Category Archives: Sociology

Comparing the overall diversity of cities versus neighborhood diversity within cities

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Nate Silver looks at how large cities can be diverse overall but still have high levels of residential segregation:

This is what the final metric, the integration-segregation index, gets at. It’s defined by the relationship between citywide and neighborhood diversity scores. If we graph the 100 most populous cities on a scatterplot, they look like this:

silver-segregation-scatter

The integration-segregation index is determined by how far above or below a city is from the regression line. Cities below the line are especially segregated. Chicago, which has a -19 score, is the most segregated city in the country. It’s followed by Atlanta, Milwaukee, Philadelphia, St. Louis, Washington and Baltimore.

Cities above the red line have positive scores, which mean they’re comparatively well-integrated. Sacramento’s score is a +10, for instance.

But here’s the awful thing about that red line. It grades cities on a curve. It does so because there aren’t a lot of American cities that meet the ideal of being both diverse and integrated. There are more Baltimores than Sacramentos.

Furthermore, most of the exceptions are cities like Sacramento that have large Hispanic or Asian populations. Cities with substantial black populations tend to be highly segregated. Of the top 100 U.S. cities by population, 35 are at least one-quarter black, and only 6 of those cities have positive integration scores.

So perhaps the Chicago School was correct: it is really neighborhoods that matter, even within cities with millions of people. This is what an interesting recent map of Detroit showed where there are clearly clusters of the city that have traditional neighborhoods while other parts are more vacant urban prairies. The sociological literature on poor neighborhoods that emerged starting in the 1970s gets at a similar concept: there are unique conditions and processes at work in such neighborhoods. And, Silver’s analysis confirms sociological research on residential segregation that for decades (perhaps highlights most memorably in American Apartheid) has argued that black-white residential segregation is in a league of its own.

Based on this kind of analysis, should sociologists only use city-wide or region-wide measures of segregation in conjunction with measures or methods that account for neighborhoods?

Traditional neighborhoods vs. urban prairies: block by block in Detroit

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National Geographic has quite a map showing Detroit with each block coded to be more or less less a traditional neighborhood or an urban prairie/naturescape. Here is the map:

DetroitBlockbyBlockNeighborhoodorPrairie2015NatlGeo

The map clearly shows clusters of both kinds of places, which contradicts the idea (reinforced by numerous stories and images) of recent years of a monolithic empty Detroit. As the text at the bottom left notes, “Many neighborhoods along Detroit’s perimeter are as densely populated as the city’s wealthier suburbs.” So it isn’t that all of Detroit needs fixing; neighborhoods that suffered from similar issues including deindustrialization, the loss of white residents, the lack of capital both for businesses and residents/homeowners, and crime do need the attention.

Record 5 homes over $100 million sold in the world last year. Is this really a trend?

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The luxury housing market is booming and a new record was set last year for sales of $100 million+ homes:

Demand for mega-mansions and penthouses has accelerated as wealthy buyers seek havens for their cash and search for alternative investments such as art and collectible real estate, according to a report Thursday by Christie’s International Real Estate, owned by auction house Christie’s. Five homes sold for more than $100 million last year, with at least 20 more on the market with nine-figure asking prices, the brokerage said…

Just one home sale exceeded the $100 million mark in 2013, following four such transactions in 2012 and three in 2011, Christie’s reported.

