[Previous Months in Review available here: Jan 14.]
[Continued from yesterday’s Part 1.]
Many of my posts deal with the interface between essential dualities: formal versus informal, complexity versus scale, government versus markets, property versus capital, control versus chaos. While some posts start at the macro and work to the micro, others start small and wind up dealing with big issues, as we saw in New York City with its discussion of Round-shouldered psyches: Part 1, Enough room for the fridge?:
Micro-apartment designed by Beriot, Bernardini Arquitectos
Every apartment looks spacious … when it’s empty of people
Every apartment looks appealing … when it’s devoid of possessions.
Looks nice … with nobody and nothing in it
If you did live here, how would you feel as the weeks wore into months; as your bedmate joined you for extended periods; as you accumulated possessions?
The (former) Bloomberg Administration has been betting that plenty of New Yorkers will find these apartments livable and then some, but as pointed out in a good article in The Atlantic (December 13, 2013), happiness is not judged solely by the day you move in:
New York City has a housing problem. Currently, it has 1.8 million one- and two-person households, and only one million studios and one-bedroom apartments. The obvious solution seems to be to develop more small residential units.
Yes, that is the obvious solution, and the Atlantic then spends many words ignoring it, returning only via implication and not statement, much less analysis, in Part 2, Do it in DUMBO?:
As we’ve seen before, because high-rises require a larger footprint than walkups and low-rises (square-cube law and structural reinforcement dictate this), they become much more complex structures, not only for their architecture and engineering, but also in terms of the amenities and services they can provide. And they become machines for living, serviced by professionals. So there is a trade – is it a good one?
For that, many city dwellers might happily trade away 75 square feet and a freestanding bed.
Adults should be allowed choices – though it’s hard to believe that only 75 square feet make the difference. I suspect the development economics requiring trading 250 square feet for the amenities, and that’s equivalent to a room and a half.
Here’s what you get for 250 square feet (and a strategically placed fish-eye lens)
In that context, Pendall says he welcomes micro-apartments as long as they fit within the larger housing ecology of the city –
Though Mr. Pendall’s test sounds reasonable, and is unquestionably well-intended, it’s unverifiable (and hence his statement is either meaningless or boils down to “whatever I like”). Ecologies are constantly changing, everything affecting everything else
– and don’t ultimately displace other types of units for families.
This too, though well-meaning, is unverifiable. In direct terms, any new homes built, of whatever size, by adding to supply reduce demand pressure throughout the ecosystem. But as they add to the supply, they also bring people into the city, creating jobs and revenue and changing the land-use economics.
Tolerating clutter in her desk: Susan Saegert
Susan Saegert, professor of environmental psychology at the CUNY Graduate Center and director of the Housing Environments Research Group, agrees that the micro-apartments will likely be a welcome choice for young New Yorkers who would probably otherwise share cramped space with friends.
[But she] doubts whether it’s a valid public goal to develop smaller units on city land. “In New York, property is just gold,” she points out. “Isn’t this something a developer could do in a [Brooklyn] neighborhood like DUMBO and make a lot of money?”
And we certainly wouldn’t want developers improving neighborhoods and making money, would we?
A developer could make a lot of money developing anything here
By the same token, if micro-apartments are indeed the wave of the future, Saegert argues, they increase the “ground rent,” or dollar per square foot that a developer earns and comes to expect from his investment.
So over time, New Yorkers may actually face more expensive housing, paying the same amount to rent a studio in the neighborhood where they used to be able to afford a one-bedroom.
That would be true only if the additional supply did nothing to alleviate additional demand – which is of course nonsense.
If Ms. Saegert really wanted to bring down the cost of housing, she and her colleagues could spotlight the real scandal – gratuitous over-housing in public housing and rent controlled housing – something that even the British are finally tackling.
With the gradual erosion of zoning rules, the micro-apartment could very well become the unit of the future, the only viable choice for a large number of renters.
Pfui. Get rid of rent control and artificial supply constraints and Manhattan will go up and up and up, staying affordable all the way.
Preferably without the soullessness of Beijing
If Ms. Saegert and friends doubt the ability of markets to respond to emerging needs, they can look either to San Francisco or to Nairobi, where transportation infrastructure emerged without government doing anything to create it, in Nairobi’s case via The self-organizing cellular network:
So comfortable and regulated are we in the formal world that we have fallen into the foolish belief that all networks must be the result of organized and conscious creation, when in fact the genius of markets lies in their ability to use the dynamics of cellular automata – hundreds, thousands, or even millions of isolated individual decisions, each one optimizing based on local phenomena – to create and maintain a robust, ever-changing, and efficient system, such as that of the Nairobi matatus, whose network was made visible by a project referenced in The Atlantic, Cities (February 3, 2014):
This Is What Informal Transit Looks Like When You Actually Map It
Even without captions, you can find the city center
As we saw with the proposed trans-Egyptian highway imagined by Professor Farouk el-Baz, one cannot simply pave a highway between two points and expect a city to grow around it. Nor can one expect commuters to change their journeys without buses to take them there. One might expect bus operators to try new routes, but they’ll do this cautiously, and will not know how to market, unless they have the evidence in front of them.
Another map, produced by Kenya Buzz
So the open-source information adds value and enables the system to change itself.
