Blogging The Boys (blog)
Amari Cooper not expected to play on Sunday versus the Cowboys
Blogging The Boys (blog)
When the Dallas Cowboys take on the Oakland Raiders on Sunday night, they may not have to face one of Oakland's best players from the last couple of years. Wide receiver Amari Cooper has been dealing with an ankle injury and it doesn't look like he …
FIFA said on Wednesday it had fired Secretary General Jerome Valcke amid alleged corruption involving World Cup ticket sales, one of many scandals surrounding football’s governing body.
“The FIFA Emergency Committee decided, on 9 January 2016, to dismiss Jerome Valcke from the position of FIFA Secretary General with immediate effect,” Zurich-based FIFA said in a statement without giving a reason for the dismissal.
An ethics investigation into the case recommended a nine-year ban for the Frenchman, former right-hand man to FIFA President Sepp Blatter who himself has been banned for eight years.
Last week FIFA’s ethics judges announced they had opened formal proceedings against Valcke, who has denied wrongdoing in the past.
Valcke was placed on leave by FIFA in September following the allegations and initially suspended for 90 days in October when the ethics committee started its investigation. That suspension was extended for another 45 days last week and a ban from all football activities remains in effect.
The secretary general’s duties will continue to be carried out by Acting Secretary General Markus Kattner, FIFA said.
Valcke has now been sacked twice by FIFA. He joined the organization in 2003 as marketing director but was fired in December 2006 for his part in botched sponsorship negotiations with credit card firms MasterCard Inc and Visa Inc.
His case has been overshadowed by the turmoil which has engulfed FIFA in the last year, with criminal investigations into the sport in both the United States and Switzerland.
Altogether, 41 people and sports entities, including top FIFA officials, have been indicted by U.S. prosecutors for offenses including corruption, fraud and money laundering.
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Jefferson Beauregard Sessions III is a man out of time, a holdover from an age when some people believed that certain groups were exempt from the rule of law. He may be out of time in another way, too: His days as attorney general might be numbered.
Even in the Senate, Sessions was something of a fringe figure on the far right. Then he had the foresight or good timing to be one of the first politicians to get on board the Trump train. Sessions quickly moved, in the words of one headline, from the fringe to prime-time.
How extreme is Jeff Sessions? The head of the Southern Poverty Law Centers Intelligence Project, Heidi Beirich, reviewed Sessions comments about Muslims and immigrants and concluded he had engaged in hate speech. She calls the new extent of Sessions influence a tragedy for American politics.
Sessions once described the N.A.A.C.P. and Dr. Martin Luther King Jrs Southern Christian Leadership Conference as un-American and Communist inspired. As Alabamas Attorney General, he used a traditionally segregationist states-rights argument to defend what historian Thomas Sugrue called that states system of separate and unequal education.
Segregationist South Carolina Sen. Strom Thurmond once said that he and Sessions think alike, act alike and vote alike. Sen. Edward M. Kennedy called him a throwback to a shameful era. Coretta Scott King wrote that Sessions had used the awesome powers of his office in a shabby attempt to intimidate and frighten elderly black voters.
The question now is, do Sessions and Trump believe that everyone is equal in the eyes of the law? Theres compelling evidence that Sessions committed perjury. When asked by Sen. Al Franken at his confirmation hearing if anyone affiliated with the Trump campaign communicated with the Russian government in the course of this campaign, Sessions replied:
Sen. Franken, Im not aware of any of those activities. I have been called a surrogate at a time or two in that campaign and I did not have communications with the Russians.
It turns out that he did, twice.
Richard Painter, who was the White House ethics lawyer under President George W. Bush, says that Mr. Sessions did not truthfully and completely testify, and makes a convincing case for his resignation or dismissal.
Sessions said this about perjury charges against then-President Bill Clinton: In America, the Supreme Court and the American people believe no one is above the law.
Does he really believe that? Consider this timeline:
On Thursday, February 23, Sessions announced that the Justice Department would suspend an Obama-era ban on doing business with private, for-profit prison companies. That means the United States government has once again embraced the mass incarceration industry.
In less than a week, Sessions and Trump made three moves that selectively bring the weight of law enforcement down on minorities and the poor.
There is a long-standing pattern of discrimination in prison sentencing. For-profit prison corporations make money from the commodification of black bodies. Thats a shameful tradition as old as the nation itself, and it just received a new lease on life.
On Tuesday, February 28, Sessions announced that the Justice Department would pull back on filing civil rights lawsuits against police departments who have engaged in patterns of discriminatory conduct.
