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Notes from UCSF Expert panel – March 10 … no link version

MetaNotes from UCSF Expert panel – March 10

Published on March 12, 2020University of California, San Francisco BioHub Panel on COVID-19Panelists:

Joe DeRisi: UCSF’s top infectious disease researcher. Co-president of ChanZuckerberg BioHub (a JV involving UCSF / Berkeley / Stanford). Co-inventor of the chip used in SARS epidemic.

Emily Crawford: COVID task force director. Focused on diagnostics

Cristina Tato: Rapid Response Director. Immunologist.

Patrick Ayescue: Leading outbreak response and surveillance. Epidemiologist.

Chaz Langelier: UCSF Infectious Disease doc

What’s below are essentially direct quotes from the panelists. I bracketed the few things that are not quotes.Top takeaways:

  • At this point, we are past containment. Containment is basically futile. Our containment efforts won’t reduce the number who get infected in the US.
  • Now we’re just trying to slow the spread, to help healthcare providers deal with the demand peak. In other words, the goal of containment is to “flatten the curve”, to lower the peak of the surge of demand that will hit healthcare providers. And to buy time, in hopes a drug can be developed.

How many in the community already have the virus?

  • No one knows.
  • We are moving from containment to care.
  • We in the US are currently where at where Italy was a week ago.
  • We see nothing to say we will be substantially different.
  • 40-70% of the US population will be infected over the next 12-18 months. After that level you can start to get herd immunity. Unlike flu this is entirely novel to humans, so there is no latent immunity in the global population.

[We used their numbers to work out a guesstimate of deaths— indicating about 1.5 million Americans may die. The panelists did not disagree with our estimate. This compares to seasonal flu’s average of 50K Americans per year. Assume 50% of US population, that’s 160M people infected. With 1% mortality rate that’s 1.6M Americans die over the next 12-18 months.]

  • The fatality rate is in the range of 10X flu.
  • This assumes no drug is found effective and made available.
  • The death rate varies hugely by age. Over age 80 the mortality rate could be 10-15%.
  • Don’t know whether COVID-19 is seasonal but if is and subsides over the summer, it is likely to roar back in fall as the 1918 flu did
  • I can only tell you two things definitively. Definitively it’s going to get worse before it gets better. And we’ll be dealing with this for the next year at least. Our lives are going to look different for the next year.

What should we do now? What are you doing for your family?

  • Appears one can be infectious before being symptomatic.
  • We don’t know how infectious before symptomatic, but know that highest level of virus prevalence coincides with symptoms.
  • We currently think folks are infectious 2 days before through 14 days after onset of symptoms (T-2 to T+14 onset).

How long does the virus last?

  • On surfaces, best guess is 4-20 hours depending on surface type (maybe a few days) but still no consensus on this
  • The virus is very susceptible to common anti-bacterial cleaning agents: bleach, hydrogen peroxide, alcohol-based.
  • Avoid concerts, movies, crowded places.
  • We have cancelled business travel.
  • Do the basic hygiene, eg hand washing and avoiding touching face.
  • Stockpile your critical prescription medications. Many pharma supply chains run through China. Pharma companies usually hold 2-3 months of raw materials, so may run out given the disruption in China’s manufacturing.
  • Pneumonia shot might be helpful. Not preventative of COVID-19, but reduces your chance of being weakened, which makes COVID-19 more dangerous.
  • Get a flu shot next fall. Not preventative of COVID-19, but reduces your chance of being weakened, which makes COVID-19 more dangerous.
  • We would say “Anyone over 60 stay at home unless it’s critical”. CDC toyed with idea of saying anyone over 60 not travel on commercial airlines.
  • We at UCSF are moving our “at-risk” parents back from nursing homes, etc. to their own homes. Then are not letting them out of the house. The other members of the family are washing hands the moment they come in.
  • Three routes of infection: Hand to mouth / face; Aerosol transmission; Fecal oral route.

What if someone is sick?

  • If someone gets sick, have them stay home and socially isolate. There is very little you can do at a hospital that you couldn’t do at home. Most cases are mild. But if they are old or have lung or cardio-vascular problems, read on.
  • If someone gets quite sick who is old (70+) or with lung or cardio-vascular problems, take them to the ER.
  • There is no accepted treatment for COVID-19. The hospital will give supportive care (eg IV fluids, oxygen) to help you stay alive while your body fights the disease. ie to prevent sepsis.
  • If someone gets sick who is high risk (eg is both old and has lung/cardio-vascular problems), you can try to get them enrolled for “compassionate use” of Remdesivir, a drug that is in clinical trial at San Francisco General and UCSF, and in China. Need to find a doc there in order to ask to enroll. Remdesivir is an anti-viral from Gilead that showed effectiveness against MERS in primates and is being tried against COVID-19. If the trials succeed it might be available for next winter as production scales up far faster for drugs than for vaccines. [More I found online.]

Why is the fatality rate much higher for older adults?

  • Your immune system declines past age 50
  • Fatality rate tracks closely with “co-morbidity”, ie the presence of other conditions that compromise the patient’s hearth, especially respiratory or cardio-vascular illness. These conditions are higher in older adults.
  • Risk of pneumonia is higher in older adults.

What about testing to know if someone has COVID-19?

  • Bottom line, there is not enough testing capacity to be broadly useful. Here’s why.
  • Currently, there is no way to determine what a person has other than a PCR test. No other test can yet distinguish “COVID-19 from flu or from the other dozen respiratory bugs that are circulating”.
  • A Polymerase Chain Reaction (PCR) test can detect COVID-19’s RNA. However they still don’t have confidence in the test’s specificity, ie they don’t know the rate of false negatives.
  • The PCR test requires kits with reagents and requires clinical labs to process the kits.
  • While the kits are becoming available, the lab capacity is not growing.
  • The leading clinical lab firms, Quest and Labcore have capacity to process 1000 kits per day. For the nation.
  • Expanding processing capacity takes “time, space, and equipment.” And certification. ie it won’t happen soon.
  • UCSF and UCBerkeley have donated their research labs to process kits. But each has capacity to process only 20-40 kits per day. And are not clinically certified.
  • Novel test methods are on the horizon, but not here now and won’t be at any scale to be useful for the present danger.
  • How well is society preparing for the impact?
  • Local hospitals are adding capacity as we speak. UCSF’s Parnassus campus has erected “triage tents” in a parking lot. They have converted a ward to “negative pressure” which is needed to contain the virus. They are considering re-opening the shuttered Mt Zion facility.
  • If COVID-19 affected children then we would be seeing mass departures of families from cities. But thankfully now we know that kids are not affected.
  • School closures are one the biggest societal impacts. We need to be thoughtful before we close schools, especially elementary schools because of the knock-on effects. If elementary kids are not in school then some hospital staff can’t come to work, which decreases hospital capacity at a time of surging demand for hospital services.
  • Public Health systems are prepared to deal with short-term outbreaks that last for weeks, like an outbreak of meningitis. They do not have the capacity to sustain for outbreaks that last for months. Other solutions will have to be found.
  • What will we do to handle behavior changes that can last for months?
  • Many employees will need to make accommodations for elderly parents and those with underlying conditions and immune-suppressed.
  • Kids home due to school closures
  • [Dr. DeRisi had to leave the meeting for a call with the governor’s office. When he returned we asked what the call covered.] The epidemiological models the state is using to track and trigger action. The state is planning at what point they will take certain actions. ie what will trigger an order to cease any gatherings of over 1000 people.

