Author Archives: legallysociable

A new suburban Walmart comes with tax revenue, crime, and economic development

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How exactly does a new Walmart change a suburb? Here are at least a few factors to consider:

From its opening day to June 30, 2017, officers responded to 445 calls for service at Walmart, 166 of which resulted in arrests, according to records obtained by the Daily Herald. That means police were called to the store an average 1.2 times per day in its first year…

Walmart announced in 2012 its plans to close an East Dundee store and build the Carpentersville supercenter less than three miles away, prompting a lengthy legal battle between the company and the two villages. Walmart is expected to receive $4.3 million in tax increment financing funds ­– property taxes above a certain point in the area that would have gone to local governments — for the new store…

Though he declined to disclose specific sales numbers, Rooney said the new Carpentersville store has generated more sales tax revenue than East Dundee reported losing…

Already, the supercenter has significantly increased traffic and economic interest on the village’s east side, he said. Plans are moving forward for constructing a new five-tenant building and an O’Reilly Auto Parts on the store’s outlots.

To be honest, many suburbs cannot afford not to welcome Walmart into their communities. It is rare to find a user for a decent sized portion of land along a major road that will bring in so much tax revenue and provide jobs. The increase in crime can be chalked up as simply part of doing major retail business (I assume there may be bumps with other major retailers or shopping malls) and may not be a huge issue if it is largely isolated to the Walmart site.

In the long run, there are additional factors to consider including the local business climate with the behemoth Walmart in town (more competition for certain businesses), the opportunity cost of what else might have operated on that site, and the image of having a Walmart and related businesses. There is a reason more exclusive communities turn down big box stores and large strip mall areas. Furthermore, the fate of East Dundee could soon befell Carpentersville; if Walmart eventually wants a better deal or a bigger store, they can simply move and bring their benefits (and problems) to a different suburb.

As I suggested above, given these short-term and long-term outlooks, most American suburbs would choose to welcome Walmart. From whence the Walmart came does not matter while the tax receipts can be blinding to many.

“People care about flooding…they don’t care about stormwater management”

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An article discussing the difficulties of avoiding flooding in a sprawling city like Houston includes this summary of a key problem:

One problem is that people care about flooding, because it’s dramatic and catastrophic. They don’t care about stormwater management, which is where the real issue lies. Even if it takes weeks or months, after Harvey subsides, public interest will decay too. Debo notes that traffic policy is an easier urban planning problem for ordinary folk, because it happens every day.

It is difficult to get people interested in infrastructure that does not effect them daily or they do not see it. Yet, flooding is a regular issue in many cities and suburban areas and it can be very hard to remedy once development has already occurred. Indeed, it is difficult imagine abandoning full cities or major developments:

The hardest part of managing urban flooding is reconciling it with Americans’ insistence that they can and should be able to live, work, and play anywhere. Waterborne transit was a key driver of urban development, and it’s inevitable that cities have grown where flooding is prevalent. But there are some regions that just shouldn’t become cities.

Given the regularity of flooding in developed areas, it is interesting to consider that there are not more solutions available in the short-term. Portable and massive levees? Water gates that can be quickly installed? Superfast pumps that can remove water?

More remodeling, less moving, and uncertainty

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Another trend that is the result of the current housing market: fewer people are moving and more homeowners are remodeling what they already have.

Now, according to research, homeowners are eager to hold onto the ultra-low mortgage interest rates they were able to get after the crash, and they are leery about taking a chance on a move. Many also lack the financial wherewithal to upgrade to a larger, pricier home. They own houses that haven’t recovered enough of their value in the wake of the crash to generate the down payment needed to buy a new place.

The percentage of homeowners moving up to their next home is the lowest in 25 years, said Todd Tomalak, vice president of research for John Burns Real Estate Consulting. Instead of moving, people are deciding to make starter homes permanent and are expanding and repairing them for the long term, he said…

From 1987 to 2008, homebuyers stayed in their homes six years on average before selling, according to the National Association of Realtors. The number of years homeowners expected to stay in their homes started increasing during the housing plunge and has been at 15 years since 2010…

Last year, people spent about $320 billion on remodeling — a 5 percent increase over the previous year, Tomalak said. This year, they are expected to spend $350 billion — a 9 percent increase.

