Month in Review, December 2010

February 16, 2011 | Apartments, Foreclosure, Global news, GSEs, Haiti, India, Management, Microfinance, Speculation | 2 comments 4,687 views

 [Previous Months in Review available here: [Nov 10, Oct 10, Sep 10, Aug 10, Jul 10, Jun 10, May 2010, Apr 10, Mar 10, Feb 10, Jan 10]

 

By: David A. Smith 

 

What could possibly go wrong?

 

Seeking alternatives to further depressing stories about the bleak state of the housing market and economy, I took time in December for a little primer on the basics of property-managing multifamily dwellings, in The cobbler’s kids: Part 1, a fool for a client?, and Part 2, some more equal than others:

 

Mr. Iacono is about to learn the difference between ownership control and property management.  The former is an essential function that should be handled by the condo board, the latter is a technical activity that can readily be contracted.

 

Yet, he said, given all the work involved and the potential discomfort in having to act as arbiters in disputes among neighbors who are also friends, the board has been discussing the possibility of turning operations over to a management company.

 

Until you do it, it looks easy; then it looks harder, and the self-managed building becomes the un-managed building, the cobbler’s kids going unshod.

 

Don’ need no shoes anyway

 

It has gone so far as to interview some candidates but has yet to make a decision.

 

Think about what you earn in your day job, and whether you really want a lower-paying night job.

 

He that teacheth himself has a fool for a master.

– Benjamin Franklin

 

Being an autodidact is overrated

 

Likewise, one can make finely wrought individual decisions if one consciously takes a small-scale approach to a large-scale problem, as revealed in Cottage underwriting:

 

One loan at a time, careful and slow

 

Tom’s a good fellow, so I trust he will take this question in the right spirit – just what is the right way, Tom?

 

Why David, you should know that the right way is the way we do it, of course

 

Global news figured prominently in December, as we examined the effects of capital on developers and governments in three countries, starting with Haiti, where It’s not what you’re doing, it’s what you’re NOT doing:

 

“To continue in Haiti, we need to be partners and have to be a part of the reconstruction plan, but I don’t think anybody knows what those plans are,” he says.

 

The NGOs concentrate on going about the business of emergency relief, while choosing to ignore the challenges of nation-building and creation of governance and systems – for many reasons:

 

·         NGOs are not governmental bodies and may shy away from engaging in governmentally-related activities.

·         NGOs want to deliver ‘relief widgets’ and see anything other than relief widgets as distractions and deadweight.

·         NGOs don’t know how to engage constructively with government

·         NGOs are afraid of being entangled in corruption and bribery.

 

What corruption?  Do you see any corruption?

 

All are good reasons – all are the most natural thing in the world.  Taken together, they add up to a massive failure of engagement, and a resulting waste of all that wonderful technology and generous aid.

 

From Haiti we jumped to India, where to understand the Andhra Pradesh microloan payment boycott, I quoted extensively from David Roodman’s definitive investigation: Part 1, Prosecution, Part 2, Defense, and Part 3, Verdict:

 

A state of microloan non-payment

 

In the first two-thirds of his terrific post, When Indian Elephants Fight, David Roodman of the Center for Global Development has done first-rate work uncovering not only the market facts – bad behavior by microfinance institutions in Andhra Pradesh – but also the shockingly vindictive, ill-thought, and counterproductive ordinance the state rushed through in an infamous day, October 14.  Now Mr. Roodman seeks to give the legislators their due:

 

The Ordinance has some good features:

 

But he has his good points too, Mrs. Lincoln

 

·         A requirement for clear interest rate disclosure

·         A “fast track” court system to resolve disputes

·         A definition of coercion.

 

After this faintest of praise, Mr. Roodman then dismantles what’s left of the ordinance’s credibility:

 

Still, it “leaves a lot to be desired,” according to N. Srinivasan, author of the 2010 microfinance State of the Sector report.  I concur.

 

[Snip]

 

The World Bank cannot be happy with these developments. (I haven’t asked my World Bank friends, not wishing to put them on the spot.)

 

Still, the true bottom line is this:

 

1. Credit

2. The poor, and

3. Business-like insistence on regular repayment

 

are a dangerous combination.

 

An excellent distillation – pick any two.

 

 

Change any one those three elements, and it is safer: savings instead of credit (cf. Gates Foundation), the well-off instead of the poor, the flexible and somewhat subsidized communality of SHGs instead of the hard-nosed efficiency of MFIs. If microcredit is to safely serve the poor, it must soften its edges. There are many ways to do that.

 

The scaling of microfinance was over-engineered and over-revved.

 

Finally, we looked at China, finding scary data by picking up Another piece of the Chinese housing puzzle: Part 1, pumping up the inflation, and Part 2, collapsing without crashing?:

 

See something that frightens you?

 

As I’ve previously posted, China’s reliance on real estate transfer taxes and its insane cheap credit provision to state-owned development companies means that money is chasing itself throughout the system:

 

We’re all chasing each other

 

 

This system is unsustainable – and the IMF agrees with my assessment:

 

The IMF said land sales make up 30% of local government revenue in Beijing. This has echoes of Ireland where “fair weather” property taxes disguised the erosion of state finances.

 

Exactly – a transaction-based real estate taxation system amplifies cyclicality instead of dampening it.

 

Back home, our markets have already taken their beating –

 

Say, none of them are in authority any more, are they?

