Monthly Archives: June 2014

Changes in foreclosures, single-family rental market

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One housing expert discusses the state of the housing market in regards to foreclosures and single-family rentals. First, foreclosures:

Yes, the pig has finally made it almost through the python. At the peak of the crisis, we were looking at about 14.5 percent of all loans being either delinquent or in the process of foreclosure. In a “normal market” that number is between 4 and 5 percent.

Right now, we’re roughly at 7.5 percent of all loans, so we’re down by half from the peak but almost twice as high as normal. In the next two to three years, that number should work its way down to the norm…

We’re seeing pretty much historically unprecedented loan performance — historically speaking, about 1percent of loans will be in foreclosure in a given year, and now we’re looking at about half of that…

And this suggests that we probably have over-tightened credit. Not that we want more people in default, but we know that people are having a hard time getting loans. Loan standards are just too tight.

Second, changes to the rental market:

Before the Blackstones of the world, 95 percent of single-family rentals were owned by people who owned five or fewer properties. It was a cottage industry, literally.

What I’ve seen happening is, these little guys are becoming the property scouts for the big investors…

They’ll buy the houses, do the repair work and flip them to the Blackstones. They’ve moved from being landlords to being flippers.

Some interesting changes with continued fallout from the bursting of the housing bubble. And it is still hard to know whether these changes are “the new normal” or the market could overheat again as we are eight years or so from the peak of the bubble.

Stereotypical NASCAR wives live in McMansions, consume a lot

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At least one NASCAR wife may not fit the mold of a McMansion owner:https://legallysociable.com/wp-admin/post.php?post=14555&action=edit

THE PERCEPTION some racing fans have of drivers’ wives is they live in McMansions, buy expensive clothes, drive luxury cars and travel to races in private planes. Krissie Newman insists this perception isn’t entirely true.

“Some [wives] are glamorous, but most of us are ordinary people,” she said during a recent interview…

Krissie, 36, seems comfortable with her life. No regrets about not practicing law?

“No, I’ve shifted my focus,” she said. “I’ve seen the benefits from what we’re doing. I think this is what I’m meant to do. You need to find balance in life; you need to know yourself.”

It might be interesting to look further at these perceptions. How many drivers live in McMansions and how does this differ from other athletes and celebrities? And why exactly is this tied to the wives and not also to the drivers who must have some say in whether they end up living in a McMansion and how their family spends money? It sounds like gender stereotypes are being linked to McMansions which are seen by critics as symbols of excessive consumption. It is harder to imagine a famous driver being criticized for having a big house as opposed to linking it to their wife. Additionally, NASCAR is often viewed as a more Southern sport and critics of McMansions could link that to suburban sprawl in the Sunbelt.

Facebook ran a mood altering experiment. What are the ethics for doing research with online subjects?

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In 2012, Facebook ran a one-week experiment by changing news feeds and looking how people’s moods changed. The major complaint about this seems to be the lack of consent and/or deception:

The backlash, in this case, seems tied directly to the sense that Facebook manipulated people—used them as guinea pigs—without their knowledge, and in a setting where that kind of manipulation feels intimate. There’s also a contextual question. People may understand by now that their News Feed appears differently based on what they click—this is how targeted advertising works—but the idea that Facebook is altering what you see to find out if it can make you feel happy or sad seems in some ways cruel.

This raises important questions about how online research intersects with traditional scientific ethics. In sociology, we tend to sum up our ethics in two rules: don’t harm people and participants have to volunteer or give consent to be part of studies. The burden falls on the researcher to ensure that the subject is protected. How explicit should this be online? Participants on Facebook were likely not seriously harmed though it could be quite interesting if someone could directly link their news feed from that week to negative offline consequences. And, how well do the terms of service line up with conducting online research? Given the public relations issues, it would behoove companies to be more explicit about this in their terms of services or somewhere else though they might argue informing people immediately when things are happening online can influence results. This particular issue will be one to watch as the sheer numbers of people online alone will drive more and more online research.

Let’s be honest about the way this Internet stuff works. There is a trade-off involved: users get access to all sorts of information, other people, products, and the latest viral videos and celebrity news that everyone has to know. In exchange, users give up something, whether that is their personal information, tracking of their online behaviors, and advertisements intended to part them from their money. Maybe it doesn’t have to be this way, set up with such bargaining. But, where exactly the line is drawn is a major discussion point at this time. But, you should assume websites and companies and advertisers are trying to get as much from you as possible and plan accordingly. Facebook is not a pleasant entity that just wants to make your life better by connecting you to people; they have their own aims which may or may not line up with your own. Google, Facebook, Amazon, etc. are mega corporations whether they want to be known as such or not.

