Tuesday, January 27, 2015

Vancouver's Wild World of De Facto Density

How zoning distorts the demand for housing at Pacific Standard magazine.

Theme: Gentrification

Subject Article: "Low-Rent Mansion Living? In Vancouver? Really?"

Postscript: "Toronto's shrinking condos: Built for families, perfect for roommates or couples without kids":

The three-bedroom condominium Krishna KC owns on the 21st floor of 126 Simcoe St. was ostensibly built for a family. When developers tried to build the tower, they agreed to make 10 per cent of units from floors 19 and above three-bedroom ones, a condition applied by the city in order to create new dwellings for families.

Mr. KC, a property investor, bought the unit preconstruction and rents it out – but not to whom the city had in mind. His current tenants are a trio of roommates in their early 20s with jobs in marketing and sales. They’ve turned the condo into a bachelor pad: there are two flat-screen televisions, an Alexander Keith’s chalkboard – the kind pubs use to advertise drink specials – is set up in the kitchen and bottles of gin, vodka and Gatorade are stored on every available surface.

I'm tempted to deviate from my game plan and discuss how supply, in this case, was supposed to induce demand. The intended demand would put, perhaps, two incomes in a space that now supports three incomes. Furthermore, the dual income house (if both parents do, indeed, work) is burdened with dependent costs (e.g. child care) that chip away at the money available for mortgage or rent payments. Conventional metrics such as average income and population don't capture the differences in demand for the same urban space. There exists much error (and hot air) in our models of real estate markets.

Tuesday, January 20, 2015

The Geography of Housing Affordability in Texas

Housing affordability and overstating geographic abstractions at Pacific Standard magazine.

Theme: Geography of ironic demographics

Subject Article: "Take A Look At Very Specific Cost Of Living Maps For Texas."

Other Links: 1. "The Midwest is outpacing the South in creating manufacturing jobs."
2. "Is Life Better in America's Red States?"
3. "Brooklyn And Park Slope Are Getting Less Alike, Not More."
4. "Map: Brooklyn residential price per square foot from 2004-2012."

Postscript: In a world where metro regions are the economic geography of choice, I wouldn't pay attention to conclusions drawn using a US state as the geographic unit of analysis. Bad enough treating a metro as a real estate market monolith. We are just beginning to grasp the real estate premiums associated with access to public transportation. More supply elsewhere in the region won't magically reduce prices for housing in areas with good access to transit. Yet the analysis of the effect of land use regulations is at the scale of metro. In such a light, one can't be so sure that Toronto is a good example of "a city where NIMBYism is kept in check." The debate about housing affordability remains ideological.

Wednesday, January 14, 2015

Shrinking City Chicago

At Pacific Standard magazine, Chicago is dying where the population is growing.

Theme: Ironic demography

Subject Article: "Chicago City Trends."

Other Links: 1. "Chicago Is Dying."
2. "Pittsburgh’s Hidden Economic Boom."
3. "How California Bested Texas."
4. "Globalization and Atlanta’s Gated Urban Core."
5. "Multiplier Effects: Connecting the Innovation and Opportunity Agendas."
6. "Globalization: Stiglitz’s Case."

Postscript: From "(Mis)leading Indicators. Why Our Economic Numbers Distort Reality":

Economists and analysts loosely refer to statistics measuring GDP, unemployment, inflation, and trade deficits as “leading indicators” and subscribe to the belief that these figures accurately reflect reality and provide unique insights into the health of an economy. Taken together, leading indicators create a data map that people use to navigate their lives. That map, however, is showing signs of age. Understanding where the map came from should help explain why it has become less reliable than ever before.

Our map of leading demographic indicators is showing signs of age. Population change and net migration tell yesterday's story, not today's or tomorrow's.

Tuesday, January 06, 2015

Pittsburgh’s Hidden Economic Boom

Doubt the numbers and disaggregate the data at Pacific Standard magazine.

Theme: Ironic demographics.

Postscript: Pittsburgh poses an interesting conundrum. Sluggish job creation numbers and demographic decline have gone hand-in-hand with a dramatically rising educational attainment rate and increasing per capita income. The simple answer would be that less people are slicing up the same total income pie. There's some truth to such warranted skepticism about the good news data. However, other dying cities don't look nearly as robust. Pittsburgh is quite the outlier from its Rust Belt cohort. Assume employment and workforce stays flat for a decade. For every manufacturing job lost, the region gains a job requiring a college degree. In Pittsburgh's case, the job created is likely associated with the higher education industry, which is a cluster on par with Boston. Local leadership would be downright depressed about the lack of quantitative gains. Meanwhile, the qualitative transformation is nothing short of astounding. Try selling that to your constituency. Pittsburgh remains Shittsburgh.