 

– which for a lender raises the thorny question, What’s worse than not being able to foreclose?:

 

A lender, you see, doesn’t want to own property.  The lender wants to own pieces of paper that represent financial obligations by a responsible counterparty who will regularly send other pieces of paper (known as checks), in stipulated amounts at stipulated times.  To a lender, this pure-DNA expression of value – numbers on a page or a screen – is the natural state of things, quantifiable, reliable, and safe.  Owning actual bricks and sticks is yucky.

 

 

Real estate ownership?  Yu-uck.

 

Yet it gets worse, for even if the lender can outsource the work responsibility to a servicer or collection agent, the servicer must physically recover the property:  Realizing the asset – turning it back into money, which is what the lender wants – involves a multi-step process:

 

1.     Declare the default.  Spend money on lawyers.

2.     Complete the foreclosure.  Spend money on lawyers.

3.     Clear the arrears and liens.  Spend money on utility and tax bills.

4.     Repair damages and make ready for sale.  Spend money on windows, appliances, security guards, groundskeepers.

5.     Market the home.  Spend money prepping brokers.

6.     Sell the home for cash.  Receive money.

 

Reading that post, you might think lenders would welcome a self-dubbed good Samaritan who will take it upon himself to do for a property in foreclosure what he thinks the lender would want done.  That road to salvation is, however, paved with good intentions:

 

Soon to be repaved with stimulus money

 

Adverse possession is predicated on the concept of property abandonment.  Obviously the delinquent homeowners have abandoned the properties, but their lenders have not.  That the lenders are moving slowly is no invalidation of their title.

 

[Mr. Guerette]‘s tenants confirmed that after he was arrested in April, he told them they could stop paying rent. Even if he is not allowed to keep taking homes, he said, why should needy people not be matched with homes left to decay?

 

Thus Mr. Guerette compounds his felony from his own actions to those of his tenants, whom he now incites to trespass.  The moral slope is slippery indeed.

 

“Men may keep a sort of level of good, but no man has ever been able to keep on one level of evil. That road goes down and down. “– G. K. Chesterton

 

“There are over 4,000 homeless in Broward, and the number is growing all the time,” he said. “I thought I could use these homes and put people into them. It could be a good thing.”

 

Good intentions grant no immunity, but perhaps they justify leniency.  Were I representing the unnamed banks in question, I’d be interested in harnessing Mr. Guerette’s good intentions while insulating myself from the risk of his moral erosion – say, by giving Mr. Guerettte a suspended sentence and placing him on probation, so long as he remained an agent on the bank’s behalf.  He wants to perform a service – he just took property to do it.

 

“So it wasn’t mine – so what?”

 

For private properties, restructuring of debts occurs via foreclosure or with the filing of bankruptcy, a route available to municipalities (with state permission) as well, but as of now states cannot, so we need to Enable state bankruptcy: Part 1, Why, and Part 2, How:

 

In practical terms, both groups [bondholders and public-employee pensioners] are stuck.  Both also depend for their eventual repayment on the state’s solvency.  Both therefore will benefit if the state can be relieved of a tax burden so weighty it drives out business and immigration – yet neither wants to compromise before the other does.  Hence the need for bankruptcy.

 

No, you concede first

 

Bankruptcy isn’t perfect, but it’s far superior to any of the alternatives currently on the table. If Congress does its part by enacting a new bankruptcy chapter for states, Jerry Brown will be in a position to do his part by using it.

 

[Update: AHI gets results! Senator John Cornyn is exploring Congressional authorization of state bankruptcy. – Ed.]

 

I also took apart an intriguing proposal to eliminate Fannie Mae and Freddie Mac that works with a peculiar kind of logic, Assume no crisis, and presto!:

 

Emil Henry Jr., who recently penned a Wall Street Journal op-ed entitled with the provocative nostrum “How to Shut Down Fannie and Freddie,” has real credentials – a stint as United States Assistant Secretary of the Treasury for Financial Institutions, working for Treasury Secretaries John Snow and Henry Paulson from October 2005 to March 2007 – so he must know that his proffered recipe is absurdly simplistic, predicated as it is on a flat declarative statement that is both hypothetical and really risky if wrong:

 

The Treasury Department can stop rubber-stamping their debt issuance at any time.

 

There will be a private market ready to absorb the securities currently held by the GSEs.

 

As I put it, in language reminiscent of the critical moment in The Wedding Singer:

 

“Once again, things that could’ve been brought to my attention YESTERDAY!”

 

When a policy is bad, I’m all for exiting it, and when it has historically been addictive, I’m all for steady withdrawal – as the UK did when it gradually phased out the mortgage interest deduction – but not now.  We kick a noxious habit when the economy is good, not when it’s hanging by a thread. And we certainly don’t want to kick up borrowing costs for everyone in America, not when millions of homes are underwater and consumer confidence is at historic lows. 

 

Maybe we shouldn’t have revved the engine up to 110 mph on a curving road – but we did – and to recommend abruptly slamming on the brakes now is at best naive.

 

Not the time for a sudden stop

 

convert this post to pdf.
PDF Creator    Send article as PDF   

Inventing the future city

February 15, 2011 | Boston, Cities, CSFW, Housing, Personal, Science fiction, Speculation, Urbanization | 6,246 views

By: David A. Smith

 

Not long ago, the Boston Phoenix published an essay, How to create a readable future, about our mosaic novel, Future Boston, The History of a City, 1990 to 2100. 

