July 2, 2012
Host: Ted Simons
- Certain consumer fireworks are legal in Arizona around the Fourth of July, but just because you can buy them doesn’t mean you can shoot them off. Brian Scholl, Fire Prevention Expert for the Phoenix Fire Department, explains the rules.
- Brian Scholl - Fire Prevention Expert, Phoenix Fire Department
| Keywords: fireworks
, fourth of july
Ted Simons: You can buy fireworks at stores and temporary stands across the valley, but that doesn't mean that you can set off what you bought wherever you choose. Joining us is Dan Farren, a fire prevention specialist for the Phoenix fire department. What fireworks are allowed?
Dan Farren: It's really confusing right now. The state law says that you can actually buy fireworks but each city is allowed to regulate how you use them. City of Phoenix you can use any except the novelty ones, sparklers, party poppers, those things. Any other kind of fireworks in the city of Phoenix is prohibited.
Ted Simons: So they can be bought and sold anywhere in the County but they can't necessarily be used anywhere in the County?
Dan Farren: Correct. It's actually in the state.
Ted Simons: Okay.
Dan Farren: State law.
Ted Simons: What kind of penalties are we talking about? What if I shoot off a bottle rocket in my backyard?
Dan Farren: It's a class one misdemeanor, six months in jail, $2500 fine.
Ted Simons: How difficult is it to enforce these sorts of things?
Dan Farren: We actually have someone on duty 24/7 during this time of season plus the police department is also going to help us out.
Ted Simons: For licensing -- for fireworks sales and such, how much licensing, how much regulation, how much do we know about the fireworks stand on the corner?
Dan Farren: Oh, we know a lot. They come to our department. We go through a permitting process with them. We do an inspection. The companies giving them the fireworks have to go through a different process. Highly permitted.
Ted Simons: There are inspections?
Dan Farren: Yes.
Ted Simons: What are you looking for?
Dan Farren: Exiting the type of fireworks, make sure it's the legal type you can actually buy, where it is in the area. You can't have too many tents and canopies too close together. That's the stuff we look for. Fire extinguishers.
Ted Simons: Are there different penalties for different illegal fireworks?
Dan Farren: No, it's the same.
Ted Simons: Same penalty.
Dan Farren: Class one misdemeanor.
Ted Simons: What about the cost if that bottle rocket sets a fire or injures me or others. Financial responsibility there?
Dan Farren: Oh, big time. Basically, they would come after you financially plus we would still come after you and fine you for shooting off that firework.
Ted Simons: How often does it happen? Was last year the first?
Dan Farren: Last year was the first year. I believe it was three times we documented cases where fireworks actually caused a fire.
Ted Simons: As far as injuries?
Dan Farren: No injuries that I know of but structural damage.
Ted Simons: So there was structural damage. Were you surprised no injuries were reported?
Dan Farren: Very surprised. We were very concerned. You see throughout the country a lot of accidents happen.
Ted Simons: Why do you think you didn't see much last year?
Dan Farren: I don't know if it was new, people didn't understand. I think it's just the newness is the Ron we didn't have that many occurrences.
Ted Simons: On forest and state land, nothing is allowed.
Dan Farren: Nothing and including any city of Phoenix park that's having a festival. You can't even bring in the novelty items like the sparklers.
Ted Simons: When you say bring in, is possession itself a penalty?
Dan Farren: Correct. Not so much a penalty with the novelty but the parks want you to sit back, enjoy the events, and let the professionals take care of it.
Ted Simons: Last year there was a lot of concern that there would be fires, injuries, people would set off fireworks that they weren't suppposed to set off. How did you prepare last year, how are you preparing any differently this year?
Dan Farren: We ramped up hard last year on making sure these places were permitted and this gave us another basically six months because they can do it around New Year's Eve as well. So we had another six months to make sure we went to every single site including commercial like Wal-Mart, Sam's club, those places that also sell fireworks, to make sure everyone in compliance. The signs say even though you can buy it you can't use it in the city.
Ted Simons: That was last year?
Dan Farren: And this year.
Ted Simons: Is there a different focus this year considering the results last year? You think last year was just a fortunate situation?
Dan Farren: We're hoping last year -- we get it out to the public well enough how dangerous fireworks are, even the consumer stuff, the novelty stuff. Hopefully people understood it's not worth it. Sit back, go to a show, enjoy it, let the professions take care of it.
Ted Simons: Yet there was so much concern, so much gnashing of teeth, yet there was so little in the way of consequence that maybe there's an overreaction going on here. Maybe people, fireworks aren't that dangerous, at least these kinds of fireworks. How would you respond?
