TV School

I've been attending Astronomy 320 on a fairly regular basis. It's really neat, with cool computer graphics to illustrate sun spots, orbits and the like. Oh, except that Channel 16 frequently cuts off the last couple of minutes of lecture. It's not so bad for me, but what if a real student then misses something important--like an assignment. Usually they go to some filler for the ten minutes between my class and the next one, so it's not for some important message.

And generally I don't mind editorial comments, but one irritated me to near distraction. I frankly don't believe that millions of people got up one morning and decided to lie on their mortgage applications. Just so unlikely. Millions of people went to mortgage brokers and banks, and were then encouraged to lie on their mortgage applications, because the banks and mortgage brokers made huge fees--and the largest fees were for the worst mortgages. It's part of the "we all contributed to the crisis" mantra. Hooey.

And now we find out that the largest number of foreclosures are in lower-income neighborhoods. What a surprise! Uh, poorer people have fewer options and less money, and have to take what's offered to them. Only a few things distinguish me from those of my fellows who took the bait:

1. I'm white, which gives me more options in the rental market.

2. I don't have any children. Studies have shown for a long time that 40-60% of the rental market is closed to families with children. And a landlord is unlikely to get caught discriminating unless (a) he's dumb enough to say that the doesn't want children in the property or (b) he tries to evict a family once they have a child. (In fact, the major case on fair housing for children involved just such a family. The landlord decided to evict when the child was five; by the time the case was decided, he was in high school.)

3. We have good credit. (See 2 above.)

4. We come from the Bay Area, where most people rent and no one thinks anything of it. You're welcomed at the City Council, expected to participate in most neighborhood clean-up days, asked to sign petitions, and can get assistance from politicians and city workers when needed. Here, and in many places outside Coastal California, tenants seem to be the equivalent of child molesters.

So it's not surprising that poorer, nonwhite families with children would decide to leap into the abyss. And it isn't because they're deadbeats or stupid or whatever--it's because they took the best of bad options. And that means that to prevent future debacles we have to look at the real causes of the crisis, and provide real solutions.

This, That and the Other

We've had a remarkably cool summer this year, only a few days over 100 degrees and a lot of days below 90 degrees. The yard should be doing better than it is, but my knees have been a problem all summer, and I've done very little beyond the minimum.

The State of California finally passed a budget, sticking it to poor children and their mothers, the disabled and state workers. The Legislature wasn't willing to tax ATT and Comcast, even though the cable providers got a windfall when the government ordered the switch to digital transmission. Those who had chosen not to get cable or satellite service discovered that their reception was, well, non-existent, and they had to get cable service to receive the standard broadcast signals.

The Governor was particularly incensed that state workers received defined-benefit pensions and sought to increase employee contributions and reduce benefits. In this he succeeded partially, but only by depending on the inability of most people to do third-grade arithmetic. For instance, the "savings" will allegedly be $100 billion in the coming decades. The problem is that said savings will only begin about 25 years from now, and will be reaped over six, seven or eight decades. At that point $100 billion doesn't seem like nearly so much money.

We have a new resident in our yard, Miss Hissy. J discovered her (we have declared her sex, not knowing how to do so with snakes) while clipping ivy and initially thought we might have a rattlesnake in the yard. I called the local 311 service to find out what we should do and was told to leave the snake alone. It would move along on its own. J then did research and discovered that Miss Hissy was, in fact, a gopher snake--entirely harmless to humans.

My TV Learning

All three of you who follow my blog know that I've become addicted to the TV courses put on by our local community college district. I've done courses in anthropology and economics. This time I'm watching an astronomy course from Sacramento City College. Nothing is more fun than learning stuff while reclining on the sofa.

Never Underestimate

the willingness of California's Democrats to toss tenants under the bus. No, that's not quite fair. They mostly just pay no attention to the ways in which their proposals affect the tenant population. The Democrats in the State Legislature have released their latest budget proposal, and some of it is good. It reduces the state sales tax, which will help lower-income Californians, who spend a disproportionate share of their income paying that tax. It increases the vehicle license fee, which should never have been reduced in the first place.

But then it does something else, and that something else is very bad for tenants. It raises the state income tax, and makes the assumption that taxpayers will recoup much of that increase by deducting state taxes on their federal income tax. But most tenants here don't itemize, as most of those who itemize do so to take the mortgage interest deduction. So we'll just pay higher taxes.

It gets worse though. Because housing prices in California are much higher than those in the rest of the country, tenants here already pay high federal income taxes. An income of $50K in many parts of the country would enable you to buy a nice house; here it enables you to rent an apartment with a roommate. So the small sum we'd save on the sales tax would be more than offset by the higher state income taxes. Grrr!

