Archive for November, 2017

It May Not Be Racial, But It Is Very Real

November 25, 2017

Analysis has found itself considering the close relationship of home ownership and politics in Newark Ohio. Many statistics and definitions must be borne in mind for insights, some of which have been covered extensively in past posts. Some, such as the near 50% of residential housing being non-owner occupant or the low rate of voter turnout, are essential to continuously bear in mind. Others, such as the existence of polarization, gerrymandering or redlining, are a little more difficult to grasp. The interrelationship of all of these does not materialize trippingly on the tongue. Redlining is described readily enough on Wikipedia. However, it is generally associated with racial segregation. According to the census bureau, Newark’s racial diversity is way below the national ratio. As mentioned in the previous posts, polarization appears non-existent within the workings of Newark City Council. And with at large council representation, gerrymandering would be difficult to ascribe to the city’s ward/at large governance. But the recent late night gazebo move brings polarity to the fore (ranks closed tightly along party lines) And past Newark Advocate reporting that has questioned why so many of Newark’s representatives, government administrators and “leaders” all reside in the 5th ward makes gerrymandering more than real for Newark voters. Redlining? In Newark? Naaa. Redlining, steering and reverse redlining have primarily been associated with racist dispositions and denial of access to opportunities. The recent T Day week end Columbus On The Record featured a rerun of a Chasing The Dream panel. One of the panelists, Beth Gifford of Columbus Works, described a recent drive through the streets of her childhood neighborhood, the south side of Columbus. She said it doesn’t look much different today than a half century ago, except the places of employment are gone (manufacturing base) and the stores have disappeared along with it. Only the residences remain, more of which become rentals with each passing year. The south end of her youth was a vibrant mix of restaurants, bars, department stores, large and small employers and church/community identity, etc. Sounds a bit like what currently comprises Newark’s 1st, 2nd, and 7th ward, doesn’t it? Like the south side Columbus of Gifford’s youth, the east side of Newark was an equally vibrant mix of employment, residences, stores, restaurants and church/community identity. For reason’s beyond the scope of one page posts, Newark’s “leaders” decided (a half century ago) to relocate the hospital from its east side home to the farm fields of the west side, on West Main Street. This was accompanied by development of employment facilities as well as housing, schools, churches, etc. (all the ingredients needed to form “community” according to Chasing The Dream). Ditto the north side, all of which currently comprise Newark’s 3rd, 5th and 6th wards. While these political districts flourished, the 3 on the east side languished. “Well, it’s where people want to be” we are told. Analysis finds this a cliché way of avoiding the answer to the more pressing question of who sold them on this end of town? And who financed it?  Just as today all the “commercial development” and places of employment magically appear outside the Newark City limits (for reasons only known to Grow Licking County and Newark Development Partners), so half a century ago Newark began expanding away from the east end. Not that there wasn’t open farmland or highway access on the east side. And someone thought it was a “safe bet”, “good investment”, “progressive thinking” to provide residential loans as well as underwrite business/commercial ones. Now it may have nothing to do with race, but providing mortgages for one area and eschewing another defines redlining. Aggressively selling one area while disparaging another likewise approximates steering. Saying it’s “too costly” or “risky” to finance maintaining properties in a designated area is akin to reverse redlining (driving up the cost for residents who own these properties). So redlining has history in Newark. The relationship to gerrymandering (and polarization) is apparent when one considers what areas comprise the wards and where the boundaries are drawn. It may not be racial, but it is very real.

