Monthly Archives: October 2011

Conservatives getting behind mortgage modifications?

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A journalist argues that conservatives are starting to argue that the federal government should step in and help homeowners stay in their homes:

Mortgage modifications have been a key pillar of the progressive response to the economic downturn–and they’ve been one focus of the Occupy protests that have sprung up across the country lately. The Obama administration offered its own such program in 2009, though it has helped far fewer homeowners than anticipated, thanks to a flawed design. But until lately, conservatives had by and large opposed the idea, arguing, as Santelli did, that taxpayers shouldn’t be forced to pay for borrowers’ bad decisions, and that banks shouldn’t have their actions constrained by government.

So what’s changed? By and large, policy hands and political leaders alike recognize that the economy isn’t going to get better on its own, at least not any time soon,. There’s a widespread consensus that until the United States tackles the massive overhang of housing debt–American homeowners’ wealth has fallen by a stunning 40 percent since 2006–the economic recovery won’t gain steam. As Feldstein wrote: “The fall in house prices is not just a decline in wealth but a decline that depresses consumer spending, making the economy weaker and the loss of jobs much greater.” Rogoff, too, views the crushing volume of personal debt as an unaffordable drag on growth. “Simply put, you can’t operate an economy where huge numbers of people are desperately in debt and have no real way out,” he argues.

Hubbard originally offered a modification plan in 2010 as a way to avoid another “costly stimulus package” designed to spur consumer demand. But he, too, may also recognize that mortgage modification, though necessary for the health of the economy, is likely to be politically unpopular. If so, better to have President Obama take the hit, rather than a future Republican president—like, say, President Romney.

Of course, right and left don’t see entirely eye-to-eye on the issue. Dean Baker, an economist with the liberal Center for Economic and Policy Research, last week slammed Feldstein’s plan as too soft on banks and a bad deal for struggling homeowners. And it’s hard to imagine that Republicans in Congress would react favorably to an aggressive mortgage modification proposal from the Obama administration.

So if this is true – and “three instances” doesn’t a trend make even as this journalist suggests – what is happening?

1. Conservatives are recognizing that the mortgage debt is holding up the larger economic recovery. If people can’t move, they can’t go to the open jobs. The debt doesn’t allow them to spend on other consumer items. If government involvement can move people past this logjam, then the “free market” can work again. Desperate times mean that political ideology has to be bent a little.

2. As the journalist suggests, they only back this when a Democrat is in charge.

3. This is pandering for votes. American culture has a dream of homeownership – neither party wants to be against that.

This bears watching. Of course, the devil is in the details: who is actually going to support what? Who is going to pay for this? How many homeowners could be helped?

More housing vouchers now being used in the suburbs

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A new report from the Brookings Institute suggests that more housing vouchers are now being used in the suburbs. Here is a quick summary of their findings:

This study analyzes the changing location of HCV recipients within the nation’s largest metro areas in the 2000s and finds:

  • Nearly half of all HCV recipients lived in suburban areas in 2008. However, HCV recipients remained less suburbanized than the total population, the poor population, and affordable housing units generally.
  • Black HCV recipients suburbanized fastest over the 2000 to 2008 period, though white HCV recipients were still more suburbanized than their black or Latino counterparts by 2008.  Black HCV recipients’ suburbanization rate increased by nearly 5 percent over this period, while that for Latinos increased by about 1 percent.  The suburbanization rate for white HCV recipients declined slightly.
  • Within metro areas, HCV recipients moved further toward higher-income, jobs-rich suburbs between 2000 and 2008.  However, the poor and affordable housing units shifted more rapidly toward similar kinds of suburbs over that period.  By 2008 about half of suburban HCV recipients still lived in low-income suburbs.
  • Between 2000 and 2008, metro areas in the West and those experiencing large increases in suburban poverty exhibited the biggest shifts in HCV recipients to the suburbs.  Western metro areas like Stockton, Boise, and Phoenix experienced increases of 10 percentage points or more in the suburbanization rate of HCV recipients.

This shouldn’t really be a surprise as more poor people now live in suburbs than big cities. But this could help explain how some of the poor are moving to the suburbs. As the US government has moved away from funding high-rise housing projects to providing housing vouchers, more people have decided to use these in the suburbs where there may be more housing and jobs.

These findings could also bring up some interesting issues regarding how suburban communities and residents feel about the use of housing vouchers in nearby housing. I think it is safe to assume that many suburban residents would not necessarily want to live near poorer residents but the voucher program makes this a bit more anonymous. If people knew that their community was a popular site for the use of housing vouchers, what would they do?

