Morning Ed: Housing {2016.12.27.T}
Putting a price tag on sprawl in India.
Against type, Adam Ozimek argues for a tax on luxury homes.
The unbearable whiteness of tiny houses.
Joe Cortright takes issue with recent headlines about the comeback of the suburbs. We at OT have discovered how hard it is to delineate what counts as suburb and what counts as city.
What’s kind of funny about this is how it addresses the opposite of all the problems I had in Colosse. Back there, it wasn’t about making it easier to move in, but taking advantage of how hard it is to leave.
Also in Seattle, Gene Balk looks at how boarding might help.
BBC looks at abandoned mansions around the world.
Speaking of which, they’ve discovered another room in the Winchester Mansion.
Tax on Luxury Homes: This seems like a largely good idea but there are some issues with geography. The New York Times does a weekly slide show titled “What X can get you in Y” Spoiler: You can buy a lot more for 1 million dollars in Iowa than in New York metro. Even in NY-Metro, 1 million might get you a one bedroom apartment in the actual city vs. a decent sized house in the suburbs. There are also a lot fewer million dollar homes in Iowa and Nebraska than there are in and around NYC, Boston, SF, LA, Seattle, etc. I worry that this is just going to become another urban to rural transfer.
Tiny Houses: I’ve mentioned this before but anti-materialism as a philosophy generally seems to rise and be present in people who grew up very comfortably. Something something Manslow’s hierarchy of needs something something. I don’t see why the Tiny House movement should be any different. As someone who has been going through all the anxiety of being a freelancer during the lawyer-glut whatever you want to call it, I don’t yearn for tiny houses in the middle of nowhere. I yearn for not having to constantly freelance and looking for work all the time. I yearn for an end of going through when it rains, it pours and then dry periods in terms of work. But this is just my anxiety talking right now.
Suburbs v. Cities: San Jose is one giant suburb. But I largely agree that this is arbitrary.
Boarding: I find it interesting and perhaps a bit depressing that our solutions to some of societies problems is to revert to things done in a time when our country was poorer. That being said, Japan had or has a lot of boarding houses. I lived in one when I lived in Japan. A lot of Japanese companies will also have dormatories for their single workers. I think the issue is that the US can never seem to get this kind of paternalism right. Our attempts at employer-provided housing fail big time. During the 19th century, Pullman infamously cut his worker’s wages but refused to lower rent in his famed Pullman town. Other workers ended up in debt to their employers. The only successful example of employee provided housing I can think of in the US is StuyTown in NYC or faculty housing at universities. I think you need to be a more communally oriented society for dorm type housing to work. The thing about roommates in the U.S. is that they are still seen as being for when you are young and before you start a family. We still see it as odd that many professionals in their 30s have roommates because of high costs of living.Report
There is no sensible definition of luxury that does not include a million dollar apartment. Living in a highly prized location is a luxury.Report
This. Just because you can’t get a cheap house on the beach in SoCal doesn’t mean that a house in Manhattan Beach isn’t a luxury. I wouldn’t mind taking into account regional costs and defining luxury house as 1.5-2x local conforming loan limits.Report
Most assessments break out land & structure valuations. You could take the structure valuations pretty much as is & scale the land value. Not sure how to treat apartments.Report
You don’t “treat” apartments. You’d tax them the same way you’d tax a residence and then the apartment owner would pass that cost on to their tenants in the form of higher rents. The only time you’d run into trouble would be if there was some form of hard rent control in which case you would end up with potentially abandoned buildings.Report
Apparently a person can own an apartment, rather than renting it.Report
then it’s a condo or a flat, innit?Report
That’s what I think of them as, but I hear about people in NYC buying single apartments.Report
It’s either a condominium or a coop. I suppose it’s theoretically possible to “buy” an apartment under some of the more idiotic and ancient rent control laws by basically paying a resident to move out.
What you’re most likely hearing about, though, is condo conversions. You take a big building of rent controlled apartments then every time one vacates you renovate it and convert it to condominium ownership. Then the people paying their grandmother 50 dollars a month on their subleased unconverted apartment squeal about gentrification.Report
Saul,
if we tax bitcoins, we ought to tax luxury homes. London real estate is a reserve currency.Report
If I were single with no kids and had no job-related reason to favor an urban location. I would go for the house in the middle of nowhere. Not the tiny house bit, but of modest size. I did this about twenty years ago, when I had a job that entailed lots of driving regardless of where I slept. Many places in the middle of nowhere are very nice places to live, so long as (a) you don’t have to generate your livelihood from the local economy, and (b) you don’t have teenaged kids correctly noting the absence of teenager recreational opportunities apart from recreational pharmaceuticals.Report
And (c) are single and like it that way.Report
A fair point. I have never had any great expectation that the love of my life would just happen to live near me, and my social life has always included long-distance elements. Also, I wasn’t really looking at that point in my life. A few years later I was living in Philly when I did meet my future wife, but she wasn’t. The bright lights and big city didn’t really have anything to do with it.Report
The boarding idea being discussed is a good example of people getting creative. You could create an incentive to get older people into right sized homes, but if the market is expensive, that isn’t going to make the larger homes affordable for younger families.
