economics

Tenants and Bankruptcy

Although he was posting under a fake name because he was trying to evade a ban and is thus a complete asshole, Hedge (posting as “TheMan”) raised an interesting point, one that I am sure he didn’t seriously intend.

When you file bankruptcy in Florida, the automatic stay will protect you from eviction unless:

  • The landlord received a judgment of possession prior to the filing of the bankruptcy. A judgment of possession is the final court court order in an eviction proceeding. When this order is signed by the judge, the tenant is officially evicted and the landlord may take possession by legal means. The judgment of possession extinguishes any legal right the tenant had in the lease, thus there are no further actions to stay. If the order was not signed before the bankruptcy is filed, the automatic stay will stop the case from proceeding.
  • The landlord files a motion with the court stating the tenant has damaged the property or the tenant has used illegal drugs on the property within the past 30 days, the tenant will have to respond or the stay will be lifted, and the debtor will be fully subject to ALL of their creditors’ actions to collect debt. If the tenant responds, the court will decide after a hearing. Since Bankruptcy Court is a FEDERAL court, and marijuana remains illegal (for now) at a Federal level, weed is enough to meet this standard. If your tenant has a weed card, you can get their stay lifted.
  • If the tenant does not make lease payments due AFTER filing bankruptcy, the landlord will be able to get the stay lifted.
  • If the tenant does not cure the default on the lease (pay past due rent due before the filing) within a reasonable time, the landlord will be able to get the stay lifted.

A tenant filing Bankruptcy is actually good news, because you know that you are going to get paid from that point forward, with the power of a Federal Bankruptcy court behind you.

By Divemedic, ago

Creative Accounting

A blog post from WIrecutter over at Knuckledraggin My Life Away brings us a story about how California landlords are charging fees for parking spots, trash pickup, pest control, use of a mailbox and routine maintenance requests everything they can think of. This is the only sensible response that landlords (or any business) has when a government has inflationary policies coupled with price controls.

The entire situation was created with the double whammy of the eviction moratorium and tax increases. In my area, you can add large increases to property insurance. Any business that has increased costs must recoup those costs by increasing prices. The government responded to that by enacting price controls (rent control). In places all over the nation, landlords are being told what they can charge for rent, even as the costs like property taxes, interest rates, and insurance continue to climb.

So landlords are responding in exactly the way that I predicted they would- they are looking for new revenue streams by charging for perks that used to be gratis. Here is what I said on the matter nearly two years ago when communities in Florida were talking about rent control:

If rent control is enacted, there are steps I can take: Each year, I will raise rents by the highest permitted under the new law. On top of that:

– I will no longer provide lawn service as a part of rent. That will shift $900 a year of expense to the tenant.
– I will no longer provide a free washer and dryer. I will recommend a company that will rent the tenant one at an additional cost, if they don’t have one. That company will be owned by me. The going rate for that is $144 a month.
– I currently pressure wash the outside of the property twice a year. I can push that off to the tenant, and make it their responsibility as a part of cleaning.
There are many ways that I can maintain profitability. Just taking the three steps above will have the effect of increasing the cost of renting by 15 percent without increasing the rent itself.

Landlords will have to be creative.

The list is endless. I can have parking stickers made, and I can charge you $15 per month for each sticker. Any car parked on the property had better have a sticker, or there will be a $50 fee charged per day for not having a sticker. If the fee isn’t paid, cars without stickers will be towed. I’m not a jerk, though. Parking in the garage will still be included in the rent.

I offer my tenants a lot of free perks- washer and dryer, lawn and pest control, all included in rent. Many landlords offer similar perks. Some rent furnished homes and include the furniture in the rent. I can see rent for furniture being an extra fee. Perhaps extra fees for things like a refrigerator, a stove, or a dishwasher. Florida law requires rental properties to have functional heating, but not air conditioning. There can be extra fees charged for use of the air conditioner.

This is a situation that was created entirely by government. Businesses respond in a rational way to price controls and increasing costs. Government officials and idiot liberals don’t seem to understand that.

By Divemedic, ago

I can’t think of a title

Retards who don’t understand economics have this saying:

The carpenter can’t run out of inches

The stadium can’t run out of points

The airline can’t run out of FF miles

And the USA can’t run out of dollars

Inches are a unit of measurement. The carpenter is using that measurement to count how much lumber he has. He can’t run out of inches, but he can run out of wood.

Points are a unit of measure. It is a way for sporting events to measure the success of the team in achieving it’s objective. The stadium can’t run out of points, but teams can be unsuccessful and not receive any.