Where do you find reliable news?

  • The John Hopkins Center for Health Security site. Which posts daily updates. The site says you can sign up to receive a daily newsletter on COVID-19 by email. [I tried and the page times out due to high demand. After three more tries I was successful in registering for the newsletter.]
  • The New York Times is good on scientific accuracy.

Observations on China

  • Unlike during SARS, China’s scientists are publishing openly and accurately on COVID-19.
  • While China’s early reports on incidence were clearly low, that seems to trace to their data management systems being overwhelmed, not to any bad intent.
  • Wuhan has 4.3 beds per thousand while US has 2.8 beds per thousand. Wuhan built 2 additional hospitals in 2 weeks. Even so, most patients were sent to gymnasiums to sleep on cots.
  • Early on no one had info on COVID-19. So China reacted in a way unique modern history, except in wartime.
  • Every few years there seems another: SARS, Ebola, MERS, H1N1, COVID-19. Growing strains of antibiotic resistant bacteria.

Are we in the twilight of a century of medicine’s great triumph over infectious disease?

  • “We’ve been in a back and forth battle against viruses for a million years.”
  • But it would sure help if every country would shut down their wet markets.
  • As with many things, the worst impact of COVID-19 will likely be in the countries with the least resources, eg Africa. See article on Wired magazine on sequencing of virus from Cambodia.

2 comments94% UpvotedLog in or sign up to leave a commentlog insign upSort bylevel 1hkmalhi8 points · 10 hours ago

This should be required reading, especially for health care professionals. Thank you for posting this.level 1GenomeShell5 points · 10 hours ago

I am glad this has been made public. There is an addendum, I believe, as follows. Names removed.

<apologies for not mentioning that the original post was a copy of notes and not official>

  • Infection rates are heavily a function of the social distancing and similar policies that companies and governments adopt.  So any point prediction is not to be relied on at this time.  Here is one description of infection rates and the observation that policy can drive as much as a 10X difference in infection rate.
  • Predictions of fatality rates depend on estimates of the number of cases in the population, which is hard to know when many people have mild or no symptoms at all.  This source describes this problem and how it can cause predictions to be overstated.  These factors undermine the back-of-the-envelope numbers I wrote about yesterday.  Instead,  look to more complete work such as The New England Journal’s frequently updated COVID-19 site…and Scott Gottlieb, the former FDA Commissioner, who writes almost daily.  As well as  John’s Hopkins’ daily updates mentioned before. 
    There’s also good news in testing capacity.  Experts now say the national testing capacity is 10 times higher than I wrote about yesterday. 
    BTW, there are substantial views that the herd immunity gained across the population this spring will prevent COVID-19 from flaring up next fall/winter. 
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Would Open Hiring Work?

  • Published on March 9, 2020

By Robert L. Cain, Copyright 2020

A mini movement is afoot. It’s one step beyond the ban-the-box edict and known as “open hiring.” That means that people with “nontraditional” work histories can get hired, no questions asked, no employment application, no background check, just put your name on the list and wait for the call. Those include ex-convicts, the homeless, drug addicts, alcoholics, refugees, those with immigration issues, and almost every other red flag an employer could run up. After the call, just show up to go to work. Is it effective? Does it actually provide jobs for the “nontraditional” employees? Or is it just a way to get cheap help and a smokescreen made to look like the employer wants to help the unemployable?

 Greyston Bakery is the original company using open hiring and has been since 1982. Recently they have been joined by other companies such as The Body Shop, Ovenly (a New York City bakery), and Hot Chicken Takeover (a Columbus, Ohio, restaurant chain). Some large companies, such as Target, Starbucks, and Walmart don’t do a background check until they have decided they might hire an employee, but that’s a far cry from actual “open hiring.”

 How it works is someone interested in a job shows up and puts his or her name on a list. The company calls when his or her name comes to the top and says “come to work.” At Greyston, they work in the warehouse stacking pallets or other jobs requiring no particular skill level. Mike Brady, CEO of Greyston was quested in a New York Times article as saying, “The candidate may not be so great at making eye contact and smiling. Does that mean he can’t stack brownies onto a pallet?” They are put on the payroll as apprentices for six months and after that time get to work as a regular employee—maybe.

 I read several articles looked at websites for more information, and Greyston in particular left me with unanswered questions. I got in touch with them, but they declined to answer these five questions.

 1.     How many apprentices end up being hired full time?

2.     How do you decide who gets hired full time?

3.     Do you ever learn what your apprentices’ criminal records are? If so, which crimes are the most problematic?

4.     How many apprentices leave before their apprenticeships are up?

5.     How many people who begin as apprentices later move into more responsible positions such as management?

 In fact, just about everything I read about Greyston looked like just PR. They tell heart-warming stories about people who have turned their lives around because they found work at Greyston. But they don’t respond to basic questions about their hiring program. Then there’s obfuscation from Dilara Casey, head of marketing at Hot Chicken Takeover. In evading-the-question style, she said, “Having a clean record doesn’t necessarily indicate that an employee is honest or trustworthy.” No it doesn’t and that’s why almost every employer screens applicants to learn, among other things, if they are honest and trustworthy.

 Screening applicants is essential not just to get the best employees but also to avoid legal problems. An article in, “An Employer’s Liability for Employee’s Acts,” explains, “Employers, and not the employees themselves, will often be held liable for the conduct of their employees. This is true even if the employer had no intention to cause harm and played no physical role in the harm.” Hire someone who is a danger to the public or other employees and run the risk of a negligent hiring claim. explains, “A negligent hiring claim is made when the filer believes that the employer should have known about the employee’s background of violent behavior. In these claims, the filer attempts to prove that the injurious behavior was to be expected based on past behavior that demonstrated that the employee was dangerous, untrustworthy, a sexual predator, or a thief, to name a few possible claims.”

 Honest, trustworthy, and competent employees can be ensured by careful screening of every applicant by checking former employers, doing criminal background checks, validating college degrees, drug screening, credit checks, explanations for employment gaps, and verifying everything on the application.

 One huge concern employers, and landlords, for that matter, right now is that ban-the-box is just the beginning. In the future, look for new laws restricting our right to make sure the applicant is telling the truth and competent to do the job he or she is applying for. Several states and cities already prohibit asking about criminal records until after an applicant has been otherwise approved. We all need to be aware, though, that there are people who consider ban-the-box just a first step toward restricting employers and landlords from doing any screening so everyone has an “fair chance,” in spite of the of the fact that many people already had their “fair chance” and blew it.

Written for Zip Reports where they provide screening services for employers and landlords. Visit their website.

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New Laws Keep Landlords from Refusing to Rent to Felons

By Robert L. Cain

In Texas, if a landlord rents to a convicted felon, he or she can be sued for negligence.  No, so far it hasn’t happened, but certainly could. Granted the felony has to be one of the Sinister Seven: murder, kidnapping, trafficking in people, sex abuse, sex abuse of a child, promotion of prostitution, or aggravated robbery or burglary. For some reason drug manufacturing isn’t included even though it should be. But now, in the cities of Oakland, California, San Francisco, Seattle, Washington, Portland, Oregon, Chicago, New York, and soon Berkeley, California, you can’t even ask a prospective tenant if he or she has a criminal record, not even one of the Sinister Seven..

Laws that restrict the objective and reasonable qualifications landlords may require make it more difficult to weed out bad tenants and even more perilous for landlords’ good tenants..  The previous perpetrators of any felony are more apt to be bad tenants than a citizen who respects the law and his or her neighbors. They have proved themselves to be no respecters of the law and community.

