S1022 – Coming to a Foreclosed Home Near You

One of the sponsors of the bill, senator Raymond Lesniak (D-Union) portrayed the initiative as “a way to support property values and reduce crime by getting people into vacant homes, provide municipal tax revenues while stabilizing the housing market.” The other sponsors of the bill are senators Barbara Buono (D-Middlesex) and Assemblyman Jerry Green (D-Union).

This is the wrong approach to a dual problem: We have many foreclosed homes in New Jersey and we also have many people that for one reason or another can not afford a home. More foreclosed homes are coming down the pipe because the judicial moratorium on foreclosures has been lifted. As more homes are foreclosed, more people will become homeless.

S1022 will authorize the N.J. Housing and Mortgage Finance Agency (HMFA) – an independent authority with bonding capability as all independent authorities have – to create a corporation: The New Jersey Foreclosure Relief Corporation (NJFRC). NJFRC will start up with Council on Affordable Housing (COAH) funds frozen everywhere in the state. The life of this corporation is limited to 5 years but its effects will last 30 years. Its purpose will be to purchase foreclosed homes from the institutional owners (see banks) and…

“(2)   Every eligible property purchased pursuant to this act shall be restricted for occupancy as affordable housing for a period of 30 years.  The restriction shall be set forth in the deed and recorded in the office of the county recording officer of the county wherein the real estate is situated.  Affordability controls shall be imposed upon purchase and maintained upon transfer in accordance with the provisions of the Uniform Housing Affordability Controls promulgated by the agency.”

Municipalities will have the opportunity to purchase the home(s) but…

“8.    a.  A municipality that purchases an eligible property pursuant to this act shall sell and convey or lease the housing unit or units acquired within 60 days of the date of purchase, unless it is not possible to do so due to practical or market conditions.  In the event that an eligible property is not conveyed or leased within 180 days of the date of purchase, or remains vacant for a 180-day period during the pendency of affordability controls, the corporation, or the agency as successor to the corporation, may commence proceedings to take control of the property and to sell and convey or lease the property in furtherance of the purposes of this act and deed restrictions of record.”


“b.    The governing body of a municipality that purchases an eligible property pursuant to this act may, by resolution, authorize the private sale and conveyance or the lease of a housing unit or units acquired pursuant to this act.  Every deed and rental agreement shall contain a provision specifying the requirement that the housing unit or units shall remain available to low and moderate income households for a period of at least 30 years.”

The houses so acquired will be sold or leased to families of low and moderate incomes plus individuals with special needs. They could also be used as half-way houses.

Individuals with special needs are defined in the bill as: “Individuals with mental illness, individuals with physical or developmental disabilities, and individuals in other emerging special needs groups identified by State agencies, who are at least 18 years of age if not part of a household. Special needs populations also include victims of domestic violence; ex-offenders; youth aging out of foster care; individuals and households who are homeless; and individuals with AIDS/HIV.”

I am not politically correct: I prefer an empty house to having bad neighbors. Better to be alone than in crappy company. That is how I think. I would not mind at all some of the categories mentioned in the above paragraph as neighbors but I would mind some of them. So would most people, including the sponsors of this bill. Nor have I much sympathy for the ultra-right wing Koch brothers (who oppose the bill) or for the former candidate for governor of New Jersey, Steve Lonegan (who also opposes the bill) yet I strangely find myself in their camp in this case. I believe the bill, if it becomes law, will have disastrous consequences for New Jersey and homeowners of New Jersey. If senator Lesniak seriously believes that planting a half-way house in an urban neighborhood or a suburb will increase the property values in the area, he should have his head examined.

I understand perfectly well that we have case law on the subject and that all the individuals mentioned above must live somewhere. It is an issue of humanity. But I also know that because most people function on the principle of not-in-my-backyard, property values will plummet wherever this new government “corporation” places one of its 30-year-deed-restricted houses. This will lead to lower property values, more foreclosures, and outright flight.

NJ Spotlight quotes Lonegan referring to this bill as “COAH on Steroids.” He is right. Christie, for his part, only cares about taking the COAH money to balance FY 2012-13 budget. He is seldom in New Jersey anyway.

I fear the HMFA will issue bonds once the COAH funds are used up and de facto this will become another fiscal liability for the State of New Jersey. Then the operation will become a bailout for banks and other investors who hold foreclosed property, all at the expense of taxpayers. New Jersey taxpayers will be hit twice: First they pay for it and second are imposed the neighbors they do not want.

