New York City Rent Is Too High!

NYC Skyline

It’s been more than two decades since I decided to give up the humble and often humiliating life of a struggling New Yorker and move out of the city.  I was living in a tiny basement apartment in Jackson Heights, Queens, working in Manhattan, but with an income that made living on America’s most fabulous island impossible.

From a May 18, 2023 CNN article:

"... The median cost of renting an apartment in Manhattan was $4,241 in April. That’s up 8% from a year ago and up 1.6% from March, when rents hit a record high of $4,175.

A one-bedroom apartment had a median rent of $4,200, up 5% from last year; while a two-bedroom apartment had a median rent of $5,500, up 11% from a year ago. A studio apartment rents for a median price of $3,235, up 13.5% from last year..."

So, on this two-decade anniversary of me moving out of NYC Housing Hell, here is my top 10 list of reasons why I don’t like NYC:

1)  >>  The Rent Is Too Damn High!  <<

2)  There is dog poo EVERYWHERE!  Why do New Yorkers think it’s OK to leave feces all over the place, so that we can all step in it and drag it into our homes?  DISGUSTING!  Sometimes I think I’m the only one who hates this.

3)  NYC Subway I:  It’s way too crowded during rush hours.  If you can’t find a seat, you’ll stand.  And if you’re lucky, the guy or gal who is packed into a subway car and standing next to you -- and I mean so packed that they are right in your face -- didn’t bother to brush their teeth that morning…

4)  NYC Subway II: In the dead of winter, the air in underground platforms is colder than the air outside, and hotter than the outdoors during the oppressive heat of mid-summer.  Lovely.

5)  NYC Subway III: Rats and Roaches.  Nice.  And the rats are brazen.  One time, I caught one literally spitting in my direction, and looking me dead in the eyes while doing so…

6)  NYC Subway IV - More disgust: I was moving between subway cars one morning, trying to find a seat, and found a MASSIVE pile of human feces in-between the cars. Almost stepped in it. Awesome.

7)  Residential and Commercial Roach Problems: Trying to eradicate cockroaches is pretty much pointless.  They are too hardy. Too resilient. Too evil. I’ve gotten a free meal in my favorite restaurant on more than one occasion, because they couldn’t get rid of them.

8) I love the city, but not the people.  The typical New Yorker is a negative, rude, nasty, putrid piece of junk.  Too much schadenfreude.  Not enough community (with the exception of the 9/11 terror attacks, when, during a long mountain-bike ride around three boroughs, I witnessed thousands of ordinary city folk gather at their local fire house to cheer and salute the heroism of New York City’s intrepid firefighters.)

9) The cops: Not all bad, of course, but enough are so bad that they engender much displeasure for all the cops.

10) When my mom retired from her job, and bought herself a new car as a retirement preset, she donated her old diesel workhorse to yours truly.  And I was quickly reminded how bad NYC roads are.  On one beautiful spring morning, I wasn’t able to avoid a huge pothole, and BANG!  Had to replace a rim.  With labor, it cost me $400 to replace, and the replacement was used! 

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A Strategic Default on Your Mortgage May Cost You More Than You Think

I was listening to some business news the other day. According to the well respected economist who was being interviewed, folks who have been walking away from their home loans in response to owing more on their home than their home is worth, have been helping to fuel consumer spending. The money that was being used to pay the mortgage has been freed up to be spent on other things. Great news for this fledgling economic recovery, but going the strategic default route should never be taken lightly. Not only will your credit score being ruined for years, you may end up with a massive tax bill from the Internal Revenue Service (IRS).

Here's a clip from a great WSJ personal finance article:

"...Americans considering walking away from an unaffordable mortgage: Beware of taxes.

Though not every homeowner who's underwater on a mortgage need worry, many are finding that a foreclosure or other form of housing loss can lead to a big tax obligation.

Maxine McDaniel walked away from her Loveland, Colo., home in January. Now the 59-year-old nurse faces a potentially huge tax bill.

