Quotulatiousness

November 5, 2016

QotD: Gentrification

Filed under: Economics, Humour, Quotations, USA — Tags: — Nicholas @ 01:00

Virtually no one has a good word for gentrification. It is lamented in tones from angry to mournful, by political commentators across the spectrum, possibly including me. Yet many of those same people are … renting or buying homes in “up and coming” neighborhood, which they prize for their proximity to other young(ish), progressive, creative-class people much like themselves. Which is to say that they are gentrifiers. In a neat inversion of the old activist slogan, they are “being the change they don’t want to see in the world”.

Their location puts them in the paradoxical situation of wishing gentrification wouldn’t happen, while avidly rooting for all the stuff that gentrification brings, from farmer’s markets to dog parks. If they are homeowners, too, they are not unhappy about the local price appreciation (their financial plan may indeed require it), however much they may regret its effects in the abstract. As a practical matter, this is something like declaring that you hate the Yankees, but have $5,000 on them to win the World Series. Your loyalties are bound to be divided.

Megan McArdle, “My Love-Hate Relationship With Gentrification”, Bloomberg View, 2015-03-26.

October 18, 2016

QotD: “Smart Growth” regulations hurt the poor

Filed under: Economics, Government, Quotations, USA — Tags: , , , — Nicholas @ 01:00

In the 1970s, municipalities enacted new rules that were designed to protect farmland and to preserve green space surrounding rapidly growing cities by forbidding private development in those areas. By the late 1990s, this practice evolved into a land-use strategy called “smart growth.” (Here’s a video I did about smart growth.) While some of these initiatives may have preserved green space that can be seen, what is harder to see is the resulting supply restriction and higher cost of housing.

Again, the lower the supply of housing, other things equal, the higher real-estate prices will be. Those who now can’t afford to buy will often rent smaller apartments in less-desirable areas, which typically have less influence on the political process. Locally elected officials tend to be more responsive to the interests of current residents who own property, vote, and pay taxes, and less responsive to renters, who are more likely to be transients and nonvoters. That, in turn, makes it easier to implement policies that use regulation to discriminate against people living on low incomes.

Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.

September 20, 2016

QotD: Municipal parking regulations hurt the poor

Filed under: Economics, Government, Quotations, USA — Tags: , , — Nicholas @ 01:00

Another land-use regulation that makes space more expensive is municipal requirements that establish a minimum number of parking spaces per housing unit.

According Donald Shoup’s analysis, parking requirements add significantly to the cost of housing, particularly in areas with high land values. For example, in Los Angeles, parking requirements can add $104,000 to the cost of each apartment. Parking requirements limit consumers’ choices and increase the cost of housing even for those who prefer not to pay for parking.

Developers typically build only the minimum amount of parking required by law, which indicates that those requirements are binding. That is, in a less-regulated environment, developers would devote less land to parking and more land to living space. A greater supply of living space will, other things equal, lower the cost of housing.

Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.

September 18, 2016

Progressives who suffer from small-c conservatism

Filed under: Bureaucracy, Business, Politics, USA — Tags: , , , — Nicholas @ 02:00

At Coyote Blog, Warren Meyer explains why many “progressives” are actually driven by very conservative ideas:

Begin with a libertarian goal that should be agreeable to most Progressives — people should be able to live the way they wish. Add a classic Progressive goal — we need more low income housing. Throw in a favored Progressive lifestyle — we want to live in high density urban settings without owning a car.

From this is born the great idea of micro-housing, or one room apartments averaging less than 150 square feet. For young folks, they are nicer versions of the dorms they just left at college, with their own bathroom and kitchenette.

Ahh, but then throw in a number of other concerns of the Progressive Left, as administered by a city government in Seattle dominated by the Progressive Left. We don’t want these poor people exploited! So we need to set minimum standards for the size and amenities of apartments. We need to make sure they are safe! So they must go through extensive design reviews. We need to respect the community! So existing residents are given the ability to comment or even veto projects. We can’t trust these evil corporations building these things on their own! So all new construction is subject to planning and zoning. But we still need to keep rents low! So maximum rents are set at a number below what can be obtained, particularly given all these other new rules.

As a result, new micro-housing development has come to a halt. A Progressive lifestyle achieving Progressive goals is killed by Progressive regulatory concerns and fears of exploitation. How about those good intentions, where did they get you?

