Get creative and sell home and new car together as package deal

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Thinking about an earlier post linking new upscale car purchases with suburban gentrification, I had an idea: why not sell more homes and new cars together as a package deal? Here are reasons this could be a good pairing:

  1. Americans like the lifestyle that comes with a single-family home and driving a car. It is particularly important in the suburbs where owning a home and the ability to drive rank high in importance. Put these two big purchases together and sell a whole lifestyle.
  2. Both a home and a car are a status symbol. Pairing the two really provides an opportunity to brand the owner. Would someone want to purchase a McMansion but still drive a two Toyota Tercel or a Pontiac Aztek? Or, retire and downsize to a nice urban condo and keep driving a minivan or an older model SUV? Matching the home and the car at the same time provides a unique opportunity to establish oneself.
  3. I wonder if there are some “efficiencies” in purchasing both at the same time. On the producer side, developers and dealers want to move properties and cars; if selling them together helps, this is a deal. On the buyer side, perhaps they can roll all of the costs together and just pay one lump sum a month for two important items. (Mortgage documents might be hard enough to put together, let alone a joint document rolling together a mortgage and a car loan). Could it all be cheaper for the buyer (or get the sellers/lenders more money in the long run on interest)?

I would guess there are also good reasons this is not done widely. Still, given how much Americans like buying properties and like driving and cars, there may be potential here.

1859 Chicago gas pipe finally out of service

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Infrastructure in American cities can go back a ways. See this recent case in Chicago involving a gas pipe:

A small crowd gathered as a flatbed truck carefully backed into position next to a cavernous hole in the ground that revealed the retiree: a 17-foot-long piece of cast-iron pipe, believed to be the oldest natural gas pipe in the city of Chicago.

The pipe was in operation from 1859 until just last week, when the last customer relying on it officially switched over to a modernized polyethylene natural gas main, said Andy Hesselbach, Peoples Gas vice president of construction.

When the retiree began its work, the streets were paved with dirt and frequented by horse-drawn carriages. The Great Fire of Chicago wouldn’t occur for 12 years…

Replacements are prioritized based on risk, he said. In the last 30 years, the pipe excavated on Friday experienced 30 leaks, making it a prime candidate. Not every pipe that is retired is excavated, he said. Some are left in place while a new main is installed nearby.

Building good infrastructure to support all sorts of positive social and economic activity requires regular attention and maintenance. The cost to replace infrastructure can often seem prohibitive but upgrades are needed for systems that can be improved upon and/or consistently need repairs. Of course, it would be best to build for the long-haul at an efficient price from the beginning but this is not always possible as technology and places change.

Affordable housing, homelessness, and a political void

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Homelessness in Los Angeles and other high cost cities may be just the tip of the iceberg of a larger housing issue in the United States that gets little political attention:

“To say it’s been a real wake-up call would be putting it mildly,” says Raphael Sonenshein, the director of the Pat Brown Institute for Public Affairs at California State University’s L.A. campus. “It continues to be the No. 1 issue voters keep pointing to. This is going to be the issue of our time for the next few years out here. I think it’s going to dominate the rest of the mayor’s administration.”

Homelessness is by no means a problem unique to Los Angeles, of course. It’s a national crisis of varying degrees in cities from San Francisco to Boston, and one that officials at all levels of government seem hard-pressed to know how to address. Ahead of the first presidential-primary debates, the issue has barely registered, if at all, on the 2020 campaign trail, even as the bursting field of Democratic contenders issues policy proposals to address a wide range of other social and economic problems. But the candidate’s may be forced to confront the issue before long if the crisis continues to spread across the country…

California’s problem may be especially acute, but the lack of affordable housing, like homelessness, is a widespread problem in a national economy where income inequality has grown steadily for years. Yet of the leading presidential candidates, perhaps only Elizabeth Warren has outlined a detailed national plan to address the lack of affordable housing. She has proposed a program that would encourage states and localities to drop restrictive zoning laws that limit multiple dwellings and drive up housing costs in exchange for grants that could finance parks, roads, and schools. Her plan is comparable to a state proposal floated by California’s new Democratic governor, Gavin Newsom.

One major problem is widespread public opposition to greater density; a city like Los Angeles epitomizes urban sprawl, but it also enshrines the ideal of a backyard swimming pool and garden. The California state Senate recently shelved a bill that would have allowed the overriding of local zoning laws to permit construction of mid-rise apartment buildings near transit hubs and employment centers, even in neighborhoods currently limited to single-family homes. The bill fell victim to intense opposition from local neighborhood groups and some progressives, who feared it would benefit developers but not create more affordable housing. A study published in February by researchers at UCLA found that Newsom’s goal of 3.5 million new homes by 2025 is unrealistic because no more than 2.8 million could be built under current zoning laws.