In Ms. McDaniel's case, the 59-year-old in January abandoned the 4,300-square-foot Loveland, Colo., home she and her late husband built. After her husband's death in July 2008, Ms. McDaniel, who earns about $34,000 a year as a home-health nurse, couldn't maintain the $3,000 monthly payments necessary on her nearly $500,000 interest-only mortgage. So she stopped making them and moved in with an uncle.

Now, she's bracing for the next blow: an Internal Revenue Service form detailing as much as $150,000 in debt canceled by the bank when it took control of the house. The canceled debt is a form of income, says the IRS—meaning she'll owe taxes on it.

'I had no clue this would happen,' says Ms. McDaniel, who, with her husband, had refinanced at least three times, including one cash-out loan. That transaction caused her problems because, while canceled debt originally used to buy or build a house can be exempted from tax filings, debt used for other purposes cannot. 'I just thought I'd get out from under the house and that would be that,' she says.

As the U.S. economy continues struggling with the fallout of the debt-induced housing crisis, millions of homeowners like Ms. McDaniel are discovering that their decision to walk away from a mortgage could result in tax bills running into the thousands or tens of thousands of dollars.

The upshot: anyone weighing whether or not to seek a mortgage modification—or debating whether to abandon a house that is worth less than the mortgage—should consider the tax treatment carefully before making a move. The same holds for any form of consumer debt that a bank ultimately cancels, including credit-card balances or an auto lease.

Federal and state tax laws have long viewed canceled debt as income because consumers who borrow money to buy a house—or who pull money out of their house to buy cars and such—and then don't pay it back 'wind up ahead of where they were,' says an IRS spokesman.

Thus far this year, Michele Knight, a CPA with a high-end clientele in Keystone, Colo., has had five clients owe taxes tied to houses and another five tied to credit cards and auto leases. 'They're calling me in tears and saying, 'What do you mean I owe taxes?'" she says. 'I never would have expected it.'

Dianne Corsbie, a White Plains, N.Y., financial planner, says about 5% of her 200-client practice owes taxes because of a foreclosure, most tied to investment properties. In Napa, Calif., Duane Carey, owner of a Ranch Tax Service, says every fifth person he sees 'comes in angry, holding one of these 1099s.'

Overall, the IRS estimates that individual taxpayers will have filed nearly 3.6 million tax returns for 2009 that include income from canceled debt. That's down a bit from 2008, but up 17% from 2007. The numbers include taxes due on primary homes, vacation and rental property, credit cards, auto leases and other canceled debts. The IRS projects the numbers to rise in coming years.

Part of that rise will likely come as the government expands its mortgage-modification program, including a call in March by the Obama administration for banks to reduce principal as a way to help people remain in their homes. That reduction could lead to tax obligations.

At first the government's mortgage-modification program focused on primary mortgages, which are tied to the purchase or construction of a primary residence, and which are eligible for exemption under a 2007 Congressional act aimed at helping homeowners avoid the tax implications of a foreclosure.

That act—the 2007 Mortgage Forgiveness Debt Relief Act—exempts taxpayers from as much as $2 million in forgiven debt. But the debt had to be acquired before Jan. 1, 2009—and had to have been used solely to buy, build or remodel/repair a primary residence.

The government's new, expanded modification programs include short sales, in which a bank agrees to accept as full payment less than the value of the mortgage balance; deed-in-lieu transactions, when a homeowner gives the house to the bank instead of repaying the mortgage; and second mortgages such as home-equity lines of credit.

In many of those instances, say Treasury officials, homeowners used mortgage money to fund everything from tuition and medical bills to vacations and cars and even the down payment on a second home or investment property. That debt, however, isn't eligible for exemption.

Sometimes the tax bills are so high that people can't afford to pay. In such a situation, the IRS will allow taxpayers to apply for an installment-payment plan.

Some homeowners can avoid the taxes completely if they can prove insolvency, in which the total value of debt exceeds total assets. But even that could leave some owing taxes.

