5 warning signs in the real-estate market that recall the mid-2000s housing bubble

  • Several gauges of housing market activity mirror trends seen just before the bubble burst in 2008.
  • Experts see the current boom as far safer than the prior rally, citing stronger lending requirements.
  • Still, here are trends ranging from home prices to construction activity that resemble 2005 and 2006.
  • See more stories on Insider’s business page.

Housing-market monitors keep repeating the phrase “since 2005,” except when it’s “since 2006.” That’s worrying – both superlatives refer back to the peak of a historic real-estate bubble.

Low mortgage rates and massive demand have powered a supercharged rally for US housing over the last year. Americans snapped up nearly all the available supply of new and previously owned homes amid huge population shifts from cities to suburbs. Chronic underbuilding after the financial crisis left contractors struggling to meet the new demand with adequate supply. That imbalance has since pushed selling prices skyhigh.

The boom’s frenetic nature has led many to compare the current market with that seen just before the infamous 2008 crash. Experts have been quick to note that, while some similarities exist, the latest price surge has more to do with a lack of inventory than dubious lending standards.

“I don’t see the kind of financial stability concerns that really do reside around the housing sector,” Federal Reserve Chair Jerome Powell said last month. “We don’t see bad loans and unsustainable prices and that kind of thing.”

But just because the market looks different on a macro level doesn’t mean there aren’t strong similarities to the period just before the bubble burst. Here are five housing-market signals flashing the same signs seen about 15 years ago.

(1) CoreLogic Home Price Index

Possibly the most basic indicator of just how much demand has outstripped supply is nationwide price indexes.

The headline price gauge for housing-data authority CoreLogic soared 11.3% year-over-year in March, according to a Tuesday report. That marks an acceleration from the February rate of 10.4% and the fastest rate of price growth since March 2006. On a month-over-month basis, prices rose 2% from their February levels.

The financial analytics firm sees that momentum cooling over the next year. A persistent wearing-away of home affordability will likely curtail some purchases, and accelerated construction will shore up supply in the months ahead, CoreLogic said. Still, year-over-year price growth should reach 3.5% as lingering demand keeps the rally alive, Frank Martell, the president and CEO of CoreLogic, said in a statement.

“With prospective buyers continuing to be motivated by historically low mortgage rates, we anticipate sustained demand in the summer and early fall,” he said.

(2) S&P CoreLogic Case-Shiller Index

Separately, a more city-focused measure of home-price inflation notched a similar reading last week. Home prices in metropolitan areas gained 12% year-over-year in February, according to the S&P CoreLogic Case-Shiller Home Price Index, the headline index of US home prices for more than three decades. The reading signals the strongest price growth since 2006 and edged slightly higher from the prior annual gain of 11.2%.

Inflation was broad-based. All 20 cities saw home prices climb, and 19 cities saw year-over-year price growth accelerate from January to February. Prices rose the most in Phoenix, San Diego, and Seattle, according to S&P.

(3) Selling prices for new vs. previously owned homes

Digging deeper into home sales reveals an unusual phenomenon unseen since the previous boom. For the first time since 2005, Americans spent more on previously owned single-family homes than on new construction, according to March housing data from the Census Bureau and the National Association of Realtors.

The dynamic signals Americans are prioritizing buying any available home instead of hunting down a new unit.

To be sure, monthly sales data is volatile and the premium for new homes could reemerge in April data. But with supply still under pressure and CoreLogic’s Tuesday report showing prices broadly climbing higher last month, the phenomenon might linger for some time.

(4) Home starts

As gauges of market demand soar to 15-year highs, so have measures of upcoming supply. Housing starts surged nearly 20% in March as contractors rushed to address the lack of new homes for sale. The leap places the annual rate of starts at its highest since 2006 and serves as the largest month-over-month gain since 1990. Permits for new residential construction also increased, albeit at a slower rate.

The rebound was somewhat prompted by winter storms curbing construction activity in February. But for the most part, a historic shortage of available homes fueled the pickup in building. Just 1.07 million existing homes were up for sale in March. That sum, at the current purchase rate, would be snapped up in only two months.

Homebuying has slowed from its pandemic-era peak, giving contractors slightly more time to meet the elevated demand. With millennials hitting peak homebuying age and lumber prices expected to decline, some economists see the rebound in construction paving the way for more moderate price growth.

(5) Home equity take-out

The sustained acceleration of home price growth has also lead owners to take out equity at the same rate seen in the mid-2000s. Homeowners refinancing their mortgages pulled roughly $50 billion in equity out of their homes throughout the fourth quarter of 2020, according to data from Freddie Mac and the Urban Institute.

Mortgage rates, while still at historically low levels, reversed their pandemic-era decline through the first quarter as investors braced for the economic recovery to give way to higher borrowing costs. Those higher rates erased the rate-reduction incentive for refinancing, making equity take-out the top reason to refinance, the Urban Institute said in a report published April 27.

