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Tag: Local taxes

  • Home valuations are rising faster than incomes. Here’s why that could hurt homeowners’ wallets

    Home valuations are rising faster than incomes. Here’s why that could hurt homeowners’ wallets

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    Record inflation may have people questioning whether homeownership is still a good investment.

    Home prices have been rising faster than incomes, which can be a problem for homeowners because as the value of a home rises, so does the cost to maintain it.

    More than 1 in 4 homeowners with mortgages are considered “cost-burdened,” meaning they spend more than 30% of their income on housing costs, according to a 2023 analysis of U.S. Census data by the Chamber of Commerce.

    “Unfortunately, a lot of people go into buying a home and they don’t understand that their monthly payment could change,” said Devon Viehman, regional vice president for the National Association of Realtors.

    Changes in two expenses in particular tend to surprise people, experts say.

    “What many [homeowners] have failed to anticipate is the rise in both property taxes — and that’s correlated to the rise in the value of their home, something that at some level helps them — as well as the increased cost of paying for that insurance,” said Mark Hamrick, senior economic analyst at Bankrate.

    ‘Paper’ wealth and rising expenses

    Single-family homeowners accumulate an average of $225,000 in wealth from their homes during a 10-year period, according to a 2022 report from the National Association of Realtors.

    “That wealth sort of boils down to being primarily only on paper, and the time that you cash in that asset is when you sell the home,” said Hamrick.

    Property taxes are one of the costs that can increase with the value of the home. Homeowners whose properties were reassessed between 2019 and 2023 amid skyrocketing valuations saw a median tax increase of 25%, according to a February 2024 study by CoreLogic. The annual median taxes for properties in the U.S. that were reassessed increased more than $600 over that period.

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    Home insurance is the other major expense that can fluctuate after a home purchase. 

    There has also been a 20% increase in average home insurance premiums between 2021 and 2023, according to insurance comparison company Insurify. Insurify estimates rates will rise another 6% by the end of 2024.

    Florida, Louisiana, Texas and Colorado have seen the biggest spike in insurance rates over that period, influenced by extreme weather events.

    Florida is leading the pack. The average annual rate for home insurance in Florida was nearly $11,000 in 2023, which is more than $8,600 than the U.S. average. The state’s cities make up six of the top 10 most expensive cities to insure in the country, Insurify found.

    What’s more, the cost of repairing a home has risen, which also affects insurance premiums.

    “This is going to be a space to watch for the foreseeable future, simply because it is such a dynamic and volatile and potentially costly environment,” Hamrick said.

    Tips for homebuyers

    Viehman of the NAR recommends people shopping for a home “lean on their realtor first.” She recommends homebuyers ask their real estate agent for a history of costs associated with owning the home such as property taxes, insurance, trash removal, water, gas and electrical bills.

    Homebuyers should also see if the state they’re looking to buy in has any laws restricting property tax increases per year.

    Just because you qualify for $3,000 a month in a mortgage payment doesn’t mean you should max it out right now … Go a little lower than that so that you give yourself that room.

    Devon Viehman

    regional vice president for the National Association of Realtors

    A good agent ought to be able to answer all those questions for you, Viehman said.

    Viehman also recommends leaving room in your monthly budget to address the possibility of surprise expenses.

    “Just because you qualify for $3,000 a month in a mortgage payment doesn’t mean you should max it out right now,” she said. “Look for something where you can get in around $2,500 if $3,000 is your comfortable budget. Go a little lower than that so that you give yourself that room.”

    Tips for current homeowners

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  • Why U.S. ports are getting a $21 billion upgrade

    Why U.S. ports are getting a $21 billion upgrade

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    U.S. ports are receiving multimillion dollar grants to upgrade cargo handling infrastructure.

    The grants are part of the Biden administration’s $21 billion commitment to modernize port infrastructure in the U.S.

    Midsize port cities such as Baltimore are among the 2023 grant recipients. In November, the Port of Baltimore received a $47 million grant to kick-start an offshore wind manufacturing hub, among other improvements. For example, the funds will pay for a new berth, or dock, for rolling cargo. Baltimore is the top U.S. destination for rolling cargo imports, a category including farm machinery from John Deere and light-duty vehicles from BMW, according to the Maryland Port Administration.

