Big home builders in trouble during market downturn, adopting new strategies

The Wall Street Journal reports on the financial troubles of several big builders and the new strategies others are adopting to push forward:

“The market is not deep enough or big enough to support all the builders,” said Alex Barron, a founder and analyst with the Housing Research Center, an independent research firm in El Paso, Texas. “There needs to be some consolidation. I don’t think that means [mergers or acquisitions]. I just think that means there has to be a shakeout.”

Mr. Barron declined to speculate about any specific companies. But two operators that other analysts are watching closely are Hovnanian Enterprises Inc. and Beazer Homes USA Inc. Some analysts believe both companies are running low on cash. Both companies have seen their stock prices decline nearly 60% so far this year—making them the sector’s biggest decliners—and both have traded below $2 a share…

Both Lennar Corp. and Toll Brothers, for example, are working out distressed real-estate loans, a move that is being cheered by many industry analysts. Toll, long known as the builder of suburban McMansions, has expanded into urban areas building condominiums, which continue to be some of its strongest performers.

Hovnanian’s strategy is to keep acquiring land lots and keep building a broad variety of homes. In the second quarter, it spent some $125 million of cash to purchase about 1,440 lots and to develop land.

I’ve wondered before if these new strategies might change the image of some of these builders who built many large suburban homes in recent years.

It would be interesting to consider what the housing industry would look like if a prolonged downturn forced these big builders out of business. Are there some regional builders who could then step into the gap? Would we have a return to smaller builders a la the pre-Levittown days?

How a 6,000 square foot Robert A.M. Stern home in East Hampton escapes being called a McMansion

A basic component of the term McMansion is a large house. But this defense of a large Robert A.M. Stern home in East Hampton shows that this isn’t a necessary component of the term McMansion:

Looking past the seven bedrooms, this Brown Harris Stevens listing on Lee Avenue in East Hampton seems to be an antidote to the McMansion trend currently occurring in the ‘Gauche-ing over’ of the East End, making a seemingly cozy use of its 6,000 square feet…

From the language in the listing, the fully screened-in porch is the work of Robert A.M. Stern (the listing says “Robert Stern” but we’re going to assume that they’ve left the A.M. off for those ‘in the know”), making it a nice, neighboring companion piece to the library and town hall that Yale’s dean of architecture has designed for East Hampton over the last 20 years.

So, while the deck—and attached house—will run you $6.5 million, you will be getting an adorable piece of early 20th century living with a late 20th century porch on roughly an acre of land in the tony Georgica section of East Hampton.

Perhaps I am just being cynical but it sounds like this home is not a McMansion simply because it was designed by a well-known architect. Because of this, it is better quality and more aesthetically pleasing.

If you look at the slideshow pictures, the home does seem to avoid some McMansion design features: no pretentious columns or two-story foyers; the rooms have some traditional features; and the kitchen is not full of granite countertops, a Viking stove, or a Sub-Zero refrigerator (at least as far as we can see).

Still, it is a 6,000 square foot home. Can that much space really be cozy? Only in places like the Hamptons could this size home seem restrained. What about arguments that all big homes are bad (large homes don’t fit with other green products) or need to be regulated (see this recent discussion in Australia)?

Juror becomes Facebook friends with defendent during trial and is dismissed from the case

There are times to friend people on Facebook and times not to. One of the times to refrain should include when you are on a jury and you want to be Facebook friends with the defendant:

Jurors and defendants are not meant to be friends — even if it’s just Facebook friends.

Four charges of contempt of court probably drilled this point home for 22-year-old Jonathan Hudson of Arlington, Texas. While on jury duty, Hudson sent a Facebook friend request to the female defendant in the case.

He was dismissed from the proceedings following the friend request, as well as for posting case information on his profile. Afterwards, he contacted the defendant through a Facebook message to apologize…

His lawyer told the paper the mistake was “a reflection of the times.”

