Author Archives: legallysociable

Making Iranian oil as unpopular as the McMansion

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Here is an argument that compares McMansions to Iranian oil:

The United States would like to perform a magic trick, and our economy might depend on its success. The illusion? We want the world to think Iran’s oil is practically a Las Vegas McMansion.

Now, nobody is going to confuse a barrel of crude with a four story desert abode. Las Vegas houses have been widely shunned and practically unsellable. As a result, their prices have plummeted for the few remaining buyers. We want the same thing to happen to Iran’s oil: We want it to become so unpopular that Iran is forced to sell it only at a significant discount.

Perhaps it seems odd that the United State should hope Iran sells any of its oil. After all, we’re using sanctions to turn Tehran into a pariah within the global financial system, making it next to impossible for them to actually export crude, with the hope that it will force the country’s leaders to drop their nuclear program. But you can’t cut the world’s fifth largest oil producer entirely out of the global petroleum market and not expect prices to surge even more than they already have.

Instead, our government wants Iran to keep shipping oil to some of its major customers — but for cheap. “Policymakers need to ensure that they are not creating an embargo of Iranian oil but, instead, implementing these sanctions so that Iranian oil becomes a distressed asset,” Foundation for the Defense of Democracies Executive Director Mark Dubowitz, who advised Congress while it drafted the sanctions legislation, told Bloomberg today.

An unusual comparison. I can see the general point: we want Iranian oil to stay in the market but we don’t want Iran to benefit from being able to sell it for high prices. So we need Iranian oil to carry a stigma so that the price has to be dropped.

But the comparison breaks down if you think this through to the end. Most critics would argue that McMansions shouldn’t be built in the first place. At this point, we can’t stop Iran from producing oil but we can effect how it is sold, similar to the ways in which McMansions have publicly been denigrated. However, we have more control over McMansions: if we really wanted to as a country, we could ban the construction of McMansions (though this would most likely have to happen at the local level).This makes me wonder if McMansions could ever be considered okay or even popular. If I remember correctly, the New Urbanist authors of Suburban Nation suggested McMansions might be acceptable if they were modified slightly to fit into traditional looking neighborhoods that encouraged civic participation. This particular comparison ties the popularity of the McMansions to their price; so they would be acceptable as long as they are cheap? Perhaps then the housing could be considered affordable housing, not just the province of the wealthy or nouveau riche, even if critics are correct in suggesting that such houses are poorly built, poorly designed, and are often in sterile neighborhoods.

Builders and Home Depot prepared to offer more multigenerational homes

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As part of a larger argument that millennials still will prefer homes but perhaps in a different form, Joel Kotkin suggests several builders and Home Depot are prepared to offer more multigenerational homes:

Some companies, such as Pulte Homes and Lennar, are betting that the multi-generational home — not the rental apartment — may well be the next big thing in housing. These firms report that demand for this kind of product is particularly strong among immigrants and their children.

Lennar  has already developed models — complete with separate entrances and kitchens for kids or grandparents — in Phoenix, Bakersfield, the Inland Empire area east of Los Angeles and San Diego, and is planning to extend the concept to other markets. “This kind of housing solves a lot of problems,” suggests Jeff Roos, Lennar’s regional president for the western U.S. “People are looking at ways to pool their resources, provide independent living for seniors and keeping the family together.”

But much of the growth for multigeneration homes will come from an already aging base of over 130 million existing homes. An increasing number of these appear to being expanded to accommodate additional family members as well as home offices. Home improvement companies like Lowe’s and Home Depot already report a surge of sales servicing this market.

A top Home Depot manager in California traced the rising sales in part to the decision of people to invest their money in an asset that at least they and their family members can live in. “We are having a great year ,” said the executive, who didn’t have permission to speak for attribution. “ I think people have decided that they cannot move so let’s fix up what we have.”

Perhaps multigenerational housing is the future though I wonder if this housing would prove so popular in better economic times.

How much extra can a builder charge for a multigeneration house and how much space does this new house have compared to a new home built for a nuclear family?

