Month in Review, August, 2010

November 24, 2010 | China, Global news, Haiti, Humor, Month in review, Rental, US News, Workouts

By: David A. Smith 

 

[Due to editorial snafus, we have jumbled the Month in Review postings. Those responsible have been drawn and quartered. Meanwhile, previous Months in Review available here: Sep, Aug, Jul, Jun, May, Apr, Mar, Feb, Jan 2010]

 

That’ll teach you to miss a month!

  

Perhaps because everyone else was on vacation not producing news, my August postings included an unusual number of multi-part essays, both parochial-humorous and global-tragic. Locally, I snickered at the Boston Globe’s snooty outrage in Attack of the fifty-foot hyperbole: Part 1, if thine house offend thee, pluck it out:

  

 

Bad taste, someone must have said, is someone else buying larger or flashier than you do.

 

I buy nice house – high-five!

 

I wouldn’t want that, runs the rationalization, so you who do must be a lout.

 

We’re not letting you people move into our neighborhood

 

And I will now demonstrate my superiority by denigrating your consumption.

 

Nowhere is this propensity to disdain the newcomer more evident than in the deeply personal matte of one’s home. Psychologically, homes project our vision of ourselves to our neighbors and to strangers, so if yours is grander than mine, I must do something to signal that I could have had equally grand, but I chose not to.

 

Too much information, guy …

 

With such a drum roll, allow me to present for your consideration the Boston Globe‘s overwrought scorn-mongering essay, The March of the McMansions.

 

We want big houses

 

The subheader is even more lurid:

 

In countless Boston suburbs, the green movement and even the recession have been unable to halt the practice of demolishing Capes and ranches to make way for monster-size homes.

 

We want to buy McMansions

 

Even the recession’ – can’t you hear the background orchestral tarantella?

 

It’s a gorgeous day in Weston –

 

Oh, no! What’s going to happen?

 

Determined to use nearly as many words exploding the Globe’s rhetorical balloon –

 

You seek to intimidate me with your rhetorical balloons?

 

– as the newspaper devoted to inflating it, I carried on through three more parts, Part 2, thy lust to expand, Part 3, greener than thou?, and Part 4, zone for thee and not for me:

 

A planner believes the solution is planning? Knock me over with a feather.

 

While some might find this approach a little too “big brother” –

It’s a regulatory taking without due process or just compensation, and when the money gets large enough, it will get you sued.

 

– it’s clear the approaches offered by both sides have merit and are in no way mutually exclusive.

 

After expending 3,500 words excoriating teardowns, 100 of which reluctantly acknowledge that owners have the right to do so, now the Globe bails out with ‘both sides have merit’?

 

My argument was going down in flames

 

What people love about a community changes over time. That’s because communities change over time. The only unchanging community is a dead one.

 

Even those who are the most opposed to teardowns and mega-mansions bristle when rules put in place to limit over-large houses begin to impact what they can do with their own properties.

 

Yes, stop thee but never stop me.

 

What double standard?

 

 

A similar hypocrisy – or if not hypocrisy, then massive self-interested short-sightedness – animated our friends, the French, in Prohibition and the rent-easy:

 

If there is a law prohibiting something, then you have to enforce it. And if its enforcement leads to absurdity, maybe you should realize the law needs to be repealed. This is the reduction ad absurdum approach to legislation.

 

Mayor Bertrand Delanoe ordered an agency last year to warn property owners that renting out residential apartments for less than a year at a time violated French law. The move was intended to address the lack of affordable housing in the city center.

 

Run that by me again?

 

Having spent twenty minutes trying to trace a plausible sequence of logic between prohibiting flat owners from renting short-term and relieving an affordable-housing shortage, I confess I give up. Only an idiot would think that owners of flats who rent them short term, when confronted with this edict, would decide to rent their apartments for whole-year intervals. People who own pied-a-terres use them some time during the year, and a year-long rental would utterly defeat that principal purpose. And if they sold the place, the buyer would not be someone wanting to create a long-term affordable rental, but someone even richer, who could leave the place vacant all year.

 

Isn’t the likelier fact pattern that these pied-a-terres bring more people to Paris, because they are cheaper than hotels, encouraging those people to stay longer and enjoy the city more, and hence contribute to the Parisian economy? Especially when I found this pithy comment from ‘Paris Property’:

 

Paris should not be just for the rich who can stay in a hotel for weeks on end, that is if they can get a room with 83% [hotel] occupancy … [According to HVS, April to October – Ed.]

