Rich and Strange Aeons

One tool I use to expose the real value of parking spaces it to ask how much a food truck would be willing to pay. Probably a lot more than $1/hour, at least during lunch time in busy areas! Or, more hypothetically, small shop trucks similar to the sunglass or watch repair stalls you find in the middle of indoor shopping malls. Or how much someone with an RV might pay for a reserved parking space, even if they have to drive off periodically for fuel fluid exchange -- certainly more than the $30/year Cambridge and Somerville are charging residents.

Anyway, in Koreatown I've observed some of those non-food trucks, grocery trucks run by Latinos. I finally patronized one yesterday, bumping into it on my walk, seeing clementines which I was out of, and feeling less averse to human interaction. 3 minutes away vs. 6 for my supermarket, outdoors (natch), and competitively priced: $3/lb for the mandarins, I think $1/2 lbs for bananas which is cheaper than Ralph's price. I didn't process the price of the potatoes and ginger, but I left with a rather heavy bag I'd paid $6.50 for.

OTOH there was a single-pack of Shin something ramen for $1.50, which seems high.

In all sincerity, free enterprise at work! Woo.

I wasn't paying that much attention but other things present: tomatoes, big oranges, other kinds of ramen, ripe bell peppers, and I think a whole lot more.

Edit after a second look: onions, apples, eggplant, pineapple, mango, Snickers, Kit-Kat, Doritos and other chips, tortillas, tostadas, sugar, more kinds of ramen, Theraflu, more. A sign said toilet paper and cleaning chemicals though I did not see them.

https://qz.com/1167671/the-100-year-capitalist-experiment-that-keeps-appalachia-poor-sick-and-stuck-on-coal/

A 2017 longform article that I just got around to reading, on the economic abuse of West Virginia/central Appalachia. Outcomes: high poverty, low income, low education, higher mortality, higher opioids...

It's an absentee extractive regime, like many colonies. Mines are owned by outside companies, coal wasn't taxed by the state until the 1970s, tons of profit simply exported. Quintessential company towns: workers living in company housing, paid in script, stuff with overpriced company stores. (Maybe less so now, but significant history.) Classist and underfunded schools. Public pays in pollution and land degradation, and now subsidizes the coal companies with outright money.

'Mullins made the National Honors Society. But in eighth grade, an administrator had talked him out of taking the advanced-track classes, telling him his course load looked like too much work for him to handle. Not that he needed much of a push—those classes were filled with the coal-boss kids, who bullied anyone whose dad actually entered a mine.'

'She told her mother she would go anywhere that had at least one stoplight.'

'They come from where even a community college is mostly unheard of. Especially thinking you could move away to a university—that’s not even in the realm of possibility.'

https://transfersmagazine.org/longer-view-the-fairness-of-congestion-pricing/

Summary:

Some people object to road pricing on the grounds of it being regressive. But free roads help the rich more: the rich drive more, and the pollution from congestion hurts the poor (living more near freeways and boulevards) more.

In top congested cities, poor households are 14% of the population but only 4% of peak commute traffic.

You have to spend a fair bit of money to get on road in the first place; free roads are more like matching grants than progressive transfers.

Money circulates: what's paid by drivers can be used to help the poor. Time lost in congestion is just lost, no one benefits.

I like doing botecs or Fermi estimates, and I also like doing them in reverse, framing a number I already know. I'll be doing the latter here.

Say I want to estimate the GDP of the USSR, not trusting their numbers. I'll posit some facts: population of 290 million, rounded to 300 million (I assume they're less likely to lie about numbers of people.) Subsistence agriculture GDP/capita of $500/year. Modern US GDP $50,000/capita -- but we're talking about 1991, 30 years ago. I know US productivity growth has been meh, so let's say the US was $30,000 back then.

So, Soviet GDP will be a GDP/capita (equivalent) estimate times population. From childhood reading I think I also know something about the Soviet lifestyle and economy: concrete apartment buildings with steam heat and electricity, supermarkets, subways, cars, aircraft carriers. Also expenses like ICBMs and a space program. Yeah, they often had the inferior version of things, but an ugly clunky concrete apartment is still a lot of resources.

