BJ’s Wholesale Club, died unexpectedly on Thursday of “presumed natural causes,” according to a statement released Friday by the company. He was 49.
“We are shocked and profoundly saddened by the passing of Lee Delaney,” said Christopher J. Baldwin, the company’s executive chairman, said in a statement. “Lee was a brilliant and humble leader who cared deeply for his colleagues, his family and his community.”
Mr. Delaney joined BJ’s in 2016 as executive vice president and chief growth officer. He was promoted to president in 2019 and became chief executive last year. Before joining BJ’s, he was a partner in the Boston office of Bain & Company from 1996 to 2016. Mr. Delaney earned a master’s in business administration from Carnegie Mellon University, and attended the University of Massachusetts, where he pursued a double major in computer science and mathematics.
Mr. Delaney led the company through the unexpected changes in consumer demand spurred by the pandemic, with many customers stockpiling wholesale goods as they hunkered down at home. “2020 was a remarkable, transformative and challenging year that structurally changed our business for the better,” Mr. Delaney said in the company’s last quarterly earnings report.
The BJ’s board appointed Bob Eddy, the chief administrative and financial officer, to serve as the company’s interim chief executive. Mr. Eddy joined the company in 2007 and became the chief financial officer in 2011, adding the job of chief administrative officer in 2018.
“Bob partnered closely with Lee and has played an integral role in transforming and growing BJ’s Wholesale Club,” Mr. Baldwin said. He said that the company would announce decisions about its permanent executive leadership in a “reasonably short timeframe.”
BJ’s, based in Westborough, Mass., operates 221 clubs and 151 BJ’s Gas locations in 17 states.
Revolut’s office in London in 2018. The banking start-up is offering its workers the opportunity to work abroad for up to two months a year.Credit…Tom Jamieson for The New York Times
Before the pandemic, companies used to lure top talent with lavish perks like subsidized massages, Pilates classes and free gourmet meals. Now, the hottest enticement is permission to work not just from home, but from anywhere — even, say, from the French Alps or a Caribbean island.
Revolut, a banking start-up based in London, said Thursday that it would allow its more than 2,000 employees to work abroad for up to two months a year in response to requests to visit overseas family for longer periods.
“Our employees asked for flexibility, and that’s what we’re giving them as part of our ongoing focus on employee experience and choice,” said Jim MacDougall, Revolut’s vice president of human resources.
Georgia Pacquette-Bramble, a communications manager for Revolut, said she was planning to trade the winter in London for Spain or somewhere in the Caribbean. Other colleagues have talked about spending time with family abroad.
Revolut has been valued at $5.5 billion, making it one of Europe’s most valuable financial technology firms. It joins a number of companies that will allow more flexible working arrangements to continue after the pandemic ends. JPMorgan Chase, Salesforce, Ford Motor and Target have said they are giving up office space as they expect workers to spend less time in the office, and Spotify has told employees they can work from anywhere.
Not all companies, however, are shifting away from the office. Tech companies, including Amazon, Facebook, Google and Apple, have added office space in New York over the last year. Amazon told employees it would “return to an office-centric culture as our baseline.”
Dr. Dan Wang, an associate professor at Columbia Business School, said he did not expect office-centric companies to lose top talent to companies that allow flexible working, in part because many employees prefer to work from the office.
Furthermore, when employees are not in the same space, there are fewer spontaneous interactions, and spontaneity is critical for developing ideas and collaborating, Dr. Wang said.
“There is a cost,” he said. “Yes, we can interact via email, via Slack, via Zoom — we’ve all gotten used to that. But part of it is that we’ve lowered our expectations for what social interaction actually entails.”
Revolut said it studied tax laws and regulations before introducing its policy, and that each request to work from abroad was subject to an internal review and approval process. But for some companies looking to put a similar policy in place, a hefty tax bill, or at least a complicated tax return, could be a drawback.
After its initial public offering imploded, WeWork went public through a SPAC deal.Credit…Kate Munsch/Reuters
After weeks of wading into the debate over how to regulate SPACS, the popular blank-check deals that provide companies a back door to public markets, the Securities and Exchange Commission is sending its first shot across the bow.
John Coates, the acting director of the corporate finance division at the S.E.C., issued a lengthy statement on Thursday about how securities laws apply to blank-check firms, the DealBook newsletter reports.
“With the unprecedented surge has come unprecedented scrutiny,” Mr. Coates wrote of the recent boom in blank-check deals.
In particular, he is interested in a crucial (and controversial) difference between SPACs and traditional initial public offerings: blank-check firms are allowed to publish often-rosy financial forecasts when merging with an acquisition target, while companies going public in an I.P.O. are not. Regulators consider such forecasts too risky for firms as yet untested by the public markets.
Investors raise money for SPACs via an I.P.O. of a shell company, and those funds are used within two years to merge with an unspecified company, which then also becomes a publicly traded company. Because the deal is technically a merger, it’s given the same “safe harbor” legal protections for its financial forecasts as a typical M.& A. deal. And that’s why there are flying-taxi companies with little revenue going public via a SPAC while promising billions in sales far in the future.
The S.E.C. thinks allowing financial forecasts for these deals might be a problem. They can be “untested, speculative, misleading or even fraudulent,” Mr. Coates wrote. And he concludes his statement by suggesting a major rethink of how the “full panoply” of securities laws applies to SPACs, which could upend the blank-check business model.
If the S.E.C. does not treat SPAC deals as the I.P.Os they effectively are, he writes, “potentially problematic forward-looking information may be disseminated without appropriate safeguards.”
The letter serves as a warning, but perhaps not much else — yet. Unless the S.E.C. issues new rules (as it did for penny stocks) or Congress passes legislation, SPAC projections will continue. But this strongly worded statement could moderate or even mute them.
“The S.E.C. has now put them on notice,” Lynn Turner, a former chief accountant of the agency, said.
Amazon Warehouse Unionization Votes
Either side needed 1,521 votes to win.
A total of 505 ballots were challenged; 76 were void.·Source: National Labor Relations Board
Amazon beat back the unionization drive at its warehouse in Bessemer, Ala., the counting of ballots in the closely watched effort showed on Friday.
A total of 738 workers voted “Yes” to unionize and 1,798 voted “No.” There were 76 ballots marked as void and 505 votes were challenged, according to the National Labor Relations Board. The union leading the drive to organize, the Retail, Wholesale and Department Store Union, said most of the challenges were from Amazon.
About 50 percent of the 5,805 eligible voters at the warehouse cast ballots in the election. Either side needed to receive more than 50 percent of all cast ballots to prevail.
The ballots were counted in random order in the National Labor Relations Board’s office in Birmingham, Ala., and the process was broadcast via Zoom to more than 200 journalists, lawyers and other observers.
The voting was conducted by mail from early February until the end of last month. A handful of workers from the labor board called out the results of each vote — “Yes” for a union or “No” — for nearly four hours on Thursday.
Sophia June and Miles McKinley contributed to this report.
A screenshot of a “vax cards” page on Facebook.
Online stores offering counterfeit or stolen vaccine cards have mushroomed in recent weeks, according to Saoud Khalifah, the founder of FakeSpot, which offers tools to detect fake listings and reviews online.
The efforts are far from hidden, with Facebook pages named “vax-cards” and eBay listings with “blank vaccine cards” openly hawking the items, Sheera Frenkel reports for The New York Times.
