Half a century of housing policy failure: Part 3, “But many don’t”

September 25, 2017 | California, Demographics, Economics, Homelessness, Incentives, Inclusionary zoning, Law, Local issues, NIMBY, Regulation, US News, Zoning | No comments 86 views

 

By: David A. Smith

 

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

 

So far in our multi-part examination of the ‘housing element’ – the statutory requirement that localities develop ornate quantitative plans for the building of affordable housing – Part 2 established that California’s housing policy is an utter failure.  Of course, not everyone sees it as a failure; those who bought homes ten, twenty, and thirty years ago probably see it as a roaring success:

 

Since early 2015, Foster City’s median home value has increased 13% to a record $1.5 million, more than seven times the national average.

 

The problem is those pesky own-nots:

 

It’d be great if you people who don’t live here would just stop complaining

 

While it’s always been more expensive to be a homeowner in California, the gap between us and the rest of the country has grown into a chasm. The median California home is now priced 2.5 times higher than the median national home. As of 2015, the typical California home costs $437,000, easily beating the likes of Massachusetts or New York (only Hawaii had more expensive houses).

 

So there’s the paradox of California: People are leaving the state because housing is too expensive, yet developers, who in the free market can be counted on to use other people’s money and build and build until they have overbuilt everything, are building less than half what California needs.

 

 

Sources used in this post

 

Los Angeles Times (June 29, 2017)

New York Times (July 17, 2017; baby blue)

San Jose Mercury-News (August 28, 2017; burnt red font)

 

 

This gives us our entry point to exploring the housing element: how could any law be so feckless?

 

 

B. The housing element provides nothing: no money, no tools, no resources, no powers

 

The hot air proves the machine is working!

 

As I’ve written elsewhere, government is a factory that produces only two types of products:

 

·         Laws.  Mandates to compel something, prohibitions against something else.

·         Money.  Incentives of monetary value, whether directly cash or non-cash and convertible, given as rewards for desired behavior or taken as penalties for undesired behavior.

 

Hot air produced by elected officials, I have joked, is merely a byproduct of the factory at work.  But now I have to add a further element: procedures are the dross waste generated in producing the two products. 

 

The factory that is the housing element is a magnificence of clanking machinery, whirring and buzzing sounds, and complex waste dross – and yet when one blows away the smoke, nothing actually emerges as output. 

 

The housing supply law, known formally as the “housing element,” is supposed to help knock down local barriers to development by requiring cities to plan for new housing that would accommodate children born in California and people expected to relocate to the state.

 

‘Requiring’ sounds wonderful, except the cities can ignore the production requirement.

 

King of France: or else what follows?

Exeter: Bloody constrain.  If requiring fail, he will compel.

 

The housing element provides no money, no tools, no resources, and no powers or mandates.  I’m having trouble remembering a government factory of such stupendous uselessness.

 

 

B.1 The housing element law provides no money to implement its mandates

 

Like the dog that didn’t bark in the night-time, the housing element is loudly silent. 

 

Is there any point to which you wish to draw my attention?

To the curious incident of the housing element in the night-time.

The housing element did nothing in the night-time.

That was the curious incident.

 

No money to buy down affordability in existing developments. 

 

No money to acquire municipal land (or obsolete vacant properties) that could then be used for affordable housing.

 

No money to fund predevelopment expenses of pro-poor housing groups that would develop if they could.

 

Affordable housing always costs money.  The monetary resources may be cash or non-cash, and is may be done inefficiently or efficiently, but resources there must be. 

 



B.2 The housing element offers no tools for pro-housing forces to use against obstructionists

 

To me it remains an eternal curiosity how readily people will pick up the wrong word and repeat it without ever considering whether it is right.

 

The law, passed in 1967, is the state’s primary tool –

 

A ‘tool’ is something I can deploy to get something done.  It is something that helps me do more, do something I could not do without it.

 

I couldn’t do this without a tool

 

– to encourage housing development and address a statewide shortage of homes that drives California’s affordability problems.

 

The housing element does nothing. 

 

“Sloth would be the best.  He’s a lawyer.”

 

A ‘tool’ is not something that makes the situation worse.  It is not something that causes me to spend fruitless money, or to waste time, or to deceive myself into thinking I am doing something when, if I realized that I was wasting time and money, I might do something entirely different.  Something that might, in fact, work.

 

The housing element is not a tool.  It offers affordable housing proponents and affordable housing developers no favorable leverage:

 

No inclusionary zoning.

 

 

No developers’ crowbar to override local zoning as in Chapter 40B.

 

 

No override of CEQA, which the NIMBY’s weaponized into a development antidote.

 

No state-level penalties(*) on localities that fail to meet the housing share.

 

(*) If you’re wondering how to state can penalize a locality, just substitute the phrase ‘cutbacks in revenue sharing.’  Clearer now?

 

Are we – clear now?

 

 

B.3 The housing element fails even to collect core facts essential to enforceability

 

So it provides no money, and it has no tools.  What else does this cornerstone of policy offer?

