Category: Externalize/Internalize

From the Census

National vacancy rates in the third quarter 2025 were 7.1 percent for rental housing and 1.2 percent for homeowner housing. The rental vacancy rate was not statistically different from the rate in the third quarter 2024 (6.9 percent) and not statistically different from the rate in the second quarter 2025 (7.0 percent). 

The homeowner vacancy rate of 1.2 percent was higher than the rate in the third quarter 2024 (1.0 percent) and higher than the rate in the second quarter 2025 (1.1 percent). 

The homeownership rate of 65.3 percent was not statistically different from the rate in the third quarter 2024 (65.6 percent) and not statistically different than the rate in the second quarter 2025 (65.0 percent).

That was then – tenant screening

Sir Walter must face financial circumstance and lease out his country manor home. The go-between, Shepard, spouts off all the appealing characteristics of his potential tenant.

And who is Admiral Croft?” was Sir Walter’s cold suspicious inquiry.

Mr. Shepherd answered for his being of a gentleman’s family, and mentioned a place; and Anne, after the little pause which followed, added—

” He is rear admiral of the white. He was in the Trafalgar action, and has been in the bast Indies since ; he has been stationed there, I believe, several years.

One must be careful using the family word in real estate, today. Best to think of other descriptors. But not personal features as such:

Mr. Shepherd hastened to assure him, that Admiral Croft was a very hale, hearty, well-looking man, a little weather beaten to be sure, but not much; and quite the gentleman to he sure in all is notions and behaviour.

Outward characteristics are not to be asked or recorded on a rental application. But the terms of the unit can be recorded.

not likely to make the smallest difficulty about terms; only wanted a comfortable home, and to get into it as soon as possible; knew he must pay for his convenience;-knew what rent a ready-furnished house of that consequence might fetch; should not have been surprised if Sir Walter had asked more;-had inquired about the manor;

Oh- and there’s this.

—would be glad of the deputation, certainly, but made no great point of it;— said he sometimes took out a gun, but never killed ;—quite the gentleman.

And theres lots to say about the family. (Also a no-no today)

Mr. Shepherd was eloquent on the subject; pointing out all the circumstances of the admiral’s family, which made him peculiarly desirable as a tenant.

He was a married man, and without children; the very state to be wished for. A house was never taken good care of, Mr. Shepherd observed, without a lady: he did not know, whether furniture might not be in danger of suffering as much where there was no lady, as where there were many children. A lady, without a family, was the very best preserver of furniture in the world. He had seen Mrs. Croft, too;

All these rich social indicators are removed when renters seek homes in today’s market.

The grocery and the mountain

When should a community gather up its resources and provide a service to all members? And when should individuals be turned out into the world to navigate on their own dime? These debates cross all levels of government.

Some provisions are accepted as a government thing, like piped water or sewer. Even basic universals like education attract conversation about private options. Roads are sometimes (although truly not very often) toll roads. Bridges are mostly a public venture, as are parks. What takes a good out of private production and places it in the receivership of a bureaucracy?

Fear usually. Police and firefighters are in place to ensure personal safety. The New Deal was to alleviate fears against a repeat of depression era outcomes. When society risks a loss that compels a human response, society steps forward with a safety net.

Mamdani, New York Cities new mayor, sold the people on a fear of escalating grocery prices and thus the need for a government run store. This seems different than when a small community rounds up a helicopter rescue for a mountain climber who ventured up a nearby peak alone and unprepared.

So who gets to pick what there is to fear? Not everyone does this well. Here’s Mises (from Theory and History)

They recommend some policies, reject others, and do not bother about the effects that must result from the adoption of their suggestions.

This neglect of the effects of policies, whether rejected or recommended, is absurd. For the moralists and the Christian proponents of anticapitalism do not concern themselves with the economic organization of society from sheer caprice. They seek reform of existing conditions because they want to bring about definite effects. What they call the injustice of capitalism is the alleged fact that it causes widespread poverty and destitution. They advocate reforms which, as they expect, will wipe out poverty and destitution. They are therefore, from the point of view of their own valuations and the ends they themselves are eager to attain, inconsistent in referring merely to something which they call the higher standard of justice and morality and ignoring the economic analysis of both capitalism and the anticapitalistic policies. Their terming capitalism unjust and anticapitalistic measures just is quite arbitrary since it has no relation to the effect of each of these sets of economic policies.

Taking over a grocery is sure to fail financially without ensuring any additional food security for those who need it. It’s a vanity project. Wouldn’t it be like telling the mountaineer that a government representative would need to participate in the planning and execution of his climb? Yet here, the little community bears a disproportionate cost for the climbers’ foolishness.

It seems that the risk to persons and the community happens to various degrees. Whether the risk triggers community involvement has to do with its extreme and the distance between the risky step and all the other steps in between.

How would it feel?

People speculate why young people have delayed home purchases. Only around 20% of home purchases fall in this category. A historic low. But is it that surprising? Look at the surge of foreclosures in ’07-’08 and ’09. Hundreds of thousands of people who were never meant to have financial struggles lost their homes.

Children ages 8-12, old enough to sense the stresses within their families, yet too young to analyze the impact of a national financial crisis, were bystanders to these unpleasant legal actions in the early 2000’s. These are today’s young home buyers. Uncertain of what a real estate purchase will do for them. The anxiety associated with foreclosures has often been portrayed in litterature.

In Death of a Salesman, the family’s fear of losing their home emerges gradually, revealed not through a dramatic announcement but through Linda’s quiet confession that they are barely keeping up with the mortgage. She tells Biff and Happy that Willy has been borrowing money just to make the house payments—a disclosure that reframes the entire domestic landscape. What had seemed like an ordinary family home is suddenly understood as something fragile, held together by secrecy and strain.

The looming threat of foreclosure exposes the play’s deepest emotional fractures. The mortgage becomes a symbol of Willy’s unraveling identity—his failure as a provider and his desperate clinging to the American Dream. Linda’s hushed explanations carry a mournful tenderness, showing how fear and loyalty tangle together under financial pressure. For Willy, the house is both sanctuary and burden, and the possibility of losing it turns that symbol of pride into a reminder of collapse. The family’s anxiety over the home’s instability reveals how economic pressure corrodes affection, pride, and hope, tightening around them until it shapes every gesture they make toward one another.

Capital Theory

What is Capital Theory in Economics?

Capital theory is the branch of economics that studies the nature, role, measurement, and productivity of capital — the produced means of production (machines, factories, tools, infrastructure, software, etc.) that are used to produce goods and services.

It tries to answer fundamental questions like:

  • What exactly is “capital”?
  • How should it be measured?
  • How does capital contribute to economic growth and income distribution (wages vs. profit/interest)?
  • Why does the return on capital (interest rate or profit rate) behave the way it does?

Capital theory has been one of the most controversial and technically difficult areas in economics, especially in the 20th century.

Key Concepts and Debates

  1. Capital as a homogeneous “fund” (neoclassical view)
    • Mainstream neoclassical economics (since the late 19th century) treats capital as a single, measurable quantity (like “dollars of capital” or a “stock of value”).
    • In simple production functions (e.g., Y = F(K, L)), K (capital) is treated like labor L — you can smoothly substitute one for the other.
    • The interest rate is the price that equilibrates saving and investment.
  2. The Cambridge Capital Controversy (1950s–1970s) – the big critique
    • Economists from Cambridge, UK (Joan Robinson, Piero Sraffa, Luigi Pasinetti) challenged the neoclassical view.
    • Major problems they exposed:
      • Reswitching: The same technique of production can become profitable again at lower (or higher) interest rates, destroying the simple idea that lower interest rates always lead to more “capital-intensive” techniques.
      • Capital reversing: Higher interest rates can sometimes lead to using more capital-intensive methods — the opposite of what neoclassical theory predicts.
      • Measurement problem: You cannot measure the “quantity of capital” independently of the interest rate or profit rate, because capital goods are heterogeneous (a robot ≠ a shovel). Their value depends on future profits, which depend on the interest rate — a circularity.
    • Conclusion of the critics: The aggregate production function and the idea of a downward-sloping demand curve for capital are logically flawed.
  3. Austrian view (Böhm-Bawerk, Hayek, Lachmann)
    • Capital is highly heterogeneous and time-structured.
    • Production takes time; capital goods are “intermediate goods” at different stages of completion.
    • Emphasizes the “period of production” or “roundaboutness”: more productive methods are more time-consuming.
    • Interest originates from time preference (people value present goods over future goods).
  4. Post-Keynesian / Sraffian view
    • Rejects marginal productivity theory of distribution.
    • The rate of profit is determined by monetary factors, class struggle, or growth requirements, not by the “marginal product of capital.”
    • Capital is valued in terms of its own reproduction cost (Sraffa’s “price of production”).
  5. Modern mainstream response
    • After the Cambridge controversy, most neoclassical economists largely ignored the deep logical problems and continued using aggregate production functions for practical reasons (they work reasonably well empirically in many contexts).
    • Some (e.g., “new growth theory”) shifted focus to knowledge, human capital, and ideas rather than physical capital.

Summary Table of Major Schools

Bottom Line

Capital theory is the attempt to understand one of the most important concepts in economics — capital — and it remains unresolved. The mainstream treats capital as a simple scalar quantity for modeling convenience, but the Cambridge controversies showed that this simplification has serious logical flaws once you dig into the details. The debate is largely dormant in mainstream teaching but still very much alive among economic methodologists and heterodox economists.

London- a late bloomer in the water department

No one in the western world really questions whether water provision is best suited to the public or private spheres. Being hooked up to city water and sewer is unanimously considered a good thing. Was it always that way? Well- no. Londoners purchased water from private suppliers through the end of the nineteenth century.

John Broich gives an excellent history of how the desire for water provision shaped London.

His account tells how secondary cities in the British Isles adopted a municipal water system decades before the great capital on the Thames. In fact, the continued delays in accomplishing this civic feat help exemplify the many facets of interests and the levers in play. There are issues of pollution and health concerns, there are networks of private providers, and the wealthy who buy their way to what they want. There is petty jealousy and the pride of belonging to an international city. And most astonishing, there is no government structure to handle such infrastructure outside of the walls of ancient London.

For provincial water reformers, the principles on which the administration of water was based-as well as the engineering principles on which water provision was based-were meant to make their cities more modern in the sense expressed by Avery, the Birmingham councilor.

“When water is under the control of private companies, the chief desire of the directors is to obtain good dividends,” said a Bradford town councilor in 1852. “When the Town Council possesses the works,” he continued, “their chief object is to make the works instrumental to the promotion of cleanliness, the health, and the comfort of all classes of citizens.”57

Water administration by a directly representative body was to provide an obvious contrast to the commercial companies that made independent decisions about water quality, abundance, and price based on the profit motive.

It is an excellent story depicting the nature of what is public and what is private. For a literary companion piece, consider reading Dickens’s Bleak House.

Listen to Grumpy (cont 2)

There’s truth in this phrase.

There is no blob of “government” money, or “policy” that can make something affordable for one without making something else less affordable for another.

So if tenants get immediate relief from a rent freeze, where does that money come from?

Those outside the business may think that this will trigger a direct transfer from a wealthy landowner. Structurally this is an impractical notion. Even for those who have equity, it is just that: wealth tied up in the value of the property. It is not cash that can circulate and pay bills.

But in most all cases, the funds that come in from rent are pegged to go out to another obligation. This might be property taxes which are known to increase every year. This might be to a bank that financed the purchase of the property. And the insurance company which provides property isurance as required. This might be to a utility company. Each of these obligations have recourse for non-payment which ultimately leads to their making first claims on the income.

The funds which subsidize the rent freeze are most likely to come from monies intended for repairs and maintenance of the property. These vary from tasks that are good to do but not urgent, to things that if defrayed cause additional costs, to things that need immediate attention like a leaky pipe or a furnace outage. To give an idea of the number of routine items involved in the care of real estate, consider this post.

Over time, two things tend to occur. First, the new landlords with all their positive energy and desires to get ahead can’t maintain a financial foothold and leave. Other longer term owners prioritizes the most important fixes but let the cosemetic upgrades go. Over time more and more of the longer term components age, yards get overgrown, appliances become run down. The housing stock deteriorates.

The neighborhood at large is depreciated by blight, taking a little chunk of equity from every property owner nearby.

Learn from Grumpy

The Grumpy Economist has another great post, this time about rent control. For those of us in real estate, it’s an irritating topic. The errors in the use of price controls are numerous. Using John Cochrane’s article as a road map might be interesting to illustrate this point. Let’s start with this paragraph.

Sure, “sharply rising rents and utility bills wreak havoc on family budgets,” if the families don’t follow the screaming market signal to move. (Which is not painless, for sure. Incentives never are.) But the money comes from somewhere. Rent controls and energy price caps wreak havoc on landlord end electric utility budgets. The money must come from somewhere.

The claim is that rents are rising sharply. The reader pictures a Scrooge-like figure pounding on the door of a cowering family of four, announcing a ‘sharp’ rent increase (extra dollar symbols for emphasis), while behind this embodiment of the typical landlord stands an eviction notice ready to be served. I’d love to see numbers to this effect. I challenge that the ‘sharp’ rent increases are occurring at lease renewals.

Large corporate landlords might have a set policy of annual increases, but they account for only 3-4% of proprietors. Landlords must juggle the cost-benefit of increasing rent. As 80% own and manage the units, they calculate the costs, time, and uncertainty of a new tenant. This is weighed against a 3% increase on $1,100 or $33/mo in additional income. Needless to say, many landlords will forego a rent increase to keep a good tenant.

These subtleties are lost in real estate analysis, where all the numbers are averaged as if there were one typical renter, one typical landlord, and one typical property. This couldn’t be further from the truth. There are whole economies of renter groups. There are students who will have negative income before they join the workforce; there are singles with high-fluting jobs and no other responsibilities; there are single parents; there are couples with kids in a city just for a bit; there are elderly on fixed income with low mobility; there are recently divorcees looking for a glamorous downtown lifestyle.

Are all these groups to receive the same treatment? The same concern for their monthly budgets?Rent controls are initiated at the city level. Every group of renters would receive the benefit of a market-restrained obligation. Is that the intention?

Landlords are also assumed to be a certain type. The persona has tremendous equity in their property, no debt, and other cash they are stashing like squirrels do with acorns in the fall. And certainly some landlords fit this description. But more likely than not, the landlord has a mortgage and obligations against their time. The new entrants to the field, those trying to get ahead by getting a foothold in real estate, are undoubtedly the ones who need to make the cash flow.

When property taxes, utilities, or the cost of hiring labor rise, a landlord has no way to respond until a lease comes up for renewal. Rent control tightens this squeeze, leaving property owners caught between increasing public demands funded through taxation and their limited ability to recover those costs through rent. The first to be pushed out are often the newcomers—the small, aspiring owners who bring fresh energy and ambition to the market, but lack the cushion to absorb sustained losses.

Lesson number one. Averaging is a mistake. Assuming there is only one type of each actor in this economic trade of money for lodging makes for an impossible conversation.

50 year mortgages and the nature of things

A proposal for a 50-year amortization mortgage aims to make homeownership more affordable by spreading payments over a longer period, thereby reducing monthly costs. However, the trade-off is that borrowers would pay substantially more interest over the life of the loan and build equity more slowly. Advocates argue it could ease housing affordability pressures, especially in high-cost markets, and improve access for younger or first-time buyers. Critics counter that such loans may inflate housing prices further, extend household debt burdens, and delay financial stability. Overall, a 50-year amortization reflects a policy tension between affordability and long-term economic prudence.

Here’s a clear example comparing 30-year vs. 50-year amortization on a $350,000 home, assuming a fixed interest rate of 6% and no down payment (to isolate the amortization effect):

Loan TermMonthly Payment (Principal + Interest)Total Paid Over TermTotal Interest Paid
30 years @ 6%$2,098$755,280$405,280
50 years @ 6%$1,870$1,122,000$772,000

The 50-year loan lowers the monthly payment by about $228, but total interest nearly doubles over the life of the loan — a very expensive trade-off for the borrower in the long run.

Adjustable-rate mortgages offer another way to reduce payments, at least initially. ARMs typically begin with a lower introductory interest rate (for example, 5% for the first five years on a 5/1 ARM) before adjusting annually based on market conditions.

While ARMs can make early payments comparable to or even lower than a 50-year fixed loan, they carry rate-reset risk — payments can rise sharply if interest rates increase. Currently, availability is moderate: most lenders still offer ARMs (3/1, 5/1, 7/1 terms), but after the 2008 crisis, underwriting standards became stricter, and long-term fixed loans remain more common.

I’m all for offering a wide variety of financial instruments for consumers to use in the purchase of a home. However, over the long run, I don’t feel that the 50-year amortization allows for a sufficient paydown. As people navigate their lives, they count on the equity that accumulates through price appreciation and mortgage debt reduction. A healthy market is fluid, where people can buy and sell without being constrained by excessive debt.

I’ll make the claim that people find the market unaffordable because they don’t want to buy what is affordable to them. This is difficult to demonstrate without specifics. But each housing market has a range of price points. If folks are paying rent, then they are more likely to be able to acquire a property with a similar payment. They simply don’t want to live in that particular spot, or do the repairs necessary to improve it, or view it as a starter home from which they will move on someday.

Public says no Payment for rescuing Private parties

Usually actions to shore up safety are drawn from the public purse. But sometimes private actions pull this obligation out of the public sphere.

A Snowstorm Blew Over Mt Washington. More than 20 Hikers were trapped

More than 20 hikers needed to be rescued from the flanks of Mount Washington in New Hampshire after wintry conditions swept across the famed peak on Saturday, October 25.

…..

“Multiple people have arrived at the summit the last few days very unprepared for winter and required assistance. Be ‘wildly Responsible’ and please do some research on current higher summits weather and bring everything needed to hike in winter conditions or just hike another day,” writes the New Hampshire State Park on Facebook.

Personal responsibility in this case means personal repayment.

The New Hampshire fines stem from a piece of legislation called RSA 206:26-bb, which states that “any person determined by the department to have acted negligently in requiring a search and rescue response by the department shall be liable to the department for the reasonable cost of the department’s expenses for such search and rescue response.”

Real Estate Books

There aren’t many. There’s the ‘how to get rich in real estate’ type of literature, which is only vaguely helpful to those with no real estate experience and, in equal measure, misleading. There are books developed to help salespersons pass the required testing to obtain a real estate license. There’s material on all sorts of financial instruments used to finance property. But I’m not talking about that type of thing.

I’m talking about the manner in which real estate features in people’s lives.

Judith Martin, a former professor of geography at the University of Minnesota, wrote Past Choices/Present Landscapes: The Impact of Urban Renewal on the Twin Cities. This project spotlights some of the effects I like to talk about. It focuses on the massive slum-clearing and subsequent redevelopment of large sections of inner-city property. In hind site Martin points out:

Much has been written about the ideas and the implementation of the urban renewal program in the United States during the 1950s and 1960s. Most of this literature views urban renewal as a program that: (1) worked to the disadvantage of people most in need of improved housing -a great deal of substandard housing was removed, but a relatively small amount of low-income housing was constructed;(2) was a boondoggle for developers-they were able to acquire land inexpensively from city authorities, and often made large profits on the projects built on this publicly acquired land; and (3) focused on
economic development issues C’let’s fix up downtown”) at the expense of housing and neighborhood concerns (Anderson 1964; Hartman 1964; Gans 1965).

Viewed in retrospect, much of this criticism is valid, but it does not tell the whole story. Critics have portrayed planners who developed and implemented urban renewal programs as heartless beasts who turned a deaf ear to the real needs of “the people.” But it is hard to see most renewal officials as greedy and profiteering, or as consciously
trying to exercise their power over helpless city residents. There are, for example, no notable cases of renewal officials growing rich working on these programs. If anything, the views of those who implemented urban renewal programs in the Twin Cities and elsewhere can be considered somewhat naive. They assumed that renewal could be
accomplished quickly, that private developers would clamor for the opportunity to build in available areas, and that the renewal process could be carried out with relatively few snags. None of these assumptions proved to be true.

Real estate is a tricky wicket. If people want to follow along, they need to, as Judith indicates, read the whole landscape and not cherry-pick a brief situation in the misty flow of time.

Decay

It takes a long time for a house to completely depreciate. Many of its structural elements have lives longer than decades. Exterior features in like roofs, siding, windows, and doors may need little maintenance for years.

Yard work left to run free may give the appearance of a property left to nature. But eradicating the growth is of little cost compared with replacing all new heating and cooling systems, water heaters and appliances. Most of these have an average life of 12-15 years. And then, of course, there are the plumbing and lighting fixtures that are often replaced for both cosmetic and functional reasons.

At each phase of putting off a replacement and trying to patch things up and get by, a debt of maintenance is created. If the property were to trade hands, a new owner might be willing to take on a few additional repairs for a concession on price. At some point (and what would that be?) the average buyer turns away. There’s too much to do. There are too many lurking money pits under the subfloor in the bathroom or behind the paneling in the lower level.

This is when the structure’s value falls to zero. The parcel will only command the price of the land it sits on, with an adjustment for the cost of debris removal. But it takes decades to get to this point. The built world is durable, and there are many opportunities for rejuvenation.

C’mon people, still?

Check out the number of views of the YouTube shorts where historian and author Sarah CM Paine punches out a history lesson in spurts of ironic and bell clear words- 2.3 million views, 1.6M, 8.5M.

Who is she? It’s hard to know because, despite her online presence, a Google search generates no profiles written about her. Her Wikipedia page has a new photo above a brief description. Only this to stand up for a long time academic who has penned a respectable number of books.

Granted, this new exposure is due to one person- Dwarkesh Patel. He has hosted and promoted Sarah CM Paine’s material. He gets full credit. And there are pleanty of profiles written on him such as in Time or here.

What a grain elevator could say

The grain elevator was the most ubiquitous commercial building in Minnesota’s small and medium towns during the mid to late 1800s.

In most towns in western Minnesota, grain elevators were the dominant feature of the skyline 1837 Treaty | Minnesota DNR. As railroads expanded westward in the 1870s-1880s, grain elevators sprang up along every railroad line to store wheat and other grains before shipping them to Minneapolis and beyond.

This makes perfect sense given Minnesota’s economy at the time. Wheat farming dominated the landscape, and Red Wing held the title as the world’s largest primary wheat market in 1873, exporting 1.8 million bushels valued at more than two million dollars United States v. Sioux Nation of Indians – Wikipedia. Every town with railroad access needed a grain elevator to collect, store, and load farmers’ harvests onto railcars.

Typically, small services would pop up alongside the tall wooden structures. Or an eating and drinking establishment. Sometimes a church was erected down the road a bit. And for decades, the railroad infrastructure supported a node of activity in remote rural areas.

