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ON THE MONEY: Baby boomers have different desires in housing

WAVE NEWSPAPERS — Unlike just 15 years ago, many baby boomers are discovering that the large, high-end homes with their high-maintenance costs no longer fit their needs as they grow older. And younger people aren’t buying big houses, either.

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By John L. Grace

Unlike just 15 years ago, many baby boomers are discovering that the large, high-end homes with their high-maintenance costs no longer fit their needs as they grow older.

And younger people aren’t buying big houses, either. It wasn’t that long ago when boomer retirees were rushing to buy or build elaborate, five or six-bedroom houses in warm climates, fueled in part by the easy credit of the real estate boom.

Many baby boomers poured millions into these spacious homes, planning to live out their golden years in houses with all the bells and whistles.

“Tastes — and access to credit — have shifted dramatically since the early 2000s. These days, buyers of all ages eschew the large, ornate houses built in those years in favor of smaller, more-modern looking alternatives, and prefer walkable areas to living miles from retail,” according to the Wall Street Journal, March 21.

The Journal opined that the problem is expected to worsen in the 2020s, as more baby boomers across the country advance into their 70s and 80s, the age group where people typically exit homeownership due to poor health or death. Boomers currently own 32 million homes and account for two out of five or 40% of the homeowners in the country.

Buyers have been led down the path of focusing on location, interest rates and inventory. The most important factor to take into consideration, however, is buying behavior based on age.

Thanks to the U.S. Census Bureau and Dent Research we can see that Americans tend to buy their first house at 31, their largest around 41 and sell those same homes at 79.

Born between 1946 and 1964, baby boomers turn anywhere from 55 to 73 this year. From 1980 to 2000 40% of all homes purchased in the U.S. were on lot sizes of a half acre to 10 acres, according to Dent Research. That is a 20-year period, where individual thinking boomers who were doing the same thing at the same time of the age group couldn’t live without their magnificent McMansions.

It stands to reason for this observer that current prices are a direct result of 76 million Americans coming into the equation. It didn’t matter whether the population was legal or illegal, legitimate or illegitimate.

With all of that demand for housing coming out of the woodwork, home prices must go up. On the other side of the equation, it becomes reasonable that when boomers who constitute 24% of the U.S. population go to heaven the supply and demand principles come back into play.

When 130 years of residential real estate remains on this earth after 76 million people go to heaven without those McMansions, you tell me where you think prices are headed.

From 1929-32 New York real estate declined 69%, wrote Zubin Jelveh in The New Republic in September 2009. That’s the same time that the stock market was off 89%, according to Yahoo Finance.

Jelveh went on to say, “A home owner who would have invested in a house on the eve of the Great Depression would not have recovered the full value of their investment until four decades later.”

If you were an adult in the early 1900s the average age of death was mid-50s, according to the U.S. Census Bureau. So you died with great regret long before prices fully recovered.

Neither of those events could ever happen again, right? Investors understand buy low, sell high. The same stock logic applies to all highly appreciated assets.

Savvy investors don’t let emotion dictate their behavior. Or you can be in the middle the pack or at the back of a herd of cows, where the view and the smell never changes.

John L. Grace is president of Investor’s Advantage Corp, a Los Angeles-area financial planning firm that has been helping investors manage wealth and prepare for a more prosperous future since 1979. His On the Money column runs monthly in The Wave.

This article originally appeared in the Wave Newspapers

Activism

OPINION: Are We About to See the Permanent Exclusion of Most Black People from Construction Jobs in Oakland?

How is that possible in this city that is believed by the world to be very progressive? Most of the work goes to members of the construction unions that have historically and currently excluded Black people through a complex set of membership requirements.

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The City Council established a task force to discuss the racial issues involved in construction and the possibility of a Project Labor Agreement. The task force included some community members, including the publisher of the Oakland Post, and was mandated to address racial discrimination first.
The City Council established a task force to discuss the racial issues involved in construction and the possibility of a Project Labor Agreement. The task force included some community members, including the publisher of the Oakland Post, and was mandated to address racial discrimination first.

By Kitty Epstein

For decades Black people in Oakland have obtained 9% or less of the work hours on publicly funded construction projects. So…for jobs that are paid for by all of our tax dollars, Black residents, who make up 23% of Oakland’s population, get only 9% of the relatively well-paid work doing construction.

How is that possible in this city that is believed by the world to be very progressive? Most of the work goes to members of the construction unions that have historically and currently excluded Black people through a complex set of membership requirements.