 

In addition, state officials don’t know if cities and counties have met their housing goals.

 

Don’t ask, don’t tell comes to California lawmaking.

 

 

Local governments are supposed to give the state information on home building each year, but many don’t. 

 

Did I mention the lack of penalties?

 

As a result, there is no reliable measure of how many houses are being built in California for low-, middle- and upper-income residents.

 

One does wonder just what psychotropic drugs were being ingested by the 1967 legislators [LSD was legal until 1966 – Ed.] who cooked up this beauty: no money, no tools, no penalties, and no information.  A four-bagger!

 

More than a quarter of California’s 539 cities and counties failed to tell the state how many homes were built within their boundaries over the eight-year period leading up to 2014, according to a Times review of housing department data.

 

 

Time to start the fines, or the confiscation of state revenue sharing.

 

[Continued tomorrow in Part 4.]

Half a century of housing policy failure: Part 2, “Can’t even think of having children”

September 11, 2017 | California, Demographics, Economics, Homelessness, Housing, Incentives, Inclusionary zoning, Law, Local issues, NIMBY, Speculation, US News, Zoning | No comments 118 views

 

By: David A. Smith

 

[Continued from the preceding Part 1.]

 

As we saw in Part 1 of what will be a lengthy post, the Golden State of California has spent the last half century killing one of the job-creating, money-laying geese – the state’s ability to house the continuous tide of people who either would like to live in California or are born into California and want to keep living there.

 

Nearly a decade removed from the depths of the Great Recession, and 38% of California’s 18 to 34-year-olds still live with their parents, according to U.S. Census data.

 

It’s tempting to think of California’s housing shortage as confined solely to the enclaves of San Francisco, Los Angeles, and (these days) Silicon Valley, because if that were true we could blame somebody – tech billionaires, environmentalists, urban politicians – or even better, national forces imposed on us from far away:

 

Housing costs are not the only thing keeping junior from moving out.

Student debt loads, disappearing labor markets, and delaying marriage are also contributing to the trend.

 

Yes, it’s tempting to blame others for our problems because in so doing we absolve ourselves. 

 

We’ve seen no thorough analysis yet on how California’s abundant avocado toast supply may be keeping millennials confined to their nests.

 

Here is the culprit

 

Alas, it’s not true. 

 

Home construction depends on complex factors including the cost of land, materials and labor, the availability of financing for developers and interest rates on mortgages for homeowners.

 

Texas, with which California hates to be compared because all the sociobusiness comparisons are unfavorable, has those same challenges and it’s having no problem at all creating new housing.  Nor is Las Vegas.

 

                    No problems building here

 

 

Sources used in this post

 

Los Angeles Times (June 29, 2017)

New York Times (July 17, 2017; baby blue)

San Jose Mercury-News (August 28, 2017; burnt red font)

 

California’s problem is widespread across the state:

 

A widely-cited report by the consulting firm McKinsey Global Institute found that in every metropolitan area in the state – from Fresno to Palmdale to Salinas – at least 30% of residents could not afford local rents.

 

Nor can California’s housing problems be blamed on the economy, since California’s economy dipped less than the rest of the country’s and most other places (don’t have California’s out-of-control rising rents/ prices.

 

 

A.3 California’s housing policy retards household formation and job creation

 

That’s roughly 3.6 million people [living with their parents] – more than the entire population of Chicago.

 

Throughout the OECD, fertility rates are declining, and while it can be attributed to many factors, housing shortages consistently show up in the positive correlations.  A decade and a half ago I read a report (which in the ensuing period I’ve repeatedly searched for and never found) that traced Italy’s birth directly to a shortage of affordable apartments – places to which young people could move after marriage.  In the merging world, Egypt and the UAE are two countries where housing policy is predicated on forecasting the number of newly marriageable young adults, and striving to deliver new affordable homes for them.

 

Georgina Romero, 28, used to live with her boyfriend in a garage behind his parents’ home in Lawndale. (Mark Boster / Los Angeles Times)

 

Georgina Romero, 28, makes $13.50 an hour teaching toddlers and pays $600 a month to live with her boyfriend, mother, two younger siblings and her sister’s boyfriend in a three-bedroom house in Watts.

 

She moved there in March to help her mother with her housing costs. Before that, Romero paid $300 a month to live with her boyfriend in a 400-square-foot garage behind his parents’ house in Lawndale.

 

“I would love to have children,” Romero said. “But with this living situation, I can’t even think of having children right now. I don’t feel like I’m stable enough.”

 

Romero works at a head start office in Torrance and said she wants children but doesn’t feel stable enough in her living situation. (Mark Boster / Los Angeles Times)

 

Meanwhile, California’s innovators are creating new jobs – just not new housing:

 

In Los Angeles, booming with construction and signs of prosperity –

 

As I’ve written before, housing is urban infrastructure, because 1=1+1.

 

 

The cranes and construction surrounding Los Angeles represent new jobs and the day-spaces that house those jobs – offices and industries and even retail.  All those jobs have to go somewhere at night, and they have to get to and from the somewhere.