Later that evening, President Trump announced the creation of a new law enforcement organization that will focus exclusively on crimes committed by immigrants even though immigrants are less likely to commit crimes than native-born Americans.
In less than a week, Sessions and Trump made three moves that selectively bring the weight of law enforcement down on minorities and the poor. Then, on Thursday, March 2, Sessions declined to resign over his senate testimony.
The problem isnt Russia. Democrats have been overly eager to embrace a report from intelligence chief James Clapper regarding Russian involvement in last years presidential election. That report is poorly written and unsubstantiated, but it allows the Democratic establishment to evade responsibility for a series of systematic political failures. Ironically, Clapper also appears to have perjured himself in senate testimony.
Nevertheless, serious questions have been raised about the Trump campaign and Russian interests. These questions must be answered.
Unfortunately, Clappers report ignores the most promising and well-documented line of investigation: the web of business relationships between Russia, Trump, and Trump associates like Secretary of State Rex Tillerson. Instead of exploring these connections, the Clapper report scapegoats left-wing political speech instead.
The American people deserve answers the Clapper report doesnt provide. There must be an independent investigation into the election. Sessions did not promise that, and leaders of both parties should demand it.They should also make it clear that no one is above the law, by demanding an independent criminal investigation of Sessions Senate testimony.
Recusal is not enough. Jeff Sessions has shown that he is not fit to serve as attorney general. In the name of equal justice for all, he must resign.
In the summer of 2002, Sheikh Hamad bin Khalifa Al Thani, the emir of Qatar, bought a couple of adjoined Beaux Arts town houses on East 72nd Street just off Central Park. He paid $26 million for the paira vast markup, it might have seemed, from a comparable purchase made earlier in the year. That March, a Manhattan landlord named Steve Croman had scooped up a six-story, 19,000-square-foot manse across the street for only $5.5 million. Cromans town house came with a problem: It wasnt a private home, but an apartment building of 23 below-market units, classified by New York state as rent-stabilized. That meant he could charge his new tenants only gradual, minor upticks in rent. But what might have appeared to be a dead-end investment was in fact an audacious, buy-low proposition. If Croman could get his tenants out, the buildings value would soar.
Cromans plan revolved around a little-used clause of the state rent-stabilization code that allows a landlord to evict tenants if he claims a building as a personal home. Almost immediately after buying the property, he served residents with lease termination notices and approached them with buyout offers. Alarmed, the tenants, who were paying as little as $844 a month in a neighborhood where studios tended to rent for three times as much, lawyered up and agitated to stay. Samuel Himmelstein, an attorney who represented several of them, argued at the time that the personal-use clause was meant to cover a few apartments at most. Ive never seen anything on this scale, he told the New York Times.
As legal proceedings unfolded, 12-14 E. 72nd St. became less and less livablea tactic, tenants were certain, to get them to capitulate and accept buyouts. Bob Leighton, a criminal defense attorney who lived in the building for 35 years, says Croman tried something new practically every day: He would remove the washing machines. He tried to close the front door, make everybody go through the basement. He got rid of the super, then had a part-time super who did nothing. Another former tenant forwarded me a 15,000-word document detailing four years of tribulations: No hot water. No cold water. Rodents. Severed phone lines. Holes in ceilings. A fire. He was taking the building apart, bit by bit, says Malcolm Kirk, a photographer who paid less than $1,000 a month for a third-floor studio he shared with his wife.
By the late 2000s, Croman had the place to himself. The buildings last holdouts had accepted buyouts, leaving him free to build a home that would reportedly include 16 bathrooms, two swimming pools, a basketball court, and a koi pond. Fourteen years after he purchased the town house, it remains, mysteriously, under renovation; on a recent visit to the property, workers could be seen hauling debris out the front door. The never-ending gut job has become an object of fascination and irritation on the Upper East Side. Neighbors and former tenants speculate about whether Croman plans to convert the place back into an apartment building, flip it to Gulf royalty, or simply plow ahead with the koi pond. Croman declined to comment on the former tenants allegations or his plans for the residence.
