When winter departs, it’s time to check for damage and prepare for hot weather ahead
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With the days lengthening and weather warming, spring is a good time to get outdoors and tackle some larger home projects. With the threat of winter storms past, you can look for damage and make any needed repairs, as well as prep your home and garden for summer. We spoke with an expert to get some tips on what to watch for this season, from proper irrigation to mosquitoes and termites (oh my!).
Inspect driveways and paths. Freezing and thawing are rough on concrete, asphalt and other hardscape materials. Take a walk around your property to look for damage to walkways, paths and driveways, then schedule repairs as needed. Asphalt can often be patched, but damaged concrete may need to be replaced entirely.
Keep an eye out for termites. Beginning in March and going through May or June, be on the lookout for these winged insects. “Termites swarm in the spring,” says Victor Sedinger, certified home inspector and owner of House Exam Inspection and Consulting. “If there’s a bunch of winged insects flying out of a hole in the woodwork, that’s probably termites. Call a licensed professional pest-control company. You’ll save money and trouble in the long run.”
Prevent mosquitoes. In recent years, we’ve become more aware of the potential danger mosquitos can pose to our health. “West Nile virus and Zika virus are just the latest diseases caused by these winged pests,” Sedinger says.
The best way to prevent mosquitos around your home is simply to get rid of any standing water. “Walk around your property [and peek at your neighbors’]. If you see anything or any area where water stands, fix it, tip it, get rid of it or maintain it regularly,” Sedinger says.
Tackle These To-Dos Over a Weekend
Wash windows. Clean the grime off glass inside and out for a lighter, brighter home indoors and increased curb appeal outdoors. Wash the exterior windows yourself by using a hose attachment, or hire a pro to get the job done.
Clean gutters and downspouts. After the last frost has passed, it’s important to have your gutters and downspouts cleaned and repaired. “Clogged gutters and downspouts can cause the wood trim at the eaves to rot, and that can invite all kinds of critters into your attic space,” Sedinger says.
Having your gutters and downspouts cleaned early in the season can also help prevent damage from spring rains. “Gutters and downspouts should be clean and running free,” Sedinger says. “If your downspouts are installed properly, water is diverted away from the house so that no water collects around your foundation.”
Clean your fireplace. If your home has a working wood-burning fireplace, the end of winter is a good time to give it a fresh start. Protect your hands with gloves and cover the area around the fireplace with a tarp. Carefully remove the (completely cool) remains of any charred logs and ash using fireplace tools. Then gently clean the fireplace surround. Do not attempt to clean inside the chimney — that job should be left to a professional chimney sweep.
Check screen doors and windows. Screens are designed to let the breeze flow in and keep the bugs out, but they can only do their job if they’re free from holes and tears.
Before setting up your screens for the warm months ahead, be sure to carefully check each one and repair any holes or tears, no matter how small. You can find repair kits at most hardware and home-improvement stores.
Inspect the roof. Winter storms can take quite a toll on a roof. When spring arrives, start by making a simple visual inspection of yours. “It doesn’t require a ladder, and you certainly don’t have to get on a roof to look,” Sedinger says. “Use binoculars or a camera or smartphone with a telephoto feature if you need to.” Look for missing shingles, metal pipes that are damaged or missing or anything that simply doesn’t look right. If you notice anything that needs closer inspection or repair, call a roofer.
Paint exterior. If you’re planning to repaint your home’s exterior this year, spring is a good time to set it up. Want to paint but can’t decide on a color? Explore your town and snap pictures of house colors you like, browse photos on Houzz or work with a color consultant to get that just-right hue.
Schedule air-conditioning service. “Home inspectors see a lot of air-conditioning systems that are just not taken care of,” Sedinger says. “Just because it gets cool doesn’t mean it’s working efficiently.” To get the longest life out of your cooling system and keep it running as efficiently as possible, change the filters at least once each season, and hire a licensed professional to service the equipment before the start of summer.
Tell us: Are you excited to get out there and tackle some home projects this spring or are you dreading it? Share which seasonal tasks you love — and which you could live without — in the Comments.