A shift occurred once the interstate system was established in the 1950s. Rail is still most beneficial for long hauls, whereas trucks carry the grain for shorter distances, typically under one hundred miles. With fewer stops, the isolated wooden elevators fell into disrepair. Often they fell for the useful purpose of serving as a training exercise for local firefighters.

The purpose of this short vignette is to show how land uses are tied intimately with public infrastructure. And these types of projects are engaged over long time frames. A slow natural progression of the property from peak usefulness to decline can be led by aging owners, people who can view themselves in a steady state for another decade or more. The insight for the outside observer to understand where in the process a parcel finds itself. And then to implement policy in relation to the receptive impulses of that moment.

Road Talk

It’s no surprise that the homes abutting a freeway are a bit cheaper than similar homes with a buffer from the noise and hubbub. A recent paper, The Traffic Noise Externality: Costs, Incidence and Policy Implications was clever in using the construction of sound barrier walls to calculate the markets preference for a home protected by the wall versus one that was not.

The authors come up with a figure of 6.8%, which in itself is not as crucial as the acknowledgment that a public goods project, such as erecting a barrier wall, uniformly corrects the imposition of a busy road across a blanket geographic area. There is a market for public goods. A consistent, non-exclusionary response to a public goal reflected in the impassionate exchange of cash for homes.

The impact of the wall’s benefit, or the detriment of a noisy road, is reflected in the nearby neighborhood. There are other impacts resulting from the existence of the road and its location. It allows people to get to jobs. It might be an emergency route to a hospital where people object to the use of sirens. Buses might run off the road and so on. For that reason the net effect of the road is best taken as a package with the ability to divvy out and assess the pro’s and cons as refelcted in the surrounding land values.

To make a jump and try to use changes in house prices to make a meaningful observation of the traffic composition is a stretch. To extrapolate the value of home price change and reflect that back onto individual cars driving down that road, as the authors of The Traffic Noise Externality simply don’t follow me. It seems it would be a categorization problem.

What is Private, What is Public Eastern block home edition

Those of you who follow this site know that we view the boundary between public and private as fundamentally a matter of choice. Bridges can be privately owned and charge tolls, but they more commonly become part of public transportation infrastructure. These decisions about what remains public versus private are often driven by considerations of efficiency and practical management. It was fascinating, then, to recently discover that following the collapse of communism in 1989, one of the most immediate and sweeping divestitures involved housing itself. Here’s that remarkable story.

The Great Housing Transfer: Eastern Europe’s Post-1989 Privatization Revolution
The collapse of state socialism in Eastern Europe triggered one of history’s largest transfers of public wealth to private hands through housing privatization. Between 1990 and the early 2000s, millions of state-owned apartments were sold to sitting tenants at deeply discounted prices, fundamentally reshaping the region’s housing landscape and creating lasting economic and social consequences.
From State Monopoly to Private Ownership
Under communist rule, Eastern European countries maintained near-total state control over housing. In most countries, 80-90% of urban housing stock was publicly owned, with the state serving as both landlord and developer. This represented one of the most comprehensive public housing systems in modern history, housing the majority of urban populations across the Soviet sphere.
The transition was dramatic and swift. Following the privatisation of state-owned housing in the transition to a market economy in the early 1990s, CEE countries now record some of the highest homeownership rates in the OECD, with over 70% of households owning their home outright. Countries like Hungary, Slovakia, and the Czech Republic saw homeownership rates soar from under 20% to over 80% within a single decade.
The Titling Process: Converting Tenants to Owners
The privatization process varied by country but followed similar patterns. Most governments opted for “sitting tenant” sales, offering apartments directly to current occupants rather than through open markets. The privatization policy of the 1990s aimed to make the sitting tenants owners of their rented flats, by offering 70–90 per cent discounts on the price of the houses and flats.
The legal titling process was often complex, requiring new property registries and cadastral systems. Many countries had to create entirely new frameworks for private property ownership, having operated under state control for decades. Voucher systems were also employed, where citizens were given or could inexpensively buy a book of vouchers that represent potential shares in any state-owned company, though these were more commonly used for enterprise privatization than housing.
The Value Transfer: A Massive Subsidy
The financial scale of these transfers was enormous. With discounts typically ranging from 70-90% below estimated market value, the programs represented massive implicit subsidies to sitting tenants. In Hungary alone, the value transfer has been estimated at several billion dollars in current terms. The Czech Republic’s privatization program transferred approximately 1.2 million units, representing roughly one-third of the entire national housing stock.
These discounts were justified as compensation for years of poor maintenance and recognition of tenants’ de facto investment in their homes through decades of occupancy. However, the beneficiaries were not necessarily the neediest—middle-class professionals and party officials often lived in the most desirable state housing and captured the largest windfall gains.
Lingering Effects: Winners, Losers, and Market Distortions
The privatization legacy continues to shape Eastern European housing markets today. The dramatic shift to homeownership created several persistent challenges:
Market Thinness: The formal rental market is generally thin and underdeveloped — only in the Czech Republic is the rental market home to more than 15% of households (19%). This limits labor mobility and creates barriers for young people entering housing markets.
Quality Degradation: Multi-apartment buildings dominate the housing stock, many built during the communist period. As a result, the stock is ageing and of poor quality. Most households cannot afford to maintain or upgrade their dwellings according to environmental requirements. The mass transfer of maintenance responsibilities to individual owners without corresponding financial capacity has led to widespread deterioration.
Social Housing Shortage: The social housing supply in most CEE countries is well below the OECD average, with the exception of Poland and Slovenia. The elimination of public housing left a gap in affordable housing provision that has never been adequately filled.
Inequality Effects: The privatization created a new form of wealth inequality, where accident of residential location in 1989 determined lifetime wealth accumulation. Urban professionals gained valuable assets, while rural residents and those in less desirable locations received minimal benefits.
The Eastern European housing privatization represents both a remarkable success in creating a property-owning democracy and a cautionary tale about the unintended consequences of rapid large-scale privatization. Three decades later, the region continues to grapple with the market distortions and social challenges created by this unprecedented transfer of public wealth to private hands.

Control price, Property will degrade to reflect change

Territory-Watersheds for Insurance

In the context of car insurance pricing, a territory is a geographic area defined by insurers to group locations with similar risk profiles for setting premiums. Territories are typically defined using the following methods and delineators:

1. ZIP Codes: The most common delineator, as ZIP codes provide a standardized way to segment areas based on localized risk factors like accident rates, crime statistics, and claim frequency. Insurers may use individual ZIP codes or aggregate them into larger territories. [2] [16] [19]

2. Custom Territories: Insurers may create their own territories by combining ZIP codes, counties, cities, or townships into broader zones. These are designed to reflect similar loss experiences, traffic patterns, or demographic characteristics. For example, multiple adjacent ZIP codes with comparable risk may be grouped into one territory. [11] [13] [14]

3. Census Block Groups: For more granular analysis, some insurers use census block groups (small areas with 600-2,000 people) to define territories. These allow for precise risk assessment in densely populated or diverse areas. [16] [19]

4. State-Regulated Territories: Some states impose rules on how territories are defined. For instance, Connecticut uses 18 predefined territories, while California requires territories to be at least 20 square miles and prohibits single-ZIP code territories to ensure fairness and avoid overly specific pricing. [13] [14]

5. Geocoding: Insurers use geocoding tools to map a vehicle’s primary garaging address (where it’s parked most often) to precise coordinates, ensuring accurate assignment to a territory. This helps account for variations within larger geographic units. [18]

Territories are defined based on data like accident frequency, vehicle theft rates, vandalism, weather risks, traffic density, and claims history, which help insurers assess the likelihood and cost of claims in a given area. The boundaries are set to balance statistical homogeneity with practical considerations like regulatory compliance and administrative simplicity.

The cost of uncertainty

I showed a house this week in a modest but well-situated neighborhood. It had some problems, but mostly superficial– carpet, paint, appliances, and the like. Yet, even at a price below the comparable sales, it remains on the market. What? Uncertainty.

The property has been through a foreclosure, and as the tax records show, the bank holding the paper, Midfirst Bank, repurchased it. But this is a murky ownership situation.

At a sheriff’s sale, the buyer is not immediately given a full and clear ownership title the way they would in a normal real estate closing. Instead, the buyer typically receives one of two legal instruments depending on the state:

  1. Sheriff’s Certificate of Sale (common in states like Minnesota)
    • This document shows that the buyer purchased the property at the sheriff’s sale.
    • It is not a deed and does not yet transfer full title.
    • The original owner still has a redemption period (often 6–12 months, depending on the type of property and state law) to pay off the debt and reclaim the property.
  2. Sheriff’s Deed
    • If the redemption period expires without the former owner redeeming the property, the sheriff’s certificate is converted into a sheriff’s deed (sometimes automatically, sometimes requiring a filing).
    • The sheriff’s deed conveys whatever interest the debtor had in the property to the buyer, but it usually comes without warranties of clear title. That means the buyer takes the property subject to existing liens, unpaid taxes, or other encumbrances, unless state law says otherwise.

The property is being marketed by the owner who went through foreclosure, even though their right to the property is only through redemption. They would have to find a buyer to settle the full amount owed to Midfirst. This middle-ground ownership area makes the market uneasy. What if the bank wants more than the sheriff’s sale for fees and expenses? What if the property’s condition deteriorates between the offer and closing? Who will handle the repair? Will the title transfer be handled properly in the end?

Minnesota’s foreclosure rate is very low at one-half of one percent of the housing stock. So these sales are rare, and an investor will undoubtedly find it worthwhile to take on as a project. But in areas with insecure property rights and poor banking relations, the surcharge for uncertainty carries a hefty surcharge.

The associational role- Tolstoy Edition

Pierre explains to the Freemasons.

“The whole plan of our order should be founded on the training of men of character and virtue, bound together by unity of conviction and aim,— the aim of suppressing vice and folly everywhere by every means, and protecting talent and virtue, raising deserving persons out of the dust and enrolling them in our brotherhood….”

Single Issue Groups vs Pluralistic Partnerships

Two recent articles by prominent housing policy voices reveal a shared concern about the structural limitations of the YIMBY movement’s traditional approach. Both Chris Elmendorf’s “YIMBYism started as a single-issue movement. It’s time to think bigger” and Matthew Yglesias’s “The power of a single-issue group” examine how YIMBY organizations have operated as focused advocates for increased housing density, but each author suggests that this narrow framework may need evolution to achieve lasting success.

The Competitive Model of Single-Issue Advocacy

Both authors describe YIMBY groups through a similar structural lens: as collections of people united around the singular goal of increasing housing density through land use reform and community lobbying. This approach has positioned YIMBY organizations as competitors in the arena of local politics, where they must vie against other community interests—from neighborhood character preservation to parking concerns—to secure favorable outcomes.

This competitive dynamic has been YIMBY’s strength. As Elmendorf notes, “The signal advantage of one-issue groups is that they can work with almost any legislator. By not taking stances on peripheral issues, they avoid making enemies.” Similarly, Yglesias emphasizes that “the strength of YIMBYism over the past 10-15 years has largely derived from its single-issue orientation during a time of relentless political polarization.” The movement has achieved bipartisan success across diverse political landscapes precisely because it hasn’t alienated potential allies by taking controversial positions on unrelated issues.

However, both authors identify a fundamental limitation in this competitive approach. When YIMBY groups operate as single-issue advocates, they inherently position themselves in opposition to other legitimate community concerns rather than as partners in comprehensive neighborhood improvement.

The Case for Pluralistic Collaboration

The articles converge on a crucial insight: sustainable support for housing density may require YIMBY groups to embrace a more pluralistic approach that considers multiple public goods simultaneously. Rather than competing against other neighborhood priorities, they could collaborate to address the full spectrum of urban challenges.

Elmendorf argues that this shift is not just strategically wise but empirically necessary. His research reveals that “people who feel good about big cities want existing cities to become more canonically city-like.” This finding suggests that support for density depends heavily on broader urban quality of life—including schools, transportation, public safety, and cultural amenities.

Yglesias acknowledges the value of this broader approach while defending the continued importance of single-issue organizing. He recognizes that multi-issue coalitions can offer something valuable to skeptical neighbors: addressing their concerns about construction impacts by simultaneously improving schools, transit, and safety.

Beyond Zero-Sum Thinking

The structural shift both authors envision moves beyond zero-sum competition toward collaborative problem-solving. Instead of viewing neighborhood concerns as obstacles to overcome, a more pluralistic YIMBY approach would treat them as legitimate issues requiring integrated solutions.

This doesn’t mean abandoning the core mission of increasing housing supply, but rather embedding that mission within a broader framework of neighborhood improvement. As Elmendorf suggests, such an approach could offer community members a compelling trade-off: “You may not like all the buildings, but you’ll love the great schools, safe streets, fast transit, and thriving business that we’ll deliver.”

The Challenge of Multiple Public Goods

Both authors acknowledge the complexity of this transition. Weighing multiple public goods requires sophisticated political judgment and potentially controversial prioritization decisions. A group focused solely on housing can avoid taking positions on education funding or transit investment; a multi-issue coalition cannot.

Yet this complexity may be precisely what sustainable urban policy requires. Rather than treating housing, transportation, education, and public safety as separate domains competing for attention and resources, effective urban governance demands understanding their interconnections and potential synergies.

Conclusion

While Elmendorf and Yglesias differ on whether YIMBY organizations should fully embrace multi-issue coalition building or maintain some single-issue focus, they share a recognition that the movement’s competitive, narrow approach has structural limitations. The path forward likely involves both preserving the strategic advantages of focused advocacy while developing new organizational forms capable of the pluralistic collaboration that sustainable urban development requires.

The evolution from single-issue competition to multi-issue partnership represents more than a tactical shift—it reflects a deeper understanding that creating livable, dense communities requires addressing the full spectrum of residents’ concerns rather than simply winning narrow victories on housing policy alone.

Externalizing and Internalizing

What does it mean? When a party externalizes or internalizes? Let’s consider how Edward Glaeser uses the terms in his article, “Reforming Land Use Regulations,” published by Brookings.

Theoretically, it is at least conceivable that America’s web of locally-constructed zoning codes have worked out to be a finely tuned system that functions like a perfect Pigouvian tax internalizing all the offsetting externalities of all new construction.

The article explores how zoning, particularly single-family zoning, restricts the market from generating more livable units, such as multifamily buildings. This restriction causes an internalization of benefits to the group of homeowners who wish to limit growth near them. And this is indeed how it works. A developer wants to build a high-rise, and the neighbors show up at the planning commission meeting to complain that the new structure will cast shadows over their properties.

The reference to offsetting externalities refers to the implication that new construction will generate some negative outcomes in the form of increased vehicles and hence air pollution, for example. Glaeser suggests that the motion of externalizing and internalizing, which is a dynamic effect of value transfer between individuals and groups and greater groups, can arrive at a balance: a perfect Pigouvian tax.

Here’s another observation about externalities.

Our attempt to assess the total externalities generated by building in Manhattan found that they were tiny relative to the implicit tax on building created by land use controls (Glaeser, Gyourko and Saks, 2005).

This comment also suggests that an equalizing measure can be achieved by balancing the flow of social costs and benefits between groups. Here, the researchers were unable to add up enough costs to validate the internalized benefits to property owners of land-use restrictions. However, perhaps this is a framing issue. Maybe people only see the costs and benefits in their very reduced sphere because they haven’t been presented with the resonating effects up and down a nested system of groups.

Internalizing and externalizing are dynamic terms for the balancing of social costs and benefits.

Delays are not all due to Land Use Regs

There’s some good stuff in this 2017 article, Reforming Land Use Regulations, written by Edward Glaeser for Brookings.

First, there is the concept of Minimum Profitable Construction Cost.

But the regulatory approach on housing should compare housing prices to the Minimum Profitable Construction Cost, or MPPC. An unfettered construction market won’t magically reduce the price of purchasing lumber or plumbing. The best price outcome possible, without subsidies, is that prices hew more closely to the physical cost of building.

Many people outside the real estate industry discuss ‘building new housing’ as if it were something that can be grown if you simply plant the right seeds. Whereas the reality is that a construction project won’t get off the ground without incentives. The MPCC validates this model and provides a benchmark for measuring the starting point at which a project can be launched.

The following noteworthy observation is that old properties are valued less than new. Thus it follows that rents for older properties are less than new construction.

We then compare these construction costs with the distribution of self-assessed housing values in the American Housing Survey. The distribution of price to MPPC ratios shows a nation of extremes.  Fully, 40 percent of the American Housing Survey homes are valued at 75 percent or less of their Minimum Profitable Production Cost. 

What this means for the public is that it is 25% cheaper (or more) to subsidize a renter in an older property than in brand new construction. Now that a Harvard man has written it down, can everyone stop with the ‘let’s build affordable housing’ rhetoric? New is never the least expensive option.

In reference to the 2008-2011 downturn, Glaeser remarks.

Our painful housing bust eliminated some of the affordability problem in our most expensive areas, but that problem has returned.

So, housing prices go up and down. Yet it seems that the topic of housing is always making the intellectual rounds when prices are on the rise —why? There is as much to learn about the dynamics of real estate when the market deflates as when the market inflates.

Here is a most underinvestigated observation.

 Getting the right national policy requires comparing the social costs of building in one location versus the costs of building elsewhere. 

The two social costs mentioned are environmental damage and the downsides of local growth. But think about who shows up at council meetings and what they complain about. Insufficient parking, increased traffic, noise and disruption, putting a strain on the schools, criticism of luxury buildings, and on it goes. The social aspect of this is extensive and profound. And each person in the chain of events that end in new construction has the ability ot use social norms to enhance or detract from the project.

Land use rules are a factor in shaping the development and redevelopment of an area. But there is so much more.

Two Parent Privilege and more?

Perhaps you’ve heard the term ‘two-parent privilege’ used lately. It seems to be in the air. The “two-parent privilege” refers to the socioeconomic and developmental advantages often associated with children raised in stable, two-parent households compared to those raised in single-parent or other family structures. It’s a concept rooted in statistical trends and sociological research, though it’s debated due to its implications and the complexity of family dynamics.

Please note that there are two key aspects to the potential benefits. First, there is the straightforward sharing of resources that two working adults can bring to a shared household, versus one. Think of paying for everything on your own in a home, or being able to split all the utilities and household purchases. Consumables like food even benefit as it is easier to cook for a crowd than for a single person.

Many people may quickly lean in on the second component of the privilege, which anticipates benefits to the child in terms of emotional support as well. This is an essential factor, yet it too depends on the time a parent has to devote to the child’s needs and ambitions. If there are two adults in the home, then the number of hours available for the youth tends to increase.

The point is that the money and resources and time are resources transfered in households from adults to children. We don’t really have a separate name for these things. Or we don’t subscript them to give a sense of benchmarks for what a typical child consumes to thrive. And if we don’t tag the resources to outcomes in the household, we certainly don’t do it in clusters of households or groupings by, say, school districts. And why not? It seems like a valuable form of analysis.

Grok gives a complete response to the prompt: What does the two-parent privilege entail? Give details on the mechanics?

Reasons for Regional Thinking

This is from Bloomberg’s news letter a few days ago:

This example comes from South Africa, but the pattern is familiar in city neighborhoods across the United States. A single area becomes highly sought after—often because of a natural amenity like a lake, a hilltop view, or tree-lined streets. As people concentrate their attention and investment there, surrounding neighborhoods are overlooked. That neglect can manifest in subtle forms—like disrepair or increased petty crime—which only reinforces the appeal of the original “best” area.

At first, residents welcome the rising property values. But over time, that early advantage turns into a burden. Friends and family are priced out. Local businesses close as commercial rents climb, replaced by boutique shops that cater to outsiders. What began as a benefit morphs into a form of isolation.

A regional perspective offers a solution. If planners and policymakers ensure that all neighborhoods remain livable and desirable—not just one or two—the pressure on any single area can be eased. Without that balance, scarcity drives runaway prices, and the community as a whole suffers.

Airport Expansion- Missoula Edition

I flew into Missoula today and the Montana Airport is wrapping up a major multi-phase expansion that reshapes regional travel and brings broader economic shifts in its wake. Here are some of the details:

The Physical Build-Out

  • Total Cost: Over $110 million for the full terminal expansion.
  • What’s New: New gates, expanded baggage claim, rental car lanes, security upgrades, and room for new routes and carriers.
  • Who’s Paying: a combo of the Feds and private interests
    • Federal: More than $50 million in grants, mostly from the Bipartisan Infrastructure Law.
    • State & Local: Matched funds from the Missoula Economic Partnership, businesses, and banks—no local tax dollars used.
    • Recent Boost: A $6M federal grant (2024) will help complete the next terminal phase.

Skyward Travel Growth

  • Missoula set a passenger record in 2024: Over 1 million flyers, up nearly 12% from the year before.
  • Targeting 1.5 million by 2044 as travel demand soars.
  • Now offering more frequent flights and year-round service to Chicago, thanks to an $875k federal grant.

The Ripple Effects

📚 University of Montana Perks

  • Easier access = stronger recruitment, research partnerships, and conference travel.
  • Out-of-state students now find Missoula more reachable and appealing.

🏘️ Housing Pressures

  • Expansion is fueling demand for housing, especially near the university and airport.
  • Rent hikes are real: Locals report steep increases, with “affordable” now starting near $1600/month.
  • Development impact fees (passed on to buyers) may also be contributing to rising costs.

💼 Local Economy

  • Jobs during construction and in airport operations.
  • Tourism boost: More flights mean more visitors spending at hotels, restaurants, and shops.
  • Stronger air links help regional business and health access.

🚧 Challenges Ahead

  • Affordability squeeze: Residents and students are feeling the pinch from rising rents.
  • Infrastructure stress: More travelers and new residents will test city roads, utilities, and services.
  • Equity concerns: Growth must be balanced to include long-term residents and low-income communities.

Final Approach

Missoula’s airport expansion is more than a construction project — it’s a gateway to growth. With smart federal funding and local vision, the region is positioning itself for a more connected future. But keeping Missoula livable as it grows will take coordination on housing, transportation, and community needs. How would one go about making some projections? Estimates of impacts and time frames could be interesting to local public leaders.

Theoretical Innovation

This is an excerpt from my working paper, which examines how contemporary economic realities challenge conventional price formation models. Traditional price theory, rooted in neoclassical equilibrium models, struggles to explain modern markets characterized by digital platforms, behavioral anomalies, and network effects. Rather than viewing prices solely as equilibrium outcomes, this section explores price as an information system and coordination mechanism shaped by institutional contexts and evolutionary market processes, proposing alternative approaches that better capture the dynamic nature of pricing in today’s economy.

IV. Theoretical Innovation

A. Proposed Philosophical Framework: Embeddedness and the Integrated Price Mechanism

This research proposes a fundamental reconceptualization of price theory through the lens of embeddedness—a philosophical framework that recognizes economic transactions as inherently situated within social contexts rather than artificially separated from them. Building on Polanyi’s (1944/2001) foundational insight that economic activities are embedded in social relations, this framework advances a more integrated understanding of price mechanisms, where Price = Private Value + Social Cost represents not an external correction but an inherent reality of market functioning.

