Marketplace - Homelessness criminalized as home sales fall and prices rise

Episode Date: June 28, 2024

Today we learned that the conservative majority on the U.S. Supreme Court upheld a local law in Oregon that criminalizes sleeping in public places, authorizing punishment for homelessness. We’ll get into how this connects to the stalled housing market. Plus, SCOTUS curtails the powers of government agencies and national work-from-home rates reach a new normal.

Well, that was quite a 24 hours, wasn't it? From American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizdall. It is Friday today. This one is the 28th of June. Good as always to have you along, everybody. We begin on this last Friday of June with a mix of economic data, the management of this economy, and the politics of this economy.

Nobody better to do that with than Gina Smilich. She is at the New York Times. Katherine Rampel is at the Washington Post. Hey, you two. Hey, Kai. Hey, Kai. Gina, let me begin with you. We will start with the data. The Fed's favorite measure of inflation, which

everybody listening to this program knows is the Personal Consumption Expenditures Price Index, PCE for short, came in. I think the word I saw one of your sources in the paper today use was mild, 2.6% year on year. Thus, perhaps maybe this spring was just a bump in a bumpy road. What do you think? Yeah, I think that's kind of the consensus that we're really seeing forming, is that this spring looked bad. It was pretty worrying.

But it wasn't necessarily anything that derailed progress here. You know, we probably saw slightly more progress than you would have expected toward the end of last year. Then we saw a lot less progress than you would have expected through March. And now we're kind of back on track to where we previously thought we might be. And so I think that's great news, you know, for anybody who's hoping that inflation comes back under control.

And it's probably good news for the Fed. You know, I think I talked to several economists today who said that this doesn't solidify the case for a rate cut as soon as September, you know, it doesn't make it a done deal, but it definitely helps the case for a rate cut as soon as September. You know, it doesn't make it a done deal, but it definitely helps the case for that. Katharine Pell, the next words out of my mouth are yes and but. We learned this week that GDP is softish, 1.4% in the first quarter.

Consumers are maybe not great. There's some sign of softening in the labor market. What do you think? Well, and even in the release today, the same release that had the PCE data also showed pretty solid income and spending numbers, which may mean that, okay, the inflation slowdown has improved the outlook for Fed cuts, but maybe there's no urgency to cut either, given that spending is still pretty strong. Do you want to encourage more spending

and potentially reignite inflation? It's kind of this cacophony of different economic indicators, which I guess is always true to some extent. You know, it's always kind of a mixed bag, but it would be nice if more of the numbers were pointing in the same direction than they have been recently, given everything we've been through. Yeah, no totally So look Gina just a very quick detour back to the fed, right? The mantra has been for

You know, I've forgotten how many months and years it's been now data data data. We want more confidence. We want more good data The fed is going to have to separate the wheat from the chaff here and decide what data they like and what data they don't yeah Yeah, right. This is the always the problem with the chaff here and decide what data they like and what data they don't. Yeah, right? This is always the problem with saying you're data dependent. It's then like, which data are you depending on exactly? And I think this is clearly one of those moments for them. I think that they've pretty clearly set out this sort of two-part test for us

that I think is somewhat useful in thinking about how they're going to think about the rest of the year, which is that they want to see sort of sustained evidence that makes them believe that inflation is under control. So I think that's basically them telling us that they are just looking at these inflation numbers. And then the second part is they would be sort of prodded toward a cut if they saw a surprising and sudden deterioration in the labor market. And so I think that those are sort of the two, you know, watch those jobs reports and watch those inflation reports. That seems to be where they're focused at the moment. Yeah. Sorry, Gina, let me just stay with you for one second. And

something you said, they want to know that inflation is under control. So we should read this 2.6% and flat monthly, by the way, the PCE that came out today, we should read that as the Fed thinking maybe inflation is not yet under control. Yeah. so I think that one of the things that they are probably pretty aware of is you are going to have and I went back She's a nerdy term, but then I'm gonna define it You are going to have base effects kick in pretty soon Which means that inflation came down a lot toward the end of last year and as we lap those softer numbers on a year-over-year Basis so as we're comparing inflation today to inflation a year ago, it's going to look like, it's going to be a little harder for inflation