A complete schedule of when to do what … and how much it costs
When I bought my dream home two years ago, I wasn’t imagining myself standing in my basement, holding an umbrella, watching my husband chase streams of water with a flashlight. But that’s where I ended up. It was the first spring thaw and he was trying to figure out where the leaks were coming from.
Clad in his work boots and a rain jacket he would alternate between stepping outside our basement door, where the rain came down in big sheets of cold wetness, and ducking into our basement to inspect various parts of our foundation. It would take three more rainstorms, the installation of a sump pump and a complete overhaul of our plumbing before we were able to correct the problem.
That was a rough introduction to the world of home ownership, but I don’t regret buying the place. It’s a great century-old row house in downtown Toronto in an eclectic and vibrant west-end neighbourhood. Still, as I watched the balance on our line of credit creep up to the $40,000 mark, I started to wonder: How much does it cost to maintain a home anyway?
After a bit of research, I found out that the general rule of thumb is that you should expect to spend 3% to 5% of the value of your home every year, on average. For a 40- year-old home worth $500,000 that means you’ll need to set aside up to $25,000 every year. I ran that figure by my husband, who is—as it happens—a commercial and residential general contractor, and he said that sounded high. But is it? We were savvier home buyers than many, but we still underestimated the cost of fixing our drainage issues and the expense of tearing down the garage (“Give it a year and you won’t have to,” one broker told us when were out shopping for insurance).
So, to get a handle on the real cost of maintaining a home, I decided to price out all of the major maintenance and repairs you can expect to perform on a typical 2,000-square-foot detached house in Canada myself.
To do this I looked at two different kinds of upkeep. The first is the regular annual maintenance that every homeowner should do to keep his or her home running smoothly. Things like changing the furnace filters and patching the driveway. The second kind of upkeep includes those once-a-decade expenses that tend to result in migraines. Here I’m talking about things like replacing your hot water heater because it rusted through, or replacing all of your outdated electrical wiring.
To get an accurate figure, I divided up the typical home into its seven major components and tallied up the costs for both large and small jobs over 25 years. I then annualized that amount, so you can make sure that you’re contributing enough to your household maintenance budget every year. I also include tips on regular maintenance you can do to keep those little problems from turning into expensive headaches. But I didn’t include jobs such as interior painting, or upgrading your kitchen cabinets. I focussed on the bare bones maintenance you need to do to protect your home and keep it from deteriorating. In short, if you’re wondering why your car came with a maintenance guide, but your home didn’t—problem solved. Because here it is: A complete maintenance guide for your home.
When Steve Bedernjak bought his detached fixer-upper bungalow in one of Toronto’s up-and-coming neighbourhoods four years ago, he didn’t bother getting it inspected. Why bother? He already knew the place needed a lot of work, and he had a plan. He’d renovate one of the bathrooms and update the very outdated kitchen. He had $15,000 saved up for the job and a great deal of handyman know-how. But his first winter brought with it a slew of plumbing problems that threw a soggy blanket on his renovation strategy.
After a particularly cold spell, the pipes in the main floor bathroom froze. Swamped with work, Steve plugged a heater into the bathroom, turned on the bathtub faucet and left. Hours later he returned to the sound of running water—but the bathtub was dry. To his dismay, while the heater had helped thaw the frozen plumbing, the extreme temperature change had caused a rupture in the copper joints in the basement. “There was water everywhere.” Worse yet: Steve had to take a sledgehammer to the bathroom’s shower, since the previous homeowner had tiled over the main shut-off valve.
A few simple steps can go a long way towards making sure the same thing doesn’t happen to you. Consider insulating all of your exposed pipes for starters—especially if they run through an unheated garage or unfinished basement. Uninsulated pipes are susceptible to temperature changes and start to sweat. This condensation starts to corrode the pipes, decreasing the life of your plumbing.
Another good habit to develop is to test all the faucets regularly and swap out old washers when taps begin to drip. Once a year top up floor drains with water to prevent sewer gases from entering your home. (A properly installed drain should have a trap—a U-shaped pipe that holds water and prevents sewer gas, such as methane, from seeping into your home.) A trick is to pour a quarter cup of mineral oil down the drain. The mineral oil sits on the water barrier and slows down the rate of evaporation.
