Charlotte housing, & Redbox goes bust (07-03-2024--Hour3)

[00:00:00] 07-03-2024. What's going on? Thank you so much for listening to this podcast. It is heard live every day from noon to three on WBT Radio in Charlotte, and if you want exclusive content like invitations to events, the weekly live stream, my daily show prep

[00:00:17] with all the links, become a patron, go to thepetekalinershow.com. Make sure you hit the subscribe button, get every episode for free, write to your smartphone or tablet. And again, thank you so much for your support.

[00:00:29] So the first hour of the program, I read a piece from hotair.com, David Strom talking about the establishment, quote-unquote, is getting crushed. He talked about populism, fighting back, pushing back all over the world against this sort of transnationalism movement that has infected Western leaders.

[00:00:51] And I'm not going to go all into that as well, but I ran through a number of topics at the time like illegal immigration, political violence, law and order or lack thereof, homelessness, the economy, educational failures, journalism, institutional failures, COVID and the health

[00:01:08] industry failures, trans insanity, like all of these things, all of these issues, right? It has led to this pushback, this populist pushback because the, quote, ruling elites are not being responsive to what people are saying they want and what they don't want.

[00:01:28] They're just trying to force through these things because they think they know best. Okay, so along those lines, I have a bunch of different stories here. For example, Charlotte is short more than 18,000 homes contributing to a shortage of 4.5 million homes nationwide.

[00:01:52] Do you think that has any connection to the amount of people that are coming into America every year? Not legally, but illegally, right? Do you think that that has an impact? I would submit it does.

[00:02:07] When you have more people demanding a supply that cannot keep up with the demand, it sends prices higher and it creates a shortage of the supply, right? You can ignore these rules of economics, but they will not ignore you. It doesn't make them stop working.

[00:02:29] This stuff is always present, right? These factors are always present. Supply and demand, this is very elementary. The data was provided by Zillow and based off a 2022 numbers, despite 1.8 million American families entering the housing market in 22, only 1.4 million houses were built. So you have a shortage there.

[00:02:54] 1.8 million entering the housing market, 1.4 built. Last year, an additional 1.45 million homes were built. Last year they weren't keeping pace either. Those behind the study believe that relaxing zoning laws is the way to help usher in new construction.

[00:03:17] They also said eliminating or reducing parking requirements and quicker approval of building permits could help. High mortgage rates have also made many potential homebuyers wary of buying with 30-year fixed mortgages averaging just under 7%. Mortgages dipped to 6.6 in January before bouncing back up over 7% in May.

[00:03:43] This is part of what I was talking about. The policies that have been pursued by the quote ruling elite or, you know, the expert class has led us to this point where you can't even build enough homes to satisfy the demand.

[00:04:00] By the way, I've heard rumors and reports that the commercial building sector is in serious trouble. Stuff isn't in the pipeline. They're just like, it's just stuff's not getting built. Then there's this from WBTV. A new report studying single-family rental homes owned by large institutions from the

[00:04:32] U.S. Government Accountability Office or the GAO found that Charlotte ranked near the top of 20 of the largest cities in the country studied. National corporations own 18% of Charlotte's single-family rental homes. Now, okay, I got to tell you, I mentioned this the other day. I forget the guy's name.

[00:04:55] I think it's called something like Your Rich Life or something. And that means something different to everybody. What does it mean to be rich? People have different ideas about that. But he's like a financial advisor guy and he's, I think it's Netflix.

[00:05:09] And he made, I thought, a compelling argument when he said, you know, renting is the better option for a lot of people. Owning your own home when your mortgage is your floor, that is your monthly expense floor.

[00:05:24] The cost to you of maintaining that home will be above what your mortgage is. Whereas when you rent an apartment, that's the ceiling. You will not be charged more for that rental than what you are paying every month, right? Hot water heater goes, you're capped.

[00:05:46] That's on the landlord, right? So I thought it was an interesting argument to make. He's a financial advisor guy, he's wealthy and he rents. He doesn't need to own the home. He doesn't want to. He wants the flexibility to go wherever he wants to go, whatever.

