Michigan ex-pat in Brooklyn, web nerd, banjo novice, loves food, mildly abrasive
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Weird UBI Argument About Rents

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I am not that interested in arguing about UBI on a day-to-day basis, but I’ve now seen one silly argument against it enough times that I feel compelled to intervene. The argument is this:

In fact, workers may not even see much of the benefit of their UBI check: if their new gains are simply passed on to landlords and merchants through higher rent and prices, the benefits will be entirely illusory, even as people appear to be receiving an enormous handout.

Perhaps this argument comes up a lot because those in the chattering classes often live in areas where local policymakers refuse to do things to keep rents under control, e.g. by building out more space or fixing prices. But even if you live in such an area, it is still a shocking theory.

Its advocates may not realize how shocking it is because, in their mind, what they are arguing is that a UBI leads to higher rents that consume the value of the UBI. But what they are actually arguing is that a UBI increases disposable incomes and that increasing disposable incomes leads to higher rents that consume the value of the income increase. Stated this way, the shocking nature of the theory becomes clear: if true, the theory predicts that anything that increases people’s incomes is pointless.

The Fight for $15 is pointless. The fight for unions that can negotiate higher wages is pointless. The fight for a more generous welfare state is pointless. Nearly everything that people talk about with respect to the economy and what could be done to improve the plight of the bottom half is actually pointless. Why? Because in all cases the internal mechanism of those proposals — increasing disposable incomes — is counteracted by a corresponding rise in rents, according to this particular anti-UBI theory.

Needless to say, I think the theory is pretty obviously false. Rises in disposable incomes generally do leave people better off, even net of rent payments, even in places where local authorities allow the price of space to spiral out of control.

But if you think it is true, you really should ask yourself what the source of the problem you have identified is. If it’s the case that higher minimum wages, stronger unions, and more generous welfare states are all helpless against rent hikes, then maybe the issue you are worried about has nothing to do with the UBI and everything to do with your area’s dumb housing policy.

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sstrudeau
23 days ago
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Brooklyn, NY
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Shaping the World

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I gave a keynote at PyCon UK recently – it was mostly about the book “Seeing Like A State” and what software developers can learn from it about our effect on the world.

I’ve been meaning edit it up into a blog post, and totally failing to get around to it, so in lieu of that, here’s my almost entirely unedited script – it’s not that close to the version I actually got up on stage and said, because I saw 800 people looking at me and panicked and all the words went out of my head (apparently this was not at all obvious to people), but the general themes of the two are the same and neither is strictly better than the other – if you prefer text like a sensible person, read this post. If you prefer video, the talk is supposedly pretty good based on the number of people who have said nice things to me about it (I haven’t been able to bear to watch it yet).

The original slides are available here (warning: Don’t load on mobile data. They’re kinda huge). I’ve inserted a couple of the slide images into the post where the words don’t make sense without the accompanying image, but otherwise decided not to clutter the text with images (read: I was too lazy).


Hi, I’m David MacIver. I’m here to talk to you today about the ways which we, as software developers, shape the world, whether we want to or not.

This is a talk about consequences. Most, maybe all, of you are good people. The Python community is great, but I’d be saying that anywhere. Most people are basically good, even though it doesn’t look that way sometimes. But unless you know about what effect your actions have, all the good intentions in the world won’t help you, and good people can still make the world a worse place. I’m going to show you some of the ways that I think we’re currently doing that.

The tool I’m going to use to do this is cultural anthropology: The study of differences and similarities between different cultures and societies. I’m not a cultural anthropologist. I’ve never even taken a class on it, I’ve just read a couple of books. But I wish I’d read those books earlier, and I’d like to share with you some of the important lessons for software development that I’ve drawn from them.

In particular I’d like to talk to you about the work of James C. Scott, and his book “Seeing like a state”. Seeing like a state is about the failure modes of totalitarian regimes, and other attempts to order human societies, which are surprisingly similar to some of the failure modes of software projects. I do recommend reading the book. If you’re like me and not that used to social science writing, it’s a bit of a heavy read, but it’s worth doing. But for now, I’ll highlight what I think are the important points.

Unsorted binary tree

Binary Tree by Derrick Coetzee

Before I talk about totalitarian states, I’d like to talk about trees. If you’re a computer scientist, or have had an unfortunate developer job interview recently, a tree is probably something like this. It has branches and leaves, and not much else.

If you’re anyone else, a tree is rather different. It’s a large living organism. It has leaves and branches, sure, but it also has a lot of other context and content. It provides shade, maybe fruit, it has a complex root system. It’s the center of its own little ecosystem, providing shelter and food for birds, insects, and other animals. Compared to the computer scientist’s view of a tree it’s almost infinitely complicated.

But there’s another simplifying view of a tree we could have taken, which is that of the professional forester. A tree isn’t a complex living organism, it’s just potential wood. The context is no longer relevant, all we really care about the numbers – it costs this much to produce this amount of this grade of wood and, ultimately, this amount of money when you sell the wood.