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In Defense Of Being Homeless

November 16, 2017

Regular Newark News Analysis readers can’t help but notice that recent posts have swirled around real property ownership and housing, directly or indirectly. “Homeownership doesn’t build wealth, study finds” headlines Diana Olick for CNBC (11-16-17). Intriguing! Analysis required reading. “”On average, renting and reinvesting wins in terms of wealth creation regardless of property appreciation, because property appreciation is highly correlated with gains in the traditional financial asset classes of stocks and bonds,” wrote study co-author Ken Johnson of FAU’s College of Business [Florida Atlantic University], in a release.” This seems to be the keynote quote pursued (for actuality, efficacy) throughout the article. What follows are the pros and cons of renting versus owning with back up insights for the period covering 2008 (when the real estate bubble burst) to the present. “Still, researchers in the study claim the adage of “throwing your money away on rent” doesn’t hold up. That is because it assumes that the extra money a renter saves by not owning a home and not saving for a down payment is simply spent on goods or services and not invested.” Well, that seems clear enough. “In other words, the rent argument works only if the renter invests the rental savings instead of consuming the money.” The article then localizes the theory. “The researchers therefore went city by city, measuring home price appreciation against a portfolio of stocks and bonds that were equal in volatility. “To have a fair race, that reinvestment into stocks and bonds has to be as risky as that particular housing market,” Johnson said.” Put crassly (and simplistically) if a homeowner considers what she pays monthly for principle and balance on her mortgage against how much (percentage wise) her real property investment made (appreciates), that margin would be less than a renter, renting the same size, quality property would have if the difference between the monthly cost of renting and the mortgage amount was invested in “”stocks and bonds.” Gasp! Butt weight, there’s more. The buried lead appears at the end, after a breakdown on the requirement “if the renter invests the rental savings instead of consuming the money.” That buried lead throws shade on the initial quote by Johnson pursued throughout the article. Here it is: “As long as home values don’t fall, which has historically been the case in most markets, with the glaring exception of the last recession, homeowners are building a nest egg. They had also been getting a tax advantage. That is now at risk in the Republican tax plan, which curbs the mortgage deduction and in the Senate version, wipes out the property tax deduction. Real estate can still be a good investment, according to Johnson, but not necessarily living in the home you own. Being a landlord or investing in real estate-related stocks and commodities can be more lucrative that keeping all your capital in the nest.” Not surprising given the “Me first” focus of the apprentice president and his MAGA emphasis, and Wall Street’s insatiable demand for more sources of capital. But “Me first” “landlord[s] or investing in real estate-related stocks and commodities” don’t make neighborhoods (or community). What more, stock and bond ownership doesn’t equate with the quality of life issues associated with community. But investment is touted as the primo path to greatness, success and wealth (the GOP use this line of argument to justify the recent tax bill and its permanent corporate tax cut, etc.) How’s that in actuality? Reporting for The Independent Clark Mindrock headlined “Trump’s top economic adviser can’t contain his surprise after CEOs say his tax plan won’t make them invest more” 11-15-17. “During an event for the Wall Street Journal’s CEO Council, an editor at that newspaper turned to ask the room a question: “If the tax reform bill goes through, do you plan to increase investment — your company’s investment, capital investment?” Prompted to raise their hands if so, very few shot their palms into the air. Mr. [Gary] Cohn, the White House Economic Council director, smiled uncomfortably at the response. “Why aren’t the other hands up?” he asked, making a joke out of the spectacle. But experts say that it isn’t hard to figure out why corporations might not want to take savings from cuts to the corporate tax cut and pump it back into their companies — all you have to do is look at who actually benefits financially from the cuts. Citing a recent Moody’s report that estimate that the Trump tax plan would yield just a 0.3 percent economic growth rate for 10 years before a likely decline, Brooking Institute senior fellow William Gale noted that business leaders might be expecting declines in the long term.” Analysis shows there is more to the homeownership’s study than the math provides. The renter’s surplus investment (which will make her wealthy) can only be made with companies that themselves are reluctant to invest. “Being a landlord… can be more lucrative that keeping all your capital in the nest.” “Real estate can still be a good investment, according to Johnson, but not necessarily living in the home you own.”