[00:06:02] He's got like concierge service at the apartment complex, whatever. So he's fine with living that lifestyle. And it's not a quote, waste of money. He's not building equity, but he's living his rich life, right? That's the whole point of his show.

[00:06:19] But when you have these single family homes and one out of five of them are essentially owned by a corporation that is just renting them out, would those homes otherwise be purchased? Probably so, right? Because you're constraining the supply essentially.

[00:06:37] And it's not just happening on the building and the zoning side, it's happening on the purchasing side. And they come to the table with a pocket full of cash and they just muscle everybody else off the table.

[00:06:49] A New York Times investigation last summer found that those are far higher, 18% are far higher than the national rate, noted the national rate is 3.8. 3.8% of single family homes. Charlotte is 18. That puts us in the, oh sorry, ranked near the top 20.

[00:07:16] We are two spots behind Atlanta where corporate national, corporate landlords own 25% of comparable houses. One out of four. It is a trend that began during the great recession and has grown particularly fast in popular sunbelt cities.

[00:07:34] A lot of these institutional investors like Blackstone bought a lot of these houses in foreclosure auctions and then turned them into rentals. That's according to the director of UNC Charlotte's Children's Client Center for Real Estate, fellow by the name of Yong Kang Chu.

[00:07:52] What started as a boon for a lagging real estate market has now grown into a challenge for would-be first-time homebuyers. So when the quote great recession hit, right, was it the big short? Go watch the big short, the movie, right?

[00:08:08] Find out what happened in the real estate bubble burst, how that happened. Who swooped in? Companies like BlackRock, Progress Residential. They focus on starter homes. They often come in with all cash offers and that puts would-be lenders at a significant disadvantage.

[00:08:26] Chu pointed out that some studies have shown that the presence of national corporations does not significantly contribute to the rampantly high housing prices of the last few years. Other studies, he cited, have found that these investors can help young couples and families

[00:08:42] find homes in safe, family-friendly neighborhoods with access to better schools. They are competing with first-time homebuyers, but the overall impact of this is not clear, he said. I will give to you the famous quote from Thomas Sowell, right? There are no good options. There are only tradeoffs.

[00:09:01] Look, I am not dissuading anybody from buying a home. I am not trying to tell anybody don't buy a house. You make your own decisions. It's the same way with the jab. I told people the same thing with the COVID shot. You do you, you know?

[00:09:14] I'm a libertarian! Like, I don't like saying that anymore. I'm a conservatarian. Live and let live. Don't hurt people, don't break their stuff, don't take their stuff. Like, that's it, right? That's the rule to live by. It's very simple. Although, you would think it was very difficult.

[00:09:30] Anyway, if you—this is a good point. This comes from The Hellion, but it is still a good point, name aside. Who says on Twitter, if your nest egg or 401k is not sound when you retire, then you better have your housing paid for, aka a home, right?

[00:09:52] You better have your home paid for, right? Because that means that you have a place to live. Because if you have not prepared for retirement and you don't have an income stream that's

[00:10:02] going to cover your housing expenses, having a home with a mortgage that is paid off—so no mortgage, right? That's the plan. That's always the plan. You don't want to be retired making mortgage payments, right?

[00:10:17] That's the idea behind that, is because otherwise you might as well be renting, right? So look, you need to talk to your own financial advisor for your personal situation. But it's not right for everybody in all cases.

[00:10:32] And I have rented—I think I did the math on this. I think I've actually rented for longer of my life than I have owned. At one point it flipped and I had been owning longer, but then we sold the house when I

[00:10:50] went to Asheville and I rented up there. Because I was working there and I would commute back on the weekends to Charlotte. And we kept the house for a couple years and then, yeah, for like two years or so, because

[00:11:09] I thought, like, I'm going to work for a bankrupt company. I'm surely going to get fired soon. So, like, let's not sell the house. But then I didn't get fired. And look, I was as surprised as you were. And so I didn't get fired.

