A crack in the Great Wall: Part 3, Offered urban hukou

April 21, 2016 | Amnesty, Bo Xilai, China, Chongqing, dipiao, Eminent domain, Formalization, Global news, hokou, Homeownership, Housing, Markets, pilot programs, Property rights, Rental, Speculation, Tenure, Urbanization, Zoning | No comments 62 views

 [Continued from yesterday’s Part 2 and the preceding Part 1.]

 

By: David A. Smith

 

As we saw yesterday, Bo Xilai’s assumption of control over Chongqing municipality was certainly eventful: in barely five years he inaugurated the largest anti-corruption trials in China’s history, swept into jail many people who thought themselves untouchable, introduced a dramatic three-part urbanization reform program, and himself was arrested, tried, and convicted of conspiracy to murder, events over which the Economist (March 26, 2016) glided with diplomatic serenity, perhaps as a tawdry distraction from the story the author wanted to tell, about the enduring impact of Mr. Bo’s triad of changes, which sought to leapfrog Chongqing ahead of other Chinese cities:

 

bo_xilai_wang_lijun

You’ve got my back, don’t you Wang?

 

The reforms are unique in scale and coherence.

 

By providing housing, they aim to attract migrants and thus expand the urban labor force.

 

By offering migrants better access to public services they aim to make life in cities fairer and thus more stable.

 

By introducing a land market, they hope that migrants will arrive with cash in hand.

 

Each of these elements is worth examination in detail.

 

 

C. Point 1, Urbanize people

 

You cannot grow technology; without technology, you cannot consume and deploy energy at scale; and without energy at scale, you cannot have a rich (or even twenty-first century middle class) society.  Urbanization is the future, and China knows it – not just the Party leadership but even more so, the Chinese people:

 

Some 250m people have moved from the countryside to cities, the greatest migration in history. Millions live in dormitories or doss down where they can.

 

They’re called the ‘ant tribes.

 

ant_tribe_dormitory

In the midst of ‘plenty’?

 

In China, as in America, the university degree is no guarantee of a good job:

 

Most have no formal contracts with their employers, and are denied access to urban public services such as subsidized education and health care.  

 

That’s the hukou discrimination at work. And the reasons for its perpetuation include economic:

 

The Chinese Academy of Social Sciences calculates that it costs about 100,000 yuan [$15,000]  (in total) to provide schooling, health care and other benefits for each rural migrant who becomes eligible to use urban services.

 

chongqing_sw_elementary_school

Free …but not costless: school children in southwest Chongqing municipality

 

For every 1m migrants, that means another 100 billion yuan [$16 billion].

 

[Editor’s note: It’s unclear whether that’s per-year or a net present value over a lifetime, and I lack the Chinese language or expertise to find out. – Ed.]

 

Around 12m of Chongqing’s residents are villagers; another 18m live in the core city and other widely scattered towns.  As elsewhere in China, the urban population has been growing fast thanks to a rapid influx of migrants (some are pictured).

 

economist_chongqing_urban_workers

Perching or nesting?

 

Even so, most who come are glad they did:

 

“I like it here,” says Zhang Xiaojie, as she surveys the crowds scurrying below her spick-and-span apartment. Migrant workers bend under sacks of flour or lug around huge circular saws for use on the building sites where they work.  

 

bangbang_man

Cultural institution or untenured indenture?

 

With that urbanization is coming economic separation, as those without skills, education, or connections fall behind those with some or all:

 

Ms Zhang, a young information-technology officer, is one of millions of people from the countryside who have flocked for work to Chongqing.  

 

She looks around at a forest of 30-storey tower blocks, all built and run by the local government, and smiles: “It’s a good place to live. The government has done a pretty good job.”

 

unfinished_blocks_chongqing

Homes for the future: high-rise blocks outside Chongqing

 

As elsewhere, where there is more housing, there is more economic growth, in part because the foundational jobs have somewhere to sleep at night.

 

Chongqing’s reforms have helped its economy.  

 

Rural migrants attracted by cheap housing, health and education have provided a ready supply of labor for the municipality’s fast-growing car- and computer-making industries (Chongqing is the world’s largest maker of laptops).  

 

Indeed, perhaps including the one on which I have been writing this.

 

china_desktop_assembly

Insert Google-blocking chip here

 

At the same time, change seldom happens simply by edict:

 

Through no fault of Chongqing’s, distribution of urban hukou has thus fallen far short of the target of 10m. 

 

Around 4m migrants have opted to switch their hukou status since 2010. Most are young and better-educated people: those with the best prospects in the cities and the least inclination to keep a rural bolt hole.

 

Naturally there is plenty of self-selection.  For even with the promised and evident benefits of an urban hukou, the observant herd is still wary:

 

china_elderly_couple_grandchild

Yes, our children have all left for the city, but it might just be a fad

 

Many farmers are reluctant to apply for urban hukou.

 

Before you dismiss their fears as irrational, consider what they have and would be giving up.

 

By law, as people from the countryside, they are entitled to farm a family plot and to use a piece of land for their housing.  Most farmers jealously guard that right: they see it as a form of insurance should they fail to make ends meet in the cities.

 

The farmer’s right to occupy and work a piece of land, title or documents be damned, dates back through history with rights that are common-law, traditional, or tribal.

 

They fear it would mean having to give up these rights.

 

I think it certainly would entail a swap of rights: urban for rural, so to embrace the new urban hukou requires bushels of trust: trust in government (and China’s government does little to engender trust), trust in the fruits of urbanization (which may be evident for the young and connected but far less certain for everyone else, and trust in oneself to adapt to a new place.  No wonder not everybody is leaping at the chance.