While I have seen other corroborating evidence that this segment of the market is indeed doing well, how much of a trend or record is this went the number of transactions throughout the world increased to five? Here is the trend from the last four years: 3, 4, 1, 5. So if 2014 was a record year, was 2013 a big plunge in the market? The number of cases is so small and the timeline is so short that it is difficult to draw any substantial conclusions. Yet, suggesting a record occurred makes for a better headline or story…

How big investors buying up properties may be limiting cheaper housing

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The economic crisis opened up space for bigger housing investors yet here is one argument about how their actions may be limiting the supply of cheaper housing:

A recent article in the Wall Street Journal highlighted how some investors are using algorithms to quickly parse housing data and formulate bids on undervalued properties, site unseen. While doing so is a cool technological feat, it can spell trouble for normal people trying to navigate the often complex home-buying process in order to make offers on similar homes. And algorithms aren’t the only benefit that more sophisticated investors have. “Investors are winning over the first-time buyers in some bidding processes because investors are all cash,” says Lawrence Yun, a chief economist at the National Association of Realtors. For a seller that means a smoother deal: no waiting around on financing, loan approvals or other inconveniences that traditional buyers bring to the table.

For their part, some investors contend that the homes they purchase don’t put them in direct competition with first-time buyers. Invitation Homes, an investing and leasing company owned by Blackstone says that they typically funnel another 10 to 12 percent of the purchase price into renovations in order to make a property market-ready—an investment that most first-time home buyers wouldn’t be able to afford. Many investors also contend that compared to the number of homes that are bought and sold nationwide, their activity is just a drop in the bucket.

When looking at the big picture, that’s true. Nationwide, large institutional investors made up only 4.3 percent of the single-family home purchases in the market during 2014, according to RealtyTrac a real-estate data firm. And overall investment activity is dwindling as home values return to normal and there are fewer deals to be had. Dallas Tanner, the chief investment officer at Invitation Homes says that the group currently buys about $25 to $30 million a week of single-family properties, that’s down from their 2012-2013 peak when the group spent upward of $160 million each week.

But like all things in real estate, it’s also a matter of location. Lots of investor activity is concentrated in markets where homes are still available at reasonable enough prices that purchasers can turn a profit. According to a February 2015 report from RealtyTrac, “There were 35 zip codes nationwide where at least 50 single-family homes were purchased by institutional investors in the fourth quarter, with institutional investor purchases representing from 17 percent to 74 percent of all single-family home sales in those zip codes.” Places like: Atlanta, Phoenix, Las Vegas, and Memphis. Those are also places that first-time buyers have the best bet of stretching their dollar far enough to purchase a home. Herbert, of the JCHS, says that that in some places, developers may in fact be pushing out normal home buyers, “For certain property segments, they may be creating competition.”

Even as the higher end of the housing market does well (see recent evidence here, here, and here), any impediment on the lower end of the market isn’t helping these days. With developers not showing much interest in building starter homes, these institutional investors may be grabbing up homes that those who want to join the housing market – whether recent college graduates or those working lower-income jobs – would need to get their foot in the door.

So if Americans – from politicians to average citizens – want to push homeownership, are these institutional investors good for this in the long run?

Wealthier communities with no fire hydrants require different firefighting tactics

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A recent house fire in a large Barrington Hills home illustrates the issues present in fighting fires in wealthier suburbs:

In all, 40 fire companies from departments as far away as Hebron, Des Plaines, Hanover Park and West Chicago converged on Barrington Hills April 18 to blast the fire with hundreds of thousands of gallons of water. But instead of hooking their hoses to nearby hydrants, all of that water had to be brought in from elsewhere in trucks, ratcheting up the degree of difficulty for firefighters.

“Having to bring water in on wheels is time-consuming,” said Deputy Chief Rich May of the Palatine Rural Fire Protection District. “The planning behind it is done quite well, but you can’t move it like tapping into a fire hydrant. There’s just no comparison.”…

“Years ago we had a lot of natural-based materials in houses,” he said. “Nowadays, with all of the synthetic products in the homes, such as plastics, they burn hotter and burn faster.”

That means houses burn hotter and collapse sooner, Giordano added…

Given the village’s lack of water system and regulations requiring minimum lot sizes of 5 acres, it’s not likely Barrington Hills residents will see hydrants near their homes anytime soon. However, fire officials said there are some steps homeowners can take to help make firefighters’ jobs easier.

