Tag: real estate

Must see: Dr. Jovanna Rosen discussing her research on community development agreements

Lisa Schweitzer

This is well worth your time. Dr. Rosen just completed her doctorate here at the Price School. Here’s the seminar:

And here’s an abstract:

Beginning in the early 2000s, community development agreements emerged as a land development innovation intended to foster equitable development and enhance community control. Under community development agreements, including community benefits agreements and project labor agreements with community workforce provisions, stakeholders leverage urban growth to promote community development and facilitate urban development. These agreements enter into a long history of land use exactions and bargaining for development, but introduce a new way of governing urban development, one that can either circumvent or supplement existing land use approval and policy formulation procedures, in favor of deliberation directly between stakeholders to create local benefits distribution policies through agreement.

However, early evidence indicates that many community development agreements are not producing all of their promised outcomes to community stakeholders, and little research has explored how implementation occurs. Existing theory on consensus building and deliberative governance overlooks implementation, but provides reason to believe that these agreements may systematically fail to deliver substantive change to marginalized groups, including community stakeholders, despite good faith deliberation and consensus. In this dissertation, I build four case studies to examine a) agreement, b) how, and the extent to which, community development agreements produce outcomes, and c) how stakeholder interests and incentives may shift during implementation and influence outcomes delivery.

I find that community stakeholders may have little direct control over outcomes delivery. They must rely on other stakeholders to realize their benefits. Community outcomes are among the last to materialize, after other stakeholders may have achieved their original goals and retain little incentive to produce community outcomes. In such cases, community stakeholders can use indirect tactics, including community monitoring and enforcement, to induce other stakeholders to produce community outcomes, but at a significant cost. This implies that community development agreements offer a fundamentally limited, though potentially net positive, strategy for generating lasting community change.

A Timeline of the Chavez Ravine and Dodgers Stadium events for @USCPrice Rawjee Family Student Conversations

Lisa Schweitzer

Some quick and dirty notes for my Rawjee Family Student Conversations at USC Price with the students on Chavez Ravine, so that I can be useful to them. Please feel free to correct–it’s very sloppy as I am in hurry.

  • up to 1950’s Mexican families, facing discrimination in most of the Los Angeles housing market, create a sustained community–a “Poor Man Shangra-La” as it is called in multiple references. It was self-contained in many ways; residents had their own churches and many grew their own food. (There was also livestock kept). The area consisted of three general districts La Loma, Palo Verde, and Bishop.
  • WWII and post-WWII Los Angeles experience tremendous new population growth, and the City begins to look for places to build. The 300-acre site in the center of Los Angeles was, to outsiders, an obvious choice.
  • 1949 The Federal Housing Act of 1949 granted money to cities from the federal government to build public housing projects.
  • and Los Angeles Mayor Fletcher Bowron voted and approved a housing project containing 10,000 new units, with Chavez Ravine being a central part of the new development plans. Much of the housing was shanty construction, and housing authority planners viewed the construction as unsanitary and unsafe. City of Los Angeles housing authority representative Tom Wilkinson was a central actor in the Plan.
  • Richard Neutra and Robert Alexander develop a plan for infill development (Elysian Park Heights) to house 3,300 families in a sprawling complex of 24, 13-story towers and 163 two-story garden apartments, where the families of Chavez Ravine could be housed. The residents were supposed to have first choice among these units.
  • In July 1950, all residents of Chavez Ravine received letters from the city telling them that they would have to sell their homes in order to make the land available for the proposed Elysian Park Heights.
  • The city began buying property and using eminent domain to push families out. An coalition emerged in LA Politics between conservative private development interests and Mexican families furious at their displacement. Mike Davis reported in City of Quartz that the buy-outs were shady.
  • In 1952, Frank Wilkinson, the assistant director of the Los Angeles City Housing Authority was questioned by the House Un-American Activities Committee. He was sentenced to one year in jail for refusing to cooperate with the committee. Five other Housing Authority employees were fired.
  • By this time, virtually all of the families had been removed and their homes razed, though some hold-outs remained in what would be called “The Battle of Chavez Ravine The property would stay vacant for nearly 10 years.
  • 1953 The City Counsel tried to back out of its contract with the federal government to provide housing; it went to court, and LA lost.
  • Also in 1953 conservative Norris Poulson won the mayor’s office using the Chavez Ravine controversy as a platform; he promised to the vowing to stop the housing project and other examples of “un-American” spending.
  • With Norris’ intervention, the feds would relent and sell the land back to the city for a low price on the condition that the land be used for “public purpose.”
  • 1957 Mayor Norris Paulson, Supervisor Kenneth Hahn, and Councilwoman Rosalind Wyman put together an offer for the Dodgers on behalf of the City of Los Angeles, including what was a privately owned, 56,000-seat stadium at the confluence of several major freeways surrounded by 16,000 parking spaces. (from O’Malley Was Right) It’s a question to me if whether this sale actually
  • 1958 Taxpayers Committee for Yes on Baseball, which was approved by Los Angeles voters on June 3, 1958 that the Dodgers were able to acquire 352 acres (1.42 km²) of Chavez Ravine from the City of Los Angeles. (This, too, was an ugly political fight, with Poulson getting accused of taking bribes and making money off the deal.)
  • Dodgers Stadium would not open for a few years yet–the Dodgers played in the Coliseum until the field opened.