 

chongqing_farmer

How are you at growing concrete?

 

To motivate the observant herd, Mr. Bo and his Chongqing colleagues used a classic strategy – give the early adopters a bonus cookie:

 

no_cookie_for_him

 

To calm migrants’ fears about taking urban hukou, Chongqing has offered concessions. 

 

1.     It has granted farmers who apply for it a three-year grace period during which they may change their minds.  

2.     It has also allowed new holders of urban hukou to retain their farming rights – certainly the best of both worlds.

 

I have no idea how Mr. Bo sold this to his then-superiors in Beijing, because it’s so revolutionary in that it treated the rural farmers as an equal constituency, indeed people that had to be trusted by government before they could be expected to give government their trust.  Perhaps he just did it, under the guise of ‘introductory offer’, figuring he could succeed and then either ask for forgiveness or be in a strong enough political position not to need it.

 

Yang Xianlu is a 60-year-old farmer in Wulong county.  He says he was offered urban hukou but turned it down. His daughter-in-law and grandson (who work in the main city) have both applied for it, however. If they succeed, he says, the family would have the best of both worlds.

 

best_of_both_worlds

I can be a wholesome fiction today and a complete reality wreck tomorrow: the best of both worlds!

 

Another problem has been that many migrants still feel a strong sense of attachment to their rural land, even after they move into the cities.

 

Surrendering the life one has known is not easy. 

 

AHI posts on China’s urbanization and capital

.    

April 27, 2007: Chinese property rights: the shot heard ‘round the world?

July 28, 2010: Little Chinese nested shoeboxes, the ‘ant tribes’ of urban men

August 23, 2010: Gleefully running up the debts, 2 parts, SOEs and development

October 28, 2011: A little learning is a dangerous thing, 2 parts, hukou and schools

May 2, 2012: Old before rich? 2 parts, China’s gray wave

July 29, 2012: I’m shocked, shocked, kickbacks in property development

August 23, 2012: China’s cities and housing: “Nothing outside China matters”

August 25, 2012: China’s cities and housing: “Imperial economy is successful society”

August 26, 2012: Suburb stuffing, 2 parts, new ghost high-rise towns

September 17, 2012: China’s cities and housing: “Between observation and doctrine, report doctrine”

November 14, 2012: Not nice places to live, 2 parts, the shortage of girls

July 22, 2013: China’s runaway money train, 4 parts, out-of-control monetary policy

December 16, 2013: Formula for an instant slum, 5 parts, supply-side urbanization

September 19, 2014: Where the money goes, people will follow, 3 parts, expatriating

February 1, 2016: Yuan to buy American housing?, 4 parts, Chinese buying US assets

March 8, 2016: The fall of China Mae, 3 parts, the likelihood of major overleverage

 

Turning a rural family into an urban one seems to take about a generation and a half.  Elder Mr. Yang will be a countryman to his deathbed, his daughter-in-law will have her heart in the country while her life is in the city, and his grandson will be an urban dweller from birth.

 

[Continued tomorrow in Part 4.]

A crack in the Great Wall: Part 2, Ten million migrants

April 20, 2016 | Amnesty, Bo Xilai, China, Chongqing, dipiao, Eminent domain, Formalization, Global news, hokou, Homeownership, Housing, Land, Markets, pilot programs, Property rights, Rental, Speculation, Tenure, Urbanization, Zoning | No comments 73 views

[Continued from yesterday’s Part 1.]

 

By: David A. Smith

 

Yesterday’s Part 1 on Chongqing’s dramatic – indeed, radical – experiment in urbanization, affordable housing, and economic capitalism, using as source material an Economist (March 26, 2016) article, the latest in an occasional series the magazine has written on this subject dating back half a decade, introduced the anti-Beijing, Chongqing, a megacity far from the capital that has gone its own way, until nine years ago when the capital sent in a new sheriff, by the name of Bo:

 

rick_sheriff_walking_dead

Howdy, pardners, I aim to clean up this dirty rotten town

 

Chongqing’s broad strategic reinvention of its urban landscape (particulars below) appears to have been the brainchild of Bo Xilai, at the time the party chief of the municipality of Chongqing.

 

To manage this better, Chongqing persuaded the central government nine years ago [2007, when Bo Xilai was transferred there from Dailan] to let it test out new ways of handling the newcomers and of making good use of the land they leave behind.

 

bo_xilai_party_congress

Before the fall: Mr. Bo at the Party Congress in Beijing, March, 2012

 

The urban reforms were the enduring part, but not the most visible part, of Mr. Bo’s campaign as municipal party chief.  Just as big-city mayors the world around fancy themselves presidential timber, Mr. Bo at one point was contending to challenge Xi Jinping for leadership of China.

 

bo_xilai_at_sentencing

Bo Xilai, at his sentencing to life imprisonment, 2013

 

One of the Red Princelings whose father was a prominent ally of Mao Zedong, Mr. Bo rose to prominence as a municipal go-getter and liberalizer, who sent his son to Harrow and then to Harvard’s Kennedy School of Government,  

 

bo_guagua_graduates

Now remember, “What would JFK do?”

 

After fifteen years running and reforming the port city of Dailan, in 2007 Mr. Bo was transferred in Chongqing, which for decades has had the reputation of being one of China’s most corrupt and gangster-dominated cities.

 

AHI posts on China’s urbanization and capital

.    