Update 8/5/10: As I expected, not 48 hours after the Democratic proposal was first unveiled, the Republicans have hauled out the poor, seniors and, yes, tenants, as potential victims of the Democratic proposal. Following in the footsteps of such Republican luminaries as Dick Armey and Steve Forbes (remember Angry Renter.com?), they've suddenly discovered that tenants pay more of their income in taxes because we don't itemize our federal taxes. Whoa! Can statewide "just cause" eviction legislation be just around the corner?

But it should be noted that those paying at the highest marginal rate are exempted from the tax increase, even though most of those taxpayers do itemize on their federal returns. If the Dems really want support for this, they need to show how those who don't itemize will benefit from the shift. The California Budget Project has a good post showing who itemizes and who doesn't.

Christmas in July

There's something really offensive about encouraging people to make unnecessary purchases in the midst of the Great Recession. In California 12.4% of our fellows don't have jobs. Many more face wage and/or hour reductions, furloughs, and other attacks on their income. While retailers are in the business of parting people from their money, they seem to be unaware that their sales in the early years of the New Millennium were dependent on credit--and the credit has dried up. People are just not in need of Christmas presents in July, and may not be in need of them in December. In fact, those who have money may think it's a bit unseemly to be buying when so many of our friends and neighbors are having a hard time.

State Workers and the Governor

The Governor is trying to force state workers in California to sign egregious contracts by threatening to pay minimum wage. As the spousal unit of a state worker, I'm none too happy about this, but rather than vent uselessly, I will instead provide some practical advice for those who may suffer from this.

1. There's a difference between rent and mortgage payments. Homeowners can skip their mortgage payments for a couple of months with little danger that they will lose their homes, although it may have a nasty effect on their credit ratings. Lenders don't typically file a Notice of Default until a homeowner has missed three mortgage payments, so the mortgage probably isn't critical for a month. (I know this only because I've written about tenants and foreclosure for a couple of years now.)

It's a whole different matter when you rent, as the landlord can begin eviction proceedings within a few days after a missed payment. It's possible that your landlord (particularly if s/he is local) will be understanding and accept partial payment or wait until there's a state budget and you're reimbursed for the withheld wages). If your landlord does agree to this, get the agreement in writing, as you want any understanding to be clear and unambiguous.

If your landlord won't agree to this and you don't have sufficient savings to cover the rent, or can't borrow from friends, relatives or your credit card, you have to make a nasty judgment call. You can either give notice now and move in with relatives or friends for the duration, or wait, hoping that a budget will be signed before the end of the month.

What you cannot do is fail to pay rent and then have your landlord take you to court. Your landlord would likely be successful in an unlawful detainer action, and those are reported to the landlord screening services. A successful eviction action would make it very difficult for you to rent for a very long time. If you receive a three-days' notice to pay rent or quit, you MUST move before the three days expires. Period.

Update: I've already been asked what happens if you rent with roommates. It's the same thing that happens in any roommate situation in most leases and rental agreements. The co-tenants are all responsible for all of the rent. That means that if one tenant doesn't pay rent, the other tenants are responsible for the entire amount of the rent. (This is why many young people move back to their parents' homes, rather than renting with roommates. The risk is just too great.) If the other tenants can't cover the rent, the landlord can, after the three-days' notice to pay rent or quit has expired, evict all of the tenants living in the unit. If you find yourself in this situation and can't raise the money for rent next month on your own, you should let your roommates know as soon as possible.

2. Your car payment is somewhere between your mortgage and rent, in that the lender may not come to repossess your car immediately, but isn't going to wait more than a couple of months before taking back the car.

3. You can make the minimum payment on your credit card(s). You may not like the interest charges, but the important thing is not to go into default.

4. You may have no choice but to skip your gas, electricity, cable and cell payments for the duration. With your public utilities, particularly SMUD, you should let them know that you can't make a payment. They will likely be more understanding than Comcast and Verizon and, in fact, are probably planning right now for just this situation. In addition, public utilities are required to give substantial notice before suspending service, which will give the Legislature more time to pass a budget.

5. You have short grace period on your car insurance. Insurers must give you 20 days after the due date to pay your car insurance before canceling your insurance. However, losing insurance means that you can't drive your car and will probably have to pay a reinstatement fee to restore your coverage.

6. It's difficult to determine what childcare providers will do. Sacramento providers may, on the one hand, be more understanding. But they may also care for several children whose parents aren't being paid and may not have the cushion to wait for payment. State workers may have to take their children to work with them.

7. If you have a 457 deferred compensation plan, you MAY be able to borrow from it. (It depends on the terms of the plan, and the costs may be high.)

8. Keep track of every penny that you have to pay because of this. If the Governor's actions are found to be retaliatory, you may be eligible for compensation for your costs. If you have to give up your rental, keep track of the costs of moving and storage. And track the costs of finding a new place, including any deposits, fees, time taken off work, and so on. Note any late fees, interest charges, penalties and such that you have to pay for delayed payments. Check your credit rating and note any changes resulting from the crisis.

Rooting for a Republican

The only Republican I'm rooting for is Orly Taitz. I want her to be invited to all the debates.