Monthly Archives: June 2013

“A staggering migration” of hundreds of millions to Chinese cities

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A New York Times video highlights the large number of Chinese residents the government intends to resettle to cities in the new two decades. Three quick thoughts on the video:

1. Yes, the scale of urbanization in China is astounding. As the video notes, China’s urbanization rate has approached Western levels in a matter of decades while it took centuries in the West.

2. The video argues that the rapid urbanization in recent years was more natural while the planned urbanization in the next 15 years is more forced by the government. I think this is an odd choice of words: “natural” versus “forced.” This seems to borrow from a typical US/Western explanation that people are free to make choices between urban, suburban, and rural areas. It may feel this way for those with money but it obscures that there are plenty of social forces, such as economic opportunities or race/ethnicity, that “push” and “pull” people away from certain areas. “Forced” seems more correct for official government policy that will require people to move but as a sociologist, I would be very hesitant to suggest social process were inevitable or “natural” or that individuals are complete free agents who can live where they like.

3. The visual in the video is unique. I understand the purpose: to give people the sense of just how large this urban resettlement in China will be. And it is visually more interesting than a graph. At the same time, it is odd to put so many major metropolitan areas in a line. The cities are geographically disparate so why line them up?

Average new US house over 2,500 square feet; average new Chicago area house 2,650 square feet

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Here is an update on the average (not the median) new house size in the United States and in the Chicago region:

As a result, the average new home completed last year was 2,505 square feet. That represents the third annual increase in square feet and puts the average home size on par with where it was in 2008. Average home size peaked in 2007 at 2,521 square feet…

In the Chicago area, the average size of homes being built today is about 2,650 square feet, down from the 2,800 to 3,000 square feet constructed during the housing boom, according to Chris Huecksteadt, director of the Chicago region for Metrostudy, a housing research firm.

The US average is not surprising but it is rarer to see see figures for specific metropolitan regions. The higher than average new housing size in the Chicago area is likely related to the wealth of the metropolitan area but its lack of recovery compared to the national average suggests the region hasn’t bounced back as much as some other regions.

The effect of neighborhoods on persistent inequality between races

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A new book by sociologist Patrick Sharkey highlights how neighborhood conditions contribute to persistent inequality by race:

Put more bluntly:

Even if a white and a black child are raised by parents who have similar jobs, similar levels of education, and similar aspirations for their children, the rigid segregation of urban neighborhoods means that the black child will be raised in a residential environment with higher poverty, fewer resources, poorer schools, and more violence than that of the white child.

This might not seem to make sense: education gains have been fairly substantial, so shouldn’t income and wealth follow? The problem is that whites are more likely to lock in gains over generations. Blacks are more likely to be in a higher income centile than their parents than whites (55/50), and less likely to be in a lower one (44/49). But they’re more likely to be in a lower income quintile (53/41) and less likely to be in a higher income quintile (35/45). Whites are more likely to inch down and leap up the socioeconomic ladder; for blacks, vice versa.

By way of explanation, Sharkey points to the work of Northwestern sociologist Mary Pattillo on the black middle class: “When white families advance in economic status, they are able to translate this economic advantage into spacial advantage by buying into communities that provide quality schools and healthy environments for children. An extensive research literature demonstrates that African Americans are not able to translate economic resources into spacial advantage to the same degree.” In the real world, this is the reality for middle-class neighborhoods like Chatham, which struggle to maintain their economic and residential base while buffeted by violence creeping in from neighboring communities.

This research counters the idea that decreased educational differences necessarily leads to reduced wealth and spatial differences. There are other important factors at work, including the spatial context. Education is not a silver bullet that solves all of the issues related to poverty.

This would seem to line up with research on wealth differences between whites and blacks (see Black Wealth/White Wealth by Oliver and Shapiro). Even if blacks have made educational gains, wealth is partly generational. Wealth really helps with buying a home in middle- and upper-class neighborhoods that then offer better schools, environments, and social capital. And this homeownership gap is still large in the first quarter of 2013 (Table 16): 73.4% for whites, 43.1% for blacks, 45.3% for Hispanics, and 54.6% for all other races.

