Category Archives: Business

Growing crisis of housing affordability

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When the government released March inflation data, it showed that prices increased by 8.5% from a year ago,the fastest pace since December 1981. Gas (+48.8%),food (+8.8%) and used cars (+35.3%) showed eye-popping advances, but another line item is also worrisome: shelter, which increased by 5% annually.

That may not seem so bad when compared to those other categories, but shelter accounted for nearly two-thirds of the monthly increase in the Core CPI, which removes the volatile food and energy figures.

The U.S. has a burgeoning housing affordability crisis, and it’s likely to persist longer than high prices in grocery stores and at gas pumps.

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Steve Jobs 2005 Stanford Commencement Speech

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This is a prepared text of the Commencement address delivered by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, on June 12, 2005.

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: “We have an unexpected baby boy; do you want him?” They said: “Of course.” My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

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DeSantis Ends Disney’s Special Status in Reedy Creek

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In the span of 72 hours, the Florida legislature introduced, passed and signed a bill stripping Disney’s hometown, the Reedy Creek Improvement District, of its status as a special tax district.

The bill goes into effect in June 2023 and ends Disney’s self-governing status, which allows the company to manage all municipal matters in the 25,000-acre district surrounding the Walt Disney World Resort, such as sewage, transportation, zoning and security.

It’s widely believed that Gov. Ron DeSantis made the move in retaliation for Disney’s opposition to Florida’s “Don’t Say Gay” bill, which passed in March. Disney had initially been quiet about the bill, aimed at curbing sex education in lower elementary grades, but proclaimed its opposition after employees staged a walk-out once the bill had already passed.

While the move to end Disney’s special status has political implications that reverberate far beyond Florida, it also leaves some very practical questions unanswered. For one, with Disney’s status dissolved, its property, duties and debt all transfer to the two counties in which it is located, Orange and Osceola counties, without adding any additional tax revenue — potentially leaving the residents of those counties with an overwhelming tax bomb.

Reedy Creek is an independent special tax district, which means it must pay taxes to the county government in addition to paying itself to run the town. Between 2015 and 2020, Disney paid an average of $45 million in property taxes to Orange and Osceola counties, and in 2021, it paid itself $105 million for local services, according to Scott Randolph, tax collector in Orange County. Once Reedy Creek is dissolved, the $105 million doesn’t transfer, but the counties will be responsible for all municipal services.

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$1-million milestone: Orange County, CA median home price hits seven figures

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The median home price in Orange County reached $1 million last month, becoming the first Southern California county to ever hit that pricey mark and underscoring just how expensive the region has become.

The threshold was crossed when the Orange County median sales price for new and existing houses, condos and townhomes rose from $985,000 in February to $1,020,000 in March, according to data released this week by researcher DQNews. It constitutes a 22% jump in median price from a year prior.

Million-dollar homes spread rapidly throughout Southern California during the pandemic, becoming commonplace in communities once thought to be relatively affordable like Highland Park and West Adams in Los Angeles County. The median price in Los Angeles County rose to $840,000 in March, up 12% from a year earlier.

The Orange County milestone marks a momentous rise in wealth, at least on paper, for local homeowners. But it comes as a regionwide lack of affordable housing has pushed people into homelessness and caused others to leave the state in search of shelter they can afford.

According to a recent survey from the Public Policy Institute of California, 64% of California adults view housing affordability as a big problem, with more than half of adults saying they are concerned they won’t have enough money to pay their rent or mortgage.

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Exxon signals record quarterly profit from oil and gas prices

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Exxon Mobil Corp on Monday said its first-quarter results could top a seven-year quarterly record, with operating profits from pumping oil and gas alone of up to $9.3 billion.

A snapshot of the largest U.S. oil company’s quarter ended March 31 showed operating profits from oil and gas, its biggest unit, could jump by as much as $2.7 billion over the prior quarter’s $6.6 billion.

March 24, 1989 Exxon-Valdez Oil Spill, the largest in US history

Exxon does not hedge, or lock in oil sales, and results generally match changes in energy prices. Russia’s invasion of Ukraine pushed up oil by 45% last quarter over the final period of 2021, to an average of $114 per barrel, the highest in seven years.

The estimates suggest total earnings for the quarter of about $9.8 billion at the mid-point of Exxon’s estimates, according to Scotiabank global equity research.

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The Party is Over – Refi Applications Plunge to Two-Year Low as Rates Surge

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Even for a week containing a holiday, last week was a bad one. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, fell 7.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared to the previous week. The week ended January 21 started with the observance of Martin Luther King’s birthday although MBA did not indicate it adjusted its data to account for it.

The Refinance Index decreased 13 percent from the previous week and was 53 percent lower than the same week one year ago. The refinance share of mortgage activity declined to 55.8 percent of total applications from 60.3 percent the previous week, the lowest for refinancing since Christmas week 2019.

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House passes landmark marijuana legalization bill

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The House passed legislation Friday that would legalize marijuana nationwide, eliminating criminal penalties for anyone who manufactures, distributes or possesses the substance.

Lawmakers approved the measure in a 220-204 vote.

Download a summary of the bill here (Word Format) :Download

The legislation, dubbed the Marijuana Opportunity Reinvestment and Expungement Act, passed in the House last year, but did not move forward in the Senate. In addition to decriminalizing marijuana at the federal level, the bill would establish procedures for expunging previous convictions from people’s records and impose a tax on the sale of cannabis products.