Interesting data yet there are some conflicting things going on here. This raises a few questions for me:

  1. If you aren’t moving soon, remodeling can make sense. At the same time, how does the remodeling square with homeowner’s interests in making money on their home? Many remodels do not recoup the money put into them – unless people are hoping that the tight market will keep housing values going up and up.
  2. Does the same animosity some have toward big box retailers like Walmart also carry over to Home Depot and similar stores? I know some things can vary tremendously from retailer to retailer – such as wages and benefits – but all big box stores have some similar effects including knocking out local businesses (who goes to the local hardware store for all their remodeling needs?) and contributing to an automobile culture with massive footprints on commercial stretches.
  3. On one hand, fewer people moving suggests the housing market is sluggish and this may not be good for the housing industry and the economy at large. On the other hand, people staying in the same house longer means they are more rooted in their communities (combats the critique of the soulless suburbs or the image of Americans just wanting to move up) and are avoiding senseless consumerism (just chewing up new house after new house). Is this an example where the consumer driven economy doesn’t really work in the long-run? (Or, maybe enough homeowners can be convinced that they need the newest item for their home – concrete countertops! wi-fi enabled refrigerators! – that the remodeling can pick up some of the slack.)

Can the housing industry survive by only catering to the wealthy?

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In the short-term, it appears the housing industry is aiming at the wealthy. Can this work in the long run?

It’s possible to get rich if your business only caters to rich people. But it’s hard to have a massive and really successful industry in the United States today if you only cater to rich people. There are only so many people in the country with good credit and lots of cash sitting around. And this week, we got evidence that one of America’s largest industries may be running into trouble because its products appeal only to the upper crust. I’m not talking about jewelry or apparel. I’m talking about housing.

And yet the article goes on to provide little evidence that the housing industry will be in trouble if it continues on this path. The profit margins are higher. The big builders, like Toll Brothers highlighted in the story (as they almost always are when there is a story about luxury housing), and the big investors who swooped in during the housing crisis are doing fine. There are not that many smaller builders left. A loss in building volume would probably mean some job losses in real estate, construction, banking, and other related services. But, perhaps the housing industry in the future is leaner and aimed at the upper end?

As I mentioned in Friday’s post, if markets work as they are said to work, there are plenty of opportunities here for businesses to jump in. Newer technologies can lead to cheaper housing units and lower construction costs. There is a huge need for affordable housing so there shouldn’t be a shortage of demand (even if it may be difficult to find sites where neighbors aren’t opposed to it). Doesn’t someone want to grind out profits at a lower margin? The question moving down the road is whether the housing industry will react in such a way or not. There is no guarantee that it will.

Finding more open space in NYC by using parking spots

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Eliminate parking along streets and there is more room for people:

The repurposed parking spots are the latest effort to carve out more open space on New York City’s crowded streets and sidewalks. These blink-and-miss-them bits of greenery — called “street seats” — have spread along commercial corridors, though they are often overlooked or overshadowed by sprawling pedestrian plazas. In contrast, street seats are tiny and temporary, returning to parking spots come winter…

There are 18 pop-up street seats this summer, double the number from 2015, according to the city. They range from one in TriBeCa that attracts moms and tots in strollers to another in Brownsville, Brooklyn, that has become popular for alfresco dining. In a hands-on lesson in urban planning, students at the Parsons School of Design at The New School in Greenwich Village have designed a street seat with drought-resistant plants and solar-powered LED lights that draws about 250 people daily…

The street seats grew out of a national movement that began in San Francisco in 2005 when members of an arts collective called Rebar transformed a parking spot with grass turf, a bench and potted tree, and invited passers-by to feed the meter. The experiment inspired a daylong celebration, known as Park(ing) Day, in which people took over parking spots. Later, a new generation of curbside micro parks, or “parklets,” was born…

While each street seat typically takes up two parking spots, the benefits of serving hundreds of people a day — versus a handful of cars — have outweighed any concerns over lost parking, said Shari Gold, a senior manager in the transportation department’s public space program. She added the department approves a street seat only with the agreement of the local community board, and nearby businesses and property owners.

I like the idea: when the weather is nicer, turn some of the street space back to the people. In fact, I would love to see this come to the suburbs, not just on streets but also in parking lots. It would be a little more difficult in locations that are highly dependent on people driving but why not have more outside dining, shopping, and socializing?

A longer-term question about this practice is whether it leads to the permanent loss of parking space and addition of public space. Once people get used to fewer parking spots, can they adjust all year long? I don’t know if proponents have this in mind but it seems like a genius way to reduce the size of roads and parking.

No cheap homes left at the bottom of the housing market

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One downside of increasing housing values is that the lower end of the market also rises:

More telling is that at the start of 2013, when home prices were just beginning to bounce off the bottom of the housing crash, the share of homes sold above $500,000 was just 9 percent of all sales. Today that share is more than 14 percent. The share of lowest-priced home sales today is less than half of what it was then as well.

“On the lower end, there is virtually no property at a very low price level anymore,” said Lawrence Yun, chief economist for the National Association of Realtors. “The same property has been moved up to a different price bucket just because the prices have been rising strongly, over 40 percent price appreciation in the past five years. We are not getting the transactions on the lower end because there is virtually no inventory on the lower end.”

