I was cc’d on an email from the indefatigable Donald Shoup today, where he laid out his ideas by web resources. That seemed worth passing along to me.
I was cc’d on an email from the indefatigable Donald Shoup today, where he laid out his ideas by web resources. That seemed worth passing along to me.
I have always known Robert Biller, who passed away Sunday, as a retired Dean. He’d stop by the school, and we’d chat about this and that. He always had time; I didn’t, not always. I’d have to run to class or some other obligation. Nonetheless, Bob was always kindly, always supportive, and always responded to any question I had.
He was the Dean of the School of Public Administration from 1976 To 1982, and then served the university in different roles, including the Vice President for External Affairs, Vice President for Undergraduate Affairs, and Executive Vice Provost.
He will be missed.
Over at Richard Green’s blog, he asks the reasonable question: What is the right downpayment for a mortgage? As he notes, letting people borrow based on little to nothing is a stupid idea, though I disagree that borrowers are the major cause of “the nonsense of the past several years.” As he also notes, 25 percent is too high, creating a barrier to entry for people at the margin of home ownership and thus, the potential wealth-building opportunities it can provide.
Note, I said the wealth-building opportunities that home ownership can provide. I am not one of those people who believes that home ownership is a magical dream. Owning a home can tie you down and prevent you from finding better economic opportunities. Owning a pile can mean you are constantly cash-strapped, pouring money into poor-quality house–or, perhaps worse, leaving you with a house you can not maintain well enough for it to hold its value. It’s not clear that in terms of building wealth, home ownership is better than just saving your money.
However, it’s also quite clear that barriers to property acquisition among many ethnic minorities has reinforced the comparative poverty of these groups, and that that disparity has created intergenerational differences which will be very hard to overcome. In affluent white families, mumsy and dadsy hand you your college tuition, hand you their extensive professional networks, and then hand you the $60,000 you need to even put a foot in the door for a decent southern California home. Then they die and leave you their multi-million dollar home in Santa Monica, protected from the evil tax man by Proposition 13. You can then repeat the cycle for your kids. All this pulling oneself up by one’s own bootstraps is exhilarating, isn’t it? Now there’s nothing wrong with this, but it is plenty reinforcing.
With 25 percent down payments in California, in another 20 years, there will be a land-holding class of people in California, a landed gentry of people who get to own homes by virtue of the fact that their parents bought here years ago. That problem is already bad enough now. The rest of us? Forget it, unless you have rich uncles that write you big checks. This is not a California we want, necessarily; I’m getting to the point where living in my beloved southern California is not worth being unable to buy a home here. You get to a point in your life where you’d like to be able to have a back yard.
And it’s not necessarily a great idea to have too many people like me floating around rental markets. By raising the bar to owner-occupancy, you can push people into renting, and where supply is constrained, the people who bear the burden of that are not necessarily cash-wealthy renters like me.
In the aftermath of the bubble, I’ve seen a lot of thinking that strikes me as just as dangerous as home ownership bubble thinking: romanticizing renting. Note in the comments to Richard’s post that somebody asks whether renting is really that much worse than buying.
Many of the “Renting Rah-Rah” thinkers strike me as thinkers who are ensconced within the happy environs of fairly lively rental markets where renters enjoy quite a few protections from bad land lords. I have a friend who is a poverty lawyer in a rural state, however, and fully half her cases, I swear, are against slum lords who refuse to fix anything and, if you so much as even touch whatever is broken, you are fined up the wazoo and forego your damage deposit–even if you hired a qualified person out of your own pocket for the fix and the fix adds value.
Then there a slumlords who loll around and expect sex with you or one of your kids for a $500 break in a rent payment you can’t make. (Yes, this is a real case of hers, where the landlord approached a woman’s 16 year-old son and got him to “help his mother out.” This went on for months before the mother found out about it, as she thought the landlord had kindly slashed the rent because of the housing price collapse. Um, no.)
Then there are landlords who, if you make even the tiniest of scratches on the 10 year-old paint will seize every single cent of the the $5000 damage deposit they extorted out of you, or the landlords who feel entitled to raise your rent by at least $200 a year no matter what is going to on the rental market because they know they can screw you based on the transactions costs of moving.
