Los Angeles files complaint that U.S. Bank is not maintaining its foreclosed properties

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Looking to help residents who don’t like foreclosed properties in their neighborhoods falling into disrepair, Los Angeles is fighting back:

U.S. Bank is the country’s fifth-largest commercial bank, with 3,000 branches in 25 states. It’s also “one of the largest slumlords in the City of Los Angeles,” according to the L.A. city attorney’s office.

In a complaint filed last month, the office accused U.S. Bank of failing to maintain more than 170 foreclosed properties, blighting neighborhoods, decreasing property values and increasing crime rates.

The allegations are similar to those made in a lawsuit filed by the city attorney’s office last year against Deutsche Bank (DB), as well as other complaints from activists around the country who say their communities have suffered as neglected foreclosures deteriorate in the aftermath of the housing bubble.

This is a potentially large problem with the number of foreclosed properties in the United States:

Roughly 620,000 foreclosed properties in the United States are owned by lenders, according to RealtyTrac. The number of these properties, known as REOs, or “real estate owned,” surged after the housing bubble but has since begun to drop, down from over one million in January 2011.

Still, of those 620,000 houses, 24% had been waiting for a new buyer for two years or more, and 11% for three years or more.

You have a confluence of events here: large banks who have thousands of distressed properties on their hands, depressed housing markets, neighbors who are worried about their own property values as well as other neighborhood issues (crime, middle-class appearances, etc.), and communities who don’t want to have to foot the bills themselves.

Throughout the last few years, I haven’t really heard from the perspectives of the big banks on how they are really dealing with these properties. What are their strategies? If they want to hold onto the properties and wait for prices to rebound, they’ll have to pay for upkeep. If they want to sell quickly, they probably can find buyers but would have to write-off significant portions of mortgages. Have the banks hired teams to take care of foreclosed properties? Could a bank take these foreclosures and legitimately and profitably spin off a property division? It seems like this could be a real opportunity for someone yet the big banks appear to killing time with some of the foreclosures.

 

Director of embattled DuPage Housing Authority let go

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A leader brought in to reform the DuPage Housing Authority has been let go after eight months:

[David] Hoicka, who had served in senior management for housing agencies in Texas, Louisiana, and Hawaii, was hired in January as part of ongoing efforts to overhaul the Wheaton-based agency that once mismanaged more than $10 million in federal funding.

He replaced John Day, who was forced to resign last year after the U.S. Office of Inspector General released two audits critical of the agency. A third audit concluded the agency improperly spent more than $5.8 million in federal money and failed to adequately document another $4.7 million.

Hoicka took the reins of the agency after the board conducted a nationwide search for an executive director. At the time he was hired, officials said Hoicka’s background made him an ideal choice.

In addition to publishing three handbooks on HUD housing programs, Hoicka served as an adviser for public housing groups in Southeast Asia and Bahrain in the Persian Gulf.

This organization has clearly had its problems (see an earlier post). Unfortunately, I think stories like these distract from the real issues facing the Authority and DuPage County: how to truly tackle issues like affordable housing and housing discrimination in a relatively wealthy county that is also facing demographic change.

While it is not clear here why Hoicka was fired, I have to wonder why he didn’t work out in DuPage County. From an earlier post, here is a longer list of his experience before taking this job:

Hoicka has served as chief operating officer for the housing authority in El Paso, Texas, worked as an adviser to the housing ministry in Bahrain, managed the New Orleans housing authority, and worked as branch chief for Hawaii’s Housing and Community Development Corp. He has written three manuals on HUD regulations.

DuPage County is unique in some ways but Hoicka had a wide range of experience that would seem to be helpful.

 

How to define a good college town

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Livability recently released a list of the Top 10 college towns and here is some discussion of how they defined such communities:

And for starters, we need a basic definition of a college town. “True college towns are places where the identity of the city is both shaped by and complementary to the presence of its university, creating an environment enjoyable to all residents, whether they are enrolled in classes or not,” Livability’s editors write. “They’re true melting pots, where young minds meet old traditions, and political, social, and cultural ideas of all kinds are welcomed.”