 

– some people have given up on finding a place and have moved into vans with makeshift kitchens, hidden away in quiet neighborhoods.

 

Come for the jobs, live in your car: giving new meaning to the term and concept of mobile home.

 

In Silicon Valley — an international symbol of wealth and technology — lines of parked recreational vehicles are a daily testimony to the challenges of finding an affordable place to call home.

 

They’re also a symbol of flexible labor and they’re actually an innovative and ecological solution – if used as a temporary or seasonal housing supply. When they become a permanent feature of the landscape, then there can be trouble.

 

 

Ben Metcalf, the state’s top housing official, has said the affordability problems are as bad as they’ve ever been in California’s history.  And the state is expected to add an additional 6.5 million people over the next two decades.

 

Only if it can house them.  Instead, something else is happening.

 

 

A.4 Job creation and net immigration is happening elsewhere

 

Nearly 40% of Torrance’s 147,000 residents now pay more than 30% of their incomes on housing, according to federal data.  In 2014, Toyota Motor Corp. decided to relocate its North American headquarters — and 3,000 jobs — from Torrance to Plano, Texas, citing as one factor the Lone Star State’s lower cost of living.

 

If I told you Silicon Valley, you’d believe me, wouldn’t you?  Toyota in Plano

 

We make much of the value of coastal living – I’ve certainly written about it as a demographic force – but as demonstrated by Texas, water can be brought into the modern urban environment and replicate the full sybaritic experience.  (Actually, Palm Springs proved the concept eighty-plus years ago.)

 

All the water sports you could want: Palm Springs, 1935

 

Even the attractive salaries and lavish perks of Silicon Valley struggle to overcome the local housing market, as young tech talent flees to the relatively inexpensive climes of Austin or Portland. Nearly 60% of Los Angeles companies in a recent University of Southern California survey said the region’s high cost of living was affecting employee retention.

 

And once a company decides to relocate, the center of the country starts to make sense.

 

Especially as it’s a non-stop flight anywhere

 

The jobs are relocating because they have seen the consequences of what the good people of Torrance tacitly doing what Councilman Bill Sutherland was impolitic enough to vocalize: decide the city is full and zone to prevent any net increase in population. 

 

In certain markets, even extremely high incomes aren’t enough to blunt the cost of housing. In San Jose, where the current median income is nearly $100,000, renters can still expect to pay 40% of their monthly income on rent, according to an analysis by the real estate data firm Zillow. 

 

Torrance has thus driven its high-paying jobs out of state, and the low-paying jobs far out of town:

 

High costs have left housing in Torrance out of reach for Azucena Gutierrez and other workers in the city.

 

Azucena Gutierrez, 38, stands outside her apartment in Boyle Heights before leaving for her job in Torrance last fall. (Mark Boster / Los Angeles Times)

 

Every weekday, Gutierrez goes into Torrance homes to teach prenatal and infant care to new and expectant parents. Gutierrez, 38, earns less than $15 an hour.

 

She lives in Los Angeles’ Boyle Heights neighborhood, crowding into a two-bedroom apartment with her husband, who is a substitute teacher, their 14-year-old son and 5-year-old daughter. Steep housing costs have forced Gutierrez’s older sister to move in with them too.

 

Housing demand is elastic: when supply is expensive, households reduce because average household size increases. 

 

Gutierrez would like to live near her job and for her children to attend Torrance’s better rated schools.

 

And the locals want to keep your kids out of their schools.

 

But the $1,600-a-month rent she saw advertised for a one-bedroom apartment in Torrance was more than the $1,500 she pays now for more room across town.

 

Azucena Gutierrez, 38, leaves her home before sunrise in Boyle Heights and heads to her job in Torrance. Gutierrez lives with her husband, children and sister and pays $1,500 a month for her two-bedroom apartment. A one-bedroom in Torrance would cost her $1,600 per month. (Mark Boster / Los Angeles Times)

 

“I waste a lot of time in traffic,” Gutierrez said.

 

Sadly, Ms. Gutierrez’s formulation is wrong: she’s not wasting that time, she’s investing it, because it is the cost of getting to her paid work.  And we can figure out what she’s paying herself:

 

Based on apartments.com, a similar 2-BR in Torrance would cost roughly $2,600.

 

Plenty for rent, just not at Ms. Gutierrez’s price point

 

The drive is roughly an (incredibly aggravating) hour each way.

 

Pick any route you want, it’ll take an hour-plus

 

“Time, I can’t get it back. I’m spending close to two hours driving every day. That’s 10 hours [a week] I could be spending with my family.”

 

So Ms. Gutierrez is spending two hours a day, 22 days a work month, or 44 person-hours.  And let’s use the IRS’s mileage cost of 54 cents a mile, which is $23,75 a day times 22 days, or $520 in extra transportation costs.  Living in Boyle Heights saves $1,100, minus the $525 of commuting costs, meaning Ms. Gutierrez is $575 after-tax better off each month for her 44 hours away.  That’s $13 an hour net after tax, and that’s the most conservative estimate of the marginal cost. 