If you, like me, love animals, forget it. If you, like me, love to garden, forget it. If you, like me, like to paint and fix things, forget it. If you’re going to be a renter outside of the NE US, you better love yourself some shitty carpet because you will never see a hardwood floor again—not until you visit your friends who actually own their homes.
In short, with your rental, everything around you is controlled by somebody else, and some landlords have great ways of helping you remember that. And there’s the little problem that if your landlord decides to sell the place out from under you, you don’t have as many protections as many policy people think you have. Landlords have all sorts of ways of making you miserable enough to move.
In the rush to “fix” home ownership after the bubble, people have largely forgotten that before people went house crazy, owning a home was a stable enough place to put your money and live your life. Nobody expected to become a millionaire from owner-occupied housing. Undergraduates didn’t expect their parents to buy them condos. People didn’t expect to “flip” anything unless they knew what they were doing. First-time buyers didn’t expect 7,000 square feet. People didn’t expect custom-built homes by the time they were 40. It was a place to live and secure, if not booming, investment that you had along with your savings account.
Let’s study before we advocate for renting as the quick fix. It’s not. It wasn’t the quick fix before the bubble, and it isn’t now.
There is a very nice manuscript in this month’s volume of Environmental Science and Technology on the GHG emissions of different foods:
Weber, Christopher L, and H Scott Matthews. “Food-Miles and the Relative Climate Impacts of Food Choices in the United States.” Environmental science & technology 42, no. 10 (2008): doi:doi: 10.1021/es702969f.
They find that what you eat matters far more than where you buy from. Here’s the abstract:
Despite significant recent public concern and media attention to the environmental impacts of food, few studies in the United States have systematically compared the life-cycle greenhouse gas (GHG) emissions associated with food production against long-distance distribution, aka “food-miles.” We find that although food is transported long distances in general (1640 km delivery and 6760 km life-cycle supply chain on average) the GHG emissions associated with food are dominated by the production phase, contributing 83% of the average U.S. household’s 8.1 t CO2e/yr footprint for food consumption. Transportation as a whole represents only 11% of life-cycle GHG emissions, and final delivery from producer to retail contributes only 4%. Different food groups exhibit a large range in GHG-intensity; on average, red meat is around 150% more GHG-intensive than chicken or fish. Thus, we suggest that dietary shift can be a more effective means of lowering an average household’s food-related climate footprint than “buying local.” Shifting less than one day per week’s worth of calories from red meat and dairy products to chicken, fish, eggs, or a vegetable-based diet achieves more GHG reduction than buying all locally sourced food.
So climate researchers and your cardiologist agree: no red meat. (Does bacon count as red meat?)
Shipping food–or anything–is not a particularly polluting activity–not for individual goods anyway. It’s when we concentrate trips spatially–like the freight coming in and out of the Port of Los Angeles or for millions of trips in the LA basin, that sustain air quality problems despite the decades of improvement from engines and fuel.
But buying local still has a flavor advantage, no surprise there; globalization and localism still manage to be compatible, at least when it comes to GHG emissions.
Justin Hollander at Tufts is a rising star in planning research. He’s got a new book out on Shrinking Cities, but I haven’t seen that one yet. The one I have seen is a volume called Polluted and Dangerous: America’s Worst Abandoned Properties and What Can Be Done About Them from last year. At a book a year, he should do pretty well in this business.
From the blurb:
Blighted, contaminated, and abandoned property mars nearly every major American city. Justin Hollander conducted primary research in twenty urban centers containing such “brownfields” or, in the most serious cases, “HI-TOADS” (High-Impact Temporarily Obsolete Abandoned Derelict Sites). His goal was to study the sites and the official handling of them through the lenses of sustainability, urban planning, redevelopment, and environmental justice. In Polluted and Dangerous, he scrutinizes specific sites in five of the affected cities: New Bedford, Massachusetts; Pittsburgh, Pennsylvania; Richmond, Virginia; Trenton, New Jersey; and Youngstown, Ohio
In this month’s volume of the Journal of Law and Economics, Hilary Sigman has a manuscript that tests the level of capitalization that occurs surrounding these sorts of properties based on different liability regimes:
Sigman, Hilary. “Environmental Liability and Redevelopment of Old Industrial Land .” Journal of Law and Economics 53, no. May (2010): 289-206.
