This fall both the cities of Minneapolis and St. Paul will have questions around rent control on their ballots. The latter’s proposal is the most straightforward. It asks voters for the right to cap annual rent increases at 3% with no exceptions (an exception might be to increase rent at a higher rate after a major renovation to the property, for example). This, I’m told, would be the most restrictive rent control measure in the country.
Minneapolis’ proposal beats around the bush a little bit as the ballot question simply asks to allow the Minneapolis City Council to investigate rent control stabilization. Many people feel that should this request pass, then the city council would simply move forward on any initiatives they felt appropriate without further input from constituents. (There’s that Minnesotan passive aggressiveness again.)
The movement seems to find momentum from the social justice warriors. We’re going to protect the citizens from the capitalists!
There’s no interest in considering price signals as a way of communicating resource allocation, or a neighborhood’s strengths and weaknesses. And maybe more importantly the relative power of the public goods in each little nook of the city. Clearly there’s no interest in comparing prices and using those relative differences to match prospective renters to the areas which would offer the greatest capacity at meeting their short comings.
The only issue at stake here is whether the stabilization controls rent increases. Because this is thought to be economically beneficial to the renter.
Capping rents however does not make a landlord keep a property in good repair; it does not prohibit them from collecting rent and not pay their mortgage. Rent stabilization does not make a landlord vigilant about the heating and cooling system, nor replacing aging appliances. It doesn’t stop them from hedging on the required time notice for entering the unit, nor being adept at keeping the noise down in the building.
Capping rents does not make the bad landlords more responsive in any way.
But most importantly, rent stabilization does not transfer any wealth to renters in times of steep real estate appreciation. When prices are climbing as they have in recent years, it does not alleviate the feeling that some folks are being left behind.
Helping transition renters to owners, showing them the ropes on caring for and managing their own home, does put them in a position of gaining wealth. And that’s the goal good-willed people should be setting their sites on. Not arbitrary price fixing.
On Friday, Governor Walz lifted the statewide mask mandate for those who have been vaccinated. His announcement coordinated with the CDC’s announcement to do the same. It took local politicians off guard, however, who turned around and extended the mandate in their cities. The claim is the risk is too great as the disparity gap is still too large.
The latest numbers show the counties in the metro are all hovering around 70%, which is the target number for herd immunity. But even out in the greater metro people at stores are wearing masks. I noticed this yesterday when I was picking up stuff for my garden. I asked at the first store and the clerk said they will continue with the policy “until everyone is vaccinated.”
Of course there are cascading stories on social media about how people are acting and how people should be acting. Discourse which battles the personal liberties versus public responsibilities debate is a national pastime– or at least a way some people need to process change in their lives. Talk it out.
But who is responsible for getting their constituents vaccinated? It’s hard not to question whether the local politicians crying fowl on disparities will be eating crow for how badly they’ve delivered safety to their constituents. Vaccines were first made available by special designation. Now they are easy to get everywhere- the state, pharmacies, community centers, health providers. If a local pol can’t handle the coordination of a free and vastly available public good, then– what?
It sets off the bat vibes that these leaders are primarily power players, and not practical cogs in the boring denouement of public life. And for sure we need power players now and again, but only, now and again. Excessive attachment to power, when pols see themselves above the nuts and bolts of public life, inevitably leads to the need for more masking.
The best take on why people aren’t showing face so far was from my daughter. “They don’t want to loose the mask because then people will think they are Republicans.”
With the mowing season upon us, let’s take a moment to reflect upon the subtle pressures in play which keep the block looking shipshape. Our pediatrician and I bantered around such stories, years ago when my then toddler kids were having a yearly wellness check. He lived in a tony part of town where buffed-up two stories sit on manicured postage stamp lots edged with crisp sidewalks.
A discarded bike in the grass would provoke an arched eyebrow. A creative chalk drawing colorfully leading up to the foot of the round top front door would cause a yoyo effect, as the pedestrian’s eyes followed the artwork up and back. An offensive pile of unattended fall leaves would cause the dog walker to yank the poor creatures nose as they hurried off.
Whether you are more casual about your yard work, or dig out each objectional dandelion at first sight of their jagged leaves amongst the soldier straight grass blades, it is something to consider at time of home purchase. Just how much time you are comfortable devoting to trimming hedges and potting geraniums can determine the admiration or wrath of your nearby neighbors.
To err on the tiptop side will mean an injurious sniff every time a green thumber strolls their pooch down the sidewalk. Err too casual, and you’ll cringe every time you approach your drive and note the massive brambling tea roses full of deadwood. You don’t want to turn into ‘that neighbor’ who inadvertently comments, or pulls a face, or displays some sort of other gesture of disapproval.
There aren’t specific standards on these things. A city may have an ordinance in place to regulate the maximum length of the grass. But it is usually pretty lenient– in the mid-calf to knee range. Even though you own your property, your neighbors have a say in its outward appearance, both through nudging and formal recourse.
Biden’s 2.5 trillion infrastructure plan has supply side incentives for getting additional housing up and running. The push is provided by grants to those who will eliminate restrictive zoning laws.
The fact sheet goes on to describe this zoning plan in two sentences, as follows:
Eliminate exclusionary zoning and harmful land use policies. For decades, exclusionary zoning laws — like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing — have inflated housing and construction costs and locked families out of areas with more opportunities.