Finally, it’s always a good idea to make sure you know where the main shut off valve for your home is located. Test it every year to make sure it’s working—and that you can get at it if you need to.
The outside structure
While curb appeal is important, remember that the primary job of your home’s exterior is to protect your home. Not easy given fluctuating temperatures, changing seasons, and the various protrusions, sharp angles and different materials used in home construction. Your job is to keep that exterior as seamless as possible—a task even Canada’s worst handyman can accomplish.
Every year start by power washing your property. (Don’t do this if you have a brick home as the force of the spray can damage the brick. Instead, consider getting the brick professionally cleaned every few decades.) By cleaning off the dirt and grime—and taking the time to just stare at your home—you’ll get a pretty good idea of necessary repairs and replacements.
For instance if you notice the outside tap (known as a bib) froze during the winter, replace it with an antifreeze model—this $30 do-it-yourself fix could save you thousands in the long run. Consider replacing the weather stripping around windows and doors, as well as the door sweep, that rubber thingie at the bottom of the door that creates an airtight seal. Simple and cheap, these maintenance steps will help increase the energy efficiency in your home and will also prolong the life of the exterior shell.
Many of these jobs can be completed in a few hours or in a weekend, and they don’t require the skills of a professional.
When all the routine maintenance is complete, turn your attention to strategic updates. Replacing old wooden windows with vinyl models will cost between $3,000 and $12,000, but it will eliminate the annual sanding, priming and painting required of old wooden frame windows while increasing the energy efficiency of your home. You’ll enjoy lower electricity bills in the summer, and lower gas bills in the winter. Also, consider replacing old doors, just make sure the door fits the frame snugly or air will seep out.
The roof is an integral part of your home’s defence system. It’s also one of the most expensive components to replace, as my husband Mark and I found out. Swamped with his own contracts, my husband had originally planned to hire a company to re-shingle a small section of our roof. But the quotes he got were shocking: up to $7,000 to replace the plywood and re-shingle just 200 square feet. No joke.
The good news is you can prolong the life of your roof, and reduce the number of cheques you write to Johnny-No-Thumbs Roofing Co., by implementing a few ongoing maintenance routines.
First, pull out a ladder and climb on up there to visually inspect your roof. The best indication of a deteriorating roof is curled and separating shingles. Also examine the amount of grit and gravel that collects in your eaves and gutters. That grit is actually bits of asphalt rolling off the roof during high winds and rainstorms. If you find more than a quarter-inch of sediment, then it’s time to look at a new roof. Finally, look for waves or dips, which are early indicators of rot. If caught early enough, rot can be eliminated with the addition of more roof vents.
Every year you should secure or replace any loose shingles, inspect the chimney and verify the chimney cap is securely fastened. You should also inspect your flashing seals. Flashing is the thin, continuous piece of metal (or other impervious material) that’s installed at every angle or roof joint to prevent water from seeping under the asphalt tiles. Sealant is used to strengthen this barrier and must be re-touched on a regular basis.
Of course, if the thought of standing on a sloped surface 40-feet above the ground terrifies you, then you can always hire a handyman or roofer to do the annual inspection for you.
Have you ever seen a house that leans to one side? Typically this is caused by a damaged foundation. And more often than not, problematic foundations are caused by homeowner neglect.
Maintaining your foundation is an easy way to avoid very costly repairs. For example, you could spend $500 to repair the crack that develops where your driveway meets your home, or you could wait and pay $9,000 to excavate and waterproof a damaged foundation.
The best way to stay on top of foundation issues is to visually inspect your home at the start of each season, explains Bryan Baeumler, a contractor and the host of HGTV’s House of Bryan. Look for signs of settling, such as small hairline cracks. Keep a special lookout for cracks that widen over time, cracks that follow your concrete block foundation in a step pattern, or cracks above windows. These may be an indication of a larger foundation problem.
Also be diligent about snow and debris removal. Snow can melt and cause water damming, while debris can invite pests.
Finally, inspect the base of your home and your basement for mold and mildew. Use your nose and a flashlight to look inside closets, behind stored contents and around fixtures, such as the hot water tank. If you find mold, remove it using one part rubbing alcohol (90% or more) and two parts water. Don’t use bleach. (According to the U.S.-based Environmental Protection Agency, bleach isn’t able to penetrate porous material so it can’t kill mold spores at the root.)