That’s pretty broad. But the editors go on: In a college town, “the college is not only a major employer, but also the reason for more plentiful shops, restaurants, and entertainment businesses.” And it has to look like a college town, too: “It doesn’t seem right to call a place a college town if you can’t tell classes are in session with a quick glance at the mix of people on a busy sidewalk.”…

For example, what would Baltimore be without the Johns Hopkins University? The economic equivalent of a smoldering hole in the ground, that’s what. Or consider Rochester or Syracuse, N.Y., from the same perspective. And what about Boston and Philadelphia—are they “college towns”?

As you’ll see from the list below, most of Livability’s “best” college towns are relatively small, remote places, based on colleges that are highly ranked by the Princeton Review. Livability, true to its name, also factored in cost of living and walkability. (College towns, by their nature, should be among the most pedestrian-friendly communities America has left.)

This sounds like a very traditional use of the term “college town”: places that are heavily dependent on the university or college and that are quaint yet cosmopolitan enough. I like the contrast with the big cities which often have a variety of colleges and amenities that cater to college students, faculty, and staff.

This leads to a few thoughts:

1. How many college students today pick colleges based on it being in a “college town”? The surrounding atmosphere must matter some.

2. How have college towns been affected by the recent economic downturn and its effects on college campuses? Let’s say the college bubble bursts like some are predicting: how badly hit will college towns be? Another way to put it might be to ask how resilient these communities would be if the college/university started struggling or is this another example of what could happen to communities that rely too heavily on one industry.

3. Why not include an attitudinal component with local residents asking how much they like or approve of or even know what is going on with the college? Town and gown relationships can be difficult and simply because a place is a “college town” doesn’t mean there isn’t some tension.

4. It would be interesting to trace the history of college towns and their appeal. Historically, were there advantages to having colleges in communities that were heavily dependent on them?

5. Just because a place looks like it is where learning should take place (and this seems very constructed), does it actually improve learning?

Would most Americans choose the glass house or the McMansion?

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The Wall Street Journal has a photo gallery of a glass house in Napa that was built by a homeowner who didn’t want to replicate nearby McMansions:

Robert Lieff, 75, an attorney and founder of the law firm Lieff Cabraser Heimann & Bernstein, purchased this 21.5 acre property in California’s Napa Valley for $805,000 in 1998, according to the Napa County recorder’s office. Mr. Lieff, who purchased the land with his then-wife, Carole, was looking to build something with more character than the usual stock. ‘I just saw so many houses around there that were like ‘McMansions’ — I had no interest in that,’ he said. He opted instead for this corrugated steel and glass home, which over the years has won plaudits for its design.

The house does indeed have a lot of character and has a kind of modern beauty to it. The pictures are quite interesting as the home features a lot of straight lines, open spaces, and beautiful views of wine country.

Yet, as I’ve wondered before, how many Americans would choose this house over a McMansion? Granted, there might be some price differences; even most McMansions are not built on 22-acres of land. But even if the prices, square footage, and land were equal, would this modern house appeal to most Americans? Critics and architects tend to like such homes, and they want to preserve modern homes built in recent decades (such as these homes in New Canaan, Connecticut) and promote new ones. But mass-market homes tend not to look like these modern homes and suburban tract homes have been roundly bashed since Levittown.

Perhaps we could trace this back to Bourdieu’s ideas about social class. Here is how this might be argued: modernist homes appeal to those with the education and class training to like them. In contrast, those of the middle- and lower-classes like other features of houses such as their functionality, space, or the middle-class nature of the neighborhood (safe, good schools, etc.). Perhaps it is tied to what the home at the base of the American Dream is supposed to look like: a cozy place for kids with a comfortable yard but not too unusual. (However, some of the McMansions are quite unusual, though not perhaps in the good sense.) We might see these boundaries pushed in coming years: there are more people interested in providing affordable housing with a modernist twist such as semi trailers remodeled into housing units.

