Monday, October 4, 2021

Monday Tweets










Marshall is, as usual, right. The coverage of of this story has been extraordinarily bad.













OAN keeps talking ABOUT the recall. "Officials are finishing up the ballot count," different anchors reading the same script said at both 5 and 7am ET. But they're not admitting what AP, CNN, and everyone else reported last night: The recall failed. Newsom prevailed. (4/7)

— Brian Stelter (@brianstelter) September 15, 2021

























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Friday, October 1, 2021

A couple of curious things about Fresno

Like the late Rodney Dangerfield, Fresno gets no respect. The name itself has been treated as a joke.



But Fresno is not a small place. It's larger than Sacramento and around 60% the size of San Francisco, and it has also become a major hotspot in California's housing crisis.

From the LA Times:

The sky-high rents in the Bay Area and Los Angeles garner most of the attention in debates about California’s housing affordability woes. But few places in the country have seen such dramatic growth in what it costs to rent an apartment as Fresno, the state’s fifth-largest city.

The monthly rent for an average apartment in Fresno has gone up nearly 60% since 2017 to $1,469. Fresno’s median home value has risen almost as much over the same time and is now $331,000.

This is not a recent development.


Remember Paul Krugman's theory (discussed here) about high income, high tech enclaves? You don't get much further from that than Fresno. The area is poor. The economic driver is agriculture. 

It's not picking up spillover from a major metropolitan area. It's the biggest city for more than two hours in any direction.

Nor can you blame a population surge. The city's growth rate over the past decade is the lowest it has ever been since it was incorporated in 1885. 

But here's the part that puzzles me most about Fresno and to a lesser degree, about most cities west of the Mississippi suffering through the housing crisis. Take a look at the city from a distance.






Now let's zoom in to the area just west of the city (though we could pretty much pick any direction except northeast).




Why doesn't Fresno sprawl? I'm not saying it should. That's a debate for another time. I'm asking why it doesn't.

Go a mile or two past the city and there's almost nothing but farm land. Yes, it's amazingly fertile and wonderfully suited for agriculture, but still worth a fraction of what the owners should be able to get from developers.

Fresno County covers just under 6,000 square miles. More than half the population lives on less than 2% of that land. Even when you take away the part covered by nation parks and forests, this still leaves a tremendous amount of space and a tremendous potential for profit. Just for fun, take one square mile, less than a tenth of a percent of the county and play around with the value of that many houses in the current market.

And it's not just the current market. Housing prices have been hot and getting hotter for almost a decade. Why have developers been leaving huge and growing piles of money on the table?

The evils of sprawl are frequently invoked in the housing debate. The mystery of the lack of sprawl, particularly in an age of remote work, goes virtually unmentioned, but it really is the dog that did not bark. In places like Austin, Texas, or London, Ontario, or Fresno, California, the conditions are right and the incentives are there, but it just isn't happening, and until you can explain that, you don't have a handle on what's going on. 
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Thursday, September 30, 2021

At least Soylent was in on the joke

Absolutely no red flags here.
It is, of course, a stock trading app.
One such startup, Gatsby, announced Monday that it has raised $10 million in Aa Series A round of funding.

Backers include Techstars Ventures, Beta Bridge Capital, a network of “super angels” placed by ClearList and an oversubscribed SeedInvest campaign. Previous investors include Barclays Bank, SWS Venture Capital and Rosecliff Ventures. 

Jeff Myers and Ryan Belanger-Saleh co-founded Gatsby, a commission-free options and stock-trading app aimed at younger traders, in 2018. The pair had already one successful exit in Dealtable.com, a social data room platform. 

I suppose we should consider ourselves lucky it wasn't a competitor to DraftKings.

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Wednesday, September 29, 2021

What do disgraced turn-of-the-millennium financial gurus do for a second act?

 Should have seen this one coming.

Rich Dad Poor Dad Author Issues Stark Warning, Tells Investors To Grab Bitcoin and Ethereum Before ‘Giant Stock Market Crash’ 


MONDAY, OCTOBER 15, 2012

She left out the part about encouraging you to get your family to risk their finances by co-signing your loans

But other than that, Helaine Olen pretty much nails it.
Robert Kiyosaki, author of the bestselling Rich, Dad, Poor Dad series of financial advice books, is offering his fans yet another lesson in how the rich are different than you and me: they file for bankruptcy not because of ill health or unemployment related issues, but instead as a strategic business move.