President Biden is calling on Congress to enact an innovative, new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.
The City of Minneapolis rezoned the entire city in 2019 to allow for multi-family dwellings across the city. What was discovered however, is that there are still many additional rules in place that restrict developers from completing the task. Things like height restrictions and underground parking. As most of the requests thus far have been in the high demand neighborhoods, the planners seem disinterested in working out the kinks.
The persistent thought that development for the wealthy is a negative, not a positive, continues to restrain people in power from acting.
The city gets full credit, however, for bringing back some old school methods of diversifying the composition of household formation. In November of 2019 a change in zoning was approved to allow for intentional housing clusters. This is a similar set-up to a rooming house where residents share a kitchen and one or more bathrooms.
The intentional community cluster development ordinance allows nonprofit organizations, government agencies or healthcare agencies to create collections of small housing units (tiny homes) and a common house or rooming houses with shared facilities on a city lot that is at least 10,000 square feet. The developments are allowed in any part of the city with the exception of industrial zoning districts.
Most recently, the county in conjunction with Avivo, a local non-profit, created “Avivo Village, an indoor community of 100 secure, private dwellings or “tiny houses” created to provide shelter to individuals experiencing unsheltered homelessness, has opened in Minneapolis’ North Loop Neighborhood.”
And the council continues to push through additional changes.
A few days ago “the Minneapolis Council Business, Inspections, Housing and Zoning Committee approved a provision that would remove language from the city’s Housing Code regarding occupancy requirements. Currently, the city’s Housing Code limits occupancy by restricting dwellings “to one family that must be related by blood, marriage or domestic partnership.”
All this undoing of how housing is built and used in the city is a start to allowing more people move into more space. More units leads to lower costs. But it is also necessary to keep the history of such restrictions close at hand. The reasons constituents blocked rooming houses were because they became problem spaces. So what’s the plan to prevent this from happening?
To revive old systems and proclaim them to be new solutions without any consideration of their history seems shortsighted. They do provide lesser expensive housing. But there needs to be an active and on-going companion piece to keep the public from turning on these ‘new’ solutions again, down the road.
A few days ago I suggested that home buyers and sellers, at least while in the process of a transaction, do not place monetary value on a city’s truth-in-housing process (TISH). Whether the city mandated point-of-sale ordinance contributes to the transfer of property is not a new discussion. It’s not even controversial in the sense that the handful of cities which require the inspections are steadfast in the process and very few new cities have ventured down the road of its implementation. You can read the Minneapolis Realtor Association position statement on the matter here.
Let’s consider the expense of the regulation in a modest suburb of 23,000 households which experiences a ten percent turnover in any one year. The city collects a fee of $250 x 2300 or $575K to cover the costs of TISH. By design this fee pays inspectors on staff and the administrative burden of processing the certificates. Financially it is a wash through the city coffers.
What exactly do the residents get for the $575K? The idea, of course, is that the condition of the housing stock is elevated to some degree. As you can read in the position statement this reasoning is flawed, at least in a relative sense. The properties that come to market have been prepped and prettied up. Buyers often require sellers to do repairs before closing based on their own private inspections. Furthermore new owners, in their excitement, invest further in mechanical and cosmetic improvements. Just ask Home Depot.
The truth-in-housing process does double duty to the private process of a more comprehensive inspection. The city is perhaps better prepared to catch failures to pull or complete permits, but that is also covered in the disclosure process required my Minnesota law.
Regulations are needed. They are desired. Let’s just be as efficient with them as possible. If the objective is to elevate housing stock, I would argue that constituents may choose something other than TISH. They may choose for the $500K to be shoveled back into clearing up permits for the least advantaged households in their community. They may choose for the city to carry out TISH on properties that have not pulled a permit in the last fifteen years.
Many mechanicals have an average 15 year lifespan: appliances, hot water heaters, even furnaces. In a fifteen year window roofs might be replaced, window and doors. There’s a good chance that these households are not pulling permits because they either suffer from lack of money or the ability to tackle large projects. Wouldn’t this be a good use of half a million? To aid those who are not able to help themselves with their housing maintenance?
I don’t claim to know how a city’s population would respond. But I know the present system doesn’t even allow the conversation to happen. (And those with the most expertise in the process are quite deliberately left out on the permis they are only capable of self-interest.) Establishing a periodic rethink of regulations refreshes the figures, and the costs, the possible alternatives, and the goals.
Wouldn’t it be great if truth-in-regulations were right there, printed on glossy paper, with all the other summary reports of a city’s performance?
The housing market is marching to pomp and circumstance as apartment dwellers and condo owners are graduating to detach single family living. As this Star and Tribune weekend article announces, “In risky move, buyers waive inspections in red hot Twin Cities home market.”
Everyone benefits from an inspection. Buyers learn what it is they are buying, and sellers are far less likely to hear about conditions issues after the fact. The average home owner has somewhat limited knowledge of all the mechanicals in a house, and first time buyers are truly limited in their understanding of not only how it all works, but more importantly which items are costly.