From Agency to Embeddedness: Reconceptualizing Economic Decision-Making

The traditional economic paradigm has privileged what might be termed an “agency perspective,” positioning economic actors as autonomous decision-makers pursuing clearly defined goals within a social environment that remains largely unexamined. As Williamson (1975) argued, economic institutions are primarily understood as mechanisms for facilitating the efficient pursuit of individual interests. This philosophical stance has produced valuable insights regarding allocative efficiency but has simultaneously constrained our understanding of how social dimensions operate within economic systems.

The proposed philosophical framework shifts toward what Granovetter (1985) terms “embeddedness”—recognizing that economic actions are fundamentally situated within, shaped by, and constitutive of social relationships. This shift allows us to transcend the artificial analytical separation between “economic” and “social” factors that has characterized mainstream economic theory since Marshall (1890/1920). Rather than viewing social dimensions as external influences or constraints on otherwise autonomous economic decisions, this framework recognizes them as intrinsic elements of economic valuation itself.

This perspective transforms our understanding of price mechanisms in several crucial ways. First, it reconceptualizes economic actors not as isolated utility-maximizers but as socially embedded individuals whose preferences and valuations inherently incorporate social dimensions. Second, it reframes markets not as abstract coordination mechanisms but as socially constructed institutions that reflect and reinforce collective values. Third, it reconsiders price formation not as the aggregation of purely private valuations but as complex negotiations of value that intrinsically include social dimensions.

The Philosophical Roots of Integrated Price Theory

The proposed framework draws upon several philosophical traditions that have remained underutilized in economic theory. First, it builds upon Heidegger’s (1927/1962) concept of “being-in-the-world” (Dasein), which emphasizes that human existence is inherently contextual rather than abstracted. Economic actors do not stand apart from their social worlds, making calculations from an objective distance; rather, they are always already embedded within networks of meaning and relationship that constitute their understanding of value itself.

Second, it incorporates insights from feminist economic philosophy, particularly Nelson’s (2006) critique of the separative self that has dominated economic theory. As Nelson argues, the conception of autonomous economic agents making decisions in isolation represents a philosophical fiction that obscures the relational nature of economic life. The proposed framework recognizes that economic valuations emerge from interconnected patterns of relationship rather than isolated individual calculations.

Third, the framework engages with Dewey’s (1922) pragmatist understanding of valuation as an active process embedded in concrete situations rather than an abstract mental operation. Dewey’s insight that values are not pre-given but emerge through contextual engagement allows us to understand how social dimensions are naturally incorporated into price mechanisms through the situated practical reasoning of market participants.

Price as Social Institution: Beyond the Private-Social Dichotomy

Central to this philosophical framework is a reconceptualization of price itself. Rather than viewing price as an essentially private valuation that occasionally requires correction for social factors, this framework understands price as what Searle (1995) terms a “social institution”—a collectively constituted reality that inherently incorporates both individual and social dimensions of value.

This understanding transcends the conventional dichotomy between private and social costs by recognizing that economic actors themselves do not experience this distinction in practice. When a business owner decides to provide flu vaccinations for employees, they are not separately calculating private benefits and then adding social considerations; rather, their valuation process inherently incorporates both dimensions simultaneously. Similarly, when consumers pay premium prices for organic products, they are not engaging in two separate transactions—one for the product and one for social benefits—but rather expressing a unified valuation that intrinsically includes both dimensions.

This philosophical reframing has profound implications for economic theory. It suggests that what conventional economics has termed “externalities” are not phenomena that exist outside price mechanisms but rather aspects of value that have been artificially excluded from economic analysis through reductive theoretical frameworks. The problem lies not in market failures but in conceptual failures that have prevented us from recognizing how social dimensions are already incorporated into price through the embedded decision-making of market participants.

Reconceptualizing Social Capital: From Linear Networks to Embedded Fields

This philosophical framework also offers a path to recover and extend Loury’s (1976) original insights regarding social capital. Loury’s conceptualization of social capital as a group-contained phenomenon recognized the embedded nature of economic opportunities, particularly in his analysis of racial income differences. However, as this concept evolved through Coleman (1988), Putnam (1993), and Lin (2001), it increasingly adopted a more individualistic framework that treated social capital as a resource that individuals could access and deploy rather than a field of relationships in which they were embedded.

The proposed framework returns to Loury’s original insight but extends it further by drawing on Bourdieu’s (1986) understanding of social capital as operating within fields of practice rather than through linear networks. This perspective allows us to recognize how price mechanisms operate not through the aggregation of isolated individual preferences but through complexly embedded fields of valuation that inherently incorporate social dimensions.

By reconceptualizing social capital as an embedded field rather than a networkable resource, we can better understand how social costs and benefits become intrinsically incorporated into price mechanisms. The business owner considering flu vaccinations operates within a field of practice that includes employee health, customer relations, and institutional norms—all of which inform their valuation process not as external considerations but as constitutive elements of their economic reasoning.

From Calculation to Negotiation: Price as Social Process

A final philosophical dimension of this framework involves shifting from understanding price as the result of individual calculations to recognizing it as emerging from processes of social negotiation. Drawing on Zelizer’s (2012) concept of “relational work,” this perspective recognizes that prices do not simply reflect pre-existing valuations but actively constitute social relationships and meanings.

This shift helps us understand why organic food commands premium prices—not simply because consumers have calculated private benefits and added social considerations, but because the price itself represents a negotiation of meaning that constitutes both economic value and social relationships. The organic certification standard functions as what Star and Griesemer (1989) term a “boundary object”—a shared reference point that enables coordination across different social worlds without requiring consensus about precise meanings.

This understanding of price as social negotiation rather than mere calculation provides a philosophical foundation for reconceptualizing how social dimensions operate within market mechanisms. It allows us to recognize that what conventional economics treats as externalities are often aspects of value that have been excluded from analysis through theoretical frameworks that reduce price to calculation rather than recognizing it as negotiation.

In summary, the proposed philosophical framework shifts from agency to embeddedness, from calculation to negotiation, and from understanding price as an aggregation of private values to recognizing it as a social institution that inherently incorporates both private and social dimensions. This framework provides the philosophical foundation for reconceptualizing price theory in a way that transcends artificial separations between economic and social valuations.

Ownership Preferred

Lists are fun, especially when your team is ranked at the top of the list. In this case, Apartment List pulled data from the Census to show that homeownership is the highest amongst Millennials in our area. Over 50 percent of folks in the 29-44 age range choose to own their homes rather than rent them.

Apartment List

Many will say that this is about price, as residents in San Jose and LA —cities at the bottom of the list —don’t own homes due to the high prices. And that’s a broad stroke, likely to be true, observation. But the list is long, and there are many other cities between the two extremes. So what else makes for a culture of ownership?

I’ve worked with some first-time buyers who don’t end up buying, and this is what seems to play on their minds. They are afraid they will lose the house in foreclosure. Someone close to them, perhaps even more than one, lost a home to creditors, and the negative experience frightens them. Second, they are afraid they will buy a lemon. Homes are complex, comprising many components. It’s easy to feel overwhelmed with the responsibility of keeping it all running smoothly. Lastly, they are afraid of adversarial neighbors.

Here’s a further breakdown of homeownership rates amongst all age groups in Minnesota.

MN Homeownership Report

I speculate that the last group has a homeownership rate of 77% because of the following factors. Low foreclosure rates keep the negative and traumatic experience of losing a home out of people’s lives. Since many residents grew up in owner-occupied households and experienced the ups and downs of repairs throughout their lives. They also have these folks in their lives to turn to for guidance. If the buyer has lived locally for most of their lives, they gravitate toward areas where they find the family and friends.

Minnesota rarely experiences the dramatic price swings that are more frequent in the coastal states. Hence, real estate tends to be a stable and reliable source of equity. People buy for pride of ownership and independence as well as frugality.

Time and Materials

A decade ago, a large apartment complex in a first-tier suburb was sold to an investor. (Who else buys such things except investors?)

Though the sale isn’t the news. The hubbub that followed was about the residents. Many were low-income individuals who would eventually relocate. The sheer number of people involved was a stress test for the supply of low-income housing. The discontent escalated, and legal action followed, resulting in settlements.

People often blame the businesspeople involved. They are the individuals taking the action that resulted in the displacement. But consider these perspectives.

  1. If long-term repairs have been postponed to keep rents low, at what point does the building become overburdened by impending renovations? And how does a dilapidated building affect the quality of the neighborhood?
  2. Is it a good thing to use housing assistance for low-income residents in geographic proximity? Whether it be due to a tragedy– ex a natural disaster destroys the building– or an impending renovation– the pressure to relocate effects a disproportionate number of folks looking for the same niche of housing.
  3. Are the residents better off or worse off for the move? Perhaps the old, dilapidated building with low rents was serving as an anchor for someone who would have had more opportunities elsewhere.

Each group, the neighborhood, the property owner, and the residents, each has a unique mix of community concerns and private returns. Often hasty assumptions are made, ie, the tenants are worse off for the move, when that may not necessarily be true. Or the landlord benefited during the period of limited repairs– not so as their equity at the time of sale will be diminished by the condition of the property.

By separating out the players and their motivations, the dynamics at hand become apparent.

Methodological Framework (con’t)

This is an excerpt from my working paper, which examines how contemporary economic realities challenge conventional price formation models. Traditional price theory, rooted in neoclassical equilibrium models, struggles to explain modern markets characterized by digital platforms, behavioral anomalies, and network effects. Rather than viewing prices solely as equilibrium outcomes, this section explores price as an information system and coordination mechanism shaped by institutional contexts and evolutionary market processes, proposing alternative approaches that better capture the dynamic nature of pricing in today’s economy.

Methodological Framework Part B: Epistemological Foundations

The Social Capital Origins of Integrated Price Theory

The epistemological foundation of this study’s central proposition—that price inherently incorporates both private value and social cost (Price = Private Value + Social Cost)—traces its theoretical lineage to the foundational work in social capital theory, particularly Glenn Loury’s seminal 1976 paper “A Dynamic Theory of Racial Income Differences.” This section establishes how Loury’s original conceptualization of social capital provided an epistemological framework that naturally integrated social dimensions into economic analysis, a theoretical insight that subsequent scholarship gradually obscured rather than developed.

Loury’s Epistemological Innovation

Loury’s 1976 work represented a fundamental epistemological departure from conventional economic thinking by demonstrating that individual economic outcomes could not be understood apart from their social context. His analysis of racial income differentials revealed that what appeared to be individual human capital decisions were actually embedded within “group-contained” social structures that shaped both opportunities and constraints (Loury, 1976, p. 843). This insight established an epistemological precedent for understanding economic phenomena as inherently social rather than treating social factors as external “corrections” to market outcomes.

The epistemological significance of Loury’s approach lies not merely in its recognition of social factors, but in its demonstration that these factors operate through, rather than against, market mechanisms. When Loury showed how social capital affects individual investment decisions in human capital, he revealed that market valuations themselves reflect social dimensions—they are not distortions of “pure” market processes but expressions of how markets actually function within social contexts (Loury, 1977).

The Fragmentation of Integrated Understanding

Subsequent developments in social capital theory, while expanding its empirical applications, inadvertently moved away from Loury’s integrated epistemological framework. The work of scholars like James Coleman (1988) and Robert Putnam (1995), while valuable in documenting social capital’s effects, tended to treat social capital as a separate domain that influences economic outcomes rather than as a dimension inherent in economic processes themselves. This theoretical evolution created what we might call an “epistemological fragmentation”—the artificial separation of economic and social domains that Loury’s original framework had successfully integrated.

This fragmentation manifested in the tendency to treat social costs and benefits as “externalities”—effects that exist outside the market mechanism and require correction through policy intervention. The epistemological assumption underlying this approach is that markets naturally tend toward outcomes that reflect only private costs and benefits, with social dimensions representing deviations from this natural state that require external correction.

Epistemological Reconnection: Toward an Embedded Theory of Price

The theoretical foundation of this study represents an epistemological reconnection with Loury’s original insights, extended beyond the specific context of racial income differences to a general theory of price formation. This reconnection is grounded in three key epistemological claims:

First, the claim of inherent embeddedness: Economic decisions, including price formation, occur within social contexts that are not external constraints but constitutive elements of the economic process itself. This draws directly from Loury’s demonstration that individual human capital decisions cannot be understood apart from their social context, extending this logic to all market transactions.

Second, the claim of integrated valuation: Market prices naturally incorporate both private and social dimensions because the decision-makers who establish these prices are embedded social actors whose valuations reflect both individual preferences and social commitments. This builds on Loury’s insight that individual economic behavior inherently reflects social capital considerations.

Third, the claim of methodological adequacy: Understanding price formation requires methodological approaches that can capture both the calculative aspects of economic decision-making and the embedded social processes within which this calculation occurs. This methodological pluralism echoes Loury’s integration of formal modeling with institutional analysis.

Philosophical Foundations in Critical Realism

These epistemological claims align with the critical realist tradition in philosophy of science, particularly the work of Roy Bhaskar (1975, 1979) and Tony Lawson (1997, 2003). Critical realism provides an epistemological framework that supports the integrated understanding of economic and social phenomena by distinguishing between empirical events, actual events, and underlying structures and mechanisms. From this perspective, observed price relationships (empirical level) reflect actual market transactions (actual level) that are generated by underlying social and economic structures and their interactions (deep level).

The critical realist framework supports the epistemological claim that social dimensions of price are not merely empirical correlations but reflect actual causal mechanisms. When a small business owner calculates the cost-effectiveness of providing employee flu shots, the resulting price decision reflects not just individual cost-benefit analysis but the underlying social structures that shape both health risks and workplace relationships. The price mechanism, in this view, serves as a “social thermometer” that registers the complex interactions between individual preferences and social conditions.

Epistemological Implications for Economic Analysis

This epistemological foundation has several important implications for economic analysis. First, it suggests that the conventional distinction between “market failures” and “market successes” may be based on a false epistemological premise. If prices inherently incorporate social dimensions, then what appears as market failure may actually represent the market’s accurate registration of social costs and benefits that conventional analysis fails to recognize.

Second, it implies that policy interventions aimed at “correcting” market outcomes may often be addressing problems that exist more in theoretical models than in actual market processes. The epistemological framework developed here suggests that markets may be more socially responsive than conventional theory recognizes, but in ways that require different analytical tools to understand.

Third, it suggests that empirical research in economics should focus more on understanding how social dimensions are integrated into market processes rather than assuming they operate as external constraints. This represents a fundamental shift in research orientation from identifying market failures to understanding market embeddedness.

Methodological Consequences

The epistemological foundations outlined above have direct consequences for methodological approach. If prices inherently incorporate social dimensions through embedded decision-making processes, then understanding price formation requires methodological tools that can capture both the formal aspects of economic calculation and the informal aspects of social negotiation and commitment.

This methodological requirement explains the integration of narrative and quantitative approaches employed in this study. Narrative methods are necessary to understand the embedded social processes through which individual decision-makers integrate private and social considerations. Quantitative methods, particularly hedonic pricing models, are necessary to identify the systematic patterns through which these integrated valuations are expressed in market outcomes.

The epistemological framework thus provides a coherent foundation for methodological pluralism that is neither mere eclecticism nor a compromise between incompatible approaches, but a recognition that understanding embedded economic processes requires analytical tools adequate to their complex, integrated nature.

After an Abstract comes the Introduction

This is an excerpt from my paper which examines how contemporary economic realities challenge conventional price formation models. Traditional price theory, rooted in neoclassical equilibrium models, struggles to explain modern markets characterized by digital platforms, behavioral anomalies, and network effects. Rather than viewing prices solely as equilibrium outcomes, this section explores price as an information system and coordination mechanism shaped by institutional contexts and evolutionary market processes, proposing alternative approaches that better capture the dynamic nature of pricing in today’s economy.

A. Research Problem and Contextual Landscape

Contemporary economic theory has constructed an artificial divide between private and social valuations that fundamentally mischaracterizes the nature of price mechanisms. The prevailing paradigm treats externalities and social costs as phenomena that exist outside market pricing structures—anomalies that require correction through policy interventions. This perspective has led to theoretical frameworks that fail to recognize how price already incorporates social dimensions of value.

This paper challenges this dominant position by advancing the thesis that price inherently accounts for social costs and benefits, functioning as Price = Value Private + Social. The conventional framing treats social costs as separate from private market transactions, focusing exclusively on externalities and spillovers as market failures requiring intervention. However, this approach overlooks crucial evidence that market participants routinely anticipate and internalize social dimensions in their valuation processes.

Several critical shortcomings emerge from the current theoretical framework. First, mainstream economics acknowledges that stock prices anticipate political actions and regulatory changes, yet fails to systematically incorporate this anticipatory social pricing into its core models. Second, empirical evidence demonstrates consumers’ willingness to pay emotional surcharges for products with perceived social benefits, yet this phenomenon remains marginalized in standard economic analysis. Third, economists typically wait for social costs to manifest as measurable externalities before acknowledging their existence, rather than recognizing their presence within the price mechanism itself.

This theoretical blind spot can be traced to a pivotal shift in economic philosophy that occurred following Glenn Loury’s groundbreaking 1976 paper, “A Dynamic Theory of Racial Income Differences,” which introduced the concept of social capital as a group-contained phenomenon. The subsequent evolution of social capital theory—through James Coleman, Robert Putnam, Nan Lin, and Mark Granovetter—gradually reframed social elements as external to market mechanisms rather than intrinsic to them. This conceptual migration has created artificial boundaries between private and social valuations that distort our understanding of how markets function.

By examining this historical trajectory and proposing a reconceptualization of price theory that acknowledges the inherent social dimensions of value, this research aims to resolve theoretical inconsistencies in contemporary economic philosophy and develop a more coherent understanding of market dynamics. The implications extend beyond theoretical discourse, offering potential pathways to address pressing socioeconomic challenges through a more sophisticated understanding of how social costs and benefits are already embedded within price mechanisms.

B. Theoretical Positioning

The philosophical underpinnings of twentieth-century economic analysis were largely constructed upon a reductive conception of human behavior—the rational actor paradigm, which posited economic agents as autonomous individuals pursuing narrowly defined self-interest. This framework, most prominently championed by neoclassical economists, created theoretical models that excluded the complex social dimensions inherent in economic exchange. By privileging methodological individualism, mainstream economics systematically marginalized the communal aspects of human decision-making and the social embeddedness of market interactions.

The 1970s marked a critical turning point with scholars like Kenneth Arrow, Gary Becker, and others beginning to interrogate this limited conception by examining economic trades within previously neglected domains such as family structures and racial dynamics. This represented an important, though incomplete, expansion of economic thought. While these analyses acknowledged that social factors could influence economic decisions, they still fundamentally positioned these factors as external constraints or modifications to an essentially self-interested calculus.

This paper advances a more radical philosophical proposition: economic actors do not merely respond to social factors as external influences but fundamentally incorporate communal objectives alongside personal gain when allocating their labor and resources. This perspective challenges the artificial separation between individual and collective interests that has dominated economic philosophy. Rather than viewing social considerations as secondary modifications to self-interested behavior, this research argues that economic actors integrate multiple value dimensions—personal, familial, communal, and societal—into their decision-making processes simultaneously and intrinsically.

This theoretical reframing has profound implications for how we understand price mechanisms. When economic actors integrate communal objectives into their decision calculus, the resulting prices already embed both private and social valuations. Market exchanges thus represent complex negotiations of value that transcend the narrow confines of individualistic utility maximization. By recognizing this inherent integration, we can begin to develop more sophisticated theoretical tools that accurately capture the multidimensional nature of economic exchange.

The proposed philosophical framework does not reject the insights gained from examining self-interested behavior, but rather situates such behavior within a more comprehensive understanding of human action that acknowledges our fundamental social embeddedness. This perspective builds upon but substantially extends the work begun by Arrow and others, offering a philosophical foundation for reconceptualizing how social dimensions operate not merely around but within economic decision-making and price formation.

Trump- shock think

Trump is irritating, bombastic, and a general pain in the patuti to all spectrums of political ideology– but you must admit that his unconventional methods get people looking at issues from new angles. Who would have thought that those on the left would become free traders? They oppose Trump’s tariffs meant to protect the American worker (or let’s avoid reading too much into the mind of the art of the deal maker).

And there’s more to see of the unseen. Writers are unveiling things like ‘hidden costs.’ In this super article by Luis Garicano, The Myth of the Single Market, the author proposes that national customs have always charged an override on goods and services that move across European borders.

The IMF puts the hidden cost of trading goods inside the EU at the equivalent of a 45% tariff. For services the figure climbs to 110%, higher than Trump’s “Liberation day” tariffs on Chinese imports—measures many saw as a near-embargo.

We advocate for the idea that social costs are part of the price at Home-Economic. They are hidden only in the sense that they are not talked about. It’s not polite to say to someone that they paid a luxury/status surcharge for their watch because they want to show off, even if Veblen said it was so a hundred years ago. People don’t want to think about whether they selected a bigger house at the expense of a longer commute, which takes their time away from their children. These trades in social commitments are sheltered from the glaring eyes of sharpened pencils and numerical analysis.

But that doesn’t mean they aren’t there. Social costs and surpluses have always been a part of price. Tariffs are just the name for the formalized process of collecting and directing them.

Thank Trump for that bit of awareness.

Tariff Textiles for Babies

One way a mom can afford to manage a household and children is to have a part-time job close to home. Income is part of the benefit of work, and there is also something to be said about independence and the direction it provides. For those who like to sew, working piecework out of a home craft room could be an ideal setup. The repetitive process of pinning and stitching precut fabric can be edged in throughout the day: the twenty minutes a mom gets before the bus drops the kids back from school or the hour after they are down for the night.

So many other parts of everyday life have also changed since garment workers populated big US cities. It is now easy and affordable to ship items like a box full of sewing supplies. Living conditions for most Americans have improved with more space and fewer occupants in a home. This frees up the workspace for a home studio. Being an independent contractor is pretty commonplace. Crafting sites like Etsy already attract vendors of homemade goods.

Now, what if an entrepreneurial spirit wanted to start a clothing line? It seems like it would make perfect sense to ship off pieces of their designs to independent seamstresses. This would save on overhead and fixed costs. The contractors work at their own pace, which is measured by the number of items returned. The designer would focus on quality, design, and distribution.

Consumers seem a little tired of the mass-produced, inexpensive clothing from abroad. Maybe a (temporary?) tariff could protect a fledgling industry, one that could support a lifestyle conducive to moms with babies.

More money, better conditions

That’s the conclusion of a recent article by the Minneapolis Federal Reserve research team.

