Tag Archives: wealthy

“Gated communities for the rich and poor”

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A sociologist who has studied gated communities in Puerto Rico discusses gated communities across the socioeconomic spectrum:

The concentration of class and racial privilege in suburbs, fortressed enclaves, securitized buildings, and private islands takes place alongside the spatial concentration of poverty in ghettos, favelas, and barrios. Residential gates for the rich have also led to the rise of gates for the poor—in favelas in Brazil, South African townships, peripheral urban migrant settlements in China, and even in some public housing developments in the United States. The built environment sorts and segregates people, physically and symbolically distinguishing communities from one another. Whether one is locked inside or kept outside is determined by one’s race, class, and gender. In both kinds of gated communities, controlled access points restrict movement in and out. However, living in gated communities of the rich and poor are vastly different experiences.

The privileged gates of Extensión Alhambra offer a retreat into a secure, idyllic community; newly privatized street and sidewalks are restricted to sanctioned, paying community members, who can decide who is allowed inside. In the impoverished community of Dr. Pila, in contrast, government and private overseers control the movement of residents. So while the gates of Extensión Alhambra permit their affluent residents to exert greater political and social influence over their home turf, in Dr. Pila they have the opposite effect, diminishing residents’ power. In privileged communities, gates lock undesirables out; in poor communities, they lock them in. In both cases, gates are erected to serve the interest of the upper classes, who are primarily white. In other words, gates reproduce inequality, and cement or—to use Michel DeCerteau’s term—“politically freeze” social distinctions of race and class.

The same types of structures, different purposes and consequences. This reminds me of the debate regarding the design of public housing projects in the United States: if high-rises hadn’t been the primary choice and public housing agencies instead went with low-rise buildings or New Urbanist type structures, perhaps major problem would not have developed. But, in the case of public housing and gated communities, they can exacerbate existing issues but it is more difficult to claim they cause the issues in the first place.

Analyzing the SuperZips of the Washington D.C. region

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There are a lot of wealthy and educated people living in SuperZips around Washington D.C.:

Clarksville sits in one of the nation’s “Super Zips” — a term coined by American Enterprise Institute scholar and author Charles Murray to describe the country’s most prosperous, highly educated demographic clusters. On average, they have a median household income of $120,000, and 7 in 10 adults have college degrees…

A Washington Post analysis of the latest census data shows that more than a third of Zip codes in the D.C. metro area rank in the top 5 percent nationally for income and education. But what makes the region truly unusual is that so many of the high-end Zip codes are contiguous. They form a vast land mass that bounds across 717 square miles. It stretches 60 miles from its northern tip in Woodstock, Md., to the southern end in Fairfax Station, and runs 30 miles wide from Haymarket in Prince William County to the heart of the District up to Rock Creek Parkway.

One in four households in the region are in a Super Zip, according to the Post analysis. Since the 2000 Census on which Murray based his analysis, Washington’s Super Zips have grown to encompass 100,000 more residents. Only the New York City area has more Super Zips, but they are a much smaller share of the total of that region’s Zip codes and are more scattered…

Yet many who live in these rapidly evolving communities do not think of themselves as rich or elite. The cost of living, particularly for housing, eats up a large chunk of the two incomes it typically takes to afford a comfortable home in a good school district.

Interesting look at social class today in America; those on the upper end tend to argue they worked hard to get there, deserve what they have, and they aren’t really rich (though comparisons to much of the U.S., let alone most of the world, suggests otherwise). As the article goes on to note, a number of people are concerned about what the lack of interaction with others might mean down the road.

This is a story that has developed in recent years. For example, a number of people have noted that a large number of the wealthiest counties in the United States are in the Washington region. While conservatives tend to tie this wealth to the growth of big government (and the businesses associated with it), how come scholars haven’t looked at this more closely? There have been some studies of a few areas in the Washington metropolitan area, such as Prince George’s County and its large suburban black population or the growth of the edge city of Tysons Corner or responses to growing immigrant populations in Prince William County, but little look at the region as a whole. Perhaps this is a lingering artifact of American urban sociology’s emphasis on some “traditional big cities” like Chicago, New York City, Boston, and Philadelphia and not paying as much attention to newer big cities like Washington D.C., Dallas, Houston, Phoenix, Las Vegas, and others. Do we need something like a “Georgetown School” or “Brookings Institution School” of urban sociology?

