In a time when rising insurance costs are impacting home building projects across the country, a non-profit group focusing on climate issues is forecasting a significant increase in rates within states most prone to natural disasters. According to the Insurance Issue report issued by the New York-based First Street Foundation, some 39 million properties, or around 25% of all homes in the country, are currently underpriced due to not taking into account probable climate risk insurance increases. The report notes that just under 24 million properties are currently subject to rising rates due to the risk of wind damage, while 12 million are facing the same issue because of possible flood damage. A smaller 4.4 million properties, primarily in the West, could see an increase in rates as a result of wildfires. The report also estimates that up to 34,000 homes by the year 2050 will burn down on an annual basis due to wildfires. Noting that some states have enacted policies suppressing insurance prices, the report notes “the insurance industry is limiting and withdrawing coverage in high-risk wildfire areas due to state regulatory policies, increasing risk from climate change, and recent economic shifts.” Result? Many insurance companies are effectively labeling some areas of the country as uninsurable, with state-backed “insurers of last resort” often becoming the only alternative for homeowners. “Without the ability to insure properties in high-risk areas with relatively affordable policies, homeowners will not be able to afford the cost of ownership associated with homes in those areas and property values will deflate," says the report. This isn’t just idle forecasting: in California, insurance rates have risen by nearly 800% for homes in areas subject to wildfire, while significant increases have also been seen related to properties in the southeastern portion of Louisiana near flood-prone New Orleans where rates last year went up by 27%. That the economic impact of wildfires is growing is seen in two statistics: according to the National Oceanic and Atmospheric Administration, wildfires cost around $8 billion in losses between 2012 and 2016. Between 2018 and 2021, that figure had risen to $79.8 billion. By Garry Boulard
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A move is underway to repurpose a former public school building in El Paso, with part of the structure and site being used as a new migrant shelter, and the other part given over to an animal shelter. The building is the one-time Morehead Middle School at 5625 Confetti Drive, some 5 miles to the northwest of downtown El Paso. That school, a part of the El Paso Independent School District, was closed more than a year ago after its students were transferred to a just-built structure elsewhere in the district. Since then, city officials, worried about an increase in migration numbers, have been looking at the one-story brick building as a possible temporary shelter facility. Now, in a unanimous vote, members of the El Paso City Council have approved a proposal to buy the facility from the district for $3.8 million. That action followed a vote by members of the EPISD's Board of Trustees to authorize selling the former Morehead building. The building sits on a nearly 19-acre site that includes several other structures. The portion of the property to be turned into an animal shelter to be run by the city's Animal Services division will also include an adjoining dog park. The selling of the former Morehead school makes good financial sense for EPISD, which has been burdened in recent years with more than two dozen vacant facilities and a maintenance budget for those facilities in the neighborhood of around $300,000. By Garry Boulard Officials with the Hota Industrial Manufacturing Company say they want to build a $99 million factory within the boundaries of the Westpark Industrial Park in Santa Teresa. The plant will go up on a 30-acre site close to the U.S./Mexican border. Hota, which is headquartered in Taipei City, Taiwan, has other manufacturing facilities up and running in its home country, as well as China, Japan, and Thailand. In a statement, David Shen, chairman of Hota, said the company decided on Santa Teresa for its plant site because "its location makes it a one-day trucking distance to many of our main customers." He added that "transportation infrastructure is in place to support the logistics of our goods and services," while "utility supply is stable and relatively inexpensive." Hota's move to Santa Teresa was aided by the awarding of some $3 million in funds to help defray land and infrastructure costs via Local Economic Development Act support. Hota has an international reputation for its production of gears and axles, turning out up to 20 million such component parts on an annual basis for automobiles, heavy duty trucks, and motorcycles. Earlier this year, the company announced plans to build three more manufacturing facilities in Taiwan in order to respond to what is expected to be a need for supply parts for around 2 million electric vehicles in the next two years. Launched in 1973, the company's revenue last year exceeded $7.3 billion. If all goes according to plans, work on the new Hota Santa Teresa facility will begin early next year, with a rough completion date in 2025. By Garry Boulard Housing starts in August were down both from the month before and in comparison with where things stood a year ago, says a new report just released by the Census Bureau. According to that agency, overall starts had dropped by 11% from July. But the decrease at 15% was larger when juxtaposed against the numbers reported in August of 2022. The report additionally noted that while single-family starts were actually up over August of 2022, it was in the multi-family sector where the real damage was seen with a 41% decline. Residential permits overall were off from last year, with a 2.7% decline, although single-family permits were up 7.2%. But, again, the numbers were daunting in the multi-family sector, where permits were down by 18% from last August. Despite that multi-family decline, as of last month there was a reported 995,000 multi-family units under construction nationally. A separate report issued by the American Banking Association notes that housing start levels in August were at their lowest point since the summer of 2020. The report also noted that a "resurgence in mortgage rates has pushed prospective buyers to the sidelines and weighed on demand." The larger housing starts decline picture, notes the site Bloomberg, is