Category: Money

San Diego County Spends $36M To Give Employees Free Parking

The San Diego County Board of Supervisors recently cut the ribbon to officially open a new $36,000,000 parking garage at Cedar and Kettner in Little Italy.  The garage has 640 spaces, built at a cost of $56,250 per space.  The garage will primarily be used for free parking for county employees and will also be available for paid public parking use on nights and weekends.

Here’s a laudatory video from the ribbon-cutting:

Supervisor Diane Jacobs noted “this truly is the best looking parking garage in the entire region and the most needed parking garage”.  The “stalls are a little wider than you’ll find in most commercial parking structures”.

The Little Italy neighborhood is home to many of San Diego’s most highly regarded restaurants including Bracero, Buon Appetito, Monello, Ironside, Davanti Enoteca, Juniper and Ivy, and many others.  Most of the restaurants have little, or zero, private parking provided.  The area has also seen tremendous growth in the number of residential units in recent years.  The result has been a thriving neighborhood that is among the most vibrant places in the entire county.  A large part of the enjoyment of Little Italy stems from the many people and attractive buildings present – I doubt India Street would be improved by the addition of a massive parking garage.  In recent years the need for parking of unused vehicles has been further reduced due to the explosive growth of taxi-hailing apps like Lyft and Uber.

The new county parking garage is the second portion of the “Waterfront Park project” that created a 12-acre park across Harbor Drive from San Diego Bay, replacing 8 acres of surface level parking lots adjacent the County Administration Building.  That project cost $49.4 million dollars after an initial project cost estimate of $44.2M with $19.7M for building the park, $18.5M for building underground parking, and $6M for design and administration costs.

In total, between the two projects $54.5M was spent on moving parking spaces and $18.5M was spent on the actual park that people enjoy.  This is excluding the $5.2M of difference from the original estimate to the actual construction costs and the $6M of design and administration costs.  Those cost breakdowns yield a result of 75% of funds used to move spots for empty cars and 25% of funds used to build a park.  For purposes of this article let’s assume the admin and cost over-run figures split on the same lines.  The vast majority of the funds used for these joint projects was for moving parking spaces, not for building a park.

locations
This is how far the parking spots moved, for more than $50 million.
before pic
Here is the before photo – this is how San Diego uses prime bayfront real estate. Shake your head.

This project was sold as a project to build a great park – it would seem fitting if most of the funds were actually used to build a great park.  Instead we spent 75% of the funds to relocate parking spaces, not creating new spaces but moving existing parking spaces.  251 spaces moved approximately 15 feet, they were undergrounded in the same location as the previous surface level lots.

To boot, the county demolished an historic building in Little Italy to make room for the large new parking garage.  The Star Builders Supply Company building was built in 1911 and added to the county list of historic buildings in 1991.  County supervisors unanimously voted to demolish the building.  It’s now gone but you can enjoy the below video of the beautiful piece of San Diego history that has now been erased like so many others.

From the total 891 parking spots that were moved, 71.8% were moved about 1-2 blocks east from their previous location.  28.2% were moved about 15 feet underground.  To accomplish this feat, county taxpayers spent $54.5 million dollars.  As enjoyable as the the new park is and a huge improvement to the ugly surface parking lots perhaps it would have been better to save that money or spend it on a better use.  To move so many parked cars such a small distance seems a pyrrhic victory.  A small consolation might be that the total number of parking spots went from 1,200 in the surface lots to 891 in the new underground and multi-level parking garages, a net reduction of 25.75%.  We could have spent even more money if we moved all of them!  A legitimate question would be if the previous 1,200 spots or the new 891 spots are actually needed or not. But as so often happens when it comes to accommodating automobiles, too much is never enough and no cost is too high.  More lanes on I-5 for $6 billion? Of course!  More parking lots in Balboa Park? Of course!  Analysis of the actual demand and cost comes far behind the populist appeal of free goodies for motor vehicles.  The environmental impacts of our car culture is even further down the priority list than our dollars.