Why live in Celebration, Florida when you can live in a Disney gated community within the resort?

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Celebration, Florida gets a lot of attention as a Disney-designed New Urbanist community but there are more exclusive Disney housing options: living in a big house within a gated community inside the resort.

Walt Disney Co.’s gated community known as Golden Oak—named after the company’s California ranch—is the only place in the world where you can own a home within Disney-resort boundaries. Some 980 acres are being carved up for as many as 450 homes on the Lake Buena Vista site, a few within eyesight of the famous Cinderella Castle fireworks.

Homeownership in the development starts at $1.7 million, and homes have sold for more than $7 million. Extras include property taxes and annual fees as high as $12,000 to cover perks, which include park passes, door-to-park transportation, extended hours for visiting attractions such as the Magic Kingdom and Epcot, and a 17,000-square-foot clubhouse with a restaurant and concierge. Residents also will have access to some of the amenities, including the spa and dining rooms at the $370 million, 444-room Four Seasons resort expected to open in Golden Oak next summer…

Many homes include nods to Mickey Mouse and friends. (Disney is willing to overlook trademark violations inside the home.) The ceiling of one of Mr. Bergami’s guest rooms has a tray ceiling in the shape of Mickey’s head. Doors have carvings of the castle, Donald Duck and Goofy.

Homeowners also have the option of adding “hidden Mickeys”—as the features are known—in everything from kitchen backsplashes to stair railings. Builder Chad Cahill included an estimated 75 hidden mouse ears in a showcase home finished earlier this year. Some are tough to spot, so when the furnished $2.7 million home sells, the new owner will receive a map of the locations.

See a 2012 post about the construction of this gated community. Sounds like the gated community is all about giving the wealthiest Disney fans what they want: an immersive Disney home just a short distance away from the Disney gates.

A thought about these wealthy Disney fans: are they easy to spot at the Disney parks? We spent a day at the Magic Kingdom in Florida last year and I was struck that the people around us looked like a broad slice of middle-class America. Granted, it is not cheap: single-day tickets were over $90, the food was moderately expensive (not as bad as I thought it might be), and many people have to travel far and pay for airfare, a hotel, and a rental car. Of course, there are lots of other things to spend big money on (for example, giving your small daughter the full princess experience), but I don’t remember seeing people who were flashing wads of money and really expensive clothes or other goods. Perhaps this says more about Americans trying to downplay their wealth (we’re all middle-class) or the findings that most millionaires don’t act like stereotypical millionaires.

Persistent homelessness in the Chicago suburbs shouldn’t be a surprise

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Homelessness is an ongoing concern for Chicago suburbs:

Advocates say her story reflects an ongoing dilemma for those working to end homelessness. The problem often is dismissed as an urban one, but thousands of homeless people seek emergency overnight shelter across Chicago’s suburbs each year. In DuPage County, nearly three-quarters of the homeless are from the county, officials said.

Although the number of people served by homeless support agency DuPage Pads has remained steady at about 1,400 people for the past three years, officials counted an additional 29 people who refused shelter this year in favor of sleeping in parks, building entryways and other public areas, said Carol Simler, executive director for the agency.

Many of these homeless people are affected by mental illness, substance abuse or debilitating health conditions. Yet stringent suburban law enforcement — which keeps homeless people from congregating or loitering — coupled with an increase in foreclosed buildings in some areas make the fringe group difficult to reach, advocates say…

In Lake County, 2,000 people receive assistance or shelter from PADS Lake County each year. Officials estimate that an additional 200 choose to sleep outdoors — a group that can be elusive, said Joel Williams, executive director of PADS Lake County.

A few thoughts:

1. Homelessness in the suburbs might be even more pernicious for those without a home because it is harder to access local services or they are less present. As this article notes, there are several organizations in the Chicago suburbs tackling the issue and the PADS organizations in DuPage and Lake County take advantage of the Metra lines or busing, respectively.