The manuscript contains a convincing analysis that liability rules are incompletely capitalized in land prices; so while potentially contaminated land is lower in price, it is not sufficiently lower in price to equalize vacancy rates or hit a point where there is parity between brownfields and greenfields in prices. This, I suspect, has to do with information problems: with a brownfield site, there is the possibility that the contamination will turn out much worse than originally believed.
Sigman is at the Bloustein school, where Hollander got his PhD. So there’s some good work coming out of there on brownfields.
Richard Florida, having always been a little light on the “how to use data” side, has really drunk the New Urbanist Kool-Aid here late, and it’s been hard to sit through. One of his latest “light on evidence, heavy on major claims” forays explains to us in the Atlantic how commuting is, basically as bad for us as smoking or obesity. Here’s a quote:
Commuting is a health and psychological hazard, not to mention the carnage and wasted time on our over-clogged roads. It’s time to put commuting right beside smoking and obesity on the list of priorities for improving the health and well-being of Americans.
Are you kidding me? My walk to USC takes me an hour. The car trip takes me 15 minutes. I’m pretty sure that the hour is the healthiest part of my day, and that commute time has little to do with health. I get that when Florida says “commuting” he’s thinking car, but he’s addled up the theorized relationship between commuting time and health in so many ways my eyes are crossed.
I don’t have the energy to go into everything that is wrong with his claims, but fortunately David King from Columbia did take some time out to break down the problems. Take a look.
Here’s a couple of favorite quotes from King:
A more inconvenient truth for Florida is that the extreme commuters–those with commutes over 90 minutes–are most likely to get to work by commuter train. Advocates for rail transit to reduce commuting costs should be careful what they wish for. People driving to work alone have the shortest commutes, and commutes are growing most in suburb-to-suburb travel which are poorly served by any transit but rail in particular. The megaregions that Florida and others hold so dearly are also polycentric regions with employment centers spread out all over the place.
Commutes by transit are, on average, longer than in duration than car commutes, by any data set you use. So…I guess since according to the commutes are bad logic, transit commutes are so long that transit is actually bad for health. Sweet cracker sandwich. Maybe transit commuters spend so much time waiting for transfers they can’t go to the gym?
One point to note: King suggests that about half of US commuters commute less than 20 minutes. One thing he leaves out: that figure has remained remarkably stable over the years that we have been collecting data on commutes. My speculation is that if we could get transit commutes down to 20 minutes they would be much more competitive with cars (but they would also be competing with bicycles, too); I suspect that many people just have travel budgets, and over time people adjust their residential locations according to their preferred access locations–not necessarily the work location. I also suspect that many of the very long commutes we see in the data are people who don’t commute every day but still report their commute length, or are people in a “change mode”–they are in the process of changing jobs or lifestyles, and they are putting with a longer commute for constrained time period until the “right time to move” comes up. Leases are sticky, and so is house buying and selling. Cross-sectional data doesn’t describe these very well.
Another point, from commuting in America II:
Contrary to what some might expect, it is the smaller metropolitan areas that show strong center city dominance. In areas below 100,000 population, The internal center city flows alone are about half of all flows, but drop to below 24% at the highest metro size levels
King highlights this but doesn’t go the full way of critiquing the assumption: why anybody wouldn’t expect polycentricity to grow with region size is beyond me. It’s what urban economics would teach us to expect as a land market response to higher downtown costs.
The LA MTA got hit again with another negative story in the Daily News, reporting that the platform turnstiles, because they only work with turnstiles, are boondoggle, TAP implementation is rushed, etc
But the first rule of implementation is that everything takes longer, costs more, and is messier than you want.
One transit advocates argues that they should just give up:
“It’s a boondoggle,” said Kymberleigh Richards, the public and legislative affairs director at Southern California Transit Advocates. “We are never going to get ($154 million) in lost fares out of this. At $1.50 a ride, how many fare evaders do you have to catch to make back ($154 million)?”