IRS rules stipulate that a taxpayer can escape taxes up to the extent of insolvency, meaning that if one's liabilities are $500,000 and assets are $300,000, the $200,000 difference is the extent of the insolvency. But if the person has $250,000 in debt canceled, then $50,000 is taxable income.

'People think their house was underwater, so they're insolvent and can get out of owing taxes,' says Arthur Auerbach, a member of the Individual Income Tax Technical Resource Panel at the American Institute of Certified Public Accountants. 'But it doesn't work that way...'"

If you visit WSJ online to read the full story, be sure to read the comments. Lots of insight there, as usual. Enjoy!

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The Helping Families Save Their Homes in Bankruptcy Act of 2009

A couple of years ago, the mother of my child moved out of the townhouse where I still live (and rent) and moved into a coop nearby. It was (and still is) my opinion that it's never a good idea to buy a home when you have no cash in the bank, but she did it anyway. I had cash, but not enough to make me feel comfortable about buying a nice home in a decent neighborhood, and put 20% or more down. I decided to continue renting, even though I could have qualified (easily) for an ALT-A mortgage. I felt that it was the right move: continue renting for a few more years, then buy a really great home when I had enough cash in the bank.

The mother of my child is struggling now, and she may have to file for bankruptcy protection. H. R. 200, the Helping Families Save Their Homes in Bankruptcy Act of 2009, is a bill that, if enacted into law, would empower bankruptcy judges to modify the terms of a mortgage in bankruptcy court. A bankruptcy judge would be able to lower both the principal and the interest rate on a mortgage loan. A lot of American see this bill as an unfair helping hand for homeowners who bought a home they really couldn't afford. Here is how John Conyers, Jr., the bill's main sponsor, explains it,

"...The legislation before us today would grant bankruptcy courts the ability to modify the terms of a home mortgage in a chapter 13 bankruptcy to bring them closer in line with the value of the home in a depressed real estate market.

For families in dire distress, this is a much-needed reform. And considering the realistic alternatives, it is fair – to all concerned.

I have been working on this legislation – on a bipartisan, bicameral basis – for nearly two years, because I believe it represents one of the most tangible steps we can take to limit the fallout from the real estate depression sweeping the nation.

While bankruptcy reform may not provide all of the answers to this crisis, surely it provides a common-sense and practical approach to helping stop the spiral of home foreclosures – which are not helping anyone.

To those who say we should continue to hold up this legislation while we seek to encourage voluntary mortgage loan modifications, outside of bankruptcy, I would point out that the evidence has shown that such modifications don’t work.

For one thing, most of the servicers who control the mortgage loans are not even legally permitted to agree to voluntary modifications.

And even when they can agree, their financial incentives are stacked in the direction of foreclosure.

As a result, the much-vaunted “Hope for Homeowners” program, which went into effect last October with the goal of helping hundreds of thousands of distressed homeowners, has processed less than 400 applications to date.

To those who claim that this legislation will only end up harming consumers by increasing the cost of credit, I would respectfully suggest that they are not taking account of the track record of the modern-day Bankruptcy Code, and have perhaps not kept up with the latest changes we will be making to the bill today..."

"...Finally, to those who argue that this legislation constitutes some form of “moral hazard” that will encourage reckless borrowing in the future, I would simply ask them to come to Detroit.

Detroit has had more than 100,000 foreclosures over the last three years. And they are continuing at the rate of 126 each day. We have block after block of “for sale” and foreclosure signs – feeding off each other, driving down home values, uprooting families, decimating communities – and causing local tax revenue that pays for police and firefighters to plummet.

We don’t have the luxury of worrying about theoretical future moral lessons; we need to stop the actual bleeding today. And the same is true in Ohio. And in California, and Florida, and Nevada, and Massachusetts, and Arizona – and in countless communities all across the country.

If we can spend 700 billion dollars to bail out the brokers on Wall Street, it seems the very least we can do is allow working families, willing to repay their debts as best they can, under court supervision, the dignity of being able to stay in their home..."

