Monthly Archives: July 2012

Size of new Canadian homes has dropped 400 square feet since peak

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While American new home size picked up in 2011, new homes in Canada have dropped in size over recent years:

Gone are the days of the McMansion, with the homeowner’s dream of a plus-sized home replaced by pint-sized living.

According to the Canadian Home Building Association, the average house size has dropped in the past decade from a mid 2000 peak of 2,300 square feet, down to 1,900 square feet, a decrease that is expected to continue.

Catalysts for the change in residential housing are varied – a choice of location over space or a move away from home-oriented leisure activities serving as but two examples – but for the most part, it comes down to the simple factor of the economics of sustainable living…

McMansions simply aren’t environmentally or monetarily sustainable.

It would be interesting to look more into why Canadian home sizes have dropped so much while American home sizes dropped a little but then picked up again. Is there a stronger cultural stigma attached to larger homes? Is there simply not enough demand in the market for the larger homes or are builders leading the way here?

I would also note that 1,900 square feet is still a decent sized home.

 

“The Queen of Versailles” is not about a McMansion

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More reviews are coming out of the new documentary The Queen of Versailles (and critics are liking it according to RottenTomatoes.com) but I would still argue with some of the depictions of the 90,000 square foot house at the center of the film. Here is an example: the Jewish Daily Forward has a headline titled “The Biggest McMansion of Them All.” I’ve argued this before: a 90,000 square foot home is far, far beyond McMansion territory. This is the land of the ultra-rich. Take this information from the same Jewish Daily Forward story:

David Siegel, 76, is the billionaire founder of Westgate Resorts, which he claims is “the largest privately owned time-share company in the world.” Jackie, 31 years his junior, is David’s surgically enhanced wife, and mother to seven of his 13 children. They live in a 26,000-square-foot home in Orlando, Fla., with a household staff of 19. They believe the house is too small…

All went well until the credit crunch of 2008. The Siegels’ problems weren’t caused by the house — though it did become a burden. Rather, David’s company ran into trouble as lending dried up. Typically, Westgate customers borrowed money from the company to pay for their vacation time-shares. The company, in turn, borrowed from the banks at lower interest rates. When the banks stopped lending, the bottom fell out.

Added to that difficulty was the burden of the PH Towers Westgate, a new 52-story high-rise luxury resort in Las Vegas, which drained Siegel’s corporate resources as well as $400 million of his own money. Finally, in November of 2011, Siegel was forced to sell…

Originally, the project was going to be a look at how the wealthy live and, of course, at the Siegel’s house-in-progress. It was very much in line with Greenfield’s previous work as a documentarian and photographer.

I’m looking forward to seeing this film at some point but it is difficult to draw conclusions about McMansions and American excess from one ultra-wealthy couple. Thus far, it sounds like reviewers and others see this film as a metaphor for the American economic crisis of the last five years or so and I’m not sure you can stretch it that far. As a view into the life of the elite, it may be fascinating but it would be difficult to describe this as a “typical” experience that explains the logic behind all McMansions and excessive consumption.

New movie to feature “nonviolent conflict resolution specialist teaching sociology”

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It is relatively rare to find television shows or movies that feature sociologists. Here is a new one: the upcoming movie Hit & Run features one of the lead characters as a sociology instructor.

Charlie Bronson (Dax Shepard) is trying to live a quiet, respectable life in a small California town in Hit & Run. He’s doing right by his girlfriend (Kristen Bell), a nonviolent conflict resolution specialist teaching sociology at a local college, sharing a tender moment in bed as the film opens. But, things go south really quickly.

You see, Charlie’s actually in the witness protection program for testifying about a botched robbery turned homicide he witnessed in Los Angeles. Now his girlfriend’s been offered the opportunity of a lifetime in LA and, rather than lose her, Charlie decides to risk everything to get her there. The couple quickly picks up a few tails in pursuit, including Charlie’s assigned marshal (Tom Arnold), Bell’s jealous ex (Michael Rosenbaum), the cons Charlie ratted out (Bradley Cooper, Ryan Hansen and Joy Bryant), and a pair of local law enforcement caught up in the swing of it.