This is a very profitable view of a tree, but it runs into some difficulties. If you look at a forest, it’s complicated. You’ve got lots of different types of trees. Some of them are useful, some of them are not – not all wood is really saleable, some trees are new and still need time to grow, trees are not lined up with each other so you have to navigate around ones you didn’t want. As well as the difficulty of harvesting, this also creates difficulty measuring – even counting the trees is hard because of this complexity, let alone more detailed accounting of when and what type of wood will be ready, so how can you possibly predict how much wood you’re going to harvest and thus plan around what profit you’re going to make? Particularly a couple of hundred years ago when wood was the basis of a huge proportion of the national economy, this was a big deal. We have a simple view of the outcomes we want, but the complex nature of reality fights back at our attempts to achieve that. So what are we going to do?

Well, we simplify the forest. If the difficulty in achieving our simple goals is that reality is too complicated, we make the reality simpler. As we cut down the forest, we replant it with easy to manage trees in easy to manage lines. We divide it into regions where all of the trees are of the same age. Now we have a relatively constant amount of wood per unit of area, and we can simply just log an entire region at once, and now our profits become predictable and, most importantly, high.

James Scott talks about this sort of thing as “legibility”. The unmanaged forest is illegible – we literally cannot read it, because it has far more complexity than we can possibly hope to handle – while, in contrast, the managed forest is legible – we’ve reshaped its world to be expressible in a small number of variables – basically just the land area, and the number of regions we’ve divided it into. The illegible world is unmanageable, while the legible world is manageable, and we can control it by adjusting a small number of parameters.

In a technical sense, legibility lets us turn our control over reality into optimisation problems. We have some small number of variables, and an outcome we want to optimise for, so we simply reshape the world by finding the values of those variables that maximize that outcome – our profits. And this works great – we have our new simple refined world, and we maximize our profit. Everyone is happy.

Oh, sure, there are all those other people who were using the forest who might not be entirely happy. The illegible natural forest contains fruit for gathering, brush to collect for firewood, animals for hunting, and a dozen other uses all of which are missing from our legible managed forest. Why? Well because those didn’t affect our profit. The natural behaviour of optimisation processes is to destroy everything in their path that isn’t deliberately preserved or directly required for their outcome. If the other use cases didn’t result in profit for us, they’re at best distractions or at worst impediments. Either way we get rid of them. But those only matter to the little people, so who cares? We’re doing great, and we’re making lots of money.

At least, for about eighty years, at which point all of the trees start dying. This really happened. These days, we’re better a bit better at forest management, and have figured out more of which complexity is necessary and which we can safely ignore, but in early scientific forestry, about 200 years ago in Germany, they learned the hard way that a lot of things they had thought weren’t important really were. There was an entire complex ecological cycle that they’d ignored, and they got away with it for about 80 years because they had a lot of high quality soil left over from that period that they could basically strip mine for a while. But the health of the forest deteriorated over time as the soil got worse, and eventually the trees were unhealthy enough that they started getting sick. And because all of the trees were the same, when one got sick it spread like wildfire to the others. They called it Waldsterben – forest death.

The problem that the German scientific foresters ran into is that complex, natural, systems are often robust in ways that simple, optimised systems are not. They’ve evolved over time, with lots of fiddly little details that have occurred locally to adapt to and patch over problems. Much of that illegibility turns out not to be accidental complexity, but instead the adaptation that was required to make the system work at all. That’s not to say all complexity is necessary, or that there isn’t a simpler system that also works, but if the complexity is there, chances are we can’t just remove it without replacing it with something else and assume the system will keep working, even if it might look like it does for a while.

This isn’t actually a talk about trees, but it is a talk about complexity, and about simplification. And it’s a talk about what happens when we apply this kind of simplification process to people. Because it turns out that people are even more complicated than trees, and we have a long history of trying to fix that, to take complex, messy systems of people and produce nice, simple, well behaved social orders that follow straightforward rules.

This is what James Scott calls Authoritarian High-Modernism – the desire to force people to fit into some rational vision of the world. Often this is done for entirely virtuous reasons – many authoritarian high-modernist projects are utopian in nature – we want everyone to be happy and well fed and fulfilled in their lives. Often they are less virtuous – totalitarian regimes love forcing people into their desired mould. But virtuous or not, they often fail in the same way that early scientific forestry did. Seeing like a state has a bunch of good examples of this. I won’t go into them in detail, but here’s a few.

A picture of a building with multiple windows bricked up.

Portland Street, Southampton, England, by Gary Burt

An amusing example is buildings like this. Have you seen these? Do you know why there are these bricked up windows? Well it’s because of window taxes. A while back, income tax was very unpopular. Depending on who you ask, maybe it still is, but it was even more so back then. But the government wanted to extract money from its citizens. What could they do? Well, they could tax where people live by size – rich people live in bigger buildings – but houses are often irregularly shaped, so measuring the size of the house is hard, but there’s a nice, simple,convenient proxy for it – the number of windows. So this is where windows taxes come from – take complex, messy, realities of wealth and pick a simple proxy for it, you pick a simple proxy for that, and and you end up taxing the number of windows. Of course what happens is that people brick up their windows to save on taxes. And then suffer health problems from lack of natural light and proper ventilation in their lives, which is less funny, but so it goes.