Dan Farren: A house could catch fire and the fireworks that may have started it is gone by the time we dot investigation. Or might be a little fire that we just put out. We actually don't know how many fires actually start from fireworks but if you look throughout the country about how many instance happen because of fireworks, there's a lot of it out there.
Ted Simons: Families thinking, let's go get some sparklers or little caterpillar things -- what's your response?
Dan Farren: My advice is don't use them at all. Just go -- we have great celebrations here in the city of Phoenix. We have a great one at the park. Go there, have fun, play around, watch the big fireworks in the sky, and be as safe as possible. If for some reason you feel like you want to have a sparkler or have a smoke bomb or something like that, which are the novelty items that you can use, do it safely. Make sure you have a bucket of water. We say put a bucket of water, put the sparkler in the bucket of water. That will extinguish it or same thing with like a snap cap or something like that. But the best advice is just not to do it at all.
Ted Simons: Good stuff. Good luck on Wednesday.
Dan Farren: Thank you.
Health Insurance Exchanges
- The Affordable Care Act requires every state to have at least one health insurance exchange in place by 2014. The Arizona Chamber Foundation Executive Director Suzanne Kinney talks about the issues and opportunities facing Arizona as it considers how to establish an exchange.
- Suzanne Kinney - Executive Director, Arizona Chamber Foundation
| Keywords: medical
, health exchange
Ted Simons: The affordable care act requires states to have at least one health insurance exchange in place by 2014. States can set up and operate their own exchange or let the federal government do it for them. In April the Arizona chamber foundation issued a policy brief on the issue and here to tell us about it is Suzanne Kinney, executive director of the Arizona chamber foundation, a research and education arm of the Arizona chamber of commerce and industry. It's good to have you here. Thanks for joining us.
Suzanne Kinney: Glad to be here.
Ted Simons: What is a health insurance exchange?
Suzanne Kinney: A health insurance exchange exists for two purposes. One is for individuals and small businesses to compare and contrast insurance plans and then make a purchase, and the second is for eligible individuals and small businesses to get the tax credits and premium subsidies that affordable care act is going to be putting into place.
Ted Simons: So this is an online marketplace for folks to shop private insurance companies and see what works best for them?
Suzanne Kinney: That's right. It would be an online vehicle to make those kind of decisions.
Ted Simons: This is for individuals and small businesses? Who is eligible here?
Suzanne Kinney: It is. It would be possible for a state to have two separate exchanges, one for individuals and a separate one for small businesses or to combine both those into a single exchange. So individuals or small businesses can compare and contrast and purchase, but only those that meet certain income levels for individuals would be able to access the tax credits or the subsidies and likewise for the small businesses to get the subsidies they would have to meet certain wage threshholds.
Ted Simons: How small a business are we talking here?
Suzanne Kinney: Well, the affordable care act sets the business number at 100 employees, however if states choose to operate their own exchange they could lower that to 50 or fewer.
Ted Simons: Interesting. For individuals who want to get involved, what is the process? Once everything is up and operational do they go online? How do they get their feet wet with this?
Suzanne Kinney: There's going to need to be a significant public outreach and educational process around this. But essentially it would be a matter of going on to the website and if it's set up in a user-friendly way it should be pretty easy to navigate through.
Ted Simons: As far as the exchanges are concerned, I read from your sheet, your information sheet, it can either be an act purchaser or market facilitator exchange. What does that mean?
Suzanne Kinney: That's right. This is where we get to the decision of whether the state moves forward with creating its own exchange or if the state decides to default and let the federal department of health and human services set up the exchange. If the state moves forward, that will be a choice. A market facilitator will be an information resource for consumers. The other option is to have the government play a much more active role in terms of deciding which health insurance companies are able to offer policies on the exchange and possibly even to do some negotiating of the race those insurance companies are able to charge consumers.
Ted Simons: I was going to say, who does decide who can get into this marketplace? Do the insurance companies have to meet certain criteria?
Suzanne Kinney: Right. So again, if Arizona does not move forward with creating one, the federal government will make all those decisions. If Arizona does decide to do down that path, we would have the opportunity to decide what constitutes a qualified health plan and what is the essential benefits package. There are parameters set around that, but the essential benefits packages, what is that minimum that a health insurance company has to provide in terms of coverage. So if Arizona goes down that route, then we would be able to decide what's in that package.
Ted Simons: Are those like the benchmark things that each plan has to have?
Suzanne Kinney: That is. That is. What would be defined as that set of coverage that all plans would have to offer in order to participate.