I wonder how much the film plays up the irony of a “nonviolent conflict resolution specialist” teaching sociology getting involved in exciting car chases…

“It is the privileged Americans who are marrying, and marrying helps them stay privileged”

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A New York Times article looks at how marriage affects inequality. Here are some of the interesting tidbits:

Estimates vary widely, but scholars have said that changes in marriage patterns — as opposed to changes in individual earnings — may account for as much as 40 percent of the growth in certain measures of inequality. Long a nation of economic extremes, the United States is also becoming a society of family haves and family have-nots, with marriage and its rewards evermore confined to the fortunate classes.

“It is the privileged Americans who are marrying, and marrying helps them stay privileged,” said Andrew Cherlin, a sociologist at Johns Hopkins University.

About 41 percent of births in the United States occur outside marriage, up sharply from 17 percent three decades ago. But equally sharp are the educational divides, according to an analysis by Child Trends, a Washington research group. Less than 10 percent of the births to college-educated women occur outside marriage, while for women with high school degrees or less the figure is nearly 60 percent…

Sara McLanahan, a Princeton sociologist, warns that family structure increasingly consigns children to “diverging destinies.”

I’ve tackled this before (see here) but this is still interesting: marriage can have powerful economic effects.

The normative implications of such findings are interesting to consider. Should we pursue pro-marriage policies in the face of record number of adult Americans living alone? If we don’t want to have the government promoting such things, how do you close this gap working with other social levers?

This reminds me of the recent discussion-provoking cover story from The Atlantic titled “Why Women Still Can’t Have It All.”  Marriage was not the primary focus of the story though it certainly plays a role in what both men and women can accomplish. Also, it is tied to a factor not discussed in the story: as Slaughter suggests, the women may be limited by the system but the interest couples have in both working might also be related to a desire to have two incomes. Indeed, having a certain standard of living in certain metropolitan areas generally requires two incomes unless one partner is in a lucrative job. Being married increases the purchasing power of a family which is no small feat.

 

Some McMansions are already multi-generational homes

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While some have suggested McMansions can be renovated for multi-family housing, one Australian observer suggests this has already happened to some degree:

“We’re seeing a new efficiency or a new austerity where people are thinking a lot more about costs such as rising energy bills,” he says.

“And it’s the return to the multi-generational household where you’ve got the parents, their adult children living at home, sometimes with their own little ones.”

McCrindle says as a result there is a question mark hanging over already established large properties.

“What’s going to happen to the McMansion? Are they going to be in demand, or are they going to drop in value?” he says.

“I think that problem is already being sorted out because those McMansions are becoming multi-generational. Some downstairs rooms are being turned into granny flats, kitchenettes are being added and whole bedrooms are being turned into study rooms or home offices. For the future, it will be about building housing stock that is flexible and will adapt to our needs.”

Perhaps the children of the “accordion family” can use this as a rallying cry: “Our living at home helps mitigate the aesthetic, environmental, and financial disasters are parents made by purchasing a McMansion.”

It would be interesting to talk to McMansion owners and see if one of the reasons they purchased the home was for the possibility that adult family members might be able to live there. If so, perhaps the McMansion purchase isn’t completely misguided as critics would suggest?

Sociologist: 70% of murders in two high-crime Chicago neighborhoods tied to social network of 1,600 people

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Social networks can be part of more nefarious activities: sociologist Andrew Papachristos looked at two high-crime Chicago neighborhoods and found that a majority of the murders involved a small percentage of the population.

Papachristos looked at murders that occurred between 2005 and 2010 in West Garfield Park and North Lawndale, two low-income West Side neighborhoods. Over that period, Papachristos found that 191 people in those neighborhoods were killed.

Murder occasionally is random, but, more often, he found, the victims have links either to their killers or to others linked to the killers. Seventy percent of the killings he studied occurred within what Papachristos determined was a social network of only about 1,600 people — out of a population in those neighborhoods of about 80,000.