 

 

 

Boston, Paris, New York – your move

 

Then I completed a trifecta of making fun of other people’s municipal outrages by looking at New York’s schizophrenic perspective on cars in I, for one, welcome our metal overlords: Part 1, aliens among us, and Part 2, rage against the machine:

 

Below-grade garages and below-grade entrances are visually equivalent, I think. Consider the offending townhouse’s garage:

 

161 East 94th Street, before garage


 

161 East 94th Street, before garage


 

Can you honestly say that the after is worse than the before? Or that, if you were walking past the street, you’d give the after a second glance? If anything, you’d be astonished there was space along the curb instead of a vehicle parked in it.


 

Under the amendment, the planning commission can deny permission for a curb cut that it finds to be “inconsistent with the character of the existing streetscape.”


 

Same question: is the After inconsistent with the streetscape?


 

According to Mr. Lobel, “Now city planning can look at the application and say, ‘There’s a line of lovely old homes; the curb cut isn’t consistent with the surrounding character’ — and there goes your authorization.”


 

Who determines what is ‘consistency’? Many of these homes had carriages and carriage houses.

 

Consistency is just an excuse for the taste police.


 

Emerson’s great quote is usually butchered:

“A foolish consistency is the hobgoblin of little minds,

Adored by little statesmen and philosophers and divines.”


 

Under the new rules, he said, “it would have been nearly impossible, or at least extremely difficult” for the Grusons to have built their driveway.

 

The human emotion is easy enough to understand. You dislike cars on your street (except yours). You bought your townhouse (for which you paid a fortune) without a garage, and you pay another fortune to garage your car at a location inconvenient to you. The idea that your arriviste neighbor gains a convenience you reluctantly forwent infuriates you beyond all measure. If you can’t have one, then by God no one else will have one either.

 

 

At the other end of the spectrum, both as to humor and as to global impact, looked at both the evidentiary theory of poverty perpetuation in Sickness makes you stupid


 

Indeed, intuitively we know this must be correct – protracted childhood illness has to be damaging. Having statistics makes correcting global hygiene more actionable because it connects hygiene to poverty alleviation, not just poverty remediation.


 

Places that harbour a lot of parasites and pathogens not only suffer the debilitating effects of disease on their workforces, but also have their human capital eroded, child by child, from birth.


 

If so, investing in urban housing, and urban water and sanitation, is therefore investing in the future every bit as much as investing in education.

 

 


Countries will not conquer disease unless they clean up their slums. They will never clean up their slums until the slums are formalized.


 

A demonstrable syllogism

 

– and that most cursed of countries, Haiti, where I reluctantly declared systemic failure of the post-earthquake international aid in a four-part tragic poem in Rebuilding needs a solid foundation of governance: Part 1, order via rule of law:


 

The tragedy of Haiti is not the quake itself – though the 200,000+ dead it caused are tragic enough – but that the tsunami of aid flowing into that unfortunate country afterwards is so vastly going to waste, and that we knew it would largely go to waste.


 

Many capable and dedicated people I know have worked or are working in Haiti. They come back sworn to a code of silence, but when given a bit of sympathetic prompting, they will open up with their tales of frustration. More than one has said a variation of, I don’t know if we did any enduring good.


 

The new refugee slum of Corail-Cesselesse


 

Rebuilding doesn’t depend on money or materials or labor or vision. Certainly those things are necessary, but none of them are irreplaceable – all of them can be obtained from outside. Rebuilding takes a solid foundation of governance: without it, all the money and volunteers and construction materials will be lost, stolen, or wasted.

 

I continued with Part 2, rational land plan and land cadastre, Part 3, anti-corruption infrastructure, and Part 4, the Tralfamadorian optimist:


 

Hello, goodbye, hello, goodbye


 

Ever since Haiti’s earthquake, I have tried to avert my gaze from it. Like Kurt Vonnegut’s Tralfamadorians, I avoid thinking about tragedies past and focus on triumphs present and potentially future. From the moment the first images hit, I despaired for Haiti, but held my tongue – there is little point ruining the aspirations of others who may after all be right. So I silently hope, and look away, and feel morally ill.


 

“There isn’t anything we can do about them, so we simply don’t look at them. We ignore them. We spend eternity looking at pleasant moments – like today at the zoo. Isn’t this a nice moment?”


“Yes.”


“That’s one thing Earthlings might learn to do, if they tried hard enough: Ignore the awful times, and concentrate on the good ones.”

– Kurt Vonnegut, Slaughterhouse Five


 

Not very good at following his own advice: Kurt Vonnegut

[Snip]


 

Rebuilding after disaster requires an infrastructure against corruption: genuine transparency in governmental dealings, public officials with provable integrity, and accountability that is enforced from without until it can be sustained from within.