Landlords can still reject a convicted sex offender or meth cook (drug manufacturer), but only after that applicant the criminal record shows up on a search done after a conditional approval of the application.  At that point, the landlord has to tell them in writing that he or she will be checking the sex offender database and looking for a methamphetamine manufacturing conviction.  In either, the applicant can be rejected. That is much the same as the “ban the box” laws involving employment.

Even so, landlords can use perfectly legal and effective ways to weed out any and all bad tenants.  The first task is to create iron-clad written rental requirements answering such questions as:  What is sufficient income? What is an acceptable credit score?  What is the source of income? What are acceptable references? And you can probably think of more requirements. But be careful of violating the Fair Housing Act.  We’ll look at why in a minute.

In addition, these four requirements are always essential:

  1. You must meet each adult applicant who would be moving in. None of this, “I’ll take it home for my husband to sign.”  Her husband must show up.
  2. You must verify their identity with picture ID.
  3. You must be able to verify all information on the application.  That means previous addresses, employers, income source, previous landlords, and income.
  4. Their income must be sufficient (you decide what percentage goes to rent, not them) and be proved by pay stubs or award letters.

If applicants don’t meet any one of those requirements , reject them out of hand.  None of these has anything to do with felony convictions. Rental owners and managers come across such prospective tenants every day. Suppose you can’t verify the length of time at the last address.  Your applicant might have made up the address or landlord, or may have exaggerated his or her time at that address.  That might have been because prison was the address he or she tried to hide.  That’s grounds to reject immediately for lying on the rental application.  Likewise with time on the job or source of income, no verification, no renting from you.

An easy way to check previous addresses listed on the rental application is the Social Search.  That is a report from the Social Security Administration that lists all previous addresses of that person. Suppose you find that he or she lived at an address not listed on the rental application? The explanation had better be good (an verifiable). What would be most interesting is if one of the previous addresses was the state prison, not listed, of course, on the rental application.

Now suppose all the information is verifiable, income is sufficient, and landlord references are acceptable.  You still have an one more important thing to check: the credit report. You decide what credit is acceptable and, of course, you include that on your written rental standards.  You can use a FICO score or possibly say that the applicant can have had no bankruptcies in the past seven years, or no collections, paid or unpaid.  The requirements will differ by property and the demographics of your current tenants. A felon may have unacceptable credit or no credit at all. That is grounds to reject.

What to be concerned about when renting to an ex-con is, in addition to his or her committing another crime on your property is being sent back to prison. 

Length of time out of prison is a good indicator of how someone may have turned his or her life around, too.  The first three years out of prison are the most treacherous for an ex-con.  The Bureau of Justice Statistics reports that the most common crimes that result in rearrest are property crime (73.8 percent) followed by drug crimes (66.7 percent), public order crimes (62,2 percent), and violent crimes (61.7 percent).  But after seven years the rearrest rate for all crimes drops to 2.3 percent.

Arrest rate is one thing, re-incarceration is another.  Just because someone is arrested doesn’t mean he or she is going back to prison.  CBS News reported, though, “About 43 percent of prisoners who were let out in 2004 were sent back to prison by 2007, either for a new crime or violating the conditions of their release.” 

Even so for that 57 percent, an arrest can be as inconvenient for a landlord as a re-incarceration.  An arrest means the police may keep that person in jail awaiting trial.  In the meantime, he or she can’t go to work and will lose his or her job.  Even if your tenant is out on bail, the company may fire him or her. That means no rent next month and an eviction.

In states where it is permissible to reject for a criminal record, landlords need to be cautious about running afoul of the Fair Housing Act since minorities comprise the majority of felons, The NAACP reports that “Though African Americans and Hispanics make up approximately 32% of the US population, they comprised 56% of all incarcerated people in 2015.” Tthe Fair Housing enforcers will look carefully at who a landlord accepts and rejects with an eye to looking at illegal discrimination.  That’s why completely objective and reasonable rental standards are essential.  What is “reasonable”? That’s the $64,000 question and subject to interpretation by the Fair Housing folks.  Ask your lawyer.

Landlords have a duty to their good tenants to provide a safe and habitable home and a duty to themselves to protect their investments. Careful screening of applicants to weed out bad citizens is essential for both duties.

Written for Zip Reports where they provide applicant screening services for rental owners  and employers. Visit their website.

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Retire? Maybe Not

By Robert L. Cain

A Nationwide Insurance study found that 31 is the average age people begin saving for retirement.  But will they ever be able to retire?  Are most people in a position, or will they ever be in a position, to amass enough savings to retire?  Saving for retirement is not even an option for many people.  There’s little or no money left at the end of the month to sock away anything  for savings. Yes, the statistics we’ll look at are discouraging, but there’s a flip side that is encouraging we’ll look at in a minute. Let’s look at the discouraging statistics first.

One study by LIMRA, a “worldwide research, consulting, and professional development organization”  reports that 61 percent of employees say debt has “negatively affected their retirement savings.”

The average 25-34 year old employee earns about $3500 a month reports the Census Bureau.  That’s before taxes and other deductions.  But just using that gross income figure, let’s look at where the money goes.  Average rent for a two-bedroom apartment is $1207 a month nationwide.  Of course, it’s more or less some places, but that is average, just as is income.  Then there are car payments.  A monthly car payment for a used car averages $391 a month.  Want a new car? Bump that up to $554.  That’s for one person.  A two-person household might add a second car for another $391 a month.  And that’s just the car payment.  Add gas, maintenance, other transportation and it’s another $336.

Then there are the student loans.  Those average $400 a month per person and take around 20 years to pay off.  So if someone finishes college with a bachelor’s degree at 22, the student loan will eat up $400 a month until he or she is about 42.  Grad school loans extend that repayment time and amount, assuming they aren’t paid off early. That’s if the loan isn’t put in forbearance for a time, which would obviously add to the time before it pays off.

And there’s food, and that’s another $1,000 or so.  Right now, we’re at $3334 in expenses, only  $116 before the $3500 is all gone for the month.  But we haven’t touched credit card debt.  The average monthly minimum credit card payment is $58, bringing us to about $3392.

The biggest knock after that is health care.  The “2018 Milliman Medical Index” from May 2018 reports that the cost is just over $6,000 a year for two people, double for a family of four, but even one person will pay $250 a month, and that’s even with the “most common employer-sponsored health plan.”  So now the entire $3500 is wiped out and then some.

Mind you, we haven’t touched child care, lunches, or dinners out.  Child care will eat up $200 a week per child, or $800 a month.  If it’s a couple with a child and two incomes, it’s possible, but another huge expense to deal with.

But won’t that all get better as those 31 year olds get older and they try to sock away some savings when they move up to better-paying jobs?  Not necessarily.  A LinkedIn survey of 1019 working professionals in September 2019 found that “41 percent of millennials—and 30 percent of all adults—found it difficult to move up in their fields because boomers are waiting longer to retire.” Because many baby boomers, those 54 to 74, aren’t retiring, there’s no vacancy for the higher paying jobs.  The Bureau of Labor Statistics reports that 20.6 percent of Americans 65 and older are either working or looking for work, up from 12.4 percent in November 1999, 20 year ago.  In fact, it’s the largest percentage since November 1960.

