The growing $100+ million in debt for the most expensive home in Los Angeles

Posted on by

Subprime lending helped bring about the housing crisis of the late 2000s but it is also utilized by very wealthy actors, such as in the case of a home valued in the hundreds of millions:

Photo by Pixabay on Pexels.com

The first loan, which a source close to the project said also refinanced existing bank debt, was $82.5 million with a minimum interest rate of 11%. It included an agreement that should the house sell for more than $200 million, Hankey would get $3.5 million of the sale.

Niami came back a little over a year later and borrowed an additional $8.5 million at the same rate, paying a loan fee of $82,500. He also agreed to more onerous terms: giving Hankey a percentage of the profits if the house sold for $100 million to $200 million.

Two months before the loans were due, Niami came back for a third helping, and got an additional $15 million at the same interest rate. There were no changes to the profit-sharing arrangement, but this time the developer had to cough up a $1-million application fee.

The total: a whopping $106 million that Crestlloyd defaulted on when it all came due on Oct. 31, 2020 — and it’s growing with interest and penalties. But Hankey is not the only lender owed by Crestlloyd, according to a title report provided by the receiver.

There is a lot of money wrapped up in this house and it is unclear whether those involved will get what they hoped for. Almost regardless of what happens in the short-term, this house will live on in future memories because of its price-tag and location. Will it end up being a cautionary tale/disaster or an eventual success in a land of mega-mansions and wealthy residents?

Because this is one of the most expensive properties around, would the fallout from the subprime lending receive more attention or less attention compared to the consequences of subprime loans in the late 2000s? How long would it take to sort out debt and payments in court? While there are wealthy actors involved, a lot of money could be lost and even the wealthiest would feel a loss of $50-100 million on a single house.

Chicago starts new round of advertising battle with Texas

Posted on by

Chicago and Illinois have been part of advertising campaigns from other states – Texas, Florida, and Wisconsin – in recent years. Several weeks ago, a Chicago group countered with a full page ad in the Dallas Morning News:

World Business Chicago, the city’s public-private economic development arm, purchased the print ad, which opens with “Dear Texas” before jumping into reasons companies should consider moving north. It cites the Midwest city’s startup ecosystem, attraction of tech and engineering graduates and a top-ranked logistics and transportation sector as strengths.

Then it hones in on what it perceives as Texas’ new weakness.

“In Chicago, we believe in every person’s right to vote, protecting reproductive rights and science to fight COVID-19,″ the ad states.

“We believe that the values of the city you are doing business in matters more than ever before,” World Business Chicago CEO Michael Fassnacht told Bloomberg News Friday.

So goes on the ongoing battle between different cities and states in the United States with sizable differences. Certain locations stand out as outliers for the two sides; places like California, New York City, and Chicago for liberals and Texas, Florida, and other Southern locations for conservatives. Certain places do have sizable differences in culture and character but are they as easy to reduce to stereotype as their opponents often do? Many Americans live in more in between spaces – such as suburbs – compared to the ideal type locations often discussed.

The real question in all of this is whether such marketing campaigns work. Would a business or resident in Texas or Dallas see this ad and then make a move to Chicago? What factors prompt people and organizations to move? Multiple features of Chicago mentioned in the article could matter: human capital, a central location, a particular culture, certain regulations. Texas’ new abortion restrictions seem to have fired up many and some companies have announced plans to help their employees in Texas. At the same time, moving is not an easy task. Texas, like most places, has its own appealing factors.

Ultimately, is such marketing more about dunking on the opponent? I would be interested in checking back in with World Business Chicago to see how the advertising worked out.

Is American unity only possible when confronting a common threat? Thoughts on reading about the Revolutionary War

Posted on by

After completing the second of two long academic books on the Revolutionary War period and teaching about groups, organizations, and social networks recently in Introduction to Sociology, I had a thought about what can bring residents of the United States together: a common outside threat or enemy. For many groups, knowing what or who they are against is helpful in forging their own identity and connections.