April 27, 2007: Chinese property rights: the shot heard ‘round the world?

July 28, 2010: Little Chinese nested shoeboxes, the ‘ant tribes’ of urban men

August 23, 2010: Gleefully running up the debts, 2 parts, SOEs and development

October 28, 2011: A little learning is a dangerous thing, 2 parts, hukou and schools

May 2, 2012: Old before rich? 2 parts, China’s gray wave

July 29, 2012: I’m shocked, shocked, kickbacks in property development

August 23, 2012: China’s cities and housing: “Nothing outside China matters”

August 25, 2012: China’s cities and housing: “Imperial economy is successful society”

August 26, 2012: Suburb stuffing, 2 parts, new ghost high-rise towns

September 17, 2012: China’s cities and housing: “Between observation and doctrine, report doctrine”

November 14, 2012: Not nice places to live, 2 parts, the shortage of girls

July 22, 2013: China’s runaway money train, 4 parts, out-of-control monetary policy

December 16, 2013: Formula for an instant slum, 5 parts, supply-side urbanization

September 19, 2014: Where the money goes, people will follow, 3 parts, expatriating

February 1, 2016: Yuan to buy American housing?, 4 parts, Chinese buying US assets

March 8, 2016: The fall of China Mae, 3 parts, the likelihood of major overleverage

 

While party chief of the municipality – in effect, something among mayor, governor, and duke – Mr. Bo was both an urban reformer and an anti-corruption crusader, though he fell spectacularly from grace and was convicted of conspiracy to murder English expatriate Neil Heywood, who may have died of cyanide poisoning, though even this is in dispute.

 

neil_heywood_cremated

More famous in death than in life: Neil Heywood

 

It’s an incredibly murky story line that I just spent several hours trying to decipher, before reluctantly concluding I had to avoid the subject entirely, because it’s baffled Sinologists way more experienced, knowledgeable, and insightful than I.  But just as a flavor – because I think all this is relevant to the urban story – here’s Wikipedia’s capsule summary:

 

Xie Caiping, left, is taken from court after her sentencing.

You get a fair trial … in your orange perp vests, that is

 

The Chongqing gang trials were a series of triadbusting trials in the city of Chongqing that began in October 2009 and concluded in 2011. Carried out under the auspices of municipal Communist Party chief Bo Xilai and police chief Wang Lijun, a total of 4,781 suspects were arrested, including 19 suspected crime bosses, hundreds of triad members, and a number of allegedly corrupt police, government and Communist party officials, including six district police chiefs and the city’s former deputy police commissioner, Wen Qiang. Time described it as “China’s trial of the 21st century”.  Concerns over due process surfaced following the trial, including allegations of torture, forced confessions, and intimidation.

 

It sounds like Gilded-Age Tammany Hall, or Prohibition Chicago.

 

deniro_switch_jury

Your Honor, my client wishes to switch the jury to the one he’s already bribed

 

The first 31 defendants were brought to trial on 12 October 2009, nine in Chongqing’s First Intermediate People’s Court and another 22 at the Third Intermediate People’s Court. Charges included murder, assault, and operating illegal coal mines.  On 21 October, three of the defendants in the first round of trials (Yang Tianqing, Liu Chenghu, and Liu Zhongyong) were sentenced to death, and another three were given suspended death sentences.  The other 25 defendants were sentenced to jail terms ranging from one year to life. 

 

millers_crossing_finney

Get the mayor on the line: I need to give him his orders

 

The highest-profile defendant has been deputy police commissioner Wen Qiang’s sister-in-law, Xie Caiping (Chinese: 谢才萍), reputedly the ringleader of the syndicate and dubbed the “Godmother of Chongqing”. 

 

xie_caipeng

When it comes to handcuffs, I put them on the men, not the other way around: Xie Caipeng

 

Xie, 46, reputedly kept 16 young men as lovers.  She and 22 accomplices were brought to trial on 14 October.  During the trial, a judge rebuked her for profanity in her testimony.  On 3 November she was sentenced to 18 years in prison for running a crime syndicate that operated illegal gambling dens, illegally locked people up, harbored drug users, ran protection rackets, and bribed police. 

 

In short, Ms. Xie was convicted of running the full urban-corruption suite.  I’m surprised that the list omitted cement-contractor kickbacks and shady land deals, since both of those are normally a common means of rewarding one’s friends, punishing one’s enemies, and bribing anyone in between.

 

The trials earned significant media attention for local party chief Bo Xilai, and its implications partially contributed to Bo’s downfall in March 2012.  Police chief Wang Lijun was also later convicted of abuse of power and went to prison.

 

For that matter, I’m even more surprised that in its reporting of Chongqing’s urban revolution, the Economist omitted not only Mr. Bo’s conviction but also his anti-corruption drive, in favor of this throwaway clause:

 

Under Bo Xilai, a now-imprisoned rival to President Xi Jinping

 

elephant_in_the_room

Gangster trials?  What gangster trials?

 

– the municipality’s government touted what admirers called the ‘Chongqing model’.

 

This involved three main initiatives.

 

Mr. Bo’s triad, as it were, was a pro-people urban revolution: urbanization, affordable housing, and private property rights.

 

[1] The government said it would give full urban status to 10m migrants, meaning they would get access to subsidized urban health care and education (typically, these services are available only in the place of one’s household registration, or hukou –  usually the place of birth of one’s mother or father).

 

I’ve posted before about hukou and how it spatially and legally excludes the rural poor from education. 