It is risky for the average buyer to accept a home without an inspector’s professional opinion. The fear is that hidden behind some panel is a terrible crack in the foundation or behind an electrical panel cover is a box about to be set alight by over-fused breakers. So wouldn’t you think there would be some value placed on a city’s truth-in-housing process? This is a process where the city requires the soon to be seller to have a city inspector come to the property and do a less thorough review, yet still a systematic evaluation of the structural features of the home.
The city collects a permit fee somewhere in the $200-250 range, produces a report, and sometimes request repairs. Yet never once in over twenty-five years have I heard a buyer say, “I don’t need to get this home inspected because I know xyz city has done one already.” Even in these fiercely competitive times when buyers are bidding on three, four, five houses before securing a purchase, they hang onto the inspection contingency.
If the actors in the market do not value the city inspections, who is receiving a benefit from the $250 being spent on the housing market? The seller is simply complying with the rules. The buyers, even the ones who only want assurance that the home won’t collapse around them on the day of move-in, don’t value it. Anyone not involved in the transfer of property, pay no attention to it.
City officials when considering a truth-in-housing ordinance say things like, ‘preserve the housing stock,’ and, ‘get in there and look around,’ and, ‘make sure they are keeping things up.’ I doubt the money is a profit to the city, maybe a breakeven. It seems that the $250 times thousands of transactions per year is the expense to feel like something is being done.
It wouldn’t be that hard to investigate the subject, especially in this market. There is an advantage for a buyer to waive the inspection as the seller will consider the offer more favorably over another; the sellers will not have to wait a handful of days to know the transaction is finalized. Simply tracking transactions between two cities, one with a truth-in-housing and one without would determine if there is any consideration given to the report.
In the reports that city’s send out to constituents pie charting out how they spend their tax dollars, it might be beneficial if city’s also had to justify the benefits of their permitting expenses. Instead of a truth-in-housing, a truth-in-regulation.
After a steady stream of buyers came through my new listing today, it’s hard to believe some people are out preparing for what is being presented as an inevitable wave of short sales.
When I sold this mid-century modern home to my clients in 2010 the listing sheet bragged that it was not a short sale, that the folks on title as owners did not have to beg permission from a lender to sell their home. A little over a decade ago buyers in the marketplace had become weary of dealing with corporate interests who had to forego of some profits in order to allow a sale to proceed. What we call a traditional seller was a valued party to the transaction.
With demand for single family homes peaking as inventory shrinks, the days of bank owned properties are part of a foggy past. But maybe it makes sense that the reason for the inventory shortage is in part due to the protections in place for all those distressed sellers who would have had to jump in the game and let their homes go to market. Once a past due seller realizes they can live rent and payment free, why not coast it out.
If the incentives are there, that is exactly what should be anticipated.
One fellow realtor went to a class recently offered on the topic, and said the presenter had some pretty astounding numbers. They are predicting a tsunami of distressed property once Covid protections are lifted. Time will tell how demand absorbs it all.
I wonder sometimes if the people who want to raise the minimum wage actually go on site and meet some of these workers and employers. They might be surprised to find situations other than the poor and the destitute. They might find new to the workforce people, and people who need a lot of flexibility, and people that drift in and out of jobs because that’s what they want to do. They might find people who are accepting the wage because they get something for it.
In each of these situations the employer is giving something in return. If you are new to the trade, you will need a lot of extra coaching and assistance. Your boss is ‘working’ extra hours in training or staying late or forgoing other responsibilities. A new to the workforce employees may need more understanding and leeway on other issues like sticking to a schedule and what to do when your car doesn’t start and how to handle notice for time away.
Flexible and short-term employment also causes a churn for employers who have the responsibility of maintaining all the HR administrative work. Yet many people I’ve know over the years, that do not qualify as destitute, have been willing to work those jobs because they are a temporary distraction, jobs they don’t have to think about, that can be ditched in a heartbeat.
I was hired for one of my first jobs due to family connections. Some might object to that, but a connection is a control string on the employee. Anything the dependent does reflects on the career officer, which puts in play strong incentives for adequate performance. When a connection is not available for that first job, employers may have to work a little harder at supervising until they are confident of the reliability of their new worker.
I could go on with examples, even if some are now taboo to talk about. I’m sure someone would frown if I pointed out that the language barriers create more work for employers. And certainly I’d be accused of the ‘r’ word if I pointed out that getting to know other folks’ culture whether about language, or sick time, or parental leave, would certainly be an adjustment versus hiring the neighbor’s kid whose father works for you.
We have to admit that this type of ‘social’ work exists, call it something, give it value, so we can enumerate it, and use it in fruitful discussions. But since there is a lack of accounting, there is no science to the discussion around minimum wage–there are just opinions. Predictions.
Until we call it out, and give a name to the work that must be done to shore up cultural and social issues; until we count the number of hours of work that goes into it, we won’t have the sophistication to deal with getting low wage workers up the economic ladder.
The EPA has designated January as National Radon Awareness Month. “Test. Fix. Save a life.” is their tag line.
Those of us in the business of helping folks buy and sell homes, have been hearing about the health concerns emanating from radon seeping into homes for the past twenty years. In the first part of the 2000’s, health department officials encouraged buyers to test for radon at time of purchase. Radon was listed alongside a variety of other environmental concerns on the state of Minnesota mandatory seller’s disclosure.