 

Those hours in traffic, in other words, pay her family better, net after tax, than her job does.

 

What she’s doing is rational.  It is also miserable.  One day, she and her whole family may move out of state.

 

From 2000 to 2015, the state lost nearly 800,000 residents with incomes near or below the poverty line. Nearly three-quarters of those who left California since 2007 made less than $50,000 annually. The leading destination for California’s poor? Texas.

 

[Continued tomorrow in Part 3.]

Half a century of housing policy failure: Part 1, “Allowed to say we’re full”

September 8, 2017 | California, Housing, Incentives, Inclusionary zoning, Law, Local issues, NIMBY, Regulation, US News, Zoning | No comments 142 views

 

By: David A. Smith

 

Increasingly taking leave of the rest of the nation

 

Over the last half century, no state has done as bad a job at housing policy as has the Golden State of California – quite an accolade when you consider the competition includes New York – and it has done so through a sequence of laws, each a more misguided attempt to compensate for the previous misguided laws now tacitly acknowledged as hideous mistakes but nevertheless politically untouchable because confer non-cash goodies to entrenched incumbent voter-donors.

 

“Shipmates, how billow-like and boisterously grand”

 

I start with this jeremiad so readers can be in no doubt of my sermon, evidence laden and analytic as it will be, using as my principal text a lengthy and well done Los Angeles Times (June 29, 2017) article by Liam Dillon, though of course I’ve rearranged his material to contextualize it. 

 

“Woe to him whose good name is more to him than goodness”

 

The farcical tragedy is in five parts with a coda:

 

1.     The housing element is an utter failure that’s crippling the state

2.     The housing element provides no nothing: no money, no tools, no resources, no powers

3.     Even as a mandate, the housing element is badly designed

4.     The housing element is easily subverted.

5.     All the housing element does is embolden exclusion.

 

And the coda will be:

 

6.     If this is such a failure, what should California do?

 

Shall we begin?

 

Sources used in this post

 

Los Angeles Times (June 29, 2017)

New York Times (July 17, 2017; baby blue)

 

 

A. The housing element is an utter failure that is crippling the state

 

After an hour of debate, Herb Perez had had enough.

 

Perez, a councilman in the Bay Area suburb of Foster City, was tired of planning for the construction of new homes to comply with a 50-year-old state law designed to help all Californians live affordably.

 

The rare elected officials who tells people the unpleasant truth

 

 

Everyone knows, Perez told the crowd at a 2015 City Council meeting, that the law is a failure.

 

 

A.1 The housing element has failed all over California

 

SACRAMENTO — A full-fledged housing crisis [Well, you wouldn’t want a partially-fledged crisis, now would you? – Ed.] has gripped California, marked by a severe lack of affordable homes and apartments for middle-class families. 

 

As I’ve shown repeatedly (because it seems always to surprise observers), there is no such thing as an inherently middle-class home or apartment; these standards change with time and space and people’s expectations always rise.  Meanwhile, affordability is likewise a temporal concept, because the price of housing, the income of the occupant, and the income of the newcomer are all continuously in flux.  There’s no such thing as permanent affordability of quality housing.

 

The median cost of a home here is now a staggering $500,000, twice the national cost.

 

The failure is manifest everywhere in California – in fact, the only parts of California that don’t have a housing crisis are those where the population is dropping.

 

One of the main criticisms of the law is that it hasn’t spurred enough new home building. Over the eight years leading up to 2014 — the law’s most recent reporting period — fewer than half of the 1.5 million new homes the law said [California needed] were built.

 

Visible persistent failure

 

That graphic, which I found in a Cal HCD report, is a damning indictment.  In 1967, when the housing element law was enacted, California had 19.2 million people; half a century later, the population has doubled, to 39.3 million, while the housing production in 2015, the highest in eight years, has barely reached the level of 1967, which was the lowest for a dozen-plus years on either side of it.

 

Developers in California need to roughly double the 100,000 homes they build each year [And this in a good year by recent California standards – Ed.] to stabilize housing costs, according to the McKinsey study and reports from the state Department of Housing and Community Development and nonpartisan Legislative Analyst’s Office.

 

Worse still, of that production, many of these new homes were built in places where the economics worked, and weren’t the areas of the greatest housing need, and only a fraction of them – roughly 10% — were affordable.

 

“The law has been completely ineffective at addressing the issue of housing affordability,” said Paavo Monkkonen, an associate professor of urban planning at UCLA. “If anything, it’s a waste of people’s time.”

 

Not wasting his time when he studies other time-wasters

 

Actually, as we’ll see in Section D of this post, from the perspective of resisting localities, the deployment of time isn’t a waste, it’s a tremendous investment because it provides fantastic social and economic returns to the incumbents’ club: it boosts the value of their housing while keeping ‘those people’ out of their neighborhood. 

 

But it’s got a sliver of its own beach

 

Sandwiched between wealthier communities to the north and south and more industrial areas to the east, the coastal Los Angeles County city of Torrance has swaths of single-family neighborhoods and lots of land for commercial and industrial business.