 

Five of FuBos’s authors:

Left to right: Alex Jablokov, David Smith, Jon Burrowes, Sarah Smith, Steve Popkes

 

Continuing our occasional series on the Ultimate Future City:

The Caves of Steel, by Isaac Asimov, 11/07

The Naked Sun, by Isaac Asimov, 11/07

The World Inside, by Robert Silverberg, 12/07

Diaspar, The City and the Stars, by Arthur C. Clarke, 3/08

Cities in Flight, Part 1 and Part 2, 8/08

1984, The poverty of slums, Part 1 and Part 2, 9/09

Trantor, from Isaac Asimov’s Foundation trilogy, 12/09

 

Envisioning the Red Sox winning the World Series – in 1990, that was sheerest fantasy!

 

Future Boston was my first foray into city-building, and perhaps contained the seeds of that same interest which led me to found AHI.  It was written by seven of us as a series of individual stories, each free-standing (and many separately published) but all drawing from the same consistent future history, and opened with a Time magazine story from October 29, 1923: Boston Will Sink, Claims MIT Prof.  

 

 

Boston, 1800: before South Boston, before the Back Bay

 

We wrote it, we got it published, we got paid tiny money, and we all went on to other things.  But remarkably, while we weren’t looking, Future Boston picked up a small following, as we discovered when the Phoenix interviewed five of us authors.

 

Future Boston, 15 years later

By S.I. ROSENBAUM  |  January 21, 2011

 

We only have three years before the aliens land.

 

The lumpy, shapeless gray ones come first, touching down on Nantucket in 2014; then a rain of furry Phneri refugees, their bodies plummeting into the harbor. Of course, there will be more harbor by then: Boston is sinking, and fast. By 2100, Bostonians — human and alien alike — will be packed into a giant cube, surrounded by seawater: a sovereign nation of our own.

 

When envisioning the future of cities, we have to incorporate major discontinuities – things that comprehensively remake the city’s fabric. 

 

 

When inventing the future, think big, think drastic

 

The automobile was one such.  I’ve previously documented the extraordinary quantities of horse manure that had to be shoveled out of cities600,000 tons of manure in Chicago annually, which led to the 1898 international urban-planning conference:

 

It was abandoned after three days, instead of the scheduled ten, because none of the delegates could see any solution to the growing crisis posed by urban horses and their output.

 

In our case, for dramatic effect, we included two big discontinuities, one enduring and one a short, sharp shock: we sank the city, and we had aliens land.

 

This was the future envisioned in Future Boston, an anthology by a group of local science-fiction writers published in 1994. If you’re a nerd of a certain age and you grew up in Massachusetts, odds are you own a copy.

 

Flattering!

 

How to succeed in business?

 

We are living in a different future now. Robots are vacuuming our floors, and our cats can type. We at the Phoenix began to think about Future Boston, about all the future Bostons — the ones that never came true, the ones that are yet to be invented. What is it about Boston that lends itself to science fiction? What do we learn about the city we live in by exploring the city it could become?

 

To answer these questions, we got the band back together. More than 15 years after the group first flooded our fair city and filled it with extraterrestrials, we sat down with five of the original nine FuBos contributors — David Alexander Smith, Steven Popkes, Alexander Jablokov, Jon Burrowes, and Sarah Smith — and asked them how they went about building the Boston of tomorrow.

 

For the full flavor, read the whole interview – in this blog, I’ll look at the city-invention aspects.

 

Why did you decide to map the future of Boston, rather than some other city?

 

Steven Popkes: We have almost 500 years of history — actually, 400 years of white history and a couple thousand years of [Native American] history before that.

 

Steve Popkes at a science fiction convention

 

David Alexander Smith: Boston is large. As Steve points out, Boston has lots of history, and the history is interesting: the history is cultural and political and topographic. So it was a good place to create a time series about.

 

One of the things that interested me about this project is that you take Boston on, and you make it the center of the universe — which is very Bostonian.

 

DAS: We felt it would be. And then there’s Sarah [Smith, no relation]‘s great line: “On all sides, Boston is surrounded by the United States.”

 

“On all sides, Boston is surrounded by the United States.”

 

When a city doesn’t need its nation – for defense, for economic growth, for scale – then the city becomes its own nation.  If in the twenty-first century larger blocks of humanity put war behind them (e.g. the Eurozone), then there is nothing to hold subnations together within a federation, and nations may become ever smaller.

 

SP: Once we decided to do the aliens, we had a long set of discussions on how that was going to happen. And we decided, exactly, to make Boston the single port authority for the world. That had interesting consequences.

 

DAS: There have been examples throughout history. Hong Kong, Goa, Nagasaki, Macau, Cape Town — several of these places that were agreed to be acceptable “foreigner-acculturation zones.” That was interesting too, because creativity comes out of the clash of an indigenous and a foreign culture.

 

Even more than nations, cities are melting points – in my local grocery store, it’s common to hear four different languages per aisle.  That blending of cultures and ideas creates new ideas and new cultures, and advances human progress.  With some consequences:

 

Alexander Jablokov: Actually, I think Sarah predicted District 9 with the way the Phneri show up, as refugees.

 

A sign reminiscent of Future Boston

 

DAS: And that comes off of the Irish being transported here in the early 1850s after the potato famine. The Irish were the 19th-century Phneri; we just modified it a little bit….  Most of the things we put in the future were modeled off of the past.

 

Jon Burrowes: That was the poignant thing riding in all our hearts: what if we take this history we all know so well, and subject it to this sort of unimaginable thing — the aliens and all this crazy future — what’s going to happen? And we were all kind of interested in that. We really did want to find out.

 

A man with a crazy future: Jon Burrowes

 

Sarah Smith: I liked that we had plenty of working-class aliens…. For me, it had a permanent effect on the way I think about Boston.  The upper class having great plans for Boston on the backs of the lower class, and then the lower class subverting them.

