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Tag: Property rights

  • County eminent domains the strip club next door to make room for more parking

    County eminent domains the strip club next door to make room for more parking

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    North Carolina strip club patrons might not be able to touch the dancers, but nothing stops the government from seizing the building they work in.

    That’s the revealing truth in an eminent domain case out of Wilmington, North Carolina, where the New Hanover County government (which contains Wilmington) is trying to seize the neighboring Cheetah Premier Gentlemen’s Club to build what it claims is much-needed parking.

    “The county identified a need to expand parking facilities to better accommodate our citizens when visiting the newly constructed government center. Exercising eminent domain to acquire the neighboring property is a legal and measured step towards fulfilling this need,” said County Manager Chris Coudriet in an emailed statement to Reason earlier this month.

    The county commission voted to authorize eminent domain of the Cheetah Club during its late Monday night meeting on November 6. The resolution authorized the county to spend $2.36 million acquiring the club.

    Conspicuously, the resolution authorizing the seizure of the club wasn’t on the commission’s agenda, and was only introduced in the final minutes of the meeting by Coudriet, reports local public radio station WHQR. The station also reports that Coudriet referred to the property only by its tax ID number and didn’t mention why the property was being seized, other than to say it was for public use.

    That left the owners of both the business and the underlying property blindsided.

    Property owner Jerry Reid describes the eminent domain resolution as “coming out of the blue.” Michael Barber, a lawyer for the owners of the Cheetah Club likewise said the first time he heard about the seizure was early Tuesday morning, after the commission vote.

    The presence of such an “adult” business next to the county center of government has caused its fair share of embarrassment. One county commissioner told the local Port City Daily that “the optics have always been an issue.” North Carolina State Treasurer Dale Folwell also criticized county commissioners about their offices’ proximity to a strip club at a hearing earlier this year.

    The sudden, seemingly surreptitious effort to seize the club has Barber speculating that the eminent domain effort has more to do with public appearances than public facilities.

    “I truly believe what set this off was State Treasurer Folwell’s comment about the government center being built close to a gentlemen’s club, just an offhand comment,” he said to the Port City Daily. “I think that’s what triggered this.”

    Reid has offered to let the county use the 74 parking spaces on his property. He noted to the local Fox station that the Cheetah Club doesn’t even open till 6 p.m. The owner of a bowling alley also lets the county use his parking lot.

    New Hanover County Commissioner LeAnn Pierce has come out against the use of eminent domain in this case. “I’m an advocate for private property rights. Eminent domain, in this case, is not something that I would be in favor of, and it absolutely should be a last resort at any time,” Pierce told the local Fox station.

    Barber has argued that the seizure of the club would cost the government tens of thousands of dollars in tax revenue and put the club’s 65 workers, some of whom are earning above the city’s average income, out of a job.

    The county has to wait 30 days after providing notice to the property owner to proceed with the eminent domain process. Some county commissioners are pushing for negotiations with the owners that might avoid seizing the property.

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    Christian Britschgi

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  • The Endangered Species Act at 50

    The Endangered Species Act at 50

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    “I’m all for conservation,” Frank Ribelin, a landowner outside Austin, Texas, told U.S. News & World Report two decades after passage of the Endangered Species Act, “but I’d like to club the little bastards.” He meant the golden-cheeked warbler, a sparrow-sized songbird that leaves the state only to winter in Central America. As a family member said, land like theirs “used to be sold by the square foot, but that all crumbled the day the warbler was listed.” Once an endangered species was found there, the land’s value plummeted.

    Thirty years later, the warbler’s status remains unchanged: It is still listed as endangered. The bird’s fate exemplifies several things about the act, which has become one of the most controversial laws on the books since being passed 50 years ago in December 1973. For one thing, an endangered species listing holds the power to make a conservationist want to bludgeon a dainty and rare bird to death. For another, the warbler’s lack of progress highlights the Endangered Species Act’s dismal record of achieving its ultimate goal: conserving species to the point that protections under the law “are no longer necessary.”

    It’s true, as supporters of the act are quick to point out, that 99 percent of species listed under the statute have avoided going extinct over its half-century. Yet less than 3 percent of listed species have ever successfully recovered and come off the list. So while most endangered species have avoided plunging over a cliff, almost none have been able to back a safe distance away from the edge. That’s largely because, as the Ribelin family’s experience suggests, the Endangered Species Act is nearly all stick and no carrot.

    The law takes a regulation-first approach that all too often makes an endangered species a liability to avoid, rather than an asset to conserve. The presence of a listed species can bring prohibitions on how property owners can use their land or even forbid state biologists from relocating animals to a proper habitat. Even the mere existence of habitat for a listed species can lower land values by entangling properties with federal designations.