Another very classic example that also comes from taxation is the early history of the Cadastral, or land-use, map. We want to tax land-use, so we need to know who owns the land. So we create these detailed land-use maps which say who owns what, and we tax them accordingly. This seems very straight forward, right? But in a traditional village this is nonsense. Most land isn’t owned by any single person – there are complex systems of shared usage rights. You might have commons on which anyone can graze their animals, but where certain fruit trees are owned, but everyone has the rights to use fallen fruit. It’s not that there aren’t notions of ownership per se, but they’re very fine grained and contextual, and they shift according to a complex mix of circumstance and need. The state doesn’t care. These complex shared ownerships are illegible, so we force people to conform instead to the legible idea of single people or families owning each piece of land. This is where a lot of modern notions of ownership come from by the way – the state created them so they could collect more tax.

And of course we have the soviet union’s program of farm collectivization, which has the state pushing things in entirely the opposite direction. People were operating small family owned farms, which were adapted to their local conditions and what grew well where they were. A lot of it was subsistence farming, particularly in lean times – when you had excess, you sold it. When you didn’t, you lived off the land. This was hard to manage if you’re a state who wants to appropriate large quantities of food to feed your army and decide who is deserving and who gets what. So they forcibly moved everyone to work on large, collective, farms which grew what the state wanted, typically in large fields of monocultures that ignored the local conditions. From a perspective of producing enough food, this worked terribly. The large, collectivized, farms, produced less food less reliably than the more distributed, adapted, local farms. The result was famine which killed millions. But from the point of view of making the food supply legible, and allowing the state to control it, the system worked great, and the soviets weren’t exactly shy about killing millions of people, so the collectivization program was largely considered a success by them, though it did eventually slow and stop before they converted every farm.

But there’s another, more modern, example of all of these patterns. We have met the authoritarians and they are us. Tech may not look much like a state, even ignoring its strongly libertarian bent, but it has many of the same properties and problems, and every tech company is engaged in much the same goal as these states were: Making the world legible in order to increase profit.

Every company does this to some degree, but software is intrinsically a force for legibility. A piece of software has some representation of the part of the world that it interacts with, boiling it down to the small number of variables that it needs to deal with. We don’t necessarily make people conform to that vision, but we don’t have to – as we saw with the windows, people will shape themselves in response to the incentives we give them,as long as we are able to reward compliance with our vision or punish deviance from it..

When you hear tech companies talk about disruption, legibility is at the heart of what we’re doing. We talk about efficiency – taking these slow, inefficient, legacy industries and replacing them with our new, sleek, streamlined versions based on software. But that efficiency comes mostly from legibility – it’s not that we’ve got some magic wand that makes everything better, it’s that we’ve reduced the world to the small subset of it that we think of as the important bits, and discarded the old, illegible, reality as unimportant.

And that legibility we impose often maps very badly to the actual complexity of the world. You only have to look at the endless stream of falsehoods programmers believe articles to get a sense of how much of the world’s complexity we’re ignoring. It’s not just programmers of course – if anything the rest of the company is typically worse – but we’re still pretty bad. We believe falsehoods about names, but also gender, addresses, time, and  many more.

This probably still feels like it’s not a huge problem. Companies are still not states. We’re not forcing things on anyone, right? If you don’t use our software, nobody is going to kick down your door and make you. Much of the role of the state is to hold a monopoly on the legitimate use of physical force, and we don’t have access to that. We like to pretend makes some sort of moral difference. We’re just giving people things that they want, not forcing them to obey us.

Unfortunately, that is a fundamental misunderstanding of the nature of power. Mickey Mouse, despite his history of complicity in US racism, has never held a gun to anyone’s head and forced them to do his bidding, outside of a cartoon anyway. Nevertheless he is almost single-handedly responsible for reshaping US copyright law, and by extension copyright law across most of the world. When Mickey Mouse is in danger of going out of copyright, US copyright law mysteriously extends the length of time after the creator’s death that works stay in copyright. We now live in a period of eternal copyright, largely on the strength of the fact that kids like Mickey Mouse.

This is what’s called Soft Power. Conventional ideas of power are derived from coercion – you make someone do what you want – while soft power is power that you derive instead from appeal – People want to do what you want. There are a variety of routes to soft power, but there’s one that has been particularly effective for colonising forces, the early state, and software companies. It goes like this.

First you make them want what you have, then you make them need it.

The trick is to to basically ease people in – you give them a hook that makes your stuff appealing, and then once they’re use to it they can’t do without. Either because it makes their life so much better, or because in the new shape of the world doing without it would make their life so much worse. These aren’t the same thing. There are some common patterns for this, but there are three approaches that have seen a lot of success that I’d like to highlight

The first is that you create an addiction. You sell them alcohol, or you sell them heroin. The first one’s free – just a sampler, a gift of friendship. But hey, that was pretty good. Why not have just a little bit more… Modern tech companies are very good at this. There’s a whole other talk you could give about addictive behaviours in modern software design. But, for example, I bet a lot of you find yourselves compulsively checking Twitter. You might not want to – you might even want to quit it entirely – but the habit is there. I’m certainly in this boat. That’s an addictive behaviour right there, and perhaps it wasn’t deliberately created, but it sure looks like it was.

The second strategy is that you can sell them guns. Arms dealing is great for creating dependency! You get to create an arms race by offering them to both sides, each side buys it for fear that the other one will, and now they have to keep buying from you because you’re the only one who can supply them bullets. Selling advertising and social media strategies to companies works a lot like this.