Consumer response to radon did not match the government’s concern, and in 2014 the MN Radon Awareness Act went into effect. The variation in apprehension is best represented by the amount of space now dedicated to the topic in the seller’s disclosure. Lines 279-309 (2020 version) of the body of the disclosure speaks to radon alone–more lines than wells, septics, or any other topic. And two pages of information regarding the detection and harm of radon gas were tacked onto the end. Out of a twelve page disclosure virtually three pages, or one quarter of the document, is now devoted to radon (as opposed to foundations, or water penetration, or roofs).
The new disclosure established an industry standard which dictates the seller is obligated to mitigate a home which tests above the 4 cPi/L established by the EPA. It’s unclear if buyers request the install due to fear for their health, or because they don’t want to be the sucker-who-got-stuck-with-the-bill at a later date, when they go to sell.
Over the course of implementing tests and installations there have been some inconsistencies which have resulted in the need for a final arbitrator. For instance, a few years ago an inspector turned off the air exchange system that a seller had installed in his 1920’s home to enhance the heating and cooling functions. The EPA guidelines state that HVAC systems should be running as normal during the test. However, since this air exchanger was located in the attic (not in the basement) the inspector felt it was an extraneous appliance and turned it off.
The reading came in slightly over the benchmark of 4 cPi/L. As it had already been a contentious negotiation the seller refused any additional compensation. The buyer choose to use $1200 (compensation negotiated for a cracked clay chimney flu) on a radon mitigation system that would not be necessary had the exchanger been left running. They chose between fire safety and radon safety.
By early 2019 licensing of inspectors who perform radon testing was implemented to handle the inevitable variations in the use of the testing apparatus, including decisions regarding air exchangers. Since the MN Radon Awareness Act went into effect, a whole industry of inspectors (tests range from $180-$240) and mitigation installers (system installation ranging from $1000-$1800) as well as a bureaucracy to monitor and deal with complaints, has been established.
The story the Minnesota Health Department has been stressing is that cancer is the leading cause of death in the state. But the leader is all cancers. Mortality rates for cancer vary within demographic groups, but generally, lung cancer makes up around 25% of cancer fatalities. Radon is called out as the second leading cause of lung cancer after cigarette smoking. What they don’t say is that radon is lumped in with second hand smoke and accounts for just 12% of the cases of lung cancer.
Feel free to chime in if I’m doing my math wrong, but a quarter of all cancer cases is around 2500 (lung). Then twelve percent of that number is 2500 x .12 = 300. In other words, death due to radon isn’t even on this top ten chart. It accounts 38% of the souls that commit suicide.
From the keys on my calculator, I have death from radon registering in at no more than 5 per 100,000. Below this grouping of accidental deaths which make up 6% of all deaths (from MN Department of Health):
Falls (2.7%): 21.1 per 100,000 population
Accidental poisoning: (1.6%) 12.8 per 100,000 population
Motor vehicle (1.0%): 8.1 per 100,000 population
The average Minnesotan is four times more likely to die from a fall, twice as likely to be accidentally poisoned and slightly more likely to die in a car crash. The claim that more than 40% of homes in Minnesota are contaminating people’s lungs with radon gas and killing them is not jiving with consumers’ personal experiences.
Nationwide Agenda from the EPA
One has to assume that the MN Health Department is following a directive for radon procedures from the EPA’s national agenda. However the EPA offers not one article newer than 2003 on its website to validate research tying lung cancer to levels of radon in homes.
A paper from Korea, which looks at the topic using measures of radon in homes, was published in March of 2016 and is the most recent academic paper I could find. It too references almost exclusively research papers written prior to 2000. Ji Young Yoon et all (Department of Humanities and Social Medicine, Ajou University School of Medicine, Suwon, Korea) wrote “Indoor radon exposure and lung cancer: a review of ecological studies” which was published in The Annals of Occupation and Environmental Medicine. There had been no studies to date in their country. They found:
For Korea, we observed tremendous differences in indoor radon concentrations according to region and year of study, even within the same region. In correlation analysis, lung cancer incidence was not found to be higher in areas with high indoor radon concentrations in Korea.
Scanning the bio’s of the faculty at the College of Design at the UMN, not one cites an interest or expertise in radon. There seems to be a lack of interest in funding or pursuing this topic.
How can we be following guidance that doesn’t appear to have been updated or even reviewed in the last ten years?
That was then this is now
Furthermore there has been a dramatic decrease in lung cancer’s claim on lives.
The death rate from cancer in the US declined by 29% from 1991 to 2017, including a 2.2% drop from 2016 to 2017, the largest single-year drop ever recorded, according to annual statistics reporting from the American Cancer Society. The decline in deaths from lung cancer drove the record drop. Deaths fell from about 3% per year from 2008 – 2013 to 5% from 2013 – 2017 in men and from 2% to almost 4% in women. However, lung cancer is still the leading cause of cancer death.
The American Cancer Society estimates deaths from all lung cancer in MN in 2021 will come in at 1950. Twelve percent of this is 234.
Time has changed the circumstances but there has been no release, or at least, re-evaluation, of the protocol. It’s like everyone moved-on and no one told the bureaucrats. So they keep RADON at the top of their checklist of ‘to-do’s. Meanwhile a whole industry of inspectors, installers and licensing and compliance people are settling into a new market.
It’s that mindset that if, ‘We can save one life!’ Then it is all justified. Yet–if 2020 has taught any lessons it is, that even in lives, there are trade-offs.
