The retailer said it also updated its technology and grocery offerings at Amazon Fresh stores in Pasadena, Irvine and Woodland Hills.

The services were previously available only to Amazon Prime members.

Delivery fees for Amazon Fresh orders online range from $4.95 to $13.95 for customers without a Prime membership. That’s $4 more than Prime members pay per delivery. Prime members also get free delivery on orders over $100.

In its Thursday, Nov. 9 announcement, Amazon said customers also can order delivery from a variety of grocery and specialty retailers available on Amazon.com. Locally, that includes Bristol Farms and Cardenas Markets.

Amazon said it plans to expand grocery delivery and free pickup to all of its Whole Foods Markets, too.

Legal headwinds

Despite the expanded services, Amazon is reportedly facing lawsuits and getting into legal battles with landlords as the number of “zombie” stores — or properties where it was supposed to open Amazon Fresh grocery stores — is starting to pile up, Business Insider reported.

The company has been trying to establish a larger presence in the grocery marketplace, Supermarket News said, but that has been a struggle since the e-commerce giant first acquired the Whole Foods grocery brand in 2017.

Meanwhile, three local stores have been revamped.

Amazon said it added thousands of new products and Krispy Kreme Doughnut shops to Fresh stores in Pasadena, Irvine and Woodland Hills, according to Claire Peters, vice president worldwide for Amazon Fresh. The clunky Dash Carts are more user-friendly, too.

The carts, which are made heavy with technology that helps track what shoppers put inside them, got updated software and hardware providing real-time receipt totals. The carts can alert a shopper to store discounts and produce can be weighed on a built-in scale in the basket.

The smartcart allows shoppers to skip the checkout line, much like Amazon’s Just Walk Out technology. When they’re ready to check out, customers exit the store through the Amazon Dash Cart lane and their payment is processed using the credit card associated with their Amazon account.

Shoppers also can check out the traditional way with cashiers.

The Southern California store upgrades follow the redesign of two Amazon Fresh stores in the Chicago area.

“We really spent the last couple months diving deep to understand what our customers really want,” Peters said. “They are focused on selection, value and convenience, so we improved on those areas.”

Peters said the Krispy Kreme shops are especially popular among shoppers.

“From what I’ve seen, everyone loves those — and our coffee sampling,” she said.

LOS ANGELES — A former Malibu resident was sentenced Thursday to nearly 16 years in prison for defrauding several people out of more than $3 million with bogus claims he had access to stock shares of Alibaba prior to its initial public offering.

Frank Rosenthal, 48, pleaded guilty in July in downtown Los Angeles to two federal counts of wire fraud.

U.S. District Judge Fernando Aenlle-Rocha ordered restitution of $1.18 million along with the 188-month federal prison sentence, according to the U.S. Department of Justice.

Rosenthal admitted making false claims of having inside connections at Goldman Sachs that would provide him with special access to purchase discounted shares of the Chinese e-commerce company Alibaba before its initial public offering.

The defendant carried out his scheme through a middleman, David Kunkle, by making fraudulent representations and pressuring Kunkle to solicit funds from his relatives and acquaintances for the purportedly lucrative investment opportunity, according to Rosenthal’s plea agreement filed in Los Angeles federal court.

To lend legitimacy to his fraudulent scheme, Rosenthal negotiated and drafted loan agreements and promissory notes with the victims that promised the victims significant returns on their loans and investments, court papers show.

The DOJ said that after obtaining their money, Rosenthal lulled his victims by, among other ways, falsely stating that Alibaba shares had been purchased and sold. Rosenthal paid his earlier victims with money from later victims’ funds.

Instead of using victims’ funds to purchase shares of Alibaba, Rosenthal used the money to support his lavish lifestyle, which included the $16,000 monthly rent of a Malibu home.

More than 2 million people ages 16 to 24 are working in California — about the same as the population of Houston —  making up 12% of the workforce. They comprise a critical portion of the state’s economy, according to a new report by the UCLA Labor Center.

But many young people earned low wages, worked long hours — often while going to school — and lacked sufficient worker protections and benefits. These hardships may impact their financial future and the state’s economy for years to come, said researchers who examined the years surrounding the COVID-19 pandemic, 2019 to 2021.

“Young people are critical actors in California’s vibrant economy and labor force,” says the study, released today. “Yet, young workers in California find themselves navigating a tumultuous landscape of societal shifts, economic challenges, and the lingering aftermath of a global pandemic.”

About 64% of California’s young workers earned low wages — defined as about $18 an hour, two-thirds of the median wage — and 60% reported difficulty affording their expenses, researchers wrote.

The assumption that young people work at service-oriented, low-wage jobs temporarily before they’re propelled to full-time careers isn’t necessarily true, said UCLA researcher Vivek Ramakrishnan. Many young people stay in low-wage jobs for years.

“When we’re looking at the data, we’re seeing young people are really struggling in these kinds of roles,” he said, adding later, “There’s a sense you can get stuck working in the service industry.”

The report analyzed data from multiple sources, including the U.S. Census Bureau’s American Community Survey, the COVID-19 Household Pulse Survey — which documented the impact of the pandemic — and the federal Bureau of Labor Statistics.

Young workers reflect California’s growing diversity. About 3 in 4 are people of color and more than half are Latino. About 15% of high school-aged young people worked full time and half of young people ages 19 to 24 worked full time.

Young workers’ trap

In the service industry, 40% of young workers are employed in bars, restaurants and retail.

These young people run the risk of being caught in a “circular labor trap,” the study says, because these low-wage service jobs are structured with little room for growth or skill development.

“When you have these skill sets that are hyper-specific toward these industries, and not much room for growth, it’s hard to compete against students who may take an unpaid internship in a very content-specific area of expertise and gain connections in the career they want to go into,” Ramakrishnan said.

Because so many service industry jobs were considered frontline jobs, the pandemic was particularly disruptive for young people, who often had to choose between their health and their income. And when grocers and restaurant businesses closed during the pandemic, younger workers, especially young people of color, experienced higher levels of unemployment or underemployment compared to older workers in other industries.

In 2020, the unemployment rate for California’s young workers increased to 18% from 9% the year before. That was twice the rate of workers ages 25 to 64.

Unemployment among young people has since rebounded to pre-pandemic levels at 8.7% nationally, according to the Bureau of Labor Statistics.

While many young people are stuck in lower-wage jobs, the research suggests they are contributing significantly to their household income. And about 12% of young workers are heads of households, according to the report.

