Chris Leinberger on Sprawl in the NYT

I got a number of emails about this Op-Ed from Chris Leinberger, and it prompted some discussion as it was passed around on PLANET. I was hoping to ignore it, but it’s been sent to me so many times that it’s probably time to write about it.

There are a whole bunch of problems here, as Joel Kotkin notes in this response in Forbes. There’s a yucky ad you have to sit through, but it’s worth it.

Leinberger’s camp say he’s right; his research shows that real estate in central cities has retained its value better, and of course, there’s always the argument that auto-oriented suburbs increase family’s costs of living, and thus, add too much strain to family’s finances, thereby making it hard for them to be able to stay in their houses.

Chicago’s Census numbers nicely illustrate a bunch of internal tensions with Leinberger’s arguments. There is a chance that Census data haven’t captured a lag in people moving back to central cities, but the city of Chicago lost 200,000 people from 2000 to 2010. Chicago is a New Urbanist dreamland, with a downtown full of walkability and design frills, with copious rail transit, and a robust commercial life downtown. How could it possibly have lost population?

Some other hypotheses/ideas:

1. We had overvaluation in the market, and there was far too much risky borrowing gone on. All apparently true. But keep in mind what exposed the house-of-cards in the tranches in the first place: a surge of unemployment led to a concomitant surge in distressed sales of real estate started the house-of-cards falling. So, yes, the housing bubble contributed, but we also have that surge in unemployment to deal with. Unemployment is a major reason why people may not move at all, let alone to real estate that is relatively more expensive, as Leinberger now says urban land is.

2. If auto-oriented suburbs were the problem, with the strain of car and house, how do we explain the number of countries where a) there is a ton of transit and relatively low levels of car ownership and b) household debt to income ratios are much, much worse now than ever, bubble or no bubble, in the US: Spain, Sweden, Britain, Canada, and the Netherlands (another New Urbanist poster child).

Go read Richard Green on Freddie and Fannie

My wonderful colleague (and yes, I know I always say that, but I never say what I don’t mean; I say it about my colleagues because it is true) Richard Green has a post up on Fannie and Freddie: six reasons not to believe that Freddie and Fannie caused the crisis.

I wonder if bubbles in general have to have more than one contributing factor?

What I learned from Richard Green recently about California and Texas

Recently I attended an undergraduate class to speak in tandem with Richard Green, who is the director of USC’s Lusk Center and one of my favorite bloggers.

So California has a lot of underwater mortgages while Texas does not. The question becomes why? Is it because one was bad and sprawling while another was wonderful and smart growth-y? That doesn’t seem likely, though California has a lot of big houses in places that make no sense for big houses, where overcapitalized consumers with incomes who could not support the loans bought (Fresno, Riverside.)

Both had a lot of built during the boom.

California makes it hard to build housing; the environmental and building regulations are very hard to get through. Texas makes it easy. As Richard says, if you’ve got a pickup and a shovel, you can build a house in Texas.

So why does California have so many foreclosures while Texas has so few? Upright moral fiber of its denizens? Free markets?

Turns out not. Most of the mortgage interest innovations that opened up subprime lending for larger numbers of borrowers in California were illegal in Texas. Market regulation at a different point.

Very interesting.

Richard Green’s testimony on how to work through foreclosures

My wonderful colleague, Richard Green, testified in front of the Senate Banking Committee. He’s convinced me, and I’ve been a bit dubious about bailing out homeowners (still: why didn’t we make the banks refinance when we were handing the banks money with TARP? I don’t get it). Here’s my favorite part of the testimony

There are those who argue that it was the attempt to advance
mortgage credit to minorities that led to our current condition—
I do not accept that argument. The loans that have performed
most poorly were originated by institutions that were not
covered by the Community Reinvestment Act or the Affordable
Housing Goals. Moreover, as Mr. Wallison himself once noted,
Fannie Mae and Freddie Mac did not do a good job of advancing
credit to minorities or low-income neighborhoods. While this is
to their discredit, it undermines the argument that their
troubles arose because they made too many loans to underserved


Ignoring the foreclosure crisis?

This quote was made before the Wall Street decided its fanny was on fire, but I was thinking about the same thing the other day. From Christopher Hayes at the Nation:

And yet, astonishingly, four years later this lesson has gone almost entirely unheeded. Our governing institutions responded with nearly unprecedented swiftness and force to save, and then revive, the pillars of the prime economy—the banks and corporate America. Yet they are leaving the subprime economy to fend for itself, to suffer through the worst privation in seventy years. “If your personal wealth is predominantly in capital markets,” says Damon Silvers, a lawyer at the AFL-CIO who served on the TARP Congressional Oversight Panel, “well, then, you had a hell of a scare, but you’re 70 percent of the way back to where you were in 2007. If your personal wealth is predominantly in your home, you’re fucked. And approximately 80 percent of people in the US, their only asset is in their home.”