    More than $653 million in Port Infrastructure Development Program grants were awarded to U.S. ports in 2023 by the U.S. Department of Transportation, Maritime Administration. Other projects receiving federal funds include the Port of Tacoma Husky Terminal Expansion in Washington state ($54.2 million), and the North Harbor Transportation System Improvement Project in Long Beach, California ($52.6 million).

    Port improvements are also coming from the Environmental Protection Agency, which offers funds to combat truck idling. The U.S. Department of Defense is deepening some waterways on the East Coast to welcome larger ships.

    Baltimore isn’t the only city with a growing port according to maritime economists. Experts say gateways along the U.S. southeast coast are moving more cargo as major points of entry clog up with truck traffic.

    “All of the ports on the East Coast are upgrading their infrastructure and capacity,” said Walter Kemmsies, managing partner at the Kemmsies Group, a maritime economics consulting firm currently working with the Port Authority of Georgia in Savannah. “What that does is it makes it more attractive to the ocean carriers. They like to be able to go in and out of a port very quickly, and they like to go to several ports.”

    Ports America formed a public-private partnership with the state of Maryland to manage equipment and operations in sections of the Port of Baltimore. The group told CNBC that $550 million in upgrades have gone into Seagirt Marine Terminal alone for densification of the container yard since the partnership began in 2010.

    These upgrades build on past plans to revive America’s declining industrial cities. In Baltimore, public officials are addressing bottlenecks along the supply chain beyond the Port. They believe that the Howard Street Tunnel expansion project will increase double-stack rail capacity out of Baltimore, which could help the companies working at the port move goods to and from points in the Midwest.

    Watch the video above to see more of the upgrades coming to the Port of Baltimore.

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  • A War on Blue America

    A War on Blue America

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    During his term in the White House, Donald Trump governed as a wartime president—with blue America, rather than any foreign country, as the adversary. He sought to use national authority to achieve factional ends—to impose the priorities of red America onto Democratic-leaning states and cities. The agenda Trump has laid out for a second term makes clear that those bruising and divisive efforts were only preliminary skirmishes.

    Explore the January/February 2024 Issue

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    Presidents always pursue policies that reflect the priorities of the voters and regions that supported them. But Trump moved in especially aggressive ways to exert control over, or punish, the jurisdictions that resisted him. His 2017 tax bill, otherwise a windfall for taxpayers in the upper brackets, capped the federal deductibility of state and local taxes, a costly shift for wealthy residents of liberal states such as New York and California. He moved, with mixed success, to deny federal law-enforcement grants to so-called sanctuary cities that didn’t fully cooperate with federal immigration agents. He attempted to strip California of the authority it has wielded since the early 1970s to set its own, more stringent pollution standards.

    In Trump’s final year in office, he opened a new, more ominous front in his campaign to assert control over blue jurisdictions. As the nation faced the twin shocks of the coronavirus pandemic and the protests that followed the murder of George Floyd, Trump repeatedly dispatched federal law-enforcement agents to blue cities, usually over the opposition of Democratic mayors, governors, or both. Trump sent an array of federal personnel to Portland, Oregon, ostensibly to protect a federal courthouse amid the city’s chaotic protests; reports soon emerged of camouflage-clad federal agents without any identifying insignia forcing protesters into unmarked vans. Trump responded to the huge racial-justice protests in Washington, D.C., by dispatching National Guard troops drawn from 11 states, almost all of them led by Republican governors. Later he sent other federal law-enforcement officers to combat rising crime in Kansas City and Chicago, a city Trump described as “worse than Afghanistan.”

    Trump has signaled that in a second presidential term, he would further escalate his war on blue America. He’s again promising federal legislation that would impose policies popular in red states onto the blue states that have rejected them. He has pledged to withhold federal funding from schools teaching critical race theory and “gender ideology.” He says he will initiate federal civil-rights investigations into liberal big-city prosecutors (whom he calls “Marxist local District Attorneys”) and require cities to adopt policing policies favored by conservatives, such as stop-and-frisk, as a condition for receiving federal grants.

    Even more dramatic are Trump’s open pledges to launch militarized law-enforcement campaigns inside blue cities. He has proposed initiatives that cumulatively could create an occupying federal force in the nation’s largest cities. Trump has indicated that “in cities where there’s been a complete breakdown of public safety, I will send in federal assets, including the National Guard, until law and order is restored.”

