Quotulatiousness

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.

April 10, 2015

QotD: Zoning hurts the poor

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

One kind of regulation that was actually intended to harm the poor, and especially poor minorities, was zoning. The ostensible reason for zoning was to address unhealthy conditions in cities by functionally separating land uses, which is called “exclusionary zoning.” But prior to passage of the Civil Rights Act of 1968, some municipalities had race-based exclusionary land-use regulations. Early in the 20th century, several California cities masked their racist intent by specifically excluding laundry businesses, predominantly Chinese owned, from certain areas of the cities.

Today, of course, explicitly race-based, exclusionary zoning policies are illegal. But some zoning regulations nevertheless price certain demographics out of particular neighborhoods by forbidding multifamily dwellings, which are more affordable to low- or middle-income individuals. When the government artificially separates land uses and forbids building certain kinds of residences in entire districts, it restricts the supply of housing and increases the cost of the land, and the price of housing reflects those restrictions.

Moreover, when cities implement zoning rules that make it difficult to secure permits to build new housing, land that is already developed becomes more valuable because you no longer need a permit. The demand for such developed land is therefore artificially higher, and that again raises its price.

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

January 11, 2015

Is more immigration the answer? It depends on how you frame the question

Filed under: Business, Cancon, Politics, Technology — Tags: , , , , — Nicholas @ 04:00

Jay Currie looks at one of the traditional way of looking at the benefits of immigration — as providing society with workers who will “do the jobs Canadians/Americans won’t do” and wonders if that’s actually true in today’s increasingly technological world:

The elite refrain seems to be that if we want to maintain our welfare system, pensions, healthcare and the like we have simply no choice but to import drafts of tax serfs to make up our declining numbers. Is that true?

Here are a few ideas to extend the independence of the Boomers and reduce the need for immigrants at any cost.

  • Postpone retirement to 70 or even 75: the boomers parents are extending life expectancy rapidly. 90 is the new 70. Greater activity, a keener sense of healthy life style choices and, as Doug Coupland put it, “Vitamin D and baby aspirin and (mum’s) going to live forever.” Boomers are nuts to be thinking of retirement at 60 unless they really are too sick to work. So don’t. Pushing back the retirement and pension ages saves a lot of pension money and reduces the need to bring in more people.
  • Have more children. Not something the boomers can do but our kids can and should. But to do this we need a lot of very family friendly policy. Income splitting is a cute idea but hardly a huge incentive to family formation. Big tax deductions for kids number three, four and five could help a bit. But those are governmental changes.
  • […]

  • Where possible transfer wealth early. There are a lot of older boomers whose parents have died and left good big whacks of dough. And those same boomers are coming to the end of their mortgages. Here is a hint: offer your kids some money. And not, ideally, as a loan. An outright gift is more useful. Don’t tie it to real estate either. There is going to be a massive correction in Canadian real estate but even if there wasn’t tying a gift to what is usually a debt and endless expense is a poor idea.
  • […]

  • Build houses and condos which can adapt to the changing needs and means of families. Everything from in-law suites to legally easy house splitting needs to be done to drive down the price of housing in Canada. Yes there is a correction coming but that does not change the fact there are many cities where housing is unaffordable. Build rental housing for families. Build up market rental housing. Encourage density. Make it possible to rent with a 1/5 of your average income rather than 1/2.

  • Use technology in place of people. A lot of the jobs “Canadians just will not do” should not be done at all by anyone. From self cleaning toilets – already done in Japan – to robotic floor cleaners and fast food “servers” there are lots of jobs which can and will be done by robots. Pushing that sort of technology will reduce the need for more immigrants.
  • […]

If you actually look at those numbers seriously and, instead of 10% use 5%, you’ll see that 900,000 low skill jobs are going to get eaten by robots and IT over the next decade. 90,000 a year. Now, look at the naturalized Canadian number for 2014 again 260,000. If half our new citizens are entering the labour force that is 130,000 new workers per year in an economy which will be shedding 90,000 jobs per year. Does that make any sense at all?

January 6, 2015

QotD: Home ownership as a form of forced savings

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

Housing is pretty effective forced savings. We pay extra on our house each month, much to the dismay of many financial types of my acquaintance. Now, in theory, I could put that money right into mutual funds. In practice, I’m probably more likely to put it into a nice table for the backyard. As Dave Ramsey says all the time, the biggest mistake people make in talking about personal finance is treating it as a math issue. It’s not. The math behind personal finance is so risibly simple that journalists can do it. The discipline, however, is very hard. So the correct comparison for homeownership is not what the buyer could have achieved by putting all that extra money into a mutual fund; it’s what they would actually have done with the extra money if they hadn’t bought a house.

So while I’m not saying that you should definitely invest in a house, I won’t say you definitely shouldn’t, either; all I would say is that you shouldn’t count on your home value too much.