Ikea is raising pay to help workers but many who need jobs can’t easily make it to their suburban locations

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Jamelle Bouie points out that Ikea is doing a good thing in raising wages but their jobs aren’t easily accessible to many who need them:

With that said, it’s worth noting that there’s less than meets the eye to Ikea’s promise to hew to local and municipal minimum wage hikes. Most Ikea stores are located in suburbs, as opposed to urban centers. The Ikea near Charlotte, North Carolina, for instance, is located on the outskirts of the area, as is the Ikea near Seattle (in Renton) and the one in Dallas (near Frisco). By virtue of geography, these stores will avoid city-mandated wage hikes.

What’s more, for as much as Ikea and similar stores might be good for workers, their overwhelmingly suburban locations make them isolated from large numbers of potential workers who lack employment opportunities in their own areas and neighborhoods…

The result is that, for both groups—but low-income blacks in particular—there is a “spatial mismatch” between neighborhoods and employment opportunities.

Put simply, the greater the sprawl of jobs in an area, the less likely it is that black residents will have easy and reliable access to them. Or, as UCLA professor Michael Stoll writes in a 2005 paper for the Brookings Institution, “Blacks are more geographically isolated from jobs in high job-sprawl areas regardless of region, metropolitan area size, and their share of metropolitan population.” And this isn’t an accident: “Metropolitan areas characterized by higher job sprawl also exhibit more severe racial segregation between blacks and whites,” he writes.

All of this is exacerbated by our shoddy, car-centric transportation policy. To get to any job in a place like Virginia Beach, Virginia—where 10- to 15-mile drives are a fact of life—you need a car. Yes, there is a public transportation system, but it’s irregular (the agency had a rate of 18 missed trips per day in March), limited in scope, and unreliable for most workers who need to be on time. But cars are expensive, and black and Latino households are much less likely to own cars than their white counterparts. What comes next is predictable: Plenty of low-income people can’t find or keep jobs because they are isolated from opportunities.

All correct though the increasing number of lower-income suburban residents may be closer to some of these Ikea stores. At the same time, most suburban residents will still need cars to get to the store, vehicles that are relatively expensive parts of household budgets.

Additionally, this helps highlight some of the contradictory nature of Ikea. On one hand, it is a quirky store in the American landscape, exposing Americans to interesting designs and promoting a more DIY mentality. On the other hand, it is just another big box store with locations near major highways, big parking lots, and lots of square footage.

Statistics from the first “Community Association Fact Book”

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Many Americans live in community associations and a new book discusses the broad patterns:

A new body of research, the “Community Association Fact Book,” tallies the numbers of associations, housing units, residents and property values for the country and each state. It was published by the Community Association Research Foundation, the research arm of the trade group Community Associations Institute in Falls Church, Va…

According to the study, 24 percent of American homes are in an association. Nationally, the number of associations increased to 328,500 in 2013 from 10,000 in 1970, the first year the foundation began keeping track. During that time, the number of housing units grew to 26.3 million from 701,000, as did the number of unit inhabitants to 65.7 million from 2.1 million. They pay about $65 billion annually assessments.

As for state data, Illinois has 17,900 associations, the fourth-highest after Florida, California and Texas.

The states with the fewest associations, less than 1,000 each, are Alaska, Arkansas, Mississippi, North and South Dakota, West Virginia and Wyoming.

That’s roughly 20% of Americans living within an association that provides oversight. Of course, these associations are often intended to protect homeowners from their neighbors within the community and outside of it. At the same time, it can lead to new sorts of issues in how to govern these associations, such as collecting and spending money in an association and operating as a board. The Chicago Tribune carries a weekly column featuring questions about associations and it often seems fairly complicated with neighbors disagreeing in a formalized setting.

There has to be an interesting story behind the disparities in the number of associations between states. It may have to do with laws in particular states that make it easier or harder to form an association. But, it all may be influenced by other factors like an urban/rural split (the states with the least number of associations are more rural) and cultural patterns (what do people think about neighborhoods, how important is protecting property values, etc.).

Testing above-the-street magnetic pods in Israel

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An Israeli defense contractor is testing out a new form of mass transit that is carried above city streets:

SkyTran is a personal rapid transit system that features two-person pods hanging from elevated maglev tracks. As futuristic as that sounds (and looks), the idea has been around since 1990. It’s been suggested in cities ranging from Tempe, Arizona to Kuala Lampur, but the idea never got off the, er, ground.

Until now. Israel Aerospace Industries is working with the California company to bring SkyTran to its corporate campus in Tel Aviv. It’s a pilot program that could be expanded throughout the city, which has been looking at adopting SkyTran for awhile now. Although the test track will be a 400- to 500-meter loop with a max speed of 70 kilometers per hour (44 mph), skyTran CEO Jerry Saunders told Reuters a broader system could hit 240 km/hr (150 mph) and carry as many as 12,000 people per track per hour.

