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Tearing down mansions; WFHers $$$; from California to Texas 🤠

By September 13, 2021 No Comments

Super-rich buying up homes just to tear them down

Last week, Rise&Shred wrote about the most expensive mansion in the United States heading into foreclosure.

Turns out, the problem is the mansion wasn’t built in the Hamptons, where the land is apparently much more valuable than the property that sits atop it!

As land values continue to skyrocket in the Hamptons, the superrich are bulldozing homes — in the pursuit of even more ostentatious mega-estates — faster than ever before.

“People buying under-utilized properties and tearing them down is not a new phenomenon, but what we have seen is that, like everywhere else, trends that were happening already have been accelerated by the pandemic,” said Long Island Assemblyman Fred Thiele to the New York Post. “More people are coming, they are staying longer, so the houses that were being used seasonally no longer work for four to five days a week, all year.”

Southampton Town Supervisor Jay Schneiderman, whose town has seen 129 whole-house demolition permits go through in the past two years, finds the trend unsettling.

“The difference I see in this era of obscene opulence is that gorgeous homes, just gorgeous estates, are being torn down, and the cost of construction is in the millions,” he said, “It’s become a new bragging point to live in a brand-new house that doesn’t host someone else’s ghosts from the past. To see some of these homes that get torn down, you’d be shocked.”

He told The Post that he is barraged with emails for “demolition sales” where everything from the shower doors to the imported marble floor slabs are sold in situ.

On the upside, Schneiderman points out that the business of building and rebuilding ad infinitum creates loads of construction and service jobs — though finding affordable housing for workers is near impossible.

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Remote workers want $$$ regardless of where they live

Early in the pandemic, some employers, offered one-time relocation bonuses to offset a reduction in base salary for workers who wanted to leave high-cost cities such as San Francisco. 

Some, grateful for job security, gladly took the offers. (WSJ paywall.)

Now, after more than a year of adjusting to remote work and remaining productive—in some cases increasing their hours—more people are questioning why their value is based on their geographic coordinates.

Geography’s impact on workers’ compensation used to be a given, but now more employees are questioning whether a pay cut makes sense given that they are working more hours, producing the same quality of work and feel they could find another job if they needed to. 

From the company perspective, there is a risk in reducing the salaries for those who move, since any reduction, no matter the reason, is bad for morale. 

As companies in San Francisco and New York City have started hiring talent to work remotely all over the country, there has been upward pressure on wages: Startups in smaller cities are finding that coastal companies are coming in offering somewhere between a coastal salary and a local one, executives say.

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California companies are moving to Texas more than any other state, by a wide margin

California companies are relocating their headquarters to Texas at more than four times the rate of any other state, according to a study by Stanford University's Hoover Institution.

The Lone Star state gained 114 California corporate HQs from Jan. 1, 2018 through June 30, 2021, compared to 25 for runner-up Tennessee. 

Researchers say more companies are looking to escape the Golden State's high taxes, restrictive regulatory policies and rising overall costs, benefitting more business-friendly states such as Texas.

While that’s part of it, another part is explained this way: Texas is NOT California.

“Warnings about California’s deteriorating business environment have been issued for years,” the study states.

“The data presented here show that headquarter relocations are accelerating substantially, with no sign of reversing course, reflecting a California business environment that ranks near the 34 bottom of all U.S. states in many dimensions, including taxes, regulations, litigation costs, labor costs, energy and utility costs, and employee cost of living,” the paper concludes.

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