What will the closed CPS properties become?

When the Chicago Public Schools closed nearly 50 elementary schools (part of the story of the series Chicagoland), they noted it would be difficult to sell many of these properties. Well, the first one just sold:

The Chicago Board of Education on Wednesday unanimously approved the sale of the former Peabody Elementary school site and building to the Svigos Asset Management company for $3.5 million.

The site at 1444 W. Augusta Blvd. was one of only three closed schools that reached a bid stage for a potential sale.

The other two — the former Marconi Elementary in West Garfield Park and Wadsworth Elementary in Woodlawn — will receive new bid solicitations from the school district. CPS said both the closed schools “failed to generate qualifying bids.”

The board also unanimously approved the sale of the district’s soon-to-be-vacated headquarters at 125 S. Clark St. to Blue Star Properties for $28 million.

This is a minimalistic explanation that leaves out some very important information. Like:

1. Were these fair prices for the properties? The suggestion that other properties haven’t sold does hint that CPS is asking a decent amount.

2. How are these properties going to be used? Perhaps it doesn’t matter once they generated some revenue and are now off the hands of CPS.

It still sounds like this could be a drawn-out process.

Driverless buses could improve mass transit

Discussion of driverless buses in Britain highlights the efficiency they could offer, leading to improved service:

Claire Perry, the Transport Minister, said that operating buses without drivers could help companies provide “better and more frequent” services, particularly in rural areas.

She also revealed that work is already under way to identify any problematic “regulatory issues” which could prevent the vehicles being rolled out on roads across Britain.

Speaking at the Driverless Vehicles Conference at Thatcham on Wednesday, Mrs Perry said she could “see a future where driverless buses provide better and more frequent services”.

“A major component of rural transport is the cost of the driver – and so a truly driverless bus could transform rural public transport in the future,” she said.

Driverless cars offer safety and commuting convenience but this is a twist: mass transit could be more frequent and cheaper without drivers. It would be interesting to know how much cheaper this could be. Would this mean a 20% increase in bus service for the same price or is it something even more drastic? If so, perhaps this could make buses a lot more attractive, particularly in rural or suburban areas where riders may not necessarily want to ride with a lot of other people and want service that doesn’t inconvenience them much.

Continued mansionization debates in Los Angeles

The Los Angeles Times reports that controversy over mansionization in Los Angeles continues as the city struggles to develop guidelines that will please residents:

Los Angeles leaders say they want to tighten restrictions on mansionization, but citywide fixes are expected to take at least 18 months to allow for repeated hearings and environmental review, according to city officials…

Local politicians and planning officials say that L.A.’s rules against mansionization — meant to prevent bloated houses from being built on modest lots — have fallen short. The restrictions, put in place six years ago, curb the size of new and renovated homes based on lot size. But the rules also include “bonuses” of 20% or 30% more space than otherwise allowed…

In the meantime, city planners have suggested temporary rules to curb demolitions and give residents “breathing room” in neighborhoods that have mobilized against mansionization, including Sunset Square, Studio City and North Beverly Grove.

The Los Angeles chapter of the Building Industry Assn. is worried about those moves, saying that the temporary restrictions could “result in a flurry of lawsuits.” Homeowners have not been given enough warning about the restrictions, which “will immediately remove property owner rights,” the group’s chief executive, Tim Piasky, said.

Planning officials say the temporary restrictions would immediately address the problem in mansionization hot spots: desirable areas with older, smaller homes targeted for teardowns…

“It creates a situation of haves and have-nots,” said Traci Considine, whose Faircrest Heights neighborhood has been recommended to get temporary curbs on home demolitions. “If you do a few Band-Aids for a few select neighborhoods, the target is just bigger on the backs of the neighborhoods that aren’t protected.

Los Angeles is a big city so having city-wide regulations could be quite difficult. Austin passed a noted anti-McMansion ordinance but the city has 885,000 people in 272 square miles while LA has 3.88 million residents in 503 square miles. In addition to size differences, real estate in California is huge: the housing market is still quite pricey so limiting the ability of property owners to cash out is a bigger restriction than in the cheaper Austin market.

I would guess that the long-term solution is different guidelines for different neighborhoods in accordance with what residents desire. Yes, this might push the mansionizers to different neighborhoods. But, this is how communities often tackle this problem.