The saga of 12-14 E. 72nd shares a script with many of the more than 140 Manhattan apartment buildings that Croman owns, save for the uncertain ending. For decades he has bought properties, rid them of rent-stabilized tenants, and filled them with more profitable replacements. In May, New York State Attorney General Eric Schneiderman tried to put a stop to these practices, indicting Croman for grand larceny, tax fraud, and falsifying business records. The heart of the case is $45 million worth of loans Croman allegedly secured by falsely claiming certain properties had been emptied of stabilized tenants. If convicted, he faces as much as 25 years in prison. (Cromans mortgage broker, Barry Swartz, was charged, too.) Schneiderman also served Croman with a separate lawsuit alleging harassment and abuse of his tenants. Having set the stage for surrender, Croman urges tenants to take buyouts as the only way out of the misery he and his company have systematically created, the complaint alleges. (Croman and Swartz pleaded not guilty to the criminal case. Regarding the harassment suit, a spokesperson for Cromans company, 9300 Realty, wrote, Many of the residential properties we purchase have suffered years of neglect from prior ownership and require substantial upgrade. We have cleared thousands of violations in our properties stemming from previous owners and drastically improved the living conditions for thousands of tenants. We invest a great deal in our properties, so it is in our interest to maintain long-term relationships with our tenants.)
At a news conference, Schneiderman called Croman the Bernie Madoff of landlords. The remark was tabloid-ready but misleading. Croman is accused of preying mostly on ordinary New Yorkers, not the elites Madoff bilked. And rather than harming the rich, Cromans strategy has contributed to the broader luxe-ification of the city. Rent-stabilization laws have their critics, but they account for some of the last sensibly priced apartments in New York City, the second-most-expensive rental market in the country after San Francisco. Schneidermans cases more accurately cast Croman as a sort of Mad Gentrifierthe archvillain of a narrative that New York has been unable to control. Indeed, Cromans career maps almost perfectly the explosion of real estate markets in high-demand metropolises, and hes perhaps the most cartoonish of a wave of landlords whove helped to usher in a wealthier, more global brand of apartment dweller. But can punishing one bad landlord really do anything to stem the onset of the gilded 21st century supercity?
In 1923, the New York Times published a curious story headlined Rents in Ancient Rome. It described Marcus Licinius Crassus, a prodigious first century B.C. politician and landlord, trying to charge a fellow senator an eye-popping 15,000 sesterces to rent an elegant bachelors apartment. Julius Caesar responded, according to the article, by prohibiting rents of more than 2,000 sesterces a year for Roman villas. Those, the Times mused, were the good old days.
At the time, New York was in the midst of its first experiment with rent control. After World War I, the city faced a severe housing crunch. Demand was steep, but builders, depleted of resources by the war, werent building. Rents spiked, and tenants revolted. In 1920 the state responded by banning rent hikes that were unreasonable, unjust, or oppressive. The rules stayed in place until 1929, when occupancy and rents plummeted along with the economy.
The pattern repeated throughout the 20th century. In 1947, facing another postwar apartment shortage, New York state passed a law that froze rents on existing properties with six units or more. By the mid-1970s a new compromise had been struck. The more flexible rent stabilization system introduced thousands of postwar buildings to rent regulation while eliminating the hard price caps of rent control. It also seemed designed, in the long run, to phase out regulation altogether: The new regime covered only buildings built from 1947 to 1974, while everything newer would hit the open market. (Pre-1947 buildings remained rent-controlled.) In 1997, the phaseout accelerated when, crucially for Croman, the state introduced loopholes allowing landlords to decontrol rent-regulated units with ease.
Decontrol currently works like this: If an apartments occupants earn more than $200,000 for two consecutive years, the unit goes market-rate. Likewise, once the monthly rent of a vacant apartment rises to the figure set by a city boardcurrently $2,700the unit is deregulated. There are two ways for landlords to reach $2,700 quickly, both of which offer incentives for them to clear out tenants. First, every time a regulated apartment is vacated, a landlord can charge the next tenant up to 20 percent more. Second, when a landlord renovates a vacant apartment, he can hike the rent by roughly 2 percent of the cost of the improvements. Those renovations, necessary or not, add up. The way to make money is by improving apartments as they turn over, says Lenny Katz, whose company, Katz Realty Group, owns a portfolio of stabilized buildings in New Yorks outer boroughs. He says his firm eschews harassment: We wait em out. We know eventually theyll choose to move, or older ones will pass away or go into nursing homes. When you get that turnover, then you have an opportunity to raise rents. And suddenly youre trading in the Dominican lady on the third floor for a lawyer at a white-shoe firm.
This was the kind of turnover Croman sought. A slight man with a hunched bearing, he began his career in anonymity. Raised in the leafy suburbs of northern New Jersey, he graduated from New York University and followed his father, Ed, a suburban mall developer, into real estate. In 1990, at 24, he began brokering apartment sales and rentals in Lower Manhattan. Two years later, he bought his first building, 221 Mott St., in Little Italy, and soon added more there and in other ethnic, bohemian neighborhoods. His timing was perfect: The early-1990s recession was over, and Giuliani-era sanitization had begun. Property values were climbing, and the neighborhoods in which Croman specialized began to gentrify.