In 2019 closed home sales in the 16 county greater metro area (Minneapolis Area Association of Realtors) came to just shy of 60,000 transactions. Take out new construction (10%) and townhomes (25%), and take out a few for opting out of radon testing assuming 36,000 test were performed. A radon test performed by a now licensed inspector averages $200. The (conservative) amount spent on radon testing in 2019 totals $7,200,000.
The MN Department of Health estimates that 40% of homes in MN will test over the benchmark set by the EPA as hazardous to one’s health, or 4 pCi/L. That would lead us to expect that 40% of the homes tested high and negotiated the installation of a radon mitigation system into their purchase. At an approximate average cost of $1200, that comes to a total expenditure for the state of MN to (36000 sales x .4 x $1200) $17,280,000.
Based on these numbers, Minnesotans spent nearly $24,480,000 on mitigating radon in 2019. The tag line from the ‘EPA Test. Fix. Save a life’ promotes an image of each install resulting in fewer deaths to cancer. But is that true?
The amount of money our metro community spent on radon is a flash in the pan compared to a state budget or even a (metro) county budget. But $24,480,000 for community associational groups, who are on the ground interfacing with those struggling with mental health and substance abuse, it is a pot of gold. And that’s where the money should be going. When a 70+ year old passes, it folds into the course of life. The impact of a father OD’ing, leaving young children behind, or the death if a youth, high on the latest street drug, will galvanize community effects that reverberate, even to the point of burning down a mile stretch of buildings.
Wouldn’t our communities be better off by spending that $24,480,000 on mental health to deter suicide? Wouldn’t this, for instance, help with community policing? I say yes.
Motivations and Spheres
The difficulty, of course, is that we can’t transfer the $24 mil from the radon pocket to the mental health pocket. Government used their ability to pressure a commercial endeavor to set up the radon industry. In fact, with the death rate for lung cancer dropping, it almost feels like the health officials are spurred onto be more aggressive. “We’re doing so well making widgets, lets make more!”
Unfortunately this is a business mindset, for work in the private sphere, one that seeks to expand and grow. The public good mindset is quite the opposite. Since the work in the public sphere is often performed to prevent something from happening–as in this case, to prevent lung cancer. Once that is accomplished, activities should cease, and resources reallocated to other demands of the public that now climb up to a higher priority.
In the meantime, the industry standard for radon testing, at time of a house purchase, has created paying jobs for inspectors and bureaucrats. Quite naturally, their motivation will be to support this new structure from a private point of view. It is not part of their employment to evaluate whether this the best use of societal funds. The inspectors and installers and continuing ed teachers and state licensures and public health workers will support the process because it pays the bills that support their families.
What happened to the feedback loop? Where in the system should there be a check to see if programs are on the right track? Feedback has been stifled because to criticize the noble cause of saving life has not tolerated.
What I am and what I’m not saying
I am not saying I have the expertise to validate or deny the tie of radon in homes to lung cancer.
I am pointing out that public health officials have struggled to get this issue to take traction in the public mind. I am saying that no research in the last fifteen years has validated our present path to safety (and one study has countered it). I am saying that an industry, in the private sphere, has sprung from these government actions, draining over $24,480,000/year from community funds for this issue. I am saying death rates from lung cancer have plummeted in the last ten years. I am saying there is no feedback loop to public officials to demand a review. I am saying it is no longer good enough to make one agenda and then push it through for a decade without any consideration that time alters all things.
For a generation there has been the activist approach in government. Select a cause; implement it nationwide; get the talking points out to all the communication outlets so it is heard in stereo; then never relent. I am saying that this is no longer good enough.
Say an individual, Bob, is concerned about a public good, like the environment. He decides to make a new year’s resolution to do something about it. Over a two to three year period, he activates others in his industry to legislate a testing requirement that costs the consumers, say, $200 on average per transaction. Note that this organizing and petitioning and writing communications and attending meetings was all done outside of the pay-check sphere of life.
One of the objectors to the added commission-for-the-public-good points out that, other than providing information, the testing will not give rise to any tangible reductions in green house emissions. Bob and his cohorts respond that doing something is better than doing nothing. Is he right?
Now let’s say that instead of doing the testing one could give the $200 to the client to not use their personal vehicle for a month, or to not take an airplane trip. In both scenarios there would be a measurable and immediate impact on green house emissions. Given these choices, it’s fair to say that there are other ways to spend $200 which would result in a greater impact on the goal to reduce global warming.
Numbers must be run so the public has a means of comparison. While everyone is working on (lobbying for, debating in favor of) one idea, other more valuable ideas are neglected, omitted from the realm of public consideration. Even though no one received payment for their time, the capacity of a community to engage and respond was tapped. So despite Bob’s sincere interest in climate change, doing nothing is, in fact, better than advocating for an unsubstantiated claim.
Now let’s say Bob was particularly talented at organizing and galvanizing folks around a cause. And due to this success he continued to seek approval and status through this type of work. The impetus for action transforms to status seeking, increasing Bob’s private persona, versus the stated tangible impact to any group concern. Now, in an error of commission, a form of corruption, starts to germinate.