Photo by Sawyer Sutton on Pexels.com

Before, during, and after the American War of Independence, the colonists on the Eastern seaboard of the United States banded together to register complaints, revolt, fight, and then form a new country. This was no easy task; different groups had immigrated to the United States, ties to particular colonies were often stronger than any sense of common cause, and regional differences mattered. During the war, not all residents in the United States supported the colonial side and a good number fought for the British. After the war, it took significant effort to develop a centralized government that could tie all of the colonies together. Ultimately, the war against Britain led to enough collective effort to form a new nation.

Arguably, these patterns have continued throughout American history. There are moments when Americans are united. After Pearl Harbor, the country was devoted to the war effort. The quest to take over the frontier from the Appalachians westward required the efforts of many. The Cold War was fairly all-encompassing. For a short period after 9/11, Americans came together.

But, the opposite tendency is also very present as well. The long presence of slavery that culminated in a bloody Civil War and insufficient efforts to address the ongoing issues afterward. Acrimonious political divides. Different actors looking out more for their own interests rather than the common good. The polarization and outrage of today.

If today the United States is in a period marked by more disunity than unity, is there a common threat that could again bring people together? Hopefully, a war is not required. There might be no shortage of suggestions from different sides about what should be unifying: fighting racism and inequality, climate change, individual freedom, reproductive rights, a commitment to capitalism, to welcome immigrants or not, religious liberty, fighting diseases, the surveillance state, and so on. Such unity has happened before and it could happen again in ways that might be difficult to foresee in the moment.

(Related earlier post: the relatively few things 90% of Americans agree on.)

Divine Programming and watching two seasons of a critically acclaimed TV show that treats religion seriously

Posted on by

This summer I read the book Divine Programming: Negotiating Christianity in American Dramatic Television Production 1996-2016. Charlotte Howell argues that television often utilizes two techniques when portraying Christian faith: keeping it at a critical distance or depicting it a cultural feature of Southern life. However, not all television shows do this. One critically-acclaimed show Howell highlighted, Rectify, sounded interesting.

Photo by Nicola Barts on Pexels.com

I have now watched the first two seasons of the show. And it is indeed interesting to see how religion in incorporated as part of the plot. The main character in the drama, a man who has been released from death row even as law enforcement and legal actors are interested in putting him back in prison, finds religion in the middle of the opening season. He has a conversion and a baptism. He is attracted to this faith through the example of his sister-in-law who attends church regularly, encourages her husband to be more faithful, attends a small group, and has a gentle spirit.

Yet, at least through two seasons, the reassurances faith provides have difficulty matching up the problems the characters face. The released prisoner finds that his conversion is perhaps less important to his thriving than interacting with his sister-in-law. The sister-in-law confronts new problems and her faith no longer provides all the answers. The other main characters do not seem to interact with faith much at all and their own self-interest and hurt drives their decisions. Outside of several individual characters engaging religion (a common approach in American religiosity) , it is not present for the other characters or the community.

The faith of this show is not simple or does not always provide an answer or does not even matter to many of them. The characters have religious highs and lows and wrestle with how faith matters in real situations. The faith on the show is not front and center in the way it is in Seventh Heaven (also a case study in Howell’s book) nor is it derided or just a cultural artifact.

At the same time, it is clear that faith or religion is not driving the plot: human desires are. I will keep watching and see whether this is ultimately commentary about the ability or inability for religious faith to intercede in human affairs.

Taking extra time to make a decision in Itasca on controversial proposal

Posted on by

I have followed the proposal to convert a suburban hotel to a treatment center from an earlier iteration in Wheaton, a march against the proposal in Itasca, and the ongoing discussion. The process is still ongoing and the final vote was recently delayed:

Photo by cottonbro on Pexels.com

Itasca’s plan commission on Wednesday unanimously agreed to recommend the village board deny Haymarket’s proposal. The Chicago-based nonprofit group is seeking permission to convert a former hotel along Irving Park Road into a 240-bed facility for adult patients with drug and alcohol use disorders.

