By Kirsten Kaschock, Ayana Allen-Handy, Barbara Dale, Lauren Lowe, Carol Richardson McCullough, Rachel Wenrick
The skyrocketing housing prices of the pandemic era have cooled since their peak in June 2022, but still remain far too high for many. Last year, the median American home price topped $400,000 for the first time, and the burden on renters is increasing too, with the national average of rent-to-income reaching a two-decade high of 30% in 2023.
Importantly, these impacts are being felt across generations. Many younger adults, saddled with student loan debt, are finding themselves without the savings or monthly earnings to qualify for a mortgage or afford rents. Meanwhile, an increasing number of older single homeowners have too much house to take care of and no feasible way to downsize without leaving their neighborhoods. And across all ages, these challenges are exacerbated in majority-Black neighborhoods, largely due to histories of racial segregation and fewer banking options, and now, gentrification and the quickening pace of institutional investors buying up properties. In historically Black neighborhoods adjacent to universities, these challenges can be compounded by encroaching development that caters to university-affiliated populations and young professionals.
In Philadelphia—the poorest big city in the country and one still reeling from pandemic-era housing market disruptions—the interlocking challenges of high housing costs, displacement pressures, and a lack of aging-in-place options are converging in the historically Black West Philadelphia neighborhood of Mantua, which borders University City (home to Drexel University, University of Pennsylvania, Children’s Hospital of Philadelphia, and other institutions).
This piece highlights a Drexel University and community partnership, Second Story Collective, which is addressing these issues by helping low-income residents at opposite ends of the age spectrum access affordable housing in university-adjacent neighborhoods through an intergenerational community collective of home-sharers that can be replicated nationwide.
From sharing stories to sharing homes
West Philadelphia’s Mantua neighborhood has a poverty rate nearly twice the city’s (46% compared to 26%), but rental rates and housing prices there have been steadily and steeply increasing for a decade—threatening to displace long-term residents while also creating a barrier for lower-income students to afford rental housing. Like many market disruptions the pandemic exacerbated, this long-simmering tension is reaching a boiling point.
The origins of Second Story Collective’s intergenerational home-sharing model reflect—and are designed to respond to—this tension. In 2014, Drexel’s Dornsife Center for Neighborhood Partnerships started Writers Room—a literary arts academic and community-based program co-created by students, faculty, and community members to amplify voices and stories, archive histories, and celebrate diverse perspectives.
Only a few months into this endeavor, Carol Richardson McCullough (a co-author of this piece) told her fellow Writers Room members that her landlord was evicting her family to market the building to Drexel students. It was then that the Writers Room’s students, artists, elders, and activists became acutely aware that they were, in fact, part of one another’s stories. Out of this moment, the idea for Second Story Collective was born.
One Writers Room member (and another co-author), Barbara Dale, introduced us to the Quaker tradition of home-sharing in the City of Brotherly Love, beginning with the history of the first racially integrated housing cooperative, Friends Housing Cooperative, in 1952. Writers Room members then began imagining a project for aging-in-place and intergenerational home access that could, in McCullough’s words, be a new exploration in “neighborhood placement rather than the displacement that has historically accompanied university expansion into neighborhoods.”
Over nine years, Writers Room has grown from a just handful at the first meeting to a lasting group of over 50 members who are diverse across race, religion, socioeconomic status, sexuality, gender, and age, and who continue to participate after graduating or moving out of the neighborhood. In that time, the group has co-developed the Second Story Collective community-university home-sharing model with three primary goals:
- Co-create a home-sharing network in which Drexel University students and neighbors live together in intentional communities rooted in storytelling and sharing.
- Provide viable affordable rental, housing, and anti-displacement options—with students paying below-market rent that subsidizes the homeowners’ mortgages—while cultivating partnerships with city agencies and nonprofits to help older homeowners repair and retrofit their homes so they can age in place.
- Help neighborhood families become homeowners and create new generational wealth by partnering with a developer to produce new homes in Mantua—designed from the foundation up as intergenerational co-housing.