Rich Global LLC, one of the corporate arms Kiyosaki has done business under, filed for bankruptcy protection in August, after it was ordered to pay just under $24 million to the Learning Annex and its chairman Bill Zanker.

Kiyosaki was one of the small-time wealth guru mountebanks who made it to the big-time in the aughts by telling his forever falling behind audience that they could get ahead, they just had not learned how. The shtick behind the Rich Dad books was that Kiyosaki was sharing secret money-making strategies of the wealthy with his wage slave readers. The tips ran the gamut from ridiculous to illegal and downright hurtful and included advocating for insider trading, arguing for the purchase of multiple real estate properties with little or no money down and telling followers they could purchase stocks on margin via unfunded brokerage accounts.
Kiyosaki is among the worst but he's not all that unrepresentative. If you feel up to it, the next time you're in a big bookstore take some time to browse the business section. Here and there, you'll find something interesting and intelligent or at least, helpful, but for the most part you'll encounter three profoundly embarrassing genres:

 1. The you-too-can-be-rich books like Rich Dad, which tend to target the financially vulnerable and deliver, more often than not, ruinous advice;

2. The guru books. These are predominantly buzzword-rich seminar fodder in the Tom Peters mode with the occasional pseudo-profound business fable thrown in (and no, I didn't make up the term 'business fable'). These are less sleazy than the first category (they primarily target people who are already in business rather than the desperate and dunemployed), but the advice is not that much better and their cost to society may be greater. Directly and indirectly, American business wastes a tremendous amount of money and what might otherwise be productive man-hours on these bozos.

3. The be-like-me books, where someone with a completely inapplicable success story tries to convince you that you can somehow get similar results by following his or her lead. These are probably the least harmful of the bunch. They can also provide some of the most amusing examples.
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Tuesday, September 28, 2021

A primer for New Yorkers who want to explain California housing to Californians

I shouldn't have to write this but...

1. The three biggest cities in the state are Los Angeles (by a large margin), San Diego, and San Jose. Any discussion of the housing (particularly involving densification), needs to focus on those three. The central valley should also be mentioned as well.

2. (or maybe 1b) For most purposes, the appropriate unit for discussing LA is not city but county. With a population of over ten million, more than one in four Californians are residents of the county. 

3. (or maybe 2... I'll stop now) San Francisco is not adjacent to or even particularly near Silicon Valley. Instead it's around fifty miles away. There are people who live in SF and commute to SV but it's a wasteful and completely unnecessary practice. San Jose is nearer and cheaper.

4. SF is not only more poorly situated and substantially smaller than SJ; it also covers a fraction of the area. Take away landmarks and public spaces and there's not much open space to develop. 

5. For this and other reasons, SF is such a problematic outlier with respect to housing that any state-wide argument based primarily on the city by the Bay will almost certainly be wrong to a significant degree. 

6. The housing crisis is very real but that doesn't mean everything you've read about it is true.

7. While building up is often preferable, building out is almost always an option. We have lots of land.

8. And lots of high ground. If you're going to write about sea levels, remember to look up elevations. For comparison, look up your own city's as well and don't forget to factor in hurricanes and storm surges. If you live in an American coastal city facing the Atlantic or the Gulf, you very probably will not be reassured with what you find.

9. The West is country of extremes. It's not unusual for two people both in the city limits of LA to call each other up and ask "how's the weather where you are?" Mountains and canyons complicate housing and infrastructure construction. The sheer scale of places like LA County make sensible seeming arguments absurd in practice.

10. At the very least, spend some time on Wikipedia and Google Maps when writing about places you're not familiar with (and maybe even places you are familiar with). If you don't, you're likely to make an ass of yourself and we'd hate to see that. 

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Monday, September 27, 2021

Did the NIMBYs of San Francisco and Santa Monica improve the California housing crisis?

Maybe so, if you're willing to go along with a few assumptions. 

First, you have to more or less go along with the arguments I've been making in this thread so far (see here, here, and here). Then there's one more fairly substantial but not unprecedented assumption: If a project falls through, some of the capital that would have gone into it is likely to be diverted to other projects in the area. Though probably not 1 to 1, blocking development in one spot will tend to free up some money for development somewhere else in the same metro area. 