At a macroeconomic level, money is also a unit of measurement. What the morons who support modern monetary theory don’t understand is that the money in circulation is a measure of a nation’s productivity. If the total of all goods and services produced by a country is far exceeded by the money in circulation, that money becomes worth less, and you get inflation.

Let’s illustrate this by pretending that the US government has just mailed a check to everyone in the country in the amount of ten million dollars. Now everyone has millions of dollars and has just decided to retire. Cool.

Now where are we going to get food from? The guy that used to work at the grocery store, or the woman who worked at the coffee shop no longer works there. Everyone has money, but nothing to eat. At this point, food has far more value than does money, and your $2 can of soup now costs $100,000 because no one is making any more of them.

That’s why seeing things like this really makes me shake my head in wonderment:

Universal Basic Income is basically what we had during COVID. Everyone received tons of money. They got free checks, free PPP loans, the government was basically dropping cash from helicopters- about $5 trillion dollars hit the US economy. Everyone got three checks totaling $3,000 or more in the space of a year. What did that do?

Inflation.

Universal Basic Income (UBI) would be like that, but on steroids. They want everyone in the nation to get checks from the government of $12,000 a year- 4 times as much as was sent out during COVID. Now ask yourself what will happen when this is happening on a constant basis.

Tyrone and Shaniqua will take their checks and try to buy some ribs and gold toofuses. The problem is that this massive outlay of money means that everyone wants ribs and gold. So the cost of ribs and gold, as well as everything else, will skyrocket.

The people who are poor will still be poor, despite the fact that there are more zeroes in their bank account. It’s just that so many people in this country are completely ignorant of this fact.

You better hope that the government runs out of inches, because they are going to be giving you every one of those inches, good and hard. Robin and Jessica won’t be the only ones getting fed those inches.

By Divemedic, ago

Shorting

Another data point that a government engineered economic downturn is coming. Congressional finance committee members are shorting the stock market. They are buying PSQ, HDGE, and SH. All are funds that short major indices in the market. This indicates that Congressional Financial Committee members are anticipating an economic downturn.

Why? What do they know?

By Divemedic, ago

Property Appraiser Answer- UPDATE @1350

The county property appraiser has answered my request to increase the market value of the house. They think that I am nuts because I am essentially asking them to increase my taxes. That is wrong in any event. Because of Save Our Homes, my assessed value can’t increase by more than 3% if I stay here, and if I move it actually cuts the taxes in my new home, because it maximizes my SOH credit.

Thank you for contacting our office. I want to make you aware that the value assigned by our office is for tax purposes only, and is not reflective of the resale value of your home. You want this value to be as low as possible. The value we arrived at is what you will pay taxes on. Did this answer your question?

If they had half a brain they would see what we are doing here.

EDITED TO ADD: I told them that I still want my value increased. They replied:

So let me understand your email more accurately: You are requesting that we raise your property taxes?

Now my wife is nervous and says “Are we sure that we know what we are doing here?”

Yes, I am. The Save Our Homes Credit is portable, and increasing the market value on our current home will reduce our taxes in the new house by about $2200 a year.

By Divemedic, ago

What is Save Our Homes?

In 1992, Florida voters were worried about runaway property values causing drastic increases in property taxes from one year to the next. With so many people wanting to move here, property values were climbing rapidly, and this was causing property taxes to skyrocket. Amendment 10 was proposed, which is a benefit of the homestead exemption that provides homeowners protection by limiting the maximum that the assessed value of their home for tax purposes can be raised to 3%, or the CPI, whichever is lower. The Amendment to the state constitution passed, and it became the law of the land in 1995.

How does it work? Like anything that relates to taxes and the government, there is a lot of confusing math involved. Let’s say that you live in a taxing district that taxes your property at a rate of 10 mils, and you bought a starter house at #1 First Ave. for $75,000 in 1993. At the time, the state of Florida had a $25,0000 homestead exemption. You would then owe 10 mils on the $50,000 taxable value of the home, or $500 in property tax each year. Your house was valued at $80,000 in 1994, and you paid $550 in taxes for 1994.

A housing boom hits, prices go way up, and by 1995 your home is now valued at $100,000. Your tax bill would have been $750 (a 50% increase from just 2 years before), but save our homes had gone into effect, so the increase in your home’s assessed value only went from $80,000 to $82,400. That means your property tax was only increased to $574.

