Over 2,000 new housing units in CHA proposal for Cabrini-Green site

Redevelopment at Cabrini-Green continues with the Chicago Housing Authority’s unveiled proposal this week for over 2,000 new housing units:

Last night, the Chicago Housing Authority formally unveiled its most recent and fully detailed proposal for the nearly 65 acres of land that once belonged the massive Cabrini-Green housing project. Earlier this year, the CHA unveiled a draft plan for the site, which sought to draw out an idea of where housing, retail and new park spaces would be located, however, last night’s meeting offered a clearer picture of how many housing units are planned for the area. The large area will be redeveloped in three phases, and will ultimately produce 2,330 to 2,830 new residences.

Currently, developers are swarming in with new retail and apartment projects, but some are arguing that the new plans don’t offer enough density. Private developers will compete to build new structures on the large parcel of land, with the first phase delivering 970-1,270 units, according to DNAinfo. The balance between market rate, affordable and public housing has not been unveiled, however the CHA could get started on the first as early as late next year.

This is valuable land as larger parcels like this, particularly on the North Side and near other desirable locations, are rare. I would imagine there will be no shortage of developers who have ideas of how lots of money can be made. Of course, this was one of the arguments of residents and critics of the plan to tear down the high-rises: was this really about providing better public housing and housing opportunities for residents or was this about opening land on the North Side for developers?

Drivers, companies adjusting to changes in car insurance due to autonomous vehicles

A recent survey asked Americans why they would buy an autonomous car and cheaper car insurance was second on the list:

Of the 1,500 US drivers the Boston Group surveyed in September, 55 percent said they “likely” or “very likely” would buy a semi-autonomous car (one capable of handling some, but not all, highway and urban traffic). What’s more, 44 percent said they would, in 10 years, buy a fully autonomous vehicle…

The leading reason people are considering semi-autonomous vehicles isn’t greater safety, improved fuel efficiency, or increased productivity—the upsides most frequently associated with the technology. Such things were a factor, but the biggest appeal is lower insurance costs. Safety was the leading reason people were interested in a fully autonomous ride, with cheaper insurance costs in second place. (Reasons not to want a robo-ride include fear of hacking, distrust of the technology, and good old love of driving.)

This is unexpected, because how insurance will shake out usually is on the “tricky things to be figured out” side of the ledger, alongside how the government will test and regulate the vehicles. The current insurance business model—car owner has insurance to protect himself from the risk of causing a crash—doesn’t make sense if the computer’s in charge. And if we can make cars that rarely crash, do we even need insurance? We certainly won’t need to spend as much on it (currently about $800 a year, according to the National Association of Insurance Commissioners)…

So yes, we’ll be rewarded financially for giving up the wheel. But in the long run, as fully autonomous cars take over our roads, the insurance companies will have to adapt. They can’t argue against saving lives, but “they’re very, very concerned,” says David Carlisle, chairman of the board of auto industry consultancy Carlisle & Company. “If the car can’t wreck anymore, those premiums have got to go down drastically.”

Sounds like a shake-up is coming for the car insurance industry. And if the business becomes a lot less profitable, how many firms will want to participate?

Another thought for those potential buyers of autonomous cars: how long would it take in car insurance savings to make up for the extra technology needed in the car? This could be like the current hybrid or electric car situation where the premium for such vehicles would take years in gas savings to cancel out.

Census projects record proportion of foreign-born residents in 2060

Recent projections from the US Census Bureau suggest the immigrant population will continue to grow:

The nation’s foreign-born population is projected to reach 78 million by 2060, making up 18.8% of the total U.S. population, according to new Census Bureau population projections. That would be a new record for the foreign-born share, with the bureau projecting that the previous record high of 14.8% in 1890 will be passed as soon as 2025.

Yet while Asian and Hispanic immigrants are projected to continue to be the main sources of U.S. immigrant population growth, the new projections show that the share of the foreign born is expected to fall among these two groups. Today, 66.0% of U.S. Asians are immigrants, but that share is predicted to fall to 55.4% by 2060. And while about a third of U.S. Hispanics (34.9%) are now foreign-born, the Census Bureau projects that this share too will fall, to 27.4% in 2060. These declines are due to the growing importance of births as drivers of each group’s population growth. Already, for Hispanics, U.S. births drive 78% of population growth…

Foreign-Born Share of Population to Reach Historic High by 2060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The U.S. today has more immigrants than any other nation. As the nation’s immigrant population grows, so too will the number of children who have at least one immigrant parent. As of 2012, these second generation Americans made up 11.5% of the population, and that share is expected to rise to 18.4% by 2050, according to Pew Research Center projections.