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BioNTech posts $3.6B net profit

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BioNTech, the German pharmaceutical company that teamed with Pfizer to develop the first widely used COVID-19 vaccine, on Wednesday reported strong
quarterly earnings growth on pandemic-fueled demand.

The company posted net profit of nearly $3.6 billion for the final three months of 2021, up from $409 million in the same period the previous year.

Quarterly revenue rose to $6.1 billion from $384 million previously.

Vaccinations with the Pfizer-BioNTech vaccine, marketed as Comirnaty, started in December 2020. BioNTech, based in the city of Mainz near Frankfurt, said about 2.6 billion doses of the vaccine had been delivered last year.

1 in 5 workers runs out of money before payday, survey finds

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As the cost of living rises, some American households are stretched too thin.

Now, roughly 1 in 5 workers cannot make it from paycheck to paycheck, according to a report.

From gas to groceries, soaring prices are straining households across the board.

More than three-quarters of working Americans said inflation has impacted their finances over the past year, according to a report by Salary Finance.

While wage growth is high by historical standards, it isn’t keeping up with the increased cost of living, which is rising at the fastest annual pace in about four decades.

When wages increase at a slower pace than inflation, paychecks won’t stretch as far.

Now, workers are running out of money faster, Salary Finance found.

Roughly 20% of employees regularly run out of money between paychecks, up from 15% last year, according to the survey of more than 3,000 working adults in February.

As a result, about one-quarter of those polled said it’s harder to afford necessary expenses and one-third are unable to build savings, issues that are particularly problematic for low-to-moderate income workers.

Low earners funnel a bigger share of their budgets to transportation costs and other staples, like food and energy, relative to wealthier households, data show.

Further, people with $50,000 or less in annual income already have thinner margins between the money they take home and what they spend, according to Kayla Bruun, economic analyst at Morning Consult.

While no one is immune to recent price spikes, smaller income households are feeling it most because they have less of a financial buffer, Bruun said.

Seminole’s growth, lack of vacant land, means rising housing costs

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As more people move into Seminole County every year, they will find it increasingly difficult to buy a new home as large swaths of vacant property to build residential subdivisions diminishes in one of the state’s smallest but most densely populated counties, officials said.

“We’re running out of land very quickly to build on, so we definitely have a supply and demand problem,” Seminole Property Appraiser David Johnson said this week during a presentation before county commissioners. “We’re not going to have people saying: ‘We’re not moving to Seminole County.’ And that’s because of the quality of life. So, we’re going to have to figure out a place where to put these folks at some point. … We are critically underhoused in this county.”

That increase in demand and drop in supply will continue to raise property values and rent prices, analysts said. The median sales price of existing single-family homes in Seminole bumped up by more than 14% in the past year from $314,250 in 2020 to $359,000 in 2021, according to county data. And the median sale price of a new townhome last year was $346,350, a jump of nearly 11% from the previous year.

It also means that more apartment buildings with 300 units or more are expected to go up in Seminole’s core, particularly along the U.S. Highway 17-92 corridor between Casselberry and Sanford, as land becomes scarce and developers look to build up, Johnson said.

His office estimated that 3,240 apartment units are scheduled to be built in Seminole this year. Renters will find eye-popping prices. The current average rent for apartments in the Seminole area, which includes Maitland, is $1,672, well above the national average of $1,570, according to CoStar Group, a real estate analysis firm. And a year from now, the average rent is expected to soar to $1,825.

But it’s not just in Seminole. Rent in the metro Orlando area — which includes Seminole, Orange, Osceola and Lake — climbed 24.3% in 2021, faster than in any other area in the South, according to CoStar. “We have a supply and demand imbalance Seminole’s growth, lack of vacant land, means rising housing costs in most of the Orlando area,” said Lisa McNatt, director of Market Analytics for CoStar Group in Orlando. “And even though the metro area has 16,000 new apartment units under construction, it’s not enough to offset the robust renter demand from in-migration.”

Seminole also is moving away from becoming a bedroom community for Orlando and Orange County, as more businesses move into the county and residents find professional jobs closer to home. “We’re becoming more urbanized,” Johnson said, pointing to large corporations, including Verizon and Deloitte, that have moved into the Lake Mary area over the past two decades. Seminole residents “realize that they don’t have to get on I-4 every morning to go to work in Orange County and come back home every night. We have our own economic incubator or dynamics that were not there 20 years ago.”

Today, about 65% of Seminole’s total value of its property tax roll is residential and 35% is commercial property. About 30 years ago, it was 85% residential and 15% commercial. By comparison, about 51% of Orange County’s total value of its property tax roll is residential and 49% is commercial, according to data from the Orange County Property Appraiser’s Office.

The sale of commercial properties in Seminole more than tripled in the past year from $425 million in 2020 to $1.3 billion in 2021. Seminole’s population is expected to jump by nearly 11% from the current 475,000 residents to 526,400 in 2030. However, at 309 square miles, Seminole is the fourth-smallest county in Florida. And about one-third of Seminole is protected from high-density development, including within the rural boundary east of the Econlockhatchee River, where development is limited to one home per five acres or one home per 10 acres.

“We all know that we’re very small geographically. So that’s an issue we’re going to have to address as we move forward” in planning for future growth, Johnson said to commissioners. Commissioners said people wanting to move to Seminole is not a bad thing. “What makes us special is that people will want to move here because of our quality of life,” Commissioner Lee Constantine said. “So we want to make sure that our quality of life stays at a premium.” mcomas@orlandosentinel.com