 

Torrance in the 1950s

 

“Many local communities basically run a scam where they spend all sorts of time — lots of public hearings, lots of public discussion — and then it’s over and you have this collection of paper sitting on a shelf,” said Sen. Scott Wiener (D-San Francisco).

 

At $50,000 every ten years, it’s cheap paper at the price.

 

“It doesn’t result in any additional housing.”

 

But it’s hard to bike all the way from San Francisco to Sacramento

 

“At some point, a city should be allowed to say we’re full,” Bill Sutherland, then a Torrance city councilman, grumbled before voting for the city’s most recent housing plan in 2013.

 

Built to be affordable: no longer

Homes in Torrance

 

I thank Mr. Sutherland for putting the issue before the reader: Who decides when a city is ‘full’?

I think I’m allowed to say we’re full

 

“I think we are actually at that point,” said Bill Sutherland.

 

Physically, no city is ever full.  It can always be built more vertical – indeed, human urban history is a continuing quest to live ever higher in the sky.

 

Developers will tell you that, as a matter of land-development economics, a city is usually built more vertical from time to time when the economics and demographics make that financially feasible.  Because developers are omnivorous creatures that will consume other people’s money, because people value what they pay for, in demographic terms a city is full only when nobody else will pay money to move into it.  So we can give a market answer to Mr. Sutherland’s question:

 

It is the outsiders who decide when a city is full.

 

The incumbents do not.

 

Torrance’s growth has slowed. Less than half of 1,828 houses called for in the city’s previous housing plan were built, according to construction permit data.

 

The lack of home building has had consequences.

 

Yes, it’s crippling California.

 

You think you’ll be able to afford housing?

 

A.2 The housing element’s failure is sabotaging California’s economy and opportunity

 

California’s housing affordability troubles have contributed to the state’s poverty rate, which is the highest in the nation.

 

And the highest in California for twenty years

 

It also has burdened millions with high rents and, according to a recent study by the McKinsey Global Institute, created a more than $100-billion annual drag on the state economy by lowering disposable incomes and limiting construction jobs.

 

To be specific, the summary states:

 

In Anaheim, Long Beach, and Los Angeles, households earning up to 115% of area median income, or $69,800 per year, are unable to afford local housing costs. In the city of San Francisco, a household earning $140,000 per year, or 179% of area median income, is squeezed.

 

Yes, you read that correctly: you can make 80% more than the median household – and you still can’t afford a home in San Francisco.  The city’s idiotic sunset zoning plays a big part in this, to be sure, but that’s merely an exacerbating and exasperating reaction to the influx of jobs, money, and the most dreaded newcomer of all – outsiders to want to live where we live.

 

Upzoning ® Affordability, and wealth creation, but the neighbors are adamantly against it

 

In dollar terms, we learned that each year Californians pay $50 billion more for housing than they are able to afford.

 

There’s a classic journal-ism – if they’re paying it, they can ‘afford’ it by definition, because nobody is putting a gun to their heads. 

 

30% of your income, please

 

Rather, ‘afford’ means ‘without sacrificing other expenditures that are normal parts of middle class life.’  Though that’s certainly a fair policy goal, using misleading terminology doesn’t help the discussion.

 

In total, California’s housing shortage costs the state more than $140 billion per year in lost economic output, including lost construction investment as well as foregone consumption of goods and services because Californians spend so much of their income on housing.

 

And, as we’ll see, not only is it getting worse, the forces making it worse are only strengthening.

 

[Continued next week in Part 2.]

The technology of urban verticality: Part 12, Broadband wi-fi

September 5, 2017 | cement, Cities, Electricity, Elevators, Housing, Infrastructure, Innovation, plumbing, Rome, Sanitation, Speculation, Technology, telephone, television, Theory, Toilets, Verticality, wi-fi | No comments 168 views

By: David A. Smith

 

[Continued from the preceding Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, and Part 11.]

 

 

12.       Broadband wi-fi (1997, Vic Hayes)

 

Broadband wi-fi? thinks the reader.  Wouldn’t that eliminate the comparative advantage of cities and reduce verticality? 

 

At first I thought so, but then with even a short bit of reflection, I realized that like the telephone before it, annihilating distance as a barrier to communication both increased the span of intellectual enterprises (favoring concentration of people in a management headquarters) and increased the relative value proposition of face-to-face (for thinking and forming bonds of trust). 

 

Empirically, the rise of broadband wi-fi has coincided with an unprecedented global urbanization, an urbanization that shows no signs of slowing down, and the corresponding depopulation of rural areas.  While correlation does not always imply causation, both these trends can be traced to the ubiquity of global information due to the instantaneity of broadband, and the unusual ability of some people to shape political and social discussions purely through electronic media.

 

Disintermediating the media?  Isn’t that illegal?

 

Broadband wi-fi is a game changer.  I know this because I remember it. 