If you buy this and you believe that the NIMBYs of SF and SM were at all effective in their efforts, then these local YIMBY losses have improved California’s housing and transportation crises and have very probably helped reduce the state’s carbon footprint by diverting development to more central, more populous and generally better situated neighborhoods. 

In the case of LA County and the Bay Area, where did that development money go (as of 2017. If I get more recent data I'll update.)? 



Top U.S. Neighborhoods that Got the Most Apartments After the Recession

 

Top 10 U.S. Neighborhoods with Most New Apartments



Downtown San Jose also breaks the top twenty.


As I've discussed in numbing detail (with, I'm embarrassed to say, more to come), the enclaves of the rich seen by the Vox/NYT YIMBYs as the keys to fixing the crisis,  are so badly situated that spending development money in any of them might possibly do net damage. One of the few pieces of good news in the California housing story so far is that we appear to be building mostly on the right places and very little in the wrong ones.

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Friday, September 24, 2021

The trick is that the trick is...

Interesting thoughts on just what constitutes an illusion.






With a bit background.




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Thursday, September 23, 2021

Yes, YIMBYs can be worse than NIMBYs Part III -- When an overly appealing narrative hooks up with fatally misaligned market forces, the results are always ugly.

[This finishes up my first round of of NIMBY/YIMBY posts (see here, here and here). I'll be addressing Joseph's asset inflation argument (more sparks will fly). I'll also be tossing in some data points which may not support my thesis since I haven't gotten around to forming one, but will raise some interesting questions about everyone else's.] 

"There are now, in effect, two Americas: the America of high-tech, high-income enclaves that are unaffordable for the less affluent, and the rest of the country," 

In this case, the narrative (heavily pushed by the NYT) is of rich, white NIMBYs who hypocritically claim to be liberal while selfishly denying the rest of the state affordable housing.  You couldn't make it any better if you had the villain twirling his moustache while a title card popped up saying "BOO! HISS!" (I am really starting to regret saying I was going to leave Boyle Heights out of this).

It is always dangerous when an appealing standard narrative (particularly a flawed narrative) attains unquestioned good status (Bowles-Simpson and the education reform movement were two recent examples). The coverage become increasingly unbalanced and the perceived righteousness of the cause lets journalists rationalize exaggeration and distortion, but things get really bad when you have a narrative that supports market forces that are badly misaligned with the public 

Developers play an important role in NIMBYism and for the most part, that's OK because their interests generally align with ours, but there exceptions, including two of the best ways of making a killing:

1. Make a desirable majority-minority neighborhood into a white neighborhood. 

2. Have the newly rich buy their way into the neighborhoods of the established rich.

The problems with the first are obvious, but normally the second is something we can safely ignore. Selling stars to Sneetches can be ugly but in the end, it comes down to annoying wealthy people arguing over tiny stretches of land which generally are not good at all from a city planning standpoint.

There is often an inverse relationship between what rich people look for in a residential neighborhood and what makes an area suitable for smart growth. The elite put a high value on mountain views, ocean breezes, trendy/touristy zip codes, and mainly a degree of isolation from the common folk. In terms of building population hubs, the first three are deeply problematic and the fourth is out and out terrible. It is no coincidence that SF, SM/Venice (adjacent and both so tiny it makes sense to combine them) and La Cañada Flintridge have natural barriers on at least two sides. (Also see Malibu.) This was a feature, not a bug.   

While SF represents less than 1% of the land in the Bay Area, the plurality and probably the majority of the coverage centers on this postage stamp. (Santa Monica is a flyspeck. Venice is the flyspeck's baby brother.)  Even if they weren't so terribly situated, no development policy changes in these "high-tech, high-income enclaves" is likely to have a detectable effect on housing in California. 

Developers, being mostly rational actors will start where the payoff is greatest, then work their way down. That queue moves slowly and may stop dead in the next economic downturn. Any sane conversation about densification in the Bay Area would start with San Jose, not San Francisco. In LA, developing around the Blue Line (and for that matter, pretty much all of Central LA) makes more sense than Santa Monica.

But the main danger of the SF/SM centric YIMBYs is not that they make horrible recommendations (which they do); it's that they've used the trivial to distract us from the vital. In terms of press attention, lobbying and legislative action, the places we need to focus on receive no support nor does the discussion we need to be having about smart growth. If anything, the fixation on these out-of-the-way tourist traps encourages legislators to water down the standards so that the stupidest growth imaginable qualifies as "smart."