Furthermore, the NJFRC would just become another little nest of political patronage.

The real and sustainable ways to help the housing industry and simultaneously those people of moderate income are to implement the reforms I propose. Among them are: a) Abolishing the property tax on primary residences of NJ taxpayers; b) Structural reforms in the extensive government apparatus of NJ abolishing one or more layers; c) Drastic increase in the minimum wage; d) State income tax code reform.

This is a bad bill for New Jersey. It will be a bad law if it becomes one.


In Drugs, Cuba Topics, the U.S. Is Isolated at Summit of the Americas

Drug war, including legalization, hot topic at Summit of the Americas – CNN.com.

“Obama voiced his view that legalizing drugs isn’t a valid option in the United States twice on Saturday — first during a meeting of business leaders alongside Brazilian President Dilma Rousseff and Santos and later during the event’s opening day session.”

I ask: Why? We are not winning the drug war. In fact, we are not winning any war but we kept on getting  in trouble because it is good business – for some; not necessarily for the county. And also because our leaders are not the ones doing the fighting nor are their kids. No wonder Milton Friedman, the economic adviser and ideologist of the Reagan administration, considered ending the military draft his greatest achievement.  The voluntary army makes war less disturbing among the high circles at tea time.

I digressed a bit. Back to the drug issue: With less than 5% of the world population, we have 25% of the prisoners of the world – that is counting all the bad guys such as North Korea, Burma, Cuba, etc. Does the lyric “the land of the free” in our National Anthem still apply?

From a Ron Paul website:

# 1 United States: 2,019,234 prisoners
# 2 China: 1,549,000 prisoners
# 3 Russia: 846,967 prisoners
# 4 India: 313,635 prisoners
# 5 Brazil: 308,304 prisoners
# 6 Thailand: 213,815 prisoners
# 7 Ukraine: 198,386 prisoners

And per capita:

# 1 United States: 715 per 100,000 people
# 2 Russia: 584 per 100,000 people
# 3 Belarus: 554 per 100,000 people
# 4 Palau: 523 per 100,000 people
# 5 Belize: 459 per 100,000 people
# 6 Suriname: 437 per 100,000 people
# 7 Dominica: 420 per 100,000 people

Drug legalization has gained traction in Central America, which is being squeezed between the suppliers to the south and the consumers to the north. Mexico is in a virtual state of civil war, notably in the northern region near the U.S. border. The cartels get their arms from across the Rio Grande. Even peaceful Costa Rica is beginning to feel the effect of the drug traffic and its president recently called for the legalization of pot.

President Obama’s best reason to oppose legalization (of anything) is that we have prohibited those substances for such a long time that is almost a tradition now. The man who promised “Change you can Believe in” has brought very little of it. And his likely opponent, Romney, is not any better; possibly worse.

If elected governor  in 2013, I intend to propose the decriminalization of marijuana sale and use in New Jersey – with the exception of the established radius around schools. However, under federal law, it will still be a crime. The N.J. Police will not chase you but the US DEA will if my proposal is adopted. I also intend to pardon a number of non-violent drug prisoners, notably those arrested because of possession of pot, now in N.J. jails.

I don’t think New Jersey is ready for more than that at the moment.

As for admitting Cuba back in the OAS and the entire US policy toward Cuba, I will just say this: It has become another traditional policy that does not take us anywhere but we have no imagination or courage to change it. The US embargo was a big problem for us in the opposition inside. We had no supply lines because of it. We were abandoned. Castro, on the other hand, has used it for propaganda purposes with great success for 52 years.

Reviving Atlantic City

Atlantic City casino revenue drops 6 percent in February; blackjack whiz takes Trop for another $2 million – pressofAtlanticCity.com: Today’s Top Headlines.

I chose this story over one that appeared somewhere else because it is the AC newspaper and despite the anecdotal reference to the blackjack guru, it offers more detail about the dilemma AC is facing. I will also incorporate some testimony of friends and family members who like AC. I, personally, find gambling boring and can count with my fingers the times I have played poker in 60 years of existence. The other article that appeared during the weekend is below:

Warm weather brings no wonder to Atlantic City earnings | NJ.com.

Atlantic City faces several challenges: Competition, poor infrastructure for access, a belt of poverty surrounding the casino district, general neglect, and not much to do in town except for gambling itself. I have anecdotal info about crime, beggars, prostitution, etc., but all that has come to me from individuals; not the media. I recall having been in AC twice in my 32 years in New Jersey and both times I had to go for reasons other than the casinos. To figure out where things are, I have to look at a map of the city or reach for Google Earth.