Out today from SPPD’s Chris Redfearn:
McMillen, D P, and C L Redfearn. “Estimation and Hypothesis Testing for Nonparametric Hedonic House Price Functions.” Journal of Regional Science doi:10.1111/j.1467-9787.2010.00664.x.
In this very nice manuscript, McMillen and Redfearn demonstrate the usefulness of nonparametric estimators on predicting house prices. The method can capture spatial effects such as done here, of local amenities like access to transit. Based on distance from train station in Chicago. The nonparametric estimators allow for a more precise and efficient analysis prediction of housing value based on distance from train stops. On average, they find a 17 percent decline in prices per mile removed from stop, though it’s a bit misleading for me to just throw that finding out since the point of the estimator is to give a more fine-grained indicator of the relationship between housing prices and distances within local areas rather than an average indicator.
Chris Redfearn is one of my absolute favorite colleagues. He does so much interesting work, for one thing, and for another he’s is currently running SPPD’s top-ranked Master’s of Real Estate Development brilliantly.
SPPD’s first Urban Growth Seminar of the year, “Climate Change Adaptation in Ho Chi Minh City“, will be on Tuesday, August 24 at 12:15 in RGL 101. This seminar will feature current work by three SPPD faculty members that bridges the gap between theory and practical application in the emerging field of climate change adaptation.
This summer, Professors Hilda Blanco, Eric Heikkila and Richard Little of SPPD traveled to Ho Chi Minh City on the invitation of Mayor Le Qoang Hong of Ho Chi Minh City to participate in a roundtable forum organized by the Pacific Rim Council on Urban Development. The purpose of that forum was to advise the city on adapting to flooding induced by climate change. During this seminar, the professors will describe the forum, detail a framework for assessing climate-change adaptation strategies and summarize the of specific climate change adaptation recommendations the forum participants generated for Ho Chi Minh City.
About the speakers:
Dr. Hilda Blanco is a Research Professor and Interim Director of the Center for Sustainable Cities at USC’s School of Policy, Planning and Development. She is also a Professor Emeritus in the Department of Urban Design and Planning at the University of Washington, Seattle, where she served as Department Chair from 2000-2007. Professor Blanco’s work focuses on climate change, urban growth management, brownfields policy, and decision-making and planning theories. Her published works include How to Think About Social Problems: American Pragmatism and the Idea of Planning (Greenwood Press 1994), and recent articles in Progress in Planning, Journal of Emergency Management, Urban Studies, and Technology and Society. She currently serves on the Editorial Board of the Journal of Planning Education and Research and the Journal of Emergency Management. Professor Blanco holds a Ph.D. in City and Regional Planning from the University of California, Berkeley.
– Heikkila, E.J., with Y. Wang, “Exploring the Dual Dichotomy in Urban Geography: An Application of Fuzzy Urban Sets” Urban Geography, forthcoming.
– Heikkila, E. J., with L. Hu, “Adjusting Spatial Entropy Measures for Scale and Resolutions Effects”; Environment and Planning B: Planning and Design, vol. 33 (6) 845-865; 2006.
– Heikkila, E. J., “Seoul: Regional Realities and Global Ambitions”; Joint US-Korea Academic Studies, vol. 14, Korea Economic Institute pp. 139-157; 2004.
Professor Richard G. Little is a Senior Fellow in the School of Policy Planning and Development and Director of the Keston Institute for Public Finance and Infrastructure Policy at the University of Southern California. Professor. Little teaches, consults, conducts research, and develops policy studies aimed at informing the discussion of infrastructure issues critical to California and the nation. Prior to joining USC, he was Director of the Board on Infrastructure and the Constructed Environment of the National Research Council (NRC). He has conducted numerous studies dealing with life-cycle management and financing of infrastructure, project management, and hazard preparedness and mitigation and has lectured and published extensively on risk management and decision-making for critical infrastructure. He has been certified by the American Institute of Certified Planners and is Editor of the journalPublic Works Management and Policy. Professor Little was elected to the National Academy of Construction in 2008 and was recently appointed to the California Public Infrastructure Advisory Commission to assist the state in implementing public private partnerships for transportation. He holds an M.S. in Urban-Environmental Studies from Rensselaer Polytechnic Institute.