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Wednesday, September 22, 2021

Here we go again

I'm sure it's a good show, but almost no one has seen Ted Lasso.
Almost everyone has, however, heard of it because Apple has spent a mind-boggling amount on marketing and particularly PR. 

If this all sounds a bit familiar (modest and quirky feel-good, fish-out-of-water show from a comedy veteran dominates the Emmys), it might be because you're a regular here at the blog. 

MONDAY, SEPTEMBER 28, 2020

I have to admit, it’s kind of a pleasant change to be making fun of trivial things again…

And you don’t get much more trivial than the Emmys.

First off, any show with Eugene Levy or Catherine O’Hara is doing god’s work and having the two work together is going above and beyond. I haven’t gotten around to Schitt’s Creek yet, but I have no doubt it’s a deserving show which certainly makes this a feel good ending:
In 2020, the sixth and final season was nominated for 15 Primetime Emmy Awards. This broke the record for the most Emmy nominations given to a comedy in its final season. During the 2020 Emmys, the show became the first-ever comedy or drama series to sweep the four acting categories (Outstanding Lead Actor, Outstanding Lead Actress, Outstanding Supporting Actor, Outstanding Supporting Actress) and one of only four live action shows, along with All in the Family, The Golden Girls, and Will & Grace where all the principal actors have won at least one Emmy Award.

If anything, this understates how unprecedented the sweep is. If you look at the other shows mentioned here (All in the Family, The Golden Girls, and Will & Grace), you’ll see that they had Emmy wins or nominations every year they ran. Schitt’s Creek had never won a single statue before this year. Until 2019 (note that date), it hadn’t even gotten a nomination. The Television Academy is notorious for playing favorites. To go from nonentity to “honor just to be nominated” to powerhouse in two years goes against the industry’s laws of nature.

The sudden rise in popularity is often credited to a “Netflix bump” from when the streaming service picked it up in January of 2017 (another date to note). Left out of almost all reporting on these bumps is the role of marketing and PR. Netflix spends billions a year on promotion and while it prioritizes its “originals” (which brings up other interesting points), it still has enough for some fairly generous “Now on Netflix” campaigns.

That said, shows getting a ratings boost from syndication has been a recognized and well-documented phenomenon since the business model was established in the seventies. There’s no question that Schitt’s Creek got a bump, but just how big was it? Though not perfect, Google trends can provide a pretty good picture of the interest in a show.




Post-Netflix numbers were certainly better but after settling down, they remained relatively flat for well over a year then, around the fourth quarter of 2018, at which point they started a remarkable climb. On a related note…
In [May] 2018, Debmar-Mercury, a division of Lionsgate, acquired the U.S. syndication rights to Schitt's Creek. The series is scheduled to debut in syndication on Fox Television Stations throughout the U.S. during the Fall 2020 television season. The series is also began airing reruns of series on Comedy Central on October 2, 2020.

Despite its low cool factor, television syndication remains a tremendously lucrative business. For a fairly obscure cable/Canadian show like Schitt’s Creek, awards and media buzz can greatly increase marketability. It would be shocking if Lionsgate, a company with billions in revenue and a substantial PR budget, didn’t launch a major campaign and, given the Q2 acquisition and time to plan the campaign, we’d expect the money to start flowing in October, 2018.



In 2020, this PR push was followed by an aggressive Emmy campaign.





I don’t want to get carried away – this is just one metric (a noisy one at that) and some anecdotes – but the standard narrative (check this Vanity Fair piece for an example that adheres strictly to the form) doesn’t really fit we we see here, neither with the Netflix bump nor with finding an audience. Instead, we have another example of how PR departments shape things like awards and media coverage, and unfortunately not just on trivial matters.
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Tuesday, September 21, 2021

Cage match continues on development

This is Joseph.

So one piece of the ongoing housing debate is that nearly everyone agrees that housing prices are becoming a crisis and there is no shortage of simple solutions. However, what I like about London, Ontario as an example is that no simple solutions are able to be easily proposed. It is a web of problems, working together. Why is the web intractable?

I think it is because of incentives. Government, which heavily regulates housing, has incentives at all levels to push up asset inflation. Matt Yglesias took on the issue of Somerville, which is in liberal Boston and is getting both less dense and more expensive. Housing prices in all of Canada are continuing to go up and I expect that this will accelerate to some extent, as small apartments are less desirable in the context of pandemic restrictions on things like malls, coffee shops, and indoor entertainment (if you think indoors is not important in Canada then I invite you to visit Saskatchewan in January). 

