Author Archives: legallysociable

What builders will do to try to move new houses in a slow housing market

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With homes on their hands, builders have options on how to attract residents:

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A golden run for homebuilders is drawing to a close. When rising mortgage rates trapped many would-be sellers in their homes two years ago, builders turned out to be the big winners — if you wanted to buy a home, your best bet was probably new construction. One economist told me last year that builders were “the only game in town” in some areas. Builders not only offered a welcome alternative to the frozen resale market but could cut deals to make their homes even more appealing to the average buyer: Mortgage-rate buydowns, in which the builder pays the lender up front in exchange for lowering the buyer’s loan rate, can save a new homeowner hundreds of dollars each month.

Now, even with the freebies, builders are selling homes at a slower-than-expected pace as buyers grapple with worsening affordability, sharp swings in mortgage rates, and general uncertainty — people would rather sit on the fence than leap into a market with so many unknowns. With slower sales across the board, the number of homes on the market has climbed. There were 108,000 finished homes for sale at the end of September, some 48% more than at the same point a year ago. There were 258,000 homes under construction but not yet sold, another sizable figure — at the same point in 2019, there were about 194,000. Builders surveyed by John Burns Research and Consulting said they had an average of about 2.5 unsold homes in each of their communities in October, representing a 47% increase from a year ago. In October 2021, they reported only 0.4 unsold homes per community. Some of this increase is by design. Companies are building more homes “on spec,” or before they have a buyer, to shorten timelines and compete directly with the resale market. But there’s no question that builders have hit a snag.

The answer might seem obvious: Cut prices! But builders will “try a lot of other things first,” says Keith Hughes, an executive at the housing research firm Zonda. “And we’re not seeing drastic price drops virtually anywhere.” Buyers may not be flooding the market, but there are fewer homes out there, too. The number of available homes for sale at the end of October, according to Realtor.com, was about 21% lower than in the same month in 2019. Builders looking to move their product lean heavily on incentives — Lennar, one of the largest homebuilders in the country, said that the average sales incentives per home amounted to $48,100 from June through August, compared with $36,400 a year earlier. Builders are also completing smaller floor plans to match the needs of cost-conscious consumers.

Builders have another fallback: the rental market. Over the past decade, homebuilders have forged relationships with companies that purchase thousands of single-family homes and manage them as rentals — if a builder were looking to move a portfolio of homes, they might find a willing buyer in a company like Pretium, which owns nearly 100,000 homes, or Invitation Homes, which manages a portfolio of more than 85,000 homes. Builders have also started developing entire communities of single-family homes to be rented out rather than sold, a strategy known as build-for-rent. The idea is to meet the demand of renters who want their piece of the American dream — a home with a yard in a safe neighborhood with good schools — but either can’t make a purchase or don’t want to. Builders can sell to a guaranteed buyer willing to purchase in bulk or hold on to the homes and enjoy the steady returns of rental income.

How about another option (and this does not change the houses that have already been built): build cheaper units in the first place. With the decline of starter homes, is it time for more builders to construct homes that meet these criteria?

Or how about channeling more effort into multi-family housing? There will continue to be a market for single-family homes in a country that idealizes them but there is also demand for more housing in numerous places and multi-family housing provides more units in the same amounts of space.

I would also be interested to hear how builder revenues and profits are affected by these changes. If builders have found ways to limit the costs by renting, are they losing money or are they making less money than they would like?

City voters changed more for Trump in 2024 compared to support in suburbs and elsewhere

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An analysis of voting data for president by county suggests Trump picked up more support from cities this election compared to changes in suburban voting:

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Let’s start with geography. Urban counties showed a bigger swing toward Trump than suburban and exurban counties, smaller metros, and rural areas. Of course, Harris did best — as did Biden four years earlier — in urban counties, but the 10-point swing toward Trump in urban counties was larger than swings in other places.

A more refined county classification from the American Communities Project, which groups counties based on their demographic, economic, and other factors, confirmed that Trump did better in 2024 than in 2020 in all types of communities, with larger swings in some places than others. Big cities, Hispanic centers, and Native American lands swung most toward Trump in 2024. The reddest communities — aging farmlands, evangelical hubs, and working class country — swung less, as did still-blue college towns and LDS (i.e. Mormon) enclaves, where Trump has repeatedly gotten smaller margins than previous Republican presidential candidates.

Going one step more granular to individual metros, many swung more than 10 points toward Trump in 2024 versus 2020, including New York, Los Angeles, Chicago, San Francisco, and Miami, as well as heavily Hispanic/Latino metros in Texas, California, and the Southwest. Just a handful of metros swung a bit bluer in 2024, mostly in the Mountain West and Pacific Northwest, including Salt Lake City, Tucson, and Colorado Springs. 