Last week, 45 state attorneys general banded together to call on Twitter, Shopify and eBay to stop the sale of false and stolen vaccine cards.
Facebook, Twitter, eBay, Shopify and Etsy said that the sale of fake vaccine cards violated their rules and that they were removing posts that advertised the items.
The Centers for Disease Control and Prevention introduced the vaccination cards in December, describing them as the “simplest” way to keep track of Covid-19 shots. By January, sales of false vaccine cards started picking up, Mr. Khalifah said. Many people found the cards were easy to forge from samples available online. Authentic cards were also stolen by pharmacists from their workplaces and put up for sale, he said.
Many people who bought the cards were opposed to the Covid-19 vaccines, Mr. Khalifah said. In some anti-vaccine groups on Facebook, people have publicly boasted about getting the cards.
Other buyers want to use the cards to trick pharmacists into giving them a vaccine, Mr. Khalifah said. Because some of the vaccines are two-shot regimens, people can enter a false date for a first inoculation on the card, which makes it appear as if they need a second dose soon. Some pharmacies and state vaccination sites have prioritized people due for their second shots.
An empty conference room in New York, which is among the cities with the lowest rate of workers returning to offices.Credit…George Etheredge for The New York Times
In only a year, the market value of office towers in Manhattan has plummeted 25 percent, according to city projections released on Wednesday.
Across the country, the vacancy rate for office buildings in city centers has steadily climbed over the past year to reach 16.4 percent, according to Cushman & Wakefield, the highest in about a decade. That number could climb further if companies keep giving up office space because of hybrid or fully remote work, Peter Eavis and Matthew Haag report for The New York Times.
So far, landlords like Boston Properties and SL Green have not suffered huge financial losses, having survived the past year by collecting rent from tenants locked into long leases — the average contract for office space runs about seven years.
But as leases come up for renewal, property owners could be left with scores of empty floors. At the same time, many new office buildings are under construction — 124 million square feet nationwide, or enough for roughly 700,000 workers. Those changes could drive down rents, which were touching new highs before the pandemic. And rents help determine assessments that are the basis for property tax bills.
Many big employers have already given notice to the owners of some prestigious buildings that they are leaving when their leases end. JPMorgan Chase, Ford Motor, Salesforce, Target and more are giving up expensive office space and others are considering doing so.
The stock prices of the big landlords, which are often structured as real estate investment trusts that pass almost all of their profit to investors, trade well below their previous highs. Shares of Boston Properties, one of the largest office landlords, are down 29 percent from the prepandemic high. SL Green, a major New York landlord, is 26 percent lower.
President Biden and Vice President Kamala Harris during a White House appearance on Thursday.Credit…Amr Alfiky/The New York Times
President Biden proposed a vast expansion of federal spending on Friday, calling for a 16 percent increase in domestic programs as he tries to harness the government’s power to reverse what officials called a decade of underinvestment in the nation’s most pressing issues.
The proposed $1.52 trillion in spending on discretionary programs would significantly bolster education, health research and fighting climate change. It comes on top of Mr. Biden’s $1.9 trillion stimulus package and a separate plan to spend $2.3 trillion on the nation’s infrastructure.
Mr. Biden’s first spending request to Congress showcases his belief that expanding, not shrinking, the federal government is crucial to economic growth and prosperity. It would direct billions of dollars toward reducing inequities in housing and education, as well as making sure every government agency puts climate change at the front of its agenda.
It does not include tax proposals, economic projections or so-called mandatory programs like Social Security, which will all be included in a formal budget request the White House will release this spring.
Among its major new spending initiatives, the plan would dedicate an additional $20 billion to help schools that serve low-income children and provide more money to students who have experienced racial or economic barriers to higher education. It would create a multi-billion-dollar program for researching diseases like cancer and add $14 billion to fight and adapt to the damages of climate change.
It would also seek to lift the economies of Central American countries, where rampant poverty, corruption and devastating hurricanes have fueled migration toward the southwestern border and a variety of initiatives to address homelessness and housing affordability, including on tribal lands. And it asks for an increase of about 2 percent in spending on national defense.
The request represents a sharp break with the policies of President Donald J. Trump, whose budget proposals prioritized military spending and border security, while seeking to cut funding in areas like environmental protection.
All told, the proposal calls for a $118 billion increase in discretionary spending in the 2022 fiscal year, when compared with the base spending allocations this year. It seeks to capitalize on the expiration of a decade of caps on spending growth, which lawmakers agreed to in 2010 but frequently breached in subsequent years.
Administration officials would not specify on Friday whether that increase would result in higher federal deficits in their coming budget proposal, but promised its full budget would “address the overlapping challenges we face in a fiscally and economically responsible way.”
As part of that effort, the request seeks $1 billion in new funding for the Internal Revenue Service to enforce tax laws, including “increased oversight of high-income and corporate tax returns.” That is clearly aimed at raising tax receipts by cracking down on tax avoidance by companies and the wealthy.
Officials said the proposals did not reflect the spending called for in Mr. Biden’s infrastructure plan, which he introduced last week, or for a second plan he has yet to roll out, which will focus on what officials call “human infrastructure” like education and child care.
Congress, which is responsible for approving government spending, is under no requirement to adhere to White House requests. In recent years, lawmakers rejected many of the Trump administration’s efforts to gut domestic programs.
But Mr. Biden’s plan, while incomplete as a budget, could provide a blueprint for Democrats who narrowly control the House and Senate and are anxious to reassert their spending priorities after four years of a Republican White House.
Stocks on Wall Street climbed further into record territory on Friday: The S&P 500 index rose 0.8 percent, bringing its gain for the week to 2.7 percent.
Shares of Amazon rose 2.2 percent after the company prevailed against a unionization drive at a warehouse in Alabama.
The relatively steady gains in the stock market have sent the VIX index, a measure of volatility, to its lowest level since February 2020. The index was below 17 points on Friday. In mid-March, as the pandemic shut down parts of the global economy, the VIX had spiked above 80.
The yield on 10-year Treasury notes jumped 4 basis points, or 0.04 percentage point, to 1.66 percent. The yield on 10-year government bonds rose across Europe, too.
On Thursday, Federal Reserve chair, Jerome Powell, reiterated his intention to keep supporting the economic recovery The rollout of vaccinations meant the United States economy could probably reopen soon, but the recovery was still “uneven and incomplete,” Mr. Powell said at the International Monetary Fund annual conference.
European stock indexes were mixed on Friday, though the Stoxx Europe 600 notched its sixth straight week of gains. The DAX index in Germany rose 0.2 percent after data showed an unexpected drop in industrial production. The FTSE 100 in London fell 0.4 percent.
Oil prices fell slightly with futures of West Texas Intermediate, the U.S. crude benchmark, 0.4 percent lower to $59.38 a barrel.
Just months after returning to the skies, Boeing’s troubled 737 Max jet is facing another setback. Boeing said Friday that it had notified 16 airlines and other customers of a potential electrical problem with the Max and recommended that they temporarily stop flying some planes. The company refused to say how many planes were affected, but four U.S. airlines said they would stop using nearly 70 Max jets. Boeing would not say how long the planes would be sidelined. The statement comes just months after companies resumed flying the jet, which had been grounded for nearly two years because of a pair of accidents that killed nearly 350 people.
