Ronald Reagan lived in Chicago; conservatives for cities?

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A Chicago Tribune story on the troubles facing President Ronald Reagan’s boyhood home in Dixon, Illinois includes some interesting information about where else Reagan lived when he was young:

However, Theodore Karamanski, a history professor at Loyola University Chicago, said presidential birth and boyhood homes aren’t often historically significant, with the possible exception of presidents like George Washington and Abraham Lincoln. Historians tend to favor places that were central during periods of power.

He pointed out that presidents often have several homes they lived in during childhood, including Reagan, who even lived for a time on the South Side of Chicago.

Instead, it is the local communities that generally push for a historic designation for birth and boyhood homes.

According to WBEZ, Reagan lived with his family in Chicago for a little more than a year:

Before Barack Obama, only one U.S. President had called Chicago home. As a boy, Ronald Reagan lived on the first floor of the building at 832 East 57th Street.

The Reagans moved into their apartment in January of 1915. They’d come to the city from the western Illinois village of Tampico. Jack Reagan, Ronald’s father, got a job selling shoes in the Loop. His wife, Nelle, stayed home with the two boys, 6-year-old Neil and little Ron–called “Dutch”–who was going on 4…

Sometime in 1916 the Reagan family left Chicago and moved to Galesburg. It’s not clear whether Jack quit his Loop job, or was fired. But their time in Hyde Park was over.

Reagan lived more of his younger years outside of the big city; but, imagine he lived there longer. Or, he chose to remember the Chicago experience as more formative. Or, the Chicago neighborhood put more effort into remembering him as living there.

Perhaps the biggest issue (besides the length of time the family lived in Chicago) is that this image of a big city boy does not match Reagan’s own politics or how he was perceived. Can a Republican leader in the United States claim to be from a big city, not from the metropolitan region but from the big city itself? Given the voting breakdown of recent elections as well as the anti-urban inclinations of conservatives, this does not sound likely. In a country that still idealizes small town life, claiming to represent those parts of the country can go a long ways.

Current President Donald Trump presents an alternative to this conservative small-town vision. Born in and still a resident of New York City, Trump is hardly a small-town or even a suburban conservative. As a real estate developer, he aims to bring large buildings with his name on them to big cities around the world. His policies do not align with a pro-urban vision even as he is clearly a city person. And, I would guess this big-city conservative is an anomaly rather than an ongoing trend for Republicans.

Ronald Reagan as a Chicago native is far-fetched but it does suggest an alternative vision: conservatives who are from and for big cities. This would require a massive shift in ideology but it is not unprecedented nor impossible. Perhaps it would just take a mythical icon of the party would saw the city as their home and priority.

At least 12 reasons Americans have the biggest houses in the world

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Why do Americans have the largest houses in the world? A lengthy list of reasons:

  1. Americans like private homes. This often means they desire detached single-family homes in the suburbs. So why not have a lot of private space? Similarly, Americans place a lower priority on pleasant public spaces or spending time in public.
  2. The trend toward larger homes really took off in the postwar suburban era. At the time, this could be linked to growing family size with the Baby Boomer generation. (Interestingly, as household sizes decreased in recent years, homes continued to get bigger.)
  3. Americans like to consume. With relatively large amounts of disposable income, Americans need space to store their stuff, ranging from clothes to media to new technological devices to cars. The answer is not to get rid of stuff but rather to have a big house to store bulk goods. Garages are important parts of homes since driving is so important.
  4. Americans have increasingly viewed housing as an investment rather than just a place to live and enjoy. If the goal is to get a big financial windfall later in selling the home, it could pay off now to buy as much as possible.
  5. Compared to some countries, Americans have a lot of land to build and sprawl. Americans have also made different land use decisions to prioritize lower densities and sprawl.
  6. There are regional differences regarding large homes. McMansions are everywhere in the United States but more culturally acceptable in Dallas than in New York City. Many metropolitan regions have housing prices that make having a big house possible (compared to New York, San Francisco, LA, and Seattle).
  7. Developers and builders are less interested in constructing starter houses as there are more profits in bigger homes.
  8. A number of communities will only allow homes of a certain size in order to maintain their character and status.
  9. The government has provided funding and support for mortgages, suburbanization, and driving over the last century.
  10. Americans have a bigger is better mentality as well as believe that growth is good. This applies to population growth and also applies to houses.
  11. McMansions are popular with some but America has plenty of large homes that would not qualify as McMansions. From large urban condos and homes to large rural properties, Americans can find plenty of big homes to purchase.
  12. The space in homes does not have to be used to be desirable. For some owners, the space itself is just worth having.