Here is one of the Lennar multigeneration home that features “The Home Within a Home”! Looking at this floor plan, it looks like it features just three extra rooms: a “next gen bedroom,” a bathroom, and a “next gen living space” with kitchenette located at the front of the home and that can be close doff from the rest of the house. The home is 2,250 square feet, smaller than the average new home, and is priced at $273,000. Here is how Lennar describes the house:

“We have created this plan to allow for dual living situations without sacrificing comfort – it’s literally a home within a home,” stated Dale Billy, Division President.

The economy has dramatically contributed to the decision to build this type of product. Many aging parents have seen their retirement investments diminish during recent years and many college-age children are finding it necessary to move back home. With housing typically being the largest part of the monthly budget, moving in together is an option many are embracing. “The opportunity for families to share a mortgage makes a lot of economic sense for many families,” added Billy. “Lennar’s Next Gen – The home within a home, is essentially two homes with one payment, making living together affordable, comfortable and flexible to your needs.”

Each NEXT GEN? suite includes a separate entrance, living room, kitchenette, laundry and private bedroom and bath. Lennar designed this unique floorplan to be incorporated into the main home floorplan in a way that allows it to be a separate space but also offers direct access from the main house, depending upon the family’s needs.

I’ll be watching for these in the Chicago area. Does Home Depot sell a prefab or easy to construct addition to attach to an existing home to make it a multigeneration home?

Some housing not so cheap when you factor in transportation costs

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Plenty of people may move to where the cheaper housing is located but this could come with higher transportation costs:

In Chicago’s transit-rich Ravenswood neighborhood, where there is an average of one automobile per household and 42 percent of commuters use transit, monthly transportation costs averaged $751 in the five-year period studied, the center determined.

Households in Marengo in McHenry County incur an average of $1,324 in transportation costs each month, the study found. Each household in Marengo, where transit ridership is less than 1 percent, also logs an average of 24,438 miles per year in their cars, versus 12,150 miles annually in Ravenswood.

When people are looking for a place to live, taking into account housing and transportation costs changes the affordability outlook significantly, said Scott Bernstein, the center’s president…

[From the print edition:] Some 69 percent of neighborhoods in the Chicago area are considered affordable under the traditional definition of housing affordability: rent or mortgage payments consuming no more than 30 percent of household income, the study said. But only 42 percent of the neighborhoods are considered affordable when housing and transportation costs are measured, it said…

The study also found that it is more difficult for a typical household in the U.S. to find an affordable place to live compared to a decade ago because incomes increased about half as much as transportation and housing costs since 2000.

This provides some data to back up Joel’s claim from earlier this week: life is cheaper (and perhaps better?) without a car.

What I find fascinating about this is that this report ties transportation costs to the idea of affordable housing. Typically, we only think about the cost of the housing itself but if you built affordable housing in the middle of a corn field 90 miles west of Chicago, those housing units won’t really help anyone.

At the same time, this is a trade-off many Americans seem willing to make: you pay less for your house and then pay more for transportation costs over time. Perhaps because the house is a significantly larger “one-time purchase” (you have repeated payments but they are somewhat fixed and you have already psychologically taken possession of the house even though you don’t own it) people can justify then paying more for transportation over time because the money trickles out and the costs are more variable. Plus, if you think of the home as one of the key pieces of the American Dream and Americans should love to drive anyway, this all could make some sense.

This is also a reminder that the cost for entry to the suburbs is not just about finding somewhere to live which often requires a sizable down payment and a mortgage. In order to get anywhere, whether it is a job or store or recreation area or church, one needs a car in the suburbs and one needs to have extra money on hand to deal with this. Without being able to pay for insurance, gas, maintenance, and somewhere to park (which is factored into a parking space or the driveway/garage that is factored into the mortgage), there is plenty of extra cost involved with having a car. This reminds me of a story I read recently about an affordable car program in Wisconsin where the state or some agency was providing cheap but reliable cars to people to help cover these growing and important transportation costs.

Argument: class concerns behind zoning laws

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One commentator suggests that activities commonly banned by zoning laws are banned because they don’t meet middle-class or upper-class standards:

1. Clotheslines instead of dryers. Reason: Looks poor. Might suggest you can’t afford a dryer. Plus, you might see underwear that isn’t your own. This is a major cause of sin.