[00:11:24] And the commute that Christy was running here in Charlotte turned into like an hour when we first moved into the house. It was only 20 minutes. So we finally said, let's sell the house. And we rented an apartment for her.

[00:11:33] So we had two different apartments that we were renting and then we were coming back and forth on the weekends. And so we did that for several years. And then, of course, we finally moved her to Asheville. And then like three months later, I got fired then.

[00:11:46] So that's how that happened. But then we bought a house after the pandemic, bought a house up there. And then two days after closing, I got this job offer. So we never even really moved into that house. That's how that went down.

[00:12:04] That's how we moved five times in two years. Yes, I do not recommend it. Although if you are trying to clear out a lot of your belongings, it's a really good way to do that.

[00:12:14] Because after you have moved boxes three, four times over the course of 18 months, you're just like throw it away. I do not want to move this stuff anymore. So yeah, we got into the house. We're like, well, we don't have any. We have like no belongings anymore.

[00:12:31] Although we were opening boxes, it was like Christmas. We hadn't seen some of this stuff in two years. It was, oh, I remember this plate, you know, that kind of stuff. Town leaders in Matthews, they are going to look at the issue of short term Airbnb type rentals.

[00:12:52] They're going to do it this summer. Town Planning Director Jay Camp told the Charlotte Ledger that town commissioners have asked his staff to draft language to incorporate short term rentals into the town's Unified Development Ordinance or the UDO, or as I call it, the UDO.

[00:13:10] Currently, the UDO only includes language for bed and breakfast establishments. And short term rentals are allowed. And so they're going to look at whether or not there needs to be some rules like would they be required to be separated from each other by a minimum of 800 feet?

[00:13:30] So you don't have like a whole cluster of Airbnbs for rent, which I guess is fine if you own the property, right? Libertarian in me was like, it's my property. I should be able to rent it out to whomever I choose.

[00:13:42] But if you get like six or seven of these rentals all around each other and then you end up with like a block party every single night and your neighbors are probably not going to be happy about that, right?

[00:13:53] They'd be required to have a zoning permit and then that permit would have to be posted publicly. That's very helpful, by the way, for neighborhoods that ban like in HOAs that ban Airbnbs and these short term rentals. Some neighborhoods HOAs do this.

[00:14:14] But it's difficult to find out who's doing it. Because unless you're because if you ever use these websites or the apps, if you go there and you try to find like I want to find a place in West Charlotte here and right

[00:14:27] around the station, well, they don't tell you what the actual address is at first. They just give you sort of like a zone. It's somewhere over here. It's like a like a nebulous area because they for security purposes, they don't want

[00:14:42] you to be going around and like stalking houses to go burglarize and that sort of thing. So you got to give them information and you got to book it and then they'll give you the address. Then you find out where it is.

[00:14:51] So it's difficult for HOAs to find out where these things are in the neighborhood, right? To confirm that that this is actually a thing in the neighborhoods or somebody has turned their home into a short term rent when it's not allowed.

[00:15:06] They would not be allowed to hold special events or gatherings. A local manager or operator would be required to be located in Mecklenburg County or adjacent to. So you got to be within you got to be within a county.

[00:15:20] I guess that means so you would be you could be called in if there's a problem or something. Got to be a local owner. So that's what Matthews is looking to do with their short term rentals. Meanwhile, the airport is kicking out the homeless people that started yesterday.

[00:15:36] It went into effect this week. Let's go over and get Dave on the program. Hello, Dave. Welcome to the show. Hey, how you doing? Hey, I'm good. What's going on? Your segment on Airbnb struck my cord real well.

[00:15:50] I live in Cabarrus County and we have a we have an Airbnb right next door to us. It's a massive house, eight thousand square feet on a half an acre. It was it was it was built for parties. And we have. What's that address again?