Why aren’t they retiring?  Transamerica Center for Retirement Studies reports that more than half of all workers in the US plan to keep working past 65 or just forget about retiring entirely.  After all, with their improved health, they won’t be forced into retirement and with their hammered 401(k)s from the Great Recession, their savings may be in non-retirement shape.  According to the Federal Reserve’s Study of Consumer Finances the median retirement account for people 55 to 64 who have a retirement account is $120,000.  If we include those without a retirement account, median savings are just $17,000.  Yes, they have to keep working.

A Moody’s study found that older workers failing to retire has held back wage growth.  The more workers 65 and older in a company, the more slowly wages increased and in fact the lower wages over all.

Those people who begin saving for retirement at 31 still have at least 36 years before they can retire, longer than they have been alive.  Considering their debt, which 2/3 of employees say negatively affects their lifestyle, and with the opportunity to move up in their jobs hindered by older workers not retiring, they could be on the lower rungs of the income ladder for 20 years, in their 40s and early 50s before they earn enough to think about sufficient retirement savings.

That means millennials and even many Gen Xers may be in no position to retire at 67 or even 70.  They simply won’t have accumulated enough savings to live the retired life they imagine. But some people will have the savings because they are careful savers.

Here’s the encouraging part. The Nationwide Insurance study reports that 56 percent of people have less than $100,00 in savings. But that means 44 percent have more than $100,000 in savings. The study further reports that 22 percent of employees say they are unprepared for retirement, but that leaves 78 percent, more than three-quarters, who are prepared. These are people who have found a way to put money away by whatever means.  These are the people who take advantage of matched savings from the companies where they work, either for retirement or other savings. As of 2020, they can contribute up to  $19,500. These are people who budget carefully and believe in paying themselves first. It’s hard to say what techniques they use because every person’s situation is different.  Whatever it is, it works for them and shows them to be responsible money managers.

Close to half of Americans are finding a way to save for retirement, and that is encouraging.  The other half may not be in as good a position to retire even after working 40 years.  Are those who save financially responsible? Probably. Are those who can’t save irresponsible? Not necessarily, they are just trying to get by.

Written for Zip Reports where they provide applicant screening services for rental owners  and employers. Visit their website.


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Slower Wage Growth Could Mean Future Problems

By Robert L. Cain

“Wage growth has hit a wall,” economist Joseph Song, wrote in a report for Bank of America.  Analysts had expected 4 percent growth but were taken aback at 3 percent and sometimes lower depending on an employee’s position.  Overall, raises ended up just over 3 percent in August 2018, down from 3.4 percent in February on their way down further.  But manufacturing wages have increased by only 2 percent, more about that and what it means in a minute. Why have wage increases showed?

Economists blame three things among others, the trade war with China, a slowing economy, weak productivity growth, and low inflation.  But two more things are often ignored, surplus workers and high corporate debt.

Surplus workers? But the official unemployment rate is at an historic low 3.6 percent. That’s misleading.  The Bureau of Labor Statistics provides another figure they call U-6 that is rarely reported.  That includes “Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons.” That also includes people who have given up finding work for whatever reason but would work if the opportunity presented itself. The unemployment figure when those people are included is 7 percent.  The official unemployment rate is called U-3 by the Bureau of Labor Statistics, and that includes “Total unemployed, as a percent of the civilian work force.”  Who’s included in the work force?  Only those with any kind of job, part time included, and those actively looking for work.

But there’s more. The labor pool has increased with 63.3 percent of Americans working or looking for work in October, the highest since 2013. That larger multitude of available workers lets businesses be more parsimonious in their wage increases.

The last two times the “official,” U-3, unemployment rate was at 7 percent were in 2008 during the recession, when it was on its way up to 10 percent in 2010 and then in 2012 when it was on its way down from recession highs.

Then,  there’s the pool of 4.4 million just part time workers who would like to be full-time workers. They mean employers don’t need to raise wages much because they are available to be made full-time at maybe current wages.  Add to that the 4.9 million, officially counted or not, who want a job but can’t find one and there is a pool of workers just wanting a full-time job and ready to work for current wages.

Interestingly enough, while all non-supervisory workers’ wages have increased an average of 3.5 percent, supervisors wages slowed considerably to 1.8 percent in October.  The reason for that is that their pay includes bonuses for meeting sales targets, reports Joseph Song.  A “sputtering economy” and lower corporate revenue because of uncertain foreign trade revenue are sometimes the cause. Not selling means lower profits in addition to lower pay.

Add to that lower productivity.  Productivity drives wages up or down.  The tax cuts helped productivity because companies bought new equipment thus increasing the amount workers could do, raising wages.  However, since early 2018, investment in equipment has slowed to a trickle as companies hunker down fearing a slower economy, slowing wage increases.

Factory employment amounts to only 8.4 percent of the workforce, but it has an imposing effect on the pay of all US workers because manufacturing workers tend to earn higher salaries than other workers do, says Joseph LaVorgna of the research firm Natixis. As mentioned at the beginning, their wages are up only 2 percent, thus dampening wage increases across the board.

Inflation drives wage increases, too, but inflation has been mostly absent.  The Consumer Price Index has been falling, or increasing at a slower rate, and stands at 1.8 percent in October.  Supposedly that’s partly due to online shopping, and expectations of lower price increases because of a “globally connected economy,” says Sophia Koropeckyj of Moody’s Analytics. More inflation of course means higher prices and so employers have to compensate workers so they can buy things at higher prices.  But low inflation means there’s little pressure to increase wages.

What does all this mean?  Different economists think different scenarios. But here’s another wrinkle to consider.  Corporate debt has skyrocketed to a never before seen $10 trillion. Even though some of this country’s best-known companies have borrowed considerable amounts, most of the borrowing this year has been by weaker, BBB Bond-rated companies.   They have borrowed money for “financial risk taking,” such as payouts to investors and dealmaking on Wall Street rather than new plants and equipment, reports the International Monetary Fund.  That means the borrowed money won’t produce any income much less profits. And they’re borrowing at rates that only the top companies could get a few years ago because the Federal Reserve lowered interest rates. These borderline companies thought let’s grab some of that with little interest but not use it to make more money and increase profits.  Disturbing thinking.

Emre Tiftik, a debt specialist with the industry association Institute of International Finance is concerned.  He said, “we are sitting on the top of an unexploded bomb, and we really don’t know what will trigger the explosion.”

The economy keeps growing, but not particularly fast, only 2.1 percent annual rate, virtually the same as the average since the end of the recession in 2009.

The unexploded bomb could go off if there’s an unexpected shock such as a breakdown of US-China trade talks, a Persian Gulf military conflict, an oil shortage, or something we just haven’t thought of yet.  Out the window would go economists’ rosy outlooks. Gregory Venizelos, a credit strategist for AXA Investment Managers in London said “You can definitely think of an Armageddon scenario.”  And last year the Federal Reserve warned about the rapid increase in risky corporate debt.

Everything may be all right, but red warning signs and klaxons are there.  Slower wage increases, surplus workers, weak productivity, slower sales and bonuses, and $10 trillion in corporate debt are disturbing.

Written for Zip Reports where they provide applicant screening services for rental owners  and employers. Visit their website.


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The Unconscious Tenant

By Robert L. Cain

They don’t mean to, but things just happen to them. They aren’t conniving and deceitful, just unconscious. These are people who go through their lives making one bad decision after another, who have a black cloud that follows them around raining (or worse) on everything they try to do, and who wonder why they “never get a break.”  They simply blunder through life. These folks actually may not even know what they do puts them decisively in the category of “bad tenant.”