to keep coming down. So those year over year numbers could flatline. And in fact, we're kind of expecting them to flatline. And so I think that's what's going to keep the Fed a little bit wary. You know, you don't want to, while those monthly numbers matter a lot, they're not going to want to cut interest rates

at a time when inflation is going to get stuck at two-six sort of indefinitely. You know, and so I think that that is're not going to want to cut interest rates at a time when inflation's going to get stuck at 2.6 sort of indefinitely. And so I think that that is what's going to keep them a little bit on watch in the months ahead. Right. Okay, Katherine Rampel, to the management of this economy from the Supreme Court of the United States today, a case in which the justices overruled what's come to be called the Chevron deference, which is to say that regulatory agencies should be deferred to,

generally speaking, when figuring out how to apply in practice laws and statutes in their areas of expertise. This is, as we talked about a little bit on the program yesterday with a different case, this is a fundamental change in the way this economy is managed. Absolutely. It is a shift of power away from the executive branch and to some extent away from Congress toward the courts. That the courts will now be probably facing a torrent of litigation, a torrent of cases

about other kinds of regulations that are on the books, labor regulations, food safety, financial regulations, environmental, energy, et cetera. They're all going to be challenged or many of them will be challenged as well. Did the regulatory agency overstep its authority? Were they putting into effect very specific instructions from Congress or were the instructions too ambiguous and therefore the agency, whatever regulations the agency put in place, rules and regulations, those no longer stand.

So I think it's going to lead to a lot of uncertainty about what the rules of the road are for major, major industries. And beyond that, it'll constrain how much various federal agencies can actually regulate the industries that they're supposed to be overseeing. There's some opportunity that Congress can step in and rewrite statutes and create more certainty. But I think the next few years, you're going to see a lot of uncertainty about how companies

should be operating. Sorry, Katherine, one more thing on this. Congress, as we know, cannot agree what day of the week it is. Yes. Which amplifies this challenge, right? And, you know, that's a facetious thing to say, but they, I mean, they can't agree on practically anything. Yes, it's not just that Congress is dysfunctional. It's that there legitimately are a lot of complicated questions that you would want to be deferred to the experts. You know, they're like professional expert civil servants at NASA or, you know, at the FDA or the EPA where you want the scientists like figuring out what's the right level of arsenic in the water or whatever. Like you don't necessarily want to rely on the expertise of

Congress, even in a Congress that were more functional than the one today. Right, right. But yes, your point is taken, that if like Congress can't agree on very basic things, how are they going to agree on these minutiae that will be needed to figure out how industries operate, how companies operate? Gina, super quick on the politics of all this. Former President Trump last night in the debate hailed his own deregulatory agenda, and we now have the Supreme Court with a deregulatory set of decisions. Uncertainty, that word Catherine kept using, uncertainty now kind of applies. Yeah.

I think that obviously I think he's probably going to take some amount of credit for the Supreme Court being the composition that it is and and this sort of Having happened. I think it's been really interesting to watch recently Not just in the debate but in a lot of his interviews late as of late President Trump former president Trump has really emphasized that his Deregulatory agenda was the thing that he thinks lifted growth in that first term to the extent the growth was lifted You know I think which we could take issue with. But I think that you're going to hear this message

more and more that deregulation is the thing that they're likely to focus on this time around because tax cuts, you know, it's hard to do a lot more on tax cuts. You can extend them. They're talking about tipped tax cut. But really, I think this deregulation is the thing we're going to see politicians, Republican politicians hammer into the election in the fall. Gina Smilich at the New York Times, Catherine Repel at the Washington Post. Thanks you two. Thanks, Guy.

Wall Street today bringing the first half of this year to a close. Traders decided to sell just a little bit though. We'll have the details Court of the United States. It's been a busy couple of days at 1st Street, Northeast, Washington, D.C., the mailing address of the Supreme Court of the United States. The court has been handing down its last handful of decisions for the term, one more decision day coming on Monday. Today though, in addition to that Chevron deference case, the justices also ruled 6-3 that city bans on homeless encampments on streets and sidewalks are not unconstitutional.

