[Previous Month in Reviews available here: Mar 12, Feb 12, Jan 12]
Among its many attributes, housing is a deeply personal asset – you are what you live in –
That’s not what we meant by mobile homes
– and so what we are permitted to do in our homes, or with our homes, is likewise deeply personal, and inspires actions from the heartwarming to the confrontational, as shown by the contrasting treatment of dogs, in House me, house my dog?:
Among the experiments Ms. Payne strongly suggests are frustration tests: show the dog toys, but don’t give them to him; show the dog food or bones, but don’t give them to him; command him to “sit” and “lie down,” but don’t relinquish the treat. Ms. Payne acknowledged that this may sound a little cruel, but said the idea was to see how easily a dog lost patience and whether it acted out if it did not get what it wanted on demand.
Frankly, I’m not sure how many New York co-op owners could pass these tests.
Trainers have assorted approaches to and varying fees for interview preparation. Ms. Payne, whose business Walk This Wayis based in her apartment in Boerum Hill, charges $250 for three sessions, although she said that depending on the dog’s baseline behavior, more sessions may be required.
Other trainers (as with apartments, Manhattanprices are higher) charge $175 to $200 per session, or more.
If one has a problematic dog, that has to be money well spent.
The application got accepted? High five!
And boats (or are they boats?), in Sail away, sail away? Part 1, tempest in a teapot, and Part 2, potential sea change:
Some cases are born momentous (NFIB v. Sibelius), some achieve moment (Miranda v. Arizona), and some have the moment thrust upon them, because an individual fired up by a combination of principle and pique stumbles unwittingly onto a major unresolved principle, such as shown by a recent Miami Herald (March 25, 2012) article:
Court documents refer to it as “that certain unnamed gray, two-story vessel approximately 57 feet in length.” To Fane Lozman, it was a floating Florida home never intended to sail the seas. Now, a long-running dispute over exactly what the structure was has landed before the U.S. Supreme Court.
This undated photo provided by Fane Lozman shows his dismantled home in Riviera Beach, Fla. Court documents refer to it as “that certain unnamed gray, two-story vessel approximately 57 feet in length.” To Lozman, it was a floating Florida home never intended to sail the seas.
Then too, homes are the shores onto which wash up those who ventured into the work world and were defeated by it, who return like prodigals to the family couch, which is Going to get old real soon? Part 1, future clouded, and Part 2, the silver (haired) lining?:
“But in spite of the trials and tribulations this generation is facing, they are extremely optimistic about the future,” says Parker.
Let’s hope they stay that way. Either that, or mature rapidly and shift into careers that will generate independent income for them.
We love you, son; now get the heck out of here
Sooner or later though, and preferably sooner for the parents’ sake, the boomerangers will once again take flight, as America recognizes that we are becoming a Renter nation: Part 1, homes are no longer an investment asset, Part 2, homes are always a family-formation asset, and Part 3, homes must revive as a consumption asset:
Conversely, we also have to change the intergenerational zeitgeist from thoughts like these:
“There is something about that that makes you feel like you are not fully a member of society,” Mr. Kinney said.
“You still feel like a child,” Ms. Kinney added, conceding that sometimes she feels that the goal is so far off that it’s not even worth trying.
In a renter nation:
Something wrong with this picture?
· Permanent affordable rental housing will be seen as a fully acceptable adult-living tenure option. (We have this condition now in a few places in America, like New York City, but there it’s a favorably byproduct of the pernicious laws of rent control.)
· We will have found ways to repurpose hundreds of thousands of unsold condos into workforce housing rentals.
· We will be developing true workforce housing and will have eliminated its resource gap.
· We will create new subsidy or financing advantages for workforce housing production.
We had better get on with it, because right now the under-equity homeownership asset class is retarding the economy, household formation, and the reinvention of America’s cities and our national competitiveness.
During April, I hoped fervently – and, as it turned out, incorrectly – that the Supreme Court would take up James Harmon’s rent control case, where had it done so rent control would have been overturned, for the reasons outlined in Correcting Yee v. Escondido by asking the right question: Part 1, the question not asked, and Part 2, the question to ask:
I’m sorry. My responses are limited. You must ask the right questions.
For more than a quarter of a century, I’ve been baffled as to why rent control hasn’t been declared Unconstitutional, but it took until just recently, with James Harmon’s lawsuit against New York City, for me to read the critical Supreme Court decision, Yee v. Escondido, both the decision itself (blue Georgia) and its syllabus (black Georgia), to understand why:
Nobody has asked the Supreme Court the right question.
