June 2019 – Page 3 – Really Right

Rent Control Smoke and Mirrors

Photo above: Los Angeles Mayor Eric Garcetti

Those of you aspiring to get rich in California real estate better buckle-up and get ready for a tumultuous ride. Those owning commercial property, your day is coming; but today; let’s look at those of you that rent housing to others.

First, congratulations! You are about to win the lottery. At least according to people that I know that rent property. No, really. Thanks to the California Assembly, under the guise of affordable housing, you are about to score bigtime. AB 1482, has passed the Assembly and is waiting on the Senate for action. This bill is a ‘guaranteed income for life dream’…at least until you get hosed by whatever happens when Prop 13 is dismantled.

This bill allows you to increase tenant rent by five percent a year plus inflation.

“… prohibit an owner of residential real property from increasing the rental rate for that property in an amount that is greater than 5% plus the percentage change in the cost of living …”
AB 1482

It’s possible that the actual rent increase could go up to seven percent if our benevolent lawmakers decide to more closely mirror the Oregon version of the law but who knows. Anyway, the only thing standing between you and this utopian dream is two guys, the senate leader and Governor. I’m not sure I’d bet against the house (pun intended) on this movement.

So what is the downside of such blessed compassion on the masses?

Ironically, more than 10,000 apartment units in San Francisco reportedly sit vacant. That’s another result of the city’s rent control and tenant ordinances: Landlords are afraid to rent their apartments to strangers. Because tenants are granted special “rights,” it’s difficult to evict them. Landlords let the properties sit idle.

That’s a reality. If the cities where I own rental houses pass rent control, I won’t be the only one who is done with that type of investment. Who has enough blood-pressure medication to handle the stress of it? In rent-controlled cities, landlords exit the business and turn their apartments into luxury condos. If they can’t make a profit, they’re not about to install new counters or put on a pricey new roof. We end up with third-world conditions: the wealthy living in beautiful places and everyone else in squalor.
Rent-Control Initiative Could Obliterate California’s Housing Markets

Oh, should this legislation go down in flames, never fear. Regardless of legislative action, statewide rent control will be on the ballot in 2020 and it’s considered a slam-dunk by its opponents.

Californians need to ponder this unpleasant reality given that community activists appear to have gathered enough signatures to place a statewide initiative on the November ballot that would overturn state limits on local rent-control ordinances. The 1995 Costa-Hawkins Act forbids California localities from placing rental-price caps on single-family homes, condos and newer construction. It also bans vacancy controls, meaning that landlords in rent-controlled cities are free to raise the rent to market rates once tenants vacant the property.

If California voters approve the repeal of that measure, the state’s housing crisis will get worse—especially in the liberal, high-priced coastal cities that almost certainly will embrace tougher rent control laws. It’s going to be difficult to stop the initiative, for obvious reasons. The pro side will hit the “easy button” (the rent is too damn high; we’ll magically make it lower!). Unfortunately, it’s hard to make a complex economic argument to voters who are suffering from unaffordable rent and housing prices, but it’s worth rehashing the long-proven results of such ordinances.

Conversations with the Naïve “Charter School Edition”

In this week’s edition, we spoke to a charter school leader regarding the future of charter schools in California.

If you’re not aware, charter schools are kind of a hybrid, they get all their funding from the state just not as much per student as traditional public schools. The teachers are not union, but get CalSTRS (California State Teachers’ Retirement System) pensions. Charters are in demand and frequently have a lottery to determine admission. Charters have been popping up all over the country as an alternative to poor performing public schools; usually in the inner-city with high numbers of people of color. To say traditional public schools hate charter schools is putting it lightly. As a result they have been under siege in California. No less than four bills are floating around the capital trying to limit/reduce the number of charter schools in this state. One bill wants a permanent cap on the number of charter schools in the state, with new schools allowed to open only after one closes, so no growth.

I had a conversation on this subject with an executive at a group of six charter schools in the Sacramento area and to call this person naïve is an understatement. Here are a few examples that this person didn’t perceive as threats to charter schools.