I have argued before there is little appetite for a national discussion about affordable housing. To some degree, housing issues are related to numerous issues at stake in the 2020 elections including economic concerns, matters of justice and inequality, and providing opportunities to all Americans. However, it is difficult to make the argument that housing is behind all of these other concerns. I think this case could be made: where people live has many consequences in life.

I’m guessing housing issues will continue to mainly be local issues for a long time. It is unclear whether even state-level solutions can make sizable dents in these issues or how many states would have an appetite for sweeping policies that would affect all municipalities.

If there is limited movement on or even discussion of affordable housing across the United States, could this mean any progress in other areas will be limited?

 

 

Scenarios in which McMansions are passed along to younger adults

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Older Americans own plenty of large homes and commentators suggest younger adults have multiple reasons for not going after such homes:

Younger people have loads of reasons not to be charmed by the vaulted ceilings and chef-ready kitchens of homes perched on mountaintops or hugging beaches that promised solitude once but now cry of isolation…

A report from Business Insider highlights numerous reasons that younger people might not want to saddle themselves with such beautiful albatrosses. Down payments, student debt and preferences for rentals in cities coupled with vacation home getaways have all contributed to what the report characterizes as “millennials wiping out starter homes.”…

And that is those among them who can actually manage to save up a down payment. Too many others are so burdened by student debt that buying a house is a foggy image off in the distant future. And lots of young homebuyers underestimate what it will cost them to keep a house, making it less likely they’ll bite off more than they can chew the next time they go home-shopping.

Factoring in their concerns over the environment—the energy footprint of a big house and a long commute—and their disinclination to own cars, as well as the need to hold down multiple jobs or have one or more side hustles—and it looks as if those mega-residences are liable to stay on the market for quite a while longer.

While one angle to this is that Baby Boomers will have a hard time selling their homes, the other side is whether the younger generations want and can get to such homes. I have seen little suggestion that young adults truly desire McMansions.

But, I would not write off this possibility just yet. I could imagine several possible scenarios where McMansions happen to end up in the hands of future generations:

  1. Younger adults do well enough economically – or enough of them do since not all Baby Boomers own big homes either – to keep McMansions going.
  2. Baby Boomers cannot sell their large homes, the prices drop, and the homes are more in the reach of younger adults.
  3. Enough McMansions are converted to other uses – think multi-family housing – to keep the prices up enough to keep everyone happy. (Or, in a more dystopian model, McMansions are simply bulldozed or replaced to limit the supply.

I have a sneaking suspicion McMansions will be passed along in decent numbers to the next generation…despite the wishes of some.

Should I say hello to people I know on campus when they are walking by with their heads buried in their phones?

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A college campus has many people walking around while looking at their phones. This leads to a common dilemma: should I say hello to someone when they are so engrossed by their smartphone? Earlier this week, I chose not to and I realized this is my default setting.

Here is my reasoning: these people are signaling they are busy or occupied. Walking in particular ways alerts others that they are not to be disturbed. Such behaviors include: closely looking at a smartphone screen; using headphones; talking on the phone; talking to someone walking next to them. Indeed, it is hard to be holding a smartphone while walking and not be viewed as saying, “Don’t disturb me.” (The only exception I could quickly think of: the number of people willing to offer to take a picture for you. I have had several people do this recently and I found it strange. Are selfies out? Did I look like I needed help?) I am helping these phone-lookers out: by not disturbing them and breaking their concentration, I am helping them accomplish what they need to do.

I do not know how many of these people I know would consider it a distraction or inconvenience if I did say hello. The posture of avoiding social interaction may be unintentional. We have a fairly friendly campus and if I see faculty, staff, and students that I know, we generally exchange greetings. Our regional norms are for fairly friendly greetings in public. As our students note, we are not quite the South but we are also not the Northeast.

If I were walking around campus with my nose buried in my phone, the biggest issue I would have with being greeted would be this: it might take me a second or two to recognize who issued the greeting. Rather than having the long lead-up to greetings where you see the person from a distance and can mentally prepare their name and your words (plenty of time for impression management), I am stirred from my focus. This will likely lead to a more generic greeting from me.

Will all this lead to the downfall of sociability on our campus? Probably not. Will it lead to more accidents as people walk into other and things? This has already happened. If anything, we will probably see more of his as time goes on and campus norms may continue to adjust to changing sociability.

Can you sell a product with the main pitch that it will help consumers “keep up with the Joneses”?

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Comcast is currently running an advertisement titled “The Joneses” that makes an explicit connection to keeping up with the consumer’s reference group:

It is regularly stated that consumers want to keep up with others around them. Reference groups matter as look to others around them as they consider what to acquire.