Different areas to address to help millennials purchase homes

Survey data suggests Millennials want to buy homes but have a hard time finding the resources. Here is a quick look at different hurdles:

So why aren’t all young would-be homebuyers just taking advantage of the low down-payment options offered by these plans to get into the market before prices rise further? Not everyone has access to the programs that can shrink a down payment, and even for those who do, such help may not be enough. “Typically the down payment is the biggest hurdle for a homebuyer” says Ken Fears, director of regional economics and housing finance at the National Association of Realtors. “Programs that have a lower down payment are going to provide a bigger boost for the consumer.” Some programs, like Fannie Mae’s Community Home Buyer’s, require a 5 percent down payment, a sum that still makes saving a difficult proposition for many young people, particularly those in areas with quickly climbing home prices, such as San Francisco and San Diego. States like North Carolina and New Hampshire, have particularly well-regarded programs that allow for down payments of about 3 percent. Some private lenders also offer assistance to new homebuyers, but fees and additional factors, such as debt-to-income ratios, can prove more restrictive.

But programs aimed at reducing down payments for first-time homebuyers can feel like a double-edged sword. In competitive areas, where homes are scarce and multiple bids are common, an affordably low down payment can be limiting. “You’re not very competitive. If you’re going into a house with multiple offers and they see 3 percent down versus 10 or 20 percent down, they’re not going to go with your offer,” says Anne Simpson, a 27-year-old teacher and prospective homebuyer in Washington D.C…

Tight inventory is also a major hurdle for first time buyers. “In a majority of large metro areas nationwide, the inventory of lower-priced homes for sale is much lower than inventory of mid and high-priced homes for sale,” says Humphries. That can make for a stressful and competitive shopping experience where prospective buyers feel like there’s a race to save up for their down payment before rates go up and favorite neighborhoods sell out…

And for more Millennials, issues of poor or nonexistent credit and lack of consistent wages push dreams of homeownership just out of reach. High student-debt payments combined with escalating rent leaves little extra income for savings and even those with steady jobs have learned that significant raises are hard to come by. According to Humphries, there’s no quick fix. Instead, patience, education, and advocacy programs for newer buyers will be the key to boosting first time home purchases among younger buyers, progress that could take another three to five years.

As the article notes, even with higher renting costs, it is not easy to buy a home. While this article provides just a brief overview, it seems like there is an opportunity for private lenders to really help or develop this market. Imagine college graduates with some student loan debt that want to own, have decent jobs, and yet don’t have the credit or big down payment yet. Isn’t there a way to craft something based on their education (tied to lower unemployment rates, higher earnings down the road)?

Decrease the number of new McMansions to increase local food security

One farmer and activist suggests reaching local food security means stopping the construction of McMansions:

Salatin — a successful American farmer, former reporter and author of nine books on the food revolution — is able to produce far more food per acre than industrial-scale farms using techniques that make raising beef, chicken, eggs and even pigs palatable to the neighbours…

Putting fallow land around monster homes that are proliferating in the Agricultural Land Reserve back into production will be key to building local food security in B.C.“We call those McMansions,” he said. “It is a problem because that is agriculturally abandoned land. We can’t begin to feed ourselves with a local-centric system if we lock up land in royal manor models.”

Even urban dwellers need to consider how far their food has to travel and whether it will come at all if there are shortages, he suggested. The integrated approach he takes to food production on the farm can be applied at any scale, Salatin said.

There are a lot of things that people, even in well-established communities, can do themselves to become more food secure, said Salatin, giving examples such as keeping honeybees on rooftops, installing food-producing solariums in our homes, capturing rainwater for food production, container gardening and reclaiming some of the billions of potentially productive acres sequestered under lawns in North America.

It is rare to find a critique of McMansions that explicitly addresses food. Such homes are often criticized for being wasteful, using too much land and resources as well as providing more space than people need.

Yet, I suspect it is not quite as simple as suggesting new McMansions automatically mean less agricultural space. McMansions aren’t the only use of land. This argument seems to use McMansions as a shorthand for sprawl. The sprawl often associated with McMansion neighborhoods consumes green land and pushes farming and agriculture further and further away.