Then look for the cause of the mold: where is the moisture coming from? Ignoring the problem and hoping it will just go away is not a great idea, as a friend of mind discovered when she neglected to address occasional sewer back-ups in her basement. To rectify the cause, she would have had to re-grade the soil outside her basement window and install a sump pump, at a cost of approximately $2,300. Instead, she left it.
A year later those spots of mold grew into a disgusting carpet of spores over a foot high. She ending up paying for pre- and post-air quality tests, professional mold remediation, debris removal, re-grading and a sump pump, at a total cost of $22,000.
Homeowners and unlicensed contractors are legally allowed to do their own electrical work, but you run a big risk if you don’t know what you’re doing, says HGTV’s Bryan Baeumler. “The worst I ever saw was a basement that was built for children and framed with steel studs.” The unlicensed contractors used an electrical wire without grommets, which enabled uninsulated wires to touch the studs. “The walls were actually live,” recalls Baeumler—if someone had touched the walls, they would have been electrocuted.
As with heating and air conditioning, consider hiring professionals when it comes to electrical work. But even if professionals do the bulk of the electrical repairs around your home, there are still steps you can take to ensure things are in proper working order.
For instance, you can make sure each light fixture is fitted with the proper bulb wattage. If you use a 150 watt bulb in a fixture that’s only designed for 100 watts, it can shorten the life of the bulb and the light fixture. You can also check your ground fault outlets by pushing the test/reset buttons. While you’re at it, check outdoor outlets and cords to make sure they aren’t damaged, and replace or repair frayed wires and plug heads.
Finally, schedule annual alarm tests and routine battery replacements in every detector and replace every fire, carbon monoxide and radon detector every 10 years, when the alarms begin to degrade.
Heating, ventilation and air conditioning
Some do-it-yourselfers are comfortable tackling furnace or central air conditioning repairs, but most of us will want to call in the professionals.
That means scheduling an annual inspection and cleaning of your furnace for the early fall. That way, you’re making sure that any potential problems with your furnace are caught well before the bitter cold season. The same diligence doesn’t have to apply to central A/C though, as long as you clean out leaves and debris before turning on the unit in the spring.
There are a few other practical maintenance steps you can do yourself to help your home’s heating and cooling system. Vacuum air grates or electrical baseboard heaters to remove dirt, and cover your A/C unit with a breathable, flexible cover to keep out debris and leaves. (Don’t tightly wrap the unit, as you could create a cozy den for critters or damage the unit’s coils.)
Also, try to change your furnace filter regularly. Not doing so is like forcing your furnace to breathe through a straw. By replacing the filter every three months, you improve both your air quality and the efficiency of your furnace.
You likely don’t have to bother having your ducts professionally cleaned though. The Canada Mortgage and Housing Corporation studied the impact of duct cleaning and found no difference pre- and post-cleaning. They did, however, recommend duct cleaning if you’ve just moved into a brand new home or just underwent major renovations.
Drainage and landscaping
A well-appointed garden can add as much as 20% to the value of your house, but landscaping also has a hidden purpose that’s much more important: to drain water away from your foundation.
To prevent water from seeping into your basement you should pay particular attention to the underside of the eaves (known as the soffits), the material that caps your gutters (known as the fascia), as well as downspouts and drains. Keep these clear of debris, such as leaves and twigs, and check for blockages. Expect to re-attach or fix these components on an annual basis. Remember: the easier it is for water to flow away from your home, the less likelihood of damage.
Now, visually inspect the grade of your foundation and driveway. Examine the ground abutting your home, or, if you’re like me and dimensionally impaired, pour a glass of water on the ground close to your foundation walls. Watch what the water does: Does it roll away from the home? Does it pool in one area? Worse yet, does it roll towards the home and then sit, waiting to be absorbed? The minimum standard for grading is an inch for every foot, with at least eight feet of grade starting at your foundation wall. Any grade that doesn’t move water away from your home should be corrected. If not, you could end up paying for expensive waterproofing remediation—one of the most avoidable, yet costliest repairs to any home.