Boarding can not only be a good way to bridge a housing gap, it could also be a way to help handle an aging population.Report
I look at the tiny house stuff as the extreme end of what is in my opinion a reasonable position, namely that as a culture we should move away from the idea that success is attached to owning an enormous home. This is especially so when that cultural ideal starts pushing public policy in an unsustainable direction (inflated mortgages supported by bad financing decisions, environmental destruction and waste, short sighted development, etc.).
Of course in our culture even reasonable ideas result in charlatans and caricatures of the movement looking for their 15 minutes of fame on crass basic cable programming.Report
I also don’t get the whole McMansion thing but the problem for urban-activists is that they are dealing with a very large country and don’t have any good ways to make Americans prefer apartment living and walkable mixed-used communities.Report
I also don’t get the whole McMansion thing…
Long-term planning by the Republicans who buy them? As in, once the Republicans in Congress whack away at Social Security, Medicare and Medicaid*, Grandma and great aunt Margaret will be coming to live in the two spare bedrooms and attached bath upstairs…
* Prior to the ACA, almost 50% (and still climbing at that time) of Medicaid funds went for long-term care for the poor elderly. Financial planning around the rules so that an elderly relative can go into care and draw Medicaid without wiping out all of their assets is at least a cottage industry. In many states, the nursing home industry would be out of business without Medicaid.Report
Long term planning? Bart is moving home to live in his grandma’s basement, dude. No need to plan anything.Report
It’s not the Republicans hacking away at Social Security. It’s math doing that.Report
*shrugs* Math says that America won’t be able to feed 66% of it’s current population by 2040.
Given that, why the fuck are we worried about Social Security???
Hell, whatcha wanna bet we’ll have lost Florida by then?Report
No it doesn’t. US population is projected to be 380M in 2040, an 18% increase. The export share of agriculture is 22%. So without a single bit of additional farmland or productivity improvements (unlikely), we could cover feeding the additional population with current production.Report
10 days off the growing year will solve that quandary for you.
Let alone the continuing draining of the Ogallala, or the worsening chaos caused by Global Warming (just a bit of heat at the wrong time), or the drought in Cali where the wells aren’t safe.Report
Ha, Mo is trying to drive with the rear view mirror.Report
10 days is 3% of the year. Also, the US, more than most countries can manage pretty well with climate change because warmer, longer summers means that while California becomes worse for agriculture, Oregon, Washington, Wisconsin, Minnesota, etc. become better for agriculture. This is not to say that global warming is good or that it can be managed globally, but a large geographically diverse country like the US is better suited to be able to adapt than somewhere like France.Report
I gotta say global warming is sweeeet from a Minnesota perspective. There’s always been so much water here so you add more heat and a little less precipitation and it just gets nicer and nicer. The autumns are divine and I think the winters are not too bad (But I’m Canadian so I would). Really the only down side to AGW in MN is a slightly elevated tornado risk.Report
Huh, average age for a Minnesota farmer is just 55. Not bad, mere youngsters, except for that whole pulmonary fibrosis thing. What odds are you giving those folks to make it to 65?Report
I, alas, am not an actuary so all I can offer is God(ess?) only knows.Report
Mo,
How many crops of cherries has Michigan lost this decade?
Just a dash of warm at the wrong time.
Oregon and washington are fucking deserts. Who the hell thinks that a desert gets better with more warmth???
Of course we’re better suited than some. Duh. There’s a nuclear weapon wielding country that’s going to be without livable land.
10 days off the growing season is light.
Can you name the country with a wall around it? They’ll be underwater soon enough.Report
There has been a lot of ink spilled over the debate on whether American preferences for suburbia with strict zoning and single family homes are natural or manufactured through government policy and propaganda from the private sector on what constitutes good and acceptable living for families.