 

hukou_buy_black_market

For twenty-five grand, you can get rights in the city

 

A political-cultural holdover from the time when Mao wanted China to be an agricultural collective, it reeks of Jefferson’s plantation mentality and even Biblical stories that all the world should be taxed, and each unto his own city. 

 

hukou_school_demolished

Community-sponsored school for 1,400 rural-hukou children in Beijing, demolished by government order

 

Banishing hukou suddenly enfranchises the majority of Chongqing’s actual residents, and as we’ll see a bit further below, it’s akin to an urban formalization amnesty.  Very powerful stuff, and irreversible (at least in Chongqing).

 

[2] The government said it would build 40m square meters of housing in the decade to 2020 for rent to the urban poor, including rural migrants.

 

While I don’t know how large the apartments will be, let’s use 40 m² (425 square feet) as a reasonable baseline.  (Indian lower-middle-income affordable housing is 25 m²; Egypt’s is 65 m².)  That’s a nice round one million additional apartments, versus 10 million migrants, and even if we assume crowded conditions/ large households, say 5-6 per household, even this incredibly ambitious plan would deal with at best 50% of the newly urbanized holders of rural hukou. 

 

Beyond the mere production, there’s further substance to the pro-poor or egalitarian aspects of the proposal that I’ll address below.  But the most revolutionary – in Chinese terms, that is – proposal was this one: giving the people in the peoples’ republic the chance to own their own piece of the people’s republic

 

peoples_republik

Spelling things backward since 1989

 

[3] The government announced changes to the urban-planning system to allow land left behind by migrants to be traded for use in building new houses and offices. That was a breakthrough in a country that still officially disapproves of selling farmers’ property.

 

In general, rural Chinese are not allowed to own property individually; instead it is owned by village collectives, and aside from not being redeveloped, it cannot be converted to urban use – even if one has become urban without moving as the ever-expanding metropolis engulfs the plot and transforms the value of land and its potential for vertical development.

 

lilp_figure_1_land_ownership_property_rights

And this just scratches the surface of its complications

 

While one can make a case for collective ownership in a pre-literate society (as one finds repeatedly in tribal lands throughout Africa), or one where private property was owned by land cartels and used to exploit people at a subsistence living (as in pre-revolutionary Mexico, hence the post-revolutionary invention of ejido land, Mexico’s clumsier version of the 1862 Homestead Act), it’s nonsensical when trying to build a middle class in a nation that is speeding out of a rural past, transiting an industrial present, and striving to leap into an information-age future.

 

[Continued tomorrow in Part 3.]

A crack in the Great Wall: Part 1, Life in Fog City

April 19, 2016 | Amnesty, Bo Xilai, China, Chongqing, dipiao, Eminent domain, Formalization, Global news, hokou, Homeownership, Housing, Land, Markets, pilot programs, Property rights, Rental, Speculation, Tenure, Urbanization | No comments 80 views

 By: David A. Smith

 Each time I write about China, I discover some new aspect of China’s uniqueness, and while I won’t claim that thinking through the apparent implications of whatever new element I’ve belatedly stumbled over enable me to be actually knowledgeable about the Middle Kingdom, at least after each finished post I can truthfully claim to be a bit less ignorant than before.

 

great_wall_crumbling

A nation defined by keeping people out

 

So I felt when I finished rearranging and organizing my thinking about Chongqing’s experiment in urban reinvention, as reported in a recent article in the Economist (March 26, 2016) about the province of Chongqing, a place so large, so far from Beijing, that for many purposes it operates with as much autonomy as a US state:

 

Though called a municipality, Chongqing covers an area the size of Scotland.

 

To put that in an American context, Chongqing’s urban area is the size of Delaware, and the whole   Chongqing province is as big as South Carolina, with a population 6½ times that state’s, its thirty million people placing it midway between California and Texas. 

 

chongqing_urbanized

A lot of people however you classify them

 

Situated on roughly the same latitude is New Orleans, it is as far from Beijing as Cleveland is from the Crescent City.  For more than a decade, Chongqing has with the capital’s tepid backing been conducting its own urbanization policy – until, that is, Chongqing’s political Icarus flew too high:

 

bo_xilai_side_eye

Oh, I’ve got it all under control

 

An ambitious plan for social change has run into trouble

 

Chongqing is the setting for China’s most ambitious social reforms. They are aimed at keeping economic expansion going while ensuring that the huge social changes unleashed by growth do not perpetuate inequalities, or foment unrest.

 

To understand what Chongqing did and how its reforms created unease, we’ll need to understand hukou, dipiao, and ‘housing with limited property rights’, all played out on a stage that has always been an outlier among Chinese cities.

 

AHI posts on China’s urbanization and capital

.    

April 27, 2007: Chinese property rights: the shot heard ‘round the world?