In the wake of the housing crisis, investors bought thousands of low-priced, distressed homes, putting a price bottom on the market but also removing lower-priced inventory. The expectation at the time was that if prices jumped, the investors would sell. For the most part, they did not. In fact, investors continue to buy properties, even at peak prices today because both the rental market and the market to flip these homes are so lucrative…

Homebuilders are continuing to increase production and selling homes they haven’t even built at a historically fast pace. They are not, however, putting up low-priced homes, even though demand there is high. They argue they cannot make the margins work, given the high costs of land, labor, materials and regulation. The median price of a newly built home recently hit a record high.

Two quick thoughts:

  1. I thought letting this go to the markets would solve the problem. In other words, if there is a need for cheaper housing, shouldn’t the market correct? It does not appear this is happening as builders do not want to have smaller margins. Some interventions may be necessary if no businesses see an opportunity.
  2. This makes the issue of affordable housing even more difficult. Many big cities already have major shortages of affordable housing. If prices keep increasing and little is being built at the lower end, might be drastic consequences?

Three possible responses to the finding that human behavior is complicated

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A review of a new book includes a paragraph (the second one excerpted below) that serves as a good reminder for those interested in human behavior:

What happens in brains and bodies at the moment humans engage in violence with other humans? That is the subject of Stanford University neurobiologist and primatologist Robert M. Sapolsky’s Behave: The Biology of Humans at Our Best and Worst. The book is Sapolsky’s magnum opus, not just in length, scope (nearly every aspect of the human condition is considered), and depth (thousands of references document decades of research by Sapolsky and many others) but also in importance as the acclaimed scientist integrates numerous disciplines to explain both our inner demons and our better angels. It is a magnificent culmination of integrative thinking, on par with similar authoritative works, such as Jared Diamond’s Guns, Germs, and Steel and Steven Pinker’s The Better Angels of Our Nature. Its length and detail are daunting, but Sapolsky’s engaging style—honed through decades of writing editorials, review essays, and columns for The Wall Street Journal, as well as popular science books (Why Zebras Don’t Get Ulcers, A Primate’s Memoir)—carries the reader effortlessly from one subject to the next. The work is a monumental contribution to the scientific understanding of human behavior that belongs on every bookshelf and many a course syllabus.

Sapolsky begins with a particular behavioral act, and then works backward to explain it chapter by chapter: one second before, seconds to minutes before, hours to days before, days to months before, and so on back through adolescence, the crib, the womb, and ultimately centuries and millennia in the past, all the way to our evolutionary ancestors and the origin of our moral emotions. He gets deep into the weeds of all the mitigating factors at work at every level of analysis, which is multilayered, not just chronologically but categorically. Or more to the point, uncategorically, for one of Sapolsky’s key insights to understanding human action is that the moment you proffer X as a cause—neurons, neurotransmitters, hormones, brain-specific transcription factors, epigenetic effects, gene transposition during neurogenesis, dopamine D4 receptor gene variants, the prenatal environment, the postnatal environment, teachers, mentors, peers, socioeconomic status, society, culture—it triggers a cascade of links to all such intervening variables. None acts in isolation. Nearly every trait or behavior he considers results in a definitive conclusion, “It’s complicated.”

To adapt sociologist Joel Best’s approach to statistics in Damned Lies and Statistics, I suggest there are three broad approaches to understanding human behavior:

1. The naive. This approach believes human behavior is simple and explainable. We just need the right key to unlock behavior (whether this is a religious text or a single scientific cause or a strongly held personal preferance).

2. The cynical. Human behavior is so complicated that we can never understand it. Why bother trying?

3. The critical. As Best suggests, this is an informed approach that knows how to ask the right questions. To the reductionist, it might ask whether there are other factors to consider. To the cynical, it might say that just because it is really complicated doesn’t mean that we can’t find patterns. Causation is often difficult to determine in the natural and social sciences but this does not mean that we cannot find bundles of factors or processes that occur. The key here is recognizing when people are making reasonable arguments about explaining human behavior: when do their claims go too far or when are they missing something?

The nuisance of Apple’s new HQ vs. it can help double your property values

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This article details the complaints of neighbors of the new Apple headquarters facility in Sunnyvale yet ends with this tidbit about property values:

Some worry that the neighborhood of mostly single-story homes built in the 1950s and ’60s is living on borrowed time as long-time residents sell their homes to newcomers.

Housing values in the neighborhood have doubled since 2011, according to Art Maryon of Intero Real Estate Services. And in the first six months of 2017, 24 houses in Birdland sold on average at $1,690,350, according to Maryon.