The answer is not to stop the Bobs of the world. Hardly. The intent of this blog is to encourage the meaningful enumeration of choices; to clarify the resources used as inputs and record the increases in public capacity and capital; the intent is to provide the information necessary to steer Bob’s ambitions to the most productive choices.
TOPA (Tenant Opportunity to Purchase Act), a proposal to offer renters the first right of refusal when their landlord wants to sell the property, is back on the front burner at Minneapolis City Hall. Some politicians see giving tenants part of a landlord’s property rights as a way to mitigate the expense of housing. The only perspective where this is at all rational, is from the view that property owners are simply sitting on a sack of gold coins which they refuse to share.
A story which is meant to support the tenant’s first right of refusal as a valid policy is told here: Tenants of Five Minneapolis Buildings Now Own Their Homes. Yet this suite of buildings was owned by a truly poor landlord. And because the guy was a fraud, the tenants acquired the buildings without TOPA. It will be interesting to watch the unfolding of this tale as more than likely these properties are run down and will have expensive repairs in the coming years. I’m expecting buyer’s remorse.
To understand the process and in turn the length of time a property could be tied up before sale, here are TOPA process charts from Washington DC. The financial power behind owning an asset is the ability to sell it and obtain your investment. When that ability is in question, markets do not respond well, hence value is affected. The TOPA process is considerably uncertain.
I attended this TOPA forum at the UMN presented by CURA. The presenters were Dominic T. Moulden is a longtime resource organizer at Organizing Neighborhood Equity and Michael Diamond, Professor of Law at the Georgetown University Law Center, teaches corporations, contracts, and a seminar in affordable housing. The non-profit housing community in attendance seemed skeptical.
NBC news covered how TOPA rules tie up the sale while parties arbitraged the TOPA rights to the highest bidder. (video) Although in effect since the 1980’s, it was more or less forgotten until Andrew McGuire Esq started a business ‘getting renters maximum dollar’ for their TOPA rights. He estimates it’s a 100 million a year market.
In San Franciscothey call it COPA. And it is not the tenants who make the purchase but a pre-selected non-profit. Also from 2019:
If approved, the COPA would give the first right to purchase (this includes a first right to offer to purchase and a first right of refusal to match an existing offer) vacant lots or residential rental buildings with three or more units to nonprofit housing organizations. This means that when an owner of a multi-unit building puts it up for sale or has received an offer to purchase, nonprofit housing organizations that are pre-selected by the City would have a chance to bid on the building first or to match an existing offer.
According to NorthStar MLS, of the 699 duplexes or triplexes sold in the last year in Minneapolis only 14 of them were built after 1970. For fifty years this simple multi-family form of housing has more or less been ignored. They are few and far between in suburbs, undoubtedly for the same reason.
So significant were the feelings against this type of housing that, despite having lifted single family zoning in Minneapolis earlier in the year, additional obstacles are preventing their creation. Restrictions such as building heights and parking throw enough of a question mark into the approval process, that developers are bailing on the idea before even approaching the planning commission.
Over the years I’ve heard of individuals using duplexes as their first steps to becoming real estate investors; then there was a story of elderly sisters going in together on a building so they could live out the remainder of their lives as neighbors. Small multi-family buildings fit right in with single family homes unobtrusively. It would be nice to see more of them.
I’m not tuned-in to how new construction is done in China, but I can say why this would never happen in Minnesota. Clients are on a time-line. They would not proceed with a purchase agreement until a somewhat (within 30 days or less) firm closing and occupancy date was clearly possible. The project would have to be far enough through the city approval process to be assured of no delays. With the hint of a builder’s lack of ability to retain tradespeople, buyers will shift to a builder that has deep enough pockets to hang onto good workers.
In a very hot market, buyers will put down money to hold lots or condo units pre-construction. This dollar amount is a small fraction of the total cost of the unit. If the developer went bust, those funds could be at risk. Only in the relatively small number of custom built single-family homes do clients risk a construction loan, where the builder receives disbursements from the bank over the six month period it takes to build a home. But the timing would never put the buyer on the hook for the full amount of the mortgage.
Let’s hope local politicians take note of the failure of the people to endorse expanding the power of local governments to use rent control, known as Prop 21 in California, which failed on a ballot measure by a 59.72%-40.28% vote.
There is a movement to provide home energy index scores for home that are going up for sale. It would accompany the homeowners’ disclosure. The Department of Energy provides this explanation in a lengthy document from 2017.
Like a miles-per-gallon rating for a car, the Home Energy Score is an easy-to-produce rating designed to help homeowners and homebuyers gain useful information about a home’s energy performance. Based on an in-home assessment that can be completed in less than an hour, the Home Energy Score not only lets a homeowner understand how efficient the home is and how it compares to others, but also provides recommendations on how to cost-effectively improve the home’s energy efficiency.
Like the stickers in the car windows which provide information on gas consumption, or the label on food products itemizing their contents, a house will be given a score between 1-10. The State of Oregon’s website has a nice, concise, easy-to-read page about the process. Here’s the first part about the score:
I’m just not convinced it’s that simple. When goods are new, whether a car, or a furnace or even a whole house, I think a scoring system could have some value. A home that has had a variety of owners, over six, seven, ten decades, some keeping them squeaky clean, some letting slide a whole host of maintenance and repairs issues, would prove to have a difficult history to rank from 1-10. The full report from the Department of Energy is long and strenuous to follow, and probably a better reflection of the complexity of scoring an entire structure.