Ted Simons: So what has Arizona done? I know the state is kind of preparing for this a little bit, but how far has the state gone in getting something at least up and almost operational?
Suzanne Kinney: The state has taken a few steps. It's been through the governor's office. So all states received an initial $1 million grant to do some very preliminary work on what an exchange might be designed. Our state also is one to receive a $30 million grant to begin the technology infrastructure investment that would be necessary. So the governor's office has led that effort, but in order for Arizona to actually set up its own, the state legislature would need to get involved and in particular to decide what the funding mechanism would be.
Ted Simons: What kind of funding mechanism options are we talking about here?
Suzanne Kinney: If we default to the federal government department of health and human services has indicated that they would put another fee on the insurance companies that participate in the exchange. So that's the route they would take. If we move forward, then we would have whatever choice we wanted to make, whether it would be something on the insurance or some other choice. That would be entirely up to our state legislature and obviously the people of Arizona to make that decision.
Ted Simons: Compare, if you would, going it with the state exchange or simply going with the Feds. Sounds like 16 states have already started something and 14 of them have deferred to the Feds.
Suzanne Kinney: Right.
Ted Simons: Does it make more sense do you think? What would be the arguments to go with the federal model as opposed to the state model?
Suzanne Kinney: For the federal model it means that we wouldn't need to make decisions. Those would be made by the federal government. The operation, who qualifies, in terms of insurance providers and what benefits they must cover, a number of other decisions. We wouldn't have to pass any legislation. But if we want more flexibility, if we want to model that is specific to Arizona, then we would need to make that decision to create our own exchange, define who we want to participate in the market, what type of choices we want to have available.
Ted Simons: And so that's something that the state still needs to decide, doesn't it?
Suzanne Kinney: That's right. A lot of people, particularly policy makers, have been waiting to see how the Supreme Court ruled. We do have an answer to that now. So we would need to meet certain time lines, certain deadlines if we wanted to create our own exchange.
Ted Simons: Isn't there a deadline coming up first of the year?
Suzanne Kinney: There is. We would have to indicate to department of health and human services that we do intend to create our own and have made certain progress by that point. This is moving pretty quickly. October 2013 is when open enrollment starts. Just over a year from now.
Ted Simons: Is there a concern all of this is going to be too confusing to folks to figure out and if so, what kind of information models are out there to help folks navigate all this?
Suzanne Kinney: Well, in an ideal scenario the website would be designed in a way that makes the purchase decision simpler than it is now because the consumer would be able to see exactly what the prices are for different plans and what each of those plans would cover. So hopefully we could have something that makes it a bit easier.
Ted Simons: Very good. Good to have you here. Thanks for joining us. We appreciate it.
Suzanne Kinney: Thank you.
Valley Housing Market Update
- Prices are rising, inventory is shrinking, and new home builders are back in business. Mike Orr, Director of the Real Estate Center for ASU’s W.P. Care School of Business, provides an update on the Valley’s housing market.
- Mike Orr - Director, ASU Real Estate Center for W.P. Care School of Business
| Keywords: valley
Ted Simons: Good evening. Welcome to "Arizona Horizon." I'm Ted Simons. The valley's real estate market is setting up so much a growing number of new homebuilders are getting back in the game. Here with more is Mike Orr, director of the airlines center at the W.P. Carey School of business. I'm reading the Phoenix area is considered a bellwether for the national real estate recovery. Is that true?
Mike Orr: I think we're in the vanguard. We're ahead of the curve in terms of our recovery. As a state and in particular in Phoenix we took it on the chin in 2007 and 2008 as the market collapsed. We went through a lot of foreclosures which caused prices to collapse. In other parts of the country it's been a little more gentle. It's still been painful but we took it really hard. As a result we're probably going to come out of there a little bit faster and probably show the way in which it can be done.
Ted Simons: Home prices keep rising, the median at 147?
Mike Orr: In May it was 147,000, a big change.
Ted Simons: 32% year to year. 7% month to month. What's going on?
Mike Orr: May was a crazy month. I don't think we'll see June or July's numbers quite as dramatic a change month to month as that. There's a lot of factors that sort of combine here. First we're rung out of the foreclosed homes owned by banks. We don't have anything like as many as 12 months ago. They were always the cheapest on the market. So if they are not for sale, those cheap prices don't go into the median. We had a really good month for luxury homes too. There were 15 homes priced over $3 million that sold, the best month in about five years. So that had an impact. And as people are starting to realize, we're well pasted bottom, which was back in September. More ordinary homeowners are saying maybe shy start thinking about getting that home I always wanted.
Ted Simons: Ordinary homeowners, are they actually getting back into the market or again, and we have talked about this before, is this mostly investor driven?