The final decision rests with the village board. But trustees don’t want to rush their decision.

On Thursday, Mayor Jeff Pruyn said the village board plans to have at least two special meetings beginning in the middle of October. The first would allow public comment about the proposal. Haymarket representatives would make their case before the village board during the second.

As a result, the village board will not vote on the proposal until late October or early November.

Making a hasty decision may be in no one’s best interest. Particularly given the controversy surrounding the proposal, making sure everyone has a chance to voice their opinion and the board has all the time to make up their mind seems reasonable.

At the same time, what would change between now and then that would have a big effect on how the board members are viewing the situation? The proposal has been under discussion from some time and community members have made their voices heard.

This is not an easy decision for a smaller community to make. There could be consequences for life in the community and future development. Either way, some people will be upset. The village board decision will either agree with the plan commission or go the other direction (and the board is able to choose either option).

Yet, a decision needs to be made. I will be interested to see what happens: how will Itasca respond? Will Haymarket look for another suburban location? More broadly, what suburban communities might welcome land uses like these that are needed in metropolitan regions?

Preserving an important Chinese American church building constructed in 1968

Posted on by

Here is a discussions of whether to preserve an important church building in Queens, New York:

Photo by Brett Sayles on Pexels.com

Classis Hudson, the regional governing body of the CRCNA, will vote on Tuesday on whether to authorize an interim committee to figure out the future of the congregation. The Queens church officially has only 27 members, according to the denomination’s website, and no full-time CRC pastor. The church’s founder, Paul C. H. Szto, led the church until he died in 2019 at the age of 95…

The Queens church raised its own funds to build a church building next door in 1968. It is believed to be among the first—if not the very first—Chinese congregation to build its own church building in the US. With the church building in place, and a new wave of Chinese and Taiwanese immigrants pouring into the country, the Queens CRC became a waystation for Chinese American Christians and a center for Reformed thought in the Chinese American community…

Pastor Szto, who had studied under the Dutch Calvinist philosopher Cornelius Van Til at Westminster Theological Seminary and under Christian existentialist Paul Tillich at Union Theological Seminary, turned the space into a lecture hall, seminar room, and theological library with more than 18,000 books. According to The Banner, an official CRCNA publication, Szto and his wife housed and hosted more than 2,000 students, immigrants, and refugees in his home…

Mary Szto would like to see the parsonage become a museum and cultural center to carry on that legacy and tell the story of her father’s life’s work and the history of Chinese American Christianity in New York City. She notes that Chinese American church history tracks closely with real estate laws and business ownership restrictions that limited where Chinese families could buy property until the Immigration and Nationality Act of 1965.

At this point, it sounds like the fate of the building is still under conversation among particular involved actors. Not all congregations last forever and making decisions about what to do with their buildings can be difficult.

More broadly, there are many church buildings in the United States that are no longer used by a congregation. Some older structures find new life as a home for a different congregation and others are converted to new uses. In places where there is demand for land, such as in New York City, the end of a religious congregation may present an opportunity for a new owner to raze the building and construct something else. Some argue more religious buildings should be preserved as they are important parts of community life.

Additionally, Queens is an important site for religious activity, particularly in the post-1965 era when immigrants arrived in the community in larger numbers. For more, see the work of historian R. Scott Hanson on religious pluralism in Flushing, Queens.

I am struck in this case by the relatively recent construction of the church building. Historic preservation conversations about churches can often consider much older structures. This building is just over 50 years old but it is also socially significant. The church building in an alternative form – museum and cultural center – could serve as a reminder of the efforts of the religious congregation that once gathered there as well as its impacts.