 

Sarah thinking about the keyboard

 

In cities, rich and poor live closer to each other than anywhere else.  This too contributes to the rapid merging and mixing of classes and cultures – and our globalizing cities are mixing cultures faster than anywhere else.

 

Is there anything that’s essential to Boston throughout the eras?

 

Boston, 1722: the Bonner map.  Rotated about 45 degrees clockwise from true north

 

DAS: I would argue that Boston is the most engineered city in the world, just in terms of the current footprint versus the original footprint, and the continuity of fairly major structural change…. From the moment the Pilgrims landed, they started technologically modifying their environment. Long Wharf? Major technological feat.

 

Long Wharf, 1768

 

Infrastructure has non-recoverable costs, and cities need much more infrastructure than suburban or rural areas.  They can afford this infrastructure mainly because cities are richer, at least per square foot of land area, than anywhere else.

 

Long Wharf, 2008

 

The first bridge across to Cambridge? All these things: big engineering projects for the 17th century. They keep doing this stuff, and it just doesn’t stop. What’s interesting is to run that forward, sink a lot of the city, and put walls around what was left.

 

Boston 1875, superimposed on 1630 Boston

 

Cities are shaped by economic need, much more than they are designed by governments or emperors.

 

AJ: The interesting thing about Boston is, no one ever made anyone do anything around Boston. St. Petersburg was decreed by a dictator: “You’re going to build a city here, even though it’s a terrible place to build a city.”

 

An author happily signing his books: Alex Jablokov

 

Bostonians came here, and no one ever made anyone do anything. They said, “We can make a buck. We’ll cut this mountain down.”

 

“We can make a buck cutting this mountain down.”

 

In the long run, the Law of Economic Gravity wins.

 

Aside from fun and profit, what do we gain from future histories?

 

Fun, yes; profit, harder to say.

 

DAS: What you gain is — the future is both predictable and unpredictable. There are some waves that are slow and predictable: the aging of America, the ethnic diversification of America, to take two examples. Then there are some that are discontinuous, and the nature of discontinuities is, not only can you not control them, you have to live with their consequences.

 

And the city forms out of that mixture of the slow and the fast…. The texture of Future Boston is this mixture of the big and the small. That, I think, is the takeaway: the future always has more past legacy and more complexity and more messiness than any single mind will create.

 

S.I. Rosenbaum can be reached at srosenbaum@phx.com.

 

The nineteenth century vision of future Boston

  

  

convert this post to pdf.
PDF24 Creator    Send article as PDF   

Apartments are occupied by money, not people

February 14, 2011 | Apartments, Economics, Landlords, Markets, New York City, Primer posts, Theory | 1 comment 3,468 views

By: David A. Smith

 

Just trying dabbing them up

 

Anyone who’s ever sought to capture liquid mercury with a spoon will sympathize with the troubles New York City has had trying to keep ‘those people’ out of the Upper West Side, only to discover, as credulously reported in The New York Times, that eliminating one kind of ‘those people’ simply changed the economics in favor of another kind of ‘those people’:

 

When Albany passed a law last summer preventing landlords of rental buildings from using their apartments as hotel rooms, neighborhood activists on the Upper West Side, where many of the conversions had taken place, were ebullient.

 

After all, we don’t want ‘those people’ living near us, do we?

 

No longer would tenants in these buildings have to contend with European backpackers and other transients traipsing through their halls.

 

Yes, wouldn’t want those backpackers …

 

Precisely the sort of riffraff we want to exclude

 

No longer would landlords force out long-term residents to make way for more lucrative hotel guests.

 

Or those hotel guests …

 

Sorry, no rooms tonight

 

But now some backers of the law, which makes it illegal to rent out most residential rooms and apartments for less than 30 days, are wondering if they have opened a Pandora’s box.

 

Some months back, we saw that like New York, Paris thought it too could stamp out ‘those people’ – true, in Paris’s case ‘those people’ were foreign tourists – by restricting rentals, only to discover that this did nothing to create affordable housing and instead drove hoteling underground.  New York has now discovered that markets always find an outlet, the highest economic use, and it will seldom be what the neighbors would like it to be:

 

To the dismay of many on the Upper West Side, at least one building that was stopped from operating as a hotel is now being turned into a homeless shelter for 200 men.

 

How dare they!

 

This was not the outcome the law’s supporters hoped for or, they say, expected.

 

No, we simply wanted to keep out those scruffy European backpackers, and those tourists come to town, and just have nice quiet people like us.

 

 “The purpose of the hotel bill is to have permanent housing,” said Councilwoman Gale A. Brewer, who represents the Upper West Side. She fought the proliferation of the informal hotels, and opposes the shelter.

 

I’m fighting proliferation

 

“We do not support transient housing. There’s going to be 200 people. That’s too many.”

 

Scrap the whole thing,’ demands Brewer

 

The law, which goes into effect in May, closed a loophole that allowed the buildings to operate as hotels, so long as most of their rooms were occupied by permanent residents.

 

Donald Trump once used a similar portable hole to create his ill-fated condo hotel.

 

Supporters of the law said the so-called illegal hotels were stripping the city of much-needed cheap housing; some of the buildings were single-room-occupancy residences, or SRO’s. “We’d see harassment of permanent tenants to get them out of their units,” said Marti Weithman, director of the SRO Law Project at Goddard Riverside Community Center.

 

Some people are single.  Some people are poor.  Many poor people are single.  Put those facts together and communities need rooming houses, boarding houses, SROs, roommate apartments, live-in situations, or whatever it is currently fashionable to call them.