So what are some GDP/capita estimates? $1000 seems too low, barely above African poverty, if that. $5000? Sure. $15,000? That's half the US of the time -- we also know the Soviets were a lot poorer than America, so it shouldn't be *higher* than that. So 5k-15k, for a GDP of $1.5 trillion to $4.5 trillion. And for a single figure, I like taking the geometric mean, so $8660/capita, and GDP of $2.5-2.6 trillion.

Wiki says $9200 for the USSR, and Trading Economics gives $36-37K for the US of the time.

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As for Wal-Mart, how much could it be making? How many people does it sell to, and how much? I know it started in the US, and failed to expand into Germany, which suggests it has tried to expand. It sells to lots of people, but not everyone. Famously it sells to poor people, so they can't be spending *that* much on it. Many people may go there for groceries and regular household expenses, which suggests $200-400 per month, or $2000-5000/year. How many such regular shoppers? 50 million is certainly a lot in US terms. The US alone can't be 300 million, but maybe it they expanded a lot abroad it could be.

So, 50 million * 2000 = $100 billion/year. 300 million * 5000 = $1.5 trillion. That's a big range! But unavoidable when you don't know much. Geometric mean is $390 billion. Actual number is $514 billion. Not bad. The real figure suggests, at $3000/year per person, 171 million people. Wiki says it's in 27 countries and multiple brands like Asda... though this raises the question of whether the $514 billion was for the whole conglomerate or just "Walmart". Wiki suggests the former, whew!

A longish article on cities (or a country) that have built their way to affordable housing, contrary to the claims of many market-allergic leftists.

http://www.sightline.org/2017/09/21/yes-you-can-build-your-way-to-affordable-housing/

Money-quote paragraph:

"Houston, for example, can be Cascadia’s model for how easy it ought to be to get permits to build homes—if we believed, as Houston does, that building homes is in itself a good thing, our permitting processes would encourage rather than discourage it through endless months of hoop-jumping and politicized reviews. Tokyo, meanwhile, reminds us that placing control over development at senior levels of government, and making development of urban property a right of its owner, helps to elevate the broad public interest in abundant housing choices over parochial opposition to change. (Leaders in California have recently succeeded in passing a raft of new laws to act upon this lesson.) Chicago teaches that a pro-housing political orientation can provide abundant housing even under conventional zoning in a deep blue city, while Montreal offers Cascadia a model of a cityscape no longer of single-family homes but of three-story rowhouses, walk-up apartments, and condominiums on quiet, tree-lined streets close to transit and neighborhood centers. Singapore’s lesson is the promise of erecting high-density, park-like “new towns” on underused city land. And Germany shows us that a future is possible where housing is no longer an investment vehicle but “a very durable consumption good that provides a stream of housing services, not a ticket to financial gain.”"


Relatedly, Vienna and Singapore as two examples of massive public housing: https://www.shareable.net/blog/public-housing-works-lessons-from-vienna-and-singapore
Also useful if anyone tries to tout Singapore as a free-market miracle...

In which I argue that the lack of affordable housing indicates something horribly wrong, and not with capitalism as such.

Have you heard of Walmart? Of course you have. What are they known for? Providing lots and lots of cheap shit. Also for bullying local governments and squeezing suppliers, but that's not the point here, which is: cheap shit. They have nicer competitors: Target, Kmart, Dollar Stores.

Plane seats are jammed and humiliating but also cheaper than they ever have been, modulo gas prices.

You can spend thousands of dollars on a fancy bicycle, or less than $100 on a cheap one.

Stores are full of cheap, if sometimes unhealthy, food.

You can spend under $13,000, or maybe $12,000 on a new car, or over $100,000 on a luxury sports car.

Many of us wear cheap clothes, "from Third World sweatshops"; others spend $thousands on elite designer clothing.

You can get a watch for $15, or $1500. They'll tell time about the same.

Our economy is full of selling cheap stuff to the masses and expensive stuff to the rich, and various things in between, (sometimes including selling cheap stuff for higher prices, if you can pull off price discrimination.) Because that's how you make the most profit, not by only making luxury stuff.

But in housing, particularly in some markets, it's said that developers are only building luxury housing. If true, why would that be? Why would housing be unlike every other part of the economy?

"Everyone needs housing, so they can extort you." Nope, that won't fly. Everyone needs food and clothing, and in the US lots of people need cars.