An unconscious tenant can be, and often is, exasperating.  We know they mean well and that they don’t intentionally do all those things that make them unacceptable to live in our properties, but they do them just the same. Actions are what count far more than the intent.

What are the characteristics identifying bad tenants?

First, they don’t take care of their homes.  They can be messy, filthy, and generally unkempt, and they break things.

Second, they don’t pay the rent on time or at all.  Of course, they always have an excuse.  They call it a reason, but it is an excuse nonetheless.

Third, their qualities as neighbors come in a variety of colors and tints.  They may have loud parties.  They or their friends may park in other people’s spaces in an apartment complex.  They may get into arguments with neighbors about things other than the parking places.  Their children may run wild through and around the property.  They may leave their possessions in the common areas.  They may smoke right outside people’s windows.

Fourth, they consider property rules only suggestions.  The landlord makes up those rules only because it’s “his way or the highway.”  The idea, then, is to break as many of them as they can get away with.  The response when they are caught is to either apologize and say “I forgot,” or say “I didn’t realize there was a problem with that.”

Those are all characteristics and actions of the bad tenant, but they also are identifying actions of unconscious tenants, but not necessarily the characteristics.  The unconscious tenants’ advantage is that they are that way all the time; they can’t help it.  The professional bad tenant knows how to seem as if he’s a good citizen and especially good tenant, and can fool the less-than-careful landlord.

The advantage for rental owners comes before an unconscious tenant has ever even filled out a rental application and has had checked what pass for references.

Sometimes you get clues about the lack of quality of prospective tenants, both bad and unconscious, without their ever having lied even once. Bad tenants tend to be inconsiderate and rude as do unconscious tenants, albeit for different reasons. These six behaviors that will give you a clue the problems you will have if you rent to these tenants.

First clue: an unconscious prospective tenant walks into the unit smoking. Today, polite and considerate people don’t walk into someone else’s property smoking without asking permission–EVER.

Smoking in someone else’s house used to be permissible and acceptable, but not today. With so many states prohibiting smoking inside any public building and not even within 20 feet of the door, smoking has become anathema.  Plus, many rental properties don’t allow any smoking anywhere on the premises, inside or out.

After you tell them that you don’t allow smoking in your units, if they put the cigarette out on the floor, even if it’s concrete, that’s a sure sign of an inconsiderate boor whom you don’t want to rent to. If they flick the cigarette out the door without ever putting it out, that’s another sure sign of someone you don’t want.

Second clue: they park in front of the driveway, blocking it so cars can’t get in or out. Unbelievable gall. Figure that you would have trouble with these jerks from day one.  Count on their parking in other people’s spots, blocking people in their spots, and always asking if they can have special dispensation to deliver, load or unload something.  It will be a constant stream of complaints and irritations from neighbors about these people’s inconsiderate habits.

Third clue: unconscious people walk into a unit without knocking or saying anything. Can you believe behavior like that? It is not their home. They have not even filled out a rental application yet, much less agreed to pay the rent mostly on time and been given the keys.

What they have done is most likely unconscious behavior.  After all, they saw an open door and that means it’s okay to just walk in.  They may be trying an assumptive close, but not likely and it doesn’t work here. Their cavalier attitude about your property should immediately eliminate them as prospective tenants.

Fourth clue: they bring their or children dog into the unit and let either run wild through the unit. Figure you will have to reject them after you check their rental application. If they won’t even control their dog or children when they’re trying to get to rent from you, how do you think they’ll do after they move in?  Imagine what previous landlords will say about them. Also, figure you will have constant complaints from neighbors about one thing or another having to do with their children or dog.  We can only speculate what those complaints might entail. Older children will result in a different set of complaints than will younger ones, of course.

Just as bad will be as their children run amok through your property, the parents scream at them.  That means the children usually ignore their parents’ instructions and may be just as unconscious as the parents.

Fifth clue: if they are late for their appointment to look at the unit, they will be late with the rent.  Of course, they will have an excuse.  But you’ve heard them all, haven’t you.  If it isn’t the flat tire, it’s kids to the doctor or the all-time undefinable favorite, the “family emergency.”  Whatever the reason, consider that they are trying it out on you to see if it will work after you let them move into your property. And why didn’t they call?

Sixth clue: look at their car if you can. If it is well-maintained (and is actually theirs), you have a clue about how well they take care of the rest of their lives. Look for a missing hubcap. If one is missing, I have heard from several landlords, it is a sign they won’t take care of their homes. This could be your experience, too.

Unfortunately, I had some tenants once, who when they applied to rent the house, showed up in a cute red car in perfect condition, clean and everything.  After I rented to them I never saw that car again.  What they had was a VW bus with writing all over the sides of it.  I don’t remember what all it said except for something about peace and love and a few peace symbols.  At least it wasn’t gang graffiti. Oh, and next to the definition of unconscious tenant in the dictionary was their picture.

Here’s the point to remember when screening and even before screening: how you do anything is how you do everything. Count on any inconsiderate behavior or unconscious behavior to be a precursor of even worse behavior if those people move into your property.  Any one of the six activities above is grounds to think about immediately rejecting a prospective tenant and meticulously double-checking everything and verifying every reference. It will save you time, money, and grief later on.

Written for Zip Reports where they provide applicant screening services for rental owners  and employers. Visit their website.


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The Plight of the Innumerate

By Robert L. Cain

They are innumerate. That means exactly what you think it does; it’s like illiterate except with math. Give innumerate people a simple math problem such as “Which of the following numbers represents the biggest risk of getting a disease? 1 in 100, 1 in 10,” and chances are they will answer incorrectly or shake their heads and say “I’m no good at math.” Just as disturbing, they can’t tell the answer to “in the BIG BUCKS LOTTERY, the chances of winning a $10,000 prize are 1%. What is your best guess about how many people would win a $10,000 prize if 1,000 people each buy a ticket from BIG BUCKS?” They can’t deal with or calculate interest, or shipping, much less everyday buying decisions.

Many people were raised with and just accept the idea that they aren’t “good at math,” maybe as a multi-generational family tradition. But in fact they may well become good at math with some easy, self-taught education. But more about that in a minute. In the paper “Measuring Risk Literacy” by Edward Cokely, et al, they wrote. “Mathematics skills are among the most influential educational factors contributing to economic prosperity in industrialized countries.” If they don’t have the knowledge or confidence in their ability to use math to make financial decisions, people will rely on “compelling stories and emotional reactions in decisions rather than the hard facts,” wrote Ellen Peters and Brittany Schoots-Reinhard in their paper “How math skills plus confidence equals (sic) better judgment on health, money.” “They tend to make worse decisions for themselves when numbers are involved.”

Just as important is confidence. Ellen Peters wrote that even if people are competent at math, numerate, if they lack confidence in their ability, knowledge of math won’t help much. In order to find out the importance of confidence in math ability, Peters et al “measured 13 self-reported good financial outcomes among 4,572 Americans—things such as not having high credit card debt or a payday loan,” and found those with both confidence and good decision-making were much superior to those who were competent but less confident. When ability and confidence matched, 82 percent had good financial outcomes as opposed to the 18 percent who experienced bad outcomes up to and including bankruptcy filing.

Compare that to the those who had both low ability and low confidence who reported “fewer good outcomes,” just 78 percent. That doesn’t seem like much of a difference, but is, according to Peters, very much like “the difference you’d see between people who make $50,000 and $144,000, a $94,000 salary difference.”