Also consider removing boxed planters built against your foundation. While these landscaping features can add a splash of colour and enhance curb appeal they can also cause problems, since water has nowhere else to go but into your foundation.
Finally, pay attention to paths and driveways on your property. If they split they can allow water to seep into the earth, which can oversaturate your lawn, promote soil erosion and prevent the garden from keeping water away from your home. Small repairs to such hardscaping features can mean big savings later on.
The final tally
So what’s the total cost of transforming your home into an efficient, water-repelling system that never causes you any sleepless nights? When I tallied up the annual cost of all of the regular maintenance, I found that you could expect to spend somewhere between $900 and $1,000 a year. If you hire professionals, you may spend upwards of $3,000 a year.
But that doesn’t take into consideration the expense of major repairs, replacements and remediation. Those expenses tend to arise much less frequently, but they hit your wallet hard. To make sure you’re prepared, you should set up a “big stuff” home maintenance account, to which you should contribute an extra $3,500 to $7,500 a year, depending on the size and age of your home.
Total annual maintenance cost: $930 – $2,600
Total annual replacement cost: $3,500 – $7,300
The total amount you should budget for home maintenance: $4,500 – $10,000 per year
To double-check my figures, my husband Mark and I went back through our own reno and repair expenses, and we found that the numbers above are accurate. Of course, they don’t reflect the hours and hours of work that you do yourself (not the mention the help from friends and family).
Looking after your home properly is a lot of work—and, yes, it can be expensive. But it’s worth it to have a place you love that’s truly yours. Despite four years of ongoing repairs and renovations, Steve Bedernjak agrees. “At one point I seriously considered only dating people with construction knowledge—because I spent all my time at my house.” But now that Steve can actually see an end to all the construction turmoil, he says it was all worthwhile. “Despite the problems that are inherent of a 100-year-old home I’m glad I became a homeowner. Every night I sit on my back porch and listen to muted bustle of the city, and I’m comforted with the knowledge that it was in my hands that my house became my home.”
Young Canadian homeowners are in for some tough times if the housing market comes crashing down around them, a new study suggests, but realtors and economists say there’s no reason to panic.
A report released last week by the Canadian Centre for Policy Alternatives suggests that one in 10 homeowners under 40 will be underwater on their mortgages — meaning their debts will be greater than their assets — if real estate prices crash as expected at some point in the near future.
Right now, real estate prices are overvalued by anywhere from 10 to 30 per cent, according to Bank of Canada estimates. Eventually, most analysts say, the market will correct itself and prices will go down, either due to declining incomes, rising interest rates, or a combination of both.
When that happens, homeowners under 40 will be disproportionately affected — not because they stand to lose more actual dollars, but because they are debt-strapped and will see a bigger drop in their net worth, the study argues.
Canadians in their 30s carry debt worth an average of four times their incomes, according to the Centre for Policy Alternatives. That means they stand to lose a much bigger percentage of their net worth if their homes lose value. (Joe Raedle/Getty Images)
“Their entire net worth is wrapped up in their home when they’re in their twenties and thirties. They’re early on in a mortgage, so … almost everything they’ve paid has gone into interest,” John Andrew, a real estate professor from Queen’s University in Kingston, Ont., said.
“And the other thing is that they’ve leveraged this to the hilt. So it’s a triple whammy, those three factors.”
‘Not a big deal’
Families in their thirties could lose an average of $60,000 if there is a correction of 20 per cent, and that would represent an average of 39 per cent of their net worth. People in their twenties would see their net worth reduced by 45 per cent in the same situation.
It all sounds scary, but young homeowners do have one thing their older counterparts do not — time.
“Even if you’re underwater, it’s not a big deal, because as long as you live in this house and you pay your mortgage, that’s fine,” Benjamin Tal, deputy chief of CIBC’s World Markets, told CBC News.
CIBC’s Benjamin Tal says young homeowners shouldn’t panic about a potential drop in housing prices because they have the luxury of being able to wait it out. (CIBC)
“Of course, it’s difficult to be underwater. It’s not a very good thing to experience. But from a practical perspective, as long as you have a job and you have income, I really don’t see a situation in which you should panic.”
