Adding new dormers: Part 2, Armed with housing lists

November 14, 2014 | Affordability, Apartments, Boston, Boston College, Boston University, Development, Dormitories, Enforcement, Housing, Land use, Northeastern, Real estate taxes, Rental, Student housing, Universities, Urbanization, Zoning | No comments 177 views

[Continued from yesterday’s Part 1.]

By: David A. Smith

Yesterday’s post confronted us with the centrality of Boston’s economy – that the city depends on the area’s universities, which among them have 250,000 students and out of which have spun aerospace, software, and genetic engineering inventions, innovations, and job a-plenty – and that the universities want to grow.  So it makes sense for Boston, for the city to forge a pragmatic working relationship of the kind that served Yale and New Haven so well, and although the former mayor never thought so, the new mayor is making it a priority, as reported in The Boston Globe (October 9, 2014):

walsh_inauguration_at_boston_college

New mayor Walsh (BC graduate) being inaugurated at Boston College, January 6, 2014

Another reason more campus leaders seem to be on board with the city’s plan: a new mayoral administration.

The city should be investing in its universities’ expansion, and when you think about it, university expansion requires only that it align four things:

1. Applicants.  Nearly all of Boston’s universities have more applicants than they can accept – a great position to be in, and one that not all American universities enjoy.

bu_nsac_team

We came for the education

2. Faculty.  The same power brands that attract students also attract faculty, and among graduate and doctoral students as leaders of seminars and pro-seminars, as well as adjunct faculty, there are (for better or worse) plenty of them.

bu_adjunct_faculty

More who want to teach than adjunct places available

3. Classrooms.  These must be built, of course, but when business are high-occupancy and high-density usage.

bu_classroom

High occupancy, low cost

4. Housing.  And here we are: back to the problem of on-campus or off-campus.

bu_warren_towers

If you want lots of students on-campus, build up

An urban university can expand without worrying about housing, because the students will find the lower-income convenient apartments, rent them, add roommates as necessary, and gradually overcrowd them (Boston Globe, April 28, 2013; blue font):

By the time Binland Lee and her friends moved into the house in the fall of 2012, landlord Anna Belokurova, who had just emerged from bankruptcy protection, was renting out nearly every space as a bedroom, including the family room with the sliding glass door. That left the building without a mandatory second exit for the upstairs unit.

It was nothing out of the ordinary for this student-packed neighborhood where homes with rafts of code violations persist despite crackdowns promised by the city. The house, which listed six bedrooms in building plans, was actually filled with 14 residents sharing 12 bedrooms, including three people who lived in basement spaces that city inspectors had cited as illegal in 2001.

nick_moore_thierry_desire_alex_mark_avaloi_atkinson_binland_lee

(Clockwise from top left) Housemates Nick Moore, Thiérry Désiré, Alex Mark, Avaloi Atkinson, and Binland Lee, in the living room of their apartment at 87 Linden St. a week before the fire there in April 2013.

– meanwhile overrunning the neighborhood and tolerating code violations (Boston Globe, September 1, 2014):

ankul_patel_asees_binepal_gurvir_dhaliwal

Students Ankur Patel, Asees Binepal, and Gurvir Dhaliwal signed paperwork to allow housing inspectors to enter and inspect their new apartment at 24 Highgate St. in Allston.

Mouse droppings. Exposed wiring. External padlocks on bedroom doors. A second-floor porch tilting at a precarious angle.

These were just some of the violations city inspectors found over the weekend in apartments where college students rushed to organize clothes, books, and furniture for the fall semester.

Such enforcement activity is depressingly rare:

The city acknowledged it has yet to fulfill its promise to increase the number of inspectors. Some landlords and tenants have resisted efforts to follow city housing codes.

Nevertheless, every journey begins with an initial step, and Mayor Walsh deserves credit for taking one:

Walsh said 50 inspectors had prowled the neighborhood in the days leading up to move-in day, armed with housing lists provided by colleges and universities, to address concerns about student apartments.

In overcrowded markets (which Boston has), even with aggressive enforcement (which Boston doesn’t have), the economically rational result will usually be absentee-landlord neighborhoods and academically-enabled slums:

Students say they are forced to share crowded apartments simply to afford the rent.

That’s probably true, and it’s a consequence of the universities’ expanding their enrollment without correspondingly expanding their dormitories:

Creating more student housing would free up some of Boston’s existing housing stock for working adults and families, Walsh’s report said. The city estimates that 16,000 new dorm beds would open up about 5,000 units to nonstudent renters.

There is a mountain of evidence that some landlords are perfectly willing to be complete slumlords:

binland_lee_escapes

How they got out … but Binland Lee didn’t

A series of Globe reports last spring uncovered illegal and dangerous living conditions, widespread overcrowding, and sanitary problems in neighborhoods popular with students. The city vowed to step up code enforcement over such issues.

“My greatest concern is the health and safety of every young college student living off campus in overcrowded apartments” Walsh wrote.

building_code_violations

…and the building code violations contributed directly to her death

For years, residents and families — fed up with both rising rents and quality-of-life issues associated with college students, including loud parties and drunken vandalism — have demanded that colleges house and police more of their own students, particularly undergraduates.

This the universities have been reluctant to do, because among other things it is a no-win cost center for them, and would put them into the position of having to police their students’ non-classroom activities, which really isn’t a university’s business.