Part of Saudi Aramco’s giant Ras Tanura oil terminal. The company said it would raise $12.4 billion from selling a minority stake in its oil pipeline business.Credit…Ahmed Jadallah/Reuters
Saudi Aramco, the national oil company of Saudi Arabia, has reached a deal to raise $12.4 billion from the sale of a 49 percent stake in a pipeline-rights company.
The money will come from a consortium led by EIG Global Energy Partners, a Washington-based investor in pipelines and other energy infrastructure.
Under the arrangement announced on Friday, the investor group will buy 49 percent of a new company called Aramco Oil Pipelines, which will have the rights to 25 years of payments from Aramco for transporting oil through Saudi Arabia’s pipeline networks.
Aramco is under pressure from its main owner, the Saudi government, to generate cash to finance state operations as well as investments like new cities to diversify the economy away from oil.
The company has pledged to pay $75 billion in annual dividends, nearly all to the government, as well as other taxes.
Last year, the dividends came to well in excess of the company’s net income of $49 billion. Recently, Aramco was tapped by Crown Prince Mohammed bin Salman, the kingdom’s main policymaker, to lead a new domestic investment drive to build up the Saudi economy.
The pipeline sale “reinforces Aramco’s role as a catalyst for attracting significant foreign investment into the Kingdom,” Aramco said in a statement.
From Saudi Arabia’s perspective, the deal has the virtue of raising money up front without giving up control. Aramco will own a 51 percent majority share in the pipeline company and “retain full ownership and operational control” of the pipes the company said.
Aramco said Saudi Arabia would retain control over how much oil the company produces.
Abu Dhabi, Saudi Arabia’s oil-rich neighbor, has struck similar oil and gas deals with outside investors.
WASHINGTON — President Biden outlined a vast expansion of federal spending on Friday, calling for a 16 percent increase in domestic programs as he tries to harness the government’s power to reverse what officials called a decade of underinvestment in the nation’s most pressing issues.
The proposed $1.52 trillion in spending on discretionary programs would significantly bolster education, health research and fighting climate change. It comes on top of Mr. Biden’s $1.9 trillion stimulus package and a separate plan to spend $2.3 trillion on the nation’s infrastructure.
Mr. Biden’s first spending proposal to Congress showcases his belief that expanding, not shrinking, the federal government is crucial to economic growth and prosperity. It would direct billions of dollars toward reducing inequities in housing and education, as well as making sure every government agency puts climate change at the front of its agenda.
It does not include tax proposals, economic projections or so-called mandatory programs like Social Security, which will all be included in a formal budget document the White House will release this spring. And it does not reflect the spending called for in Mr. Biden’s infrastructure plan or other efforts he has yet to roll out, which are aimed at workers and families.
Trump administration’s efforts to gut domestic programs.
But Mr. Biden’s plan, while incomplete as a budget, could provide a blueprint for Democrats who narrowly control the House and Senate and are anxious to reassert their spending priorities after four years of a Republican White House.
Democratic leaders in Congress hailed the plan on Friday and suggested they would incorporate it into government spending bills for the 2022 fiscal year. The plan “proposes long overdue and historic investments in jobs, worker training, schools, food security, infrastructure and housing,” said Senator Patrick J. Leahy of Vermont, the chairman of the Appropriations Committee.
Shalanda D. Young, who is serving as Mr. Biden’s acting budget director, told congressional leaders that the discretionary spending process would be an “important opportunity to continue laying a stronger foundation for the future and reversing a legacy of chronic disinvestment in crucial priorities.”
The administration is focusing on education spending in particular, seeing that as a way to help children escape poverty. Mr. Biden asked Congress to bolster funding to high-poverty schools by $20 billion, which it describes as the largest year-over-year increase to the Title I program since its inception under President Lyndon B. Johnson. The program provides funding for schools that have high numbers of students from low-income families, most often by providing remedial programs and support staff.
The plan also seeks billions of dollars in increases to early-childhood education, to programs serving students with disabilities and to efforts to staff schools with nurses, counselors and mental health professionals — described as an attempt to help children recover from the pandemic, but also a longstanding priority for teachers’ unions.
Mr. Biden heralded the education funding in remarks to reporters at the White House. “The data shows that it puts a child from a household that is a lower-income household in a position if they start school — not day care — but school at 3 and 4 years old, there’s overwhelming evidence that they will compete all the way through high school and beyond,” he said.
There is no talk in the plans of tying federal dollars to accountability measures for teachers and schools, as they often were under President Barack Obama.
his vision of having every cabinet chief, whether they are military leaders, diplomats, fiscal regulators or federal housing planners, charged with incorporating climate change into their missions.
The proposal aims to embed climate programs into agencies that are not usually seen as at the forefront of tackling global warming, like the Agriculture and Labor Departments. That money would be in addition to clean energy spending in Mr. Biden’s proposed infrastructure legislation, which would pour about $500 billion on programs such as increasing electric vehicle production and building climate-resilient roads and bridges.
Strategic National Stockpile, the country’s emergency medical reserve, for supplies and efforts to restructure it that began last year. Nearly $7 billion would create an agency meant to research diseases like cancer and diabetes.
Reporting was contributed by Coral Davenport, Zolan Kanno-Youngs, Lisa Friedman, Brad Plumer, Christopher Flavelle, Mark Walker, Dana Goldstein, Mark Walker, Noah Weiland, Margot Sanger-Katz, Lara Jakes, Noam Scheiber, Katie Benner and Emily Cochrane.
filed for state unemployment benefits last week, the Labor Department said Thursday. That was up modestly from the week before, but still among the lowest weekly totals since the pandemic began.
In addition, 237,000 people filed for Pandemic Unemployment Assistance, a federal program that covers people who don’t qualify for state benefits programs. That number, too, has been falling.
Jobless claims remain high by historical standards, and are far above the norm before the pandemic, when around 200,000 people a week were filing for benefits. Applications have improved only gradually — even after the recent declines, the weekly figure is modestly below where it was last fall.
But economists are optimistic that further improvement is ahead as the vaccine rollout accelerates and more states lift restrictions on business activity. Fewer companies are laying off workers, and hiring has picked up, meaning that people who lose their jobs are more likely to find new ones quickly.
“We could actually finally see the jobless claims numbers come down because there’s enough job creation to offset the layoffs,” said Julia Pollak, a labor economist at the job site ZipRecruiter.
But Ms. Pollak cautioned that benefits applications would not return to normal overnight. Even as many companies resume normal operations, others are discovering that the pandemic has permanently disrupted their business model.
“There are still a lot of business closures and a lot of layoffs that have yet to happen,” she said. “The repercussions of this pandemic are still rippling through this economy.”
Shoppers in Berlin’s Alexanderplatz. Germany and other countries have cut their value-added taxes to encourage consumer spending.Credit…Lena Mucha for The New York Times
The European Central Bank’s chief economist argued on Thursday that fears of a big rise in inflation are overblown, a sign that the people who control interest rates in the eurozone are likely to keep them very low for some time to come.
The comments — by Philip Lane, an influential member of the central bank’s Governing Council whose job includes briefing other members on the economic outlook — are an attempt to calm bond investors who are nervous that the end of the pandemic will lead to high inflation.