Looking across all counties that have reported election data, the geographic pattern of the 2024 vote was less polarized than in 2020 in some ways. Most notably, counties with a higher share of Hispanic residents were more likely to vote for Harris than for Trump, but by smaller margins than for Biden in 2020. Same with higher density counties: there was a very strong correlation between county density and Harris vote share, though not as strong as in 2020. In contrast, the correlation between county education level and Harris vote share strengthened further in 2024. Density and education are themselves highly correlated, with residents of more urban counties more likely to have a college degree than those of more rural counties, but higher-density counties swung toward Trump, while highly educated counties did not.

This is a different kind of analysis than looking at percentages of urban, suburban, and rural voters and who they voted for. This considers which places changed the most between 2020 and 2024.

One question about this is whether the electoral college outcomes changed if one candidate picked up more votes in cities. If the election came down to key states, were these swings in urban areas enough to win the state? Or maybe they did prove consequential in purple states. Looking at these swings in particular places could help address this. In Pennsylvania, did changes in metropolitan Philadelphia and Pittsburgh decide this or in Wisconsin, changes in metropolitan Milwaukee and Madison?

Additionally, it is less clear what this all means for considering suburban voters. The American Communities Project typology includes multiple suburban settings, Urban Burbs, Middle Suburbs, and Exurbs, in addition to suburban areas that might fit into other categories because of unique traits (such as a college town in a suburban county). Just looking at the three with suburbs in their title in one form or another, the 2020 patterns held: exurbs leaned Republican, suburbs near cities leaned Democratic, and middle suburbs leaned Republican. But voters in each three categories moved toward Trump. Was this shift substantive? Did suburban voters decide the 2024 election?

I am sure there is more analysis to come on this subject and I will keep looking for it.

Exit poll data on suburbanites in key states in the 2024 presidential election

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NBC reports exit poll results involving people in 10 key states, hinting at how suburbanites voted for president in the 2024 elections:

Based on these results, it looks like the Democratic candidate won large percentages in urban areas, the Republican candidate won a majority in rural areas, and suburban voters went slightly for the winning candidate.

If this pattern roughly held across the United States, it would be similar to patterns from previous presidential election cycles. If a candidate wants to win, they need to appeal to enough suburban voters.

What appealed to suburbanites specifically in 2024? If economic conditions was a top concern of voters, is this what drove suburban voters? The top table above suggests white suburbanites in these 10 states voted for the winning candidate. Were they driven by economic concerns or other issues?

And as attention turns to the next election cycle, how will parties and candidates seek to appeal to suburbanites? In addition to those thinking of presidential office, how will House districts involving suburbs speak to suburban residents?

More colleges in places with higher costs of living

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Where do colleges tend to be located? This graph in The Chronicle of Higher Education uses one metric:

Two quick thoughts in response:

  1. Does the presence of these colleges over time help contribute to a higher cost of living? I am reminded of Richard Florida’s argument about the creative class. If I remember the analysis correctly, places with colleges tend to have higher percentages of creative class residents. And he suggests colleges and universities can help attract people and development.
  2. When Ben Norquist and I looked at the locations of smaller Christian colleges, we found they tended not to be in the biggest cities (which account for some of these higher cost of living places). In contrast, research schools are often in big cities according to the article: “Almost a third, or 32.2 percent, of colleges in The Chronicle’s analysis were in counties where cost of living was at least 15 percent higher than the national average. The types of institutions found in these expensive regions tended to vary. About 10 percent of doctoral-granting universities and 23 percent of four-year special-focus institutions (like those specializing in health professions or religious training, for example) are in the priciest 1 percent of the nation’s counties, where the cost of living is more than one-and-a-half times the national average. In contrast, nearly half of associate- and bachelor’s-granting institutions were in counties with below-average costs of living.”
  3. The other category with a larger percentage discrepancy is among the percentage of institutions in counties at 90 to 100 in cost of living.

The prime suburban real estate available when restaurants close

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Want a prime location in the suburbs? Red Lobster and TGI Fridays might have an answer:

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Vacant restaurant chains are creating prime real estate for a wide range of companies looking for spots to grow, especially fast-food chains that want to install drive-thru lanes on spots where diners once sat down for dinner.