In a recent paper co-written with researchers from the University of Wisconsin-Madison and the University of Illinois-Chicago and initially published by the Minneapolis Fed, we measured the evolution of housing quality for low-income households over the past several decades across the United States. We found broad and generally large increases in housing quality and smaller but still important increases in living space.

So, it’s not surprising that the data show fewer low-income people living in squalor.

I like this part too. It’s a great example of how headlines can suggest misleading information. Although gross rents have increase, they have hit people’s monthly budgets at a much lower increase.

As housing quality and quantity are getting better, how much more are households paying for it? According to the AHS, for below-median-income Twin Cities area residents, real monthly spending on housing increased by 32 percent from 1998 to 2021, from $1,008 to $1,333. Around half of below-median-income Twin Cities households remain housing-cost-burdened (spending 30 percent or more of their income on housing) and a quarter remain severely housing-cost-burdened (spending 50 percent or more of their income on housing). For many families that spend a large fraction of their income on housing, findings about general housing improvements may be tough to appreciate.

However, our analysis indicates that greater housing spending reflects not only higher housing prices but also Twin Cities area residents’ ability to afford housing that is larger and nicer. Overall, the average housing budget share only increased by 4 percentage points from 1998 to 2021, from 36 percent to 40 percent of income, which indicates that most of the growth in spending on housing is driven by higher incomes, better quality, and more spacious homes, as opposed to needing to allocate a greater share of income for the same, unimproved housing.

Some combination of private money, public efforts, and community involvement is improving living standards for those with lower incomes. And it’s not clear at all that the burden is falling on the most vulnerable.

Amenity Migration

A Descriptive Overview

Amenity migration refers to the movement of people—often affluent, educated, or remote workers—from urban or high-cost areas to rural or scenic regions primarily for lifestyle reasons rather than economic necessity. These “amenities” include natural beauty, recreational opportunities, perceived safety, cultural charm, and a slower pace of life. Unlike traditional migration driven by jobs, amenity migrants move to improve quality of life, often bringing their wealth, urban habits, and consumption patterns with them.

The term emerged in the 1990s within geography and regional planning literature, especially in the context of the American West, Canada, and parts of Europe. Scholars like Laurence Moss and others used it to describe changing population dynamics in places like Colorado, Montana, and the Alps—regions once defined by extraction or agriculture that saw a demographic shift toward service-based, lifestyle-oriented economies.

In policy circles, amenity migration is a double-edged sword. On one hand, it can inject new capital into stagnant rural economies, diversify local culture, and support new businesses. On the other, it can displace long-term residents, inflate housing costs, and strain infrastructure designed for much smaller populations. Planners and local governments use the concept to anticipate pressures on housing, schools, and transportation, and to shape land use regulations or zoning to balance growth with preservation.

The term is now central to discussions about rural gentrification, climate migration, and the long-term effects of remote work. Amenity migration isn’t just about who moves where—it’s about how those moves reshape the economic and cultural fabric of entire regions.

Gordon Tullock diplomat

Gordon Tullock’s interaction with the U.S. Department of State from 1947 to 1956 involved diplomatic postings in Tianjin, Hong Kong, and Korea, alongside Chinese language training at Yale and Cornell. His nine-year tenure exposed him to bureaucratic hierarchies and inefficiencies, which he later critiqued in The Politics of Bureaucracy. He observed self-interested behavior, information distortions, and overstaffing, shaping his rational choice model of bureaucracy and public choice theory. While he likely performed standard diplomatic tasks, his key contribution was translating these experiences into a seminal critique of bureaucratic behavior, though his conclusions may overemphasize dysfunction due to his theoretical bias.

Stagnant vs Dynamic

A reader writes about enterprises who succeed by not only complying with regulations but pursuing further advancement in their industries with the intended spirit.

For example, businesses in the renewable energy sector often find that adhering to strict environmental regulations can spur innovation, leading to the development of more efficient technologies.

…

Companies that embrace these regulations find themselves at the forefront of sustainability and often cultivate a loyal consumer base that values corporate responsibility. 

Given these perspectives, I’m curious: 

How do you think businesses in sectors with fewer regulations can proactively embrace innovative practices that mirror those in more regulated industries?

He makes a good point. Often, regulation is introduced when asymmetric information has left consumers in the dark about what goes into the product they are buying. Once the word gets out that such and such creates environmental harm, people take it upon themselves to come up with solutions. Just recently, it’s been observed that electric cars reduce carbon emissions, and yet there are environmental expenses in the production of their batteries.

Regulations can serve as an intervention that signals something is up. But regulations are rigidand stagnant and respond directly to a moment in time. Further discoveries, like the fact that battery production also harms the environment, may make a regulation in favor of electric cars more harmful, not less.

Regulations are expensive to maintain and supervise. Often, they are left on books well past their useful life simply because people are not sure of their expiration date. Sometimes multiple enforcers create confusion and waste. No one doubts the benefits of smoke detectors. House fires still cause fatalities, so enforcing the use of $60 smoke detectors seems like a no-brainer. The thing is, multiple agencies become involved in the proper use of the device. Are they to be installed in the sleeping rooms or right outside the sleeping rooms? How many are needed? On every floor? One inspector calls out this rule, and another dictates another rule. Pretty soon, builders are installing fifteen detectors just to not have to follow up on a $60 item. Multiply this by the thousands, and a small thing grows into a monster.

Smoke detectors are still worth regulating. Regulations are part of the process. Finding optimal use of regulations is the trick

I appreciate hearing from readers!

Property Rights- Africa Edition

The best part about using AI is being able to request information in various ways. In the process of thinking up the question, a new angle on the issue can open up further probing. Say you start with something you only know a bit about, like property rights in Africa. You might think it is all about wealth. If GDP is high, then laws must be in place for such things as the enforcement of property rights. And these two things seem connected to political stability.

So you ask. And this is what you get.

(Unfortunately, Ethiopia was cut off. Property rights are entirely controlled by the governement.)

Surprisingly, GDP does not appear to be connected to securing property rights. The legal enforcement column raises various issues: whether there is a process for recording ownership, whether there is a mechanism to resolve disputes, and finally, whether there is political power to take even with these two features in place.

Of course, the level of political control is of interest. But it’s hard not to believe that even in countries where the story is that the government controls all, informal institutions do not play out in everyday lives. Governments do not have the manpower or interest, I would think, to dictate who gets what dwelling when such and such happens. And directing who has a pecking order over whom. These societies more than likely barter in their own off-the-record way to say who gets what.

Yet uncertainty is costly for everyone.

Circuits and Tariffs

At least a couple of decades ago, when I’d help a client purchase a home that happened to be along an open field, I’d remind them that the view may not always stay that way. The Twin City metro was growing and fields just like the one adjoining their new home were being plowed in and repurposed into neighborhoods of single-family homes. They would nod in acknowledgement and yet still feel a loss when a crop of dwellings soldiered up outside their windows.

There are more situations like that– where the surrounding circumstances change and present residents feel like a cost is imposed on them. Take that lightning rod word: gentrification. In certain circles, it is spit out with as much vehemence as the title capitalist. In reality, gentrification implies that a neighborhood is getting cleaned up, crime is being brought down, structures are being fixed up, and truancy is being pushed out. But when you spruce up the place, more people want to live there. This is distressing to longtime residents who don’t want to see rent prices rise in response to higher demand. The situation is changing around them without their consent!

Or consider an elderly couple who own a large, beautifully situated parcel of land on Flathead Lake. In the years they moved to northwestern Montana, it was remote. Desolate even. Over time, others discovered their paradise and passed the word along to still more people who appreciate views of the rugged snow-capped Rockies. As people arrive, more services are necessary which pushes up property taxes. Is it fair for the elderly to endure the increases? They did nothing to give rise to these new obligations, and now the expense may make their living choice beyond their reach.

Tariffs are a response to the same issue. When the pool of labor is opened up to a global market, should the loss of work in the Midwest manufacturing industries fall solely to die-cutters and assemblymen? They did nothing to change the circumstances, yet they bear the burden. Wall Street profits, labor abroad profits, and they are told to adapt.

What is the proper cycle of protection for the renter affected by gentrification? How long would the elderly be eligible for lower property taxes? Is there a natural circuit for these things to enable an easing of the effects of changing circumstances to all involved?

Keeping track of Tariffs

With all this tariff talk, I’m breaking some misconceptions. For instance, I thought China was our top trading partner. I had no idea that Canada charges tariffs between provinces —sounds laborious to keep track of! Nor did I realize the extent and amount of the tariffs charged worldwide.

Top Ten U.S. Trading Partners and Tariffs Charged Prior to April 1, 2025

  1. Mexico
  • Trade Context: Mexico was the U.S.’s top trading partner in 2023, with total trade valued at approximately $776 billion (goods only). Under the U.S.-Mexico-Canada Agreement (USMCA), most U.S. goods entered Mexico duty-free prior to April 1, 2025.
  • Tariffs Charged: For USMCA-compliant goods, tariffs were generally 0%. For non-USMCA goods, Mexico applied MFN rates, averaging around 7% for industrial products and higher for certain agricultural goods (e.g., up to 20-25% on some items like dairy or poultry under supply management systems). Specific rates depended on the product.

2. Canada

  • Trade Context: Canada was the second-largest U.S. trading partner, accounting for 14.3% of U.S. trade in 2023. Like Mexico, it operates under the USMCA.
  • Tariffs Charged: Most U.S. goods entered Canada duty-free under USMCA prior to April 1, 2025. For non-USMCA goods, Canada’s MFN tariff averaged 4.1%, with higher rates on protected sectors like dairy (up to 200-300% on certain products due to supply management) and softwood lumber (subject to duties averaging 10-20% depending on market conditions).

3. China

  • Trade Context: China was the third-largest U.S. trading partner, with a 10.9% share of U.S. trade in 2023 and a significant trade deficit ($295.4 billion in 2024).
  • Tariffs Charged: Prior to April 1, 2025, China’s average MFN tariff rate was around 7.5% for U.S. goods, but retaliatory tariffs from the first Trump administration’s trade war (2018-2020) raised rates on many U.S. products to 20-25% or higher (e.g., soybeans, autos). The “Phase 1” trade deal in 2020 reduced some tensions, but specific rates varied widely by product.

4. Germany

  • Trade Context: Germany, as part of the EU, contributed 4.4% of U.S. trade in 2023. The EU as a whole is a major U.S. trading partner.
  • Tariffs Charged: Prior to April 1, 2025, the EU applied an average tariff of 5.1% on U.S. goods under MFN rules (no U.S.-EU free trade agreement existed). Specific rates included 10% on autos, 25% on certain steel products (retaliatory), and higher rates on agricultural goods (e.g., 15-20% on some food items).

5. Japan

  • Trade Context: Japan is a significant U.S. trading partner, with a trade deficit noted in 2024 data.
  • Tariffs Charged: Under the U.S.-Japan Trade Agreement (effective 2020), many U.S. goods entered Japan duty-free or at reduced rates prior to April 1, 2025. Japan’s average MFN tariff was 4.3%, but agricultural products faced higher rates (e.g., 38.5% on beef, 15% on some fruits). The Trump administration later claimed Japan charged 46% equivalent when factoring in non-tariff barriers.

6. South Korea

  • Trade Context: A key U.S. trading partner in Asia, South Korea had a free trade agreement (KORUS FTA) with the U.S.
  • Tariffs Charged: Prior to April 1, 2025, most U.S. goods entered South Korea duty-free under KORUS FTA. The average MFN tariff was 6.2%, with higher rates on agriculture (e.g., 40% on some rice products). The Trump administration later cited a 50% equivalent rate including non-tariff barriers.

7. UK

  • Trade Context: The UK ran a trade surplus with the U.S. in 2023 ($14.5 billion per U.S. data).
  • Tariffs Charged: Post-Brexit, the UK applied an average MFN tariff of 5.7% on U.S. goods prior to April 1, 2025, with most rates mirroring the EU’s (e.g., 10% on autos). No U.S.-UK free trade agreement was in place, though negotiations were ongoing.

8. India

  • Trade Context: India is an emerging U.S. trading partner with a notable trade surplus.
  • Tariffs Charged: Prior to April 1, 2025, India’s average MFN tariff on U.S. goods was high, around 13.8%, with significant variation (e.g., 20% on electronics, 100% on some alcoholic beverages). The Trump administration later claimed a 52% equivalent rate including non-tariff barriers.

9. Taiwan

  • Trade Context: Taiwan is a key supplier of electronics to the U.S.
  • Tariffs Charged: Prior to April 1, 2025, Taiwan’s average MFN tariff was 7.1% on U.S. goods, with lower rates on industrial products and higher rates on agriculture (e.g., 15-20% on some items). The Trump administration later cited a 64% equivalent rate with non-tariff barriers.

10. Vietnam

    • Trade Context: Vietnam has grown as a U.S. trading partner, especially for consumer goods.
    • Tariffs Charged: Prior to April 1, 2025, Vietnam’s average MFN tariff on U.S. goods was around 9.6%, with higher rates on specific sectors (e.g., 20-30% on some agricultural products). The Trump administration later claimed a 92% equivalent rate, halved to 46%, factoring in trade imbalances and barriers.

Notes and Context

  • Data Sources: Trade partner rankings are based on 2023/2024 data from sources like the U.S. Census Bureau and Euronews. Tariff rates reflect pre-April 1, 2025, conditions, primarily MFN rates unless a trade agreement applied.
  • Limitations: Exact tariff schedules for every product aren’t fully detailed here due to variability. The listed averages are indicative, and specific rates could be higher or lower depending on the good.
  • Trump’s Reciprocal Tariffs: On April 2, 2025, President Trump announced new U.S. tariffs effective April 5 (10% baseline) and April 9 (country-specific rates), calculated as half the perceived “charge” (trade deficit divided by exports, plus non-tariff barriers). Pre-April 1 tariffs from trading partners didn’t directly align with these calculations, which included non-monetary factors like currency manipulation.

This list reflects the top U.S. trading partners and their general tariff policies toward U.S. goods before the significant policy shift on April 2, 2025.

Sincerely, Grok

Watersheds- Organizing out of Interests

There are lots of ways groups form in order to tackle shared interests. “In 1955, the Minnesota Legislature authorized the creation of watersheds through the Watershed Act. The intent of the Act was to develop water management policies and plans on a watershed basis, because water does not follow political boundaries.”

Water flows in the direction of the lowest point. If your neighbor’s lot sits higher than yours, then more than likely you will deal with the drainage that flows following a storm. For that reason, people in a shared drainage system collaborate to be sure adverse effects are tackled. These generally include land use planning, flood control and conservation projects.

From an analysis point of view, the watersheds are interesting as they are independent of standard governance structures. Water crosses country lines, meanders between cities, and flows around carefully surveyed property lines. They can group people and their properties over vast plains.

But where is the value in the grouping? Mainly in the flood zone analysis. Inundation and water tables effect construction prospects and insurance issues.

Flood Zones

Understanding flood zones is crucial because they directly affect the safety of homes, businesses, and infrastructure. Knowing whether a property is in a high-risk flood area can help individuals and communities prepare for potential disasters, take necessary precautions, and make informed decisions about insurance. Floods can cause significant property damage, disrupt lives, and even lead to loss of life, making it essential to assess and understand the risk of flooding in any given area.

This is where FEMA maps come in. These maps, created by the Federal Emergency Management Agency, provide detailed information about flood zones, identifying areas with varying levels of flood risk. They help communities plan for floods, guide building regulations, and determine where flood insurance is required. Essentially, FEMA maps serve as a vital tool for understanding and managing flood risk.

This is the search result for 183 Dana Ave, Columbus (Franklinton) Ohio.

You will note the comment on the map that references the reduced risk due to a levee. The whole area hashed over in blue and white stripes, is protected by a seven-mile flood wall completed in 2004.

This has significance for property values as it lowers the cost of homeownership. Generally, property insurance in a flood zone can run three times the cost for the same property in a low risk area.

Abandoned

We’ve all seen them. Whether in a rural area or in the heart of a depleted urban setting, homes are abandoned. The cause generally is not due to a population boom or bust, but rather a population shift. For the later half of the twentieth century, there was heavy migration into cities. Thus rural areas were littered with homes like the one in the photo.

On the other hand, inner Detroit suffered from abandonment and is still dealing with the effects. Following the auto industry’s decline, residents suffered, and the urban neighborhoods slipped from neglect. Without proper shoring up of institutional services, residents continued to escape the area, seeking more favorable suburban dwellings.

The two most impactful effects on neighborhoods are undoubtedly access to employment and street safety.

Unpopular Opinion

This bill is a shame. As if our school districts aren’t already reeling to keep up with mandates under strained budgets.

Of the 49.6 million school age children in the US, according to the article, 22 thousand experience a cardiac arrest while away from a medical facility. That’s less than a half of one percent of children.

This plan would require the district to have a designated cardiac emergency response team. Those teams would, as the bill is written, be required to do a simulation 30 days before the school year begins. Coaches would also have to be CPR and automated external defibrillator trained.

It feels like a lawmaker trying to get a bill passed more than a community need clamoring for attention. Feels like a resume builder.

And yet time, regulation and responsibility is going to be mandated down across 331 school districts in MN. It turns educators into medical care providers.

The bill would also require schools to make response plans available and accessible both on the school website and in paper form. It proposes offering $3 million to schools to assist and fund these efforts.

CCX Media

This bill shouldn’t pass the use of public funds and efforts efficiency test.

New Realtor Rules- Were they consequential for consumers?

CNN brings readers up to date on the antitrust lawsuit against the National Association of Realtors. The plaintiffs were granted $418 million last summer, not a small amount of cash. Once all the legal bills were paid, the 500 petitioners received an estimated $900.

So, did all that work and expense result in a new way of doing business?

“Paperwork has changed, and I think some really good things have happened in the way most of us discuss commissions upfront with our buyers and sellers,” said Brita Kleingartner, a Realtor in Los Angeles. “But I don’t think that business has changed in any way.”

With mortgage rates hovering around 7% for the last six months and average home prices across the US continuing to rise, the new rules, which took effect in August, had spurred hope that commissions paid to real estate professionals would plunge, making homebuying and selling less expensive for average Americans. Last year, TD Cowen Insights estimated that the new rules could cause fees paid to Realtors to fall by 25% to 50%.

Instead, commissions have remained largely unchanged since August, according to a study released this month by real estate platform Redfin. For relatively lower-priced homes that sold for under $500,000, Redfin found that the average commission has increased since the rules took effect.

As I predicted a year ago, how business is done has not changed. The lawsuit alleged a problem that did and does not exist. How do we know? Watch the consumers and what they do. If they choose not to employ two realtors (one to represent the seller and one to represent the buyer), if they decide to pay them at a different rate, then their pull in the market generates a change. If consumers, despite all the layer’s fees, publicity, and exposure, continue to desire representation by a professional licensed agent, then the market rate is being met in an open and non-coercive environment.

Is all this activism worth it? I wish someone would keep track. A legal battle of this size is expensive. Plus, the plaintiffs who were encouraged to participate spent valuable time on this versus other aspects of their lives. It tapped into some of their family capacity for civic participation. Could other causes within their immediate circles better deserve their efforts? Very possibly.

Many feel a moral superiority by fighting the good fight. But when the fight goes to show that the monsters were but mist off a lake on a cold fall morning, then one must count up the expense of it all and do an analysis.

Now that people are talking in groups…

Robin Hanson wrote recently about his Status Circles. They start on an enormous scale with the whole universe and then life on Earth. But when most people focus on nation, acquaintances, and family, Robin distinguished his affiliations to people interested in the big questions—the intellectuals. But even within this grouping, he offers a wide range of ever-narrowing groupings.

Government structures are often thought of as falling into one another. The town is part of a county, which is part of a state, which falls under a country’s national laws and jurisdictions. Let’s call this the Russian Doll effect. By encapsulating one organization into the other, it seems a default that the interests of the smallest doll would be taken in consideration up the chain.

In Vincent Ostrom’s book The Intellectual Crisis in American Public Administration, the author uses ideas offered by de Tocqueville to suggest otherwise.

I’m reading Vincent Ostroms The Intellectual Crisis in American Public Administration. On page 80, he refers to De Tocqueville’s impressions of the US administration. Can it be said that the French man thought there was independence between various levels of US governance, and that’s a good thing?

ChatGPT said:

Yes, Alexis de Tocqueville generally viewed the decentralization of governance in the United States as a positive feature. In Democracy in America, he admired how local institutions, especially townships and states, maintained a degree of independence from the central government. Tocqueville saw this decentralization as essential to fostering civic engagement, political responsibility, and democratic stability. He believed that allowing different levels of government to function with relative autonomy helped prevent tyranny and encouraged active participation by citizens in public affairs.

Vincent Ostrom, in The Intellectual Crisis in American Public Administration, often draws from Tocqueville to critique centralized bureaucratic models. Ostrom emphasizes how polycentric governance—where multiple centers of authority operate independently but cooperatively—aligns with Tocqueville’s observations about America’s administrative structure. So yes, Tocqueville did see this independence as beneficial, particularly in reinforcing democratic habits and limiting the overreach of centralized power.

4o

You said:

If one were to take the imagery one step further, could one separate each level out by encapsulating them in a self-interest cloak- the idea being that in terms of action, each level will prioritize the interest at the local level, which can be at odds with other levels of governance.

ChatGPT said:

Yes, you could extend the imagery in that way. If each level of governance is wrapped in a “self-interest cloak,” it suggests that local, state, and federal authorities will act primarily to protect their own interests, which may sometimes conflict with other levels. This aligns with public choice theory, which Ostrom himself engages with, emphasizing that political actors—whether at the local, state, or national level—pursue their own interests rather than some idealized collective good.

Tocqueville observed that the strength of American governance lay in its decentralized structure, where local institutions had enough autonomy to make decisions that best served their immediate communities. However, this same independence could lead to friction when different levels of government pursue conflicting agendas. For example, a state might resist federal mandates that it views as intrusive, or a local government might implement policies that are at odds with state priorities.

This “self-interest cloak” metaphor also ties into the broader tension in American federalism: the push and pull between cooperation and competition among different levels of government. In practice, while decentralization fosters adaptability and local problem-solving, it can also create inefficiencies, redundancy, and legal battles when interests clash. Ostrom, like Tocqueville, would likely argue that this tension isn’t necessarily a flaw but an inherent feature of a system designed to resist centralized authority and encourage pluralism.

The benefit of this model, as opposed to the Russian Doll model, is understanding when a group becomes a competitor rather than an altruistic companion. For instance, during the COVID crisis, all the states bid up the price of masks by bidding against each other. In their actions, which were independent (cloaked in self-interest), Americans increased the costs of masks for all Americans to the benefit of those abroad. When reorganized as a bidding unit at the national level, this price effect is reduced.