Eight more years go by, and you decide in 2003 that you want to sell. Your home is now worth $145,000. Of course, save our homes only has you paying taxes on the assessed value of $104,000, minus your homestead exemption, making your tax bill $790 for the year. Anyhow, you get $150,000 for the place. The tax assessor still says it’s worth $145k, and the guy who buys it will have to pay $1200 in taxes in 2004, assuming the value stays at $145k. (you already paid 2003’s taxes)

You, however, bought your second house at #2 Second Street. You were able to get this one for $240,000. Your portable SOH credit was (145,000-104,000=41,000) so even though the tax guy says this place has a market value of $220,000, you will only have to pay taxes on (220,000-41,000-25,000), making your tax bill $1,540.

Then in 2008, voters approved an amendment that increased the homestead exemption to $50,000 for the non-school portion of property taxes. This complicated things even more, but that is a different topic.

Why do these Amendments keep getting voted on? Whenever the Democrats want more voter turnout, they make sure that something of interest to Democrat voters that will drive voter turnout is on the ballot. Tax cuts in property taxes, legalizing marijuana, increasing the minimum wage, saving baby pigs from the slaughterhouse, things like that.

By Divemedic, ago

Lawyers: Expensive, but Worth It

There is an old saying: a person who is acting as their own attorney has a fool for a client and an incompetent attorney. In this case, we are talking about real estate taxes. We are in the midst of buying a new home. There are a lot of expenses to consider with a move, and taxes are one of them, especially in Florida. Understanding how Florida computes real estate taxes is important, if you want to pay as little in taxes as possible.

This paragraph is specific to how Florida computes real estate taxes. If you aren’t interested in the mechanics of that, you can skip to the next paragraph. When you own real estate in Florida, the county property appraiser assigns your property a “market value” each year. If you live in your home, you can claim it as your homestead, and every year after the first year that you own it, the value can only increase by 3% for taxing purposes, and this amount is called your “assessed value.” The difference between the market and assessed value is called your “Save Our Homes” credit. You subtract your Save Our Homes credit from your market value to arrive at the assessed value, then your homestead exemption ($50,000) from your assessed value, and that is your “taxable value.” The taxing authority where the real estate is located then taxes you on that value, and the amount of tax you own varies by taxing district. (I know that this sounds complicated and it is, but the end result is that there are only 9 states in the US that have a lower tax burden than Florida (we are tied with Louisiana), so there is that.) The reason that I explain this is because the “Save Our Homes” credit is portable, and this is important when moving.

What’s important here is that, when you are moving, you want your old house to be valued as high as possible, and your new house to be valued as low as possible. This will minimize your property taxes going forward. Since we are preparing to move, I got our current home appraised and sent a copy of that appraisal to the county property appraiser’s office. Each August, the appraiser’s office sends every homeowner a copy of the proposed numbers, and you have until September 15 to appeal these numbers. The appraisal that we got from the county was almost $100k less than what the our private appraiser says it is worth. Since this is how our tax credits are calculated, I need to get this fixed, because allowing this to stand will increase our property taxes on the new house by about $2,200 a year for the entire time we own the place.

To do that, you need to apply to the Value Adjustment Board. It’s a sort of tax court that is run by a county magistrate. It’s a legal process, and I think that it is worth our money to hire a real estate tax attorney to handle the process. My wife wants to just do it ourselves because she says lawyers are expensive. My point to her is that we only get one chance to get this right, and screwing it up will cost us more than $22,000 over the next ten years in taxes that we otherwise wouldn’t have to pay. If it costs a grand or two now, a lawyer is well worth the cost going into the future.

By Divemedic, ago

Shrinkflation

Another example of how inflation is getting us in ways we hardly notice. Just a year ago, Hostess Ding Dongs came 12 snack cakes to a box of 17 ounces, making them about 1.4 ounces per snack cake:

Now those same cakes are 10 to a box of 12.7 ounces, making each cake 1.27 ounces. The cakes are smaller, there are fewer of them, and now you pay more to get 25% less.

By Divemedic, ago

Two Economic Plans

What he is talking about is Demand side economics, or Keynesian Economics. Named for Economist John Maynard Keynes, who developed his economic theories during the Great Depression of the 1930s, the chief underpinning of this theory is that the demand for goods and services drives economic activity. Keynes believed that unemployment is the result of inadequate demand for goods and services. To solve this, he believed that governments should increase spending to spur economic activity by artificially creating demand.

The problem with this is that low demand causes a matching reduction in production. If a government tries to spur demand artificially by putting money into the economy, the increased demand in the face of reduced supply sees more money chasing a limited supply, which is a key driver for inflation.