2. No livestock, but large pets are acceptable. Reason: Ostensible reasons are health based, a few even broadly grounded in fact, They ignore, however, that carnivore manures are almost certainly more dangerous than any other livestock manure, and health issues are at least as prevalent from pets. The same is true of considerations of size, noise, etc… – barking dogs the size of ponies are permitted while three quiet hens are not. The real reason is that pets are broadly a sign of affluence, since they cost us money, while livestock are a sign of poverty, because they provide economic benefits.

3. No front yard gardens. Reason: The lawn is a sign of affluence – you have money, leisure and water enough to have a chunk of land, however tiny, that doesn’t produce anything.. It creates in many neighborhoods a seemingly contiguous but basically sterile, often chemically toxic and seeming “public” greenspace that is actually privatized and not very green. Gardens, on the other hand, have dirty wildlife and bugs in them, and might grow food, which is bad because it implies you can’t afford it – even if you can’t.

4. No rainwater collection. Reason: This is mostly in dry places in the Southwest, for fear that the tiny amount of available rainwater might not reach people who can’t afford to pay for it, or strangely believe that water that lands on their roof might belong to them, and who would like to have gardens anyway. A few other municipalities do it for fear of west nile disease because they seem never to have heard of screens or mosquito dunks. Oh, and barrels look like you can’t afford to water your lawn with sprinklers, even when it is raining. While western riparian water rights are an issue, research has shown over and over again that rainbarrels increase net water access and that lost water in storm surge that could have been collected in rainbarrels is a net gain. Fortunately, many cities are finally getting over this one.

5. No commerce that isn’t white collar. Reason – Class. Telecommuters who can make money out of their homes all they want, or upscale white collar professionals with home offices are generally permitted in residential zoning.. This means people who want to sell food, do hair, fix things, cannot hang a discrete sign selling their biscuits or offering their services. This is deemed ugly and bad – and it is a visible reminder that people might not have enough money to keep warm burning it, and might need to earn some.

This seems to get at one of the basic principles of suburban life in recent decades, particularly in places with homeowners associations: legislate against certain behaviors in order to protect your own property values. Voluntarily give up some of your property rights in order to protect yourself from neighbors who don’t care about their property as much as you do. Theoretically, everyone then wins because the neighborhood is protected.

This reminds me of accounts of some early suburbs in the United States where people built their own homes and frequently kept animals. Building your house yourself these days would likely run into all sorts of code concerns (unless you were a proficient plumber, electrician, etc.). Additionally, I imagine the home might look less “perfect” than mass produced housing and these accounts told about how people frequently were adding on to their homes or leaving certain parts in various states of repair.

Many suburbs and communities have faced the question in recent years about residents keeping animals. Some have allowed it, some have not. I assume this is not as much of a concern in wealthier suburbs but it would be interesting to see if there are patterns in which communities allowed animals and which did not.

Overall, zoning is often black and white in its approach and residential zones are meant to be only for residences.

Reasons young Americans are not buying houses at the same rate as prior younger generations

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Derek Thompson shows that younger Americans are not buying homes at the same rates as previous younger generations:

When older generations wonder what’s the matter with Millennials, they often judge their younger cohorts against such financial and social benchmarks as finding a job, getting married, and buying a home. These observations often come wrapped in weak science — “blame Facebook for their indolence” — or dripping with judgment — “blame their parents for making them weak.” The science is weak, but the observations are true. Fewer young people are finding jobs. Fewer young people are getting married. Fewer young people are buying homes.

Between 1980 and 2000, the share of late-twenty-somethings owning homes had declined from 43% to 38%. The share of early-thirty-something home owners slipped from 61% to 55% in that time. After the boom and bust were over, both rates kept falling. The rate of young people getting their first mortgage between 2009 and 2011 was chopped in half from just 10 years ago, according to a recent study from the Federal Reserve.

The reasons Thompson gives for this decline: rising student debt, lower (delayed?) rates of marriage, limited wages, and housing prices have increased.

