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Monday, May 08, 2006


Gasoline Bid Rents

GAS STATIONS ON MANHATTAN: fewer stations equals less competition.

Wednesday, May 03, 2006



Urban Population growth in lesser developed or third world countries are booming. Cities, like Argentina’s capital city Buenos Aires, are massive cities with well developed cities for there area/country/region and packed full with large numbers of employers. But these cities have a problem. While here in America we are suffering through, and trying to manage or slow down, the new problem known as Sprawl, these cities are suffering from reverse-sprawl or ‘anti-sprawl if you will. What is causing this and what can be done about it?

These cities are suffering; they are suffering because of the massive inflow of people trying to move into the city. These emigrants are trying to find a better life within the urban areas. That better life can only be found in the urban areas of these lesser developed countries, through the employment opportunities that the cities have to offer. Unfortunately, there are way to many people moving into the city, and not enough economic growth within the city to support the massive amounts of new workers that arrive in the city every day. Some find employment, but most do not. Where do those who cannot find work and their families go? They go to the last place they can, to the outskirts of the city. There you will find them by the thousands. With most of the time the entire city will be surrounded by literal walls of poverty. These walls were created in the form of shanty-towns. A shanty-town is an area where large numbers of people live (or squat) in large undeveloped areas of makeshift housing and severe poverty. These areas have little to no electricity, no sewage or running water. Yet, more and more people are moving into them. Why does this occur, one might ask. To me the answer is relatively simple.

People flood into cities because they have found the opportunity costs of not moving into the city and finding employment with its possible higher wage outweighs the chance of not being able to find employment in the city. Unfortunately for the people who were already in the city are competing with these migrant workers which drives the wage down and the requirements for employment up. Way up. This makes it harder for new migrants to find work, and for those who are employed to maintain a job at their agreed upon wage. This does not do anything to help the local economy of the city. In fact it hurts the economy in too many ways to list

What is keeping the economies of these cities and countries with massive <25%>US did during the depression with the New Deal? No, they couldn’t afford to do that either. So, that throws the idea of taking them in right out the window too.

So that leaves the only one other solution to the problem, in my very and probably over simplified example. That solution is to wait and do nothing and the problem will self adjust and dissipate. Because in the long run the impoverished living in these shanty-towns will eventually do one of two things. One, leave on there own accord or two, die; but whether they leave or if they die, it still solves the problem of the severe-unemployment caused by anti-sprawl. So in the long run that is the solution. To let the poor die off, survival of the fittest I guess. But hey, at least they are not suffering from sprawl?

Monday, May 01, 2006


Florida Smart Growth and Charrettes

Florida developers have recently discovered a new development review process weapon in the arsenal to push through projects that is called a "charrette". What is a charrette? Thought you'd never ask:


Or, if you prefer not to click on a link:

Here are the usual components of a charrette:

  • definition of issues to be resolved;
  • analysis of the problem and alternative approaches to solutions;
  • assignment of small groups to clarify issues;
  • use of staff people to find supporting data;
  • development of proposals to respond to issues;
  • development of alternative solutions;
  • presentation and analysis of final proposal(s); and
  • consensus and final resolution of the approach to be taken.

  • These charrettes are being used to push through the beauracratic red tape that can come with development projects, and in a quick summary can be thought of as a town meeting that happens to be on a timer. Any party affected by a development project is encouraged to attend, and the charrette process has been discovered to be particularly useful when an impasse between parties has resulted.

    Now, the Florida developers have found that the charrette process can be particularly helpful when they've identified a profitable project that needs to be pushed through a review process quickly.


    What's unique about this particular charrette is that the organizers feel as though it should be appealing to builders that could be categorized as having a "cookie cutter" mentality. In fact, one of the charrette organizers states that "
    Production builders typically build single-use neighborhoods with pretty much one price point,” and that because of this have shied away from the new urbanist approach. This is in addition to providing the developers with more design autonomy and reaching a greater segment of the market.

    All of this sounds astonishingly simple as an approach to board review of development proposals, and if they have succeeded in at least presenting these politicians and interest groups with an alternative to building the typical suburban developments then it would appear that success can be declared in the war on the cookie cutter neighborhoods that seem to dot the landscape of eastern Colorado Springs. This might also provide some with hope that this would give other builders the economic incentive to consider a more aesthetically pleasing approach to sprinkling the occasional strip mall and development project across our landscape while maintaining an economic model of profitability (but not at the expense of any overall societal well-being and without removing the process of choice for the consumers).


    "McMansion" Craze

    According to an online article I just read, our suspicions have been confirmed: American houses are getting bigger. No big surprise, but here are the stats:

    Average American home size in 1950: 983 square feet
    Average American home size in 2004: 2,349 square feet

    About a 140% Increase

    Source: http://realestate.msn.com/buying/Articlenewhome.aspx?cp-documentid=418653>1=8012

    That’s a notable increase. Moreover, it is not uncommon to hear about houses twice to four times the 2004 size.

    Since the mid 1980’s the term “McMansion” has been used in describing houses that are large and about as different from one another as Big Macs are from each other.

    So, what’s the big deal about McMansions?

    They’re usually built cheaply and front-loaded, meaning that the budget allocation is highly skewed toward curb appeal and monumental entrances rather than efficient, livable, usable space. I’ve always thought they were built for the next buyer, not the current occupant.

    Then there is sprawl. Most of these whoppers have been built in the suburbs, surrounded by acres of grass. The environmental impact of this sort of development is less than positive: irrigation, heating and cooling costs, energy inefficiency, herbicides, pesticides, high material costs, septic systems, commuting pollution, and the like.

    But now, the trend is to come back into in-town neighborhoods, to tear down existing houses to build new, bigger houses. It looks very out-of-place and weakens the fabric of the neighborhood, but that’s not all. Density has been cut in half. Available housing inventory has been reduced. Property taxes go up and push out more residents. It’s a new kind of gentrification, but it doesn’t preserve any architectural heritage; perhaps the opposite.

    The dollar cost of such a project will keep it to a minimum there, but not in less well-to-do areas. In poorer neighborhoods, homes and lots will be cheaper. Displaced residents will have fewer options for housing, and the lower-income housing stock is already in shortage world-wide.

    Then, given the cost of energy these days, I’ve got to wonder how long the McMansions will survive before their own size and inefficiencies will bring them crashing to the ground, allowing them to rest in land filled peace next to those that fell to clear their way.

    Should local ordinances pay attention to over-sized “McMansion” homes to protect our housing inventory and taxable values?


    Insurance denied!

    Recently through a source that shall remain anonymous, I found out that over the past year, several major insurance companies are denying the issuance of new or continuance of existing homeowners policies in certain regions of the south (Florida, Louisiana). This food for thought has gigantic economic consequences regarding the growth of cities in addition to the modification of existing bid rent curves.
    To purchase a house (financed) the house must have homeowners insurance on it. If insurance is no longer being offered in certain areas, these areas will most likely see the following:

    Devaluation of land. If someone can't get insurance on the house, it will most likely not be worth purchasing, by means of financing, and such the price will most likely fall.

    Movement of inhabitants. People will most likely move from the areas no longer accepted for insuracne to just beyond the uninsured zone. This will mean unexpected growth and most likely have regional impact.

    Significant sprawl. The spreading out will occur in the cities unaffected by the policy. Governments would be wise to plan on the influx of people now, for when the market rolls around to the aftershock.

    Higher Prices of Ins. The companies that are willing to cover the homeowners insurance in these locations will do so at a price premium.

    This is simply the market in action.

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