Tag Archives: property values

Countering the negative responses to micro-apartments

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As some city residents fight micro-apartments, here is a set of arguments countering the complaints:

Families often complain that there isn’t enough housing to suit their needs, especially for large families. They’re right. In Seattle, for example, just two percent of market-rate apartment units have three or more bedrooms, according to a 2014 report by the Seattle Planning Commission. The last thing that these families need—especially low-income families and larger families of color—is to compete with single, young professionals for that limited housing stock.

Yet zoning for approximately 65 percent of Seattle’s land area is designated single-family, meaning that the options across much of the city are restricted to what’s already been built. That’s good news for incumbent homeowners, but bad news for people who want to move to Seattle. The city’s not an outlier in this regard, of course: Low-density zoning spurs young renters to rent group houses (or “stealth dorms” as the case may be) all over the nation. It’s not a hard and fast rule, but when single renters can’t find good options in a growing job market, chances are that renting families won’t find them, either…

Incidentally, making sure that housing is legal, affordable, regulated, and, well, available is one way to guarantee against any truly adverse health effects from shared living. The alleged increased health costs specifically associated with micro-housing … well, I don’t want to say that they’re not bad. But they can’t be any worse than the health costs of unaffordable housing. It’s arguable that the stress of unsafe, uncertain, or unsustainable living situations—housing insecurity, as the Centers for Disease Control and Prevention puts it—outweighs the potential crowding-related stress of micro-apartment living…

It’s certainly the case that micro-housing looks trendy, in part because it is presented in savvy renderings by smart architectural firms such as nArchitects. But micro-apartments are also not a type of new housing we’ve never seen before. They’re apartments. Advances in technology and interior design make micro-housing possible without requiring that micro-apartments be tenements, boarding houses, or single-room-occupancy hotels. But the concept of multifamily living is preserved (even if the division of amenities changes).

A more charitable interpretation of the complaints of residents is that lots of affordable housing is needed across sectors: for poor residents, for families, for the elderly, for recent college graduates, and so on. Certain residents may just want the kind of housing that helps them and people like them more than they want to help others groups. A less charitable take might emphasize property values: who wants to live near these cheaper units (people may complain about health or traffic or density but they are more worried about what will happen to the value of their own unit) and the people who might live there (which underlies concerns Americans have about apartments)?

One solution to all of this would be to pay less attention to the exciting new idea of micro-apartments and for cities to comprehensively address housing issues with a range of solutions. Many major cities are short tends of thousands of affordable housing units and a few trendy micro-apartments aren’t going to do much. But, a more comprehensive plan could threaten even more people with a range of locations and housing options…

Install an artificial plant to hide nearby McMansion

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Have an unsightly McMansion next door? Install artificial plantings:

A San Marcos, California based company, Geranium Street Floral, has installed their artificial plants at many hip remodeled homes throughout Southern California. The company recently installed an artificial hedge at a remodeled property in North Hollywood that no doubt greatly improved the view in the backyard of the custom remodeled home. Geranium Street specializes in creating backyard privacy with their artificial plants.

Geranium Street president, Bob Smith explains that with the advent of “McMansions” throughout Southern California, the need for privacy is at an all time high. “Before, you had houses in a neighborhood that were all basically the same height, so privacy wasn’t much of an issue, but now they are tearing the old houses down and building houses that tower over those of their neighbors – suddenly everyone feels like they are living in a fish bowl. We have ways to solve that problem quickly with our artificial plants,” said Smith…

Bob Smith explained that many real estate developers have found the quick solution to their privacy and decorative needs by installing artificial plants. “Whereas it may take months to grow real vines and plant real trees, we can come in and install our artificial plants in a day or two. The new artificial trees and plants look more realistic than they ever did before, and they are very durable,” said Smith.