Two things that I like about this:

1. Generational talk and “common sense” about the differences is indeed “weak science.” Many people provide anecdotal evidence (my children or students do this, etc.) tied to individual traits (they don’t have the same work ethic, etc.).

2. Because of this “weak science,” we do need to examine how structural forces affect generational behavior. Thompson suggests that broad factors in economics and society have pushed this generation of younger Americans into different actions.

One thing I think is missing here: there seems to be an assumption here that if the economics and social factors were right or similar to the past, this younger generation would buy houses at similar rates. What about the cultural component, the idea that a younger generation of American doesn’t buy into the traditional American Dream in the same way as previous generations? Of course, these structural factors can influence this rejection or adoption of the American Dream: if it is simply more difficult to buy a home at a younger age today, then people might pursue a different vision.

But I think there is growing evidence (see here and here as examples) that this younger generation genuinely values different goals than previous generations and owning a house is just not the same priority. Perhaps they have different values like wanting to be in culturally exciting areas (the creative class thesis). Attaining this and owning a home are not mutually exclusive but most suburbs would not fit this bill. Perhaps they do not desire long-term debt (the common 30 year mortgage) in a rapidly changing world or they want more freedom to be able to move and respond to changes in job markets and cultural and relational shifts. Perhaps they don’t want to have to maintain a home and would rather spend their time elsewhere. Perhaps they explicitly reject the materialistic or consumeristic approach they see in previous generations and instead prize friendships and fulfilling careers. If they do want homes, they want different kinds than in the past (see here and here) and perhaps don’t think many homes reflect their desires.

This is worth paying attention to: will the idea of the American Dream and the need to own a home change dramatically in the years to come because of both structural and cultural shifts?

US mosques increased from 1,209 to 2,106 between 2000 and 2011

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A new study shows that the number of mosques in the United States increased 74% between 2000 and 2011:

Researchers conducting the national count found a total of 2,106 Islamic centers, compared to 1,209 in 2000 and 962 in 1994. About one-quarter of the centers were built between 2000-2011, as the community faced intense scrutiny by government officials and a suspicious public. In 2010, protest against an Islamic center near ground zero erupted into a national debate over Islam, extremism and religious freedom. Anti-mosque demonstrations spread to Tennessee, California and other states.

While some are pleased as this suggests Muslims feel comfortable enough in the United States to establish religious congregations, I think there are two other interesting things about these findings:

1. The methodology for counting mosques:

The report released Wednesday, “The American Mosque 2011,” is a tally based on mailing lists, websites and interviews with community leaders, and a survey and interviews with 524 mosque leaders. The research is of special interest given the limited scholarship so far on Muslim houses of worship, which include a wide range of religious traditions, nationalities and languages.

Researchers defined a mosque as a Muslim organization that holds Friday congregational prayers called jumah, conducts other Islamic activities and has operational control of its building. Buildings such as hospitals and schools that have space for Friday prayer were not included. Chapters of the Muslim Student Association at colleges and universities were included only if they had space off-campus or had oversight of the building where prayer was held…

The 2011 mosque study is part of the Faith Communities Today partnership, which researches the more than 300,000 houses of worship in the United States. Among the report’s sponsors are the Council on American-Islamic Relations, the Hartford Institute for Religion Research, the Islamic Society of North America and Islamic Circle of North America.

I wonder if other researchers might disagree with this methodology, particularly with how a mosque was defined. This is a reminder that it can be difficult to track or count religious groups because there are no master lists, not everyone is in the phone book, and not everyone has a web site. Additionally, religious congregations can quickly form and disband.

(I assume the researchers talk about this in their report but could the increase in mosques could be related to doing a more comprehensive search this time around?)

2. It is interesting to note where the mosques are located:

The overwhelming majority of mosques are in cities, but the number located in suburbs rose from 16 percent in 2000 to 28 percent in 2011. The Northeast once had the largest number of mosques, but Islamic centers are now concentrated in the South and West, the study found. New York still has the greatest number of Islamic centers — 257 — followed by 246 in California and 166 in Texas. Florida is fourth with 118. The shift follows the general pattern of population movement to the South and West.