Would a middle ground be consistently using McMansion land for growing things and raising animals? I have yet to see a request from McMansion homeowners to allow chickens or livestock – though such lots could accommodate such activities. It probably comes down to property values…

 

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Chinese homebuyers flood LA suburb with big homes

Bloomberg examines an influx of large-home purchases by Chinese buyers in Arcadia, California:

A year ago the property would have gone for $1.3 million, but Arcadia is booming. Residents have become used to postcards offering immediate, all-cash deals for their property and watching as 8,000-square-foot homes go up next door to their modest split levels. For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

This flood of money, arriving from China despite strict currency controls, has helped the city build a $20 million high school performing arts center and the local Mercedes dealership expand. “Thank God for them coming over here,” says Peggy Fong Chen, a broker in Arcadia for many years. “They saved our recession.” The new residents are from China’s rising millionaire class—entrepreneurs who’ve made fortunes building railroads in Tibet, converting bioenergy in Beijing, and developing real estate in Chongqing. One co-owner of a $6.5 million house is a 19-year-old college student, the daughter of the chief executive of a company the state controls.

Arcadia is a concentrated version of what’s happening across the U.S. The Hurun Report, a magazine in Shanghai about China’s wealthy elite, estimates that almost two-thirds of the country’s millionaires have already emigrated or plan to do so. They’re scooping up homes from Seattle to New York, buying luxury goods on Fifth Avenue, and paying full freight to send their kids to U.S. colleges. Chinese nationals hold roughly $660 billion in personal wealth offshore, according to Boston Consulting Group, and the National Association of Realtors says $22 billion of that was spent in the past year acquiring U.S. homes. Arcadia has become a hotbed of the buying binge in the past several years, and long-standing residents are torn—giddy at the rising property values but worried about how they’re transforming their town. And they’re increasingly nervous about what would happen to the local economy if the deluge of Chinese cash were to end.

Interesting look at how this affects one particular community. It seems to bring together several issues that might trouble the average American suburbanite:

1. An influx of immigrants. This is happening across the suburbs as many new immigrants move directly to the suburbs. At the same time, there are a number of ethnoburbs in the LA region so this is not unknown.

2. An influx of immigrants from China. The United States has an interesting current relationship with China and Americans didn’t treat Chinese immigrants well in early California. A large group of wealthy foreigners from a country with a huge economy and shadowy government might make some nervous.

3. This big money means older homes are being torn down and replaced with big houses. A large number of teardowns in an established community tends to attract attention as the homes can change the character of neighborhoods as well as raise prices (though this is also presented positively in this story as long-time residents can cash out).

All together, this rapid change will be worth watching.

Satire: Hamptons residents tear down McMansions to build mini-mansions

This is unlikely to happen anytime soon:

The latest thing in the Hamptons are Mini-Mansions. People everywhere are tearing down their 15,000-square-foot McMansions and replacing them with little three-bedroom houses of 2,000 square feet. This trend is unprecedented in America. But here in the Hamptons, it’s the latest craze.

Alice Henderstreep did this. She’s married to the steel magnate Charles Henderstreep and they tore down their McMansion in Quogue for a Mini.

“It’s wonderful,” she said. “Some friends of ours in East Hampton did this. I call my husband, he’s in the next room and comes. We’re never far away from one another. And I love it. The dog runs around underfoot. The kids are in the kitchen. It’s family. And the room we now have on our five acres is just phenomenal. We have huge lawns, we now have tennis courts. The kids have parties in our new pool house. We even built a baseball diamond.”…

“This is the way the original settlers lived,” Fred said when we called. “We followed the plans for a saltbox pictured in the historical museum. And so did the Henderstreeps in Quogue. It’s not like that old split level that was here we tore down for the McMansion. This is a recreation of the early settlers. Hand-hewn beams. Wavy old glass in the windows. It wasn’t cheap. In fact, it cost more than the McMansion we tore down.”

The only way I could imagine this happening is if downsizing becomes the new marker of luxury. It would be the opposite of conspicuous consumption: you can afford to downsize your vacation home and live small for a few days. Or, the tiny house movement could go upscale, perhaps with gratuitous use of innovative yet expensive technology. Of course, such claims might be followed up by a pricey trip to another mini-mansion in another wealthy vacation spot…

Key to national railroad on-time performance is Chicago?

In an interview, Amtrak’s leader suggests Chicago plays a critical role in the nation’s railroad structure:

I want to talk about on-time performance, and especially the role of freight prioritization. How has that played out?

The big problem I see right now is the on-time performance in and out of Chicago. Chicago is the hub for the long-distance system. All freights today are having a fluidity problem in and out of Chicago.

One of the things I’ve just done recently is every senior manager of this company had to adopt a train that operates in and out of Chicago. The reason for that is to get them really paying attention and focusing on a major part of what we do as a business. To make sure that our employees know that senior management’s paying attention to this. Communities know that senior management is out there looking at this. So that they understand our business better than they have in the past. That they can see what might be hurting us. Where can we improve ourselves? So that we can continue to hold a higher ground on the need for the freights to move our trains.