This is the first time in 14 years the Census Bureau has made projections of the foreign-born population. Predicting future immigration and birth trends is a tricky process, and the bureau has substantially changed its projections from year to year in light of reduced immigration and birth rates.

While these numbers are sure to contribute to political debate about current policies, they continue trends started in the late 1960s where immigration policies were changed. Additionally, the projections suggest the United States is still a desirable place to immigrate to and that the growing foreign-born population is a significant contributor to the overall growing population of the US.

I would be interested to hear about the discussions behind the scenes regarding the 14 year gap in making such projections. How much of this was guided by politics? What are the upper and lower bounds of the confidence intervals for these projections? Have our projection abilities improved significantly?

Developers give reasons why they won’t construct starter homes

Here are some of the reasons given by developers regarding their lack of interest in starter homes:

The market for new “starter homes” is drying up, mostly on the supply side. As credit markets recover, there are more and more people who could be buying their first homes … if only builders could build them. But for a host of reasons, they can’t:

  • Materials costs have risen.
  • They lost a lot of their labor force during the economic downturn.
  • Communities entitled large lots during the boom, and now they won’t zone them for smaller parcels.
  • Cash-strapped local governments have raised permitting and other fees.
  • Building codes and other requirements make it harder to build cheap.

This makes it extremely difficult to build a house for less than $200,000 in many places, which is a hefty multiple of local median incomes.

Three quick responses:

1. I know this doesn’t get much discussion in many industries but when they say it is difficult to build for less than $200k, what exactly does this mean? A home at that price won’t meet their profit goals? What kinds of profits do developers and builders make at the lower end of the housing market as opposed to the higher end? Builders can’t make any money off new started homes or they can’t make enough money for them to see it as worth their time?

2. As noted, communities have some influence on this process. How many are really willing to zone for starter homes and/or have different guidelines for starter homes?

3. Isn’t this an opportunity to construct homes more efficiently? It sounds like there is some turmoil in costs – material, more uncertain labor, higher fees and requirements – but this is where the housing industry could find some new solutions.

“Having…a bigger McMansion…probably won’t make you happier. At least, not in the long term.”

A journalist discusses keeping up with the Joneses and includes this bit involving McMansions:

So what does this mean for the drive to keep up with the Joneses? It means that having a nicer car, a bigger McMansion, a greener lawn or even the latest iPhone probably won’t make you happier. At least, not in the long term.

How many suburban status symbols can you include in one sentence? While this piece summarizes the detrimental effects of spending in order to keep up a wealthier reference group around us, this reference to McMansions is not unusual. Here, the McMansion stands in for a pattern of excessive consumption, a consumer good that isn’t necessary, requires long-term debt, and doesn’t really lead to long-term well being (at least such satisfaction based on comparisons with others).

Perhaps the more scandalous suggestion here is that the iPhone could function in the same way as a McMansion. The iPhone costs a lot less, is much more common (at least 500 million units have been sold – imagine that number of McMansions), and might even enhance sociability (as opposed to the McMansions emphasis on private space). The iPhone is a status symbol in its own right. But, the iPhone doesn’t attract the same level of criticism…

Storing wealth in New York apartments, contemporary art

According to one asset manager, the wealthy are now storing their wealth in apartments and art:

“Historically gold was a great instrument for storing of wealth,” the chairman of BlackRock Inc. said at a conference in Singapore on Tuesday. “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted.”…

“The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”…

The median sale price for existing condos in Manhattan jumped to a six-year high of $1.3 million in the first quarter, driven up by buyers seeking alternatives to out-of-reach new developments, according to Corcoran Group, a brokerage. In the U.K., asking prices for property climbed to a record in April as values in London rose 2.5 percent, Rightmove Plc said on Monday.

Three quick thoughts on this:

1. Good thing New York City has a boom in luxury building. Those underground expansions in wealthy London neighborhoods don’t hurt either.

2. What is the point where these apartments turn into a luxury housing bubble? There are only so many uber-desirable locations and only so many people who can afford these luxury places. If this part of the housing market collapses, what happens?

3. I recently read 33 Artists in 3 Acts by sociologist Sarah Thornton and this trend among the wealthy certainly has had an effect on the art world. There are some interesting discussions amongst artists involving money, commodities, and related topics.