I’m sure someone could develop a defense for this: being Facebook friends isn’t the same kind of friendship that might compromise a decision in a court case. But that then gets into the interesting area of what exactly it means to be a friend on Facebook.

If this is a “reflection of the times,” it suggests people have difficulty knowing when using newer technologies, like Facebook or texting, is appropriate. The courtroom is probably one of the more conservative institutions where it takes some time to change behavior norms. Would Facebook ever be incorporated into courtroom and trial behavior? What if jurors had electronic devices that they could use to interact with each other as they are hearing cases?

A sociology PhD student is studying changing women’s clothing sizes while also not looking in the mirror before her wedding

This story has now been going around for a few days: a bride-to-be decided 6 months before her wedding to not look at herself in the mirror for the next year, blog about the experience, and draw attention to how women think about beauty and their bodies. What perhaps has gotten lost in this story is that this is being undertaken by a sociology PhD student who is writing a dissertation about women’s clothing sizes:

When Kjerstin Gruys got engaged to her longtime boyfriend, the former fashion merchandiser turned sociologist feared she would relapse into an eating disorder as she hunted for the perfect wedding dress. She was fiercely committed to researching her sociology Ph.D. on beauty and inequality, but was overwhelmed by the pressure of having a picturesque wedding. Her values and behavior were at odds, and she knew had to do something — and quick.

Instead of becoming engulfed in a vanity obsession, she committed to a year without mirrors — and launched the blog Mirror Mirror…OFF The Wall six months before her wedding date…

For her Ph.D. research, Gruys has moved on from body image and started examining vanity size — when clothing that was once, say, a size 8, becomes a size 6 so that women feel better about themselves, she said. By analyzing Sears catalogs from the past 100 years, Gruys said she’s seen drastic changes in clothing size over time. “I think the most interesting thing I’ve found so far is simply that clothing sizes have changed so dramatically, especially for women, and in the direction of getting away from having the clothing size and clothing measurements having any relationship to each other.”

“When we think of standards we think of things that make our lives more standard and more efficient,” she said. But clothing size standards are different across every fashion firm and even across brands within a firm. “We attach so much emotion to body size, women especially and companies want us to feel good when we are trying on their clothes.”

Both projects sound interesting and studying women’s clothing sizes from a sociology of culture perspective is something I wrote about recently.

It is also intriguing to think how this PhD candidate is mixing more traditional forms of research with blogging. This particular mirrors project is not simply being undertaken by someone like AJ Jacobs, a writer who has tackled some odd activities and then written about them (my favorite: The Year of Living Biblically). Rather, this is an academic who has a background in fashion who is also researching topics in the same subfield. The blog could function as more of a personal outlet but I assume it would be informed by sociological insights. I suspect we will see more of this in the future as academics would benefit quite a bit from blog side projects that draw attention to noteworthy issues as well as highlight their research.

A final thought: what would be an equivalent project that a man could undertake?

How jobless Americans are spending their time

Some new research suggests that unemployed Americans are doing a variety of things:

One study last year found that much of the extra time gets spent sleeping and watching TV–leading to news reports that the jobless “frittered away” their time. Another analysis–this one released in January and co-written by Princeton economist Alan Krueger, who was announced Monday as the White House’s pick to serve as the chief economic adviser to President Obama–pointed in the same direction. It found that people tend to devote fewer hours to job searches the longer they’ve been unemployed, and that sleep–especially “sleep in the morning hours”–increases as joblessness goes on. Together, the studies appeared to create a picture of the unemployed as lazy and unproductive.But a sophisticated new analysis (pdf) complicates that picture. In a paper written for the National Bureau of Economic Research, Mark A. Aguiar, Erik Hurst, and Loukas Karabarbounis, using data from the American Time Use Survey, found that the jobless do spend about 30 percent of their extra time–the time they would otherwise have spent working–sleeping or watching TV, and another 20 percent on other leisure activities. But around 35 percent is spent doing unpaid but nonetheless important work, like child-care and housework. And other investments–things like education, health-care, and volunteer work –account for another 10 percent.