This person had no idea that there was even a movement in the legislature to restrict or limit charter schools, let alone a series of bills for this express purpose working their way towards the governor as we spoke. Please keep in mind that the livelihoods of this person and their employees are at stake here.
The state has tightened their grip on local schools with such mandates as serving hot meals for breakfast and lunch; however, charters have no facilities or capabilities to comply. The person that I spoke with is under the belief that the traditional districts are willingly going to pick up the stack in this area since they have a good working relationship. Such wishful optimism is literally sticking your head in the sand. At some point, charters will be forced under the authority and control of traditional districts. In this particular case, they have charter schools operating in areas governed by three different traditional districts. While the EGUSD (Elk Grove Unified School District) is doing decent financially, Sacramento City Unified is a complete dumpster fire. If you don’t think Sac City isn’t gunning for your state per capita money then you are very naïve.
This person speaks about the curriculum being different from traditional public schools….this is disingenuous at best and an outright lie at worst. The state dictates the curriculum (he who has the gold, makes the rules) and if you don’t teach it….well, you’ll pay for it. Ask the Blog Father, he knows someone who is a teacher at a public school, not teaching the curriculum gets you “axed the question.”

Adding insult to injury, this person is completely aloof to what public schools can “offer.” A cynical view is that basically the only difference between traditional public schools and charter schools is about $7K in teacher pay. This naïve person scoffed at the notion of teachers leaving charters for public schools over money because get this…. “they drank the Kool-Aid.” (Bonus: this person had no clue where the drink the Kool-Aid saying came from.) On the one hand, such a comment is calling their staff mindless drones incapable of thinking for themselves, yet also thinking they are superior for working at a charter?

I think a drill to unionize charter schools is in play and will be seen in the next few years. I foresee a scenario in which the state’s education apparatus becomes more hostile to charter schools and uses the power of the budget to compel them to merge with existing districts or else…

Controlling benefits and linking them to union membership is the reason why you will never see a mass exodus from the CTA. Teachers get no benefits or legal representation without union membership. If charters were denied these benefits without union membership, their teachers would jump ship in a heartbeat.

The problem here is this, this charter group is banking on Fortune Charter schools (led by a black lady) carrying their water. This group didn’t even know about a charter school protest being held at the capital literally a stone’s throw away from one of their schools! Leaving Fortune to fend for themselves!

Margaret Fortune–Charter School leader
(not interviewee of this post)

Turns out this group, like many other charters, would prefer not to “stir the pot or speak up.” Problem is they are likely going to be legislated right out of existence in California. The CTA (~~Communist~~ California Teachers Association) is very strong and a huge player in this state, they want charters gone and charters seem to have no interest in speaking up or defending themselves.

Unions equate charter schools with corporate greed

I could throw in a, they came for the gypsies first, then the Pols, then the Russians, … but I won’t stoop to that level; since I’m a Trump supporter, it would be racist.

Hopefully the charter schools don’t get whacked, but I can’t think of many reasons to keep them around, as this group of schools have been accused of grade inflation.

Johnnie Does

Why Tesla Still Lives

When I saw that Tesla stock was up today (which is a rare occurrence), I thought Elon was back on Twitter but alas, I found a different reason. Tesla is getting free money.

As mentioned in a previous installment, Tesla is being subsidized by European automakers so they can make their emission goals thanks to the nonsensical fake environmental “science” of carbon taxes and emission credits. Now Bloomberg has published an article that Tesla is also being subsidized by American automakers GM (Government Motors) and Fiat-Chrysler.

For years, Tesla Inc. has hauled in revenue by selling credits to other carmakers that needed to offset sales of polluting vehicles to U.S. consumers. These sorts of transactions have largely been shrouded in secrecy — until now.

General Motors Co. and Fiat Chrysler Automobiles NV disclosed to the state of Delaware earlier this year that they reached agreements to buy federal greenhouse gas credits from Tesla. While the filings are light on detail, they haven’t been reported on previously. They also represent the first acknowledgments from carmakers that they’re turning to Tesla for help to comply with intensifying U.S. environmental regulations.

The deal with GM will come as a surprise to those who thought years of sales of plug-in hybrid Chevrolet Volts and all-electric Chevy Bolts would leave the largest U.S. automaker in the clear with regard to regulatory compliance.
GM and Fiat Chrysler Unmasked as Tesla’s Secret Source of Cash

Oh, also buried in this article is a nugget about the 2020 election.