Four quick thoughts:

  1. Given the water issues in California, I’m surprised this press release doesn’t include the rationale of saving money on plantings. Have a hedge and no water is required.
  2. It would be interesting to think about how these installations play with the idea of “nature.” Some would say the real plantings in the suburban sprawl like that found in southern California are already poor imitations of nature. But, what if those same plantings aren’t even real? Is this a more honest admission of the lack of nature? These options are billed as durable but they likely provide a different aesthetic and physical experience.
  3. Theoretically, such hedges could be built to any size of shape. McMansions can come in all sorts of sizes and shapes and a company could get pretty creative in how an artificial hedge hides the ugly house next door.
  4. What do artificial plants do to property values? They may be durable but I imagine they could be viewed as tacky or lower class.

Neighbors: keep gangster’s house or support replacement McMansion?

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Tampa residents are facing a quandary: do they support two possible McMansions to replace the home of a notorious gangster?

The community is rallying around the five-bedroom, 2.5-bath house built in 1952 by Santo Trafficante Jr., a supposed gangster who ran casinos in pre-Castro Cuba as the head of one of the most powerful organized crime syndicates in Florida.

Parkland Estates residents are upset about an application asking the city to split the lot in two at the request of Trafficante’s surviving daughters, Mary Jo Paniello and Sarah Ann Valdez…

“They’ve always been good neighbors and this is kind of a slap in the face,’’ said Anneliese Meier, vice president of the Parkland Estates Civic Club, which vigorously opposes the plan. “No matter what the history is, it’s a gorgeous house and should be preserved.”…

She said splitting the lot might mean the 63-year-old house will be torn down to make way for two larger homes.

“That doesn’t fit the character of this neighborhood,’’ Meier said. “McMansions tear up the community. They are big houses on small lots. Nobody’s happy about it. We’re tired of seeing this happen in our community.”

Both situations could leave the neighbors with some notoriety that they might think could threaten their property values. But, it is interesting that the neighbors quoted in this article think the McMansion is worse than the gangster: the family were good neighbors but a McMansion would pose a more important threat. Perhaps this suggests that neighbors think people are replaceable but the physical structure has a stronger impact. A broader question to ask many Americans would be: would you rather have a bad neighbor in a nice house that enhances the neighborhood or a bad house nearby with lovely neighbors?

Asking $9.8 million for one small home near Wrigley Field

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The property near Wrigley Field is getting quite valuable – at least according to the asking price:

In the world of real estate, location means everything. But does a property around the corner from Wrigley Field command $9.8 million? The sellers of 3710 N Kenmore Ave. realize that there is much more to the property than the two-story frame house that sits on it. The property has some potential to earn a few bucks and the listing agent is suggesting that investors consider erecting rooftop advertising (specifically a digital billboard) on the site. The Ricketts family have famously scooped up several of the surrounding rooftop properties, but this property is billing itself as one of the few that is not under the control of the Cubs organization. Broker Amy Duong of Jameson Sotheby’s Intl Realty tells us that the seller has been paying attention to sales in the neighborhood, notably the McDonald’s parking lot that the Ricketts family paid $20 million for. Duong also tells us that there’s no mistake in the price in the listing and the seller is fine with sitting on the house until a reasonable offer comes forth.

Perhaps the asking price was influenced by the success of the team this past season. More wins and young talent mean that property values may go up even more. In contrast, look at the land near U.S. Cellular Field on Chicago’s South Side. While that land is not easily converted to party/retail/restaurant space like the properties near Wrigley, imagine if the team was good for a number of years. Wouldn’t businesses and residents want to be part of the scene?

I’m guessing the property won’t sell soon for anywhere near this initial price but why not ask for the moon while the team is winning and the owners are spending money on property and renovations?

Can we have both protected open spaces and affordable housing?

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Conservatives argue that the affordable housing issue is simple: stop protecting open space and let developers build more housing units.

But, beginning in the 1970s, housing prices in these communities skyrocketed to three or four times the national average.