Mike Orr: Well, it's very busy with investors. So if you are out there trying to buy an affordable or medium priced home you'll be competing with investors. Virtually nothing escapes the notice of investors now. The problem for ordinary owner pock piers is they are very stiff competitors. They are looking for a bargain but they have a pile of cash. When the seller is interested in getting his house sold they tend to prefer cash offers to those that are financed. Makes ordinary people -- their bidding at a disadvantage.
Ted Simons: 30% of homes are renter occupied where the normal rate would be 10%. Is that a concern?
Mike Orr: That really represents the amount of successful purchases by investors, 30%. On the other hand it means 70% are being purchased by ordinary people still. But that would have been 90 to 92% in normal times.
Ted Simons: The bottom line, though, is there too much investors activity right now?
Mike Orr: I think if we haven't had the investor activity in 2009-2010, the market would have collapsed even worse. It was good they were buying homes when nobody else want them. Now that everybody wants them maybe we wish they would go away, move down to Tucson.
Ted Simons: Isn't it true that so many of these investors are bringing with cash. They are not likely to move down to Tucson any time soon. It's not like in the past where a bunch of folks tried to get the quickest loan and easiest down payment all of a sudden became a landlord. This is serious business.
Mike Orr: Very serious. They are putting their own money into it. They will stop buying whether prices have gone up enough that it no longer looks like a bargain to them. A lot of them are buying to become landlords. The equation to what they pay for the property and what they can get in rent. Rents are stable but the prices have gone way down. Now there coming back up. If they continue to go up then investors will lose some of their enthusiasm and find somewhere else where prices are still very cheap.
Ted Simons: You mentioned the inventory of homes going down. I can remember not long ago the major concern in the housing market in the Phoenix area was too much inventory. What happened?
Mike Orr: Well, in 2008-2009 we had about 58,000 homes listed on the ML S. Far too many. Something like 32, 33,000 would be normal. Now we're down to below 20,000. That's including a lot of homes that actually have a contract but are being left on the market by banks who are doing short sales. We have unusually low inventory. That's just adding to the stress on buyers trying to compete.
Ted Simons: We hear that Maricopa, places in the far west valley, there were tons of new homes just sitting there. The inventory was huge. Are people now living in those homes, and are they renters or are they owners?
Mike Orr: Well, both. Those homes are now occupied. A lot of them have been bought by investors, turned into rentals. Those places that used to be virtually no rentals now would go up as much as 50% of the homes on a particular street may be rentals. That's because a lot of people have been foreclosed Orr had to do a short sale and you have to do a time in the penalty box to get your credit back into a shape where you can get a loan and get back into the housing market. But people are starting to go through that now. We have seen people do short sales or foreclosures and go back in and buy a home again.
Ted Simons: Building permits, new homebuilders are seeing this, sounds like permits are up. New home sales are up. New home prices are up. Things on the upswing there?
Mike Orr: Definitely. We have had a very quiet period, almost four years' worth of very little happening in new home building. The builders are now very optimistic as they see people frustrated but they can't successfully buy a resale because there's so much competition. It's much easier to buy a new home and there's still pretty good value for money because they have been competing with the rest of the sales for a long time, so they look amazingly attractive compared to 2006.
Ted Simons: Where are they building these new homes?
Mike Orr: Probably the favorite area is Gilbert, but also Goodyear, Peoria, Chandler. A number of places. Still small quantities by what we used to get back in 2004. We did about 700 in May. There were months back in 2005 and 2006 when we did more than 4,000 in a single month.
Ted Simons: Are some of the homes being built on lots that are now inexpensive or the lots themselves maybe went through a foreclosure?
Mike Orr: Yes. Many of those lands that were subdivisions that basically ran out of customers got foreclosed, changed hands, maybe a couple three times. The builder is now building on that land but they are starting to run short of that cheap land and are starting to look around. Have to buy more land at today's prices, which have actually gone up quite significantly in the last six months or so.
Ted Simons: Would you be more comfortable if things weren't as white hot -- we all lived through the white hot. We know what happens when the white hot turns away. Would you rather see things more calm here or business is business?
Mike Orr: It would be better for everybody if it was a little calmer. We have had a very frenetic, stressful spring. I think the summer will see a little bit because prices are up, demand will cool a little built, prices going up brings a little more supply on as well. So we'll get a little more in balance and it won't be so stressful. Having said that you need this imbalance to really push prices back to where we want them to be for a nice, balanced market.
Ted Simons: great information. Thanks for joining us.
Mike Orr: Thanks very much, Ted.