The third is you can sell them sugar. It’s cheap and delicious! And is probably quite bad for you and certainly takes over your diet, crowding out other more nutritious options. Look at companies who do predatory pricing, like Uber. It’s great – so much cheaper than existing taxis, and way more convenient than public transport, right? Pity they’re going to hike the prices way up when they’ve driven the competition into the ground and want to stop hemorrhaging money.

And we’re going to keep doing this, because this is the logic of the market. If people don’t want and need our product, they’re not going to use it, we’re not going to make money, and your company will fail and be replaced by one with no such qualms. The choice is not whether or not to exert soft power, it’s how and to what end.

I’m making this all sound very bleak, as if the things I’m talking about were uniformly bad. They’re not. Soft power is just influence, and it’s what happens every day as we interact with people. It’s an inevitable part of human life. Legibility is just an intrinsic part of how we come to understand and manipulate the world, and is at the core of most of the technological advancements of the last couple of centuries. Legibility is why we have only a small number of standardised weights and measures instead of a different notion of a pound or a foot for every village.

Without some sort of legible view of the world, nothing resembling modern civilization would be possible and, while modern civilization is not without its faults, on balance I’m much happier for it existing than not.

But civilizations fall as well as rise, and things that seemed like they were a great idea in the short term often end in forest death and famine. Sometimes it turns out that what we were disrupting was our life support system.

And on that cheerily apocalyptic note, I’d like to conclude with some free advice on how we can maybe try to do a bit better on that balancing act. It’s not going to single handedly save the world, but it might make the little corners of it that we’re responsible for better.

My first piece of free advice is this: Richard Stallman was right. Proprietary software is a harbinger of the end times, and an enemy of human flourishing. … don’t worry, I don’t actually expect you to follow this one. Astute observers will notice that I’m actually running Windows on the computer I’m using to show these slides, so I’m certainly not going to demand that you go out and install Linux, excuse me, GNU/Linux, and commit to a world of 100% free software all the time. But I don’t think this point of view is wrong either. As long as the software we use is not under our control, we are being forced to conform to someone else’s idea of the legible world. If we want to empower users, we can only do that with software they can control. Unfortunately I don’t really know how to get there from here, but a good start would be to be better about funding open source.

In contrast, my second piece of advice is one that I really do want you all to follow. Do user research, listen to what people say, and inform your design decisions based on it. If you’re going to be forming a simplified model of the world, at least base it on what’s important to the people who are going to be using your software.

And finally, here’s the middle ground advice that I’d really like you to think about. Stop relying on ads. As the saying goes, if your users aren’t paying for it, they’re not the customer, they’rethe product. The product isn’t a tree, it’s planks. It’s not a person, it’s data. Ads and adtech are one of the most powerful forces for creating a legible society, because they are fundamentally reliant on turning a complex world of people and their interactions into simple lists of numbers, then optimising those numbers to make money. If we don’t want our own human shaped version of forest death, we need to figure out what important complexity we’re destroying, and we need to stop doing that.

And that is all I have to say to you today. I won’t be taking questions, but I will be around for the rest of the conference if you want to come talk to me about any of this. Thank you very much.

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sstrudeau
26 days ago
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See also: zoning
Brooklyn, NY
acdha
26 days ago
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Washington, DC
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The Story Behind the Housing Meme That Swept the Internet

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The Providence Gamelin House opened its doors in Seattle in 2005. It was built to offer safe, affordable housing for low-income seniors in Seattle’s Rainier Vista neighborhood. To occupy any of the facility’s 77 units, residents must be ages 62 and older and earn below 50 percent of the area median income for King County in Washington. Most of them earn far below it: The average annual income for Gamelin House residents is $11,000.

For more than a decade this permanent supportive housing facility has served low-income residents of south Seattle. It’s their home. But the Providence Gamelin House only came into its own at the end of 2017, when an architectural rendering of the project was compelled into service as a meme. Specifically, as a housing meme, which is its own bucket for signifiers of our slide into late capitalism.

The meme surfaced wherever memes surface and spread however memes spread—idk. Eventually it found its way to the desk of Timothy Zaricznyj, director of housing for Providence Supportive Housing, the person who now oversees this alleged gentrification nightmare. (In fact, he manages 16 affordable-housing developments in Washington, Oregon, and California.) Zaricznyj was not exactly tickled. “They chose the wrong project, if they want to slam developers,” he says.

He’s right: The meme was a total self-own by whoever came up with it. (Although not as sick of a self-own as being born during the Carter administration and writing a meme explainer.) The fact that this meme depicts modest affordable housing—not penny-pinching, developer-driven Fast-Casual architecture—even inspired a meta-meme backlash.

Zaricznyj says that he gets the point, too. The original meme is a vague critique of “architecture by bean-counters” (of which Seattle does not lack for examples) and developers’ thirst for transitional neighborhoods. The Gamelin House was the work of Michael Fancher, an architect who designed affordable housing across the Pacific Northwest in the 1980s and ‘90s. But don’t blame Fancher: Affordable housing is subject to severe restrictions and even worse funding shortfalls.

Rainier Vista was never designated an arts district. But between 1999 and 2010, the area was subject to a redevelopment master plan to remake it as a mixed-income community. The city spent $240 million on the effort, including a $35 million Hope VI Revitalization grant from the U.S. Department of Housing and Urban Development. These were funds assigned to demolish distressed public housing and build something better in its place.