After a fire at an off-campus apartment in Allston in April 2013 killed Binland Lee, a 22-year-old Boston University student, community activists called on colleges in Boston to release the addresses of their off-campus students to enable the city to detect overcrowded living conditions.

binland_lee_02

Dying from a shortage of dormitories: Binland Lee

Devin Quirk, director of operations at Boston’s Department of Neighborhood Development, said he believes that having data to support the dorm-construction plan is a key driver for the enthusiasm of school leaders.

“It’s a very data-driven plan,” he said. “We now have data we didn’t have before.”

Though I can understand why the universities were initially reluctant – privacy concerns are a bugaboo – in this case, the public imperative is more powerful.  And presumably the universities and the city agreed to scrub from the information anything too personal (such as people’s names) and instead provide simply a list of addresses, number of people at each one, which college or graduate school of the university, and so on – so that the city could in fact properly map where the students were living.

A key portion of that new information was provided recently by colleges.

Most universities, citing privacy concerns, resisted until June, when Walsh met with college leaders, who largely agreed to disclose the students’ addresses.

Good – without it, the city would be planning in the dark.

In August, the City Council formalized the rule, making it a legal requirement for schools to give the addresses and related data to city officials each semester.

Give the mayor credit for this; town-gown relations are often strained, and he seems to be opening a new page in the book.

“It’s refreshing that [Walsh] has brought universities into the conversation,” said Nucci.  “He’s trying to establish a collaborative approach, and that’s a great idea.”

The cost to build 18,500 new dorm beds in Boston would exceed $2.6 billion, according to the report.

At $140,500 per dorm bed, a typical 3-BR dorm room must cost $420,000, which to the family  a total cost of $420,000 apiece, a huge sum that probably reflects the university’s need to build high-density, high-amenity dormitories.

W1ST4699.JPG

Gotta house those hockey players, remember?

While the colleges could finance that sum in the bond markets, capital isn’t their principal obstacle.  Instead, the mayor’s desire brings us back to my question to my dining-hall-kitchen supervisor: Where do you want me to put them?  And the new mayor has a different answer from his predecessor:

Menino Walsh

Yes, I know he won without any support from me, but I know how to smile in public, don’t I?

[Continued next week in Part 3.]

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Adding new dormers: Part 1, Where would you like me to put them?

November 13, 2014 | Affordability, Apartments, Boston, Boston College, Boston University, Development, Dormitories, Enforcement, Housing, Land use, Northeastern, Real estate taxes, Rental, Student housing, Universities, Urbanization, Zoning | 1 comment 152 views

By: David A. Smith

With a quarter of a million students living in the immediate metropolitan area, more than half of them in universities domiciled in the city, Boston has as good a claim as any to be the world’s university capital, counting 60 institutions of higher learning, eight of them (BU, Harvard, Northeastern, BC, UMass Boston, Suffolk, Tufts, and MIT) with enrollments of 10,000 or more, and five of those with their campuses wholly in the city proper.

boston_area_universities

And that’s just some of them

[In the map above, Cambridge, Somerville, and Brookline are independent cities, but everything else is a neighborhood of Boston: that is Allston/ Brighton, Fenway, Back Bay, Charlestown, East Boston, South Boston, South End, Dorchester, Roxbury, Jamaica Plain – Ed.]

As there aren’t enough dormitory beds for all the students, they spill into neighboring areas, particularly the Fenway, Jamaica Plain, and especially Allston/ Brighton, which has turned into largely absentee-landlord off-campus housing zones.  Among other things, this puts tremendous upward pressure on rents, which makes student dormitories – or the shortage of them – an issue of city housing policy, one that new Mayor Walsh appears ready to take up, as reported in The Boston Globe (October 9, 2014):

Boston offers a plan to help colleges add dorms

Mayor Martin J. Walsh of Boston wants to cut in half the number of college students living off campus by 2030 and is calling on Boston colleges to collectively add 18,500 new dormitory beds to make that possible.  The city envisions 16,000 for undergraduates and 2,500 for graduate students.

The concept was laid out in a report, Housing Boston 2020, prepared by DND, the BRA, BHA, and the Mayor’s office.

Last year, of the 136,000 students enrolled at four-year colleges and universities in Boston, an estimated 36,300 lived off campus, while 36,500 lived on campus, [according to a report the city issued]. The rest [63,200 students] resided in a mix of on- and off-campus housing in other municipalities.

Of the cities and towns ringing Boston, those I expect have the largest student populations are Waterford, Brookline (only the eastern half, near Allston-Brighton), Cambridge, Somerville, and Quincy. 

boston_bikability

Despite abutting Boston, Milton has virtually no students

Walsh’s predecessor, Thomas M. Menino, sometimes clashed with leaders of local colleges as he pushed them to house more students on campus.

Imagining the scene between Mayor Menino and the real estate departments of (say) landlocked BU and Northeastern, I recall what I said, a long time ago, to someone who made an analogous request (personal digression in shaded box).