So, can you run a successful advertising campaign based on (1) regular human behavior (2) that is regularly maligned? “Keeping up the the Joneses” is not often a positive term. Instead, it implies striving to be like others. These strivers are not content; they have to earn approval through acquiring what others have. All of this can lead to conformity if everyone is chasing some trend or perceived advantage. Suburbanites have heard this critique for decades: they are trying to look like the leading middle- to upper-class suburbanites. In the Judeo-Christian tradition, perhaps these people are viewed as violating the tenth commandment.

Perhaps this is all meant to be ironic. “Keep up with the Joneses” while winking or doing something unusual with all of that high-speed Internet. But, this commercial does not seem to have that tone. The goal does seem to be to have the same high-speed connection as everyone else. Maybe the true story is something like this: “keep up with the Joneses’ and everyone can use that Internet to hide in their private residences and do their own thing online and in social media.

Patterns in racial/ethnic change in Chicago area counties 2010-2018

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Recently released Census data at the county level shows the shift toward larger non-white populations in the Chicago area:

The Chicago Tribune article also points out a few of the notable patterns:

The six suburban counties gained a total of 14,857 non-Hispanic black residents from 2010 to 2018, most of them in Will and DuPage, the new census data shows.

Cook County, meanwhile, lost 75,081 black residents over the same time period. Black residents’ share of the county population decreased the most of any racial group in the last eight years…

In each of the six suburbs surrounding Cook, non-white Asian residents grew by at least 13% since 2010. DuPage County grew by the most people, with an increase of 21,960 Asian residents in that time.

I’ll throw in three more patterns I see in the table:

  1. The further out counties, the more exurban locations (Kendall and McHenry Counties) have much higher proportions of white residents. It will be interesting to see how these change in the coming decades. Not only are those locations farther from Chicago, they also have fewer historic industrial suburbs (like Joliet in Will County and Elgin in Kane County) that attracted more non-white residents.
  2. In all of the six counties, Hispanics account for larger proportions of the overall population than black residents. Whether this translates into political representation or status within the region is debatable.
  3. The Asian population is more concentrated as a proportion in some counties – DuPage, Cook, and Lake – compared to others.

Suggestion that tiny houses face snobbish responses because of links to lower classes

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An overview of tiny houses in the United States (though no mention of how many there actually are) includes an interesting bit about social class:

But the main obstacle is a legal one: most municipalities and towns ban residents from living year-round in anything on wheels, and often have statutes requiring homes to be at least 900 square feet…

Historically in American culture, bungalows, caravans and mobile homes have a bad reputation — they are seen as badly made and decidedly lower-class.

But the Berriers’ home is impeccably decorated with a bathtub, a sunroom and a movie screen — no “trailer trash” here.

“There are preconceived notions. They haven’t seen it enough. It’s just something new. I think that’s the problem,” Berrier said.

This leads to a conundrum: if Americans love driving and homeownership, why do they dislike mobile or smaller housing so much?

The less positive reactions to tiny houses suggests it is not solely about owning a vehicle or home; the kind of vehicle or home matters. Driving is good but driving a nicer car is better. Owning a home is good but owning a bigger, more permanent home is clearly superior. Cars and homes are functional items and status symbols, important social markers of who a person is and desires to be.

A more functional approach to housing might be more open to tiny houses. People need a place to live at a reasonable cost? Affordable housing is scarce? Homeless people need residences? Let’s make it happen. Change zoning guidelines. Make it cool to downsize.

On the other hand, there are plenty of tiny house buyers who prefer getaways or luxury touches, not long-term housing in such a small size. It would be easy for the tiny house movement to be co-opted by those with resources and social status. Those people might be able to get tiny houses into certain places where they might otherwise not be allowed, but their motives would run against others who want tiny houses because of their reduced footprint and simpler lifestyle.

Many Americans can’t afford a McMansion (even if they might aspire to one)

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A recent study suggested Americans aspire to own the larger homes in their neighborhood. By using the term “McMansion,” the study might be read as some as suggesting that this belief is widespread among many Americans. Americans like big houses and they like to look to external reference groups to help guide their own behavior. Isn’t everyone after a McMansion?

Just three little problems:

  1. Many Americans do not live in neighborhoods with McMansions.
  2. Many Americans cannot afford a McMansion.
  3. Not all larger houses are McMansions.

McMansions are particular kinds of houses that require a certain social class and set of resources to acquire. Even in cheaper housing markets, McMansions are not within reach of many residents. Academic articles and media articles journals can use the term broadly but how many Americans truly live in McMansions – 10%? 20%?

At the same time, it is worth looking at the aspirations of Americans. Homeownership, particularly in a suburban setting, is an ingrained goal in American society. And Americans do seem to like bigger homes. But, do they really want a McMansion, a home that can be made fun of by others and with a descriptor rarely used in real estate listings? There is clearly a market for such homes but the buffoonish McMansion may not exactly be the goal of homebuyers.