Especially since he is providing the increased spending through application of Modern Monetary Theory. Modern Monetary Theory (MMT). says that government spending can be financed by printing money rather than borrowing. Biden is doing both.

The US government has increased our debt by $1 trillion in the past 57 days. Our debt today stands at $32.8 trillion, and on June 27, it was $31.8 trillion. At the same time, the M2 money supply has increased from $20.5 trillion in the summer of 2021 to $20.9 trillion today.

So we have large scale government spending coupled with an increase in circulating money supply.

That’s Bidenomics.

Biden and the rest of the Keynesians are wrong- demand isn’t the problem. Demand remains strong, as evidence from the credit sector indicates that credit card debt is skyrocketing.

According to recent data from Credit Karma, Gen Z and millennials have experienced a significant increase in credit card debt in the second quarter of 2023. Average credit card debt for Gen Z now exceeds $3,300 — a 4.2% rise — while millennials hiked up credit card debt by 2.5% to an average of nearly $7,000.

This marks the first time since 2001 in which credit card debt didn’t fall in the first quarter. In fact, the only times card debt didn’t fall in the first quarter of the year since the New York Fed report began were 2000 and 2001. Every year since, card debt fell at least a little bit — until this year.

The money in circulation (M1) has decreased from $19.4 trillion to $18.5 trillion, so overall savings are increasing while credit card debt is rising. So the overall savings of Americans is increasing while at the same time credit card balances of GenZ and Millennials is increasing to record levels. This indicates that people born before 1981 are beginning to sit on bank accounts, while those born after 1981 are continuing to spend using credit cards.

So what will happen as a result? Rising interest rates, coupled with increasing credit card balances, will cause increasing credit card defaults and banks tightening up their exposure to risk. We are seeing that already, as numbers from the Fed indicate.

According to the most recent delinquency data from the Fed, the 30-day delinquency rate (or the percentage of total outstanding credit card balances currently at least 30 days overdue) rose from 2.25% to 2.43% in the first quarter of 2023. That’s the sixth straight quarter of increases, keeping rates above 2% for the third straight quarter.

That’s Bidenomics.

By Divemedic, ago

Exploding Debt

On June 1, the Republicans caved by giving President Biden a blank check to borrow whatever and how ever much money he wants to spend. On that day, the US debt stood at $31.46 Trillion. Within a month, the US had borrowed another Trillion dollars. Here we are, just six and a half weeks after they handed him the credit cards, with $32.54 Trillion in debt.

Proving that the Democrats never deal on ANYTHING with good faith, they are already calling for the abrogation of the handshake agreement that the parties reached to rein in the spending. They are borrowing money at a rate of over $100 Billion every business day. To put that in perspective, I wrote in 2009 that Obama had broken a record by borrowing a Trillion dollars in only six months.

It took this nation over 200 years to borrow a trillion dollars. Trump did it in seven months, Obama did it in only 6 months. It took Biden 9 months to borrow his first Trillion dollars, but he soon got better at it. His second trillion took three months, borrowing $2 trillion in his first year. In fact, he has increased the national debt by 118% in just two and a half years.

President Trump increased the National Debt by 134% in four years.

Obama increased the debt by 194% in eight years.

President George W Bush borrowed his first trillion dollars in two and a half years. He borrowed his second trillion a year and a half later. Another two years, another $1 trillion. All told, President Bush borrowed $5 trillion in 8 years, increasing the national debt by 187%.

It took President Clinton 3 and a half years to borrow his first trillion dollars. All told, he borrowed $1.2 trillion in his first term, and $600 billion in his second. He increased the national debt by 140% in eight years.

George HW Bush borrowed his first trillion in 3 years, and he increased the National debt by 170% in four years.

Reagan borrowed his first trillion in 6 years, and doubled the National debt during his eight years in the White House.

Carter increased the National debt by 150%, but “only” borrowed $300 billion in 4 years. I guess that was when $1 Billion was real money.

Ford increased the debt by 147% in 3 years., Nixon by 135% in 5 years, Johnson by 116% in 6 years, Kennedy by 106% in 2 years, Eisenhower by 108% in eight years.

Democrats, and Republicans, both in a contest to see who can spend the most in our society of “how much can you give me if I vote for you.”

Remember when the Biden spokeswoman told us that borrowing trillions didn’t cost anything because it was already accounted for? So that’s where we are- under Biden, the US has borrowed $4.75 trillion in just two and a half years. This can’t continue.

By definition, anything that can’t continue, won’t. There is no amount of voting that will fix this.

By Divemedic, ago