Although equity take-out on its own is normal, the sharp uptick seen last year could be cause for concern. Some economists have criticized the Fed’s ultra-accommodative policy for encouraging risk-taking across various markets. Increased equity take-out presents new financial risks for participating homeowners since a decline in home prices from their skyhigh levels could cut deeply into their balance sheets.

And while equity take-out sits at its 2005 level, it is still well below the 2006 peak. Yet with mortgage rates expected to climb over the next few years, take-out refinancing could accelerate further.

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A federal judge scrapped a nationwide moratorium on evictions, saying the CDC went beyond its authority

Eviction Moratorium Activists Massachusetts Signs DOJ
Housing activists erecting a sign in front of Gov. Charlie Baker’s house in Swampscott, Massachusetts.

A US federal judge on Wednesday blocked an order from the Centers for Disease Control and Prevention to prevent landlords from evicting their tenants during the coronavirus pandemic.

“The CDC order must be set aside,” US District Judge Dabney Friedrich said in a 20-page ruling.

The order was initially announced on September 4 to take effect for the rest of 2020. President Joe Biden on his first day in office extended the order through June 30 to aid struggling tenants through the pandemic’s financial fallout.

Friedrich wrote that the ban was among “difficult policy decisions that have had enormous real-world consequences” in the pandemic.

“The question for the Court is a narrow one,” the ruling said. “Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not.”

Judges in Ohio and Texas have also ruled against enforcing the ban, which has prompted concerns from renters and housing advocates. The Associated Press reported in November that while the nationwide order aimed to protect more than 23 million renters, it often left tenants vulnerable because of uneven enforcement at the state and local levels.

Data from the Center on Budget and Policy Priorities has indicated that about 15% of renters are behind on monthly payments. In December, that figure was about 19%, Insider’s Ayelet Sheffey reported.

As of January 2021, 10 million Americans were behind on rent payments, according to Moody’s Analytics. Beyond the eviction moratorium, Biden had also allocated nearly $50 billion towards rent assistance in the American Rescue Plan. But, as Insider’s Ayelet Sheffey reported, that assistance needs to be disbursed before courts start processing evictions again, and the cash infusion is a tool for renters to help fight off eviction.

That means that rulings against eviction moratoriums could jeopardize Americans getting rental assistance. The Washington Post reported that officials in the Treasury Department were “racing” to distribute aid before eviction moratoriums were struck down.

According to Moody’s, the Americans behind on rent are “among the most vulnerable members of society: more likely to be unemployed, with less income and less education.”

An April report from the National Low Income Housing Coalition found that, on the whole, renters of color were more likely to be behind on their rent in March. They found that “22% of Black renters, 20% of Latino/a renters, and 19% of Asian renters were behind on their rent compared to 9% of white renters.”

Even with eviction moratoriums in place, 42% of those behind on their rent anticipated that they’d be evicted within the next two months. According to the Princeton University Eviction Lab, landlords filed 329,653 evictions during the pandemic.

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Bill and Melinda Gates bought a $43 million beach house in California last year- see inside

Bill Gates beach house.

  • Bill and Melinda Gates bought a beachfront home near San Diego, California.
  • They reportedly paid $43 million for the six-bedroom, 5,800 square foot house.
  • The mansion is part of a massive real estate portfolio that could be divided in the couple’s divorce.
  • Visit Business Insider’s homepage for more stories.

Bill and Melinda Gates bought an oceanfront property near San Diego last year.

Gates, who rose to prominence as co-founder of Microsoft, bought the Del Mar, California home for $43 million, the Wall Street Journal first reported. It was reportedly one of the largest ever sales in the area.

The Del Mar property was last on the market for $48 million before it was purchased by the Gates in late March 2020. It was previously owned by Madeleine Pickens, the ex-wife of Texas billionaire and hedge fund manager T. Boone Pickens.

The Gates’ real estate portfolio is estimated to be worth over $200 million. Now with the news that Gates and his wife of 27 years, Melinda, are ending their marriage, the properties could be divided up.

The couple owns other luxury properties, including a southern California ranch purchased for $18 million in 2014, and a mansion in Medina, Washington, estimated to be worth $127 million. They have a separation contract that likely dictates how property will be split.

Take a look inside the San Diego property.

The house was built by architect Ken Ronchetti in 1999.

Bill Gates beach house.

Source: Realtor.com

It is considered a landmark in Del Mar.

Bill Gates beach house.

Source: The Guiltinan Group

Wood ceilings throughout give the beach house an island feel.

Bill Gates beach house.

The main living space has large windows that open up onto the porch.

Bill Gates beach house.

Outside, the property has 120 feet of oceanfront.

Bill Gates beach house.

The owners can swim in the ocean, or enjoy the view from the porch.

Bill Gates beach house.

Outdoor furniture and a fire pit make the most of the space.

Bill Gates beach house.

As if that wasn’t enough, there’s also a large pool…

Bill Gates beach house.

…and a ten-person jacuzzi.

Bill Gates beach house.

The jacuzzi and fire pit have everything for a perfect beachy respite.

Bill Gates beach house.

Back inside, the house has six bedrooms…

Bill Gates beach house.

…some with stunning ocean views.