Nationally, only 7.2% of the carpenters’ union members are Black; 8.3% of the electricians’ union members and so on. The City of Oakland has done two very thorough reports of these racial equity issues. You can find this important information at the end of this story.

But the leadership of the construction trades now insist that that they should obtain an even larger portion of the construction hours and that this practice should be set in stone by something called a Project Labor Agreement. It is now being inaccurately called a “Community Workforce Agreement,” which is nonsense because it doesn’t help the community.

Why would progressive Oakland consider giving exclusive benefits to organizations that practice well-documented racial discrimination? At least one part of the reason is that the construction unions spend enormous amounts of money on Oakland elections. They were instrumental in former City Councilmember Desley Brooks’ defeat in District 6, for example, because they did not consider her sufficiently compliant with their demands.

The City Council established a task force to discuss the racial issues involved in construction and the possibility of a Project Labor Agreement. The task force included some community members, including the publisher of the Oakland Post, and was mandated to address racial discrimination first.

The community members proposed that the entire task force work collectively throughout the process of making proposals and negotiating solutions. The City rejected this proposal and began meeting with the building trades alone, saying that they would return with a proposed Project Labor Agreement, although there has been no demonstrated change in the racial exclusivity practiced by the construction trades.

This is outrageous on three levels:

  1. These are the tax dollars of Black residents, as well as others.
  2. The community’s interests in racial justice have not been resolved in any policy venue.
  3. The community belongs at the table throughout whatever process takes place.

The usual arguments for labor/employer negotiations do not apply. The construction unions are NOT city workers. If they were city employees, they would have both the rights (negotiations) and the responsibilities (non-discriminatory hiring) of the city. Since they are not held responsible to Include Black people in their organizations, they should not have the right to exclusive negotiations about anything

I am hopeful, of course, that the City will reject the continuation and expansion of racial discrimination policies practiced by the leadership of the trades unions and will insist on the drastic changes necessary for Black people to obtain 23% of the work hours they are due by virtue of their proportion of the population and tax dollars contributed.

These two documents below provide information that is both illuminating and horrifying.

Oakland Equity Indicators: https://www.oaklandca.gov/projects/oakland-equity-indicators

Disparity Study – https://www.postnewsgroup.com/disparity-study-examines-patterns-of-discrimination-seeks-remedies-for-city-practices-of-selecting-contractors-in-construction-goods-and-services/

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California Black Media

Seven Initiatives Qualify for California November Ballot

Special interest groups have raised more than $370 million to convince voters to either pass or reject the initiatives. Over 88% of the money raised is for settling whether two sports betting proposals should be legalized.

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The office of California Secretary of State Dr. Shirley N. Webber has qualified seven ballot initiatives for the November 8 statewide General Election.
The office of California Secretary of State Dr. Shirley N. Webber has qualified seven ballot initiatives for the November 8 statewide General Election.

By Edward Henderson, California Black Media

The office of California Secretary of State Dr. Shirley N. Webber has qualified seven ballot initiatives for the November 8 statewide General Election. Seven is the lowest number of measures to appear on a statewide general election ballot since 2014.

One initiative is Senate Constitutional Amendment 10 (SCA 10). It is asking voters to safeguard a person’s right to reproductive freedom. To qualify for the November ballot, SCA 10 received the required 2/3 supermajority vote in each chamber of the Legislature.

The other six measures initiated by citizen groups are asking voters to decide on sports betting, funding K-12 art and music education, kidney dialysis clinic requirements, income tax to fund zero-emission vehicle projects, and a flavored-tobacco products ban. To be on the ballot, the initiative proponents were required to gather a minimum of 623,212 signatures verified by county elections officials. June 30 was the deadline for the measures to qualify for the November ballot.

Two other measures could have qualified for the ballot but were withdrawn by their sponsors. An initiative to increase the cap on medical malpractice lawsuits was withdrawn when the sponsors reached agreement with the Legislature and Assembly Bill 35 by Assembly Majority Leader Eloise Gómez Reyes and State Senator Tom Umberg, was passed and signed by Gov. Newsom.

An initiative to reduce plastic waste reduction was withdrawn after it was clear that Senate Bill 54 by State Sen. Ben Allen would pass. Gov. Gavin Newsom signed it into law in June.

Assembly Constitutional Amendment 3 (ACA 3), the California Abolition Act, which would have removed a clause in California’s Constitution that allows the practice of involuntary servitude as a means of punishing crime is not on the ballot because, while it passed the Assembly with the required 2/3 vote, it failed to get enough votes in the Senate.