The moral of this story comes back to the very first item I listed, that people should be able to live the way they wish. Progressives feel like they believe this, but in practice they don’t. They don’t trust individuals to make decisions for themselves, because their core philosophy is dominated by the concept of exploitation of the powerless by the powerful, which in a free society means that they view individuals as idiotic, weak-willed suckers who are easily led to their own doom by the first clever corporation that comes along.

Postscript: Here is a general lesson for on housing affordability: If you give existing homeowners and residents the right (through the political process, through zoning, through community standards) to control how other people use their property, they are always, always, always going to oppose those other people doing anything new with that property. If you destroy property rights in favor of some sort of quasi-communal ownership, as is in the case in San Francisco, you don’t get some beautiful utopia — you get stasis. You don’t get progressive experimentation, you get absolute conservatism (little c). You get the world frozen in stone, except for prices that continue to rise as no new housing is built. Which interestingly, is a theme of one of my first posts over a decade ago when I wrote that Progressives Don’t Like Capitalism Because They Are Too Conservative.

September 6, 2016

QotD: Minimum lot size regulations hurt the poor

Filed under: Bureaucracy, Economics, Government, Quotations, USA — Tags: , , , — Nicholas @ 01:00

Other things equal, the larger the lot, the more you’ll pay for it. Regulations that specify minimum lot sizes — that say you can’t build on land smaller than that minimum — increase prices. Regulations that forbid building more units on a given-size lot have the same effect: they restrict supply and make housing more expensive.

People who already live there may only want to preserve their lifestyle. But whether they intend to or not (and many certainly do so intend) the effect of these regulations is to exclude lower-income families. Where do they go? Where they aren’t excluded — usually poorer neighborhoods. But that increases the demand for housing in poorer neighborhoods, where prices will tend to be higher than they would have been.

And it’s not just middle-class families that do this. Very wealthy residents of exclusive neighborhoods and districts also have an incentive to support limits on construction in order to maintain their preferred lifestyle and to keep out the upper-middle-class hoi polloi. Again, the latter then go elsewhere, very often to lower-income neighborhoods — Williamsburg in Brooklyn is a recent example — where they buy more-affordable housing and drive up prices. Those who complain about well-off people moving into poor neighborhoods — a phenomenon known as “gentrification” — may very well have minimum-lot-size and maximum-density regulations to thank.

When government has the authority to restrict building and development, established residents of all income levels will use that power to protect their wealth.

Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.

June 13, 2016

Moving really is hell

Filed under: Cancon, Personal, USA — Tags: — Nicholas @ 02:00

In the New York Post, Naomi Schaefer Riley reports that Americans are apparently moving less frequently than they used to, and at least part of the reason is the hellish experience of moving:

Americans are stuck. Research from the Census Bureau suggests that Americans have stepped in some wet cement and have yet to extract themselves.

In 1948, more than 20 percent of Americans moved to a new home. But that percentage has been steadily declining since the ’80s, to the point where now only 11 percent of Americans say they have moved in the last year.

Experts have offered all sorts of reasons for this immobility. But for some of us, anyway, there’s the unavoidable fact that moving is a pain in the behind. It’s expensive and time-consuming — and it seems to be getting worse. When I tell friends that our family is moving this week, they look at me as if I’ve just told them a family pet has died.

When my parents sold a house three decades ago, they were told to “straighten up.” But now our homes are expected to be immaculate displays. There are people who make their living “staging homes,” as if we should put on some kind of theatrical performance in order to get top dollar.

Real estate agents will give you piles of material to explain what to do to a house to make it “show ready.” (That “show” is apparently “House Hunters.”) “Make your house look like a Pottery Barn catalogue,” one agent explained. “Only three to four books are allowed on any shelf.”

Apparently people in Pottery Barn catalogues don’t read. Also, their children don’t have Legos.

We moved house earlier this year and we’re still digging out from underneath the rubble. It didn’t help that we found the perfect house to buy long before we expected to, and so hadn’t begun any kind of prep work in our existing house in advance of the move. We were trading a larger home in a 15-year-old suburb for a house in a small town that was nearly 200 years old. That translates to not only smaller living space (about 1000 square feet less) but also little to no storage space (closets were extremely rare in the 1830s). We’d been 13 years in the house and our stuff had “settled” around us … we could have used six months to de-clutter, pare down our less-frequently-used possessions, and make regular trips to the dump. Oh, and my sudden health issue and two-week stay in ICU almost exactly in the middle of the packing phase really didn’t help at all.