By helping elder members of the community remain in their homes longer and encouraging connection and community-building across generations as part of the rental and homeownership process, the model hopes to demonstrate how alternative affordable housing and rental options can benefit both low-income students and long-term residents.
With research and funding, a collective idea becomes collective action
Research and community leadership were instrumental in moving the Second Story Collective from an idea to an actionable project. Once it became clear through the lived experiences of Writers Room members that displacement and affordable housing were their most pressing issues, they used Drexel’s involvement and their shared knowledge to co-design a research agenda, plan for actionable change, and attract financial resources.
On the research side, Writers Room has partnered with Drexel’s Justice-oriented Youth (JoY) Education Lab and the Mantua Civic Association since 2018 on AmeriCorps-funded community-driven participatory action research to investigate the potential for cooperative living to combat displacement. Utilizing census data, the research team found that the displacement of Black residents is happening at faster and higher rates than initially hypothesized, with a 73% increase in the Mantua’s white population over the past 10 years. Further analysis of a sample block group in Mantua revealed rental rates rose over 44%, with a 74% increase in rent-burdened households (those paying more than 30% of their income on rent) and a 454% increase in extremely rent-burdened household (those paying more than 50% of their income on rent).
Building off these findings and community input, Writers Room has received several new sources of funding. In 2021 and 2022, the Barra Foundation and Pennsylvania Department of Community and Economic Development provided funding to test the aging-in-place model in two homes and generate a proof of concept for project expansion and replication in other university-adjacent neighborhoods in Philadelphia and beyond. In 2022, the research team received a National Science Foundation planning grant to further develop a scalable model. And most recently, Writers Room received funding from the Mellon Foundation to help create a living-learning agreement between home-sharers in the Village Square on Haverford—a mixed-use development on a series of currently vacant lots. The development will include 18 for-sale homes that will provide intergenerational co-housing to help neighborhood families become homeowners while providing more affordable options for students. Ground-breaking for the first phase is scheduled for this spring, with expected completion of the 18 houses in 2024.
Writers Room is currently in the process of working with the Mantua Civic Association and the Urban League of Philadelphia to identify program participants, and will prioritize selling to long-term neighborhood residents. Additional selection criteria and the application process will be determined with community input.
Creating the potential for tangible, replicable affordable housing results in university-adjacent neighborhoods
Addressing the interlocking challenges of high housing costs, displacement, and lack of aging-in-place options—not only in Philadelphia, but nationwide—requires a creative, place-based approach that leverages and strengthens connections between individuals, groups, and organizations within the community and across sectors. Second Story Collective offers other university-adjacent communities an alternative housing strategy and an example of how anchor institutions can center the arts to bridge differences and enact real change.
As stated by Charles Lomax of Lomax Real Estate Partners, lead developer of the Village Square: “This is an opportunity to change the narrative of university-adjacent development from one of displacement of long-term residents to engagement and community-building.”
Photo: Courtesy of Writers Roomreal estate housing market pandemic
Generative AI’s growing impact on businesses
Over recent years, artificial intelligence (AI) has gained considerable traction. And on the back of the resultant excitement, price-earnings (P/E) ratios…
Over recent years, artificial intelligence (AI) has gained considerable traction. And on the back of the resultant excitement, price-earnings (P/E) ratios for stocks even remotely related have soared. Is the excitement premature?
McKinsey recently published an article titled The State of AI in 2023: Generative AI’s Breakout year, draws on the results of six years of consistent surveying and reveals some compelling findings. My takeaway is that service providers are buying the chips and working furiously to offer AI-enhanced solutions, but corporate customers are still some way off embedding those solutions in their own workflows. There exists a lack of understanding, necessitating more education.
The highest-performing organisations however, as showcased in the research, are already adopting a comprehensive approach to AI, emphasising not just its potential but also the requisite strategies to harness its full value.