Bill Gates beach house.

The house is 5,800 square feet, including 3.5 bathrooms.

Bill Gates beach house.

Limestone floors continue throughout the house.

Bill Gates beach house.

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Melinda Gates bought a $1.2 million cottage in Seattle 3 weeks before she and Bill Gates filed for divorce

Philanthropist Melinda Gates attends an international conference on health in developing countries, in Oslo, Norway November 6, 2018.
Philanthropist Melinda Gates attends an international conference on health in developing countries, in Oslo, Norway November 6, 2018.

Melinda Gates bought a $1.2 million cottage in Seattle’s North Broadway neighborhood three weeks before she and Bill Gates filed for divorce.

She bought the four-bedroom, two-bathroom home in early April, according to a deed seen by Insider.

The Gates announced they were divorcing on Monday after 27 years of marriage.

“After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage,” they said in a statement. “Over the last 27 years, we have raised three incredible children and built a foundation that works all over the world to enable all people to lead healthy, productive lives.”

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Expensive lumber costs have added $36,000 to the average price of a new home, report finds

construction workers building home
Construction workers build a new Centex home on Tuesday, June 23, 2020, in Houston.

  • Expensive lumber has added to the costs of new houses in a year when all house prices have skyrocketed.
  • NAHB found that soaring lumber costs have added $35,872 to the average price of a new home.
  • Experts are concerned that high home prices will hinder homebuying for many – especially millennials.
  • See more stories on Insider’s business page.

Just a few months ago, in February, the National Association of Home Builders (NAHB) released shocking data about how the historic appreciation in lumber prices was crimping the housing market. A newbuild was $24,000 more expensive, on average.

Three months later, that number now stands at $35,872.

The housing market took off last summer, as the pandemic enabled many to work from home indefinitely, and with mortgage rates so low, many people rushed to buy new homes. But the pandemic shut down lumber production, and it hasn’t kept pace with building since.

“This unprecedented price surge is hurting American home buyers and home builders and impeding housing and economic growth,” NAHB Chairman Chuck Fowke said in a statement. “These lumber price hikes are clearly unsustainable. Policymakers need to examine the lumber supply chain, identify the causes for high prices and supply constraints and seek immediate remedies that will increase production.”

A report from the NAHB in February said the lumber supply chain impact came as factories shut down almost immediately last March for safety reasons, and then as demand spiked, supply couldn’t keep up. Lumber prices have jumped by 340% compared to last year.

Insider reported on March 26 that because lumber prices are so high, home builders have been building fewer homes and intentionally raising prices to keep up with the high demand for houses amidst the low supply of lumber.

In addition, a report from Redfin – a real estate brokerage- found that the average home sale price hit an all-time record in March, increasing 16% year-over-year t0 $331, 590, and with about one in three homes being sold for more than the asking price in February, experts like Redfin Chief Economist Daryl Fairweather are concerned.

“When the pandemic is over, purchasing a home is going to cost much more than ever before, putting homeownership much further out of reach for many Americans,” Fairweather said in a statement. “That means a future in which most Americans will not have the opportunity to build wealth through home equity, which will worsen inequality in our society.”

Insider’s Hillary Hoffower reported on April 30 that the pandemic and the lumber shortage are combining to put homeownership out of reach for many, but especially the millennials entering their prime homebuying years. Fairweather told said the housing shortage is leaving millennials “boxed out of the housing market.”

On March 12, the NAHB, along with more than 35 other housing organizations, wrote a letter to Commerce Secretary Gina Raimondo asking her to examine the lumber supply chain and look into solutions for the high costs.

They said: “Housing and construction can do their parts to create jobs, boost the economy to its pre-pandemic strength, and provide safe and affordable housing for all Americans, but in order to do so the federal government needs to address skyrocketing lumber prices and chronic shortages.”

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Tech jobs, sun, and no income tax: experts explain why Florida is poised to keep growing even after the pandemic

Florida’s population grew by 2.7 million over the last decade.

  • Florida’s population grew by 14.6% in the last decade – and the pandemic has accelerated this.
  • The state famously has no personal-income tax, and its banking and finance industries are booming.
  • But the rise in remote working, its lack of lockdown, and attractive house prices are also drawing people in.
  • See more stories on Insider’s business page.

More and more workers are moving to Florida during the pandemic – and the sunny climate isn’t the only reason why.

Top companies are opening new offices in the state, and the rise in remote working is giving staff more freedom to choose where they want to live.

Florida’s population grew by 2.7 million – or 14.6% – between 2010 and 2020, according to US Census data. This is double the rate of overall US population growth.

Read more: Is Florida the new Wall Street?

“It’s not just retirees – it’s tech workers leaving San Francisco,” John Boyd, the CEO of Boyd Consultancy, said.

Businesses are flocking to Florida

“Florida certainly has a winning formula for business attraction,” Boyd told Insider.

In particular, Florida is becoming a hotspot for banking and financial services, while Miami is as emerging as “one of the hottest new tech hubs in North America today,” he said.