Quickly, he identified the significant profit margins tucked away in the citys stock of rent-regulated apartments. But unlike Katz, he wasnt willing to wait for the Dominican lady to enter the nursing home, and he soon developed a reputation for aggressive tactics. At first he might play nice, couriering goodies to tenants and offering them buyouts over coffee. If that didnt work, hed serve them with lawsuits. In 1998 the Village Voice named him to its Ten Worst Landlords in New York list for the first (but not last) time.
Cromans strategy wasnt exactly new. Among others, Donald Trump famously spent half of the 1980s trying to oust the longtime residents of a rent-regulated building at 100 Central Park South so he could replace it with a high rise. Doormen were ordered to stop accepting packages. Mushrooms were found growing on carpets. At one point, Trump threatened to fill the building with homeless people. The battle raged in the tabloids and in the courts, until, in 1986, the tenants won the right to stay.
Croman stood out from the pack thanks to the scale of his operation. By the mid-2000s he owned about 70 buildings, and his social profile had appreciated alongside his portfolio. He and his wife, Harriet, sent their sons to Columbia Prep, claimed membership at Temple Emanu-El on Fifth Avenue, and were regulars on the Upper East Side/Hamptons gala circuit.
Around that time, corporate investors began to see potential in rent-stabilized properties. In 2006, Tishman Speyer joined with the investment firm BlackRock to purchase Stuyvesant Town/Peter Cooper Village, the historic working-class Manhattan housing complex that sprawls along the East River, for $5.4 billion. Each company spent only $112 million of its own money, attracting outside investors by promising that within five years the propertys rental income would triple and its value would balloon to $7 billion. Their logic was simple: At the time of purchase, 73 percent of the complexs units were rent-stabilized. All they needed to do was destabilize them.
Similar deals were being struck in less desirable neighborhoods. In the years before the housing crash, according to Benjamin Dulchin, executive director of the nonprofit Association for Neighborhood and Housing Development, about 100,000 rent-stabilized unitsa tenth of the totalwere financed by private equity. And equity needed huge returns. A natural rate of turnover for a stabilized building is 3 percent, 4 percent a year, Dulchin says. The corporate lenders backing the deals needed that number to increase significantlyby as much as 30 percent, according to underwriting documents studied by Dulchins group. That level, he says, is utterly inexplicable unless youre planning on harassing the hell out of these guys.
Had the housing crisis not intervened, the strategy, which tenants groups dubbed predatory equity, might have worked for the big firms. Theyd already underestimated the difficulty of emptying their buildings, and the weaker market prevented them from filling vacated units with higher-paying tenants. Several companies sold their buildings after only a few years. In 2010, with Stuytowns value a lackluster $1.8 billion, Tishman Speyer and BlackRock defaulted on their debt and sold off their stakes. It was the largest commercial mortgage default in U.S. history.
Croman kept his momentum, in part because his small walkups were easier to turn over. By the 2010s he owned more than 100 buildings, and he and his family had become local celebrities. The New York Posts Page Six started covering the debauched B-list parties he and Harriet threw in the Hamptons. They bought a Sagaponack manse, adding to their stable of residences in Manhattan and Westchester County, and paid for Ariana Grande and Amare Stoudemire to headline their son Adams bar mitzvah at the American Museum of Natural History.
In March 2016 came broader notoriety, when Cromans eldest son, Jake, a University of Michigan student whose LinkedIn profile lists him as an associate at his fathers firm, was filmed verbally abusing an Uber driver in Ann Arbor. Theres 50 of you and theres one of me here who spends the most money here, you little f—, Jake says, flanked by fellow Tau Kappa Epsilons. Minimum-wage faggot. Go f— yourself. See you later. Go pick up another f—. You working all day? Guess what? Im gonna go sit on my ass and watch TV. Virality ensued. Jake, who later claimed the driver had provoked him with anti-Semitic remarks, has kept a low profile of late. According to a family friend, he can be seen stalking around Sagaponack puffing on an e-cigarette.
Steve Croman soon joined his son in the spotlight. Schneidermans harassment case, which relies on, among other evidence, a trove of internal e-mails, text messages, and employee testimony, alleges that Croman pursued a three-pronged strategy to oust rent-stabilized tenants: First, file frivolous lawsuits to bleed tenants cash and break their spirits. Second, hire an ex-cop named Anthony Falconite to stalk and intimidate them. Third, plunge their apartments into squalor while performing often illegal and unsafe construction on other units. According to depositions from current and former Croman employees, he offered bonuses to those who got tenants to leavesomething he seemed to obsess over. The only time me and him were communicating was if [he said], Oh, do you have a buyout? What are you working on with regard to buying people out? said one ex-staffer in her deposition.