The only trick, of course, is that you must trust that the greater group will, in turn, divide out the masks to everyone’s satisfaction.

Regulation vs Market Clearing–Knob and Tube Edition

A few months ago, I wrote about an investor who bought a property with an old style of electrical wiring called knob and tube. Their post was an example of the complexity of a rehad project. The price of the building was undoubtedly part of their decision-making. But you don’t always know what you are buying. Inspections are done to determine all the variables upfront; when it comes to real estate renovations, there are bound to be some unexpected costs. The expense of rewiring a nine-unit building was a downstroke against their profit.

Homes have so many features, which leads people to make different choices depending on their skills, what they value, and their tolerance to risk. Some homeowners, for instance, will not purchase a home with a tuck-under garage. The thought of the amount of energy loss every time the twenty-foot double garage door goes up in the winter when it is below zero makes them cringe. The energy inefficiency of this floor plan makes the home unacceptable in their eyes.

Over time, particularly when mechanicals or construction processes improve, old systems like knob and tube wiring make their way out of the market. First, the market starts to reject the item, so sellers, in preparation for sale, determine they would be best off making the improvement before going on the market. Sometimes, the insurance company will influence the market by making it more expensive to insure certain features, which provides incentives for replacing those items. Eventually, the old way of doing things becomes obsolete and unacceptable to buyers.

This process may take a couple of decades or a quarter century. Old-timers grumble about replacing perfectly feasible mechanicals, wasting funds that could be spent elsewhere. A long time ago, a local electrician advised that as long as the cylindric glass fuses supported the current demand, then all was well. When one insurance company refuses coverage, other smaller companies may step in. And around it goes until the verdict changes and most homes have been converted.

Consider this method versus a regulation. Once an empowered authority draws a line and publishes a restriction, the market no longer has the ability to evaluate this change in contrast to all the dozens of other upgrades and improvements that can go into a home. The burden falls most heavily on the more dated homes, which are often owned by people who have gotten on in years and are not keeping up on things or those of lesser means who patch and plug problems as that’s the best they can do.

A decree from above creates an acute demand for that one mechanical, which, in my experience, causes opportunistic behavior and price inflation. The market system is the kinder and gentler way to transition from one set of norms to another.

Dramatic Plunge

Sometimes, crazy northerners crack a hole in the ice and disrobe down to a skinny bikini before plunging into a chilly frozen lake. It’s called a Polar Plunge. It’s supposed to be fun!

But that’s not the type of plunge I’m bringing you in this article by well-known urban geographer Bill Lindeke. New construction in the legacy cities, which had made nice strides from 2017-2021, plummeted down 88%.

Comparing the slowdown to other cities of similar size reveals an undeniable first place in the worst record award to be given out. The cause, you ask? Bill suggests.

The most obvious culprit to me is that both St. Paul and Minneapolis have enacted (or taken steps toward enacting) rent stabilization policies. This was an issue that I argued about back in 2021, writing that the policy proposal appearing on the referendum would amount to St. Paul “redlining itself” when it came to attracting housing investment. The bigger surprise is that Minneapolis seems to also have been affected by concerns about rent stabilization, even though they haven’t actually enacted any actual policy.

I say it doesn’t stop there. The hostile environment against developers, landlords, tradespeople, maintenance and upkeep folks, and anyone who puts effort into the upkeep of real property has taken a toll.

There are other municipalities that welcome people who want to build upon and maintain investment properties. Options provide choices.

Outsider on point, Outsider not so much

I’ve been diving into Democracy in America lately, written by a Frenchman, Alexis de Tocqueville, about a voyage to the New World in 1831. He was writing for the French government and primarily focused on public life. So, taken by the spirit of the population, it resulted in a text that shares the rhythm and enthusiasm of civic life, which makes the book popular today.

One point of fascination is the energy of governance at the township level. He ogles at the ability of a small group of men to tackle a public project, do their best (although he notes that this is often not as well done as professional bureaucrats), and see it through to completion. He notes the short distance between the man on the street and the organizer of public goods. In France, the central authority resides far from the common man. It’s a distance thing.

As an outsider, de Tocqueville was a keen observer. But this isn’t always the case. Sometimes, the outsider over-simplifies, and sometimes, they interpret to fit a convenient view.

Lately, immigration has been in the news, particularly the subset of intelligent, well-educated types. We have one such community. The tech workers from Asia gravitate to the same suburban area, the same school district, really. This public school district pulls in the highest scores in the state. It’s no coincidence. All the Tiger moms want their kids to go to the top school—not a private school, mind you, but a public one. For comparison, Asians in Minnesota make up 5% of the population.

Their contribution to raising the level of education among all those other Minnesota kids doesn’t stop there. Their interests in debate club, science club, and robotics flush out the teachers who are willing to lead the group. Inevitably, a photo of the teams winning some national prize filters into the community newspaper a few pages ahead of the sports teams and their accomplishments. These families want a lot and put in the work to get it.

This community also wanted to play cricket close to home. And voila! Our city has a cricket pitch.

Plymouth to Get City’s First Cricket Pitch

The activity of this group reminds me of what de Tocqueville describes in the immigrant communities he witnessed. The profile of people who support the notion that anything is possible if you put a little elbow grease into the project. The distance between those with ambition and those able to coordinate and shepherd a favorable outcome is short.

When commentators imply otherwise, you wonder where they’ve been. If you are in the education game, it’s clear who carries the ball. It’s the families and the teachers. Corporations are so far removed from education mechanics that they might as well be on an island somewhere. General observation shows that highly educated, foreign-born tech workers result in positive externalities to their surrounding communities.

Big business and corporate America aren’t even on the same playing field. And those who think so might want to check the game’s rules.

Housing needs and prices vary

The US Census has a new look. The site has improved tremendously. This might be old news, but it’s news to me. It’s worth checking out if you haven’t been there in a while. I particularly like the profile pages, like this one.

Take note of the breakdown of housing units and households. There are approximately 5.7% more housing units than households in the state. You need some vacancies as there are units under renovation or being held while a family relocates from one living situation to another. Is 5.7% in the comfortable range? It’s hard to know. Still– comparing the spread between households and units is a measure to determine how many extra spaces, if any, there are for families to live.

The county-level profiles are great too and come in several formats. Here are three to compare.

Each county has a different spread between the number of housing units and the number of households. The range is from 7% vacancy in the agricultural area of Blue Earth to a low of 1.8% in the most densely populated Hennepin County to a generous 16% in the northern lakes area of Mille Lacs County. Hennepin County is the only place we can say with certainty that there is a clear need for more housing.

Counties are large. There may be vacant structures in rural Blue Earth county while the demand for places to live is in Mankato, a nice-sized town of forty-five thousand. For that reason, it’s great that the Census even zooms into the city level.

Here’s a snapshot of Perham, a small but humming town about an hour SE of Fargo.

The point here is that housing is local. When people observe that the price of housing did not come down when new units were added, the follow-up question should be, what type of housing and where?

An Example

Say you live in a high-density, well-frequented area where lots of people come and go to visit local amenities like ballparks, restaurants, and museums. At some point, you get tired of being unable to host book club because your friends can’t find parking in front of your home, or the noise of continual foot traffic along the sidewalk is plain annoying. You decide to do something about it. After all, this is your home—right?

The voluntary action taken to rev up the neighbors, petition your city council, and air your grievances across social media platforms can, in sum, add up. It is an opportunity cost to you. You’ve engaged in volunteering and spent some of your time and talents to improve your environment. In fact, you’ve done such a good job that there is now a team of neighbors- Team A- all on the same quest.

Traditionally, streets and sidewalks are open-access town amenities. It’s too inconvenient to block passage for those from afar and those nearby. Hence, most roadways in the US are public in the most generous sense of the term. The free flow of people circulates around for their various needs, whether it be for a commercial delivery, a commuter getting to and from work, or a family out and about doing what families do. People in the know might adjust their schedule and stay off the roads at rush hour or following a Taylor Swift concert, but otherwise, it is a free-for-all, first-come-first-serve type commodity.

Team A, in the neighborhood wants more control than the anything goes, and engage their city to intervene in the spirit of preserving their neighborhood. They make a material claim to the pavement outside their doors. In order to make it official, they need the blessing of an official body with authority. The constraints change once a sign goes up on the block limiting parking hours, or requiring a parking pass.

Imposing minor inconveniences like restricted hours, passes, or even meters might make street parking more orderly. It’s a way of relaying information. A restriction might be just what someone needs to make an effort to drive through the alley and put their car away in a garage. A small charge encourages people to walk further and park on a less busy street.

The time to take note is when a restriction pushes other groups to form. Then, there are more preferences to consider than simply those of the neighbors who want ownership benefits of the street spots in front of their homes. Take the recent change implemented for those who wish to drive into Manhattan. To listen to this guy, it’s all a great success to charge $9 and discourage entrance by vehicle. He appears to speak on behalf of the commuting group.

Screenshot

What other groups are in the mix? Shoppers who would come into the city, but now the surcharge discourages them? Small shop workers like home repair people? Tourists who decide against coming in for the day? What is the cost of their behavior in the face of this new constraint? It seems that retail shops and restaurants could see a decrease in business. Less competition for small-scale home repair services results in higher prices for homeowners. Fewer tourists, as pesky as they seem, weakens the arts and museum support systems.

Time will tell. But it seems that gaining a little bit of ownership of the asphalt might cost Team A more than the time it took to lobby for the change. Commuter Team B may benefit the most, as the $9 is a fraction of the income they earn in the city. And the others—workers, shoppers, and tourists—all lose out. After all, there’s no free lunch. But more importantly, is this matrix of tradeoffs between various interest groups the desired outcome of implementing the surcharge?

Super Power

It might be a bit difficult to buy this picture as a model of spontaneous order. Spontaneity, perhaps, but order?

Each little bubble is a representation of an independent actor out fulfilling their purpose of the day. Bubble wrapped, as they each get to retain their skills, talent and experiences and bring those forth in the work they do.

This is in fact their super power. No matter who you know in life or where you start, you have the power to devote your time and energy to the endeavors of your choice.

Luckily, the twentieth century is full of modeling the chores done in exchange for pay. No need to review that here. Economics is most comfortable in this environment: money for goods, services, and labor. It’s countable. The measures are used in all sorts of reports and for all sorts of comparisons.

Sometimes the numbers seem off. Sometimes, people don’t end up where someone thinks they should. And Social Welfare Economics tried to get a handle on such things. As a method, it really couldn’t pull off the knowing part. How do you know when such a group is better off than the other? Isn’t a comparison contingent on all the factors that go into the moment? This is what James M Buchanan seems to argue in Positive Economics, Welfare Economics, and Political Economy (1959)

A second major problem which has concerned theorists in welfare economics has been the possible existence of external effects in individual consumption and production decisions, sometimes called “spillover” or “neighborhood” effects. But this annoying complication also disappears in the approach to welfare economics suggested here. If, in fact, external effects are present, these will be fully reflected in the individual choices made for or against the collective action which may be proposed. External effects which are unaccounted for in the presumptive efficiency criterion of the economist and the proposal based upon this criterion will negate the prediction of consensus represented in the alternative suggested. The presence of such effects on a large scale will, of course, make the task of the political economist more difficult. His predictions must embody estimates of a wider range of individual preferences than would otherwise be the case. The compensations included in the suggested policy changes must be more carefully drawn and must be extended to include more individuals who might otherwise be neglected.®

The reader might be led to believe, in this bottom-up observation of human behavior, that consumers reflect a comprehensive analysis of the entirety of their transaction, including internalizing spillovers and externalizing expenses. The market filters through individuals’ private desires and their accommodations for public or group enterprise in a complex, yet thoughtful manner.

The graphic specifies the draw of a common cause, whether it be education, peace, or public health (and there are thousands more). It is the cause that sorts the analysis. It’s not a group being told to sign up to walk for MS. It’s the desire to be on the team fighting a deadly disease that drives the worker to devote their superpower to a cause.

In review

First principles of the model are

  • 1. Actors are independent free agents.
  • 2. Actors may offer work for private benefit or toward a group goal.

Construction customs and outcomes

In a recent post, House Prices and Quality: 1971 vs. 2023, Jeremy Horpedahl points out the difference in house prices by time values, which I really like for comparison purposes. He notes, “As you can see, in 2023 it took 31 percent more hours of work to buy a square foot of the median home, compared with 1971.” Furthermore, he makes the adjustments for the extra footage most homes offer today versus when the Brady Bunch lived in their swanky multi-level Californian home.

Then he goes on to say the quality of construction in the 1970s was modern and hence met a certain threshold of acceptability. I would argue that’s not the case. The 70s was a time of experimentation with new methods driven by a desire to enhance eco-friendliness. These materials and techniques did not provide the same longevity of use as the old country techniques from earlier in the century. This article cites a variety of issues. Focusing on a few mechanical components of a home will best exemplify how the norms and standards of the time affect the durability of the product, which is internalized in price.

Homes are expensive to buy and to maintain. One justification for paying the premium for new construction is that all major mechanicals are warranted for ten years, and most, on average, will last more than that. Heating and cooling systems have an average lifespan of fifteen years and cost $12-14K. Roofs keep homeowners dry for twenty-two years or so ($15K). Windows and siding can vary significantly depending on the quality of the materials.

For instance, in the photo on the right, the windows are original to the 1912 apartment building. They are wooden double-hung sashes that protected the lower level laundry and storage area from the weather for a century, serving the purpose intended. The windows on the left are vinyl replacement windows that were installed less than fifteen years ago. The dirty-looking glass is called a broken seal. Moisture has found its way through the double-paned structure, dictating that they are a failed mechanical by industry standards.

Window repair and replacement are among the more costly repairs in a home. The insert on the left probably costs about $3,500 in our market, just for one window.

The 1970s were full of experimentation with lower-quality materials. Hardwood flooring was replaced with plywood and then covered with carpet. Whereas wood floors are sanded and refinished for a beautiful crisp feel once every twenty years, carpet wears out in about a third of the time, seven years. My hardwood flooring guy tells me they have been back to refinish quarter-inch oak in one-hundred-year-old homes. There is the esthetic appeal to this home feature but it also translates to lower upkeep.

Solid stucco exteriors (stucco is a cement-like product that lasts for thirty years or more) are another application prevalent in homes built prior to the 1970s. Exteriors were instead clad in inexpensive plywood. This fibrous product does not necessarily fail in functionality after twenty years but no longer takes paint well and hence looks thrifty. Woodpeckers tend to find it appealing for sharpening their beaks as well.

By the late 1980s, homes built in the 1970s were highly unpopular. In part, their split entry style and vaulting with dark beamed ceilings had lost their cosmetic appeal to younger buyers. Buyers also longed for quality craftsmanship. The seventies homes were built cheaply, and consumers felt it. Most people wouldn’t have verbalized their selection as a commentary on an experiment in housing gone wrong, but they showed it in their choices.

Russian Doll model of public safety

Some goods are best produced privately, and some perform better in the public goods market. Production in the former is enhanced by the division of labor, whereas in the latter, crowdsourcing is vital. The recent high-profile apprehension of a person of interest in the death of a local CEO is illustrative.

Let’s break down the Russian Dolls. The largest doll is the level of law enforcement, which is officially put in place by the government and funded through taxation. These forces fall under territorial boundaries. Since the attack against the healthcare executive took place on the sidewalk in front of the Hilton in Manhattan, the NYPD is in charge of the case.

These uniformed professionals went to work and quickly found the getaway route the suspected assailant took leaving the scene. He fled on foot and then jumped on an e-bike. He went through Central Park and ended up at a bus station. The officers were fortunate to find out the suspect had spent the night at a local youth hostel (Time).

A senior law enforcement official is quoted as telling the Times that the person of interest photographed used a fake New Jersey identification to book a room at a hostel, checking in on Nov. 24 after arriving in the city via bus. He then checked out of the hostel on Nov. 29, before checking back in the next day.

The real breakthrough from this local contact was a photo of the normally masked man who had been snapped in the hostel lobby. He showed his features at the friendly receptionist’s request. A citizen can contribute to an investigation simply by following the rules of their employment.

As the manhunt continued into other states, the following levels of Russian Dolls were engaged. Even though the NYPD remained in charge of the official investigation, it depended upon the work and resources of many other branches across state lines. These details remained in their reporting realm. While the media activated public interest in the case, they kept the general public interested in the pursuit.

This brings us to the McDonald’s worker who noticed a similar-looking young man in his restaurant. He could have looked the other way. Now we are down to the last Russian doll. Not everyone at this level will engage. How many others saw the perp, became suspicious, and stayed quiet? There’s a potential cost of reporting, and not everyone is willing to take the risk.

Fortunately, the greater society doesn’t need everyone to report. Only one person needs to step up. This is not pay-by-the-hour employment; it is a job one does under the influence of a shared vision when the duty shows up on the other side of your counter at McDonald’s.

Public goods respond well to this blended model of paid personnel in conjunction with a more significant population of people who follow the norms, like the youth hostel receptionist, and those willing to take risks and report. But I do hope the McDonald’s worker gets a bonus.

The rent really isn’t that high

In a recent post about time prices, the excellent Jeremy Horpedahl noted that workers are better off today than in 1924 except in the cost of housing. These comments are rooted in data compiled by Anthony Davies.

Antony Davies recently did a 100-year comparison of time prices for an average worker in the US. He compared prices in 1924 for several common food items, gasoline, electricity, movie tickets, airline tickets, an automobile, and several measures of housing costs to the best comparable thing in 2024. This following table shows his results:

Is housing really more expensive?

Rent is shown to be less expensive than in 1924 in small and medium cities, not more expensive, and by quite a bit. Living in a small city today only costs the worker 4.7 days of labor versus 1.3 weeks in days of yore.

However, consider the increase in the cost of living in a large city, shown at 2 weeks versus a week and a half. Doesn’t the proximity to work and services save workers a considerable amount of time? Many people who live in smaller towns or rural areas commute long distances to work. They drive to larger commercial centers for shopping and medical services. In an emergency, an ambulance service can run up a large bill.

Aren’t there considerably more services in the large cities than in 1924? In addition to road transit, there is access to international airports. The city is also the heart of entertainment culture, from major sports franchises to fine arts and musical venues. Conferences take place in the city, and universities are located there. Cities provide the landscape for all the restaurants and eateries where politicians and leading business figures congregate.

When you rent in a large city, part of what you pay is the capitalization of the entrance fees to many more social enterprises that were not available in 1924.

Public motives, Private motives

Here at Home-Economics, we argue that there are two motivations behind every transaction. People trade to benefit the public interest, such as funding flood insurance relief at the federal level. On the other hand, people are motivated to trade for the benefit of themselves—the purchase of a private residence to house a family. A blended purchase is easily seen at a fundraiser when a guest pays an inflated price for TimberWolves tickets, obtaining the private benefit of going to a basketball game while the surcharge is kept by the non-profit.

Goods traded in private markets have certain traits and are taxed and supervised by a governing body. Non-profits and governments provide many public goods and services that are not taxed nor subject to the same level of oversight. But what about private companies that provide public goods? This seems to be at the crux of the recent kerfuffle over Google.

The issue at hand is the Google search function. Clients do not pay to use it. Clients can use any other search engine and have them appear as the default web page. The search page is access to an environment. Just as the air conditioning in the mall is paid to make the shopping experience of mall shoppers more enjoyable is an enhancement to a public space, a high-functioning search is an enhanced entrance to the internet. They are both public goods to the groups of people who access their spaces.

What would be a beneficial review of a public good? Is it available to the greater group without impediments? Google search- yes to all those who have access to the internet. (Efforts are underway to make it available to residents in rural Minnesota). Is the search function supported voluntarily with some degree of additional financial support? Yes, there has been substantial investment in R&D for the benefit of the consumer. Is it providing a beneficial service? Yes- Without a doubt.

Not all public activities can meet these thresholds with the same confidence level.

Deregulation on the tip of the tongue

Everyone is talking about peeling back regulations. I, too, think this is a good thing. Picking which rules should go and which should stay is the question of the day. The rules were put in place often to save folks from some harm, so those would be worth keeping, right? But where is the final test to turn for such judgement?

Every industry will be different. Perhaps people in each walk of business will have an opportunity to point out the absurd or even the slightly off base.

Real estate construction offers a wide play of potential overreach by bureaucrats. At least from the layman’s side of things, it’s a bit difficult to understand the fine nuances of a vent’s proximity to a floorboard. Can a metal heat vent ever rise to a temperature that would ignite a beam? If the vent turns at this angle it is unacceptable, yet a few degrees to that angle it passes.

AI could be one way to double-check the interpretations of safety requirements. Instead of well-intended people imposing the most stringent interpretations of what is safe, a history of events could be considered. The power of scanning large files allows thousands of cases of, say, insurance claims to detail actual construction failures that resulted in harm. If there has never been a claim involving a heat vent setting framing on fire, that should give some direction on whether the rule is worth pursuing.

The standards each community picks will reflect its risk tolerance. But if the level of acceptability has risen far above what the average person tolerates in their own dwelling, then the rule makers are stifling the construction process and adding undue expense.

Talk of Tariffs- MN Edition

In 2022, Minnesota traded a total of $6.2 billion with Mexico. With our neighbors to the north in Canada, Minnesota traded more than $21 billion.

In response to the question of who pays for tariffs, University of Minnesota professor of economics Tim Kehoe replied, “And the findings have been that somewhere between 90% and 100%– the number gets bigger over time– of the tariff revenue comes from US firms or consumers. That is, we pay more for the imports.” But this is really a follow-the-money answer. Where does the cash come from that goes into the tax revenue? The consumer who made the purchase.

This is an incomplete analysis.

The economist says Minnesotans will pay higher prices to cover the tariffs. Yet he suggests that when countries retaliate, they simply have the choice to buy goods elsewhere. It seems that a country that imposes a tariff suffers, and one that chooses a less efficient trade with another partner also suffers a loss. The question isn’t whether the less agreeable trading arrangements are costly. The question is what the cost of buying is, and is that worth it?

Consider the objectives at hand.

“Now, President-elect Donald Trump says, on day one in office, he will impose sweeping new tariffs of 25% on Canada and Mexico and another 10% tariff on China. Trump says, the Mexico-Canada tariff is to crack down on illegal immigration and drugs. “

I’d be interested in an analysis that shows how tariff penalties will incentivize these trading partners to respond to the above-mentioned objectives. Will the cost of this trade arrangement induce Mexico and Canada to put some muscle into immigration issues? How about drugs?

The American people want these issues addressed, and this implies they are willing to put resources towards this aim. Will these new trade agreements prove to be the most cost-effective compared to other enforcement options? (MPR article quoted)

The Thing about Regulation

People expect their government, or governing bodies, to protect them. It’s the most basic and oldest public good. Band together in a cave or behind fortifications and put the physically strongest in charge of fending off harm. For better or worse, this placed the physically strong in high-status positions for more than several millennials.