Fueling their fears, inflation in the eurozone rose to an annual rate of 1.3 percent in March from 0.9 percent in February, according to official data released on Wednesday, the fastest increase in prices in more than a year.
Market-based interest rates have been rising because investors worry that President Biden’s $2 trillion stimulus program will provoke a broad increase in prices for years to come. The interest rates that prevail on bond markets ripple through the financial system and can make mortgages and other types of borrowing more expensive, creating a drag on economic growth.
Despite big monthly swings in inflation during the last year, the average had been remarkably stable at an annual rate of about 1 percent, Mr. Lane wrote in a blog post on the central bank’s website on Thursday. That is well below the European Central Bank’s target of 2 percent.
“The volatility in inflation over 2020 and 2021 can be attributed to a host of temporary factors that should not affect medium-term inflation dynamics,” Mr. Lane wrote.
That is another way of saying that the European Central Bank is not going to panic about short-lived fluctuations in inflation and put the brakes on the eurozone economy anytime soon.
On the contrary, Mr. Lane’s analysis suggests that the European Central Bank will continue trying to push inflation toward the 2 percent target. In March, the central bank said it would increase its purchases of government and corporate bonds to try to keep a lid on market-based interest rates.
Mr. Lane said it was no surprise to see “considerable volatility in inflation during the pandemic period.” He attributed the ups and downs to quirky factors that are not likely to recur.
Germany and some other countries cut their value-added taxes to encourage consumer spending, then raised them again later. The price of fuel fluctuated wildly. People spent almost nothing on travel, but increased spending on home exercise equipment or products that they needed to work from home. That affected the way inflation is calculated and made the annual rate look higher, Mr. Lane said.
“The medium-term outlook for inflation remains subdued,” he wrote, “and closing the gap to our inflation aim will set the agenda for the Governing Council in the coming years.”
Prince Abdulaziz bin Salman, the Saudi oil minister, has argued that increasing oil output too fast would be risky.Credit…via Reuters
OPEC and its allies, including Russia, are expected to meet by videoconference Thursday to discuss whether to ease production curbs on oil as countries around the world try to expand from pandemic lockdowns.
Analysts say recent events will support the views of Prince Abdulaziz bin Salman, the Saudi oil minister, who has argued for caution in increasing supply, noting the risks of swamping the market. But other outcomes are possible at the meeting of the group known as OPEC Plus, including modest increases and even cuts in oil production,
France’s reimposition of a national lockdown, announced Wednesday, underlines persistent doubts about the pace of recovery from the pandemic, as have rising case numbers in the United States.
After modest increases when the Suez Canal was recently blocked by a cargo ship, oil prices were rising again on Thursday, with Brent crude, the global benchmark, about 1.6 percent higher, to $63.75 a barrel.
“All signs seemingly point to the group maintaining current production levels,” Helima Croft, head of commodity strategy at RBC Capital Markets, an investment bank, wrote in a note to clients on Wednesday.
Yet pressure may also come to increase supply. Members of the OPEC Plus group are withholding an estimated eight million barrels of a day, or about 9 percent of current global consumption. As the global economy recovers, it will become increasingly difficult for the Saudis to persuade others to restrain supplies.
A ChargePoint charging station in Berkeley, Calif. Shares in ChargePoint rose 19 percent on Wednesday. President Biden’s infrastructure plan supports the use of electric vehicles.Credit…John G Mabanglo/EPA, via Shutterstock
U.S. stock futures rose on Thursday and tech stocks were set to extend their rally as traders focused on optimism about the economic recovery. Shares in Europe and Asia were also higher before the Labor Department’s latest weekly report on initial applications for state unemployment benefits.
Bond yields pulled back from their recent 14-month high. The yield on the 10-year U.S. Treasury note fell 3 basis points, or 0.03 percentage point, to 1.71 percent.
Last week, jobless claims were at the lowest for the pandemic, but economists have warned against assuming this is the new trend because of measurement issues. New data released on Thursday showed a slight rise in claims for unemployment benefits, On Friday, the Labor Department will publish its monthly jobs report for March.
Biden’s Infrastructure Plan
On Wednesday, President Biden laid out a $2 trillion infrastructure plan, which included money for a range of activities, including repairing roads and bridges, building affordable housing and caregiving facilities, and expanding access to broadband. It would be paid for by an increase in corporate taxes, undoing some of the cut by his predecessor, President Donald J. Trump.
The infrastructure plan also includes spending about $50 billion on the semiconductor industry, where a global shortage in chips has disrupted car manufacturing. Shares in Micron Technology, an Idaho-based chip maker, rose nearly 5 percent in premarket trading.
The plan includes $174 billion to encourage the manufacture and purchase of electric vehicles. Tesla shares rose 2.7 percent in premarket trading and ChargePoint Holdings, which has a large network of electric-vehicle charing stations, rose 9 percent premarket, extending a 19 percent increase on Wednesday.
Elsewhere in markets
Most European stock indexes were higher even as more lockdowns were announced in the region. In France, restrictions have been expanded to more regions and schools will close for several weeks. In Italy, business closures will extend until the end of April. But a series of reports published on Thursday showed manufacturing activity picking up in Europe.
Oil prices rose ahead of a meeting between the Organization of the Petroleum Exporting Countries and its allies, at which they are set to decide production quotas for May. Brent Crude, the European benchmark, rose 1.23 percent to more than $63 a barrel. West Texas Intermediate, the U.S. benchmark, climbed 1.5 percent to just above $60 a barrel.
QuantumScape, a California-based start-up working on a technology that could make batteries cheaper, said it had reached a technical requirement that would clear the way for a $100 million investment by Volkswagen. QuantumScape’s shares jumped 13 percent in premarket trading.
On Friday, markets will be closed in the United States, Europe and some other countries for Good Friday.
The occupancy rate in nursing homes in the fourth quarter of 2020 was down 11 percentage points from the first quarter, but there are hurdles to staying out of facilities.Credit…Amr Alfiky/The New York Times
The pandemic has intensified a spotlight on long-running questions about how communities can do a better job supporting seniors who need care but want to live outside a nursing home.
The coronavirus had taken the lives of 181,000 people in U.S. nursing homes, assisted living and other long-term care facilities through last weekend, according to the Kaiser Family Foundation — 33 percent of the national toll.
The occupancy rate in nursing homes in the fourth quarter of 2020 was 75 percent, down 11 percentage points from the first quarter, according to the National Investment Center for Seniors Housing & Care, a research group. The shift may not be permanent, but this much is clear: As the aging of the nation accelerates, most communities need to do much more to become age-friendly, said Jennifer Molinsky, senior research associate at the Joint Center for Housing Studies at Harvard.
“It’s about all the services that people can access, whether that’s the accessibility and affordability of housing, or transportation and supports that can be delivered in the home,” she said.
But there are hurdles for those who wish to stay out of a facility, Mark Miller reports for The New York Times:
A major shortage of age-friendly housing in the United States will present problems for seniors who wish to stay in their homes. By 2034, 34 percent of households will be headed by someone over 65, according to the Harvard center. Yet in 2011, just 3.5 percent of homes had single-floor living, no-step entry and extra-wide halls and doors for wheelchair access, according to Harvard’s latest estimates.