The result can be financial decisions that will land them in difficulties for possibly their entire adult lives. Kailey Hagen wrote for the Motley Fool that “Annual fees, late fees and APRs are also important, especially for those who have credit card debt or have been known to fall behind on their payments.” The article continued that many millennials admitted they had no idea what APR means. As a result they “underestimate the expense of carrying a balance.”

Of course, that reflects on their credit scores, their ability to get car loans, better credit rates, and rent apartments, and even get a job when an employer checks credit. In many jobs, simple math calculations come into play, possibly even in warehouse jobs where figuring how much stock is left and how long it will take to deplete are essential.

Bad decisions will continue because they will rely on “compelling stories and emotional reactions” and too-good-to-be true offers for their purchases as opposed to calculating the best way to spend money. They are easy prey to less-than-ethical salespeople who will tell some compelling stories in their sales pitches, who will tell how other customers have “benefited” so much from using their products or services, who will sell them a car with a payment that uses up 30 percent or more of their income so they can “be proud driving it down the street to their house” while the math-challenged customer can’t calculate the actual cost.

Financial problems proliferate with missed payments, worse credit scores, and even financial disaster that affect their entire existence.

Some adults seem to believe that poor math skills are genetic, because after all, their parents and grandparents were no good at math. But in fact math is something that is relatively easy to learn. Starting with “Math Facts,” someone should be able to answer a basic math question in under two seconds, such as what is six times 12, or what is 10 percent of 72?  How does someone get those skills?

Readily available resources such as phone apps, flash cards, websites, allow people to practice a few minutes a day and make remarkable progress, gaining both ability and confidence in math.

How can you know your own degree of numeracy? One test cited by those who know as the gold standard over and over is the Berlin Numeracy Test. It takes less than five minutes to complete and requires pencil and paper. You can take it yourself by going to

The essential point here is that poor math skills can and do condemn people to a life of financial misery simply because they can’t figure out if something is a bad deal. So much information comes at everyone daily that the important numerical information gets overshadowed by the “compelling stories,” “emotional reactions,” and too-good-to-be true offers concealing easy math calculations.

Written for Zip Reports where they provide applicant screening services. Visit their website.

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How Financial Illiteracy Is Hurting the Millennials

By Robert L. Cain

They were 18 years old, got a free t-shirt, $5,000 in debt, and a 600 FICO score. Before the Credit CARD Act’s implementation in 2010 made them stop, credit card companies set up tables on college campuses and handed out credit cards along with free t-shirts and coupons for free food to college students.  It was like free money to those 18-year-olds because they were blissfully ignorant about how money and finances work. The credit card companies figured that mom and dad would pay the bills to save their children from financial disaster.  Sometimes that worked.  Other times in landed the kids in financial purgatory.

Times have changed, and credit card companies face many more restrictions on their marketing on college campuses and their ability to take advantage of 18-year-olds’ financial ignorance and inexperience.  But Millennials lack of financial understanding is the same as it was when credit card companies were handing out credit cards like candy. The result, reports Bankrate, some 58 percent of young people have been denied at least one kind of credit because of their credit scores. Some 36 percent with annual incomes under $40,000 couldn’t get credit and 22 percent with incomes over $80,000 couldn’t.  For Millennials, it was credit cards (36 percent) but 18 percent couldn’t get a car loan  They could be denied not just a credit card, a car loan, but a mortgage, or a rental.  And they may not understand why.

Today’s young people, the Millennials, technology is second nature because they have used it their entire lives.  But a 2018 study from Discover found that only 12 percent of them have what Discover described as “a complete understanding” of what will affect their credit, compared to up to 29 percent of “older generations” who have a “complete understanding.”  (That means that almost three-quarters of “older” people still don’t get it about what affects their credit standing. But that’s another story.)

Even so, young people have managed to accumulate debt. An NBC News study found that three of four Millennials owe money. And it gets worse. A quarter of 19 to 34 year olds have more than $30,000 in debt and 11 percent owe more than $100,000.  Just 22 percent have no debt at all. That 11 percent owing more than $100,000 accounted for at least 30 percent of the money owed.

Credit card debt is the most prevalent kind, not the highest dollar amount of debt, but the most common with 46 percent owing that. Student loans come in second in prevalence with 36 percent owing those, but of course those come with far higher balances. The average debt of graduating seniors more than doubled since 1996.

Who is it then who is not having financial or credit difficulties and who is?  Elevate’s Center for the New Middle Class found out.  Most of the financial problems non-prime Millennials have come from a lack of financial education. They define non-prime as those people with FICO scores below 700.  Most of them learned about finances from trial and error.  Only 49 percent learned anything about that from parents, never seeing how their parents dealt with finances. They were clueless.  Conversely, 61 percent of prime Millennials, those with a FICO score over 700, learned about finances from their parents.

What factors could cause them difficulties in everyday living?  The Elevate study found that almost six in 10 of them lived paycheck to paycheck, and more often than not 41 percent of them ran out of money every month.  Half of them worry about living expenses exceeding their abilities to pay and only 41 percent  say they could meet short-term financial goals as opposed to 65 percent of non-prime Millennials.  Only half of them have any kind of handle on day-to-day financial matters, while 65 percent of prime Millennials say they are confident they have their goals under control.  And the non-prime Millennials are in debt.  Two-thirds say they have too much debt, twice as many as the prime Millennials.  And they are “more likely to experience unexpected car repairs or non-routine medical expenses,” the study found.

What could they learn that might make life easier? A study by FINRA Foundation, The 2018 National Financial Capability Study, suggested that Millennials’ blissful ignorance encompassed at least four items.

One, taxes. Billy Hensley, president and CEO of the National Endowment for Financial Education, said “taxes are a mystery to most of us.” They may not realize that if you file a simple return, that is, one that has only taxes taken from a paycheck and maybe a little income from stocks, or interest income,  it doesn’t cost anything.  You don’t even have to file if your income is less than a specific amount.  But if you want the taxes withheld from paychecks to be refunded, you have to file. You could get all the money paid in taxes back. But many don’t know that.

Second, of the one-third of adults under the age of 30 who have student loans, more than half of them never tried to figure out what their monthly payments would be before they agreed to the loan, reported a policy brief from the Global Financial Literacy Excellence Center.  The result is that they may be paying far more than they could have if they had shopped for a different loan type, say a subsidized government loan.

Third, they don’t know how to build a credit history or what factors affect a FICO score.  They don’t realize that even one late payment, that’s one made more than 30 days after the due date, and missed payments will remain on a credit report for seven years.  Two missed payment can cause a 60- to 110-point drop in a credit score says Equifax.  Those may not just be a late credit card payment but other unpaid bills and rent.  Further they don’t know how to, or care to apparently, access the free credit report they are entitled to every year.

Fourth, they not only don’t budget, but they don’t save, either. Jonathan Clarke, associate professor of finance at Georgia Tech’s Scheller College of Business says, “Being able to think through a budget can make all the difference in the world in terms of achieving financial security.”  He reminds us of the old adage, “pay yourself first.”  Ten percent a paycheck is a terrific place to start by putting that amount into a savings account before it ever gets to the account where it can be spent with a debit card.