And the company wants to bank the credits for future years when emissions rules get tougher — especially if a Democrat beats President Donald Trump in 2020.

“This might not be a bad hedge,” said Mike Taylor, the founder and president of Emission Advisors, a Houston-based environmental credit consultant and broker. “If a Democrat gets elected in 2020, GM may need the credits and prices may go up.”

If you read further into the article …

Tesla has generated almost $2 billion in revenue from selling regulatory credits since 2010.

So between US and European manufacturers, we now know that Tesla has banked at least $4.3 billion dollars just for existing—and producing nothing.

Once again, it is proof positive that in a truly free-market economy, Tesla would not cut it as a viable business. Only because of government interference–direct and indirect–does this company still draw breath.

CRA Finds its 2020 Ticket

Just when everyone thought the CRA was dead, they come back with a vengeance like never before. They have no more use for Ted Cruz since he has signaled that he wants to work with Trump. Other saviors like Ben Sasse and Mitt Romney (yeah you endorsed him too) were taking a pass on challenging Trump in the primary. Despite these setbacks, you got good news last week. Justin Amash a little-known Republican from Michigan called for Trump’s impeachment.

Mr. Amash is endorsed by the Tea Party, and the CRA loves him because, like Tom McClintock, he claims to vote “NO” on everything. Amash claims he read the Mueller Report and there is substantial evidence to begin impeachment proceedings, (heavy emphasis on claims to have read by the way). Amash doesn’t know it, but he found a friend in every dues paying CRA member. Amash is–so far–the only Republican member of the House to call for impeachment. I’m sure the CRA couldn’t be more proud. I think Amash will be the newly endorsed candidate for a 2020 primary challenge, I hear the ballots are already being made up.

As for a VP slot, word is that this is already locked-up by retired “judge” Andrew Napolitano (R-Fox News). The T.V. judge earned this honor for his take that the Mueller Report when added to Trump’s subsequent bizarre interview can only mean that things don’t look good for Trump. He concluded that “impeachment is on the table.” He is likely a household name with the CRA, and a Fox News contributor to boot.

Napolitano, by the way, was suspended as a contributor for essentially making things up about said Mueller Report while working at Fox. Sounds like a great CRA member and a candidate to boot! Napolitano, when he appears on Fox, just blows a bunch of hot air, which as long as it doesn’t travel through a Smart Meter makes him a winner for the CRA.

I’m glad the group is turning things around. With the departure of Ted Cruz from the reservation, I feared for the safety of their members…. suicide is painless but it’s a permanent solution to a temporary problem!

Editor’s Note: Suicide is Painless would be a great campaign theme song for Amash and da Judge since it hasn’t been heard since MASH was cancelled in 1983. It also describes the political result of Republicans opposing Trump. Maybe the campaign song’s lyrics should include the line, “NeverTrumpers are brainless, political suicide isn’t painless.”

However, as a word of caution, to install this ticket you will need to impeach both Trump and Pence. There are many ways to do this, but I recommend changing the Senate rules because you need the GOP majority to remove the President…but I digress.

I must admit I’m disappointed the CRA couldn’t come around on Trump. I know he never banned Smart Meters, and hasn’t gone far enough on abortion yet, but this new ticket Is the answer to all your issues. Amash/Napolitano “Change you will get.”

The best part is that due to the ineffectiveness of the CRA and California Republican Party, all Amash and da Judge have to do is release their tax returns and they will be the only Republican Presidential candidates on the California ballot.

In a revival of legislation that former governor Jerry Brown vetoed in 2017, the California Senate has passed a bill that would deny access to the state’s 2020 presidential primary to any candidate who hasn’t disclosed five years of personal income tax returns.
California Threatens to Ban Trump From 2020 Primary Ballot Unless He Releases Tax Returns

Bloggers note: We here at reallyright.com are sorry you never got behind Trump as witnessed by your sheep voting in mass to endorse Cruz when he had NO MATHEMATICAL WAY OF WINNING THE DELEGATES REQUIRED! We also get it that you hate the man. Think about how things would have gone should Hillary have won…. Liberal leaning Supreme Court, Obamacare with no chance of repeal, and all-around chaos involving her. Move on, Trump is here to stay.