We moved out in phases, clearing out most of our stuff from the interior of the house, but leaving the garage and basement stuffed with anything we couldn’t get packed in time for the movers to take. We had much of the interior of the house repainted (actually, we had both the houses repainted), plus new carpeting upstairs and lots of “handyman” fixes to try to erase as much of the bumps and dings of having actually lived in the place for more than a decade. Then the real estate agent brought in the staging crew and decorated the place. After that was done, we barely recognized it, but while the furnishings and decorations were visually attractive, it was clearly not the kind of usage any normal family would have for the space.

Fortunately, our house did sell fairly quickly for just a bit less than our original asking price, but remember all the crap we stashed away in the garage and the basement? We only just finished clearing that out the same day we had to hand the keys over to our lawyers prior to the sale closing. Where did it all go? Most of it ended up in what I eventually plan to be my woodworking shop in the garage. Lots of the rest ended up going to the dump. I lost track of the total number of dump runs we made … and I know there’s probably more that will need to go that route as we begin to unpack the remaining boxes.

After all that, I really understand the attraction of minimalism but I know I could never live that way: between my thousands of books and my woodworking tools and materials there’s no way to be truly “minimal”. For example, while the garage is currently filled to the brim with “stuff”, my table saw and other woodworking power tools are in a storage locker because there’s no room for them in the shop (yet).

Of course, on a warm spring afternoon, just looking out over the backyard reminds me that the move was worth it:

Backyard view

April 5, 2016

QotD: The art of buying a house with real problems

Filed under: Humour, Quotations — Tags: , , — Nicholas @ 01:00

My house cost less than $25,000 when I bought it. I wasn’t expecting a rose garden. As it turned out, I got a lupin garden, but that’s a story for another day. There was a lot wrong with my house, and I knew it. I even knew that the sewer wasn’t likely to be first rate. There was a patch on the concrete floor around the sewer pipe. There’s always a reason why the floor has been patched around a sewer line. All the reasons are bad reasons.

I needed a house six years ago or so after catching the poverty. It was my own fault. I foolishly went to the early-bird special at the Honest Work Buffet, but Wall Street had gotten there before me and sneezed on the warming tray with the regular economy in it. Lyme Disease didn’t help any, either, although I still find ticks less loathsome than politicians.

I believe that a house is the chassis of a competent family. We were broke but it was important to keep us together in a house where we would have some control over our affairs. I looked for a house that was as cheap as the chrome on a Kia, but didn’t have anything wrong with it that I couldn’t understand or fix myself. Our house fit the bill. It had been abandoned, and the bank wanted to get rid of it, badly.

The house was owned by a local bank that held the note from the prior owners, a real rarity back when the real estate leverage world was desolating the landscape. People kept predicting that housing would fall an additional X percent, and then they’d buy. They didn’t realize that the big banks holding the leveraged debt had no interest in the real real estate. The financial institutions were being made whole by logrolling the government. The houses were abstractions to them, and only the paper was real. The local banker had his tit in the wringer over our house. I could reason with him. Either I could live in it, or he could. No one in their right mind would want to live in my house.

I didn’t want an abstract house. I wanted one with real problems. Mission Accomplished. I tried in vain to make real estate agents understand that I wanted to buy a house nobody else wanted. They kept trying to show me houses that looked like Home Depot had exploded inside them. The current owners wanted me to pay for the privilege of ripping out all the silly stuff they had inexpertly selected and installed. What I really wanted was a neglected house. Neglect is easier to handle than active malice. That applies to real estate and elections, now that I think of it.

Our house had been neglected, that’s for sure. There was a hole in the back roof that I could stick my head through. The wiring was still partly knob and tube. It takes a long time to foreclose on a house, even if it’s abandoned, so all the pipes had frozen and burst while the bank went through all the legal steps to foreclose on an empty house. When we bought our home, it was essentially a poorly constructed shell of a house, not a dwelling.

Sippican Cottage, “Interestingly, ‘Unified Field Theory of Neglect’ Is the Name of My Left Banke Tribute Band. But I Digress”, Sippican Cottage, 2016-03-21.

January 18, 2016

And … Closed

Filed under: Personal — Tags: — Nicholas @ 17:46

img_1948.jpeg

Our new house, as of 4:00 this afternoon. It was too dark to get a photo, so this is from our initial visit during an open house.

