Wednesday, March 31, 2010

Happiness is a short commute

Via Matt Yglesias, I note this piece from a recent David Brooks column.
If the relationship between money and well-being is complicated, the correspondence between personal relationships and happiness is not. The daily activities most associated with happiness are sex, socializing after work and having dinner with others. The daily activity most injurious to happiness is commuting. According to one study, joining a group that meets even just once a month produces the same happiness gain as doubling your income. According to another, being married produces a psychic gain equivalent to more than $100,000 a year.
One reason I fell in love with real estate was that I quickly realized that it tied together so many other disciplines.  I was first exposed to these ideas as a 20-year old History undergrad, when I took a class called History of Suburbia.  We talked about how living in far-flung developments and driving an hour to work every day inevitably leads to isolation.  We talked about the costs of commuting and the effect on our physical health.  We talked about the effect on youth, and how being chaperoned around for 16 years inevitably stunts development.  Big surprise that everyone goes off to college and goes nuts - it's the first time in their life they've ever had any autonomy.  We talked about the decline of communities, and the loss of public life.  We also talked about red-lining and the racial history of suburbia.

The connection between our social, psychological lives and the physical way we live simply made sense to me.  So I'm not surprised to see some quantitative analysis on how much we value the interactions that in-town living makes much easier.  The fact that commuting is negatively correlated with happiness doesn't surprise me - not only does the actual commute suck, but it prohibits all manner of other meaningful activities.  It is a lot harder to find time to socialize after work or have dinner with friends when you spend two or three hours a day commuting.

Tuesday, March 30, 2010

So you're telling me there's a chance

In further sports blogging, Michigan and Notre Dame will take a two-year hiatus from their football rivalry in 2018 and 2019.  Perhaps the long-rumored Michigan-UGA game can finally take place.  Michigan beat writer Angelique Chengelis has her own list up.  Her preferred teams:

  1. LSU
  2. Tennessee
  3. Florida
  4. Texas
  5. Oklahoma
  6. Nebraska
  7. Virginia Tech
On a purely selfish note, I would love to see UGA and Michigan play.  For starters, the two tradition and stadiums at the two universities should make any true football fan salivate - who wouldn't love to see Michigan between the hedges, or UGA in the Big House?  Mostly though, I'd get to see Michigan play without having to go to Ann Arbor.  Hopefully by then Michigan will be back in business and we'll put a hurtin' on the Dawgs.  

Friday, March 26, 2010

At least I can do some sports blogging....

I don't mention the alma mater too much - mostly in passing.  I'm a big sports fan, but there hasn't been much to crow about lately.  The Wall Street Journal even has an article about just how crummy it has been as a Michigan fan lately:

Let's not even bother trying to sugarcoat this. The University of Michigan's recent performance in sports has been as pathetic as any in the school's history.
The football team tanked, the basketball team collapsed and NCAA investigators turned their focus on Ann Arbor.
The school's typically brilliant hockey team was hardly a beacon of light in the darkness. It had such a lousy regular season that it was on the verge of missing the NCAA tournament for the first time in 20 years.
Yup, that's about right.  However, the hockey team managed to win the conference tournament and get an automatic bid to the NCAA tournament.  What does the WSJ have to say about that?
And with two more wins, the Wolverines would reach the tournament's Frozen Four, which is being held this year in nearby Detroit. It's not the Final Four or the Rose Bowl, for sure, but for a suffering sports school, it would be something.
And who knows? If they win, they might be able to transform Michigan into a hockey school, if only until football season rolls around in September.
Wait a sec.  That's just not right.  (What is a blog for if not the kvetch?)  In my experience, Michigan was ALWAYS a hockey school.  Partly this was because in my tenure the basketball team was atrocious (smack in the middle of a 10-year NCAA tourney drought), but partly this is because everyone in Michigan seems to grow up playing hockey.  Especially the yoopers.  I remember Michigan hockey games being in many ways more fun than football games.  I personally never went to a basketball game in my four years up north, but I went to my share of hockey games.  As far as I'm concerned, Michigan is about as big of a hockey school as a major D-I school can be.  

My apologies

I didn't realize it had been so long since I last posted.  I've been very busy finishing up my degree and with some extra-curricular activities.  I should return to regular posting soon.  There have been a number of recent articles I've flagged to talk about, but just haven't had the time to get my brain around.

Thanks for hanging in there with me, I'll get back up to snuff eventually.  I graduate in May, which means after that I'll have more time than I want to spend blogging.  Have I mentioned I'm super excited about graduating with a degree in real estate and finance in the middle of a recession?  I'm just stoked.

Thursday, March 18, 2010

Fallout of urban decline

Economix has an interesting post about what happens when cities shrink.  It dovetails nicely with the discussion we had last night in my Real Estate Finance class about the current dislocation between supply and demand nationally.  My professor mentioned the idea of simply bulldozing houses to help reduce supply.

The third, and most extreme, approach is to bulldoze buildings and turn them over to some alternative use, like parks or agriculture. Razing empty, dilapidated, hazardous structures is fairly uncontroversial, but more questions must be raised if the mayor is going to forcibly move significant amounts of people in order to physically reshape large land areas.
If the residents of largely empty areas aren’t willing to sell and move, then we are back in the same quandary that always faces large public changes in urban land use, like the construction of G.M.’s Poletown plant.  To what extent should a city put perceived citywide interests ahead of the wishes of individual property-owners?
If removing a largely vacant neighborhood really generates significant gains, then some sizable fraction of those gains can be given to the citizens who will have to give up their homes.   If generous payments, rather than eminent domain, are used to move the remaining residents, then right-sizing can be win-win.
In Atlanta, the areas that have been in decline still have people - they are just extremely poor and neglected.  Think English Avenue.  In Detroit, these areas are just empty. This is a fairly random Google Streetview image of Detroit - I went to Google Maps and zoomed in on residential neighborhood sort of near Downtown.  This is what you get:


There has been a ton written on the decline of Detroit, but I'm not sure we in Atlanta can appreciate what is going on there.  Go on Google Maps and just scroll around the satellite images - you'll see areas with half the lots just empty.  This is what happens when the economic base of a region collapses in slow motion for thirty years.  