"They're just chasing profit." But the point of my examples is that there's tons of profit in non-luxury goods and services. Walmart is *huge*, with its founder's children inheriting $20 billion each of accumulated profit.

And in fact, if you look around the world, you do see cheap(er) housing options. Mobile and manufactured homes for the individual, pre-fab housing for soulless but cheap developer tracts, microapartments that cut living space to 100 square feet, SRO hotels that go further by making you share bathroom and kitchen (if any), granny apartments. In cheap land markets (prefab housing in surbuban developments) and expensive ones (microapartments in Tokyo and Hong Kong.)

But not in Boston, or San Francisco. Why not? Is there something about those places that makes developers spontaneously ignore non-luxury demand? Or is something, like zoning laws and permitting processes, preventing them from doing so?

If you know me, you probably know my answer: the latter. But if you don't like that answer, what's your alternative? Why don't we see Walmarts, Spirit Airlines, $15 watches, and $13,000 cars of modern urban housing?

So there are various ways government policy could try to make housing cheaper, but one that I see a lot of people pushing now is a form of inclusionary zoning. Specifically, especially from what I've been told by Cambridge/Somerville politicos, requiring that a percentage (10-30%) of new units (of large developments) be rentable at low price. Not because they're smaller or more cheaply built, but just at a lower price. As Wikipedia says, "Many jurisdictions require that inclusionary housing units be indistinguishable from market-rate units"

(I don't know how that applies to a building that was planned to have diverse housing anyway. I suppose a percentage of each housing class?)

Developers[1] push back on this, and I've seen it described as a tax on them. Is that a fair description? Time for a simple thought experiment: imagine a building of 100 units, planned price of $1000/month, total revenue of $100,000/month. Then the city passes a new law during construction, requiring 30% be offered at $800. That's 30 units getting a $200 discount, $6000/month, which yes, you can think of as taxing the developer 6% and giving that back to the lucky tenants.

6%, not of profit, but of gross revenue. That's a lot! If the developer was anticipating profit of 5%, it is no longer worth building. Even if they anticipated 8%, that's now 2%; you might as well quit and invest in 30 year federal bonds. Or build hotels or condos that won't be hit by IZ, or just go build somewhere else.

And it can be worse. 30% requirement is high, but 20% subsidy might be low; 15% at $500/month would mean $7500, or a tax of 7.5%.

What's the alternative? Say the city instead decided to attach an explicit public subsidy to some of the new units. The $6000/month, $72,000/year cost would be spread among the whole population and tax base, not one developer. For a 77,000 person city like Somerville, that's under $1/person.

That's not quite fair though: that's just one development, and IZ applies to all of them, so we should look at that. Then again, there aren't many big developments in Somerville, which has "ambitious" plans to barely keep up with population growth at about 1% a year, and historically has done far less than that (3% total over some 20-30 year period I now forget, when Boston and MA did 12% and the country grew 24%). If we're adding units at 1% a year, and 30% of those are subsidized, then the subsidy of a new unit is spread over 300 existing ones. At a simplifying assumption of one person per unit, $2400/year ($200*12) is spread over 300 people, so $8/year.

(Most of what I've heard about recently is about a proposed 500 unit development in Union Square; assuming Somerville's 77,000 people live in 30,000 units, that's over 1% right there. But it'll take a few years.)

Of course, this is supposed to apply to all new housing, so after 30 years the subsidy support will have climbed to $240/year. This is pretty significant, especially compared to municipal taxes and revenue; probably talking about raising those up to 10% of existing levels. Also, affordable (or subsidized) units will be almost 10% of the housing stock.

But then someone might reasonably say "why should we dick around with only subsidizing new units? Why not just go ahead and subsidize 10% of all units, right now? The math's the same." And all the economists nod in agreement, and all the politicians blanch in terror...

Personal conclusion: yes, it is a tax on developers, and as with unfunded mandates[2] in general, it's an unfair tax, pushing a requirement onto a small subset of society, instead of funding it honestly out of general taxes and expenditure.

Of course, I feel that we shouldn't be trying to subsidize our way to cheap housing, which won't even address the real problem of more people wanting to live in cities now; we should enable building *more housing*, by removing the massive artificial restrictions on urban supply imposed by local governments. But that's another topic.

