What Is It Felon 34 Calls This Country Again?
A Look At This S#*! Hole Country.
This month’s update has something for everyone. We have positive national economic data regarding
employment and inflation, improving local rental and real estate market statistics, and a good old fashioned
price fixing scandal in the property management industry. Additionally, we’ll provide a sample of our new
leasing update reports and tease two exciting new service enhancements that will be launching over the next
two months. Let's jump right in!
JUNE JOBS REPORT
In June, the U.S. economy added 206,000 nonfarm payroll jobs, surpassing the expected 200,000 but below the
revised May figure of 218,000. The unemployment rate rose to 4.1%, the highest since October 2021, with labor
force participation increasing slightly to 62.6%.Despite long-standing forecasts of a more pronounced downturn, the
U.S. labor market has remained resilient, with job prospects staying strong even as employers moderate their hiring
efforts. The latest report indicates that conditions are gradually tightening which is exactly what the Fed is hoping to
see. Market reactions included a slight rise in stock futures and negative Treasury yields, with increasing bets on a
Federal Reserve rate cut in September.
WEEKLY JOBLESS CLAIMS
The number of Americans filing new applications for unemployment benefits dropped by 17,000 to 222,000 for the
week ending July 6, surpassing expectations of 236,000. This decrease marks the lowest level since late May.
Despite the noise in the data, signs indicate the labor market is cooling due to significant interest rate hikes by the
Federal Reserve in 2022 and 2023. In Utah, jobless claims also showed improvement. Advance claims fell to 1,297
from the prior week's 1,550, marking a decrease of 253 claims. This indicates a positive trend in the state's labor
market, aligning with the overall national improvement.
CONSUMER PRICE INDEX
In June, US consumer prices fell by 0.1%, marking the first monthly decline since May 2020. This brought the
annual inflation rate down to 3% from 3.3% in May, the slowest pace since June 2023. Excluding food and energy,
the core CPI also rose by just 0.1%, its slowest pace since August 2021, bringing the annual core inflation rate to
3.3% from 3.4%. The better-than-expected report has raised hopes for a Federal Reserve rate cut as early as
September, potentially followed by another in December. Interest rates have been at a 23-year high due to the
Fed's inflation-fighting measures.
FED MEETING
The upcoming Federal Reserve policy meeting is on July 30-31, 2024, and the consensus expectation is that they
will hold rates steady. However, the recent June CPI report, showing a 0.1% decline in consumer prices, increases
the probability of implementing rate cuts as early as their September meeting. The cooling inflation provides the Fed
with more flexibility to ease monetary policy and support continued economic growth. While the Fed aims to balance
employment and price stability, the decision will heavily depend on upcoming economic data and the ongoing risks
associated with high-interest rates. At the last meeting, the Federal Reserve held rates steady at 5.25-5.50%,
pausing its rate-hiking campaign that began in March 2022. The Fed plans to keep rates unchanged until inflation
nears the 2% target, despite recent moderation.
Biden Announces Tariffs on Chinese Metals Routed Through Mexico
The measure aims to close a loophole that officials said allowed metals made partly in China to come into the United States duty free.
Administration officials said that 3.8 million tons of steel came into the United States through Mexico last year, and that overall steel imports from Mexico had been on the rise. About 13 percent of Mexican steel imports into the United States last year were melted or poured outside of North America, according to the White House.
Officials in the Biden administration said the United States wanted to protect American factories that produce steel and aluminum, including those that have recently received new investments from government funds.
Kevin Dempsey, the president of the American Iron and Steel Institute, which represents metal makers, welcomed the action, and called for vigorous enforcement of the rule.
“We urge the U.S. government to continue to press for additional actions to address the many schemes by steel traders to circumvent and evade U.S. trade laws,” he said.