By contrast with Nairobi, whose matatus are celebrated, envy of a private bus network is currently breaking out all over San Francisco, demonstrating something, though I don’t really know what.
Similar populist anger has already broken out at scale in Spain, though in Spain’s case the reasons are all too apparent and understandable, as I reported in Spain’s Lech Walesa? Part 1, The cost of demotivation,
In Spain, a heroine perhaps as unlikely as Poland’s Lech Walesa is gathering political strength, not coincidentally in liberal Catalan proto-secessionist Barcelona, who is exploiting Spain’s feckless repressionism, which combines many polysyllabic words and long lines of anonymous police behind shields and face plates, with an unwillingness to use force except in the most media-event-creating ways:
Ada Colau is carried out by riot police officers after occupying a bank as part of a protest
I’ve been writing about Spain’s debtor’s economic prison for several years now (November 9, 2010, October 15, 2012, and November 29, 2012), and over that period the housing and foreclosure crisis has not eased – if anything, it’s become structurally intractable, and that is breeding a civilized but determined populist movement that has found or made its leaders, as reported among other places by the BBC News (February 18, 2014):
Hundreds of families in Spain are evicted every day, after falling behind on mortgage payments – and under Spain’s draconian laws they must continue paying off the loan even after the home has been repossessed. Their main source of support is a determined woman from Barcelona – Ada Colau.
As I previously reported, it has been the strategy of the European troika to keep Spain (and Greece, and Cyprus) on a starvation-penance diet. I wrote in November, 2012:
Spain is teetering on the edge of having to accept further budgetary cuts in exchange for another European Central Bank funding round.
Aside from being humiliating (which, let’s face it, is a commodity that a bankrupt debtor should sell, since humiliation is much cheaper than money), it’s micromanagement and adios, sovereignty, where an unelected executive (Mario Draghi) is deciding, in the manner of a Renaissance moneylender, who shall survive and who shall expire.
I’m not responsible for every undercapitalized country in this business
I followed this line of reasoning through to a possible endgame in Part 2, Earnable amnesty, Part 3, Political suicide, and Part 4, Europolitical jujitsu:
As an ecosystem, I find this flabbergasting. Where is the consumer protection? Where are the class-action lawsuits, such as we had in Florida, against robo-signing or punitive provisions imposed without proper notice?
Where is everybody?
The case is overwhelming for an earnable amnesty law to be enacted by the Spanish Parliament, something like the following:
The Spanish ‘Earned Amnesty’ Program
A possible resolution for the PPAM to adopt
1. Deed-in-lieu and leaseback. Eligible homeowners who cannot pay their mortgages may choose to give the bank a deed in lieu of foreclosure and rent the home back from the bank, at a market rent offered by the bank. (If the homeowner rejects the market rent, then the homeowner moves and the bank tries to rent or resell the home.)
2. Post-deed renters have a right to re-buy their home at a price bank’s appraised value (as of now), rising by a stipulated formula (such as CPI).
3. Eligibility. To be eligible, the homeowner (a) has to have lived in the home continuously for the last [three] years, (b) has to have been current on the loan until its debt service payments were reset (upwards), (c) has to have kept the home in good maintenance condition, and (d) must file personal bankruptcy as in the next point.
4. Voluntary personal bankruptcy. A foreclosed homeowner files personal bankruptcy, surrenders excess assets (beyond the typical US-style personal property exceptions), and is released from the remaining unpaid loan balance.
5. Only one opportunity. Homeowners who take advantage of the earned amnesty program may not do so again for the next [seven] years.
You have one chance of salvation before the last deficiency judgment
In the Earned Amnesty program, the concept is that the bank declares a value for the home and a market rent for the home, and the homeowner chooses whether to rent at the market rent, in the hopes of being able to re-buy at modest inflation from the market value. If the home’s price is genuinely depressed, the bank will set the rent and market price at realistic figures, because an occupied home is much better than a vacant one.
Earnable amnesty is designed to clear the inventory backlog, to give homeowners a way out of economic debtor’s prison, and to restore appropriate motivation to both homeowners and banks. There’s just one little problem: Spain’s leaders think it is political suicide.
Bad politics?
Se se puede translates to Yes we can.
The European Court of Justice’s ruling gives Prime Minister Rajoy an opportunity for nifty Europolitical jujitsu – accede to the ECJ’s ruling and tell the ECB that the Spanish Parliament has no choice but to enact relief legislation. Then simply stand back and get out of the way.
That little thought experiment has a larger policy point: Spain is operating under impossible rules. Spain must compel the rules to be changed, and since Prime Minister Rajoy has already capitulated to Brussels, he must find a Brussels peer to use in opposition to Brussels. The European Court of Justice has unwittingly given him that opportunity, and he should have seized it.
But he didn’t. The Prime Minister reacted as a politician might:
Shortly after, the government drafted a set of strict new laws against public protests, laws that many believe are aimed at Ms. Colau’s initiatives. The laws introduce steep fines for those who take part in unauthorized protests, publish pictures of police officers or interrupt public events.
A flatfooted elected official versus a charismatic and photogenic populist. Despite the disparity in apparent power sources, my money’s on the newcomer.
One of us has the power – one of us will gain it
Right now Ms. Colau’s movement is merely anti: anti-foreclosure, anti-government, anti-Brussels. It must become for something – what will that be?
What will her movement be for?