In May, I visited several aggrieved tenants to get a glimpse of the notorious Croman experience. Tomasa Rivera has lived for almost 40 years in a modest $700-a-month stabilized apartment on West 103rd Street near Central Park. Shortly after Croman bought the building, in 2013, one of his employees showed up at her door with a buyout offer. I had the lady tell me, Wouldnt you like to go to Puerto Rico? Rivera recalls. She was saying, For what you can get for this place, you could have a mansion in Puerto Rico. And I literally just look at her and say,F— would I want to go to Puerto Rico?
Several of her neighbors took buyout offers, though, and within months her apartment was permeated with vast quantities of white dust from renovations of the vacant units. Initially, Rivera was concerned mainly for the family members living with her: her adult son, whos asthmatic, and her daughters two young children, who have muscular dystrophy. By December she was having trouble breathing herself. The following year, a city inspector ordered Croman to abate elevated levels of lead dust in the apartment, prompting Croman to send an inspector of his own. Rivera says the inspector swabbed the apartment, reported normal lead levels, and didnt return. (According to text messages quoted in Schneidermans complaint, the same inspector conspired to doctor reports in other Croman properties. In one building, the city health department found lead dust levels to be 65 times the legal limit.) A U.S. Department of Housing and Urban Development employee wound up performing the abatement. Riveras grandchildren left to live with their mother in the Bronx.
A couple of days after visiting Rivera, I met Cynthia Chaffee, who in 2007 formed an activist group called the Stop Croman Coalition (not to be confused with the Croman Tenants Alliance or croman-realty-sucks.blogspot.com). Chaffee, a longtime tenant, devotes the better part of her life to chronicling the landlords sins, administering an exhaustively researched website and occasionally composing Seussian diss tracks. Sample lyric: Your hearts an empty hole, you were born without a soul, Mr. Cro-man. And that includes your uber-turd son, Jake.
Chaffee and her husband have a one-bedroom walkup that rents for $860 a month on East 18th Street, just a few blocks from Stuytown. Sitting in her living room, surrounded by boxes of research and legal documents, she spins horror stories for two hours. No gas for 55 consecutive days in 2011. No overhead electricity for 56 consecutive days in 2013. Mold. Water damage. The removal of a railing, which she says resulted in her breaking a leg. Still, she and her husband resisted Cromans buyout offers. Once it became clear they wouldnt change their minds, Chaffee says, Croman began serving her with eviction threats and debt collection letters, claiming she hadnt paid her rent. E-mails obtained by the attorney general make clear that Cromans office was aware as early as 2012 that Chaffee was paying in full. Yet into 2016, he was still demanding that she pay him $26,000 hed already received.
As a refusenik, Chaffee is in the minority. After Croman purchased her building and two others on the block, 25 rent-stabilized tenants accepted his buyout offers. (According to a Croman spokesperson, 11 tenants remain, 4 passed away, and 32 units were vacant at the time he bought the properties.) This ratio jibes roughly with an analysis by the housing coalition Stabilizing NYC, which found that in the past five years, Croman has deregulated 390 units. Thats a lot for one guy, but its part of a broader trend that speaks to the recent erosion of rent-regulated housing in New York. By 2014 more than a million units47 percent of the citys rental housing stockremained rent-regulated. But according to NYUs Furman Center for Real Estate and Urban Policy, in the previous three years, 85,000 units had either been deregulated or had become unaffordable to low-income renters. It is about the loss of New York, Chaffee says. This placewe knew all our neighbors. We had a Greek family, Spanish families, we had old Italian ladies. Theyre gone.
A Croman defender might argue that, in the long run, landlords like him improve neighborhoods by boosting property valuesthat hes the opposite of a slumlord (something hes frequently called). As he told the New York Observer in 2013, We restore older buildings and make them beautiful. Yet the claim strains credulity. Midway through my conversation with Chaffee, a young woman in a sundress knocks at the door. She gives her name as Sophia. An NYU drama major who lives upstairs, she explains that she forgot her key and asks if she can crawl up the fire escape to her apartment. Is he the worst? she asks when I mention her landlord. Arent there, like, articles written about him or something?