 

But the law did not, and perhaps legally could not –

 

Do I sense a tone of wistful regret by the Times that the law could not simply confiscate the property rights without due process or just compensation?

 

Wish I could just take it without compensation

 

– decree what the SRO owners should do with their buildings once the tourists were outlawed. Many of the buildings are warrenlike, crowded with tiny bedrooms and shared bathrooms and kitchens.

 

The Alexander, on West 94th, is becoming a homeless shelter. 

 

Alexander Scharf, the managing partner of the Alexander Hotel, on West 94th Street, and David Satnick, who represents three other SRO-slash-budget hotels on West 94th and West 95th Streets, said the layout of their buildings limited their uses.

 

Zoning is one form of destiny; so is the building’s exoskeleton. And the third destiny is economics – because in the end, apartments are occupied by money, not people.

 

For a landlord, the purpose of property is to generate Net Operating Income – cash flow that can go off-site after paying all the expenses:

 

That’s all we care about: how much NOI escapes after expenses

 

To maximize NOI, the landlord uses the apartments as a kind of honey trap, seeking a tenant who will pay for the privilege of living there:

 

Bring your money, preferably a big bag’s worth

 

Absent the income stream from tourists, they said, the low rents generated by long-term residents could not cover costs.

 

Because urban land’s value rises steadily with density and economic growth, so too do occupancy costs and hence do too do rents.  Further, because the costs of housing a person are largely invariant of the person’s wealth, the customer we want to attract is the richest one we can.  Hence gentrification.

 

I just know rich people will be moving in soon

 

Government can influence the economics, and hence influence the use, by adding the fifth kind of money, subsidy, which supplements the meager contribution of a poor resident:

 

We’ll pump up the volume if you’ll rent to whom we choose

 

Put it all together and the government can flow through subsidy to impel a change from tourist hotel to homeless shelter:

 

In fact, we can overload any use if we’re willing to boost the subsidy high enough

 

“We had to make use of the current layout, and there are very few other uses,” Mr. Scharf said.

Seth Diamond, commissioner of the Department of Homeless Services, said his agency signed a nine-year, $7.9 million contract with a nonprofit group, Samaritan Village, to run the shelter at the site; $3.7 million of that amount will go to rent.

 

Good cop, left hand; bad cop, right hand

 

Let’s do the arithmetic.  $3,700,000 over nine years is $400,000 a year, or about $4,400 per apartment per year.  Assuming this is pure NOI, the property is worth $6,700,000 (at a low 6% cap because it’s New York), or about $75,000 per apartment. 

 

He said there was no plan to convert other SRO’s in the area to shelters. Mr. Satnick said the hotels he represented — the Mount Royal, the Continental and the Pennington — would most likely be put up for sale.

 

State Senator Liz Krueger and Assemblyman Richard N. Gottfried, two sponsors of the bill, said it was wrong to blame the law for the arrival of the homeless shelter.

 

“If a homeless shelter was legal on 94th Street today,” Mr. Gottfried said, “it was legal before anything that the Legislature did.”

 

True, but before the legislature acted, there was a higher and better use. 

 

By chopping down the low-cost hotel alternative, the legislature relatively promoted the SRO economically – and changed the owner’s decision.

 

Renovations are already under way at the Alexander. It is unclear what will happen to the roughly 10 permanent residents left. One, Frank Kinkele, 70, a former traffic controller and waiter, has lived at the Alexander for 29 years; the hotel and his three decades of sobriety are among the few comforts and constants in his life. He fears that the influx of homeless men will bring with them the dark temptations of drug and alcohol abuse. “Everybody deserves a second chance,” he said. “I just don’t know what’s going to happen.”

 

It is unclear what will happen to Frank Kinkele, a longtime resident.

 

It is unclear whether Mr. Kinkele will be allowed to remain at the hotel.

 

False suspense – there is no reason to conclude he would not.

 

Mr. Diamond said the homeless men could not move in until the place had been emptied.

 

Any rational landlord would relocate Mr. Kinkele briefly and allow him to return.

 

Barbara Brancaccio, a spokeswoman for the homeless services agency, said that the department usually encountered local resistance, and that the city had to house the homeless wherever there was space.

 

Yet several community members said the Upper West Side was already home to enough units of so-called supportive housing. According to one neighborhood association, Neighborhood in the Nineties, the Upper West Side was home in 2007 to nearly 2,000 such units, one of the highest concentrations in Manhattan.

 

“We have an allergic reaction to having any more special-needs population,” said Aaron Biller, president of the association, which is also fighting the conversion of St. Louis Hall on West 94th Street into a home for addicts and the mentally ill. “How much is too much in an area?”

 

Should have thought of that before your assemblywoman advocated evicting those European backpackers.

 

Laws should work the way I want them to work.

convert this post to pdf.

Create PDF    Send article as PDF   

Bypassing the twentieth century: Part 2, the future becomes the present

February 11, 2011 | Aleppo, Bilateral agencies, Cities, Formalization, GTZ, Infrastructure, Islam, NGOs, Slum upgrading, Speculation, Syria, Urban renewal | 6,443 views

[Continued from yesterday’s Part 1.]

 

By: David A. Smith

 

As we saw in yesterday’s post, to create the future out of the past, a city’s infrastructure – including its grid layout and traffic patterns – have to be remade, all the while preserving the buildings that are its cultural heritage. 

 

Crossroads of history and culture: Aleppo

 

At first sight the plan for Aleppo’s rehabilitation may not seem a radical departure from preservation as usual. Led by GTZ, a nonprofit organization owned by the German government [Just renamed into GIZ – Ed.], it began with a two-year analysis of the city’s historic structures that included hundreds of interviews with residents.

