When a suburb dismantles a plane in a homeowner’s driveway

You don’t see too many airplanes parked on the typical suburban street but this incident in New York may serve as a warning to those interested in just that:

A 70-year-old Long Island man who allegedly ignored 17 summonses calling for him to remove a plane parked in his driveway threatened to use a crossbow on town officials who dismantled it.

Crews spent most of the day Thursday disassembling the single-engine Cessna parked outside Harold Guretzky’s home in Oceanside, ending a 1½-year saga that pitted Guretzky against his neighbors and the town…

Town officials said housing the aircraft in Guretzky’s driveway violates building safety codes…

Last year, Guretzky likened it to parking a boat in a driveway and has said he didn’t have money to house the plane in a hangar. Some neighbors, however, said there’s no comparison.

What a production that included local officials giving a press conference in front of the plane in the driveway of street of raised ranch homes. The main reason given for removing the plane was safety but no one said exactly why it was a safety hazard. The owner compares it to a boat and the safety issues there could be similar: large gas tanks just sitting there. Presumably, he is not going to try to take off on the suburban street (though wide streets of many recent suburbs would help avoid clipping mailboxes).

My guess is that this is more of an eyesore/property values issue. For similar reasons, communities may not allow RVs or work trucks to be in driveways. Is a plane that is rarely used really more of a safety hazard than a large truck? However, it does look unusual (particularly with the wings spread out) and probably draws the ire of some neighbors who are worried about potential homebuyers or outsiders getting the wrong idea about the block.

One solution is for Guretzky to find a suburban airplane subdivision. They do exist: see the example of Aero Estates in NapervilleAero Estates in Naperville.

Claim that McMansions have proportionally lost resale value

A recent study by Trulia suggests McMansions don’t hold their value:

The premium that buyers can expect to pay for a McMansion in Fort Lauderdale, Fla., declined by 84 percent from 2012 to 2016, according to data compiled by Trulia. In Las Vegas, the premium dropped by 46 percent and in Phoenix, by 42 percent.

Real estate agents don’t usually tag their listings #McMansion, so to compile the data, Trulia created a proxy, measuring the price appreciation of homes built from 2001 and 2007 that have 3,000 to 5,000 square feet. While there’s no single size designation, and plenty of McMansions were built outside that time window, those specifications capture homes built at the height of the trend.

McMansions cost more to build than your average starter ranch home does, and they will sell for more. But the return on investment has dropped like a stone. The additional cash that buyers should be willing to part with to get a McMansion fell in 85 of the 100 largest U.S. metropolitan areas. For example, four years ago a typical McMansion in Fort Lauderdale was valued at $477,000, a 274 percent premium over all other homes in the area. This year, those McMansions are worth about $611,000, or 190 percent more than the rest the homes on the market.

The few areas in which McMansions are gaining value faster than more tasteful housing stock are located primarily in the Midwest and the eastern New York suburbs that make up Long Island. The McMansion premium in Long Island has increased by 10 percent over the last four years.

Read the Trulia report here.

Interesting claim. After the housing bubble burst, some commentators suggested that Americans should go back to not viewing homes as goods with significant returns on investment. Instead, homes should be viewed as having some appreciation but this happens relatively slowly. This article would seem to suggest that return on investment is a key factor in buying a home. How often does this factor into the decisions of buyers versus other concerns (such as having more space or locating in the right neighborhoods)? And just how much of a premium should homeowners expect – 190% more than the rest of the market is not enough?

This analysis also appears to illustrate both the advantages and pitfalls of big data. On one hand, sites like Trulia and Zillow can look at the purchase and sale of all across the country. Patterns can be found and certain causal factors – such as housing market – ca be examined. Yet, they are still limited by the parameters in their data collection which, in this case, severely restricts their definition of McMansions to a certain size home built over a particular time period. As others might attest, big homes aren’t necessarily McMansions unless they have bad architecture or are teardowns. This sort of analysis would be very difficult to do without big data but it is self-evident that such analyses are always worthwhile.

Why would we want to promote more HOAs with a tax break?