Chains like Red Lobster and TGI Fridays filed for bankruptcy this year and closed more than 175 restaurants combined. Red Lobster was driven into bankruptcy by mismanagement under a previous owner, global shrimp supplier Thai Union, while TGI Fridays fell under private equity owner TriArtisan Capital Advisors. Denny’s is also closing 150 restaurants…

In the past, these restaurants would often be replaced by a different restaurant chain, with tables to sit at and servers to bring out the food. But now, fast-food and fast-casual chains are taking these spaces and building more drive-thru lanes. Chipotle is building 4,000 new locations, the majority with drive-thru lanes, while Chick-fil-A is building new spots with four-lane drive thrus…

Many of these restaurant locations are also attractive to prospective tenants, as they are freestanding buildings, not located in the back of decaying indoor malls. Indoor malls have struggled in recent years, and mall vacancies reached 6.5% last quarter, according to CBRE. Macy’s, JCPenney, Nordstrom and others have closed hundreds of their stores in malls as online shopping has grown to around 16% of retail sales. Real estate research firm Green Street estimates about 150 enclosed malls have closed since 2008, leaving about 900 today.

Most of the closed restaurants are also located on high-traffic streets with large parking lots or adjacent to a shopping center, making them attractive sites.

I have heard before that certain restaurants and retailers are less into the business of selling things and more into the business of real estate. Think just of the largest fast food chains in the world: how many prime locations do they occupy? If all that land went up for sale at once, how many other businesses would be interested in jumping in?

I have been thinking about locations like these in terms of religious congregations recently. They often occupy important locations within communities, sometimes at busy intersections or in important historic locations. If that location is no longer occupied by a congregation and/or a religious building, it could be a loss in the community (and a possibility for something else).

In the case of these restaurants, it appears there is plenty of demand for the land and plenty of interested parties want to make more money with these properties. Additionally, I would guess most municipalities love that another restaurant will take over. Those new restaurants and businesses can generate even more revenue. The worst possible outcome is that the land remains vacant with limited demand and the property becomes an empty eyesore.

How long before these new restaurants that take over are selling off their own properties? Ten years? Twenty years? At least in this moment, new restaurants want to snatch up these properties but that might not always be the case.

“Visit your local IKEA store”

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A recent advertisement encouraged people to “visit your local IKEA store.” I get the general idea: I can go find what their latest deals at my closest store.

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However, the “local” part of it stuck with me. Do I have a “local IKEA store”? Here is why the term might not work well:

  1. There are two IKEA stores in the entire Chicago region of over 9 million people. One is closer to those living toward the north, one is closer toward those living in the southern part of the region. Thus, many in the region will have to take a bit of a drive to reach a store. These are not stores found in numerous communities. How far away from a residence is a “local” store?
  2. Local can imply local business or smaller in scale and size. All of these might be in comparison to big box stores that offer predictability and many square feet. IKEA is more in this latter category with stores that are large, found along major roads, and are surrounded by large parking lots. These are not local businesses; this is a global corporation with a limited number of stores and pick-up sites in the United States (see the map here). These are destinations, not local businesses near the hearts of communities.

I, like many others, will make a trip to IKEA in the future to look for items and have an experience that cannot easily be found elsewhere. But I will not consider it a local store as I travel down highways to the sizable building located among many other national and international retailers at a convenient nexus of sprawling suburbia.

Seeing notable but small art in a big space, The Great Wave edition

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The Art Institute of Chicago is currently displaying The Great Wave by Katsushika Hokusai. I enjoyed seeing the print and reading more about it as it is not always on display.

But it was also notable the setting in which the print is displayed. The Ando Gallery is unique; hear the audio tour experience here. The room has darker lighting and there is a high ceiling. The print is on a long wall to the back left from the entrance.

Because the print it smaller and the gallery has space, here is what the scene looks like:

On the day I was there, the print had a small crowd around it as people took in the work and the text on the wall. I was reminded of the gallery of The Louvre with the Mona Lisa where a large crowd presses to see what is a smaller painting. In both places, the work and its status attracts crowds.

This is a different experience compared to other common settings. First, large paintings – like A Sunday on La Grande Jatte at the Art Institute – can attract crowds. However, the size of the painting means many people can still see the whole thing even when there are numerous people around. Second, numerous works in art museums have few or no people looking at them. Even on busy days, one can find quiet rooms where there are no crowds and an observer can take it all in on their own.

Even as we might interact with art as individuals regularly, whether in museums or in books or elsewhere, this also serves as a reminder that we often do it in interaction with others. The small crowd around The Great Wave were quiet, even reverent, as each person or group took it in. But they could not ignore that many others were also right there having their own experience.

The many people still on public housing waiting lists in Chicago

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Many Chicagoans are on public housing waiting lists:

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There are 164,000 unique applicants across CHA waitlists, a CHA spokesperson said.