We know that housing wealth makes people more likely to spend and may compensate for things like stagnant wages. We also know that housing price collapses cause underwater mortgages with horrible effects on labor mobility and bank solvency. Imagine if the prices in London, Ontario reverted to the long term mean -- people who had bought houses in the past 5 years would be destroyed and many, many loans would go bad.

So you have an incentive on all parts to increase asset inflation. People like having their houses become worth more money and making a large profit. They like plentiful parking and low levels of local traffic. They generally like affluent neighbors. Cities like taxes and keeping wealthy citizens happy. National governments like to keep the banks solvent and try to use low interest rates to stimulate the economy. Yes, even in the face of a housing bubble so large it might crack the economy open. 

So the reason I am YIMBY sympathetic is that, no matter how daft their ideas are, they at least are not conspiring to inflate assets further. This is less of a crisis in the United States but nobody can look at the Canadian housing market and feel comfortable. 

So this really is my reply to Mark: at least the YIMBY are trying to find a solution. His analysis of Krugman suggests that they are not doing a good job of it, but at least they are identifying a real problem. In my view, the emerging link between housing prices and homelessness is a bit of crisis for low income Canadian and American residents, and it needs to have some solution. Stopping asset inflation would be a good place to start. 
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Monday, September 20, 2021

Krugman then told how the ring of mountains almost kept the Challenger Expedition from finding the lost city of Los Angeles

God, this is painful.

Economists trying to understand the rise and fall of regions within a country often rely on some form of economic base analysis. The idea is that a region’s overall growth is determined by the performance of its export industries — that is, industries that sell mainly to customers outside the region, such as the technology firms of Silicon Valley and the Los Angeles entertainment complex (or, here in New York, the financial industry). Growth in these industries, however, generates a lot of growth in other sectors, from health care to retail trade, driven by the local spending of the base industries’ companies and employees.

...

One way to think about this is to say that California as a whole is suffering from gentrification. That is, it’s like a newly fashionable neighborhood where affluent newcomers are moving in and driving working-class families out. In a way, California is Brooklyn Heights writ large.

Yet it didn’t have to be this way. I sometimes run into Californians asserting that there’s no room for more housing — they point out that San Francisco is on a peninsula, Los Angeles ringed by mountains. But there’s plenty of scope for building up.

I'm a huge fan of Paul Krugman. For me, he's by far the best opinion columnist the NYT has. He's a sharp and insightful writer, but like a lot of smart people (see Felix Salmon on the television industry), when he starts talking about something he knows nothing about, his "maybe I should check this" indicator fails to engage. 

1. SF is not part of Silicon Valley; it's around fifty miles away. 

2. People who want to seriously discuss Northern California housing focus on (or at least mention) largest city in the Bay Area, San Jose.

3. Neither the city nor the county of LA is ringed with mountains. We do have some pretty good peaks (the high point in the city is over five thousand feet. Twice that for the county), but they run mainly to the north.

4. More importantly, LA has tremendous scope for building out. That doesn't mean it's a good idea (it's almost certainly not), but LA County has over four thousand square miles of land including tens of thousands of acres of farmland. Add the Inland Empire and we're looking at around thirty thousand square miles. We are not spatially constrained.

For the record, I'm for building up Central LA (much more than Krugman and the rest of the NYT/Vox NIMBYs who favor developments on the edge of the county). I know first hand how bad the housing situation is in LA, but the NYT's take on this has been terrible.




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Friday, September 17, 2021

The cage match goes wild

This is Joseph

Mark had a thoughtful reply to me here. In response I am going to make a strong argument that there is a very simple way to find places to increase density. Build where the prices are high. Not just the cities where the prices are high. I mean the residential neighborhoods with the highest underlying cost per square foot of residential land.

Housing tends to be a ladder. If there is a great new apartment building in Georgetown then people will move there (with its proximity to all sorts of great things) and that will ease pressure from gentrification in Anacostia. It is close to a lot of amenities and people want to live there -- the median house price exceeds a million dollars. This is more than double that of Anacostia. 

Georgetown lacks a metro station, it is true, but that could be remedied with political will and how better to generate than than the residents of a high resource area? If you try an experiment in Watts (a Los Angeles neighborhood) that doesn't work so well, there is a lot less pressure to implement fixes. 

