Author Archives: legallysociable

What’s in a name? Certain subdivision names lead to higher housing values

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A study suggests homebuyers are willing to pay extra in subdivisions with certain words in their name:

According to a study by two researchers at the University of Georgia, homebuyers pay an average of 4.2 percent more when the development has the word “country” in the name. And if it has the term “country club” as part of its name, buyers will pay 5.2 percent on top of that.

That’s a total of almost 10 percent more that people are willing to pay for the prestige associated with the term “country club.”

A joke? Hardly. The study, the results of which were published last year in the Journal of Real Estate Research, is a serious investigation of sales in the Baton Rouge, La., area over 15 years. It carefully controlled for such variables as location, number of bedrooms and bathrooms, and days on the market, among others.

“This is the first study to find through empirical research that buyers are willing to pay more for certain property names, with all other attributes of a house being equal,” the paper said. “In fact, buyers of more expensive houses may be willing to pay more for a name that conveys prestige than they are willing to pay for a good school for their children.”

No wonder, then, that the naming process is often a psychodrama, with builders and their marketing teams becoming more hung up over what they will call their communities than they are over the copy for a $10,000, full-page ad in the local newspaper.

There is no tried-and-true naming method. Some builders resort to the old standards — station, park, commons, woods, village, farms, hunt, square and gardens. Some look to history for a name, while others use location or a characteristic of the property. A few pick a name that immortalizes themselves or their loved ones.

It sounds to me like this is all about status. Living in a subdivision with a certain word in its title conveys status and wealth, important considerations for homeowners, particularly when selling a home.

Several thoughts come to mind:

1. I assume that this effect only works at certain income levels. For example, could you build a run-of-the-mill townhouse development, slap the “country club” label on it, and expect a price premium? I would guess not. To some degree, I would guess there is a relationship between the price of the properties (which then limits who can live there in the first place) and the names. Additionally, builders don’t want to dilute their products by suggesting that “normal” homes are upscale in name alone. (It is unclear to me whether the researchers were able to control for all the factors that would separate an upscale suburban subdivision from a typical subdivision.)

2. Beyond “country” or “country club,” do other words or names not matter? If not, then you simply get a muddled mess of subdivision names that don’t really signal much of anything except general references to tranquility, pastoralism, and perhaps some local landmarks or figures.

2a. Are there names that have a negative effect on price?

3. I wonder how much the generally bland subdivision names feed into the critique that suburbia is a homogeneous place. With many subdivision names not anchored to any particular place, you could be in a “Thousand Oaks” in Ohio just as well as Texas. Is this simply another piece that suggests that Americans aren’t anchored to any particular places?

When looking at the minimum wage, should we consider whether a poorly paying job is better than no job?

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I ran into an argument about whether the minimum wage should be raised in the United States and it got me thinking about the reasons behind the argument for raising it. To start, here is some of the debate:

One of the harshest realities of America’s slow economic recovery — and there are many — is the fact in spite of modest job growth, pay for workers is falling. Year over year, average inflation adjusted wages have dropped by 0.6 percent for all private sector employees. They’re down a full 1 percent for non-supervisors — your retail salespeople, your shop floor factory workers, your cashiers. In other words, even as the overall employment picture has improved in fits and starts, the working poor are getting poorer.

Some believe this is a sign of the recovery’s weakness, and today the National Employment Law Project used it as a rallying point to call for a higher minimum wage. According to their analysis, which is current through the beginning of 2011, while the bulk of job losses during the recession affected medium wage earners, such as paralegals and nurses, most of the hiring post-recession has been for low-paid service work. Middle class jobs, they argue, have been replaced with poverty wage jobs…

But here’s the alarming part. All of this might simply mean that the same forces that caused wages to stagnate before the recession will make them stagnate after the recession. It’s just another sign that income inequality is here to stay, unless something radical changes that will give working class families a larger slice of the pie. Will raising the minimum wage do that? It might help on the margins, certainly for the 3.8 million workers who earn it.  (I’m not one of those who believes that a higher minimum wage actually kills jobs. This great, short Slate piece from 2004 explains why.) But the vast majority of American workers won’t see much benefit from it. Rather, fixing the wage problem means we need to think about the fundamental problems skewing income growth towards the top, from spiraling CEO pay to an inadequate education system.