July 28, 2010: Little Chinese nested shoeboxes, the ‘ant tribes’ of urban men

August 23, 2010: Gleefully running up the debts, 2 parts, SOEs and development

October 28, 2011: A little learning is a dangerous thing, 2 parts, hukou and schools

May 2, 2012: Old before rich? 2 parts, China’s gray wave

July 29, 2012: I’m shocked, shocked, kickbacks in property development

August 23, 2012: China’s cities and housing: “Nothing outside China matters”

August 25, 2012: China’s cities and housing: “Imperial economy is successful society”

August 26, 2012: Suburb stuffing, 2 parts, new ghost high-rise towns

September 17, 2012: China’s cities and housing: “Between observation and doctrine, report doctrine”

November 14, 2012: Not nice places to live, 2 parts, the shortage of girls

July 22, 2013: China’s runaway money train, 4 parts, out-of-control monetary policy

December 16, 2013: Formula for an instant slum, 5 parts, supply-side urbanization

September 19, 2014: Where the money goes, people will follow, 3 parts, expatriating

February 1, 2016: Yuan to buy American housing?, 4 parts, Chinese buying US assets

March 8, 2016: The fall of China Mae, 3 parts, the likelihood of major overleverage

 

 

A. Chongqing has always been an outlier city

 

Far up the Yangtze River from Shanghai and Nanjing, Chongqing is by far China’s largest truly land-locked city, and judging by its economy, it has something of St. Louis. 

 

Politically, the municipality ranks on a par with Beijing and Shanghai [cities that have autonomy akin to a province, a quirky governmental legacy from the imperial past].

 

Despite the spectacular scenery of the Yangtze’s Three Gorges, it is by most accounts a dreary place to live (Wikipedia extract):

 

qutang_gorge

Ready for your watercolor?  Qutang Gorge on the Yangtze

 

Chongqing has a monsoon-influenced humid subtropical climate (Köppen Cfa), and for most of the year experiences very humid conditions. Known as one of the Three Furnaces of the Yangtze River, along with Wuhan and Nanjing

 

chongqing_wuhan_nanjing

 

– its summers are long and among the hottest and most humid in China, with highs of 33 to 34 °C (91 to 93 °F) in July and August in the urban area.  Winters are short and somewhat mild, but damp and overcast. The city’s location in the Sichuan Basin causes it to have one of the lowest annual sunshine totals nationally, at only 1,055 hours –

 

That’s an average of three hours a day.

 

chongqing_fog_2

Does this count as sunshine?

 

– lower than much of Northern Europe; the monthly percent possible sunshine in the city proper ranges from a mere 8% in December and January to 48% in August.  

 

There is an old saying in China, probably two thousand years old, that ‘a Szechuen dog barks at a sun,’ because the sun so seldom appears.”

 

chongqing_funerary_dogs

Finally seeing the sun: Sichuan funerary dogs

 

With over 100 days of fog per year, Chongqing is also known as the “Fog City” (雾都), and a thick layer of fog shrouds it for 68 days per year during the spring and autumn.

 

Fog may be a euphemism; smog is more like it.

 

According to the National Environmental Analysis released by Tsinghua University and the Asian Development Bank in January 2013, Chongqing is among one of the ten most air-polluted cities in the world. Also according to this report, seven of the ten most air-polluted cities are in China, including Taiyuan, Beijing, Urumqi, Lanzhou, Chongqing, Jinan and Shijiazhuang.

 

All that pollution is the byproduct of a national commitment to industrialization, environment be damned and fleece the guilty Europeans of their carbon credits, and it’s predicated on wealth emerging from those smokestacks, not just soot.

 

 

B. Chongqing’s ‘mayor’, Bo Xilai, introduced a property-rights revolution

 

About Chinese politics and the Chinese economy there is no shortage of opinions, from those who believe the country’s going to overtake the US as the world’s dominant economic power, to others (like me) who think that China is hitting the side-effects of overly rapid emphasis on industrialization at the expense of society, governance, and population, and no longer has control over its monetary policy, its elite citizens’ aspirations, nor their outflow of capital to other markets and countries.  What is certain, even through the fog of unreliable Chinese statistics, are two things:

 

chongqing_fog

Welcome to Chongqing: good luck discerning the truth

 

·         China is experiencing the greatest migration in human history, from rural China to its megacities.

·         China’s economy is slowing down.

 

And a nation born of a revolution that sparked in a city knows full well what happens when millions of rootless (and wifeless) young men congregate in cities.

 

tiananmen_1989

Heady days in 1989 … long suppressed in China now

 

[Sidebar speculation: Perhaps that is why revolutionaries, upon obtaining power, are so intent on taking everyone to the countryside and re-educating them, to embed loyalty the new doctrine and to eradicate free thinking. – Ed.]

 

But those urban dwellers must not be merely workers, they must also be consumers, and while China’s figured out how to export manufactured goods to the educated cosmopolitan bourgeoisie extant around the world, the country hasn’t solved how to turn its own people into such consumers.

 

As the country’s growth slows, the Communist Party hopes migrants will play an even bigger role in boosting the economy, not just by toiling in factories, but by joining the middle class and spending their new wealth. So it is looking for ways to improve their lot.

 

Here enters real estate, and in particular, home ownership.

 

In every developed nation in the world, real estate is a huge part of the economy:

 

·         Construction creates jobs and a big chunk of GDP.

·         Ownership creates a savings and wealth-building strategy and outlet.

·         Finance creates accessible capital to start or grow a business, or start or grow a collegian.

 

To grow the economy without either natural resource extraction or manufacturing for export, real estate development and ownership is essential.  But that flies in the face of Communist Party dogma, and as I’ve written before, in China, Between observation and doctrine, report doctrine.

 

three_china_premises_breakdown

These rules work great … until they don’t work at all

 

Time for some discreet, deniable, and controllable pilots?

 

For several years, Chongqing’s efforts to achieve this have gone further than anywhere else in the country.

 

[Continued tomorrow in Part 2.]

