The 2024-25 fiscal year budget faced challenges from the start as labor costs continued to outpace revenues. The cost of salaries and benefits were expected to rise by $488 million from last year to the 2024-25 budget. But county officials were able to close the $250 million gap through a series of new revenue sources and reductions.

Still, challenges lie ahead as the county expects the state to cut funding due to its own multi-billion deficit. The county’s healthcare system is also bracing for the impact of Regional Medical Center closing its trauma center and downgrading other life-saving programs.

“We are facing trickle-down impacts from the state and federal levels, along with a private sector actor that is pushing its social responsibilities to the local government,” County Executive James Williams said in a news release. “But, unlike a for-profit business, we must find a way to operate that maintains our commitment and support for the residents who need us most.”

Among the many priorities outlined in the budget are a sizable chunk for seismic improvements in the county’s healthcare system — $40 million at Santa Clara Valley Medical Center and $60 million at Valley Health Center San Jose.

The budget also expands access to mental health services, adds new funding for agricultural worker housing and increases investments in sustainability projects and programs, among other priorities.

Despite it being on the chopping block last month, Special Olympics Northern California was also able to obtain the necessary funding for its operations in Santa Clara County.

Board Presidents Susan Ellenberg said in a statement while she’s “relieved” that the county was able to balance its budget and maintain “service levels for the most vulnerable residents, secure our core budget priorities and protect the jobs of county employees, I don’t believe we are out of the woods.”

“The real test will be in the coming years, so our continued prudence and collaboration in how we steward our residents’ tax dollars will be critical,” Ellenberg said.

The county has projected a $158 million deficit for the 2026-27 fiscal year.

Inflation is still running well above plan, and that means the Federal Reserve is keeping its finger firmly on the pause button. The central bank raised rates 11 times in 2022 and 2023, with the expectation that it would reverse course this year. But as inflation has stayed above 3%, it is standing pat. Following the Fed’s June 12 meeting, its fourth gathering of the year, Chairman Jerome Powell held steady again, announcing no change in interest rates. The Fed also signaled that it’s likely to cut rates only once this year, down from its previous estimate of three cuts.

“Mortgage rates, which have remained higher for longer, will likely remain in the high 6s until later this year,” says Lisa Sturtevant, chief economist at Bright MLS, a large listing service in the mid-Atlantic region. “Some homebuyers who have been sidelined by affordability challenges are going to wait until rates come down to buy. Increasingly, home sellers may have to do more negotiating to attract offers.”

The Federal Reserve and the housing market

Earlier in the inflationary cycle, the Fed had enacted increases of as much as three-quarters of a point. Now that inflation is down to 3.3% — still higher than its official target of 2%, but not terribly far off — that round of tightening appears to be over. However, until inflation drops down closer to that target, housing economists wonder when the anticipated rate cuts will begin.

“We still look for mortgage rates to drop to about 6.5% by the end of 2024,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association.

In an effort to rein in inflation, the Fed boosted interest rates aggressively in 2022 and 2023, including a single jump of three-quarters of a percentage point. The hikes aimed to cool an economy that was on fire after rebounding from the coronavirus recession of 2020. That dramatic recovery has included a red-hot housing market characterized by record-high home prices and microscopic levels of inventory.

The Fed’s rate hikes have slowed the housing market. Home sales have dropped sharply. But home prices remain near record levels. Because home values are not driven solely by interest rates but by a complicated mix of factors, it’s hard to predict exactly how the Fed’s efforts will affect the housing market.

Higher rates are challenging for both homebuyers, who have to cope with steeper monthly payments, and sellers, who experience less demand and lower offers for their homes. After hitting 8% last fall, mortgage rates have dipped back down a bit. As of June 12, the average 30-year rate stood at 7.10%, according to Bankrate’s national survey of lenders.

How the Fed affects mortgage rates

The Federal Reserve does not set mortgage rates, and the central bank’s decisions don’t move mortgages as directly as they do other products, such as savings accounts and CD rates. Instead, mortgage rates tend to move in lockstep with 10-year Treasury yields.

Still, the Fed’s policies do set the overall tone for mortgage rates. Lenders and investors closely watch the central bank, and the mortgage market’s attempts to interpret the Fed’s actions affect how much you pay for your home loan. The Fed bumped rates seven times in 2022, a year that saw mortgage rates jump from 3.4% in January all the way to 7.12% in October. In 2023, mortgage rates went higher still, briefly touching 8%.

“Such increases diminish purchase affordability, making it even harder for lower-income and first-time buyers to purchase a home,” says Clare Losey, an economist with the Austin Board of Realtors in Texas.

What happens to the housing market if interest rates rise?

There’s no doubt that record-low mortgage rates helped fuel the housing boom of 2020 and 2021. Some think it was the single most important factor in pushing the residential real estate market into overdrive.

In the long term, home prices and home sales tend to be resilient to rising mortgage rates, housing economists say. That’s because individual life events that prompt a home purchase — the birth of a child, marriage, a job change — don’t always correspond conveniently with mortgage rate cycles.

History bears this out. In the 1980s, mortgage rates soared as high as 18%, yet Americans still bought homes. In the 1990s, rates of 8% to 9% were common, and Americans continued snapping up homes. During the housing bubble of 2004 to 2007, mortgage rates were high, yet prices soared.