“The image that you see in this meme is obviously a tiny fraction of a master site development that extends blocks in every direction. Rainier Vista has its own vernacular. Part of that extends to its own color palette,” Zaricznyj says. In fact, when the Seattle Housing Authority recently repainted the Gamelin House, the powers that be left the color palette as is. “The final form of that development, right down to the color, was imposed by the master site.”

The Providence Gamelin House, an affordable housing development for the elderly designed by Michael Fancher in south Seattle. (Google)

The Providence Gamelin House was built using funds from another HUD program, Section 202, which provides capital for building affordable housing for the elderly. Yet Section 202 added another regulatory wrinkle: Projects developed with these funds were subject to caps not just on dollars spent per square foot, but on the amount of common area built altogether—restrictions meant to drive development costs way down.

As even meme-lords now realize, federal-ugly Gamelin House is a problem most cities should be lucky to have. That’s not to say the HUD programs that gave rise to affordable housing in Rainier Vista worked out everywhere. Police dragged people out of their homes in Chicago’s Cabrini–Green projects under the authority of Hope VI. (Congress stopped funding the program in 2010.) Section 202, the program that builds housing for the elderly, may see its funding slashed by 10 percent or more under budget cuts proposed by the Trump administration.

So, lessons learned:

Is  a e s t h e t i c  always lost in affordable or permanent supportive housing? Handsome examples of low-income housing can be found in Washington, D.C., and San Francisco. For sure, cheap corporate architecture is everywhere. You, an intellectual, might point out that lifting residential zoning restrictions would result in better design and more affordable housing.

Can HUD still fund affordabois like Gamelin House? Not if the Trump administration’s plan for tax reform passes Congress, since it could diminish the power of Low Income Housing Tax Credits and (at least in the House version) wipe out tax-exempt private activity bonds—both instruments that are crucial to building new affordable housing. Even if the worst doesn’t come to pass, sequestration has already decimated housing aid. The market can’t build deeply affordable housing without public subsidy.

Should I refrain from ever, ever writing about memes again? Absolutely—💯.

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sstrudeau
27 days ago
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Housing: Part 268 - Trickle Down Economics meets Housing Policy

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"Trickle down" economics refers to economic policies that are meant to remove obstacles to private capital development.  The story generally told (skeptically) is that if employers pay lower taxes, they will invest more, hiring more workers and raising wages.  This tends to rhetorically frame economic activity in a way that focuses on anecdotal transitional shifts between employers and employees.

As framed, there isn't anything explicitly false about this description, and, as framed, this story is one about which we might be wise to be skeptical.  The devil is in the framing, because:
  • Systematic effects are more important than anecdotal effects.
  • Long-term effects are more important than transitional effects.
  • The relationship between producers and consumers is more important than the relationship between employers and employees.
In each case, "trickle down" rhetoric focuses on the least relevant ways of contextualizing capital-friendly economic policies.

This rhetoric is even used in housing markets.  In a 2015 opinion piece in the San Francisco Examiner, titled "It's still called trickle-down economics, even in San Francisco", then San Francisco Supervisor David Campos wrote:
Free marketeers are claiming that if we build enough luxury housing it will eventually trickle down and turn into housing for the poor and middle class. This is the failed policy of Reaganomics at its worst.
I had referenced the Campos piece before.  I was revisiting it recently, and I had forgotten how obtuse it was.  It is strange that the "trickle down" rhetorical logic is applied here to housing.  First, housing is basically a pure form of capital.  There is no employer/employee relationship.  This is purely a matter of capital deployed for use by consumers.  Where in this story is there anything trickling down?  If 100 new units are allowed to be built, then there are 100 new units available, now.  If those are "luxury" units, they are still units.  It's not like high income households are some sort of alien symbiotes that spontaneously reproduce when a unit is completed to claim the new space.  Somebody, most often somebody already living in the city, will claim the new unit and another unit will become available immediately.  There is no need to wait for some hoped for investment.  The investment itself is the initial action.  There is nothing left to trickle.  In traditional trickle down rhetoric, one might argue that giving tax breaks to developers in the hope that they invest it in new units is futile.  It's the hope for the investment itself that is deemed naïve.  But, here, the investment is the whole point of the thing.

Second, Closed Access housing policies have been in place long enough to see the difference between the long-term effects and transitional effects.  Campos is complaining here about transitions - that new market rate units will just attract wealthy new tenants, leaving working class tenants out in the cold.  Let's forget for a moment the near-sightedness of that contention.  We don't need to logic through the way new supply would help all parts of the local housing market.  We don't need to work through the logic because there are "n minus 5" metropolitan areas in this country who have what Campos would call trickle down housing markets, and all of them have more affordable housing.  In fact, the more "trickle down" they go, the more affordable their housing is.  Working class families aren't lined up in Dallas, hoping for that promised affordable housing which somehow never comes.  It never left.  Don't call it a comeback.  It's been there for years.  Where are working class families waiting for affordable housing to trickle down?  New York City, Boston, LA, and San Francisco, where heroes like David Campos get letters from desperate residents who need someone to fight against the free market ideologues to help secure them some lottery ticket to publicly subsidized housing.  (From the op-ed: "If you're currently seeking housing in our city and can't afford market rates you have three choices: be homeless, leave, or get on a long wait list for low-income housing.")