A new proposal in Congress would allow members of a HOA to deduct their association fees from their federal taxes:

Upward of 67 million people live in these communities — ranging from sprawling master-planned subdivisions down to individual condominium or cooperative developments. As of 2014, they contained nearly 27 million housing units. Their homeowners associations often provide the functional equivalents of municipal and county services, and residents nationwide pay roughly $70 billion a year in regular assessments to fund road paving and maintenance, snow removal, trash collection, storm water management, maintenance of recreational and park facilities, and much more.

The same residents also pay local property taxes to municipal, county or state governments. But unlike other homeowners, only their local property tax levies are deductible on federal tax filings. Their community association assessments that pay for government-type services are not.

Now a bipartisan group of congressional representatives thinks that’s inequitable and needs to be corrected. Under a new bill known as the HOME Act (H.R. 4696), millions of people who live in communities run by associations would get the right to deduct up to $5,000 a year of assessments on federal tax filings, with some important limitations…

The bill’s primary author is Rep. Anna G. Eshoo, D-Calif. Co-sponsors include Reps. Mike Thompson, D-Calif., and Barbara Comstock, R-Va.. Though the bill has little chance of moving through the House or Senate during this election year, it sends a message to the legislative committees now working on possible tax code changes for next year: Congress needs to acknowledge the role the country’s community associations play in providing municipal-type services. The way to do it is to allow deductions on a capped amount of the money residents are required to pay to support community services.

It will be fascinating to see what sort of formula is used to calculate these deductions as the fees paid to associations do not cover all sorts of municipal services used outside of the association.

At the same time, won’t this promote more HOAs, or at least make them more attractive? And do we really want more? They certainly are popular but they continue a trend that is not necessarily good for society: privatizing municipal goods and helping neighbors guarantee their property values. For the first, instead of paying a municipal government, a new layer of private government is enabled to take care of certain services. Americans tend not to like more and more layers of fees and government. However, this might be outweighed by the second factor: the HOAs help keep the neighbors in line without owners directly having to interact with other neighbors. Instead of possibly having to live next to the neighbor who paints their house purple and starts a garden in the front yard, the HOA polices this. In other words, this tax break might help more and more Americans work out civic life through private associations that they see as a necessary evil.

Given all of the HOAs, is there any analysis that shows they pay off financially in the long run either for the property owners or the municipalities?

Hiding the remains of the dead Chicago Spire

With the plans for a 150-story Chicago building postponed or dead, the massive hole in the ground is going to be harder to see:

It was supposed to be a strutting 150-story lakefront symbol of the city’s virility — but eight years after construction of the Chicago Spire skyscraper ground to a halt, the gaping hole where it was to have stood has instead become an enduring reminder of the Great Recession.

So owner Related Midwest is now hiding the unsightly circular hole that would have formed the foundation of the world’s second-tallest building behind a pile of dirt.

Workers last week started moving dirt to form a landscaped berm that will block the view of the 110-foot diameter hole from a row of 10 Streeterville row homes on the 400 block of East Water Street…

The screen, which won’t be tall enough to block the view of the hole from nearby high-rise buildings, is simply “the neighborly thing to do,” Anderson said on Tuesday, declining to comment on Related Midwest’s long-term plans for the land.

There could be a variety of reasons for blocking views of this large hole:

  1. The city requires such changes.
  2. People have complained about this, either because it is a safety issue or it harms property values.
  3. The company has some plans or changes they don’t want to broadcast.
  4. The empty hole in the ground is a negative symbol that reflects poorly on the property and Chicago.

We tend to like stories of large skyscrapers that succeed against all obstacles. They fit with narratives of endless urban growth, humans producing technological marvels, reaching for the heavens, and serve as symbols of power and wealth. Recently, I had my class watch part of Episode 8 (“The Center of the World”) of the PBS documentary New York which details the decades long effort to build the World Trade Centers which were not needed but came to be important markers. Yet, there are certainly stories of significant building projects that failed or never got off the ground. These are rarely told or there is little physical evidence that something went wrong. A large hole in the ground present for years suggests something didn’t work out and few corporations, planners, or urban officials would want to be reminded of this.