Megan McArdle, “Buying a Home Isn’t Bad for You”, Bloomberg View, 2014-04-07

August 7, 2014

QotD: Hobbit architecture

Filed under: Quotations — Tags: , , , — Nicholas @ 09:52

Before you read the rest of this post, go look at these pictures of a Hobbit Pub and a Hobbit House. And recall the lovely Bag End sets from Peter Jackson’s LOTR movies.

I have a very powerful reaction to these buildings that, I believe, has nothing to do with having been a Tolkien fan for most of my life. In fact, some of the most Tolkien-specific details – the round doors, the dragon motifs in the pub – could be removed without attenuating that reaction a bit.

To me, they feel right. They feel like home. And I’m not entirely sure why, because I’ve never lived in such antique architecture. But I think it may have something to do with Christopher Alexander’s “Timeless Way of Building”.

Alexander’s ideas are not easy to summarize. He believes that there is a timeless set of generative ur-patterns which are continuously rediscovered in the world’s most beautiful buildings – patterns which derive from an interplay among mathematical harmonies, the psychological/social needs of human beings, and the properties of the materials we build in.

Alexander celebrates folk architecture adapted to local needs and materials. He loves organic forms and buildings that merge naturally with their surroundings. He respects architectural tradition, finding harmony and beauty even in its accidents.

When I look at these buildings, and the Tolkien sketches from which they derive, that’s what I see. The timelessness, the organic quality, the rootedness in place. When I look inside them, I see a kind of humane warmth that is all too rare in any building I actually visit. […]

I think it might be that Tolkien, an eccentric genius nostalgic for the English countryside of his pre-World-War-I youth, abstracted and distilled out of its vernacular architecture exactly those elements which are timeless in Christopher Alexander’s sense. There is a pattern language, a harmony, here. These buildings make sense as wholes. They are restful and welcoming.

They’re also rugged. You can tell by looking at the Hobbit House, or that inn in New Zealand, that you’d have to work pretty hard to do more than superficial damage to either. They’ll age well; scratches and scars will become patina. And a century from now or two, long after this year’s version of “modern” looks absurdly dated, they’ll still look like they belong exactly where they are.

Eric S. Raymond, “Tolkien and the Timeless Way of Building”, Armed and Dangerous, 2014-08-02.

June 2, 2014

QotD: Realtors

Filed under: Business, Humour, Quotations — Tags: , , — Nicholas @ 07:04

I talked a few times with the realtor, and they were as helpful as realtors usually are: not helpful. They couldn’t answer any important questions for me, because realtors don’t know anything important about the properties they sell. Well, that’s not entirely true. They often know very important things about the properties they sell. Those are invariably the things they’re hiding from you, hoping to entice you into standing in the decrepit shack they’re listing while they perform their Svengali perorations about its potential. Weave a tapestry of possibilities in the air that’ll have you frisking yourself in no time, looking for your checkbook before that handyman that’s interested in the property snatches it from under your nose.

Oh, I know that handyman. That guy gets around. I never learned his name, but he seemed to be interested in every property I was interested in Maine. No matter where I went — Turner, Cornish, Peru, Livermore Falls, Norway, Rumford…

Anyway, that polymath handyman with the lead foot and the nose for diamonds in the rough was always one step ahead of us, ready to stuff our defeat into the jaws of his victory. He was very interested in Turner, I hear.

Sippican Cottage, “I’m Fixing A Hole Where The Intertunnel Gets In “, Sippican Cottage, 2013-11-13

May 14, 2014

Not fewer entrepreneurs – fewer resources for entrepreneurs

Filed under: Bureaucracy, Business, USA — Tags: , , , — Nicholas @ 13:51

This image showed up in a post at Coyote Blog a couple of days ago, and it’s an indication of the decline in new business formation in the United States:

US becoming less entrepreneurial 1978-2011

Increasing bureaucracy — especially at the state level — undoubtedly contributes to that depressing chart, but it’s far from the whole story:

Home equity has historically been an important source of capital for small business formation. My first large investment in my company was funded with a loan that was secured by the equity in my home. What outsiders may not realize about small business banking nowadays is that it is nothing like how banking is taught in high school civics. In that model, the small business person goes to her local banker and presents a business plan, which the banker may fund if they think it is a good risk.

In the real world, trying to get such an unsecured loan from a bank as a small business will at best result in laughter. My company is no longer what many would call “small” — we will do millions in revenue this year. But there is no way in the world that my banker of over 10 years will lend to my business unsecured — they will demand some asset they can put a lien on. So we can get financing of equipment purchases (as a capital lease on the equipment) and on factored receivables and inventory. But without any of that stuff, a new business that just needs cash for startup cash flow is out of luck — unless the owner has a personal asset, typically a house, on which the banker can place a lien.

So, without home equity, one of the two top sources of capital for small business formation disappears (the other top source is loans from friends and family, which one might also expect to dry up in a tough economy).

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