Each person in that network of 1,600 people had been arrested at some point with at least one other person in the same network.

For those inside the network, the risk of being murdered, Papachristos found, was about 30 out of 1,000. In contrast, the risk of getting killed for others in those neighborhoods was less than one in 1,000.

On one hand, this isn’t too surprising, especially considering the prevalence of gangs. At the same time, these numbers of striking: if a resident is in this small network, their risk of being murdered jumps 3000%.

I would be interested to know how closely the Chicago Police have mapped social networks like these. Do they use special social network software that helps them visualize the network and see nodes? Indeed, the article suggests the police are doing something like this:

Now, he wants to tap the same social networking analysis techniques that Papachristos, the Yale sociologist, developed to identify potential shooting victims, only McCarthy wants to use it to identify potential killers.

Police brass will cross-reference murder victims and killers with their known associates — the people projected as most likely to be involved in future shootings.

“Hot people,” McCarthy calls them.

Those deemed most likely to commit violence will be targeted first: parolees and people who have outstanding arrest warrants.

McCarthy said his staff estimates there are 26,000 “hot people” living in Chicago.

It would also be worthwhile to see how effective such strategies are. This isn’t the first time that organizations/agencies have tried to identify at-risk individuals. So how effective is it in the long run?

Google adding more and more indoor maps of buildings

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Google continues to expand its Maps program by adding more and more indoor maps:

10,000 indoor maps. You can consider this proof-positive that Google is making headway in its effort to chart every nook and cranny of navigable terrain, even if this includes carpet and linoleum.

Even more noteworthy: A great many of these floor plans weren’t created in partnership with Google. Instead, they were uploaded by users — business owners and institutional leaders who were motivated to make their properties just a bit more open to all. A steakhouse in Massachusetts. A camera store in New York. Even the Mayo Clinic in Scottsdale, Arizona. More and more pioneering spirits are using Google’s self-service tool to upload their building layouts for everyone to see.

But there’s a caveat: It’s nearly impossible to find most of these indoor maps, unless you happen to stumble upon one during your day-to-day use of the Maps app. Or unless you read Wired.

Google launched its indoor mapping initiative and its Google Maps Floor Plans self-publishing tool in November 2011. But right now, if you look at the Google Maps support site, you’ll find a bare-bones list of some 80 available indoor maps inside the U.S. This list only includes major museums, airports, and business locations that Google has partnered with.

Much more interesting to Wired are the individual businesses and organizations that have made their own indoor-mapping leaps of faith. We were smitten with the idea that so many people willingly uploaded their floorplans to the mapping database, so we asked Google to share a sampling of user-submitted examples. As you can see from the images above, some of the maps are most noteworthy for their sheer, well, normal-ness. But this, in part, reflects the limitations that Google puts on people who voluntarily opt into the service.

While the last uncharted area of the Earth may be deep under the oceans, providing widely available maps of public indoor spaces (Google is not yet accepting private buildings) is also pretty cool. These maps could be really helpful to visitors who don’t realize what may be turn around the corner or corridor inside a nearby building.

So when can I start getting turn-by-turn directions on my smartphone from the entrance to the Field Museum in Chicago to my favorite exhibits?

Of malls, Mormons, mammon, and Mitt

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A long article in Bloomberg Businessweek on “How the Mormons Make Money” discusses City Creek Center, a $2 billion “megamall” development that opened in March 2012 “directly across the street from the church’s iconic neo-Gothic temple in Salt Lake City”:

The mall includes a retractable glass roof, 5,000 underground parking spots, and nearly 100 stores and restaurants, ranging from Tiffany’s (TIF) to Forever 21. Walkways link the open-air emporium with the church’s perfectly manicured headquarters on Temple Square. Macy’s (M) is a stone’s throw from the offices of the church’s president, Thomas S. Monson, whom Mormons believe to be a living prophet.