The problem of space: a personal tale from 1971

Once upon a time, 43 years ago, I was a freshman needing a job and was sent, among other university-provided jobs, to Harvard Business School’s dining room, Kresge Hall, where dined the future captains of industry, hedge fund titans, cable television aggregators, and others whose names now adorn dormitories their donations endowed. 

kresge_hall_hbs

And it looked basically that way 43 years ago, too

I was a dishwasher, and the machines were institutional-kitchen class, so they could handle large loads, but only at a set speed, and what came out of the dishwasher was blistering hot.

romney_hbs_1973

Guys like that were at HBS when I was a dishwasher

One evening the diners were treated to an after-dinner speaker, someone important (I forget who), and instead of the normal scattered arrival of trays, everyone was spellbound (or polite) so the trays came not in a stream but in a tidal wave.  My dishwashing partner (a countercultural lad with fiery red long hair and beard and a wry sense of humor) were running the machines as fast as we possibly could, taking in the trays and stacking them anywhere we could think of, pulling the racks out as soon as they cleared and setting them somewhere, anywhere to cool off (we had a limited number of racks and had to unload the hot stoneware plates before we could refill the rack to go back in), and generally scrambling at warp speed.  And still the new trays arrived, wedging into the aperture like tardy passengers squeezing into a subway car.

Amid all this frenetic motion, into the kitchen rushed the shift boss, whom if memory serves had previously been mess hall manager in the air force.  “It’s piling up out there!” he said angrily.  “They’re waiting!  You’ve got to clear that entry and take in those trays!”

For a moment I looked at my coworker, sweat pouring off him as it was pouring off me – then I swept my arm grandly around encompassing the scene – where on every available surface precariously perched coffee cup racks, stacks of plates, teapots with vapor steaming from their sides like sweaty skulls, the approach conveyor belt filled with trays jostled against each other as if a train derailment had piled up, the window stuffed so that one could not see through it – and said in an emphatic voice, Where would you like me to put them?”

Where would you like me to put them?”

The universities, you see, are landlocked:

big_four_footprints

“Where would you like me to put them, sir?”

And none is more landlocked than Boston University, whose 31,750 students make do with this footprint:

bu_campus_map

Dominating a sliver along the river

The overcrowded footprint is the legacy of John Silber, who ran BU from 1971 through 2003, and as his New York Times obituary grudgingly put it:

john_silber_at_bu

Tough talk, tough action, and a university legacy

John R. Silber [] transformed a faltering Boston University into one of the nation’s leading private schools in a volcanic 25-year presidency that promoted innovation, crushed opposition [The Times has to editorialize, it can’t help itself – Ed.] and made him America’s highest-paid educator and one of its most divisive.

He built B.U. into a world-class research center and one of the nation’s largest private universities, with a faculty boasting Nobel laureates like Elie Wiesel, Saul Bellow and Derek Walcott and distinguished economists, historians and physicists.

He raised endowments to $422 million from $18 million and research grants to $180 million from $15 million, and balanced the budget every year.  He raised tuition to Ivy League levels and tightened admission standards, but enrollments nevertheless climbed to 30,000 from 20,000. He also financed $700 million in new construction and tripled the university’s property holdings.

All of that left BU, today Boston’s largest university, with a tiny campus (135 acres, roughly one-fifth of a square mile, not counting the 80 acres of BU’s medical campus) and the highest university density I’ve ever encountered (amazingly, 76% of the undergraduates live on campus, but note that says nothing about graduate students), which also makes Kenmore the highest-density residential area in the City of Boston.

northeastern_campus

The Huntington hounds of Northeastern

Nearby – practically across the street (Commonwealth and Huntington Avenues, to be precise) is Northeastern, with 24,400 students – to say nothing of:

Suffolk (12,000 students, and training ground for future Massachusetts politicians):

suffolk_campus

Suffolk: sprinkled in among the pols and Brahmins of Beacon Hill

Bunker Hill Community College (8,800, made briefly famous by Good Will Hunting)

bhcc_entrance

Where Good Will Hunting matriculated

Simmons (4,900), Emerson (4,500), Berklee (4,050), and Wentworth (3,800), all of them within the heart of Boston’s urban environment.

berklee_college

Corner of Massachusetts Avenue and Boylston Street

wentworth_urban_campus

Wentworth: fighting for space next to Northeastern

For a city seeking to grow a modern economy, a university has got to be one of the top potential land uses.  It brings in people who spend money while sitting, talking, and thinking.  Its output is purely intellectual and produces no sulfurous fumes or toxic waste.  It employs locals by the thousands.  The business model is reliable, annually renewing.  Over time, it builds up donation expectations that contribute to the built environment. 

No American city has capitalized from universities more than Boston.  Boston’s cluster of educational asteroids creates its own global gravity, bringing students from all over the world, because not only is there enormous intellectual and cultural diversity, Boston is a fantastic city to be a university student – with such a preponderance of students everywhere, the city’s cultural life orbits around the universities.  Directly or indirectly, the universities drive the Boston economy.  The city’s future economic success – and with it, economic growth and any other form of prosperity – requires them to be healthy, and if possible to grow. 

[Continued tomorrow in Part 2.]

 

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Month in Review, September, 2014: Part 2, Decisions small and big

November 12, 2014 | Boston, Boston Redevelopment Authority, BRA, Casinos, China, Eminent domain, Everett, GAIA, Gambling, Inclusionary zoning, Markets, Martin J. Walsh, Month in review, New York City, Speculation, Thomas Menino | No comments 254 views

By: David A. Smith

[Continued from yesterday’s Part 1.]