How the wealthy LA suburb of San Marino became majority Asian

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Following up on an earlier post on majority-Asian suburbs, a number of which are located outside Los Angeles, The Atlantic profiles the LA suburb of San Marino which has remained exclusive even as it has a growing Asian population:

In the early Cold War years, San Marino became renowned for its conservative institutions. The far-right John Birch Society established its western headquarters there in 1959. In the 1966 California gubernatorial election, San Marinans cast only 778 votes for Democratic candidate Pat Brown, compared to 6,783 for Republican Ronald Reagan.
During the 1960s, San Marino residents expressed deep concerns about threats to the racial homogeneity of their community. At a 1966 gathering of the San Marino Republican Women’s Club, Republican California State Senate candidate Howard J. Thelin spent the bulk of his speech responding to the “vicious charges” that he “favored and supported the Rumford Act,” a 1963 law prohibiting racial discrimination in sales or rentals of housing…

It wasn’t until the 1980s, however, that San Marino’s Asian population truly exploded. By 1986, the student body at San Marino High School was 36 percent Asian, up from 13.5 percent just five years earlier. The transformation sparked sometimes-violent confrontations between white and Asian students…

In the end, San Marino’s transformation resulted from the felicitous interplay of economics and assimilationist paternalism. Whites hoped that San Marino’s Asians would work to assimilate rapidly into their adopted community by learning to speak English, participating in civic activity, donating to local institutions, and raising behaved, academically elite children. Shared bourgeois values produced a functional relationship between residents and newcomers and relative racial harmony.

A very interesting story of how a suburb changed tremendously demographically but stayed wealthy. According to the Census Bureau, the median household income is nearly $155,000. It sounds like there is now ethnic diversity but little class diversity: the poverty rate in the community is 3.5%. As long as the newcomers were willing to pay good money for houses and act middle/upper-class, there wasn’t enough trouble between old-timers and newcomers to stop the process.

Are McMansions about maximizing exchange value?

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A commentator takes a look at a new, oversized condominium building and discusses use value versus exchange value:

The house on this lot was rebuilt into two large condominiums.  Each is about 3,000 s.f. and priced at $849,000.  It’s a way to maximize the return for the property owner.  I can’t say the building is very attractive, but it is one block from the forthcoming Monroe and Market Street development adjacent to the Brookland Metro Station, and is two blocks from the Metro.

It’s too bad buildings such as this are oversized for the lot in a manner that degrades the visual qualities of the rest of the block.  Use values, including aesthetics, are subsidiary to the exchange value of place (maximizing financial return) in this instance.

To complete the circle about use value, one could also look at the experience of the homebuyers. Are these large housing units worth the money? Even if these big homes don’t quite fit in the neighborhood, they could be nice places to live. As noted above, they are spacious, located near desirable mass transit stops, and are probably have some nice interior features (surely granite countertops, stainless steel appliances, and hardwood floors!). Even the New Urbanists that wrote Suburban Nation admit that Americans have superior private realms in our homes. (Of course, there are others, like Sarah Susanka and Winifred Gallagher who suggest these spacious, comfortable homes may not be good fits after all.)

Lurking behind this analysis is Marx’s discussion of use value, exchange value, and capitalism. In a capitalistic system, much can be commodified: Twitter followers, positive online reviews, and houses. Particularly during the 20th century, American homes became more than just shelters: they were expected to increase in value and become investment vehicles. (One could look at some data to see if these oversized housing units are flipped more quickly than other kinds of housing as owners look to make money.) Builders and developers can make even bigger money on houses. One very influential idea in urban sociology in the last few decades is the growth machine model, the idea that boosters, business leaders, politicians, and developers work together to make profits by transforming open land into valuable land. From the early days of the American suburbs when streetcar operators built their lines into the countryside and then offered free rides to the end of the line to show people lots and potential to McMansions today, much development, aesthetically pleasing or not (actually, aesthetics may indeed just help increase the value!), is about making money. Commodifying the home can move the discussion away from other important aspects f purchasing and owning a home like community life, environmental responsibility, and providing affordable housing.