    Punitive policies turn would-be partners in recovery into enemies of rare species. It’s why a popular colloquial stance toward endangered species has long been called “the three S‘s”: shoot, shovel, and shut up. It’s unfortunate, because farmers, ranchers, and other private citizens provide the majority of habitat for many listed species, and an estimated two-thirds of all listed species have at least some habitat on private land. Unless there’s a change in the law’s approach toward the people who can provide so much important habitat for at-risk species, the prospects for rare species don’t seem likely to improve.

    Irreconcilable Conflict

    “As the one person in the Congress, the only one, that voted for the Endangered Species Act,” the late Rep. Don Young (R–Alaska) said at a hearing a few years ago, “please beat me with a whip.” Young took office the year the Endangered Species Act became law and became the longest-serving Republican in congressional history before dying in 2022. When the act passed, he has said, congressional members were told it would save “leopards,” not wildlife like “mussels and snails and turtles.” Virtually everyone envisioned the law protecting bald eagles and manatees, not halting infrastructure builds or slowing economic development in the name of slimy invertebrates or obscure fish.

    “Essentially no skepticism was expressed about either the law’s conservation goals or its regulatory strategies,” University of California, Berkeley law professor Holly Doremus has written. “There was no organized interest group opposition. No one voted against the Senate bill.” Lawmakers scarcely contemplated that the act would ever interfere with federal projects or restrict uses of private property. Since environmental citizen lawsuits were a new phenomenon in the early ’70s, the citizen suit provision included in the act drew little attention.

    “It’s easy to get everybody to sign on with protecting whales and grizzly bears,” Doremus recently told the Associated Press. “But people didn’t anticipate that things they wouldn’t notice, or wouldn’t think beautiful, would need protection in ways that would block some economic activity.”

    It didn’t take long for people to figure that out.

    In August 1973, a few months before the act was passed, a University of Tennessee biologist discovered a novel type of three-inch minnow in the waters of the Little Tennessee River. By then, Congress had already sunk tens of millions of dollars into the massive federal Tellico Dam project on that same waterway. The newly discovered snail darter was listed as endangered two years later, and the Endangered Species Act had its first major conflict.

    The biology professor and a law student filed suit on behalf of the fish, a legal lever that also proved fortuitous for locals who fiercely objected to a project that would flood their communities. A federal court ruling stopped construction of the facility. The Senate Appropriations Committee was not impressed. Its members wrote that they had not “viewed the Endangered Species Act as preventing the completion and use” of such projects, adding that “funds should be appropriated to allow these projects to be completed and their benefits realized in the public interest,” the act notwithstanding.

    The case ended up before the U.S. Supreme Court. The justices sided with the snail darter, memorably ruling that through the Endangered Species Act, Congress had prioritized conserving rare species “whatever the cost.” In the wake of the decision, even as The New York Times praised the act’s aims, it declared the law “far too inflexible,” pointing out that the “potential for irreconcilable conflict remains in the law’s absolutism.”

    It took another act of Congress to complete the dam’s construction. Legislators also created a so-called God squad that could exempt future government projects from being similarly derailed. But the law had plenty of conflict left to create.

    Megafauna or Minnows?

    The idea that the act fundamentally protects “charismatic megafauna”—popular, symbolic, large animals—holds sway even today. While nine in 10 Americans say they support the Endangered Species Act, people severely underestimate how many species are protected under it. More than 1,600 domestic species are listed, yet Americans typically estimate the number is more like 100.

    Congress directed the U.S. Fish and Wildlife Service to protect two categories of species under the act. Species that are “endangered” are already at risk of extinction, while “threatened” species are deemed likely to become endangered in the “foreseeable future.” The law made it illegal to “take” endangered species—that is, to “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect” them—or to degrade their habitats. The agency has effectively extended those prohibitions to most threatened species as well, largely erasing the distinction between the two listing categories. For listed species, the Fish and Wildlife Service can designate “critical habitat,” or areas it identifies as essential to conserving the species, and the act regulates federal activities affecting those areas. (The National Marine Fisheries Service administers the law for marine species.)

    The upshot is that when people encounter endangered animals, or merely take an action that may alter their habitats, they can end up in “irreconcilable conflict” with the Endangered Species Act. Mundane activities such as plowing farmland, harvesting timber, or developing a vacant lot can make private citizens subject to five-figure fines or even imprisonment.

    These poor incentives are among the reasons that recovery progress has been slow. According to Fish and Wildlife Service projections, nearly 300 domestic species should have recovered by mid-2023. In reality, only 13 of those species did. (The agency had made no time-specific projections for 44 other species that recovered by then.)