[00:16:05] No, I'm kidding. I'm just kidding. Well, and if you see it, I mean, it's got it's got an in-ground pool. It's got eight or nine bedrooms can sleep 15. Got a basketball court, a pool table. I mean, you're renting it for parties and people actually come into our neighborhood.

[00:16:21] Literally fill our cul-de-sac and the street on both sides. We've called police multiple times concerned of emergency vehicles not being able to make it down. This past Sunday was a wedding. The sheriff's had to be called twice for noise after 11 p.m.

[00:16:40] Wow. And there's really not much they can do. The owner does not live on the premises. He bought it to rent it out as an Airbnb. And it's and it's pretty much meat. And we've collected pictures and evidence that this place is an event center. Yes. Reception center.

[00:16:57] Yeah. How is that? How is that not classified as a commercial property at that point? Well, exactly. Exactly. And we're going to I'm going to be, you know, reaching out to the county attorney and the zoning people. I'm going to I'm going to ask the question.

[00:17:13] I'd like to move out of my house and have it become an event center. What do I need to do? And I'll often see if this place has done it. It should not have ever been built in a neighborhood because it's just monstrous.

[00:17:25] Are you guys in are you in an HOA neighborhood? The good news is we're not. The bad news is we're not. Right. Back in the late, late, mid to late 90s when this subdivision was created, you know, there wasn't such a thing as Airbnb.

[00:17:42] But I think that some people would buy a property like this in a quiet neighborhood on a street that's got a cul-de-sac and rent it out, thinking that all they're going to do is get people that are going to come in and stay in this this this estate.

[00:18:01] With a pool, a pool table, a basketball court and not have a party now, we do get those people. We got some people there right now. They're very, very quiet. Right. Two or three people.

[00:18:11] I don't know if they paid the normal thousand dollars a night for this place, but that's you know, that's fine. But it's a party place.

[00:18:19] Right. And at some point it crosses a line into nuisance that if it was just if it was just a neighbor that was, you know, behaving in the exact same way, they would also be they would be running afoul of nuisance laws, too.

[00:18:36] Yeah. And the other use of these facilities. And it's it's it's well known. They they they buy them, they purchase them by the hour. And we've had porn shoots at this place. Really? Again, what's the address on? No, I'm kidding. I'm just I'm just kidding.

[00:18:50] Yeah. We've had porn shoots a year and a half ago. How do you know? How do you know that they were porn shoots? An awful lot of scantily clad ladies going in through the front door. That could have been a music video.

[00:19:05] And they could do a lot of awful. Well, a lot, a lot of men in some very, very costly suits and sound coming over the brick wall between our two properties. OK. Talking about it was good. Let's reset it up and shoot it again.

[00:19:19] So we've had a federal raid there last two years, a year and a half ago. Have you thought about Dave? I think I think I may have a solution. I mean, by all means, keep pursuing the other avenues you're pursuing.

[00:19:30] But how about this? You need to set up a live stream. You need to you need to monetize this.

[00:19:38] You need to make it like what's happening at the event space next door, you know, and you need to get you a bunch of cameras, set them all up in the public, you know, so this way it's like it's on your property. It's viewable from your property, whatever.

[00:19:49] Don't run afoul of any kind of laws or anything. But we are a one party consent state. So you can you can record this stuff and then live stream it. And so then you could then go in and post it up there like anybody that's renting this place.

[00:20:01] Just be aware we are going to be also sharing what you do at the house. We're going to be posting it. Yeah, yeah, yeah. One of my goals is to get the reviews to say, be careful of the bad guy next door. Oh, yes.

[00:20:17] Yeah, yeah. You can have a link up to the thing like you could have. You could build an entire like influencer operation, you know, because if you get all the other neighbors, you get

[00:20:26] multiple camera angles going, you can go up to man on the street interviews with the people that are getting out of their cars. You'd be like walk up to them with a microphone and start interviewing them like, oh, what are you here doing?

[00:20:38] Like, oh, I see you got this kind of alcohol. Oh, is that fentanyl? You know, whatever. Like you could do all sorts of interviews with them on the street. You could actually monetize this and you could make a bunch of money.