 

Time passes by and the leaves that are green turn to brown

 

The older one gets, the faster time seems to pass – and yet even with the senescence time dilation, the pace of change brought on by wi-fi and broadband has been nothing short of breathtaking.

 

You’ve got no choice, it’s here

 

While I have early memories of television and of live television, wi-fi arrived in my ‘early middle age’ (43) so all my memories of it are adult and current.  When first it came along, it was the stuff of science fiction (as were computer viruses), and it arrived unexpectedly, as part of the Rise of the Electro-Nerds.

 

1985: Over 340,000 US citizens carry cell phones. The FCC releases 3 “garbage bands” for use without a government license: 900MHz, 2.4GHz and 5.8GHz, radio frequencies then allocated to non-communication purposes like microwave ovens.

 

Because it touched on finance, I can still remember the FCC auctions of frequencies:

 

In 1993 Congress passed the Omnibus Budget Reconciliation Act, which gave the [Federal Communications] Commission authority to use competitive bidding to choose from among two or more mutually exclusive applications for an initial license.  Prior to this historic legislation, the Commission mainly relied upon comparative hearings and lotteries to select a single licensee from a pool of mutually exclusive applicants for a license.  The Commission has found that spectrum auctions more effectively assign licenses than either comparative hearings or lotteries.

 

1934 science fantasy

 

The FCC’s auction structure drew from extensive academic and theoretical game-theory research of open-simultaneous-bid auctions.  Each participant could bid for as much or as little of the spectrum as it wanted, and then a nifty computer aggregator tested all possible combinations of bids to find the one that yielded the highest proceeds to the FCC.

 

The auction approach is intended to award the licenses to those who will use them most effectively. Additionally, by using auctions, the Commission has reduced the average time from initial application to license grant to less than one year, and the public is now receiving the direct financial benefit from the award of licenses.

 

With an auction, even idiots can sell anything

 

The auction system did many good things at once:

 

·         Opened the competition, hence increased competition.

·         Took patronage out of the equation.

·         Optimized use of the entire portfolio (whole spectrum).

·         Gave clearly delineated property rights to buyers, hence (like clear title to land) encouraged development of the transferred property.

·         Did not specify the usage of the property, thus encouraging higher-density development (that it, more information per slice of the frequency band).

·         Allowed simultaneous innovation so that multiple ‘uses’ of the property could happen at once.

 

The broadband auction is a useful lesson for policy makers of the value of government getting out of the business of prescribing process.  Instead government can prescribe rules and desired outcomes, then use the power of the market to innovate faster and more competitively than government could ever think of, much less authorize.

 

But we had a committee of the best scientists design this

 

In part because of all of these things, it generated a ton of money for the Federal government – and because helped kick off the wifi revolution.

 

1997 – 2000. A committee, made up of engineers from NCR Corporation, Bell Labs, and the IEEE (Institute of Electrical and Electronics Engineers) agree on an industrywide wireless standard; a data-transfer rate of two megabits per second, using either of two spread-spectrum technologies, frequency hopping or direct sequence transmission. 802.11a and 802.11b, (Max 11 Mbps) are released, and a big explosion in wireless capabilities occurs.

 

Explosion is an understatement.  Consider this far-reaching prediction by well-informed Mitchell Stephens, writing bold predictions in 2000:

 

In 1998 it was already possible to view video on the World Wide Web and to see and search television broadcasts on a computer. As computers become more powerful, they should be able to handle video as easily as they now handle text.

 

‘Should be able’ – hear the caution words.  Only eight years later, in 2006, Google acquired YouTube.

 

Look at this guy using his phone as a phone

Your phone’s not for calling, your phone’s for foot-balling

 

The television schedule may eventually be replaced by a system in which viewers are able to watch digitally stored and distributed programs or segments of programs whenever they want.

 

‘Eventually’ arrived virtually the next day.  Football on your phone arrived in 2013.

 

It’s like I spilled milk all over your blouse

It’s like the milk is like football, and the blouse is your phone

 

In 1999, “IEEE 802.11b Direct Sequence” is renamed “Wi-Fi” by cobrand-consulting firm Interbrand Corporation. Lucent develops a Wi-Fi adapter for under $100, and Apple introduces Wi-Fi on the iBook, under the brand name AirPort.

 

Well, that name didn’t last.

 

Such technological changes, including the spread of new cable networks, have been arriving slower in most other countries than in the United States. Indeed, according to one survey, it was only in the 1990s that the spread of television transmitters, television sets, and electricity made it possible for half of the individuals in the world to watch television. However, television’s attraction globally is strong. Those human beings who have a television set watch it, by one estimate, for an average of two-and-a-half hours a day.

 

Broadband and videophones arrived much faster than anyone foresaw; Tahrir Square was broadcast not by CNN but by thousands of Egyptians, and the Arab Spring (remember that?) happened solely due to the millions of mobile phones that created a movement out of isolated frustration.

 

Not the revolution, but the idea of a revolution?

 

As broadband spread globally at epidemic speed, we redefined the meaning of ‘virus’ twice in a single decade:

 

Virus ® Computer virus ® Going viral

 

Remember this?  Remember how long it lasted?