I am most interested in the figures about the suburban growth as I have tracked several cases of proposals for mosques in the Chicago suburbs. This article doesn’t say but I wonder if the greater number of suburban mosques is because city mosques have moved from city to suburb (which would mirror the movement of Protestant churches out of the city in the post-World War II suburban boom) or because these are new suburban mosques built in response to a growing suburban Muslim population.

 

Modern skeuomorphs are touches of the past in a digital age

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Clive Thompson discusses skeumorphs, “a derivative object that retains ornamental design cues to a structure that was necessary in the original” (Wikipedia definition), in a digital world:

Now ask yourself: Why does Google Calendar—and nearly every other digital calendar—work that way? It’s a strange waste of space, forcing you to look at three weeks of the past. Those weeks are mostly irrelevant now. A digital calendar could be much more clever: It could reformat on the fly, putting the current week at the top of the screen, so you always see the next three weeks at a glance…

Because they’re governed by skeuomorphs—bits of design that are based on old-fashioned, physical objects. As Google Calendar shows, skeuomorphs are hobbling innovation by lashing designers to metaphors of the past. Unless we start weaning ourselves off them, we’ll fail to produce digital tools that harness what computers do best.

Now, skeuomorphs aren’t always bad. They exist partly to orient us to new technologies. (As literary critic N. Katherine Hayles nicely puts it, they’re “threshold devices, smoothing the transition between one conceptual constellation and another.”) The Kindle is easy to use precisely because it behaves so much like a traditional print book.

But just as often, skeuomorphs kick around long past the point of reason. Early automobiles often included a buggy-whip holder on the dashboard—a useless fillip that designers couldn’t bear to part with.

I’ve noticed the same thing on my Microsoft Outlook calendar: the default is to show the full month of February even today when I don’t really care to look back at February and would much rather see what is coming up in March. I can alter it somewhat in the options by displaying two months at a time but it still shows all the earlier part of February.

What would be interesting to hear Thompson discuss is the half-life of skeuomorphs. If they are indeed useful for helping users make a transition from an old technology to a new one, how long should the old feature stick around? Is this made more complicated when the product has a broader audience? For example, iPhone users could be anyone from a 14 year old to an 80 year old. Presumably, the 14 year old might want the changes to come more quickly and tends to acquire the newer stuff earlier but the device still has to work for the 80 year old who is just getting their first smartphone and is doing partly so because they only recently became so cheap. How do companies make this decision? Could a critical mass of users “force”/prompt a change?

This is also a good reminder that new technologies sometimes get penalized for being too futuristic or too different. If skeu0morphs are used, users will make the necessary steps over time toward new behaviors and ways of seeing the world. Perhaps Facebook falls into this category. The method of having “friends” all in one category is often clunky but if users had to simply open their information to anyone, who would want to participate? However, by gradually changing the structure (remember we once had networks which were a comforting feature because you could easily place/ground people within an existing community), Facebook users can be moved toward a more open environment.

In general, social change takes time, even if the schedule in recent decades has become more compressed.

Odd statement: “Only 2.8% of your property tax bill goes to DuPage County”

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Two days ago, our household received the quarterly newsletter from DuPage County. While the front page of the DuPage Review trumpets “DuPage County Cuts $10.7 million from 2012 Budget,” the back page had this interesting statement: “Did You Know? Only 2.8% of your property tax bill goes to DuPage County.” See the figure below:

What exactly is the County trying to convey here? Pointing out this figure means: (a) you should not be concerned at all since this is a small amount (b) you should not care much if we ask for a little more (c) you should be impressed that we use such a small percentage, particularly compared to other taxing bodies. .

The focus here is on the small number (only 2.8%!) but it might also lead a lot of people to ask what my wife asked: why does the County need 2.8% anyway? The rest of the newsletter offers some hints: taking care of county roads, dealing with stormwater, and facilitate things like senior services and electronic recycling. The county budget for 2012 is $434.7 million and you can find more specific details here.