Hedge fund Elliott Management is moving its headquarters to West Palm Beach, private-equity firm Blackstone plans to open an office in Miami, and Goldman Sachs is considering the state for its asset management division. Even Subway is shifting some business units to Miami.

Software company Civix and Sonesta International Hotels are opening new offices in Orlando, too.

Deloitte has invested $63 million in Orlando since 2014, while KMPG chose Orlando for its $450 million global training center, which Barnes said is the largest capital investment in KMPG history, according to Casey Barnes, vice president of business development at the Orlando Economic Partnership.

Colliers previously told Insider that interest from out-of-state firms in South Florida real estate is “torrential” – and they’re looking for much bigger officers than before, too.

Average salaries are climbing

As these businesses open offices in Florida, the job-market in the state is booming, too.

Andrew Hunter, co-founder of job search engine Adzuna, told Insider Florida’s job vacancies are back at pre-pandemic levels and the number of unemployed is reaching record lows while average city salaries are climbing.

The number of financial-services employees in Florida has almost returned to pre-pandemic levels with nearly 600,000 people working in the sector. New York, on the other hand, is rebounding much slower, and still has around 30,000 fewer employees in the sector than it did in early 2020, according to data from the US Bureau of Labor Statistics.

Casey Barnes, vice president of business development at the Orlando Economic Partnership, told Insider that Deloitte has created more than 2,200 new jobs in the city since 2014, while KMPG chose Orlando for its $450 million global training center, which Barnes said is the largest capital investment in KMPG history.

Adzuna said that tech company Oracle is the top company hiring in Florida on its site. Boyd said that financial services and tech workers are leaving cities like Boston, Chicago, and New York to move to Florida, but some are coming from overseas in India and Brazil, too.

And billionaires including Charles Schwab, Carl Icahn, Tom Brady, and Peter Thiel have all bought homes in the state.

carl icahn billionaire miami
Activist investor Carl Icahn moved his eponymous company to Miami earlier this year.

And it’s not just finance and tech workers who are benefitting from Florida’s growing economy. The state is also hiking up its minimum wage to $15 per hour by 2026, too.

Working remotely gives people more freedom

The rise of remote working has also made it easier for workers to relocate independently of their employers.

Boyd said that the pandemic has created “a time of historic mobility for both companies and people.” Companies are increasingly letting staff work from home on a permanent basis, which allows them to save on real estate costs, he said.

There is growing momentum for companies to let employees work from home permanently. Facebook, Twitter, Salesforce, and Ford have said their employees can remotely post-pandemic, and some companies are canceling office leases.

“Orlando was an ideal place to live, work, and play prior to COVID-19, and the region’s offerings will only be more valuable to professionals in the pandemic’s wake,” Barnes told Insider.

This was something Alexandra Scherbich, global head of B2B marketing at Tenth Revolution Group, found when she relocated to Tampa from London in April 2019. She told Insider that managing her colleagues in the UK could be challenging from abroad because of the time zone differences, but that she is able to now dedicate her afternoons to meetings with clients on the West Coast, which would have been much harder in the UK because of the eight-hour time difference.

Florida has a pro-business environment

Florida famously doesn’t have a personal income tax, and this is one of the major motivators for migration, Boyd told Insider. He added that many people moving to the state come from high-tax states that don’t have such a pro-business environment, like Connecticut and New Jersey, as well as New York, which recently announced plans to bump up its income-tax rates for its wealthiest residents.

“And the other part of all this is, you know, economic development really comes down to leadership at the end of the day,” Boyd said.

“Governor DeSantis is a good salesman-in-chief of the state of Florida,” he said. He added that Miami’s Mayor Francis Suarez was positioning the city as a major tech market.

ron desantis florida vaccine 60 minutes
Florida Gov. Ron DeSantis.

Florida has sun, sea, and no lockdown

Florida has also remained largely open during the pandemic compared to other states. This led to people choosing to make Florida their primary residence for the pandemic, Kelly Smallridge, CEO of the Business Development Board (BDB) of Palm Beach County, told Insider.

When people relocated to Florida, they started enrolling their children at nearby schools, and soon found themselves settled down in the state, Smallridge said.

Barnes said that many companies are choosing to expand in or relocate to Florida because “they see it as a destination that will attract workers and their families.”

miami florida
Florida’s lifestyle also attracts people to the state.

“Most executives will go take a swim in the beach before they even go to work,” BDB’s Smallridge said. “And, you know, they never have to shovel snow and they don’t have to ride with the subway.”

Scherbich said that, alongside work opportunities, the climate was part of her reason for migrating. She added that she’s settled into the city well and that it has a large UK expatriate community.

Housing and living costs are lower than New York

House prices have gone up around 10% over the past year as more people move to the state, but Florida still has a “very attractive” real-estate market compared to some other major markets in the US, Boyd said, adding that there are affordable housing options “in virtually all parts of Florida.”

The average price for a house in Florida is $277,429, rising to $323,094 in Palm Beach County and $407,245 in Miami, according to data from Zillow. In New York, in comparison, average house prices are $323,094 for the city and $649,490 for the state.