Irrespective of the industry, and of whether they are service organisations or manufacturers, the most successful industry leaders strategically chart significant AI opportunities across their operational domains. McKinsey’s findings suggest that despite the buzz surrounding the innovations in generative AI (gen AI), a substantial portion of potential business value originates from AI solutions that don’t even involve gen AI. This reflects a disciplined and value-focused (cost) perspective adopted by even top-tier companies.
One of the critical takeaways from McKinsey’s research is the integration of AI in strategic planning and capability building. For instance, in areas like technology and data management, leading firms emphasise the functionalities essential for capturing the value AI promises. They are capitalising on large language models’ (LLM) prowess to analyse company and industry-specific data. Moreover, these companies are diligently assessing the merits of using prevailing AI services, termed by McKinsey as the “taker” approach. In parallel, many are working on refining their AI models, a strategy McKinsey labels the “shaper” approach, where firms train these models using proprietary data to build a competitive edge.
But the number of organisations doing so are relatively few (Figure 1.)
Figure 1. Gen AI is mostly used in marketing, sales, product and service development
Nevertheless, the latest McKinsey global survey reveals the burgeoning influence of gen AI tools is unmistakably evident. A mere year after their debut, a striking one-third of respondents disclosed that their companies consistently integrate gen AI in specific business functions. The implications of AI stretch far beyond its technological aspects, capturing the strategic focus of top-tier leadership. McKinsey quotes, “Nearly one-quarter of surveyed C-suite executives say they are personally using gen AI tools for work,” signalling the mainstreaming of AI in executive deliberations.
In other words, however, a common finding is individuals are using gen AI personally, but their organisation have yet to formally incorporate it into daily processes and workflows. This, despite the “three-quarters of all respondents expect[ing] gen AI to cause significant or disruptive change in the nature of their industry’s competition in the next three years.”
As an aside, AI’s disruptive impact is expected to vary by industry.
McKinsey notes, “Industries relying most heavily on knowledge work are likely to see more disruption—and potentially reap more value. While our estimates suggest that tech companies, unsurprisingly, are poised to see the highest impact from gen AI—adding value equivalent to as much as 9 per cent of global industry revenue—knowledge-based industries such as banking (up to 5 per cent), pharmaceuticals and medical products (also up to 5 per cent), and education (up to 4 per cent) could experience significant effects as well. By contrast, manufacturing-based industries, such as aerospace, automotive, and advanced electronics, could experience less disruptive effects. This stands in contrast to the impact of previous technology waves that affected manufacturing the most and is due to gen AI’s strengths in language-based activities, as opposed to those requiring physical labour.”
Moreover, the journey with AI isn’t devoid of challenges. McKinsey’s findings highlight a significant area of concern: risk management related to gen AI. Many organisations appear unprepared to address gen AI-associated risks, with under half of the respondents indicating measures to mitigate what they perceive as the most pressing risk – inaccuracy.
Drawing from McKinsey’s comprehensive survey, it’s evident that while the realm of AI, particularly gen AI, presents immense potential, it’s a domain still in its very early stages. Many organisations are on the brink of leveraging its power, but there’s still a considerable journey ahead in terms of risk management, strategic adoption, and capability building. As the landscape continues to evolve, McKinsey’s research offers a crucial ‘Give Way’ sign in the roadmap for businesses to navigate the AI frontier.
And that means there is every possibility the boom in AI-related stocks is a bubble. Stock market investors are notoriously impatient and if the benefits (measured in dollars) aren’t coming through investors will recalibrate their expectations. There is every possibility AI is as transformative for the world as promised, but the stock market’s journey is likely to be rocky, inevitably rewinding premature expectations ahead of more sober assessments. Think, ‘fits and starts’.
As a result, investors should have ample opportunity to invest in the transformative impact of AI at reasonable prices again and shouldn’t feel compelled to pay bubble-like prices amid a fear of missing out.stocks
Lights Out for Stocks and Bonds? Not So Fast.
The stock market suddenly has the look of a wounded prize fighter. And the bond market is bordering on being dysfunctional. In a word, the market is…
The stock market suddenly has the look of a wounded prize fighter. And the bond market is bordering on being dysfunctional. In a word, the market is disoriented. Disorientation leads to mistakes.