    The red-cockaded woodpecker offers a classic example of how punitive incentives hinder conservation of rare species. The bird, listed as endangered for the entire life of the Endangered Species Act, prefers to inhabit mature longleaf pines in the American South. A seminal study in The Journal of Law and Economics examined more than 1,000 forest plots in North Carolina; it estimated that the discovery of a red-cockaded woodpecker colony could prevent a landowner from harvesting $200,000 worth of timber. It also found that the closer forest landowners were to the bird, the sooner they harvested their trees. Another study, this one in Economic Inquiry, found that forest owners who knew or thought they were in close proximity to the woodpecker were more likely to clear-cut their land, essentially ruining potential habitat “so that the existing values of their property could be protected from the Endangered Species Act–related land use limitations.” It would be hard to craft a policy that puts habitat-providing landowners more at odds with an imperiled species in need of support.

    The truth is that some of the most charismatic species, such as eagles, alligators, and grizzlies, have done pretty well since the act’s passage. It’s the obscure or downright homely ones that often have not fared as well. When wolves were reintroduced to the Yellowstone ecosystem in the 1990s, people bought posters featuring the carnivores to raise money for the effort. The funds helped compensate ranchers in the area when they lost livestock to the predators, an innovative way to help wildlife pay for itself. Rare mussels like the Carolina heelsplitter or Atlantic pigtoe, by contrast, do not generally feature on fundraising calendars. But it’s the mollusks and minnows most Americans have never heard of, let alone realize are on the endangered species list, that most need the incentives for conservation to be right.

    Taking Liberties

    Endangered species regulations create warped incentives because they typically work against private landowners, state agencies, and conservation groups. The word take is a prime example. A term that essentially means “harm” has been interpreted so broadly that it applies even to activities meant to help listed species.

    The Nigiri Project, for instance, is a Northern California initiative that encourages farmers to allow juvenile endangered salmon to use their flooded rice fields during the winter. The habitat mimics insect-rich flood plains and nurtures the growing salmon before they migrate to the ocean, boosting their survival rates. As a scientist from the conservation group California Trout has noted, the project’s biggest challenge was convincing federal and state agencies to let it move the salmon to the temporary habitat, an activity considered to be a form of take.

    Then there’s the saga of the threatened Utah prairie dog. Several years ago, the rodents’ furious digging destroyed construction sites, compromised airport runways, and ruined children’s playgrounds. So the state of Utah and private partners bought conservation lands with suitable habitat for the prairie dogs, and biologists relocated thousands of the rodents to them. Their population boomed, a clear conservation win. Then a court re-instated federal take prohibitions.

    When policies make it hard even to undertake projects that help endangered species, they’re bound to frustrate land-owners who simply want to get on with the routine activities of, say, running a farm. It explains why timber owners decide to preemptively cut forestland rather than grow older, larger trees that would garner higher prices: The fear of a woodpecker’s presence and its associated federal regulations outweighs the potential for greater profits.

    The Endangered Species Act has not just made the presence of listed species a liability. It has turned lines on a map designating habitat areas into the opposite of instant curb appeal.

    Critical Condition

    “Our land is not suitable for the frog,” Edward Poitevent said a few years ago while looking over his family’s timberland in southeastern Louisiana. “We know that. The government and Fish and Wildlife Service have said that you don’t have the elements for it.”

    Poitevent then described the steps it would take for his land to support the dusky gopher frog, an endangered species that once inhabited the area but had not been documented in the state for more than half a century. “To make it suitable, you’d have to rip up every tree on 1,544 acres, replant all of it with the right tree, make sure the ponds are still there, and make sure you burn it every year.” (Some pine forests need routine fires to rejuvenate and thrive.)

    The government designated Poitevent’s property a “critical habitat” because it contained several rare ponds of the type the species requires to breed. Yet in recent decades, the tract had been farmed as a dense commercial timber plantation, a far cry from the open-canopied longleaf pine landscape that the frog needs.

    “Their job is to find a habitat,” Poitevent said. “The consequences are not their problem.”

    By the federal government’s own estimate, those consequences included losing out on a maximum of $34 million if the designation prevented the family from developing the land, which is near an interstate in a fast-growing part of the state. A lawsuit, Supreme Court ruling, and subsequent settlement ultimately removed the land from the designation.

    For listed species, the Fish and Wildlife Service may designate as critical habitat the geographic areas it deems essential to conserving them. If a designation encircles private land, it immediately lowers the market value due to stigma. Prospective buyers worry about and account for the regulatory risks. The agency and some environmentalists have argued the stigma is irrational, but that doesn’t make it any less real.