Sophia offers me a brief tour of her formerly stabilized apartment, telling me that she and her two roommates pay $5,200 a month. The place has been renovatedwine fridge, exposed brickbut in a cheapo, Ikea way. We just had someone in here fixing our shower, she says. We have a dishwasher thats been broken since weve moved in here. Our dryer is, like, total shit. You have to dry things, like, 84 times. She pauses. The joke is: Everything is pretty, but nothing actually works.
To get Cromans side of the story, I call more than two dozen of his friends, but no one will speak with me. Frank Ricci, the government affairs director of the Rent Stabilization Association, New Yorks misleadingly named landlord lobby, doesnt rush to Cromans defense. Look, hes a bad apple, Ricci says. Croman declines to speak with me, but a reputation management professional representing him, Jane Hardey of Marathon Strategies, promises to connect me with two of his friends and his rabbi. Eventually she balks, instead forwarding me the names of three ostensibly pro-Croman tenants, only one of whom turns out to have sued him. (She won.) The other two, Upper West Siders, didnt report any problems with Croman.
In late June, I show up at the criminal branch of the New York State Supreme Court in Lower Manhattan, where Croman is scheduled for arraignment. Just after 9 a.m., he appears, alone, and slips calmly into a security line. A dozen protesters, oblivious to his arrival, wield anti-Croman signage outside the courthouse. (Chaffee arrives a little later.) After the proceeding, I buttonhole his attorney, Ben Brafman, who also has represented infamous Hotel Sofitel patron Dominique Strauss-Kahn and pharma bro Martin Shkreli. I plead for access to Croman or his inner circle, arguing that it might behoove him to attempt some positive spin. Brafman just shrugs and says, Its going to be a negative story no matter what.
Few can recall a case of this stature against an individual landlord in New York. Himmelstein, the lawyer who represented the 72nd Street tenants, speculates that Croman will spend time in prison: Im thinking hes probably going to be living upstate somewhere. They really want to make an example out of him.
Cromans epigones include Raphael Toledano, a 26-year-old yeshiva dropout who has bought up a substantial chunk of the East Village, and is, as he put it to the real estate magazine the Real Deal in June, worth a f—load of money. Last year he reportedly paid $1 million to settle with a group of stabilized tenants he was accused of harassing. When you go from zero to 60 in three seconds, he said, sometimes you exceed the speed limit. And then theres Jared Kushner, the developer, Observer proprietor, and son-in-law of Donald Trump. Over the past four years, Kushner has bought roughly 50 buildings in the East Village, including one where Allen Ginsberg once lived. According to rent-stabilized tenants in that building, Kushner served them with eviction notices andin the tradition of his father-in-laws Central Park South buildinglet the property fall into disrepair. (Kushners company claimed in court that tenants werent paying rent or werent even eligible for their rent-regulated apartments.)
To Dulchin, of the Association for Neighborhood and Housing Development, Croman and his spiritual heirs are almost beside the point. The movement they started has outgrown them. Somethings really shifted in the way the landlords are now understanding their properties, he says. Market rents have gone up so much around the city that increasingly even the non-awful landlords have taken a very aggressive stance and pursue any vacancy they can. At a Brooklyn real estate summit in June, a lawyer and self-styled buyout guru named Michelle Maratto Itkowitz addressed the new status quo in a presentation on de-tenanting apartments. Tenants have gotten the memo, read a pamphlet she distributed to the audience. If they move, the owners make way more money.
Sending one landlord to jail wont turn New York City into a communitarian paradise, of course, but the attorney generals case against Croman suggests the state is at least eager for gentrification to proceed legally. The city has maintained rent freezes on one-year leases for stabilized apartments for the past few years. Mayor Bill de Blasio has called for the repeal of decontrol loopholes (though the state is unlikely to accede), and has overhauled the zoning code so that many new residential buildings must set aside units for low-income tenants.
But such measures will do nothing to address the seemingly inexhaustible demand from privileged undergrads and Qatari emirs for well-appointed New York apartments. There are those, too, who argue that rent control isnt worth fighting forthat it artificially suppresses housing supply and creates opportunities for bad actors such as Croman to exploit. The two priciest markets in the country, after all, are Manhattan and San Francisco, which has even stricter rent-control laws than New York. But rents have also soared in Boston since Massachusetts abolished rent regulation two decades ago. What do these three cities tell us about the efficacy of rent control, if anything? Economists will continue to debate that. In the meantime, average New Yorkers are left to resist the Cromans, Toledanos, and Trumpswho, even when they lose, often seem to win in the end.