I would also suspect that the use of these vouchers in clustered in less wealthy suburbs, not very spread out throughout the metropolitan region.

Asking “why aren’t Americans moving to the city”

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Even as the percentage of Americans who live in the suburbs has increased over the decades, one writer asks “why aren’t Americans moving to the city?”

Polling by the real estate advising firm RCLCO finds that 88 percent of Millenials want to live in cities. Their parents, the Baby Boomers, also express a burning desire to live in denser, less car-dependent settings. But in the past decade, many major cities saw population declines, and the overwhelming majority of population growth was in the suburbs…

Methinks we may have jumped the gun on the whole collapse of the suburbs bit…

For the Millenials, the showstopper was jobs, or lack thereof. They managed to survive the last few years of college, but lacking paying work in the city, they’ve moved back in with mom and dad. So now they’re all kicking it in the TV room back on Deerhaven Drive, watching It’s Always Sunny in Philadelphia reruns and dreaming of big city living.

There are other factors that have slowed down the great urban migration that predate our recent economic woes: Crime rates are down nationwide, but that has done little to diminish the perception that cities are dark, violent places. Poverty, addiction, and blight still haunt many urban centers. Then there are the kids. The Millenials aren’t the first generation of young people to get all stoked about the city. The ones before them continue to pick up and leave as soon as Junior hits school age.

Of course, much of this is the result of ill-advised investment: We’ve poured money into unsustainable suburban development while starving the urban centers. (One writer on this website recently argued convincingly that subsidized sprawl is a giant Ponzi scheme.)

But I think there is a deeper force at work here. Here’s another headline that reads like it could have come out of the Onion: “Almost half of Americans want to live somewhere else.”

It’s actually from USA Today, and the accompanying story looks at a 2009 PEW Research Center poll that found that 46 percent of the public “would rather live in a different type of community from the one they’re living in now — a sentiment that is most prevalent among city dwellers.”…

Listen, I don’t mean to belabor this point. This is all just to say that the urban renaissance is not fait accompli.

This seems like a reasonable argument to me: there is no guarantee, as some critics have suggested, that Americans will see the error of the suburbs and flock back to the city. For many Americans, the suburbs seem to offer the best alternative to other living options: it combines some of more rural living (a bit of land) and more urban living (amenities nearby). Attacks on the suburbs won’t necessarily change their minds though higher costs of living (gas prices, less valuable houses) might.

The cited survey is also interesting. The Pew website about the survey is titled “For Nearly Half of America, Grass Is Greener Somewhere Else.” Are Americans simply afflicted with an itch to be somewhere else? Is this manifest destiny in action? Also in this survey:

Americans are all over the map in their views about their ideal community type: 30% say they would most like to live in a small town, 25% in a suburb, 23% in a city and 21% in a rural area.

If you combined the small town and suburban percentages, you would get almost the exact percentage of Americans who live in the suburbs. So when people responded that they would prefer a small town, do they really mean a suburban small town or a more rural small town and living in a rural area is more of living on a farm or five acre plot of land far from a big city?

“Suburgatory” picked up for a full first season

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Based on the audience for the first three episodes, ABC’s new show Suburgatory has been renewed for a full first season. The number of viewers for the first three episodes has been impressive: 9.81 million, 9.11 million, and 8.92 million.

I haven’t had a chance to see an episode yet – perhaps its popularity is really due to the fact that it offers something new? It does have a nice time slot between The Middle and Modern Family. Interestingly though, Episode 3 had a 3.1 rating, slightly higher than The Middle (2.9 rating) but below Modern Family (5.9 rating). Episode 4 airs tonight.

Chicken regulations in Naperville

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More suburbs have had to deal with this issue in recent years: should suburbanites be allowed to keep chickens? Here is the latest from Naperville:

The majority of Naperville council members voted Tuesday to make no changes to an existing ordinance that governs the keeping of fowl in the city, which states the birds must be kept 25 feet from neighboring homes and cleaned regularly.

City staff presented a proposal Tuesday that would place further regulation on chicken coop keepers, requiring them to obtain a permit for the birds and construct larger perimeters around the livestock. But council members opted to maintain the status quo that has regulated chicken ownership for years…

While both residents — neighbors, in fact — who spoke during public forum were on opposite sides of the fence on the issue, they agreed the council’s decision came as a surprise…

But the council’s decision has no effect on those who live in subdivisions, some of which have their own bylaws that govern the keeping of livestock.

While the article suggests at the end that there are only a few formal complaints about this a year, I suspect this is an issue that will continue to pop up. This is a classic NIMBY issue: will nearby property values decrease if a neighbor keeps chickens? It is also interesting to note that Naperville’s guidelines don’t apply to subdivisions, presumably because they have Homeowner’s Associations that already tackle this issue. (Naperville has an unusual number of HOAs – noted builder Harold Moser helped pioneer this in the city.)