Young workers are overrepresented in households living below the poverty line compared to those over the age of 25. About 14% of young workers lived in poverty compared to 5% of older workers, according to the report. A third lived in households with incomes below 200% the federal poverty line. That number in 2021 was $53,000 for a family of four.

Working through school

Along with responsibility for helping family members cover basic expenses, young people often have to balance work with education, in pursuit of a better future.

About half of young workers go to school. and about 40% of them worked 15 to 29 hours a week, the report says. One-fourth of workers in high school, and more than half in college, worked 20 hours or more a week. And about 17% of young workers worked 40 hours or more weekly.

Postsecondary education became more essential for a stable career, yet with education costs increasing, it was less accessible for young people, according to the report.

From 2018 to 2020, the share of California high school graduates enrolled in postsecondary education within 12 months fell from 65% to 63%, according to the study.

While nearly all racial and ethnic groups experienced declines in college matriculation, Black college-going rates plunged from 61% to 55%, and American Indian and Alaska Native rates dropped from 53% to 47%.

Nationally postsecondary enrollment began rebounding last fall, though study researchers said they don’t know yet if that’s the case in California.

Meanwhile, from 2019 to 2020, young peoples’ average student loan amount increased from $6,847 to $10,000.

On-the-job training?

One in 3 jobs in California requires some college education, the study notes. Yet as higher education costs and student debt climbed, job earnings haven’t kept up.

Aside from education, researchers found other pathways toward higher paying jobs and careers also are not very accessible to young people.

For instance, trade apprenticeships are significantly underutilized. In 2022, there were about 80,000 federally registered apprenticeships in California, but only 24,000 were filled, the study said.

Latino workers held the majority of apprenticeships, 66%, while Black young people held 4%. Most apprenticeships went to young men, 94%, while young women held 6%.

Many apprenticeships are linked to unions. While surveys show young people are more pro-union than ever, they’re underrepresented in unionized jobs. Just 9% of young workers are union members, compared to 19% of older workers.

Ramakrishnan said the data paints a “scary” picture of the realities young people face, but it also highlights some areas where policy changes can help.

He noted that Gov. Gavin Newsom recently signed a measure by Assemblymember Liz Ortega, a Democrat from Hayward, that directs California high schools to educate students about workers’ rights and the labor movement.

There’s a need for other career programs that offer young people training and school credit, Ramakrishnan said.

Five years, $1.2 billion. And a new model for government contracting in the tech-challenged home state of Silicon Valley.

That is what California officials say it will take to overhaul an employment safety net pushed to the brink by record pandemic job losses, widespread fraud and the political panic that followed.

The biggest-ever attempt to reform California’s Employment Development Department, known as “EDDNext,” officially started late last year. A roughly 100-person team is leading the rebuild, and is already signing multi-million-dollar contracts for Salesforce and Amazon technology, according to interviews and records requested by CalMatters.

At the same time, the EDD is quietly making plans to move on from its turbulent relationship with longtime unemployment payment contractor Bank of America. Between now and 2025, the EDD will begin rolling out new benefit debit cards, and eventually, a direct deposit payment option from a different, yet-to-be-named contractor, the agency said in a statement.

Ron Hughes, a former state technology official and consultant who came out of retirement to run EDDNext, said his team is prioritizing “the biggest pain points for the public” — online accounts, call centers, identity verification, benefit applications — as the agency tries to turn the page on an era of mass payment delays and widespread fraud.

“EDD did over 200 technology projects during the pandemic. They were basically putting out fires,” Hughes told CalMatters. “EDDNext is really a way of being proactive about it. We want to solve some of these problems, instead of just putting Band-Aids on.”

Workers still experiencing payment delays, fraud confusion and jammed phone lines are skeptical — especially since the EDD promised many similar changes after the Great Recession around 2009. Business groups, meanwhile, are sounding alarms about the state’s $19 billion in outstanding unemployment debt to the federal government. They are clashing with labor groups who want to expand jobless benefits and increase payments to keep pace with costs of living, instead of relying on fraud-prone emergency programs like those created during the pandemic — a newer version of an old fight about the scope of the safety net.

“There’s a longstanding narrative… like, ‘Look, see, this is a program that people just abuse,’” said Jenna Gerry, a senior staff attorney with the National Employment Law Project. “If people are concerned with actual fraud, then I want to look at what solves it: fundamental reform of the system.”

For Jennifer Pahlka, who co-led Gov. Gavin Newsom’s task force to triage COVID-era problems at the EDD, the challenge ahead is emblematic of difficulties that many government agencies face in adapting to the digital age. As inequality widens and risks like fraud evolve, Pahlka wrote in her book “Recoding America” that the EDD still operates with patchwork computer systems, its staff bound by an 800-page training manual and political dynamics that can leave leadership more beholden to shifting regulatory regimes than real people — fundamental issues that could still undercut EDDNext and its 10-figure budget.

“Do I know how to wave a magic wand and fix California’s unemployment insurance system? No, I don’t,” Pahlka said in an interview. “But I do know that what we’re currently doing doesn’t work, and that other states have some approaches that we should be trying out.

“Start with not burning $1 billion in a parking lot.”

EDD Director Nancy Farias has read Pahlka’s book, and the many state audits that have dissected the agency’s recurring failures. She’s well aware of the “light switch” trap, where a government agency bets it all on one, years-long tech project, then prays it all works when a switch is flipped. To try to avoid that, she and Hughes decided to break EDDNext into dozens of smaller projects through 2028.

“It leaves less room for a big failure,” Farias said. It will only come together, the former labor union executive added, with parallel efforts to simplify the process and alleviate strain on staff: “You can have the best IT in the world, but if you don’t change your policies and procedures, it does not matter.”

The COVID hangover

This past summer, San Diego jewelry maker Phaedra Huebner found herself stuck in a loop that might sound familiar to people who filed for unemployment early in the pandemic.

At 8 a.m. each day, Huebner, 52, said she dialed the EDD right as call centers opened to ask where her benefits were. She used a trick she learned on YouTube to bypass pre-recorded messages, punched in her Social Security Number and tried to get in the queue to talk with a real person. Then came the redialing up to 67 times a day, bouncing between departments and, more often than not, hanging up without answers about when she might see the money she needed to make rent.

The twist: Huebner wasn’t filing for unemployment, but for disability — hinting at how issues with call centers and identity verification continue to ripple across EDD’s multiple large programs. After each day on the phone, Huebner said she wrapped her hands in ice packs to ease the shooting pains in her hands and arms that put her out of work in the first place.