Newark’s Likely Voters

November 9, 2017

Originally Analysis was going to cover the recent election. Reuters (amongst others) reported “Maine governor says he will not expand Medicaid despite vote” by Gina Cherelus, 11-8-17. Déjà vu all over again with “About 60 percent of voters in Maine approved the ballot proposal in Tuesday’s election, according to the Bangor Daily News, making the state the first in the country to vote to expand Medicaid, the government health insurance program for the poor and disabled.” GOP Governor LePage refuses to implement it. Sound familiar? Hint: Marijuana. That’s right, a citizens’ initiative approved by the voters of Newark re: marijuana possession in Newark was ditto refused to be implemented by GOP Mayor Hall. More recent is the cavalier late night destruction of the gazebo vociferously opposed by residents, all to no avail. These left Analysis with the question “why is the will, and vote, of the people (citizens) so impotent within a government founded on democracy?” Presently the Democrats are all Broadway musical happy after limited “victories” this just past election but, again, Newark doesn’t reflect that. This blog’s previous post displayed the inadequate attempt by Lesha Farias’s service organization to affect Fred Ernest’s 10 year “vision.” Couple that with the very low turn out Monday (11-6-17) to “protest” the demise of the gazebo and the question gets even thornier – where is the democracy in Newark? And if it’s missing, why? Again, (11-9-17) Reuters headlines “Trump’s low approval rating masks his support among likely voters” by Chris Kahn. Couple this with the actual voting outcomes reported by The Advocate (GEMS Election Results from 11-8-17). For overall county election races (like the muni court judgeship) 29.1% of eligible voters turned out. Now “likely voters” looms large. Analysis finds that though urban precincts encompass more registered voters, rural district issues and races attracted a greater percentage of voters, though lesser in number. Newark precincts involve 4-6 thousand voters each and were turning out roughly 24-25% of them to decide the contest. That’s less than the county actual (likewise likely) voter percentage (29%). Most rural precincts show way less than 2,000 possible voters (many less than 1,000) with turn out being 33-35% (Northridge School’s district precincts turned out over 50%!). Many have repeatedly asked “Why is turnout, interest and active engagement so low in the very urban city of Newark?” That is, why does the description “likely voter” include so few already registered voters in Newark? Those paid to know offer many theoretical possibilities – culture, economics, education, disinterest or even distrust of government. Analysis considers a material actuality. “Landlord doubles rent, evicts nuisance tenants to improve property” by Shelly Schultz for the Zanesville Times Recorder (11-8-17). “Following an abatement warning, the owner of an apartment complex located at 1252 Edwards Lane issued residents a zero tolerance notice for illegal activity and nearly doubled the rent.” The back story to which is “In September, several residents converged on the public safety committee complaining of a sudden increase in prostitution and drug activity in their neighborhood.” Somewhat deeper: “Tenants who have been identified as a nuisance have been evicted, according to Horvath. The rent has increased from $300 to $500 and heading towards $600. The property now mandates a background check on tenants.” (“Eriech Horvath of Newark, owner of Stone Works Development, purchased the 22 unit apartment complex in March and said he has been working diligently to clean it up.”) Back story to the back story would be from WHIZ’s report of “Zanesville Police Dept. cracking down on nuisance homes” by Matthew Herchik 6-30-17. “To be able to move forward with a nuisance abatement, [ZPD Police Chief Tony] Coury says they must prove that the house is in fact a “nuisance,”” “The ZPD has been working in conjunction with the city Law Director as well as the Prosecutor’s Office to make these homes a bigger focus.” And finally, the back story to the whole story is the Ohio Revised Code 3767.01 and .02 which define “nuisance” and “nuisance homes”. All of which sounds pretty sensible when dealing with crime and violence until one makes the connection that Mr. Horvath is using the imminent power (and actions) of the prosecutor/law director/police to justify evicting tenants and upping the rent on his recently acquired property. Given that 48% of Newark’s residential housing is non-owner occupant (rental) and that the census bureau shows over 40% of the US population as having no net worth (living pay check to pay check) it is little wonder that, though greater in numbers, so few registered voters are “likely voters” in Newark, let alone actually voting in elections. Not wanting to rock the boat and potentially be evicted from one’s rented home (for whatever reason, be it the inability to suffer an increase in monthly rent or “nuisance” designation) is a very normal response to being asked to engage in a political process. Analysis shows that having a home to come home to matters a lot.