So the current slowdown may be more of an overheated market’s return to normalcy rather than the signal of an incipient housing crash. “The combination of elevated mortgage rates and steep home-price growth over the past few years has greatly reduced affordability,” Fratantoni says.

But if mortgage rates pull back, affordability will become less of a factor. For instance, borrowing $320,000 at the mid-June rate of 7.10% translates to a monthly principal-and-interest payment of $2,151, according to Bankrate’s mortgage calculator. Borrowing the same amount at 8% translates to a monthly payment of $2,348. That’s a difference of nearly $200 per month.

A continued decline in mortgage rates could create a new challenge, though: It will likely draw new buyers into the market, a surge that could further intensify the ongoing shortage of homes for sale.

Next steps for borrowers

Here are some pro tips for dealing with elevated mortgage rates:

—Shop around for a mortgage: Savvy shopping can help you find a better-than-average rate. With the refinance boom considerably slowed, lenders are eager for your business. “Conducting an online search can save thousands of dollars by finding lenders offering a lower rate and more competitive fees,” says Greg McBride, Bankrate’s chief financial analyst.

—Be cautious about ARMs: Adjustable-rate mortgages may look tempting, but McBride says borrowers should steer clear. “Don’t fall into the trap of using an adjustable-rate mortgage as a crutch of affordability,” he says. “There is little in the way of upfront savings, an average of just one-half percentage point for the first five years, but the risk of higher rates in future years looms large. New adjustable mortgage products are structured to change every six months rather than every 12 months, which had previously been the norm.”

—Consider a home equity loan or HELOC: While mortgage refinancing is on the wane, many homeowners are turning to home equity lines of credit (HELOCs) to tap into their home equity. The rationale is simple: If you need $50,000 for a kitchen renovation and you have a mortgage for $300,000 at 3%, you probably don’t want to take out a new loan at 7%. Better to keep the 3% rate on the mortgage and take a HELOC — even if it costs 10%.

(Visit Bankrate online at bankrate.com.)

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.

Inflation is cooling after a hot start to 2024, but it’s still higher than policymakers would like.

One culprit: The cost of auto insurance.

Consumer Price Index data released Wednesday showed U.S. inflation rose 3.3% year-over-year in May compared to a 3.4% bump in April. While some price increases that consumers feel most — food, gas, utilities — held flat or dropped month-over-month, other necessities, including housing and medical care, were still on the rise.

Motor vehicle insurance jumped a whopping 20.3% over last year.

After plummeting in 2020 as pandemic lockdowns kept drivers off the road — and insurance companies returned premiums to policyholders — the average cost of full car insurance has reached about $165 a month nationwide and $157 in Minnesota, according to personal finance website ValuePenguin. Industry experts point to a variety of reasons for the price increases, including rising repair costs for more complex cars, more frequent and serious crashes, severe weather and an uptick in consumer litigation.

“The reality is that auto insurers are in the business of providing financial security and a promise to their policyholders,” said Tony Cotto, director of auto and underwriting policy for the National Association of Mutual Insurance Companies. “And as the cost of fulfilling that promise goes up, so must the cost of the actual product, of the insurance contract.”

Auto repair and maintenance costs are up 7.2% compared to May 2023, according to the Bureau of Labor Statistics, continuing a brisk climb that began in 2021. Other costs associated with driving, including the costs of cars themselves, have declined: Wednesday’s federal inflation report showed a 9% year-over-year drop in the index for used cars and trucks.

Financing a vehicle purchase with a loan isn’t going to get cheaper in the immediate future — Federal Reserve officials this week opted to hold the federal funds rate at 5.25%-5.5% — but easing inflation could prompt a cut later this year. Officials had predicted three 2024 rate cuts but held off as inflation persisted early this year, meaning borrowing costs will stay higher for longer.

“We are strongly committed to returning inflation to our 2% goal in support of a strong economy that benefits everyone,” Fed Chair Jerome Powell said at a news conference Wednesday. “We are maintaining our restrictive stance of monetary policy in order to keep demand in line with supply and reduce inflationary pressures.”

Some of what auto policyholders are seeing now is a correction from the height of the pandemic, when prices were unusually low, said Rick Gorvett, a professor in the department of mathematics and economics at Bryant University.

“There’s a (cycle) to insurance, and we have periods where rates increase — not usually quite this much — but if you take the entire cycle, an up and a down portion of the cycle, you get a very reasonable kind of annual increase,” he said.

“I think the auto insurance sector is due for a reckoning, and I think eventually people are not going to be willing to tolerate this anymore,” Baydoun said, noting consumer pressure has recently pushed companies including Target and McDonald’s to lower prices.

“They’re going to want very, very clear explanations for why their rates are going up by the exorbitant levels that they are.”

In the meantime, consumers can save money by shopping around with different companies, bundling home and auto insurance or — cautiously — dropping specific coverage areas such as rental car reimbursement, said Leslie Kasperowicz, managing editor at Insurance.com.

While the cost of auto insurance is unlikely to fall significantly — and the pressure on consumers will linger as policyholders renew at different times — industry watchers say they don’t anticipate additional price spikes.

“The insurance companies are starting to see things level off in terms of what their loss ratios look like, which is how much they pay out versus how much how much they make in premiums,” Kasperowicz said. “So I think we’re going to still see it climbing for a while, and then it will level off.”

©2024 StarTribune. Visit at startribune.com. Distributed by Tribune Content Agency, LLC.