That said, the environmental issues do matter. It is unclear whether we need more density in New York city, for example, given rising sea levels and already high levels of density. It is probably a good case for stewardship of the infrastructure that is there and some tough thinking about sea walls. This is a good argument for the "every case is different' and the reason why a national conversation is so hard. Seattle has a completely different risk from climate change than New York City or Miami, due to geography alone. Denver can probably ignore any plausible amount of rising sea levels, but might care a lot more about drought. 

This issue is not just a US issue -- look at the changes in London Ontario housing prices. 


This is a mid-sized city with a mid-ranked university and a 9-10% unemployment rate. Rents are also spiking, so it isn't just houses that are becoming expensive. Unsurprisingly, London now has a growing homelessness problem. And really, that is the entire game. The real reasons that you have had the rise of the density movement is not that crowded is good, it is that there are a limited number of ways to combat the escalating cost of housing that is slowly crushing young people and generating housing problems for people on the margin. 

I remain open to alternative proposals that would drop the cost of housing, I am just worried that car commuting is hitting structural limitations, cars are getting a lot more expensive, and that dense housing is the best shot to drop prices. Very happy to lose in the next round of the epic cage match! 

EDIT: Mark pushed back hard on the September 16th post on using neighborhood examples, which were in this post before I had a chance to read his second post. I think that this exclusion of examples puts one in a hard spot. Real estate is unusual in that every case is always different in some details (no two pieces of land have the same geometry, for example). 

So one can argue that my Georgetown example is one small parcel of land. But DC is extremely expensive (see million dollar median home prices cited above) and has a huge height limit. There are buses, metros and all-season walkability, with many employers in walking distance from NW DC. 

I think the crux of NIMBY versus YIMBY is the question of whether people living in an expensive neighborhood have the ability to increase housing costs, via scarcity, at the cost of limiting the rights of others to develop property that they own. Obviously YIMBY have daft ideas, but the London, Ontario example is a great case of an entire city tripling housing costs and seeing rents go up by as much as 15% per year. The city has 380K inhabitants (and is surrounded by farmland not other developments), so it seems unlikely that the city has simply hit the carrying capacity of a city, beyond which cars cannot work, while simultaneously being unable to develop transit alternatives. 

Los Angeles is a terrible example because Los Angeles county is a complex metro area with non-trivial geography issues and ten million inhabitants. Similar issues are true for New York City and San Francisco. The real canary in the coal mine is the huge cost increases (and consequent rise in homelessness) in cities that are small, have plenty of road capacity, no geographical constraints (London is on a plain, surrounded by farms), and that did not suffer any of these issues 20 years ago.

Now it is true that one apartment building in Santa Monica isn't going to change things. But something is going very wrong if even small cities are seeing these huge increases in housing costs. 

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Thursday, September 16, 2021

Yes, YIMBYs can be worse than NIMBYs Part II -- Peeing in the River

Last time, I suggested the following rules for prioritizing development:

 1. Locations should be centrally located in a high population area. Important to think in terms of traditional and electric bikes, as well as other micromobility options in addition to public transportation (particularly buses).   The object is to have access to the widest possible range of jobs, shops, schools, etc. Sites cut off in one direction by mountains or large bodies of water are always sub-optimal.

2. And well served by EXISTING public transportation. Ideally within walking distance of a major hub like Union Station. Failing that, directly connected to one of these hubs by rail or rapid bus lines. Think North Hollywood. Particularly if not served by a good metro line, it needs a good selection of reasonably high frequency bus routes going north, south, east and west. Think Echo Park. 

3 Given the costs and carbon footprint of construction, we should avoid sites that are viable now but which probably won’t be in the near future.

a. For coastal cities, elevation should be at least twenty feet. For areas prone to storm surges (pretty much everywhere back East), add another twenty feet to that. Given the economic and environmental costs of building and demolishing large structures, it makes no sense to put them in locations that will be underwater by 2050.

3b. For cities in the West, areas with high risk of megafires should be avoided. In addition to the obvious importance of not putting people in harms way, keeping housing out of burn zones makes essential controlled and managed burns easier. At the very least, we shouldn't have policies that encourage development in Western wildland-urban interfaces.

4. Money matters. Developable land matters. Constraints matter. Magnitude matters. None of the distributions are uniform. The costs of increasing density by, say, a couple of thousand people per square mile varies wildly from town to town and neighborhood to neighborhood.