“For six weeks I should have been resting,” Huebner said in early September. “Instead, I’m in pain with no disability income doing all of my own administrative work.”

The EDD’s benefit programs have always been complex and highly individualized. In the majority of cases, the EDD told CalMatters in a statement, people applying for benefits do not encounter major delays. The agency cited its own 2022 survey of several thousand people using its benefit systems, where 69% reported they were “completely or mostly satisfied” with the unemployment application process, and 63% were satisfied with the disability process.

The problem, workers and attorneys say, is that even a portion of the EDD’s customer base amounts to tens of thousands of people — and when things go wrong, they can still go very wrong.

In January 2022, for instance, the EDD froze 345,000 disability accounts, including an unknown number of legitimate ones, amid a wave of suspected fraud involving claims tied to fake doctors. Putting stronger safeguards in place is one of the “lessons learned from the pandemic that we should be applying to every program,” said former California State Auditor Elaine Howle.

“People saw the (unemployment) program was being defrauded left and right,” Howle said, “and it was like, ‘Shoot, if I can do that, what other programs are out there that I can defraud?’”

Mason Wilder, research manager of the Association of Certified Fraud Examiners, said unemployment and disability programs are just two examples of many public and private sector systems being targeted as online fraud gets easier. It now costs as little as 25 cents to buy a Social Security number online, leading to a cycle of large-scale attacks followed by broad fraud crackdowns.

The risk of unsuspecting people getting caught in dragnets is only anticipated to grow, Wilder and other analysts say, as technologies such as artificial intelligence allow scammers to work faster and more easily forge documents. Benefit debit cards used by California’s CalFresh food assistance and CalWorks cash aid programs have also been targeted in recent fraud schemes, along with many similar programs across the country.

“It becomes kind of whack-a-mole,” Wilder said.

That’s not to say that the EDD’s pandemic unemployment problems have been neatly resolved. As of September, more than 130,000 California workers were still fighting long unemployment appeals cases, waiting an average of 137 days for a hearing with a state administrative judge, according to U.S. Labor Department data analyzed by CalMatters.

The EDD’s own data shows that the number of rejected unemployment claims has climbed steadily since the pandemic surge, to more than 1.9 million claims rejected from March 2020 through October 2023. The agency says that reflects the success of anti-fraud measures; advocates see it as evidence that the state also continues to trap legitimate workers, given that federal data shows EDD decisions are overturned almost half of the time on appeal.

“I definitely don’t think anything’s been resolved,” said George Warner, director of the Wage Protection Program at Legal Aid at Work. “A lot of the issues remain the same.”

The EDD stresses that it has implemented changes recommended by the California state auditor — including providing more public data and creating a new plan for future recessions — but the auditor remains unconvinced that several major issues have been remedied. This past summer, the auditor added the EDD to its list of “high-risk” state agencies, unlocking additional resources for potential future audits. Top concerns were poor customer service, high rates of benefit denials overturned on appeal and the agency’s inability to tally pandemic fraud, delaying the state’s two most recent annual financial reports.

“EDD’s mismanagement of the (unemployment) program has resulted in a substantial risk of serious detriment to the state and its residents,” the auditor’s latest report concluded.

EDD Director Farias said that all states face similar challenges, especially when it comes to quantifying fraud that is widely varied and, for obvious reasons, difficult to trace.

“There is no definition of what is fraud… and that’s really the biggest problem,” said Farias, who also sits on the board of the National Association of State Workforce Agencies. “There is Nigerian fraud ring fraud — Fraud with a capital ‘F’ — and then there is, you know, Mary Jo Smith down the street that really didn’t understand what the program was.”

In San Diego, Huebner unexpectedly got an up-close look at how identity verification issues continue to plague the EDD. After she filed for disability, it took a month and a half to get her first check. But then she received a letter in the mail addressed to a woman with a different name and employer in Northern California, which said that her benefits had been discontinued.

When Huebner tried to call to figure out what was going on, she realized that her YouTube trick to get through on the phone no longer worked, throwing her back in benefit limbo while she recovered from a spinal procedure and waited to see if a new EDD debit card showed up.

“They won’t tell you anything,” Huebner said in late October. “Pain is one thing, but helplessness is totally different.”

What next for California unemployment reform?

Before he was hired to fix the state’s pandemic problem-child, EDDNext director Hughes was enjoying retirement on his Sierra foothills ranch dotted with cattle, horses and sheep. He put that on hold and went back to work at the EDD when his former colleague Farias asked him to.

Hughes is quick to note that he wasn’t there for the worst of the pandemic issues. He spends a lot of time talking with other state tech executives who can empathize, such as peers at the DMV.

Even from the outside, it wasn’t hard to see what went wrong at the EDD during the pandemic.

“When you roll out a solution, it needs to work. If it doesn’t work and they call the help desk, you need to answer the phone,” Hughes said. “We didn’t do either of those things very well.”

In June, his team launched a new online portal called “MyEDD,” which uses Salesforce technology for workers to file and track the status of their benefits. Some users reported crashes during the first days of the rollout, but the system stabilized. It will be built out over time, Hughes said, as the agency works through contracts for identity verification and a “claims navigator” to show workers all benefits they are eligible for.

A new call center system using Amazon technology is slated to debut within the year — first for the state’s older disability system at the end of 2023, Hughes said, then for unemployment next summer. The idea is to ultimately go from the five or six systems that EDD agents currently juggle to one system for processing claims.

“Under the new system, there is a single pane of glass,” Hughes said. “As soon as they call in, all the information on their claim will come up.”

It’s not the first time the EDD has tried to streamline its claims system, parts of which date back to the 1980s. Pahlka in her book compares making sense of the patchwork programs to going on an archaeological dig.

After the Great Recession, the state paid Deloitte to upgrade several facets of its operation, including part of its claim management systems, in a series of contracts that ballooned to more than $152 million from 2010 to 2018, copies provided to CalMatters show. That system was one of several that state reports later found buckled during COVID, but Deloitte was awarded another $118 million as the state doled out emergency pandemic funds, according to contracts provided to CalMatters.

The irony, as Pahlka observed in her book, is that the money went to the very vendor “which built the ineffectual systems in the first place.”

U.S. Rep. Katie Porter, a Democrat from Orange County who sits on a U.S. House Oversight Committee that has investigated pandemic unemployment fraud, sighed heavily when asked about the past Deloitte “unemployment modernization” project — a response, she said, to both the contractor in question and a broader lack of oversight on big-budget projects.

