Michigan ex-pat in Brooklyn, web nerd, banjo novice, loves food, mildly abrasive
680 stories
·
60 followers

Housing: Part 300 - The Global Bubble Hypnosis is a Larger Problem than NIMBYs

1 Comment and 3 Shares
Here is a recent article at the Financial Times.  The headline:
New York property jitters herald declines elsewhere
 The first line:
Clouds are hovering over New York’s housing market.

This is a great example of the mass hypnosis that has infected the public consensus on housing.

There is a broadening realization that the lack of access to urban labor markets and the lack of access to affordable urban housing are the prime challenge of early 21st century economics.  The problem is, solving that problem requires economic dislocation and upheaval of urban housing markets.  If you see falling real estate prices in urban centers should your reaction be to worry about "clouds hovering" over urban real estate markets?  I say, celebrate.

If our primary economic problem is that a lack of housing in urban centers causes it to be overpriced by a factor of 2 or more, then the DIRECT solution to that problem is that urban real estate needs to lose 50% or more of its value.  This article begins by noting that the median price per square foot in New York City has declined by 18% from last year.  Your reaction to that should be, "That's a great start!"  Full stop.  If that's not your reaction, then what are you doing?  What's your purpose?

Further, the article argues that global capital markets are leading to a new synchronization of urban real estate markets, so that additional supply is such a strong factor in bringing down urban housing costs that new units in New York City can bring down prices in London.  Your reaction to that should be, "Wonderful news!  Supply is a much more powerful factor than we thought."  Full stop.  If that's not your reaction, then what are you doing?  What's your purpose?

Reasons given in the article for this drop in New York prices include: (1) removal of tax benefits, (2) "glut" of luxury supply, (3) globalization, (4) "financialization", (5) "ultra-loose" money.  Your reaction to that should be, "Oh.  OK.  Those must all be good things.  Let's do more of those things."   Full stop.  If that's not your reaction, then what are you doing?  What's your purpose?

But, that's not the direction the article takes.  The article notes that sales volume is also down, and, as is the convention, it treats this downturn as the inevitable end of a boom bust cycle.  So, instead of seeing the drop in sales as a sign that all these good things might come to an end - as something we should counter - the article treats the boom that preceded it as the problem, and the solutions proposed are all policies aimed at stopping the real estate expansion before it develops!

This is an explicit defense of a monetary and credit regime that is specified to ensure rising urban real estate costs.

Now, admittedly the problem of solving urban costs is difficult, because normalized, unconstrained urban housing markets would require building with few unnecessary obstructions and low costs.  And, part of what happens in these regimes is that the bridge between basic costs and market value gets filled with all sorts of "limited access" rent seeking.  Developer fees, concessions to advocacy and neighborhood groups and municipal powers, queuing, etc.  These added costs emerged.  They didn't develop as some sort of plan.  So, if supply actually starts to increase enough to bring rents down to a reasonable level, these extra costs will have to be reduced in order to allow new development to come online profitably. Since the cost of queuing is pure waste, the first step here is "easy".  Just keep pushing through more projects for approval that are bringing in those "clouds".  There are a few trillion reasons why local planning boards aren't going to do that to existing owners and developers.

But, for activists and researchers who want to solve the urban housing problem and for global financial journalists who cover these markets, the reaction to that political problem should not be to kill any booms in their infancy.  The reaction should be, "How do we entice these urban planning departments to keep pushing through new supply when it looks like a downturn is coming?"  Because, to refer to any supply in these cities as anywhere close to a "glut" is a laugh.  A horrible, dark, depressing laugh.  There will be a glut of supply when rent in New York City is similar to rent in Atlanta, or even Chicago.  Until then, any use of the word "glut" to describe New York City housing should be met with laughter.

The reason we are engaged in this odd public rhetorical house of mirrors is because we all have a virus in our brain.  It's a cultural meme.  And it's a received canonical premise that there was a housing bubble, and that bubble was caused by loose money and loose credit.