Andrew agrees. Asked what advice he has for young homeowners, he said: “Don’t panic. Yes, your net worth may have declined significantly, but until you go and sell your house, if you’re in the market, you’re in the market.”
Interest rates hikes an ‘urgent issue’
Both Tal and Andrew say the bigger issue at play here is the possibility that interest rates on mortgages will rise, triggering the anticipated drop in housing prices.
“I’m pretty sure we’re not going see a collapse in home prices until we see a rise in interest rates,” Andrew said.
And while most young homeowners can withstand a housing market crash by staying put and waiting it out, not everyone can afford to pay a bigger monthly mortgage.
“If you can’t keep the house because you can’t afford the extra $350-$400 a month in mortgage payments, now you’ve got a really serious and urgent issue,” he said.
‘The economy will slow down’
Soaring interest rates and declining housing prices can also impact the economy at large.
“You have a situation in which more young people, young families, spend more money on their housing as opposed to anything else. So you don’t go to restaurants, you don’t take vacations — you just finance your mortgage,” said Tal.
“And if you don’t [spend money], the economy will slow down, and that will make things even worse because it means that unemployment starts to rise, and therefore some people actually won’t be able to pay at all.”
That’s particularly bad news in Canada, said economist David Macdonald, who authored the Centre for Policy Alternatives study.
“We’re already seeing weak growth in Canada,” he said, “and this would add to that slow growth.”
What’s the solution?
In his study, Macdonald recommends the government look at adopting U.S.-style policies to help young Canadians weather the storm.
That could mean giving unemployed homeowners some leeway on their mortgages, or allowing those in extreme circumstances to walk away from their mortgages without taking a huge hit to their credit scores.
But these are solutions for later down the road, when prices start dropping, he says.
In the meantime, Tal said young and prospective homeowners should make sure they have enough wiggle room in their budgets to comfortably make monthly mortgage payments even if rates rise by a couple of percentage points.
“If they cannot do it, they should buy a smaller house,” he said.
Or, not buy a house at all.
‘There’s nothing wrong with renting’
Studies like this one might put you off buying at all, and that’s a perfectly reasonable option, said Andrew, especially in high-cost cities like Toronto, Vancouver and Calgary, where a housing market crash would hit hardest.
“If you look at a lot of world-class cities around the globe, there’s nothing wrong with renting. If you lived in New York City, you could easily rent your entire life and you wouldn’t feel inadequate about it.
“We’ve got this kind of Canadian hang-up,” he said. “There’s this sense that if you don’t own your own home … you’re not a success. And I think that’s changing.”
Homeowners in big, expensive cities like Vancouver stand to lose the most if housing prices drop. That’s why some analysts say it might be better for city-dwellers to rent. (Robert Giroux/Getty Images)
Renting means avoiding the hidden costs of home ownership, like maintenance and property taxes. What’s more, you can up and leave whenever you want.
“Certainly for young people, as long as you’re saving some money, as long as you’re putting a significant amount away monthly and working toward that long-term goal, there’s absolutely nothing wrong with that.”
Source: CBC Sheena Goodyear, CBC NewsPosted: Nov 16, 2015 5:00 AM ET
The racial wealth gap has hit an all-time high while Barack Obama has been president. The median net worth of white households is now 20 times that of black households. Why?
Some argue that the gap is a current manifestation of a historical problem. Others say blacks are to blame. While I can’t eliminate the lingering effects of slavery and Jim Crow, or change stereotypes, I can highlight one area where blacks may be inadvertently contributing to the racial wealth gap: When most black people buy homes, we hurt ourselves economically.
Home ownership has been an important vehicle in creating a solid white middle class, but it has not done the same for most black homeowners, because blacks and whites buy homes in very different neighborhoods. Research shows that homes in majority black neighborhoods do not appreciate as much as homes in overwhelmingly white neighborhoods. This appreciation gap begins whenever a neighborhood is more than 10% black, and it increases right along with the percentage of black homeowners. Yet most blacks decide to live in majority minority neighborhoods, while most whites live in overwhelmingly white neighborhoods.