Why? Because local government laws and policies severely restricted, or banned outright, the building of anything on vast areas of land. This is called preserving “open space,” and “open space” has become almost a cult obsession among self-righteous environmental activists, many of whom are sufficiently affluent that they don’t have to worry about housing prices.

Some others have bought the argument that there is just very little land left in coastal California, on which to build homes. But anyone who drives down Highway 280 for thirty miles or so from San Francisco to Palo Alto, will see mile after mile of vast areas of land with not a building or a house in sight…

Was it just a big coincidence that housing prices in coastal California began skyrocketing in the 1970s, when building bans spread like wildfire under the banner of “open space,” “saving farmland,” or whatever other slogans would impress the gullible?

When more than half the land in San Mateo County is legally off-limits to building, how surprised should we be that housing prices in the city of San Mateo are now so high that politically appointed task forces have to be formed to solve the “complex” question of how things got to be the way they are and what to do about it?

The argument goes that this is an example of supply and demand: open more space for development and housing prices will have to drive as supply increases. Is it really this simple? Here are at least a few other factors that matter in this equation:

  1. The actions of developers. Even if more housing units could be built, there is no guarantee they could build cheap or affordable housing. They want to make money and they argue the money is not in affordable housing.
  2. Is cheap suburban housing (what is typically promoted by conservatives in these scenarios – keep building further out) desirable in the long run? Opponents of sprawl might argue that having a cheap single-family home 30-50 miles out from the big city is worse in the long run than a smaller, more expensive unit close to city amenities and infrastructure.
  3. What exactly is the value of open space? Conservatives sometimes argue this is another sign of the religion of environmentalism but there are realistic limits to how much housing and development land can hold before you end up with major issues. (For example, see the regular flooding issues in the Chicago area.) If green or open space is simply about property values – keep my home values high by not building nearby housing – this is a different issue.
  4. There is a larger issue of social class. I’m guessing there are few Americans of any political persuasion that would choose to live near affordable housing. There is a stigma associated with it even if the housing is badly needed. Lots of people might argue affordable housing is needed but few communities want it in their boundaries and middle and upper class residents don’t want to be near it.
  5. Another option for affordable housing is to have denser urban areas. Think cities like Hong Kong where a lack of land and high demand have led to one of the highest population densities in the world. If a region wants to protect its open and green space, why not build up? Many city residents don’t want this – the single-family home urban neighborhood is a fixture in many American cities – and conservatives fear a government agenda pushing everyone into dense cities.

Opening more land to development might help lead to cheaper housing but it would take a lot more to get to affordable housing that is within a reasonable distance from job and population centers.

Californians to be free to hang laundry on clotheslines

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In a move toward energy conservation, California will soon have “laundry liberation“:

In what a legislative analysis called a “modest energy conservation and freedom of choice measure,” Gov. Jerry Brown on Thursday signed legislation requiring property managers to let renters and homeowner association members string clotheslines in private areas.

Assembly Bill 1448, by Assemblywoman Patty Lopez, D-San Fernando, comes amid heightened concern about greenhouse gas emissions in California – and the energy consumption of driers.

One columnist notes the class dynamics at work:

As a class signifier, the clothesline has always been highly charged. In the late 1960s, tumble dryers began to creep their way into middle-class households — according to the U.S. Energy Information Administration, fewer than half of American households had dryers in 1980; by 2009, it had jumped to 80% — the clothesline has connoted a certain unsophistication if not downright poverty.

That’s especially true in big cities, where clotheslines hanging between buildings are an indelible marker of tenement living and overall blight. I visited Beijing a couple of years ago, and hanging laundry was ubiquitous even on the balconies of expensive high-rises. During the 2008 Olympic Games, I was told, the Chinese government prohibited outdoor clotheslines as part of an overall image-control effort. As soon as the Games were over, the laundry went back up.

The primary argument against clotheslines is the perceived effect on property values. Yet, why not give people the choice to dry clothes outside rather than put it in the hands of homeowner associations or local governments? I would guess that many middle and upper class residents still won’t hang clothes outside even if they can. At the same time, it could be a nice economic benefit for households with less money.