Falling wages are taking us back to where we were before the recession. For many workers, that’s not a good place. And there aren’t any easy ways out of it.

Of course, arguments for raising the minimum wage often focus on the idea that it is not enough money to live on. Hence, calls for a living wage that is more closely tied to a more steady standard of living.

But I wonder if there isn’t a bigger issue at work here: the idea that low-paying jobs may not be worth having. In other words, people might be better off without a minimum wage job. The low-paying job may be helpful in securing a new job (you don’t want an unemployment gap in your resume) or moving up but too many of these low-paying jobs pay so little that employees may not be able to do the things they need to do to move up (move to a new area where jobs are more plentiful, own a reliable car to expand job prospects, enroll in classes, etc.). Additionally, a number of these jobs don’t really offer chances for advancement; if they do, it is limited to a small group of workers. So these workers can get trapped in a cycle of low-paying positions that meet some basic needs to survive but never provide the hope to do something better. This is reflected in books like Nickel and Dimed: it is hard enough to do the daily grind, let alone find some light at the end of the tunnel in terms of a better-paying job.

In this sense, making a small adjustment to the minimum wage wouldn’t seem to do much. It might offer a little more money but this is likely eroded quickly by inflation (past and future). What we then need is more jobs that provide a higher standard of living and give more employees the opportunity to move on and up to something better.

(I realize there is a lot more going on here. But I wanted to get at the idea that simply having a job isn’t a guarantee of having the chance to reach the American Dream. Being willing to work doesn’t necessarily guarantee a good outcome. This also reminds me of Katherine Newman’s book No Shame In My Game about the working poor who want to work but can’t access the jobs that would lead to success.)

NATO blunder or deep-seated Chicago wish to be recognized as the capital of Illinois

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I know a lot of people were having fun at NATO’s expense yesterday after it made several errors in a video ahead of the upcoming summit in Chicago. One of them was particularly interesting:

A video about Chicago posted Thursday on the website of NATO’s in-house television news network, Natochannel.tv, could leave leaders fumbling the facts at the international water cooler.

First, there’s the matter of Illinois’ capital city.

“More than 60 heads of state and government will meet to discuss crucial matters of security and stability in the Euro-Atlantic area,” a narrator’s voice says as the five-minute video plays panning shots of Chicago. “And so, the leaders of the member nations of the organization created by the 1949 Washington Treaty will meet in the capital of Illinois this time.”

What in the name of Abraham Lincoln? The summit was moved to Springfield?

While the capital of Illinois is indeed Springfield, I wonder if this doesn’t hint at a secret wish of Chicagoans for the city, whose region has roughly 70% of the state’s population, to be the actual capital. As the most populous city as well as the economic powerhouse for the state, why not simply move the government operations there as well? Doesn’t Chicago effectively function as the capital anyway? Now I know official state business takes place in Springfield but think about the power and influence politicians from the Chicago area wield. Think of the economic impact Chicagoland has on the state. Think of the images many Chicago area residents have of those who live “downstate.”

An argument could also be made about the need to move capitals to reflect changing realities. Springfield wasn’t the first capital in Illinois and the earlier capitals were all further south, reflecting where the population of the state was at the time. Indeed, Chicago was a small community into the late 1830s and northeastern Illinois was relatively unsettled compared to the rich farmland further south. Geographically, Springfield made sense. I think you may be able to apply some of this geographic logic to a few other state capitals as well such as Albany compared to New York City and Sacramento compared to Los Angeles or San Francisco. Going even further, Washington D.C. emerged as a new city because of a compromise between different factions (Alexander Hamilton’s wished for the nation’s capital to be a big city, New York City specifically). Imagine what a powerhouse New York City could be in global city rankings if it also had Washington D.C.’s share of governmental influence? (Ironically, the United Nations, the foremost global governance organization, is based in New York City even as the capital of the United States is not.)