The Christie administration has placed most if not all of its hopes for AC in the new Revel which is scheduled to open soon. Of course I wish it all will work out well and that AC will be already on the road to recovery if I am elected governor of New Jersey in November 2013. It would be one less problem.

Just in case that does not happen, this is what I intend to propose to the Legislature to rescue what was once our jewel on the seashore. Keep in mind that these are proposals and not all may fly with the N.J. Legislature and part of the public. We will adopt what passes but the following I consider fundamental steps to make Atlantic City unique in the nation:

1 The beaches or at least a good portion of the beach in front of the hotels must be declared clothing-optional (CO). It does not mean that one has to be naked but the choice would be there. The only other CO public beach in New Jersey is in Sandy Hook, on federal territory. Same as in SH, alcohol should be allowed on the beaches.

2. Prostitution: It is already there (and everywhere) so we may as well legalise it in a limited district near the casinos with the following conditions: Sex-workers must be in a house, must be tested regularly for STD, and have at all times an updated medical affidavit of health in the form of a card. Sex-workers must not operate in the streets.

3. I already have proposed the legalisation of marijuana statewide. It may be more appropriate to call it the decriminalisation of marijuana by the State of New Jersey; the U.S. DEA will still chase everybody. So it is not pertinent to speak of decriminalising marijuana in Atlantic City because it would be legal everywhere in N.J. But if the Legislature cringes at the idea of decriminalising marijuana statewide – their blunder in my opinion – then I would settle for doing it in AC only.

4. I do not know if AC has a curfew. If it does, it must be abolished. Police presence must be commensurate with needs.

5. We have to improve the infrastructure of access but I am not able to offer more details at this point. Same goes for the airport which is, I believe, about 9 miles away.

This is still work in progress and I am very open, as always, to suggestions and criticism.

N.J. Property Taxes Are the Worst Enemy of Senior Citizens

NJ Spotlight | Assembly Bill Would Help Neighbors Grow Old Together.

The bill, although not bad in concept, is a miserable band-aid on the gaping wound that property taxes open on family budgets. And among the most vulnerable and often financially stressed households, those led by seniors are at the forefront.

The reality is that seniors in New Jersey are often forced from their homes by property taxes that surpass – and outlive – their mortgages. Unlike mortgages, which eventually are paid off, property taxes never go away and continue to increase year after year. If we add the actual direct increase in property taxes during the first two years of the Christie administration and the indirect increases caused by the elimination of the State property tax rebates, we arrive at the massive increase of 20% in 2 years. That is scandalous and it has had the effect of pushing numerous seniors out of their homes, or at the very least under the poverty line – in terms of disposable income.

Then governor Christie has the nerve to climb on a podium and claim that he has balanced two consecutive budgets without increasing taxes!

The most effective way of helping all New Jersey seniors to remain in their homes is by abolishing property taxes for the primary residence of all New Jersey taxpayers. I will be the only gubernatorial candidate who will propose such a reform of our tax system in 2013. The elimination of property taxes for most will also have the desirable effect of raising property values and increasing demand for homes. Property taxes are suffocating our economy,

Simultaneously, I offer a well thought and balanced alternative to fund education and municipal governments. Local services would not be touched. County governments would be abolished although many of their departments and their schools would remain. County governments account for over 20% of the total property tax levy in New Jersey. A large portion of that money goes toward consulting and brokerage firms which in turn are heavy contributors to election campaigns. That is one of the pillars of political control.

These changes I propose would involve one or more amendments to the State Constitution and would undoubtedly meet strong resistance in the New Jersey Legislature.

Costa Rica’s President Laura Chinchilla Urges Debate on Drug Legalization

Costa Rica’s Chinchilla Urges Legalization Debate – Bloomberg.

The War on Drugs is extending at inexorable pace from Mexico south and threatens to link by land with the ongoing conflicts in Colombia and Peru. Costa Rica, an island of tranquility in an otherwise restless region, has seen its crime rate increase and all evidence points to drug traffic. Costa Rica has become part of the Drug Road. Costa Rica has had no army since the 1940’s.

Mexico is fighting what is nothing less than a civil war with the cartels. In Colombia, despite all the government efforts and U.S. aid, and regardless of sporadic victories against traffiquers and the leftist FARC, there is no end in sight to the conflict.