In other words, the wealthier nature of the community led to a lack of fire hydrants. This is a bit odd because homeowners here could probably afford the costs of a full water system but would not have wanted to pay the costs for it which were exacerbated by the large lot sizes. Yet, when they need to put out a fire, doesn’t this lack of paying upfront for the water system lead to financial consequences down the road? One of the suggestions in this article – sprinklers within each home – would help keep homeowners more responsible for fighting fires in homes built in such settings.

See earlier posts about the unique challenges of fighting fires in large homes or McMansions.

“Urban clusters” = a small town outside of an urban area

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In looking at Census definitions for urban areas, I found this definition for what many Americans would consider small towns:

For the 2010 Census, an urban area will comprise a densely settled core of census tracts and/or census blocks that meet minimum population density requirements, along with adjacent territory containing non-residential urban land uses as well as territory with low population density included to link outlying densely settled territory with the densely settled core.  To qualify as an urban area, the territory identified according to criteria must encompass at least 2,500 people, at least 1,500 of which reside outside institutional group quarters.  The Census Bureau identifies two types of urban areas:

  • Urbanized Areas (UAs) of 50,000 or more people;
  • Urban Clusters (UCs) of at least 2,500 and less than 50,000 people.

“Rural” encompasses all population, housing, and territory not included within an urban area.

From a certain perspective, this all makes sense. When we think of cities, we think of places with larger populations and the Census sets this boundary at 50,000 people. At the same time, “urban clusters” doesn’t quite have the same ring to it as “urban areas.”

An additional complication in all of this is that Americans might legitimately see themselves as small town residents within an urban area. For example, the Chicago region may have over nine million residents but more than two-thirds live outside of the city and many live in communities under 60,000 people. The cultural attachment is “small town” is important: it often implies a tighter-knit community, a certain quality of life (particularly avoiding big city problems), and smaller units of government that are more responsive to local residents.

My recommendations would be:

1. Find a replacement term for “urban cluster” that is more palatable.

2. We need a better way to differentiate between small town feel and actual small towns. Leaders in Naperville often claim it has features of a small town even with a population of over 140,000.

“Megacities Might Not Save the Planet After All”

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One researcher suggests not all megacities are as efficient as they might be:

It turns out that while density equals efficiency, “megacity” does not necessarily equal density. Many megacity dwellers live outside those hyper-efficient city centers, Kennedy explains. Look at New York—if you live in Manhattan or parts of Brooklyn and Queens, you’re probably getting around on the subway. But if you live in Westchester, New Haven, or Newark? You’re probably driving your car—maybe not into the city center, but around it. And there are a lot of you. That’s why New York is almost off the chart in its consumption of transportation fuel, despite all its great rail.

Mega_Cities3

But not all megacities consume as many resources as New York. Look at the ones clustered at the bottom end of transportation energy use: Mumbai. Karachi. Lagos. Cairo. Delhi. These are also some of the cities that use the least amount of electricity per capita. Unfortunately that’s not because their electrical grids are super-efficient. It’s because not everyone living there has electricity. “There’s huge disparities between the amount of resources being used between the wealthiest megacities and the poorest ones,” Kennedy says. In the latter, the resource inputs aren’t enough to support a basic standard of living for all citizens…

So while developed-world megacities should consider reining in their gasoline and electricity use—or expanding center-city style efficient infrastructure to the ’burbs—growth (combined with smart policy) may be the answer to developing-world megacities’ woes. Which is good, because if one thing’s for sure it’s that megacities are growing, and they’re not going to stop.

So the issue may not really be density but a higher order issue of social class. In other words, efficiency is the result of different processes depending on the wealth and development of particular cities and countries. In wealthier countries, individuals have the resources to spread out and can afford to consume too much. On the other hand, poor countries have big cities with lots of residents who can’t afford to consume what they need.