Don't be fooled. From an investment standpoint, this is one of those periods where those who stay vigilant and pay attention to developments will be in better shape than those who remain confused by circumstances.
As I noted last week: "The relationship between interest rates and stocks is about to be tested, perhaps in a big way. Observe the tightening of the volatility bands (Bollinger Bands) around the New York Stock Exchange Advance Decline line ($NYAD) and the major indexes. This type of technical development reliably predicts big moves. The real arbiter may be the US Treasury bond market. And the place where a lot of the action may take place once bonds decide what to do next may be the large-cap tech stocks. Think QQQ."
Bond Yields Trade Outside Normal Megatrend Boundaries
Big things are happening in the bond market, which could have lasting effects on stocks and the US economy.
I've been expecting a big move in bond yields, noting recently that yields on the 10-Year US Treasury Yield Index ($TNX) were "on the verge of breaking above long-term resistance," while adding that if such a move took place, it "would likely be meaningful for all markets; stocks, commodities, and currencies."
Well, it happened; after the FOMC meeting and Powell's post-mortem (uh, press conference), TNX blew out all expectations and broke above the 4.4% yield area in a big way, marking their highest point since 2007. It was such a big move that it may be an intermediate-term top. At one point in overnight trading on September 21, 2023, TNX hit the 4.5% level. But the current selling in bonds is way overdone, which means that at least a temporary drop in yields is on the cards.
Here's what I mean. The price chart above portrays the relationship between TNX and its 200-day moving average and its corresponding Bollinger Bands. As I noted in my recent video on Bollinger Bands, this is a crucial indicator for pointing out trends that have gone too far and are ripe for a reversal.
In this case, TNX blew out above the upper Bollinger Band, which is two standard deviations above the 200-day moving average. That move is the magnitude of a Category 5 hurricane on steroids and amphetamines. It's also unlikely to remain in place for long unless the market is completely broken.
The price chart suggests we may see a similar situation to what we saw in October 2022 when TNX made a similar move before delivering a nifty fall in yields, which also marked the bottom for stocks.
Meanwhile, as described below, the S&P 500 ($SPX) is reaching oversold levels not seen since the October 2022 and the March 2023 market bottoms.
Oil Holds Up Better Than QQQ For Now
A great way to regroup after a tough trading period is to first look for areas of the market that are exhibiting relative strength. Currently, the oil sector fits the bill. Second, it pays to look for beaten-up sectors where recoveries are happening the fastest. At this point, it's still early for that part of the equation to develop, as too many traders are still shell-shocked.
Starting with a look at West Texas Intermediate Crude ($WTIC), prices are holding above $90 as the supply for diesel and fuel is well below the five-year average. And yes, U.S. oil supplies continue to tighten while the weekly rig count falls.
The NYSE Oil Index ($XOI), home to the big oil companies such as Chevron Texaco (CVX), had a mild reaction to the heavy selling we saw in the rest of the market. XOI looks set to test its 50-day simple moving average in what looks to be a short-term pullback.
Chevron's shares barely budged earlier in the week despite an ongoing, albeit short-lived strike by natural gas workers at its Australian facilities. That's a strong showing of relative strength. You can see that short sellers are trying to knock the stock down (falling Accumulation/Distribution line), but buyers are not budging as the On Balance Volume (OBV) line is holding steady.
On the other hand, the very popular trading vehicle the Invesco QQQ Trust (QQQ) broke below the key support level offered by the $370 price point and its 20 and 50-day simple moving averages. This is an area that I highlighted here last week as being critical support. It now faces a test of the support area at $355. A break below that would likely take QQQ and the rest of the market lower.
An encouraging development is that the RSI for QQQ is nearing 30, which means it's oversold. Let's see what happens next. You can also see a similar pattern in the ADI/OBV indicators to what's evident in CVX above, which suggests that when the shorts get squeezed, it could be an impressive move up.
