Zoning, defining “family,” and exclusion

Zoning is a tool municipalities can use to control what kind of developments – and by extension, what kinds of people – can be in their community. A recent law review article looks at how zoning guidelines extend to defining families for the purposes of who can live in a residential unit:

Today, when courts ask “what makes a family?” they often look beyond blood, marriage, and adoption to see if people have made other meaningful, familial commitments that qualify for the obligations and benefits that family law provides. As functional family law developed, cohabitation became one of the most important factors, if not the determining factor, in these kinds of cases. The problem is that zoning laws often prevent these same functional families from living together in the first place. Through this underlying connection to zoning, functional developments in family law are much more vulnerable than they appear.

“Formal family” regulations in zoning are pervasive, and come with the imprimatur of the nation’s highest court. In the 1974 case Village of Belle Terre v. Boraas, the U.S. Supreme Court ruled that municipalities can legally differentiate between related and unrelated families. In the intervening years, courts in 14 states have ruled that “formal-family” zoning is permitted by state constitutions, and the issue remains undecided in an additional 30 states. Only four state courts, in New Jersey, California, Michigan, and New York, have refused to sanction this form of discrimination, and lawmakers in Iowa recently became the first legislators to ban it. The Supreme Court has only revisited the issue once, in 1978, to clarify that the zoning definition of family cannot prevent blood relatives from living together…

The good news is that formal family zoning is of surprisingly recent vintage. There is a long history of functional family approaches to zoning in American jurisprudence, dating back to the early 20th century advent of zoning law. The first zoning ordinances didn’t define “family,” at all, and throughout the first 50 years of their operation, courts often ruled that functional families of all kinds—from gay couples and religious adherents to cult followers and sororities—could live together in peace. Even as “blood, marriage, or adoption” ordinances became more common, courts continued to rule that functional families fell within their wide interpretive ambit….

Formal family zoning is a familiar song—the same legal mechanisms that famously reinforced housing discrimination on the basis of race, also discriminate against families that vary from the nuclear ideal of a heterosexual couple raising their biological children. There is also compelling evidence that low-density zoning, like formal family ordinances, is a significant driver of racial and class segregation. In short, formal family zoning discriminates against non-normative families, but it also reinforces the racial and economic segregation effects of low-density zoning in general.

When they want to be, communities can be creative in developing zoning and other mechanisms that bring in the kind of residents and businesses that they feel fits their community (often along the lines of race and class).

I wonder how these family guidelines are related to zoning restrictions on overcrowding and the number of people allowed in dwellings. Court cases have dealt with this and it seems like the conditions could be similar at times to guidelines against functional families.

If functional families are not as desirable for some communities, perhaps another trend in households is more to their liking: the rise in single-person households. On one hand, suburban housing can be too big and not provide certain amenities like walkable places and public transportation. On the other hand, people in single-person households may use fewer public services and may be willing to purchase smaller, newer units (many suburbs want to build and sell condos and townhomes near downtowns or community focal points). Or, does zoning truly privilege the formal nuclear family in ways that do not extend to any other kinds of household configurations?

Housing as the ultimate marker of poorly functioning (free) markets

Alexis Madrigal considers generational access to housing and the high real estate prices in some markets:

There are obviously many reasons that coastal housing markets have gone so bonkers. But it is an ironic twist that residential property, which once served as the bedrock for American capitalism, has become the most obvious sign for young people that something is deeply wrong with the markets.

What exactly has gone “deeply wrong” with these housing markets? Madrigal lays out a number of factors. But, I wonder if we could extend the analysis a bit further from “housing markets” to “economic markets” more broadly. Here is what two opposing sides might say:

One side: these housing markets with high prices have never truly been free. For decades, federal policy has privileged single-family homes. Local policies have made particular choices, often toward protecting property values and limiting density. Open up these markets to true competition. If affordable housing is needed, limit regulations and let all the money of potential buyers drive new development.

The other side: housing markets have not been regulated enough. The federal and local policies have tended to privilege certain actors – like the white middle-class and connected developers – over the needs of many working-class and poor residents as well as non-white residents. Policies aimed at providing more housing for all need more teeth and the ability to compel protected wealthier residents to accept development near their own homes.

As a sociologist who has studied this for over a decade, I tend to side with the latter argument: (1) markets are rarely ever completely and free and (2) the scales have been tipped toward whiter and wealthier residents for a long time. Perhaps the true lesson of these high-priced housing markets is that calls for regulation and oversight only go so far when property values and who neighbors are is truly at stake.

Beware of buying a 1×100 plot of land between villas at a real estate auction

One man was surprised to find out what he actually purchased in a Florida real estate auction:

Kerville Holness thought he’d done a great job snapping up a $177,000 Tamarac villa for only $9,100.

He got a 1-foot-wide, 100-foot-long strip of land on Northwest 100th Way — valued at $50.

It starts at the curb where two mailboxes have been installed, goes under the wall separating the garages of two adjoining Spring Lake villas, then extends out to the back of the lot…

The message from county officials and real estate experts is that auction participants need to do their homework and make sure they’ve checked for all possible problems a property might have…

Real estate is a hot investment option these days. Add the interest people across the United and world may have in property in southern Florida plus the ability to purchase online and you could get more situations like this. How many people would be willing to purchase a property without ever seeing it?