It's all pretty convincing, until you reach the part about increasing the cost of credit. I'm not an economist, but it's clear to me that this bill would increase the cost of credit, making it harder for responsible borrowers to buy a home. Mr. Conyers is not being realistic. When a bank prices a loan, the primary factor is risk. Giving bankruptcy judges the power to modify mortgages would obviously make loans riskier, which would in turn drive up interest rates.

Mr. Conyers then tries to dismiss the moral hazard issue like it's some theoretical nonsense. He doesn't seem to get that, for responsible borrowers, it's an issue of fairness . Mr. Conyers, it seems, doesn't mind rewarding the irresponsible. H.R. 200 would legitimize reckless borrowing at the highest possible level by condoning it in the United States Code.

And now for the counter. George Mason University law professor Todd Zywicki wrote an extremely poignant article about this issue in the Wall Street Journal:

"...The nation faces a foreclosure crisis of historic proportions, and there is an understandable desire on the part of the federal government to "do something" to help. House Judiciary Chairman John Conyers's bill, which is moving swiftly through Congress (and companion legislation introduced by Sen. Richard Durbin) would allow bankruptcy judges to modify home mortgages by reducing both the interest rate and principal amount on the loan. This would be a profound mistake.

Mortgage modification would indeed provide a windfall for some troubled homeowners -- but its costs will be borne by aspiring future homeowners, and by any American who uses credit of any kind, from car loans to credit cards. The ripple effects could further roil America's consumer credit markets.

In the first place, mortgage costs will rise. If bankruptcy judges can rewrite mortgage loans after they are made, it will increase the risk of mortgage lending at the time they are made. Increased risk increases the overall cost of lending, which in turn will require future borrowers to pay higher interest rates and upfront costs, such as higher down payments and points. This is illustrated by a recent example: In 2005, Congress eliminated the power of bankruptcy judges to modify auto loans. A recent staff report by the Federal Reserve Bank of New York estimated a 265 basis-point reduction on average in auto loan terms as a result of the reform.

Allowing mortgage modification in bankruptcy also could unleash a torrent of bankruptcies. To gain a sense of the potential size of the problem, consider that about 800,000 American families filed for bankruptcy in 2007. Rising unemployment and the weakening economy pushed the number near one million in 2008. But by recent count, some five million homeowners are currently delinquent on their mortgages and some 12 million to 15 million homeowners owe more on their mortgages than the home is worth. If even a fraction of those homeowners file for bankruptcy to reduce their interest rates or strip down their principal amounts to the value of their homes, we could see an unprecedented surge in filings, overwhelming the bankruptcy system.

Finally, a bankruptcy proceeding sweeps in all of the filer's other debts, including credit cards, car loans, unpaid medical bills, etc. This means that a surge in new bankruptcy filings, brought about by a judge's power to modify mortgages, could destabilize the market for all other types of consumer credit.

There are other problems. A bankruptcy judge's power to reset interest rates and strip down principal to the value of the property sets up a dynamic that will fail to help many needy homeowners, and also reward bankruptcy abuse.

Consider that the pending legislation requires the judge to set the interest rate at the prime rate plus "a reasonable premium for risk." Question: What is a reasonable risk premium for an already risky subprime borrower who has filed for bankruptcy and is getting the equivalent of a new loan with nothing down?

In a competitive market, such a mortgage would likely fetch a double-digit interest rate -- comparable to the rate they already have. Thus, the bankruptcy plan would offer either no relief at all to a subprime borrower, or the bankruptcy judge would set the interest rate at a submarket rate, apparently violating the premise of the statute and piling further harm on the lender.

More worrisome is the opportunity for abuse.

Imagine the following situation: A few years ago a borrower took out a $300,000 loan with nothing down to buy a new house. The house rises in value to $400,000, at which time he refinances or takes out a home-equity loan to buy a big-screen TV and expensive vacations. He still has no equity in the house.

The house subsequently falls in value to $250,000, at which point the borrower files for bankruptcy, the mortgage principal is written down, and the homeowner keeps all the goodies purchased with the home-equity loan. Several years from now, however, the house appreciates in value back to $300,000 or more -- at which point the homeowner sells the house for a tidy profit.