A congested city like Tel Aviv is an ideal place for transit pods that float above crowded streets. The small pods and fixed route place the system somewhere between a car and light rail. The system is automated; passengers will summon a pod on their phone, have it meet them at a specific destination and carry them where they need to go. “Israelis love technology and we don’t foresee a problem of people not wanting to use the system. Israel is a perfect test site,” Sanders told Reuters.

The low-maintenance tracks move the cars with “passive” magnetic levitation, so there’s no power required to keep the pods elevated and mobile. An initial burst of electricity sends each pod to 10 to 15 mph, and it carries onward to 44 mph while gliding inside the track with the attachment levitating one centimeter above the rails.

Given different important areas of innovation in recent decades, it is interesting that the automobile with an internal combustion engine has proven to have remarkable staying power. Of course, cars (and variants from motorcycles to trucks) require quite an infrastructure from roads to the production of gasoline as well as a whole host of industries build around them like fast-food restaurants and big box stores. A new transportation technology, regardless of its genius, would take some time to develop its own infrastructure and for people and places to adjust around it.

Soccer won’t make it big in the US because it doesn’t have enough time for commercials?

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Forget cultural differences; perhaps soccer won’t make it big in the United States because there is not enough money to be made.

“Soccer is the least profitable sport on the planet,” says Stefan Szymanski, professor of sports management at the University of Michigan and co-author of Soccernomics. “The whole structure of soccer is totally at variance with the America model.”…

In America, TV contracts have a lot to do with a sport’s profitability. MLS recently took a step toward the big leagues with new contracts that will generate around $90 million in revenue per year, the most ever for the league. But that’s puny compared with leagues such as the NFL, which takes in about $5 billion per year from TV rights. The visibility generated by saturation TV coverage helps the NFL earn even more revenue from sponsorships, ticket fees and licensing deals.

It might be unfair to compare the MLS with the NFL, which is the world’s most profitable sports league and an almost unexplainable phenomenon. But pro soccer in the U.S. may face a chicken-and-egg problem that prevents it from ever following in the NFL’s cleats. Most NFL, NBA, MLB and NHL teams manage to be profitable whether they win or lose. That’s because of revenue-sharing deals, salary caps and other equalizers meant to keep leagues competitive and owners satisfied…

“The MLS is pursuing the America business model, which means it’s not pouring billions into making it successful but is actually limiting player spending,” Szymanski says. “There are probably 30 soccer leagues that spend more on wages per team than the MLS — including the Romanian soccer league.”

I wonder how American sports fans would react to the idea that sports “work” in the US because owners can make lots of money. Sure, the sports may be interesting and the athletes impressive but the owners have to make money and there have to be lots of commercials. The average football game has about 11 minutes of gameplay. It’s more like the sports play around the commercial breaks.

Does this mean American sports don’t really follow a free market model? It sounds more like team owners work together to guarantee their profitability and then others on the outside, like various corporations and television networks, can try to make money.

New arts centers in cities, like a Lucas museum, don’t bring in all the benefits suggested

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Chicago may have landed the George Lucas museum but a new book suggests such arts centers don’t lead to all the benefits suggested:

“In terms of the study, our major hypothesis was that these major facility projects—new museums, new expansions—would have these positive net benefits to the surrounding urban area,” says Woronkowicz, a professor in the school of public and environmental affairs at Indiana University Bloomington. “And that they would have potentially have less positive or even negative effects on surrounding organizations.”

Through case studies, surveys, and construction-cost analyses, the Cultural Policy Center report found that the museum building boom didn’t bring the net benefit to communities predicted by the so-called Bilbao Effect. While poverty rates fell and property values generally rose in communities where new cultural centers or expansions were built—good news!—poorer residents also suffered displacement in those areas. Beyond the standard gentrification effect, the researchers’ evidence shows, supply may have outstripped demand over the course of the U.S. arts center building boom—leaving some cities with the responsibility to maintain or even pay for cultural centers that they don’t entirely need…

“The types of leaders who provide the passion and drive to build structures of this sort [major performing arts centers] are successful men and women who are accustomed to relying on their own experience and judgment,” the book reads. “They depend on what they might describe as ‘inside knowledge’—knowledge gleaned from their own experiences, and those of their collaborators’ experiences.

“What tends to be absent in their thinking, however … is ‘outside knowledge,’ such as what statisticians refer to as ‘the base rate’ regarding the distribution of projects that did not go as planned,” the book continues.

Other traps that civic leaders fall into include hindsight bias and consistency bias: People’s memories about decision-making for projects tends to change over time, and people tend to revise their memory of the past to fit present circumstances.

There are similar findings regarding sports stadiums: they tend to benefit the teams more than the city.