The United States, with barely 4% of the world population, has the dubious distinction of having the largest number of people incarcerated: 25% of the prisoners of the world are in American jails. The number nears 1% of the total population of the United States. Forget about China, North Korea, or anybody else. In that field we are truly number one.  The Land of the Free holds more prisoners than anyone else.

Former Mexican president Vicente Fox has called for the legalization of drugs in Mexico. So does Ron Paul, the republican/libertarian candidate for president of the United States in 2012. I had originally included the legalization of marijuana in my program for New Jersey but such measure would run into frontal conflict with federal law. The legal sale of marijuana in New Jersey or anywhere in the U.S. is impossible until the federal authorities authorize it. We have seen how much trouble the medical marijuana program has stirred; even for people who are at the edge of death.

Thus I have opted for downgrading the my proposal to just decriminalizing the use or sale of marijuana in New Jersey. If I am elected governor in 2013, I will propose to our Legislature that our laws be changed so that our enforcement would take a passive posture toward the use and sale of marijuana and concentrate on other issues of more importance. Restrictions with regard to sale near schools would remain in effect. Legal age for consumption would be 18, as in with tobacco and similar to what I will propose with regard to alcohol. I would not be opposed to a popular referendum on the issue however the economic and political reforms must come first.

All laws regarding using  motor vehicles or machinery which apply to alcohol would apply to marijuana as well. The Police of New Jersey would cease cooperating with the DEA or FBI in investigations regarding marijuana. Nonetheless, it should be clear that sale of marijuana would remain illegal in New Jersey, in U.S. authorities’ view. A vendor could still be arrested by federal authorities.

It is very likely that I would seriously consider pardon for a number of non-violent offenders convicted for marijuana use and possession now in New Jersey’s jails who have had no other convictions.

The main obstacle to the review of drug policy, both here and abroad, is the intransigent position of the United States. The Drug War fuels two industries: The illicit drug contraband and the lawful industry for its repression. Like in all wars, there are those who die and those who become rich. Nobody is winning this war. In fact, I do not believe we have the aim of winning but rather of being at war at infinitum.

Perhaps if New Jersey takes the initiatives I propose, we will start a dialogue on the drug issue in this country. I believe it is overdue.

High Healthcare Costs Hold Back Economic Growth in New Jersey

NJ Spotlight | Watchdogs Target Insurance Brokers Cashing In On Lucrative Government Work.

In the public sector, government, private health insurers, and health insurance brokers form the Bermuda Triangle where the public money vanishes. These high costs are passed onto the private sector and public in the form of taxes.

Of course the almost 2000 government units and subdivisions of the State of New Jersey would save a lot of public money if they went back to the New Jersey Health Benefits Plan (NJHBP), eliminating the middle man. However, most middle men are politically connected and donate to politicians. They have political power. In a few cases, they are not only insurance brokers but political brokers as well.

Once upon a time, almost all government units participated in the NJHBP and the health costs were lower. Under the pretext of introducing competition, more or less like is happening with education now, many government subdivisions hired brokers to look “for the best options”. They often threw the carrot of better coverage to the unions. It was a long process but yielded the high cost health benefits system that we have today.

The biggest name in the insurance brokerage business for local governments is George Norcross, the South Jersey Democratic power broker and often ally of Republican Gov. Chris Christie. Why is it that I am not surprised?

From NJ Spotlight: “Nine months ago, Senate President Stephen Sweeney (D-Gloucester) attempted to insert a provision in pension and healthcare legislation that would have barred the State Health Benefits Plan from accepting any more county or municipal governments or school districts as members. Sweeney pulled the offending clause after the New York Times charged that Sweeney was trying to help Norcross, his political mentor and childhood friend, whose firm was losing business to the low-cost state government competitor.”

My deduction is that Sweeney is a puppet of Norcross. Mr. Norcross has now become very interested in education issues.

To address the State fiscal crisis, motivated in part for those inflated heath care costs, the governor and a complacent legislature declared heath care non-negotiable and imposed on public employees a partial contribution toward premiums. The fairness of such contributions may not be viewed in the same way by everybody but the first step the administration should have taken was to reduce health care costs, not only for public employees but for the private sector as well.

Now the New Jersey Comptroller and the Citizens Campaign Chairman Harry Pozycki point the way to do so. Eliminating the fleecing of the government will not, by itself, solve the issue of high cost of general healthcare but it will be a step in the right direction.