The former points out that American cities have always had a higher percentage of single family homes on free standing lots long before the car became widespread simply because American cities could cover enough square miles to provide this. All you needed was a reasonable way to get people around like the train, trolley, or subway. Even New York City, America’s most dense and transit oriented city has many parts of Queens, Brooklyn, and Staten Island dominated by single family homes on independent lots. Other major cities like San Francisco, Seattle, and Portland have large numbers of single family homes by international standards.
The other side point out believes that America was growing more urban before the explosive growth in suburbia was only possible because of strict regulations on land use and what could be built and a transportation policy favoring cars and planes over everything else. You have people of all political stripes that believe this. I think that American policy certainly made suburbia and single family homes more common and affordable, the mortgage tax deduction is a massive subsidy, but the preference has always been for single family homes that are relatively well zoned.Report
There is a cultural aspect: In New Orleans, the original French/Spanish city was built w/ high density, wall-to-wall construction, entrances directly onto the sidewalks, owners living above (or in back of) their store. Outer dwellings were for the free-blacks, the lowest class, living in shanties.
The Anglos that started coming after the LA Purchase didn’t like the arrangements and built a housing area separate from the business districts with each house surrounded by a garden (small fenced-in lawns w/ foundational plantings). They valued even a small splash of lawn, and a degree of separation from work and other people. The beauty of the Anglo houses could be viewed from the street, whereas the aesthetics of the French/Spanish could be observed in their dress (seen from the small balconies) and in the private courtyard, if one were invited.
That all seems like good evidence of ingrained cultural preferences, which could be reinforced by regulation and tax policy.Report
Plenty of colonial built cities in British North America had a similar mix of store and workshop combined with living space because everybody had to walk or ride a horse everywhere. When lower Manhattan, the Wall Street and South Street Seaport area, became exclusively commercial because of rising real estate prices, the omnibus and horse tram appeared. The wealthy preferred to live in exclusively residential areas and travel down to the tip of Manhattan to work. This is apparently where the phrase downtown, referring the commercial heart of the city, appeared because of Manhattan’s north-south axis.
When single family homes became prohibitively expensive for all but the wealthiest New Yorkers after the Civil War, one argument against living in apartments was that proper Anglo-Saxons live in homes and not flats even if that home is a row house. Multifamily buildings were not seen as really Anglo-Protestant enough even though the Scottish were doing it for centuries.Report
Seconding my brother on tax on luxury homes and tiny houses. My idea house is a bungalow, something that isn’t too small and isn’t too big.
Saul is also right about the suburb vs. city argument. It is arbitrary and many American cities are collections of suburbs under one municipal government with some areas devoted to commerce, industry, and entertainment. To me an urban environment requires mixed used zoning and the ability to get around easily without a car. Strict zoning and car based transportation make things a suburb.
Boarding: This is what people used to do when the United States was poorer as Saul noted. For most of the 19th century and a good chunk of the 20th century, it was common for families to need to take in borders so that they could pay the rent on their own small apartments. Single people would live five to ten in a room meant for one person. This actually still happens today in immigrant communities. There are apartments in New York City that have been turned into boarding houses filed with bunk beds. Its illegal but its how immigrants afford the rent.Report
City vs. suburbs: I am reminded of a discussion I once had about major league ballpark locations. The modern trend is to put them downtown, or right on the edge of downtown. The older trend, of the 1960s and ’70s, was to put them out in the suburbs. The discussion was about the Philly ballpark (I don’t remember if this was in the Veterans’ Stadium days or the modern Citizen’s Bank days, but it hardly matters, as the locations are essentially the same.) It is located in south Philly. Go south, past the railroad yard, and you are at the old Navy Yard, which has been converted into industrial use. Go north and once you are past the parking lots you are in rowhouses. They guy I was having this discussion with complained about the park being out in the suburbs. I realized that his taxonomy allowed for skyscrapers and suburbs, with no category in between. You can get there by friggin’ subway (the sensible method, by the way: avoid said parking lots entirely!). That pretty strongly says “not suburb” to me.
But yeah, defining these things is tough. I clicked through the link to look at the maps of how one of the cited studies classified things. I live in what I call a semi-rural semi-exurban county. It is plausible to commute into Baltimore or, if you are really ambitious, DC from here, but the town I live in is the county seat and has its own cultural and economic identity. Lots of people both live and work hear in locally centered jobs that are in no way suburbanish. Oh, and drive from here to any city and you will pass corn fields. So how do we distinguish between people who treat this as a bedroom community and work in the city, and those who treat this as a distinct community? My guess is that the study doesn’t, instead throwing everyone into the “suburban” pot. I can only guess on the actual proportions. Based on the rather limited transit infrastructure between here and elsewhere and my experience with rush hour traffic, my guess is that the number of people making that commute is actually fairly low.