When Emma-Jane Nutbrown went on a family vacation to Jamaica last year, she did so with one condition: that everyone donated to an LGBTQ charity once they got there.

Nutbrown felt uncomfortable with her parents’ choice of destination. Same-sex sexual activity between men is against the law in Jamaica and carries a maximum jail term of 10 years with hard labor. Both Nutbrown and her brother, Simon – whose 40th birthday the family was celebrating on that trip – are gay.

“It made Simon uneasy going there, but most people like to travel for the place, not the politics behind it, so we couldn’t really hold my parents accountable,” says Nutbrown, founder of Queer Edge, which creates safe spaces for the community in London. “I won’t refuse to travel somewhere with family, but I will raise it. So instead of us refusing to go, Simon made everyone donate to a charity out there as his birthday present.”

Nutbrown and her brother are some of the millions worldwide who have an extra layer to consider when booking a vacation: Will they be safe in the destination, and how are local members of the LGBTQ community treated?

“I’m predominantly against it [travel to destinations where homosexuality is banned], but I’m pragmatic. It’s not as easy as ‘Don’t go,’ ” she says. “If there was a shared consensus across the planet [to boycott destinations] then it would work, but I think it’s a lot more complex.”

There are 62 countries worldwide that still criminalize (or de facto criminalize) homosexuality, according to the International Lesbian, Gay, Bisexual, Trans and Intersex Association (ILGA), which counts UN member states. The Human Dignity Trust counts 64.

Of these, 12 could potentially impose the death penalty for same-sex activity, including tourist favorite the United Arab Emirates; Qatar, whose airline was this week deemed the best in the world; Nigeria, which welcomed the Duke and Duchess of Sussex in May; and Saudi Arabia, which last year claimed that it welcomed LGBTQ travelers.

Many people – even those outside the LGBTQ community – simply will not travel to countries where homosexuality is illegal. Corey O’Neill, an office manager from London, is one.

“Safety is at the forefront of anyone’s mind when traveling,” he says. “Even if you’re not visibly queer, there’s an innate danger that how you act might be perceived as gay, which entails not only formal punishments, but police brutality, hate crimes, the general atmosphere. I don’t want to have that in my mind on vacation.”

O’Neill’s stance means that unless laws change, he will never see the pyramids (Egypt has de-facto criminalized homosexuality with jail-term punishment); sleep overwater in the Maldives (up to eight years jail-time plus 100 lashes); take a Kenyan safari (maximum 14 years imprisonment); see Red Square (Russia designates the LGBTQ movement – even displaying a rainbow flag – as ‘extremist’ with up to 12-year sentences); or stop over in Qatar (up to 10 years in prison, with “no legal certainty” over a potential death penalty).

But he’s OK with that. “Why would I give money to a country that doesn’t want me to exist? Even if $10 went towards a tax that actively harmed people, that’d be my money I gave them.”

It’s not just LGBTQ people who feel this way.

Members and allies of the community are currently in their 10th year of boycotting the Dorchester Collection hotels, owned by the Brunei Investment Agency (part of the Ministry of Finance and Economy), since the country introduced laws authorizing the stoning to death of LGBTQ people, as well as the public flogging of women for adultery. In 2019, George Clooney wrote of the importance of boycotting.

But while a boycott may be possible against a business, some feel that swerving an entire country harms the local community even more.

“It can cause a very visceral reaction in people, but there are 50 shades of discrimination, and the challenge is where you draw the line,” says Darren Burn, founder of inclusive travel companies Out of Office and TravelGay.

“Would you go somewhere you can’t get married, or can’t go into the army? The reality is there are loads of places where, even if it’s not illegal to be gay, there are challenges. I totally respect that some people don’t want to support an economy where [homosexuality] is illegal. But the other side is that I want to go, and by going, I’m helping to change mindsets. Every country has gay people. We hear from staff members and locals in destinations, who say, ‘Please come.’ ”

Burn never planned to enter the travel industry. He was a journalist when he went on holiday to Sharm el-Sheikh in Egypt.

“I was in my early 20s, and I was a bit naïve. It was Sharm – a tourist haven,” he says.

“I was traveling with my ex, and we weren’t allowed to check in. We had to go to another hotel. I thought, that shouldn’t happen to anyone, ever.” In 2016, he founded Out of Office, building a contact book of “welcoming suppliers and tour guides.”

‘Do you need two beds?’

In recent years, destination marketers have become more vociferous in attracting LGBTQ clients. There’s usually a financial reason behind it, says Burn. Travelers from the community “are less likely to have children and more likely to have disposable income. They’re loyal customers and trust word-of-mouth referrals.”

Sherwin Banda, president of luxury safari provider African Travel Inc says that the LGBTQ community has “the largest disposable income of any other niche market.”

“A destination’s reputation as being LGBT-friendly is a primary motivation for us,” he says.

A 2021 report from nonprofit Open for Business showed that Caribbean nations outlawing homosexuality saw their GDP hit by up to 5.7% and lost the tourist industry $423 million to $689 million annually.

In Jamaica, tourism officials have tried to downplay the impact of the island nation’s laws against homosexuality.

In 2022, legislation was repealed in Barbados, Antigua and Barbuda, and St. Kitts and Nevis. Trinidad and Tobago had already decriminalized same-sex relations in 2018; in April 2024, Dominica followed suit.