Granted, you would expect an organization like NATO to get the capital of Illinois correct. But perhaps their error simply reflects what Chicago leaders think…

Fuel efficiency goes up, gas tax revenues go down $50 billion (or so)

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A new report from the Congressional Budget Office suggests that increasing standards for fuel efficiency will leave a large deficit in highway funding:

This week, the CBO issued a new report that looked at how the upcoming, higher CAFE fuel economy rules will affect the Highway Trust Fund. The short answer? Between 2012 and 2022, the Fund will see revenues that are $57 billion lower than they would be without the new CAFE rules. The slightly longer answer:

The proposed CAFE standards eventually would cause a significant reduction in in fuel consumption by light-duty vehicles. That decrease in fuel consumption would result in a proportionate drop in gasoline tax receipts: CBO estimates that the proposed CAFE standards would gradually lower gasoline tax revenues, eventually causing them to fall by 21 percent. That full effect would not be realized until 2040 because the standards would gradually increase in stringency (only reaching their maximum level in 2025) and because the vehicle fleet changes slowly as older vehicles are replaced with new ones.

To illustrate the effect that the standards would eventually have on the trust fund’s cash flows (in 2040 and beyond), CBO examined how a 21 percent reduction in gasoline tax collections would alter the agency’s current budget projections for the trust fund, which span the period from 2012 through 2022. CBO estimates that such a decrease would result in a $57 billion drop in revenues credited to the fund over those 11 years, a 13 percent reduction in the total receipts credited to the fund.

The CBO suggests three ways to deal with the shortfalls: do nothing (i.e., keep on transferring money from the general fund), spend less on highways and mass transit or raise the gas tax (or other taxes and direct them to the Fund). An increase to the gas tax wouldn’t have to be huge. Just five cents a gallon would be enough to offset the $57 billion, the CBO says. But until Congress can agree on this simple change, there’s always the voluntary gas tax.

This isn’t idle speculation. Joel noted some commentary about this in early February 2012.

This reminds me of a recent post about the possible unsustainability of suburbia. Under the current system, we either need more drivers overall (which could then be based on population growth plus more car ownership) or people to use more gasoline (which goes against a push to be more green). Are either of these options really optimal or even desirable? Of course, the gas tax could be increased by a small amount (perhaps just a few pennies?) and the deficit would disappear. However, would this simply lead to more gas tax hikes down the road compared to the option of resetting the system so that highways are funded through a more consistent mechanism? Which politicians want to tackle this? Perhaps we are closer to a tax per mile driven than we might know?

h/t Instapundit

French suburbs known as “zones of banishment”

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The French suburbs are getting more media attention in the lead-up to the run-off election. This article talks about the current status of the “urban sensitive zones”:

Inside the French suburbs, referred to here as “zones of banishment” or “the lost territories of France,” the 2012 presidential elections seemed like a good time to wake up the nation.

In a small office in the suburb of Clichy-sous-Bois, a group of mostly Arab and African 20-somethings hit on an idea: Create a “crisis ministry of the suburbs.” It would address France’s ignorance about the 731 areas ringing the country’s biggest cities, known officially as “urban sensitive zones,” where most of France’s non-European minorities live. Geographically, they are suburbs, but socioeconomically, they resemble the US inner city.

Paris Mayor Bertrand Delanoe gave the upstart “ministry” a temporary office next to City Hall. For two days, rappers, artists, and activists merrily held court with a French media that rarely makes it to the suburbs and worked on a 120-point reform plan. Several presidential candidates, including front-runner François Hollande, showed up.