Suburbs wooing the Chicago Cubs highlights the regional nature of sports teams and stadiums

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The Chicago Cubs moving out of the city seems unlikely. But, that hasn’t stopped several Chicago suburbs from suggesting they would be willing to work out a deal with the Cubs to build a new stadium:

What the soliciting suburbs believe — and sources close to the Cubs confirm — is that the siblings of Cubs Chairman Tom Ricketts are souring on Chicago and growing increasingly concerned the deal will be modified in a way that denies the team the revenue it needs to renovate Wrigley without a public subsidy…

“If this deal looks like it’s going down in flames or not getting done in a reasonable time, Tom will invest in ‘Plan B’ locations. He’d still work with the mayor on a city site. But, maybe not in Wrigleyville. I know people don’t believe it. But, it’s true,” the Cubs source said…

Aides to Mayor Rahm Emanuel privately dismissed this week’s public solicitation from DuPage County Board Chairman Dan Cronin as a Cubs-orchestrated negotiating ploy.

“This is all manufactured to gain leverage,” said a top mayoral aide, who asked to remain anonymous.

Last month, Ricketts threatened to move his team out of Wrigley and Chicago if he doesn’t get the outfield signs he needs to bankroll a $300 million stadium renovation without a public subsidy.

This comes after the announcement this week that DuPage County has two potential sites for the Cubs. But, little extra information about these plans were provided.

But, I think a more interesting take is the regional nature of sports teams and stadiums. Sports teams these days are really regional entities, particularly considering that more people live in the suburbs than central cities. It is unusual to have a team like the Cubs so closely tied to a specific neighborhood. Additionally, cities often see sports stadiums as economic engines, even though research suggests spending lots of taxpayer dollars on stadiums doesn’t pay off for communities. On one hand, it is not all that different than fighting over big box stores or corporate headquarters because of the supposed economic benefits. Yet, on the other hand it is a constant status symbol. Could the city of Chicago really afford in terms of prestige to lose the Cubs? I don’t think so. Would a suburb get a big status boost from hosting the Cubs? Possibly. If a suburb was able to woo the Cubs, I imagine they would trumpet this fact and try to build around it for decades.

This has happened before in Chicago. When the Chicago Bears were looking for a new stadium from the 1970s to the early 1990s, several suburbs were involved. The Bears ended up getting a decent enough deal from the city to stay. (Maybe they should have pushed harder. They have the smallest NFL stadium in terms of seats and with it also being an open-air facility, this limits its Super Bowl possibilities in the future. Also, the facility is still owned by the Chicago Park District and this has led to issues over the years.) Again, it is hard to imagine the Chicago Bears, a historic NFL franchise, playing out in the suburbs next to a major highway. What would have been a boon for a suburb would have been a big perceived loss for Chicago.

In the end, these sorts of negotiations can pit cities against suburbs in similar ways to fighting over business opportunities. But, rather than arguing about just money, sports teams are viewed as public goods that belong to a region. Perhaps the worst possible outcome is for the region to lose a team to another region altogether. The second worst outcome might be for the big city to lose the stadium to an upstart suburb.

The unfinished “concrete bathtub” Block 37 CTA station

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Here is an inside look at the partly completed Block 37 CTA station that was once intended to be home to express service to both Chicago airports:

The superstation, which was mothballed in 2008, runs on a diagonal from beneath the corner of Randolph and Dearborn streets, southeast to the corner of State and Washington streets. I’m not supposed to say how you access the space — security concerns, you know — but let’s just say that a variety of elevators, locked doors and ladders are involved.What’s striking once you get in the space is its size: as long as a football field-and-a-half (472 feet), 68 feet wide and averaging 28 feet high. Call it a concrete bathtub — or an “envelope,” as our tour guide, Chicago Transit Authority Chief Infrastructure Officer Chris Bushell, put it — with rows of support pillars receding into the dim far distance. And all completely unlit, except for some temporary light strung up on the mezzanine and the portable lights we brought along…

The money needed for express train service, likely in the billions, never was obtained. And any private-sector interest melted away when the economy entered its worst downturn in many decades in the late 2000s. So, the city stopped after completing the shell and built no more.

By that time, though, City Hall had spent $218 million — $171 million of CTA bonds, $42 million in tax-increment financing and $5 million from outside grants, the CTA says. And to make the station useable — to connect the tracks, build the escalators, attach all of the needed electrical and plumbing to the outlets — will take an additional $150 million or so, the CTA says.

It’s too bad the city won’t say what they envision doing with this space. Just how long will it stay empty? Because of this, I’m a little surprised Chicago was willing to show reporters exactly what they built. Not only was several hundred million spent, the city still does not have any faster train service to the airports. All together, this is not exactly a shining moment in Chicago infrastructure.