Special interest groups have raised more than $370 million to convince voters to either pass or reject the initiatives. Over 88% of the money raised is for settling whether two sports betting proposals should be legalized.

The following are details on the fall ballot measures.

Proposition 1California Constitutional amendment to prohibit the state from denying an individual’s reproductive freedom

In response to the Supreme Court’s ruling to overturn federal protections for women seeking abortions, California lawmakers proposed a California Constitutional amendment to protect the reproductive freedom of women. Following the Supreme Court’s ruling, Gov. Newsom stated “Abortion is legal in California. It will remain that way. We will not cooperate with any states that attempt to prosecute women or doctors for receiving or providing reproductive care.”

Proposition 26Authorizes new types of gambling

This proposition would allow federally recognized Native American tribes to operate dice games, roulette and sports wagering on tribal lands. On-site wagering at privately operated horse-racing tracks in four specified counties for betters 21 years or older would become legal. Prop 26 also imposes a 10% tax on sports-wagering profits at horse-racing tracks and directs portion of revenues to enforcement and problem-gambling programs.

Proposition 27Allows online and mobile sports wagering

Currently, sports’ betting online is illegal in California. This proposition would allow Californians 21 and older to place bets online through federally recognized Indian tribes and eligible businesses like Draft Kings and FanDuel. Prop. 27 is estimated to increase state revenues by tens of millions of dollars yearly and potentially direct hundreds of millions of dollars in fee revenue to housing services for homeless Californians.

Proposition 28Provides additional funding for arts and music education in public schools

This proposition sponsored by former Los Angeles Unified School District superintendent Austin Butner would require the state to set aside $800 million to $1 billion annually beginning in 2023-24 for arts education in school. A greater proportion of the funds would be allocated to schools serving more economically disadvantaged students.

Proposition 29Requires on-site licensed medical professional at kidney dialysis clinics and other state requirements

This measure requires a physician, nurse practitioner, or physician assistant with six months’ relevant experience to be on site during treatment at outpatient kidney dialysis clinics. It authorizes an exemption for staffing shortages if a qualified medical professional is available through telehealth. Prop 29 prohibits clinics from closing or substantially reducing services without state approval and prohibits clinics from refusing to treat patients based on source of payment. This is the third attempt by SEIU United Health Workers West, a union representing over 100,000 health care workers and patients across the state, to pass the measure. Opponents of Prop 29 cite it would cost tens of millions of dollars annually for clinics to implement.

Proposition 30Provides funding for programs to reduce greenhouse gas emissions

Individuals with a personal income of over $2 million would receive a tax increase of 1.75% to raise between $3 billion to $4.5 billion a year to fund greenhouse gas initiatives. A majority of the funds would go toward incentives for Californians to buy zero-emission vehicles and build new electric charging or hydrogen fueling stations. Twenty-five percent of the funds would go toward wildfire fighting and prevention initiatives.

Proposition 31Referendum challenging a 2020 law prohibiting retail sale of certain flavored tobacco products

This proposition sponsored by the tobacco industry aims to overturn Senate Bill 793 signed by Gov. Gavin Newsom in 2020 banning the sale of all flavored tobacco products. A “yes” vote keeps the law and a “no” vote overturns the law.

California ballot measures require only a simple majority of the votes cast to be approved.

As new initiatives enter circulation, fail, become eligible for, or qualify for an election ballot, the Secretary of State’s office will issue status updates. The updates can be found athttps://www.sos.ca.gov/elections/ballot-measures/initiative-and-referendum-status or here.

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Activism

California Commits $100 Million to Producing Its Own Insulin

Black Americans are slightly overrepresented in the statistics. They are 15.5% of those diagnosed with diabetes while being roughly 13% of the nation’s population, according to the United Health Foundation. Black people are also 60% more likely to be diagnosed with diabetes, are 2.3 times more likely to be hospitalized for amputations associated with the disease and are twice as likely as whites to die from it, according to the U.S. Department of Health and Human Services.

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“There is a shortage of insulin just in general so having more providers obviously reduces cost,” said Dr. Karen Hansberger, the former chief medical officer of the Inland Empire Health Plan (IEHP). “Producing it is one thing but producing it at a very high quality is the second piece of it.”
“There is a shortage of insulin just in general so having more providers obviously reduces cost,” said Dr. Karen Hansberger, the former chief medical officer of the Inland Empire Health Plan (IEHP). “Producing it is one thing but producing it at a very high quality is the second piece of it.”