Enjoy the Waterfront Park (aka Parking Lot Relocation Park); it’s a great place.  Building beautiful things is something a great city does.  I’m proud that San Diego built it.  In total, though, this project was a massive use of taxpayer dollars to move parking spots a small distance – not to build a great public park.  They are distinct items and taxpayers did not need to spend tens of millions to provide a tax-free employment perk that most employees, government-employed or not, do not enjoy.  We also did not need to use prime real estate to do so.  Taxpayers must demand better stewardship of public funds and assets.

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Many thanks to Streetsblog, San Diego Free Press, Bike San Diego, and Voice of San Diego Morning Report for sharing this article!

Personal Finance – Three Broad Points to Start From

I’ve recently been talking about personal finance with a variety of people and following are some broad points that are a good starting point for thinking about finances and developing a game plan.  I hope these notes help you to get organized and put a strategy in place to chase down your goals.

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There’s a lot of beauty in the world. Enjoy it.

  • Know Your Info

    • To decide where to go, you have to know where you are now.  Put together a list of all your accounts – assets and liabilities.  Add the current balance for all the accounts.  I highly recommend using Mint to track balances and where money is earned and spent.  It’s free and a huge, huge help in managing your finances.  This simple exercise is so important and shows you how things stack up.  It might not be pretty.  It might be gorgeous.  Either way, you must know where you stand before you decide where to go.
    • Take it a step further and look at your income and expenses.  For the past month look at what you made and what you spent.  If you’re using Mint this process is automated and you can use the built-in budget and tracking tools to see where you spend and start to identify where you want to make changes.

  • Automate

    • Who wants to spend time paying bills? No one. (Except maybe Rick Moranis in Ghostbusters.)  Automate your finances – savings, bills, etc. – and save yourself time spent on recurring non-value activities.  Take that time and use it to pursue your goals.  Look over last month’s spending and see where you want to trim your budget.  Talk to your spouse about an investment you’re interested in.  Read a post or two by Mr. Money Mustache and learn something new.
    • Automating savings tools is especially valuable.  Put your 401k on auto-pilot, with an automatic annual increase, or open a Betterment account and contribute $10 a week.  You’ll remove the need to consciously choose to contribute and while you’re not paying attention those funds will grow.   Weeks, months, years and the power of compounding really starts to add up and you don’t even have to think about it.  Another benefit is once the money is invested you won’t be tempted to spend it.

  • Prioritize by Size

    • Focus your efforts on the biggest items in your budget whether income or expense.  We all have a limited amount of time and you’re better served prioritizing based on size.  Does the $4 latte you buy daily matter? Yes.  Does your $200,000 mortgage matter more? Yes.  Daily habits are important and consciously working to have healthier, better habits is a lifelong process.  Don’t beat yourself up about the small things – if you’re consistently working on the big things you’ll come out on top.  Taking a look once a year and getting comparison quotes on your insurance or cutting a $100 a month expense is worth more of your time than clipping $2 worth of coupons every week.  Again – good practices on small matters do matter but should be lower on the priority list than large matters.

Once you know where you stand and where you money is going to and coming from you can look at your goals and how you can take action to pursue them.  Best of luck on your financial journey!

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Cars are a huge expense for most Americans. Might be worth thinking about.

Letter to Editor – Short-Term Rentals

Below is a letter to the editor I wrote to the San Diego Union-Tribune that was published on October 14, 2015.  The short-term rental debate continues in San Diego and the 125 word limit forces one to choose a specific point to make.  The one I address below is that short-term rentals are bringing many millions of dollars into San Diego and those monies are broadly distributed to property owners across the city (and to businesses across the city as well).  I do not doubt that there are some issues caused by short-term rental tenants, as there are issues caused by tenants of all sorts – long-term renters, short-term renters, property owners, vagrants, etc.

We should not lose sight of the enormous economic opportunity that short-term rentals present for San Diego, and San Diegans, while discussing how to address problems created and other factors.

 

Short-Term Rentals Present Opportunity for San Diegans

Regarding “Short-term rentals pay $16.4M in taxes” (Oct. 8): The expanding tourism sector of short-term rental properties creates more than a quarter of a billion dollars of economic impact in the City of San Diego – $285 million – per a study released last week by the National University System Institute for Policy Research.  The study’s author, Erik Bruvold also notes this is a conservative estimate and that additional growth is expected in future.  This large, positive economic impact in a city well-known for tourism should not be banned, as some are calling for, in response to complaints of noise, trash, and other negative impacts.  Millions of dollars for San Diegans is a good thing, and provides funds for code enforcement and public benefits like parks.