highlighting the “toll of declining housing affordability.” Alicia Huey, chairman of the National Association of Home Builders, pointed to the ongoing increase in mortgage rates as a primary reason for the housing starts slump. Interviewed by the publication The Street, Huey continued: “Builders continue to grapple with shortages of construction workers, buildable lots, and distribution transformers, which is further adding to housing affordability woes.” Generally, according to NAHB figures, single-family permits have been significantly higher for most of the last decade when compared to multi-family permits. By Garry Boulard Two auto manufacturing plants in Colorado have been targeted by the United Auto Workers as part of the labor union’s larger national strike. Workers have now walked off the job at the General Motors Denver Parts Distribution Center, located at 23400 E. Smith Road, a facility that produces more than 200,000 parts on a monthly basis. The second Colorado job action is taking place at the Stellantis Distribution Center in Commerce City. That plant, located at 12225 E 39th Avenue, supports the company’s multi-brand manufacturing. The UAW, with a total membership of more than 391,000 workers, announced on September 15 that it was calling a strike against the Ford Motor Company, General Motors, and Stellantis, which, combined, employ around 145,000 workers. The union said it was striking over what it says are stagnant wages that have failed to take into account the impact of inflation. The organization also wants to see a restoration of retirement benefits and overtime, two benefits that were discarded during the Great Recession. Talks between the UAW and representatives of the auto plants began last spring but failed to resolve major issues. In a union-wide ballot on August 15, 97% of the members voted to go on strike. UAW President Shawn Fain, who has said that the membership specifically wants a 20% immediate raise and gradual yearly, amounting to what will ultimately be an increase of 46%, recently remarked that the union’s action is an “act of faith” in its workers. “Yes, these corporations are mountains,” Fain was quoted as remarking in the Financial Times, “but together we can make them move.” In a press release, the UAW noted that while progress has been made in negotiations with Ford officials, “Stellantis, like General Motors, is refusing to make significant progress.” The statement added: “Our strategy is applying pressure where it is most needed.” The UAW action has seen strikes at plants primarily located in the Midwest. Besides Colorado, the only states in the West thus far impacted have been Texas, with job actions at both a Ford and Stellantis plant; Nevada, at a General Motors facility; and two Stellantis plants in California and Oregon. General Motors, in its latest statement, announced that while it was committed to ongoing bargaining, it also had “contingency plans for various scenarios” and was prepared to “do what is best for our business, our customers, and our dealers.” By Garry Boulard The latest step is underway in an ongoing campus expansion of a homeless shelter and service group in Las Cruces. Members of the Las Cruces City Council have voted for a resolution approving the purchase of a one-acre site in the 900 block of W. Amador Avenue which may be used by the Mesilla Valley Community of Hope. The Community of Hope group is a non-profit organization created in 1991 that is not only devoted to housing solutions, but also income support and case management services. The organization serves upwards of around 5,000 people a year, with a particular emphasis on veterans’ support. In response to the group’s need for more facility space, the Las Cruces council agreed to a $438,000 purchase of a one-acre site owned by the Las Cruces-based company Stone Masters. The site is more specifically located at 915 and 921 W. Amador Avenue, on the same block as the Community of Hope’s primary facility at 999 W. Amador Avenue. Last year the city council approved a master plan identifying some $26 million in needed capital improvements on, and the expansion of- the Community of Hope’s campus. That action followed a vote in early 2020 committing $1.3 million for the purchase of the 999 W. Amador property, which for years had been occupied by the Horse N Hound Feed N supply store. In 2011 the Community of Hope opened what is called Camp Hope, a tent community for up to 50 people that included a modern bathroom and shower facility. By Garry Boulard As economists try to get a feel for whether the country is heading into a late 2023 recession, the construction industry is thriving, as judged by the most recent reported employment levels. According to data just released by the Washington-based Associated General Contractors of America, the industry’s job count was up in 45 states, as well as the District of Columbia last month over August of 2022. The figures show gains in every region of the country with some of the nation’s largest states adding the most employment: Texas was up by 21,000, followed by California with 15,600 jobs, Ohio at 11,600 jobs, along with an increase of 10,600 jobs in Georgia. On just a percentage level, Wyoming in August led the nation with a 13% job increase. Arkansas saw a 9.9% jump, followed closely by Kentucky, enjoying an increase of 9.2%. New Mexico was among the strongest percentage gainers with a 7.3% increase. The August numbers, said Ken Simonson, chief economist with the Associated General Contractors, are providing only the last evidence that “construction has been a leading source of employment growth almost universally in the past year.” Reflecting a general state of affairs in the industry nearing the final quarter of 2023, Simonson added that “Contractors report needing even more workers as large projects rev up across the country.” But problematic for many contractors is the challenge of trying to find qualified workers. A separate survey by the AGC noted that some 85% of responding construction firms said they currently had open positions, but of that group nearly 90% said it remained difficult to find experienced, qualified people, particularly among the vital craft workforce. Additional figures: 68% said applicants simply lacked the skills to work in general construction, while around 33% indicated that job candidates were unable to pass a drug test. In response, many construction firms are embracing new approaches to finding workers. The AGC survey noted that 63% of respondents said they are using social media and targeted