“The Caribbean is moving quite quickly,” says Burn, who adds that the anti-homosexuality laws in many Caribbean and African countries were established under European colonialism.

Banda, who is South African, agrees. “Colonial laws combined with stringent religious beliefs have prolonged a stigma attached to homosexuality across Africa,” he says.

However, he is still comfortable arranging safaris for LGBTQ travelers.

“Once we know travelers are from the community, we take great care to ensure guides, hotels, all the touchpoints throughout the journey are safe for them, but also inclusive,” he says.

“Nobody will say, ‘Do you need two beds?’ We ensure our clients don’t have to come out again to everyone they meet in Africa.”

‘Tolerance is practiced not preached’

The experience on the ground is often different from the letter of the law. As Burn says, “It’s also illegal to drink alcohol in the Maldives, but all resorts have it.” (He advises not holding hands at the airport, however.)

In 2020, Bilal El Hammoumy and Rania Chentouf launched Inclusive Morocco, the first LGBT-founded tour operator in a country that punishes same-sex activity with up to three years in jail.

“Being members of the community, we felt we would understand better how to approach it,” says El Hammoumy. “Morocco is a country where tolerance is practiced but not preached.

“We could understand clients’ fears, but on the other hand, it was important to create a space where the local LGBT community can be involved in training programs and hiring opportunities.”

El Hammoumy says that in Morocco, “the reality is a bit different from the law.”

In the early 20th century, cities such as Tangier were “gay heavens” for creatives escaping conservative Western countries. One of Marrakech’s main sights is the Majorelle Garden, where the ashes of former owner Yves Saint Laurent were scattered by his former partner, Pierre Bergé.

El Hammoumy says that Moroccan hotels are generally accepting of same-sex couples, but those they work with have extra training to ensure travelers are comfortable. Some guides have opted not to work with them when they explain their clientele, he says.

However, he says that visiting destinations can change mindsets.

“A lot of anti-LGBT feelings come from prejudice and a lack of education, and direct contact can change preconceived ideas about the community,” he says. Burn agrees.

There’s the economic incentive, too. Banda, who grew up under apartheid, believes that South Africa would not have changed without economic pressure from the wider world.

“Travel does something no other industry can do,” he says. “Africa is heavily dependent on tourism dollars. We can advocate for inclusivity with partners who are prepared to actively welcome our guests. If we stay away, we lose that opportunity to use our voice.”

Travel can ‘bring change’

Does that mean every country should be showered in travel dollars in a bid to change opinions? Not according to these experts, none of whom would send a client to Saudi Arabia.

Uganda is another sticking point – its 2023 Anti-Homosexuality Act legalized the targeting of the LGBTQ community in myriad ways and even carries the death sentence.

“As a company, you need to stand for something, and Uganda advocates for brutal violent acts against gay people. We cannot in good conscience send people there,” says Banda.

Michael Kajubi has a different perspective. In 2013 he founded McBern Tours, curating Uganda tours, after being fired from his previous job because of “suspicions” that he was gay.

“I had to start a company to employ myself and people like me who could not get jobs because of who they are,” he says. The majority of McBern staff are LGBTQ, and all profits go to the McBern Foundation, which supports elderly Ugandans and marginalized youths.

Kajubi – who left Uganda four years ago because of his activism – says that he is still comfortable sending LGBTQ travelers there, as long as they “respect the laws – don’t wave their rainbow flag all over the place.”

All the hotels that McBern uses – even for straight guests – have been carefully vetted as LGBTQ-friendly, says Kajubi. He believes travelers should still visit these destinations but be vigilant where their money is going. He suggests looking for tour operators affiliated to the IGLTA, so that you can be sure you’re not funding inequality.

Boycotting leaves the local community stranded, he argues. Companies that have stopped working with McBern because of Uganda’s anti-gay legislation “have a valid point, but supporting local companies can bring change. You’re paying salaries for people who wouldn’t otherwise be employed.

“If people don’t come we can’t support [Foundation] beneficiaries with healthcare, tuition and basic needs.”

‘Discrimination all over the place’

Of course, discrimination isn’t confined to countries where homosexuality is illegal.

For starters, over 500 anti-LGBTQ laws were introduced in US state legislatures last year alone. In May, the US State Department issued a worldwide alert about potential attacks on LGBTQ+ people and events.

In 2014, Matthieu Jost founded MisterB&B, an LGBTQ travel community with 1.3 million members, after an Airbnb host in Barcelona made it clear that he and his partner were unwelcome. Previously, a French hotel had refused him and his then-boyfriend a double bed.

“This kind of discrimination is all over the place, even in 2024,” says Jost, who won’t even hold hands with his partner in Paris. Banda won’t do that in Los Angeles, either.

For Jost, traveling to a country where homosexuality is banned means abiding by local rules. MisterB&B users are not allowed to book travel in a country with the death penalty for same-sex behavior. In a destination where it’s illegal, users are flagged before booking.

“We warn travelers they need to be cautious. Ask for separate beds, don’t show personal gestures, let family know where they’re traveling and have the embassy contact,” he says.

“If you really want to go there, you need to respect the laws and religion of these countries and play the game.” Burn adds that booking with a specialist is essential – his staff have mystery-shopped mainstream tour operators and found them lacking in knowledge, he says.

For O’Neill, and many like him, it’s not enough.

