Fetishizing Disposability

M. Nolan Gray, a planner and researcher at UCLA, scolds that America needs to Stop Fetishizing Old Homes. He lists several complaints to buttress his point.

For starters, before I go into a critique of Mr. Gray’s points, I do not believe all old homes are better than new homes. Just as I do not believe the opposite. Generalizations, as such, get us nowhere.

Gray makes some broad and overreaching statements to condemn, in general, old housing.

He begins by labeling old housing as “at best, subpar and, at worst, unsafe.” No doubt, some old housing surely is subpar and unsafe. However, so is some new housing.

He next takes a dig at “self-righteous” preservationists. Though some may be pompous or pretentious (which can be the case in many occupations), some older things are worth saving and equally attractive as their newer, supposed, replacements. He fails to mention the craftsmanship and materials in older, quality homes, which many newer (even well-built) homes don’t contain.

Gray claims we “fetishize” old homes. I would like to think some people just like to take care of well-built or well-crafted items. Maybe Gray just fetishizes disposability over maintenance. 

He states, “If we want to ensure universal access to decent housing, we should be building a lot more of it.” First, although a noble goal, I'm not sure Republicans want to ensure universal access to decent housing. Second, new housing and old housing are not mutually exclusive. We can have well-built, well-maintained older housing alongside newer construction.

Here I should point out I am not for saving every building simply because of old age or some sentimentalism. Some buildings are too far-gone and exorbitant investment just does not make sense. But Gray's overarching theme here that everything old stinks and everything new is wonderful is just an extreme oversimplification and wrong.

Gray then lists some regional differences in the age of homes. Some places have more new homes than others do and vice-versa. Rather than condemning, in general, old homes, it seems Gray’s issue is with dilapidated properties and zoning practices. If this is the case, we can agree. Older, dilapidated buildings should be allowed to be razed so that newer, denser construction (whatever the highest and best use of the site is) can replace it.

He then goes on to proclaim that new housing is “just plain nice to live in.” Yet, some newer housing is also cheap, poorly built crap. Gray had previously criticized fetishizing the old, but here he is fetishizing something for simply being new.

Gray then rattles off insulation, HVAC and windows as supposed reasoning for why newer is better. He also discusses room layout and closet sizes. Yet, retrofitting an older home for insulation, HVAC and windows is common. Considering the quality of some older homes, this is also more economical than completely new construction. Moreover, older, quality-built homes have larger closets and functional layouts. Cheap construction is cheap construction whether it is built in 1922 or 2022.

Sure, there are a lot of old crappy buildings out there that aren't worth saving. But that does not de facto conclude that anything newer is better. There is a lot of cheap, new stuff. So how about cities look for ways to build dense housing where needed along with respecting older, quality construction. We are a pretty innovative country (when we want to be), I think we can move forward and accomplish two goals simultaneously. 

Weekend Reading

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U.S. labor shortage? Unlikely. Here’s why

Low Wages and Crappy Jobs Gave Us the Labor “Shortage”

U.S. Labor Shortage? No, We Have a Crisis of Low Wages.

WILL lawyer, Wisconsin farmer appear on Tucker Carlson Show to allege racism against white farmers

Esquire ranks Milwaukee among five domestic cities that are 'unexpectedly awesome'

Lumber mania is sweeping North America

Homeownership

[source]

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4. Milwaukee

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Why Government Is Virtuous
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Weekend Reading

The Most Expensive Tax Breaks

1. Employer Paid Health Insurance - Five year cost: $760 billion
2. Lower Rate For Capital Gains, Dividends - Five year cost: $616 billion
3. State And Local Tax Deductions - Five year cost: $431 billion
4. Mortgage interest deduction - Five year cost: $379 billion
5. Tax Free Medicare Benefits - Five year cost: $358 billion
6. Workplace Retirement Saving Plans - Five year cost: $336 billion
7. Earned Income Credit - Five year cost: $326 billion
8. Child Credit - Five year cost: $292 billion

Adding Up Just How Little We Actually Move
14 GOP Congressmen Against Borrowing, Have Big Debts Of Their Own
Workers Saving Too Little To Retire
Hate Paying Taxes? Try These States
Housing Has Been Booming! Construction Jobs Haven't. Here's Why.
Stop Subsidizing Wall Street

Weekend Reading

The Hoax Of Entitlement Reform
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No, Marco Rubio, Government Did Not Cause The Housing Crisis 
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The Economic Trail Of Tears

The Business Journal of Milwaukee recently ran a handful of articles regarding a revival in Milwaukee, an new arena being a part of that, and Oklahoma City (OKC) possibly being a roadmap for the whole process.

Oklahoma City has recently developed a river walk, completed a large hotel development, and built a stadium to attract an NBA team (the OKC Thunder). I guess we're supposed to imagine Milwaukee doesn't already have these, or that duplicating similar venues will lead to greater growth?