Nothing in Mr. Conyers's proposed legislation would prevent this scenario from occurring. To modify a mortgage, a borrower would have to enter a Chapter 13 repayment plan for five years. If the homeowner sells his house while he is still in bankruptcy, the mortgage lender can recapture some of any appreciation in its value on a sliding scale -- 80% the first year, 60% the second, 40% the third, and 20% the fourth. After that, however, any appreciation in the value of the house goes into the debtor's pocket.

This dynamic creates obvious opportunities for borrowers to file for bankruptcy to strip down the value of their property in anticipation of rising real-estate markets down the road. At the very least, Congress should extend the time period for allowing lenders to recapture home appreciation beyond five years.

Mortgage modifications during bankruptcy will almost certainly increase the losses of mortgage lenders -- and this may further freeze credit markets. The reason is that when mortgage-backed securities were created, they provided no allocation of how losses were to be assessed in the event that Congress would do something inconceivable, such as permitting modification of home mortgages in bankruptcy. According to a Standard & Poor's study, most mortgage-backed securities provide that bankruptcy losses (at least above a certain initial carve-out) should be assessed pro rata across all tranches of securities holders. Given the likelihood of an explosion of bankruptcy filings and mortgage losses through bankruptcy, these pro rata sharing provisions likely will be triggered. Thus, the holders of the most senior, lowest-risk tranches would be assessed losses on the same basis as the most junior, riskiest tranches.

The implications of this are obvious and potentially severe: The uncertainty will exacerbate the already existing uncertainty in the financial system, further freezing credit markets.

If Congress wants to deal with the rising number of foreclosures, it should not create a new mess by converting the mortgage crisis into a bankruptcy crisis. Doing so will open the door to a host of unintended consequences that will further freeze credit markets, raise interest rates for new home buyers, and spread the mortgage contagion to other types of consumer credit. Congress needs to reject this plan and look for better solutions..."

Sorry, but I just had to quote the whole thing. I didn't want to dilute the power of the article by leaving anything out.

I've been watching the credit crisis very closely since it began, and I think Todd Zywicki is right on all points.

I found myself cheering as I watched CNBC's Rick Santelli tell it like it is:




Yes, calling misguided homebuyers "losers" on national television was indelicate. Mr. Santelli could have been a bit more diplomatic in his tirade, but no one should hold that slip of the tongue against him. When you're fired up, sometimes the wrong word slips out. Happens to the best of us.

So, what does H.R. 200 do for folks like me who made responsible, housing-related decisions when others did whatever they wanted? What does it do for those responsible borrowers who put 20% down and bought the right-sized house, and who now owe more on their mortgage than their home is worth? Nothing. Lots of decent Americans are getting very hot under the collar about the government's fixes for the economic crisis. Lots of hard working, responsible Americans have been gnashing their teeth as careless mortgage borrowers and Wall Street banks get generous bailouts, while they get...well, they get to sit in their underwater homes and watch.

The American Recovery and Reinvestment Act of 2009, which was recently signed into law by President Obama does offer some help for those who may be looking to buy soon. That help comes in the form of a homebuyer tax credit:

"...$8,000 credit for all homes bought between 1/1/2009 and 12/1/2009 and repayment provision repealed for homes purchased in 2009 and held more than three years..."

The Senate wanted a $15,000 tax credit. It's a shame they didn't get their way.

The new law also contain these provisions:

• $2 billion to help communities purchase and repair foreclosed housing
• $200 million for helping rural Americans buy homes

Hmmm...Maybe it's just me, but these numbers seem kinda' wimpy considering the scale of the entire package. At the core of this nation's economic woes is a major housing crisis, so I think the spending in this arena should be as aggressive as possible. Lawmakers should make sure that people like me have all the help we need to go into a distressed neighborhood, buy a foreclosed home on the cheap and fix it up. Without the boldest possible action, I fear that the housing crisis will still be with us 2 years from now.

