November 16th – Dead End

What I’m Reading

Dead End: Just a few days after St. Paul, Minnesota voters approved the nation’s strictest rent control measures, developers and their lenders are halting projects due to the economic impact.  Now politicians – many of whom supported the measure – are backtracking furiously as they realize that the outcome will be dramatically less development.  In their defense, there was no way of knowing this would happen even though the exact same thing has occurred everywhere it has been tried.  Star Tribune

Sweet Spot: New research from Green Street finds that single-family homes built for rent are proving to be the real estate strongest market segment for investors, delivering strong returns based on sustained demand, short supply and high prices. The Real Deal

Pushback: The mayor of Redondo Beach is leading an initiative to overturn SB 9, which passed recently and effectively did away with single family zoning in California by allowing homeowners to build duplexes or subdivide their lots.  The so-called Community Zoning initiative, which would block the state from imposing most kinds of zoning requirements on cities and counties has until April of next year to collect the 1.5 million signatures needed to qualify the initiative for the November 2022 statewide ballot.  This could get very interesting.  Easy Reader News

Opting Out: Productivity is growing faster than the marginal returns to consumption and people – especially Gen Zers – are opting out of the traditional workforce.  This has major implications for full employment and ability to retain workers, none of them good.  Business Insider

Waiting Game: Consumers and investors are currently behaving as if they believe that the recent price spikes are a temporary phenomenon driven by the pandemic.  The risk is that consumers and businesses start believing that even bigger price increases are coming in the future—and adjust their behaviors in response. The Overshoot

Chart of the Day

Household balance sheets have arguably never been stronger.  Most surprising here is how much cash households are holding given negative real rates.  

Image

Source: Bank of America Research

WTF

Rolling: A woman who was pulled over and arrested for drunk driving at 2am claimed that her erratic driving was “due to her eating an eggroll” because Florida.  The Smoking Gun

Double Life: A man who was recovering from a medical procedure in the hospital was busted for leading a double life when his wife met his fiancée because Florida.  CBS News

Basis Points – A candid look at the economy, real estate, and other things sometimes related. 

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