If you think this is class and not race, you are wrong. A 2001 Brookings Institution study showed that “wealthy minority neighborhoods had less home value per dollar of income than wealthy white neighborhoods.” The same study concluded that “poor white neighborhoods had more home value per income than poor minority neighborhoods.” The Brookings study was based on a comparison of home values to homeowner incomes in the nation’s 100 largest metropolitan areas, and it found that even when homeowners had similar incomes, black-owned homes were valued at 18% less than white-owned homes. The 100 metropolitan areas were home to 58% of all whites and 63% of all blacks in the country.
Those conclusions are supported by a large body of research. Put simply, the market penalizes integration: The higher the percentage of blacks in the neighborhood, the less the home is worth, even when researchers control for age, social class, household structure, and geography.
A 2007 study by George Washington University sociology professor Gregory D. Squires comments on why most whites avoid racially diverse neighborhoods: “Evidence indicates that it is the presence of blacks, and not just neighborhood conditions often associated with black neighborhoods (e.g., bad schools, high crime), that accounts for white aversion to such areas. In one survey, whites reported that they would be unlikely to purchase a home that met their requirements in terms of price, number of rooms, and other housing characteristics in a neighborhood with good schools and low crime rates if there was a substantial representation of African Americans.”
When blacks buy homes in majority minority neighborhoods, we increase the racial wealth gap. Whites who want to experience racial diversity at home also pay dearly.
Of course, home ownership has significant benefits even if it is not a great financial investment. Homeowners generally experience lower crime rates and better schools and municipal services. Also, not all black homeowners increase the racial wealth gap when they buy homes. Blacks who live in overwhelmingly white neighborhoods win as long as they remain a very small part of the community.
The recent crash and subsequent rebounding of the market—”fiscal cliff” jitters notwithstanding—show how meaningful this is: White median net worth is down by only 16%, while black median net worth is down by 50%. This is because the stock market has significantly rebounded and compensated for whites’ losses in home equity, but blacks, without comparable stock investments, have not benefited.
This leads to my final point: While many whites are comfortable investing in the stock market, most blacks are not.
White middle-class families are more than twice as likely to own stock as black middle-class families. Why? Blacks’ wages tend to be lower, so we have less disposable income, but even when studies control for income, they find that blacks are less likely to invest in the stock market. The reasons are complex. Blacks in the middle class are often called on by family members for financial assistance, leaving less income for investing. We’re less likely to have grown up in homes where investing in the stock market was commonplace. And it can’t help that the securities industry is overwhelmingly white. Recent data show that fewer than 6% of Wall Street professionals are black.
To be sure, investing in the stock market is a risky endeavor even when you know what you’re doing. However, the rewards are great. Investing in stocks not only builds wealth by paying dividends, but all income from stocks is taxed at a much lower rate than income from wages: 15% versus up to 35%. This problem is not eliminated as black income rises.
We can end this discussion where we began, with President Obama. For the years the Obamas’ income was over $1 million, their tax rate was 10 percentage points higher than that of their white peers, who get at least a quarter of their income from stocks. The Obamas got less than 1% of their income from stocks. (Those who would argue that President Obama avoided investing in the stock market because he knew he would run for president someday ignore the reality of the many other presidential candidates with capital gains and/or dividend income.) Higher income alone will not cure the racial wealth gap.
Hopefully someday homeowners, black and white, won’t be penalized for wanting diversity at home. In the meantime, in order for blacks to have more wealth at home, we need to start investing outside of it.
Source: Forbes Magazine. This article is by Dorothy Brown, a professor of tax law at Emory University Law School.
But when Penny Neufeld lost the man who used to call her his “wife without a wedding,” what proof did she have that their relationship was actually spousal?
Norman Dafoe’s children claimed Neufeld was just someone their dad “took in at a difficult period in her life.”
They tried to pin him down on the exact nature of the relationship many times before he died, but doubted it was “intimate.”
And so, in what lawyers say is an increasingly common occurrence, it was left to a judge to sift through the details to determine if the two lives were — in fact — one.
“The only document in evidence that actually suggests that they had any kind of joint enterprise is a receipt from a veterinarian,” B.C. Supreme Court Justice Mark McEwan noted in his decision.
‘No end’ of disputes
No paper perhaps, but there were witnesses who saw the couple together: a storekeeper and a friend.
