Month in Review May 2009
[Previous Months In Review available here: Apr 09, Mar 09, Feb 09, Jan 09]
Though housing is the output of an enormously complex, ever-changing, hugely capitalized value chain, unlike other abstract capital-markets products like Credit Default Swaps, we all connect to it because we live in its results, and we all care about it because the equity in our owned homes drives our new business formation, our self-esteem, our family formation – you name a major life milestone and it is likely accompanied by a change in housing configuration or tenure, and hence in housing finance.
In that spirit, we looked in May at three very micro-level dramas, starting with that invisible informality, the in-law apartment, via Outlaw in-laws: Part 1, symbiotic replication, Part 2, creeping densification, and Part 3, quiet amnesty:
Ma, maybe you should have your own entrance?
“When in-law apartments are outlawed, only outlaw in-laws will have apartments.”
– Bumper sticker from the National Relatives Accommodation Association (NRAA)
Despite all the emphasis we bestow on the visible and regulated forms of affordable housing – LIHTC, HUD Section 8, even inclusionary zoning – there are more forms of invisible affordable housing than are dreamt of in the typical policy maker’s philosophy.
Spot the affordable housing?
To mobile homes and triple-deckers we must add the modest creature with the unlovely name of accessory dwelling unit (ADU), more commonly known as the ‘in-law apartment,’ and featured in a bland but nevertheless thought-provoking little briefing primer, Accessory Dwelling Units: Case Study, prepared for HUD’s Office of Policy Development & Research by Sage Computing [Why them? No particular expertise in housing. – Ed.].
Even more fundamental than expanding or subdividing a house is building it or tearing it down, and in both cases the production paradox applies – whatever you want to do, your neighbors will oppose it.
We’re against it! … What are you proposing?
In England you can’t built it up, as we saw with the Travellers, who are blatantly exploiting British government’s inability to move quickly, in Whose side are you on? Part 1, the invasion, and Part 2, choose your side:
The Daily Mail provides a link to a previous article showing exactly the same tactics:
A Daily Mail photograph of Crays Hill in Essex, a Travellers’ community
Travellers tarmac a new camp in a bank holiday weekend as helpless villagers watch
Marching to the faster-than-government beat of their own drummer, the Travellers were determined to finish all their structures before the opening of business Tuesday morning.
Farm worker Matthew Davies, who lives near the site, said: ‘They changed what was a pretty meadow into a building site overnight. Who knows what it will look like a few days down the line?’
It’ll look like a community of people – informal, unzoned, but not unplanned.
Local councillor Len Lawton said: ‘Villagers were told the field’s owners only wanted to build temporary accommodation for horses.’
Horses yes, people no? Is something out of whack here?
‘When the owners started making small engineering changes earlier this year, such as laying pipes, the council reminded them that major building work required planning permission.’
That shivered their timbers.
Not another council reminder!
No, no, shooting an elephant, not an elephant shooting!
In America you can’t tear it down, as newly liver-transplanted Steve Jobs found out in Shooting a white elephant: Part 1, the elephant, Part 2, the blunderbuss, and Part 3, the human shields:
After this exhaustive exercise in proving the blindingly obvious, the Environmental Impact Report found that:
Things physically feasible cost lots more money
Things that didn’t cost more money neither
Built a new house nor
Stopped the current house from crumbling.
Ladies and gentlemen of the electronic Town Council, you have now heard the staff’s report.
How would you vote?
Remember, then Friends of the Jackling House will be watching:
On May 12, 2009, the Woodside Town Council may vote to wiggle around a string of Court rulings AGAINST granting demolition of this historic mansion. There is still no adequate evidence to grant demolition.
Before you vote, let me add the most ironic part:
It is important to point out that in acting on this application, the Town Council’s authority is limited. The Council may approve or deny the demolition permit. The Council does not have authority to direct that one of the restoration alternatives described below be implemented.
Because directing such an action would be equivalent to a taking, and that would cost the town a lot of money.
I wonder, did Mr. Jobs realize that if he submitted plans for a big new house, such a projection might cost a high enough figure that it would make salvaging the Jackling house economically feasible? Might he have gamed the new-house price down?
Council members asked why cost estimates for renovation of the Jackling House appeared so high, while projected costs for a proposed new house for Mr. Jobs appeared preposterously low. Will there really be very low-grade surfaces in the new master bathroom? many wondered in disbelief.
Now you see it …
Remember, the demolition approval has nothing to do with the application for a new house. Mr. Jobs could then change his mind.
… Now you don’t
It’s my mansion and will die if I want it to
Die if I want it to.
Die if I want it to.
The end?
Housing affects health, both mental and physical, as we saw in Check out of the roach motel
Asthma is an urban disease, possibly affecting as many as one in four urban children, a much higher toxicology rate than in rural areas. So naturally we deduce that something about urban buildings triggers asthmatic responses – but the causes have been much debated until a recent study fingers a likely culprit:
Hiding in plain sight?