That is one extreme end of an ongoing housing crisis in this country, crises really, of supply and affordability. And we got more evidence of that this week. The National Association of Realtors told us that pending home sales fell about 2% in May, and the group predicted median existing home prices are gonna keep on rising to more than $400,000 this year. That's up about 4% from 2023. Marketplace's Mitchell Hartman has the rest

of that story. The spring home selling season is wrapping up. And if you're the chief economist for the country's realtors, you can say goodbye to it with a Bronx cheer. Home sales activity for spring 2024, it was a sluggish disappointment. That's Lawrence Yun at the National Association of Realtors. Pending contracts lowest ever since we began our measurement from 2001. Meanwhile, the sale prices listed on those contracts are the highest in U.S. real estate history. Part of the problem is very low inventory of homes for sale because of what's called the lock-in effect.

Homeowners with a 3% mortgage don't want to put their house on the market, then swallow a mortgage rate that's twice as high on their next house. Yun says this is starting to change. Life moves on. There's divorces, marriages. People have additional child in the family. Maybe people are looking for a different school district. People want to change residence.

And recently, the supply of homes for sale has increased. But just when that happened, home demand turned sour, at least demand for homes at their current astronomical prices. One reason is those high mortgage rates. And then there's all the other rising expenses families are dealing with. Robert Dietz at the National Association of Home Builders says we're facing... A multi-decade low in housing affordability conditions, price to income ratios expanding as home prices

increase. Deitz estimates that after years of underbuilding, the U.S. has a deficit of one and a half million new homes. If we're able to increase housing production by about 100,000 homes a year, it's going to take a decade. So maybe at this point, you could let spring turn to summer without trying to become a homeowner, says Chris Mayer at Columbia Business School. I hear it over and over again, when you rent, you're flushing money away.

I don't think that's true. It makes perfect sense if rent is low relative to buying, that you should rent and take the money that you would have spent buying the home. And save it for later. I'm Mitchell Hartman for Marketplace. If you had to pick one word, one idea to sum up the American economy the past two-ish years, it might be normalization. Supply chains, inflation, GDP growth, they have all normalized from the height of the

pandemic. According to data out this week from the Bureau of Labor Statistics, we can add work from home to that normalization list. The BLS says that in 2023, 35% of employed people did some or all of their work at home. And while that is more than 10 percentage points higher than in 2019, didn't change much from 2022 as workplaces and workers, I suppose, settled into their new normal. Marketplace's Elizabeth Trouval has that story from home. There's something special about today's data from the Bureau of Labor Statistics. Daniel

Hammermush with UT Austin says, imagine a bunch of American workers filling out diaries of how they spend their time. The beauty of the diaries is you fill it out when you start an activity, when you finish an activity, or at least you do it in retrospect over a day, and that's got to be 24 hours, no fooling around. The data reflects people's routines, work, leisure, childcare in 2023. But Hammer Mesh doubts that much has changed today. So I ask him, if the work from home rate is hovering around 35%, can we go ahead and chisel that into stone?

You use something a little bit less durable than stone because something could come along just as COVID did to completely surprise people. So yes, it's interesting. Nothing else happens of totally revolutionary importance. It will be this way for quite a while, I predict. That work from home rate has leveled off in the past couple of years. Jose Maria Barrero is with the Mexico Autonomous

Institute of Technology and studies the transition to work from home in the US. Looking ahead, he says, If anything, work from home is likely to increase in the long term. And so the reason basically being technology. Technology that makes it even easier to do our jobs at home in our pajama pants, but many employees did actually have to put their work pants on in 2023.

In fact, the BLS data show that there was also an increase of people who went into the workplace, either sometimes or full time. There may be a move towards more hybrid work. Economist Emma Harrington with the University of Virginia says there are benefits to the hybrid model. You get focused time at home for cranking out tasks. And then also some of that more collaborative time in the office where you're having those, you know, inspirational water cooler chats. For some it's the best of both worlds.