Biden administration officials said they had worked closely with the Mexican government on the measure, and that they had been clear with Chinese officials both publicly and privately about their concerns about unfair Chinese trade practices. In visits to China earlier this year, Treasury Secretary Janet L. Yellen and Secretary of State Antony J. Blinken had raised the issue of industrial overcapacity with the Chinese government.
HEADLINE NEWS
FBI Searches Property Management Company in Rent Price-Fixing Investigation
The FBI conducted an unannounced search of Cortland Management's headquarters in Atlanta on May 22 as part
of an investigation into alleged rent price-fixing in the multifamily housing industry. The search was connected to a
Department of Justice (DOJ) investigation into potential antitrust violations. Cortland, a major national apartment
developer, confirmed the search and stated that they are fully cooperating, though neither the company nor its
employees are currently considered targets of the investigation.
This action is part of a broader DOJ criminal antitrust probe into claims that Cortland and other property
management companies conspired to artificially inflate apartment rents. The investigation is linked to RealPage, a
software company accused of helping landlords set maximum rent prices in a coordinated manner, which Arizona
Attorney General Kris Mayes described as monopolistic and harmful to Arizona's housing market. The alleged
conspiracy has led to multiple lawsuits from tenants across the country, which have been consolidated in federal
court in Nashville.
A ProPublica investigation previously reported that RealPage's rent-setting algorithms might violate antitrust laws
by enabling landlords to maximize profits unfairly. RealPage has denied these allegations, while the DOJ noted that
algorithms represent a significant new challenge for antitrust enforcement, potentially posing greater competitive
threats than traditional methods of collusion.
Lawsuit against RealPage
Arizona Attorney General Kris Mayes has sued RealPage for allegedly creating a "rental monopoly" by helping
landlords inflate rents in Arizona's largest cities. The lawsuit claims RealPage's pricing algorithm allowed landlords
to suppress competition, leading to rent increases of 30% to 76% over six years. Similar lawsuits have been filed in
Seattle, Boston, and New York.
RealPage's software, which influences pricing for 4.5 million housing units nationwide, is accused of directing
landlords on rent prices, undermining fair market practices. Despite RealPage's denial of enforced pricing, a
ProPublica investigation found landlords adopted up to 90% of its recommendations. These lawsuits, including
others consolidated in federal court in Nashville, could set precedents for software use in rental pricing and
address anticompetitive practices in the industry.
INDUSTRY UPDATES
HUD’s Criminal Screening Proposal - On June 10, 2024, the public comment period for HUD's proposed rule on
criminal screening, aimed at reducing barriers to HUD-assisted housing, closed. This rule would change how
housing providers conduct criminal screenings, imposing a three-year lookback period, strict guidelines on
convictions, and new pre-admission denial notices. The National Apartment Association (NAA) fears these changes
might eventually apply to all housing providers. NAA, with other housing or ganizations, submitted feedback and
over 2,000 members participated in NAA's call to action. HUD acknowledged NAA's concerns, particularly by
excluding certain programs to encourage participation. NAA continues to advocate as the rule moves forward.
U.S. Sees Surge in Single Family Built-For-Rent Construction - Construction of single-family built-for-rent homes
in the U.S. is on the rise, with about 18,000 homes started in the first quarter of 2024, a 20% increase from the same
period in 2023, according to the National Association of Home Builders (NAHB). This growth is partly due to the
housing affordability crisis, which makes renting a more attractive option when buying a home is out of reach.
Experts note that as mortgage rates remain high, more potential buyers are turning to rental properties. The trend
reflects a broader move towards built-for-rent properties, which doubled their share of all housing starts from 5% in
2021 to 10% in 2023. With the typical asking rent for a single-family home rising to $2,262 in May 2024, compared to
$1,896 for multifamily units, and median mortgage payments also increasing, renting offers an alternative to those
unable to afford home purchases.