The housing bubble, such that it was, was caused by an extreme shortage of urban supply.  Because of that shortage of supply, the process of meeting the public need for housing requires a "bubble" and the availability of credit that is flexible enough to allow for ownership where rents regularly take 50% or more of a household's budget.  Since supply in those cities barely responds to price, prices in those cities have to be bid up to high enough levels to induce outmigration so that new housing can be built in the rest of the country where supply can react to high prices and high demand.  At the peak of the US housing "bubble", credit markets were just beginning to push market prices to a level that induced that new supply.

Now, it would be better to build ample units in the urban centers.  But, since that doesn't appear to be close to happening, this was a second-best solution.  And, in terms of rent - which is the appropriate measure for considering housing affordability - 2005, briefly, was the one point since 1995 where supply at the national level was abundant enough to moderate rising rents.

Unfortunately, the Closed Access cities in the US are such a problem that in order to create enough housing at the national level, we had to induce a mass migration event out of those cities, and that mass migration event was the source of the dislocations in places like Phoenix that drove the country to demand a credit and monetary contraction.

This is the first step to fixing the problem.  We need to get that virus out of our heads.  The problem, all along, was supply.  Trying to pop the bubble before it inflates is the opposite of what we need to do.  I think the first rhetorical step to beat this virus is to stop thinking about housing affordability and housing markets in terms of price.  Price is a secondary function.  Affordability is about rent.  And, in the end, price is also about rent.  And, in the past 25 years, there have been two successful means for moderating rents.  (1) build like it's 2005, or (2) pull back on the money supply and credit so severely that a good portion of the country is foreclosed upon.

If we had committed to (1), today rents would be lower, prices would be higher, homeownership would be strong, and American balance sheets would be healthy.  It would be nice if a lot more of those American households could also live in the coastal cities.  I don't know if that can happen, but it sure as heck isn't going to happen if there is a consensus reaction to protect those precious urban real estate values every time the solution actually starts to play out by worrying about a "glut" of supply, and then by accepting pro-cyclical credit and monetary policies in order to "pop" the "bubble".

In that counterfactual, where the urban supply problem isn't solved and the rest of us commit to abundant supply, there would be gnashing of teeth about how the Federal Reserve is feeding bubbles and they are at fault for making home prices too high.  We have indulged that intuition for a decade now.  Now we know how wrong that is.  This was the darkest timeline.  Let's roll the dice again and proceed with the knowledge that doing it wrong has provided us.

New York real estate is getting cheaper and is pulling housing costs down in other cities, says the Financial Times, because (1) removal of tax benefits, (2) "glut" of luxury supply, (3) globalization, (4) "financialization", (5) "ultra-loose" money.  OK.  Those must all be good things.  Let's do more of those things.  What's your purpose?
Read the whole story
satadru
75 days ago
reply
New York, NY
sstrudeau
76 days ago
reply
Brooklyn, NY
Share this story
Delete
1 public comment
duerig
76 days ago
reply
This article really does show the inconsistency in our thinking. Everybody wants housing prices to stay low. But everybody wants houses to appreciate in value because they are 'investments'. And that is why the reporting on it is muddled.

There are so many similar confusions when it comes to economics. People want a 'strong' dollar, but get outraged at other countries manipulating their currency to make them artificially cheap. People want to reduce deficits by lowering taxes and keeping their benefits.

My new policy brief at Mercatus

2 Shares
My new policy brief is up at the Mercatus Center.

Most of the content will look familiar to IW readers, but this is probably the best summary of the basic argument - that undersupply of housing caused the housing bubble.

https://www.mercatus.org/publications/housing-was-undersupplied-during-great-housing-bubble

Here is the take-away:
For a decade, the collapse has been treated as if it was inevitable, and the important question seemed to be, What caused the bubble that led to the collapse? This needs to be flipped around. Given the urban housing shortage, it was rising prices that were inevitable. So the important question is, Why did prices and housing starts collapse even though the supply shortage remains? And why were housing starts still at depression levels in 2011?
The surprising answer to those questions may be that a housing bubble didn’t lead to an inevitable recession. It may be that a moral panic developed about building and lending. The policies the public demanded as a result of that moral panic led to a recession that was largely self-inflicted and unnecessary. They also led to an unnecessary housing depression that continues to this day.
Read the whole story
satadru
124 days ago
reply
New York, NY
sstrudeau
131 days ago
reply
Brooklyn, NY
Share this story
Delete

Reckoning with climate change will demand ugly tradeoffs from environmentalists — and everyone else

1 Comment and 3 Shares

Climate change is a crisis. Serious damages are already underway, there’s enough carbon dioxide in the atmosphere to ensure more damages to come, and if carbon emissions continue unchecked, species-threatening damages become a non-trivial risk.

