Monthly Archives: May 2012

Second-class shareholders

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Commenting on James Surowiecki’s recent New Yorker piece, Felix Salmon decries the structure of Facebook’s IPO, which left Mark Zuckerberg with 57% of the voting shares while actually owning only 18% of the company:

The reason to be concerned about the rise of companies with dual-class share structures, then, is not all that dissimilar to the reason to be concerned about the rise of big private companies more generally. The stock market is no longer the common ownership of the means of production: it’s a place where early-stage investors can exit to a group of muppets and high-frequency traders.

Initial public offering (IPO) investors are increasingly being offered “ownership” of companies that comes with little or no actual control.  As Surowiecki puts it, companies are effectively telling investors, “Thanks for your money. Now shut up.”  It’s a very peculiar system that gives majority stockholders a non-majority say in corporate governance.

Wired: “Living Large in a 130-Square-Foot Apartment”

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Tiny houses are getting their share of attention these days and I find it hard to resist seeing how people design and live in small spaces (in a country where new homes are roughly 2,500 square feet). Check out this gallery and description of  “Living Large in a 130-Square Foot Apartment“:

The apartment was once the master bedroom of a larger apartment, which should give you a pretty good idea of its postage-stamp size. The idea was to separate the room to create a small studio that could create rental income…

The smartest design trick was to create a split-level floorplan. Baillargeon and Nabucet divided the studio into two levels by building a platform for the kitchen and bathroom, which creates the illusion of separate spaces without using any walls or dividers. The only true partition between living and dining is a long, bar-height shelf that doubles as a functional table for eating. A smart take on the traditionally depressing breakfast nook…

The bed is always a challenge in a studio space. You don’t really want a mess of comforters and pillows in the middle of your living space, and no grown person should really be sleeping on a futon. Baillargeon and Nabucet brilliantly bucked the Murphy bed concept with a bed on wheels that slides elegantly beneath the kitchen platform. The bed can also do double duty, sliding halfway underneath to create the illusion of a couch, thanks to the addition of decorative pillows.

A coffee table, stored along the wall while the bed is in use, slides elegantly out in front of the couch. The convertible bed/couch is Ménard’s favorite feature, as it allows for maximum square-footage for socializing. “It’s a multi-faceted space which can be adapted for watching a movie, working, inviting friends over or cooking.”

Looking at the pictures, the split-level plan seems to make a big difference. So when can Ikea sell all of this as a package? I wonder how much an architect or designer can make for putting together a space like this…

Another thought: can tiny dwellings only really work in communities that emphasize or at least allow socializing in public/private spaces? How much time does the average tiny house dweller spend in their unit compared to people with bigger homes? I could see this as a marketing pitch for tiny houses: you’ll be forced to be more social in public!

Living alone in higher percentages in Rust Belt cities

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Living alone is not limited to young singles: some Rust Belt cities have higher percentages (compared to the national figures of 27% of single households) of older single households.

Pittsburgh, former capital of the nation’s steel industry, has seen its population drop by more than half to about 306,000 since 1950, according to the 2010 Census. The government said 41.7 percent of households consist of one person, the sixth-highest rate in the nation…Now, about one in eight Pittsburgh households is occupied by a single elderly person, the fifth highest among U.S. cities. Russell said a significant share of the single households consist of elderly women, whom he calls “Rust-Belt babushkas.”…

In the Census data, Atlanta and Washington were tied at 44 percent for the highest percentage of one-person households.

Cincinnati ranked third in the nation with 43.4 percent of its 133,420 households consisting of single people. In 1900, Cincinnati was the nation’s 10th largest city, with a population of about 326,000. In 2010, it was the 62nd largest, with about 297,000.

The city’s relatively high number of singles is probably the result of families leaving for suburbs starting in the 1970s, combined with an influx of young professionals to the central city, where University of Cincinnati and Xavier University students also live, said Jeffrey Timberlake, an associate sociology professor at the former.

This reminds me of Eric Klinenberg’s earlier book Heat Wave that looked at the implications of the elderly living alone in Chicago. There are large social forces at work that can lead to certain communities having larger populations of elderly single people.

My thought: the implication here is that Sunbelt cities (South and West) don’t have as large single populations. What is the primary reason for this: the cities simply aren’t as old and they haven’t seen these cycles of population that the Rust Belt cities have experienced? Is it because Sunbelt cities don’t have some of the same kinds of dense urban neighborhoods and downtowns (and instead have more sprawl)? Are these cities more attractive to families (certain kinds of jobs, values, lower crime rates, more single-family homes in suburban subdivisions, etc.)?

