KeNo's Housing and Economic Portal: Thursday January 28 Housing and Economic stories

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TOP STORIES:

Toll hikes on Bay Area bridges a step closer - (www.sacbee.com) Transportation officials have moved closer to raising tolls on seven bridges in the San Francisco Bay area. A committee of the Bay Area Toll Authority on Wednesday approved a plan to raise car tolls from $4 to $5 on the Richmond-San Rafael, Zampa, Benicia, Antioch, Dumbarton and San Mateo bridges. The San Francisco-Oakland Bay Bridge would see tolls rise from $4 to $6 during peak commute times on weekdays and $5 all day on weekends. Carpoolers on all bridges would pay $2.50. They currently cross for free. The Golden Gate Bridge, which is run by a separate agency, will not be affected. The new rates would go into effect in July, though increases for trucks would be delayed one year.

Schwarzenegger files furlough appeal - (www.sacbee.com) The Schwarzenegger administration filed an appeal Wednesday in a lawsuit over his furloughs of state workers, contesting a decision by the controller to restore pay for prison guards. Last year, Gov. Arnold Schwarzenegger ordered some 200,000 state employees to take three days off a month without pay, cutting their paychecks by 14 percent to help close the state's budget gap. The California Correctional Peace Officers Association sued, arguing that guards are losing three days' pay each month, but can never take the time off because prisons operate around the clock. Alameda County Superior Court Judge Frank Roesch sided with the 30,000-member union last month. On Tuesday, state Controller John Chiang said he intends to restore guards' full pay to comply with that ruling. The guards' court victory does not affect about two dozen other union lawsuits opposing the furloughs.

California Creditors Dread IOUs With Aid Plea Failing - (www.bloomberg.com) California’s hopes are fading for federal help in closing a projected $19.9 billion deficit that has caused the lowest-rated state’s borrowing costs to rise 24 percent since September. “We recognize they have enormous problems,” David Axelrod, senior adviser to President Barack Obama, said in an interview. “But we can’t solve all of those problems from Washington.” Investors are growing more concerned that California, whose debt rating was cut today by Standard & Poor’s, will repeat last year’s fiscal crisis that forced it to use IOUs to pay bills. With Governor Arnold Schwarzenegger seeking $6.9 billion in federal assistance to narrow the deficit, the extra yield paid on the state’s 10-year bonds over AAA-rated municipal securities rose to 1.31 percentage points yesterday from 1.06 points on Sept. 11, according to Bloomberg fair market value index data.

New rules designed to speed up short sales - (www.orlandosentinel.com) Financially stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers. The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Central Florida's housing market, where about one in every five existing-home purchases involves a short sale. Gary Balanoff, a real-estate agent with Re/Max Select in Oviedo, tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury's expedited short-sale process emerges between now and April, he said, he's not going to tell his clients any differently. "It's a very, very tough process to get some degree of standards," Balanoff said of short sales. "I think this will help — it will put more pressure to comply and get quicker results. … Three or four months of waiting for an answer is not doing anyone any good — even lenders."

Landlords Pocketed Prop 13 Savings, Killed CA Schools - (www.lacitybeat.com) argaret Todd is L.A. County’s top librarian, but in 1978 she was nearly done in by Howard Jarvis and his Proposition 13. Not that the tax-cut monomaniac would have cared, of course. Asked what Prop. 13 would do to libraries during a televised debate three decades ago, Jarvis underscored his broad disdain for libraries and public schools when he guessed that “63 percent of the graduates are illiterate, anyway,” and would have no use for books. Todd clung to her job and fought for the library system’s survival during one of the darkest times for public institutions in California history. “I was fourth on the layoff list for four years,” says Todd, who was 23 and working at the county library’s La Mirada branch at the time. “It froze everything. We didn’t buy books for a number of years. We did not hire anybody, and it was very, very difficult.” The way the measure insinuated itself into the routines of everyday life surprised many of its supporters, who arrived at the La Mirada library to find it with neither recent encyclopedias nor bestsellers. “What we found over and over again, people would come in and say, ‘We needed to control our property tax, but we never meant it to affect the libraries,’” recalls Todd. “That was the hardest thing for the communities, because when they voted for Prop. 13, their property taxes were out of control, and they needed to do something to protect their homes. But they never intended that local services be devastated, and that’s what Prop. 13 did.”

Fed Seeks to Block Release of Bank Bailout Secrets - (www.bloomberg.com) The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal the identities of financial firms that might have collapsed without the largest government bailout in U.S. history. The U.S. Court of Appeals in Manhattan will decide whether the Fed must release records of lending programs that were instituted or expanded to help banks survive the longest recession since the Great Depression. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News. “This case is about the identity of the borrower,” said Matthew Collette, a lawyer for the government, in oral arguments yesterday. “This is the equivalent of saying ‘I want all the loan applications that were submitted.’” Bloomberg argued that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money. Banks and the Fed warn that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell-off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued. The lower court agreed with Bloomberg.

OTHER STORIES:

Twin Cities Housing - (www.minnesota.publicradio.org)

Houseownership: Less Than Meets the Eye - (www.businessweek.com)

Californias Folly: Proposition 13 - (www.beyondchron.org)

Defense Of Fed Secrecy - (www.Mish)

Interest Rates Fueled Boom - (www.cbsnews.com)

Scariest Chart Of The Day - (www.business.theatlantic.com)

Treasury Investors Most Bearish in 2 Years - (www.bloomberg.com)

Rove: Obama's Bait-and-Switch Game - (online.wsj.com)

Israel Apologizes to Turkey Over Insult - (online.wsj.com)

Democrats Report Progress on Health - (online.wsj.com)

Surely he can't still be bearish? - (www.ftalphaville.ft.com)