The increase in property values mirrors what has happened in the rest of Sunnyvale, and across the Bay Area, but Birdland’s proximity to Apple Park makes it even more desirable.

“Many say we should just be happy that Apple is raising our property values,” said Birdland resident Debby MacDonald. “This doesn’t do me much good unless I plan to sell. And I am not sure what we have had to put up with and will continue to put up with is worth the money.”

This presents suburban residents with quite the dilemma: will NIMBYism or raised property values win out? Both are goals for the average suburbanite. They resist significant changes to the character of their community as this can disturb their quality of life through altered scenery, increased traffic, and a change in neighborhood activities. Ultimately, the changes may lower property values. Yet, this massive headquarters may change their neighborhood and significantly raise property values since it houses many employees and is home to one of the most desirable brands in the world.

Someone needs to make sure to follow up on this in a few years or ten years and find out how many residents are left. And even if they cash out – some because they want to and others because they have to (increased housing values can also lead to other increased costs) – those who leave might feel a real sense of loss.

San Jose residents don’t want tiny houses for the homeless nearby

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Several cities have looked into tiny houses for the homeless (examples here and here) but residents in San Jose don’t like the idea:

But finding sites for the tiny home villages — which could house up to 25 people — proved to be a major challenge. The city looked for publicly owned sites that were a half-acre in size, near transit and with access to utilities. But after an outpouring of complaints, San Jose officials added even more restrictions — 100 feet away from homes and creeks and 150 feet from schools and parks, leaving just a handful of potential sites.

“It’s a shame that we didn’t have more viable opportunities from this list,” said Ray Bramson, the city’s acting deputy director of housing. “But we were constrained because land is so hard to find in this community. Some of the major concerns that we heard were about the potential impacts, from traffic to noise to new people coming into the neighborhood. We’re trying to be respectful of neighbors and the community.”…

“They’re almost segregating homeless families from existing neighborhoods and that’s not what San Jose is about,” Campos said. “If we can do this right and not give in to NIMBY-ism, then we set the path for other cities in California to address the homeless crisis in their own communities. This sends the wrong message.”…

But there’s push-back on those remaining sites as well. Councilman Johnny Khamis said at least 30 people came to his “open house” office hours last Saturday to voice concerns about the tiny homes site at Branham Lane near Monterey Road in his district. Residents were concerned about security and the “vetting process for the homeless,” he said, fearing crime, especially related to drugs and assaults, will rise.

How can a city address homelessness if few local residents want to live anywhere near the formerly homeless? Cities are sometimes criticized for sending the homeless out of town but it sounds like this could be an outcome here through restrictive options without officially sending them away.

There are several options available here but they aren’t that good. Homelessness, like many urban issues, is not just present in the big city but rather is a regional issue. Could multiple communities chip in? (Unlikely.) Perhaps the city could loosen their restrictions – such as needing a half acre of land – since these are unique housing units. (The neighbors might even be less happy if tiny houses are squeezed in smaller lots.) Try to shame the public into addressing homelessness? (Not a good long term strategy with voters and whatever shame might not be as compelling as the idea that their property values could fall.)

What is the best single marker of being a suburb?

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Spurred by yesterday’s post on Alaska’s changing suburbs, I put together a list of the most important markers that indicate whether an American community is a suburb roughly in order from the most important to less important:

  1. Proximity to the big city. If you are within the social and economic orbit of the big city (and this can differ based on the city as well as on the size of the big city), the community is a suburb. This is more vague on the outer edges of the metropolitan region.
  2. A physical layout dominated by roads and relatively spaced out single-family homes. (This may describe some urban residential neighborhoods but I would suggest the homes there are typically closer together and there are often additional transportation options.)
  3. An exclusivity toward undesirable residents and businesses. Suburbs have different socioeconomic levels but there are typically groups that are not as welcome and there are a variety of techniques to keep them out.
  4. A moral order built around the autonomy of individual residents as long as this doesn’t hurt the property values of other residents and a lack of social conflict because neighbors generally leave each other alone (unless they choose to interact through common interests – such as kids in school).
  5. A community emphasis on middle-class family life. This may be more aspirational than reality (whether it involves wealthier residents who claim to be just middle-class or working-class or poorer suburbs who distinguish themselves from poor urban neighborhoods).
  6. Additional physical markers including roads lined with shopping malls, strip malls, fast food restaurants, and big box stores as well as a lack of walkability.
  7. Homogeneity across residents. There are plenty of suburbs today that are not this way but American suburbs are still often perceived as white and wealthy.
  8. An emphasis on local government as community members seek to control their own lives.

It is hard to separate out these factors as many can be found in other geographic settings or are traits of American culture at large. Yet, the combination of these factors leads a unique social setting that can be defined and measured.