Perhaps the answer going forward is that a lot of people would be willing to do this. If you can buy a car without driving it first, then more and more properties and units could go this way. In hot markets where properties go fast and the competition is fierce, it probably already happens at higher rates.

I wonder if at some point there could be a local backlash about Internet property sales. Just the idea that someone from anywhere could purchase land or buildings might make some nervous. Takes places like Vancouver or southern California where outsiders are making a lot of purchases. Or, perhaps the backlash from angry buyers who did not get what they thought they would (such as in the story above) could change Internet property sales. What format or what details are needed to truly make physical property a salable commodity to Internet buyers all over?

Reporting on the return of investment for house flippers

Selling flipped homes is up while the average return on investment for flipping a home is down:

Homes that were resold within 12 months after being purchased made up 7.2 per cent of all transactions in the first quarter, the biggest share since the start of 2010, Attom Data Solutions reported Thursday. Meanwhile, the average return on investment, not including renovations and other expenses, dropped to 39 per cent, an almost eight-year low…

“Investors may be getting out while the getting is good,” Todd Teta, chief product officer at Attom Data Solutions, said in the report. “If investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more.”

Three quick thoughts:

  1. The return on investment for flipping a home is down. Changes in the real estate market mean there are fewer homes with large return potential. I wonder how much of the lack of such homes is due to fewer homes on the market versus sellers getting better at pricing their homes versus multiple kinds of investors driving up prices at the lower price points.
  2. The return of investment of 39% sounds high…until you factor in “renovations and other expenses” which are not part of the figure. So what is the actual average return on investment once factoring in everything? 5%? 15%? This initial figure then helps make sense of the need of flippers to reduce expenses and make cost-effect renovations because those decisions directly connect to profits.
  3. Thinking of the money in house flipping, I have seen little about the accuracy of HGTV shows and other shows that often provide a purchase price, expenses summary, and then give a profit at the end. Are those figures normal? Do they represent unusual housing markets and/or unusual advantages to being part of a TV crew doing house flipping?

Argument: Trump “is acting like a real estate developer”

Want to understand the behavior of President Donald Trump? Megan McArdle suggests he is simply doing what a real estate development might do:

Because what you see on TV shows about house-flippers is, writ large, the nature of the whole business: To compete in a highly capital-intensive industry, almost everyone takes on a lot of debt. Like most real estate people, Trump loves debt — “There’s nothing like doing things with other people’s money,” he told a rally in 2016. “Because it takes the risk, you get a good chunk of it and it takes the risk.”…

That’s why the real estate business rewards a certain willingness to put everything you have on a long shot; if you can’t cheerfully take risks with horrific potential downsides, you need a different job. The best argument for this approach is that some problems can’t be solved any other way — if developers demanded steady, predictable incomes like the rest of us, most of America would still be farmland.

In its best form, the developer’s way of thinking can achieve the impossible — or at least what the more staid and methodical folks said was impossible. I opposed moving the U.S. Embassy to Jerusalem and was at best ambivalent about sticking with Kavanaugh, but I have to admit that the apocalyptic doom predicted by Trump’s opponents has so far failed to materialize, while the political gains were immediate, and large.

Then again, there’s a reason most of us don’t live like real estate developers, or want to. Bankruptcy is a sadly normal fact of life in the real estate business, which is why Trump can tout his extensive experience negotiating with creditors. The cost of gaining wins with big bets is that you never know when you might lose everything.

Analyzing behavior and motives from afar is a difficult task. Yet, this argument raises some interesting questions:

  1. Could an average American describe how a real estate developer operates? A few might be known to a broad number of people but I’m guessing many operate behind the scenes. And these developers can significantly effect communities.
  2. It would be interesting to know how the president polls among real estate developers. Would they proudly call him one of their own? Would they recognize the approach?
  3. Are there examples of other real estate developers who became political leaders? If so, did they act in similar ways?
  4. Is there a way to quantify or easily explain the amount of influence real estate developers have had in cities or places? Donald Trump was a big name developer: widely recognized, some degree of wealth, and a number of large buildings with his name on it. Yet, how much did he influence New York City or other locations?

 

Wanting to preserve the past, music masters edition

A long piece details the calamitous fire that hit an important vault of music at Universal Studios Hollywood on June 1, 2008:

Eventually the flames reached a 22,320-square-foot warehouse that sat near the King Kong Encounter. The warehouse was nondescript, a hulking edifice of corrugated metal, but it was one of the most important buildings on the 400-acre lot. Its official name was Building 6197. To backlot workers, it was known as the video vault…

The scope of this calamity is laid out in litigation and company documents, thousands of pages of depositions and internal UMG files that I obtained while researching this article. UMG’s accounting of its losses, detailed in a March 2009 document marked “CONFIDENTIAL,” put the number of “assets destroyed” at 118,230. Randy Aronson considers that estimate low: The real number, he surmises, was “in the 175,000 range.” If you extrapolate from either figure, tallying songs on album and singles masters, the number of destroyed recordings stretches into the hundreds of thousands. In another confidential report, issued later in 2009, UMG asserted that “an estimated 500K song titles” were lost…