 

And the greatest of these is a government of integrity.


 

Preconditions for effective disaster recovery activity

 

1. Rule of law as the basis for adjudicating claims and restructuring the city.

2. Government that is functional, coordinated, and uncorrupted.

3. A land cadastre where plots and property can be defined, bounded, and owned.

4. A rational layout for the city that is to be (re)built.

5. Written, enforceable contracts among independent parties.

6. Stable currency.

 

With all of these, there will naturally emerge:

 

7. Financing to enable people to pledge their future earnings for goods and services today.

 

As far as I can tell, Haiti has none of them.

 

“You have to stop him. If you know this, can’t you keep the pilot from pressing the button – ”
“He has
always pressed it, and he always will. We always let him, and we always will let him. The moment is structured that way.”

Kurt Vonnegut, Slaughterhouse Five


 

A statue of Toussaint l’Ouverture, Port-au-Prince

 

The news that Haiti is now [November, 2010 – Ed.] being swept by a cholera epidemic only adds proof to an assertion I wish could have been disproved.

 

At the other end of the cash spectrum, China continues its breakneck building pace by blowing cash into the financial system at a rate that makes Ben Bernanke’s quantitative easing II (QE2) look penurious and honest –

 

Say goodbye to $600 billion, lady Liberty?

 

– as profiled in Gleefully running up the debts: Part 1, pennies from heaven, and Part 2, everybody’s doin’ it, doin’ it:


 

Yesterday’s post introduced the extraordinary spectacle, reported in The New York Times, of state-owned Chinese developers bidding against each other to buy land at high prices from Chinese municipalities.

 

Here’s how we did it, boys!

  

So dangerous and shortsighted is this that I grope for words – staggering and scandalous come to mind.

 

However low they go, markets eventually do clear, often in favor of The third men to own a property. Similarly, hope against hope underlies the strategy of extending loans past their original maturity date, as revealed in Maybe the dog will talk: Part 1, maturity defaults okay, and Part 2, credit defaults not okay:


 

Yesterday’s post revealed the Wall Street Journal trying to discredit ‘extend and pretend’ as a loan modification strategy by using a counterexample – a case where extending the loan, because it had a maturity default and probably not a credit default. That’s ironic, because many of us – me among them – think the banking industry is averting its eyes from the problems, simply as a means of kicking the can down the road.


 

“Let us roll over this loan,” she said.

They did.

It was good.

 

While an individual bank’s motivation for can-kicking might be shortsighted – frankly, it often is – such motivation cannot be ascribed to Treasury, which has been actively authorizing such actions:


  

Regulators helped spur banks’ recent approach to commercial real estate by crafting new guidelines last October, with a 33-page set of guidelines.

 

I went off and got the full text in pdf. Here’s the introduction:

 

I also reviewed, more sympathetically than did its authors, the Wall Street Journal’s study of banking consolidation in Capturing wallet share: Part 1, some get bigger, and Part 2, too big, or too few?, which featured the tribulations of one of my many namesakes:


 

Although I give [David Smith, CEO of Trim-Park in Orlando] great credit – firings and layoffs are the hardest thing an employer does – if you were his bank, would you not be worried, especially with the regulators breathing down your neck? You’d want additional collateral so you could classify the loan as performing.


 

A Wachovia spokeswoman declined to comment on the case, but said that in general, “Sometimes banks take additional collateral in order to continue providing financing while protecting the bank’s interest.”


 

Is Wachovia being too tight with its bucks?


 

We’re closing our Bedford Falls branch, and closing down the town too

 

If so, another bank will come along to take its place.


 

Let’s start a bank right here

 

I finished the month by looking long, very long, with an important multi-part post, America’s housing in 2020: Part 1, aging and selling, America’s housing in 2020: Part 2, moving and renting, finishing during September with Part 3, buying and building:


 

We have thought of transit-oriented development as reducing carbon footprint and creating more affordable workforce opportunities, but if history is any kind, is major beneficiaries will be – you guessed it – us narcissistic baby boomers, who’ll use the network to reduce our transportation costs as we move from suburban automotives to urban pedestrians.


 

Communities in the United States face an historic tipping point. After decades of stability, we expect the ratio of seniors to working-age residents to grow abruptly, increasing by roughly 30% in each of the next two decades.


 

The exit of the baby boomers from homeownership could have effects as significant as their entry, though with different consequences.


 

You aren’t kidding.


 

Just wait ’til we crack immortality!

 

Still blogging in 2015?