Financial knowledge accrues benefits that many people can’t imagine: good credit, more income, financial security, and far less stress. Little has changed over the decades as to the financial illiteracy of young people. But today, unlike say in 1970, the world is far more complicated.  Everything is tracked, recorded, and reported.  A new more world-wise attitude would serve young people.  Figure that those who would take your money, who would lend you money, who would offer unneeded services are not there to benefit you but to benefit themselves.  Once people of all ages figure that out, the way to achieve financial security will become obvious.

Written for Zip Reports where they provide applicant screening services.  Visit their website.

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Who Pays With Cash, and Why or Why Not?

By Robert L. Cain

Cash is king, at least for $19.99.  If $25 or less will bill buy it, chances are that’s what you’ll use, at least if you’re under 25 or over 45.  A Federal Reserve study, “2018 Findings from the Diary of Consumer Payment Choice,” examined how people use cash and found that cash beats cards hands down for purchases under $25 across all age groups.

People still do carry cash.  The Federal Reserve report found that the amount of cash people have on hand was $59 in 2017, little changed from previous years. Why is it that people opt for paying cash over using a card, especially for smaller purchases

Most of the evidence is anecdotal, relying on individuals willing to explain why they prefer cash to paying by card, but their reasons make sense. I did a quick, completely unscientific survey just to get an idea of people’s opinions of cash.  One person wrote back to me, “It depends! If I’m buying a beer at the local pub—cash. If I’m filling my RV with gas—card. Anything that might have a warrantee— card.”  But another response was, “Card, 2% cash back on everything. Different card for gas, 4% cash back there. Everything is inflated, have to try and get some back.”  Still another man wrote me, “Cards (debit/credit) for most everything. My cash is my ‘rat-hole’ money!!!!”  I can only speculate what “rat hole money” is.

Dollar bills are accepted almost everywhere.  Amazon opened no-cash stores, but they backed off and accept real money now, and several cities have even prohibited stores from refusing to accept cash.  Even when someone might otherwise use a card, sometimes cash can be the only option to pay because some small stores don’t accept cards.  Then there’s the incident at Target a couple of months ago when their online payment portal went down.  Wanted to pay with a card? Too bad.  Paying with cash? Step right up.

The benefit that people mention most often is convenience.  A study found that 40 percent of people prefer cash because it is faster and easier. Just take the money out of your wallet or purse and pay.  All done, no hassles, and it’s fast.  Yes, it has gotten faster to pay with a debit card than when the chip cards were first introduced, but there must be as many card terminals as there are stores, every one different.  Unless you’re a regular at the store, it may take a few extra, sometimes aggravating, seconds to sort out how the terminal works.  Some you can put your card in before the cashier finishes ringing up; others if you do that, the whole thing blows up and you have to start again.  Then you have to read the screen to find out what you’re supposed to do next. For example if you want cash back, with all of the terminals different, it could move from the upper left corner to the lower right or lower left, or who knows. On each screen snares lurk that can mislead the less–than-attentive or more distracted.  Then you get to start all over. Grrr. But with cash, just get the change and out the door you go.

Some gas stations give discounts for cash, but you have to go inside, probably twice, and pay in person, once to give them the cash so they turn on the pump and then to get your change when you’re done.  Is it worth the extra 25 cents to 50 cents for 10 gallons of gas to pay at the pump by card?

The tendency to spend less is another reason people may appreciate cash.  Using real money is painful. Take it out, hand it over, and it’s gone.  As a result, you are more likely to decline the add-ons and extras because spending real money is real and hurts more sometimes.

Plus, if you want to enjoy your purchases more, pay with real money.  “Individuals who pay with more painful forms of payment [cash among them] increase their emotional attachment to a product, decrease their commitment to non-chosen alternatives, are more likely to publicly signal their commitment to an organization, and are more likely to make a repeat transaction,” found a 2013 Journal of Consumer Research  study. It is because “Consumers must physically part with cash in a transaction, so they can easily feel the money they are spending.”  “I use my card. The money in my pocket is too valuable to waste,” one respondent posted to me.  Not so much with a debit card and not at all with a credit card because the money doesn’t seem real.

There’s no debt with cash.  Use a credit card and the bill comes at the end of the month. Pay with real money and there’s no bill and no interest.

Then there’s the privacy issue.  Pay with a debit or credit card and those who want to know can track the purchase, what it was, where it was made, and how much it cost. Broadcast to anyone who has access to bank records, in real time, and to businesses who pay for the information, they can inundate you with offers for their products and services.  If you want to keep a birthday present purchase secret from your husband , wife, or significant other, you’d better pay cash.  A debit card charge shows up immediately on the bank’s website and a credit card purchase on the bill at the end of the month.

One important warning by financial adviser and friend Sal Boenzi, “I’m currently working on a continuing education class and the topic is Elder Financial Abuse. One of the recommendations listed to help prevent this abuse is to ‘limit the use of cash, and use checks and credit cards instead, which leave a paper trail.’”

Pay with cash and it is anonymous.  Pay with a card and all bets are off. One person wrote, “I think that the government is at war with everyone who wants to use cash.”

Cash is easy, but maybe cards are easier and hurt less when we use them.  For smaller purchases, cash is convenient and preferred at least by people under 25 and over 45.

Written for Zip Reports where they provide applicant screening services.  Visit their website.

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The War on Landlords

By Robert L. Cain

Own rental property?  Homelessness is all your fault. Shortage of available rentals is all your fault. Higher rents are all your fault.  State legislatures are on the warpath to make housing better for renters but are punishing rental owners and damaging the rental property business.  In New York, Oregon, and California, and the city of Seattle, increased restrictions on the rights of rental property owners are making owning rental property a bad business decision driving landlords out of the business.  What those who want to improve tenants’ situations forget is that you can’t do just one thing.  They believe that they can pass laws and the parties who are negatively affected will just stand by and eat it. They won’t.

Rental owners have a couple of options for counteracting the effects of the laws states and municipalities enact that negatively affect their businesses.  We’ll look at those at the end

This year the New York State legislature passed what the sponsors described as the “strongest tenant protections in history.”   What it really does is ensure that rental properties in New York will deteriorate. If a landlord wants to make a capital improvement on a property, those include such things as boilers, roof replacement, or, according to the IRS “Addition of new or replacement components or material sub-components to property,”  anything that “Extends the useful life of the property” and “Ameliorates a material condition or defect.” The new law caps such expenditures at $15,000 on individual apartment improvements for 15 years for which the landlord can increase rent.  Then the rent reverts to what it was before the renovation.

Spend more than $15,000, it comes out of the landlord’s pocket.  Landlords can only raise the rent 2 percent a year to pay for the improvements when before they could raise it 6 percent.

New York also caps the maximum rent increases for rent-controlled tenants. Those are to be set at “the average of the last five Rent Guidelines Board annual rent increases of one-year, rent-stabilized renewals, or at 7.5 percent, whichever is less.”

If a tenant complains about a rent “overcharge,” the court or state Division of Housing and Community can go back six or more years, up from four, looking at rent history to determine if the overcharge was too high.

And that’s for existing tenants.  New tenants get protections, too.  A New York Times article reports, “Security deposits will be limited to one month’s rent and procedures will be improved to make it easier for renters to get their security deposits back. Tenants who were seen as troublemakers by landlords — perhaps for standing up for their rights — would sometimes end up on blacklists that would be shared among rental agencies. That practice would be banned.”  In addition, “[existing] Tenants would be better protected during the eviction process, particularly against retaliatory evictions.” No, there won’t be an official “blacklist,” but landlords can still call other landlords for references.