Newspaper representations of gentrification

The Journal of Urban Affairs has a nice new issue out, with plenty of papers worth reading. This was my pick for this morning:


It’s secured, I’m sorry to say, as it’s an academic journal. I didn’t have much luck finding a pdf, but I also didn’t try that hard, either. If you find one, send a blogger a head’s up, please. From the abstract:

 This study indicates that newspaper coverage of gentrification is far more diverse than the gentrification literature predicts. Our analysis of 4,445 articles published between 1986 and 2006 in nine papers in seven U.S. cities with a population of one million or greater suggests that newspaper frames of gentrification range from those that are wholly supportive of gentrification to those that are strictly critical. Papers also regularly publish accounts of gentrification that reference both its perceived “costs” and “benefits.” We find that coverage changes over time and that newspaper frames vary in relation to depictions of place characteristics, gentrifiers, and long-timers. As a result, this paper addresses questions in the gentrification literature about the content and tone of representations of gentrification, speaks to urban studies scholarship on culture’s role in urban change processes, and reveals the mutability of the meaning and use of the term “gentrification.” Finally, it serves as a call for further studies of representations of gentrification, as well as future analyses of their influence.

A couple concerns: they use a text mining method for drawing articles, but they don’t really describe how they derived their list of key words that are meant to convey different sentiments. They cover this issue in their discussion of frame mapping, citing recent research on the issues in computer-aided frame mapping. That said, it’s probably safe to assume that ‘yuppie’ indicates something negative. This is their list of words:



affordable housing

There’s the problem we always face in using computer-aided searching: why stop with yuppie and not include all its variants? Yuppified, yuppification, etc.

However, the authors don’t stop with computer coding, and that’s to great benefit for the study. They hand-code the themes in the articles to the costs and benefits associated with gentrification, primarily, it seems, from the material that journalists have quoted from current neighborhood residents.

They find:

Nearly 37% of sample articles singularly criticize gentrification. Another one-third offers more than one perspective, pointing to risks and benefits. A total of 17.4% are unabashedly supportive of gentrification, and 12.9% neutral.15 Below, we explore how frame deployment changes over time before documenting images of places and their residents associated with each frame.

The part about the study I really get interested in here concerns how sentiment changes over the course of gentrification.

They find that at the early stages, sentiment is generally positive. They use an example from an NYT article:

“At… a sumptuously decorated cafe that opened last May. . . [a barista] froths milk for cappuccinos and serves delicate salads. . . The frenetic about-face that transformed Alphabet City from a drug-infested no man’s land to the epicenter of downtown cool hasn’t quite made it to Avenue D, and some predict it never will” (Bleyer, 2005).

So it’s a story about redemption at the beginning. Then, as the gentrification occurs, the tone changes to more critical as existing residents perceive their displacement from the new services:

“‘I’ve tried to give people a reason and a reward to buy in the city and to fix up their homes—and this [recent property tax hikes] just whacks them for it. It’s government-driven gentrification, and it’s just plain wrong’” (Geringer, 2002)

Now, we could dispute that statement as being negative regarding gentrification in general, or government-driven gentrification. That is, in reading that, I am less convinced that it’s a complaint about gentrification per se, or whether it’s a complaint about taxation.

The authors argue that as gentrification nears completion, the inevitability of it begins to allay negative comment.

There’s a lot in this manuscript that makes you think, so go read if you can–a real contribution.

Visualizing the Bubble

Decision Science News has a wonderful graphic on visualizing the housing bubble, using the Standard and Poor numbers. This is a really data-rich graphic, one of those that is both simple yet complex, and you can spend a lot of time thinking about what the different trajectories mean in terms of the extent and timing of the bubble. This is their first graphic–go to the website and read the rest of the presentation. A second, cleaner graphic calls out the ‘exceptional’ stories–a good way to build a narrative with graphics: first show the whole picture, then select what people should take away.

I’d like to know more about the bounce at the end of those numbers; every city gets higher, then crashes, then (for most, not all), there’s a bounce, then another fall.

Voila Capture11

The graphic was made with ggplot2, one of my favorite new toys for R.