(This post was inspired by this recent article. Also, see this earlier post “Explaining why Americans desire larger homes.”)

Waterbeds and “straitlaced suburban living”

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A 2016 piece from Mental Floss connects waterbeds to suburbs:

Although many associate waterbeds with strait-laced suburban living, back in the ‘70s they were a symbol of the free-flowing counterculture movement—more likely to be sold with incense and Doors albums than with fluffy pillows and high thread count sheets. “That fluid fixture of 1970s crash pads” was how a New York Times story from 1986 described them. The names of manufacturers and distributors reflected this: Wet Dream, Joyapeutic Aqua Beds, and Aquarius Products were a few that rolled with the times.

Sex, of course, was a big selling point. “Two things are better on a waterbed,” an Aquarius ad stated. “One of them is sleep.” Another ad proclaimed, “She’ll admire you for your car, she’ll respect you for your position, and she’ll love you for your waterbed.” Hippies and hip bachelors alike were the target market for the bed that promised the motion of the ocean. Hall even got in on the act, offering a $2800 “Pleasure Island” setup, complete with contour pillows, color television, directional lighting, and a bar. Hugh Hefner loved the craze, of course—Hall made him one covered in green velvet, and Hef had another that he outfitted in Tasmanian possum hair.

By the ’80s, waterbeds had moved from the hazy fringe to the commercial mainstream. “It has followed the path of granola and Jane Fonda,” the Times noted. Indeed, waterbeds were available in a variety of styles, from four-post Colonials to Victorian beds with carved headboards to simple, sturdy box frames. Allergy sufferers liked having a dust-free mattress, while back pain sufferers were drawn to the beds’ free-floating quality. Advertisements by sellers like Big Sur Waterbeds played up the health benefits with shirtless, beefy dudes like this one…

By 1984, waterbeds were a $2 billion business. At the height of their popularity, in 1987, 22 percent of all mattress sales in the U.S. were waterbed mattresses.

While the particular history (and then demise) of the waterbed is interesting in itself, it hints at larger patterns. Is this is an isolated story of a product that goes from the counterculture to suburban homes or is this a common pattern among American consumer goods and cultural products? What was once radical or born out of a subgroup can become simply a run-of-the-mill item found in millions of homes. Cool often can only last so long. I am reminded of the argument that the retailer Gap lost its edge when it became another company looking for suburban consumers.

Of all the consumer goods I could think of that are associated with the suburbs, it would be a long time before I made it to waterbed. I might have to start such a list with cars (after ruling out single-family homes because they are too expensive to really quality for such a list).

Democrats want suburban voters!

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(And so do Republicans but this ABC News story details the efforts of Democrats🙂

The effort, which will target areas that will likely define the 2020 presidential contest, kicks off on Thursday with a roundtable event, hosted by Democratic National Committee Chair Tom Perez, alongside local Texas residents in the suburbs of Harris County…

“Suburban voters sharply rejected Republicans in 2018 and they’re ready to hold Trump accountable in 2020,” said David Bergstein, DNC Director of Battleground State Communications. “They’re fed up with his toxic health care agenda, failure to support commonsense gun safety measures and endless string of broken promises on a number of issues.”…

Exit poll analysis following the 2018 midterms completed by Langer Associates for ABC News shows that the suburban voters comprised half of the American electorate. While Democrats won over urban residents and Republicans won over small cities — the suburbs were split evenly, 49-49%…

“The theory is that former Republicans in the suburbs were content with Republican policies on the economy, maybe even immigration to an extent,” she continued. “But some of the rhetoric that the president uses and some of the policies that Republicans have embraced, are maybe not in line with the Republican Party of George Bush.”