Update: Sorry for the initial oversized picture … I don’t usually use the WordPress mobile app to post new items, and forgot that the fine-tuning isn’t quite there.

Elizabeth has always longed for a century house, but this is rather older than just a century. Based on very incomplete information, it appears that the house was already standing in the early 1830s, and may be a decade or two older than that. Elizabeth is looking forward to digging in the archives to find out more about the house and the property.

September 23, 2015

In debt to the bank? Underwater on your mortgage? You might want to check the document carefully…

Filed under: Bureaucracy, Business, Law, USA — Tags: , , , , — Nicholas @ 04:00

At The Intercept, David Dayen says that there are a lot of sketchy documents that banks are hoping will stand up in court, but they might well be wrong:

A Seattle housing activist on Wednesday uploaded an explosive land-record audit that the local City Council had been sitting on, revealing its far-reaching conclusion: that all assignments of mortgages the auditors studied are void.

That makes any foreclosures in the city based on these documents illegal and unenforceable, and makes the King County recording offices where the documents are located a massive crime scene.

The problems stem from the Mortgage Electronic Registration Systems (MERS), an entity banks created so they could transfer mortgages privately, saving them billions of dollars in transfer fees to public recording offices. In Washington state, MERS’ practices were found illegal by the State Supreme Court in 2012. But MERS continued those practices with only cosmetic changes, the audit found.

That finding has national implications. Every state has its own mortgage laws, and some of the audit’s conclusions may not necessarily apply elsewhere. But it shows how MERS reacted to being caught defrauding the public by trying to sneak through foreclosures anyway. Combined with evidence in other parts of the country, like the failure to register out-of-state business trusts in Montana, it suggests that the mortgage industry has been inattentive to and dismissive of state foreclosure laws.

September 3, 2015

How Buildings Learn – Stewart Brand – 6 of 6 – “Shearing Layers”

Filed under: History, Randomness, Technology — Tags: , , — Nicholas @ 05:00

Published on 10 Jun 2012

This six-part, three-hour, BBC TV series aired in 1997. I presented and co-wrote the series; it was directed by James Muncie, with music by Brian Eno.

The series was based on my 1994 book, HOW BUILDINGS LEARN: What Happens After They’re Built. The book is still selling well and is used as a text in some college courses. Most of the 27 reviews on Amazon treat it as a book about system and software design, which tells me that architects are not as alert as computer people. But I knew that; that’s part of why I wrote the book.

Anybody is welcome to use anything from this series in any way they like. Please don’t bug me with requests for permission. Hack away. Do credit the BBC, who put considerable time and talent into the project.

Historic note: this was one of the first television productions made entirely in digital — shot digital, edited digital. The project wound up with not enough money, so digital was the workaround. The camera was so small that we seldom had to ask permission to shoot; everybody thought we were tourists. No film or sound crew. Everything technical on site was done by editors, writers, directors. That’s why the sound is a little sketchy, but there’s also some direct perception in the filming that is unusual.

September 2, 2015

Seattle is considering implementing rent control

Filed under: Economics, Europe — Tags: , , , , — Nicholas @ 04:00

Megan McArdle on the things Seattle may learn — painfully — if they fail to heed the experiences of other cities that have implemented rent control:

So I see that Seattle is considering rent control. For a columnist who covers economic issues, this is a little bit like hearing that residents are debating how big to make the reet pleats on their zoot suits. It’s hard to get economists to agree on much of anything, but as Alex Tabarrok notes, this is an area of rare consensus among economists: Rent control creates more problems than it solves.

If you want a vivid example of what those problems look like, you can do no better than a letter written by a resident of Stockholm to the good citizens of Seattle, quoted by Tabarrok: “Seattle, you need to ask your citizens this: How would citizens like it if they walked into a rental agency and the agent told them to register and come back in 10 years? … Stockholm City Council now has an official housing queue, where 1 day waiting = 1 point. To get an apartment you need both money for the rent and enough points to be the first in line. Recently an apartment in inner Stockholm became available. In just 5 days, 2000 people had applied for the apartment. The person who got the apartment had been waiting in the official housing queue since 1989!”

Now, Stockholm is extreme. But the general effect always goes in the same direction. Rent control creates two classes of tenants: people who have the right to rent at below-market rates, and renters who would like to get a long-term lease on an apartment, but cannot, or must pay through the nose for a limited number of uncontrolled properties. Meanwhile, landlords let the quality of the existing stock decline and become very reluctant to build new housing that they can’t make a profit on.