John Anderson

North Park

Rip Current Brewing is one of the many local businesses my guests frequent. Congrats to Rip Current on recent award of "Best Very Small Brewery"!
Rip Current Brewing is one of the many local businesses my guests frequent. Congrats to Rip Current on recent award of “Best Very Small Brewery”! at the Great American Beer Festival!

Good Reading – The New Rules of Real Estate

I recently read Zillow Talk: The New Rules of Real Estate by Spencer Rascoff and Stan Humphries.  It’s a book in the “Zillow Talk” series and the authors are the CEO and Chief Economist, respectively, at Zillow, an online platform for housing data.  Zillow and Redfin are the biggest players in the space for MLS listings accessible to the public.

Austin is a really cool town and they have houses there! [Zillow screenshot]
Austin is a really cool town and they have houses there! [Zillow screenshot]
The book is a quick read – 258 pages – but is entertaining and has some interesting anecdotes and insights.  If you’re interested in real estate or work in the industry I’d definitely recommend checking it out.  Some of the items I most enjoyed learning about were:

  • Breakeven Horizon – A tool that Zillow has put together to estimate the number of years it would take for renting a residence vs. buying to even out when considering tax benefits, expected appreciation of real estate, etc.  In San Diego County the breakeven is 3.8 years so if you expected to live here for 5 years it would probably make more sense to buy rather than rent.  At the end of 2014 that national breakeven horizon was 1.9 years, there’s a lot of variation among markets.  Interesting tool to check out if you’re considering whether to buy or rent.
  • Words Matter – The book takes a look at how words affect home values in a variety of ways.  Which street suffixes are most valuable? Way, Place, and Court.  Which are least valuable? Street, Road, and Avenue.  The less valuable suffixes are the more common ones.  The book also looks at named streets vs. numbered streets (named streets are much more valuable – 33.5% more valuable in Dallas!).  Which words to use in a listing  to maximize price is also discussed – granite and stainless are great to use but cosmetic and TLC should be avoided.  More words in a listing also help quite a bit.
  • Timing (and Pricing) Matters Too – When is the best or worst time to sell or buy a home? It varies during the year, and in different ways in different markets.  December is a great time to buy generally and March/April is a great time to sell.  Having your listing price end in a 9 is a great idea but ending in a 4 is a bad one.  8 is also a great ending digit if you’re in an area with lots of Chinese residents.

Fun read and lots of interesting trivia and tidbits to absorb.  Well worth a couple of hours if you’re buying, selling, or potentially doing either in the future.  Enjoy!

The book is better than my photo skills. :)
The book is better than my photo skills. 🙂

Thinking About Housing Affordability

San Diego real estate is pretty expensive – the median home price in September 2015 was $460,000.  There are many places where real estate is more expensive – New York and San Francisco are prominent examples. Close to San Diego, in September 2015 neighboring Orange County had a median price of $615,000 (33.7% higher) and Los Angeles had a median price of $490,000 (6.5% higher).  The cost of housing in San Diego is a common topic of conversation.  I’ve been thinking about housing affordability and just wanted to jot down my thoughts on the basic causes as I think and read more about the subject.

There are two primary factors at play in pricing an item – supply and demand.  For housing this basically means:

  1. Supply – number of housing units
  2. Demand – number of people (and dollars they have)

To lower the price / value for housing either supply needs to increase or demand (population and dollars) needs to decrease.  There are a variety of ways to impact either of these

Increase supply

  • Increase number of units – build more housing (homes, condos, apartments, etc.)
  • Increase number of people per unit – Increasing the amount of persons per unit (more per room or more per total unit) makes more units available
  • Small units – Replace large units with smaller units to increase overall supply.  Example would be to replace one 3 bedroom home with 4 townhomes.
  • Build higher – At surface level, the square footage can be used only once.  Building upwards allows the same amount of land to support more units.
  • Build farther out (sprawl) – Expand the footprint of the developed area of the town / county to increase the amount of units.
  • Convert land to residential use – Repurpose commercial land, roadways, agricultural land, etc. to residential use.  Increasing the land available for residential use supports creation of more units.
  • Add units not on land – Utilize water (bay, ocean) to add housing units.