How do these rules align with where the YIMBYs focus their efforts, attention and political capital?

The three areas that have long been in heavy rotation with the California YIMBYs are, in order, San Francisco, Santa Monica and Venice Beach. Trailing the pack, the NYT has singled out La Cañada Flintridge and Matt Yglesias did a post on Beverly Hills. I'm not cherry-picking here, at least not consciously. With the possible exception of some gentrification battles in majority-minority neighborhoods like Boyle Heights, these are all the places that come to mind.

San Francisco is one of the worst places in the Bay Area to build if you want to alleviate the housing crisis and reduce commuting. It's an hour and a half from the population and employment hub of San Jose and Silicon Valley. Geographically, it's an isolated postage stamp (though still far larger than any of the other cities/neighborhoods on this list). Even if you could build up every one of its forty-seven square miles (and, of course, you can't), you'd still have a trivial impact on housing compared to similar development in larger and much less dense towns such Oakland and, yes, San Jose. There's always the chance that new housing will attract more Silicon Valley tech workers willing to make the hellish commute in order to have a cool zip code. Just the opposite of the outcome we're hoping for and already a problem.

While the fixation on San Francisco is odd, the focus on Santa Monica and Venice is simply bizarre. Tiny (covering combined about twelve of LA County’s four thousand square miles), out-of-the-way, cut off by ocean to the west and mountains to the north. Scoring miserably on places readily accessible by public transit (the E line is terrible though proposed upgrades may improve this somewhat). A big chunk of SM is designated a wildland-urban interface. Venice, while safe from fires, is one of the few parts of LA low lying enough to be threatened by rising sea levels. 

La Cañada Flintridge, in addition to being tiny and isolated, is almost uniquely menaced by megafires with wild-land on both north and south. 

Beverly Hills may be the leper with the most fingers here, but it is still very small (<6 square miles), not centrally located, cut off to the north by hills and canyons, and obscenely expensive. [I hope I’m anything on this last one. BH is one of the parts of LA I’ve explored the least. It’s not a very interesting place.]

To summarize, when you put aside gentrification of black, Latino and Asian neighborhoods,  practically all of the discussion of of the villainy of California’s anti-density NIMBYs and the heroism of the YIMBYs has focused on pieces of land that are vanishingly small and situated in some of the worst spots imaginable for development. 

This is not a coincidence. It is a direct result an overly appealing but fundamentally flawed narrative combined with fatally misaligned market forces and a dollop of NYT toxic provincialism (I expect so much better from Paul Krugman). The quality of the discussion is so badly thought out and relentlessly trivial that it is next to impossible for serious solutions to get any traction.

Next time, why things are so bad (after a rebuttal from Joseph).

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Wednesday, September 15, 2021

They used to wait till the last minute

Via Andrew Gelman


From NBC News:

Republican Larry Elder appealed on Monday to his supporters to use an online form to report fraud, which claimed it had "detected fraud" in the "results" of the California recall election "resulting in Governor Gavin Newsom being reinstated as governor."

The only problem: On Monday when the link was live on Elder's campaign site, the election hadn't even happened yet. No results had been released. And Elder was still campaigning to replace Newsom as governor.


While the timetable has moved up, the basic idea has been around for a long time.





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Tuesday, September 14, 2021

Lifetime caps on dementia costs

This is Joseph.

So I was looking at this proposal in the United Kingdom to cap dementia costs over one's lifetime to £86,000 per person. End of life care costs are challenging, especially as spouse's often pool assets over a lifetime and disentangling what is what can be quite hard.

But the other side of this proposal is that it does nothing to protect the future access to assets of the person under care, as dementia is an irreversible disease that tends to lead to poor outcomes. Now, that would be different if a person was abandoned as soon as they run out of assets. But even stingy countries like the United States use Medicaid to prevent that. 

Instead, the main thrust seems to be to protect the inheritance of the upper middle class. If your house is worth £100,000 and you have £8,000 in savings then the cap does little to protect assets. If you have a house worth £800,000 and £12,000 in savings (say you bought a house in the correct part of the country to benefit from asset inflation) then you have a lot of protected wealth, which you (as a dementia patient) are not going to be spending. 

This is not to say that this policy is necessarily bad or that there might not be good reasons for the design, as is, but that these are very hard policies to design well. 

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