The notion advanced by some that jobless benefits are being used to support a life of leisure is, at best, simplistic.

But as Nancy Folbre, an economics professor at the University of Massachusetts, Amherst, notes, there’s a limit to how much useful unpaid work the jobless can do. “They lack the capital, land, tools and skills needed to flexibly shift from wage employment to production for their own use.,” she writes. “Even when they can make a partial shift, their productivity is likely to be lower in unpaid work than paid work.”

I’m a little surprised by the quote from an economist at the end: unpaid work still needs to be done by someone whether they currently have the skills for it or not. Perhaps she is referring to longer-term issues: do the unemployed go back to work (perhaps by changing fields or getting educated in new areas) or do they adjust to a life of unpaid work? In the meantime, there is a transition that has to be made. But I can imagine that some people would see this quote and wonder what this means for people who have always done unpaid work, particularly mothers.

Another way to interpret the earlier study that the unemployed enjoy a life of leisure is that this is due to feelings of restlessness and perhaps even depression.

In general, I find time use studies to be quite interesting. When you ask people general questions about how they spend their time, like how long they spend at work, the numbers can be quite inflated. The better studies require logs or diaries and ask questions about recent time periods where memories will not be as distorted. Here is how the American Time Use Study describes some of its methodology (starting at page 11 of this document):

The ATUS sample is randomized by day, with 50 percent of the sample reporting about
weekdays, Monday through Friday, and 50 percent reporting about Saturday and
Sunday. Designated persons must report about their activities on their designated day,
without any substitution of days…

The ATUS interview is a combination of structured questions and conversational
interviewing. It consists of four major topics: the household roster, the time diary, the
summary questions, and a section related to information collected in the eighth CPS
interview. The portion of the interview relating to the CPS is divided into four sections:
labor force status, looking for work, industry and occupation, and earnings and school
enrollment. These questions are used to update or confirm time-sensitive CPS data or
to fill in missing CPS data. Each section is described below in more detail…

For all parts of the interview except the collection of the time-use diary data (in
section 4, above), interviewers read scripted text on the CATI screen and enter the
reported responses.

For the time-use diary, the interviewer uses conversational interviewing rather than
asking scripted questions. This is a more flexible interviewing technique designed to
allow the respondent to report on his or her activities comfortably and accurately. This
technique also allows interviewers to use methods to guide respondents through memory lapses, to probe in a nonleading way for the level of detail required to code activities, and to redirect respondents who are providing unnecessary information. As each activity is reported, the interviewer records the verbatim responses on a new activity line. The interviewers are trained to ensure that the respondent reports
activities (and activity durations) actually done on the previous (diary) day, not
activities done on a “usual” day. Interviewers do this by placing continual emphasis on
the word “yesterday” throughout the interview.

This study relies on both a diary and asking questions about yesterday.

Predicting and preventing burglaries though statistical models in Indio, California

In January 2011, I wrote about how Santa Clara, California was going to use statistical models to predict where crime would take place and then deploy police accordingly. Another California community, Indio, is going down a similar route to reduce burglaries:

The Indio Police Department with the help of a college professor and a wealth of data and analysis is working on just that — predicting where certain burglaries will occur.The goal is to stop them from happening through effective deployment or preventative measures…

The police department began the Smart Policing Initiative a year ago with $220,617 in federal funding from the U.S. Department of Justice…

Robert Nash Parker, a professor of sociology at the University of California, Riverside and an expert on crime, is working with Indio.

On Friday, he shared his methodology for tracking truancy and burglary rates.

He used data from the police department, school district, U.S Census Bureau and probation departments, to create a model that can be used to predict such daytime burglaries.

Nash said that based on the data, truancy seems to lead to burglary hot spots.