A few responses to this article (and similar ones):

  1. That suburbanites are monolithic in their political views (and in other parts of their lives). I assume campaigns know this but this generally does not come out in the media much. The stereotype of white wealthy families living in the suburbs does not always hold.
  2. Everyone is looking for trends among suburban voters. It can often be difficult to see trends when we are in the middle of changes. For example, the article wonders if the trend away from Republican suburban voters is a trend that is here to stay or could be reversed. Either could be true? (Though we can make educated predictions; but see #1 above for the ongoing changing population composition of American suburbs.)
  3. A relatively clear pattern in suburban voters seems to be a divide between suburbanites living closer to cities who lean toward Democrats and suburbanites closer to the metropolitan edges who lean toward Republicans. This leaves a middle suburbia that can go either way. But, again, see #1 above regarding a much more diverse and unevenly settled suburbia.
  4. The American electorate should be slightly more than half of the voters since the percentage of Americans living in suburbs is roughly 52%.

Living close to work

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Presidential candidate Beto O’Rourke tweeted earlier this week about the ability of workers to live near their place of work:

https://twitter.com/BetoORourke/status/1171238016289034240

There is a lot to think about here. A little historical context: most workers lived very close to work up until the Industrial Revolution and the urbanization that came with it. The separation of home and work life is a relatively recent phenomenon for humans.

A little data on commute times. The 2017 American Community Survey showed the average commute time was 26.9 minutes. Commuting time can differ quite a bit across metropolitan regions:

McKenzie says the East Stroudsburg, Pa. metro area has among the longest average one-way travel time, clocking in at about 37.9 minutes. The U.S. Census Bureau contacted NPR with new information to include the New York-Newark-Jersey City metro area, which has a travel time of 37 minutes. Travel times for the two metro areas are not statistically different from one another.

Among the shortest average travel times, usually less than 20 minutes, were in Cheyenne, Wyo. and Grand Forks, N.D.

There is an academic term that addresses this issue: spatial mismatch. In this theory, jobs available to lower-income workers are located far from their residences. Imagine a typical well-off suburb: can the workers at the local Target or McDonald’s or gas station or hotel live in that community or nearby? Patterns of residential segregation and exclusionary zoning can mean that cheaper or affordable housing is not available close to certain jobs. This can be a more hidden form of inequality as longer trips to work mean less time for other activities.

This might get trickier for people with more resources and the options of where they want to live. A common American trade-off for the middle-class gets at this: should a homeowner move further out from work to purchase a larger home or live closer to work and job centers (which can include urban downtowns as well as suburban job centers dozens of miles away from urban downtowns)? Is a shorter commute worth having if it comes with paying more money for (possibly smaller) housing?

And perhaps the wealthy can truly live the closest to work if they so choose. Some of them might even locate their business or firm to where they are. Others might have multiple homes, including ones significant distances away where they can get to work by means not available to many such a private jets and helicopters.

So perhaps the issue here is not really living close to work but deeper issues involving mixed-income neighborhoods and moving away from resources (income and wealth) determining where people can life. O’Rourke gets into this a bit more, calling for smarter and denser cities that he says will lead to numerous positive outcomes – which could include shorter commutes.

How a bank could still make money offering negative interest rate mortgages

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A bank in Denmark explains how they can make money by offering mortgages with interest rates below zero:

Jyske Bank has had to do a lot of clarifying; there’s a widespread misconception that the bank is actually paying borrowers to take their money. First of all, the bank is not actually paying anyone; it is simply forgiving part of the loan each time a payment is made. A mortgage borrower is likely to end up paying Jyske back a little more than they borrowed, factoring in fees and charges associated with arranging the mortgage loan.

And the bank can afford to do this without losing money because it borrows at negative interest rates as well…

Despite being in “historic remortgaging,” Høegh said the negative interest rates don’t actually make it any easier for home buyers to get a loan, but makes it easier to get a bigger loan – a lower rate means a higher disposable budget.

As long as the borrower is paying more in interest than the mortgage cost the bank, there is money to be made.

I might be showing my ignorance here but it leads to a few more questions:

1. Does this change how much volume in mortgages banks and lenders need to make in order to make money?

2. Would an extended period of such mortgages lead to inflated housing values because people can pay more for homes?

3. These changes might not be so bad in a fairly stable housing market but I wonder if there would be more issues in a high-demand or high-price market.

It looks like we would have a ways to go before negative rate mortgages come to the US but it would be interesting to see what happens if they do come.