 

 

A Mighty Fortress Is Our Homeowner

November 3, 2017

A weird news coverage article appeared out of thin air in The Advocate 11-3-17. Maria DeVito headlined Group thinks Newark vision plan didn’t account for whole city. The article primarily covered the 10 year “vision plan” currently in play with Newark Development Partners and what transpired at their recent meeting (11-2-17). There is little grounding for Analysis in the world of dreams and visions. A 10 year “vision” differs little from a 5 (or 10) year Stalin era “plan,” except in the execution – who does what and how. As mentioned in this journal’s previous post, the current political administrations of Mr. Hall and Mr. Bubb, along with Grow Licking County and Newark Development Partners, couch everything in terms of “the economy versus…” Fred Ernest’s development franchise engages in an ethereal dance in sync and lock step with the team on this “vision” quest as well (could Dancing With The Stars be far off?). Besides, the best laid plans of mice and men can change in a heartbeat if PNB should opt to relocate to New Albany (happens all the time. Meritor is still sitting vacant). One thing in the article jumped out, primarily in terms of its lack or absence. That lack or absence spoke volumes in terms of what Lesha Farias and The Newark Think Tank on Poverty were attempting to convey (but failed according to DeVito’s reporting). “”It’s not the community’s plan,” she [Lesha Farias] said. “It’s the people that they wanted to make the plan making the plan.”” Who is “they”? The article (or Farias) never makes “their” identity apparent. What is apparent though, and does give direction as to what Farias was trying to express, is the glaring lack within the “Seven Pillars” envisioned by the “vision.” Sounds almost biblical, doesn’t it? “Seven pillars are identified in the plan: image and brand; public safety; mobility and transportation; neighborhood revitalization; vibrant downtown; arts and recreation; and quality education.” Notice anything absent? Hint: you can probably buy the Basket on the edge of town for what it costs to make a McMansion on an out of town rural acreage. That’s it, housing! What never figures into the celestial fluff of the “10 year vision” is the actuality of the preponderance of non-owner occupied residential housing that IS Newark, not some pie in the sky “image and brand(ed)” “neighborhood(s).” Remember “Welcome to Old Town West” along West Church Street? Does it look different today than it did 25 years ago during the heyday of its promotion? What makes the difference answers the “Who is the “they”?” The current ongoing conversation/debate nationally is the new GOP tax overhaul, the central pillar being slashing the corporate tax rate by over 40% of the present. The GOP claims corporations will “reinvest” that windfall in higher wages and new jobs. In the 1980’s and 90’s it was established policy that corporate America’s first allegiance is to the share holder evidenced by the resulting consolidations, mergers resulting in plants being padlocked and wages remaining stagnant to this day. But with Newark Development Partners’ “vision” the actuality of that experience becomes unmentionable – it lacks presence. The last time The Advocate cited non-owner occupant housing in the city of Newark it was around 48%. An underlying principle of “neighborhood revitalization” in almost all urban areas is the emphasis on those who live in a neighborhood having “ownership” of that neighborhood (and yes, Virginia, Newark is urban). Like corporations, landlords’ allegiance is not with the neighborhood, but with a return on investment. Recently it was revealed that the second most segregated city in the US, segregated in terms of income disparity, is Columbus Ohio. On the basis of this finding WOSU has been running a series entitled “Chasing the Dream” (wosu.org/chasingthedream). As pointed out in this series people living paycheck to paycheck, as well as red lining, planned development and gentrification (with its higher tax valuation) make home ownership out of reach for most. Along with public transportation (the number 1 issue for sustainable jobs), affordable housing is essential for any kind of sustainable development. Of course that would mean disruption with regard the sacred cash cow. Of course that would mean a disruption in who could own a piece of Newark. Lending institutions (like PNB) would need to create financial instruments making homeownership possible (like low interest or subsidized loans, inclusive lending practices, low or no down payments, etc.) and the city/county would need to create abatements and tax breaks for individual home buyers (versus developers!). The “they” that Farias was alluding to becomes very apparent when the glaring lack of the “Seven Pillars vision” manifests itself. A mighty fortress is our home owner!