As we saw in yesterday’s Part 1, roughly half of my September posting concerned itself with scandals, one overhyped and one underappreciated – but of course scandals are only the outcome of decisions gone wrong (at least from somebody’s perspective), and the other September posts explored decision possibilities, starting with the most micro: personal safety via a bunkered home. 

baghdad_electrical_engineering

A city where electrical engineers have to wear Kevlar has some ways to go

At a recent Harvard Graduate School of Design conference on Rebuilding Baghdad, when the discussion turned to the sequencing of security versus rebuilding, I posited as a means of pursuing incremental progress that would think of security as operating in nested expanding rings: security of one’s person (not being violated), one’s room, one’s home, one’s sidewalk, one’s neighborhood, one’s city, then state, then country, and ideally the whole world (we’re not there yet).  That concept is made tangible in a post that explored The ultimate hideaway:

Somehow I doubt that this little adventure, reported in Popular science, is the solution envisioned by the Department of Homeland Security:

The World’s First Everything-Proof Underground Luxury Community

Survive the end of the world for just $5,000 down

popsci_everything_proof

What lies beneath?

Robert Vicino at the entrance to his Terra Vivos underground shelter network near Barstow, California

To reach the world’s first everything-proof underground luxury community, I drive east out of Barstow, California, 50 or so miles into the Mojave Desert, then turn down an unmarked gravel road, park in a barren lot surrounded by razor wire, enter what appears to be a small cinderblock garage, and walk down two steep flights of reinforced-concrete stairs, at which point the project’s enthusiastic promoter, Robert Vicino, greets me with an outstretched hand, slams a 3,000-pound blast door behind us, and asks this question: “Do you have a family?”

Always be closing, eh? 

Then: Do I have life insurance? Would I like to have 10 times the life insurance I already have? Would I like to have something even better? Because I can. 

From one house to many houses are markets made, and during September, I corrected Fortune’s exaggerated reports of the death of the housing recovery in Beats the alternative:

george_burns_100

Beating the alternatives for 100 years

Interviewer: How does it feel to be 100%?

George Burns: “Beats the alternative.”

Demonstrating the journalist’s precept that an ominous warning always trumps a happy event, Fortune (July 18, 2014) manages to bypass the real story in favor of a scaremongering headline:

Why the housing recovery is over, in four charts

‘Over’, as in ‘about to plunge again’?

about_to_plunge

Downward rush inevitable?

Instead of answering, Fortune taunts us with the opportunity that we just missed.

taunting_frenchman

Stupid Forrtyune rrrreaders!

The housing recovery that began in 2012 came on almost as quickly and forcefully as the real estate crash that preceded it.

Low interest rates, investor interest, and good, old-fashioned confidence –

The author is air-grabbing because he has no clue: low interest rates persisted well before 2012, investor interest is an effect not a cause, and good old-fashioned confidence is not something injected into a marketplace – it too is an effect, not a cause in itself.

From many houses and industries can rise smog, pollution, and traffic, the byproducts of a productive economy that can in turn make that economy unproductive.  Societies, especially cities, are both productive and consumptive – they both make things and then enjoy those things.  Though we choose our city for its capacity to manufacture (and pay us), we like it based on its capacity to consume. 

smog_drebin

Nothing to see here, folks; no pollution at all!

If these are mismatched, — a place that is enormously economically productive but also socially destructive – we have the curious phenomenon of people making money in one city and spending it, or even investing it, in another, as China is now experiencing, and Where the money goes, the people will follow: Part 1, 64% of China’s rich, Part 2, Breathing freely is a basic requirement, and Part 3, Not in China’s operating system:

Up until now, my posts puzzling out China’s affordable housing have focused on its urban challenges, and whether the Chinese can make new cities that people want to live in without destroying the formerly-rural middle class by culturally and economically impoverishing them in totalitarian-style housing blocks.  Foolish me, I overlooked the best possible indicator of China’s fortunes: the behavior of those who have choice, and as reported in the Wall Street Journal (August 15, 2014), their actions are telling:

The Great Chinese Exodus

Many Chinese are leaving for cleaner air, better schools and more opportunity.

Among the many benefits of capitalism, workforce mobility is too little remarked, perhaps because when Marx was writing, workforces had to go to factories rather than the reverse; but in an information economy, where value chains can be discorporated, talent goes where it maximizes its life quality, and that is a complex equation involving both economic and non-economic factors.  Controlled economies can sometimes produce huge quantities (real or reported) of tangible goods, but in this pursuit they sacrifice everything to do with quality of life.  This works as a starting point when people are extremely poor and tangible goods are directly beneficial in extending healthspan, but once a country achieves a large middle-class, they start demanding more than tractors and concrete blocks – and that a totalitarian country cannot deliver.

beijing_smog

What is clean air worth to you? To your daughter?

So it traps its people inside the country … if it can.  And if it cannot, what then?

[Huge snip]

Having seen the 1980s Japanese buying waves, when Theory Z was the rage and the sale of Rockefeller Center was regarded as the fall of an icon, I’m more sanguine about America’s prospects, and the world’s prospects.

China also isn’t particularly interested in making American Chinese. It isn’t in China’s operating system to welcome, integrate and empower immigrants to redefine the very meaning of Chinese-ness. That means that China lags behind the US in a crucial twenty-first-century way: embracing diversity and making something great from many multicultural parts.

When all is said and done, a leadership that loses its intelligentsia’s confidence loses its legitimacy.

tiananmen_square_liberty

Liberty!

And then it loses its power.