Student writes letter to Sociology 301 course, reinforces stereotype about the easiness of sociology

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A Canadian student wrote a letter to her Sociology 301 course about what went wrong:

But slowly, week by week, you became less interesting. I don’t know what it was, but I just didn’t want to see you anymore. I showed up, sure, and I continued to take notes, but my heart just wasn’t in the relationship like it had been in July. You had grown dull, boring. I wanted something better, something that kept my attention, and I thought of the classes I’d taken last fall, but I continued our weekly meetings.

The first mid-term came, which was wonderfully open book. I passed with minimal studying and flying colours. I think our relationship rekindled a bit there, because I remembered why I was so taken with you in the beginning: you were easy.

But then the second mid-term approached, and I knew I wasn’t prepared. All my note taking wasn’t enough to make sense of your endless rambles. What did I actually know of society, the course material, since I barely listened in class, choosing to read a novel in between writing down your notes. So I studied hard, not wanting you to know I was losing interest. I wanted you to believe that I still cared. And I passed, again, and I don’t think you knew just how little I wanted to see you anymore…

The final was today, and I have to say, I’m not going to miss you, Soc. Sure, we had some fun times, some great moments of discussion and humour, but we’re just not made for each other. I’m going to go back to journalism classes in the fall, I think you should know that. No, we can’t hang out anymore – you’re just not right for me. And despite my grades, I don’t care about you. I faked the whole relationship. I’m sorry.

While this could be taken as a story about the lack of effort from college students, I’m more interested in the other part: why take a sociology course in the first place? The early parts of this letter (not quoted above) share the student’s enthusiasm for the course. But, by the time the exams rolled around, the true sole reason emerges: the class was supposed to be easy and it didn’t quite turn out that way. And when it got a little tough, sociology suddenly didn’t seem so exciting.

I’m not surprised by this as sociology often has a reputation as an easy class. Doesn’t everyone know about society? Isn’t a lot of it common sense? I wonder if the student who wrote the letter might have had a different opinion if that first mid-term was challenging which might have led her to more engagement before the second mid-term. By asking interesting questions, sociologists can demonstrate that it is discipline that offers variety, complexity, and connections to individuals and groups. Indeed, a good portion of Introduction to Sociology is about showing that the richness of the discipline, one which many college students have not heard of or only have cursory knowledge. Humans present an ever-moving target with complex and fluid relationships. Collecting and analyzing data can be complicated. Working with and developing to explain (and perhaps even predict?) human behavior is messy. The (implicit) goal of Introduction to Sociology is to show all of this and present sociology as a worthy discipline that can enrich student’s lives as well as help the world.

 

New cultural gatekeepers: paid online reviewers

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After recently discussing buying Twitter followers, the New York Times explores another new online realm: paid online reviewers who only give extremely positive reviews.

In the fall of 2010, Mr. Rutherford started a Web site, GettingBookReviews.com. At first, he advertised that he would review a book for $99. But some clients wanted a chorus proclaiming their excellence. So, for $499, Mr. Rutherford would do 20 online reviews. A few people needed a whole orchestra. For $999, he would do 50…

“The wheels of online commerce run on positive reviews,” said Bing Liu, a data-mining expert at the University of Illinois, Chicago, whose 2008 research showed that 60 percent of the millions of product reviews on Amazon are five stars and an additional 20 percent are four stars. “But almost no one wants to write five-star reviews, so many of them have to be created.”

Consumer reviews are powerful because, unlike old-style advertising and marketing, they offer the illusion of truth. They purport to be testimonials of real people, even though some are bought and sold just like everything else on the commercial Internet.

Mr. Liu estimates that about one-third of all consumer reviews on the Internet are fake. Yet it is all but impossible to tell when reviews were written by the marketers or retailers (or by the authors themselves under pseudonyms), by customers (who might get a deal from a merchant for giving a good score) or by a hired third-party service.