I'm Elizabeth Trouval for Marketplace. Hey, here's the best of both worlds. You can listen to us on the radio, but if you miss us, you can get our podcast. It is available, of course at marketplace.org or on the platform of your if you miss us, you can get our podcast. It is available, of course, at Marketplace.org or on the platform of your choice. Just follow us there. Coming up. The economic model for EMS-based community paramedicine is very challenging. Getting medical care when you need it, but more particularly where you need it. First though, let's do the numbers.

Dow Industrial is off 45 points today at 10%, 39,118. The NASDAQ dipped 126 points, 7 tenths of 1% finished at 17,732. The S&P 500 slid 22 points, about 4 tenths percent, 54 and 60. For the week the Dow dwindled just a tenth of 1%. The NASDAQ gained about a quarter percent. The S&P 500 slipped a tenth percent. Monday and Tuesday next week by way, normal trading days, early close Wednesday off Thursday for the fourth, back to work on Friday on Wall Street. Nike stock ran down a whopping 20 percent today. That's after it reported less than expected quarterly revenue. The company said it expects a sales drop of 10 percent this quarter due to soft sales

in China and, quote, uneven consumer trends globally. Bond prices fell. When that happens, the yield goes the other way. Up the yield on the ten-year T-note, 4 consumer trends globally. Bond prices fell. When that happens, the yield goes the other way. Up the yield on the 10-year T-note, 4.38%. To end the week, you're listening to Marketplace. The wait is over. Dell Technologies Black Friday and July deals are live. Check out incredible savings on select laptops and more, like the XPS 15 powered by Intel Core processors. The XPS 15 brings you the perfect balance of power and portability, plus stellar visuals and immersive sound. Your talents now have a device to stream videos, edit photos, or create your next masterpiece.

Plus, complete your dream setup with deals on select monitors, mice, and more must-have electronics and accessories. When you shop online at dell.com slash deals, you'll have access to exceptional tech and electronics and free shipping on everything. Don't miss out on Black Friday and July savings at dell.com slash deals. That's dell.com slash deals. This is Marketplace. I'm Kyle Rizdahl.

Ticker symbol CVX up about a quarter percent today in New York. If you're not up to speed on your New York Stock Exchange tickers, that's Chevron, which I mentioned not as a measure of what traders think of that company's prospects, but as a shorthand way to get into the nuts and bolts of what Catherine and Gina and I were talking about earlier in the Supreme Court this morning overturning a doctrine known as the Chevron deference, which again, until today held that federal agencies and regulators in their areas of expertise are the best ones to decide how laws should be applied in actual practice. So what happens now for those agencies and regulators?

Here's Marketplace's Kimberly Adams. The end of the Chevron Deference will mean changes for federal agencies and for lawmakers, says Kristin Hickman, a professor at the University of Minnesota Law School. The Supreme Court is signaling as strongly as it is able that it expects Congress to be a little bit more careful in how it drafts statutes. And she says the court won't be as willing as it was in the past. To allow Congress to just fall back on agencies

rather than making some hard choices for itself. Especially when it comes to more controversial topics like workplace safety or environmental regulations, says Devin Ambrase at the Center for American Progress. There is a real concern that the court may now begin placing statutory constructs in amber and not allowing agencies any flexibility to address new and emerging challenges. Moving forward, agencies will have to stick to exactly what's written in the law, says Dan Greenberg, general counsel at the Competitive Enterprise Institute, which filed a brief

before the court in favor of overturning the Chevron Doctrine. Congress is going to be required to do a better job to write clearer text, clearer statutes. And no longer will agencies be able to come in and clarify ambiguities. Because if agencies do try to interpret the law in a way that, say, a business or industry group thinks goes too far... They're on notice that the courts will probably strike it down. Because previously they had some degree of independence. That era is over. And a post-Chevron era has begun.

In Washington, I'm Kimberly Adams for Marketplace. Health care, as we know, is not distributed evenly in this economy. It's not distributed evenly by race. It's not distributed evenly by income. And it's not distributed evenly by location. In some rural parts of this country, the parts where hospitals and doctors are in short supply, what's happening is that people are calling 911 to get basic medical care. That's not great for a lot of hopefully obvious reasons, but a new-ish model called community paramedicine aims to address it by having paramedics regularly check in on people before the health issue becomes an emergency.