Neufeld recalled Dafoe’s smoking habits and how often the house they shared had been painted.
And then, McEwan said, there was her nickname: “‘D-Rod,’ apparently a reference to her hairstyle looking like that of Rod Stewart, the entertainer.”
Toronto-based estate lawyer Kimberly Whaley says the courts have seen an increase in cases involving complex family arrangements. (Kimberly Whaley)
“There’s no end of the types of disputes, but it is interesting to see how our courts are treating these relationships,” says Kimberly Whaley, a Toronto-based estate lawyer.
“Part of it probably has to do with sheer demographics in an aging population. People living longer, being healthier in later years, having later life partnerships. And then these unions cause rights and obligations.”
Whaley wrote a paper last year showing trends that “demonstrate an increase in competing family interests.” The number of Canadian common law couples rose 13.9 per cent between 2006 and 2011; more than 12 per cent of couples with children are step-families; and nearly half of those involve complex permutations and combinations of kids.
People lie about relationships at the best of times. They become downright secretive when religion, culture, children or Revenue Canada is involved.
Which means lawyers call on everything from Christmas cards to prescriptions for Viagra to establish a “marriage-like” relationship.
If it looks like a marriage …
As part of his reasoning, McEwan referred to a list of “indicia of ‘cohabitation or ‘consortium'” which comes up time and again in spousal support cases. It covers everything from sleeping arrangements to conduct in public.
Did the parties have sex? If not, why not? Did they buy gifts for each other on special occasions? Who did the shopping and cooking? How did the community and their children view them both alone and as a couple?
Even so, making a call can be tough.
Ontario Superior Court Judge Duncan Grace admitted his frustration last summer after Helen Havaris spent months trying to convince him she was entitled to part of John Prelorentzos’s estate.
The 71-year-old was still married to another woman when he died, though they had been separated for years.
But Havaris claimed she lived with him, travelled with him and attended his family’s Christmas, Easter and birthday celebrations.
His children said they saw no signs of affection. Indeed, they claimed their father used to joke about the fact Havaris “had placed a chain on the inside of her bedroom door.”
The judge said he found Havaris’s testimony “wooden.” Not one of her witnesses “mentioned a single word or gesture that demonstrated affection.”
“Despite the length of the trial the evidence on this issue left me asking: is this really all there is?” Grace wrote.
But in the end, after poring through documents including the pair’s rentals of one-bedroom hotel rooms, Grace decided “by a very thin margin” that Havaris qualified as Prelorentzos’s spouse.
Kids are always the last to know
In both that case and Neufeld’s challenge, the judges had to consider the attitude of the deceased’s children toward a woman who was not their mother.
When Dafoe was close to death, “a nurse who mistook the plaintiff for the deceased’s ‘wife’ appears to have created anxiety in the deceased’s family,” McEwan wrote.
Family law expert Georgialee Lang says children are often the hardest to convince in spousal estate battles. (Georgialee Lang)
There were competing stories about deathbed statements and cash boxes. His family changed the locks on the doors. Neufeld “announced she would not be staying.”
B.C. family law expert Georgialee Lang says she has represented many women seeking to prove their place in a man’s life. Inevitably, the offspring are the hardest to convince.
“That’s part of the dynamic. He doesn’t want to disappoint his children. Sometimes a relationship has happened very quickly after a spouse died and it’s seen as unsavoury,” she says.
“It’s all those kind of personal, emotional and moral dynamics that come into play.”
In the end, McEwan decided the proof of Neufeld and Dafoe’s relationship lay as much in how others saw them as in how they saw themselves.
She was a caregiver during his illness. He bought her two cars. They appear to have been faithful to each other.
And McEwan said the very fact his children had been asking what was going on for years “implicitly affirms a relationship that appears to be spousal or becoming spousal.”
The judge awarded Neufeld $60,000 out of a gross estate worth $160,000.
It’s a battle you can avoid with two simple weapons: a piece of paper and a pen.
A previous version of this story mistakenly said Dafoe was awarded $60,000 by the judge. In fact Neufeld was awarded $60,000.
Nov 02, 2015 6:49 AM PT
Source: Jason Proctor, CBC NewsPosted: Nov 01, 2015 2:00 AM PT