A few issues come to mind:

1. Could criminals simply change up their patterns once they know about this program?

2. Do approaches like this simply treat the symptoms rather than the larger issues, in this case, truancy? It is a good thing to prevent crimes or arrest people quickly but what about working to limit the potential for crime in the first place?

3. I wonder how much data is required for this to work and how responsive it is to changes in the data.

4. Since this is being funded by a federal agency, can we expect larger roll-outs in the future? Think of this approach versus that of a big city like Chicago where there has been a greater emphasis on the use of cameras.

The morality of termination rights

Raustiala and Sprigman over at the New York Times Freakonomics blog take on the morality of copyright termination rights, “an obscure provision of U.S. copyright law…[that] allows songwriters and musicians to…take back from the record labels many thousands of songs they licensed 35 years ago”:

In general, if you decide to sell or perpetually license a piece of property, you can’t later take it back, no matter how much you might want to. So If I sell my house and two years later the city decides to build a lovely public park in my neighborhood, the value of my former house may rise substantially. But no one contends that I can take the house back, or that I’m due a bonus payment from the lucky buyer.  A deal is a deal.

So why the exception for copyright owners?

I have to start somewhere, so it might as well be here:  it’s disingenuous to invoke a home-sy (literally) analogy, show that it fails, and use that failure to “prove” your point.  Raustiala and Sprigman note that “in general,” residential homes are sold outright.  So what?  Equally “in general,” commercial property leases for retail outlets (e.g., stores in shopping center developments) explicitly vary rent payments based on sales (i.e., higher store sales this month/year = higher rent).  Both systems are unobjectionable, assuming one simple fact:  the parties know what kind of deal they are making at the time they make it.

Thus, Raustiala and Sprigman’s analysis falls apart right off the bat.  Termination rights are not a recent phenomenon that nobody knew anything about until a year ago.  Unlike, say, Congress’ decision to re-copyright works that had already fallen into the public domain, termination rights have clearly been a part of U.S. copyright law since 1976.  They may have been “an obscure provision” to the general public reading the Freakonomics blog, but they certainly weren’t obscure to artists and labels.  Raustiala and Sprigman’s characterization is like calling the infield fly rule “obscure”–and then implying that a bunch of MLB players should be out because they didn’t know it existed or how it worked.

They go on:

Think for a moment about the economic effect of the termination provision on the behavior of parties to copyright transactions. Because buyers can expect, on average, to make lower profits when the law contains the termination provision, they will offer less in the initial transaction. Thus, sellers will be more willing to accept less, because they know that if a work later proves valuable, they can terminate and demand some additional payment. So the most likely effect of the termination provision is to force deal prices down across the board….Put differently, the termination provision is a regressive tax.  And in that light, the “fairness” justification for the termination provision is less than overwhelming.

Even assuming this is true, the record labels’ supposed “offer [of] less in the initial transaction” has already happened–35 years ago.  Changing the rules at this point to favor the labels over artists would also seem to invoke its own set of fairness issues.  To put it mildly.

Path for sociology PhDs: official demographers

Amidst conversations that graduate programs could provide students more help in pursuing non-academic positions, I was reminded of this career path that sociologists can pursue: demography within the public sector.

Steve Murdock, the former head of the U.S. Census Bureau, will be the keynote speaker at the annual general assembly of the Golden Crescent Regional Planning Commission on Tuesday.

Murdock, now a sociology professor at Rice University, was also the first official state demographer for Texas.

He was named one of the 50 most influential Texans by Texas Business in 1997 and as one of the 25 most influential persons in Texas by Texas Monthly in 2005.

According to Murdock’s CV, he has spent much of his career in government, working at the Texas State Data Center, serving as Texas’ first state demographer, and heading the US Census Bureau in 2008 and 2009. This position also seems to have led to some notoriety. How many states have official demographers?

Between Murdock and his successor at the US Census Bureau, Robert Groves, the Census Bureau seems like a good non-academic place for sociology PhDs to land. I wonder how many current and past employees have sociology backgrounds.