On the morning of its grand opening, thousands of shoppers thronged downtown Salt Lake, eager to elbow their way into the stores. The national anthem played, and Henry B. Eyring, one of Monson’s top counselors, told the crowds, “Everything that we see around us is evidence of the long-standing commitment of the Church of Jesus Christ of Latter-day Saints to Salt Lake City.” When it came time to cut the mall’s flouncy pink ribbon [press release here], Monson, flanked by Utah dignitaries, cheered, “One, two, three—let’s go shopping!”

Watching a religious leader celebrate a mall may seem surreal, but City Creek reflects the spirit of enterprise that animates modern-day Mormonism.

A few thoughts and questions:

1.  A new, $2 billion retail development seems quite aggressive given the current business climate.  Then again, Utah seems to be faring much better than the rest of the U.S. economically.  The state averaged a 6.7% unemployment rate during 2011, 11th out of 50 states (+DC), according to the Bureau of Labor Statistics (BLS).  More specifically, Salt Lake City’s 2011 rate was even lower at 6.5%, putting it at 52 out of 372 major metropolitan areas.  (If you’d like to see Utah’s unemployment rate over time and/or compare it with other state(s), Google has a wonderful interface for interacting with the BLS’ public data here.)

2.  City Creek Center (official webpage here) seems to be neither a traditional mall nor a “lifestyle center“.  Rather, it sprung fully formed within its urban environment (which no doubt contributed to its multi-billion dollar cost) as a rebuilding of Main Street rather than a “Main Streetification”.  If successful, could it usher in a new era of high-dollar, high-stakes urban retail (re)development?  Or does City Creek Center’s strong ties to LDS businesses constitute circumstances so special that they cannot be duplicated elsewhere?

3.  The Bloomberg article seems to connect City Creek Center to Mitt Romney, stating,

It’s perhaps unsurprising that Mormonism, an indigenous American religion, would also adopt the country’s secular faith in money. What is remarkable is how varied the church’s business interests are and that so little is known about its financial interests. Although a former Mormon bishop is about to receive the Republican Party’s presidential nomination, and despite a recent public-relations campaign aimed at combating the perception that it is “secretive,” the LDS Church remains tight-lipped about its holdings. It offers little financial transparency even to its members, who are required to tithe 10 percent of their income to gain access to Mormon temples.

The unstated implication seems to be that Romney’s savvy and secrecy with his own finances is somehow related to the LDS Church’s savvy secrecy with theirs.  Is this a fair conclusion to draw?  Is Bloomberg suggesting that there is something inherent within Mormonism that mandates this particular way of doing business?

 

Wells Fargo pays more than $175 million to settle case of steering minorities to worse mortgages

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This is part of what discrimination looks like today: Wells Fargo has just agreed to a big settlement for offering minorities worse terms on mortgages.

At least 34,000 African-American, Hispanic and other minority borrowers paid more for their mortgages or were steered into subprime loans when they could have qualified for better rates, according to the Department of Justice. The DOJ settled a fair-lending lawsuit with Wells Fargo, the nation’s largest mortgage lender, on Thursday…

The complaint also says that between 2004 and 2008, “highly qualified prime retail and wholesale applicants for Wells Fargo residential mortgage loans were more than four times as likely to receive a subprime loan if they were African-American and more than three times as likely if they were Hispanic than if they were white.”

During the same period, the complaint says, “borrowers with less favorable credit qualifications were more likely to receive prime loans if they were white than borrowers who were African-American or Hispanic.”

Wells will pay at least $175 million to settle the case; it denies any wrongdoing in settling. Bank of America agreed to pay $335 million in settling similar charges in December.

This is not unusual: audit studies have shown that minorities tend to have more difficulty renting, securing a car loan, getting a job, and getting mortgages compared to whites.

Even though I have looked at several news reports on this, here is what I really want to know: is this a large enough settlement for Wells Fargo to really care? In other words, is this a light fine or a heavy fine? And perhaps more importantly, how do we know that they and other banks won’t pursue similar tactics in the future?