Why large communities just for 55+ residents may not be a good thing

Posted on by

One researcher suggests the development of 55+ only communities limits opportunities for the residents and the communities:

Photo by Kindel Media on Pexels.com

Del Webb of Sun City fame recognized that, rather than rocking away their “golden years” in the northern cold, older adults could be convinced to pull up roots, leave empty nests and move to communities of similar people and lives of leisure. A radio jingle promoting this new model of living sang out: “Don’t let retirement get you down! Be happy in Sun City, it’s a paradise town.”

But is a town without the sounds of children and a diversity of races and styles really a paradise?

A growing number of older adults say no, recognizing that living with neighbors of all ages and from all walks of life just makes sense. They realize that intergenerational connections are not just valuable for them but for their communities and country.

They recognize that ageism will not be defeated by a retreat to age-segregated corners, but only by engagement, collaboration and dialogue across age, race and class divides. They believe that there is more to graying than playing.

I wonder how housing and community organized by age fits with ongoing and persistent processes of residential sorting by race/ethnicity and social class in the United States. Looking at the Census QuickFacts for The Villages, Florida shows the community is almost 97% white and the poverty rate is 4.6%. Since wealth in the United States is related to race and ethnicity, how racially segregated are 55+ communities?

This commentary also hints at a broader issue in the United States: why is aging treated as it is? Why aren’t older adults seen as resources rather than liabilities? Why aren’t intergenerational relationships and communities celebrated more? These communities might be considered the physical embodiment of particular cultural values in the United States.

A growing number of US suburbs contain a majority of renters

Posted on by

A new analysis suggests the number of suburbs with a majority of renters is increasing:

Photo by Marlene Leppu00e4nen on Pexels.com

Renters now make up the majority of residents in more than 100 suburbs around the U.S., according to a new analysis of Census Bureau data from Rent Cafe. Another 57 suburbs are on their way to becoming predominately renter territory over the next five years, the apartment search website also found…

Overall, roughly a quarter of the more than 1,100 suburbs near the nation’s 50 largest metro areas are renter-dominated, according to Rent Cafe. Some 21 million people rented their homes in the suburbs as of 2019, up from 17 million a decade ago.

Millennials and members of Generation Z account for most suburban renters, Census data show. Rent Cafe notes that 55% of suburban renters are younger than 45, with median household earnings of around $50,000.

Meanwhile, the pandemic is expected to further fuel the shift away from suburban homeownership in favor of renting. Remote work opportunities have generated more interest in suburban areas within striking distance of cities.

If this is indeed the case, it would be interesting to know if these suburbs share characteristics. Do they tend to be close to the city or further out? Do they have particular hosing stocks compared to other suburbs? Are middle-class and up suburbs still devoted to residents owning single-family homes as a status marker?

My guess is that a majority of suburban residents would still say that they desire to home at some point. But, if more suburbanites are now renters, is the pathway to homeownership in their own community or other suburbs much more restrictive? This is part of the larger affordable housing conversation; people need any decent housing to live in but because many Americans aspire to own a home, having affordable ownership options is important as well.

An interesting middle path in some communities could be having significant numbers of single-family homes with long-term renters. The appearance and status of homes is maintained while renting adjusting for current conditions. On the other hand, many have argued that renters do not care for their properties or communities in the same way and communities may not like this trend.

The United States does not produce new big cities; it produces more edge cities, boomburbs, and suburbs

Posted on by

Two recent posts – a plan for a new multi-million person American city and the fastest-growing American communities are all suburbs – plus the construction of many new cities around the world led to this idea: the United States produces far more suburbs than big cities.

This was not always the case. The urbanization of the United States was quite rapid and gave rise to numerous big cities by the mid-twentieth century. In the early 1900s, the United States was less than 30% urban and less than one hundred years later was 80% urban. See this table from a 2002 US Census publication:

Before this, certain cities boomed. Chicago went from a small community in the 1830s to the second largest city in the United States in 1890. Numerous Sunbelt cities exploded in population, whether Atlanta or Phoenix or Las Vegas.