One firm look at a particular subset of singles (they “restricted its analysis to single, widowed, and divorced women age 25-64. Without this cap on the age range, places with higher concentrations of elderly people would show a misleading number of single women.”) argues these are the 10 US cities with the smaller percentages of singles:

People tend couple up more in the smaller towns, though there are big city outliers like Edison, NJ, and Nassau-Suffolk metro area in New York. Many places that view themselves as traditional boast marriage rates above the national average.

A few college cities buck the trend of having more singles. North Carolina cities, Raleigh and Charlotte–each home to a university with more than 20,000 students–are in the bottom 25% by percentage of singles.

Logan, UT, and Provo, UT, both have fewer than 20% singles, the lowest in the country. Texas cities McAllen and Laredo have similarly low numbers of single people.

See their statistics for the 100 biggest US cities here. Since Pittsburgh and Cincinnati are so much further down this list, it suggests that those Rust Belt cities have larger percentages of elderly singles.

 

Quick Review: the Chicago History Museum

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I recently had a chance to visit the Chicago History Museum, a place I had visited several times as a kid but hadn’t been to in at least 15 years. Here are a few thoughts about the museum:

1. The best exhibit, in my opinion, is the dioramas of key moments in Chicago’s history. While these are now decades old, they still look quite good and effectively tell the story of Chicago’s early years. Here is the classic diorama of the 1871 Chicago Fire:

2. The museum has some interesting historical artifacts, ranging from Native American items to modern-day Chicago neighborhoods. My favorite: the Pioneer locomotive which made the first run on the Galena & Chicago Union railroad (the first railroad running out of Chicago and currently the Union Pacific West line in Metra nomenclature) in 1849:

3. Moving beyond my favorites, I think there is a larger issue with the museum: who is supposed to be its target audience? School kids? Tourists? Local residents? This drives another decision: how much detail should the museum present? I think there is a surprising lack of detail about major events which seems particularly appalling since Chicago is a world class city and urban sociologists still talk about (or perhaps joke about) Chicago being the quintessential American city. The second floor covers more modern Chicago history but it does this very quickly and without much context for each event/issue. For some of these modern topics, say transportation or Chicago neighborhoods or suburbanization, you could fill whole museum rooms and really inform the public about what happened and what it means for the future.

4. I also noticed that there is a very little in the museum about recent politicians (say, since the early 1900s). No commentary on the two Daleys and Harold Washington? I assume part of this might be driven by the fact that the Daleys are still around but there is a lot of potential material that could be covered here. For example, there is a small display about the 1968 Democratic Convention and a clip from a History Channel documentary on the subject but there is very little commentary on it. The lack of political material is quite noticeable when talking about the history of a city with powerful (and sometimes problematic) politicians.

5. The lobby of the museum is pleasingly eccentric. If I remember correctly, the museum used to a grand staircase in the lobby which gave it a very traditional look. But here is what one of the lobby looks like now:

Overall, the Chicago History Museum has some good moments but I don’t think it lives up to the world-class standards of Chicago. When the best exhibit consists of decades-old dioramas, there is room for improvement. In a city known for its museums, culture, and history as well being a center for urban study, the museum could be so much more.

Most people buy greener houses for the cost savings

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At the end of a larger discussion about builders constructing more green houses, an industry insider talks about why people buy green homes:

Q: Over the years, industry studies have shown that consumers’ interest in green building has tended to focus on energy conservation; they want to reduce their heating, cooling and appliance costs.

Do they still see green building through that lens of energy efficiency? Are they more motivated to build green for the sake of being green?

A: They’re still energy-oriented. In the most recent study, about two-thirds of consumers who requested green features in their homes said they wanted either to lower energy use or to save money.

In addition, consumer health concerns related to indoor air quality have moved up rapidly among the reasons for requesting green. But concern for the environment was a major issue for only about one-fourth of consumers requesting green.

While it will be interesting to see what green features the new homes of the next few years have, I think this hints at a larger issue with green products: people are more willing to invest in them upfront (in the case of a house) or buy them if they offer savings in the long run. Even with houses, this insider suggests that 30% of people wouldn’t pay extra for green features. The motivation here is not necessarily the earth or all of humanity but rather costs for individuals. This is a very different ideology and seems rooted in a consumeristic mindset.

But what happens when going green requires higher prices – like gasoline or other energy prices – without obvious cost savings for individual consumers? This is a much harder sell.

Ph.D. degrees are pretty rare, The Five-Year Engagement notwithstanding

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In the movie The Five-Year Engagement, one of the main characters has a post-doc at the University of Michigan in social psychology. I wondered how many people know what a post-doc is and this pushed me to think more broadly: just how common is a Ph.D. in the United States? According to the 2012 Statistical Abstract, there were 49,562 PhDs awarded in 2009, up from 42,437 in 1996. According to the National Science Foundation, here are some additional figures on the number of doctorates awarded:

-In the first year of their data, 1957, there were 8,611 PhDs awarded.