Decrease demand

  • Decrease desirability – Reduction in safety, outdoor amenities, pollution levels, etc. decreases demand as people will be less likely to elect to live in unsafe or undesirable location.
  • Decrease purchasing power – A downturn in the economy or weakness in job market will reduce the amount of money available for property purchases or rent, bringing down the price level.
  • Decrease population – Probably not feasible in a variety of ways but could indirectly be impacted by stopping creation of new units (which would counteract impact by reducing supply)
  • Increase other costs – An increase in the cost of other items – electricity, food, taxes, etc. – would leave less money available for housing, potentially reducing demand
  • Reduce buyer pool – Limit pool of parties that can purchase property.  Could add surcharges or taxes to non-owner occupied properties or potentially exclude buyers unless they plan to occupy.

I’ll likely add to this but before getting into the more intricate issues involved with housing and property cost I wanted to lay out thoughts on the underlying basics.  Have some thoughts to add? I’d love to hear them.

Many people desire to live by the ocean. Get rid of the ocean, reduce demand.
Many people desire to live by the ocean. Get rid of the ocean, reduce demand.

Neighbors Lying About Neighbors – The STR Debate Continues

Below is a Facebook post from an Airbnb host that was shared last night after the Community Planners Committee meeting on the issue of short-term rentals.  I plan to meet with the commenter to get additional details but see little reason to doubt the story below given the amount of details included and don’t see a reason for that person to lie.

I wanted to share this today because it seems that in the debate in San Diego there is much scorn being placed on those hosting via platforms like Airbnb and VRBO.  Few are questioning the validity of complaints about noise, trash, and parties – they are taken at word.  The few times I’ve had to call the police or a towing company they have arrived and addressed the issue promptly and completely.  I find it hard to believe that in the wealthier parts of town (where many of the complaints and anti-STR groups are centered) this would not be the case.

In the below instance you can see the power that this default trust gives to complainants.  I’ve removed specific names from the below post but everything else is verbatim from the host being accused of bad behavior.

I need to know who to write to in order to speak my voice. Three of the speakers lied. I have proof because I’m the big corporation with a water park in my back yard. I’m a mom of 3 whose son has brain cancer so make a wish gave him his wish to have a small waterslide added to the pool already there and I’m called a water park. I rented it out for the summer to pay bills and they knew that but adopted the “not in my neighborhood” signs, harassed me and my family (yes I was the one who broke down in tears talking about it at the PB mtg). All before a single guest arrived. C. harassed every renter and at 2pm in the afternoon when a family came out back and she saw they were not white she left voicemails which I kept with her displeasure. I could go on and on about her C. C. who said he is native and moved here from Texas a few years ago and doesn’t live on the street,etc. Their complaints that they put in writing was a baby cried and one renter dared to have food delivered. I have proof all my renters were families and not parties. I drove by day and night just to make sure. Sorry I had to get that out.

There remains much to be discussed in the STR debate in San Diego but hopefully we can step away from name calling and outright falsities to impugn those we disagree with.

Thoughts on Saving for Kids’ College Educations

HOUSTON, TX - DECEMBER 22: J.J. Watt #99 of the Houston Texans enters the field before the game against the Denver Broncos at Reliant Stadium on December 22, 2013 in Houston, Texas. (Photo by Scott Halleran/Getty Images)
Rage on, eldest kids in classroom. (Photo by Scott Halleran/Getty Images)

If you live in a privileged enough strata of American life you’ll likely encounter questions about paying for your offspring’s college education starting around the age of 1. 1 day.  Even before the competition begins for the most coveted preschools and under-3 soccer leagues you can expect to start thinking about saving up for a diploma.  (In regard to the soccer leagues, remember to utilize birth control to plan your child’s birth date to ensure they are the oldest – and thus, biggest and strongest – in their class and can dominate like AJ Watt).

