Rental housing designed to stress your budget, a municipal fine against Elon Musk that is not stressing his wallet and a Chinese property developer who is stressing investors. From the wild and woolly world of real estate, here are the hits and misses for this week.
Miss: The Rent is Too Damn High. Living in the Big Apple is not for the financially faint of heart, as new data from Miller Samuel and Douglas Elliman recorded the average monthly Manhattan rent in July was $5,588, up 9% year-over-year and a new record. Manhattan’s median rent also set a new record at $4,400 per month, and another peak was reached with the $84.74 price per square foot. And in view of the seriously deteriorated quality of life in Manhattan, one has to question why anyone would be willing to pay so much in rent for living in a city that is far past its glory days.
Hit: An Eagerness for Change. One of the surprising news stories this week involved a survey from the nonpartisan Public Policy Institute of California that found the majority of Californians (55% of those polled, to be precise) were in favor of relaxing the state’s stringent environmental and land use restrictions in order to boost the short supply of available housing. For a state that’s historically been in the forefront of environmental protection, it is invigorating to see that most residents acknowledge that too much regulation has its drawbacks. The only region in California that wants to keep the restrictions untouched is the Bay Area – and, as luck would have it, this leads nicely into our next entry…
Miss: Punishing Elon Musk (Not). San Francisco officials added a post-script to their effort to force Elon Musk to remove the giant flashing “X” sign from the roof of his social media company’s headquarters – the Department of Building Inspection issued a fine of $4,447 for putting up the sign without obtaining a permit. How did they come up with such an odd sum? Well, $761 was for a building permit to remove the sign, $1,580 was for Planning Department enforcement fees and $2,106 was for Department of Building Inspection enforcement fees. Musk has a net worth for $239 billion, so $4,447 is chump change for him – but in this case, he isn’t paying a penny. Columbia Reit – 650 California, the landlord for the building where Musk has his company, is being stuck with the fine. The landlord also has a lawsuit against Musk for non-payment of rent, so these new shenanigans are probably not appreciated.
Hit: Inhale, Exhale, Stay Calm. San Francisco bureaucrats notwithstanding, there are plenty of laid-back people in California. Indeed, a survey by LawnStarter.com on the nation’s Most Relaxed Cities found California occupying five of the top 10 rankings – with San Francisco placing second behind Sunnyvale in California’s Santa Clara County. The survey compared the 200 biggest U.S. cities based on 42 stress factors and stress relievers including depression rates, the average length of a workday, and access to spas and massage therapists. Perhaps not surprisingly, Detroit ranked last as the most stressed city in the nation. Oh, National Relaxation Day is on Aug. 15 – not a bad day to take off from work, yes?
Miss: What’s Chinese for “Ouch”? Country Garden Holdings, the last major Chinese property developer that did not go into default, is going through a painful patch. According to the Wall Street Journal, the company is expecting to announce its worst loss in the 16 years since it went public, with a red ink bloodbath of $7.6 billion for the first half of this year. Contributing to this mess was a 60% decline in contracted sales from one year ago. And the impact of this decline is scaring the financial markets, with the Journal noting that investors are treating Country Garden “like a ticking time bomb.” The company’s shares, which are on the Hong Kong Stock Exchange, were trading today for one Hong Kong dollar, or about 13 cents in American currency.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
Photo by Thierry Ehrmann / Flickr Creative Commons
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