The excuse that many local governments are offering not to switch back to NJHBP is the existing union contracts. But that is a very lame excuse because contract negotiations can be reopened by mutual accord, on a single subject, without having to wait for the expiration of the current labor agreements.

As New Jersey moves along to establish the Healthcare Exchange mandated by the Patient Protection and Affordable Care Act, New Jersey should adopt the most aggressive posture of active purchaser. The Christie administration has remained undecided on the issue and the Norcross connection may be a causal factor in the governor’ s inactivity. The status quo benefits the brokers.

I have long supported a very strong Healthcare Exchange for New Jersey, with a  powerful public option which could be cored with the NJHBP. Furthermore, the State of New Jersey should be an active player in the market, screening out those plans that aim to take advantage of the least insurance-savvy patients. That is the active purchaser role.

Is Education Better Off With NCLB, Race To The Top?

States Address Problems With Teacher Evaluations – NYTimes.com.

Continuing with the education series, I introduce another New York Times piece and my views – and open questions. Please, do not limit to read what I wrote; read the link above as well. But in essence, the points that both the article and I are making are – in my case it is more an inquisitive monologue: Are all the time and resources consumed by this new form of micro-managed classroom paying off?

Here is a supporter of the new system: Daniel Weisberg is executive VP and general counsel – that means he  is above all an attorney –  at The New Teacher Project : “If you don’t solve the problem of teacher quality, you will continue to have an achievement gap.”

That sounds to me like an awful simplification of what the causes of the achievement gap are- in statistical terms.  Again, as I have said before, individual cases which do not conform with an statistical model, are exceptions to the rule; not the rule. There is a huge dimension that Mr. Weisberg completely ignores – just as governor Christie and the other advocates of education reform do here in New Jersey: It is what I will call from now on – in the least controversial form I can find for the sake of keeping minds cool: The Student Baseline (SBL). In reality, SBL is the sum of all the background factors weighing in every student’s life.

Just to clarify: The first two dimensions are time (which could be translated into money) and teacher quality. Mr. Weisberg concentrates on the latter.  My actual position (I say actual because it is evolving) is that time is fundamental too and has the unique virtue of at least partially compensating when we can not modify SBL – of all 3 dimensions, SBL is the one that approaches the most the concept of a constant – distinct but almost immutable for every student.

To visualize the SBL’s imagine a blank sheet of paper with 20 or 25 horizontal straight lines, all at hopefully only slightly different heights, but all close to the bottom edge – meaning  the beginning of the academic year – and we want to bring all those lines to the same goal-line at the top of the page. And the task of promoting different rates of climb (ROC) in every student, while teaching the same class level to all falls squarely on the teacher’s shoulder – according to Mr. Weisberg: Teachers are the factor.

Now going back to the NYT article I find some rather unexpected side-effects: In one place, physical education teachers are incorporating math and writing into their activities since 50% of their evaluations are based on standardized tests, not sports.

Then there seems to be a lot of time spent on evaluations and conferences. Evaluating is the principals’ role by default but with the new system, it appears they have to evaluate every teacher more or less equally rather than concentrating on those that are known to be deficient.

Another paragraph in the article mentions principal/teachers meetings, the first before classes start and the second at the end of the day. The article does not mention whether this is done every day but I presume it is. On the other hand, the article mentions “4 to 6” hours inputting data but does not clarify in what period of time – a day, a week? I do hope it is a week. A principal also claims that this leaves much less time for contact with parents. How can we expect parents to be involved then?

Principals have less time to do unannounced spot check on classes they may perceive as needing more attention, They spend a lot of time evaluating teachers that they know perfectly well are effective. Gera Summerford, of the Tennessee Education Association – a teachers’ union – compares the system to forcing a car mechanic to use all the tools he owns regardless of the problem that is to be fixed.

Mr. Weisberg  says that the new system will need time to work. Then my reply to that is that we should see perhaps not jumps but at least noticeable incremental improvements every year. I must emphasize that if we are taking valuable time away from actual teaching, that deficit should be balanced by gains in quality and ROC on a constant basis – unless we simultaneously increase time. Otherwise, plain and simple: We will be losing the education race.

Now at the end, I would like to bring to the top a rather mundane question which above all applies to New Jersey under governor Christie: If any of you were 18 years old and in college, about to choose a major, would you choose to be a teacher in New Jersey? Or in other words: Given the current set of conditions in New Jersey, will we be able to attract the best and brightest and most dedicated  to teaching here?

Or will those young men and women thrown their arms in the air and move on to greener pastures?