Man ups ante in zoning battle by allowing the KKK to use his property

There are many ways to wage war with your neighbors but one Georgia man has a unique technique:

Bill Torpy of the Atlanta Journal-Constitution visited the Six Hills subdivision in tony Milton, Georgia, to get to the bottom of things. “For a decade,” Torpy writes, “the owners of a mostly land-locked 24-acre parcel in Six Hills have tried to develop the property and have gotten increasingly frustrated in getting turned down.” The latest owner is one Douglas Hay, whose own development proposal was rejected by the city of Milton and who has responded by (reportedly) letting pigs run free on the land, hiring a loud truck to annoy a neighbor, and now renting space to the Loyal White Knights of the KKK.

“We go out there, it’s open for our members to camp out, to target practice, to have our meetings because we’re a religious organization,” a KKK rep said.

Hay bought the land for $900,000 and now says his “feud” with the neighborhood/city will end if he can sell it for $2 million. Just a reasonable regular businessman, this Douglas Hay.

This goes beyond buying a nearby property to avoid a teardown or going to court. Presumably, the tactic is intended to threaten the property values of neighbors who will then cave to the plans for the property. Bring in one of the most reviled groups and see how the neighbors like that! The community of Milton is well-off: the median household income is nearly $111,000. Then, the question becomes how long the neighbors can wait Hay out. Or, perhaps they can mount a counteroffensive including demonstrations and negative publicity for the landowner? It sounds like the various actors can draw on a number of resources to win this zoning battle.

One thing McMansions can do? Play host to Smash Bros. tournaments

McMansions are often derided for their size but imagine them as a fun site for a weekend of Smash Bros.:

Some tournaments take place in massive convention centers. Some grand finals even go down in giant arenas. While these events can be truly impressive, they don’t have the spark of early tournaments that captured the imagination and hearts of Smash players. Friends crowded around TVs, laughing, jeering, and, while the competition was fierce, they were still having the time of their lives. This is the atmosphere players will find at McMansion 7, a tournament that’s like a vacation with live music and a whole lot of Smash.

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This home in Pensacola Beach, Florida (according to the comments) is a modest home by McMansion standards. I can only imagine the kind of fun and mayhem that might occur in a larger and more opulent McMansion, say 8,000 square feet in a ritzy neighborhood. Still, a massive video game tournament may help fill out those great rooms, bonus rooms, and expansive spaces of the McMansion. But, what would the neighbors think about the kind of people who play video games, the noise, the cars, and the property values related to being near the video game heaven McMansion…

Regulating sex businesses in the suburbs

Many suburbs want nothing to do with strip clubs and similar businesses so they employ several methods to discourage them:

Warren is running into something that has plagued businesses dealing in sex for decades. Local governments — and the officials elected to govern them — don’t want these businesses around, according to Judith Hanna, a professor at the University of Maryland.

Hanna has testified as an expert witness in more than 150 court cases involving sexually oriented businesses. She even wrote a book about her experiences…

The majority of the cases she testified for involve strip clubs, which Supreme Court rulings protect because of First Amendment rights…

Menelaos Triantafillou, a professor at the University of Cincinnati who teaches courses in planning and urban design, explains: “The only thing you can regulate is not the use itself,” he said, “but the specific location.”

Local governments typically allow these businesses to exist in industrial areas. Restrictions are placed on how close they can be to other establishments such as schools and day cares.

In the particular case discussed in this article, the community is working hard to make a swingers club go away. But, it sounds like they are making it up as they go to appease voters as several local officials have privately supported the new business.

Perhaps an alternative strategy is in order. Zoning is a big deal in suburbs as they get to keep uses that limit endanger property values or a high quality of life away from single-family homes. But, zoning can only do so much. Yet, communities can make it clear that certain businesses are not welcome. While suburbs often welcome new businesses (they provide jobs, property tax revenue, perhaps sales tax revenue), couldn’t they also make it hard for the new business to make money? I’m thinking bad publicity, protests, no invitations to the local chamber of commerce and local events.