Companies and entire cities–such as Chicago, which banned all indoor smoking, starting on January 1, 2008–are encouraging smokers to put out their cigarettes. Could apartment owners be next?

Maybe. Citywide smoking bans in places like New York and Chicago have been successful–just last week, Chicago Health Commissioner Dr. Terry Mason said the ban, which is not even six months old, had been accepted across the city.

Companies are also trying to get smokers to quit because it reduces their health insurance costs–although for some companies, it’s a touchy subject.

Last week, the 16,000-strong Tribune Company recently rescinded on a plan to
charge its 600 smokers an additional $100 a month for insurance, according to the Los Angeles Times.

The Tribune Company is now considering a program that would offer employees benefits for stopping smoking. And it’s not alone.

More than half of 453 large employers surveyed in a report by the National Business Group on Health
and consulting firm Watson Wyatt Worldwide are offering financial incentives to help employees be more healthy; that includes incentives to quit smoking, Newsweek says.

Twenty-four percent more employers say they’ll offer health improvement bonuses in 2009.

And now, apartments may be getting in on the anti-smoking action. According to ABC News, California is considering making all its rental housing smoke-free.

• New legislation being considered by a state senate committee that would allow rental housing owners to ban smoking on all or part of their property.

• The bill–proposed by State Senator Alex Padilla–would let renters smoke within their units until the lease they signed prior to the bill’s passing expired.

And then: No more puffing.

If renters do, it would be considered a breach of the agreement–and they could be evicted.

Regulating unit use if it affects the unit–i.e., no repainting walls, no knocking them downs–is one thing, but should property owners and managers have the right to regulate what residents do inside the unit with their body?

Perhaps. Smoking can discolor walls, leave an odor and require repainting, which adds an expense for the owner.

But a large part of the restaurant smoking ban opposition has revolved around personal rights–and when a renter is paying to reside in a unit for a given amount of time, do we have the right to limit what they do in that unit (within reason)?

What do you think–would a smoking ban for rental properties be fair, or wouldn’t it?

Forget concern about the U.S. sliding into a recession. According to a survey of all 50 state fiscal directors, many states are already in a recession–and as the July 1 fiscal year approaches, the situation may get worse, the New York Times says.

The National Conference of State Legislatures report, released Friday, said that "whether
or not the national economy is in recession– a subject of ongoing
debate — is almost beside the point for some states."

The funding shortfalls are so severe in some areas of the country, it looks like–even once the housing slump does noticeably improve–states may be dealing with the housing market fallout for years to come.

Housing has already taken a toll on the economy (which has, in turn, taken a toll on housing): Because home equity is dropping, many homeowners don’t want to invest in their home, so furniture and appliance sales are declining.

At the same time, people are spending less in general because higher gas and food costs are eating up their cash. 

And the slowed economy is hurting tax revenue–some states are really suffering, such as:

• Delaware: The state’s funding has a $69 million gap this year.

• California: The report predicted California would have a $16 billion budget shortfall over
  the next two years.

Florida, too, doesn’t expect its revenue situation to improve quickly because of how long its housing slump has been going on, the Times says.

And Florida is not alone. Sixteen states reported budget shortages because taxes had come in less than earlier estimates by mid-April; that’s twice the number of states that posted a deficit six months prior.

And the upcoming fiscal year may not be much better. Twenty-three states are currently reporting a total of $26 billion in budget shortages, according to the NCSL–more than two-thirds say they’re worried about budgets for next year.

With good reason: The Center on Budget and Policy Priorities
said last week that 27 states are reporting projected budget shortfalls equaling at least $39 billion next year.

We’ve been so focused on improving the housing market, it’s possible we’ve lost sight of its far-reaching effects–but make no mistake, dealing with sharply reduced state budgets on the heels of a prolonged housing slump is not going to make life easy.

In fact, as the economy slows and we try to climb out of a housing decline–and potential national recession–we’re going to need those state programs and aid more than ever.

No one wants to see education or other necessary programs suffer. But there are even more pressing problems, such as shelter. The rising number of foreclosures in the U.S. alone are going to
increase the need for housing–some of it will need to be affordable or
aid-based.

So what can we do now to help buffer the housing decline’s effect on state funding? Is it time to reconfigure and trim budgets know, anticipating a further decline in tax revenue? Or should the Fed be addressing the problem and increasing state financial allocations?

What do you think?

Single-family homes may be taking a beating–but multifamily affordable housing isn’t.

Just ask Fannie Mae. According to The Wall Street Journal, Fannie Mae and Freddie Mac are working to make up for the lenders who have pulled back from project funding, especially in the multifamily affordable housing market.

A spokesman for Fannie Mae said that the multifamily market’s low delinquency rates–a scant one-tenth of 1 percent in January–makes it a good bet for the government-backed agency, according to the Journal.

Fannie and Freddie aren’t the only ones working to increase affordable housing. As the subprime housing crisis continues, states–including New York–are spending more money on affordable housing programs.

In fact, most New York housing programs will receive an infusion next year, according to Newsday, including:

• Access to Home, an organization that gives property owners funds to increase disabled residents’ accessibility options, is slated to get $14 million. Last year, it received $5 million.

• A public benefit corporation created in 1985 called the Affordable Housing Corporation will receive $45 million to help low- to moderate-income residents get homes–a $20 million increase from what it got last year.

• The Housing Trust Fund Corporation, which last year received $29 million, will get $73 million for programs that sponsor new construction and pre-existing housing rehabilitation for affordable housing. (Developers interested in applying for the funds can here.)