By Aldon Thomas Stiles, California Black Media

On July 7, Gov. Gavin Newsom announced that California will be the first state to produce its own insulin in an effort to drive down costs for diabetics statewide.

“On my first day in office, I signed an executive order to put California on the path towards creating our own prescription drugs. And now it’s happening. California is going to make its own insulin,” Newsom stated.

Diabetes is recognized as the most expensive chronic condition in the U.S. According to data compiled by the Centers for Disease Control and Prevention (CDC), about 1 in 10 U.S. citizens live with diabetes, which is 8.8% of the planet’s known diabetes diagnoses, despite the U.S. only accounting for 4.25% of the world’s total population.

Black Americans are slightly overrepresented in the statistics. They are 15.5% of those diagnosed with diabetes while being roughly 13% of the nation’s population, according to the United Health Foundation. Black people are also 60% more likely to be diagnosed with diabetes, are 2.3 times more likely to be hospitalized for amputations associated with the disease and are twice as likely as whites to die from it, according to the U.S. Department of Health and Human Services.

Dr. Karen Hansberger, the former chief medical officer of the Inland Empire Health Plan (IEHP), explained that one of the reasons for the higher death rate for Black people with diabetes is they sometimes receive the diagnosis later in the disease progression, so by the time they see a doctor, some organs might already be damaged.

“Oftentimes, people of color don’t go to the doctor until their symptoms are really bad,” said Hansberger. “It’s harder for them to take off work and they face more difficulties when they do take off work.”

The American Diabetes Association (ADA) reports that 10.5% of California’s adult population has been diagnosed with diabetes with 16.9% of that number comprising Black adults. Black people represent about 6.5% of the state’s total population.

Californians with diabetes have been vocal about the high cost of insulin and state officials claim that monthly out-of-pocket costs for the life-saving drug can range from $300 to $500.

In 2018, insulin in the U.S. cost over 10 times more than in 32 other similarly developed countries, according to the U.S. Department of Health and Human Services.

“Nothing epitomizes market failures more than the cost of insulin,” Newsom said. “California is now taking matters into our own hands. The budget I just signed sets aside $100 million, so we can contract and make our own insulin at a cheaper price close to at cost and to make it available to all.”

The budget is split in half with $50 million going toward developing insulin products and the other $50 million dedicated to creating an insulin manufacturing facility based in California, according to the governor.

Newsom claims that this initiative aims to cut the costs of insulin and insulin products by at least half. “It’s simple. People should not go into debt to get life-saving medication,” he said.

Dr. Hansberger agreed that this could bring costs down but has reservations about the state’s ability to produce insulin well.

“There is a shortage of insulin just in general so having more providers obviously reduces cost,” said Hansberger. “Producing it is one thing but producing it at a very high quality is the second piece of it.”

Hansberger believes that the government should invest more energy in diabetes prevention for people of color, as it can be difficult getting access to fresh food in some communities of color.

“When I was the chief medical officer in East Los Angeles, we had one area – a housing project – that had been cut off by all of these freeways,” said Hansberger. “And for them to get fresh food, they had to take a 2½ hour journey. It was ridiculous.”

Hansberger stressed the significance of success for California’s insulin production plan.

“If the state of California is going to get into that business, they have to do that business well because people’s lives depend on it.”

However, she believes, in her experience, that governments “don’t necessarily do business well.”

Two other states, Washington and Maine, have joined California in establishing state-based efforts to disrupt the U.S. pharmaceutical market and assure affordable and equitable access to essential medicines through public production. Each has passed legislation related to addressing insulin costs and access within their borders by having the state participate in manufacturing and distributing it.

On the national level, U.S. Senators Susan Collins (R-ME) and Jeanne Shaheen (D-NH) have introduced bipartisan legislation by way of the Improving Needed Safeguards for Users of Lifesaving Insulin Now (INSULIN) Act which would impose mandates on insulin providers and individual health insurance companies in the private sector to cap prices for products.

“The American Diabetes Association is proud to endorse the INSULIN Act introduced by Sens. Jeanne Shaheen and Susan Collins, legislation that stands to have a historic impact on the diabetes community by dramatically reducing the cost of insulin,” said ADA Chief Advocacy Officer Lisa Murdock during a press conference last month. “More than 37 million Americans have diabetes, and 1-in-4 insulin-dependent people with diabetes report rationing their insulin for economic reasons. We urge Congress to address the prohibitive and rising cost of insulin by passing the INSULIN Act.”

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Photos courtesy of Ella Baker Center, photography by Brooke Anderson
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