Lots of people acknowledge this. But it’s one think to acknowledge it and another to really take it on board, to follow all the implications wherever they lead. Very few people have let the reality of the situation sink in deep enough that it reshapes their values and priorities. Being a consistent climate hawk, it turns out, is extremely difficult.

Let’s take a look at an example of what I’m talking about, and then pull back to ponder the broader problem.

Zero-carbon energy vs. environmentalists in New England

The operators of the Pilgrim Nuclear Power Plant, the only remaining nuclear plant in Massachusetts, recently announced that they would close the plant no later than June 2019. It has long been plagued with maintenance and safety issues, and nuclear is having a hard time competing in wholesale energy markets.

Pilgrim Power

Pilgrim is a 690 megawatt plant that has been producing 5.12 terrawatt hours of energy per year — around 4.1 percent of the New England region’s energy. (These numbers are courtesy of Jesse Jenkins, an energy analyst and MIT PhD candidate, whose tweet thread got me thinking.)

That represents an enormous amount of carbon-free energy about to vanish from the grid, which any climate hawk must surely view with alarm.

Take the Massachusetts chapter of the Sierra Club (SCM). It proclaims that “climate change is an existential threat.” But it is not fighting to find new ownership or better safety procedures for the Pilgrim plant, or ways for the plant to be compensated for the lack of CO2 it produces (as in New York). It advocates that Pilgrim be closed immediately.

OK, well, Pilgrim is a pretty poor performer, safety-wise, so maybe it’s best to replace it as quickly as possible with clean energy.

So how about this idea? As part of an effort to clean the grid, Massachusetts Governor Charlie Baker has proposed the Northern Pass transmission line, which would bring around 9.45 TWh/year of hydroelectric energy down from dams in Quebec. That would replace the lost Pilgrim energy and add more carbon-free energy to boot.

SCM ... opposes that too. “Not only will we be contributing to ecological destruction on a massive scale,” it writes, “we will be furthering the exploitation of the indigenous people of Canada.”

Well then, what does MSC propose doing to replace all that energy from Pilgrim? Simple: it advocates getting all that power from renewables. But there are two problems with that.

First, it would cost more than hydro. Lots more. Jenkins pulls together a rough comparison:

You can quibble about the exact numbers (check the thread for more discussion), but the point is that existing nuclear and hydro are both extremely cheap. Closing off both possibilities raises the cost of decarbonization substantially.

Second, even if New England citizens were willing to pay that much more for energy, even if procurement and construction went perfectly and the region were covered in solar panels, that energy would be replacing the energy lost from Pilgrim (and rejected from Quebec) rather than adding to it. There would be less progress toward decarbonization in Massachusetts than otherwise possible.

And it wouldn’t even be a one-to-one replacement. Because it is variable, a MW of sun or wind does not play the same role as a MW or nuclear or hydro; it would have to be backed up by lots of natural gas (or oil).

Yes, it will be possible some day to run an energy grid almost entirely on wind and solar, using demand-shifting and energy storage for the role natural gas (the dominant energy source in the state) plays today. But Massachusetts needs energy soon, and of the options available, natural gas is the cheapest and most available, so that is, in practice, what’s likely to fill the gap.

In short, losing Pilgrim (and rejecting Northern Pass) would almost certainly result in a net increase in New England carbon emissions. This isn’t speculation — something similar already happened: when the Vermont Yankee nuclear power plant closed in 2014 (amid promises from environmentalists that it would be replaced by renewables), the region’s energy-sector emissions subsequently increased by 5 percent, after years of decline.

Long story short, as Jenkins says, SCM does not seem to be acting like a group that views climate change as an “existential threat.”

Before moving on, let’s touch on a few necessary caveats here.

First, it’s fine if an individual or group chooses to prioritize rivers in Quebec or the safety risks of existing nuclear power plants over the threat of climate change. Sincerely: it’s fine. I don’t personally agree with that ranking, but people are entitled to their own values and priorities.