Even apart from that, the division of my region into the various sorts of suburbs is simply mystifying. The criteria used are not at all obvious from looking at that map.Report
Tiny houses and the whiteness thereof: It seems to me that the linked piece conflates the whiteness of cable TV real estate porn, of the “tiny house community,” and of those persons actually buying and/or living in tiny houses. All three might well be real things, but I have a hard time caring about the first two: the real estate porn in particular. It is a current cable TV trend. Wait a year or two and it will go away. Or, my favored solution, don’t watch it.Report
Tiny House Nation is an hourlong (!) show on the FYI network in which it’s never a slight case of lupus.
“What are we going to do tonight, House?”
“What we do every night, Wilson. Misdiagnose and damned near kill a patient three times.”Report
Wait, stop. STAHP!
Nobody ever talks about needing some kind of cost of living adjustment for the federal progressive income tax.
Why are so many people above finding that they need a cola carve out for a federal real estate tax?Report
(This sort of urban area middle class white collar blue voter special pleading? *this* is how you get Trump)Report
K,
watch with using terms that don’t exist anymore.
ya know, like middle class.
it’s “working families” all the way now, because middle class doesn’t focus test right anymore.Report
People talk about exactly this for AMT.Report
Fair point.Report
I’ve made that complaint more than once.Report
As much as I would benefit from that COLA, it seems like it’s pretty obviously bad policy–the feds subsidizing high costs of living in high tax, high service, high desirability areas. It seems exactly like the people who cry that not everybody can afford to live in one of the most desirable cities in one of the most desirable states in one of the most desirable countries.Report
I am day late with this, but it speaks to things we discuss a lot here:
As illegal warehouse living flourished, Oakland struggled to enforce safety rules — until the Ghost Ship fire
For those not aware, there was a warehouse in Oakland being used as unpermitted living space, artist lofts, and then underground dance hall, until a fire broke out and killed a lot of people.
Now there is a tremendous soul searching and handwringing and Monday morning quarterbacking about What To Do.
Before the fire, it seems the city either turned a blind eye to these unpermitted spaces, or at least failed to enforce regulations and zoning laws.
Also before the fire, it would be possible to view the spaces as exemplars of how unnecessary building and zoning regulations are, or how they interfere with the creative use of space.
I’ll resist the temptation to see this as vindication for regulation writ large, but I think it does point out why the stifling regulations arise in the first place.
But there is also this:
And the cost of bringing a building up to standards of safety are in fact very high, and would price many people out of the market.
So it doesn’t seem like there are easy villains here, so much as hard choices about how to use land, who benefits and who pays.Report
That’s the devil, isn’t it? Balancing regulations to adequately address safety etc. without raising costs to a point that’s beyond the ability of the 75% to afford.Report
This would seem to be a good place for Hanley’s anti-rent seeking amendment. I imagine that would help us limit ourselves to the regulation that are actually necessary/make sense AND limit wasted costs in meeting/enforcing them.Report
We could also have a conversation about subsidizing pricey requirements as a way of creating affordable housing.Report
As opposed to what, though? Regulations that make no sense are the very ones that the Ghost Ship occupants and builders thought they were casting aside.
They certainly didn’t intend to build a firetrap; no one went around thinking of that building as a disaster waiting to happen.Report
” I imagine that would help us limit ourselves to the regulation that are actually necessary/make sense”.
That’s a great idea. It only requires that (a) Congress (and the states) pass laws that mandate the creation of only necessary regulations; and (b) agreement among the bureaucrats, the pro-regulation forces and the anti-regulation forces as to what is necessary.
It’s easy to believe that bureaucrats are evil/stupid/obsessed with their own power. Some are! But as a practical matter, the vast majority of regulations are written in response to duly enacted laws.
(btw, there is a tremendous amount of both academic and popular literature on the regulatory state.)Report
You may wish to read Hanley’s posts on the amendment. I could find only part one (here: https://ordinary-times.com/2013/11/08/the-anti-rent-seeking-amendment-part-i-definitions/ , but maybe a little more Googling can get you to part 2). He’s pretty well informed on the tremendous amount of academic literature on the regulatory state.
And for the record, Hanley doesn’t think his proposed amendment would solve everything, or even end all instances of rent-seeking. His argument is more modest.Report
Here’s part 2: https://ordinary-times.com/2013/11/11/the-anti-rent-seeking-amendment-part-ii-the-amendment/Report
Remove all regulations and let the market decide. A lot of people are going to die in fires, but that’s what they wanted i.e. revealed preference.Report
Underwriters Laboratories does a good job making sure we don’t need to see revealed preferences on a lot of stuff.