Although I belong to the economic class for which college savings is a major priority I don’t agree.  Primarily it is because I paid for my college education in full, and knew that would be the case from the time I was in 5th grade.  I was fortunate to receive a number of scholarships, loans, and good jobs that allowed me to pay for college.  I expect my children to do the same, or attend a less expensive school if their academic record doesn’t warrant scholarships or entry to a school with a robust needs-based financial aid policy.  Secondarily it is because it is more important to take care of my own financial house before my children’s since I will not be able to do much for them if I’m in a poor position myself.

A major tool for saving for college today is the 529 Plan, introduced in 1996. “Qualified tuition program” is the legal name though many refer to it simply as a 529 College Savings Plan.  The plans are different in each state and can offer a prepaid tuition plan and/or a savings plan.  Some states offer a tax deduction for contributions and the earnings in the plan are federally tax free if used for secondary education expenses.

529 Pros & Cons

Pros

  1. State tax break (depends on state) – In our state of California there is not a tax break for contributions to 529 plans.  You can live in one state and invest in another state’s plan and funds can be used across state lines as well, they are not tied to a specific state.
  2. Federal and state tax benefit – no tax on earnings of 529 plan

Cons

  1. Federal Penalties – 10% penalty on earnings for funds not used for education. Taxes also applied to earnings of 529 plan.
  2. State penalties – In my state of California, an additional 2.5% penalty applies if the federal 10% one does
  3. Pressure – Implicit or explicit pressure on children to attend college may be amplified by financial pressures from establishing and funding plan
  4. Limited options – Plans vary, but narrower set of options than investing outside a plan
  5. Limited flexibility – This is a big one for us. If we run into an emergency (or a great opportunity) we feel our financial needs must come before our children’s college funding.  A 529 plan locks in the funds applied for quite a while and limits the options unless one wants to take the penalty hit.
  6. Plan fees – On top of the fund fees (which you would also pay investing directly) the 529 plan likely applies a separate fee.  CA ScholarShare charges an additional .10% fee, for example.
  7. Financial aid – 529 funds count as a negative in financial aid applications (as do many other assets) in assessing student need.

Instead of utilizing a 529 plan for our kids, we’ve set up a Betterment account for each (which is currently in our name).  We make a contribution each month to grow the value over time.  The accounts for them are basic taxable investment accounts to preserve flexibility and due to this, we value the tax-loss harvesting Betterment provides as worth the fees charged.  In time we may choose to use these funds to purchase investment property, gift to our children, add to our retirement funds, or take another course of action.  Whatever we do, it will be with an eye to providing for our children but not be locked into a specific program and set of options.  In our case we’ll lose out on the tax break on earnings but will keep flexibility in the many years until our children are considering college.

[Disclaimer: This post is not and should be be considered to be investment or tax advice.  The post was typed by a goat while dictated by the author.  Please consult your religious authority, accountant, political official, or post-person for additional inquiries.]

 

 

Bike Sexy Debut – Tees Now Available

Excited to announce that I’m working with Ryan Woldt of Socalsessions.com on a project we’ve dubbed “Bike Sexy”.  Basically we think that riding a bike is sexy and we want to encourage people to be loud and proud about it.  Being healthy, having fun, helping the planet, saving some money, connecting with your community – how much better does it get? #bikesexy

Our first Bike Sexy product is a sweet black t-shirt with silver reflective ink.  The material is light combed cotton that is super soft.  You can order online here or hit one of us up personally.

bikesexy t
Awesome shirt for awesome you

Props also to Ryan for last week’s debut of Night Rider, a film produced with Cool Guys Productions giving a view of the joy of biking in San Diego at night.  I’m looking forward to many more video projects highlighting the cultural importance (and fun!) of biking here.  Check out the short film below with great music from local band Dead Feather Moon.

https://vimeo.com/138476195

Bonus thank you to Ryan for putting together the first Undie Bike Ride in San Diego which took place in Pacific Back on September 17th.  Thanks to everyone that came out and hope you had a great time!

Pizza Crust Recipe – Quick and Tasty

We often make our own bread, using this great recipe.  A bonus to making our own bread is we have the basic ingredients needed for making a variety of baked foods.  We often make pizza at home and use the following scratch dough recipe.  It’s not the best I’ve ever had – that would go to high temperature Naples-style pizza – but it’s better than buying pre-made dough and only takes 10 minutes.  I had a couple of requests for the recipe so am sharing it here – enjoy!