[1] 'Developer' has gotten a bad rep somehow; what if we called them builders, instead? It's not even a euphemism, more like an anti-euphemism: they are literally building new buildings and housing. Especially for the projects that get hit by IZ; you could argue that converting a house into apartments isn't real building (though it is real construction work, and more 'real' than hedge fund finance, say), but IZ applies to big projects, which are mostly new buildings.

But then it sounds worse: what kind of asshole opposes building new housing? (People who already have housing and don't want more neighbors, that's who.) Much easier to intone against "developers" and "profit" (as if homeowners don't hope to profit from growth in their home values, not to mention from their jobs.)

[2] Also see EMTALA, requiring ERs to stabilize anyone regardless of ability to pay; it's great that they do that, not so great that government didn't both reliably compensating them for it, so the costs were driven into other medical prices. Or landowners sometimes winning the anti-lottery of discovering there's an endangered species on their land and now they can't use it; protecting the environment is cool, but it would be fairer to compensate people for unexpected loss. And yes, strictly speaking minimum wage is an unfunded mandate on employers, and a price floor on labor, both nominally bad ideas, though that issue gets complicated by data and macroeconomics.

Recent thought about equilibrium effects on housing:

If many people actually *prefer* denser areas, or the amenities that result from them, then shifting the supply curve right (by loosening zoning codes) leads to more housing and lower rates, but may be followed by the demand curve shifting right because the area is more desirable due to higher density, leading to more housing and higher rates. And then shifting again, until the demand curve stops shifting or you run into a steeper part of the supply curve (whether due to looser but still extant legal limits, or sheer physical capacity) so that price increases outweigh increased amenities in desirability. (Or you simply run out of ability to add people.)

So it's true that free market housing won't necessarily lower prices for good; OTOH, it does allow more people to live in a place they'd prefer, which is still good.

Some articles on democracy (pluralist and feminist) among Syrian Kurds: NYTimes, FT, scribd copy of FT.

If we kept DST all year, or got rid of it.

A Madoka fanfic I'm reading. It's like Starship Troopers or Old Man's War crossed with Madoka crossed with transhumanism and Culture ship Minds. Kyubey said we'd go to the stars, and we did. Many fans think magical girls are potentially immortal, and here they are. I've been enjoying it a lot. Could have used some more editing passes, but generally fun to read, often funny, I'm engaged with the show characters and the original one. Downside: it's longer than Lord of the Rings and still ongoing, last update Oct 6.  I've read 34 chapters out of 44 and am thinking I should pace myself, maybe go read Ancillary Mercy while I still sort of remember what happened in Ancillary Sword.

Funny panel from the Fate/zero manga.

Japan is actually doing quite well per capita: low unemployment, very high employment to working-age-population ratio, inflation is back.  Abenomics, and Keynesianism, works.  GDP is shriking... because the population is, especially the working-age population.

James notes that Heinlein's first story is closer to Dickens' last novel than it is to us.  This will be more interesting when his *last* book is closer to Dickens than to us, but still.

Polio is judged to be even closer to eradication.

Portugal's Left Bloc, a party run by women.

Secret gardens and numinous fantasy

SF written in 1666 by Margaret Cavendish

(simply copying a comment I made elsewhere:)

So, according to Google's convenient graph, Somerville's population was 76,295 in 1990, and 78,804 in 2013. That's 3% growth stretched over 23 years. Boston has grown 13% in the same period. Cambridge, 12%. Massachusetts, 12%. The US as a whole, 28%. If population increase had been distributed evenly, there should be over 97,000 people in Somerville now. Or 85,000, at only the state's level of growth.

In reality there's been migration to warmer (or cheaper) states; OTOH, there's also been migration back into dense cities, as many people who grew up in suburbs don't want to live there. Except hardly anyone's building dense cities anymore -- it's usually illegal[1] -- so the price of the old stuff gets bid up way high. 97,000 people wanting to live in the space of 78,000 people will explain a lot of the housing price increase even without bringing in tech or "have no kids"[2] money.

(And I think it's fair to use the higher number -- after all, Boston and Cambridge rents have been going up a lot too, indicating people want to move here faster than housing can be built for them.)

[1] A friend claimed that 99% of Somerville is non-conforming to the current zoning code. If the city burned down, it wouldn't allow itself to be rebuilt as it is.

[2] Or "have no car" money, what with relying on bikes and the Red Line.