“Deloitte has an unfortunate track record of not getting it done here,” Porter said. “If we’re going to contract this and spend our dollars with a private company to do this, we have to hold them accountable for delivering.”

Deloitte defended its work for the EDD in a statement, noting that “many technology constraints highlighted by California elected officials during the pandemic related to functions in EDD systems that Deloitte was not contracted to maintain.”

The company declined to comment on whether it intends to bid on the new EDDNext project.

Hughes said that no vendor is off the table for EDDNext, but that past contract performance will be taken into consideration for all bidders. This time around, Hughes said the plan is structured to include more oversight.

“It’s just way too much work for one vendor to do, and so we’ve split that up,” he said. “We’ve got different vendors doing different solutions. We can manage them much more effectively that way.”

Familiar fights

Another promise of EDDNext, Farias said, is that workers, advocates and front-line staff will have more of a say in how the project is built. The agency has also created a new customer experience arm, which outside observers like Pahlka see as a promising development.

Gerry of the National Employment Law Project was among the worker advocates briefly shown a version of the new EDD online portal before it launched. It will require more sustained effort, she said, to ensure that people relying on the system end up with something easier to use.

“It’s hard, because yes, we see certain incremental changes, but these systemic issues are still there,” Gerry said. “Unless there really is a big overhaul within the agency culture and the way they’re approaching this EDDNext project, we’re going to see these problems continue.”

The EDD maintains that more visible changes are coming, including a planned redesign of the agency’s 10 most-used forms to cut unnecessary questions, translate them into more languages, and make them easier to understand and access online.

Similar efforts are also underway in many other states, where officials have raised questions about whether the federal government should do more to standardize applications, anti-fraud measures or other elements of the system. Robert Asaro-Angelo, commissioner of the New Jersey Department of Labor and Workforce Development, recently told a U.S. House committee that states and territories that all currently have their own processes could use more guidance to bolster security while ensuring rightful benefits are paid.

“We keep talking as if there’s one unemployment system. There’s 53 different systems,” Asaro-Angelo said. “These fraudsters being able to pick and choose — they couldn’t be happier.”

In California, concerns about the nuts and bolts of the state’s unemployment program are magnified by a more fundamental concern: the financial quicksand beneath the entire system.

The state unemployment fund that pays for benefits is operating in the red, or “structurally insolvent,” as the California Legislative Analyst’s Office put it in a July 2023 report.

Though the state was making progress on paying down its $20 billion-plus pandemic unemployment loan from the federal government, state forecasts now show the debt creeping back up, adding urgency to a fight over whether to change California’s 1980s-era tax system.

Business groups are already pushing Gov. Gavin Newsom to use other state money to pay down the debt, despite California’s current budget deficit. The state has spent more than $680 million in recent years to pay interest on the federal loan.

“California’s vast unemployment insurance system has been under enormous strain since 2020, and employers are paying the price,” the California Chamber of Commerce argued in an August report.

From her vantage point at Sacramento’s Center for Workers’ Rights, labor lawyer Daniela Urban has watched cycles like this play out before. When the economy tanks, everyone — stressed-out workers, angry lawmakers, state watchdogs, the governor — wants to know what’s happening at the EDD.

But as people go back to work, the outside interest and funding wanes: a collective failure to fix the system before the next time things go south.

“Once the watchful eye is gone, I worry that it will be neglected,” Urban said, “and not by the people working there.”

The California Home Act, effective Jan. 1, 2022, paved the way for residential lot splitting (into two lots), allowing up to four separate living units to be built for a maximum of two units on each of the two lots.

In October, Assembly Bill 1033 reinstated ADU sales separate from the primary home. And AB 976 also signed by Gov. Gavin Newsom in October removed ADU owner-occupancy requirements. These two new laws offer a viable pathway for ADU construction and expansion for homeowners and real estate investors.

Also see: Duplex housing law met with resistance from California cities

“Yes, arguably more housing, more affordable housing allows less expensive properties in more expensive neighborhoods,” said Guy Cecala, executive chair at Inside Mortgage Finance. “There’s a crying need for more housing and more affordable housing,”

“It’s carving up single-family homes. Most people living in those neighborhoods don’t support them,” said Cecala, referring to common NIMBY reactions to new housing development.

If you’re looking to build an ADU from scratch, stick-built construction costs will run $350 to $400 per square foot, according to Mark Lefitz, vice president of business development at EZ Plans, an architect-design firm. “Soft costs (professional fees such as architectural and engineering and city fees) are $12,000 to $15,000.”

Also see: Want to jump on the ‘granny flat’ trend? This company was created to help

So, for example, an 800-square-foot ADU could cost $320,000 to build (or more depending on the interior).

You can also look into factory-manufactured ADUs which are then installed on site.

“Prefabs can be more expensive than stick builds,” said Steve Lefler, a consultant with Tiny House Alliance. “Electrical circuit costs and sewer connection costs are the biggest expenses.

More housing news: The least affordable housing market since 1984 is getting worse

If a homeowner doesn’t want to go to such lengths building an ADU and then selling it, they can opt to split the lot and sell it to a developer.

Matt Lucido, CEO of Yardsworth, has been buying dozens of inner-city lots in Los Angeles. Ideally, he looks for rectangular lots, say 6,000 to 9,000 square feet with small homes already on the property.

His firm provides a $5,000 non-refundable deposit to the lot seller with a six-month escrow period. A long escrow period is needed to square up the lot-split legal entitlements with the city.

Also see: Cash buyers flood US housing market, no-mortgage buys at 10-year high

“The seller makes somewhere between $100,000 and $250,000 for the lot split sale,” said Lucido. “If we can’t get the split done, the seller keeps the deposit.”

While Lucido is working on constructing properties on certain lot splits, none are completed and sold yet. So, it’s hard to know how much money a lot-split home would fetch since these ADU and lot-splitting laws are relatively new.

So, let’s say you do a lot split but keep the primary residence. How does that affect your property taxes?

“The land carries its own base (separate from the structure),” said Claude Parrish, a property assessor for Orange County. “The city building department must approve it.”

Affordability: 7 in 10 Californians say their kids will be worse off

Cities, I should note, have to follow state law. They cannot make arbitrary decisions like declining lot-split requests.

Parrish offered an example of land valued at $100,000 and evenly split 50/50. One parcel would have land assessed at $50,000 and so would the other parcel. The work involved, he said, is “not for the faint of heart.”

The Subdivision Map Act, enacted in 1974, enables cities and counties to administer, control and supervise the development of land, according to Chris Akin, a title operations manager at Lawyers Title.