2. It shouldn’t be surprising in 2013 to see “urban” issues in suburban areas. For example, the number of people in poverty in the suburbs now exceeds the number in poverty in big cities. Or, see the recent set of articles in the Chicago area about an uptick in heroin usage in the suburbs. Yet, it is still common to see articles like this or reactions from suburbanites that say things like, “isn’t it strange to see urban issues in the suburbs?” It could be that there are still suburbanites who aren’t expecting these issues or who intentionally moved to the suburbs to get away from such concerns. Yet, I also wonder if this isn’t really code for something: this is really more concern in wealthier suburbs who would like to keep these sorts of troubles far from their borders.

New York City seeing a rise in super-rich mansions (not McMansions)

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Curbed highlights a Gizmodo story about “McMansions” in New York City – and both get it wrong as these new homes are far beyond McMansions:

But developers may be reaching a breaking point in Manhattan, where warehouses are being bought to build $100 million single-family homes.

A handful of real estate stories this week question whether NYC is reaching peak development. First off, we have a mind-boggling report about the rise of single-family “palaces” in Manhattan. According to the New York Times, the super-rich are buying up warehouses, parking garages, and other commercial buildings to turn them into gigantic McMansion-style homes (including what will soon become the largest single-family home in the city). According to one broker, the new “benchmark” price is going to be $100 million, as opposed to the almost austere $50 million buyers expected to pay a few years ago.

It’s one thing to get rid of warehouses and garages—but another set of trend pieces alert us of a more problematic trend: The disappearance of gas stations in the city. As developers strive to find new plots of land that can be rebuilt from the ground up, they’re buying up gas stations left and right. We’ve covered at least one of these developments before, but according to the NYT and the Village Voice, it’s becoming a problem for cab drivers who can’t always find a station in time.

Note: the New York Times article cited above which starts with the story of a new 40,000 square foot home does not use the term McMansion. Calling them McMansions is just wrong; these are unusually large and expensive homes that go far beyond the typical, mass-produced, large suburban home.

More on these new homes from the New York Times:

“The town-house buyer doesn’t want a multi-unit condominium that is mass-produced,” said Wendy Maitland, a senior managing director of sales at Town Residential, who just closed a deal on a town house at 45 East 74th Street for $26 million. “This is an entirely private home, built for the lifestyle of someone who has multiple staff, a private driver. These people do not need a doorman, and they aren’t sharing amenities.”

Such buyers don’t exactly need a discount, but the value of private homes compared with condominiums is a draw anyway. “There is a gap in the marketplace — mansions are an area that is undervalued,” said Louis Buckworth, a broker at the Corcoran Group. He recently represented the British real estate magnate Christian Candy in buying a $35 million 30-foot-wide mansion for his family on the Upper East Side. (“Mansion” is typically defined as a town house at least 25 feet wide.) Mr. Candy’s new home, at 17,000 square feet, cost less than $2,100 a square foot. Meanwhile, “an 11,000-square-foot apartment at One57,” said Mr. Buckworth, referring to the glass tower in Midtown that Extell Development is building, “sold for $10,000 a square foot, making what we paid a joke.”

McMansion owners may want similar things – privacy, more space – but these homes are a step above.

Interestingly, even with their size and price, they tend to compare favorably to expensive homes in other global cities:

And for many buyers — especially foreigners who see real estate as more affordable in New York than in cities like London or Hong Kong — the numbers are eye-catching. Mr. Candy, for example, just sold a $250 million apartment in London and a $400 million home in Monaco, Mr. Buckworth said. “So as a foreigner, you say to yourself: ‘I can spend £20 million for an average-size flat in London, or get a mansion in prime Manhattan.’ And you can see why these numbers aren’t going to be particularly scary.”

So instead of pitching the story on Curbed and Gizmodo as the excesses of the American wealthy in New York City, this could be told as a story of relative value for big homes in a major global city. Same data, different contexts and narratives. Just bringing up the word McMansion implies selfish owners out to live in ostentatious homes.

The “trick or treat index” for metropolitan areas and Chicago neighborhoods

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In a ranking sure to bring in some Internet traffic, Zillow has put together a “trick or treat index”. The top ten cities: San Francisco, Boston, Honolulu, San Jose, Seattle, Los Angeles, Chicago, Washington D.C., Portland, and Philadelphia. You can also see the top neighborhoods for these cities. Here is what goes into the index:

Zillow takes numbers seriously, even when it comes to trick or treating. Taking the most holistic approach, the Trick-or-Treat Index is calculated using four equally weighted data variables: Zillow Home Value Index, population density, Walk Score and local crime data from Relocation Essentials. Based on these variables, the Index represents cities that will provide the most candy, with the fewest walking and safety risks.