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Chorizo, onion, cilantro, kale, with jack cheese and no sauce. Yum.

Ingredients

  • 1 (.25 ounce) package active dry yeast
  • 1 teaspoon white sugar
  • 1 cup warm water (110 degrees F/45 degrees C)
  • 2 1/2 cups bread flour
  • 2 tablespoons olive oil
  • 1 teaspoon salt

Directions

  1. Preheat oven to 450 degrees. In a ceramic bowl, dissolve yeast and sugar in warm water. Let stand until creamy, about 5 minutes.
  2. Stir in flour, salt and oil. Mix by hand thoroughly. Let rest for 5 minutes.
  3. Transfer crust to a pizza pan or baking sheet lightly greased with olive oil. Spread with desired toppings and bake in preheated oven for 20 minutes, or until golden brown. Let baked pizza cool for 5 minutes before cutting and serving.
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Jack and feta cheese with kale and onions. Very tasty, except for the feet.

This recipe is from Allrecipes.com with some tweaks to the instructions. Have another tweak or a topping suggestion? Drop it in the comments or email me and I’ll add.

Happy cooking!

Airbnb Not Typically Allowed in Apartments

As the Airbnb debate continues in San Diego, I found it interesting to receive a warning letter from my previous apartment manager, Torrey Pines Property Management this week informing tenants that using sites like Airbnb is not allowed in the buildings they manage.  I contacted Torrey Pines and was informed that this is a proactive measure to avoid issues in future, not in response to issues that have occurred.  Good for them for taking a proactive, informative approach to the issue.

I wanted to share this since there are likely many San Diegans that would like to utilize sites like Airbnb to rent a spare room, or their apartment while they are out of town.  If you rent a property, or live in a building or community with an HOA it is important to check the terms or covenants, conditions, and restrictions before trying to host a guest on these platforms.  Note that this may also be the case even if you’re not receiving money by using a site like HomeExchange or Couchsurfing.

In addition to issues with your landlord, renting a room in your apartment or home is currently illegal in the City of San Diego and you may be liable for tens of thousands of dollars in fines as a woman in Burlingame has found out.  To date, this is the only penalty of this sort in San Diego but the Code Enforcement Division will be responding to complaints about this sort of use in the future and I assume pursuing violators with the same vigor as the Burlingame case.  Per conversations with Code Enforcement any enforcement will be complaint-driven – they won’t be using the publicly accessible information on sites like Airbnb and VRBO to identify potential violations.

If your lease doesn’t allow you to host on Airbnb but you think it would be beneficial try talking to your landlord.  Some landlords are willing to allow the use if you agree to take liability for any issues caused or may be willing to allow it for an increase in your rent payments.  I know a couple of people personally using this approach, and in San Francisco it worked out for a couple as well.

From SFGate:

Kelsey and Mike Sheofsky achieved that balance. The couple travel frequently for Shelter Co., their luxury-camping business. They had dabbled with the idea of listing their Mission District house on Airbnb. Then their landlord approached them.

“She said, ‘What do you think about Airbnb-ing your place when you’re gone?’ ” Kelsey Sheofsky said. “I thought, ‘Perfect, we’re ready to go.’ Now we do it, and we give her a 20 percent cut of any money we make after cleaning expenses. Some months we give her an extra 600 bucks.”

Your landlord may or may not be open to Airbnb – make sure you are informed and if you have a question make sure to ask.

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Our most recent Airbnb stay was in Budapest adjacent the Opera House.

Below is the letter from Torrey Pines in full.

Dear Resident(s):

The increasingly popular site airbnb.com where individuals can post short-term, vacation rentals is a growing concern for Landlords in San Diego due to the noise, strain on resources, and lack of regard for the property that comes from using any residence as a “Hotel” or “Bed and Breakfast”.

We would like to take this opportunity to remind our valued Residents that posting your apartment on this, or a similar site is considered a breach of contract and could result in legal action including eviction from the premises.

We take this matter very seriously and will be moving forward with legal action should your unit be located on a listing site for the purpose of subletting without our expressed written consent. Please contact your Property Manager if you have any questions or wish to report suspect or known violations.

Sincerely,

Torrey Pines Property Managment, Inc.
(858) 454-4200
www.torreypinespm.com