Is the status tied to using a clothes dryer in your own home more about consumption (having the ability to buy such an object and pay for its ongoing use) or the ability to keep personal items (like dirty laundry) within private areas?

Allowing suburban residents only two garage sales a year

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Suburban homeowners must protect their interests, from policing Halloween decorations to limiting the number of garage sales at one address:

Wheaton residents may soon be limited to hosting only two garage sales per year, each for a maximum of two days.

The Wheaton City Council reviewed a proposed ordinance Monday that would modify the city’s existing garage sale regulations.

“There are some homes in the city where people have stuff out on their lawn every weekend throughout the year, or at least throughout the summer months,” said Councilman John Prendiville. “The neighborhoods are becoming a little bit upset with that, they think it is hurting the enjoyment of their property.”

City Manager Don Rose added that this summer has been “different,” with the number of “almost continuous garage sales, taking up the name of hoarder sales” becoming problematic in several neighborhoods.

What exactly does “hurting the enjoyment of their property” mean? Perhaps it is referring to enjoying nature on the front lawn, whether through using the space or having a clear sight line from house or porch to other areas. Perhaps this is generating some extra noise and blocking sidewalks or parking along the street. But, what it really probably means is that homeowners are worried about their property values. What does it look like if neighbors consistently have things for sale in their driveway or front lawn? It looks lower class and less desirable. It is suggestive of commercial establishments or of neighbors who constantly need money. All of this could translate to less value.

At the same time, I’d be interested to hear how a suburban community would enforce this guideline. Will people have to officially register their garage sale? Will police officers start a database? Will neighbors be able to take time-stamped photos of illegal garage sales and turn this in as evidence?

Are Forest Preserves really about maintaining property values and quality of life, not protecting nature?

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Each day on the way to and from work I drive past multiple Forest Preserve properties. They are generally green and open, providing a relaxing scene under the rising sun or after a long day. Yet, how much are they really about preserving or protecting nature as opposed to improving the quality of life of suburbanites? Are these two goals antithetical to each other?

The DuPage County Forest Preserve – alongside others in the Chicago metropolitan region – has been aggressive over the decades in purchasing land. The pace of acquisition picked up after World War II in the era of mass suburbanization where development eventually spread throughout all of Cook, DuPage, and Lake County. See an animation here of the land acquired by the DuPage County Forest Preserve since 1920.

The mission of the organization is stated here:

As mandated by the Illinois Downstate Forest Preserve Act, our mission is “to acquire and hold lands containing forests, prairies, wetlands, and associated plant communities or lands capable of being restored to such natural conditions for the purpose of protecting and preserving the flora, fauna and scenic beauty for the education, pleasure and recreation of its citizens.”

The mission mentions both nature and citizens. But, one way to look at the acquisitions is that they enhance the quality of life of wealthier residents by providing green and/or open space that will not be developed, offering recreational opportunities, and raising property values for nearby housing and not just for those that border the properties but for numerous developments who don’t have to contend with more nearby developments. Of course, forest preserves and parks can be used by residents of all class backgrounds. Yet, taking away all of the land from possible development means that affordable housing – already limited in wealthier places like DuPage County – may be even less possible. Property values are always lurking in the background of development decisions in the suburbs and I suspect it is relevant here.

Additionally, “protecting and preserving” nature is a tricky business. It is not exactly in a “natural state” as human beings have been in the area for at least hundreds of years going back to the first white settlers in the 1830s and Native American groups as least a few decades before that. These Forest Preserves present a particular kind of nature, one that this is never too far from busy roads, housing developments, tricky water run-off situations, and pollution. This is made more clear in the term sometimes used of “open space” where concerned suburbanites want empty land.

In the end, do suburbanites really desire Forest Preserves for the mediated nature they provide or the enhanced quality of life they bring? The answer might be both but we rarely discuss the implications of the second reason.