And it isn’t just houses that cost less in the Sunshine Site. Overall living costs in Orlando are 6% lower than the US average, Barnes said.

Florida’s transport networks are growing

There are a lot of transport developments in the pipeline for Florida, too, Boyd said. This includes Brightline, a rail system with investments from Richard Branson’s Virgin, which connects Miami to West Palm Beach, with expansion plans Orlando and Tampa.

Boring company los angeles
The Boring Company is also building a tunnel in Las Vegas.

And North Miami Beach official told Insider’s Grace Kay the city is in early talks with Elon Musk’s The Boring Company over a possible plan to build a one- to two-mile tunnel to tackle congestion.

The state has more than 100 public airports, and Tampa’s direct flights to London were part of Scherbich’s decision to relocate to the city.

Orlanda in particular bills itself as the “tomorrowland of transportation,” Barnes said. This includes serving as a hub for one of the world’s first jet-powered flying taxis, which will depart from more than 10 locations across Florida. The aircrafts by German startup Lilium will be based at Orlando’s Lake Nona, which Barnes said it “a growing testbed” for smart city technology.

“The signal is really ahead of the curve,” Boyd said.

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Donald Trump is set to share a $617 million windfall with Vornado Realty Trust, due to a property refinancing deal, reports say

Protestors outside 555 California Street in San Francisco.
Protestors outside 555 California Street in San Francisco in 2017.

  • Vornado and Trump will get $617 million as part of a $1.2 billion bond sale, Bloomberg reported.
  • The payout is part of a refinancing deal for 555 California Street in San Francisco.
  • Trump is a 30% partner in 555 California and 1290 Avenue of the Americas in New York.
  • See more stories on Insider’s business page.

Former President Donald Trump may receive a multimillion payout from his minority ownership stake in a San Francisco property with Vornado Realty Trust, which on Friday sold $1.2 billion in bonds, according to Bloomberg.

The deal included a $617 million return for the partners, Bloomberg had previously reported. It was unclear how much would go directly to Trump.

The Trump Organization has about 30% ownership in office towers on both coasts through a partnership with Vornado. Together, they own 555 California Street in San Francisco and 1290 Avenue of the Americas in New York City.

As much as $800 million of Trump’s net worth is tied up in the buildings. Unlike other buildings owned outright by The Trump Organization, the ex-president doesn’t have control over the properties he owns with Vornado.

The money raised on Friday from bonds sales would be used to refinance loans and fund construction on their three-building 555 California property, according to Bloomberg.

Vornado is in the middle of a $66 million redevelopment project for both 555 California and 345 Montgomery Street, another of the buildings in the complex, according to a February filing with the Securities and Exchange Commission.

Built in 1969, the 52-story 555 California building was formerly known as the Bank of America Tower.

Before his presidency, Trump sought to cash out his stake in the Vornado properties, Insider reported. As banks and businesses cut ties with Trump during or after his presidency, Vornado reportedly considered buying out Trump’s stake, The Wall Street Journal reported earlier this year.

The firm is New York City’s largest commercial real estate owner and manager.

Read the original article on Business Insider

He was the first African American member of Miami’s most exclusive social club. Today, he owns it – and has a plan to recoup his $8 million investment.

R. Donahue Peebles
R. Donahue Peebles

  • Miami’s exclusive club The Bath Club has reopened with new owners.
  • After years of excluding Black people, its current owner Don Peebles is African American.
  • The new owner talks to Insider about his plans to build an “exclusively inclusive” club to cater to a new generation of private club-goers.
  • See more stories on Insider’s business page.

When R. Donahue Peebles first set foot on the sand of the Beach Club in Miami in 1996, toured its three acres of private beach, two clay tennis courts, and 26,000-square-foot clubhouse, he had no idea he would be the private social club’s first African American member.

“It was a beautiful Mediterranean building,” said Peebles, who is the founder of the multi-billion dollar real estate development company Peebles Corporation. He’d come to Miami to build the Royal Palm Hotel in South Beach – a project that would make him the first African American to develop a major hotel in the US.

And that wouldn’t be his last first: In 2000, Peebles bought this very social club, remaking its image after decades of excluding people of color. He and his wife Katrina, who is creative director at Peebles Corporation, invested $8 million renovating the club, which reopened this February with a membership list curated by the couple.

The new Bath Club, they said, will be a place where everyone is welcome – and Peebles has a plan to recoup his investment by catering to a new generation of private club-goers who value his family’s “exclusively inclusive” approach.

This wasn’t the barrier I was looking to break’

Founded in 1926, the Bath Club was the first private social club established in the Southeast United States. It was a place of leisure for the Vanderbilt, Cartier, and Boeing families, though minorities, especially Black and Jewish people, were barred from entering.

R. Donahue Peebles
R. Donahue Peebles

Though Peebles joined seventy years later and thirty years after the end of the Jim Crow era, he said there were moments when he felt used – a mere vehicle to help the storied club change its image. “This wasn’t the barrier I was looking to break,” Don said.