But, the United States now has relatively few new big cities. For decades, numerous small suburbs have truly expanded. One of the most noteworthy, thank to journalist Joel Garreau’s work Edge Cities, is Tysons Corner, Virginia. Once a rural intersection, the construction of a shopping mall and the arrival of thousands of square feet or retail and office space created a new kind of suburban community: one dominated by business rather than residents. While Tysons Corner has plans for additional residential units, it is a convergence of business and office activity at the intersections of several major roads outside Washington, D.C. Instead of new big cities, Americans get office parks and retail in the suburbs that rivals that of smaller big cities.

Another alternative to new big cities are suburbs that boom in population. I have detailed the population growth of Naperville, Illinois which grew from roughly 12,000 residents in 1960 to nearly 150,000 today. Boomburbs, analyzed by Robert Lang and Jennifer LeFurgy, are suburbs with multiple consecutive decades of double-digit growth. Some of these suburbs have grown to multiple hundreds of thousands of residents, including places like Henderson, Nevada or Mesa, Arizona. While some of these suburbs now have populations rivaling smaller big cities, they are more suburban in nature with sprawling landscapes and dependence on cars.

More broadly, where other places around the world have focused some development attention and resources on new cities, the United States has continued to fund and pursue suburbs. There are multiple reasons Americans love suburbs – I highlight the top seven – but this is still an interesting choice given how new cities might have non-linear benefits in certain areas that could help people and the country meet new challenges.

The ten fastest growing American communities are all suburbs, all in South or West

Posted on by

Growth in the United States continues to occur in suburbs in two regions of the country:

Photo by Ingo Joseph on Pexels.com

The 2020 Census listed Meridian as one of the 10 fastest-growing large cities in the country. All the cities on the list grew at rates of more than 44 percent. They are all in the South and the West. And they are all suburbs…

Meridian and the nine other cities represent a trend, according to U.S. Census Bureau officials. As the country’s biggest cities grow and become increasingly unaffordable to many, their suburbs have ballooned, taking on their own identities…

The Phoenix and Dallas-Fort Worth metro areas have had suburbs on this list every decade, he said. “Sizable amounts of empty land for construction of housing” encourages this population growth, and that land is more commonly available in the West and South. Now, people are often going farther and farther from city centers to search for empty lots, especially in cities that have been growing for the past half-century, Perry said…

Meridian and suburbs like it, Perry said, are “a reminder that there are still some pockets of rapid population growth in certain areas of the country,” despite the past 10 years being the second slowest growing decade for the U.S. population. What the Census data makes clear is that many suburbs are taking on a life of their own.

This is a continuation of several longer trends. The population growth in the United States has generally shifted to the South and West and away from the Northeast and Midwest. Certain suburban communities continue to grow rapidly, driven by expanding metropolitan areas, a quest for cheaper land, and the celebration of sprawl and single-family homes. Many big cities are still growing but they are no longer the fastest-growing places.

At the same time, these ongoing patterns might be surprising for several reasons. First, the suburbs have endured critiques for decades yet the same pattern seems to keep repeating: small towns outside hot metro areas balloon in size and population over the course of several decades. As the article notes, this can bring a lot of change that is not universally liked by the residents there before sprawl or even some of the residents who join the sprawl. The rapidly-growing suburbs are no longer places like Naperville but the descriptions of what is happening are very similar. What have Americans learned in the seven-plus decades of postwar suburban growth?

Second, are these growth patterns sustainable in areas with water and other environmental concerns? Communities in the West are reconsidering growth amid water shortages. Is the land converted to subdivisions stable and have good drainage? Does the emphasis on driving contribute to smog and the use of land that was once more open?

Third, population increases are often accompanied by a gain in status. Larger communities are better-known, have more business activity, and become destinations. Will these rapidly-growing suburbs suddenly be put on the map (also suggesting that other places decrease in status)?

Put together, will there be cheap enough open land outside attractive cities for explosive suburban growth? Or, because there will always be some suburban land somewhere cheaper than properties in the most expensive markets, think New York City, Los Angeles, and San Francisco, there might always be a market for sprawl.