“I know it limits where I can go – I’ll probably never see the pyramids or go on safari. But there are so many beautiful places in the world that support queer people. That sounds like a much nicer vacation to me.”

The-CNN-Wire & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

California’s biggest utility sees power demand doubling by 2040, driven by artificial intelligence, electric cars and other efforts to electrify more of the economy, according to PG&E Corp.’s top executive.

PG&E is equipped to meet that surge in demand without significantly adding to its fleet of power plants, Chief Executive Officer Patti Poppe said Friday in an interview on Bloomberg Television. That’s because the utility’s system isn’t running at its full potential.

“Our grid today is underutilized,” she said. “We built the grid big years ago, and now we get to utilize it.”

Utilization rates on PG&E’s grid are currently at around 45% and Poppe said she sees that growing to as much as 80%. While there will be “some new generation,” the CEO said better use of existing assets will be key to delivering more power without driving up costs.

Shares of PG&E fell 0.9% at 10:46 a.m. in New York. The stock has risen 1% this year.

Other parts of the US are also projecting massive increases in power demand, with the head of the grid operator in Texas estimating this week that power demand there would nearly double by 2030. A number of US power companies have also dramatically increased their projections of demand, though unlike PG&E, other companies are planning to build new plants.

Wildfires

Poppe has pledged to prevent catastrophic wildfires, which drove the utility into bankruptcy in 2019 after its equipment sparked some of the worst blazes in California history. More than 100 people died and thousands of homes were destroyed.

The utility says it has reduced ignitions tied to its equipment by 68% since 2017 by installing more weather monitoring stations, hardening poles, covering and burying power lines and preemptively cutting power during dry and windy weather.

–With assistance from Josh Saul.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

Boeing Co. said it’s inspecting undelivered 787 Dreamliners after discovering that fasteners were incorrectly installed on a section of the carbon-composite aircraft, underscoring the heightened scrutiny on quality lapses at the embattled manufacturer.

The issue is the latest to come to light as U.S. regulators ramp up oversight of Boeing following a near-catastrophe with another jet model, the 737 Max, earlier this year. The U.S. Federal Aviation Administration is also probing the 787 quality defect, the agency said.

The FAA has “multiple active investigations” into the planemaker underway following a rise in reports from whistleblowers and through its safety hotline, FAA chief Michael Whitaker said at a Senate hearing on Thursday.

“You expect to see an increase in reports when you have a safe place for employees to report, so that’s what we want to see,” Whitaker told reporters after the hearing. “We would be a little concerned if we weren’t seeing an increase in numbers.”

The fastener misstep underscores how Boeing continues to unearth manufacturing errors as it works to tighten up quality standards after a door plug blew off a 737 Max mid-flight in January. U.S. investigators have said the panel was missing four bolts meant to hold it in place, a revelation that unleashed withering scrutiny of the planemaker from regulators, airlines and the public.

The company hasn’t halted deliveries of the 787 as it determines whether any repairs will be needed to fix the incorrectly torqued fasteners, which connect the mid-section of the carbon-composite barrels to interior strengthening components. The FAA said in a statement that the problem doesn’t pose an immediate flight-safety issue.

“Our 787 team is checking fasteners in the side-of-body area of some undelivered 787 Dreamliner airplanes to ensure they meet our engineering specifications,” Boeing said in a statement Thursday. “The in-service fleet can continue to safely operate. We are taking the time necessary to ensure all airplanes meet our delivery standards prior to delivery.”

Boeing said it discovered the manufacturing glitch through its quality management system, and that it alerted the FAA. The discovery, first reported on Thursday by Reuters, is the latest in a spate of errors to come to light as the manufacturer encourages workers to flag issues and addresses damage to its safety culture exposed by the latest crisis. Whitaker said he intends to visit the North Charleston plant where the Dreamliner is manufactured on Friday.

Max deliveries

Whitaker during the hearing said the FAA won’t lift a cap on output for the 737 Max model it imposed earlier this year until he’s satisfied the company’s steps to bolster quality and safety have taken root.

Boeing’s 737 output in recent months has been a fraction of the 38 jets per month allowed by the agency. But there are signs that the pace of work is starting to pick up, as executives have predicted.

The U.S. planemaker appears to have delivered 11 Max aircraft so far in June, up from four at the same point in May, Deutsche Bank analyst Scott Deuschle said in a note to clients on Thursday. Boeing’s only other delivery for the month is a 787 Dreamliner, he said.

More oversight

During the Senate hearing, Whitaker faulted the agency for not having “much better visibility” into the company prior to the Jan. 5 accident.

A prior approach to oversight was too focused on paperwork audits rather than on-the-ground inspections, he said. That policy has since changed, he said.

The FAA will monitor a series of factory measures in real-time, including some designed to flag work performed out of sequence. It will also track worker training and measures the company implements to monitor workers tools — a common source of so-called “foreign object debris” left in planes.

Progress on those fronts will determine when the cap on 737 production is removed, Whitaker said.

©2024 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

David Tai Leung, 58, of Sacramento, pleaded guilty in February to three counts of wire fraud. Leung owned Kome Japanese Seafood Buffet in Daly City, Tomi Japanese Seafood and Grill in San Jose, and Tomi Japanese Seafood Buffet in Concord.