I am most intrigued here by the possible change in relationship between a reviewer and an author. The article suggests there is some sort of “sacred” distance between the two: the reviewer is free to criticize the work without recrimination. Some reviewers have attained elite cultural gatekeeper status, people who guide decision-making for millions of people. Think of critics like Siskel and Ebert and Robert Christgau who are seen as authoritative figures. Hence, people are upset when they learn that a positive review they saw wasn’t an “honest” opinion but rather a business transaction.

However, let’s not forget that these reviewers also make careers out of their thoughts – they may not have sold out to a corporation or a product but they do have a financial interest. I would argue that this distance between reviewer and author/creator has never really been so sacred and there are plenty of areas where we are used to paid reviewers. If you follow a reviewer enough, you can often learn what they do or do not like. Indeed, some reviewers have become outspoken proponents of certain movements and not others. Is this based on a completely rational, detached perspective? Of course not. Don’t many reviewers interact with the people who are producing the products they are reviewing? Think of blurbs on the back of books: are these truly unsolicited comments or from people who are truly judging the merits of the book? More crassly, commercials often present “reviewers” or “real people” or people made to sell certain products. Perhaps this is simply a sign of our times and will become normal as there is clearly a market for good reviews.

It will be interesting to see how websites like Amazon, heavily dependent on user reviews, works through this issue. I always try to read both the five star and one star reviews when considering a product. Additionally, there are other issues: the ratings can be about the product itself or a particular aspect of the product or about people’s expectations for the product or the shipping or the customer service or something else. I think Amazon could include a few extra questions, as other websites do, that would help one sort through the variety of reviews. Overall, the system is not perfect and we should be aware that we may not be getting the “unvarnished truth,” but at least it is better than going off anecdotal evidence from a friend or two…right?

Question at the beginning of urban planning: “beautiful people or beautiful cities”?

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Here is part of an overview of the “birth of urban planning” and how the field began with a “focus on place at the expense of people”:

Before then, there were three types of people thinking about how a city should look and function — architects, public health officials, and social workers. Each group approached the question of city building very differently.

The architects were focused on the city as a built environment, implementing ideas like L’Enfant’s grand vision for Washington, D.C., and the New York City grid (set out by the Commissioner’s Plan of 1811). The public health professionals, on the other hand, were consumed with infrastructure. They knew there was a connection between certain diseases and social conditions, even if they didn’t know precisely what it was. Planning how a water system would work, or where waste should go, or how to get garbage out of a city, was the most effective way to stop diseases from spreading (see, for example, John Snow, who figured out in the 1850s that a single water pump on Broad Street in London had infected hundreds of people with cholera). And lastly the social workers wanted to use the city to improve the lives of the people living there. They wanted cleaner tenements, spaces for immigrant children to play, and more light and fresh air for residents.

These thinkers were brought together by the pressure cooker that was the Industrial Revolution. “At that moment, we began to look for technological ways to expand the city,” says Elliott Sclar, a professor of urban planning at Columbia University. “All of a sudden here’s a pressure to comprehensively plan. You can’t just put a privy wherever you want.”…

At that conference, and in the years that followed, any one of these early urban planning strains could have taken over as the intellectual giant in the field. Though the social workers and the public health officials continued to play a role, urban planning’s intellectual history ended up grounded in architecture.

That outcome is thanks in a large part to the creation of the country’s first urban planning school, at Harvard. The University founded a school of landscape architecture in 1898. It was, effectively, a vanity project, slavishly devoted to Frederick Law Olmstead (in fact, it was started by Olmstead’s son). At the same time, It was a place to start. Soon after, they began offering classes in city planning, a first for higher education in America.

This could be an intriguing intellectual “what if”: what if urban planning had initially followed a public health or social work path? How might our cities be different and how would that have changed our culture?