 

Once broadband became infinite, videoconferencing took over.  The ground phone is already obsolete, it’s just that we oldsters don’t know it yet.

 

 

Business cards already list a cell phone over a desk phone.  A quarter of the business cards I receive now either list the mobile phone in preference to the ground phone, or omit the physical address in favor of the Web site and email address.

 

You’d have thought the omnipresent visual communication would eliminate the need to go up, but the reality is the reverse: with it, you don’t need to go downstairs to connect, so you can have the three-dimensional accessibility of everyone. 

 

“Tell Mommy I telephoned”

“What’s a telephone?”

 

As people we like our privacy, but as people we also like optionality and choice.  Nowhere can that combination be better delivered than in cities – vertical cities, of that third dimension.  Verticality gives us walkable proximity.  It gives us high-density ecological sustainability: rich vertical cities have by far the least ecological impact per person housed.

 

Sources used in this post series

 

Arthur Pound, “Of Mills and Markets”, 1926, cited here; teal font)

Steel-framed buildings in Britain, 1880-1905 (1998); Alastair Jackson; rustoleum font)

History of Television by Mitchell Stephens (~2000; color-TV gray font)

Life before artificial light, Guardian (October 31, 2009; methane-blue font)

Sarah Woodbury, the invention of the chimney (December 15, 2011; creosote brown font)

Mike Rendell, Georgian Gentleman (February 13, 2012; coprophagic brown font)

The secrets of ancient Roman concrete (June 21, 2013; galvanized zinc font)

Elevators, the vertical utility (April 1, 2014; 5 parts; mud brown font)

Tesla v. Edison: Who was the better inventor? (July 20, 2014; pearl-gray spats font)

The father of the fireplace insert – Benjamin Franklin (brick red font)

Sewer history, Toilets, earth closets, and house plumbing (undated)

Ucopia: The history of wi-fi (undated; CRT green font)

 

 

While omnipresent virtually instantaneous broadband has annihilated distance in communications, doing so divided the world into two kind of communication: electronic and face-to-face.  Once electronic communications become instant and virtually free, face-to-face boosts its premium advantage. 

 

Some things can be experienced properly only in person

 

I wrote some of this post on an airplane and most of the rest from my home office.  Yet, five days a week I’ll take the subway (urban transportation innovation) to my elevator to an office from which via AHI I and a small and highly talented cadre of people work around the world – and we do much of our thinking in face-to-face spaces.

 

The technology of urban verticality
12 inventions that evolved the modern city

 

1.   The arch (~400 BC, Romans)

2.   Cement and concrete (~79 AD, Romans)

3.   Flying buttress (~400 AD, Romans)

4.   Chimneys (~1150, Western Europe)

5.   Flush toilet (1778, Joseph Bramah)

6.   Gas lighting (1789, William Murdoch)

7.   Elevators and brakes (1852, Elisha Otis)

8.   Telephone (1876, Alexander Graham Bell)

9.   Electricity (1881, Thomas Edison)

10. I-beam steel and curtain wall construction (1890)

11. Television (1927, Philo Farnsworth)

12. Broadband wi-fi (1997, Vic Hayes)

 

 

It’s a new world, an urban world, a vertical world – and in a few years it’ll be even more new, more urban, more vertical.

 

“What would think Alexander Graham Bell would say if he saw you watching football on your phone?”

“Who cares?  Dude’s dead!”

The technology of urban verticality: Part 11, *Live* television

August 22, 2017 | cement, Cities, Electricity, Elevators, Housing, Infrastructure, Innovation, plumbing, Rome, Sanitation, Speculation, Technology, telephone, television, Theory, Toilets, Verticality | No comments 106 views

 

By: David A. Smith

 

[Continued from the preceding Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, and Part 10.]

 

As we saw in the previous Part 10, the arrival of television ‘de-socialized’ the consumption of news and entertainment.  Before television, people had a shared experience of news and entertainment – the big theater, the newsreel, and the three-reeler – that led to a socialized and homogenized view of both politics/ events and culture.  With entertainment and news socialized, the home was a place for family-level entertainment – actual face-to-face conversation, and though it was before my time, likely the topics were familial, the information unavailable through the newsreels or the movies.

Gee, mom, we never run out of things to say about soup and sandwiches, do we?

 

After television, people could both differentiate their experiences of news and entertainment and they could consume those experiences in private, or at least within the privacy of the family.

Although shifting to private news/ entertainment did not boost urbanization, it removed the social/ cultural drawback of entertainment, and it therefore relatively advantaged the city. 

 

Nevertheless, what changed urban America forever – in fact, it changed forever America and the wider world – was television’s ‘killer app’ (excuse the expression): its ability to bring the news right into your living room, as demonstrated twice in the 1960’s, first with the assassination of John F. Kennedy:

 

Television’s coverage of the assassination of President Kennedy on Nov. 22, 1963, and of the events that followed, provided further evidence of the medium’s power.