But what does that mean to keep you safe? And here is the sticky part. There is a broad spectrum upon which the answers to that question may fall. In some cultures, women are safe when clothed from head to toe and sequestered out of the public eye. Most people and women find this a violation of individual liberty. It is not up to the group to seek a safety goal so that it impinges excessively on one or a whole section of society’s liberties.

One story in the news yesterday tells of a mom in Georgia arrested for negligence when her ten-year-old was seen walking home on a rural road. The police were notified by a neighbor. They then showed up at the family’s home and cuffed the mom in front of her kids. Last month, there was a story in the news of another ten-year-old in another part of the country who was finally detained when he drove a stolen car through his neighborhood playground. This ten-year-old had been released on numerous occasions for auto-related theft to a mother who was never held responsible in any way.

Of course, there are many more mundane questions about what is safe. How many smoke detectors does a house need? How many inches does a metal vent need from a combustible floorboard? Will that tenth detector be the one that alerts the family of smoke in the house? Can a wood rafter really catch on fire from metal only exposed to air heated to seventy degrees? Someone thought so. How high does a standard need to be to be safe enough? I’m not sure. But I expect that no one wants to be the regulator who, after a death from a fire, is thought to have been too lax.

The thing is that too much regulation can kill, too. At least, that’s the argument for those who feel there are too many restrictions in the drug industry. Failure to approve causes people to die from lack of access to a cure. Lengthy approval processes cause people to die, too. Just like too many building codes add an undue burden to housing expenses. Without housing, some people are severely disadvantaged and may even die on the streets.

So– what to do? What level of protection is requested when the people go to the government and ask? It seems like the answer would be some expected norm of the group.

If you raise the standards above the norm, people are restricted from liberties they would have enjoyed. Plus, more than likely, some people will disregard the regulation as they feel it is not worthwhile. Before you know it, the mayor of some town is caught at a party without a mask when all other good city dwellers have been putting up with the stinky things. A non-conformist attitude can then carry over to different areas, like permits for home repair. And people start getting their brother-in-law, who’s ‘handy’ to connect a gas line. Here the permit and ensuing inspection is beneficial.

Walking the fine line between setting regulations and meeting people’s expectations for safety is a balancing act worth figuring out.

There are no regulations against garage door decorating.

Honor and Respect

Vintage picture with Arlington Cemetery in the foreground and the Kennedy Center across the Potomac, through the trees.

Now it’s time to return to honoring the faithful, like the military personel who serve our country. Let’s hope for a while we can bring back recognition for most, instead of the few, who voluntarily support the many in lieu of the self. Let’s remember, through the year, at each holiday, to praise those tried and true workers who show up for others.

Betting on the Future

You know how during a basketball game, when the losing team comes back from halftime with new energy. All of a sudden, the three-point shots start to fall. The layups hit the glass right at the sweet spot. Turnovers help to turn the game around. The momentum has shifted, and the losers can do no wrong.

That sort of thing happens in neighborhoods too. It might start off innocent enough. One resident starts to add a few extras to their lawn maintenance routine: edging along the sidewalk and mulching the flower beds with that deep chocolate-colored mulch. Another neighbor takes note of the new look when out walking their dog, thinks to themselves how nice that looks, and evaluates how little extra time it would take; he too brings the soon-to-be new norm back home.

The satisfaction of returning home to a place that looks just a wee bit nicer acts as an accelerant. Pretty soon, a scrutinizing eye picks up on some peeling paint. The next weekend, a paint scraper, primer, paint brush, and matching paint are purchased and put to use. Others might not be able to handle the ladder work and hire it done. That’s when the cargo vans start to show up. Some have rolls of carpet peeking out of the back doors strapped shut with tie-backs. The one with a lightning bolt logo on the side deposits a worker who installs nifty spotlights over the covered porch.

And on it goes. The circulating activity of people in the trades leaves the neighborhood just a bit more polished when they leave. People enjoy the effect and start to walk their dogs more frequently to check out everyone’s progress. There’s a beautification movement underway. Residents are betting on the future.

What will Women do?

The embers of the women’s movement championed by Gloria Steinem and Betty Friedan are cooling and turning to ash. During the last election cycle, a successful initiative was still able to galvanize women voters into one voting block through abortion rights. Similar attempts did not succeed in this year’s competition. Falling in status are pink things people wear on their heads, bra burnings, and Murphy Brown reruns.

Where will white wealthy women turn for direction?

Nancy Pelosi is without a doubt the most powerful women in American politics. She took office in the house of representatives in 1987. She was the first women to become speaker of the house in 2007. All this after she raised five children with a man she married in 1963. Despite spending nearly a quarter of a century focused on being a wife and mother, Nancy Pelosi has enjoyed an enormously successful political life.

Perhaps being part of a large, bustling family contributes to her success rather than distracts from it. Perhaps devoting the necessary energy to maintaining a life-partner garners the type of support one needs in political life. Justice Ruth Bader Ginsburg (1933-2020) also chose a very traditional family life. She raised two children with one husband, whom she married in 1954. The same can be said about Secretary of State Madeleine Albright.

As minority groups switch alliances, perhaps it’s time for a new focus for women. Perhaps there will be a rising status of all those activities in neighborhoods full of long-term partners and their kids. It seems that such efforts come back in forms of future career support later in life.

A new Administration, Less Regulation?

Even prior to the election outcome, there was bipartisan interest in reducing regulations which hinder housing. Yet in 2024, efforts around housing ended up being a power struggle between different levels of government and zoning control. Traditionally, land use is determined at the local level. The political efforts were geared at removing local control through state mandates. Come to find out, residents like to control the land in their direct periphery.

With the new administration, one would anticipate this spirit of deregulation to find its way to most industries. Is there a good place start? Where would less government result in a net positive? Where are the low hanging fruit?

The market solves for social concerns. Tesla is a prominent example. If there is a mass of consumers with a shared concern, than they will demand it of the market. Looking for the majorities with shared common interest might be a start. For example a ballot measure passed in Minnesota to divert funds from the lottery to the environmental trust fund. It passed with 77.5% of the vote.

When people voluntarily allocate resources for a casue there is a better chance that mediating their interests through the market will result in a more efficient outcome. Without the surcharge of bureaucracy and the unintended outcomes of intervention, markets often are more fruitful. When it comes to the environment, the majority of Minnesotans indicate that they will spend the money to preserve and protect.

Social influence on price- Endogenous or External?

It was a privilege to meet sociologist Viviana Zelizer yesterday. Our No Due Date book club read her 1994 book The Social Meaning of Money and we are fortunate to have an hour live with authors to discuss their work.

I think ChatGPT provides some interesting insights into her work:

Viviana Zelizer’s work suggests that the value of social relations is not simply an external force acting on price, nor is it strictly endogenous in the sense of being fully determined within the price mechanism itself. Instead, she argues that social relations and economic transactions are deeply interwoven in a way that both shapes and is shaped by the cultural and moral contexts surrounding them.

In her framework, Zelizer contends that social values and economic exchanges co-constitute one another. That is, social relations influence economic value and practices, but these exchanges also affect the nature of social relationships. For example, in “The Social Meaning of Money,” she demonstrates that people assign specific social meanings to money and earmark it for different purposes (like gifts or household expenses), which reinforces particular social relationships. The relational context affects how money is perceived and used, indicating that social and moral values are not external to money and price but integral to how people understand and navigate economic transactions.

Zelizer’s approach thus goes beyond a simple model of “external influence” or “endogenous value,” advocating instead for a relational view. She calls this the “relational work” perspective, emphasizing that people continuously create and manage the boundaries between social and economic life. Through this process, social norms and values both influence and are influenced by economic behavior, making them mutually constitutive rather than separable or one-directional forces.

In-Group, Out-Group

The On-Line Sociologist newsletter has been popping up in my mailbox recently, and today’s installment included in-group and out-group under key concepts.

In-Group: A social group an individual identifies with and sees as essential to their identity, creating feelings of loyalty and solidarity.

  • Example: A person who strongly identifies with their nationality may feel pride and connection with others from the same country.

Out-Group: A group that an individual does not identify with and may view as fundamentally different or opposed to their in-group.

  • Example: Someone with a strong religious affiliation may see members of other faiths as part of an out-group, which can lead to feelings of rivalry.

There are some great examples of in-groups and out-groups in the neighborhood setting, which also exemplify this sense that action for people within the group is altruistic, whereas action outside the group is competitive. Take school districts for instance. For activities within the district, volunteers come forward with their time and resources. The same educational supporters are more than willing to badmouth the adjacent district for being too lax, too uptight, not creative enough, and so on.

When I was young the ‘wrong side of the tracks’ was a popular framing of the other side of town that isn’t quite good enough. If you live over here, we will rideshare with you, we will look out for each other, but if you’re from the other side of the tracks, it’s not up to us. You are in the out-group.

Of course, the divide may require a nose stuck even higher in the air when discussing refined neighborhoods with famous people or the seriously affluent. And those folks want to be rated against the other ultra-rich, maybe even in another state. The competition here has reached a plateau that requires proper comparisons to reach across state lines, across to greater metropolis.

What in-group and out-group formations do you see near you? Cyclists versus auto drivers? Shift workers versus day workers?

Internalize, Externalize, Optimize

If you’ve been following this site, you know the thesis in play here is that at the time of transaction, there is a settling of accounts. Both private and social ambitions are considered before cash is exchanged for a good or service. Price is a numerical representation of both selfish and communitarian aspirations and obligations.

But that’s not what you hear when externalizing costs and internalizing benefits are explained. A familiar story of social costs is a story of industrial pollution. The product is being sold at a sub-optimal level as it does not reflect the nearby communities’ detriment of absorbing manufacturing waste. Marginal Revolution University (the best place for economic education) offers this graph in their section What Are Negative Externalities.

The lines on the chart tell the story. If the cost of the good included the social cost of pollution, the price would be higher, and the company would have to survive on fewer sales. Note the efficient quantity on the horizontal axis is to the left of the market quantity.

Fortunately, the market can also be responsible for positive externalities. This occurs when a transaction leads to extra benefits for those nearby who did not contribute financially to the transaction. If a few businesses at a corner invest in surveillance equipment, the neighborhood could benefit from a drop in crime. If a wealthy family invests in a school music program so their young protege can have a venue for their talents, the whole student body benefits from access to a higher level of music education.

In this case, more of these transactions would be beneficial to groups nearby, so they are underproduced, as the graph shows. Here, you will note that the quantity most efficient is located on the right-hand side of the market quantity on the horizontal axis.

Thus, the efficient quantity, which we want for the best private/social optimization, lies along the horizontal axis from left to right. At some point, Q efficient must share a spot with Q market. That’s the price we are interested in here- the price at which the optimal level for both private and social needs and ambitions is met. Price falls on this point more often than not.

Attn Geographers

My brother told me today that Minnesota was one of the first in the game of GIS mapping. Hence, the state offers a wealth of geospatial data at Minnesota GIS and Maps.

Here’s a sample of their data on daycare providers.

This dataset is a collection of records that communicate the locations of child care, family child care and certified child care centers in Minnesota. It was created by downloading licensing information from the Minnesota Department of Human Services (DHS), geocoding the spreadsheet records and converting them to a spatial format. The approximately 10,000 records are combined into one layer, which can be queried to separate by license type. This version focuses on a smaller set of core attributes than can be found on DHS’s Licensing Information Lookup Page; see that page for all the attributes: https://licensinglookup.dhs.state.mn.us/

There’s a section called What’s in My Neighborhood?

The MPCA’s What’s in My Neighborhood contains a wide variety of environmental information about your community. This includes potentially contaminated sites, permits, licenses, registrations, inspections, and closed enforcement activities.

Potentially contaminated sites: Since the early 1980s when major federal and state cleanup programs were created, the MPCA has been aggressively searching for and helping to clean up contaminated properties, from very small to large. This website contains a searchable inventory of those properties, as well as sites that have already been cleaned up and those currently being investigated or cleaned up.

Environmental permits and registrations: This Web application also contains a searchable inventory of businesses that have applied for and received different types of environmental permits and registrations from the MPCA.

Getting cash to those in need

Viviana Zelizer’s sociological classic, The Social Meaning of Money, is full of historical examples of the conveyance of time and resources to those in need. The author also depicts the evolution of aid from charities to pensions from the state, from controlled expenditures to variations of individual freedom to choose how to spend.

What sort of money, then, was this new charitable cash? Rejecting the model of dole, wage, or insurance, pensions appropriated instead the forms of the middle-class domestic economy; or, more precisely, they replicated women’s housekeeping cur-rencies. Considering that most recipients of public pensions and a large number of those receiving or at least managing private cash allowances were women, charitable cash was easily transformed into a special category of domestic currency, a sort of collective pin money. Notice the vocabulary: the term “allow-ance” comfortably echoed the familiar income of middle-class wives. Pensions, of course, had been legitimized as a dignified payment by the enormously successful federal program of Civil War payments for veteran soldiers. But there was also a long tradition of pensions as a substitute income for husbandless women. And it was middle-class women who, for the most part, ran this feminized currency exchange; not only did women’s organizations become the strongest supporters of mothers’ pensions but mostly female social workers supervised both public and private forms of cash relief.

Zelizer is one of the few academics who speaks of the poor as worthy to choose. Furthermore, she repeatedly illustrates how participating in systems of trade serves to educate the participants, gives them standing, allows them to be role models to their children, and so on. Instead of the standard starting point that the poor will simply be happy to receive, Zelizer paints out in broad relief the full benefits of market participation to this group of modest means.

Policy Thought of the Day

I sat through an interesting presentation today at the Federal Reserve Bank of Minneapolis—a striking glass and steel building on the edge of the Mississippi River. The commentators all shared angles on the ambitions for affordable housing in their respective areas of the country. The very pragmatic Jenny Schuetz with Brookings is speaking here.

One of her messages is to pick a reasonable goal, such as downsizing parking requirements, and get that passed. Massive bills packed full of ideas are interesting only in theory.

With simplicity in mind, here’s a product idea meant to steer resources in the right direction. A few days ago I panned the idea of swaying behavior through signage- Will Signs Work? The lack of incentives is what is missing here.

Let’s think of it as a model. The man in the middle, we’ll call MN1. After all, the driver of all intentions in this endeavor is MN1. This is the person we desire to receive resources. Without this person, there is no need for the non-profit to exist to come to their aid. Without MN1, the drivers would not be tempted to pull to the side at a busy intersection and pass a few dollars through the window. The model takes the perspective of MN1.

What does MN1 want? In the news clip, the panhandler said he hoped to earn $20-30 from a day on the curb. Now we know the amount of incentive necessary to show up. What do the motorists want? They wish to satisfy their impulse to come to the aid of a fellow human in need. To give directly is very satisfying. What do the non-profits want? They wish the panhandlers would come to their sites for the services they are trying to administer. Their livelihood is based on attracting MN1’s.

If the motorists could purchase a voucher for $50 which the MN1s could redeem at the non-profits, all actors achieve satisfaction. The motorists pass aid directly into the hands of the panhandler. The cash incentive should drive MN1s to contact the non-profit. This allows face time to sell their services. Furthermore, for vouchers lost or unclaimed, the non-profit earns the face value of the donation.

The MN1 folks are able to come away with cash and hopefully additional avenues to services that alleviate their plight. The motorists appease their need to help while donating a nice amount to the local non-profit of their choice, a choice with the added benefit of a screening process. The non-profit has customer leads showing up at their door while receiving additional donations.

What should the voucher be called? A Twenty-Bucker?

Fact of the Day

How much US cash is held out of the country? A lot. Christopher Neely at the St. Louis federal Reserve explains:

The U.S. dollar has been the most widely used international currency since 1945.1 The dollar is the most traded currency on international financial markets, dollars comprise 60% of official reserves (i.e., foreign exchange reserves), and many traded goods, such as oil, are commonly invoiced in dollars. In addition to these commercial uses of the dollar and dollar-denominated assets, individuals in many parts of the world hold U.S. currency, i.e., paper money, both as a store of value and as a medium of exchange.2 This blog post3 explains the widespread use of U.S. currency and provides some simple, back-of-the-envelope calculations on the size of some of the benefits to Americans.

The rest of the world holds a great deal of U.S. currency, i.e., cash. Although the amount can’t be precisely tracked, the Federal Reserve Board of Governors recently estimated that foreigners held $950 billion in U.S. banknotes at the end of the first quarter of 2021, or about 45% of all Federal Reserve notes outstanding, including two-thirds of all $100 bills. Overall holdings of U.S. currency have grown rapidly, however, and overseas holdings of Federal Reserve notes would now be worth closer to $1.1 trillion if such holdings are still half of all U.S. currency.

Will signs work?

I say no.

The City of St. Paul is looking to curb panhandling in busy intersections. It’s looking to encourage people to donate money to organizations that help those who are unhoused instead of handing out cash. FOX 9

City leaders say they’re doing it for public safety reasons. It’s putting signs up at intersections to bring awareness to drivers on how to help those who are unhoused. 

This is so Minnesotan. If we simply ask nicely, the good people of St. Paul will listen and do as we say! Let’s ignore incentives and inclinations.

There are two groups and two forces at work. The well enough to do in their cars are compelled at the sight of the need to fulfill an urge to act. Their instincts are crying to lend a helping hand. This is so easily accomplished by reaching into a wallet for a few dollars and rolling down a window. Searching for a reputable organization to direct funds to is tedious and not very rewarding. When you send in a check, you just get a thank you but no human touch.

Incentives for Group 1: Sign 0 Direct Give 1

The second group is the panhandlers. They have a need and are working to externalize cash from motorists’ desire for mutual aid. Although public policy types may rationalize that these folks really need this, and really need that, and it’s all because of X, does not eliminate the clear immediate need for cash. That’s their mission. The solution in the sign does not meet this need.

Incentives for Group 2: Sign 0 Direct Give 1

The sign idea does not work. If vouchers were given to motorists who want to reach out and touch someone to make a difference, and the panhandler could take said voucher to the organization for cash, among other things, then you would meet the incentives for both Groups 1 and 2. The organizations would also have a shot at ‘selling’ the panhandlers on their other services. If successful, the panhandlers would no longer need to hit the curbs with their stools and cardboard signs.

Pilfering at the non-profits

Shoe-string organizations run valuable community services. Most employment is provided on a volunteer basis. The positions are usually stretched, leaving a few core people to bear most of the responsibility. Thus, a lot of trust is placed in the hands of folks who have just shown up for the job.

It isn’t uncommon to hear people joke about so-and-so or such-and-such, keeping a few extra concessions in their garage or pocketing some cash from the till. You wouldn’t think there would be much money in it, but a basketball tournament weekend would draw in a net of $25K back ten years ago when I ran them. That said, these thefts are typically small stuff that is not worth pursuing—except once in a while, a whale is caught.

Investigators found that she began making unauthorized withdrawals less than two months after she assumed the role of treasurer. 

 “The PTO debit card was also used in hundreds of personal purchases, including childcare expenses, student loan payments, groceries, and takeout food purchases,” the criminal complaint read. “The unauthorized transactions included checks written out to [McMullin] and deposited into her personal bank account. Once in [McMullin’s] personal bank account, the money was used for mortgage payments, bills, and other personal expenses. [She] also withdrew cash from the PTO bank or from ATMs. At various points, Defendant did make some nominal deposits from her personal bank account back to the PTO account.”

But only a portion of the actual loss is in the dollars pilfered. Stealing from the social side of life is a strike against shoring up losses; it’s an attack on moving people forward. Kids’ programming can set youth on the right track with competition and discipline. Kids’ programming keeps young folks doing physical activity that is known to promote long-term health. Kids’ programming puts mentors in touch mentees for guidance throughout formational years.

Fraud within the industry is a drag on participation. People tend to give up their time when they trust a system and share the ethos of the work. Suspicions of theft encourage people to take their support elsewhere.

Cracking the kid’s question

My husband and I both come from families with five kids. Even then, ours were larger families, as the average US woman bore 3.6 children. Big families were those with ten or more children. A college friend with twelve siblings scored top prize in the mega family category.

Today’s fertility rates are not even up to replacement numbers. So, what can be done to make large families fun again? One approach may be to consider them in election choices. Here’s a father of five kids running for a county commissioner position. People who live a lifestyle conducive to a gaggle of kids are bound to favor programs and support services geared that way.

Most people want similar things, such as personal safety, good schools, and adequate health care, all within the reach of decent employment. However, a large families’ focus is undoubtedly skewed to their preferences. Safety means kids can navigate city roads to and from schools and parks without harm. In contrast, a family with a musical prodigy may be perfectly willing to buffer themselves against some urban crime so their child can be within reach of the top ballet school. One wants ubiquitous small town the other wants access to specific cultural activities.

Good schools, for instance, mean good public schools in the large family scenario. It can also mean a school that isn’t too elite so that their kids have a chance to dabble in varsity sports or theater or debate without being squeezed out by intense competition. Large families form a buying group of public services. Figuring out how to match the most likely who desire a large family with the mix of services that enriches their lives is the best way to grow the population.

Artificial price Alteration

A few people were talking in the office the other day about how small their electric bills were due to the use of solar panels. One gentleman disclosed that the bill on his home in Arizona was barely above what would be typical for running standard kitchen appliances. This was when his air conditioner was continuously running to beat the hot desert sun. The Minnesota home was squeaking by with being charged an electrical bill that was less than most streaming services. These are wonderful endorsements for an eco-friendly real-estate-related energy application.

A group of realtor types don’t think word-of-mouth stories like these are enough to spread the word about eco-friendly energy use. They want the dollars saved through higher efficiency and more environmentally positive energy use to show up in the numbers. If a home has a certain level of insulation or a particularly efficient set of appliances, then the market should bear a higher price for that property, they reason. So instead of trying to find it in the price determined by buyers and sellers in a meeting of the minds, they suggest appraisers add a tweak post-sale. When in doubt- fudge it, I guess.

The reality is that the benefits of newer mechanicals and construction are featured in price. The reduced electric bill from solar panels is in there, too. It’s just not as standout noticeable as some people want. Therefore, I suggest they spend their efforts on another end to this issue. The focus should be on hyping up those communities where the ethos of the problems is alive and well. More people will be on board if they feel the acceptance of the norm by others. Start in the middle and work out.

I’m not sure utility bills and insulation thickness are the lowest-hanging fruit. Proper disposal of all the old appliances, depleted mechanicals, and construction debris seems much more problematic. Think of the rusty wall heater in the basement or the moldy knotty pine paneling from fifty-odd years ago. Face it, people are bad about staying on top of clutter; part of this is disposal.

Start a movement- clean out your house!

The demand is there

Now consider the supply of a residence hall with services. Looking for a location with uptapped capacity. See the arguements here, here, here, and here for the use of this site.