 

Since historic preservation mixed with urban revitalization requires balancing competing interests and embracing the city’s inherent complexity and messiness, resident enumeration and community-led resident solicitation are keys to success:

 

With GTZ’s guidance the government began laying more than 323 miles of sewage and water pipes –

 

Slums are a place where private investment has outrun public infrastructure, so its retrofitting into the urban environment is a key step in formalizing slums, which is a precondition of healthy urbanization.

 

 

– removing the webs of dilapidated electrical wiring that stretched across its alleyways and replacing missing cobblestones.

 

Informal infrastructure is dangerous, so its formalization makes the city safer.  However, for cities to formalize, that public investment must be matched by accompanying private investment, and that takes financial stimulus – in other words, money or subsidy in one of its five basic forms.

 

To encourage building owners and their tenants to stay, the group set up a pilot program that offered interest-free construction loans.

 

Not only is this favorable hard debt, ergo an embedded subsidy, it also avoids any complicated sharia compliance, giving it easy and swift customer acceptance.

 

For those who accepted, it helped ensure that any renovations followed preservation guidelines.

 

“The rationale was that if the state is forcing preservation on people,” Mr. Hallaj said, “then the state has a responsibility to pay for that burden.”

 

That’s quite appropriate – otherwise the struldbrug buildings would never be renovated until they finally collapse.

 

“So if they want a historical hand-carved window instead of an aluminum one, the state pays the difference.”

 

Arabic townhouses with grilled windows: Aleppo

 

The impact will be even greater if incremental subsidy is coupled with a mandate or even strong exhortation to preserve historic character.

 

Armenian church, Aleppo

 

Other incentives were put in place to encourage local businesses to stay — the kind of small neighborhood commercial establishments whose importance was championed by urban thinkers like Jane Jacobs.

 

Small street-front business are part of the city’s cryptobiotica that keep a community together.

 

What makes the project such an auspicious model for the region, though, is its clear grasp of how architecture can both shape and define relationships among social groups. Long before developers got an inkling of what was going on, GTZ and its government partners divided the Old City into zones, with new hotels and restaurants confined to two areas, one around the Citadel and the other in the Jdayde neighborhood.  

 

Jdayde Square with its stylish tourist-friendly hotel

 

These zones, in turn, are being anchored by increasingly ambitious — and often architecturally magnificent — public spaces.

 

Cities tend to be overgrown – public space sustains itself only when it is protected both judicially and by a strong civic presence.  So the place has to look attractive, and be maintained by the municipality.

 

The first, Al-Hatab Square in Jdayde, is a small patch of stone shaded by a few trees. Once partly built over with squalid sheds, the square has become a vibrant mix of Syrian families and foreign tourists, framed by old jewelry shops, fish markets and cafes.

 

Working at tiny scale to remake the central city

 

Significant here is the small scale at which the redevelopers are working – the economic zones are less than a tenth of a square mile each.  That allows for painstaking restoration and extensive consultation – all of which is expensive.  Enter the funder:

 

It has been a decade since the Aga Khan Trust for Culture began its meticulous restoration of the Citadel.

 

The Ismaili lion, symbol of the Aga Khan

 

Its enormous moat was cleared of garbage and lined with low-growing plants. The ruins of houses and shops built by Ottoman soldiers stationed here in the 18th century, and destroyed in the 1828 earthquake, were torn down.

 

The mazelike interior walls — a monument to medieval paranoia [It’s not paranoia – Aleppo was besieged many times – Ed.] designed to keep invaders from reaching the court’s inner sanctum — were cleared of rubble.

 

If you were on the conquerors’ freeway, you’d fortify your citadel too

 

The Crusader castles were masterpieces of engineering and defensive technology, and during their occupancy they were heavily fortified and well maintained. 

 

A mighty fortress is our God?

 

Just as important is the social vision behind it. The road surrounding the Citadel, which choked it with cars and exhaust fumes, has been replaced by a pedestrian walkway bordered by the newly landscaped moat on one side and scattered historical buildings on the other. Many of these are being beautifully restored, including a palatial 1930 neo-Classical structure that is being transformed into a hotel by the Aga Khan Fund for Economic Development.

 

Government must lead urban revival, because the initial investment always seems speculative.  With enough public capital, however, there comes a moment when the total urban reinvestment creates a gentrification tipping point, as the observant herd of private developers follows the public infrastructure.  The herd moves faster if the investment is sustained:

 

There is more to come. A few months ago the Aga Khan Trust for Culture began building the foundations for the 42-acre park in an impoverished neighborhood just outside one of the gates of the Old City. This hilltop site is now strewn with garbage.  A sprawling asphalt parking lot borders it on one side; crumbling modern apartment blocks and decrepit 19th-century houses line the other.

 

The project, which is being modeled on an earlier one in Cairo, Al-Azhar Park, will feature rambling walkways and gardens with views over the Old City to the refurbished Citadel.

 

Al-Azhar: an oasis of green in otherwise gray Cairo

 

Because slums are wealth-extraction machines, formalization also requires raising the neighborhood’s income level, and that takes education and training:

 

The trust plans to train local people in traditional crafts like carpentry and stonecutting so they can take part in the park’s construction.

 

Very sensible.

 

Levantine stonecutters, 1905

 

In a speech he gave in Aleppo two months after the Sept. 11 terrorist attacks, the Aga Khan described his mission as creating an intellectual garden “where there would be no possibility of suffocation from the dying weeds of dogma” and “beauty would be seen in the articulation of difference,” a statement crystallizing what preservationists hope will happen now in Aleppo.