Third, these policies have also been in place long enough that we can see the systemic effects.  Campos references 2,000 Ellis Act evictions, which arise when landlords sell homes that have tenants in them, usually at controlled rental rates.  Each of those is an anecdote.  But, tens of thousands of households are forced to move away from the San Francisco metro area every year because of the lack of units.  Those are systematic.

Part of the problem is that cities like San Francisco have implemented such extreme levels of capital repression for so long, that their housing markets don't have anything close to market rates.  Even the publicly negotiated "below market" rate units are more expensive to build than units in an actual market would be, but for the capital repression.  And, since this is the case, it seems clear that people like Campos see the housing market in San Francisco as some sort of foreign creature and only the subsidized stock of housing is true San Francisco housing.
When people are evicted from their rent controlled homes we diminish supply. When apartment owners convert units to condos we diminish supply. When homeowners put units on the short term rental market we diminish supply.  
He is making that distinction quite explicitly here.

It is tempting to point out the absurdity here.  I mean, go listen in on any conversation among macro-economists, market forecasters, realtors, Fed officials, developers, investors - basically any group of people engaged in anything but politics.  You will never here a single conversation based on this conceit.  None of those people have ever talked about how rising supply will lead to rising rents.  It is quite the opposite.  In fact, it is part of the problem, because while people like Campos deny a central role for market-developed units in affordability, all of those other people are concerned about stability, and every time new supply in the Closed Access cities gets close to something reasonable, they start worrying about oversupply, and how its going to crater the local real estate market - fearing the ever near bubble/bust dynamic.

But, the problem here is that San Francisco is so far out of sorts that the long-term is far, far away.  It's transition as far as the eye can see.  And, it really would take tens or hundreds of thousands of units to bring costs in market-rate housing down far enough to start to effect supply with costs that are in the range of subsidized affordable housing.  In Campos' world, the real San Francisco really wouldn't benefit from those new units.  It's not that supply isn't the long-term solution.  It's that San Francisco is too far from the end of the tunnel to see the light.

From the piece: "Think about it this way: if there were a bread shortage in San Francisco and the cost of bread skyrocketed, no amount of fancy cake would fix the bread market." and later "If the city needs more affordable housing then let's build affordable housing."  Notice that, here, Campos treats "luxury" housing and "affordable" housing as two different stocks of units, differentiated by some sort of real, material characteristic.

But, this is at odds with his description of the housing market above.  When he describes a unit shifting from subsidized rentals to market condos as a loss of a unit, he implicitly acknowledges that there is nothing special about "luxury" units.  If an "affordable" unit can suddenly become a "luxury" unit simply by moving from apartment to condo, then, surely a "luxury" unit can become an "affordable" unit when supply growth in other parts of the city lowers market rents.

Campos is engaging in some real rhetorical hocus-pocus here.  There is no question that supply and demand work in the San Francisco housing market.  If units rent for $4 per square foot, added supply would bring them down to $3.50 or $3, or whatever.  Campos' position is that if affordable housing is housing that rents for $1 or $2, then reducing rents to $3 per square foot is useless.  That's all happening out in the "luxury" market, which Campos considers irrelevant to the "affordable" market.

He claims that he is fighting "trickle down" or "supply-side" ideology, and that it is he and his allies who actually understand supply and demand.  But, he has rhetorically removed supply and demand from the San Francisco market.  When units are moved from his subsidized programs into markets, he explicitly refers to this as a loss of a unit.  The world of supply and demand has been wholly and explicitly erased from his view.  He goes through the motions of that for us.  You can see him doing it in the piece.

The stock of "affordable" units in San Francisco, which is the only market he acknowledges the relevance of, certainly has nothing to do with supply and demand.  That stock of units is explicitly part of a program that has politically imposed prices in a context of perpetual shortage.

He says, "Let me be clear - not a single affordable housing activist denies the existence of the law of supply and demand."  Really?  His own piece is a systematic contradiction of that statement.  On the other hand, he follows that sentence with, "Where we all agree is that the incredibly complex San Francisco housing crisis won't be solved by the recitation of freshman economics notes." And, on this matter, the rest of the piece is a systematic confirmation of the statement.

Shooting a ball into a basket can be solved by a recitation of freshman physics notes.  However, winning a game of basketball is incredibly complex.  Why?  Because in basketball, one must contend with defense.  Building affordable housing can be solved by a recitation of freshman economics notes.  However, building affordable housing in San Francisco is incredibly complex.  Why?  Because in San Francisco, one must contend with defense.

In historically developed urban centers some defense is inevitable.  There are legacy residents who have certain expectations and demands, and those sorts of demands might be universal - just as complicated if Austin attempts to build a dense residential center for tech workers as it would be in San Francisco.  The international scope of this problem suggests this is the case.  And, surely, in those contexts, nonsense is an important tool for those legacy residents in the quest for stability and exclusion.  So, in a way, this sort of rhetoric is endogenous.  Supply and demand exists for nonsense, too.  But, it must also be true that, on the margin, nonsense might be coaxed into advancing or retreating, and in retreat, might allow for enough progress to pull some cities past a tipping point into functionality.  When it comes to tipping points for the quantity of nonsense, San Francisco is probably nowhere near the margin.  But, cities like Seattle and Washington, DC are.