[00:20:49] Yeah, well, the owner asked me if I wanted to be the manager, the host of the property.

[00:20:56] I think he felt it was going to be a good way to get rid of, you know, I guess all the neighbors that are complaining to have one neighbor be the host. That is a tactic. Yes, absolutely. Corporations do it all the time. They'll hire their worst critic.

[00:21:08] Yep. Yeah, not going to work in this case because the traffic of people, strangers coming into our neighborhood, my kids are all out of the house. But I can't imagine having young kids and getting people coming from who knows where.

[00:21:24] And also there was an article on Fox this morning about a guy that was shot at his own wedding, the groom. Yes. They have a wedding in the backyard and two masked gunmen came in to rob all the wedding goers.

[00:21:37] Yep. We had a wedding on Thursday and these or I'm sorry, Sunday. And these people were not making noise till five o'clock in the morning. They didn't care. Yeah. About anything. Well, Dave. Yeah, no, I know.

[00:21:50] Yeah, I appreciate the call and I hope you do get it resolved. Yeah, that's just awful. I appreciate it. Happy Independence Day. May you be independent from awful neighbors. Look, this is tough. These property rights issues are tough.

[00:22:03] They and I get again limited government libertarian or lowercase libertarian. I understand. However, would you want would you want the pig farm right next door to your house? Right. People who bash H.O.A.

[00:22:21] I get it. I've lived in H.O.A., I've lived outside of H.O.A. I get it. I see the pros and cons for both.

[00:22:28] Right. But that's one of the things that they prevent from occurring is these types of nuisance properties and and guests and residents and that sort of thing. And if you don't and if people don't want to live in that, they don't have to live in that right.

[00:22:43] Your choice. See, I'm a I'm a choice guy. I want all of the above. I want people make their own decisions on these things.

[00:22:51] But yeah, that's like at some point, though, you do get into the and there are nuisance laws and that's how you're able to call police and get them cited and all of that.

[00:22:59] Now, I don't know what happens if you get cited enough in the Airbnb or Verbo systems or whatever. Like, I don't know if you get so many tickets, maybe it's just the cost of doing business.

[00:23:08] But at some point, I got to believe it gets too expensive, you know, to maintain as a business. So a new policy went into effect this week at Charlotte Douglas International Airport.

[00:23:22] And it's meant to prevent people who can't go into the Airbnb from sleeping inside or on the airport property, mainly in the baggage area. I remember we started talking about this like last year.

[00:23:34] I want to say we had people that worked at the airport sending me pictures of homeless people that were living in the baggage claim. Airport officials briefed Charlotte City Council members back in April on the matter.

[00:23:49] At that time, officials estimated that about 30 people were living inside the airport, many of them in the baggage claim area. The new policy went into effect Monday and it defines airport property to include the terminal building and hourly parking deck, including roads and tunnels leading to those areas.

[00:24:06] The airport also defined what it means to have business at the airport. And it doesn't mean you have to do business at the airport, no, it means you have business essentially covers ticketed passengers, providing assistance to passengers,

[00:24:21] airport employees, contractors, vendors and government employees or those invited to be there for a specific event. OK, so if that's what it means, if you've got business at the airport. It doesn't mean doing your business at the airport because anybody could do that.

[00:24:38] OK, if you're listening to this podcast, you are obviously paying attention to the world around us. You also have really great taste, I might add. But if you haven't started getting prepared for various emergencies, I got to ask, what are you waiting for?

[00:24:50] Please call my friends Bill and Jan at Carolina Readiness Supply and they'll help get you started. If you have no idea how to start, they can help you. If you're an experienced prepper, they can help you to being prepared is just smart. We've already established that you're smart.

[00:25:05] I mean, you listen to this podcast after all. So let's put those smarts into action. Go to Carolina readiness dot com. That's Carolina readiness dot com or call them at eight to eight to two, six, seventy two thirty nine.