A brief and clear explanation. The index includes four equally weighted factors: the price of homes (giving some indication of the wealth in the neighborhood), density (how many people/households are available to go to for candy), walkability (can easily walk to more candy locations), and crime rates (safety while trick-or-treating). All of this presumably adds up to identifying the best places to get candy: wealthy people are likely to give better candy, there are more households within a short walk, and it is safe. But, why don’t we get the actual ratings in these four categories for the top cities?

It is probably not worth anyone doing a serious research project on this but it would be interesting to crowdsource some data from Halloween to see how this index matches up with experiences on the ground. In other words, does this index have validity? This seems like a perfect Internet project – think GasBuddy for Halloween candy.

One way to avoid teardown McMansions nearby: just buy all the properties yourself

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Mark Zuckerberg has a way to avoid annoying teardown McMansions next door:

Facebook chief and founder Mark Zuckerberg bought four homes adjacent to his own tony Palo Alto house to prevent a developer from building a McMansion capitalizing on being next to the creator of Facebook.

Zuckerberg paid more than $30 million for the four properties next door and behind his home, and is now leasing them back to the owners, according to the San Jose Mercury News.

The 29-year-old billionaire reportedly bought the houses to prevent a developer from building a McMansion and marketing it as “being next door to Mark Zuckerberg,” according to an unnamed source.

According to public records, the home behind Zuckerberg’s was sold last December to a legal entity affiliated with Iconiq Capital, a San Francisco company that handles Zuckerberg’s finances. Last month, two more properties behind his home and one next door were also bought by associated entities of Iconiq. One of the properties sold for $14 million.

The irony of this is that defeating teardown McMansions requires having more money than the possible property owners. Have less money and residents can often have a fight on their hands.

Another issue: who would pay more money for a home just because it is next to Mark Zuckerberg? Rather than offering opportunities to spy on Zuckerberg, I wonder if this is more of a halo effect for the neighborhood: it’s such a good neighborhood that one of the world’s best-known people live here.

The wealthy continuing to give to wealthy universities and colleges

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Gregg Easterbrook, ESPN’s Tuesday Morning Quarterback, continues to highlight a pattern: wealthy donors giving to already wealthy universities and colleges:

Don’t Give to Harvard! A running TMQ cause is that rich people give money to schools such as Harvard, Yale and Stanford, places already possessing gargantuan endowments, rather than to schools where money is needed. The rich underwrite elite schools for ego reasons — at cocktail parties they can say, “I just donated $10 million to Harvard, now a shower stall will be named after me.” At colleges and universities that serve average people, donations can change lives. If you’ve got money, donate to noble Berea College, which accepts only poor students and charges no tuition, or to gallant Bethune-Cookman, a historically black school that mainly serves the underprivileged. Alumnus Charles Johnson just gave $250 million to Yale — which is already sitting on a $19 billion endowment. At a place like Berea College, $250 million would have been a transformative event in the lives of the deserving. At Yale, it’s a rounding error in the lives of the privileged.

Reader Jon Miller of Beaumont, Texas, notes that despite having a world’s-best endowment of $32 billion — nearly double the GDP of Honduras — Harvard just kicked off a capital campaign, asking for another $6.5 billion. Rich people, show a little class: Don’t give to Harvard. Or Yale, Princeton or Stanford. Make your donation count.

This gets back to an old question: do elite universities perpetuate social inequalities? If giving patterns changed as Easterbrook suggests, perhaps there might be a shift…

Do private schools keep wealthy families in American big cities?

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In response to last week’s argument that bad people send their kids to private school, Megan McArdle suggests urban private schools have kept wealthy families in big cities.