Trying to move Los Angeles toward a less auto-dependent, greener, more sustainable city

To say the least, Los Angeles has a reputation as a car-friendly (and/or dominated) city. Some people are hoping to change that:

The most explicit attempt to capture the shift in the zeitgeist is the notion of the “Third Los Angeles,” a term coined by Los Angeles Times architecture critic Christopher Hawthorne. In an ongoing series of public events, Hawthorne has proposed that L.A. is moving into a new phase of its civic life. In his formulation, the first Los Angeles, a semi-forgotten prewar city, boasted a streetcar, active street life, and cutting-edge architecture. The second Los Angeles is the familiar auto-dystopia that resulted from the nearly bacterial postwar growth of subdivisions and the construction of the freeway system. Now, Hawthorne argues, this third and latest phase harks in some ways back to the first, in its embrace of public transit and public space (notably the billion-dollar revitalization of the concrete-covered Los Angeles River). Hawthorne’s focus is not specifically environmental. But a more publicly oriented city also tends to be a greener one. This is partly because mass transit and walking mean lower carbon emissions. And more broadly, willingness to invest in the public realm tends to coincide with political decisions that prioritize the public good, including ecological sustainability…

On all of those fronts, there are signs of change. One of the most obvious counter-examples is CicLAvia, the kind of phenomenon that makes Jacobs acolytes swoon. Launched in 2010, it’s a festive event during which miles of streets are closed to cars and swarmed by bikes. Taking place every two to three months, and rotating among different neighborhoods (Echo Park, the Valley, South L.A., etc.), each occasion attracts a diverse crowd of tens of thousands of people. They are the type of feel-good events—some might even call them utopian moments—where strangers smile at each other and ordinary life feels suspended. Traffic lights blink, and even cops whiz by on two wheels, wearing endearingly dorky helmets. In every sense—the car-shunning, the enthusiastic proximity to strangers, the exploration of different parts of the city—CicLAvia is antithetical to the guarded, privatized, auto-carved Los Angeles of lore.

CicLAvia remains a special occasion, but everyday transit is slowly improving as well. Banham wrote that the freeway “is where the Angeleno is most himself, most integrally identified with his great city,” and he predicted that “no Angeleno will be in a hurry to sacrifice it for the higher efficiency but drastically lowered convenience and freedom of choice of any high-density public rapid-transit system.” In 2008—pushed in part by unbearable traffic—Angelenos proved him wrong. On that Election Day, citizens of Los Angeles County voted for Measure R, which imposed a half-cent sales tax to support funding for transportation projects, including the expansion or construction of 12 rail and bus rapid transit lines. It is expected to generate $40 billion in revenue over 30 years. This choice stands in stark contrast to the famous Proposition 13, the 1978 California anti-property-tax law which has wreaked havoc on the state’s budget for public investment ever since. Jonathan Parfrey, executive director of the L.A.–based organization Climate Resolve and a former commissioner at the Department of Water and Power, told me, “The day we voted for Measure R, we voted for a new Los Angeles.”…

Starting in the early ’80s, the city got more serious about conservation, as seen in its mass conversion to low-flow toilets. The city has been responding to the current drought on a number of fronts. It has significantly reduced its own water use, especially in the Parks Department. It has offered a rebate to homeowners who replace their lawns with drought-tolerant landscaping, as well as rebates for installing rain barrels, among a variety of other measures. (It remains to be seen how the city will implement the new mandatory state restrictions.) The Department of Water and Power is also preparing a new Stormwater Capture Master Plan, and L.A. has a target of reducing imported water use by 50 percent by 2025. According to Andy Lipkis, executive director of the influential nonprofit Tree People, even in a drought, the proper technology can capture significant amounts of water—3.8 billion gallons per inch of rainfall. Mayor Garcetti just launched a corny public awareness campaign urging conservation. Contra Mulholland, the new slogan is “Save the drop.”

Early Los Angeles was a streetcar leader and the metropolitan region today is the densest in the United States (meaning that it is spread out but it is pretty dense in its spread). Yet, truly transforming the region away from reliance on cars requires a lot of work including: building mass transit (buses might be best given the roads but building light rail and subways could be more powerful in the long run even if they are incredibly expensive at this stage), approving denser development (not an easy task in a region where property values are incredibly important), developing a vibrant downtown that also includes housing units, and perhaps finding ways to deincentivize development on the metropolitan fringes.

Perhaps the best thing that could happen to Los Angeles in this area of green sustainability is the continued improvement in vehicles. Radically transforming Los Angeles may be a hard sell but slowly increasing MPG, introducing new power sources (fuel cells, hydrogen, etc), getting older cars off the road, and eventually having autonomous cars could be very helpful. Of course, those changes are not ones really made at the city or metropolitan region level but the guidelines of the state of California and the federal government may just go a long way.

Identifying the pockets of carless Chicagoans

With more Americans living alone and significant transportation costs for middle-class Americans, where do the carless Chicagoans tend to cluster?