Miami Beach has a long history of racism and discrimination. In fact, it used to be a sundown town, a nearly all-white community that banned Black people past sunset. Aside from the Bath Club, other prominent social clubs, such as Indian Creek and the Everglades Club, have all faced decades-long criticism for their policies which appear to discriminate against Black and Jewish communities. Some of these clubs have found a loophole in a Florida law that only explicitly bans clubs with over 400 members from discriminating against minorities.

Freddy Stebbins, a history and sociology professor at Miami Dade College, told Insider the old Bath Club used to send postcards that said “gentiles only” on the back – a way to signal they didn’t want Jewish people to enter the club. (In 1947 Miami Beach passed a law banning businesses from displaying signs that used the distinction.)

“It was a boy’s club,” Stebbins said, adding that members were typically those from the North who had money, wealth, and prestige. “You most often had to be Protestant. You could definitely not be a person of color and you could definitely not be Jewish.”

The Bath Club
Exterior of The Bath Club

Things began to change, however, after the passage of the Civil Rights Act, and the end of Jim Crow. The area experienced an influx of immigrants and new money. Then, in 1996, came Peebles.

More diverse than ever before, but still just as exclusive

Katrina Peebles & Don Peebles
Katrina Peebles & Don Peebles

As the demographics of South Florida began to change, old-school exclusive clubs fell on hard times. Over 70% of the region’s population is Latino, compared to an overall 27% for the state of Florida. As of 2018, over 50% of the population was born outside of the United States (the national average is just 13%). Miami has the highest population of Cubans outside of Cuba; it has a vibrant Haitian community in what’s known as “Little Haiti,” and a Colombian population nearing 300,000.

In the modern era, the Bath Club struggled to attract new members. After it experienced financial difficulties, Peebles won a bid to buy it in 2000 for $10 million. At first, he allowed the club’s original owners to retain rights; he built a luxury tower and six beachside villas on the property.

But around 2013, he began buying out club members. Two years later, his company took full control of the club and used it as an event space. It was Katrina who suggested turning it back into a social club.

The aim for the new Bath Club, said Katrina, is to be “exclusively inclusive.” As a biracial couple, both have experienced feeling like the “only” people in the room and felt buying the historic Bath Club sends a message. “It could show how far Miami and even America has come,” she said.

The club may be more diverse than ever before, but it’s still just as exclusive. The initiation fee is $20,000 with annual dues costing $18,000 – a steal compared to other clubs where initiation fees can start at $200,000. Membership is capped at 200 and is via referral by a member, or the Peebles themselves.

So far, about 150 of the memberships have been sold, though they declined to share to whom beyond saying the group included some “high profile” people. The Peebles are fixtures on the nation’s social scene, having hosted campaign fundraisers for both the Clintons and the Obamas.

Peebles says he’s already made a third of his $8 million investment back. The rest he’s expecting to recoup in less than two years.

Enter, the new Roaring 20s

The club’s exclusivity is a selling point to many new members, as it gives the opportunity to socially distance while lounging in a cabana on a private beach.

The private dining spaces, ballroom, spa, and restaurant attracted new members like Lauren Geduld, who told the Miami Herald she joined the club alongside her husband and two daughters, looking for a place to entertain themselves safely and privately. “The beach is what attracted us. It’s located in such a special part of Miami Beach. The service is great. The food is great. It has such a magical environment.”

The interiors, done by female-founded firm Antrobus + Ramirez, contain floral patterns, with a mix of retro-furnishings. The Prohibition-era secret doors were restored, and the new menus are curated by the Apicii Hospitality, which also worked on the Walt Disney World Dolphin Resort in Orlando.

The US market for golf courses and country clubs hit over $20 billion last year and is expected to increase at least 2% over the next five years. Calling the social club industry “interesting,” Peebles isn’t in a rush to buy another one. In fact, he said, when he bought the club he didn’t even necessarily have plans to reopen it; he just wanted to preserve it. But then of course, on the cusp of a bustling new jazz age, it would be quite irresistible not to share that white-sand view of the twinkling night sky above the Atlantic.

“It was a long winding road to get us here,” Don said. “But buildings tell stories, and this one tells the American story of how we were segregated, how our wealth was concentrated racially, then someone like me bought it, and, along with my wife, this is what we did with it.”

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See inside the prefab tiny homes LA is building to combat the city’s homelessness crisis

A peek inside one of the tiny homes.

  • This year, Hope of the Valley opened two prefab tiny home villages to house Los Angeles’ unhoused residents.
  • The nonprofit plans to open two more communities in Los Angeles this year.
  • Take a look inside the prefab tiny homes, which were made by Washington-based Pallet.
  • See more stories on Insider’s business page.
Los Angeles’ homelessness crisis has been quietly brewing for several years now.

Tiny homes at the Chandler Street Tiny Home Village.

To address this issue, nonprofit Hope of the Valley Rescue Mission has opened two colorful tiny home villages in the city this year: Chandler Street and the newer Alexandria Park.

The Alexandria Park Tiny Home Village.