Additional resources:

KCRW’s Coverage of Richard Neutra and Robert Alexander’s plan for public housing

chavez ravine la historia de un pueblo fantasma en trinchera de palabras

The Provisional City: Los Angeles Stories of Architecture and Urbanism
By Dana Cuff (The MIT Press, 2002)

Chavez Ravine 1949 by Don Nomarck

PBS Independent Lens documentary Chavez Ravine

The Rawjee Family Student Conversations at USC Price
This conversation series provides undergraduate students the opportunity to interact with a variety of community leaders in the Los Angeles area. Students gain new perspectives on important social issues, cultivate new interests and passions, discover potential career opportunities, and create lasting friendships with their peers and mentors. Through these enrichment opportunities, undergraduate students have met with city managers, debated ballot initiatives, addressed health policy issues, and toured the Los Angeles River. Learn more here about what we are up to with undergraduates: here.

#ReadUrbanandPlanningWomen2014 entry #16: Stephanie Frank

Lisa Schweitzer

I’m a bit behind with ReadUrbanandPlanningWomen2014, but I will keep going. I’ve always been a slow worker. What are you going to do besides keep plugging away at it?

This week I discuss the work of Stephanie Frank, who is one of my students, which means the work is brilliant and perfect in every way and anybody who says otherwise gets a knuckle sandwich. Stephanie has left our beloved USC, and she is now an assistant professor at the University of Missouri-Kansas City.

The paper of hers I am going to highlight is:

Frank, S. (2012). Claiming hollywood: Boosters, the film industry, and Metropolitan Los Angeles. Journal of Urban History, 38(1), 71-88. doi:10.1177/009614421142064

The year is 1937; the place is a then-small, but rapidly urbanizing, region in southern California. There is money being made in film industry, and by selling the idea of “Hollywood.” Culver City boosters get the smart idea to rename themselves from the prosaic–and, frankly, Midwestern-sounding, Culver City to Hollywood. (Not accidental: Culver City took its name from an early pioneer from Nebraska.) Even today, Hollywood is a district or a neighborhood. Despite multiple pushes for secession, Hollywood is part of the larger city of Los Angeles. Culver City, however, is not. My use of the present tense is a spoiler: boosters failed, and to this day, Culver City remains plain old Culver City, though it is a very nice place to live with lots of wonderful things to do.

I let you read the manuscript for the full story of how and why the boosters attempt failed; let’s just say it’s a story of big-fish elite of one type, and bigger-fish elites of another type, and one (of many ways) the movie industry made its spatial impact on the geography of Los Angeles.

Stephanie wrote her very fine dissertation on movie studios as land developers under the direction of David Sloane, Greg Hise, and Bill Deverell, and she should have a book coming out shortly. Keep your eyes peeled for it, and for future work. My auntie-like bias notwithstanding, she really is a fine young scholar.

Help out my undergraduate developers?

Lisa Schweitzer1 Comment

My class on the Urban Context was charged with creating a website marketing the city they would develop in Honduras as a Charter City if they had carte blanche. The groups that got the highest scores are being run in a face-off via a web poll. It would be really great if you could take a few minutes to surf through their sites and vote on which city you might consider moving to. Alternatively, there is a comment area, so you can give them some feedback. I’d appreciate it.

Remember, though, they had a week to develop the proposals, and this is the first time most of them have done either web development or marketing. That said, some of them had really great ideas and presented them really well.

The poll has hot links to all the cities: it is found here.

Here are the cities in no order, if you want to browse outside the poll.

Isla Macao
Vulgaria
El Paraiso Habitable
Costa Verde
The Perfect City

I really appreciate it if you can take the time.

House voyeurism in the age of austerity in the FT

Lisa Schweitzer

The Financial Times has a little piece on how British reality TV has changed in response to the downtown.

I honestly do not know how people watch the Home Channel. I admit that I have loved This Old House for years, the original, back-in-the-day program because I like old houses and the program actually told you a lot about them, the history of the design movement the house reflected, and good methods for renovation. We all knew that the people renovating the three-story Georgetown townhouses and the Manhattan brownstones were rich, yuppy millionaires, and we secretly hated them, but we got to see inside a process and a house we were never going to get to see either as laborers or as guests. Oh, and Norm Abrams is about as cute as they come in real life.