In May 2021, Leung submitted an application for $5 million in Restaurant Revitalization Funds, or RRF, which he certified would be used for approved business-related expenses like payroll, rent and utilities, the U.S. Attorney’s Office said in a news release. The application was approved and Leung received the funds in June 2021.

Prosecutors said Leung admitted he transferred about $3.5 million to a personal investment account he controlled and used the funds to purchase securities and pay fees associated with the refinancing of a mortgage on his personal residence in Sacramento.

Leung also admitted he had previously applied for and received two Paycheck Protection Program, or PPP, loans, which he used to enrich himself, prosecutors said. He spent some of the money at a Northern California casino and on payments to a Lexus dealership.

Prosecutors said Leung ultimately misused about $3.36 million of the $5.6 million in RRF and PPP funds he received.

In addition to the prison term, U.S. District Court Judge Charles Breyer ordered Leung to serve three years of supervised release and pay more than $3.3 million in restitution.

The PPP was administered by the Small Business Administration, or SBA, as part of the Coronavirus Aid, Relief and Economic Act. The law was enacted in 2020 to provide emergency financial assistance to Americans suffering from the economic effects of COVID-19.

The SBA also oversaw the RRF as part of the American Rescue Plan Act. Enacted in 2021, the law provided funding and support to restaurants, bars and similar businesses serving food and drink that experienced revenue losses as a result of the pandemic.

Both programs provided forgivable loans to small businesses for job retention and other qualified business expenses.

The sentence follows a separate case in which Leung was charged with stealing $893,000 in wages from employees and evading hundreds of thousands of dollars in sales and employment taxes, according to the California Attorney General’s office.

In November, he pleaded guilty to six counts of wage theft, tax evasion and filing a false tax return.

From the federal government on down, the focus — and the funding — has long centered on moving homeless people directly into permanent housing. The problem with that strategy, as Funk sees it, is there simply aren’t enough affordable homes available, and building new units takes years and can cost $1 million per door.

DignityMoves’ solution: temporary tiny home shelters, which can be erected in months for as little as $50,000 a unit. So far, the San Francisco-based nonprofit has developed five tiny home sites totaling 450 beds across California cities including San Jose and San Francisco. It has 11 more sites in the pipeline.

But despite offering supportive services, such sites sometimes struggle to place people in permanent housing, with some residents ending up back on the street. We spoke with Funk about why she believes DignityMoves’ “interim housing” model can still be a crucial solution to combat homelessness. The conservation has been edited for length and clarity.

Q: How does DignityMoves develop tiny home sites at a low cost?

A: We borrow vacant land that somebody might have plans for someday. It can be either private or public, so the land cost is zero. And that’s already half of the problem. The other reason we can do them cost effectively is because the state has declared an emergency. And if cities declare a shelter crisis, as San Jose has (and many) cities in California have, then it allows us to use more reduced building codes that are life-safety, but not a lot else. So we don’t have to do underground foundations. We don’t have to trench the utilities. We don’t have to plan for 100-year storms. And then the third one is we buy modular units from various manufacturers. Heck, you can buy a unit at Home Depot these days. So, relocatable cabins on borrowed land and emergency building codes, and wow, all of a sudden, you’ve cut a few zeros off of the cost to construct.

Q: How are the sites funded?

A: In some cases, especially in cities, like for instance, San Francisco — which was kind of stuck in the old thinking and felt like any money they spent on anything that’s not permanent was a waste of resources — our first community there was fully funded by philanthropy. Then we walked everybody through it, and they loved it. And now the city has adopted it, and is doing it on their own budget. Cities can come up with that capital money. The expensive part is then the ongoing operations and supportive services. And we know the single biggest gating factor to cities adopting this model is how hard it is to pay for the services. And so we spend a lot of our energy helping find sources for that funding.

Q: How does DignityMove’s “interim housing” differ from traditional group shelters?

A: Traditionally, shelter is meant more than anything to be a place to get out of the elements. And shelter tends to be what we call congregate, which is for cost efficiency, lots of bunk beds in a group, in a warehouse-type facility. It works to get you out of the rain, but it doesn’t work to help people rebuild their lives, because they’re still unstable. In the old world, where we had plenty of housing coming online, permanent housing, it was fine to have shelter, and then you get either back on your feet or you go to permanent supportive housing. But now that housing is so expensive to build, there’s this missing gap, and interim housing has developed in the middle as an alternative.

Q: How can tiny homes stabilize people’s lives?

A: It makes it much more likely that they’re in a mindset where they can then start to listen to the supportive service and start thinking forward. And you just can’t when you’re still in survival mode. We learned in eighth-grade science that when you’re in fight-or-flight mode, the blood literally doesn’t even go to the logical parts of your brain. Of course, you can’t figure out getting a job — even in a group shelter, where you’re still worried you’re leaving tomorrow, and you’re trying to figure out where you’re going to go next. It’s not until you’re stable and safe that now you’ve got a chance to start thinking about rebuilding and actually applying for a job or skills training.

Q: Why have cities only recently begun to embrace tiny homes?

A: There are such deep-seated commitments to permanent housing as the only dignified and safe solution. And that’s because we only measure how many people get to permanent housing. Well, those can be your metrics, they’re not mine. My metrics are whether people are on the streets and whether we’re allowing them to degenerate to the point of chronic homelessness.

Q: But tiny home sites sometimes limit how long people can stay, correct?