Seattle and Washington, DC build a lot more housing than San Francisco does, and while supply there has some constraints, housing markets are still functional enough for supply to affect costs in a way that can still be immediately felt in affordable neighborhoods.  Supply and demand is visible in those cities, so that it can't so easily be rhetorically dismissed.  The demand for both housing and nonsense in those cities is strong - in a way, they seem to be complementary goods.  We need to supply the former and not the latter.
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sstrudeau
31 days ago
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The Truth about Student Housing in Ann Arbor

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When residents and visitors comment on the changing face of Ann Arbor they’re most commonly referring to the proliferation of high-rise student housing projects that have popped up along South University, Huron and Washington over the past decade or so. Too often these projects are misunderstood. In addition to my running commentary on the development of these buildings here in Ann Arbor, I work in the student housing business on a day-to-day basis (brokerage across the country) so I wanted to shed a little light on how they work, the supply-demand dynamic at the University of Michigan, and why they’re a necessary evil here in town.

20160513_092611

Zaragon Place, with 248 beds, was one of the first high-rise student projects in recent years, opening in the fall of 2010.

First, it’s important to note these are private housing projects, built by developers and marketed towards upperclassmen students. The university maintains its own housing system, the bulk of which is meant for first year students, and it has also built new housing in recent years including North Quad and the Munger Graduate Residences. The private off campus buildings lease by-the-bedroom typically with parentally guaranteed annual leases and often in larger 4, 5 and even 6 bedroom configurations. The developers have been almost exclusively out-of-town companies and thus far all but Zaragon have sold their projects soon after completion. The characterization of these developers as being profit-motivated and not long-term stakeholders in our community is unfortunately largely accurate.

Second, love it or hate it, these buildings are filling a huge housing need. The first vertical student housing development in recent times was Corner House at State and Washington, which opened in 2003 with just 154 beds. Since that time the university has grown by 8,135 students. Between the university residence halls (1,080 beds) and all of the private development (3,730 beds), there has been approximately 4,810 beds added to the current stock in that time. Not even close to keeping pace. The flurry of new development looks to add an additional 1,241 beds in 2018 and a total of 2,384 over the next 4 years, still not keeping up with anticipated demand. We could argue all day about whether the university needs to or should grow but it has. If there are not new buildings to house students on or off campus, it presents an entirely different set of problems.

Lastly, if it’s clear that the students have to live somewhere, they can live near campus in mid to high rises, we can re-zone some areas a little further from campus for mid-rise development, or they can live way further out and commute in from garden style apartment complexes. To date, the vast majority of new projects have been vertical in D1 zoning areas within a couple blocks of campus. The exceptions would be The Courtyards on North Campus and the new project on Main Street, The Yard. A new development, The Cottages at Barton Green up on Pontiac Trail, would be the first commuter style complex in Ann Arbor although most universities have a plethora of this type of housing. I am generally opposed to this type of student project here in Ann Arbor, it encourages car ownership and places a concentration of students in residential neighborhood. However, it would provide additional much-needed new construction housing at a more affordable price point than downtown.

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Six11 will bring 343 beds to East University in the fall of 2018.

For those that question the need and demand for housing, feel free to peruse my company’s research report on the market:

UofM_ResearchReport_2017

The quick stats: university enrollment is 46,002, a new record, and the freshmen class of 6,847 is the largest in school history. Average occupancy across the market is north of 99%, the highest rate we have ever surveyed at a university. Rents increased over 3.5% year over year although demand for 4 bedroom unit types seems to be waning. All those new buildings?  They’re all full. The worst occupancy was 96%. It’s pretty evident that the student housing market at the University of Michigan is extremely healthy.

What does that mean for the future? The university is likely to pump the brakes on growth in coming years, they’re essentially at capacity to house incoming students on campus. There seems to be a good chance that the university will explore building a new residence hall in coming years, the rumor is a larger replacement for aging Mary Markley Hall. Private development is likely to continue as well, mostly in the South University corridor but I’m hearing whispers of a new project on Washington as well. Students have to live somewhere, I believe the focus should continue to be on a dense projects near campus that dissuade car ownership with a renewed emphasis on quality building materials and design, and attractive, pedestrian-oriented ground floor retail and streetscaping.

 








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sstrudeau
34 days ago
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Course Correct

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Near West 41st Street, Platform Beer Co.’s big open windows look out on Lorain Avenue. Inside the beautiful brick building, the taproom’s ethos is best summarized by the name of one of its most popular beers: New Cleveland Palesner. Opened in 2014, Platform helps anchor SoLo, the comically truncated affectation for the area south of Lorain Avenue in Ohio City.

Ben Trimble, Ohio City Inc.’s senior director of real estate and planning, says for the 11 years he’s been in the area, real estate agents have used SoLo to signal to clients that the neighorhood is investment-worthy. 

“It’s this weird phenomenon in real estate,” Trimble says. “It’s just a way to talk about things and make people really excited about things that weren’t there before.”

Whatever its beginnings, SoLo stuck. The area block club uses the name; a faux-antique map on Platform’s wall identifies it alongside Cudell, Battery Park, Ohio City, Detroit Shoreway and Edgewater. The name has been ironically mocked over many a pale ale. It even pops up in real estate listings. 