However, I think that Benedikt isn’t thinking through what would actually happen if everyone felt a moral obligation to send their kids to public schools. What would actually happen is that Allison Benedikt wouldn’t live in Brooklyn, because New York, like most of the rest of the U.S.’s cities, would have lost all of its affluent families in the 1970s — the ones who stayed largely because private school, and a handful of magnet schools financed by the taxes of people who sent their kids to private school, allowed them to maintain residence without sending their kids into middle- and high-schools that had often become war zones. Anyone with any choices left that system, one way or another. But because New York had a robust system of private and parochial schools, they didn’t necessarily need to leave the city to leave the violence behind…

Now, Benedikt could lecture you until the cows came home about your moral obligation to public schooling, but you still wouldn’t leave your kids in a school where the teachers were being set on fire (and neither, I imagine, would Benedikt). If you couldn’t send your kids to private school, you’d just move. That, in fact, is what happened to most urban school systems; any resident who had any means at all picked up and moved outside the city’s borders, beyond the legal limits of busing so that there could be no question of bused students importing these problems to their kids’ schools…

Benedikt’s dictum makes sense only if parents can’t move. If they can — and bid up the value of real estate in good school districts — then making parents send their kids to the local schools probably doesn’t mean that all the parents in mixed-income neighborhoods will put their children, and their effort, into the local school. It probably means that they’ll leave the mixed-income neighborhood, taking their tax dollars with them.

This is nominally public schooling, but in fact, as I once remarked, parents who think that they are supporting public schooling by moving to a pricey district with good schools are actually supporting private schooling. They’re just confused because the tuition payment comes bundled with hardwood floors and granite countertops.

Cities need and/or desire to have wealthy residents because they provide tax dollars. Perhaps this is the deal cities make with such residents: we need you so we will provide you with the opportunity to spend your money how you wish regarding the education of your kids. So, cities and politicians try to support public schools but also allow space for private schools, setting up a two-tier system where wealthier families can buy into the second track.

Another thought: McArdle’s argument makes the assumption that schooling is the primary factor that pushes families out of the city into the suburbs. Schools are a huge factor but not necessarily the only one. Her argument also highlights an interesting feature of middle/upper-class American society: do all you can for the children.

It would be interesting to look for data to test McArdle’s argument but it seems like you would need a city or a few cities where private schools weren’t available in order to make a comparison.

h/t Instapundit

“The McMansion Man” builds larger houses in the Hamptons

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The Hamptons have long been known as a retreat for the wealthy but the recent actions of one builder suggest the houses are getting bigger and nicer:

“We’re as busy as we’ve ever been,” said Joe Farrell, the president of Farrell Building, during a recent interview and tour of his $43 million, 17,000-square-foot home here. The estate, called the Sandcastle, features two bowling lanes, a skate ramp, onyx window frames and, just for fun, an A.T.M. regularly restocked with $20,000 in $10 bills…

With a customer base composed largely of Wall Street financiers, Mr. Farrell has more than 20 new homes under construction, or slated for construction, at a time, making him the biggest builder here by far. He has plans for more, many of them speculative homes built before they have buyers…

“Houses have gotten smaller over all but not entirely: 8,000 square feet was the norm, now 6,500 is,” Mr. Farrell said. “Everyone wants six or seven bedrooms and their pool and their tennis.”

Where Mr. Farrell built speculative homes that sold for as much as $20 million before the recession, he now specializes in properties that sell for between $3 million and $10 million. “Mostly, though, $3 million to $6,” he said. “I love that market — there are probably 10 times as many people in that market than to buy an eight- or nine-million-dollar house, right?”

I’m not quite sure what the issue is. The Hamptons are for the wealthy and this man builds houses for the wealthy (though they are smaller and cheaper than a short time ago). But, the article suggests there might be several things going on:

1. Even the wealthy in the United States have to be careful to not completely flaunt their wealth. In particular, when economic times are bad it doesn’t look great to keep spending at high levels when other people are struggling.

2. There is an ongoing tension between old money and new money. The older homes, associated with older money, have more character and have been part of the community for decades. The new homes, associated with new money from the finance sector or from celebrities, are seen as gauche.

3. The construction of more spec/mass housing means the whole area will suffer by appearing more generic. Any historic architecture will disappear under a flood of mass-produced McMansions.

These are interesting arguments in themselves but I suspect (1) many Americans can’t relate and (2) there is enough money involved that it doesn’t really matter – just help pave over the issues with some more money. In other words, this provides a small window into how the wealthy view change within their own neighborhoods.