“The sale of the ADU and corresponding lot split would have to conform to the Subdivision Map Act,” said Akin. “It’s a mini subdivision.”

Lots that are ineligible include those that have improper zoning (they must be zoned as single-family residential), do not meet minimum lot square footage requirements, cannot have been previously split or exist in floodplain (property near water).

Full disclosure: My firm, Mortgage Grader, does business with Lawyers Title.

So now, how to you finance the ADU construction? Well, that comes in many forms.

Examples range from the FHA 203(k) property rehabilitation loan to Fannie Mae’s HomeStyle and Freddie Mac’s CHOICE Renovation. A cash-out refinance of your existing mortgage or a home equity line of credit also can finance the build.

If you have an existing mortgage there could be problems splitting the property lot. Mortgage lenders don’t allow for partial reconveyances, so homeowners will need to clear any mortgage liens at the time of lot sale or lot split.

If you are considering buying a residential home (or building on a property you already own) to build ADUs and do a lot split, the first thing would be to hire a licensed appraiser. He or she can objectively help you to calculate the projected completed value and what rents these mini homes will command.

Next would be hiring a construction cost estimator. You’ll need an expert to figure out if it’s worth the investment.

Lastly, if you are going to hire a contractor, check him or her out thoroughly. The worst client and reader complaints I’ve heard over the years have been about nightmare contractors who did horrible work, some of which had to be redone. Some contractors even took the money and never did the work or just disappeared for days at a time.

Have your attorney review and approve ahead of signing anything.

Freddie Mac rate news

The 30-year fixed rate fell to an average 7.5%, 26 basis points lower than last week. The 15-year fixed rate fell 22 basis points to 7.03% from a week ago.

The Mortgage Bankers Association reported a 2.5% mortgage application increase compared with last week.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $726,200 loan, last year’s payment was $207 less than this week’s payment of $5,078.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with 1 point: A 30-year FHA at 6.625%, a 15-year conventional at 6.5%, a 30-year conventional at 6.99%, a 15-year conventional high balance at 7.375% ($726,201 to $1,089,300), a 30-year high balance conventional at 7.75% and a jumbo 30-year fixed at 7.25%.

Note: The 30-year FHA conforming loan is limited to loans of $644,000 in the Inland Empire and $726,200 in LA and Orange counties.

Eye catcher loan program of the week: A 30-year adjustable, interest-only and fixed for the first five years, rate at 7.5% with 1 point cost.

Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or jlazerson@mortgagegrader.com.

Holiday travel can be taxing even without the added stress of disruptions such as cancellations, flight delays or lost bags.

Last winter, Southwest Airlines’ holiday travel meltdown left millions of travelers stranded and angry. Travelers were still filing for compensation for ruined trips weeks later. Consumer complaints against U.S. airlines to the Department of Transportation in February 2023 increased sixfold compared with February 2019, forcing the agency to temporarily stop reporting more data as it processes complaints.

Despite the chaos, holiday travel shows no signs of slowing down this year. About 50% of Americans plan to pay for flights or hotel stays this holiday season, according to a NerdWallet survey conducted by The Harris Poll in September among over 2,000 U.S. adults. They will be referred to as “2023 holiday travelers” going forward.

More than a third of 2023 holiday travelers (35%) say they will keep their usual holiday travel plans this year, regardless of expense. And given the rising cost of gas, a quarter (25%) of those traveling say they’re flying rather than driving.

If you’re determined to get your dose of festive cheer, you may wonder if it’s worth paying extra for travel insurance this year. The survey found that 21% of 2023 holiday travelers plan on buying or have already bought travel insurance for their holiday trips, up from 16% last year.

Is flying truly worse?

The post-pandemic travel surge is real. But has the flying experience honestly gotten worse? Let’s take a look at the numbers.

The Department of Transportation releases reports on the performance of the 10 largest airlines and their marketing carriers. An analysis of data through June 2023 (which, it should be noted, doesn’t capture the complete picture of summer travel) by the U.S. PIRG Education Fund found:

• The number of airline passengers for the first half of 2023 increased by 11%, to 419.2 million, compared with 2022. That’s almost back to 2019 pre-pandemic levels (419.7 million).

• On-time performance for flights in June fell to 71.3%, worse than a year ago. The on-time rate for the first half of 2023, at 76.5%, was slightly better than in 2022, but worse than in 2019.

• Flights are fuller this year than they were before the pandemic. More than 419 million passengers traveled in both the first half of 2023 and the first half of 2019. There were, however, fewer flights operated in 2023 — nearly 3.5 million compared with nearly 3.9 million in 2019 — meaning the same number of travelers had fewer flight options.

• The flight cancellation rate in June fell to 2.1%, better than a year ago. The cancellation rate for the first half of 2023, at 1.6%, was half of what it was in 2022 and better than in 2019.

So, while travel returns to pre-pandemic levels, travelers have fewer flight options. Given those gloomy statistics, travel insurance is at least worth considering this year.

Insurance aside, one way to lower the risk of disrupted travel is by adjusting when or how you fly. Nearly 2 in 5 2023 holiday travelers (35%) in the NerdWallet survey plan to avoid busy travel days by extending the duration of their holiday trips.

» Learn more: The busiest days to fly during the winter holidays

What type of travel insurance should you get?

The type of insurance you should buy depends on a few factors, including:

• Whether your trip is nonrefundable.
• Where you’re going.
• If your credit card has built-in protection.
• What your health coverage is at the destination.

Let’s assume you’re traveling domestically and already have health insurance coverage. Depending on your age and health, you may not have to pay extra for medical coverage. Note that only some travel insurance policies cover pre-existing conditions.

Some travel credit cards offer basic trip cancellation or interruption, baggage delay coverage and rental car coverage up to a certain dollar amount. If you think the options your credit card provides are good enough, you won’t need additional coverage.

If you don’t have a credit card with built-in protection or the limits aren’t high enough for you, look into buying a stand-alone travel insurance policy.

You can opt for the trip insurance your airline offers, buy it directly from an insurance provider or get it via an online travel agency such as Expedia. You can also compare quotes from travel insurance marketplaces you can find online. The cost of your policy will depend on the details of your trip.

Flying home for the holidays may not get any better this year, but having travel insurance could give you some comfort during your trip.

The article Should You Buy Travel Insurance for Holiday Travel? originally appeared on NerdWallet.