But the good vibe didn’t last. Days later, Mohammed Merah, a self-styled Islamist radical born to Algerian parents in a Toulouse suburb, shot and killed two soldiers, three children, and a rabbi. The killings seemed to reinforce all the stereotypes and fears about the troubled suburbs.

A fascinating overview.

A few quick thoughts:

1. I think many Americans would have difficulty processing this given our images of the suburbs.

2. Issues of race/ethnicity and class take place all over the world. The article suggests French students hear that their country is “an egalitarian utopia without issues of race and religion” but the situation on the ground suggests otherwise.

3. It would be interesting to read a more complete story of government involvement in the suburbs. How did this happen (politically and funding-wise) and is this what the government prefers?

McMansions are symbols of “the excess of greed”

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An interesting way the term McMansion is sometimes used is to see such houses as symbols for some larger issue in our culture. This usage is illustrated in a documentary to be shown next week in Vancouver:

Vancouver’s treasury of modern architecture is the subject of Coast Modern, by Michael Bernard and Gavin Froome (May 8, 7 p.m., Vancity Theatre).

“Coast Modern is an exceptionally beautiful film,” says Woodend. “I have a bit of a yen for modernist architecture, just because it’s so exquisite, and it’s one of those films [that takes] house porn on a whole new level.

“Although, to give it credit, it looks at architecture as a manifestation of social values. [It has] Douglas Coupland weighing in on McMansions, and how they’re sort of this travesty, not just in architectural terms, but as an embodiment of cultural and social values, the excess of greed that has come out of the last 10 years and shown up in brick and mortar.

“In that regard it’s pretty thoughtful, it really uses architecture as a means to talk about culture.”

From this point of view, houses are not just things to be purchased by individual buyers. Rather, homes and their architecture represent broader trends in society. McMansions can then be viewed as symbols of excess, products of an era where people consumed more than they needed with impunity. Presumably smaller homes indicate (whether they are tiny or “not-so-big“) fighting back against this culture of excess.

Of course, labeling a home as a McMansion then does the job of pointing out the excess. If you live in such a home that acquires this label, do you try to respond that the home really isn’t that excessive? Or perhaps that it is green enough (perhaps a tactic of celebrities)?

Religious change in America between 2000 and 2010

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Results from the 2010 U.S. Religion Census show religious changes in America between 2000 and 2010:

The 2010 U.S. Religion Census, released May 1 on the Association of Religion Data Archives, found that The Church of Jesus Christ of Latter-day Saints gained the most regular members in the last 10 years, growing by nearly 2 million to a total of 6.14 million adherents in 13,600 congregations…

  • Taken together, nondenominational and independent churches may now be considered the third largest religious group in the country, with 12.2 million adherents in 35,500 congregations. Only the Catholic Church and the Southern Baptist Convention are larger.
  • The U.S. was home to 2,106 mosques nationwide in 2010. The figure includes 166 mosques in Texas, 118 in Florida and 50 Muslim houses of worship in North Carolina…

Mainline Protestant churches lost an average of 12.8 percent of adherents in the first decade of the 21st century; 5 percent fewer active members were found in Catholic churches.

There is an explanation for this growing diversity toward the end of the article: the religious economy approach. This school of thought in the sociology of religion suggests that religious groups in the United States have to compete for adherents, sharpening the appeal and “marketing” of some of these groups. This takes place because of the separation of church of state which is a contrast to state churches in Europe that tend to stifle religious competition.

Some of these changes are also interesting at the local level. For example, Muslims are the fastest growing religious group in Illinois and there are now more Muslims in the Chicago area than Methodists. [The actual numbers for this second fact are not in this online story but were in the print version of the newspaper.]

