Data analysis firm CoreLogic says that for every two homebuyers who moved to California from 2000 through 2015, five others sold their homes, packed up and moved out

Californians fleeing state’s high cost of housing

Nov. 14, 2016

California’s warm weather, sunny beaches and world-class schools have lured people to the Golden State for decades, but rising home prices are turning that equation around.

Data analysis firm CoreLogic says that for every two homebuyers who moved to California from 2000 through 2015, five others sold their homes, packed up and moved out.

Arizona and Texas were the top destinations for people moving out of California, CoreLogic reported. Only New Jersey had a higher ratio of fleeing homeowners during that period.

“California had the largest number of out-migrants in 2015,” CoreLogic Senior Economist Kristine Yao said in a blog post published Thursday.

The trend of out-migration was also noted in a separte trio of reports released earlier this year by Beacon Economics. Beacon noted that 625,000 more U.S. residents left California between 2007 and 2014 than moved into the state. The vast majority ended up in Texas, Oregon, Nevada, Arizona and Washington.

The search for more affordable housing is sending low- and middle-income workers out of the state, while higher-wage workers continue to move in, which argues against the theory that high taxes are driving people away.

“California has an employment boom with a housing problem,” said Beacon founding partner Christopher Thornberg. “The state continues to offer great employment opportunities for all kinds of workers, but housing affordability and supply represent a significant problem.”

Home prices and rents have been rising steadily for more than four years.

CoreLogic figures show Orange County’s median home price was up 42 percent in the four years ending in September. Prices were up 55 percent in Los Angeles County, 57 percent in Riverside County and 75 percent in San Bernardino County.

Although home sellers leaving California last year paid, on average, 36 percent less for their new homes out of state, they tended to end up in better neighborhoods, CoreLogic reported. Their purchase prices ranked in the 77th percentile for their new metro areas, while their sale prices ranked in the 62 percentile back home.

“Of the homeowners moving out of state, more of them sold in high appreciation, high cost areas and bought in lower appreciation, more affordable areas,” Yao wrote.

California home prices have risen in part because of a lack of inventory.

From 2005 to 2015, permits were filed for only 21.5 housing units per every 100 new residents in the state. That put the Golden State second to last behind Alaska, where only 16.2 housing permits were filed for every 100 new residents.

On the flip side, Michigan saw 166 permits filed for every 100 new residents.

Register staff writer Jeff Collins contributed to this report.

http://www.ocregister.com/articles/home-735151-prices-state.html

O.C. Watchdog: The Voter Empowerment Initiative would require voter approval for guaranteed pensions for new public workers, as well as voter approval for pension increases for current workers

O.C. Watchdog: Even though public workers paying more into their pensions, shortfall still growing

Public workers are kicking in more to fund their retirements, helping to stabilize the burden borne by California’s cities.

The gaping hole at the bottom of California’s public pension funds grew monstrously nonetheless.

New figures from the state controller show glimmers of light escaping from an otherwise oppressively dark cloud. California’s 470-plus cities spent just a half-percent more on retirement costs in 2014 than they did in 2011, almost entirely because cities drastically reduced what they paid to pick up their employees’ required share of pension costs.

That’s the fruit of union contracts where workers agreed to shoulder more of the load.

“No one cares more about the sustainability of retirement funds than the state’s teachers, firefighters and other public workers,” said Steven Maviglio, spokesman for Californians for Retirement Security, a coalition of public employee unions. “They are paying more for benefits than ever, while seeing them scaled back.”

But, despite such efforts, the gap between what public agencies have promised to pay workers upon retirement, and what we actually have, continued to grow.

The hole is called “unfunded liabilities” in accountant-speak. And the total for all of California’s public pension systems skyrocketed 3,710 percent in just a dozen years – from $6.3 billion in 2003 to $241.4 billion in 2014, according to the latest figures from the state controller.

The hole grew nearly 22 percent between 2013 and 2014 alone.

“What a record!” said Chuck Reed, Democrat and former mayor of San Jose, who is aiming a pension reform initiative at the 2016 ballot.

Reformers argue that this hole matters to all Californians, because if it isn’t filled up with meatier investment earnings and heftier contributions from public workers and employers alike, taxpayers will have to fill it directly.

Why? Because in California, the promises made to public workers on Day One of their employment can never, ever be broken – at least, not outside of federal bankruptcy court. And even in court, officials from Vallejo and Stockton and San Bernardino did not ask to scale back these burdens, fearing they’d have trouble attracting and retaining workers.

PERSPECTIVE?

Public labor unions bemoan the “pension bogeyman,” and argue that unfunded liabilities can be misleading.

Those are not hard-and-fast numbers reflecting fixed debt, Maviglio has said. They change, depending on many moving parts and assumptions, including how long people are expected to live and projected annual returns on investments.

When the market booms, returns are great and liabilities get smaller. When the market tanks, returns shrink and liabilities grow.

“Cropping the picture for one or even three years always is dangerous,” Maviglio said. “As any financial advisor will tell you, you need to look at the big picture. And if you do that, returns and expenses are relatively stable.”

California’s pension systems are, indeed, starting to factor for longer lives and less-stellar investment returns: Public agencies – and workers – are paying 30 to 50 percent more a year into the pension kitty now than they were just a few years ago, and will keep paying at this rate for years to come.