    Several researchers have tried to quantify the effect. A 2020 study led by economist Maximilian Auffhammer analyzed 13,000 real estate transactions within or near critical habitat for two listed species in California. It found that a designation of critical habitat for the red-legged frog cut land values by about half, and designations for the bay checkerspot butterfly slashed values by an estimated 78 percent. A 2006 working paper published by the National Bureau of Economic Research examined the critical habitat designation for a pygmy owl in Arizona. The authors found that land proposed for designation was developed approximately one year faster than comparable tracts outside of the designation, presumably to avoid being officially declared as habitat.

    The rub of the designation approach is that it can penalize landowners even as it offers no clear conservation benefits to at-risk species. The ponds that supposedly remained on Poitevent’s family land were never likely to help the dusky gopher frog, because the surrounding land wasn’t suitable for the amphibian.

    In fact, designating private land may have net costs for conservation as well as for property owners.

    Gray Skipper’s family has stewarded timber in Alabama for more than a century, enrolling tens of thousands of forested acres in a state wildlife management lease since the 1950s. The lease allowed the public to hunt deer and turkey and permitted state biologists to carry out wildlife research and surveys. That willingness to further conservation turned to regret when the Fish and Wildlife Service designated about 30,000 acres of the family’s land as critical habitat for the black pine snake, a reptile Skipper has never seen outside of a Bass Pro Shops store in Mississippi.

    After decades of collaborating in state conservation efforts, the family withdrew their land from the lease. “No good deed goes unpunished,” says Skipper, who is suing the Fish and Wildlife Service over the designation.

    “Infringing property rights is no way to encourage conservation,” adds Charles Yates, an attorney at the Pacific Legal Foundation who is representing Skipper. “For more than half a century, the Skippers have responsibly managed their land. Now the service is penalizing them for it.”

    A law that pits people who could provide habitat for rare frogs or snakes against those very species is entirely counterproductive. That approach certainly helps explain why less than 3 percent of species have ever recovered and come off the list. Fights over the potential fallout from delistings account for much of the rest.

    Gnashing Teeth

    In the early 1800s, Lewis and Clark fascinated Americans with tales of a “verry large and a turrible looking animal, which we found verry hard to kill.” The grizzly bear became easier to kill over subsequent decades, and state and federal bounties helped fuel efforts to get rid of it. The grizzly population in the Yellowstone region bottomed out at 136 bears in 1975, the same year that all lower 48 populations of the species were listed as threatened.

    Since then, it has largely rebounded. The Yellowstone grizzly now numbers an estimated 1,063, more than double its recovery target of 500. Yet efforts to delist the population in 2007 and then 2017 both failed due to litigation from environmental groups.

    “It’s recovered under any metric we look at,” Tom France of the National Wildlife Federation said after the last attempt to de-list the population. “We should consider it a great success.” But WildEarth Guardians sued to challenge the delisting. Now, even as Yellowstone National Park touts that grizzlies “have made a remarkable recovery,” the bears there remain listed and, technically, unrecovered.

    When species protected by the Endangered Species Act are accompanied by hefty regulatory hammers, decisions over whether to list (or delist) wildlife become all-or-nothing battles. Environmentalists often latch on to the powerful law to stop things they dislike, from hunting to harvesting to mining, so a delisting means one less lever to halt what they consider to be damaging activities.

    But the people who suffer higher costs of living with endangered species want to see recovery efforts rewarded with de-listings. “Who bears the cost of the recovery of these species?” Stefanie Smallhouse asked at a 2018 hearing on potential reforms to the act, noting that it’s “a handful of ranchers” who lose out from living near endangered Mexican gray wolves, as she does.

    Smallhouse, president of the Arizona Farm Bureau and a fifth-generation rancher, estimated that her family’s land hosted at least 20 listed species and was subject to seven critical habitat designations. “All of the people who want to see those wolves live in the city,” she continued, “and don’t have to live with the wolves themselves.” A Colorado rancher echoed the sentiment in 2019, when activists called for reintroducing endangered gray wolves to his state, telling The Colorado Independent that a “bunch of city dudes” were trying to “cram it down our throats.”

    Any listed species can bring red tape, restrictions on how land can be used, and limitations on how state agencies can resolve conflicts—for instance, by removing a troublesome predator from areas with lots of cattle. In the case of large carnivores like grizzlies and wolves, rebounding populations have led to more conflicts with humans and livestock. But when species remain listed even after surpassing scientific recovery objectives, states and landowners have fewer options and less flexibility to address the conflicts. There’s no carrot of regulatory relief at the end of the path to recovery.

    Poach or Protect?

    Three decades after being listed, the golden-cheeked warbler remains endangered largely because the incentives to recover it, let alone delist it, aren’t right.