New York City’s rent control could be Unconstitutional on any of three grounds:
1. Rent control could be a physical taking, an invasion. Yee asked the court that.
2. Rent control could be a regulatory taking – an economic deprivation. Nobody’s asked the court that.
3. Rent control could be a violation of substantive due process. Nobody’s asked the court that.
The Supreme Court doesn’t work that way
I further foreshadowed it in Rent control’s prescient dissent: Part 1, invisible seizure, and Part 2, impossible release:
When, in the summer of 1975, I first moved into a rent controlled apartment, I became an unwilling beneficiary of said rent control in Cambridge – because at the time not only was it illegal for the landlord to charge more than the $202 I initially paid, it was likewise illegal for me to pay more. Back then the law was still relatively fresh (enacted 1972); over the next 22 years, it steadily extended its grasp and eventually reached the absurd end point where it was illegal either (a) for an owner to move into a rent-controlled apartment that he or she owned, and (b) it was a criminal offense to hold a rent-controlled apartment vacant for more than sixty days.
In fact, I witnessed first-hand what I later came to recognize was the self-perpetuating, city-destroying inescapable cycle of judicial rent control
Hence the Rehnquist dissent is both personally memorable and professionally prescient, for as we’ll see, Justice Rehnquist foresaw the encroachment of rent control long before anyone else did:
Alas, the Supreme Court declined to grant certiorari. I believe that was because there was no contradictory ruling – Mr. Harmon had lost (unjustly, in my view, but lost nevertheless) in every previous trial, so the Supreme Court had no conflict of law to reconcile.
You must ask the right questions
Though crises are never to be wished for, when they happen it’s possible to correct a chronic structural mistake, as Ireland is now doing with its approach to local property taxation, as I reported in Irish breakfast: Part 1, Bitter brew, and Part 2, Let it steep:
No one likes to pay taxes. We pay them if we believe three things:
1.They are the necessary minimum amount.
2.We get value for money in services received.
3. Our share is fair relative to other people’s.
As far as I can tell, Fine Gael is doing what I recommend three years ago:
In short, I told my hosts [in 2009], from what I could see of the US, and what little I understood about Ireland, a move to a recurring real estate tax on residential property would be wise – and the only way to do it without committing political suicide would be to connect it directly to increased local autonomy over visible local services.
We’re doing it for the next generation
Then to China, where the need to keep industry churning leads to building flats well in advance of actual demand, in Suburb stuffing: Part 1, If people don’t want to buy flats, and Part 2, Nobody’s going to stop them:
Like adolescents who grow in spurts and are gangly in consequence, emerging nations grow their economies unevenly – often industrial production (and exports) grow faster than internal consumption and people’s standards of living. That mismatch represents a finite asset – an ‘underpaid’ labor force that manufacturers (and in this era, information companies) use to price their goods and services attractively in world markets. Slums are a part of this, as they represent an accessible affordable pool of low-cost/ rising-skill workers. Then slums change, as urban workers demand better living conditions. That’s healthy – cities improve – and yet as they do, and the urban workforce becomes better paid, some of the national competitiveness disappears. That’s why it’ll be much, much harder for either China or India to reach the US’s levels of GDP per capita any time soon – not that they’re handicapped, but rather that the raising of income, education, infrastructure, transportation, civil society, and economies is a gargantuan task.
Beijing earlier this year lowered its annual growth target to 7.5%, signaling that China’s decades of explosive double-digit growth is drawing to a close. On Friday, it reported growth slowed to 8.1% in the first quarter of the year, its slowest pace in nearly three years.
If China’s not careful, it could wind up with excess goods unsold and inadequate domestic demand for those goods.
First we build them, then we worry about whether anyone wants to buy them
Here at home, the overhang of houses means that lenders like Bank of America have decided it’s Time for Foreclosure Plan C:
Not Plan 9?
When Plan A fails, we go to Plan B – and when Plan B fails?
Time for Plan C, as shown in this Wall Street Journal (March 23, 2012) story:
BofA Tests an Option to Foreclosure
As we’ll see, this is less an option to foreclosure than a variant of what happens during foreclosure.
That’s one approach
That shift in US markets, and the unknown world entered once you have the gumption to put a municipality into bankruptcy, raised the curious spectacle of Negotiating with the zombie:
In the eternal contretemps between capital and governments, government always has the nuclear trump card – sovereign power – but that weapon can be played only once, and the fallout is severe. You can screw over Greece’s bondholders, but if you do then you’re unlikely to get any further money from the capital markets, as Argentina has found out for the last decade or so.
That’ll take some forgetting
I finished the month by castigating once again that monstrous embarrassment of architecture which some nevertheless feel obligated to celebrate, in The box the building came in:
In the 50 years since, architects worldwide have declared Kallmann and McKinnell’s City Hall one of the greatest buildings of the 20th century.
Oh? Have they ever been inside it? I have.
No one from the government is here to help you