Finally, as the month closed, I started posting what proved to be my longest multi-part entry ever, because it explored the complicated, multi-dimensional, politically supercharged issue of legalizing and licensing casinos in Massachusetts, in When the house loses: Part 1, $700 million a year?:

In Las Vegas they remind gamblers, The house always wins, but in the inverted logic of Vegas, ‘house’ means casino, and when it comes to cities and casinos, the house – the city and its inhabitants – seem always to lose, as shown in a David Frum essay in The Atlantic (August 7, 2014):

A Good Way to Wreck a Local Economy: Build Casinos

Maybe casinos aren’t guaranteed or even likely to wreck the local economy, but they certainly have a habit of showing up in places that are troubled even after the casinos’ arrival – which is all the more relevant as metropolitan Boston has just finished an eighteen-month battle of deception, maneuver, and politics that ended with the Massachusetts Gaming Commission awarding the sole metro-area license:

After five days of nail-biting deliberations, the state gambling commission voted 3 to 1 [It’s a five-person board; the chair recused on a conflict of interest, possibly UMass’s publishing of a 2011 study, Dice or No Dice: The Casino Debate in Massachusetts – Ed.] in favor of Wynn’s vision to turn a forlorn plot of polluted land on the Mystic River, just north of Boston in Everett, into a gleaming $1.6 billion gambling resort.

wynn_everett_casino_maquette

Will it Wynn?  In November, voters statewide will decide whether the casino law will be repealed.

A city is a triad of jobs, housing, and the means to get efficiently and cheaply between them (transportation), and every mayor, and every city council, always wants more of each – but there is only so much space in the city (except when the city goes up, which is expensive), so every investment of infrastructure must be evaluated as to how much it will boost each of these. Are casinos, which offers many jobs but low-wage ones, worth it?

The economic and political considerations are especially timely here, as first depressed Springfield, and now as Boston and Everett and Chelsea and Revere have been conducting a meat-market/ beauty-contest to attract a mega-casino, one of three new ones to be allowed in Massachusetts – or will they be?

The state’s highest court decided Tuesday [June 23, 2014 – Ed.] that a casino repeal measure can appear on the November ballot, touching off a ferocious referendum campaign over one of the most charged issues in a generation and jeopardizing the future of the billion-dollar industry in Massachusetts.

When pitching for regulatory approval, casino developers (like Vegas’s own Steve Wynn and Connecticut’s Mohegan Sun) claim, and their supporters believe, that new casinos will bring jobs, tourists, taxes, and stronger urban economics to the city lucky enough to provide the land that hosts the new edifice, like Las Vegas, a town that would not have existed but for gambling and government’s edge effect:

That was just the warmups, as the post continued with Part 2, Keeping glam money here?, Part 3, Predictable for this type of site?, Part 4, Impossible business risk?, and Part 5, Backed up with money?:

Yet of Revere, Chelsea, Charlestown, Medford, and Malden, none has a strong economy, and none (except possibly Malden) seems to be improving. So, over the last eighteen months, they have fought for the right to host the casino.

 

6. Urban casinos are always the prize in intra-urban political fights

I can tell the Queen of Diamonds by the way she shine
Come to Daddy on an inside straight

Leisure industries depend on a healthy economy elsewhere, they don’t create it themselves.

Unfortunately for the casino industry’s growth hopes, downscale America has less money to spend today than it did before 2007. Nor is downscale America sharing much in the post-2009 recovery. From a news report on the troubles of a recently opened Ohio casino:

Ameet Patel, general manager of the property, says the softness in casino revenue that he and other operators have seen –

bg_everett_03_kim_sinatra

General counsel and secretary at Wynn Resorts Kim Sinatra reacted while the gaming commission discussed its reasons for choosing Wynn Resorts.

Hence the surrounding communities all sought to create teams of (1) casino operators, preferably with balance sheets, (2) owners of large parcels of declining-value land who hope for a casino revival, and (3) local elected officials who believe or come to believe the casino will be the economic jolt they need. Wynn, for instance, went hunting for a suitable town-site partner:

Wynn, in 2012, proposed to compete for the Boston-area license with a Foxborough proposal, but withdrew due to local opposition. He found a much friendlier political reception in struggling Everett, where 86% of voters supported the Wynn plan in a referendum.

suffolk_downs_aerial

Suffolk Downs: with subway lines, plenty of space, proximity … needs a new use, doesn’t it?

Suffolk Downs also lost a referendum last year, when East Boston voters rejected the track’s casino plans on the East Boston side of the city line. That surprise defeat led track officials to join with Mohegan Sun for a new proposal entirely in Revere.

Leisure-based economies can cycle economic activity, and they can create service jobs, but essentially they are drawing economic activity in either of two ways.  They can draw it out of hiding, a point personalized by a great Washington Post (August 26, 2014; green font) column by Petula Dvorak, written as an open letter to Baltimore’s mayor:

All the studies and numbers bear it out — proximity to gambling means that more irresponsible gambling will happen. And I’m not telling you this as someone who is guessing.

Gambling is a negative-sum game; except in players-only configurations like poker, every gambling game(*) versus the house is stacked in the house’s favor, so while any individual may win, in the aggregate, the house gets richer, and the punters get poorer, every day.

 

playing_roulette

You can concentrate on looking cool because there’s no skill involved

[ (*) Editorial exception: In single-deck blackjack, the player can gain an advantage by counting cards – so casinos regularly ban players who show they can count. – Ed.]

proposed_casino_location

Three gambling epicenters?