New gadgets, apps want more location data from users

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Location data is valuable and more new gadgets make use of the information:

Location-tracking lets developers build fast, useful, personalized apps. They’re enticing, but they come with tradeoffs: your gadgets and apps maintain a log of where you’ve been and what you’re doing, and more of them than you think are sharing that data with others.

It’s going to advertisers, mostly, so they can lure you into the Starbucks a block away or the merch tent at Coachella. It’s as creepy as any other targeted marketing, but most of us have come to accept that it comes with the territory. Jennifer Lynch, a senior staff attorney at the Electronic Frontier Foundation, says it goes deeper. Your data might get sold to your credit reporting agency, which wants to know more about you as it determines your credit score. It might go to your insurance company, which is very interested in your whereabouts. It might be subpoenaed by the government, for just about any reason. Maybe none of that is happening. Maybe all of it is. There’s really no way for us to know…

Your phone’s ability to pinpoint your exact location and use that info to deliver services—a meal, a ride, a tip, a coupon—is reason for excitement. But this world of always-on GPS raises questions about what happens to our data. How much privacy are we willing to surrender? What can these services learn about our activities? What keeps detailed maps of our lives from being sold to the highest bidder? These have been issues as long as we’ve had cellphones, but they are more pressing than ever.

Another major trade-off that I suspect most users will make without much fuss in the coming years. The cynical take on the advantages for the user is that this is primarily about customizable marketing that can account for both your individual traits and where exactly you are. In other words, sharing location data will give consumers new opportunities. More consumerism! On the flip side, it is less clear how or when location data might be used against you. But, when it is, it probably won’t be good.

The broader issue here is whether people should have geographical freedom that is not known to others. This is increasingly difficult in today’s world even as we would celebrate the mobility Americans have within their own communities, country, and to travel throughout the world.

Chief economist for Zillow says “homeownership is not for everyone”

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The chief economist for Zillow suggests we need alternatives to homeownership for low-income American residents:

All this leaves us with a conundrum: Overall, homeownership is a tremendous boost to millions. But in some specific cases, it simply does not deliver as advertised. Depending on circumstances, homeownership is not for everyone. And our steadfast belief that homeownership is always the better option has led us to worry less about the one-third of Americans that rent,leading to a crisis in affordable rental housing.

Please don’t get me wrong. None of this is to say that lower-income Americans should not aspire to homeownership, nor be given opportunities to access its tremendous benefits. But we also need to be steely-eyed about the realities and foster a wider diversity of options on housing, crafting innovative solutions that address the reality we face, not the one we imagine.

If we truly believed this, we could do different things. We could focus on the creation and maintenance of more affordable rental housing. We could find innovative new ways to build wealth, aside from homeownership. Given the prevalence of single-family rentals in the aftermath of the recession, we could explore the feasibility of renting-to-own on a wider scale. We could narrow and sharpen our focus on addressing the fundamental sources of inequality that drive differences in homeownership in the first place.

Yet, even with the strong negative effects of the recent economic crisis/housing bubble, I wonder if it is easier to promote homeownership than it is to advance other policies. Here are several reasons why this might be the case:

1. Americans really do seem to prize homeownership. Homeownership is closely tied to the American Dream, making this issue both politically and culturally important. As far as I know, every president since the 1920s has promoted homeownership. Suggesting that everyone can’t access the American Dream can be problematic.

2. Renting may be a good short-term solution but because of the status conferred to homeowners, renters receive the opposite sentiments: transient, less committed to their community, more prone to social problems, etc. Plus, how many wealthier residents want to live near cheaper rental housing?

3. Speaking of cheaper housing, affordable housing is a very contentious issue. Where will these units be built? Wealthier neighborhoods and communities want little to do with affordable housing. Which developers will go this route rather than chasing bigger profits with larger and more expensive housing units?

4. Getting at the fundamental issues behind the the differences in homeownership is a huge task. Which shall we tackle first – Race? Social class? Residential segregation? Large disparities in wealth? Unequal access to resources?