That might be said of 100 Central Park South, at least. Despite failing in the 1980s to replace the property with a shiny high rise, Trump decided to hang on to it. Then, as real estate values rose during the 1990s, he renamed the building Trump Parc East and turned it into a condominium, selling vacated, decontrolled $1,000-a-month apartments for millions of dollars, while allowing existing rent-stabilized tenants to stay. Some of those who had once fought him became his ardent supporters, but Trump left no doubt who he thought had prevailed. A great deal, he later told the New York Times. It was a long battle, but it was a successful battle. As usual, I came out on top.Continue reading
Kansas City Star
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Kansas City Star
Last week I touched on some of my top suggestions for recovering your finances next year. A major component of that is savings. If you're able to get out of credit card debt, any number of emergencies or financial conundrums can occur that put you …
Twitter's Increase To 280 Characters Perfect For Blogging And Engagement
Above the Law
I love blogging, as blogging is meant to be a conversation. By referencing something someone else has written and offering my take, I am in effect entering into a conversation with them. At 140 characters that was tough to do. Two hundred eighty …
Weve become accustomed to exceptionally high returns in recent decades but they were the exception, not the rule, as a new report explains
Its a question that has haunted the minds of high-flying financiers, self-help authors and regular Americans for decades: whats the best way to make money investing?
In the past, the best way, hands down, was to have won the genetic lot: to have been born so that your peak earning and investing years coincided with a bull market. If you came of age in the early 1980s and started investing, youve already won the game. Those years saw an extraordinary bull market in the bond market, and the three decades since included what became a golden age for stock market investors.
Sure, the stock markets path was a bumpy one, with downturns, mini-crashes and other more serious bursts, like of the dotcom bubble in 2000. Overall, however, returns greatly exceeded historical averages, and recessions cleared the way for the market to climb to greater heights. Consulting company McKinsey is now warning us that the factors that contributed to those golden age returns dont exist any more. But the era lasted long enough to make Americans think of it as normal, and to leave us wondering about what feels like an abnormal environment of volatile markets and mediocre returns.
That, the McKinsey analysts argue in a new report making waves throughout the investment world, is precisely the wrong way to look at the whole matter. It was those abnormally high returns that were unusual, they point out. Now were heading into a period of compressed or collapsing investment returns, and well need to adjust all our expectations and behavior accordingly.
The McKinsey study attributes the exceptional returns to four unusual factors.
A sharp decline in US inflation rates, to well below their historic average, led to a rise in the price that investors were willing to pay for every dollar of corporate earnings, or the much-discussed price/earnings ratio. A steep drop in interest rates boosted returns from bonds and also helped buoy stock prices. While global GDP growth was normal during the golden era, the researchers found that demographics in emerging markets and improving productivity worldwide boosted corporate profits and revenues, and contributed to stock market returns. Then theres the unprecedented surge in corporate profits in the last three decades: US companies never had it so good.
These factors are gone. Its time to brace for a period in which investment returns could be lower than long-term averages.
Between 1985 and 2014, the US stock market delivered returns of 7.9%, on average, every year; the bond market rewarded investors with an average annual return of 5%. Over the next 20 years, look for those figures to shrink to as little as 4% to 5% for stocks (if youre cautious about the economic outlook), and zero to 0.1% for bonds. If you take a more upbeat view of the economy, you can ratchet the figures up to 5.5% to 6.5% for stocks, and 1% to 2% for stocks.
Well, thats OK, isnt it? You could put all your money in stocks and ignore bonds how much difference can a percentage point or two make? You could also put all your eggs in a proverbial basket, and ignore the details.
While youd be right to favor stocks in any asset allocation model (they tend to perform better over the long haul), you also need diversity. As the crisis of 2008 reminded us all, there will be periods when if you dont have at least part of your portfolio in safer investments, such as bonds, youll end up losing capital.
A similar look at the long term shows that a single percentage point can make a very, very big difference. Lets say that youve got $100,000 and youre earning an annual return of 5.5%. At the end of 30 years, assuming you have reinvested all of the money you make, thanks to the magic of compounding, youll have about $500,000. But if your returns are only 4.5%, that sum will fall to $375,000. A single percentage point has cost you $125,000 over 30 years. A decline of two percentage points, and youve lost nearly half of your total potential returns.
McKinseys message is that investors need to lower their expectations, work more years and double their savings.
While many advisory firms dont find much to quibble about in McKinseys conclusions, some arent as willing to tell investors to simply give up.