Medicare does not pay for most long-term care services, regardless of where they happen; reimbursement is limited to a person’s first 100 days in a skilled nursing facility. Medicaid, which covers only people with very low incomes, has long been the nation’s largest funder of long-term care. From its inception, the program was required to cover care in nursing facilities but not at home or in a community setting. “There’s a bias toward institutions,” said Judith Solomon, a senior fellow specializing in health at the Center on Budget and Policy Priorities.
Marigold Lewi and Kimberley Vasquez outside their high school Baltimore City College this month in Baltimore, MD.Credit…Erin Schaff/The New York Times
A year after the pandemic turned the nation’s digital divide into an education emergency, President Biden is making affordable broadband a top priority, comparing it to the effort to spread electricity across the country. His $2 trillion infrastructure plan, announced on Wednesday, includes $100 billion to extend fast internet access to every home.
The money is meant to improve the economy by enabling all Americans to work, get medical care and take classes from wherever they live. Although the government has spent billions on the digital divide in the past, the efforts have failed to close it partly because people in different areas have different problems. Affordability is the main culprit in urban and suburban areas. In many rural areas, internet service isn’t available at all because of the high costs of installation.
“We’ll make sure every single American has access to high-quality, affordable, high speed internet,” Mr. Biden said in a speech on Wednesday. “And when I say affordable, I mean it. Americans pay too much for internet. We will drive down the price for families who have service now.”
Longtime advocates of universal broadband say the plan, which requires congressional approval, may finally come close to fixing the digital divide, a stubborn problem first identified and named by regulators during the Clinton administration. The plight of unconnected students during the pandemic added urgency.
“This is a vision document that says every American needs access and should have access to affordable broadband,” said Blair Levin, who directed the 2010 National Broadband Plan at the Federal Communications Commission. “And I haven’t heard that before from a White House to date.”
Some advocates for expanded broadband access cautioned that Mr. Biden’s plan might not entirely solve the divide between the digital haves and have-nots.
The plan promises to give priority to municipal and nonprofit broadband providers but would still rely on private companies to install cables and erect cell towers to far reaches of the country. One concern is that the companies won’t consider the effort worth their time, even with all the money earmarked for those projects. During the electrification boom of the 1920s, private providers were reluctant to install poles and string lines hundreds of miles into sparsely populated areas.
Taxpayers who received unemployment benefits last year — but who filed their federal tax returns before a new tax break became available — could receive an automatic refund as early as May, the Internal Revenue Service said on Wednesday.
The latest pandemic relief legislation — signed into law on March 11, in the thick of tax season — made the first $10,200 of unemployment benefits tax-free in 2020 for people with modified adjusted incomes of less than $150,000. (Married taxpayers filing jointly can exclude up to $20,400.)
But some Americans had already filed their tax returns by March and have been waiting for official agency guidance. Millions of U.S. workers filed for unemployment last year, but the I.R.S. said it was still determining how many workers affected by the tax change had already filed their tax returns.
On Wednesday, the I.R.S. confirmed that it would automatically recalculate the correct amount of benefits subject to taxation — and any overpayment will be refunded or applied to any other outstanding taxes owed. The first refunds are expected to be issued in May and will continue into the summer.
The I.R.S. said it would begin processing the simpler returns first, or those eligible for up to $10,200 in excluded benefits, and then would turn to returns for joint filers and others with more complex returns.
There is no need for those affected to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return, the agency said. Those taxpayers may want to review their state tax returns as well, the I.R.S. said.
People who still haven’t filed and expect to do so electronically can simply answer the questions asked by their online tax preparer, which will factor in the new tax break when they file. The agency provided an updated worksheet and additional guidance in March for taxpayers that prefer paper.
Microsoft’s HoloLens headsets, demonstrated above in 2017, will equip soldiers with night vision, thermal vision and audio communication.Credit…Elaine Thompson/Associated Press
Microsoft said Wednesday that it would begin producing more than 120,000 augmented reality headsets for Army soldiers under a contract that could be worth up to $21.9 billion.
The HoloLens headsets use a technology called the Integrated Visual Augmentation System, which will equip soldiers wearing them with night vision, thermal vision and audio communication. The devices also have sensors that help soldiers target opponents in battle.
The deal is likely to create waves inside Microsoft, where some employees have objected to working with the Pentagon. Employees at other big tech companies, like Google, have also rejected what they say is the weaponization of their technology.
But Microsoft has long courted Defense Department work, including a $10 billion contract to build a cloud-computing system. Amazon had been seen as a front-runner to win the contract, but the Defense Department chose Microsoft.
Amazon claimed that President Donald J. Trump had interfered in the process because of his feud with Jeff Bezos, Amazon’s chief executive and the owner of The Washington Post. A legal fight over the contract is still active.
Soldiers have tested the Microsoft headsets for two years, the company said. The Army said the devices would be used in combat and training.
Microsoft said its testing of the headsets had helped the Defense Department’s “efforts to modernize the U.S. military by taking advantage of advanced technology and new innovations not available to military.”
The devices will “provide the improved situational awareness, target engagement and informed decision-making necessary” to overcome current and future adversaries, the Army said in a news release.
In 2018, Microsoft won a $480 million bid to make prototypes of the headsets. The Army said Wednesday that the new contract to produce them on a larger scale was for five years, with the option to add up to five more years.
WASHINGTON — Kimberly Vasquez, a high school senior in Baltimore, faced a tough problem when the pandemic began. She had no fast internet service in her home, but all her classes were online.
Marigold Lewi, a sophomore at the same school, was regularly booted off Zoom classes because of her slow home connection.
Ms. Lewi spent a lot of time explaining Zoom absences to teachers. Ms. Vasquez sat outside local libraries to use their internet access and at times used her phone. The two of them helped push a successful public campaign for better and free service to low-income families in the city.
His $2 trillion infrastructure plan, announced on Wednesday, includes $100 billion to extend fast internet access to every home.
The money is meant to improve the economy by enabling all Americans to work, get medical care and take classes from wherever they live. Although the government has spent billions on the digital divide in the past, the efforts have failed to close it partly because people in different areas have different problems. Affordability is the main culprit in urban and suburban areas. In many rural areas, internet service isn’t available at all because of the high costs of installation.
“We’ll make sure every single American has access to high-quality, affordable, high speed internet,” Mr. Biden said in a speech on Wednesday. “And when I say affordable, I mean it. Americans pay too much for internet. We will drive down the price for families who have service now. We will make it easier for families who don’t have affordable service to be able to get it now.”
Longtime advocates of universal broadband say the plan, which requires congressional approval, may finally come close to fixing the digital divide, a stubborn problem first identified and named by regulators during the Clinton administration. The plight of unconnected students during the pandemic added urgency.
F.C.C. announced $50 to $75 broadband subsidies for low-income families from $3.2 billion granted by Congress in December for emergency digital divide funding. Both programs involve one-time emergency funding to address broadband access problems exacerbated by the pandemic.
The administration’s $100 billion plan aims to connect even the most isolated residents: the 35 percent of rural homes without access. In those areas, the White House said, it would focus on “future-proof” technology, which analysts take to mean fiber and other high-bandwidth technology. The administration highlighted its support for networks run and owned by municipalities, nonprofits and rural electrical cooperatives. Several states have banned municipal broadband networks, and the F.C.C. failed in its attempts to overturn those bans in court during the Obama administration.