This reminds me of the roots of sociology. Like urban planning, sociology became a more formal academic discipline around the turn of the 20th century. While some people had been practicing sociology and urban planning, it took time for this to become institutionalized and formalized. Similarly, American sociology had its roots in a few influential departments, particularly Chicago, which shaped the early years of the field. Indeed, I suspect a number of the social sciences were formalized in this period as the cultural turn toward science and rationality combined with expanding college campuses.

Suburban tree ordinance helps fight off McMansions, preserve “suburban quality of life”

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Many suburban residents may not pay much attention to tree ordinances in their community. However, a recent debate about the ordinance in Oyster Bay, New York reveals some interesting motivations for such ordinances:

Amendments to the code of the Town of Oyster Bay were discussed at the Tuesday, Aug. 14, town board meeting. They included regulations pertaining to the growing of bamboo on both residential and commercial property (see article on page 10), storm water management and erosion and sediment control, and the removal of trees on private property…

Oyster Bay Town Supervisor John Venditto opened the hearing by explaining the town’s decision that the law as stated was burdensome and needed balance. He said, “Trees are probably the most visible symbols of our suburban quality of life.” The supervisor explained the law was intended to protect the tree population but that when it was instituted they didn’t hear the other side of the story. Now the board members are hearing from residents who are saying, “Who are you to come into my backyard and say I can’t remove a tree.” He said homeowners viewed it as a loss of their individual rights and called it “government intrusion.” After listening to many speakers who seemed to understand his views, he said, “It’s a question of balance.” Mr. Venditto said it was the homeowner dealing with trees on their private property that were the ones the repeal of the ordinance would benefit.

Still the possibility of repealing a tree ordinance reminds people of why they wanted one in the first place. Nassau County Legislator Judy Jacobs (D-Woodbury) was the first to speak. She reminded the audience that, “The initial tree ordinance was passed in 1973 following the total destruction of a 15-acre parcel of land in Woodbury which was bull dozed by a developer, Sidney Kalvar, who was denied an application for zoning on the property.  Hundreds of trees were just leveled and a barren piece of land replaced the natural growth which was there.”

In 2007, an amendment to the town’s 1973 tree ordinance was adopted as a result of the work of Save the Jewel By the Bay which was working to protect the hamlet of Oyster Bay from an onslaught of “McMansions.” The town added to the tree ordinance as well as adopting several zoning ordinances to prevent McMansions; both ordinances were adopted townwide.

Trees clearly have environmental benefits. Yet, they also serve as status symbols. Two things struck me here:

  1. Regulations about trees are tied to fighting McMansions. A common image of the construction of McMansions includes a developer/builder coming in with teams of bulldozers, flattening the landscape, and then mass producing unnecessarily large and ugly houses. Of course, this is not that different of a process from other suburban construction going back to the early days of mass produced housing in places like Levittown. My question: can McMansions be made more acceptable if the developer/builder work more with the existing landscape and retain many of the trees? Put another way, can’t communities simply tell McMansion builders that they must retain or plant a certain number of trees? It doesn’t seem to me that McMansions and trees necessarily have to be antithetical to each other.
  2. Trees denote a “suburban quality of life.” Suburban streets are often depicted with broad, leafy trees spanning over the roadway. I recall reading how the creators of The Wonder Years wanted this sort of suburban image and found it in Culver City, California. Yet, one can find this is many urban neighborhoods. So perhaps it is more about the number of trees. Urban streetscapes are often limited to having trees in the space between the sidewalk and street and sidewalk and building. Or, perhaps it is about trees plus a little green space around the trees which is also tougher to find in cities. I wonder how much having older and/or more trees on a property increases the property value of suburban homes. Neighborhoods with few or shorter trees tends to indicate that the neighborhood is newer but is there a price reduction because of this? How much of the character of an older neighborhood is tied to the trees? Is having plenty of older trees an indication of the community being older and monied?

A final note: the article mentions that two residents say that in order to be known as a “Tree City USA” community, a municipality must have a tree ordinance on the books. I was not aware of this and have wondered what it took to get such a designation and sign along the roadway.