted, “How do they deal with us?” – Ed Zander, May 10, 2007

• “The iPhone is going to be nothing more than a temporary novelty that will eventually wear off.” – Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007

• “Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.” – John C. Dvorak, Bloated Gas Bag, March 28, 2007

• “Even if [the iPhone] is opened up to third parties, it is difficult to see how the installed base of iPhones can reach the level where it becomes a truly attractive service platform for operator and developer investment.” – Tony Cripps, Ovum Service Manager for Mobile User Experience, March 14, 2007

• “I’m more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular… iPhone may well become Apple’s next Newton.” – David Haskin, Computerworld, February 26, 2007

• “There’s an old saying — stick to your knitting — and Apple is not a mobile phone manufacturer, that’s not their knitting… I think people overreacted to it — there was not a lot of tremendously new stuff if you think about it.” – Greg Winn, Telstra’s operations chief, February 15, 2007

• “Consumers are not used to paying another couple hundred bucks more just because Apple makes a cool product. Some fans will buy [iPhone], but for the rest of us it’s a hard pill to swallow just to have the coolest thing.” – Neil Strother, NPD Group analyst, January 22, 2007

• “I can’t believe the hype being given to iPhone… I just have to wonder who will want one of these things (other than the religious faithful)… So please mark this post and come back in two years to see the results of my prediction: I predict they will not sell anywhere near the 10M Jobs predicts for 2008.” – Richard Sprague, Microsoft Senior Marketing Director, January 18, 2007

• “The iPhone’s willful disregard of the global handset market will come back to haunt Apple.” – Tero Kuittinen, RealMoney.com, January 18, 2007

• “[Apple’s iPhone] is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.” – Steve Ballmer, Microsoft CEO, January 17, 2007

• “The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant… Apple is unlikely to make much of an impact on this market… Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.” – Matthew Lynn, Bloomberg, January 15, 2007

• “iPhone which doesn’t look, I mean to me, I’m looking at this thing and I think it’s kind of trending against, you know, what’s really going, what people are really liking on, in these phones nowadays, which are those little keypads. I mean, the Blackjack from Samsung, the Blackberry, obviously, you know kind of pushes this thing, the Palm, all these… And I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong, but I think Apple can do wrong and I think this is it.” – John C. Dvorak, Bloated Gas Bag, January 13, 2007

• “I am pretty skeptical. I don’t think [iPhone] will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed.” – Jack Gold, founder and principal analyst at J. Gold Associates, January 11, 2007

• “Apple will launch a mobile phone in January, and it will become available during 2007. It will be a lovely bit of kit, a pleasure to behold, and its limited functionality will be easy to access and use. The Apple phone will be exclusive to one of the major networks in each territory and some customers will switch networks just to get it, but not as many as had been hoped. As customers start to realise that the competition offers better functionality at a lower price, by negotiating a better subsidy, sales will stagnate. After a year a new version will be launched, but it will lack the innovation of the first and quickly vanish. The only question remaining is if, when the iPod phone fails, it will take the iPod with it.” – Bill Ray, The Register, December 26, 2006

• “The economics of something like [an Apple iPhone] aren’t that compelling.” – Rod Bare, Morningstar analyst, December 08, 2006

• “Apple is slated to come out with a new phone… And it will largely fail…. Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits… When the iPod emerged in late 2001, it solved some major problems with MP3 players. Unfortunately for Apple, problems like that don’t exist in the handset business. Cell phones aren’t clunky, inadequate devices. Instead, they are pretty good. Really good.” – Michael Kanellos, CNET, December 07, 2006

• “We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.” – Ed Colligan, Palm CEO, November 16, 2006

iPhone really did change the world.

"Federal Research invented it" Says Pelosi

Federal government taking credit for inventing the iPhone because they funded research that led to the parts and materials used in the iPhone is like parents taking credit for inventing the iPhone because they paid for the engineer son working at Apple.  