Strung up on the scaffold: Part 8, The same gloomy thing for forty years

April 15, 2016 | Apartments, Cities, Columbia, Construction, Ecosystem, Homelessness, Housing, Liability, New York City, Precautionary principle, Regulation, scaffolding, struldbrug buildings, tort law, US News, Zoning | No comments 87 views

By: David A. Smith

 [Continued from yesterday’s Part 7 and the preceding Part 1, Part 2, Part 3, Part 4, Part 5, and Part 6.]

 

I wanted a perfect ending. Now I’ve learned, the hard way, that some poems don’t rhyme, and some stories don’t have a clear beginning, middle and end.

Gilda Radner

 

always_something-gilda

It’s always something!

 

Though the law that spawned the shed epidemic (New York’s Local Law 10) was enacted for the best of motives and with seemingly limited intention, more than a third of a century after Grace Gold’s tragic death it has lost its way and is universally bemoaned if not despised.

 

Sources used in this post

 

Crain’s New York Business (January 24, 2016)

New York Times (September 2, 2014; Bloomberg green)

Columbia Spectator (October 29, 1981; Columbia powder-blue)

 

Yet it still lives, because of the last axiom.

 

9. Nobody’s in charge of streamlining the whole ecosystem

 

Shed proliferation has occurred because each participant in the system has blinkers on.

 

AHI posts on building materials and construction

 

July 31, 2008: Donors as scaffolding, 2 parts, a metaphoric treatment

September 1, 2009: Temporary permanence, initial foray into scaffolding

October 14, 2011: Doing something concrete about green construction, new uses for poured-in-place green concrete

April 1, 2014: Elevators, the vertical utility, 7 parts, the ups and downs of buildings

February 17, 2015: Form forces function, 8 parts, impracticality of Brutalist concrete

January 13, 2016: Morality, economy, innumeracy, illogic, 8 parts, Union Theological Seminary’s redevelopment of its air rights to pay for facade restoration

 

Some building owners – those intent on actual renovation – simply want to get through the process as fast as they can.

 

Others, like Mr. Shadid of the Lenox/ West 123rd shed, are entirely reluctant captives.  Mr. Shadid didn’t want the shed; he wants to renovate the exterior of his building.  But he can’t do that because he’s located in a historic district and hasn’t got through their design-review process.  Thus caught, he cannot remove the shed (legal liability under Local Laws 10 and 11) and can’t undertake the facade work (historic commission review).

 

As long as the landlord continues to pay the relevant fees, the city’s policy allows the shed to stand.

 

Mr. Shadid has thus found the administrative saddle-point – the maxi-min solution or his particular problem. 

 

One recent afternoon, a weeks-old sanitation ticket for littered curbs issued by the Environmental Control Board was folded up and taped to a gray metal gate in the shadow of the shed. City records indicate the $100 fine has not yet been paid.

 

It sounds eerily similar to Pagedale’s housing-quality police – and that’s not a good thing at all.

 

ecb_tribunal

We’re hauling you up before the tribunal

 

It’s much cheaper simply to pay the fines, as and when they arise, in much the same manner that many urban dwellers treat parking tickets as randomized parking fees.

 

nyc_parking_ticket

Just think of it like a ‘shared parking space’

 

Thus the shed persists:

 

[The Lenox/ West 123rd shed] has [stood for a decade], despite the more than $60,000 in fines for scaffold-related violations that have accumulated over the years –

 

Six thousand a year is about $18 a day – yep, it’s just a form of parking fees.

 

– because the city cannot compel the landlord to do the necessary repairs.

 

Vendors of scaffolding-related products and services have business that depend on the system, so they patiently explain it, occasionally defend it, and expertly help clients cope with it, they’re unlikely to be revolutionaries dismantling it.

 

dismantling_scaffolding

Sometimes harder to take down than put up, isn’t it?

 

Then there are those who can acutely observe the problem without necessarily proposing a solution:

 

“Sheds are awful and everywhere,” lamented Dan Biederman, president of the 34th Street Partnership, a midtown business district where sheds cover about 20% of the sidewalk space.

 

Dan Bierderman of Bryant Park Corporation. (Bryan Smith/for NY Daily News)

Pointing out that sheds are awful and everywhere

 

“So many things about the city have improved, yet sheds are the same gloomy thing they’ve been for more than forty years,” groaned Stephen Varone, president of Rand Engineering & Architecture.

 

stephen_varone

Varone says, away with gloom!

 

Actually, as we’ve seen earlier in this post, the sheds are now more gloomy than they were before, what with the additive requirements of Hunter Green 1390 paint, the twenty-story brick-bouncing structural requirements,

 

[The shed epidemic] could be remedied with legislation similar to the law requiring the Housing Authority to take down its sheds.  

 

As mentioned before, I doubt the enforceability about the state’s NYCHA-removal-order law, which is a moot point in the context of NYCHA, but far from moot if a private owner were involved.

 

But City Council Speaker Melissa Mark-Viverito wouldn’t comment on whether she would support such a law, and the state couldn’t pass one without the city giving its go-ahead.

 

mark_viverito_mike

I’ll have to get back to you on that one

 

For urban change, therefore, the field is entirely left to those, like Mr. Delly and Ms. Heard, who identify a particular target and then concentrate on it with persistence:

 

Laurent Delly said his efforts to clean up the block had become a Sisyphean ordeal of drawing promises from city agencies only to walk outside the next morning and still be overcome by the smell of urine. “It’s not healthy, it’s not pleasant,” he said. “And it affects property values.”

 

Yet that is no one’s problem except Mr. Delly’s and his neighbors’.