A: It takes some creativity to get around time limits. We certainly don’t want somebody to stay forever, but it’s based on the funding sources and availability. It shouldn’t be expected to be six months. If there’s not the supply of permanent housing, we need to let go of those time limits. So we’re really advocating for being more open-minded with that, too. And quite frankly, what blows people’s minds is some people don’t want that permanent apartment yet. Some people prefer this living, and that needs to be okay.

Q: Critics argue that shifting scarce affordable housing funding toward temporary tiny homes is a shortsighted strategy. How do you respond to that argument?

A: The truth is, we do need more permanent housing. That is the reason we have homelessness. But the reality is, today, we’re not going to get it low enough. And we’re not going to build enough of it fast enough in order to solve this problem. The analogy I use is, if you see somebody have a car accident, you run over, you take your T-shirt off and wrap it to help the bleeding. Even if your T-shirt is dirty, right? You’re not sanitized, you didn’t stop to see if this place on the freeway is designated as an emergency zone, you’re just going stop the bleeding. And then they can get to the hospital where they can have surgery that saves their life.

Five things to know about Elizabeth Funk:

1. Funk started her career as a product manager for the first Microsoft Word program.

2. She was an early employee at Yahoo.

3. She describes herself as a steadfast optimist.

4. She was an early pioneer in what is now called “impact investing.” Her Dignity Fund connected investors with entrepreneurs in developing countries.

5. She’s a single mom of two kids who remains committed to her work.

Name: Elizabeth Funk

Occupation: CEO of DignityMoves

Education: Stanford University, bachelor’s in economics and international relations. Harvard University, Master of Business Administration.

Born and raised: Kansas City

City of residence: San Francisco

Age: 54

Anyone with half an eye on the housing market over the last two decades will know that in many countries, not least the United States, it’s become much more difficult to buy a home.

But a new report sums up the feeling of many potential home buyers by creating a category that labels some major cities as “impossibly unaffordable.”

The report compared average incomes with average home prices. It found that pandemic-driven demand for homes with outside space, land use policies aimed at limiting urban sprawl, and investors piling into markets had sent prices soaring.

US cities on the West Coast and Hawaii occupied five of the top 10 most unaffordable places, according to the annual Demographic International Housing Affordability report, which has been tracking house prices for 20 years.

Perhaps unsurprisingly, the most expensive US cities to buy home are in California, where San Jose, Los Angeles, San Francisco and San Diego have all made the top 10.

The Hawaiian capital of Honolulu also rates a mention in sixth place of 94 major markets surveyed in eight countries.

Australia is the only other country besides the US to dominate the “impossibly unaffordable” list, led by Sydney and the southern cities of Melbourne in Victoria and Adelaide in South Australia.

But topping the global leaderboard is Hong Kong, the compact Asian financial hub known for its tiny apartments and sky-high rents. Notably, it’s the only Chinese market covered in the report.

A regular entrant on the “most expensive” tables, Hong Kong has the lowest home ownership rate of all the cities surveyed, at just 51%, compared to its Asian rival Singapore where home ownership tops 89% due to the government’s decades-long commitment to public housing.

Hong Kong may be the least affordable city worldwide, but potential home buyers may be encouraged to know that it’s not as unaffordable as it once was.

House prices slipped during the pandemic in 2020, when the government closed the city’s borders and imposed a zero-Covid policy — that’s on top of new national security laws that have had a chilling effect on the city.

Why so high?

The report measures affordability using a price-to-income ratio of the median house price divided by the gross median household income.

It links the rise in working from home during the pandemic to a “demand shock” for houses outside city centers, which have more outside space. But it also blames soaring house prices on land use policies, including “urban containment,” a kind of planning designed to stop urban sprawl.

“The middle-class is under siege principally due to the escalation of land costs. As land has been rationed in an effort to curb urban sprawl, the excess of demand over supply has driven prices up,” the report said.

Prices were driven up even further as investors jumped into the market to make a profit.

One solution, the report’s author wrote, is to look to New Zealand.

In an opinion piece for Canada’s Financial Post, Wendell Cox, a senior fellow at the Frontier Centre for Public Policy, advocated for Canada, in particular, to follow New Zealand’s lead and free up more land for immediate development.

Both Vancouver and Toronto made the list of the cities that are “impossibly unaffordable.”

Cox points to a policy, “Going for Housing Growth,” introduced by New Zealand’s coalition government that requires local authorities to immediately zone for 30 years of housing growth.

“Toronto and Vancouver show that the cost of taming expansion is unacceptably high: inflated house prices, higher rents and, for increasing numbers of people, poverty,” Cox wrote.

For those who can’t wait for a change in policy or for demand to fall, the report also identifies the most affordable cities of the 94 surveyed worldwide.

They are Pittsburgh, Rochester and St Louis in the US; Edmonton and Calgary in Canada; Blackpool, Lancashire and Glasgow in the United Kingdom; and Perth and Brisbane in Australia.

The report was compiled by researchers from the Center for Demographics and Policy at Chapman University in California and the Frontier Centre for Public Policy, an independent public policy think tank in Canada.

Top 10 “impossibly unaffordable” cities

• Hong Kong
• Sydney
• Vancouver
• San Jose
• Los Angeles
• Honolulu
• Melbourne
• San Francisco/Adelaide
• San Diego
• Toronto

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The Supreme Court on Friday struck down a federal ban on bump stocks approved by former President Donald Trump, the high court’s latest stroke limiting the power of federal agencies to act on their own.