During May, it was our great privilege at AHI to be favored with two of the three parts of Sherlock Holmes’s long-lost and definitive Socratic dialogs on What makes a good consultant? Rules of engagement, Part 1a, Part 1b, and Part 1c, throughout which Holmes first established that though the consultant may be expert, the client is the decider:
A5. Never makes the client’s choice for the client
Although Holmes never truckled at setting himself up as judge and jury where John law was concerned, he had no delusions of grandeur concerning his clients.
“Well, it is not for me to judge you,” said Holmes as the old man signed the statement which had been drawn out. “I pray that we may never be exposed to such a temptation.”
The Boscombe Valley Mystery
He once said to me, in the course of the case of the politician, the lighthouse, and the trained cormorant, of whose particulars we were sworn to secrecy, that “a client, Watson, is owed our energy, our insights, and our wholehearted commitment to her problem – but neither our reproof nor our foreclosing her options. No client thanks us for superseding her right to choose for herself.”
The first thing I knew about it was when I saw you two gentlemen driving back in her dog-cart.”
“And I had my doubts about you gentlemen, I should add.”
Holmes rose and tossed the end of his cigarette into the grate. “I think, Watson, that in your medical capacity, you might wait upon Miss Smith and tell her that if she is sufficiently recovered, we shall be happy to escort her to her mother’s home. If she is not quite convalescent, you will find that a hint that we were about to telegraph to a young electrician in the Midlands would probably complete the cure.”
The Adventure of the Solitary Cyclist
More truths will be revealed in due course
Good God, Holmes, they’ve posted your essay without paying for it
Later that month we offered the world the second volume, What makes a good consultant? Services and activities, Part 2a, and Part 2b:
B1. Protects his client’s interests
Clients, he once told me with great exasperation, have the annoying habit of acting despite our advice. Then he chuckled.
I heard a sharp rustle, the night air blew into the heated room, and the avenger was gone.
On occasion those ruined by evildoers received vengeance.
If they did not, if they always acted wisely, why then there would be no clients for me, no emerald stick pins, no continuing stream of challenges.
When given the opportunity to do the right thing, he acted:
Hardly had the woman rushed from the room when Holmes, with swift, silent steps, was over at the other door. He turned the key in the lock. At the same instant we heard voices in the house and the sound of hurrying feet. The revolver shots had roused the household. With perfect coolness Holmes slipped across to the safe, filled his two arms with bundles of letters, and poured them all into the fire. Again and again he did it, until the safe was empty.
The Adventure of Charles Augustus Milverton
When I later asked Holmes why he had done this, at some risk to ourselves, he looked at me as if I were daft, and said merely, Common decency warrants no surcharge.
Common decency warrants no surcharge
New York and Boston are an endless source of entertaining housing or real estate stories:
Good source of baseball stories, too!
– as we saw in Spot the culprit, and Better dead than read?:
As the unionized employees of the Boston Globe debate among themselves whether they will accede to the $20 million in annual wage cuts demanded by their owner, the New York Times Company, they might do well to ponder a grim real estate reality, as presented with clinical dispassion by the Boston Business Journal:
The Boston Globe might be worth more dead than alive to the New York Times Company.
A dismantling of the Globe’s assets could yield roughly $85 million.
Worth 85x that dead?
One who was worth much more alive regrettably died: Jack Kemp, 1935-2009:
Kemp was, I think, the first American who rode sports success into politics. Nowadays we think nothing of having Jim Bunning in the Senate, or Steve Largent and J. C. Watts in the House – back in 1971, for a football to win elective office was either a joke or a novelty (and, as Jesse The Brain Ventura later showed us in Minnesota, sometimes too much a novelty) – but his real success, at least in housing, was his single term as HUD Secretary under President Bush 41.
“Pro football gave me a good perspective. When I entered the political arena, I had already been booed, cheered, cut, sold, traded, and hung in effigy.” – Jack Kemp, 1996
Not to mention, “chewed out by the best”
Kemp’s predecessor was the narcoleptic Samuel Pierce, on whose soap-opera-fueled watch HUD experienced its worst scandals ever (and that is saying something), and he entered the building, under Pierce’s tenure as a place for being quietly irrelevant, in much the manner of the Tasmanian Devil in a Bugs Bunny cartoon. He was a whirlwind of ideas, including:
1. Reorientation of public housing toward residents as principal customers.
2. Lobbying for an American version of UK stock transfer. Kemp promoted Homeownership and Opportunity for People Everywhere (HOPE), under which public housing would be sold to tenants. (Congress appropriated only a tenth of what he sought.)
3. Creation of Empowerment Zones.
4. Welfare reform with a temporary rent-increase freeze for people who get jobs, to get them out of the means-testing poverty trap.
Too bad more of them weren’t implemented consistently or sufficiently.
I’ve still got ideas!
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