The Biden infrastructure plan faces a tough path in Congress. Republicans have pushed back on the cost. They even argue about definitions of broadband. Republicans balk at some proposals to require faster broadband standards — such as 25 megabits for downloads and as much as 25 megabits for uploads, which they say is a bar too high for providers in rural areas. Those speeds would allow multiple family members to be on videoconferencing, for example.
“I believe that this would make it harder to serve those communities that don’t have broadband today,” Michael O’Rielly, a former F.C.C. commissioner, told the House commerce committee last month.
Educators lobbied Congress throughout the pandemic to extend broadband in the country. When little relief was in sight, some took matters into their own hands.
Last April and through the summer, administrators at the Brockton School District in Massachusetts bought more than 4,000 hot spots with their own funding and a federal loan. They were able to reduce the percentage of students without high-speed internet or a device to about 5 to 10 percent, from about 30 percent.
Superintendent Mike Thomas said the district was starting to go back to classrooms and would most likely be fully in person by the fall. But he plans to retain many aspects of distance learning, he said, particularly after-school tutoring.
In Baltimore, where an estimated 40 percent of households lack high-speed internet, students and community activists fought to raise awareness of their circumstances. Ms. Vasquez and Ms. Lewi held protests against Comcast, the dominant provider, for better speeds and lower costs for its much-publicized low-income program. Their group, Students Organizing a Multicultural and Open Society, also lobbied the Maryland legislature and the city to put a priority on affordable broadband for low-income households.
“We didn’t have options, and we deserved better,” Ms. Vasquez said.
Adam Bouhmad and some community activists began to install antenna “mesh” networks tapping into the hot spots of closed Baltimore schools to connect surrounding homes. Through a jury-rigged system of antennas and routers, Mr. Bouhmad’s group, Waves, got cheap or free internet service to 120 low-income families.
Mr. Biden’s promise to support alternative broadband providers could include projects like the one led by Mr. Bouhmad, who said the past year had shown how scant broadband options had left residents in Baltimore in the lurch.
“Investment upfront to build out infrastructure and support internet providers is fantastic,” Mr. Bouhmad said. He added that residents in places like Baltimore would continue to need federal subsidies and that the administration should focus on the costs of broadband as a major hurdle.
“Availability doesn’t equal accessibility in terms of price and user experience,” he said.
The pandemic has intensified a spotlight on long-running questions about how communities can do a better job supporting seniors who need care but want to live outside a nursing home.
The coronavirus had taken the lives of 181,000 people in U.S. nursing homes, assisted living and other long-term care facilities through last weekend, according to the Kaiser Family Foundation — 33 percent of the national toll.
The occupancy rate in nursing homes in the fourth quarter of 2020 was 75 percent, down 11 percentage points from the first quarter, according to the National Investment Center for Seniors Housing & Care, a research group. The shift may not be permanent, but this much is clear: As the aging of the nation accelerates, most communities need to do much more to become age-friendly, said Jennifer Molinsky, senior research associate at the Joint Center for Housing Studies at Harvard.
“It’s about all the services that people can access, whether that’s the accessibility and affordability of housing, or transportation and supports that can be delivered in the home,” she said.
Mark Miller reports for The New York Times:
A major shortage of age-friendly housing in the United States will present problems for seniors who wish to stay in their homes. By 2034, 34 percent of households will be headed by someone over 65, according to the Harvard center. Yet in 2011, just 3.5 percent of homes had single-floor living, no-step entry and extra-wide halls and doors for wheelchair access, according to Harvard’s latest estimates.
Medicare does not pay for most long-term care services, regardless of where they happen; reimbursement is limited to a person’s first 100 days in a skilled nursing facility. Medicaid, which covers only people with very low incomes, has long been the nation’s largest funder of long-term care. From its inception, the program was required to cover care in nursing facilities but not at home or in a community setting. “There’s a bias toward institutions,” said Judith Solomon, a senior fellow specializing in health at the Center on Budget and Policy Priorities.
LONDON — When Gregg finally stopped gambling in late 2018, he was in a dire financial position. He had lost nearly $15,000 during a nine-month betting binge, on top of two outstanding loans totaling more than $70,000 and a mortgage of more than $150,000 on his small home in Britain.
Now he is on a hunt to know whether his favorite gambling app, Sky Bet, knew about his problems and still tried to hook him.
Records show that Sky Bet had what amounted to a dossier of information about Gregg. The company, or one of the data providers it had hired to collect information about users, had access to banking records, mortgage details, location coordinates, and an intimate portrait of his habits wagering on slots and soccer matches.
After he stopped gambling, Sky Bet’s data-profiling software labeled him a customer to “win back.” He received emails like one promoting a chance to win more than $40,000 by playing slots, after marketing software flagged that he was likely to open them. A predictive model even estimated how much he would be worth if he started gambling again: about $1,500.
More than a dozen states, including New Jersey, Nevada and Virginia, now allow app-based gambling.
London lawyer behind the effort to obtain Gregg’s data. “When we start to look inside the vault, as we are here, then we see how vulnerabilities are laid out to the platforms.”
report published last year said 60 percent of the gambling industry’s profits came from the 5 percent of customers who were “problem gamblers,” or at risk of becoming so.
“We’re trying to get transparency,” Mr. Naik said. “It shouldn’t take this much work from lawyers to figure out what’s going on.”
Sky Bet was the most popular gambling app in Britain last year, downloaded roughly 140,000 times per month, according to the market research firm Apptopia. Once controlled by Rupert Murdoch’s British media company, Sky, it is now owned by Flutter Entertainment, which owns a number of casino apps and generated about $7.4 billion in revenue last year.
In Sky Bet’s privacy policy, which runs over 10,000 words, the company says it collects personal information including browsing history, spending, demographic data and behavioral information, such as the sports a person likes to bet on. The data, which can be shared across at least 12 gambling services owned by Flutter, is used for marketing and personalization, while financial information is collected for money-laundering and fraud protection, the policy says.
chat service for sports fans. “If you use that data in a way that you know, or should know, is harmful to your users, then that’s a serious problem.”
Mr. Naik, who previously helped uncover data misuse by the political consulting firm Cambridge Analytica, was contacted last year by Gregg, who was seeking help getting copies of data from Sky Bet and companies it used to profile users.
The data that he and Mr. Naik obtained included a 34-page breakdown of his financial history from a company called CallCredit, which conducts fraud and identify checks for Sky Bet. It contained information about his bank accounts, debts and mortgage, with details down to monthly payments. In bold was a loan default in March 2019.
Another company used by Sky Bet, Iovation, provided a spreadsheet with nearly 19,000 fields of data, including identification numbers for devices that Gregg used to make deposits to his gambling account and network information about where they were made from.
totaled $7.3 billion, nearly double the next-largest market, Japan, according to Global Betting and Gaming Consultants, an industry research group. This week, four of the top five free sports apps on Apple’s App Store in Britain are gambling related. The companies own and sponsor soccer teams and dominate advertising during televised sporting events.
The country is at the center of the global debate about regulating the new generation of betting apps. The government has opened a review of gambling laws that will include the consideration of new rules for data use and affordability checks, according to the agency conducting the review.
Lawmakers should pass new regulations that allow companies to use data to spot problem gamblers but limit how it can be used for marketing and other sales objectives, said James Noyes, a senior fellow at the Social Market Foundation, a London think tank.