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If the mother of my child ends up loosing her home, my daughter always the option of moving back with me. I recently fixed her up her room with a desktop computer I put together with mostly salvaged parts from other PC's.

Foreclosed homeowners can move back to renting. What's wrong with that? There's nothing wrong with renting!

I think the big question is: do we, as Americans, want to be a nation of Sullenbergers or a nation of Sulemans? There's a great WSJ article by Peggy Noonan here.

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A Guerilla Approach to Fighting Foreclosure

I was digging through the WSJ.com archives for fun today, and came across an interesting article about Richard Davet, an Ohio native who was able to ward off foreclosure for 11 years. The part of the story I found most compelling was when a federal judge dismissed 14 foreclosure suits because the plaintiffs weren't able to prove that they in fact owned the mortgage when the lawsuit was filed.

During the housing boom of recent years, lots of lenders made millions by originating loans, then bundling them together and selling them on the secondary market. Eventually, it became difficult to know exactly who owned these mortgages.

So maybe a viable defense against foreclosure is, "Oh, so you wanna' foreclose on me? Well, I'm not moving, because I don't think you own my mortgage anymore. If you don't like it, take me to court and prove it!" With this defense, you'll probably end up on the street eventually, but it could buy a money-strapped homeowner many years in a mortgage-free home, time that can be used to save money and stabilize finances.

Here are some clips from the article:

"...Faced with the threat of foreclosure, many homeowners give up and abandon their homes.

Then there's Richard Davet.

He and his wife, Lynn, lived in a six-bedroom home in this Cleveland suburb for nearly 20 years when, in 1996, he was served with a foreclosure lawsuit. Rather than turn over the keys, he hit the law books. Flooding the courts with papers, Mr. Davet staved off foreclosure for 11 years, until this past January, when a county sheriff's deputy evicted the couple and changed the locks. They didn't make a mortgage payment the entire time..."

"...A former jewelry-business owner, Mr. Davet and his wife, a former graphic-arts tutor, bought their home in 1978 for $150,000. As its value increased they borrowed against it. They made their mortgage payments, but on one loan, they allegedly made payments late -- 90 times, according to NationsBanc Mortgage Corp., which assessed the couple some $4,000 in late fees.

After the Davets for two years refused demands to pay the late fees, during which NationsBanc began refusing to accept their regular mortgage payments, the company sued for foreclosure. At the time the couple still owed $80,000 in principal, plus an additional $160,000 on a second mortgage on the home. Mr. Davet insists the late fees were erroneous -- he points to a deposition in which a NationsBanc employee conceded that the company couldn't back up its claims for a chunk of the fees. So he began his full-time crusade in the courts to keep his home.


He started with the help of lawyers, but those arrangements didn't last. Dan Dreyfuss, who represented the couple when the case was filed, called Mr. Davet's strategy "a recipe for how to confound the courts." He quit after Mr. Davet filed a motion to disqualify a judge against his advice. Mr. Kalk eventually sued Mr. Davet, successfully, for unpaid legal fees.

On his own, as a "pro se" litigant, Mr. Davet was undeterred. Four times a week he went to Case Western Reserve University School of Law to study legal writing and case law in its library. His briefs were angry and colorful, including football analogies and an aside on Enron Corp.

Among his maneuvers: asking a judge to arrest NationsBanc's CEO for initiating a "sham" proceeding against him because the company claimed in error that it owned his loan. (The judge dismissed the request.) He later sought to disqualify the judge because she had accepted campaign contributions from real-estate developers, whose Beachwood developments Mr. Davet had publicly protested before the foreclosure litigation. When he didn't win that motion, Mr. Davet sought to disqualify the judge who had dismissed it. He appealed at every chance he could, which bought him extra years in his home..."

"...The house was later sold to another family for $410,000.

The eviction finally happened on a snowy day in January of this year. Don Saunders, who lived three doors down from Mr. Davet and is a trustee of the neighborhood association, says it came as a shock in the upscale area.