Americans on the whole may not like public housing but that does not mean there is not a need for it. Chicago, like many major cities, has long provided some public housing but what was provided did not adequately meet the housing needs (and created other issues). And the CHA waiting lists historically were long and did not open often for people to join.

Who has a plan to reduce the waiting lists and provide housing? Large-scale public housing is probably not in the works, but small-scale projects and scattered-site projects often only make small dents in the waiting lists and the larger need for housing.

Tackling housing at a metropolitan scale would be helpful. If Chicago does not want to or cannot address these housing needs, what other communities can or will? Or what if housing was viewed as an opportunity for the whole region to collectively address a pressing need?

Clubs and organizations: “Join or Die”

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A new documentary follows up on the argument of Bowling Alone and why it is worthwhile to join a club:

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If you’ve been feeling depleted and disconnected from a world of diminished meaningful in-person interactions, “Join or Die” explores one reason why, as laid out by social scientist Robert Putnam. Collectively, we’re less involved in organized gatherings. There are all kinds of reasons for that, but it’s a fundamental shift that’s affected our quality of life, because the social bonds that result when you join a club or organization are not just a matter of “warm, cuddly feelings,” Putnam says in the film. “In area after area of our community life, our communities don’t work as well when we’re not connected.” And that, he says, has far-reaching effects not only on us as individuals, but on democracy itself…

Putnam’s thesis is that communal activities build social ties, which have value beyond the immediate satisfaction of just doing things together. It creates a sense of mutual obligation.

I was thinking about some of these ideas as I was reading an article in the Chicago Reader about dog owners letting their pets run off-leash in city parks. Technically it’s not allowed and the practice can be controversial, but the story focused on an aspect I hadn’t considered: “While proximity and green space may have motivated people to start utilizing unofficial areas, the community that forms within is what keeps them coming back.”

This is more or less Putnam’s theory come to life. According to the story, because of the “community-oriented and unregulated nature of the unofficial dog parks, their patrons feel that they look out for each other’s dogs more than people do when at an official (dog-friendly area). The sentiment that ‘we all look out for one another’ was repeated more times than I could count, whether in the context of cleaning up after dogs, calling dogs that run outside the gates and/or begin to wander off and explore new scents, or maintaining space for other park patrons.”…

Putnam says TV is one of the reasons we’re fractured. He calls it “lethal for social connectedness — basically we’re now watching ‘Friends’ instead of having friends.” But I think it goes even deeper. The kind of stories we see on TV reinforce many of the factors he’s citing. Instead of stories rooted in the idea that life is a group project, we’re fed the message that fixing or changing anything is, as Putnam put it, “the business of somebody else” — and on screen that’s usually the police or superheroes, rather than regular people working together to solve problems.

Another way to think about it is that there are collective and individual benefits to joining a club: it can help one’s well-being and improve social connections. At the same time, the social relationships and social networks formed can help tighten bonds and communities.

In contrast, other common activities may not do the same things. Online or social media activity can bring people together – but it can also lead to atomization and relationships that work differently when not regularly conducted in-person. Television tends to be a more solo activity or occurs with a small group, even as mass media has the potential to bring people together to some degree (common experiences, etc.).

I am curious to hear more about the actual in-person component of joining a club and how much this matters for building social capital. As Randall Collins explains in Interaction Ritual Chains, unique things happen when humans are in physical proximity.

Suburbanites who like to vote in national elections but not in local ones

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Ahead of yesterday’s elections, I read this from the DuPage County Clerk:

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“While it’s too early to make predictions, it appears that DuPage County is on track to have a large turnout for this presidential election. There’s excitement in the air,” Kaczmarek says. “In 2020, the turnout was 76.55% with 491,067 ballots cast – the largest turnout in DuPage history.”

In recent years, DuPage County has had the highest voter turnout in the region in every election.

In other words, voter turnout was high with a presidential election. But this high level of turnout does not carry over to local elections. See posts from 2022, 2019, and 2018.

I can understand why turnout is high during presidential and national races. The rhetoric is persuasive, the stakes are high, and the advertising is plentiful.

But suburbanites like local government and local control. They like seeing their tax dollars at work in the community. They like the access to local leaders. They select communities based on particular amenities that they want to preserve or enhance.

National and state politics do affect what happens in communities. But the huge drop-off between voting for the president voting for the local mayor or council is a bit odd; in day-to-day life, the suburbanite may see experience more affected by local government than by the president. With the federal system the United States has, local government (municipalities, townships, counties, etc.) have significant decision-making and monetary powers. To not participate in local elections at similar rates to national elections is to indicate less concern and interest for the former.