    Sam Hamilton was the top U.S. Fish and Wildlife Service official in Texas when the bird was listed, and later served as director of the agency. “The incentives are wrong here,” he told U.S. News & World Report around the same time Ribelin was joking about clubbing the songbirds. “If I have a rare metal on my property, its value goes up. But if a rare bird occupies the land, its value disappears. We’ve got to turn it around to make the landowner want to have the bird on his property.”

    South of the border, in northern Mexico, a group of ranchers has found a way to coexist with endangered jaguars. The nonprofit Northern Jaguar Project rewards ranchers who support recovery efforts: For every photo of a jaguar taken by remote trail cameras, ranchers receive a payment. As Hamilton dreamed, the approach transforms a protected species that would usually be a liability or even poaching target into an asset.

    “At first, the attraction was the money,” rancher Diego Ezrré told a local radio station a few years ago. “But most of the ranchers who are in the program, our perspective has changed. We realize that the jaguars aren’t such a threat.”

    U.S. endangered species policy, on the other hand, remains as likely to hamstring as to encourage conservation. In Arizona, jaguars worry ranchers even though the species barely exists there. The big cat used to roam from Louisiana to California, but, like many large predators, it was exterminated over time. Jaguars are now largely confined to the territory stretching from Mexico south to the tropics, with only rare sightings north of the border. Yet the Fish and Wildlife Service designated critical habitat in Arizona and New Mexico for the species in 2014.

    After the designation, some University of Arizona researchers interviewed local ranchers about it. “The ranchers were less concerned about the presence of jaguars,” they wrote, “but were more concerned about possible limiting effects of the Endangered Species Act, distrust of government entities, and litigious environmental groups.”

    The prospects for reforming the Endangered Species Act—and improving its record at actually recovering imperiled species—seem slim. There have been no substantive changes to the legislation since the late 1980s. The U.S. Constitution has been amended more recently. But without changes to the act, the next 50 years under it will likely look like the first. Most endangered species will cling to existence, but they will fail to recover and will linger on the list. Landowners who want to harbor rare species will remain as elusive as recovered species.

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    Tate Watkins

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  • Hong Kong’s property prices won’t pop any time soon. Here’s why

    Hong Kong’s property prices won’t pop any time soon. Here’s why

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    Residential buildings in Hong Kong, China on October 23, 2023.

    Vernon Yuen | Nurphoto | Getty Images

    Hong Kong’s leader John Lee this week eased the city’s decade-old residential property cooling measures — but questions remain on whether it’s enough to boost market sentiment and low transaction volumes for the private housing sector.

    “Although relaxation of property restrictions was highly anticipated, the BSD [buyers’ stamp duty] cut from 15.0% to 7.5% surprised us; the other relaxations were in-line,” Citi’s Ken Yeung wrote in a note.

    He doesn’t expect the move to reverse downward trend in Hong Kong’s property prices as interest rates remain high.

    According to data from real estate agency Midland Realty, the second-hand property market average turnover ratio between 2017 and 2023 stands at 3.7%. That’s compared with 8.7% before the cooling measures took effect in 2010.

    Buggle Lau, chief analyst at Midland Realty told CNBC the average turnover ratio in 2022 to 2023 are at historic lows, as property prices have corrected down by nearly 20% since their peak in August 2021.

    He expects the policy address will give property prices “a chance to stabilize” and for volumes to pick up.

    For the market to fully recover, both in terms of price and volume, interest rates will have to come down next year, the property analyst said.

    He expects a further 5% downside on prices in the first half of next year should there be a rate cut. 

    Homeowners’ struggles

    Hong Kong homeowner KC Mok has been trying to sell his apartment before his family immigrates at the end of the year — a popular reason for people selling their property in recent years.

    The 41-year-old told CNBC that his 707 sq. ft. 3-bedroom apartment is currently listing at $9.5 million Hong Kong dollars ($1.21million), 20% lower than his purchase price in 2019.

    He said many people have been viewing his place, but the only offer he received so far is a mismatch.

    “Now when we come to selling the apartment, we found that the value of the apartment [is] already like $2 million dollars less, so a little bit depressed but we have to leave so it’s the timing maybe,” Mok said, acknowledging that the latest cooling measures “will help a little bit” for his situation.

    Meanwhile, 33-year-old Kitty Yiu considers herself “lucky” as she sold her apartment and started renting in February, just before property prices fell and interest rates rose.

    Yiu gave birth to her firstborn earlier this year and needed a bigger home to accommodate her growing family.

    “To be honest, we are still in a struggle to see whether we should buy a new flat, like to buy a flat again,” she said.

    “I think the price at this moment is still high, even if it’s having a downward trend, but for me I think it’s still overpriced,” said Yiu who doesn’t think the latest policy relief would increase her appetite to purchase a house.

