$6,000 Condo Assessment

Are Twin Cities Condo's Suddenly Pet-Friendly?

At my broker open in Golden Valley yesterday, a "civilian" (vs. Realtor) came through who was grumbling about a $6,000 special assessment just levied on the condo association where he lives.

Apparently, even though the condo association's Bylaws expressly prohibit animals, a resident who was evicted because he had a dog successfully sued the association.

While I was duly sympathetic, I tried to put things in perspective: in an age when attorneys charge -- I don't know -- $200-plus an hour, a $6,000 hit isn't exactly the end of the world.

At which point the individual clarified: the assessment was $6,000 per condo, and the complex has more than 150!

He further spied a link between aforesaid lawsuit, and Twin Cities condo's suddenly all becoming pet-friendly.

Any Twin Cities blog readers who can corroborate any of the above?? Area Realtors?

At least up until now, my legal background tells me that condo associations can proscribe anything they want, provided it doesn't violate any laws or other public policy (i.e., no discrimination etc.)

Tax Credits vs. Low Rates

The Right Stimulus for Housing

There now seems to be a clear consensus that, to help the economy, government must first do something to help housing. However, there's still no consensus about what.

The two leading strategies are:

One. Using taxpayer money to basically subsidize mortgage rates down to some previously unheard of number, like 4% or even lower.

Two. Using tax incentives to motivate prospective home Buyers. There are various proposals being floated, but the basic idea is to give Buyers up to a $15,000 tax credit.

The debate isn't just over what will stimulate housing the most for the least cost, but which strategy will help housing the most long-term (or perhaps, hurt it least).

In that vein, some critics of the "cheap money" approach are concerned that that will just set up housing for another fall down the road. It's one thing to qualify for a mortgage, they point out, but completely another to be able to afford that mortgage if home prices drop and/or the economy contracts.

Lenders in Florida, Southern California, Las Vegas, Arizona and many other locales can you tell you all about that . . .

"Strategic Food Reserve"

Creative Responses to the Financial Crisis

I suppose it's just another a sign of our warped, contemporary values that we have a Strategic Petroleum Reserve ("SPR") -- heaven forbid our SUV's become idled -- but nothing equivalent for food.

Clearly, the ongoing financial crisis is going to be with us for awhile longer. In the meantime, wouldn't everyday Americans find it reassuring to know that the country has an emergency stockpile of food at the ready?

The implicit message would be that, come what may, society's basic needs are going to be met: no one's going to be allowed to starve. (Need an over-sized soup Kitchen? What better use for our mostly idle sports palaces -- subsidized if not paid for with public funds -- than to feed the hungry. I've even got a suggested name: 'Katrina Kitchens.'')

"Katrina Kitchens"

Once Americans feel that their basic, daily needs are provided for, they might actually relax a little bit. Once they're more relaxed, they're likely to . . stop panicking!

As FDR knew, step #1 in fighting a systemic economic collapse is addressing people's collective state of mind (curiously, a challenge made both easier and more difficult by the advent of the Internet).

While soothing words are definitely an important ingredient, so is concrete action.

Directing hundreds of (borrowed) billions towards insolvent, irresponsible banks fans people's anxieties. Taking obvious steps to safeguard the public's safety and welfare would do wonders to calm them.

Jim Cramer's RE Rx

Cramer: 'Home Buyers Need a Bigger Carrot'

In the financial community, Mad Money's Jim Cramer is known for being a showman first, and for prescient market calls a very distant second (his manic, shotgun approach to stock picking seems to be if you throw enough darts, sooner or later a couple are bound to hit the bull's eye).

That said, no one ever called him dumb (he's actually a Harvard Law grad, worked for Goldman Sachs, and is an idea machine). And once you strip out his individual stock picks, his market analyses are often insightful.

So what's his prescription for fixing the housing market?

First, making it the number one economic priority. Here's Cramer's logic:

Everything comes down to housing. The wealth effect, a function of house values and portfolio values, is being gutted by both. You can't fix stocks -- they are reflective of earnings -- but if you stabilized home values, you could get some confidence, particularly given the collapse in oil. Stabilize housing, and you get a positive trend in consumer spending.

--Jim Cramer, "Housing Needs a Tax Credit"

The centerpiece of his proposal is a massive ($25,000) tax credit for home buyers. Cramer also calls for dramatically lowering interest rates, and for a shakeout amongst the national builders.

In fact, all of the foregoing proposals have already been floated in one guise or another (a $7,500 tax credit is already law, though few Buyers seem to have noticed). What's notable about Cramer's approach is the scale and urgency.

In that respect, Cramer joins a growing list of (calmer) pundits, including Thomas Friedman, calling for some variant of "shock therapy" to address the ongoing housing and credit debacle.

As big banks absorb ever-greater mortgage losses, their arguments are gaining traction.