This is both a boon and a problem. For Chicago, this means that there is a tremendous amount of rail traffic going through the region, providing more opportunities for jobs and facilities. On the other hand, there is a limited amount of land, a lot of at-grade crossings, and getting trains through this bottleneck can be a headache. These issues have helped push more trains and facilities further out from the Loop, whether beltway lines or new intermodal facilities.

And this isn’t just a railroad problem in Chicago. As a transportation center, Chicago can be a bottleneck for air traffic with the soon-to-be world’s busiest airport (and recent infrastructure issues). The road traffic isn’t so great either.

New way of measuring poverty gives California highest rate

The Census Bureau tried changing the definition of poverty and it put California at the top of the list for poverty:

California continues to have – by far – the nation’s highest level of poverty under an alternative method devised by the Census Bureau that takes into account both broader measures of income and the cost of living.

Nearly a quarter of the state’s 38 million residents (8.9 million) live in poverty, a new Census Bureau report says, a level virtually unchanged since the agency first began reporting on the method’s effects.

Under the traditional method of gauging poverty, adopted a half-century ago, California’s rate is 16 percent (6.1 million residents), somewhat above the national rate of 14.9 percent but by no means the highest. That dubious honor goes to New Mexico at 21.5 percent.

But under the alternative method, California rises to the top at 23.4 percent while New Mexico drops to 16 percent and other states decline to as low as 8.7 percent in Iowa.

Not surprisingly, the new methodology has become political:

It’s now routinely cited in official reports and legislative documents, and Neel Kashkari, the Republican candidate for governor, has tried to make it an issue in his uphill challenge to Democratic Gov. Jerry Brown, even spending several days in Fresno posing as a homeless person to dramatize it.

The definition of poverty is an interesting methodological topic that certainly has social and political implications. I assume the Census Bureau argues the new definition is a better one since it accounts for more information and adjusts for regional variation. But, “better” could also mean one that either reduces or increases the official number which then can be used for different ends.

Several of Chicago’s most dangerous intersections the result of diagonal streets

A new list of the most dangerous intersections in Chicago for pedestrians includes several with three streets:

The six-way intersection of Milwaukee, North and Damen avenues on the North Side is the most dangerous junction for pedestrians in Chicago, according to a list released by the advocacy group Active Transportation Alliance…

There were 43 crashes involving either a pedestrian or a bicycle at the Milwaukee/North/Damen intersection from 2006 through 2012, the highest number of any city intersection for that period, the group found…

“There are proven solutions to make crossing these intersections safer,” said Kyle Whitehead, a campaign directorat the alliance, said Tuesday. “Things as simple as improving the markings on a crosswalk or installing a pedestrian countdown signal can make a difference.”…

The three most dangerous intersections in Chicago were Milwaukee/Damen/North; Cicero and Chicago avenues on the West Side; and Halsted Street/Lincoln Avenue/Fullerton Parkway in Lincoln Park.

It makes sense that some intersections with more streets involved are more dangerous: there are more routes for vehicle traffic and pedestrians have to navigate more crosswalks while having to look in unique directions for potential danger.

Yet, I was struck by two features of these diagonal, and potentially dangerous, streets.

1. The diagonal streets have a long history preceding the efforts of Americans to impose a grid on the Midwestern landscape:

Well, it turns out that most of Chicago’s diagonal streets were originally Native American trails. No, really. Milwaukee Avenue (originally West Plank Road), for example, was once a buffalo route that led to the Chicago River. Eventually settlers moved in, kicked the Native Americans out, and started building taverns along the trail. Once there were taverns, homes and businesses cropped up and the street thrived. Sound familiar? These diagonal paths in the city (Lincoln was Little Fort Road, Elston was Lower Road, Ogden was Southwestern Plank Road) became plank toll roads, and then finally regular streets that serve as some of the major arteries of Chicago.

In other words, the diagonal streets were more direct routes between settlements.

2. Diagonal streets are one of the features of Daniel Burnham’s lauded Plan of Chicago. Such roadways cut through a grid, providing quicker access into and out of the center of the city. However, only one major diagonal was even extended as the result of Burnham’s plan: Ogden Avenue was extended to go closer to the lake. Burnham had a number of avenues intended to radiate out from his proposed Civic Center which was never constructed. (Read more in this booklet in honor of the centennial of the Burnham Plan.)