“They detect your pattern of play, your likes, dislikes, spending tendencies and exposure to risk,” Mr. Noyes said. “It’s taking information about you and turning it right back on you.”
LONDON — When Gregg finally stopped gambling in late 2018, he was in a dire financial position. He had lost nearly $15,000 during a nine-month betting binge, on top of two outstanding loans totaling more than $70,000 and a mortgage of more than $150,000 on his small home in Britain.
Now he is on a hunt to know whether his favorite gambling app, Sky Bet, knew about his problems and still tried to hook him.
Records show that Sky Bet had what amounted to a dossier of information about Gregg. The company, or one of the data providers it had hired to collect information about users, had access to banking records, mortgage details, location coordinates, and an intimate portrait of his habits wagering on slots and soccer matches.
After he stopped gambling, Sky Bet’s data-profiling software labeled him a customer to “win back.” He received emails like one promoting a chance to win more than $40,000 by playing slots, after marketing software flagged that he was likely to open them. A predictive model even estimated how much he would be worth if he started gambling again: about $1,500.
More than a dozen states, including New Jersey, Nevada and Virginia, now allow app-based gambling.
They said the companies behind the apps required more oversight and are calling for tougher laws to identify problem gamblers and prevent data from being used in underhanded and predatory ways.
London lawyer behind the effort to obtain Gregg’s data. “When we start to look inside the vault, as we are here, then we see how vulnerabilities are laid out to the platforms.”
report published last year said 60 percent of the gambling industry’s profits came from the 5 percent of customers who were “problem gamblers,” or at risk of becoming so.
“We’re trying to get transparency,” Mr. Naik said. “It shouldn’t take this much work from lawyers to figure out what’s going on.”
Sky Bet was the most popular gambling app in Britain last year, downloaded roughly 140,000 times per month, according to the market research firm Apptopia. Once controlled by Rupert Murdoch’s British media company, Sky, it is now owned by Flutter Entertainment, which owns a number of casino apps and generated about $7.4 billion in revenue last year.
Flutter, like Sky Bet, declined to comment for this article. In Sky Bet’s privacy policy, which runs over 10,000 words, the company says it collects personal information including browsing history, spending, demographic data and behavioral information, such as the sports a person likes to bet on. The data, which can be shared across at least 12 gambling services owned by Flutter, is used for marketing and personalization, while financial information is collected for money-laundering and fraud protection, the policy says.
At least eight times in the privacy policy, the company suggests that people who don’t want all that data collected “not use our services and to close your account.”
chat service for sports fans. “If you use that data in a way that you know, or should know, is harmful to your users, then that’s a serious problem.”
Mr. Naik, who previously helped uncover data misuse by the political consulting firm Cambridge Analytica, was contacted last year by Gregg, who was seeking help getting copies of data from Sky Bet and companies it used to profile users.
The data that he and Mr. Naik obtained included a 34-page breakdown of his financial history from a company called CallCredit, which conducts fraud and identify checks for Sky Bet. It contained information about his bank accounts, debts and mortgage, with details down to monthly payments. In bold was a loan default in March 2019.
Another company used by Sky Bet, Iovation, provided a spreadsheet with nearly 19,000 fields of data, including identification numbers for devices that Gregg used to make deposits to his gambling account and network information about where they were made from.
A document from Signal, a company used by Sky Bet that provides tools for tracking users online and offline, listed personal characteristics, like Gregg’s history of playing slots and making soccer his favorite sport to bet on.
totaled $7.3 billion, nearly double the next-largest market, Japan, according to Global Betting and Gaming Consultants, an industry research group. This week, four of the top five free sports apps on Apple’s App Store in Britain are gambling related. The companies own and sponsor soccer teams and dominate advertising during televised sporting events.
The country is at the center of the global debate about regulating the new generation of betting apps. The government has opened a review of gambling laws that will include the consideration of new rules for data use and affordability checks, according to the agency conducting the review.
Lawmakers should pass new regulations that allow companies to use data to spot problem gamblers but limit how it can be used for marketing and other sales objectives, said James Noyes, a senior fellow at the Social Market Foundation, a London think tank.
“They detect your pattern of play, your likes, dislikes, spending tendencies and exposure to risk,” Mr. Noyes said. “It’s taking information about you and turning it right back on you.”
For 15 years, Harvey Yancey has been building and renovating market-rate homes, affordable housing and commercial spaces in Washington, D.C. During that time, his company, H2DesignBuild, has navigated funding challenges and found its way into beneficial deals.
But all along, Mr. Yancey, who is Black, said he was aware of the industry’s racial homogeneity and the limitations he faced because of his skin color. “It was always the quiet conversation in the room,” he said.
Today, commercial real estate remains a field in which the vast majority of developers are white. Few reliable statistics are available, but the industry association NAIOP reported in a 2013 survey, the most recent year available, that 4.4 percent of commercial real estate professionals were Black. This year, just 5 percent of Urban Land Institute’s members described themselves as Black or African-American.
The disparity has many sources, including many African-Americans’ unfamiliarity with the field and subsequent dearth of connections. But the biggest challenge, Black developers say, is gaining access to capital, including loans, loan guarantees and equity. That may be the result of limited balance sheets, short track records or a lack of wealthy and influential networks. As a result, their firms struggle to grow and remain on the margins as cities around the country see their downtowns reshaped by other, deep-pocketed developers.
overwhelmingly white, though its leaders are pledging to change.
Banking giants like Bank of America, Citigroup and JPMorgan Chase, as well as smaller institutions, have announced initiatives totaling billions of dollars that are largely focusing on communities and entrepreneurs of color. Some of the funding is earmarked for affordable housing and commercial development in low-income communities, which will benefit all real estate developers.
Longtime practitioners and analysts in the field say that if new dollars are to redress the industry’s racial imbalance, the funds need to be carefully designed so that more of the money winds up in the hands of Black developers.
In October, JPMorgan Chase announced a $30 billion initiative to advance racial equity that included substantial commitments for minority-led small businesses and Black and Latino households. The announcement also listed $14 billion in new loans and investments over the next five years to expand affordable rental housing in low-income communities.
announced $200 million of equity and financing for affordable housing projects by minority developers.
net worth of a typical Black family in America was one-tenth that of a white family, according to a study by the Brookings Institution. Black developers say that coming up with several million dollars in “friends and family” equity is often impossible because their networks don’t have that kind of money.
“Equity capital is not readily available,” said Craig Livingston, a managing partner at Exact Capital and the chairman of the New York Real Estate Chamber. He and his colleagues may have incredible track records, he said, “but when competing with second- or third-generation developers, we don’t have the same financial footing or access to risk capital.”
A few initiatives have emerged that focus on this problem. In June, for instance, Morgan Stanley and the Ford Foundation started a $26 million fund that provides equity to emerging minority- and women-owned companies. The fund — which is the result of almost a decade of strategizing about how to best help developers of color — will be managed by TruFund Financial Services, a Community Development Financial Institution.
And Blue Vista, an investment management firm in Chicago, is creating a $100 million private equity fund for minority and women-owned real estate businesses. Moved by the racial justice protests this summer, Robert G. Byron, a co-founder of the firm, examined the company’s history and found that the deals in which the company had provided capital to novice companies led by people of color and women had worked out well.