My spiritual/ statistical quest continued in October, with Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, and Part 12, whose implications I’ll discussed in a forthcoming Month-in-Review, after Massachusetts’ voters have in their wisdom either retained or repealed casino gambling.

union_members_against_repeal

An issue that cuts across party and ideological lines in unexpected ways:

Union members campaigning to keep gambling

 

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Month in Review, September 2014: Part 1, Scandals faux and real

November 11, 2014 | Boston, Boston Redevelopment Authority, BRA, Casinos, China, Eminent domain, Everett, GAIA, Gambling, Inclusionary zoning, Markets, Martin J. Walsh, Month in review, New York City, Speculation, Thomas Menino | No comments 149 views

By: David A. Smith

Because it lies at the intersection of both personal issues and political ones, housing generally, and affordable housing particularly, is fertile ground for journalists seeking scandal stories, and in September I profiled two of them, one faux and one real.

faux_outrage

And I’d never get any ratings at all

For all that we human spouse principles of equality of opportunity, we also like living with like, and we are easily seduced by the concept of other people’s equality so long as still other people are paying for it, as illustrated by the squirrel! newspaper stories about the Poor poor pitiful door: Part 1, Sudden unmasking:

dug_squirrel

Righteousness!

For newspapermen, there must always be column-inches even if there is too little news to justify them, and it is in the long slow days of summer, when the chattering classes are on their island or woodland vacations, that there appear the Summer Stories, which invariably have the following journalistic elements:

gaia_story

I call them GAIA stories: God, Ain’t It Awful. 

god_help_us

Ain’t it awful?

A Guardian investigation has discovered [Love that whiff of uncovering skullduggery – Ed.] a growing trend in the capital’s upmarket apartment blocks – which are required to include affordable homes in order to win planning permission – for the poorer residents to be forced to use alternative access, a phenomenon being dubbed “poor doors”.

In media terms, the name ‘poor door’ is inspired – it’s short, catchy, descriptive, and normative – perfect for a summer GAIA story, which must always have a judgmental lead:

Even as so many crises roiled the world recently, the news that a development on the Upper West Side of Manhattan would proceed with a brand of distasteful social engineering still managed to command international attention.

Naturally, in a GAIA story one is expected not to think, merely to deplore, and certainly not to explore the complexities, which I did in Part 2, Presumption of offense, Part 3, Hunting for culprits, Part 4, Loophole du jour, and Part 5, About a year:

irritated_baby

I hate stereotyping, don’t you?

Aside from my general irritation that the subject was so deliberately misrepresented, these little flashpoints of zeitgeist illustrate both the human reality (we wish to think ourselves better than others), the political dynamics (no one ever went broke underestimating the American public), and the journalistic imperative (‘if it bleeds, it leads’), and how these collectively are the enemy of effective public policy.

And that’s important, because even as affordable housing does not exist inn economic nature, affordable housing policy does not exist in political nature.  It’s not a politician’s natural response – rent control is, even though rent control is the worst public policy imaginable.  So the sound bite/ headline/ catch-phrase mode of political discourse does meaningful damage to what I care about – and that doesn’t just tick me off, it makes me enduringly angry.

Critics of 40 Riverside aren’t satisfied merely to play the “racism” card.  Council Speaker/mayoral candidate Christine Quinn [At the time, a mayoral candidate, who lost – Ed.], Councilman Robert Jackson [At the time, candidate for Manhattan Borough President; he lost – Ed.]  and Assemblywoman Linda B. Rosenthal are insisting that all residents of any future “inclusionary” building must enjoy exactly the same apartments, views and services, whether they pay peanuts or a fortune to live there.

Sorry: Such rules would mean no “affordable” units being built at all.

no_such_luck

No such luck

Certainly no one would take the density bonus in that case; the cost wouldn’t be worth it.  Mayor de Blasio would be back trying to compel the market to produce.

In the end, the development at Riverside Boulevard will have generated a lot of controversy and political heat, all for the benefit of fewer than five dozen families in a city where more than 50,000 people are homeless.

homeless_pavement_nyc

50,000 of him, 55 in 40 Riverside

A GAIA story doesn’t really want change; it wants readers to be stirred up, to feel righteous and superior, and to admire journalists for ‘standing up for the little guy.’  Hence these stories tend to return, like the swallows to Capistrano, at the same time every year.  As I was researching this one, I found exactly the same story line, about exactly the same property, a full year earlier: August, 2013, with the same rhetoric.

The mushrooming stink over the ‘two-door’ policy at 40 Riverside Blvd. is noxious on every level. Contrary to howls that it’s tantamount to “apartheid,” separate entrances at Extell Development Co.’s planned new condo/rental project are well-precedented and logistically necessary.

Last summer, just as New York’s mayoral campaign was heating up, 40 Riverside became a convenient political scapegoat for the lame-duck Bloomberg Administration, and as we saw many ambitious New York elected officials came out strongly against it.  But then, with new mayor de Blasio in office, seven months went by with no action on this front – instead Mayor de Blasio announced a dramatic, ambitious, and implausible 200,000-home affordable housing production goal.  Tightening inclusionary zoning to eliminate this feature, if it does anything, will work against that goal.

The focus now is to reverse the zoning change, Deputy Mayor Alicia Glen told me, a process that should take about a year.