Free Market, indeed.Report
Meh, just ban fire. Done deal.Report
Fire is a social construct.Report
a good servant but a bad masterReport
So it doesn’t seem like there are easy villains here, so much as hard choices about how to use land, who benefits and who pays.
I agree. On the front end people make the best choices they can to improve their lives. On the back end are Churchlady-types (gender neutral term!) hyperfocused on identifying “wrongs” and imposing devastating blame on them. Our society is more interested in imposing punishments than on forgiveness, even when – like the Oakland fire – there really isn’t anyone to blame since no one really did anything wrong*.
*Except by Churchlady standards.Report
I happen to be reading a very good essay on the fire, and the conflict between creative spaces and safety:
The Ghost Ship Fire and the Paradox of a “Creative City”
It insightfully points out that cities pride themselves on the creativity that these spaces bring, but the creativity is only made possible by both physical spaces that are precarious, and people themselves who lead a precarious existence.
It wasn’t just ordinary middle class people who occupy these spaces- it is also the outsiders and marginalized who use them, who create the bounty of creativity that the engines of our new economy use as fuel.Report
Well, it’s a tricky thing. I live in a place (Boulder County, CO) where the Code is used primarily (seems to me) to ratchet up property values.
When the people who live here complain about the lack of racial, economic and cultural diversity, I make a mental note that such complaints are NOT ironic.Report
There are many different types of regulations, intended to produce different results, which is why I get so touchy when people speak about “regulation” like it is some monolithic thing.
Zoning regulations were conceived to produce mostly aesthetic ends , to make cities more pleasant places to live and work. They had, even in their concept, only a bare minimum of health and safety intentions.
Building regulations by contrast, were conceived by fire officials and insurance interests for the purpose of preserving lives and property.
So zoning regulations lend themselves very easily to abuse, since racism and class tension is itself aesthetic, a desire to get rid of undesirable things.
Which is why the essay above reminded me of the great American cities of the Gilded Age, when these regulations were first enacted.
The huge engines of prosperity that produced all those magnificent mansions and libraries and opera houses in New York, Chicago, Pittsburgh all relied upon their massive factories. The factories in turn relied upon the desperate and precarious workers at that “abrasive edge” where the worlds met.
It was things like the Triangle Shirtwaist Fire or when the ugly truth of the slaughterhouses and the treatment of those who worked there brought these two worlds into collision.
Zoning laws were meant to drive the dirty dangerous factories far away from the genteel society, while building regulations were meant to prevent the factories from burning down.Report
I’m not down on a code. Or enforcing it. In Boulder, tho, the code is lauded as being “the most progressive green code in the country” or some such, and all that does is drive up property prices. From what I’ve heard, meeting the energy standards in the Boulder code adds about 15% to the total cost of construction.
Which isn’t a surprise, given the priorities of the community.Report
Are they willing to subsidize that cost for affordable housing, or is any subsidy coming from state or federal grants?Report
They do, but I’m not crystal clear on how it works. For example, there’s one low income development in town that caps resale price and so on, but it’s only about 40 units. And eventhen, they aren’t cheap (just cheap in terms of ownership). Federally, there’s section 8 subsizies and so on. But from what I can gather from the development world, the city-sponsored subsidies on development are so low that most folks (approaching all, functionally) won’t avail themselves of them since they can make more targeting a higher price range.Report
Sounds like they don’t really.Report
Returning home for the holidays I am reminded of the pre-eminent southern preoccupation. The fear that someone, somewhere, is getting away with something. (This extends beyond conservatives. Beyond politics, really.)Report
Well, look at it this way: What better time is there to celebrate a national tradition than over the holidays!Report
Well, yeah. If it were really just about saving money, you’d buy a nice mobile home or trailer home, not a $75,000 tiny house. Unless I’m missing something.Report
Classic rich guy/poor guy: if you live in under 200 square feet, you’re either a millionaire or homeless.Report
My first apartment was about 400 square feet. A front room that could comfortably hold 4 people if two of them were married, a hallway/kitchen area to the bedroom that could comfortably hold a bed and a dresser, and a bathroom that was on the other side of the wall of the kitchen/hallway.
The apartment itself cost about $330/month back in 1998 (those were Clinton dollars!) and I couldn’t believe my good fortune in getting it.
As we were packing up and moving out, after our neighbors joked that we were the only people in the complex that didn’t sell drugs. “Poor” has a lot of things that attend it. Nice mobile homes are likely to be surrounded by other mobile homes.Report