Chicago second in the country in economic segregation

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I recently noted a Brookings Institution report about how zoning contributes to differences in academic achievement. Looking further at this data, Chicago shows that Chicago doesn’t do well among metro areas:

* In Chicago, the “housing cost gap” is large: costs (a combination of renting and buying) are over twice as high in neighborhoods near high-scoring elementary schools than in low ones. In context, the metro area has the 32nd biggest gap out of the 100 largest metros.

* The area does worse on the “test score gap”: 24th in the country, with a 26-point gap between middle/high-income schools and low-income schools.

* The authors pinpointed zoning as a driver of these inequalities, because of the relationship between restrictive zoning, low density, and high prices, but on that the area does best, the 70th most restrictive out of 100.

* On economic segregation? As a measure of how many low-income students would have to move to achieve equal distribution (a measurement similar to how racial diversity is measured), Chicago is second-worst in the country, behind Bridgeport, Connecticut, 61 to 58 percent.

Whet Moser argues that this economic segregation doesn’t bode well in a city that is also known for racial segregation. Of course, racial and economic inequality is linked so perhaps this shouldn’t be too surprising.

To solve this issue, you would need to find some way for students of different backgrounds to mix in schools. Of course, this has a long history in the United States. The Coleman Report suggested this back in the 1960s. In response, the government promoted busing but this proved unpopular. Today, Chicago claims to deal with this by allowing kids to attend other schools throughout the city but of course there are not enough spots in these high-performing schools and the poor performing schools still need help.

Academics flock to research the Occupy movement

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A New York Times article suggests a number of academics have seized the opportunity presented by the Occupy movement to not only teach about but also research the protests:

“This thing just erupted so quickly,” said Alex S. Vitale, a sociologist at Brooklyn College who studies the policing of demonstrations. “It’s almost overwhelming to deal with all the information that’s out there.”

Mr. Vitale is finishing a 10-city study of interactions between protesters and the police since last fall, which he said showed a lack of overall “militarization” in police response in major cities. (New York is an exception, said Mr. Vitale, who organized a demonstration against police tactics in Zuccotti Park last fall but said he did not consider himself part of the Occupy movement.) Other researchers are doing ethnographic studies, crunching survey data, recording oral histories and analyzing material by and about the movement, all at lightning speed compared with the usual pace of scholarship.

“Academics are used to taking forever, but we don’t have to,” said Theda Skocpol, a sociologist at Harvard and author, with Vanessa Williamson, of “The Tea Party and the Remaking of Republican Conservatism,” a study of Occupy’s right-wing counterpart published in January…

Some researchers also say that the sympathy many academics feel for the movement risks undermining objective research.

It will be very interesting to see the research and then the resulting discussions.

This highlights a larger issue in academia: the common lag time between events and publishable research. This can often take a few years as researchers quickly draw up plans, collect data, analyze it, and then work through the review process. I imagine there will be some pressure to get some of this Occupy research going more quickly, perhaps with an interest in more quickly addressing and understanding this phenomenon and with the idea of capitalizing on political momentum. Could this change how research is presented and considered in the future? Work could be published in web or open source journals. What about books that are rushed into print or even more timely, e-books?

Prospective buyer of McMansion wants to know which builders can be trusted

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One of the questions that emerges out of my recent McMansion study (read about it here and here) is how people who buy McMansions feel about their purchase. In other words, who would openly go about seeking out a McMansion to purchase and live in? Lo and behold, here is an open thread at DC Urban Moms and Dads titled “Yes we are going to buy a suburban tract home/mcmansion . . . builder reputation?” 

As you might suspect, there is a certain degree of snark in some of the responses. Additionally, it quickly devolves into a debate over specific locations and the city vs. the suburbs.

Some McMansions critics might argue that it is impossible to find a quality-built McMansion.  I found one of the four major definitions of the term refers to the poor architectural design and/or quality of the home. The assumption is that McMansions are built quickly, are constructed with poor quality materials, are intended to impress rather than last, and often incorporate multiple styles of architecture creating mishmash rather than a unified whole.