Perhaps the price to be paid in housing bubbles is more palatable to those in charge than the other options…

Ferguson doesn’t get much revenue from the Fortune 500 companies in town

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Many suburban communities give tax breaks to corporations so that they locate in their community. Ferguson, Missouri is one such case where Emerson Electronics and other businesses don’t pay as much as they might in local taxes:

In 2014, the assessed valuation of real and personal property on Emerson’s entire 152-acre, seven-building campus was roughly $15 million. That value has gone up and down over the last five years as Emerson has sold off some buildings and built others, but it has not exceeded $15 million in the period since the data center was completed. So what happened to that brand-new $50 million dollar building?…

For tax purposes, Emerson’s Ferguson campus is appraised according to its “fair market value.” That means a $50 million dollar solar-powered data center is only worth what another firm would be willing to pay for it. “Our location in Ferguson affects the fair market value of the entire campus,” Polzin explained. By this reasoning, the condition of West Florissant Avenue explains the low valuation of the company’s headquarters.In fact, the opposite is true: The rock-bottom assessment value of the Ferguson campus helps ensure that West Florissant Avenue remains in its current condition, year after year. It severely limits the tax money Emerson contributes to the Ferguson-Florissant district’s struggling schools (Michael Brown graduated from nearby Normandy High School, a nearly 100 percent African American school that has been operating without state accreditation for the last two years), and to the government of St. Louis County more generally. On the 25 parcels Emerson owns all around St. Louis County, it pays the county $1.3m in property taxes. Ferguson itself receives far less. Even after a 2013 property tax increase (from $0.65 to the state-maximum $1 per $100 of assessed value), Ferguson received an estimated $68,000 in property taxes from the corporate headquarters that occupies 152 acres of its tax base—not even enough to pay the municipal judge and his clerk to hand out the fines and sign the arrest warrants.

St. Louis County doesn’t just assess Emerson a low market value. It then divides that number in three—so its final property value, for tax purposes, ends up being one third of its already low appraised value. In some states, Ferguson would be able to offset this write-down by raising its own percentage tax rate. Voters would even be able to decide which services needed the most help and raise property taxes for specific reasons. But Missouri sets a limit for such levies: $1 per $100 of property. As Joseph Pulitzer wrote of St. Louis during the first Gilded Age, “millions and millions of property in this city escape all taxation.”…

Emerson Electric isn’t the only business on Ferguson’s West Florissant Avenue. The street is also home to a number of big box stores including a Home Depot, a Walmart, and a Sam’s Club, located at the city’s northern limit. These companies all came to town in 1997 through something called tax increment financing—known (to the extent it’s known at all) by the acronym TIF. Along with low appraisals and tax abatements, TIF districts are one of Missouri’s principal tools for encouraging new development.

The conclusion here is that these tax policies reproduce the economic inequalities in Ferguson. Hence, the community has to find alternative sources of revenue, such as targeting motorists.

Here is where this gets trickier: if Ferguson didn’t offer these deals, could it have attracted these businesses? If many suburbs participate in the game of tax breaks, wouldn’t someone else offer good tax breaks? Where race matters here is that communities like Ferguson – lower income, transitioning from white to black over recent decades – have to offer even better tax breaks to compete. But, for all of these communities, it is a race to the bottom as a better deal to attract a corporation means less revenue for the city. Still, local politicians can sell the jobs created or the prestige generated. But, as this article points out, the jobs and prestige may not help much in the long run.

What you might need here is a metropolitan wide policy against such tax breaks or TIF districts to reduce the competition. Or, perhaps some tax revenue sharing program where sales tax and property tax dollars are partly redistributed to reflect who shops at or works at these facilities (they all don’t come from the community in which the firm is located). Yet, such policies require a lot of political will and again encounter the problem of race as communities, especially wealthier ones, will not want to share their revenues with others.