And for frequent updates on the technicals for the big stocks in QQQ, click here.
The Market's Breadth Breaks Down and Heads to Oversold Territory
The NYSE Advance Decline line ($NYAD) finally broke below its 20 and 50-day simple moving averages and is headed toward an oversold reading on the RSI, which is approaching the 30 area.
The Nasdaq 100 Index ($NDX) followed and is not testing the 14500–14750 support area. ADI is falling, but OBV is holding up, which means we will likely see a clash between short sellers and buyers at some point in the future.
The S&P 500 ($SPX) is in deeper trouble as it has broken below the key support at 4350 and its 20 and 50-day moving averages. On the other hand, SPX closed below its lower Bollinger Band on September 22, 2023, and is nearing an oversold level on RSI. Still, the selling pressure was solid as ADI and OBV broke down.
VIX Remains Below 20
The Cboe Volatility Index ($VIX) is still below the 20 area but is rising. A move above 20 would be very negative.
When VIX rises, stocks tend to fall as it signifies that traders are buying puts. Rising put volume is a sign that market makers are selling stock index futures in order to hedge their put sales to the public. A fall in VIX is bullish as it means less put option buying, and it eventually leads to call buying, which causes market makers to hedge by buying stock index futures, raising the odds of higher stock prices.
Liquidity is Tightening Some
Liquidity is tightening. The Secured Overnight Financing Rate (SOFR) is an approximate sign of the market's liquidity. It remains near its recent high in response to the Fed's move and the rise in bond yields. A move below 5 would be bullish. A move above 5.5% would signal that monetary conditions are tightening beyond the Fed's intentions. That would be very bearish.
To get the latest information on options trading, check out Options Trading for Dummies, now in its 4th Edition—Get Your Copy Now! Now also available in Audible audiobook format!
In The Money Options
Joe Duarte is a former money manager, an active trader, and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best-selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com and now in its third edition, plus The Everything Investing in Your 20s and 30s Book and six other trading books.
To receive Joe's exclusive stock, option and ETF recommendations, in your mailbox every week visit https://joeduarteinthemoneyoptions.com/secure/order_email.asp.bonds sp 500 nasdaq stocks fomc fed us treasury etf currencies testing interest rates commodities oil
Bitcoin Mining Can Reduce Up To 8% Of Global Emissions: Report
Bitcoin Mining Can Reduce Up To 8% Of Global Emissions: Report
Authored by Ezra Reguerra via CoinTelegraph.com,
A paper published by the…
A paper published by the Institute of Risk Management (IRM) concluded that Bitcoin has the potential to be a catalyst for a global energy transition.
IRM Energy and Renewables Group members Dylan Campbell and Alexander Larsen published a report titled “Bitcoin and the Energy Transition: From Risk to Opportunity.”
The paper argued that while BTC was perceived as a risk because of its energy consumption, it can also catalyze energy transition and lead to new solutions for energy challenges worldwide.
Within the report, the authors also highlighted the important function of energy and the increasing need for reliable, clean and more affordable energy sources.
Despite the criticisms of Bitcoin’s energy intensity, the study provided a more balanced view of Bitcoin by showing the potential benefits BTC can bring to the energy industry.
Amount of vented methane that can be used in Bitcoin mining. Source: IRM
According to the report, Bitcoin mining can reduce global emissions by up to 8% by 2030. This can be done by converting the world’s wasted methane emissions into less harmful emissions. The report cited a theoretical case saying that using captured methane to power Bitcoin mining operations can reduce the amount of methane vented into the atmosphere.
The paper also presented other opportunities for Bitcoin to contribute to the energy sector.
“We have shown that while Bitcoin is a consumer of electricity, this does not translate to it being a high emitter of carbon dioxide and other atmospheric pollutants. Bitcoin can be the catalyst to a cleaner, more energy-abundant future for all,” the authors wrote.
According to the report, Bitcoin can contribute to energy efficiency through electricity grid management by using Bitcoin miners and transferring heat from miners to greenhouses.
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