‘About a year’?  Just in time for another round of GAIA stories when 40 Riverside is being occupied.

philip_roth

Don’t make jokes about waxing me

While New York was waxing wroth over its micro-outrage, up here in Boston there’s a real scandal.  With the election of Mayor Marty Walsh, and the departure of avuncular tyrant Tom Menino [Now, sadly, dying of cancer. – Ed.], lights are being shined throughout Boston’s convoluted, arbitrary, micromanaged, ineffective, and altruistically corrupt housing strategy administrator, the Boston Redevelopment Authority, as I explored at length in Oh, THAT money we were supposed to collect: Part 1, “We’re not enforcing”, Part 2, Incapable of performing basic functions, Part 3, An abject mess, and Part 4, “The BRA? That’s me!”:

menino_claps

“The BRA?  That’s me!”

F. The BRA had no strategy (no goals, no objectives)

Instead of a plan, the BRA depended on pleasing its patron, the mayor.

The audit did not make any mention of Menino, but many of the failures it uncovered focused on development deals made during his tenure.

When your whole existence depends on pleasing one person, there’s no need for job manuals:

While the Manual does contain certain job performance and evaluation criteria, when asked, virtually all of the employees at the BRA/EDIC have not had their job performance evaluated in many years or at all to determine whether individuals have been performing at, above or below expectations.

Why bother to evaluate?  As far as I can tell, Mayor Menino never sought to have anyone removed from the BRA; he just froze out anyone who wasn’t part of the development-approval process, and since the BRA was making money off its developer extractions, goodness knows how many people are rattling around its offices doing, essentially, nothing of value. 

Instead of a strategy, the BRA operated at the mayor’s whim, and nothing better illustrates that whim than a story the retired mayor told, with great pride, just last week:

He brightened, asking, “Have you seen the playground next to Spaulding (Rehab Hospital), over in Charlestown? That’s one of the last things I did. Spaulding is a very special place to me; I spent a lot of time there (eight weeks) when I was sick and saw a lot of things that really touched me.”

“So when they opened the new Charlestown building I was standing on the fifth floor with (hospital president) David Sorto, and I saw this little piece of land right next to it.”

david_sorto

Trying to save lives but needing the BRA: David Sorto

“I said, ‘David who owns that?’ He said, ‘The BRA owns it.’

“And I thought, ‘The BRA? That’s me!’”

That’s a telling admission now, isn’t it?

I finished with this:

“If you look at its history, the BRA has created one of the great cities of the world and that has benefited the people who live in it,” [interim CEO Brian] Golden [a five-year insider at the BRA – Ed.] said.

Aside from the arrogance of that statement, which reeks of you didn’t build that, it at best confuses causation with correlation.  It’s entirely possible that the BRA has, in fact, retarded Boston’s development for two decades out of mayoral pique and authority craven obeisance.

downey_full_retard

You should never go full-retard on development

People think the BRA is benevolent – it’s a government body, it must be benevolent, mustn’t it? – but there’s no evidence of this other than the BRA saying so.

Brian Golden, the BRA’s secretary and executive director under former Mayor Thomas M. Menino, who is now heading the BRA under Walsh, acknowledged that the agency “is a mess.”

“The BRA needs to develop acceptable business practices for most of its major operations,” Golden said.

Readers will recall that Mr. Golden claims he had no idea of the organization’s failures and lack of acceptable business practices, despite being the number two man on the totem pole.

Walsh said Wednesday that Golden will remain acting director for the “foreseeable future,” but he has not made any final decisions about the future of the position.

Mr. Golden cannot be part of the solution because insofar as he knows anything about cities and urban planning, he learned it at an authority that by his own admission is a mess, in which he was the second in command and yet was miraculously not responsible for any of the mess.

Clean house, Mr. Mayor.  Find out how much has been forgotten, lost, wasted, pilfered,

You want to turn around the BRA?  Go get Joe Tulimieri; he’s eminently qualified, having run the Cambridge Redevelopment Authority, and he’s available.

joseph_tulimieri

Tanned, rested, and ready: hire him, Mr. Mayor

Those scandals also served as counterpoint for the month’s other posts:

[Continued tomorrow in Part 2.]

 

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Yo ho ho and a share of the profits: Part 6, “Shall have our gracious pardon”

November 10, 2014 | Amnesty, Business model, Economics, Entrepreneur, Informality, Marcus Rediker, Markets, Mobility, Networks, Piracy, Pirates, Slavery, Speculation | No comments 116 views

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

By: David A. Smith

Having made it all the way to the end of my self-indulgent multi-part speculation on piracy as a transitional business model based on disruptive technology, in which I largely disagree with Marcus Rediker’s views, at least as presented in a Rebecca Onion interview in the Boston Globe (August 24, 2014), we’ve come to the most novel part of the story – how does piracy end, either for the individual or the industry as a whole? 

roberts_buttercup

Really, I’m just misunderstood

Sources used in this post

Rebecca Onion, Boston Globe (August 24, 2014)

Burying Treasure (January 15, 2010; gray font with blue inset quotes)

Daniel Defoe (attributed), A General History of the Pyrates, 1724; blue italics

Friday’s post ended with Daniel Defoe exhorting his government to develop the fishing industry as job placement for pirates, “for a Fishery is a Trade that cannot be overstock’d.”  Perhaps he was reflecting the common wisdom in Whitehall, because his book also includes this remarkable 1718 proclamation from George I:

A Proclamation, for Suppressing of Pyrates

George R.

george_i_hanoverian

I’m becoming king of a country whose language I speak only a few words of, but I have proclamation-writers for that sort of thing

After an opening statement decrying piracy, the proclamation then does a U-turn and offers the pirates time-limited amnesty:

[…] We do hereby promise, and declare, that in Case any of the said Pyrates, shall on or before the 5th of September, in the Year of our Lord 1718, surrender him or themselves, to one of our Principal Secretaries of State in Great Britain or Ireland, or to any Governor or Deputy Governor of any of our Plantations beyond the Seas; every such Pyrate and Pyrates so surrendering him, or themselves, as aforesaid, shall have our gracious Pardon, of and for such, his or their Pyracy, or Pyracies, by him or them committed before the fifth of January next ensuing.