Or, maybe we can turn back the clock and reverse our history. Milwaukee is an older city (1846) than Oklahoma City (1889). Newer cities, like developing countries, are experiencing higher rates of growth than older cities. Add in the warmer climate and the heavy influence of Big Energy (mostly oil & natural gas) and you pretty much have to whole story behind OKC's growth. It's not because of some magical development plan based on the public funneling more money to private projects.

Oklahoma City actually has a larger share of its workforce employed by the government - 15.1% versus  13.2% in Milwaukee.  Should Milwaukee expand government? I'd love to see the MMAC recommend that.

20.8% of Oklahoma City residents have no health insurance coverage, in Milwaukee, it's 15.6%. For that 5 or so percent of the population in OKC with no health care coverage, would they claim a better quality of life?

The rental vacancy rate on OKC 8.1%, in Milwaukee 3.5%. Median home value in OKC $131,100, in Milwaukee $133,800. Median rent in OKC $720, in Milwaukee $753. It appears the value (and occupancy) of the built infrastructure is holding it's own compared with OKC.

The article relies on quotes from Greg Marcus, CEO of Marcus Corporation, for the inside story on Oklahoma City. He developed a hotel there, so he knows. Marcus claims Kohl's Corporation may have moved to downtown Milwaukee if the quality of life had been better. Couldn't this excuse (quality of life), to some degree, plausibly be used every time one location is chosen over another? And, by doing what? What does he recommend that Milwaukee, imitating OKC, do to improve the quality of life?

Marcus elaborated, "If you don't invest in your product, you don't get customers. You need to have a product that is so compelling and invest in infrastructure."

Yet, these same omnipotent business leaders also don't want to have to pay the taxes that pay for improvements in infrastructure.

None of this means there isn't anything to learn from OKC. But sound economic development isn't just latching on to the latest rising star and reciting their most recent achievements as a best practices guide.

Weekend Reading

Challenges In Housing & Mortgage Markets
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Scott Walker Rejects Health Care Reform
10 Things 401K Plans Won't Tell You

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The Arithmetic Of Unemployment & Labor Force Participation 
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The Evolution Of Airfares In One Chart
A History Of Movies In Four Parts
Housing Recovery In Perspective
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Lavish CEO Pay Doesn't Work As Intended
Private Sector Not GSEs Triggered Crisis
The Problem Of Conservative 'Intellectuals'
Ryan Supported Social Security Privatization
Will Paul Ryan's Past Threaten His Future?

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Comparing Housing Recoveries
Five Myths About Obama's Stimulus
Giving Economics A Bad Name
Looks Like Ryan: Mitt's Pick
Obamacare Benefits Are Starting To Roll Out
The Opportunity Cost Of Hoarding Cash Is Lower Than You Think
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Where The World's Running Out Of Water

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Americans Like Federal Spending After All
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Real House Prices & Price-To-Rent Ratio
Scott Walker's Victory, Un-Sugar-Coated
The Scott Walker No Tax Increase Lie
Walkergate: The Russell Revelations

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How Policy Has Contributed To The Great Economic Divide
'Nuns On The Bus' Visit Paul Ryan's Office
Public Sector Layoffs
Reagan's Gone. You're Old. Get Over It.
The Rent Is Too Damn High
Revenge Of The Urban Nerds
The Scam Wall Street Learned From The Mafia
Twilight Of The Elites
Wages Continue To Fall

Weekend Reading

Americans Brace For Next Wave Of Foreclosures
Bankruptcy Costs & America's Household Debt Crisis
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Housing Scorecard Points To Stability In Market
The Impossibility Of Defense Cuts
MIT Predicting Global Economic Collapse By 2030
More Public Pension Scare Stories At The Post
U.S. Labor Market Increasingly Low-Wage Driven
Where America Needs Doctors
Where Do Our State Tax Dollars Go?
Will Foreclosures Drive Home Prices Lower?
Why A Housing Recovery Could Happen Sooner Than You Think

What We Spend Money On

How Americans Spend Money

An Obtuse & Deceptive Accounting

If a lie is repeated often enough, Republicans hope it becomes the truth.

Republicans are bringing Community Reinvestment Act (CRA) myths back from the dead. Ron Johnson, in an ever-increasingly extremely right-wing and non-sensical senatorial campaign, is claiming the CRA (passed in 1977) is responsible for our current recession.

Th Journal recently gave ink to Johnson's (and the Republican's) already debunked hypothesis. The Journal at least included some voices with a counterpoint to this unfounded CRA-caused-recession fantasy of Johnson's. But, with a title like "Johnson said the seeds of recession began with 1977 law," I think we know the message the Journal really wants readers to take away.

Yet Ned Gramlich, of the Federal Reserve, found, "Banks have made many low- and moderate-income mortgages to fulfill their CRA obligations, they have found fault rates pleasantly low, and they generally charge low mortgage rates. Thirty years later, CRA has become very good business." Russel Kroszner, also of the Federal Reserve, states, "Contrary to the assertions of critics, the evidence does not support the view that the CRA contributed in any substantial way to the crisis in the subprime mortgage market."