    Unlike Mok and Yiu, Eugene Law faces the struggle of rising mortgage rates as a new homeowner.

    Together with his mother, Law, who is 30, purchased a flat at pre-construction in 2021 and moved in last year. His mortgage rate started at 1.9% and is currently at 3.375%. That means he needs to pay an additional HKD $6,000 ($767.09) per month for the interest, which he says makes him feel “so bad.”

    We don't have more plans to move beyond real estate, says Hong Kong property developer

    “[It was] unexpected … because I expected the HIBOR may rise but I didn’t expect the prime rate will also rise, and also in a very high percentage.”

    Prospective homebuyers in Hong Kong can choose to peg their mortgage rate with HIBOR or prime rate – known as the “H Plan” and “P Plan.” HIBOR refers to the interest rate for interbank borrowing, while prime rate is determined by individual banks.

    In a low interest rate environment, the prime rate is usually the more popular choice as it is considered more stable, and easier for the mortgagor to make financial plans.

    Despite regretting the timing of his purchase, Law said the latest easing of policy would not have affected the decision. 

    Risks for Hong Kong property

    A recent report from UBS showed Hong Kong is the 6th overvalued city on their Global Real Estate Bubble Index. Zurich, Tokyo and Miami are the top three.

    “Biggest risk [to Hong Kong’s property market] will be [a] pro-longed high-rate environment, and hence further mortgage cost increase. Longer run will be geopolitical risk,” said UBS’s china property market Mark Leung in an email to CNBC.

    While describing the current sentiment as “a bit weak,” he expects the policy address would release sizable purchasing power from non-local expats who are waiting to become permanent residents.

    With the second-hand market bid-ask spread remaining high and many homeowners not willing to sell their properties at a discount, Leung said he expects little room for property prices to reverse the downward trend.

    For the primary market, he expects developers will now be more willing to cut prices in order to boost sales and “recycle cash, given higher interest rate environment.”

    “Price-wise should be muted, as we think developers may be aggressive in price setting, hence cap the price rebound potential,” he added.

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  • Rent or buy? Here’s how to make that decision in the current real estate market

    Rent or buy? Here’s how to make that decision in the current real estate market

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    Choosing whether to rent or buy has never been a simple decision — and this ever-changing housing market isn’t making it any easier. With surging mortgage rates, record rents and home prices, a potential economic downturn and other lifestyle considerations, there’s so much to factor in.

    “This is an extraordinarily unique market because of the pandemic and because there was such a run on housing so you have home prices very high, you also have rent prices very high,” said Diana Olick, senior climate and real estate correspondent for CNBC.

    By the numbers, renting is often cheaper. On average across the 50 largest metro areas in the U.S., a typical renter pays about 40% less per month than a first-time homeowner, based on asking rents and monthly mortgage payments, according to Realtor.com.

    In December 2022, it was more cost-effective to rent than buy in 45 of those metros, the real estate site found. That’s up from 30 markets the prior year.

    How does that work out in terms of monthly costs? In the top 10 metro regions that favored renting, monthly starter homeownership costs were an average of $1,920 higher than rents.

    But that has not proven to be the case for everyone.

    Leland and Stephanie Jernigan recently purchased their first home in Cleveland for $285,000 — or about $100 per square foot. The family of seven will also have Leland’s mother, who has been fighting breast cancer, moving in with them.

    By their calculations, this move — which expands their space threefold and allowing them to take care of Leland’s mother — will be saving them more than $700 per month.

    ‘You don’t buy a house based on the price of the house’

    “You don’t buy a house based on the price of the house,” Olick said. “You buy it based on the monthly payment that’s going to be principal and interest and insurance and property taxes. If that calculation works for you and it’s not that much of your income, perhaps a third of your income, then it’s probably a good bet for you, especially if you expect to stay in that home for more than 10 years. You will build equity in the home over the long term, and renting a house is really just throwing money out.”

    Mortgage rates dropped slightly in early March, due to the stress on the banking system from the recent bank failures. They are moving up again, although they are currently not as high as they were last fall. The average rate on a 30-year fixed-rate mortgage is 6.59% as of April — up from 3.3% around the same time in 2021.

    But that hasn’t significantly dampened demand.

    “As the markets kind of bubbled in certain parts of the country and other parts of the country priced out, we’ve seen a lot of investors coming in looking for affordable homes that they can buy and rent,” said Michael Azzam, a real estate agent and founder of The Azzam Group in Cleveland.

    “We’re still seeing relatively high demand” he added. “Prices have still continued to appreciate even with interest rates where they’re at. And so we’re still seeing a pretty active market here.”