The numbers will be subtracted from public agencies’ balance sheets beginning next year. Some city officials in particular are bracing for this, as it could make a few municipalities appear insolvent. That is, their total liabilities will exceed their total assets, at least on paper.

The expected shock of this exercise might work to the pension reformers’ end.

BALLOT FIX?

A pair of initiatives by Reed and former San Diego councilman Carl DeMaio, aiming for the November 2016 ballot, try to address the problems.

The Voter Empowerment Initiative would require voter approval for guaranteed pensions for new public workers, as well as voter approval for pension increases for current workers.

The Government Pension Cap Act would limit public agency contributions to new workers’ retirement accounts to 11 percent of base compensation, up to 13 percent for public safety workers. Many agencies now pay about 20 percent for regular workers, and more than 50 percent for public safety workers.

Reed and DeMaio say local governments need more tools to help rein in unsustainable pension costs that siphon dollars away from services for regular citizens. Opponents say they would gut public pensions and eliminate guaranteed retirements across the board.

Reformers keep playing an initiative cat-and-mouse game with the Attorney General, who keeps giving the measures titles and summaries that they consider the kiss of death. They only plan to put one initiative on the ballot. Supporters have six months to submit signatures to qualify for November’s ballot.

In a survey released in September, the nonpartisan Public Policy Institute of California found that the majority of voters favor changing the pension system for new public workers – 72 percent of likely voters said the amount of money spent on public pensions is a problem, and 70 percent said voters should have a hand in pension decisions at the ballot box.

But pollster and political consultant David Binder Research found that support for the two initiatives was far lower, around 42 percent. Binder surveyed likely voters, and released results last week.

Dave Low, chair of the union coalition Californians for Retirement Security, pronounced the reform initiatives “dead in the water.”

Reformers disagree.

“Of course the unions opposing pension reform will manufacture inaccurate polling numbers to distract from our momentum,” DeMaio said. “Our internal polling – and all publicly available polling by independent third parties – show California voters overwhelmingly favor pension reform.”

Workers pitch in

California’s 470-plus cities are picking up less of the workers’ share of pension costs as workers pick up more. But unfunded liabilities in California’s public pension systems continue to skyrocket.

Contact the writer: tsforza@ocregister.com

http://www.ocregister.com/articles/public-696676-pension-workers.html

The pledge by Team Newport to audit the $140 million Taj Mahal – $228 million with debt service – Newport Beach allocates $300,000 for Civic Center audit

Newport Beach, California –

An audit of the Newport Beach Civic Center construction process is moving ahead with a new – and higher – price tag.

The City Council voted 4-3 Tuesday in favor of the audit and to allocate $300,000 for its completion, including periodic reporting to the council.

Mayor Ed Selich and council members Keith Curry and Tony Petros voted against the measure.

Councilwoman Diane Dixon said the council owed constituents an audit of the $140 million project. She said it would also give the city a better idea of how to manage future projects the same size or scope of the Civic Center.

“My wish is this gets a clean bill of health and we can move on,” Dixon said. “I’d like to take the acrimony out of this and see this as a positive.”

Curry called the audit a political manipulation to use in the upcoming election cycle. The city manager already provided “two feet” of documents and a review of the building process, he said. Taxpayer money could be better used for projects in the community, he said.

“We’re asking consultants to tell us who won WWII,” Curry said. “It’s a complete waste of money.”

Planning for the facility started more than 15 years ago and its scope morphed significantly over the years, according to Register archives. The complex near Fashion Island opened in 2013 and included the government building, council chambers, a 450-space parking structure sunk to protect views, a 17,000-square-foot library expansion and a 14-acre park connected by an over-road bridge.

The council in June asked the city attorney’s office to hire an independent audit project manager, who could then hire a firm to do a financial and management performance audit of the Civic Center project. When the audit was originally brought up in January by council members, a price tag of $100,000 was highlighted.

Allyson Gipson, the independent audit manager hired by the city, said the industry standard for the cost of audits this size are usually one percent of the total cost of the project, though she thought the city could get an audit at about half that price.

A staff report suggested a two-phase audit, which could cost as much as $560,000 – about $110,000 for the first phase and $450,000 for the second. The council voted to limit the audit to one phase and set the limit at $300,000.

http://www.ocregister.com/articles/audit-693820-council-city.html?utm_source=MailingList&utm_medium=email&utm_campaign=Keeping+a+Campaign+Promise+%E2%80%93+Auditing+the+Taj
Contact the writer: 714-796-7990 or mnicolai@ocregister.com
Keeping a Campaign Promise – Auditing the Taj

Dear Friend,

Our steering committee met a couple of weeks ago to review the past year since Team Newport was elected, and plan for the 2016 city elections.

One of the key issues in last year’s election was the pledge by Team Newport to audit the $140 million Taj Mahal. ($228 million with debt service)

On a 4-3 vote, Team Newport (Diane Dixon, Kevin Muldoon, Duffy, and Scott Peotter) approved a $300,000 contract to conduct an audit with the goal of finding out if taxpayers were fleeced, or if the costs were supportable and reasonable.

Of course, leading the opposition to the audit was Keith Curry – the councilman that spent over $1 million trying to ban wood burning fire rings.

You can read the Register’s recap of the city council’s action here, including Keith Curry’s claim that the audit is a politically motivated “complete waste of money.”

I am proud that Team Newport kept their word – a novelty in these times.

Sincerely,
Bob McCaffrey

Volunteer Chairman, Residents for Reform

Newport Beach