I wonder how many DuPage County residents know what goes on at the county level. Outside of occasional local issues, how many people actually have to be concerned about what the County does? Add in the fact that Illinois has the most local taxing bodies in the country (outpacing second place Pennsylvania by over 2,000) and it can be really hard to figure out how the County, township, Forest Preserve, Park Districts, municipalities and the other taxing bodies fit together and utilize property tax money.

Questionable web survey of the day: smart USA finds Americans prefer “right-sizing”

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I ran across a recent survey that initially looked promising as the findings suggested Americans prefer “right-sizing”:

While the last decade is often seen as a period of gluttonous consumption, McMansions, and Super-Size meals, the old adage that less is more seems to be ringing true in today’s post-recession era. The survey found that three out of four Americans prefer to receive a present in a small package over a large one. Those who thought bigger was better tended to be young, a preference that shrinks as people get older and wiser. (34% of Americans age 18-34 preferred bigger presents compared to 22% of those age 45-54 and 17% of those age 55+).

Overall, on the subject of preferring less over more:

  • 97% of Americans believe that at least some of the items in their household are junk (i.e., they could easily get rid of it)
  • Nearly one out of 10 (9%) Americans believe they can part with a full half of their stuff
  • 9% of Americans believe that 51-100% of the items in their household are junk, indicating that the supposed American obsession with size and quantity is overstated

I’m not sure the statistics here strongly show “the supposed American obsession with size and quantity is overstated” but this still seems interesting. Lots of people would argue Americans have too much stuff and particularly the admissions about having some or a lot of junk back this up. But if you read more closely, two issues pop up:

1. The survey was sponsored by smart USA and Harris Interactive. Not familiar with smart USA? Here is a hint:

“The fact that a majority of Americans are deeply concerned with right-sizing their lifestyles and making intelligent choices shows why smart has so much curb appeal today,” says smart USA General Manager Tracey Matura. “People are rethinking whether bigger is actually better and focusing instead on value. They’re looking at how they can cut down the clutter in their lives, whether in their choice of vehicle, home or other purchases, so they have fewer, better things rather than simply more, more, more. And smart is proof that good things do come in small packages.”

So the survey shows that there should be plenty of Americans who want to buy a smart Fortwo! While early sales of the car lagged, Mercedes Benz trumpeted moving 9,341 smart cars worldwide in April 2011. Is this really just a marketing survey?

2. There is another issue with the survey, which happened through the web:

This survey was conducted online within the United States by Harris Interactive on behalf of Smart from December 6-8, 2011 among 2,246 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact terry.wei@mbusa.com.

Perhaps I’m missing something but the admission that this is not based on a probability sample is bad news. This usually means that the survey is not terribly representative of the American population at large. Of course, the surveys results could be weighted to try to make up for this but weighting may not be able to truly adjust for having a bad sample.

In conclusion, I’m not sure this survey really tells us much about anything. I assume that the findings are useful to smart USA but the results about larger American consumer patterns should be used with much caution.

The gift of empathy

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Megan McArdle of the Atlantic has a timely reminder of the dangers of schadenfreude:

I saw a fair amount of chortling this morning about this Bloomberg piece on wealthy financial-industry types who are having to cut back because of plummeting bonuses….[W]hen middle class people take out a mortgage that’s perfectly affordable on the income they’ve been enjoying for years, and then lose the house because they suddenly saw that income cut in half, we don’t feel a delicious sense of joy because they finally got what was coming to them.   We recognize that this it is really terrible to be forced out of a home where you’ve built loads of happy memories and dreams–and not incidentally, to possibly be forced to yank your kids out of the aforementioned schools.

Why are people supposed to shrug off the exact same thing because they’re rich?  It’s still really awful to lose your house.  I hardly think it’s whining to worry about this when your income drops and your fixed expenses don’t.
There are plenty of problems in this country and this world.  Rejoicing in the misery of others is just another problem that nobody needs.
The fact is that no matter how much you make, seeing your income fall below the expenses you’ve committed to is difficult.  Obviously, people whose expenses are closer to the minimum deserve more of our sympathy, and our help.  But I’m not sure that this means we’re supposed to be happy when it happens to someone richer than we are.  It’s not very attractive when conservatives rejoice to see union members thrown out of work.  I’m not sure this is much better.