[00:25:18] Carolina Readiness Supply has 2000 square feet of supplies as well as educational materials that you're going to need for any kind of emergency. Veteran owned Carolina Readiness Supply. Will you be ready when the lights go out? OK, I was not aware Redbox got bought.

[00:25:34] Did you know that chicken soup for the soul? Remember those books? I remember the first one. I remember when that thing came out, chicken soup for the soul. And everybody was like, oh, my God, it's such an amazing book. We love it.

[00:25:45] And it was like the number one bestseller and everybody was getting it for Christmas and stuff. And you would read it and you'd be like, oh, I like every story.

[00:25:53] And then they did like another one, another one, and they like were branching off into like chicken soup for your computer, stuff like that. And I was kind of like, I feel like they're missing the point here. But chicken soup for the soul entertainment.

[00:26:09] It's a parent company, apparently they went, I guess the books were so successful, they made so much money, they started branching out. They're like, we're going to go into visual media.

[00:26:19] We're going to go and buy a bunch of kiosks that are located at your pharmacy and grocery store where you can rent movies on DVD. They were ahead of the curve here, people chicken soup for the soul entertainment. They bought Redbox and they bought them in.

[00:26:44] Oh, here it is. Twenty twenty two. So right at the height of the DVD craze. They were they were right on for right at the tip of the spear there.

[00:27:00] Yeah, the bankruptcy filing comes after months of a series of financial struggles for the company and piling up unpaid bills. Chicken soup for the soul has accumulated nearly a billion dollars in debt.

[00:27:11] And the chapter 11 filing submitted Friday in Delaware bankruptcy court shows that after reporting loss after loss after loss. There, yeah, they're circling the drain. The filing also discloses that chicken soup for the soul owes millions of dollars to some five hundred creditors.

[00:27:33] Which range from big names in the entertainment world like Sony Pictures and Warner Brothers to major retailers like Walgreens and Walmart.

[00:27:43] As of March of this year, Friday's filing shows that chicken soup for the soul had about four hundred fourteen million dollars in assets, nine hundred seventy million in debt. The lenders are unwilling to cooperate with the refinancing that chicken soup had asked for.

[00:28:01] So they're going into protection, by the way, when they bought chicken soup, when they bought Redbox. It included the assumption of Redbox's debt, as these things generally do. Redbox, they bought this company two years ago and Redbox had three hundred twenty five million dollars in debt.

[00:28:25] And chicken soup for the soul is like, we can fix this. So they go in there and they offered all you can eat shrimp. No, I'm kidding. They didn't. They didn't do that. They didn't do that. They said, let's change the formula of this soda. No, I'm kidding.

[00:28:40] They didn't do that. They apparently just ran up a couple extra million. So it went from three hundred twenty five million in debt. Now they're up to four hundred fourteen million. Oh, sorry. That's assets. Nine hundred seventy million in debt. Good Lord, guys.

[00:28:58] They operate so Redbox currently has twenty seven thousand kiosks. Twenty seven thousand of these Redbox kiosks. Twenty seven thousand of these Redbox kiosks still exist in America. And that is down from thirty six thousand when they were purchased in August of twenty. It hasn't even been two years.

[00:29:18] It's been twenty three months and they've already lost ten thousand. They've lost a third of the kiosks in America in in twenty three months. By the way, Chicken Soup for the Soul Entertainment also operates ad supported streaming and video on demand offerings like Redbox Live TV.

[00:29:43] Never heard of it. And Crackle, which I think I've seen on like a thumbnail on my on my list of apps or something. Is that the thing they play at the gas station pumps? All right. That'll do it for this episode. Thank you so much for listening.

[00:30:03] I could not do the show without your support and the support of the businesses that advertise on the podcast. So if you'd like, please support them, too, and tell them you heard it here.

[00:30:11] You can also become a patron at my Patreon page or go to the Pete Callender show dot com again. Thank you so much for listening. And don't break anything while I'm gone.