Price Signals

There’s a local story circulating through the press about increasing the daily per diem for jury participation. Blois Olson writes an informative daily newsletter, Fluence Media, and here is his explanation:

The daily rate is too low to be competitive against even the minimal paid job, so it’s difficult to follow the logic that more money would be enough of an impact to draw in this segment of the population. After all, the others who show up aren’t happy to be there either. Some have delayed more than once to avoid the inconvenience to their daily lives.

So why do people show? Somewhere along the way, people who are meaningful to them impose it as a duty to support an existing system. You have duties to your family, for instance, like visiting the elderly in care homes. You have duties to a level of civic decency in your neighborhoods, like not playing your Elton John albums at full volume while lounging on your deck. You have duties to your workmates and so on. You give to generate a pool of goodwill which eventually comes back around.

Jury duty meets an even higher standard for some, as they are live participants in a system that affects their lives. Perhaps that is why they shy away from it. They don’t want to be asked uncomfortable questions. Yet, it is through participation that their input is recorded. Showing up is how the game works, and that is the message, not pricing, that needs to be sent out.

Letwin talks of David Hume

David Hume, a member of the Scottish Enlightenment crew and good friend to Adam Smith, was a practical sort of guy. Perhaps it was his good sense that kept him out of the universities and engaged with a broader, more genial audience. He wrote on many topics. Fortunately, people like Letwin parse through the material to pull out interesting bits like this one.

But if the politician had to be in a way mediocre, he had also to be thoroughly civilized. Civilization was not the same as morality. Hume refused to divide men into good and bad; in the history he rounded off each portrait with a neat balance of virtues and vices, that fails utterly to give a picture of a living man, but makes it clear that he was neither saint nor villain. For Hume would allow no character to be “wholly bad or good; tho’ the prejudices of party make writers run easily into the extremes of both panegyric and of satire.”

So often people are painted as all evil or all angel when we all know, as David Hume tells us, there’s at least a bit of both in most everyone. Then what should we look for in evaluating the political performance of public servants who are apt to be swayed in both directions?

The political morality Hume demanded is in a way far more difficult to observe than the extremest puritan austerity. For it is easy either to follow some set of rules absolutely or to ignore moral qualms altogether. It is easy also to try to establish a perfect city, come what may. But the man who tries to adapt himself to circumstances and yet preserve his integrity, to recognize new problems without destroying law and order, has an endless task. He is eternally obliged to balance one thing against another, to distinguish and compromise, and all this without falling into moral indifference. Perhaps most difficult of all, Hume’s politics assumes great personal resources, an ability to find meaning in life for oneself, and to require from the state nothing more than a convenient setting for private enthusiasms.

Use values for a historic hospital

Before rehabbing a structure, most owners consider how the building will be used. With high vacancies in the downtown business districts, some folks are suggesting the commercial buildings be converted to residential units. It doesn’t take much imagination to understand the impracticality of changing around floor plans from acres of cubicles to one thousand square foot residences with a couple of bathrooms, a kitchen, and outward-facing windows. It’s not impossible to change the use from office space to living space, yet a momumentous task.

The hospital housed the patients, so it is more akin to residential use. The buildings are grand.

There are historic photos of wards lined with beds, which would no longer be acceptable. Instead of 1900 residents, perhaps the space could accommodate 500 in order to comply with modern standards for living space. This would still be a sizeable project. I’m wondering though if the building would appeal to the mainstream population? It seems people would have a difficult time shaking off thoughts of the mental illnesses formerly contained within its walls. Although the structures look like dormitories in a liberal arts college, details like bars on the windows are reminiscent of past occupants.

It seems like the best use for the complex would be for housing folks who are presently suffering from homelessness and mental illness. It’s quite a step up from the tent encampments being dismanteled daily in the core cities.

Entrepreneurial Philanthropy

Government is really good at saying ‘no.’ Rule-making is all about saying “don’t do this” and “don’t do that.” Sometimes solving problems means saying yes. Like, yes, we can fix that stinky, polluting car. In steps the philanthropic entrepreneur, Environmental Initiative.

Launched in 2017, Project CAR works with local car repair shops to cover the cost of fixing emissions control and exhaust systems for qualifying lower-income Minnesotans. Nearly 600 cars have been repaired since the program began, eliminating 32 tons of emissions. Project CAR is focused on fixing the estimated 25% of passenger vehicles that cause 90% of vehicle air pollution in Minnesota.

Folks who are driving the car which contributes the most to declining air quality are also stretched by other priorities.

Cathy Heying, executive director and founder of The Lift Garage, an established partner of Project CAR, praised the program’s expansion, expressing enthusiasm for the collective impact such partnerships can generate. “Customers come in with all sorts of needs, and, often, environmental impact is not their top priority due to cost constraints. So, this program is amazing because customers want to do the right thing for the environment and this program allows them to do that while also improving their car’s functionality,” she said.

This non-profit ends up offering a two-for-one. They provide people with transportation to go about their daily lives and they reduce a negative externality to the local public. All this without interfering with the owners’ everyday flow of finances and obligations.

What other low hanging fruit are our there for the entrepreneurs to capture?

Max Pay for Political Types?

The Hennepin County Commissioners just voted to raise their pay by 49%. Sometimes this is justified, when the starting pay is unreasonably low. A large percent of a very small number is still a small number. But here the Commissioners were already at what people in this part of the US would consider a nice salary.

District 2 member Irene Fernando proposed the pay raise during Tuesday’s Administration, Operations, and Budget Committee meeting. The proposal would increase the current salary cap for commissioners from $122,225 to $182,141. 

According to Fred, this figure is double of the per capita income in the state.

The commissioners stated that this new amount brings their wage in line with other county executives. But is this a fair comparison? Should elected officials be motivated to serve and then draw an adequat salary? Or should the salary be the motivator to run for office?

The Governor chooses to take home only $127K a year. He seems to think that part of the prize is the job, not the wage.

A strong monetary motivation can also produce golden handcuffs. It’s commonly accepted that incumbent county officials (or city coucil people for that matter) rarely loose their position in an election. Their name recognition and familiarity with the constituents often secures their job. Is it a good idea to pay out a salary that would be tough to duplicate elsewhere and thus encourage someone to stick with it once they’ve lost interest in the spirit of the work?

When I was young, I often heard that jobs from teachers to government positions were done with a spirit of public service. That generation appears to have retired from the workforce.

Flow

Often, the merits of a transaction are given from the perspective of a single agent in the trade. An assembly line-worker lost their job when the plant was moved to another location. This is bad. The worker suffered a loss. Quickly, within sentences, the effect is generalized to all the workers in the plant, town or even region. The Experience of the middle aged white guy who is difficult to retrain and find meaningful work of the same quality is the catalyst for all sorts of feelings and demands for government intervention.

Do you see the slide? From a valid totaling up of wins and losses for one individual turned into a model involving segments of society.

It’s important to declare which model is in play as this dictates whether the players are individuals or groups, whether the tally of net benefit or loss is assigned to one or to many, and perhaps most interestingly the flow of reaction and counterreaction as value settles in the system. More interesting insights surface when consequential outcomes are looked at in a flow of events.

Think back to the time of the 2008 recession. Say one buyer purchased a home at the peak of the housing market with a three-year adjustable ARM. When the ARM recalculated in 2011, the buyer’s payment adjusted upwards to an amount beyond their ability to pay. Due to the recession, the value of the home had decreased below the mortgage balance. The buyer ends up in a familiar situation at that time and loses the property to foreclosure. This is a clear loss.

But say every other homeowner in the neighborhood had owned their homes for more than ten years. None of them were interested in selling until after 2015. These individuals realized no impact from the value changes during the recession expcept to see their assessed values decline resulting in lower property taxes. As a neighborhood the effects of the recession were uneventful.

In the plant closure story, there were most probably workers who ended up better off for the closure. Perhaps it encouraged them to return to school to achieve an updated skill. At the other end of work life, perhaps someone nearing retirement ended up with a more favorable retirement package. Getting people to think of workers as a mass might be useful for unions, but loses a finess of obeservation for analysis.

It seems, to have a profitable discussion, one must pick a playing field. If you want to pick a town, then the players are all the workers, their economic impact on local services, and the support available through the municipality’s local services. Who netted out what and where did the money settle in time periods 1, 2, and 3 following a plant closure. If there was a draw of support from a higher level of governance, maybe the playing field needs to be moved up a rung to the county level, or to the region within the state. The players then get expanded to blend in other economic agents and their positive and negative tallies.

Instead, the story is usually told like some mid-19th century Russian novel. The peasants were persecuted and the capitalists must be blamed! This is not helpful.

An hour of your time for goodwill?

A local writer-comedian asks on X:

Here are some of the eighty-four responses which rolled onto the thread in just a few hours.

  • Compassionate Action for Animals
  • All About Family
  • MELSA for libraries
  • Minneapolis City Soccer org
  • People Serving People (Shelter)
  • Bridging (furnishings)
  • CommonBond Communities (Shelter)
  • Community Aid Network MN (Food)
  • Open Arms MN (Food for critically ill)
  • Planned Parenthood
  • Habitat for Humanity
  • Union Gospel Mission
  • Ronald McDonald House
  • Community Kitchen
  • Political Campaign
  • For Goodness Cakes (Foster Kids)
  • Sactuary Supply Depot (Mutual Aid for unhoused)
  • Animal Humane Society
  • Tool Library
  • Walker Art Ctr
  • CANMN (Mutual Aid with language barriers)
  • The Sheridan Story (Child Hunger)
  • Teen Center
  • Your Mom’s House
  • DC Silver Lining
  • The Crisis Nursery (Child Care Drop off)
  • International Institute of MN serving refugees
  • MN Women’s Prison Book Project
  • Listening House
  • Peace House
  • Minneapolis Animal Care and Control
  • Save a Bull Rescue (Dog rescue)
  • People’s Laundry
  • Second Harvest
  • Face 2 Face Health Counseling
  • Boneshaker Books
  • EMT at the University of MN
  • St Croix Trailblazers (Special Needs)
  • Volunteer Match dot Org
  • Local Elementary and Middle Schools
  • Extreme Noise
  • Southside Harm Reduction Center (Crisis Line)
  • The Bitty Kitty Brigade (Foster)
  • Feed my Starving Children
  • NorthPoint Health and Wellness
  • Minneapolis Institute of Art
  • Fairview Hospital
  • Second Harvest (Food Shelf)
  • Twin Cities Walk to end Alzheimers
  • Caring for Cats
  • Abbott Northwestern Hospital
  • Cardz for Kids
  • Junior Achievement
  • Meals on Wheels
  • Cedar Cultural Center
  • Darts
  • The Open Door
  • YouthLink
  • Pet Haven Mn

The benefit to volunteer hours is that at every donation an individual evaluates the worth of their time against the mission at hand. This anarchist form of dispensing goodwill will never exceed the need and hence avoids fraud. It also is given with the lowest possible overhead.

Let’s talk Internalizing Externalities

All the cool kids are doing it. An externality occurs when an activity with a commercial goal creates a positive or negative impact on parties outside of the transaction. The classic example is the manufacturing plant polluting the water with their waste. The community downstream suffers a negative impact. Or consider a drug dealer taking up business alongside the playground at the local park. The neighbors no longer use the public park which is there for their use.

The plant and all those who benefit from its production internalize a gain from not properly disposing of their waste, which pushes out a cost to the people downstream. The dealer accesses a young group of clients internalizing a gain from his location while the neighbors suffer the loss. But what about the other way around? A small group forms a club to advocate literacy. They offer extra help in the local schools and give out scholarships to new high school graduates. They lose their time, which could have been spent on something else, so that the local youth may internalize the gain from extra tutoring. Perhaps a company agrees to locate to a small town under the condition the municipality brings in internet infrastructure. The townspeople internalize the benefit of the corporate relocation.

All this talk seems to suggest there are groups of people who are either on the inside or on the outside. The lines are porous, but exist. What if there were a group who had gotten a bad rap for an extended period of time – and it was considered beneficial to come to their aid in some way? Wouldn’t it make sense to place them in locations where other groups have the knack of externalizing benefits to others? That way, no direct interference messes with the balance in their lives. The positive externalities show up in the serendipitous manner of access.

Transaction action and Institutions

Does affordable housing vary in quality based on location? Or is it simply a category of housing no different than a category of a car or a type of breakfast cereal? If you can use the home to shelter a household whose income falls below an acceptable level, then the property adequately meets its intended value.

A group of black pastors, led by Dr. Alfred Babington-Johnson, thinks location does matter. They are suing Minnesota Housing, an agency responsible for the allocation of public funds to subsidized housing, for exacerbating a household’s access to success by predominantly building in areas serviced by weak institutions.

A prominent voice among Black Twin Cities ministers, Babington-Johnson sued Minnesota Housing and the Metropolitan Council last year, arguing that state and regional efforts to build affordable housing effectively have backfired, increasing racial segregation while concentrating poverty in poor neighborhoods.

“Whether that’s done with proven intentionality, the outcomes clearly indicate none of the disparities go away,” Babington-Johnson said in an interview Wednesday. “The educational gaps don’t close. The economic opportunities don’t materialize.”

In this quote, Babington-Johnson refers to two institutions: schooling and the workplace. Efforts to develop educated people are regarded as the path to improved employment. Yet when people reside in areas where 40-50% of the residents live below the poverty level, it is easy to imagine that the lack of informal networking and time resources available to nurture these institutions is not at hand.

The Minnesota Housing Commissioner counters:

In a letter to the state advisory committee last month, Minnesota Housing Commissioner Jennifer Ho wrote that “in the last several years, 63% of the new rental units in the Twin Cities metro area that have been awarded funds through the Agency’s Consolidated Request for Proposals have been in the suburbs while 37% have been in the central cities of Minneapolis and St. Paul.”

Which seems to contradict what people on the ground are feeling. My question, as a casual follower of the issues, is why are the numbers so hard to come by? Every time I’ve gone down the rabbit hole to try to nail down the numerical facts of these conversations, time has not allowed for a successful outcome. As public information, it seems they should be accessible. Attorneys for the pastor group put out these numbers.

Attorneys for Stairstep noted that in the Twin Cities, more than 23,000 affordable housing units received subsidies that began between 2017 and 2021. Of them, 56% — or 13,000 units — were subsidized by Minnesota Housing, the Met Council or another form of state funding.

Note the difference in verbiage between ‘new’ units versus all subsidized units. Two thirds of the new units may go to the suburbs. However, this clouds the issue, which is that most subsidies, by the structure of aid distribution, flow to neighborhoods of high poverty. The Housing Commissioner proposes work to be done to create the ideal institutions in place.

“For example,” she said, “the only avenue for lower-income parents of color to access well-resourced schools should not be making them move to a white, wealthy community, which may lack other opportunities that they value. Rather, we should invest in disinvested communities and ensure that all schools are well resourced, allowing people to achieve equity in place.”

The implications that folks could be giving up support groups in a move is a valid one. But who would be in the best position to provide voice to whether it is more feasible to relocate or to enhance institutions in high poverty areas? The pastors, or the residents if given the choice to move, or the government who holds monopoly on dictating where the housing units are located? Shouldn’t residents have a choice?

Show me the Market

I don’t think people will balk at the idea of dual choice, that with every transaction there are blended motivations to the self and to society. But what will be fun to pursue is the idea of a market for the social side of life. The price will set us free (or at least make a lot of decisions easier).

Environmental reviews- Just a way to say NO?

In the latest round of environmental review versus the world (or do it my way legislation), the boxers are the almighty climate combatants versus those who request a road expansion. I should qualify. When I say ‘request,’ I mean demonstrated demand through usage. If the roadways are full, then it’s safe to say that the participants find travel along that freeway by car best suits their needs. Once vehicles come to a standstill on a commute, they are polluting an extra amount by idling. Managing the road system to facilitate flow keeps emissions lower.

A new law passed last year requires an environmental review before authorizing a roadway enlargement. Calculating a social cost at the time of the transaction, like a road installation, is an interesting thing to do. It should be done in conjunction with calculating of all the other benefits prompt and efficient transporation offers, such as getting the elderly to their doctors’ appointments or kids to their extra-circular activities, as well as getting commuters to their jobs.

Residents are dong that all the time. Cars cost money to own and maintain. Consumers will use them when they are their best option. Denying a population access to a road enlargement pushes them to substitute less desireable options. These are less attractive not because of their love affairs with the car, but most probably because they eat into their time and ability to achieve their other daily tasks.

If the goal is to reduce trip miles, then study populations who achieve success at all their goals while using the fewest miles. How is their matrix of choices allowing this to happen? What are their priorities and how did they achieve them. I can promiss one answer. It isn’t because a bureaucrat squeezed their road improvement project.

Convo with Stiglitz

I have been introduced to so many interesting (and famous!) people through Tyler Cowen’s podcast, Conversations with Tyler. This last one with Joseph Stiglitz is no exception. Tyler knows exactly the tempo to keep the clip of information at a perfect speed. The written follow-up provides links to referenced papers. It’s truly a wonderful service.

The breath of Stiglitz career leaves many areas open for further review. But this comment stumped me a little.

STIGLITZ: Today, the critical issue in trade policy is US CHIPS Act and the IRA. The CHIPS Act was, we had lost the ability to make chips. That meant that if anything happened to Taiwan or Korea, we were in a very vulnerable position. Markets don’t take into account that kind of defense concern, or even the resilience. That goes back to some of my earlier work that markets aren’t very good at assessing risk and pricing risk into the decision-making process.

How does he mean that the market does not take into account national defense? Undoubtedly the chips made in Taiwan are produced at a lower cost than in the US, hence the benefit from trade. But where is the documentation to show the accounting of that price drop? Surely people think that a portion of the discount is from the difference in state governance?

When US retailers buy from a textile plant in Bangladesh, they are aware of the different standards imposed (or not imposed) on the building facilities. Surely they factor that into the the price difference? The US retailers could choose to pay a bit more under the conditions that the building and machinery were held to a high standard, should they choose.

The dynanism of the market will adjust to new circumstances and knowledge as it surfaces under changing conditions.

A form seen in highlights

Albert Hirshman describes an economic motion in his book Exit, Voice and Loyalty (1970). Parties can withdraw if they do not care for a product or arrangement. They may attempt to impact the process by exercising their voice. Over time, loyalties develop, which influence the superstructure of relationships.

It seems Hirshman would agree with his contemporary, Milton Friedman, about the benefits of school vouchers. Should a family be displeased with a pedantic school district, they could collect a coupon for their tax dollar input and cash it in at another more vibrant district. Since schools are tied to geographies, consumers always have the choice to relocate their homes to attend elsewhere. Vouchers make the process more fungible.

Hirschman outlined the logic of the exit option and how noted how increased competition could improve government performance. But competition didn’t solve all problems, and the exit option had several important drawbacks. The freedom to exit was often used by the most ambitious, educated, or well-to-do users of a particular service, and once they exited, those remaining were even poorer, less educated, and less demanding. Moreover, Hirschman pointed out, the possibility of exit weakened the effectiveness of voice, that is, the ability to directly change the management’s behavior through feedback, discussion, and criticism. 

As Frank Fukuyama explains in his American Interest piece, Hirshman didn’t believe vouchers were the answer to improving a school system. Unlike other commodities, the departure of the stronger students from the classroom has a negative impact on the remaining students. This observation gives a new form to education. Casting the product in this light projects a little amber glow onto all members of the school community. The mission is to educate everyone. If not an educator or a student, the role may be to voice praise or criticism.

A school does not produce widgets on an assembly line, but a group process produces educated students. Changing the composition of the pool of players can have both positive and negative effects on the outcomes. And there are roles for an audience as well.

Commerce with World Vision

An associate asked if I’d consider a donation to World Vision, a philathropy dedicated to assisting children in poverty. I’m familiar with their work as they’ve been present in the developping world since I was a kid. Still- I did my due diligence and checked out their website: World Vision.

At the bottom of the web page the site offers linkes to organization which can vouch for their efficacy as a non-profit organization.

But I wanted to know the individual theoeries behind each on the tiles listed under the tab ‘Ways to Help.’ So I asked ChatGPT to break down an analysis.

Monetary Contributions:

  1. Research planned giving options:
    • Input: Donors contribute financial resources through wills, stocks, IRAs, or gift annuities.
    • Return: Theoretical support from Social Exchange Theory suggests that donors gain satisfaction, tax benefits, and a sense of legacy by supporting a cause, fostering a reciprocal relationship with the organization and society.
  2. Philanthropy:
    • Input: Christian philanthropists invest significant financial resources.
    • Return: According to Altruism Theory, the return is intrinsic satisfaction and fulfillment from helping others, along with potential social recognition and community status.
  3. Create your own fundraising page:
    • Input: Individuals invest time and social capital to raise funds.
    • Return: Prosocial Behavior Theory supports the idea that individuals receive social approval, increased self-esteem, and a sense of accomplishment from mobilizing resources for a good cause.
  4. Shop for a cause:
    • Input: Consumers spend money on products where proceeds support World Vision.
    • Return: Cause-Related Marketing Theory suggests consumers gain utility from purchasing needed items while simultaneously supporting a cause, enhancing their perceived personal value and satisfaction.
  5. Donate cryptocurrency:
    • Input: Donors provide cryptocurrency assets.
    • Return: The Theory of Planned Behavior implies that donors are motivated by perceived ease of donation, tax advantages, and the belief that their actions will significantly impact.
  6. Find donation-matching employers:
    • Input: Employees donate and leverage employer matching programs.
    • Return: Corporate Social Responsibility (CSR) Theory suggests that employees feel greater satisfaction and loyalty towards their employer, while employers gain enhanced reputation and employee engagement.

Volunteering Time and Effort:

  1. Volunteer at a warehouse:
    • Input: Volunteers invest time and physical effort.
    • Return: Volunteer Function Inventory (VFI) indicates that volunteers gain personal growth, social connections, and fulfillment from contributing to a meaningful cause.
  2. Host an event:
    • Input: Organizers invest time and resources to plan and execute events.
    • Return: Event Management Theory suggests organizers receive community recognition, personal satisfaction, and social networking opportunities.
  3. Run or walk for clean water:
    • Input: Participants invest time and physical effort in running or walking events.
    • Return: Health Belief Model supports that participants benefit from improved health, social interaction, and the satisfaction of contributing to a cause.
  4. Build kits with your group:
    • Input: Groups invest time and effort to assemble kits.
    • Return: Group Dynamics Theory posits that groups enhance cohesion, collective efficacy, and mutual support while achieving a shared goal.
  5. Knit blankets and sweaters:
    • Input: Individuals invest time and skill in knitting.
    • Return: Flow Theory suggests that engaging in this activity provides a state of flow, where individuals experience deep satisfaction and absorption in a meaningful task.
  6. Pray for those in need:
    • Input: Individuals invest time and spiritual energy in prayer.
    • Return: Spiritual Well-Being Theory indicates that individuals gain a sense of peace, purpose, and connection to a higher cause through prayer.

