Saturday, July 16, 2016

Affordable Housing Politics


It is an election year and therefore the silly season of campaigning is in high swing.  Politicians eager to use your hard earned income in the form of taxes to buy votes.  Simple equation everywhere.

Only in "progressive" cities like Seattle just worse.

Here is a campaign mailer from a candidate I've never heard of named Marcus Courtney.  He's running for State Representative in the Washington legislature.

He's got some ideas for providing more affordable housing.  Unfortunately, some of them contradict his stated goal.

He wants to create a Washington Department of Housing, the equivalent of HUD on the state level.  Perhaps he should first investigate HUD's dismal record in building affordable housing or the mismanagement of HUD's Section 8 program.  Since when does putting the government in charge of something actually increase market efficiency?

Next he wants local authority rent control.  No comment necessary on this nonsense.  When does rent control lead to MORE housing units?  This author is correct when he says if you want to destroy a city rent control is the best way to do it.  Maybe Mr. Courtney should visit San Francisco and learn about their rent control experience.


The photo above is not Berlin in 1945 but the South Bronx in New York City in 1980.  This devastation was the result of New York's never ending experiment with rent control.

My favorite campaign promise from the above mailer is to "ensure residential construction includes infrastructure for electric vehicles."  Perhaps Mr. Courtney does not understand the cost of installation and maintenance of this system is not borne by the landlord but by the tenants---MOST OF WHICH DO NOT DRIVE ELECTRIC CARS and NEVER WILL.  So the richer car owners will have their fuel rights subsidized by the poorer tenants who do not own cars.

Installation costs for electric car charging in apartment buildings are variable but here is one estimate for about $21,000 for a system.  That sounds very low to me given the specifications necessary but on a small apartment building of 8-20 units still prohibitive.

Mr. Courtney has other progressive ideas such as a new income tax for Washington (which currently, Thank God, does not have one) and all the usual green energy and diversity boilerplate required of all liberal candidates for office.

What I can say with certainty is imposing capital spending burdens on landlords does not create affordable housing.  Making landlords pay for things, especially boondoggles like electric car charging stations, make housing less affordable.  Do politicians think landlords are going to raid their children's scholarship funds or their own 401(k)s to pay for these retrofits?  Tenants in a building pay for all improvements through rent, a common sense idea which often eludes the political mind.


Friday, July 1, 2016

Mike and Irene Milin Statement



I have been receiving a high volume of media requests for more information on Mike and Irene Milin.  I have written about these former get-rich-quick real estate gurus in the past such as here and here in this blog.

For those who do not know, the Milins have returned to the public spotlight in a huge way because of their involvement with Trump University and also having made donations to the Marco Rubio Presidential campaign.

This is my formal statement on the Milins to the media and those requesting more information from me.



Mike and Irene Milin have been fixtures on the get-rich-quick guru circuit since the 1980s.  The fact the Milins gave money to the Rubio campaign is no big deal.  The Milins are U.S. citizens and long time Republicans.  They supported Mitt Romney in 2012.  The Milins are also active on political issues involving Israel such as supporting Jewish Republicans in U.S. Congressional races.  The Milins supported Republican candidate and former Hawaii governor Linda Lingle on her unsuccessful U.S. Senate run in 2012.

The legal history of the Milins is well documented online such as in articles like this one.  Like most major real estate gurus they have had many encounters with unhappy customers, law enforcement, and regulatory agencies.  You cannot sell expensive books, programs, seminars, and home study courses that promise people easy and instant wealth and then expected still poor and now unhappy people to react calmly.

What fascinates me about the Milins is not their get-rich-quick exploits such as through Trump University but their personal politics.


How does a 1970s counterculture couple in just ten years go from radical communist SDS members advocating the violent overthrow of the United States government at Arizona State University to appearing on Robin Leach's television show "Lifestyles of the Rich and Famous" boasting about champaign wishes and caviar dreams?

Leach would go on to star in a Milin's half hour sales infomercial called "Two Years to Financial Freedom" where the couple drove around in a Rolls Royce, exited a Lear jet, and showed off expensive houses and just about everything else that costs lots of money.  Leach would later successfully sue the Milins for copying his TV show format and promoting their wealth in other infomercials.

Again, how does one go from Karl Marx to Robin Leach in ten years?

This is the Milin book I would love to read.

The basic question I am getting from media inquiries is whether the real estate community knew all about the Milins and their reputation at the time Trump University hired them.  Sadly, the answer is yes. Whether Donald Trump, Trump University, or the Trump Organization knew is another story.

Wednesday, June 22, 2016

Mellon's Millions


I bought this truly amazing book on Andrew W. Mellon at a garage sale for a quarter.


It is literally the best business biography I have ever read.  This contemporaneously written book about the living (and then happening) exploits of one of the world's richest men from 1933 is even better on Mellon than MELLON: AN AMERICAN LIFE by author David Cannadine which itself is a tremendous and much celebrated work.

Amazon sells the book I found for $25 or more depending on condition.  I got a real bargain not on the price but especially on the content.

HIGHLY RECOMMENDED BOOK.