Perhaps the drop in property values in Ferguson could prompt change

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The fallout from last year’s events in Ferguson, Missouri continues including this look at the changes in property values:

For the city’s 2014 budget, approximately 20 percent of the city’s revenue came from the city’s courts, and 17 percent came through property taxes. But after a Department of Justice report found the courts were profiting off racial discrimination, the State of Missouri took over to implement reforms. Couple that with rapidly falling property values (which are used to calculate owed taxes) and it seems like key parts of the city’s business plan are falling out from under it…

The average selling price of a home in the city has been on a steady decline since the shooting of Brown last August, according to housing data compiled from MARIS, an information and statistics service for real estate agents. Prior to Brown’s death, the average home sold in 2014 was selling for $66,764. For the last three and a half months of the year, the average home sold for $36,168, a 46 percent decrease.

The trend has continued on through this year, with the average home selling for only $22,951 so far in 2015. Another negative indicator: in the eight and a half months leading up to Brown’s death, the average residential square foot in 2014 was selling for $45.82. In the eight and a half months since Brown’s passing, the average residential square foot in the city has sold for $24.11. That’s about a 47 percent downtick in one of real estate’s core indicators.

In the suburbs, where quality of life (including factors like crime, the quality of the houses, performance of the local schools) is paramount in (1) influencing housing values and buying and selling real estate and (2) building a tax base through attracting businesses and organizations, infamy is not a good thing. But, given the patterns of local treatment of people by police in the area, it is hard to see how this wouldn’t affect housing values and the tax base. When given options across the suburbs of St. Louis, how many homeowners or companies would choose to move to Ferguson? And, if we’re honest, hitting suburbanites where it really matters – property values and their tax base (the double whammy of housing and land values going down while property taxes may need to increase to close the gap) – may be what is needed to prompt change.

Growing real estate segment: commercial cannabis real estate

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A new startup wants to help buyers and sellers identify properties that are eligible to grow and/or sell marijuana:

Chicago’s real estate industry is in the midst of a few building booms, but if a new startup has its way, another one is about to bloom: commercial cannabis real estate. HerbFront, co-founded by CEO Alan O’Connell and Matt Chapdelaine, head of business development, want to create the Zillow of marijuana-based real estate. Their concept, which they’re developing at the ElmSpring accelerator at 1871 and plan to release in February, is a tool that lets investors see where they can legally locate dispensaries and grow operations, and helps property owners discover if buildings in their portfolio qualify for this potentially lucrative market. According to O’Connell, zoning rules and regulations can make locating a dispensary or grow operation complicated, but the huge upside means entrepreneurs are looking for someone to help point them in the right direction.

“There’s a lot of murky water in the industry, right now,” says Chapdelaine. “A lot of people are looking to access real estate, and real estate people are looking to access the industry.”

HerbFront will offer an array of services, from listing a property for $50 on its database to leasing the software to providing specialized business intelligence to investors and municipalities, in effect becoming a consultancy as well as a marketplace for these industry-specific property transactions. Chapdelaine, who has background as a broker, saw what happened during the last permit application process in Illinois, and believes his program can fill an important gap, as well as provide a form of insurance for those spending at least $250,000 to obtain a permit. With that kind of down payment to start a small business, obtaining a guarantee from HerbFront that potential sites are properly zoned becomes valuable (or so the founders hope).

I could see how this service might be valuable. But, it seems less difficult to map the available properties than it will be to predict and/or know what these properties might be worth. How profitable are such facilities? Are there other businesses or services that want to be or are needed near marijuana facilities? More broadly, could these be tools for economic development? From what I read about planning for such facilities in different Chicago suburbs, there is still hesitation based on what kind of people and activity such facilities could attract as well as how they might affect the reputation and image of the community. But, if they became a unique opportunity for economic development, perhaps communities would be falling over themselves to attract one.