 

For the historic restoration to succeed, the city’s economy must grow, and ideally tourism, especially cultural tourism, will be its magnet.

 

The beauty is in the maze: Aleppo from above

 

The silver lining of redeveloping Aleppo’s historic center will create its own cloud: expanding spontaneous communities that in turn need formalization.

 

And the city’s mayor, Maan Chibli, said that he recently asked GTZ to help plan for the redevelopment of the informal ramshackle settlements that have sprouted on Aleppo’s outskirts.

 

The world keeps urbanizing, so we must keep creating better cities.

 

“These settlements date from the 1970s,” Mr. Chibli said. “They are part of a social pattern that leads back to the old villages. Someone arrives, then his brother follows. So the idea, as before, is not to destroy these areas. It is to begin by providing them with infrastructure and services, then work programs.”

 

That’s impressively pragmatic – formalizing the slums is incremental and sequential. 

 

But how to make the final link between historic preservation and the creation of a contemporary city remains blurry. Many preservationists working here, including some at GTZ, see the last 70 years as unworthy of their interest. And most contemporary architects, whose clients are almost uniformly drawn from the global elite, are out of touch with the complex political realities of the poor in the region.

 

Aleppo, whose bones were formed in the nineteenth century and before, has to leap over the twentieth century and into the twenty-first.  That’s no easy challenge.

 

Aleppo’s Citadel, 1921

 

The real lessons that cities like Aleppo and Damascus can teach [is that] their power is not just the beauty of historical layers. It is that the coexistence of those layers, often piled one on top of the other, embodies a world in which every generation — including ours — has the right to a voice and individual creativity triumphs over ideological difference. It is the point at which tradition and modernity are no longer in violent conflict.

 

Well said.

 

A crossroads for millennia

 

convert this post to pdf.
PDF Converter    Send article as PDF   

Bypassing the twentieth century: Part 1, the past is ever with us

February 10, 2011 | Aleppo, Bilateral agencies, Cities, Formalization, GTZ, Infrastructure, Innovations, Islam, NGOs, Slum upgrading, Speculation, Syria, Urban renewal | 6,808 views

By: David A. Smith

 

Cities are urban palimpsests, each new culture laid atop the old, which lies buried in the ruble underneath – or, if the city is continuously inhabited, like Aleppo, still coexisting, the new and the old cheek by jowl.

 

How many centuries can you see in this picture?

 

That scrambling of past and present is what makes old cities charming, even hypnotic, but can also make them inefficient, congested, and squalid.  Revitalizing a city requires clearing away the outmoded without destroying the cultural or ethnic heritage – which China is doing with its uncreative destruction of Kashgar, Xinjiang – but that makes it complicated, as profiled in a sympathetic New York Times article by Nicolai Ouroussoff (who previously wrote so superficially and dismissively of Masdar).

 

Byzantine walls that still define streets

 

Aleppo, Syria — At first glance it seems an unremarkable scene: a quiet plaza shaded by date palms in the shadow of this city’s immense medieval citadel, newly restored to its looming power.

 

Make a date at the plaza that leads to the Lion Gate

 

The citadel is, of course, a Crusader construct, one of the many they built to hold their sliver of Holy Land against attacks from Arabs, Mamluks, and Mongols.

 

Foreign tourists sit side by side with people whose families have lived here for generations; women, both veiled and unveiled, walk arm in arm past a laborer hauling tools into an old government building being converted into a hotel.

 

But this quiet plaza is the centerpiece of one of the most far-thinking preservation projects in the Middle East, one that places as much importance on people as it does on the buildings they live in.

 

Historic preservation has come later to the Islamic world than it has to the western world.

 

The project encompasses the rebuilding of crumbling streets and the upgrading of city services, the restoration of hundreds of houses in the historic Old City, plans for a 42-acre park in one of the city’s poorest neighborhoods –

 

Walls within walls: the old city of Aleppo

 

Pre-automotive cities were built for protection, with walls in rings, then castles, then keeps.  These exoskeletal strictures choked the city’s organic growth, so that upon the arrival of cars and freeways, the oldest parts of town were also the poorest.

 

Arab, Ottoman, French, and congested: Aleppo’s old city

 

– and the near-decade-long restoration of the Citadel itself, whose massive walls dominate the skyline of Aleppo, one of the oldest continuously inhabited cities in the world, and a gem of Islamic architecture.

 

A bastion within a bastion: Aleppo citadel

 

Just as the historic restoration of old-city Aleppo fuses the new into the old, so too does it fuse Arab and Islamic cultural institutions with western benefactors, notably one government and one private foundation:

 

The effort, led by a German nonprofit group [GTZ, recently renamed GIZ – Ed.] and the Aga Khan Trust for Culture working with local government, is the culmination of a major philosophical shift among preservationists in the region.

 

As leader of an Islamic sect but with much of his heritage firmly in the western tradition, the Aga Khan is an intriguing bridge-builder between cultures.

 

The dude in the suit is the Aga Khan

 

As a change-maker, that his foundation has enormous wealth doesn’t hurt either.

 

It seeks to reverse a fifty-year history during which preservation, by myopically focusing on restoring major architectural artifacts, sometimes destroyed the communities around them.

 

Because they are alive and self-organized, cities are inherently messy.

 

How many centuries can you find in this picture?

 

They take some getting used to, and some tolerance.  The pace of urban life is quicker: people walk faster in cities, and faster in large cities than small ones.