    Trump envisions an even more invasive door-to-door offensive against undocumented immigrants. In an early-2023 speech at the Conservative Political Action Conference, Trump said he “will use all necessary state, local, federal, and military resources to carry out the largest domestic deportation operation in American history.” Stephen Miller, who was his top immigration aide in the White House, later added that Trump envisions establishing massive internment camps for undocumented immigrants awaiting deportation. Trump has also promised “to use every tool, lever, and authority to get the homeless off our streets,” and move them to camps as well. (On this front, Trump has said he would work with states, but in practice that would likely involve partnering with Republican governors to impose policies to clear the streets opposed by their own Democratic mayors.)

    Michael Nutter, a former mayor of Philadelphia, told me that if a reelected Trump sought to implement these policies, the result would be “chaos, confusion,” and “massive demonstrations.” “Nobody is going to allow that to just happen,” Nutter said. “You are just going to see standoffs. It is going to be the Philadelphia Police Department versus the National Guard. Neighbors are going to be surrounding people’s houses. Folks are going to rush and seek safety in churches and synagogues and mosques and temples.”

    Of course, Trump would face other obstacles in attempting to implement these plans. The president’s legal authority to deploy federal forces over the objections of local officials is murky. And the relatively small number of federal law-enforcement officers under his direct control at agencies such as U.S. Immigration and Customs Enforcement and Customs and Border Protection could limit his options, according to Richard Briffault, a professor at Columbia University Law School who studies relations among cities, states, and the federal government.

    But in Trump’s final months in office, he got creative about augmenting the forces at his command by drawing on National Guard troops provided by sympathetic Republican governors. His advisers are already talking about doing the same to staff his deportation agenda, as well as using the emergency authority he cited to fund his border wall to build his camps for undocumented immigrants without congressional approval.

    Briffault told me that the inevitable court challenges to any Trump-ordered projections of force into blue cities would likely pivot on the courts’ interpretation of how much authority the president possesses under various emergency statutes. His advisers have already discussed invoking the 19th-century Insurrection Act, for example. As legal scholars have pointed out, the scope of the president’s emergency powers is much broader than most Americans recognize, and Trump is clearly signaling that if he returns to the White House, he intends to test the outer boundaries of that authority. The question for the courts will be “to what extent can he engage directly in law enforcement and having militarized law enforcement in the United States, in the absence of a request by a governor or a mayor that there is a riotlike condition or civil disorder?” Briffault said. “Can he declare an emergency even though he’s not being asked for it?”

    As president, Trump seemed to view himself less as the leader of a unified republic than as the champion of a red nation within a nation—one that constitutes the real America. If anything, Trump has assumed that factional role even more overtly in his 2024 campaign, promising that he will deliver “retribution” for his supporters and dehumanizing his opponents. Powered by such fetid resentments and grievances, the agenda Trump seeks to impose on blue cities and states could create the greatest threat to the nation’s cohesion since the Civil War.


    This article appears in the January/February 2024 print edition with the headline “A War on Blue America.”

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    Ronald Brownstein

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  • East Coast mayors call for more office-to-apartment conversions

    East Coast mayors call for more office-to-apartment conversions

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    Mayors in cities across the U.S. want to loosen rules that can slow the pace of office-to-residential conversions. In some instances, cities have offered generous tax abatements to developers who build new housing.

    “We have a great opportunity to change the uses in the downtown,” said Washington, DC, Mayor Muriel Bowser at a December 2022 news conference in support of her housing budget proposals.

    “It’s absolutely a budget gimmick” said Erica Williams, executive director at the DC Fiscal Policy Institute, referring to Bowser’s 2023 proposal to increase the downtown developer tax break. “We fully support the idea that some of these buildings could be turned into residential properties or into mixed-use properties, but that we don’t necessarily need to subsidize that.”

    In New York City, a task force of planners assembled by Mayor Eric Adams is studying the effects of zoning changes, and possible abatements for developers who include affordable units in conversions.

    Cities like Philadelphia have previously embraced these policies to revitalize their downtowns. In Philadelphia, homeowners and investors received more than $1 billion in tax breaks for their renovation projects.

    A small collective of developers have taken on this challenging slice of the real estate business. Since 2000, 498 buildings have been converted in the U.S., creating 49,390 new housing units through the final quarter of 2022, according to real estate services firm CBRE.