More details of unethical US medical experiments in Guatemala in the 1940s

Research methods courses tend to cover the same classic examples of unethical studies. With more details emerging from a government panel, the US medical experiments undertaken in Guatemala during the 1940s could join this list.

From 1946-48, the U.S. Public Health Service and the Pan American Sanitary Bureau worked with several Guatemalan government agencies to do medical research — paid for by the U.S. government — that involved deliberately exposing people to sexually transmitted diseases…

The research came up with no useful medical information, according to some experts. It was hidden for decades but came to light last year, after a Wellesley College medical historian discovered records among the papers of Dr. John Cutler, who led the experiments…

During that time, other researchers were also using people as human guinea pigs, in some cases infecting them with illnesses. Studies weren’t as regulated then, and the planning-on-the-fly feel of Cutler’s work was not unique, some experts have noted.

But panel members concluded that the Guatemala research was bad even by the standards of the time. They compared the work to a 1943 experiment by Cutler and others in which prison inmates were infected with gonorrhea in Terre Haute, Ind. The inmates were volunteers who were told what was involved in the study and gave their consent. The Guatemalan participants — or many of them — received no such explanations and did not give informed consent, the commission said.

Ugh – a study that gives both researchers and Americans a bad name. It is also a good reminder of why we need IRBs.

While the article suggests President Obama apologized to the Guatemalan president, is anything else going to be done to try to make up for this? I also wonder how this is viewed in Central America: yet more details about the intrusiveness of Americans over the last century?

(See my original post on this here.)

Measuring colleges by their service to community and country

Many publications want to get into the college rankings business and Washington Monthly released their own take today. The difference? They emphasize how the college gives back to society:

The Monthly’s list aims to be a corrective to the annual ranking of colleges published by U.S. News World & Report–the industry-standard roster that typically leads with well-endowed Ivy League schools that turn away the vast majority of applicants.

Instead, the Monthly ranks schools using three main categories: how many low-income students the college enrolls, how much community and national service a given college’s students engage in, and the volume of groundbreaking research the university produces (in part measured by how many undergraduates go on to get PhDs). To paraphrase the long-ago dictum of President John F. Kennedy, the Monthly is seeking, in essence, to ask not so much what colleges can to for themselves as what they can be doing for their country.

By that measure, only one Ivy cracked the top 10–Harvard. The University of California system dominated, with six of California state schools among the top 30 national universities. Texas A&M, which is ranked 63rd by U.S. News, shot into the top 20 in part because of how many of its students participate in ROTC. Meanwhile, Washington University in St. Louis plunged in these rankings to 112 from U.S. News’ 13, because only 6 percent of its student body qualifies for federal Pell grants, an indication that Washington’s students come almost entirely from upper- and middle-class backgrounds.

The U.S. News & World Report “relies on crude and easily manipulated measures of wealth, exclusivity, and prestige for its rankings,” Washington Monthly editor Paul Glastris wrote. The U.S. News’ rankings take into account freshmen retention rate, admissions’ selectivity, high school counselors’ opinions of the school, faculty salary, per-pupil spending and the rate of alumni giving, among other things.

While the editor suggests these new rankings are not as influenced by status and wealth, I wonder if the measures really get away from these entirely. It takes resources to enroll low-income students, provide resources ground-breaking research, and perhaps extra time for students to be able to be engaged in community and national service. On the other hand, colleges make decisions about how to spend their money and could choose to put their resources into these particular areas.

I’m sure there will be questions about methodology: how did they measure impactful research? How much should ROTC count for and how did they measure community engagement?

New rankings also give more schools an opportunity to claim that they are at the top. For example, Northwestern College in Iowa now trumpets on their main page that “Washington Monthly ranks NWC third in the nation.” Read past the headline and you find that it is third within baccalaureate colleges. On the other side, will schools like Washington University in St. Louis even acknowledge these new rankings since they don’t look so good?