But an individual or group should not do so while also proclaiming climate change an existential threat. By doing so they are deceiving themselves, their members, or both. There are tradeoffs among priorities, and eschewing 9.45 TWh of carbon-free energy is a big-ass tradeoff. To make that tradeoff is to prioritize being an environmentalist over being a climate hawk. It should be done with open eyes.

Second, SCM is not a stand-in for “environmentalists.” Environmentalists (even within Sierra Club!) and the broader left are split on nuclear power, hydro, transmission lines, and many other things. They differ on broad strategy, on policies, and on individual regulatory and siting decisions. It’s a fractious, diverse community. This post is not meant to stereotype or bash environmentalists, only to draw attention to the tensions between climate and other problems.

Third, what to do with existing nuclear or hydro power plants is a different question from whether to build new nuclear or hydro power plants. There are climate-based arguments for and against new ones, with good-faith positions on both sides, but it is difficult to think of a plausible climate-based argument against the ones that are already built, running, and paid off. They are generating carbon-free power and we need all the carbon-free power we can get.

Fourth and most importantly: SCM is far, far from alone in prioritizing more immediate and visceral concerns over the somewhat abstract threat of climate change. Almost all of us do it.

Shutterstock

Environmentalists and climate hawks are not the same thing

When I first started covering climate change, I kept running into the same problem. The only term available to describe those concerned about climate change was “environmentalists,” and that just didn’t work. Not all environmentalists prioritize climate change and not everyone concerned about climate change would self-identify as environmentalist.

Climate change will damage natural systems, yes, but it will also be an economic drain, a cause of migration and conflict, and driver of social inequality. Anyone who cares about any of that ought to care about climate change — even if they have no particular love for nature and don’t recycle. There ought to be a word for people who care about climate change that does not commit them to all the cultural and ideological presuppositions of environmentalism.

So way back in 2010, I introduced “climate hawk” (you can read the origin and rationale in this post, or in shorter form in this tweet thread).

“Climate hawk” implies no particular value system, and it certainly implies no position on organic food or camping. One can be both a climate hawk and an environmentalist (some of my best friends ...), but as the story above shows, they do not always jibe. They are not the same, not only demographically but in terms of real-world political and policy decisions.

Being a committed, consistent climate hawk will occasionally put one at odds with the rhetorical tropes, policy habits, and priorities of environmentalism. Think solar panels in fragile desert ecosystems. Wind turbines that kill birds. Transmission lines that bisect species habitats.

And my personal obsession: urban density and public transit (both crucial to decarbonization). The wealthy developed world, but especially the US West Coast, is filled with liberals and environmentalists who are perfectly willing to drive a Prius and buy organic veggies, but raise holy hell if anyone tries to build a bike lane, light rail station, or new housing anywhere near them.

It’s one thing to go to the occasional march, but giving up on-street parking? Let’s be serious.

Cole Burston/Toronto Star via Getty Images

Being a climate hawk is a challenge to everyone, eventually

Here’s the the thing, though. Being a climate hawk and an environmentalist at the same time is occasionally challenging, but being a climate hawk and anything else is occasionally challenging. Anyone who really digs in and follows the logic of climate change, who understands both the risks and the extraordinary mobilization required to avoid them, will eventually find that climate concern bangs up against their other values and priorities.

I have called this climate change’s “totalizing tendency” — the more you absorb it, the more it eclipses everything else.

It is genuinely difficult to wrap your head around the scale of action needed to avoid catastrophic changes in the climate.

Oil Change International

It would mean an immediate, sustained global mobilization of a sort that has no precedent in human history.

If something like that mobilization were to happen, it would not be gentle or pretty. It would not unfold according to the best-laid plans of wonks. Some people, landscapes, and legitimately worthwhile priorites would suffer in the short- to mid-term.

One example: environmentalists often cite studies showing that high penetrations of renewables are possible in the US. But those studies all show that achieving high penetrations requires a country-spanning network of new transmission lines. If there’s a study showing how to fully decarbonize without tons of new transmission, I haven’t seen it. So yes, transmission lines connecting zero-carbon power sources and loads might disrupt some people and ecosystems, but systematically opposing them simply isn’t commensurate with being a climate hawk.