    Buying a home is part of the American Dream

    The Jernigans are achieving a big part of the American Dream. Buying a home is a life event that 74% of respondents in a 2022 Bankrate survey ranked as the highest gauge of prosperity — eclipsing even having a career, children or a college degree.

    The purchase is also a full-circle moment for Leland, who grew up in East Cleveland, where his family was on government assistance.

    “I came from a single-mother home who struggled to put food on the table and always wanted better for her children … it was more criminals than there were police … It is not the type of neighborhood that I wanted my children to grow up in,” said Jernigan.

    The new homeowner also has his eye on building a brighter future for more children than just his own. Jernigan plans to purchase homes in his old neighborhood, renovate them and create a safe space for those growing up like he did.

    “I’m here because someone saw me and saw the potential in me and gave me advice that helped me. … and I just want to pay it forward to someone else” Jernigan said.

    Watch the video above to learn more.

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  • Andy Warhol, Prince at center stage in Supreme Court case

    Andy Warhol, Prince at center stage in Supreme Court case

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    WASHINGTON — Andy Warhol and Prince held center stage in a copyright case before the Supreme Court on Wednesday that veered from Cheerios and “Mona Lisa” analogies to Justice Clarence Thomas’ enthusiasm for the “Purple Rain” showman.

    Despite the light nature of the arguments at times involving two deceased celebrities, the issue before the court is a serious one for the art world: When should artists be paid for original work that is then transformed by others, such as a movie adaptation of a book?

    The case affects artists, authors, filmmakers, museums and movie studios. Some amount of copying is acceptable under the law as “fair use,” while larger scale appropriation of a work constitutes copyright infringement.

    As the 90-minute arguments unspooled, the justices discussed how courts should make that determination.

    Justice Samuel Alito asked about a copy of the “Mona Lisa” in which the color of her dress was changed. Justice Amy Coney Barrett used “The Lord of the Rings” trilogy and its movie adaptation as an example, as well as a box of Cheerios cereal, making an analogy to famous Warhol images of Campbell’s Soup cans. The television shows “Happy Days” and “Mork & Mindy” were also cited.

    The case involves a portrait of Prince that Warhol created to accompany a 1984 Vanity Fair article on the music star. To assist Warhol, the magazine licensed a black and white photograph of Prince by Lynn Goldsmith, a well-known photographer of musicians, to serve as a reference. Goldsmith was paid $400.

    Warhol used it to create portraits of Prince in the same style he had created well-known portraits of Marilyn Monroe, Jacqueline Kennedy and Mao Zedong. He cropped the image, resized it and changed the tones and lighting. Then he added his signature bright colors and hand-drawn outlines.

    Warhol ultimately created several versions, including one of a purple-faced Prince that ran with the Vanity Fair story. Goldsmith got a small credit next to the image.

    The issue in the case began when Prince died in 2016. Vanity Fair again featured another of Warhol’s Prince portraits, this time an orange-faced Prince that ran on the magazine’s cover. Warhol had died in 1987, but the magazine paid The Andy Warhol Foundation for the Visual Arts $10,250 to use the portrait.

    Goldsmith saw the magazine and contacted the foundation seeking compensation, among other things. The foundation then went to court seeking to have Warhol’s images declared as not infringing on Goldsmith’s copyright. A lower court judge agreed with the foundation, but it lost on appeal.

    Justice Thomas on Wednesday asked the foundation’s lawyer, Roman Martinez, whether the foundation would sue him for copyright infringement if he got creative with the Warhol image.

    “Lets say that I’m both a Prince fan, which I was in the ‘80s,” he said, and fan of Syracuse University, whose athletic teams are the Syracuse Orange. “And I decide to make one of those big blowup posters of Orange Prince and change the colors a little bit around the edges and put ’Go Orange’ underneath.” Thomas said he would wave the poster around at games and would market it “to all my Syracuse buddies.”

    Martinez implied he could sue and Thomas would lose.

    A number of justices suggested that the appropriate result in the case is to clarify the first of four factors that courts use to assess whether something is “fair use” and to send the case back to lower courts for further review. “Why wouldn’t we send it back,” Justice Ketanji Brown Jackson asked at one point.

    A range of high-profile organizations stressed the importance of the decision, including The Motion Picture Association, prominent museums in New York and Los Angeles, and the creators of “Sesame Street,” who say they often rely on “fair use” for parodies but also license copyrighted characters such as Cookie Monster and Elmo for use in new works by others.

    Groups urging the justices to side with Goldsmith include the Biden administration, the organization that owns the copyrights to the works of Dr. Seuss, The Recording Industry Association of America and Jane Ginsburg, an intellectual property expert and daughter of the late Justice Ruth Bader Ginsburg. The Warhol foundation’s supporters include the foundations of two other prominent artists, Robert Rauschenberg and Roy Lichtenstein.