The nation’s top accident investigator said Thursday that a surge in close calls between planes at U.S. airports this year is a “clear warning sign” that the aviation system is under stress.

“While these events are incredibly rare, our safety system is showing clear signs of strain that we cannot ignore,” Jennifer Homendy, chair of the National Transportation Safety Board, told a Senate panel on Thursday.

Also see: 3 passengers sue Alaska Airlines after off-duty pilot accused of trying to cut engines mid-flight

Homendy warned that air traffic and staffing shortages have surged since the pandemic. She said there has been a “lack of meaningful” training — and more reliance on computer-based instruction — by the Federal Aviation Administration and airlines, and too many irregular work schedules among pilots and air traffic controllers.

“Where you end up with that is distraction, fatigue,” she told the aviation subcommittee. “You are missing things, you are forgetting things.”

Also see: Delta says California pilot accused of threatening to shoot the captain no longer works for the airline

The NTSB is investigating six close calls, or what aviation insiders call “runway incursions.” The FAA identified 23 of the most serious types of close calls in the last fiscal year, which ended Oct. 1, up from 16 the year before and 11 a decade ago. Independent estimates suggest those figures grossly understate such incidents.

Thursday’s hearing included only a momentary discussion of pilot mental health, which is on travelers’ minds because of the arrest of an off-duty pilot accused of trying to disable a plane in midflight and a co-pilot who allegedly threatened to shoot the captain.

Also see: United Airlines flight attendants want Dodgers questioned about racial bias claims

The hearing produced no new ideas for increasing safety but brought a new warning about the potential for travel disruptions over the upcoming holidays because the FAA doesn’t have enough air traffic controllers.

“We are not healthier than we were last year, controller-wise,” said Rich Santa, president of the National Air Traffic Controllers Association. “I think FAA’s own numbers indicate we have potentially six more air traffic controllers than we had last year.”

The union president said many controllers are forced to work 10-hour days or six-day weeks.

Related story: Horizon Air cockpit scare revives pilot mental health concerns

The Transportation Department’s inspector general criticized the FAA in a report this summer, saying the agency has made only “limited efforts” to fix a shortage at staffing at critical air traffic control centers.

Among the close calls in recent months, the scariest occurred in February in Austin, Texas. During poor visibility in the early morning hours, a FedEx cargo plane preparing to land flew over the top of a Southwest Airlines jet that was taking off. The NTSB has estimated that they came within about 100 feet of colliding.

An air traffic controller had cleared both planes to use the same runway. In other recent incidents, pilots appeared to be at fault.

Consumers and investors were spared from a 12th rate hike when Federal Reserve officials voted in November to keep their benchmark borrowing rate steady.

Don’t take the pause as an indication that officials are ready to sound the all-clear on their firefight against inflation.

Fed Chair Jerome Powell’s main message after the Federal Open Market Committee’s (FOMC) November rate decision was that officials are not yet sure they’ve raised interest rates enough to quell inflation. That’s even as the Fed’s key borrowing benchmark sits at a 22-year high of 5.25%-5.5%.

In economic projections last updated in September, officials indicated to Fed watchers that one more increase is on the table for this year. If approved, the move would bring the Fed’s key benchmark interest rate to a new 22-year high of 5.5%-5.75%. It could also possibly be the last rate hike. Just one official sees rates rising higher than that next year, those projections show.

Those projections, however, can prove to be fleeting in an uncertain economic environment. Officials are slated to refresh those estimates at their last meeting of the year in December.

Higher rates mean more expensive borrowing costs. Following the Fed’s moves in lockstep are the prices consumers pay to borrow money, whether it’s the price of financing a purchase on a credit card or the cost of taking out an auto loan.

But that uncertainty is two-sided. Just as officials aren’t confident that interest rates are high enough, they also aren’t convinced that they need to raise interest rates again at all.

“We haven’t made any decisions about future meetings,” Powell repeated at the Fed’s post-meeting press conference. “It’s fair to say that the question we’re asking is: Should we hike more?”

The Fed has been lifting borrowing costs with a purpose: Officials are trying to cool down an overheated post-pandemic economy that contributed to the hottest inflation in generations.

Fed officials are seeing some progress in stabilizing prices, but the job isn’t over yet. Hotter gas prices contributed to a pick up in inflation for two straight months this summer, with prices now stuck at a 3.7% annual growth rate since August, according to the Bureau of Labor Statistics’s latest reading.

Overall inflation can be more volatile because of fluctuating food and energy prices. Yet, if those prices rise for long enough, they could add to the Fed’s headaches. Fed Chair Jerome Powell has said households experience food and energy inflation most, making it an important driver of their expectations for where prices end up in the future.

Powell has also reiterated that how fast prices excluding food and energy — so-called “core” inflation — rise is the better indicator of underlying inflation. That gauge has fallen more than 2 percentage points from its peak but is still about two times higher than the Fed’s target, giving Fed officials another reason to remain on guard.

After the Fed decides whether it’s raised interest rates high enough, next comes the task of determining how long to keep interest rates at that historically high level — a debate that policymakers may be hesitant to let markets in on, out of fear that it could prematurely loosen financial conditions.

Should the Fed raise rates again? Past experience is igniting the U.S. central bank’s hawkishness

Experts say the risks of pulling back too soon and kickstarting another vicious inflation spiral remain higher than the risks of doing too much. The Fed’s failure to slow the economy enough and stomp out inflation in the 1970s led to a painful recession in the 1980s.

“The worst thing we can do is to fail to restore price stability because the record is clear on that,” Powell said in September. “It can be a miserable period to have inflation constantly coming back and the Fed coming in and having to tighten again and again.”

The U.S. economy is showing clear signs of slowing. Job growth last month rose by the slowest pace since June, with employers adding 150,000 jobs in the month. But that slowdown isn’t looking worrisome yet. Even with the Fed raising interest rates a whopping 525 basis points since March 2022, unemployment is still at historic lows below 4%.

The job market’s strength is giving workers time to make up some of the ground that they lost to inflation, though their paychecks haven’t fully recovered yet.

Fed officials hope it suggests they can gradually cool prices without hurting the job market. But the ultimate fear is it could contribute to more inflation.

On the back of the still-strong job market, consumer spending is helping drive the economy. Consumption in September rose 0.7% from the previous month, the fastest pace in six months, according to data from the Department of Commerce. A red-hot summer of spending helped the financial system grow by the fastest rate — 4.9% in the third quarter of 2023 — since 2021, gross domestic product (GDP) figures show.

Economists say signaling another rate hike is more about giving the Fed options.