    Prominent investors Societe Generale and KKR have worked with developers like Philadelphia-based Post Brothers to finance institutional-scale office conversions in expensive central business districts.

    “Capital has gotten much more limited,” said Michael Pestronk, CEO of Post Brothers. “We’re able to get financing today. … It is a lot more expensive than it was a year ago.”

    Many experts believe local governments will alter zoning laws and building codes to make these conversions easier over the years.

    “Our rules are in the way, and we need to fix that,” said Dan Garodnick, director of New York City’s Department of City Planning.

    Watch the video above to learn how cities are getting developers to convert more offices into apartments.

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  • Gaetz friend says lighter sentence deserved for cooperation

    Gaetz friend says lighter sentence deserved for cooperation

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    ORLANDO, Fla. — A former Florida tax collector whose arrest led to a federal investigation of U.S. Rep. Matt Gaetz learns this week how much prison time he gets on charges of sex trafficking a minor and identity theft, but not before trying to persuade a judge that his cooperation in several probes should lighten his sentence.

    Former Seminole County Tax Collector Joel Greenberg had faced a prison sentence of between 21 and 27 years under federal sentencing guidelines, but prosecutors asked a judge to substantially reduce any sentence of incarceration. During a court hearing Wednesday, U.S. District Judge Gregory Presnell calculated that the reduction would put prison time at between 9 1/4 and 11 years. The judge will make a final sentencing decision Thursday.

    Greenberg pleaded guilty to six federal crimes, including sex trafficking of a minor, identity theft, stalking, wire fraud and conspiracy to bribe a public official. Prosecutors said he had paid at least one underage girl to have sex with him and other men.

    His attorney, Fritz Scheller, told the judge that the jurist has the discretion to reduce the prison time even further. But the judge during Wednesday’s hearing appeared disinclined to follow that advice and seemed ready to add more time since he said he didn’t think the sentencing guidelines worked appropriately in Greenberg’s case. Greenberg was in the courtroom during the hearing.

    “I have, I think, considerable discretion to deal with this anomaly,” Presnell said.

    Scheller told the judge that Greenberg had assisted in the probes of two dozen individuals, including eight people being investigated for sex crimes. Greenberg’s cooperation had led to four federal indictments and two new indictments were expected in the coming months, said Scheller, without elaborating on which type of cases the new indictments involved.

    “It’s clear that his cooperation has been useful,” said Scheller, noting that Greenberg had given testimony to prosecutors on 15 occasions.

    The minor in the sex crimes case was almost an adult and had advertised as being over age 18 in her escort profile on the website “Seeking Arrangements,” which facilitates “sugar daddy” relationships, Scheller said in court papers.

    “Greenberg appreciates the seriousness of his crimes. Based on such a recognition, he has been trying to make amends through cooperation and the payment of restitution,” Scheller said. “He has provided significant substantial assistance to the government in the areas of public corruption, election fraud, wire fraud, and sex trafficking.”

    The judge should also take into consideration Greenberg’s struggles with mental illness, starting with an attention-deficit disorder diagnosis at age 7 and panic attacks, depressive and anxiety disorders as an adult. At the time he committed the crimes, he was suffering from bipolar disorder with symptoms of mania, which affected his judgment and impulse control, Scheller said.

    Both prosecutors and Greenberg’s defense attorney filed documents under seal and out of the public eye, saying they were part of ongoing investigations being conducted by federal authorities in Florida and Washington, as well as state investigators.

    Greenberg’s cooperation could play a role in the ongoing probe into Gaetz, who is being investigated over whether he paid a 17-year-old for sex. Gaetz has denied the allegations and previously said they were part of an extortion plot. Gaetz, a Republican, represents a large part of the Florida Panhandle. No charges have been brought against the congressman.

    Greenberg has been linked to a number of other Florida politicians and their associates. So far, none of them has been implicated by name in the sex trafficking probe.

    In his sentencing memo asking for leniency, Scheller noted that other potential co-conspirators that Greenberg has named, “including public figures,” haven’t yet faced criminal charges. If prosecutors want to use Greenberg as an example to deter crime, then those others should face justice too, he said.

    “Unfortunately, at the time of Greenberg’s sentencing, many of these individuals have not been held to account,” Scheller said.

    ———

    Follow Mike Schneider on Twitter: @MikeSchneiderAP

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