This reminds me of My Blue Heaven, a study of the working class Los Angeles suburb of South Gate. In the early days of this suburb, it was common for residents to own animals and build their own homes. I suspect this sort of activity would not go over well in more middle or upper class suburbs.

If you are curious, here is what Naperville’s municipal code says about “fowl and livestock”:

1. Housing: All fowl and livestock shall be kept within a pen, coop, building or other enclosure sufficient in size and strength to confine such animals to the owner’s property, except that livestock may be tethered securely to a fixed object outside the enclosure, but only if the animal is so confined to the owner’s property.

2. Zoning: Fowl and livestock may be kept in any area in the City except as otherwise provided by this Chapter or the City’s Zoning Ordinance.

3. Restrictions:

3.1. No livestock shall be kept, housed, maintained or pastured within a distance of two hundred (200) feet of any occupied residence other than that of the owner.

3.2. No pen, coop, building or other enclosure used for the purpose of housing fowl (with the exception of homing pigeons) shall be erected or maintained within twenty-five (25) feet of any occupied residence other than that of the owner.

3.3. Every person maintaining a pen, coop, building, yard or enclosure for fowl or livestock shall keep such area clean, sanitary and free from all refuse. Such areas shall be thoroughly swept at least once every twenty-four (24) hours and the dirt and refuse shall be disposed in a clean and sanitary fashion.

3.4. All feed for fowl or livestock shall be kept in containers that are rodent-proof until put out for consumption of fowl or livestock.

Another report suggests Naperville is somewhat unusual in not regulating this issue more closely:

Homeowners on both sides of Laird’s Rivanna Court property are urging the Naperville City Council to re-examine a decades-old city law that puts no limits on the number of chickens one can have, as long as the pen is cleaned once every 24 hours and is kept at least 25 feet from neighboring homes.

Naperville is one of a few municipalities — including St. Charles, Batavia, Oak Park and Chicago — that allow residents, with a few conditions, to raise chickens at home. But in an email to council members, Laird’s neighbors stressed the city is “no longer a rural farming community but residential with nice homes and smaller backyards.”

I wonder if this is one of those issues in Naperville where formal regulations are unnecessary as social pressure would keep too many people from having chickens. One resident in the story suggests that his chicken coop was opened at night by others. I would guess that could be a lot of disapproving glances and talk if someone started building a chicken house.

American Academy of Pediatrics: television has no positive effects on children under two

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Here is a new recommendation from the American Academy of Pediatrics about children under two watching TV:

Their verdict: It’s not good, and probably bad.

Media, whether playing in the background or designed explicitly as an infant educational tool, “have potentially negative effects and no known positive effects for children younger than 2 years,” concluded the AAP’s report, released Oct. 18 at the Academy’s annual meeting in Boston and scheduled for November publication in the journal Pediatrics. “Although infant/toddler programming might be entertaining, it should not be marketed as or presumed by parents to be educational.”…

As screens proliferated, so did research. “There have been about 50 studies that have come out on media use by children in this age group between 1999 and now,” said Ari Brown, a pediatrician and member of the AAP committee that wrote the new report…

Three studies since 1999 have tracked educational television use and language development, and they found a link between increased TV time and developmental delays. Whether that’s a cause or effect — parents who leave kids in front of televisions might simply be poor teachers — isn’t clear, nor are the long-term effects, but the AAP called the findings “concerning.” In the same vein, there may also be a link to attention problems.

Several thoughts about this:

1. This article suggests researchers have found a correlation, not necessarily causation. But since researchers have not found any positive effects, they must feel confident in issuing this recommendation.

2. Does research suggest that television has some positive effects for children over two years old? Overall, are there studies that suggest television has positive effects for adults?

3. What does this do for children’s programs and videos? What about all of those “Baby Einstein” videos? Will new cottage industries spring up to fill this void?

Not just one national housing recovery

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National figures about the housing market give us an idea of what is happening across the United States. But if all real estate is local, it might be worthwhile to remember that the housing recovery may or may not be happening at different rates in different regions.

It would be interesting to hear housing experts talk about what this means for attempted national policies regarding housing. Would national policies take care of what needs to be done in Fresno, California and also Detroit, Michigan?

Lord Giddens as “Blair guru”

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I occasionally run across stories involving Anthony Giddens, well-known sociologist, speaking about political issues in Britain. Here is another example of the actions of the “Blair guru”:

Labour peer Lord Giddens, who brought the debate on 13 October entitled Universities: Impact of Government Policy, said ministers appeared to be pursuing policies of “ill-considered, untutored radicalism” that were not based in proper research and had “imponderable outcomes”.