Look for buildings and units to fall into disrepair because landlords simply can’t get financing to pay for improvements and repairs. A lender has to be able to show that the property owner could get enough more rent to cover the loan payments.  No financing, and the rental owner won’t be able to make the improvements. That in turn decreases the value of real estate because unresolved repair problems and deteriorating buildings drive down real estate prices.

The regulations will hit the “mom-and-pop landlords hardest because many of them are surviving month to month.  Any inability to raise rents appropriately can result in their simply abandoning their properties as has happened in the past. A coalition of four real estate groups, the Taxpayers for an Affordable New York, said, “This legislation fails to address the city’s housing crisis, and will lead to disinvestment in the city’s private sector rental stock, consigning hundreds of thousands of rent-regulated tenants to living in buildings that are likely to fall into disrepair.”

What’s just as bad is that if a property owner wants to move into his or her own property or have a family member move in, he or she may not be able to because only one “owner use” conversion is permitted.

As if that isn’t enough, there’s more, though not so egregious, that is easy to find by doing a search for New York rent laws.

That’s just New York. Landlords are the targets of recent restrictive legislation in other states, as well.

Seattle has for many years been on the forefront of attacks on landlords. Washington state Landlord-Tenant Law provides for a 20-day, no-cause termination notice.  That didn’t work for the City of Seattle.  Instead, they passed the just-cause eviction ordinance many years ago.  That requires a one-year lease and a “just cause” for terminating a tenancy.  “Just cause,” of course, can include non-payment of rent and violation of lease terms.  But it cannot be because the landlord wants the tenant out and doesn’t want to deal with a formal eviction and with court and court costs.

Then the city of Seattle recently passed two ordinances designed to “combat racial discrimination.”  The 2016 “first in time” ordinance and the 2017 “Fair Chance Housing Ordinance” are supposed to keep landlords from slyly avoiding renting to minorities.

The “first in time” ordinance required that landlords rent to the first applicant who meets their rental standards. That law was overturned on March 28, 2018 by a trial judge because it violates a property owner’s right to choose whom to allow on his or her property.  However, the Fair Housing issue is still in place.  If a member of a protected class believes he or she was illegally discriminated against, the Fair Housing enforcers will investigate beginning with the assumption that every landlord wants to illegally discriminate and it is their job to catch them.  One method to avoid having to rent to a first-in-line unacceptable tenant who “meets” rental criteria is to begin numbering rental applications with the number 3.  Another, and better, method is to create rental standards that are so stringent they keep less-than-desirable applicants from even thinking about applying.

Now in the courts is the “Fair Chance Housing Ordinance” that prohibits landlords from considering an applicant’s criminal record. The Pacific Legal Foundation described it as “Landlords can deny someone tenancy if they are on a sex offender registry for a crime committed as an adult, but only if they can prove to the Seattle Office for Civil Rights that they have a ‘legitimate business reason’ for doing so.” Deciding what a “legitimate business reason” is makes work for lawyers and judges.

Then there’s Oregon.  Governor Kate Brown called SB 608 “a critical tool for stabilizing the rental market throughout the state of Oregon.  It will provide immediate relief to Oregonians struggling to keep up with rising rents in a tight rental market.”  Once more, landlords are being blamed for too few rentals that cost too much to rent.  Ethan Blevins attorney for the Pacific Legal Foundation believes, “As housing costs have skyrocketed, blame has tended to be placed on landlords, rather than land-use and zoning regulations that have often been a key driver on housing affordability. From what I’ve observed, there is also a tendency to exaggerate the role of discrimination in landlords’ rental decisions.” Oregon is notorious for restrictive land-use regulations, but those certainly aren’t the fault of rental owners..

SB 608 reverses the prohibition for rent control in the Oregon Landlord Tenant Act and mostly prohibits no-cause evictions.

No-cause evictions have been a valuable tool for landlords who simply want a marginal or bad tenant out but don’t want the hassle of a legal eviction.  The previous law made that possible with a 30-day, no-cause termination.  The tenant had no recourse in court but just had to leave.  That was a benefit to a tenant because with a court-ordered eviction, it appears on a credit report for any landlord to see when the tenant applies to live in a new place.  Not so with a no-cause eviction.  Only if the prospective landlord calls the old landlord and gets a straight answer would the truth come out.

Under the new law, only in the first year are no-cause evictions allowed.  After the first year, landlords can end a month-to-month tenancy with a 90-day notice but only for a “qualifying landlord reason.”  Those don’t include just because the tenant is an irritation or the landlord doesn’t want to go through a court-ordered eviction.  Those “qualifying reasons” can include wanting to move into or have a family member move into a unit.  It can also be because the landlord is selling the property to a person who plans to be an owner-occupant.   Then, if the landlord takes possession for a “qualifying reason,” he or she has to pay the renter one-month’s rent when the notice is delivered.

As if that weren’t enough, rents can be increased no more than 7 percent a year plus the “yearly change in the consumer price index.”  The law specifically exempts properties less than 15 years dating from their first occupancy certificate.

The law covers all rental properties, both apartments and single-family.

Saving California to last because there’s such a diverse situation to deal with. Individual cities sometimes have their own laws that negatively affect landlords. However, just discussing 2019 changes, as of August 1, 2019, the city of San Diego requires landlords to accept Section 8 vouchers and forbids stating that they do not participate in the Section 8 program.

Then AB 2343 extends the notice requirements to 10 days for nonpayment of rent and five days for a nuisance excluding Saturdays, Sundays, and legal holidays; that’s up from five days all around.

The state has had its share of emergencies in the past year and the legislature responded with AB 1919 that makes it a misdemeanor to raise the rent more than 10 percent after a state of emergency is declared.  In addition, it would make it a misdemeanor to evict a tenant after the declaration of a state of emergency and rent or “offer to rent” at a higher rental price.

If a third-party pays the rent for a tenant, AB 2219 allows a landlord to require that the person paying the rent acknowledges in writing that they are not living in the property and that acceptance of the rent does not create a tenancy with that third party. That’s actually landlord friendly in that it keeps tenants from sneaking in people who have not been screened by the landlord.

The National Apartment Association in their white paper, “The High Cost of Rent Control,” reports that economist and housing-policy expert Dr. Anthony Downs wrote “the economic and social costs of rent control ‘almost always outweigh any perceived short-term benefits they provide.’”  In addition, he found that rent control are both “unfair to owners of rental units and damaging to some of the very low income renters they are supposed to protect.”  As I mentioned at the beginning, you can’t do just one thing.  Passing a law will make those negatively affected by the law to do what they need to do to keep themselves afloat.

Attorney Ethan Blevins of the Pacific Legal Foundation says the biggest threats to landlords now are “Probably the resurgence of rent-control policies and the rise of draconian tenant screening restrictions, such as bans on criminal background checks.”  Even more difficult is just keeping track of the changes in the laws that could result in fines and even jail for a misdemeanor.

How to deal with these gross attempts by state and local governments to damage the businesses of rental owners.  Carefully drafted tighter rental standards and policies followed by meticulous screening including landlord references will go a long way toward ensuring that quality tenants rent a property.  To avoid the business-killing restrictions, such as rent control and inability to evict bad tenants, the only workable solution is to sell rental properties to owner-occupants and buy other rental properties in states and cities that want responsible landlords to do business. The top landlord-friendly states as ranked by several websites are Texas, with Colorado, Arizona, Florida, Indiana, and Georgia also welcoming rental owners.

Written for Zip Reports where they provide applicant screening services.  Visit their website.

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