The villages aren’t meant to house millennial tourists or trendy minimalists interested in tiny living.

The Alexandria Park Tiny Home Village.

Instead, the two communities were built to temporarily house Los Angeles’ unhoused residents.

Tiny homes at the Chandler Street Tiny Home Village.

This serves as an alternative to “congregate” shelters that can often be more expensive and less time-efficient to construct.

Tiny homes at the Chandler Street Tiny Home Village.

The goal of Hope of the Valley’s tiny house program is to help its residents find a permanent home by the end of their stay.

Two people at the Chandler Street Tiny Home Village.

The program starts at 90 days with the option to extend for an additional three months depending on the progress of the resident, Priscilla Rodriguez, a caseworker at the Chandler Street Tiny Home Village, told Insider.

Tiny homes at the Chandler Street Tiny Home Village.

The two villages are about two miles away from each other and were opened only two months apart.

The Alexandria Park Tiny Home Village.

The first tiny home village on Chandler Blvd. (pictured below), opened in February as a “test case” for Los Angeles, Rowan Vansleve, CFO of Hope of the Valley Rescue Mission, told Insider.

The tiny homes at the Chandler Street Tiny Home Village.

The North Hollywood-based community has 40 tiny homes and 75 beds, but as of now, only couples are allowed to share a unit due to COVID-19 protocols.

Tiny homes at the Chandler Street Tiny Home Village.

So far, the program has been a success, according to Rodriguez.

Tiny homes at the Chandler Street Tiny Home Village.

The village’s on-site caseworkers help the residents with a variety of tasks, from obtaining a social security card, to finding income, to teaching them life skills, such as how to keep their tiny homes clean.

The tiny homes at the Chandler Street Tiny Home Village.

“Some people come here and they’re used to being in a tent and not having their own space,” Rodriguez said. “They’re going to be housed one day on their own, and we want to support them in every way so when they get there, they feel confident to be there and to keep that house on their own.”

Tiny homes at the Chandler Street Tiny Home Village.

Many of the residents at this first site have already made “huge progress,” and the majority of the community’s 43 occupants are already on track to be housed independently, according to Rodriguez.

A tiny home at the Chandler Street Tiny Home Village.

Now, Hope of the Valley is looking to continue this success with its latest tiny home community just a short drive away from the original Chandler site.

The Alexandria Park Tiny Home Village.

The new Alexandria Park Tiny Home Village is the largest tiny home community in California, according to the nonprofit.

The Alexandria Park Tiny Home Village.

The new site, which is also located in North Hollywood, is over double the size of the original Chandler location with 103 tiny homes and 200 beds.

The Alexandria Park Tiny Home Village.

The new community will begin welcoming its first round of residents this week.

The Alexandria Park Tiny Home Village.

The Alexandria Park and Chandler Street sites are both filled with 64-square-foot shelters made by Washington-based Pallet, which specializes in building tiny homes for people who have been unhoused due to natural or personal disasters.

pallet shelters tiny home homeless
Pallet shelters in Multnomah County.

Source: Insider

The company also makes 100-square-foot units, but let’s take a look inside the smaller iteration that’s being used by Hope of the Valley.

A peek inside one of the tiny homes.

The cabins have an aluminum frame with insulated, fiber-reinforced plastic composite walls.

Inside a tiny home at the Chandler Street Tiny Home Village.

Source: Insider

Like any typical home, the shelters have a lockable entry door.

The lock on the door of a tiny home at the Chandler Street Tiny Home Village.

A locking door may seem like a no-brainer for most people, but many of the communities’ residents may not have previously had this security measure.

The window of a tiny home at the Chandler Street Tiny Home Village.

This sense of privacy and security isn’t possible in a “traditional” congregate shelter, Michael Lehrer and Nerin Kadribegovic, Lehrer Architects’ founding partner and partner, respectively, told Insider in an email interview in February. Lehrer Architects designed the Chandler site with the Los Angeles Bureau of Engineering.

Inside a tiny home at the Chandler Street Tiny Home Village.

“Ethically and morally for people who’ve experienced trauma, having a locking door can sometimes become the difference between accepting help getting off the street and making a step towards permanent supportive housing,” Rowan Vansleve, CFO of Hope of the Valley Rescue Mission, told Insider.

Inside a tiny home at the Chandler Street Tiny Home Village.

A 64-square-foot space may seem small, but it has enough room to accommodate all of the unit’s amenities, which include temperature controls like an air conditioner and heater …

The inside of one of the tiny homes.

… lights that can be used when the four windows don’t provide enough natural brightness …

The inside of one of the tiny homes.

… and outlets.

Inside a tiny home at the Chandler Street Tiny Home Village.

The beds are topped with a navy blue duvet, which is meant to invoke a calm feeling, according to Vansleve.

The bed inside a tiny home at the Chandler Street Tiny Home Village.

There’s also a small desk, a smoke detector for an added layer of security …

The smoke detector inside a tiny home at the Chandler Street Tiny Home Village.

… and storage space underneath the bed frames.

Inside a tiny home at the Chandler Street Tiny Home Village.