-The greatest years of PhD growth (measured by % change from previous year) were clearly in the 1960s with peaks of 14.1% in 1965 and 14.6% in 1970.

-There were 48,069 doctorates awarded in 2010.

(Unfortunately, these tables do not break down how many doctoral students graduated with degrees/concentrations in social psychology.)

Census figures from 2010 say 27.9% of Americans have a bachelor’s degree or higher. Figures from 2011 show that 7.95% of Americans have a master’s degree and 3% have a doctorate or professional degree.

All this suggests that PhDs are relatively rare in the United States meaning that many Americans may not be able to relate to this story (plus, how many movies or TV shows focus on academia?). However, the movie is set in San Francisco and Ann Arbor: 51.2% of residents in San Francisco have a bachelor’s degree or higher (with a California state figure of 30.1%) and 19.7% of residents have a graduate or professional degree (ACS estimates). In the college town of Ann Arbor, 71.1% of residents have a bachelor’s degree or higher (with a Michigan state figure of 25%) and 42% have a graduate or professional degree (ACS estimates).

So is Judd Apatow aiming for a more educated audience with his latest film?

CA town: the public will help determine how a one penny sales tax increase is spent

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Amidst other changes in Vallejo, California, the community is trying something innovative involving a recent one cent sales tax increase:

And the city council struck an unusual deal with residents — if they agreed to a one-penny sales tax increase, projected to generate an additional $9.5 million in revenue, they could vote on how the money would be used. The experiment in participatory budgeting, which began in April, is the first in a North American city.

The approach was pioneered in Port Alegre, Brazil, as a way to get citizens involved in bridging the large gap between the city’s middle-class residents and those living in slums on the outskirts. Individual districts in New York and Chicago are also experimenting with the process, and residents there have expressed interest in spending money on things such as more security cameras and lighting, public murals, and Meals on Wheels for seniors.

Here is more information on Measure B the city provided before the vote over the tax. Measure B itself passed in a very close vote and it looks like the city opened up the approved sales tax to the process of “participatory budgeting” (with some disagreement) in April 2012:

A bid to draw significant public participation in the city’s budget planning was approved Tuesday night by the Vallejo City Council.

The council voted 4-3 to launch a process known as “participatory budgeting,” setting aside 30 percent of revenue collected from a sales tax hike initiative voters passed in November.

Under City Charter provisions, public-proposed uses for the estimated $9.5 million a year ultimately will require council approval.

Duly noted: this is a measure with some controversy. It will be interesting to see how this works out: how much input will the public get? Will a good number of people in the city participate in the process? How much money will the public be able to control? What happens if the public wants to use the money for other purposes than the city council?

Could this work beyond the local level?

h/t Instapundit, Via Meadia

Two years of construction on Congress Parkway yields…bleh

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The Chicago Tribune’s architecture critic Blair Kamin provides an overview of what the two years of construction of Congress Parkway have yielded…and his verdict is ambivalent:

Yet two years and innumerable construction delays later, it’s hard to muster enthusiasm for the nearly complete, $20 million undertaking, which was paid for with city, state and federal stimulus program funds. That’s not because the job has failed to accomplish what it set out to do. Rather, it’s because many of those things have been done and, still, no one would mistake the new Congress Parkway for the Champs-Elysees…

Handling more than 60,000 vehicles a day, Congress became a barrier that separated the revitalized Printers Row district to the south from the Loop to the north. The recent appearance of dormitories and other academic buildings on both sides of Congress has only accentuated its identity as an asphalt moat…

For now, though, the new features remain overwhelmed by the still-intimidating width of the road and its vast field of shiny black asphalt. The cars don’t seem to have slowed down. Engines still rev. Horns still honk. Some pedestrians still jog through crosswalks to avoid speeding cars. As cars accelerate as they near the Ike, Congress feels more like a highway than a parkway…

Perhaps that will happen, but it will be more important in the long-run for city planners to keep attacking other problems that continue to make Congress Parkway a Champs-Elysees wannabe, such as the ragged building edge and a relative lack of street-level shops. The present revamp, while welcome and attractive, is but one step down a very long road toward taming the highway monster.

Several thoughts:

1. This seems like a very unique project: how many American highways with this kind of traffic end up turning into regular city streets within a few blocks? This is a reminder of what can happen when highways are imposed on the cityscape – the construction of highways in Chicago altered a number of neighborhoods.

2. I’m not sure why Kamin refers back to Burnham’s 1909 plan when talking about this road. While the Burnham Plan tends to get idealized, how much of it was actually carried out? Going further, how much of it was even realistic with the shift to cars and highways that Burnham could have only dreamed about?

3. A major issue seems to be that Congress Parkway itself is not a living street. Traffic is not necessarily an inhibitor of an interesting street. However, if there aren’t businesses along this road itself, such as shops and restaurants, this remains simply as a road to cross rather than a place to go for its own purposes.