Mr. Davet continued to try, unsuccessfully, to get the federal court to agree that the state judgment was invalid. Then, a possible lifeline arrived this past October, when a federal judge in Cleveland, Christopher A. Boyko, dismissed 14 foreclosure suits because the plaintiffs that brought them couldn't prove they owned the mortgages when the suits were filed.

Such a problem can occur when mortgages are turned into securities and sold to investors. The companies involved in the transaction may not have checked that each mortgage was legally transferred, or "assigned," to the new owners. In essence, the originating lender continued to legally own the mortgage -- and would thus need to be the plaintiff in a foreclosure suit. In Mr. Davet's case, however, the mortgage, which was not securitized, changed hands multiple times and wasn't actually owned by NationsBanc until three years after the company filed suit.

Other judges have since followed Judge Boyko's lead. The Ohio attorney general has asked numerous judges to dismiss or delay foreclosures based on similar grounds.

Earlier this month, Mr. Davet filed a second federal appeal, this time citing the Boyko ruling, which he believes he inspired. It's unclear whether the latest salvo will work. If it doesn't, Mr. Davet says, he will set his sights on the U.S. Supreme Court..."

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Falling Home Values and Urban Blight: The Start of a Grand Debt Reduction Adventure

About a decade ago, my sister and my mother bought a modest two family home together in a working-class neighborhood made up primarily of people that lived in the homes that they owned. Many of these people had been in the neighborhood for decades, and many were getting on in age.

Through the years, as the older folks passed away, their adult children would return from suburbia long enough to pack up a few mementos, sell what could be sold, leave the rest on the curb for the city trash collectors to dispose of, and turn the keys over to a realtor. A few kept the keys and joined the ranks of absentee landlords, as were many of those buying properties from the realtors.

Soon, we had strangers in our midsts. Drug dealers who were tired of the competition and danger of selling in New York City and preferred the relative calm and higher profits of the capital region made up a significant portion of the new arrivals. A neighborhood that once featured kids playing outside and neighbors who all knew each other, became one in which shootings happened. Stabbings happened. Drug and prostitution traffic were readily visible.

The children had to be taught how to adapt to the new environment. If you hear loud arguing, get in the house. If you see the police driving slow down the block, come in. No playing outside without one or more of the Great Danes keeping watch. Those are the rules for the back yard, they're never out front alone. A dispute between drug dealers ended up with a 12 year old getting grazed by a stray bullet a couple of summers ago.

Property values, naturally, declined. My mother passed away and I took over her half of the two-family home. And, my sister and I started to think. We thought about: over $900 per month for the mortgage, almost four thousand a year for property tax, and heating costs of more than $500 per flat per month during the heating season. All for a place in which we were, really, no longer happy.

Our situation was this: with kids and an assortment of pets that includes Great Danes upstairs and downstairs, her cats, my mother's birds, which I had to take custody of after her death, as they would not survive my sister's cats, and my nephew's turtle, we have no choice but to own. Selling the house leaves us with no start up capital to buy another home, as the property values have dropped and we have debts remaining from the period of time after my mother's stroke, when her health insurance ran out, until we could make other arrangements for her health care costs. Credit scores were damaged in the struggle to make sure my mother had her medicine during the period she was without health coverage.

And, then, we came up with a plan. Our grand debt and cost of living reduction adventure. Sell the house, eliminate the lingering debt, get a fresh start. Buy a tract of land, and set up our homes to run off the grid, using solar and wind power, reducing our expenses greatly. Invest our efforts and our money into being as self-sufficient as possible, including food production. The goal is to eliminate debt and reduce cash outlay, which will, in turn, allow us to reduce the time spent working and increase the time spent enjoying our children and our lives. After all, children grow so fast, too fast, and all too soon there will be plenty of time for 60 hour weeks again.

We are currently in phase one -- wrapping up the details of the house, packing up, and putting things in storage until we are ready for them. The motor home is parked out front, awaiting the beginning of our journey to make our new home in much warmer weather. We expect to leave NY during the first week of February and I look forward to sharing the details of our grand debt and cost of living reduction adventure with you as we experience it through the weeks and months to come.

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