It sounds like arts centers can be explained by growth machine theories. Cities want to promote growth and cultural relevance so bringing in a building dedicated to the arts looks good. It helps a city be more cosmopolitan, connect to famous names, promote tourism, have a new starchitect-designed building (if the city goes that route) or revive an existing structure, and even create jobs. A mayor can look back and say, “I helped bring that institution to the city and further confirm our world-class status.” Yet, such buildings may not do much for the entire city. Who pays for the land, new building, and maintenance? What if the new structure doesn’t draw as many people as planned? What if the institution moves away later? How much tax money does the arts center contribute to the city and where does that money go?

Micro-housing that is too expensive to solve the problems of affordable and sustainable housing

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Micro-housing may lead to some cool design opportunities but it may not solve important problems: providing more affordable and sustainable housing.

Which is, of course, the problem with zeroHouse: Nobody needs micro-housing in places where plots of prairie, mountain, and sea (!) are available in plenty.

Now, the zeroHouse might not be designed for the urban dweller at all. Several of the home’s signature features seem as though they’re meant for another type of buyer altogether. The design specs note that the house is entirely secure, with tempered “Sentry-Glass” windows, Kevlar-reinforced doors, and fully mortised locking systems. (Shocking that a house that looks like a Transformer could double as a bunker!)

Given the design features, land-parcel requirements, and other aspects of the building’s design—it can go into an energy-conserving “hibernation” mode for extended period of times—zeroHouse sounds like it might be better suited for Cliven Bundy country than for downtown infill construction. But then, that Manhattan Micro-Loft isn’t a much better model for addressing the lack of affordable housing in major U.S. cities.

I don’t mean to pick on Specht Harpman Architects, a New York- and Austin-based firm that’s mostly in the business of designing interiors and elegant single-family homes. Tiny-house offenders are everywhere, from the pages of any shelter magazine to the real-estate section of the New York Times, where per-square-foot costs and land allotments are out of sync with what (say) most New Yorkers need from micro-housing.

From what I’ve seen, much of the interest in tiny houses is driven by two market segments: (1) architects, designers, and other creative types who relish a new puzzle (how do you fit a lot of desirable features into a smaller amount of space) and (2) “downshifters” (to borrow a term from sociologist Juliet Schor), people deliberately trying to limit their consumption by limiting their living space as well as how much stuff they can accumulate.

Of course, there are some interested in micro-housing for its ability to address affordable housing and sustainability issues but several things still hold the micro-housing market back: zoning issues, a lack of large-scale building of these units thus far which would make them appear more normal and more practical to build with economies of scale, and price points that may not be cheap enough for the affordable market.

A Sociology of Disney course makes sense because Disney itself claims an influential legacy

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I recently saw a story about a new Sociology of Disney course. Is such a course helpful or a good use of time? Some might see this as frivolous, perhaps the same people who sound the alarms about sociology courses about celebrities like Miley Cyrus, Lady Gaga, or Jay-Z. I would argue otherwise: not only is it a good means to introduce students to sociology but Disney itself claims it is an influential factor in American life.

First, a quick description of the Sociology of Disney course:

A classroom case study: A young woman stuck in an abusive home escapes her family through marriage. Fast forward 60 years: Another young woman calls off her wedding to a deceptive fiance and focuses her time on her older sister and a new partner from a lower social class.

If these two fictional examples came from the same writer, what does this say about how the author’s attitude toward women changed?

They may sound like a classic comparison of gender roles, but they’re actually the plot of two Disney movies — “Cinderella” and “Frozen.”

Heather Downs, a Jacksonville University sociology professor, is using such examples in her “The Sociology of Disney” summer course, which she created last year as a way to get students interested in common sociology topics. The course has gained popularity since, and 16 students completed their final Friday by running around the Magic Kingdom and taking photos of examples of sociology topics discussed in class.

Second, I recently saw the Treasures of the Walt Disney Archives at the Museum of Science and Industry in Chicago. Lots of people know Disney and like Disney but I was particularly interested in how Disney itself was presented. And the legacy-building was thick. It included: the early life of Walt Disney in the heartland of America (Chicago, small-town Missouri); his early forays in Hollywood with interesting cartoon work and new ideas; the formation of the Disney company; all sorts of new techniques in animation (matching sound with drawings, coloring, a multi-plane camera, reintroducing fairy tales); innovative work matching animation and live-action (think Mary Poppins); the construction of iconic characters and theme parks; and best-selling movies. All throughout, there were videos and quotes from Walt Disney talking about what the company was trying to do and how they accomplished it.

Connecting this to the Disney course, it is worth studying Disney because this successful international corporation itself recognizes its influence. Walt Disney is held up as an American success story, a Midwestern boy who followed his dreams and helped enrich the lives of millions. Individuals don’t have to like the films or themes or what Disney stands for but it is hard to refute that most, if not all, Americans have interacted with Disney in one form or another. While people are certainly influenced by other sources, Disney capitalized on a number of trends – generally, adapting to new mass media forms – and is worth examining.