Justice Clarence Thomas wrote the opinion for a 6-3 court. The court’s liberal wing, led by Justice Sonia Sotomayor, dissented.

Trump had pushed for the ban in response to a 2017 mass shooting that killed 58 people at an outdoor music festival in Las Vegas. Bump stocks allow a shooter to convert a semi-automatic rifle into a weapon that can fire at a rate of hundreds of rounds a minute.

“A bump stock does not convert a semiautomatic rifle into a machinegun any more than a shooter with a lightning-fast trigger finger does,” Thomas wrote in his opinion. “Even with a bump stock, a semiautomatic rifle will fire only one shot for every ‘function of the trigger.’”

The ban was challenged by a Texas gun store owner, Michael Cargill, who purchased two of the devices in 2018, turned them over to the government after the prohibition was implemented and then promptly sued to get them back. The federal rule made possession of a bump stock a crime punishable by up to 10 years in prison.

Though the case didn’t rely on the Second Amendment, it did put the debate about guns back on the court’s docket in one of the most closely watched controversies this year. In that sense, the decision was the latest from the high court to side with gun rights groups.

Sotomayor reads dissent from the bench

Sotomayor wrote in a scathing dissent joined by the court’s other two liberal justices that the majority’s ruling “will have deadly consequences.”

The decision, she wrote, “hamstrings the Government’s efforts to keep machineguns from gunmen like the Las Vegas shooter.”

In a move that underscored Sotomayor’s discontent with the court’s ruling, the justice took the rare step of reading her dissent from the bench on Friday.

“When I see a bird that walks like a duck, swims like a duck, and quacks like a duck, I call that bird a duck,” Sotomayor wrote in her dissent. “A bump-stock-equipped semiautomatic rifle fires ‘automatically more than one shot, without manual reloading, by a single function of the trigger.’ Because I, like Congress, call that a machinegun, I respectfully dissent.”

From Capone to the Supreme Court

The bump stock challenge was tied indirectly to a gun control law Congress enacted in the 1930s that was intended to target gangsters like Al Capone and John Dillinger. Responding to grisly crimes in which machine guns were used to rob banks or ambush police, lawmakers required owners to register those weapons.

The law was amended several times and, by 1986, it prohibited Americans from transferring or possessing a machine gun altogether in most circumstances. Importantly, the amended law defined “machine gun” as a weapon that fires more than one round with “a single function of the trigger.” What, precisely, that phrase meant was the focus of the appeal.

Both the Trump and Biden administrations, as well as gun control groups, said the way bump stocks work mean they qualify as machine guns. The Bureau of Alcohol, Tobacco, Firearms and Explosives reclassified the devices as machine guns in 2018 and, based on the earlier law, barred people from buying or owning them.

Trump described bump stocks at the time as converting “legal weapons into illegal machines.”

ATF estimated that as many as 520,000 bump stocks were sold between 2010 and 2018. The device replaces a semiautomatic rifle’s regular stock, the part of a gun that rests against the shoulder. It lets shooters use the recoil of the weapon to mimic automatic firing if they hold their trigger finger in place.

Opponents say the ATF overstepped its authority with the reclassification. They noted that the agency under both Democratic and Republican administrations had long said the devices were not covered by the law.

A US District Court in Texas and a panel of three judges on the conservative 5th US Circuit Court of Appeals sided with the Justice Department. But the full 5th Circuit reconsidered the case and issued a fractured opinion last year siding with Cargill.

The court appeared split during oral arguments in late February. Several of the court’s conservatives were concerned, in particular, with the idea that Americans who purchased bump stocks when they were not classified as machine guns could suddenly be prosecuted for a crime they were not aware of.

Justice Brett Kavanaugh worried that the criminalization of the device would “ensnare” Americans.

“Even if you’re not aware of the legal prohibition, you can be convicted,” Kavanaugh told the attorney representing the Biden administration. “That’s going to ensnare a lot of people who are not aware of the legal prohibition.”

Another central theme of the arguments was the question of whether Congress – rather than the ATF – should have approved the ban. It’s an issue that’s emerged as a central theme at the Supreme Court in recent years, with groups challenging financial and environmental regulations in separate cases.

The court, meanwhile, has repeatedly sided with some of the same gun rights groups, including the National Rifle Association, that opposed the bump stock ban. Most recently, the court’s conservative majority invalidated a New York state law that required state residents to have a special need to carry a weapon outside of their homes.

Thomas includes graphics of how bump stocks work

In an opinion that reflected the technical nature of the case and the oral arguments in February, Thomas’ opinion digs deeply into the mechanics of semi-automatic rifles – including with a series of graphics demonstrating what happens when triggers are depressed.

“Firing multiple shots using a semiautomatic rifle with a bump stock requires more than a single function of the trigger,” Thomas wrote, underscoring the idea that the devices are not the same thing as an automatic weapon where a shooter simply holds down a trigger.

“Too much forward pressure and the rifle will not slide back far enough to release and reset the trigger, preventing the rifle from firing another shot. Too little pressure and the trigger will not bump the shooter’s trigger finger with sufficient force to fire another shot,” Thomas wrote. “Without this ongoing manual input, a semiautomatic rifle with a bump stock will not fire multiple shots. Thus, firing multiple shots requires engaging the trigger one time – and then some.”

This story has been updated with additional details.

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