 

Though few saw the assassination itself, many saw Walter Cronkite report the president’s death:

 

The power of television: immediate emotional connection

 

As immediate as were those stories, television’s real power came two days later, when the President’s assassin was himself assassinated on live TV:

 

A new form of media: reality television in your living room

 

Most Americans joined in watching coverage of the shocking and tragic events, not as crowds in the streets, but from their own living rooms.

 

Bringing the world’s events, the world’s entertainment, and the world’s violence into the house opened a Pandora’s Box: no longer would the home be a place that purely soothed. 

So don’t wait up for me

 

By 1965, Tom Lehrer had captured the doublethink in his parody folk song for World War III:

 

So long, mom!
I’m off to drop the Bomb
So don’t wait up for me
But while you swelter
Down there in your shelter
You can see me
On your TV

 

Good night, Chet; good night, David; let’s hope America is here in the morning

While we’re attacking frontally
Watch Brink-ally and Hunt-ally
Describing contrapuntally
The cities we have lost
No need for you to miss a minute
Of the agonizing holocaust!

 

A few years later, the networks broadcast the urban riots, and then on August 28, 1968 it all came together in the biggest piece of violent performance art the world had even seen.  The protesters lost the riot –

 

“The whole world is watching!  The whole world is watching!”

 

– but, having a better sense of asymmetric warfare than the police, they won the news cycle:

 

Gore Vidal and Paul Newman, Democratic delegates

 

I find the above picture extraordinary, because for that one moment Paul Newman – at the height of his career, arguably the world’s most recognizable actor – is not acting; he is agape at what he is seeing, something he would never have been able to see without television.

 

Sources used in this post series

 

Arthur Pound, “Of Mills and Markets”, 1926, cited here; teal font)

Steel-framed buildings in Britain, 1880-1905 (1998); Alastair Jackson; rustoleum font)

History of Television by Mitchell Stephens (~2000; color-TV gray font)

Life before artificial light, Guardian (October 31, 2009; methane-blue font)

Sarah Woodbury, the invention of the chimney (December 15, 2011; creosote brown font)

Mike Rendell, Georgian Gentleman (February 13, 2012; coprophagic brown font)

The secrets of ancient Roman concrete (June 21, 2013; galvanized zinc font)

Elevators, the vertical utility (April 1, 2014; 5 parts; mud brown font)

Tesla v. Edison: Who was the better inventor? (July 20, 2014; pearl-gray spats font)

The father of the fireplace insert – Benjamin Franklin (brick red font)

Sewer history, Toilets, earth closets, and house plumbing (undated)

 

In the Fifties, my generation’s parents made out at the drive-in; in the Seventies, they made love without turning off Johnny Carson; by the Nineties, they were falling asleep to Carson best-of on videocassette.

 

Over the ensuing four decades, television killed the dining room, and in its stead arose the home theater.

 

Why on earth would everybody sit around a table like that?

 

First floor, sixtieth floor – what difference does it make?

 

Television brought immediacy and interactivity through a convenient personally controlled portal, and it brought one other thing: discreet (or even private) choice, so compared with other pre-television media, it offered an unbeatable value proposition:

 

 

That’s my table, whose research consisted of me typing it up, so it’s grossly generalized and unproven … but as I’m not gunning for either a doctorate or tenure, I can publish whatever I like without qualifiers or proof statements. 

 

AHI’s housing technology series

 

March 14, 2006: The earliest apartments, Roman insulae

April 14, 2006: The evolving modern home

April 28, 2006: The cradle of apartment living: New York City

August 13, 2007: Cities and scale, 3 parts

March 25, 2008: The economics of water, 7 parts

June 19, 2008: Urbanizing requires formalization, 2 parts

March 20, 2009: When and where modern housing was born

April 5, 2010: Preaching the gospel of water infrastructure, 2 parts

April 20, 2011: The high-rise’s mahout

January 28, 2013: Grandma in a can?

July 20, 2013: The new urbanism of Tiny Tower

April 1, 2014: Elevators, the vertical utility, 7 parts

August 4, 2014: Vertically obsolete?, 3 parts

February 17, 2015: Form forces function, 8 parts

April 15, 2015: A tale of two cities (Chicago), 12 parts

June 20, 2016: Pre-municipal cities, four typologies, 10 parts

December 5, 2016: The first housing commissioner, 10 parts

 

In any case, the potency of television’s value proposition has consistently shown over the last half century, because despite its smaller screen, blurry image, and often tinny sound:

 

1.     Television reoriented the family’s evening away from each other and toward its beaming glow.

2.     It redefined cooking, leading first to the TV dinner and then giving ubiquity to the microwave.

3.     It doomed the dining room.

With television, the windowless room became not a core utility space but also a place for privately viewing the entire world, and so hypnotic is it that it’s penetrated that other awkward closed social space, the elevator.

 

The fusion of two vertical technologies: television in elevator

 

Which brings us, more or less, to the final technology disruption, yet another one that on its face would collapse the vertical value proposition.

 

Hey, pay attention, I’m blogging about you!

 

[Continued in Part 12.]