Rebuilding beachfront McMansions

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A journalist argues the construction and reconstruction of large homes near Atlantic beaches is a losing proposition in the long run:

Through federally funded flood insurance, huge appropriations for beach nourishment projects, and generous, well-intended relief aid, government policy allows developers and wealthy investors to build huge houses and hotels on beachfronts and low-lying barrier islands at high risk from coastal flooding as well as hurricanes. Uncle Sam’s generosity makes it all possible…

Writing just as the extensive damage from Hurricane Florence became apparent, Gaul covers the waterfront, so to speak — from Hurricane Katrina to South Florida, to the halls of Congress. In North Carolina, he stops Down East in Columbia, Creswell and other towns of North Carolina’s “Inner Banks,” where rising water levels and flooding are washing away entire communities…

According to Gaul, things began to tip in the 1980s, when multistory “McMansions” began to supplant the simple Cape Cods. (A similar trend has transpired on the north end of our state’s Outer Banks). Disasters such as the Ash Wednesday flood of 1962 did little to discourage development. On the contrary, real estate dealers saw storms as “clearing the market,” blowing down older, ramshackle structures and making way for the new, bigger units that buyers seemed to want.

Real estate prices went up, and increasingly retirees and residents with modest incomes were squeezed out. But there were always more customers in line for resort property.

I wonder if the primary objection is that big homes are being built and someone is profiting from the government money or should there be no homes on these properties? If the goal is to protect the beach and taxpayer dollars, less development in these areas is better. If the problem is profiting with the government’s money, there could be restrictions on the size of the new home or how the money is used.

It would be an interesting thought experiment to consider what this would look like without any government intervention. The argument here is that the government’s funding for rebuilding simply encourages the cycle of building larger and larger homes. If there were no regulations, what would the market bear? Or, as the author seems to suggest, would different regulations be better for the long-term fate of the beach and tese communities?

Declining populations in the New York City, Los Angeles, and Chicago regions

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The biggest metropolitan areas in the United States are losing residents:

Source: William H. Frey

And what is behind this?

Each of these Chicago phenomena—declining immigration, revitalized downtowns coinciding with a middle-class exodus, and the specific decline of the black population—has spread from the heartland to America’s largest coastal metros…

First, immigration to both New York and Los Angeles has declined by 30 percent in the last five years. This could be for a variety of reasons, including the fear, and reality, of more restrictive immigration policies; richer and safer home countries; and a less affordable housing stock in these metros.

Second, higher-income residents bidding up the price of housing in both cities has accelerated the middle-class exodus. Earlier this decade, Los Angeles was the fastest growing county in all of southern California. But in 2018, it was the only major county in the region to shrink, even as its median home price set a new record. As more middle-class families leave the Los Angeles area for cheaper markets in the West and Southwest—their preferred destinations: Las Vegas, Phoenix, and Dallas—California’s population growth has slowed to its lowest rate in state history. This might have something to do with the recent tax law, which, in capping the state and local deductions, effectively raised the cost of living in these places for the upper-middle class. (The next few years will tell us more about whether high earners are fleeing high-tax metros for the South, as well.)

Third, the black population of both New York and Los Angeles peaked in the early 2000s and has since been in steady, and perhaps accelerating, decline. The political implications of the first Great Migration were immense, as blacks moving into northern cities forged an alliance with urban liberals and pushed the Democratic Party to prioritize civil rights in the middle of the 20th century. The political implications of the Reverse Great Migration could be equally ground-shaking, if blacks moving south redraw the political map for the second time in 100 years. The slow decline of America’s largest metros may also mark the beginning of a new political movement in the suburbs of the South and Southwest.

When it was just Chicago losing residents, it was easier to write it off as inevitable Rust Belt decline combined with particular issues that have dogged the city and region for decades. But, if New York and Los Angeles are also losing people, then this becomes more interesting as even the glitzy coastal cities are losing people to other parts of the United States and there are fewer new residents via immigration.

Is there evidence then that cities are losing steam compared to suburban areas? Not necessarily; Sun Belt cities are growing in population. At the same time the three biggest cities draw outsized attention in the United States (consider the relative anonymity of Houston which is approaching Chicago for third in population). Americans generally do not like what declining populations connote and particularly not in their largest locales.

Ultimately, the actual population figures which could fluctuate slightly from year to year might matter less than the perception that the biggest cities are floundering. Would they then put into place big plans to try to attract residents? Would second tier cities step up their efforts to toot their own (growing) horns?

Final note: Chicago’s long-standing quest to put itself in the same company as New York City might be looking up if both cities are losing residents.