4. Does anyone consistently do cost-effectiveness studies of highway/road projects? Kamin notes that this project cost about $20 million and took longer than expected – can we ask whether it was worth it? Should the public have gotten more bang for their buck?

5. Fairly, Kamin notes that the streetscape is not complete and some interesting design features have yet to be installed.

When will more romantic comedies reflect living alone, cohabitation, and women getting more education than men?

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The world of romantic relationships is changing: more people are living alone, cohabitating (maybe or maybe not marrying in the long run), and more women are obtaining college and graduate degrees than men. So when will romantic comedies reflect this?

I bring this up because I recently saw The Five-Year Engagement. This movie tackles the latter two issues I mentioned above: the couple lives together roughly 3-4 years before they get married (there is a clear period when they live separately). Also, the woman is working on a post-doc in social psychology at the University of Michigan while the man is a chef who has taken some classes as a culinary school. They end up having to try to compromise between their two jobs but little is mentioned about the relative status of the two professions. (A side note: how many people seeing this movie even know what a post-doc is? Is this mainstream? Also, I am undecided whether the film makes the field of social psychology look good or bad.) Yet, in the end, the couple still gets married. In fact, much of the plot of the movie is driven by the idea that the couple wants to get married but circumstances keep getting in the way. Additionally, the other main couple in the movie gets married quickly after they find out the woman is pregnant.

In the future, can the genre of romantic comedies survive without marriage at the end? Marriage is a nice plot device to end the film: they invariably show happy couples finally going through a marriage ceremony. It wraps up the story nicely. However, fewer American adults are married (51%) so are these films now more aspirational than ever and/or do they reflect the interests of a shrinking subset of the population? This also reminds me of the film (500) Days of Summer where marriage is not in the cards for the couple involved but movie viewers probably don’t get the same happy feeling at the end. I suspect romantic comedies will subtly or not so subtly change in the coming years to reflect these new realities and still try to provoke happy feelings even if marriage is not seen as much as the end goal.

Recent uptick in sales of McMansions?

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Here is an argument that new home sales of recent months might be driven in part by larger homes, sometimes known as McMansions:

Data released on Wednesday shows that sales of newly built homes rose 3.3% in April from a month prior and 9.9% from a year ago. While the figures do not disclose the size of these new homes, home builders credited the McMansion side of the spectrum. That’s a reversal from recent trends: During the recession the size of homes got smaller, shrinking 3.4% to 2,382 square feet, according to the US Census. But last year that size jumped 5.2% to 2,505 – the largest in at least four years. In many regions of the country, homes are even larger.

Home builders say the trend toward larger new homes picked up more this year. Michael Villane, president of Lead Dog Builders, a custom home builder in Rumson, N.J., says he’s currently building homes with sticker prices of $1.5 to $4 million, up from the $1.3  to $1.5 million his clients were commissioning a year ago. While the average size of homes in the region is 3,500 to 5,500 square feet, he says the orders he’s received this year are for 7,000 plus-square feet homes. Though there’s no official definition of the word, many define McMansions as new homes larger than 3,000 square feet.

In some cases, home builders are enlarging homes even if clients don’t ask for it. Michael Dubb, CEO and president of The Beechwood Organization, a New York-based home building company, says his firm is building houses with larger kitchens, higher ceilings, and overall more spacious rooms in an attempt to appeal to buyers who might be on the fence about buying a new home. By building bigger without raising the price, he says, the company is hoping to increase its sales. (He says they’re not downgrading quality, but rather cutting into their profits in order to make more sales.)…

Requests for large new homes come at a challenging time for the overall new home market. New home sales hit a 51-year low of 307,000 last year, according to the NAHB. That figure is expected to jump 18% this year, but it would still be way off its peak of 1.3 million homes in 2005.

If I had to guess at what is behind this, here is what I would say: there is a bifurcation in the current housing market. On one hand, you have a large group of potential homebuyers who are looking for smaller homes. One recent book I reviewed calls this the “demographic inversion” as young adults and retiring Baby Boomers look to downsize and purchase in denser areas. Proponents of these trends argue that the Americans of the future are looking for a different kind of homeowning experience in the future. On the other hand, you still have a decent number of wealthy homebuyers who are now moving out of a hibernation stage brought on the economic/housing crisis several years ago. They are looking to buy homes similar to what they would have bought ten years ago but now feel financially stable enough to pursue this.

The article doesn’t mention this but I wonder if this is also at play: new home sales are at the lowest stage in 51 years so this new push for larger homes among the wealthy is really raising the average in a way that we haven’t seen in the past. When those at the lower economic spectrum get back into buying homes (though some would argue that they won’t – perhaps we’re moving to a rental society), the average figures for the whole country might come down or stabilize a bit.