Chicago tries to solve stormwater issues with Deep Tunnel but is behind in utilizing greener options

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The Chicago Tribune suggests while Chicago has pursued the impressive Deep Tunnel project to relieve stormwater issues, the city has fallen behind in pursuing greener alternatives:

Cities from Philadelphia to Seattle already are moving aggressively to prevent basement backups and sewage overflows without the expensive work of laying pipes and boring tunnels. Milwaukee is the first city in the nation with a federal stormwater permit that legally requires “green infrastructure,” such as streets and parking lots with permeable pavement and neighborhood rain gardens designed to capture the first flush of stormwater…

For instance, the Green Alley program promoted by former Mayor Richard Daley has overhauled just 1 percent of the 1,900 miles of Chicago alleys with permeable pavement, according to city records. Other than a showcase project on Cermak Road in the Pilsen neighborhood, city officials could not provide details about any other street outfitted with green infrastructure…

Daley’s 2003 “Water Agenda” and 2008 “Climate Action Plan” promoted green infrastructure as a solution. Mayor Rahm Emanuel embraced the idea last year in his “Sustainable Chicago 2015” plan, which called for making the projects a routine part of the city’s bricks-and-mortar budget and promised to annually convert 1.5 million square feet of impervious surfaces into areas that allow runoff to seep into the ground.

But despite the years of talk about green alternatives, the city’s money and political focus largely is still on big-ticket construction projects like Emanuel’s program to replace and refurbish old sewer lines, funded in part by doubling water bills for the average household by 2015.

The larger official response to flooding and sewage overflows in Chicago and suburban Cook County is the Deep Tunnel, a network of massive storm sewers and cavernous flood-control reservoirs that has been under construction since the mid-1970s. The Metropolitan Water Reclamation District, a tax-supported agency that operates independently from city government, has spent more than $3 billion on the project but isn’t scheduled to complete it until at least 2029.

There seem to be several issues at work:

1. Deep Tunnel is a sunk cost already and it will still be years before it is fully operational. Can a government back away from such a large project, supposedly one of the largest civil engineering efforts in the world, when so much money has already been spent? This kind of retreat with billions spent already is difficult to envision. Also, I assume we know more about stormwater management today than people did in the 1960s and 1970s when Deep Tunnel was planned.

2. The greener alternatives seem to take a different approach to stormwater. Instead of relying on a large, centralized system, it sounds like other cities have stricter requirements for individual property owners. These owners can’t foist the problem off on the city or nearby properties; they have to find ways to reduce their contributions to the system.

3. Chicago has tried to promote a greener image over the last decade or so. Mayor Daley was fond of pointing out the city’s green roof initiative. Here is a little bit more on Chicago’s green roofs:

“If every rooftop in Chicago was covered with a green roof, the city could save $100 million in energy every year,” said Jason Westrope, a developer for Development Management Associates, who has overseen the building of green roofs in the city.

Green roofs also help absorb stormwater runoff. That’s important because the city’s stormwater drains through its sewers, and if the system gets overloaded after a big storm, that wastewater is in danger of backflowing into the river, the lake, and even into people’s basements.

Chicago already has 359 green roofs covering almost 5.5 million square feet — that’s more than any other city in North America. But city planners are pushing for even more.

Chicago has mandated that all new buildings that require any public funds must be “LEED” Certified — designed with energy efficiency in mind — and that usually includes a green roof. Any project with a green roof in its plan gets a faster permitting process. That combined with energy savings is the kind of green that incentivizes developers.

Does this assessment of Deep Tunnel work against this green image? Compared to other major cities, how exactly does Chicago rank in terms of green programs and initiatives? It is one thing to look at a single project, even a massive one, compared to an overall assessment.

Some wealthy US zip codes don’t have enough mansions to sell

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This may be related to a supposed McMansion comeback: some wealthy US communities have a limited inventory of big homes available for purchase.

While housing inventory is falling throughout the country, it’s falling especially fast in some of the country’s richest ZIP codes. A study from Altos Research, the Mountain View, Ca., real-estate research firm, found that inventory in the nation’s 90 wealthiest ZIP codes fell 15 percent over the past year, slightly faster than the broader market.

But in the richest ZIP codes, inventory is down more than 50 percent. In a ZIP code in Carmel, Calif., inventory fell 76 percent over the past year. There were only four homes left on the market priced at $1 million or more as of the end of May, according to Altos.