However, the home “interior” shows, which are all decorating rather than design, are super barf-worthy. The ‘design’ always boil down to the same principle: eliminate anything that might look like people actually live there (books! toys! all clutter!) then make it look like some sterile environment from a magazine, then we’re supposed to clap and pay more for the vision that confronts us.

All these makeovers always end up making places look like therapists’ waiting rooms.

My loft is full of books and dogs and cats and people and confusion, by contrast.

The new movement, according to the FT, is based on watching people lose their homes and possession. I don’t find this any more entertaining than listening to decorators cattily criticize somebody’s wallpaper choice.

Pivo and Fisher on the Walkability Premium for Commercial Properties

Lisa Schweitzer1 Comment

Edited thanks to thoughtful commenter Derek Pokora:

The full article in per can be downloaded from Pivo’s academic page at the University of Arizona.

I always follow the work of Gary Pivo, and he and Jeffrey Fisher have a new manuscript in this (excellent) edition of Real Estate Economics. Because this is a scholarly publication, you have to pay for access, unfortunately. I will discuss it extensively here for those who can’t go read it themselves.

Here is the citation:

Pivo, G., & Fisher, J. D. (2010). The walkability premium in commercial real estate investments. Real Estate Economics. doi:10.1111/j.1540-6229.2010.00296.x

From the abstract:

This article examines the effects of walkability on property values and investment returns. Walkability is the degree to which an area within walking distance of a property encourages walking for recreational or functional purposes. We use data from the National Council of Real Estate Investment Fiduciaries and Walk Score to examine the effects of walkability on the market value and investment returns of more than 4,200 office, apartment, retail and industrial properties from 2001 to 2008 in the United States. We found that, all else being equal, the benefits of greater walkability were capitalized into higher office, retail and apartment values. We found no effect on industrial properties. On a 100-point scale, a 10-point increase in walkability increased values by 1–9%, depending on property type. We also found that walkability was associated with lower cap rates and higher incomes, suggesting it has been favored in both the capital asset and building space markets. Walkability had no significant effect on historical total investment returns. All walkable property types have the potential to generate returns as good as or better than less walkable properties, as long as they are priced correctly. Developers should be willing to develop more walkable properties as long as any additional cost for more walkable locations and related development expenses do not exhaust the walkability premium.

The use regional, neighborhood, and building variables in their models. Among their building characteristics include: number of stories, a square of that, the property tax, and whether the property is within a half mile of rail transit station. For neighborhood characteristics, they have property crime rates, population density and Walk Scores. They also use a bunch of regional variables.

One of the nice parts of the paper is their discussion of the Walk Score and what it measures.

Ohhhhhhh how I wish they had had parking availability for this study. A walking premium holds with theory. But theory would also suggest that the sorts of designs that accommodate both parking and walking would be even more productive for the developer and the tenants. The big box world of large surface lots has become uninteresting to a lot of urban consumers. But think about all the urban Trader Joe’s out there that have four stories of parking underneath or above in addition to their street-level storefront. Those are the properties that I bet get a nice value boost, and there’s no way to glean that from their data or model.

The difference is huge for those who argue that walkable developments “take cars off the road.” These developments may do so, but they may also simply generate more trips overall–and that’s certainly not a bad thing from the developer’s viewpoint.

Pivo and Fisher find that apartment properties had little premium value associated with walking–rather, the major boost came to commercial property, and in particular, retail property. They argue that it may be that the Walk Score, reflecting multiple things, is also capturing what may be negative effects from proximity to busy commercial centers (noise, lack of privacy, etc). It could be that–Lord knows, plenty of the people who advocate loudly for urban living completely discount its inconveniences.

But I strongly suspect one of the reasons they don’t see more of an effect for the apartments is that there is just plain more variation in quality and individual building characteristics than they can really capture with the data they’ve got. So it’s not like there is no effect, it’s just really hard to suss here given the data and given, as they point out, the potential conflicting effects from the Walk Score.

They find a 0.18 coefficient for market value with regard to their 1/4 mile buffer, and it’s highly significant, for the rail access variable, but that variable correlates at 0.51 to the Walk Score, and they don’t really present any tests for this problem. The correlation is not the end of the world, but it’s just high enough, and it’s positive, that had I been a reviewer, I would have grouched at them to check on it more. When you are using a combined or index measure like a Walk Score, it’s important to help your reader understand how it may interact or correlate with other measures.

The proximity to transit variable tells an interesting story for urban theory. They have appreciation and income variables for outcomes, and these variables are all logged. They find, just as with the Walk Score, that rail transit access has the highest impact (all effects significant) for retail and commercial property. Retail gets a nice boost in operating income from a higher walk score and rail transit access.