Blue Vista structured its new fund in response, with a plan to provide seed capital and mentoring to a handful of talented newer developers. Within a few years, recipients are more likely to be ready to seek capital from more established sources.
Blue Vista’s program is similar to one that Don Peebles, a successful Black developer in New York, announced in 2019. Mr. Peebles is aiming to gather $450 million in investments for undercapitalized developers in several key markets. But among private equity firms, Mr. Byron says, there doesn’t seem to be any real competition to find and invest in these developers.
“Just by scratching the surface, without marketing, we’ve found really capable people — smart, talented, experienced,” Mr. Byron said. And investors are excited, too.
“What I hear from both investors and potential users is, ‘This is exactly what we’ve been clamoring for,’” he said.“It’s kind of a no-brainer.”
To tame a frothy real-estate market, China is turning to one of its root causes: the way land is sold in big cities.
From a standing start in the 1990s—when employers still provided housing for many—China’s property market has experienced phenomenal growth, with home ownership rates soaring and affordability declining dramatically. A 2018 study found Chinese home prices averaged 9.3 times annual incomes, outstripping San Francisco’s 8.4 times.
With the yearslong boom continuing despite the coronavirus pandemic, authorities are now sounding the alarm and pushing big cities to coordinate land auctions. Investors and analysts say this should discourage bidding frenzies and by disadvantaging weaker companies, it could help speed up industry consolidation.
Key cities should coordinate residential-land auctions and hold them at a few specific times each year, state media quoted China’s Ministry of Natural Resources as saying in late February.
That would mark a big change from the current setup, in which local governments release parcels independently and with no set schedule. The uncertainty prompts property developers to bid aggressively for land.
Large developers like China Evergrande Group and Sunac China Holdings Ltd. finance their purchases by borrowing heavily from banks and bond investors and then bring in more cash to keep the cycle going by selling many homes before they are completed.
Theoretically, synchronized land auctions would mean dozens of parcels would come up for grabs at once, meaning only large, financially strong developers could compete for multiple sites.
Iris Pang, an economist with ING Bank in Hong Kong, said the new system was a “very efficient” way to shut indebted developers out of bidding for land, since prospective buyers have to pay large deposits to participate in any auction.
Qingdao, a coastal city in eastern Shandong province, has already said it would hold this year’s land auctions in three batches. Local media said the new policy would cover 22 cities, including Beijing, Shanghai and Shenzhen.
Chinese authorities have already tried a range of cooling measures including introducing limits on mortgage financing, speculative purchases, bond issuance by developers and on who can buy new homes. More recently, they have capped bank lending to the sector and introduced a system of the “three red lines” that essentially requires weaker players to cut debt.
Hayden Briscoe, head of Asia-Pacific fixed income at UBS Asset Management, said the new policy was “the final piece to the puzzle.” With larger developers more confident of getting better-quality land, they are likely to speculate less, he said.
In a sign that Beijing’s top leaders take the risks seriously, one of the country’s most senior financial regulators recently called out risky behavior. “Many people buy houses not for living, but for investment or speculation, which is very dangerous,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said in a March 2 speech.
That echoes years of government messaging, but Mr. Guo underlined it by warning that he sees a real-estate bubble forming; a collapse could cause “a great loss of personal assets” and loan defaults that would ripple through the banking system and economy.
Christopher Yip, senior director of corporate ratings at S&P Global Ratings, said while earlier curbs could be easily reversed, the newer initiatives were “more long-term, and it’s not just controlling the symptoms.” Weaker developers will have to bid very selectively or seek other ways to acquire land, such as by participating in urban-renewal projects, he said.
Stocks of Chinese property developers listed in Hong Kong and in the mainland have climbed on expectations the change will reduce costs and improve margins, especially for bigger players. A Wind index of 133 real-estate companies traded in Shanghai or Shenzhen has gained 9.1% over the past month, compared with a 12.5% drop in the broader CSI 300 index.
In time, investors believe some companies could be forced out of business or into mergers with bigger rivals, accelerating a shakeout that is already underway.
“There will be short-term pain,” said Mr. Briscoe of UBS. But leverage in the sector will decline, and the market leaders will grow bigger. “They will grow at scale, but in a slower fashion.”
LOS ANGELES–(BUSINESS WIRE)–Housing justice advocates from AHF and its housing advocacy arm, Housing Is A Human Right (HHR), will run a new advocacy ad in the Los Angeles Times focusing on the years-long failed approaches by City and County officials to the homeless and housing affordability crises in Los Angeles. The ad suggests swift, system-wide overhauls that could result in more effective and faster solutions to the ongoing—and sadly increasing—problem. It is set to run this Sunday, March 14, 2021.
Provocatively headlined “L.A. Is a City That Doesn’t Work,” the full-page, four-color newspaper ad takes the form of an old, yellowed newspaper from a bygone era with the banner: “Housing News.” The ad also features a present day photo of an overflowing, trash strewn tent encampment, and a sub-headline asks, “How Did Homelessness Get This Bad?”
The ad notes:
“Los Angeles was once a City we could be proud of, but the lack of leadership and a clear path forward has left us with a humanitarian crisis of epic proportions.”
It also identifies behaviors and actions that became roadblocks to mounting a truly effective region-wide response to the crisis, including:
Corporate Developers continue to build market rate and luxury housing, to the exclusion of very-low-income and low-income residents. We are spending taxpayer money to build units that are out of reach for the people who need it most.
Developments for homeless housing are mired in red tape, with inspectors from the same department approving and then rejecting plans and upgrades, leaving nonprofit housing developers with no roadmap to bring critical housing online.
After voters approved Measure HHH, the City did not enact cost controls on housing and spent upwards of $500,000 to $700,000 for small units of homeless housing. For what they spent, it would have been less expensive to purchase condominiums and create homeownership.
Motel conversions to permanent housing are facing red tape and code restrictions that leave units vacant while people die on the streets.
However, AHF’s homeless advocacy ad is not solely intended to criticize the status quo of our homeless response. The advocates also suggest concrete, sometimes very basic actions that could help improve the regional response throughout Greater Los Angeles. Among these ideas:
Lower the cost to build units using prefabricated modular housing or take advantage of existing structures, like motels, by utilizing adaptive re-use.
Stop the bureaucratic red tape and green light motel conversions and new homeless housing, recognizing that homelessness is a public health and humanitarian crisis that represents an emergency.
Stop wasting money on temporary fixes and solutions that are a revolving door back into homelessness and spend it instead on permanent housing. Taxpayers spend $35,000 to $45,000 per person that is chronically homeless and spends much less for those who are in permanent housing.
Take advantage of vacant units throughout the City and County of Los Angeles to place our unhoused community into permanent housing.
Last week (Sunday, March 7, 2021) AHF ran another full-page Los Angeles Times ad celebrating its Healthy Housing Foundation (HHF). HHF, which launched in late 2017 and is the housing production arm of AHF, provides decent housing units at an affordable cost to low-income people, including families with children, and those previously unsheltered or homeless. That advocacy ad, headlined “AHF’s Family of Housing,” was a brightly colored collage of old photos and renderings of several of the older hotels and motels that AHF has purchased over the past three-and-a-half years to refurbish and repurpose as extremely-low-income housing. Since 2017, AHF has purchased nine old SRO hotels and motels in Greater Los Angeles and created nearly 900 housing units.