In deciding to issue this proclamation and then crafting its multiple provisions, someone (perhaps Sir Robert Walpole, at the time chancellor of the Exchequer, later to be the inventor of the post of prime minister) was making a very shrewd and practical offer: Cease pirating and keep what you have gained, or continue and we will hunt you down.

robert_walpole

“Become part of our society, or be eliminated”

And we do hereby strictly charge and command all our Admirals, Captains, and other Officers at Sea, and all our Governors and Commanders of any Forts, Castles, or other Places in our Plantations, and all other our Officers Civil and Military, to seize and take such of the Pyrates, who shall refuse or neglect to surrender themselves accordingly.

Having thus made seizure of pirates (and inferentially, confiscation of their goods) an imperial policy covering the whole world, the King and his ministers then license anyone to be a pirate bounty hunter:

And we do hereby further declare, that in Case any Person or Persons, on, or after, the 6th Day of September 1718, shall discover or seize, or cause or procure to be discovered or seized, any one or more of the said Pyrates, so refusing or neglecting to surrender themselves as aforesaid, so as they may be brought to Justice, and convicted of the said Offence, such Person or Persons, so making such Discovery or Seizure, or causing or procuring such Discovery or Seizure to be made, shall have and receive as a Reward for the same, viz. for every Commander of any private Ship or Vessel, the Sum of £100 for every Lieutenant, Master, Boatswain, Carpenter, and Gunner, the Sum of £40; for every inferior Officer, the Sum of £30 and for every private Man, the Sum of £20.

Nor was the author satisfied to deputize the citizenry; pirates were explicitly authorized to betray each other:

And if any Person or Persons, belonging to and being Part of the Crew of any such Pyrate Ship or Vessel, shall on or after the said sixth Day of September 1718, seize and deliver, or cause to be seized or delivered, any Commander or Commanders, of such Pyrate Ship or Vessel, so as that he or they be brought to Justice, and convicted of the said Offence, such Person or Persons, as a Reward for the same, shall receive for every such Commander, the Sum of £200. which said Sums, the Lord Treasurer, or the Commissioners of our Treasury for the Time being, are hereby required, and desired to pay accordingly.

Given at our Court, at Hampton-Court, the fifth Day of September, 1717, in the fourth Year of our Reign.

God save the KING.

8. Piracy and informality in the twenty-first century: a byproduct of mobility and money

somali_pirates_03

We’d rather be doing something else

Whatever one may think of piracy’s morality, it’s economically logical for a particular group of people – very poor underemployed young men who are citizens of a failed state or a non-existent state – at a particular time in history — when the technology of commerce has outrun the government and regulation of the commerce lanes.

somali_pirates_container_ship

That she blows: Somali pirates boarding a container ship

Rome, the Misstress of the World, was no more at first than a Refuge for Thieves and Outlaws; and if the Progress of our Pyrates had been equal to their Beginning; had they all united, and settled in some of those Islands, they might, by this Time, have been honoured with the Name of a Commonwealth, and no Power in those Parts of the World could have been able to dispute it with them.

Informality is the alternative when formality breaks down – or when formality’s proposition is much worse than informality’s. 

INDIA-SOMALIA-SHIPPING-PIRACY

The consequences of overexpansion: Captured Somali pirates

In Slums are a wealth-extraction machine (April 13, 2007), I posted the following:

From the slumlord’s perspective, a slum is a place efficiently to extract rent from those who must live somewhere and will live wherever it is cheapest to live. 

Just as a desert becomes green only if it can trap water, to make a community healthy one has to enable it to store wealth within itself.  (As long as a slum can extract wealth, what goes out will rise instantly to equal what comes in.)  Rule of law matters, otherwise portable wealth is simply stolen or extorted from residents.  So does indigenous business and commerce.

To improve a neighborhood, raise the rent-paying power of its inhabitants.  To do that, raise their ability to earn money, and with it their choices about where to live and what to invest.

 

How do you eradicate slums?  You drive them bankrupt.

 

going_out_of_business

The way to win

For a poor Somali neighborhood, piracy is an economic choice with high risk, high return, and high entrepreneurial risk premiums.  And when the status quo is grinding poverty in a failed state, the downside (imprisonment in the west) doesn’t look that bad.

Besides, our own Coast, for the most Part, supply the Dutch, who employ several hundred Sail constantly in the Trade, and so sell to us our own Fish. I call it our own, for the Sovereignty of the British Seas, are to this Day acknowledged us by the Dutch, and all the neighbouring Nations;

somali_pirates_captured

If this is the downside, how bad can it be?

Even as policing and enforcement are critical to eradicating piracy, so too is building up the local economy.

somali_piracy_down

Government catches up

Wherefore, if there was a publick Spirit among us, it would be well worth our while to establish a National Fishery, which would be the best Means in the World to prevent Pyracy, employ a Number of the Poor, and ease the Nation of a great Burthen, by lowering the Price of Provision in general, as well as of several other Commodities.

Piracy

If you want me in another profession, give me a better proposition

 

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