“It’s important for the Fed at the moment to have all the options on the table,” says Tuan Nguyen, an economist at RSM. “All of those meetings will be live, meaning the Fed will have the options of whether to pause or hike.”

Investors aren’t convinced the Fed will raise rates again — and some economists agree

Investors aren’t convinced the Fed will be able to follow through. Even as the Fed signaled it hasn’t made its mind up yet, most market participants still predominantly assume the Fed is done, according to data from CME Group’s FedWatch tool.

So do some prominent Wall Street firms and their economists, from Morgan Stanley to Moody’s Analytics.

One reason why the Fed might end up going on a prolonged pause is simply because the U.S. economy hasn’t caught up to higher rates just yet. Experts say it may take a year for the full effect of a rate hike to hit the job market. Hiring is often the last shoe to drop. A year ago, rates had just been pushed past the so-called “neutral” rate of interest, or the point where borrowing costs are no longer stimulating economic growth.

Some economists say raising rates is akin to driving a car down the road while looking out of the rearview mirror. Data is backward-looking, and the Fed may find it’s done too much to slow the economy when it’s too late. While the economy had a blockbuster third quarter, it could also be the last hurrah before higher rates come to crash the party. Historically, the Fed hasn’t been able to raise rates without triggering a recession very often.

“Not only is it a concern, but the odds favor it,” McBride says, referring to a recession. “Look at the last three [tightening] cycles: Two of them ended in recessions, and the one that didn’t was an economic slowdown, where they had to reverse course and start cutting rates. History is not on their side.”

Another reason to be cautious, the Fed can keep squeezing the economy without raising rates. What often does the trick is if the “real” cost of money — meaning the difference between interest rates and overall inflation — is on the rise. The Fed’s key benchmark rate has been higher than inflation since May.

“If the Fed continues to raise rates in an environment in which inflation is coming down, that creates more pain for aggregate demand and more pain for the economy,” says Jordan Jackson, global market strategist at J.P. Morgan Asset Management. “Then, you run the risk of further exacerbating a downward movement in inflation. … You’re in a situation where you could be looking at outright deflation.”

Fed officials are also mindful of bank failures from last March, which demonstrate that risks can pop up out of nowhere and without much notice. A massive surge in long-term interest rates — with the 10-year Treasury yield crushing new 16-year highs in October — could also do some of the Fed’s work for it.

To top the balance of risks off, the threat of a possible government shutdown could make it harder for the Fed to track just how much these varying forces are impacting inflation. The government agencies that produce the consumer price index (CPI), personal consumption expenditures (PCE) index and employment situation reports would be on furlough until the gridlock is resolved.

How the Fed navigates the pros and cons of future rate moves depends primarily on the FOMC’s point of view — and how they decide to weigh the conflicting backdrop.

“If you’re balancing risks and you get less worried about the economy slowing and more worried about inflation just staying high and getting built into the price and wage-setting process, then you might conclude you need to move faster,” says Bill English, a finance professor at the Yale School of Management, who spent 20 years at the Fed. “Lags just make the problem harder because you have to be forward-looking and judge where the economy is going to be.”

5 steps to take with your money when rates and recession risks are high

Another increase means higher borrowing costs for consumers, including on credit cards, personal loans, auto loans and more. And even if central bankers are done raising rates, those interest rates are unlikely to fall until the Fed cuts its borrowing benchmark — a move that U.S. central bankers think still remains off in the distance.

The highest rates in more than two decades mean that money is no longer cheap. In this new era of monetary policy, these are the important moves you should be making with more money.

1. Keep a long-term mindset

Differing expectations about what the Fed could do with rates in the months ahead could lead to more market volatility. Plunging stocks mean pain for investors, and the possibility of a recession or even higher Fed interest rates could worsen the volatility. But don’t succumb to market volatility and change your approach. Remember, a diversified portfolio and a long-term mindset protect you through the most brutal times in the stock market.

2. Pay down debt

Consumers with fixed-rate debt, commonly on loans such as mortgages, won’t feel any impact when the Fed raises rates. But Americans are more fragile if they have a variable-rate loan, especially if it’s debt on a high-interest credit card. The average credit card rate is hovering at the highest levels ever recorded, thanks to the Fed’s recent inflation fight, according to Bankrate data.

Consider consolidating that debt with a balance-transfer card to help you make a bigger dent in your principal balance, with some cards offering borrowers 0% introductory annual percentage rates (APRs) for up to 21 months. However, the time to take advantage may be now. Consumers may find it tougher to get approved for one of these offers — or issuers may get rid of them altogether — if the economy ever takes a turn for the worse.

Homeowners with an adjustable-rate mortgage or a home equity line of credit (HELOC) might want to consider refinancing into a fixed-rate loan. “You don’t want to be a sitting duck for higher interest rates on your credit card or home equity line of credit,” McBride says. Home equity lines of credit have also historically been a cheaper way to borrow money, but that’s now looking like a relic of a low-rate era with HELOC rates now pushing 9%.

3. Boost your emergency savings

With the economic outlook uncertain, now’s an important time to take a careful look at your finances and find ways to boost your emergency fund if you don’t already have the recommended six to nine months’ worth of expenses stashed away. But the silver-lining to rising rates: Savers can find the best yields in over a decade that can even help them grow their purchasing power, with many yields at online banks now beating inflation.

4. Find the best place for your cash

Savers can earn even more money on their cash by switching to a high-yield savings account. Many accounts on the market are offering consumers who bank with them yields near 5%. If you put an initial $10,000 deposit into an account with a 5% annual percentage yield (APY), you’d earn $500 in interest, compared with just $60 on the average savings yield of 0.60%.

Consumers who already have an emergency fund may even want to start thinking about locking in those elevated yields for the longer haul by opening a 2-year or 5-year certificate of deposit. Savings account yields are variable, and banks often don’t wait for the Fed to cut rates before lowering their own yields.

5. Think about recession-proofing your finances

Given that plenty of risks lie ahead for the Fed, always be on the lookout for ways that you can recession-proof your finances. Along with building up your emergency fund, experts say it comes down to living within your means, staying connected with your network, identifying your risk tolerance and staying focused on the long haul if you’re an investor.

“To relieve individuals, households and businesses of historically high inflation, the Fed has been prepared to accept the risk of a recession if it achieves the mandate of stable prices,” says Mark Hamrick, Bankrate senior economic analyst. “Choosing from the least of two evils, it isn’t dissimilar from when firefighters trade some damage from water for fire damage.”