 

Nine axioms of urban development regulation

 

1.     A species without predators overruns the ecosystem

2.     Catastrophe is a precondition to over-reaching safety legislation

3.     The precautionary principle is a dumb idea for imposing burdens on other people

4.     Precautionary-principle mandates always grow, diversify, and become more costly

5.     Unprotected public spaces are always privatized via capture … and not always for the better

6.     All bridges add tolls … and trolls

7.     Program designers forget about their ‘political horizon effect’

8.     New York City never met a n urban-property-use law it didn’t over-complicate

9.     Nobody’s in charge of streamlining the whole ecosystem

 

nine_kings_of_men

We were proud real estate entrepreneurs … and then the regulations came

 

No one in New York City owns the ecosystemic problem, and no one will own it until it becomes so rampant that even the mayor cannot overlook it.

 

As dusk brought a bit of relief from the heat last Wednesday, Roy Scott Jr. shifted in his wheelchair, balancing an unlit cigarette, a lit cigarette and a beer can concealed in a brown paper bag.

 

welles_third_man

So long, Holly

 

If you want a happy ending, that depends of course on where you stop your story.

Orson Welles

Strung up on the scaffold: Part 7, Great for criminals as a place to hide

April 14, 2016 | Apartments, Cities, Columbia, Construction, Ecosystem, Homelessness, Housing, Liability, New York City, Precautionary principle, Regulation, scaffolding, struldbrug buildings, tort law, US News, Zoning | No comments 83 views

By: David A. Smith

 [Continued from yesterday’s Part 6 and the preceding Part 1, Part 2, Part 3, Part 4, and Part 5.]

 

People feel that the EU is heading in a direction that they never signed up to. They resent the interference in our national life by what they see as unnecessary rules and regulation. And they wonder what the point of it all is. Put simply, many ask ‘why can’t we just have what we voted to join – a common market?’

David Cameron

Yesterday’s Part 6 in this series on scaffolding showed how the intersection of two well-intentioned laws can create bad outcomes from everybody’s perspective, including that of the original designers of each law.  In New York City’s case, Mount Morris Park suffers from an excess of love;

 

·         A historic district designation, which makes doing anything a long slow procedure.

·         Buildings with ornate and heavy stone facades that are now well over a hundred years old, which makes doing something an urgent priority.

·         A prescriptive and pervasive shed-mandating law, which presumes that sheds will be temporary when in fact they’re increasingly permanent.

 

three_huging

We just love you to death

 

So the beautiful facades are masked by ugly sheds intends to prevent passers-by from being conked on the head by masonry falling from twenty stories up … except that none of the buildings are taller than four stories, and the law permits no ‘lower-height’ exemption.

 

Sources used in this post

 

Crain’s New York Business (January 24, 2016)

New York Times (September 2, 2014; Bloomberg green)

Columbia Spectator (October 29, 1981; Columbia powder-blue)

 

That combination illustrates the ninth axiom, which I’ve made particular to the Big Apple but which seems also to apply to any high-density city with lots of well-educated people just brimming with ideas.

 

brimming

So full of ideas I need a big brim

 

 

8. New York City never met an urban-property-use law it didn’t over-complicate

 

Many an ambitious, up-and-coming politician who relishes his newfound verbal prominence as mayor of a big-media city discovers, to his continuing nettlement, that though his rhetoric soars toward a future of higher office, he is inescapably rooted in the mechanics of urban government, and people expect him to do something about the stop lights, the potholes, and yes, the sheds.

 

Last year, Mayor Bill de Blasio described sheds as “great for criminals as a place to hide” and “great for folks who want to throw their trash on top.”

 

And the solution to the epidemic of unsightly structures spawned by regulation? 

 

Why, add more regulation!

 

scotty_canna_take_it

Cap’n, the city canna take any more

More rules, Scotty, I need more rules

 

On Jan. 8, his administration announced a “shed safety sweep” in which inspectors will examine sheds to ensure they’re well-lit and code-compliant.

 

Evidently the mayor felt no need to explain what would happen if sheds weren’t well lit.  On the other hand, the mayor did succeed in this:

 

Last summer, the de Blasio administration removed eight miles of sheds from New York City Housing Authority properties where no active work was taking place.

 

Perhaps the mayor found his motivation out of this stimulus:

 

Last month, Gov. Andrew Cuomo signed into law a bill that requires the Housing Authority to remove any remaining dormant sheds on its sites.

 

cuomo_stone_de_blasio_explaining

“Now Andy, this is what you should do as governor”

“Bill, you’re dead to me”

 

Trust Cuomo to poke De Blasio, but in this case he has a point.

 

AHI posts on building materials and construction

 

July 31, 2008: Donors as scaffolding, 2 parts, a metaphoric treatment

September 1, 2009: Temporary permanence, initial foray into scaffolding

October 14, 2011: Doing something concrete about green construction, new uses for poured-in-place green concrete

April 1, 2014: Elevators, the vertical utility, 7 parts, the ups and downs of buildings

February 17, 2015: Form forces function, 8 parts, impracticality of Brutalist concrete

January 13, 2016: Morality, economy, innumeracy, illogic, 8 parts, Union Theological Seminary’s redevelopment of its air rights to pay for facade restoration

 

Though legally questionable and probably unenforceable, Governor Cuomo’s action is politically obvious.  The feud between the ambitious mayor of New York and the ambitious governor of New York is well documented.  Further, on the face of it, I can see no legal basis for the state of New York to tell NYCHA what to do, particularly as funding for New York public housing comes straight from HUD without ever passing through Albany.  Nevertheless, many city budgets and authorities are subject to state oversight, and Governor Cuomo has never scrupled about such distinctions.  And it gives New York City-district state assembly and state senate members, who might otherwise have no way of gaining the mayor’s attention, a means of reminding him that what goes around comes around.