In Palm Beach, Fla., the number of $1 million-plus homes has plunged by 70 percent, falling from 89 to 26. And in the Old Greenwich, Conn. ZIP code, there are only 10 homes left priced at $1 million or more, down 58 percent, according to Altos.

“I don’t recall seeing the market like this, and it’s come so quickly,” said Cristina Condon of Sotheby’s International Real Estate in Palm Beach. She said buyers have poured into the market in recent months, many from overseas. American buyers are also piling in—some from higher-tax states like California, lured by low taxes and still-low prices in Florida.

The phrase “mansion shortage” sounds funny. It may be true in a business supply and demand sense but shortage is a term often reserved for more essential commodities, not luxurious homes.

This is more evidence that there is a bifurcated housing market: the wealthy, whether Americans or residents of other countries, seem to be doing fine with their real estate.

Opposing gentrified suburban strip malls in order to give immigrants and others cheaper business opportunities

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Plenty of suburban critics detest strip malls for their ugliness, auto-dependence, and effect on traditional shopping districts. But, Kaid Benfield argues they may need to be protected from gentrifiers as they offer cheap real estate that can be taken advantage of by immigrants and others.

And yet:  As these properties have declined, so have their rents, making them affordable to small, often entrepreneurial businesses.  Particularly as immigrants have settled in inner suburbs (where many of these fading commercial strips are), businesses owned and patronized by the immigrant population have occupied many of these spaces, in some cases alongside small start-ups owned by longtime community residents as well.

The risk is that, as we reshape these old properties with new buildings and concepts, the replacement properties will be much more valuable than their predecessors; indeed, that’s why new development is appealing to investors and how it is made possible.  Overall, that’s a good thing.  But small businesses either go under, unable to afford new rents, or relocate as a result.  The logical place to relocate in many cases will be vacant storefronts in other strip malls in locations less attractive to the businesses’ clienteles.  What to do?…

According to Ritchey’s article, Asheville’s strip malls offer a setting for synergies to develop and help connect entreprenurial businesses to each other:  for example, establishments offering diverse but complementary products and services can share a customer base, trade ideas, and cross-promote.  This strikes me as analogous in some ways to synergies available to start-ups in more urban “business incubators.”

It makes a lot of sense to me and, in many parts of the country, it is newer Americans who are benefitting the most from these opportunities.  For them, a successful business in a strip mall is the American Dream at work.  Three years ago, Aaron Renn (The Urbanophile) and I wrote separate articles about a sort of organic economic revitalization being initiated by immigrants within the existing fabric of our older suburbs.

Interesting argument. Three quick thoughts:

1. Does this mean strip malls might be viewed differently in the future by suburban critics? While they might prefer strip malls are not built in the first place, this does seem like a good use of resources.

2. When people argue that small businesses are really important to the American economy, how many of these small businesses are in strip malls? Could the humble strip mall be one of the backbones of the American economy?

3. This is tied to larger issues about redevelopment in mature suburbs. In American metropolitan areas, many suburbs are built-out and have no large land parcels for new development. There is a lot of potential then for utilizing existing structures or knocking them down and doing something new. If people don’t like strip malls, what would replace them? How much density are suburban residents willing to accept in their neighborhoods or nearby?

New HUD study shows minorities continue to be shown fewer homes, apartments

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A new HUD audit study shows that compared to whites, minorities are given less access to homes and apartments:

Compared with white homebuyers, blacks who inquire about homes listed for sale are made aware of about 17 percent fewer homes and are shown 18 percent fewer ones. Asians are told about 15 percent fewer units and are shown 19 percent fewer properties. Researchers are unsure why Hispanic buyers were treated more equitably than other minority populations.

Among renters, all minority groups found out about fewer choices than did white consumers. Hispanic testers who contacted agents about advertised rental units learned about 12 percent fewer units available and were shown 7 percent fewer than white renters saw. Black renters learned about 11 percent fewer units and saw 4 percent fewer available rentals, while Asians were told about 10 percent fewer available rentals and shown 7 percent fewer units.

In the Chicago area, researchers found that African-American and white renters got equal access to information and showings of apartments, but African-Americans were less likely than white consumers to see at least one home that had no problems.

Blacks also were more likely than whites to be told that a credit check had to be performed and that particular rental units carried fees. They also were quoted higher fees than the ones quoted to white testers. On average, the extra fees quoted to blacks put the first-year cost of securing a rental unit at $350 more than the cost for white renters.

Hispanic testers in Chicago reported that they heard comments about their credit standing more often than the white testers, and the extra payments quoted to them were $131 more than white testers’.