 

Other restoration efforts have also sparked gentrification, driving the poor from their homes and, at their worst, fostering rage that plays into the hands of militants.

 

It’s called market eviction, and it’s natural and almost inevitable.

 

By offering an array of financial and zoning incentives to homeowners and shopkeepers, this approach has already helped stabilize impoverished communities in a part of the world where the most effective social programs for the poor are often still run by extremist organizations like Hezbollah and the Muslim Brotherhood.

 

As I’ve written, slums are alternate power structures, as well as houses of crime, so their formalization and improvement – ending their exclusion from the formal city – is a key to growing healthy twenty-first century cities. 

 

“The project in Aleppo is quite an exceptional model,” said Daniele Pini, a preservationist who has worked for Unesco, the United Nations cultural arm, throughout the region.

 

Pini likes exceptional models

 

In places like Cairo and Jordan, he said, those who would restore historic buildings and those who live in them are often at loggerheads.  The Aleppo plan, he said, “allows people to adapt the old houses to the needs of modern life.”

The role of postwar urban planning in the rise of fundamentalism is well documented.

 

This is news to me [A quick Google turns up nothing – Ed.], but inherently plausible.  It was the baleful influence of Le Corbusier and the Athens Charter crowd.

 

It’s my future – you’re just going to live in it

 

In the 1950s and ’60s nationalist governments in countries like Egypt, Syria and Iraq typically viewed the congested alleys and cramped interiors of historic centers not as exotic destinations for tourists but as evidence of a backward culture to be erased.

 

As I’ve previously written in the slum you need, using Cairo’s garbage people as the example, cities need people who do the scut work.  They have to live somewhere – and unless government creates viable affordable housing, where they live will be called a slum.

 

Garbage City in Cairo

 

Eliminating their habitat does eliminate them, although they normally return.

 

Planners carved broad avenues through dense cities, much as Haussmann had before them in Paris.

 

Straight lines sliced through the medieval city

 

Ever wonder, Pierre, what had to be demolished to make room for this?

 

Families that had lived a compartmentalized existence — with men often segregated from women in two- or three-story courtyard houses — were forced into high-rises with little privacy, while the wealthy fled for villas in newly created suburbs.

 

Where we live can change how we live.  Arab culture emphasizes strict segregation of the sexes, and any design which flouts that cultural geas is asking for trouble.

 

But while preservationists may have scorned Modernist housing blocks, they were often just as insensitive to the plight of local residents who got in their way.

 

As far as I can tell, the only people who can live comfortably in high-rises are rich people, because they can afford the in-building infrastructure, amenities, and comforts that make high-rises pleasant enclaves.  They should all be torn down – and fortunately, many have been.

 

Can you see the heritage in this picture?

 

Even as they worked to restore architectural monuments in the Muslim world, they could be disdainful of the dense urban fabric that surrounded these sites. Neighborhoods were sometimes bulldozed to clear space around landmarks so they would be more accessible to tourists.

 

That philosophy is still active, in Mecca, for instance, where the entire area around the Kaaba complex is being remade as a high-end mixed-use complex.

 

Traditionally a family might have built onto a house to accommodate a newly married son, for instance, adding a floor or a shop out front. But those kinds of changes were often prohibited under preservation rules.

 

Rendering stillborn the embryo house and the backyard apartment just kills the city’s vitality and its growth.

 

“The word ‘athar’ — ‘antiquities’ — became a horrible word because it meant preserving our houses but not our traditions,” said Omar Hallaj, the chief executive of the Syria Trust for Development and a preservationist who has worked in Syria and Yemen.

 

Omar the city-maker

 

These tensions grew with the boom in global tourism, as cities around the world sought to give travelers the “authentic” experience they craved, but in a safe, tidy and germ-free environment.

 

The twenty-first century city will do both – and that’s part of the challenge of slums.

 

The Old City of Damascus, for example, has in the last decade become a major draw both for the international tourist set and for Arabs.

 

What about a historic preservation law?

 

Even as the city government races to preserve its character, its courtyard houses are being converted into boutique hotels and fashionable restaurants.  Many 20th-century structures — including impressive examples of early modern architecture from the time of the French mandate period — remain unprotected.

 

Better protect it before it falls down

 

The city has introduced incentives to keep some homeowners, but many preservationists think it’s too late.

 

It all depends on how big the incentives are.

 

Militant Islamic hardliners, meanwhile, have had equal disdain for both the modernizers and for the preservationists, many of them Western, who followed them.

 

“I remember when we first moved into the city of Zabid in Yemen, the local imam started going to the mosque saying, ‘The Germans are here to transform your towns into cabarets and brothels,’ ” Mr. Hallaj said.

 

Fortunately, Syria is not Yemen – despotic to be sure, but not anarchic.

 

At least you know who’s in charge

 

For the sake of the world, Islamic culture has to embrace the twenty-first century without losing its cultural identity. 

 

Alley in old city Aleppo

 

What many militant extremists are fixated on is a utopia of the past: a vision of Islam in the era of the Prophet.

 

The observant herd needs some examples of positive deviance.

 

Not only Western influence, but also three centuries of Ottoman rule — the period when the fabric of most Arab cities was created — is seen as a form of corruption.

 

The Ottomans were not Arabs – they were both Turks and urbanists, whereas Arab culture was forged in nomadic deserts.  We forget that only a hundred years ago, Arabia was not a country but an unbounded wasteland with a few holy sites.

 

Founder of his country, and father of the current Saudi king

 

[Continued tomorrow in Part 2.]

 

convert this post to pdf.
PDF Printer    Send article as PDF