Another example: full decarbonization would require, among other things, an enormous industrial shift. Tens, maybe hundreds of thousands of jobs in polluting industries would be wiped out and workers displaced. There would be new jobs in clean energy, but the US has not typically handled such workforce transitions well. Being a climate hawk means accepting serious social and economic disruption.

Decarbonization will also involve a mind-boggling amount of manufacturing, building, and retrofitting. Multiple solar and wind gigafactories would be built every year. Renewables would cover every open surface. Every city would be as dense and transit-served as possible. Being a climate hawk means accepting that some natural areas will be turned over to energy production and that “the character of the neighborhood” is going to be disrupted by infill and multi-modal transportation systems.

Conservative climate hawks may have to tolerate climate solutions that involve heavy government intervention. Farmer climate hawks may have to tolerate swaths of their land being claimed for transmission lines or wind turbines. Wealthy climate hawks may have to tolerate restrictions on their consumer purchases or airline travel. Environmentalist climate hawks may have to tolerate large-scale carbon sequestration or new rivers given over to dams. And so on.

That’s what “crisis” means. It’s what “existential” means.

It might seem that environmentalists who fall short as climate hawks are uniquely annoying, since they say they prioritize climate change. After all, everyone loves to bash (other people’s perceived) hypocrisy.

But that’s backwards, if you think about it. I would certainly rather someone claim climate as a priority and occasionally betray that claim in action than ... not claim it at all. At least environmentalists are getting closer to taking it seriously than the vast bulk of the populace, which doesn’t take it seriously at all (and that includes liberals and Democrats).

Just about nobody is taking climate change completely seriously at present, because, let’s face it, doing so is traumatic. To absorb the full implications of climate change is to realize that even a level of action beyond what’s reasonable to hope for can at best avert the worst of the damage. Changes in ecosystems that are effectively permanent and irreversible are already underway; within the century, we will enter a range of climate conditions entirely new to our species. There is no “safe” available any more.

To take that seriously is to support massive, immediate carbon reductions, not only at the level of theory, not only in statements and proclamations and pledges, but in the sense of preferring the lower carbon strategy in every local, city, state, or federal decision, whether it’s about land, housing, transportation, infrastructure, agriculture, taxes, regulations, or lifestyle habits.

It means preferring the lower carbon strategy even if other things you value must be sacrificed, even if the lower carbon strategy is suboptimal in light of your other preferences and priorities.

Judged by that harsh criteria, pure climate hawks are a rare species indeed. None of us can claim purity on that front, so we should show one another compassion. But we should also, at every opportunity, drag our eyes back, unflinching, to the terrible truth.

Read the whole story
acdha
205 days ago
reply
The neighborhood I live in (Takoma) is basically the Berkeley of the DC area: organic is huge, 4 vegan restaurants within eyesight of the metro station, the Maryland side's city council voted to be “nuclear free” in the 80s, etc.

None of that prevents a crazy number of people coming out of the woodwork to demand high minimum parking allotments, prioritizing commuting traffic over pedestrian/bike/transit concerns, etc. There's a big apartment complex planned adjacent to the metro station and people are demanding 2 cars per unit parking or the neighborhood will collapse into chaos, even after the last building they did that too is renting out half of its garage as storage lockers due to sustained low demand.
Washington, DC
satadru
204 days ago
Ah yes the nouveau riche "fuck you I've got mine" philosophy of roughly everyone.
sstrudeau
205 days ago
reply
Brooklyn, NY
Share this story
Delete

Weird UBI Argument About Rents

2 Shares

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.

Read the whole story
sstrudeau
273 days ago
reply
Brooklyn, NY
Share this story
Delete

Shaping the World

1 Comment and 3 Shares

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.

Read the whole story
sstrudeau
275 days ago
reply
See also: zoning
Brooklyn, NY
acdha
276 days ago
reply
Washington, DC
Share this story
Delete

The Story Behind the Housing Meme That Swept the Internet

1 Share

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—💯.

Read the whole story
sstrudeau
276 days ago
reply
Brooklyn, NY
Share this story
Delete
Next Page of Stories