(Visit Bankrate online at bankrate.com.)

©2023 Bankrate.com. Distributed by Tribune Content Agency, LLC.

Revenue increased for Walt Disney Co.’s theme parks globally in the fourth quarter, but the numbers lagged at Walt Disney World, the entertainment giant reported Wednesday.

Disney’s experiences division, which includes theme parks, hotels, Disney Cruise Line and merchandise, saw an uptick in revenue of 13% for the quarter ending Sept. 30. Domestic parks earned $5.4 billion, up 7%, while earnings at international parks were up 55% to $1.7 billion.

The report said Disney World suffered “lower results” without offering specific numbers. They were attributed to lower guest spending because of a decrease in hotel room rates, the cost of the accelerated depreciation for Star Wars: Galactic Starcruiser, the two-night theme experience that was shuttered in September, as well as inflation.

The company’s third-quarter report also indicated a slump at Disney World and pointed to the flattening of attendance and softening in other Florida tourism markets.

Higher attendance and higher ticket prices fueled the growth at Disneyland, officials said.

“Parks and experiences overall remains a growth story, and we are managing our portfolio exceptionally well,” Disney CEO Robert Iger said during an analyst call Wednesday afternoon.

“Even in the case of Walt Disney World, where we have a tough comparison to the prior year, when you look at this year’s numbers compared to pre-pandemic levels in fiscal ‘19, we’ve seen growth in revenue and operating income of over 25% and 30% respectively over the last five years,” Iger said.

Interim Chief Financial Officer Kevin Lansberry said Disney World numbers were suffering in comparison with those from the resort’s 50th anniversary celebration, which ended April 1.

Disney World will have “a little bit of that lapping effect that will continue for a little bit as we go through Q1,” he said. “But as I look out at the other domestic businesses … Disneyland continues to look exceptionally strong, as does Disney Cruise Line. So bookings, all of those continue to be very, very strong going forward.

“We continue to be bullish on the long-term positioning of our experiences business,” Lansberry added. “We expect those investments to ramp up towards the back half of that 10-year period, with more gradual increases in the first few years,” he said.

Iger repeated his $60 billion plan to “turbocharge” growth for the theme parks at multiple locations.

In an interview with CNBC’s Julia Burstin, Iger said the long-term success of the parks played a part in those investments.

“When we looked ahead and how we’ll allocate capital … we decided that a great place to place our bets or our capital is in the business that’s delivered the best results,” he said.

Fourth-quarter revenue for Walt Disney Co. overall was $21.2 billion, a 5% year-to-year increase.

The company reported an increase of almost 7 million subscribers to its Disney+ streaming service. The addition of theatrical releases “Elemental,” “The Little Mermaid” and “Guardians of the Galaxy Vol. 3” boosted the service, Iger said.

dbevil@orlandosentinel.com

The uncrewed spacecraft is designed for now to take cargo to the International Space Station, having won a NASA contract to join SpaceX and Northrop Grumman for commercial resupply missions.

The first nearly complete version of Dream Chaser, named Tenacity, is set to leave Sierra Space’s Louisville, Colorado, production facility to begin its journey to the Space Coast. Its first stop will be to NASA’s Neil Armstrong Test Facility in Sandusky, Ohio, for a battery of environmental shakedown tests in the coming weeks.

“Today we have arrived at a profound milestone in both our company’s journey and our industry’s future – one that has been years in the making and is shaped by audacious dreaming and tenacious doing,” said Sierra Space CEO Tom Vice during an event heralding the completion of what is planned to be a fleet of Dream Chasers.

Just like the space shuttle, it will launch from Florida and land in Florida. It’s slated to be the Certification-2 mission for United Launch Alliance’s Vulcan Centaur, which is gearing up for Certification-1, a mission to send the Astrobotic Peregrine lunar lander to the moon, as early as Dec. 24.

Vulcan Centaur, which will launch from Cape Canaveral Space Force Station’s Space Launch Complex 41, is the replacement rocket for ULA’s Atlas V and Delta IV family of rockets, powered by two American-made engines by Blue Origin. ULA needs both missions under its belt before it can begin a spate of missions it has lined up for the Department of Defense.

ULA President and CEO Tory Bruno this past summer said it would try to fly Dream Chaser within the first few months of 2024 if its first Vulcan flight goes well. But Tenacity still has several months of testing in Ohio before making its way to the Space Coast.

The spacecraft will go through hot and cold extremes under a simulated vacuum to ensure vehicle performance in space. Vice last week targeted April as the earliest possible launch, which also requires NASA to find an open parking space at the busy space station.

Dream Chaser, which has been in the works for 15 years, would become a unique option for NASA, with the ability to make a landing right back at the former space shuttle runway at Kennedy Space Center. SpaceX Cargo Dragon spacecraft make water landings off the Florida coast while Northrop Grumman’s Cygnus cargo capsules burn up in Earth’s atmosphere once NASA is done with them.

The launch actually has Dream Chaser attached to an expendable cargo module called Shooting Star so it can cart up about 12,000 pounds of cargo, although return trips can only handle about 4,000 pounds. NASA can use the Shooting Star to get rid of trash as it, just like Cygnus, burns up in the atmosphere.

The mission plan calls for ISS crew to capture Dream Chaser by grappling the Shooting Star module with the Canadian robotic arm at the station and to marry it to one of the ISS ports.

Sierra Space has seven cargo missions to fly to and from the ISS under NASA’s Commercial Resupply Services 2 (CRS-2) contract awarded in 2016. The return trips also feature low G-force landings — less than 1.5 G’s  — something that allows for more delicate science including live animals to return safely from space within the pressurized cargo hold. It’s built to withstand 3,000 degrees Fahrenheit on reentry and make at least 15 trips to space each. Work on a second Dream Chaser has already begun.

Sierra Space also has plans to expand Dream Chaser to support crew, and the spacecraft is central to its efforts to support its partnership with Blue Origin to develop a commercial low-Earth-orbit space station called Orbital Reef. Although a finalist, that version of the Dream Chaser lost out to SpaceX’s Crew Dragon and Boeing’s CST-100 Starliner in 2014 when NASA chose those two companies for rotational crew duties to the ISS.

Dream Chaser is about 1/4th the size of space shuttle orbiters and would support up to seven crew members and supplies. It also can land at any compatible commercial runway, not just the one at KSC.

In 2022, though, Sierra Space said it would base its commercial astronaut training at KSC, and company officials still are targeting 2026 for a passenger-ready version of the Dream Chaser.