The academic, who advised former prime minister Tony Blair and is professor of sociology at LSE, said the reforms would leave England as a “global outrider” with one of the lowest levels of public support for higher education in the industrialised world.

He said the “ideological thrust” of the Browne Review should have been rejected and instead tuition fees only gradually raised alongside the maintenance of direct public support for universities, due to their “massive” beneficial impact on society.

“Universities are not a sort of supermarket where education can be chosen like a washing powder off the shelf. Students are not simply consumers, making day-to-day purchasing decisions. They will make a one-off decision,” he said.

Reading these stories, it seems like Giddens has more political clout than most sociologists. Is this simply a function of having been close to Tony Blair, did Giddens do specific work/research that put him in contact with politicians, or does Britain simply have a different culture regarding public intellectuals and how sociologists can be involved in social and government life?

Finding new ways to store your bike in the city

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With space at a premium in many cities, some people have developed innovative ways to store bicycles:

Fortunately some cities have responded to the challenge with exceptional ingenuity. Japanese engineers have developed a multi-level “cycle tree” — perhaps more appropriately named a “cycle cave” — that stores bikes in an elaborate underground system. Riders feed their bike into a mechanized rut that sends it down into a designated spot, retrieving the bike later with a simple swipe of a card. One “cycle tree” in Tokyo, considered the world’s largest, holds some 6,500 bikes.

A truer bike tree can be found in Geneva, where riders can watch their bike raised high above the hands of thieves while remaining protected from the elements. In that same anti-theft vein, German designers have created a bike lock with inline wheels and a small motor that enables riders to power their bikes high up a street pole. Seoul, Korea, is working toward a system of bike hangers that cling to the site of residential buildings; riders can park for just $15 a year, though they have to pedal to retrieve their bike. A slightly less advanced version of this concept has been implemented already by some riders in the East Village…

Those who don’t mind cramming their bikes into their apartments have a growing number of options as well. These range from basic wooden wall mounts to simple, cheap wall hooks to stylish, colorful hanging nodes to elegant bike storage furniture that, in the words of Freshome, “unite cycling culture with interior design.” A Times slideshow from a few years back showcases some other space-saving solutions. These include a wall device that lifts bikes off the ground with a hydraulic spring, a freestanding rack made of oak, an incredibly compact and sleek wall hook, and a similar structure that, while bulkier, provides space for helmets and other equipment.

Many city dwellers, conscious of their limited apartment space, are now looking for bike storage devices that serve a double purpose. Knife & Saw recently introduced a hanging bike shelf that also acts as a small bookshelf. Less costly variations are starting to appear as well. Those with a balcony might consider a bike-shelf-birdhouse combination that holds a helmet as easily as it holds a helmetshrike. The most innovative, though perhaps also the least comfortable, design goes to Store Muu Design Studio, which conceived a sort of hybrid bike-desk, wherein the bike seat doubles as the office chair.

Some fascinating pictures to look at. You can even find out a little more about what happened to the foldable bicycle.

Home buyers looking for McMansion features

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I’ve highlighted the trend toward granite countertops and stainless steel appliances and here is some more evidence of home buyers looking for McMansion features, this time in the Philadelphia area:

Two couples I know are trying to sell city houses they have owned for more than three decades. The houses are historic, and conventional wisdom when they bought them as shells was to restore them without compromising their architectural integrity.

They bought them when they were young, raised their families in them, and now they are ready to move on.

One couple have had their house on the market since April. One of the owners told me prospective buyers seem to want marble bathrooms and gourmet kitchens, which are more suburban McMansion phenomena than urban trends.

“They can go to the home center and get those things,” she said, blaming TV reality shows for the attitude.

Today’s numbers reflect an impasse: Few people are buying, and those who do are paying bottom dollar; most sellers aren’t willing to take less.

Buyers want the best features but want the cheaper price while home sellers have to wrestle with not spending too much money to update in a down market when housing values have dropped.

Can we solely blame TV reality shows for this phenomenon? Here are three other reasons this might be happening:

1. Tastes have gone up and people expect better features in their home. This isn’t just from reality TV: advertising plays a role (similar pitches from the 1950s to today) as do reference groups.

2. More than in the past, home owners don’t have the home repair skills or will to do these repairs. Therefore, they want the sellers to have done this work for them and then don’t want to have to deal with it for a while.

3. It is a buyer’s market and so buyers tend to ask for everything. Many home sellers don’t have much leverage.