Marfa Public Radio's Travis Bubenek reports from West Texas. It's a scorching hot summer day in the tiny desert town of Terlingua, Texas, where Susan Martin's the local EMS chief. This is our apparatus bay. We do have the one ambulance. We have a rescue vehicle now that serves kind of as an all purpose vehicle for us.

It's what our community paramedics run out of when they go on calls. Martin's small crew, fewer than 10 people, responds to 911 calls across a dusty 3,000 square mile range of rural West Texas. A lot of what we're seeing now with the heat is environmental, some dehydration, some heat exhaustion, things like that. Martin says they also get calls from people with chronic health issues. Some patients don't understand their medications.

They don't make me feel good, so I don't want to take them, so I don't take them. Then I end up being a 911 call. The closest hospital is more than an hour away, so her department's one ambulance can be tied up for a good chunk of the day on an emergency call. That's a big part of why Martin's team has launched a community paramedicine program, where paramedics regularly check in on people with known health issues, patients who might not get to the doctor as often as they should. Alexandra Hollenbeck is one of the local paramedics.

A lot of people out here, you know, they're very reclusive. It tends to be older people or people with chronic illnesses such as like hypertension, COPD. A 2023 survey from a national paramedics trade group counted more than 150 of these kinds of community paramedicine programs across the country. It's a growing healthcare model championed by EMS agencies and hospitals at a time when some advocates say rural healthcare is facing a crisis. Adrian Billings is a long time West Texas doctor and rural health expert at Texas Tech University. This area is one of the most under-resourced

healthcare areas in our state. Billings says for patients, routine paramedicine check-ins at home can avoid expensive emergency room visits. Hospitals want to avoid that too. They can face penalties when too many patients come back to the ER soon after release. That's called a readmission. From a financial standpoint, community paramedicine programs do help cut down on readmissions that can be very costly for

hospitals. One KFF health news analysis from 2022 tallied $320 million in hospital readmission penalties nationwide. But even though paramedicine programs can save big on costs, preventative care like this requires an upfront investment. The economic model for EMS-based community paramedicine is very challenging. That's Matt Zavodsky, a long-time emergency medicine professional in Texas who now works for a national consulting firm for EMS operations. He says insurance providers, Medicare, Medicaid, and private insurers mostly don't cover paramedics making house calls. So we've got EMTs and paramedics all over

the country who are doing the right thing by trying to work with patients to prevent unnecessary emergency department visits, but yet they're not eligible for reimbursement. The new paramedicine program in small town Terlingua is being funded as part of a broader five million dollar U.S. Department of Agriculture rural development grant with no guarantees for long term funding. Being able to prove to the payers that these programs are economically more efficient than a 911 call to the emergency department is going to be crucial for those rural communities to sustain these outstanding programs.

Zavodski hopes that with time and data, community peer medicine programs will be able to prove their worth to health care insurers. In Marfa, Texas, I'm Travis Bubinik for Marketplace. This final note on the way out today, which caught my eye, I think because I'm going to be on and off airplanes a lot over the next five weeks. Saw this in the Wall Street Journal, data courtesy of TSA, that seven of the 10 busiest days in the history of the TSA, 20-something years, have happened between the 23rd of May and today, daily record to shy of three million people passing through checkpoints.

Here is one reason why. Although they are still higher than they were in the before times, airfares are down almost 6% over the past year or so. Our theme music was composed by BJ Liederman, Marketplace's executive producer is Nancy Fargalli. Donna Tam is the executive editor. Neal Scarborough is the vice president and general manager.

I'm Kyle Rizal. Have yourselves a great weekend, everybody. We will see you again on Monday, all right? All right. This is APF. Hey, I'm Ryan Knudsen, co-host of The Journal, a daily news podcast about money, business, and power. Every day on our show, we bring you the most fascinating stories from the business world, from covert corporate moves. What Amazon was doing is they set up a very secretive show company that people at Amazon

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