digital advertising to attract young applicants. Contractors, according to the AGC narrative accompanying the survey, are “also increasing investments in their internal training programs in an effort to address the fact that many candidates lack the basic hard and soft skills needed to be successful.” Of this group, some 41% of firms have increased spending on training and professional development programs, while 24% have enhanced their online and video training protocols. A smaller 14% are even using “augmented and virtual reality technology to better train workers.” By Garry Boulard Just under 30 new affordable apartment units are slated for construction in Scottsdale in a project that has now won the approval of the Scottsdale City Council. To go up in a section of the city known as the Paiute Neighborhood Center in the 6500 block of E. Osborn Road, the project will see the construction of both studio and two-bedroom units specifically designed for persons with disabilities, as well as seniors. It is thought that the project will cost around $15.7 million to complete, with most of that money coming from the City of Scottsdale at nearly $8 million. An additional $7.8 million will be made up of federal funds secured by Maricopa County. According to city documents, the project is animated by the “increasing number of seniors and families who are displaced from their homes due to non-renewal notices, rising rents, and a decreasing number of affordable rents and mortgages for all.” The project has been the subject of several public input meetings, with final design expected to be completed in early 2024 and construction slated to start to sometime in 2025. The larger Paiute Neighborhood Center was created by the city in 1995 and is also the subject of an on-site aging building replacement project budgeted at just over $11 million. By Garry Boulard A successful and popular homeless shelter group in southern Colorado is hoping to expand its always-needed services via the building out of yet more shelter space. Located in a one-story building at 728 W 4th Street in Pueblo, the Pueblo Rescue Mission has for decades provided not just nightly bed shelter for up to 25,000 people a year, but also food, physical and mental health care, and addiction support services. Launched in 1984, the shelter underwent an extensive renovation in 2020. But now officials want to purchase a one-story structure just down the street at 710 W. 4th Street for additional shelter space. The 710 W. 4th Street building is part of a triangular-shaped plaza built in 1952 and designated as a Class B structure. While the current facility provides space for around one hundred people a night, the new building would allow the non-profit to offer shelter for another 125 people. As envisioned, the new building would also house office space and a service center providing dental care, legal assistance, and Alcoholics Anonymous meetings. As yet another sign of the rescue mission's growth, a 1,000 square-foot, 94 year-old brick building at 718 W. Fourth that was once a private residence has also been purchased by the organization and is being looked at for additional shelter space. That one-time house is one of the last structures of its kind recalling the days when the currently mostly commercial W. Fourth Street was primarily residential. A timeline for when work will begin at the 710 W. 4th Street building, if successfully purchased, has not yet been announced. By Garry Boulard Although he is historically associated with an unpopular war and urban unrest, the last president to govern during an era of unprecedented trust in government was Lyndon Johnson, according to a new Pew Research Center survey. Johnson, who was president from November of 1963 upon the assassination of John F. Kennedy until the end of his term of office in January 1969, remains today a controversial figure, primarily because he enlarged the U.S military presence in Vietnam to the tune of more than half a million soldiers. But in the early months of his presidency, notes the Pew study, Johnson basked in a public trust level that reached 77%, the highest ever recorded by the organization. By the end of his presidency, the percentage of people indicating that they trusted the federal government to do the right thing had dropped to 62% and has been precipitously heading downward ever since. The most recent Pew survey on the topic shows how far south the numbers have gone: the overall average of people expressing trust in Washington is now down to 16%, a number only lower at 10% in 2011 when the country was in the midst of the Great Recession. Currently, notes a Pew narrative accompanying the latest numbers, “25% of Democrats and Democratic-leaning independents say they trust the federal government just about always or most of the time, compared with 8% of Republicans and Republican-leaners.” At the same time, “Democrats report slightly less trust in the federal government today than a year ago,” while “Republicans’ views have been relatively unchanged over this period.” Looked at from any perspective, the responses by party identification are depressed compared to early 1964 when 80% of Democrats and 73% of Republicans expressed a positive view of Washington. The Pew survey also indicates a racial unity of sorts on government trust questions: while 74% of whites during the final years of Dwight Eisenhower’s presidency in 1958 and 62% of blacks said they trusted the government to “do what is right always or most of the time,” today only 13% of Whites expressed any level of confidence, along with 21% of Blacks. Hispanic Americans were not polled on the question until 1990, when 39% indicated trust in government. That figure among this demographic is now down to 29%. Asian Americans, not polled until the summer of 2020, have expressed a similar decline in trust dropping from 27% to 23%. While the levels of trust have been almost consistently on a slippery slope since the 1960s, notes Pew, there have been several upward bumps: during the last year of the Reagan presidency the figure was up to 44%, up from 32% when Reagan took office, and during the months after the September 11 attacks, when the figure reached 54%. At no time since 2001 has the level been above the 50% mark. The most recent 16% positive poll, notes Pew, “is among the lowest trust measured in nearly seven decades of polling,” even lower than the 20% in 2022 who said they “trusted the government just about always or most of the time.” By Garry Boulard |
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