Chicago suburbs without property taxes – but perhaps not for much longer

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In a region known for high property taxes, at least a few suburbs outside Chicago have no property taxes:

A town of about 40,000, Carol Stream managed to avoid a property tax even when another outlier, Schaumburg — a village with a much larger retail base — took the leap during the Great Recession.

But officials say Carol Stream is facing significant budget pressures from rising pension costs. If it maintains the status quo, projections also show the village would exhaust capital reserves during the third year of a five-year plan for roadwork and infrastructure projects…

In Oak Brook, another town that doesn’t charge a property tax, candidates in the last mayoral race took stock of the financial challenges from flat sales tax revenues. Carol Stream also saw a 2.4% drop in sales tax dollars — the village’s largest revenue source — from calendar years 2017 to 2018.

Suburbs have multiple ways to reduce or eliminate residential property taxes. Sales tax revenue can come from shopping malls, big box stores, and other retail options. Schaumburg and Oak Brook have sizable shopping malls surrounded by many more retailers. Communities can also seek out industry; Carol Stream founder Jay Stream intentionally set aside much land for industrial parks (which are still there). Some suburbs would not like this as industry could conflict with an ideal of quiet neighborhoods of single-family homes.

The article suggests these suburbs with no property taxes will have to reconsider because of declining sales tax revenues and rising pension costs. Given the fate of shopping malls and the problems facing retailers, even in successful malls in wealthy areas like in Oak Brook and Schaumburg, communities need additional revenue.

Suburbs typically do not have the ability to quickly counter declining sales tax revenues. In order to not have property taxes in the first place, certain decisions had to be made long ago. Then, later decisions build within a framework of no property taxes. Making changes to land use takes time for study, approval, development, and then reaping benefits. A suburb cannot say it wants to bring in more sales tax revenue and line up a set of retailers operating within a year.

The fate of these suburbs will be worth checking in five years to see whether they can hold on against levying property taxes.

(Reminder: this does not mean residents in these communities do not pay any property taxes. Rather, their suburbs do not collect property taxes even as school districts and other taxing bodies do.)

Zoning for single-family homes contributes to California’s housing issues

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If a lot of individual communities zone largely for single-family homes, it can add up to larger housing problems:

At its heart, California’s housing problem is one of scarcity: According to one analysis, the state has 3.5 million fewer homes than it needs to house all the people who live there. That gap was created over decades — largely as a result of the zoning policies of individual communities, under pressure from local residents. Randy Shaw, a longtime Bay Area housing advocate and author of the book Generation Priced Out, says the best way to describe the dynamics at play is to look at the city of Atherton. Thirty minutes from San Jose, Atherton is the most expensive city in the country: The median price of a home there is $8.1 million.

“You can’t build an apartment building in Atherton,” Shaw says. City code prohibits anything other than a single-unit building with a footprint that cannot exceed 18 percent of the land. In other words, everything but a single, detached home with a yard is verboten. “You have all of these cities in California where you can’t build anything but a luxury home,” Shaw says. “When you have zoning restrictions that prevent you from building the housing you need, you’re pretty much guaranteed to get in the situation we have.”

It’s a problem lawmakers across the state are grappling with, including in San Jose, where 94 percent of the city is zoned for single-family homes. “You got lots of family housing, and you’re not going to bulldoze it to go build apartments,” Liccardo said at a meeting of the state’s mayors in July. “At least, not if you don’t want [homeowners] to burn down City Hall.”…

At the start of the legislative session this past January, the housing committee introduced a slate of bills focused on streamlining approvals for new construction, protecting renters, funding affordable housing, and, most controversially, reforming zoning laws. Wiener’s top priority was SB50, an ambitious proposal that would prohibit cities from having zoning laws like Atherton’s. Residential neighborhoods historically reserved for single-family homes would be opened up to multi-unit housing like triplexes and fourplexes. And even higher-density construction would be allowed around transit corridors and “job-rich” enclaves.

With suburban preferences for single-family homes, exclusion, and local control, providing cheaper housing at a state level is going to be a tough sell. As I have asked before, what incentive do wealthier homeowners have to change the rules that let them live with people like them? But, if California can find some path through this all that actually makes an impact – and it will likely take quite a while before significant change could be noted – then it could provide a helpful template for other American locations that suffer from similar problems.