McKinseys take on lower returns is spot on, in our opinion, says a memo from New Jersey investment advisor RegentAtlantic. But it also argues there are parts of the market such as the emerging markets, and smaller companies in those markets, in particular that offer higher returns (and more risk).
The report, however, merely articulates handwriting thats been on the wall for a while. But it does warn that its going to be much, much more difficult for any of us to recover from any financial mistakes that we make. The markets arent going to give us a helping hand.
So when you read lists of financial tips such as starting to contribute to your 401k as soon as you can, dont see them as suggestions theyre commandments. If the market isnt going to help increase the amount you save, youll have to do it, making every dollar you put aside more valuable and the dollars you save in your 20s will always be vastly more valuable than those you invest in your 40s or 50s, thanks to compounding. Just do it.
Similarly, watch out for some of the worst financial pitfalls you can make: dipping into that 401k, except in the direst of emergencies; racking up credit card debt and making only minimum payments; buying more houses than you can afford.
Even paying for private schools from kindergarten through college, or helping to finance your childs wedding, can be a mistake if youre doing it at the expense of funding your own retirement needs. Yes, you are investing in your childrens future (or the future health of the florist or wedding photographers businesses), but how will they feel when, in 15 to 20 years time, they realize that the price for that financial help is ongoing financial support? In a low-return environment, with investment tailwinds transformed into headwinds, those are some of the tough trade-offs that well have to wrestle with.
Like it or not, its time to prepare for the new normal.Continue reading
Expansion Boost for Summer Holiday Blogging Programme
Scoop.co.nz (press release)
A blogging programme for school children â to help them maintain academic grades over the summer holidays â is to expand significantly with support from NEXT Foundation. The Summer Learning Journey has been developed through a partnership with …
Successful summer blogging project gets funding boostVoxy
School summer learning programme receives a major funding boostNew Zealand Herald
Spotify has long refused to restrict new releases from its ad-supported non-paying listeners because it would make the streaming app confusing. It wanted all music available to everyone, always. But as it preps to IPO, it needs to negotiate better royalty rates with the major labels, and allowing this windowing practice is a bargaining chip its finally going to cash in.
Today Spotify confirmed that its struck a deal with Universal Music Group to pay the label less per stream, but only allow new releases to be streamed by Spotify Premium subscribers for up to two weeks, The Verge reports. Ad-supported listeners will have to wait. TechCrunch reported in February that Spotify would seek to renegotiate its licensing deals to pave the way for a 2018 IPO. Similar windowing deals with other labels could follow.
The result is a degraded experience for its free-tier listeners, but a boon to the startups long-term financial health. Users should understand that for Spotify to survive as an independent music company, it may have to cut some corners on satisfaction.
Spotify is the only top-tier music streaming service that offers an on-demand free tier, which is great for users who wont pay $10 per month, and serves as an effective funnel getting people hooked until they do pay to ditch ads and restrictions.
Spotify is also the only leading on-demand streaming app that is solely a music company. Apple, Google and Amazon all make money in other ways and just offer music as a complementary service. Meanwhile, Spotify lives or dies by its royalty rates.
Yet todays deal is a sign that Spotify has grown to a scale where its finally getting leverage over the record labels. Only because its unique free tier has gotten so popular can it extract lower royalty rates per song play by briefly holding new releases back from these users.
Spotify has four other ways its gaining power versus the labelsas it negotiates new royalty rates:
From Freddie Hunt to Chris Eubank Jr, the offspring of sports stars often end up competing, too. Is the name a help or a hindrance?
Freddie Hunt, 29, is a professional racing driver. He is the son of 1976 Formula One world champion James Hunt.
When I was very small, I knew Dad had been world champion, but I didnt know what that meant. I was probably in my early teens when I realised hed been someone special. Friends fathers, who remembered him well, would get excited talking about him. To me, he was only ever just Dad.
Id always had a need for speed. My nickname as a kid was Fearless Fred. I had constant bike crashes. There was only ever one speed for me: flat out. But I knew absolutely nothing about cars. When I was tiny, I went to a few grands prix with Dad, but I didnt go to the races properly until after he died. Then, in 2006, I went to the Goodwood Festival of Speed as a spectator, and a friend suggested I jump in a Maserati and have a go. Id never driven anything like it before, but I loved it.
I was playing professional polo at the time, but that wasnt going well due to lack of money. All my horses were knackered. The day before Goodwood, Id made a plan to sell them. Call it fate, if you like, but the next day I was in that racing car and knew it was what I wanted to do. I rang up Uncle Dave, Dads little brother who also raced, and asked him to help me. Ring me back in a week if youre still serious, he said. So I did.Continue reading