Corporate and Group Engagement:

  1. Explore corporate partnerships:
    • Input: Companies invest resources to engage employees in charitable activities.
    • Return: Stakeholder Theory supports that companies enhance their reputation, employee morale, and customer loyalty by demonstrating social responsibility.
  2. Ignite your Christian school:
    • Input: Schools invest in educational programs on poverty and injustice.
    • Return: Transformative Learning Theory suggests that students experience personal growth, increased awareness, and a commitment to social justice.
  3. Activate your church congregation:
    • Input: Congregations invest time and resources in community engagement.
    • Return: Community Engagement Theory posits that congregations strengthen community bonds, deepen spiritual growth, and enhance collective efficacy.
  4. Do the 30-Hour Famine:
    • Input: Students and participants invest time and experience temporary hunger.
    • Return: Empathy-Altruism Hypothesis supports that participants develop greater empathy, a deeper understanding of global hunger, and a stronger commitment to social action.
  5. Ask for a World Vision speaker:
    • Input: Organizations invest time and resources to host speakers.
    • Return: Narrative Theory suggests that audiences gain inspiration, motivation, and a deeper emotional connection to the cause through storytelling.

Advocacy and Voice:

  1. Tell congress what matters:
    • Input: Individuals invest time and effort to communicate with legislators.
    • Return: Civic Engagement Theory indicates that individuals feel empowered, experience increased political efficacy, and contribute to shaping public policy.
  2. Connect kids with sponsors:
    • Input: Ambassadors invest time and social capital to promote child sponsorship.
    • Return: Social Capital Theory suggests that ambassadors build networks, enhance their social influence, and experience fulfillment from facilitating connections that improve children’s lives.

Minimize the Rules

Too many rules:

  • Make it hard for well-intentioned people to find their way.
  • Are difficult to enforce.
  • And thus encourage people to do their own thing anyway.

How to find an infill lot

It’s not easy.

Clients who want to live in an old neighborhood have few choices. The open land is gone. Most homes that are in the neighborhood are in good enough shape to add value to the lot upon which they are perched. Ideally, the clients want to find a tear down, or a home is such rough shape that most everyone cannot see a renovation opportunity. But it doesn’t stop there. As this thread explains, there are more issues in play.

Soil testing and estimates for debris removal and site prep are easy numbers to come by. The tricky bits of information is whether the plan the clients have in mind will fit on the parcel and still comply with the building codes and municipal ordinances.

Lack of information results in uncertainty. Too much uncertainty and people do not want to move forward. That’s not progress!

What I like about this paper

A recent paper, Houston, you have a problem: How large cities accommodate more housing, by Anthony W. Orlando and Christian L Redfearn, offers a new reading of real estate data.

Consider the stylized fact that unmet demand is most-inexpensively delivered on low-cost land at the periphery of the commuting shed, known as a “greenfield” site. This type of development uses low-cost, low-density construction methods. However, in productive and desirable urban areas, low-cost land—especially close to jobs and retail—is quickly consumed, pushing single-family home builders farther away from the amenities that make these urban areas attractive. Eventually, this progression reaches a limit in which commuting back to these amenities is too costly. At this point, the greenfield land is effectively “built out,” and developers are forced to look inward to more expensive land closer to the core where spatial amenities are valued by renters and buyers. When this “infill” development becomes a larger share of new housing supply, the marginal cost of supplying a new housing unit will increase, and the elasticity of supply will fall. Thus, even in the absence of different regulatory regimes, an MSA with more population and more density will appear to have a steeper supply curve because large and growing urban markets naturally progress in this direction.

Real estate has a history of being talked about in static numbers. Orlando and Redfearn discover a dynamic in their research. A city grows along the fringe where the developers can build over large parcels of undeveloped land. This is the most consumer-friendly by meeting the desired structure for the lowest cost. But at some point, the authors observe that the commute to a central business district causes infill projects to gain in status. At that point, a city gains new units within the old infrastructure instead of in the greenfield.

Much of what we have learned in the two decades since DiPasquale (1999) first prompted the field to investigate housing supply is aggregate and static in nature. The goal of this empirical work is to document the location of housing stocks within several MSAs over a long time of growth. The results presented in the article are largely descriptive. It is abundantly clear that aggregate analyses miss the compelling dynamics we documented.

Why stop at the trade-off between low cost fringe housing versus commute time? There are many other interesting dynamics to expore.

No Problem Here

I see this in reverse. The beauty of real estate is that it keeps people honest.

The business of Public Goods

My grandmother would tell a story of giving in their rural Iowa community. Word would get out after a Sunday service at Holmes Lutheran Church that a family was in need. A gathering of kids’ clothes or staple food supplies would be left in a neutral pickup area, maybe at the end of a driveway. Then the mother in need would later pick it up. Poverty was shameful, you see. Direct contact in the transference of aid would be a disrespectful slight on their condition.

The evolution of social welfare has come a long way since the happenings along the gravel roads squaring off sections of farmland. Provision of resources funnels through formal government channels instead of being left solely to the church aid societies of the 50s. Efforts to detach stigma from acceptance of aid are ongoing. The evolution of food stamps is a credit card with funds for the purchase. Free lunches are provided in all school buildings so there is no distinguishing between families that qualify for aid and those who don’t.

It’s hard to see how public humiliation in the face of unforeseen circumstances is profitable. However these control mechanisms were developed as a means of discouraging group members from taking more out of the communal pot of resources than needed. It was a social metering of loosely held assets. Back-up reserves are not attached to one specific individual in the group. They are intended to meet the shortfalls of the worse off.

Scolding looks are used in other ways to keep up shared appearances, When the neighbor grass is getting knee high they may feel the scorn of dogwalkers as they pass on the sidewalk. Pushing and nudging with looks, back turns, and low whispers are simply how it’s done in society when it’s thought necessary to get the word out about control of shared space.

There’s a two-fold reason these norms are swept away in the face of dire poverty. The unkindness is too harsh as the victims are too vulnerable. And furthermore who wants to discourage, in any way, a mother from taking food for their child? The desire for stigma-free acceptance of benefits for kids is simply a long-term win for the group. Healthy kids make for healthy adults.

There are those who, however, may come to an erroneous conclusion about the tapping of public benefits without those disdainful social guardrails. Some will pursue as many benefits as they can find available to them with no personal calculation of need. And others still take the pursuit of public benefits as a business model. They dreamt of being an entrepreneur, they say. This claim is being made in defiance of accusations of fraud.

When public goods and resources are formalized through government metering, then funny things happen. They no longer have the appearance of a common pool resource but rather they take on a more private form under the guise of a ‘program.’ Gone are the nuances of need-based use. Instead, they are peddled and appropriated in a coin-counting manner.

Perhaps an ingredients label is required. This is a one-hundred percent publically funded resource. It is fraudulent to transact outside its intended mission.

Turns out Libraries do matter

There a new paper out supporting the capital investments in libraries: The Educational Benefits of Libraries.

The figure shows that after a boost in library capital investment, reading test scores steadily increased. In the short run, library investments increased reading scores by 0.01 standard deviations. Seven years out from a project, scores were 0.04 standard deviations higher in districts that invested in public libraries than their counterparts.

I’ll wager there are further tie-ins between libraries and the general social well-being of surrounding neighbors. Personally, I plan to brush up on my french.

What was learned?

As the Lift/Uber kerfuffle comes to a close, it will be interesting to see what is learned from the two year process of politicians acting as labor negotiators between the independent ride share drivers and the platform owners.

The Governor singed a bill amid grandstanding to settle a set ride fare which all parties found acceptable. This is a win as the service is valued by a spectrum of riders and sectors. The negotiations, however, were lengthy. As one council member recently observed, the final horse trading involved in getting to ‘yes’ from all sides used up the political capital that could have been used to get the bonding bill done this year. No bonding bill means no bonding money for all the projects requested across the sate. The loss is all the agreements that were left unconsidered due to the distraction of a relatively small pool of workers.

Economists refer to this as opportunity costs. If your capital is doing one thing, it can’t be doing another. Some might say the politicians are constrained by the amount of time they have in a session to review, discuss, and come to terms on items of public concern. But if public officials are in the profession of providing goods and services of value to their constituents, doesn’t it follow that their choice of which products to work on is actionable? To not make time for the bonding bill is a choice not a constraint

Rosolino and Pete continue to develop this argument that “opportunity costs be regarded not as constraints to which individuals passively respond. Rather they are the reciprocal of choice itself.” Paper in the link.

Robert Nozick explains individual action for communal benefit

Nozick is a lesser know political philosopher who wrote Anarchy, State and Utopia in 1974. It was offered as a response to John Rawl’s theory of justice. One point of contention revolves around different methods for redistributing resources to the least advantaged. Should this be a top down imposed structure or spontaneously emerge from the churning motion of voluntary action from below?

Some fear individual action is inadequate if left to the individual. Hence the need for control. In this passage Nozick captures the essence of individual action toward communal goals. The delight of it secures its success.

Consider the members of a basketball team, all caught up in playing basketball well. (Ignore the fact that they are trying to win, though is it an accident that such feelings often arise when some unite against others?) They do not play primarily for money. They have a primary joint goal, and each subordinates himself to achieving this common goal, scoring fewer points himself than he otherwise might. If all are tied together by joint participation in an activity toward a common goal that each ranks as his most important goal, then fraternal feeling will fourish. They will be united and unselfish; they will be one. But basketball players, of course, do not have a common highest goal; they have separate families and lives. Still we might imagine a society in which all work together to achieve a common highest goal. Under the framework, any group of persons can so coalesce, form a movement, and so forth. But the structure itself is diverse; it does not itself provide or guarantee that there will be any common goal that all pursue jointly. It is borne in upon one, in contemplating such an issue, how appropriate it is to speak of “individualism” and (the word coined in opposition to it) “socialism.” It goes without saying that any persons may attempt to unite kindred spirits, but, whatever their hopes and longings, none have the right to impose their vision of unity upon the rest.

Five Minute Real Estate

In this five minute video clip, Frederick Melo with the St. Paul Pioneer Press refers to a number of important real estate outcomes. He was invited to the weekly PBS show, Almanac, due to a recent announcement that a portfolio of commercial buildings, including the iconic First National Bank Building, is being listed for sale.

The collection of buildings are owned Madison Equities. Long time real estate developer, Jim Crockarell died in January and his heirs are not interested in being landlords. Building owners can gain emotional attachment to their properties as appears to be the case here. Some of them were half empty and some completely empty. Significant vacancies do not happen on the turn of a dime. Commercial leases are multi-year and companies have an investmest in their locations. So this recent announcement reflects activity which has been brewing for a while.

Well known architectural firm, TKDA, is also moving. They are relocating to Bloomington to keep workers happy. After 100 years, the downtown devotees are succumbing to practical desires for free parking. An added feature is scenic vistas over the Minnesota River. To attract workers back into the built environment, they are seeking out new surroundings in the third largest city in the state.

US Bank is also stepping away from downtown yet still staying in St. Paul. Workers here also say no to the densest part of the city. Melo reports that the building has had ghost leases for years. While technically under contract, the one-employee-per-floor occupancy has been a long-time indicator of what the future held.

What to do with all these vancant buildings is the question of the day. The solution under proposal is converting the office space to living space. But conversions are very expensive and the demand for residential in the capital city is not as strong as next door neighbor in her sister city. It’s a tough place to live.

Grants and tax increment financing are being proposed as public interventions. Is this a good idea? I’m not so sure. The mayor is quiet letting a non-profit alliance offer investment strategies. Their approach is to focus on one street at a time. One street a downtown does not make.

Cathy Wurzer brings in the ringer of a topic just at the end. Crime and personal safety. These are real issues that have been muted in the last four years. People don’t want to have to worry about being carjacked at knife-point when they’ve got a head full of kid’s programming and an armful of work manuals. Proximity to violence is a deal breaker for many people.

I had not heard of the study the Downtown Alliance had done around the DT Greeters pre and post pandemic. Within a district where a tax was collected to support the greeter program, quality of life crimes decreased by 40%. Whereas in the adjacent Lowertown area (where the St. Paul Saints stadium is located) crimes increased by 20%. Jim Crockarell, the real estate developer, opposed the district. This is speculation, but I’m guessing he thought greeting people and being busy maintainers of sidewalk safety was meant to be organic. It was the civic thing to do. Yet here is concrete data that an organized effort to deter crime, a significant motivator, was successful with subsidized labor.

In review, we were told about multiple exits to the city core. Be careful to note this was not a sudden occurance. We heard about emotional attachments beyond the pull of financial prudence. We heard about consumer driven needs for parking and easy access. We heard about the impracticality of retrofitting the built environment (file under why so many old buildings come down). We heard about public subsidies that will fall woefully short of the task. We heard about the big driver, safety, which is often kept on the QT so as not to implicate an area.

That’s a lot in five minutes

How many people does it take to start a protest movement?

It turns out quite a few. Tablet Magazine has an excellent article on the people behind the recent protests on campus’ across the US: The People Setting America on Fire- An investigation into the witches’ brew of billionaires, Islamists, and leftists behind the campus protests.

Not only does the article list out the actors: “This largely decentralized network of agitators is, in turn, politically and financially supported by a vast web of progressive nonprofits, NGOs, foundations, and dark-money groups ultimately backed by big-money donors aligned with the Democratic Party.”

But also gives shape to the dynamics of the interaction:

These groups, Shideler says, typically operate in a decentralized manner, using successful tactics drawn from decades of anarchist organizing and spread through left-wing activist networks via word-of-mouth, as well as through formal trainings by professionals such as Fithian or the nonprofit “movement incubator” Momentum Strategies. “If you look at Fithian,” he says, “she has consulted with hundreds of groups on how to do these things: how to organize, how to protest, how to make sure your people don’t go to jail, how to help them once they’re in jail.” There is no one decision-maker; rather, decentralized “affinity” groups work together toward a shared goal, coordinating out in the open via social media and Google Docs.

It’s worth a full read.

Christ Church, Malacca

Christ Church is the oldest protestant church in Malaysia. It sits on the same square as the administrative buildings set up by the Dutch in the seventeenth century.

The Stadthuys (an old Dutch spelling, meaning city hall) is a historical structure situated in the heart of Malacca City, the administrative capital of the state of Malacca, Malaysia, in a place known as the Red Square.[1] The Stadthuys is known for its red exterior and nearby red clocktower. It was built by the Dutch in 1650 as the office of the Dutch governor and deputy governor. It continued to be used as the Treasury, Post Office, Government Offices, and suites of apartments for the high officials after the takeover by the British.

WIKI

Knob and tube and deal breakers

In the early part of the last century, when electrification was new, a house wiring system called knob and tube was installed in many homes. It was a labor intensive process but the materials were less expensive. Where there were workers, knob and tube made sense. Wires ran between the interior walls and the outer shell throughout the house on the whim of the electrician. Without a plan, it is difficult to know which wires connect where. This becomes a drawback at time of a remodel. But the more significant drawbacks are the safety hazards due to overloading the system with electrical demands the system was not designed to carry.

This investor purchased a nine-unit building with k&t.

The fuse box looks funny because it doesn’t have the flip breakers. The cute green topped glass are the circuit breakers.

Insurance companies in our area will no longer cover a home with k&t. At least that’s the latest I’ve heard. They tried twenty years ago or so to make it a rule, yet it did not hold. There was enough demand in the market to over turn removing that option from their insurance offerings.

Lenders, federal mortage insurance rules, property insurance providers all play a role in real estate excahnges. In this way they feature in the price of property. It’s uncommon for a subsidary service to make a property unsaleable, but over the years there have been instances where property types have taken significant hits. Condos in the early 1990s would be another example.

Pop star or rule or pop stars rule

They’re called influencers when they hit soccial media venues peddling cosementic products and outfits. Pop mega-star Billie Eilish isn’t hawking commodities. She’s pushing for people to make a sacrifice for the environement. Instead of enjoying a new outfit, settle for a used one. Instead of going solo in a vehicle to her concert, pair up and carpool.

“Hit Me Hard and Soft,” Eilish’s third album, is due out May 17. For the tour, she is focusing on sustainability and is continuing her longtime relationship with environmental nonprofit Reverb, to which she’ll donate a portion of proceeds from ticket sales. She’s also encouraging fans to carpool or take public transportation to her concerts and to wear thrifted or borrowed clothing rather than purchasing new. Fans are also invited to bring an empty reusable water bottle as there will be free refill stations at the venue.

St Paul Pioneer Press

Reminding people to do their part toward a common goal is one way to advance its objective. Another is to pass a law. No plastic straws, for instance, was meant to help the environement.

What I wonder about is which of these to strategies has a bigger impact, and to what degree? Spitballing it I would guess that someone of Eilish’s stature teases out more action, probably a lot more action. It wouldn’t be that hard to measure the ridership of the audience memebers.

I wonder why there aren’t more efforts to nail down the results of some of these strategies. If a mega-star can generate more significant results than a law. Skip the bannings that no one pays attention to and hire the influencers to change the world.

Ruby slippers and a Value question

How do you put a number on historical value? A Minnesota bill is about to put a price on the ruby slippers worn by MN native Judy Garland in the Wizard of Oz. The slippers, stolen twenty years ago, were recently returned to their owner following the completion of the trial last year. The FBI were tipped off to the where abouts and recovered the sparkly heels in a sting.

Now the owner plans to have them auctioned off after sending them on tour. Their estimated auction value is put at $3.5 million.

The state of MN is going to put in a bid but it’s a bit shy of the estimate.

How are cultural values calculated? A one-off item is difficult to determine. But other similar items come and go from the market. Properties, for instance, have been designated as historical landmarks.

Coalitions can’t forget about constituents

A coalition of diverse groups, it was reported, were all coming together for a housing bill. That was sixty days ago.

(KNSI) — The Central Minnesota Builders Association is throwing its support behind a piece of legislation aimed at addressing the lack of housing and the high cost of new construction.

A coalition of housing advocates and bipartisan lawmakers joined together at the State Capitol to call for an increase in access and affordability in housing through the Minnesotans for More Homes initiative.

The bill (HF 4009/SF 3964) legalizes missing middle housing and new starter homes across Minnesota.

KNSI Radio

From the builders association to affordable housing advocates, an unlikely melange of interested parties were looking for ways to reduce housing costs. How better to lower expenses then to reduce barriers to building by rolling back the rules. This bill brought authority over what can be built where to statewide control.

Once the implications of un-zoning the neighborhood hit local communities, residents weren’t impressed. Here are some of the changes proposed.

  • Sets a base level for density allowed on any residential lot by right (or without needing to go through a discretionary review processes) regardless of size at 2 units statewide and 4 units in cities of the first class. If certain conditions are met, 8 units are allowed in second-, third-, and fourth-class cities and 10 units may be allowed per lot in cities of the first class.
  • Forces administrative approvals of projects that meet the standards in the bill language and prohibits public input in the approval process.
  • Limits minimum lot size requirements to no greater than 2,500 square feet for first class cities and 4,000 square feet for all other cities except for Greater Minnesota cities with populations of less than 5,000.
  • Requires all cities to accept Accessory Dwelling Units on all residential lots regardless of size and allows property owners to subdivide their lots by right.
  • Prohibits off-street parking from being required close to major transit stops and limits off-street parking minimum requirements to 1 spot per unit in other areas.
  • Allows multifamily buildings to be built up to 150 feet tall on any lot in a commercial zoning district.
  • Broadly prohibits design standards for residential development and eliminates minimum square footage and floor area ratio requirements.
League of Minnesota Cities

The cities organized and alerted their constituents who must have followed thorugh with calls to their state representatives as the bills is no longer progressing through the chambers. I doubt constitutents will agree to handing over local property rights to the state. This seems like a heavy handed, top down approach.

So how does one encourage increased density? Why- the market of course!

MN is #1- Helium Edition

A recently discovered helium reservoir in Minnesota boasts “mind-bogglingly” high concentrations of the gas that are even greater than initially thought, potentially paving the way for commercial extraction.

Resource exploration company Pulsar Helium, Inc. announced the discovery of helium stores in late February, after a drill just outside of Babbitt, in northern Minnesota, located gas deposits at depths of 2,200 feet (670 meters). Initial measurements showed helium concentrations of 12.4% — which “is just a dream,” Thomas Abraham-James, the president and CEO of Pulsar Helium, told CBS News at the time. But new laboratory readings have surpassed those results.

Live Science

The find is special.

Normally, helium is obtained as a byproduct of natural gas production, as it accumulates underground in pockets of methane and other hydrocarbons. Minnesota is one of just a handful of locations globally where helium is known to exist without hydrocarbons — the others being in Greenland and southern and eastern Africa. These sites all feature a crust of granite rock rich in uranium and thorium, as well as a rift system that fractures the rock to expose the helium produced through radioactive decay. A dose of volcanism then releases helium atoms from the rock.

Northern Minnesota has a love/hate relationship with the extraction of natural resources from the ground. The article doesn’t address how mining methods affect, if at all, the environment.

A woman with dagger words

Happened into the thrift store today…

The 1960s failed, I believe, partly because of unclear thinking about institutions, which it portrayed in dark, conspiratorial, Kafkaesque terms. The positive role of institutions in economically complex societies was neglected. The vast capitalist distribution network is so efficient in America that it is invisible to our affluent, middle-class humanists. Capitalism’s contribution to the emergence of modern individualism, and therefore feminism, has been blindly suppressed. This snide ahistoricism is the norm these days in women’s studies programs and chi-chi, Foucault-afflicted literature de-partments. Leftists have damaged their own cause, with whose basic principles I as a 1960s libertarian generally agree, by their indifference to fact, their carelessness and sloth, their unforgivable lack of professionalism as scholars. The Sixties world-view, which integrated both nature and culture, has degenerated into clamorous, competitive special-interest groups.

Times Literary Supplement, London, May 22, 1992

Yikes! Paglia knows how to slice and dice her impressions. And I completely agree with her analysis.

The window tax

And why it is regressive.

The window-tax, as it stands at present (January, 1775), over and above the duty of three shillings upon every house in England, and of one shilling upon every house in Scotland, lays a duty upon every window, which, in England, augments gradually from two-pence, the lowest rate, upon houses with not more than seven windows; to two shillings, the highest rate, upon houses with twenty-five windows and upwards.

The principal objection to all such taxes is their inequality, an inequality of the worst kind, as they must frequently fall much heavier upon the poor than upon the rich. A house of ten pounds rent in a country town may sometimes have more windows than a house of five hundred pounds rent in London; and though the inhabitant of the former is likely to be a much poorer man than that of the latter, yet so far as his contribution is regulated by the window-tax, he must contribute more to the support of the state.

The Wealth of Nations, Adam Smith
Taxes saved by bricking up windows.

Say social support has value in a picture