Of course Felon 34’s S#*! Hole Country includes Utah:
UTAH REAL ESTATE MARKET
In June, the median sold price for homes in Utah rose to $613,764 in June, up 2.30% from May and 4.03% year
over year, indicating rising property values. The number of homes sold month over month decreased same as the
year over year data, reflecting a slight market cooling. The average number of listings was down 14.33% from May
but up 3.28% year over year, showing fluctuating inventory but an overall increase. Despite monthly declines in
sales and listings, the market shows stable and growing property values year over year.
RENT REPORT
In June, the rental market across Utah exhibited a mix of upward and downward trends. Among cities, Salt Lake
saw month-over-month increases in rental rates reporting a notable 0.9% rise. However, several cities, including
Layton, experienced declines, with a rate decreasing by 0.4% from the previous month. Overall, Utah experienced a
statewide month-over-month increase of 0.4% in rental rates. Despite this growth, statewide rental rates remained
1.7% lower compared to the previous year, indicating a continuing trend of year-over-year declines across the state.
Once a G.O.P. Rallying Cry, Debt and Deficits Fall From the Party’s Platform
Fiscal hawks are lamenting the transformation of the party that claimed to prize fiscal restraint and are warning of dire economic consequences.
When Donald J. Trump ran for president in 2016, the official Republican platform called for imposing “firm caps on future debt” to “accelerate the repayment of the trillions we now owe.”
Those ambitions were cast aside in the platform that the Republican Party unveiled this week ahead of its convention. Nowhere in the 16-page document do the words “debt” or “deficit” as they relate to the nation’s grim fiscal situation appear. The platform included only a glancing reference to slashing “wasteful” spending, a perennial Republican talking point.
To budget hawks who have spent years warning that the United States is spending more than it can afford, the omissions signaled the completion of a Republican transformation from a party that once espoused fiscal restraint to one that is beholden to the ideology of Mr. Trump, who once billed himself the “king of debt.”
“I am really shocked that the party that I grew up with is now a party that doesn’t think that debt and deficits matter,” said G. William Hoagland, the former top budget expert for Senate Republicans. “We’ve got a deficit deficiency syndrome going on in our party.”
The U.S. national debt is approaching $35 trillion and is on pace to top $56 trillion over the next decade, according to the Congressional Budget Office. At that point, the United States would be spending about as much on interest payments to its lenders — $1.7 trillion — as it does on Medicare.
Mr. Biden, who has proposed raising revenue by increasing taxes on the rich, argued that the nearly $2 trillion in tax cuts that Mr. Trump enacted in 2017 were to blame for the yawning deficit.
For years, Republicans have raised alarm about the national debt when a Democrat controls the White House, only to outspend Democrats 5 to 1.
Yet that passion for austerity dissipated when Mr. Trump took office and Republicans passed a $2 trillion tax cut that was paid for with borrowed money.
A recent analysis by the nonpartisan Committee for a Responsible Federal Budget found that Mr. Trump approved nearly twice as much borrowing — $8.4 trillion — during his time in office as Mr. Biden has so far during his term.
Maya MacGuineas, the group’s president, said she found it alarming that the Republican platform ignored the national debt and failed to offer any ideas for addressing the biggest contributors to increased federal spending — Social Security and Medicare.
“It is pretty astonishing to read the platform of a party that for years has talked about controlling fiscally irresponsible behavior, and find promises to cut taxes, promises not to fix Social Security and not even a mention of reducing the out-of-control national debt,” Ms. MacGuineas said.
Mr. Trump has called for extending his 2017 tax cuts, which analysts estimate would cost $4.6 trillion over a decade.
If Mr. Trump wins and succeeds in enacting a fresh round of tax cuts, he is likely to argue, as he did in 2017, that they will spur sufficient economic growth to pay for themselves. Economic research has shown that while those tax cuts did spur business investment, they did not pay for themselves.
The director of the Congressional Budget Office, Phillip Swagel, told lawmakers this week that the 2017 tax cuts “by far” did not pay for themselves and neither would extending them.