A responsible news organization would have had the studies and the numbers available to educate Johnson and squash out his ridiculous charge. Instead it's their usual he-said with a passing, milquetoast counterfactual and no real discussion or data in between. Eric Alterman and George Zornick reveal, "In the 15 most populous metropolitan areas, 84.3 percent of the subprime loans in 2006 were made by financial institutions not governed by CRA."

The Journal Sentinel even notes, in the article, "The federal law [CRA] applied only to depository institutions, not private, unregulated mortgage lenders." So, you'd think they'd then give you the number of loans issued by private lenders versus those subject to CRA. You know, some actual evidence one way or the other, proving or disproving the claim.

As Paul Krugman explained, "The Community Reinvestment Act of 1977 was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act."

"The CRA applies only to banks and savings institutions. It does not apply to credit unions, independent mortgage companies, or investment banks," details Ellen Seidman.

Neil Bhutta and Glenn B. Canner discovered, "The small share of subprime lending in 2005 and 2006 that can be linked to the CRA suggests it is very unlikely the CRA could have played a substantial role in the subprime crisis."

It's a scary thing when someone is so ideological as to just run with the misinformation of their party and not do the heavy lifting (the actual research). Ron Johnson is just throwing out well-worn Republican talking points and seeing what sticks, hoping to scare people into voting for him. I don't know about you, but I want a senator that actually reads the bills and makes an informed decision. I don't want someone who just goes with their gut or with the polling. And, when Johnson won't even take questions from his local newspaper, you know something is amiss.

Wisconsin deserves better. Vote Russ Feingold.

For Further Reading:

Community Reinvestment Act And The Mortgage Crisis

Community Reinvestment Act Makes Bankers Stupid

Community Reinvestment Act Of 1977: Not Guilty

Did Liberals Cause The Subprime Crisis

Don't Blame The Dream Of Home Ownership

Firing Back On The CRA Libel

Subprime Suspects

Housing Is A National Decision

Patrick McIlheran at the Milwaukee Journal-Sentinel pontificates on housing and how it must remain in the realm of individual decision-making. Somehow property and housing - wherever a person wants to build and live - is a right. There shall be no input from government, no growth boundaries, no planning involved in how we create our built environment, house our citizens, and construct our society and communities.

This McIlheran-thinking is really just another stunning example of selfish, greedy, base-instincts at their worst. These are some of the same driving forces and impulses that led to the current economic mess we're in.

Is McIlheran really that uninformed regarding the many environmental and economic issues involved in sprawling development? The upkeep of the new roads, additional sewer and water issues, policing, electrical grid infrastructure, commuter pollution, paved land, among many others. There are ecosystems, food sources, natural resources, animals, wet lands, and other natural systems that are destroyed in our continually destructive "build wherever land is cheapest and construct a highway out to it" mentality.

Can we all also agree on the point that just because we desire something or would like things to be a certain way, this does not mean that we automatically get what we want, nor does it mean that things should be our way, nor does it imply things will turn out a certain way? There are larger societal issues here than just each individuals wants and desires.

Although the advertisers and public relations hucksters may want it this way, we should not be aspiring to be a nation of hedonistic gluttons. Just because some developers want to sell the "American Dream" as a McMansion on 5 acres an hour out in the middle of nowhere doesn't make it so and it doesn't make it the most highly productive, efficient, or beneficial housing or development policy. It's a way to make a quick buck for the developers, while the negative externalities are passed on the public.

It's time for us to be more responsible to the environment and more sustainable in our development decisions. It's time to realize that what is right and just is not always cheap and easy.

Chris Caldwell, of the Financial Times, gives a nice primer on highway building, suburban sprawl, and the many negative consequences of both here.

Subsidizing Mansions

Here is an alarmingly informative October 18, 2005 article from Professor Peter Dreier (key points are italicized below):

The two major homeowner tax breaks cost the federal government almost $90 billion last year—$70.1 billion for the mortgage interest deduction and $19.3 billion for the property tax deduction.

Less than one-fourth of all low-income Americans (those who have Section 8 rental vouchers or who live in government-assisted developments) receive federal housing subsidies. In contrast, almost two-thirds of affluent Americans—many living in mansions—get housing aid from Washington.

More than half (53.7 percent) of last year's $89.5 billion homeowner subsidies went to the 11.8 percent of taxpayers with incomes over $100,000. More than one-fifth (20.6 percent) of these subsidies went to the wealthiest 2.3 percent of taxpayers with incomes over $200,000—some living in mansions.

Wealthy households are most likely to own homes and to itemize deductions. Half of all homeowners do not claim deductions at all.

62 percent of households with incomes above $200,000 receive a homeowner tax break, averaging $7,219. In contrast, only 3.5 percent of households with incomes between $10,000 and $20,000 get any subsidy, averaging $317.

Only one-third of the 52 million households with incomes between $30,000 and $75,000 receive any homeowner subsidy.