However, the aggregate regressions show a positive value for appreciation and negative for income.

So what does this mean? Their interpretation, if I understand them, means that the value of the additional business you get from walking customers probably gets captured by landlords and property owners rather than businesses renting–that is, they pay higher rents for their location location location. Property owners benefit from walkability, but tenants should think twice if somebody asks them to pony up for walking improvements. It also suggests that the property tax is a good source of funding for walking improvements, given who financially benefits, even though we all know that expecting property owners to pay taxes is the equivalent of spitting on veterans and making cookies for Jane Fonda.

Mortgage foreclosures in low-income and minority communities: Carolina Reid, Researcher from the San Francisco Fed

Lisa Schweitzer1 Comment

USC’s marvelous Lusk Center sponsored a terrific talk from Carolina Reid, researcher at the San Francisco Fed. Some of her papers can be found here.

The takeaway: there is pretty good evidence from her foreclosure data, which she matched with HMDA data, that mortgage channel really affected the outcomes of high-cost loans for low-income and minority residents. She finds a strong and persistent effect of race on foreclosures, and then using both interviews and logistic regression, traces the differences in high cost loan usage by rates to the channel. Banks covered under Community Reinvestment Act requirements originated loans that were, for the most part, much lower cost to the borrower than ones that originated among mortgage brokers.

However–and this was a point that I think comes through very clearly—the mortgage brokers were more effective at outreach–unfortunately. For a cluster of her respondents in Oakland, almost all had originated their loans with a mortgage broker they knew from their church. In Stockton, many were able to use brokers they met on-site—but who spoke Spanish.

The importance of social networks here does not decline. Even with a house in foreclosure, the mortgage holders appear to be faulting the banks rather than the brokers.

It’s the question of outreach that interests me. If you are from a low-income background where your parents do not own a home, it’s hard to understand what is going on in the mortgage market. Mortgage brokers could be a positive force in these communities if they come from those communities–and were trained and licensed more thoroughly. The goal, I’m thinking, should be to help increase the “pipeline” and “pathways” to better credit and financial management–and then step into home ownership.

Rather than the narrative we have now, which appears to be “Those black and brown people couldn’t handle credit and caused the mortgage market collapse.” Um, no. Maybe they shouldn’t have taken the loans they did, but there was plenty broken about the system that didn’t involve them.

There is good evidence that suggests families can benefit tremendously from home ownership under the right conditions. Those condition preclude an unregulated feeding frenzy on secondary market right along with more and better up-front counseling.

Red State, Blue State, and the mortgage interest deduction

Lisa Schweitzer3 Comments

Perhaps nothing reinforces the social scientists’ biggest lament that findings with catchy, reductive labels take hold far more than detailed, contextualized, and nuanced findings like the Red State, Blue State thing. It doesn’t hold up to much scrutiny. But it gets used, and this morning I was reading an interesting note on it.

Via Tax Prof blog this morning comes a story on a short analysis from Martin Sullivan on the geographic distribution of the benefits of the mortgage interest deducation, arguing that California and Maryland homeowners get more from the deduction than do people in West Virginia and other rural states. The story appears in Tax Notes.

The comments are, as usual over there, pretty sharp. I’m not sure why this report is a surprise to anybody: these are average benefits, and California has far more multi-million dollar homes than West Virginia does, pushing the distribution of benefits up, and the more interest you pay, the more valuable the deduction is for you, and the higher your bracket, the more valuable it is. The deduction has always had a free food for millionaires quality towards it, and regional housing markets differ markedly. No, it’s not fair that the mortgage interest deduction benefits blue states more than red states, but professors in Iowa City live like real estate kings while I get rent an apartment—or pay four times what they do—for housing.

It would be interesting to break this down with a more structural look: I’m not sure anybody has done so, but theory would suggest that banks, homebuilders, and landowners would receive at least a part of the benefit, as part of the distortion would be increasing the relative attractiveness of mortgages and homes over other goods.

One of the other interesting breaks in the theories here for sustainable development concern the assumption that many urbanists make that if you eliminated the deduction, people would rent more and live in apartments more. I’m sure some of that would occur, but both higher benefits from the mortgage interest deduction and more apartment dwelling are driven by regional housing markets–a lot of people wanting to live in the same place drives up land values, which drives up housing values and increases the returns to density.

At the margin, perhaps–those in small houses go back to renting in apartments, those in higher levels of the market buy smaller than they otherwise would. But I also suspect that smaller regions get a boost from when housing costs more in major metro areas; no, many people do not have discretion in where they live, but many others do–with some predictable effects about mobile, young worker boosting regional economies like Austin, TX and Charlotte, NC. Sorting doesn’t just occur within regions, iow, it happens among regions, and where you can buy may be important to some demographics.