    A decision in the case, The Andy Warhol Foundation for the Visual Arts v. Lynn Goldsmith, 21-869, is expected by the end of June when the Supreme Court typically breaks for its summer recess.

    ———

    Follow AP’s coverage of the Supreme Court at https://apnews.com/hub/us-supreme-court

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  • Andy Warhol, Prince at center stage in Supreme Court case

    Andy Warhol, Prince at center stage in Supreme Court case

    [ad_1]

    WASHINGTON — Andy Warhol and Prince held center stage in a copyright case before the Supreme Court on Wednesday that veered from Cheerios and “Mona Lisa” analogies to Justice Clarence Thomas’ enthusiasm for the “Purple Rain” showman.

    Despite the light nature of the arguments at times involving two deceased celebrities, the issue before the court is a serious one for the art world: When should artists be paid for original work that is then transformed by others, such as a movie adaptation of a book?

    The case affects artists, authors, filmmakers, museums and movie studios. Some amount of copying is acceptable under the law as “fair use,” while larger scale appropriation of a work constitutes copyright infringement.

    As the 90-minute arguments unspooled, the justices discussed how courts should make that determination.

    Justice Samuel Alito asked about a copy of the “Mona Lisa” in which the color of her dress was changed. Justice Amy Coney Barrett used “The Lord of the Rings” trilogy and its movie adaptation as an example, as well as a box of Cheerios cereal, making an analogy to famous Warhol images of Campbell’s Soup cans. The television shows “Happy Days” and “Mork & Mindy” were also cited.

    The case involves a portrait of Prince that Warhol created to accompany a 1984 Vanity Fair article on the music star. To assist Warhol, the magazine licensed a black and white photograph of Prince by Lynn Goldsmith, a well-known photographer of musicians, to serve as a reference. Goldsmith was paid $400.

    Warhol used it to create portraits of Prince in the same style he had created well-known portraits of Marilyn Monroe, Jacqueline Kennedy and Mao Zedong. He cropped the image, resized it and changed the tones and lighting. Then he added his signature bright colors and hand-drawn outlines.

    Warhol ultimately created several versions, including one of a purple-faced Prince that ran with the Vanity Fair story. Goldsmith got a small credit next to the image.

    The issue in the case began when Prince died in 2016. Vanity Fair again featured another of Warhol’s Prince portraits, this time an orange-faced Prince that ran on the magazine’s cover. Warhol had died in 1987, but the magazine paid The Andy Warhol Foundation for the Visual Arts $10,250 to use the portrait.

    Goldsmith saw the magazine and contacted the foundation seeking compensation, among other things. The foundation then went to court seeking to have Warhol’s images declared as not infringing on Goldsmith’s copyright. A lower court judge agreed with the foundation, but it lost on appeal.

    Justice Thomas on Wednesday asked the foundation’s lawyer, Roman Martinez, whether the foundation would sue him for copyright infringement if he got creative with the Warhol image.

    “Lets say that I’m both a Prince fan, which I was in the ‘80s,” he said, and fan of Syracuse University, whose athletic teams are the Syracuse Orange. “And I decide to make one of those big blowup posters of Orange Prince and change the colors a little bit around the edges and put ’Go Orange’ underneath.” Thomas said he would wave the poster around at games and would market it “to all my Syracuse buddies.”

    Martinez implied he could sue and Thomas would lose.

    A number of justices suggested that the appropriate result in the case is to clarify the first of four factors that courts use to assess whether something is “fair use” and to send the case back to lower courts for further review. “Why wouldn’t we send it back,” Justice Ketanji Brown Jackson asked at one point.

    A range of high-profile organizations stressed the importance of the decision, including The Motion Picture Association, prominent museums in New York and Los Angeles, and the creators of “Sesame Street,” who say they often rely on “fair use” for parodies but also license copyrighted characters such as Cookie Monster and Elmo for use in new works by others.

    Groups urging the justices to side with Goldsmith include the Biden administration, the organization that owns the copyrights to the works of Dr. Seuss, The Recording Industry Association of America and Jane Ginsburg, an intellectual property expert and daughter of the late Justice Ruth Bader Ginsburg. The Warhol foundation’s supporters include the foundations of two other prominent artists, Robert Rauschenberg and Roy Lichtenstein.

    A decision in the case, The Andy Warhol Foundation for the Visual Arts v. Lynn Goldsmith, 21-869, is expected by the end of June when the Supreme Court typically breaks for its summer recess.

    ———

    Follow AP’s coverage of the Supreme Court at https://apnews.com/hub/us-supreme-court

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