This is not some sort of arcane secret that has not reached the policy analysts in our nation’s fair metropolises. They’re well aware of what rent control does. So why is it ever on the table?

August 26, 2015

How Buildings Learn – Stewart Brand – 5 of 6 – “The Romance of Maintenance”

Filed under: Randomness, Technology — Tags: , , — Nicholas @ 02:00

Published on 10 Jun 2012

This six-part, three-hour, BBC TV series aired in 1997. I presented and co-wrote the series; it was directed by James Muncie, with music by Brian Eno.

The series was based on my 1994 book, HOW BUILDINGS LEARN: What Happens After They’re Built. The book is still selling well and is used as a text in some college courses. Most of the 27 reviews on Amazon treat it as a book about system and software design, which tells me that architects are not as alert as computer people. But I knew that; that’s part of why I wrote the book.

Anybody is welcome to use anything from this series in any way they like. Please don’t bug me with requests for permission. Hack away. Do credit the BBC, who put considerable time and talent into the project.

Historic note: this was one of the first television productions made entirely in digital — shot digital, edited digital. The project wound up with not enough money, so digital was the workaround. The camera was so small that we seldom had to ask permission to shoot; everybody thought we were tourists. No film or sound crew. Everything technical on site was done by editors, writers, directors. That’s why the sound is a little sketchy, but there’s also some direct perception in the filming that is unusual.

August 13, 2015

Grand Theft, banking style

Filed under: Law, Liberty, USA — Tags: , , , , , — Nicholas @ 05:00

At Salon, David Dayen tells the astounding tale of American banks going feral and mass-forging legal documents to foreclose mortgages on houses they had zero claim on:

If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)

A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.

This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.

July 15, 2015

Price Ceilings: Rent Controls

Filed under: Economics — Tags: , , , — Nicholas @ 03:00

Published on 25 Feb 2015

Rent controls are a type of price ceiling. We’ll use our diagram to show how rent controls create shortages by reducing the supply of apartments available on the market. Rent controls also result in reduced product quality, since they reduce the returns to landlords from renting apartments. Landlords respond by cutting costs or performing less maintenance, leading to lower quality. There are search costs associated with rent controls, and they also lead to a misallocation of resources since apartments are not allocated to renters who value them the most.

May 7, 2015

Vancouver – where “happiness” doesn’t co-relate with “quality of life”

Filed under: Cancon, China, Economics — Tags: , , , , , — Nicholas @ 04:00

Reducing the realities of life in a given city to a quick numerical value or data point on a chart requires you to ignore subtleties and local influences. Last month, Mark Collins linked to this article by Terry Glavin on what the “quality of life” numbers for Vancouver actually conceal:

If the Economist Intelligence Unit’s annual top 10 world cities rankings are what you’ve been relying on, you probably weren’t surprised last month when the global human resources outfit Mercer tagged Vancouver on its Quality of Living index as the best city in North America. But you might have been surprised this week when Statistics Canada released a study showing that, by a variety of indices, Vancouverites are the unhappiest people in Canada, falling dead last among the residents of 33 cities across the country.

We like to think of Lotusland’s grand metropolis as a place where people ski, sail, ride their bikes, swim, and hike though lush rainforests, all in the same day. But StatsCan’s annual survey of median household income in Canadian cities routinely puts Vancouver close to the bottom of the heap on that same list of 33 cities, and in January the Demographia International research institute ranked Vancouver second to last in a global survey of 378 cities on its Housing Affordability Survey.

Vancouver’s median household income in 2014 was $66,400, while the city’s median home price was 10.6 times higher: $704,800. Only Hong Kong fared worse, and just barely. Hong Kong also tops Vancouver, again only barely, as the property investment bolt-hole most favoured by Mainland China’s loot-laden millionaires. For years, we’ve been instructed to pretend that this is somehow mere coincidence. You can’t get away with talking to Hong Kongers like that, but Vancouverites take it sitting down.

In happier places like Saguenay, Sudbury and Thunder Bay, there’s manufacturing, dairy farming, forestry and mining, and there’s a high degree of neighborliness and civility. But Vancouverites make most of their money from increases in the real estate value of whatever property they might be lucky to own. This tends to skew any real sense of hometown belonging, and nothing quite so rattles the cages as loose talk about the elaborate, federally-sanctioned swindle that has been keeping the bubble inflated all these years.

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