However, not all states are making a push to fund affordable living. It’s not that they’re against it; but at least one state–Massachusetts–is on the verge of changing the way it’s done.

The state could soon pass an amendment that would require large affordable housing builders to pay construction workers higher wages–raising overall construction costs on some projects, the Boston Globe reported recently.

Developers would have to pay workers a "prevailing wage"–which means the Massachusetts Department of Labor determines minimum hourly rates on projects involving 75 or more units or projects with $25 million or more in overall development costs. Those rates can be twice as high as a project’s nonunion worker hourly rates.

Government projects already require the prevailing wage. Projects during 2002 to 2006 that paid the wage spent 34 percent more–roughly $60,000–on each unit, according to a 2007 study by the Massachusetts Housing Partnership.

As the economy sinks, higher wages will likely help builders; but it could cost the community by reducing the amount of housing being built.

One wonders if Massachusetts has really thought the wage hike through. Residential construction employment has declined in the past year–so will making higher construction costs mandatory for large affordable housing projects really help workers in the long run?

It’s a delicate balance–workers are battling the same higher food and gas costs affordable housing recipients are–but overprice our projects, and they’ll be out of work…

It’s spring, which according to the New York Times, means thousands of recent college grads will soon be hitting the rental market looking for an apartment … and many will be in for a shock.

There is no rental market quite like New York City. As a result, there’s no landlord like a New York City landlord.

In some markets, rental property owners may be having a hard time
filling units as the economy slows. Vacant units have caused
foreclosures in some markets, such as Boston, where multifamily
foreclosures rose 27 percent from February 2007 to 2008, according to
the Boston Herald.

But New York’s rental market remains strong.

With $3,000 average monthly rents in some neighborhoods, its market is pricey–and also large. Because home selling prices are so high in New York, 75 percent of the city’s housing stock are rental properties.

Perhaps that’s why the rental market is so strong: Vacancy rates in New York City hovered
around 1 percent for the third consecutive year in 2007, according to real estate broker Citi Habitats.

The tight apartment supply caused rents to rise 5.5 percent on the most expensive residential market in the U.S., Bloomberg said.

With that kind of demand, landlords can call all the shots–and do:

• Qualifying for an apartment can be tricky. New York landlords only want residents who make 40 times the monthly rent amount, according to the Times–which, for a $2,000 apartment, would be an $80,000 annual salary. The average 2006 recent grad salary? According to census data, $35,6000.

• Roommates may not even help. Many renters take on roommates to help buffer the high rent cost–but while some landlords will take the combined incomes of several roommates, some won’t.

• Co-signer requirements are even stricter. If a renter doesn’t make 40 times their rent, a guarantor–such as a parent–needs to step in. The guarantor must make 80 times the monthly rent amount.

Once you qualify, getting into the unit isn’t cheap. First, there’s a security deposit, which can be the first and last month’s rent–which in New York, can be $6,000 for that $3,000-a-month place we mentioned earlier.

Many renters also must pay a broker’s fee; it can cost more than $10,000 just to get inside your new unit.

Some landlords and apartment brokers may find the market is changing due to sites like Craigslist, which offers no-fee and fee-based broker listings. But Alicia Schwartz, director of howtorentinnyc.com, doesn’t think the broker system will become obsolete.

“At the height of the rental season, landlord listings change from hour
to hour,” she told the Times. “And the only ones who talk to landlords hour to
hour are brokers, not listing services.”

New York’s housing market has fared better than much of the country; although some of the boroughs recently saw price declines, across the city, home prices rose 28 percent earlier this year, according to the Real Estate Board of New York.

But the city isn’t immune to the national credit crisis. As mortgages become harder to get and less residents are able to buy, the city’s rental market is likely to strengthen–and space will always be at a premium in Manhattan.

True, New York is a unique rental housing example; but are there things we all could learn from the way its property owners and managers do business?

Two news items today indicate the economy is in real trouble–and may be approaching an even tougher time in the near future.

• The Fed’s Beige Book indicates the economy is getting worse. The Fed said that "economic conditions have weakened since the last report." Nine districts
  reported a lesser economic pace; the other three said activity was
  "mixed or steady."

The culprit? Housing: According to Bloomberg, because of the "worst housing contraction in a quarter
century," growth declined to a 0.6 annual pace from October to
December–a reduction from a 4.9 percent pace during the three
prior months.

• Merrill Lynch lost $1.96 billion in the first quarter. Cringe-worthy news from Merrill–one of the firms that has been hardest hit by housing issues–included it posting $1.5 billion in collateralized debt obligation-linked
  writedowns and $3.1
  billion in Alt-A residential mortgage-related writedowns.

That brings Merrill’s writedown total to $27.4 billion for three quarters in a row.

And it’s causing Merrill to cut about 10 percent of its workforce–which fits right in with the Labor Department’s announcement today that it appears unemployment is rising. In the week ended April 12, unemployment benefit claims rose by 17,000.

In all: Not a great snapshot of a healthy economy, is it?

Speculation still exists about whether or not the country is headed toward a recession–some say we’re already in one–and things are not looking good.

If firms like Merrill Lynch aren’t through with seeing mortgage-related writedowns, unemployment is rising and the overall economy is slowing in more areas than it isn’t, can we still pull out of the tailspin to avoid a recession?

Those economic stimulus checks should be on their way soon … will that provide enough of a burst to consumer spending to save the day?

Or are we doomed to stand by and watch while our economy contracts further–and further–until it is officially declared as being in a recession?

Share your opinion by posting below …