The mandate for standardized nutritional facts labeling on food has been in place since 1990. The obesity rates, however, in the US continue to rise from 12% in 1990 to 23% by 2005 to upwards of 35% in some states in 2019. Despite being notified of what they are buying (which to be perfectly clear I am in favor of) consumer’s eating habits are becoming worse not better. Forcing businesses to label is something the government has the power to do, but it doesn’t mean it will be effective in accomplishing the goal.
If the goal is to persuade homeowners to spend extra money on home energy improvements, the tactic I would pursue is to search out the most likely group that has shown interest in this purchase. Retirees on a fixed income are good examples. The combination of desiring a low monthly obligation and of being at a point in life when there is extra money for this versus other activities, leads their homes to often having superior mechanicals (which undoubtedly offsets the dated décor). Or if you really want people to seal up the cracks in their homes so all the a/c doesn’t leak out in the summer nor heat in the winter, team up with the pest control people. I promiss that moms will pay a lot to plug up all the holes and keep the mice out.
The enforcement of norms is an everyday event. Whether through disapproving looks across a bin of oranges at the grocery store in response to a parent’s disciplining techniques, or the scoff of disbelief at your friend’s new beau’s use of culturally insensitive language, or showing up to work with a card and flowers for a co-worker who recently lost a spouse. The behavior of shaping, criticizing or supporting of each other is judged and metered out with eye movements, gestures, and offers to help.
Once an infraction is deemed serious, it is made a law- you shall be prosecuted if you leave your toddler in a hot car while you shop. There is a lot of ground covered, a lot of degrees of severity and risk in parental actions, between scolding a toddler over a pyramid of piled up produce and locking someone up for child endangerment. But everyone can agree that we are all better off by formally acknowledging a certain threshold of acceptable behavior and enforcing persecution against those who cross over.
We are all better off knowing we can drink tap water from the faucet and that our houses won’t crumble overhead, and we can feed our kids hotdogs from the concessions stands at the Little League games. Accepting these standards and counting on a system, comprised of a series of reportings and enforcements, will maintain the freedom to move in and between communities safely. This is a social advantage we often take for granted.
It can also be shown that at some point there are diminishing return to regulations as their burdens cause detriments that are costly. Most of these arguments set up a discord revolving around health and safety (often tied in with the environment) versus the ability to supply families with income from a job. But this source of monetary capital also affects a person’s ability to lead a healthy safe life. You end up with this big teeter-totter where on one side all the variables set to maximize production of industry are weighted, and on the other, all the variables set to maximize social concerns piled up. What we want to find is at what point where the board finds balance.
Since this topic will be the question of this century, let’s start with a wide angle view in considering the use of regulation to keep the teeter-totter level.
Regulations for commercial enterprises seem to ratchet-up more freely than to release and reevaluate. There are many indications that the systems in place which regulate commerce, (often bureaucracies like Departments of Commerce and Federal Administrations, but cities as well) are not getting the feedback necessary to properly account for all the downsides to their actions. Things at the city and county level work fairly well. Yet, I propose that in the case of big business the intended beneficiaries of the regulation are removed from the system. They do not receive an accurate evaluation of the issues nor a proper accounting. And except to become activists at times of tragedy, they fail to regularly communicate with the regulating agencies.
For purposes of contrast, first consider water quality which is administered at the city level. Complaints about the water filter up through the city council and can be voiced at open city council meetings. Elected officials respond to constituents, especially those who show up. Even city staff feel the pressure when the seats are all taken in the normally hushed city council chambers. Other than the very notable example of Flint MI (and undoubtedly a few under-reported incidents) potable water is successfully provided to 331 million people in the US.
Take hot dogs at a concession stand. The county public health people have the power to decide the cleanliness of the two-windowed, wood clad concession stand with its pretzel warmer and popcorn popper and slushy machine. It is in their power to have it to meet the same standards as a science lab, of they so choose. But the regulator, who is more than likely a part of the community, knows that if the rules checklist becomes too long, making the workload too great for the already tapped, completely volunteer workforce to handle, it will shut down. No concessions, no extra money. No extra money, no new uniforms or dugouts, or pitcher mounds. Do ballfield concession stands or Rotary pancake breakfasts really need to be run at restaurant level standards of cleanliness to keep people safe? Or is there some other level that is ‘good enough’ that won’t squelch to whole endeavor?
Regulation of businesses, however, are missing the community tie-in. Commercial enterprises are regulated by bureaucracies, where people develop careers and other monetary incentives to successfully develop and implement regulations. It’s their job. The purpose of the position is to protect the consumer, where more protection always seems better.
This system removes the citizens that show up at the council meeting both in favor and against city action from the system. The bureaucrats judge and evaluate. They search for evidence to justify their position, not from the public, but from other detached experts. The consumer who can best express the complete picture of tradeoffs for their particular lot in life, has no routine forum. The next closest party to the transaction is the business person who hears and tries to comply with the requests of the consumers. Yet he/she is considered tainted by a money motive, and hence regarded with suspicion or often disregarded.
With the absence of a consumer evaluator, there is no system wide continual assessment of the costs and benefits of the regulation. There is no dynamic information being provided to determine when the regulation has gone too far and is causing too great of a burden.