As the HUD Secretary notes, these actions are less obvious than the redlining, blockbusting, and restrictive covenants of the early 1900s but they still lead to similar outcomes. This kind of study with pairs having the same qualifications and traits except for their race/ethnicity has been conducted for several decades with similar results: whites consistently have better access to housing options. Limiting access to housing options like this is illegal but happens regularly both in cities and suburbs. And housing and patterns of residential segregation is related to all sorts of other important life chances including job opportunities, schools, community resources and services, and social networks.

This article fails to mention what can be done about such discriminatory practices. Housing providers and those in real estate can be sued. However, this takes place on a case by case basis and thus it can take a while to crack down on a large number of offenders.

Methodological issues with the “average” American wedding costing $27,000

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Recent news reports suggest the average American wedding costs $27,000. But, there may be some important methodological issues with this figure: selection bias and using an average rather than a median.

The first problem with the figure is what statisticians call selection bias. One of the most extensive surveys, and perhaps the most widely cited, is the “Real Weddings Study” conducted each year by TheKnot.com and WeddingChannel.com. (It’s the sole source for the Reuters and CNN Money stories, among others.) They survey some 20,000 brides per annum, an impressive figure. But all of them are drawn from the sites’ own online membership, surely a more gung-ho group than the brides who don’t sign up for wedding websites, let alone those who lack regular Internet access. Similarly, Brides magazine’s “American Wedding Study” draws solely from that glossy Condé Nast publication’s subscribers and website visitors. So before they do a single calculation, the big wedding studies have excluded the poorest and the most low-key couples from their samples. This isn’t intentional, but it skews the results nonetheless.

But an even bigger problem with the average wedding cost is right there in the phrase itself: the word “average.” You calculate an average, also known as a mean, by adding up all the figures in your sample and dividing by the number of respondents. So if you have 99 couples who spend $10,000 apiece, and just one ultra-wealthy couple splashes $1 million on a lavish Big Sur affair, your average wedding cost is almost $20,000—even though virtually everyone spent far less than that. What you want, if you’re trying to get an idea of what the typical couple spends, is not the average but the median. That’s the amount spent by the couple that’s right smack in the middle of all couples in terms of its spending. In the example above, the median is $10,000—a much better yardstick for any normal couple trying to figure out what they might need to spend.

Apologies to those for whom this is basic knowledge, but the distinction apparently eludes not only the media but some of the people responsible for the surveys. I asked Rebecca Dolgin, editor in chief of TheKnot.com, via email why the Real Weddings Study publishes the average cost but never the median. She began by making a valid point, which is that the study is not intended to give couples a barometer for how much they should spend but rather to give the industry a sense of how much couples are spending. More on that in a moment. But then she added, “If the average cost in a given area is, let’s say, $35,000, that’s just it—an average. Half of couples spend less than the average and half spend more.” No, no, no. Half of couples spend less than the median and half spend more.

When I pressed TheKnot.com on why they don’t just publish both figures, they told me they didn’t want to confuse people. To their credit, they did disclose the figure to me when I asked, but this number gets very little attention. Are you ready? In 2012, when the average wedding cost was $27,427, the median was $18,086. In 2011, when the average was $27,021, the median was $16,886. In Manhattan, where the widely reported average is $76,687, the median is $55,104. And in Alaska, where the average is $15,504, the median is a mere $8,440. In all cases, the proportion of couples who spent the “average” or more was actually a minority. And remember, we’re still talking only about the subset of couples who sign up for wedding websites and respond to their online surveys. The actual median is probably even lower.

These are common issues with figures reported in the media. Indeed, these are two questions the average reader should ask when seeing a statistic like the average cost of the wedding:

1. How was the data collected? If this journalist is correct about these wedding cost studies, then this data is likely very skewed. What we would want to see is a more representative sample of weddings rather than having subscribers or readers volunteer how much their wedding cost.

2. What statistic is reported? Confusing the mean and median is a big program and pops up with issues as varied as the average vs. median college debt, the average vs. median credit card debt, and the average vs. median square footage of new homes. This journalist is correct to point out that the media should know better and shouldn’t get the two confused. However, reporting a higher average with skewed data tends to make the number more sensationalistic. It also wouldn’t hurt to have more media consumers know the difference and adjust accordingly.

It sounds like the median wedding cost would likely be significantly lower than the $27,000 bandied about in the media if some basic methodological questions were asked.