 

karma_dominos

The one you cross today you may need next week

 

Taking down the sheds would be an advance.  So would deregulating them.

 

Shed builders certainly would not welcome more government oversight, in part because their business is already heavily regulated. Nearly every aspect of a shed is determined by the city government.

 

Regulation adds cost.  And recall the Precautionary-Principle’s Public-Benefit Inequality:

 

precautionary_principle_public_benefit_inequality

Over time, C rises, as does N

 

Compliance costs invariably rise because the compliance obligations invariably become more extensive, prescriptive, and precautionary. 

 

It starts with the city saying the structures must be strong enough to support 300 pounds per square foot –

 

Given that the average person has a weight-bearing footprint of about two square feet (we stand with our feet apart), that’s about four times normal human load, assuming people were walking atop the shed!

 

– twice as much as demanded by any other city.

 

And the reason?

 

That rule, which has been on the books since at least the 1960s, ensures structures are strong enough to absorb the shock of a brick falling 20 stories, but it also means a column is required every eight feet to support the load. That helps explain why New York sheds gobble up so much sidewalk space.

 

crains_01_scaffolds_are_ubiquitous_160126

Built strong enough to dribble bricks atop

 

Verticality and gravity are non-negotiable.  Once one has decided that a shed must be able to bounce a brick from twenty stories up, then it’s got to be a muscular construction – even if it’s skirting structures much shorter than twenty stories:

 

shed_4622_avenue_c

A structure to take a twenty-story brick drop?  Absolutely!

 

Even shed builders agree their works don’t exactly please the eye.  “Basic sidewalk sheds are built for safety, economy and functionality, not beauty,” said Ken Buettner, CEO of York Scaffold Equipment Corp. in Long Island City.

 

kenneth_buettner

Buettner’s not making beauty an engineering criterion

 

Over-regulation for compliance also kills innovation:

 

Six years ago the building industry held a contest to create a nicer-looking shed. The winning entry was an attractive assemblage of high-strength recycled steel, translucent plastic and LED lighting, called Urban Umbrella.  

 

urban_umbrella_side_view

Better on paper …

 

But it flopped because it costs more than traditional steel-and-wood sheds and is harder to assemble.

 

urban_umbrella_nyc

… Nicer when installed

 

And so the dismal spread of sheds continues.

 

“What’s supposed to be a temporary structure has become an architectural feature of the city,” said Andres Cortes, Urban Umbrella’s designer. “How do we get out of this?”

 

Change the law, Mr. Cortes.

 

It doesn’t help that the Urban Umbrella experiment was a bust.  Great as it looked–Mayor Bloomberg called it the shed for the 21st century – contractors said it (a) didn’t fit well into the city’s busy sidewalks, (b) couldn’t support scaffolding and (c) cost twice as much as a conventional shed.

 

manhattan_pedestrians

Nobody uses the sidewalks anymore; they’re too crowded

 

Anyone who’s tried to walk any distance in Midtown Manhattan knows how crowded the sidewalks already are, and how people pile up at the corners because of the difficulty cars have in turning left or right.

 

Urban Umbrellas have been installed in downtown Toronto –

 

urban_umbrella_toronto

… Nicer still when installed in Toronto

 

Where they don’t have New York City’s cost structure or its urban regulatory thicket – which is, among other things, why Toronto is so often used as Gotham’s movie stand-in.

 

toronto_for_nyc

Yes, but is the scaffolding authentic?

 

toronto_nyc_movies

 

– and Cortes said he is working on improvements. “For the public, it’s a forefront issue,” he said. “To developers, it’s a line item.”

 

Not just a line item, Mr. Cortes, a transitional line item, whose principal purpose is regulatory compliance and liability protection.  Hence, on a list of ten important criteria for sheds and scaffolding, esthetics comes in eleventh.

 

The building community and city took another crack at shed-beautification by announcing four winners of another contest last month. Unfortunately, shed builders aren’t happy with the latest crop, although Joe Covello, vice president at United Hoisting & Scaffolding, said all were pleasing to the eye and meet code. “Investing in a system that [exceeds] minimum requirements is not a good investment for me unless a customer of ours is willing to overpay, which is rare.”

 

crains_03_joe_covello_vp_scaffolding_160126

Covello’s willing to overdeliver for customers willing to overpay

 

Personally, I’d like some of those customers wiling to overpay.

 

Ideas to make sheds look better almost invariably go nowhere because developers figure that no one ever paid more to rent an office or buy an apartment because the building once had a nice-looking shed.  

 

For most real estate executives, the expense of installing an aesthetically pleasing shed just is not worth it. As Jonathan Drescher, senior vice president for project development at the Durst Organization, delicately put it, “We try to do everything in the best way we reasonably can.”

 

jonathan_drescher

Drescher durst do it the best way his company can

 

Another contractor said only one design looked ‘slightly realistic’ and worried that all the contest winners would collapse if hit by a car or bus because their spans are so long. “I doubt that any of the designers or engineers were asked to consider such a real-life situation,” the shed builder said. “This real-life situation happens all the time.”

 

While you imagine the litigation consequences of that, we can finish with our Peter-Senge-inspired last axiom of urban land-use regulation:

 

[Concluded tomorrow in Part 8.]