The vault fire was not, as UMG suggested, a minor mishap, a matter of a few tapes stuck in a musty warehouse. It was the biggest disaster in the history of the music business. UMG’s internal assessment of the event stands in contrast to its public statements. In a document prepared for a March 2009 “Vault Loss Meeting,” the company described the damage in apocalyptic terms. “The West Coast Vault perished, in its entirety,” the document read. “Lost in the fire was, undoubtedly, a huge musical heritage.”…

Today several of the company’s nearly 1,500 facilities are devoted to entertainment assets. Warner Music Group stores hundreds of thousands of master recordings in Iron Mountain’s Southern California facilities, and nearly all of Sony Music Entertainment’s United States masters holdings — more than a million recordings — are reportedly kept in Iron Mountain warehouses in Rosendale, N.Y. The Boyers, Pa., facility where UMG keeps most of its United States masters is a 1.7-million-square-foot former limestone mine. The facility offers optimal archive conditions, climate control and armed guards.

The boom in cultural products in the last 100 years or so with the rise of mass media and new technologies presents unique challenges for corporations, the public, and preservationists. How should all of this material be preserved? The amount of space needed for storage could be huge – even for digital files (see the Library of Congress efforts to collect tweets). Keeping all of that material safe from fire, temperature changes, water damage, and other forces is costly and requires constant vigilance. Technology changes and renders prior productions difficult to utilize. There may need to be an obvious payoff for whoever is storing this material in order to go through all the effort.

One solution to all of this is to get mediocre copies of things. The example at the end suggests music listeners can access so much through streaming services. One expert profiled in the story describes it this way: “The music sounds like it was mastered in a Coke can,” he says. “But on long drives, it’s the best.”” I suppose it could be argued that having access to music and films and other items is worth it, even if the quality is not that great.

But a bigger question is this: just how much material is worth saving? What will people in the future want to look back on? Will future people see big benefits from the most preserved material ever compiled by previous generations? How will future preservationists, historians, and others construct cultural narratives about life today based on so much material (both tremendously popular and not)?

Looking at “The McMansion Effect:” home satisfaction and size of the homeowners’ home

A new study under review looks at how satisfied owners are with owning some of the largest homes in their area:

This finding, Bellet reasons, has to do with how people compare their houses with others in their neighborhood—particularly the biggest ones. In his paper, which is currently under peer review, he looks closely at the construction of homes that are larger than at least 90 percent of the other houses in the neighborhood. By his calculation, if homes in the 90th percentile were 10 percent bigger, the neighbors would be less pleased with their own homes unless those homes grew 10 percent as well. Moreover, the homeowners most sensitive to such shifts are the ones whose houses are in the second-biggest tier, not the ones whose houses are median-sized.

To be clear, having more space does generally lead to people saying they’re more pleased with their home. The problem is that the satisfaction often doesn’t last if even bigger homes pop up nearby. “If I bought a house to feel like I’m ‘the king of my neighborhood,’ but a new king arises, it makes me feel very bad about my house,” Bellet wrote to me in an email.

The largest houses seem to be the ones that all the other homeowners base their expectations on. In neighborhoods where the biggest houses are more modest, Bellet told me, expanding the size of one’s house can be 10 times as satisfying as undertaking such an expansion in a neighborhood where the biggest homes are palatial.

Bellet sketches out an unfulfilling cycle of one-upmanship, in which the owners of the biggest homes are most satisfied if their home remains among the biggest, and those who rank right below them grow less satisfied as their dwelling looks ever more measly by comparison. He estimates that from 1980 to 2009, the size of the largest 10 percent of houses increased 1.4 times as fast as did the size of the median house. This means that the reference point many people have for what constitutes a big home has shifted further out of reach, just as many other lifestyle reference points have shifted in an age of pronounced wealth inequality.

Read the working paper here.
Three quick thoughts:
  1. The term McMansion in the paper seems to refer simply to the largest homes. At least a few of the homes are not likely McMansions since the term is much more complex than just referring to homes with a large amount of square feet. Is the big home architecturally sound? Is it a teardown replacing a smaller home? Is it less of an issue of the single home and more an issue of sprawl and excessive consumption? Calling all big homes McMansions does not add much to helping understand what exactly is going on with large homes. Not all large homes are made alike or may be as satisfying. It may, however, add sizzle to the title: “The McMansion Effect” sounds good.
  2. I would like to see more research that addresses the issue of homeowners comparing their homes to others around them. This paper suggests satisfaction is linked to nearby comparisons. How far does this geography extend – walking distance? Half a mile? 2 miles? Within the same municipality? Compared to what is seen on TV?
  3. This sounds similar to a recent argument about the “Dream Hoarders,” the group just below the wealthiest people who have status anxiety about keeping up. Here, those just below the biggest homes in the neighborhood can feel worse. Is it the largest houses that are the problem or the people in the next to largest houses who then long to have the biggest house. If only we could control the pesky human tendency to compare ourselves to people who have just a little more than us…