The new Alexandria Park tiny homes also come with toiletries bags customized for men and women.

The inside of one of the tiny homes.

Several of the new shelters’ furnishings are sourced from Hope of the Valley’s five donation and thrift shops located throughout the greater Los Angeles region.

The inside of one of the tiny homes.

Several residents who have been living at the Chandler location have already made themselves at home with plants, posters, and artwork.

Tiny homes at the Chandler Street Tiny Home Village.

The tiny homes either come with one or two beds, and some of the single-bed units have enough space to accommodate a wheelchair.

The interior of the wheelchair accessible tiny home.

The shelters don’t have room for a private restroom, but both communities have shared individual bathrooms that each come with a sink, toilet, and shower.

Alexandria Park Tiny Home Village’s bathroom.

Same goes for laundry, which can be done at the sites’ communal laundry facilities.

The laundry facility at the Chandler Street Tiny Home Village.

Pallet’s shelters typically have a lifespan of over 10 years, and the units can be easily disassembled and reassembled, according to Pallet.

A window inside a tiny home at the Chandler Street Tiny Home Village.

Source: Insider

The Pallet homes located in Alexandria Park can be assembled within 90 minutes.

The Alexandria Park Tiny Home Village.

A 64-square-foot Pallet shelter starts at $4,900.

The Alexandria Park Tiny Home Village.

Source: Insider

But external costs such as sewage, electricity, and internet bumped the cost of each bed at the Alexandria Park location up to about $43,000.

The Alexandria Park Tiny Home Village.

“It doesn’t feel like a homeless shelter, it feels like a launching pad,” Vansleve said about the Alexandria Park Tiny Home Village. “As you walk through, it almost has a college dorm sort of vibe to it, which is exciting.”

The Alexandria Park Tiny Home Village.

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Not even the pandemic and political unrest could knock Hong Kong from its spot as the world’s most expensive city to rent a luxury apartment

GettyImages 106695301
Luxury apartment buildings are seen from The Peak in Hong Kong.

  • Hong Kong is once again the most expensive city in the world when it comes to renting a luxury apartment, according to a new report.
  • A $10,000 monthly budget in Hong Kong will currently get a renter less than 1,500 of living space.
  • One house in the city is currently being rented for $174,000 a month – or $2 million a year.
  • See more stories on Insider’s business page.

When it comes to the price of luxury real estate, Hong Kong is still on top.

The city retains its title as the world’s most expensive city to rent a luxury apartment, per a report from global property consultancy Knight Frank. The report examines the cost of a three-bedroom apartment in a central location across eight different cities.

The news of the city’s rental prices comes amidst political turmoil in the city and against the backdrop of the pandemic.

“Over the past couple of years, Hong Kong has not only had the global pandemic to tend with, but also the protests and unrest in the city which many thought could destabilize appetite for the property market,” Victoria Garrett, head of APAC residential for Knight Frank, said in a press release.

According to the report, prime rents in Hong Kong stood at $6.70 per square foot at the end of 2020, and a monthly budget of $10,000 would get a renter less than 1,500 square feet of space. In New York City, which ranked No. 2, the same budget would get a renter 2,249 square feet of space.

Singapore, London, and Sydney respectively follow behind Hong Kong and New York City when it comes to the cost of renting a luxury apartment.

Hong Kong has managed to maintain its rental prices amid a wave of protests that erupted in June 2019 and lasted for months over a proposed extradition bill under which Hong Kong residents would be brought to mainland China to be tried. The city is now facing a business exodus, and one projection sees as many as one million people leaving the city in the next five years, per a Bloomberg report.

To date, Hong Kong has recorded more than 11,700 coronavirus cases and 209 deaths, according to data from the Johns Hopkins University Center for Systems Science and Engineering (JHU CSSE). The city kept borders mostly closed to foreigners for several months in 2020 and has strict quarantining measures in place for anyone arriving in the city.

A year of records

Hong Kong has clocked various property records in recent months.

In February, a penthouse in The Peak, a famously upscale neighborhood home to billionaires and CEOs, sold for $59 million, becoming the most expensive apartment per square foot ever sold in Asia. The five-bedroom penthouse went for an astounding $17,542 per square foot.

Earlier that month, a 1.25-acre plot in the city sold for $935 million, marking the highest price ever for a government-owned residential property in Hong Kong.

The Knight Frank report only examines apartments, but landed properties in Hong Kong are also known to sell for sky-high prices. In March, news broke that a home in The Peak was being rented out for a city record of $2 million a year. The home stretches across four floors and has a 2,000-square-foot yard.

But even as some parts of the city notch record real-estate highs, other parts of the city are experiencing extreme housing shortages.

The 2021 Demographia International Housing Affordability report from the Urban Reform Institute and the Frontier Centre for Public Policy found that Hong Kong is the world’s least affordable city. The report examines the mean multiple – the median house price divided by the gross median household income – in 92 housing markets globally. A mean multiple of 5.1 is considered “severely unaffordable”; Hong Kong’s mean multiple far exceeds the benchmark at 20.7.

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