I do not discount how federal funds are behind many areas of research done at universities and other facilities but to state that federal funds did the inventing is atrocious. With that said lets consider the amazing inventions that government never had a part in that changed the world. Johannes Gutenberg's printing press or Oliver Evans who invented the first refrigeration machine, are examples.  

I am indebted to the research and development funded by our government and do not discount that contribution for I lived the space race through my dad who worked on the Apollo and Shuttle projects.  But lets give credit where credit is actually due, Government may have funded but men and women who, used their intelligence (another natural resource not invented by government) researched, experimented, developed, invented and produced. Providing cash doesn't invent anything (taxpayer's $ BTW) without inventive, visionary and innovative minds.  Federal funds are worthless without these people.  Her inability to see this and instead give shameless credit to an inanimate institution is a sad testimony of our politicians to elevate their positions over the real inventors.

That's my 2 cents.

Bob

Design, Presentation, Flags & Roman Mars

First you have to love the guy's name, "Roman Mars."  But you also have to love his attention to design found in all places.  Roman is the creator and host of the 99% Invisible podcast.  In his TED Talk he not only does a wonderful presentation as if he is producing one of his podcasts, but wonderfully reveals the simple approach of design using flags.  Yes, flag design. To me it is the earliest example of the icon that simply and graphically communicates about the person, place or thing it represents. The approach used in flag design principles shared in the presentation can be used in virtually all graphic design whether it be a poster, a business card or a logo.  

Enjoy

Bob Ybarra

Remarkable Engineering - Near Disaster - Citicorp Tower, NYC

http://www.601lexington.com

Location: 153 East 53rd Street, Manhattan,  10022, United States

Construction started: 1974

Completed & Opened : 1977

Cost: $195 million (USD)
(in adjusted inflation $758,904,448)

Height: Architectura l915 ft (279 m)  Floor count 59

ArchitectHugh Stubbins / KlingStubbins, Emery Roth & Sons

Structural engineer: Le Messurier Consultants, James Ruderman

Ever see a building and ask, "How did they do that?"  The Citicorp Building in NYC, now called the Citigroup Center, is one of those.  Most recognized by its 45 degree top that stands out over the NYC skyline its base is what prompts the question.

As an architectural work the building has little to say but as an engineering work it has lots to say.  The structural engineer was the foremost William LeMessurier.  Due to a requirement by the sellers of the property, St. Peter's Lutheran Church, a new church building was required to be built along side the new tower.  This resulted in a design where the typical corner columns would instead be centered with the sides of the building with chevron bracing (diagonal bracing) to the corners.  

But then the intrigue of 1979 has added to the engineering story.  After the the completion of the building a Princeton engineering student, named Diane Hartley, chose the CitiCorp Building to write her thesis on.  In her research she contacted the office of William LeMessurier and spoke to an associate engineer.  With her evaluation of the materials she was given she asked about the building being evaluated for quarterly winds.  These are winds that travel diagonally against the building pushing against two faces at the same time.  She never learned more about her inquiry or what resulted because of it until she watched the documentary linked below and a meet up with her old professor.

The issue was that the connections between diagonal members and the corner members of the building were changed from welding to bolts while under construction.  This was suggested by the contractor to save money and recalculated by Mr. LeMessurier's office.  However, they did fail to consider the quarterly wind reactions. The inquiry by Diane Hartley triggered a recheck of the calculations and discovery of a potentially catostrophic failure of the bolted connections in a 70 mph plus wind.  In NYC this had a 1 in 16 chance of happing and storm season was approaching. The response was an immediate action to weld those connections at night when the offices were closed.  The added intrigue was that the tenants were not told of the potential danger nor the character of the repairs.  Meanwhile the city put in place an emergency evacuation plan with the RedCross in case there was an imminent threat of 70 mph winds. Fortunately, it never was needed.  

As the story was later told by Mr. LeMessurier, he was called by a young man that was an engineering student who revealed to him the error of the calculations. It wasn't until Diana Hartley later spoke to her retired professor that she realized she was that student.  This makes the story all the more remarkable and maybe even a miracle. So today the CitiCorp Building remains standing with its neighboring buildings.