The many jokes about SoLo are an indicator of the unrelenting discussion of gentrification in Cleveland. Branded neighborhoods like SoLo make it easy to equate the whole of Cleveland with the few spots with an improved veneer — the Tremonts, Ohio Citys, University Circles.

We are evidently so gripped with worry about gentrification that the City Club of Cleveland has repeatedly made it the topic du jour. It was top of mind during an off-the-record Dinner & Dialogue event at the Black Pig earlier this year. In June, it undergirded a panel conversation about Clark-Fulton, Fairfax and Hough. 

In July, Trimble, Famicos Foundation’s Khrys Shefton, Cleveland Neighborhood Progress’ Mordecai Cargill and SoLo block club chair Julia Sieck spoke about it at a panel on the geography of gentrification. 

Seated on a stage on the recently renovated Public Square, all seemed to agree: equitable development is good, unrestrained gentrification is bad.

But endless hand-wringing that neighborhoods like SoLo are the second coming of Brooklyn in Cleveland is like using a wrecking ball on an empty lot. All of us well-meaning Cleveland liberals are swinging at the wind. There are bigger problems, ones created by decades of inequitable planning, to be concerned about.

“We are fighting [negative] perception in our neighborhood. We are fighting gunshots in our neighborhood. Those are the things that are critical and important,” says Shefton, whose nonprofit works on housing in Glenville. “People eating, people having employment. All this conversation about gentrification is a distraction about the true issues.”

Much of the concern seems to arise from national media, which highlights the most egregious cost of living increases in places like San Francisco. Locals are following the national trend by wearing their concern on their sleeves.

Yet Cleveland is a far cry from the screaming affordability crises in the Bay Area, Boston and Washington, D.C. On the whole, Cleveland’s housing market is showing promising signs but is still far from healthy.

According to data compiled by <a href="http://Cleveland.com" rel="nofollow">Cleveland.com</a> and The Plain Dealer, the median single-family home sale price in Cleveland last year was $33,000. The city’s market is making a comeback, with the fourth straight year in growth and an increase in the number of sales from 3,809 in 2015 to 4,280 in 2016.

It’s not truly apples to apples, but contrast that modest improvement with Cleveland Heights, where the median sale price last year increased by 25 percent, from $78,000 in 2015 to $97,200 in 2016, the best price since the 2007-08 financial crisis, or with the overall Cuyahoga County suburban median of $130,000.

In small pockets of Ohio City, Tremont and even on East 105th Street in Glenville’s Circle North, homes are selling for up to $300,000. An early August Zillow search revealed new SoLo townhomes listed for hedge fund manager-friendly prices of $370,000 and $410,000. But a few blocks south were a smattering of foreclosures and listings for $40,000, $59,000 and $60,000. 

Rents are rising in Ohio City, Trimble says, but that doesn’t mean longtime residents are being priced out en masse. “We had a lot of vacant land, underutilized land in Ohio City,” he says. “We still do.” 

Rents are going up, but Ohio City Inc. is hoping that by owning as much property as possible and prioritizing affordability, it can mitigate the creep of displacement before it gets too severe. “I think that we have a ton of vacant space that’s being developed and that’s a good thing,” says Trimble. 

Problematically, we also can’t even measure whether bands of kombucha-swilling Cleveland Clinic executives are actually forcing longtime residents in Cleveland’s few prosperous pockets from their homes. 

“You can tell whether or not there are young white professionals jogging in a previously black neighborhood,” said Cargill during the July panel. “But there doesn’t seem to be a lot of research about who is getting pushed out, if they’re getting pushed out.”

“Having just completed a master plan for a community, [gentrification] is not something that we don’t think about,” Shefton says. “But you know what I think about more? Equity. How can I make this revitalization plan that we say is for everyone, for everyone?”

For Shefton, that means ensuring residents get the construction jobs to building valuable homes those families can live in.

“If you’re upset about pretty pictures and changing the names, you might not be worried about the right stuff,” says Shefton. “No one is including the details in terms of the differences in the neighborhoods that we’re talking about. Ohio City is a 25-year story. Glenville’s story hasn’t been fully realized yet.”

Indeed, most Cleveland neighborhoods are closer to Glenville than to Ohio City.

Further, it’s not clear we’re all freaking out about the same thing. The term “gentrification,” at least among the urbanists that pick this stuff apart for fun, is understood to have little meaning at all. From its progenitor, sociologist Ruth Glass, to academics like Neil Smith and urban culture authors like Richard Florida, everyone hitches their own definition to it.

In everyday conversation, it describes trendy condos and New Cleveland Palesner, rising living costs and that guy in the neighborhood Facebook group being a jerk about a little noise after 10:30 p.m. 

Ultimately, it means things that are new or things that are different. And no one is ever comfortable with change.

But change must come to Cleveland if the city is to survive. There are still thousands of people to pull out of eye-popping poverty, a school system to keep on track, funding for public transit to find and decades of disinvestment, segregation and population loss to reverse. The city needs economic growth, the stability for honest-to-god corporate competition, jobs and entrepreneurship.

Cleveland deserves to be considered as a whole. Fretting over managed change in a few neighborhoods, by those who have the privilege of time to speculate, does a disservice to the very real and immediate policy problems that we have failed to solve. Let’s fight something real, rather than a specter. 

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sstrudeau
98 days ago
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