So what to do? One solution is to consider how people live, by considering their revealed preferences. Testing, if you will, where the new standards are in relation to what the population expresses as their acceptable risk level. For instance, say you have a city that imposes a rental property review based on a scoring system comprised of a four page list of items. Missing smoke detector 5 points, missing receptacle plate 2 points, no furnace tune-up in the last year 5 point, ripped window screen 1 point, etc.. When the property scores 20 or more the renters must vacate the property as it is deemed inhabitual.
Now let’s say the assessment is used on the other 23 homes on the block. If 75 percent of them failed then it seems that the review checklist is too stringent. The regulator are basically saying to its own constituents that their standard of house maintenance are inadequate and they must move. (How do you think that would go over?)
Think of how this came about. The property regulators were trying to do right by the tenants, trying to get rid of the slumlords. They developed a tool that would allow them to put a handful of bad actors out of business. They get little community objection. Even very acceptable landlords are going to stay quiet when heavy handed regulation is in the mix as they are fearful of retaliation. But by setting a standard well above the average accepted living conditions, the regulators have raised the cost of providing housing. Since cost is reflected in rents, this causes undo pressure on affordable rentals.
Indexing off a general-population-standard may not be the end-all-be-all, but it would provide a starting point for the group. If analysis showed reasons for regulators to require more out of a subgroup (rental property), than at least this could be publicly discussed and agreed upon. But forcing the landlords to provide housing units at a higher standard than the average, and hence places undue costs on the provision of housing, avoids a proper accounting. This leads to endless circular discussions about the lack of affordable housing and whose to blame and whose to pay.
Furthermore when regulations don’t match the populations expectations, people resort to go-arounds until the formal rules are disregarded entirely. The highway speed limit debate that started in the early seventies left the public conversation once States set their driving limit to how fast motorists tended drive.
As a part of the system, development, implementation and enforcement of regulations need to be influenced by all actors. When a bureaucracy takes on an agency of their own, which allows them a power position which in effect rebuffs feedback from the general population. Using an indexing method for the group would at least reveal an average standard. It would provide an initial means of analysis. Ideally, even in situations of complex issues there could be a greater transparency with all the costs at hand. And in this way the average citizen could participate in a continual feedback loop while they assess their costs. Without this participation we are simply creating a power void ready to be filled by bureaucratic czars.
We’ve lost track of regulation by allowing it to jump out of the mechanics of the entire system. Lack of transparency and convoluted agency keep any meaningful accounting of the tradeoffs. In the same way that the business community’s opinion of the issues at hand are tainted by the money motive, so are the bureaucrats. They are incented to build their agencies, find new safety concerns, beat back business with zeal. So why are we surprised when they do so?
The Metropolitan Council was conceived a little over fifty years ago with the foresight that the Twin City Metropolitan Area of Minneapolis and St. Paul would benefit from a multi-county planning entity. Large infrastructure projects like transit and water/sewer in particular would be best coordinated regionally in lieu of by an aggregation of cities. The 17 member council serves at the pleasure of the sitting governor. Here is a nice fact sheet providing an overview of the council’s latest accomplishments.
The council wields a tremendous amount of power for an unelected body. Over the years objections to this structure have been voiced by champions of both the left and the right. But for the time being, it is a structure which continues to influence the growth of residential settlement through patterns of transportation provided by bus and light rail, and through the provision of city and water.
In a presentation last week, Charlie Zelle, the chair of the council stressed that his agency is responsible for planning. In light of this spirit, I would like to propose a new way to frame up some of the research.
There are two new infrastructure projects which will offer circulation options for residents. First off, a new interchange off interstate I94 will provide direct access to the city of Dayton, a third tier suburb. Dayton, with a population of 6,302, was bypassed for development and become donut hole to suburban expansion while the populations of neighboring communities grew: Maple Grove to 71k, Champlin to 25k and Rogers to the NW to 13K. The mayor of Dayton touts the economic potential that will be unlocked by the anticipated increase in vehicle traffic from the off ramp.
The second infrastructure project is the Southwest Light Rail which recently received its Full Funding Grant Agreement from the Federal Transit Administration. This transit option links the four SW suburbs of St. Louis Park, Hopkins, Minnetonka, and Eden Prairie to the City of Minneapolis.
Excitement around Southwest LRT in not just confined to transportation advocates, already the alignment has seen hundreds of millions of dollars of private investments along the line. From affordable housing to commercial centers, Southwest LRT is making an impact on the state’s economy a trend which will continue far into the future.
Both of these projects will allow a new pattern of circulation for residents. One will experience growth and transformation from rural low density to suburban. The other will allow a built community to circulate more readily to and from the downtown core.
Whereas commuters and businesses are often the focus of the benefits to transit, I would be interested in seeing how all pubic goods in these communities fare following the completion of these two projects. Are there effects to public safety? Are the public schools over-loaded or better-funded? Are people healthier due to better access to medical care?
Maybe part of the concern regarding representation within the Metropolitan Council is for this reason; for the need to voice both the positive and negative impacts of transit and water/sewer infrastructure (restrictions) on the suite of public goods underwritten by a city. Elected officials, especially mayors, manage a boutique of goods for their residents, and they are not seeing the Council take all of them into consideration