So where do those carless Chicagoans live, and how many of them are there? A lot, it turns out. If you break down Chicago by cars and household size using 2012 census numbers, these are the only groups of more than 100,000:

One person, one vehicle 193,174
One person, no vehicle 168,004
Two people, one vehicle 135,143

Along the northern lakefront, around half the households don’t have a car; there are pockets in the Near North Side and Lake View over 60 percent. In one Edgewater tract, it’s over 70 percent. It’s not the highest percentage, though—there are two tracts in one of the poorest stretches of the South Side, between U.S. Cellular Field and 47th Street along the Dan Ryan, above 80 percent.

As you move north and west and the city gets less dense, the percentage of carless households drops off. There’s an exception, though: one tract in Logan Square, adjacent to the California Blue Line stop, where 41 percent of households don’t own a car. The “twin towers” transit-oriented development that’s going up at 2293 N. Milwaukee, and causing controversy as it goes, will live right next to that tract.

If I had to guess, this is related to income, age, more expensive parking options (for example, having to pay for a garage spot as opposed to plenty of street parking), and housing types (single-family homes which are more attractive to families versus apartments, condos, etc.). How well would these clusters line up with where the Creative Class lives?

The headline suggests that this is has led developers to respond with what they are proposing and building. Yet, the article doesn’t say much regarding these changes. For example, how about more shared streets like have been proposed for a few spots in Chicago? How about more bike lanes in these areas? How about more high-rise housing? If these population clusters hold and developers are indeed responding, these could be very unique places in a few decades.

New Naperville leaders say the suburb is in “maintenance mode”

With little open land to develop, several new Naperville officials discussed what the city can do:

Chirico said that one of the highest priorities for the new council will be to find a way to ease the burden on property taxpayers.

He said that, with the city essentially built out, smart economic development is needed to maintain revenue to keep the city operating at its current level.

Chirico said that a good first step toward that smart development would not necessarily be new projects, but rather concentrating on existing structures that are either empty or not suited to modern commerce…

Chirico used the example of the former Kmart on Ogden Avenue, and the nearby intersection of Ogden and Naper Boulevard, as areas that could be ripe for redevelopment.

“We may have to rethink the entire area,” he said.

Hinterlong agreed, saying “We are at build out…we’re in maintenance mode.”…

Chirico acknowledged the [affordable housing] problem, saying that “it might take some political will” to address it.

On one hand, this is not too surprising. Naperville likes to think of itself as having small-town charm and this is enhanced by a high quality of life, lots of single-family homes, conservative fiscal policies that don’t take too many risks, and developments that don’t rock the boat too much.

On the other hand, I’m not sure it is possible to simply go into “maintenance mode.” Here are three reasons why this may be difficult:

1. Trying to maintain a certain quality of life plus rising costs (inflation, pensions, less funding from the state of Illinois) without significant new sources of revenue may be difficult.

2. While Naperville touts its small-town charm, the suburb is where it is today partly because of aggressive growth with annexations for subdivisions and businesses as well as working to build a vibrant downtown. Retreating into a protective shell doesn’t seem to suit Naperville’s desires to be a leader.

3. Other communities, from Chicago to other growing suburbs, will not hesitate to pursue different strategies for growth. If Naperville doesn’t want to do much, other places may. Just because Naperville has this current level of population, wealth, and jobs doesn’t mean this is guaranteed several decades from now.

This doesn’t necessarily mean that Naperville suddenly has to approve high-rise condo and office buildings – I don’t think it would be too difficult to find developers for such projects. Yet, “maintenance mode” can mean stagnation, something that businesses and local politicians really don’t want.

Middle-class Americans pay a higher proportion of expenses for transportation

Driving and a suburban lifestyle comes with a price: recent data suggests the middle-class pays more for transportation that wealthier and poorer Americans.

In this case, the numbers show that middle-class Americans spend a much higher share of their total household annual expenditures on getting around, compared with the poorest and richest groups. Instead of gentle downward slopes, the transportation shares are closer to a bell curve (with the sixth decile added in for emphasis):

CityLab

The same surprising distribution holds true when we drill down into a subset of transportation costs. The middle-class pays an outsized share on gas, vehicle maintenance, car insurance, and “other” related expenses—with the fifth decile above the medians (4.9, 1.6, 2, and 5.1 percent, respectively) in every case…

The data don’t say why transportation is taking a disproportionate toll on middle-class wallets, but it’s not hard to target a confluence of factors: sprawling development, city housing affordability, poor transit investment, and the result of them all, car-reliance.

I wonder if this then means that driving is an aspirational activity: it offers independence and access to private suburban property but it can be quite costly. If you don’t have a certain level of income, such a lifestyle may not make much sense. But, after a certain point, one can aspire to join the wealthier people who can better afford it (and probably have nicer cars and bigger houses).