So, as negative as I've been about the economic prospects for Atlanta - hey, at least we aren't Detroit!

Tuesday, March 16, 2010

ULI boards and feedback

We have finally received the feedback for the ULI competition that I mentioned previously.  This means the main part of the competition is over and I can finally post our team's boards.  See high res version here.



You can also view the pro forma here.

Our group made it to the short list (the top 29 out of 117 submissions), and many of my financial assumptions got high marks.  Among the concerns were proposing too much new office space for a submarket with historically low levels of new office construction, as well as an over-valuation of the present land value.   My market research seemed spot-on, but I think the proposed level of office space limited the financial portion to being slightly above average.  I would have preferred more commentary, but I presume that our proposed uses of public funds, equity sources, etc., were all realistic or they would have had a problem with them.

The design scorecard was decent, as well - apparently many of the judges were skewed to 1's and 2's for what was considered average, but not terribly interesting, work.  So our 3's and 4 were better than they look.  The judges seemed to like many of our big-picture decisions such as relocating the city's proposed new central library.  We also were painstaking about our parking plans, which paid dividends.

I should also congratulate the other local team, composed of Tech planners/designers and Emory b-school students, that got an honorable mention for "demonstrating excellent sensitivity to current market conditions."

While obviously we would have liked to have done better, landing in the top 25% isn't embarrassing, either.

Monday, March 15, 2010

Entrepreneurial cities

Sorry for the lack of posting... real life has been very busy.  I've been meaning to post something about City Hall East getting a new buyer, but can't seem to find the words.  Jamestown has been involved with the White Provisions project, among the other major projects mentioned in the AJC.  Hopefully they'll be able to get something done with the building.  I'm not sure what else there is to say about the decline of Emory Morsberger's dream, other than I'm a bit surprised it took this long.

In other news, I'm much more interested in this post on CEOs for Cities and the accompanying PDF about entrepreneurial cities.  The policy brief is from the same Edward Glaeser I linked in my last post, and makes some interesting points:

(1) Investing too much in attracting large, mature firms may not be good policy.
(2) There is little reason to have much faith in the ability of local governments to play venture capitalist. The best role for government is simply to encourage competition among local banks and financiers.
(3) There is much to be said for the strategy of focusing on the quality of life policies that can attract smart, entrepreneurial people.  The best economic development strategy may be to attract smart people and get out of their way.
(4) Good universities have faculty members who are involved in local start-ups and train students who may become entrepreneurs and the employees of entrepreneurs.  Imposing costs that restrict the growth of such institutions can be cost
My opinion generally is that cities and metro regions should focus on providing quality core services.  I'm not ideologically opposed to government doing other things, but the fundamental job of city government is to keep people safe and to ensure that the city's physical infrastructure meets its population's needs.  I would include education in the "infrastructure" category along with the traditional sewers, water supply, streets, etc.

So I'm basically reiterating my skepticism of pursuing tourist attractions and big businesses.  Atlanta is already good at attracting young, educated folks.  If we can focus on quality of life, basic services, and education.  Create real communities that can attract and encourage entrepreneurs.

Wednesday, March 10, 2010

How will Atlanta recover?

Via Rusty comes a NYT blog post about Atlanta and the potential for future growth.  I've written before about the stagnant state of our economy, and complained about the lack of vision from our political and business leaders.  What does Harvard economist Edward Glaesar have to say?

Yet there are three key reasons to think that Atlanta will weather this storm and continue to thrive.
First, Atlanta benefits from the fact that it is the dominant agglomeration in the region. The continuing vitality of large cities is a remarkable feature of our age and Atlanta benefits from that fact.
Atlanta also benefits from its business-friendly politics, which will continue to attract plenty of companies.
Finally, Atlanta also benefits from being highly skilled — something that outsiders too often forget.
Nearly 43 percent of adults in the city of Atlanta have college degrees, as opposed to 27 percent in the nation as a whole, and 41 percent in Boston. The figure is even higher in surrounding Fulton County.
Skills have long led to urban success, especially when mixed with large urban size.
Smart money never bets against the ability of a huge concentration of smart people to weather an economic storm. Don’t count Atlanta out.
Fairly encouraging, I'd say.  It also relates to some stuff I've read recently about the relationship between an area's college population and economic prosperity.
Nearly 60% of a city's success, as measured by per capita income, is explained by the percentage of college graduates in a city's population. An increase in college attainment rates by one percentage point in the largest 51 metro areas yields $124 billion in additional personal income each year for the nation. 

Thursday, March 4, 2010

Scary ole Downtown

This is pretty much a residential property's worst nightmare - a resident gets shot on the property, followed by the media talking about how scary and dangerous the place is.  A lot of the quotes in the article are actually very positive about the property, which is the Pencil Factory Lofts just east of GSU on Decatur St. Residents call it "fairly quiet," say they never felt unsafe before, and that the incident is shocking.  Still, one guy has to pull the "hey, this is downtown" card, which is annoying, like you just sign up for this stuff, y'know?

My problem is that the article indicates the victim was a GSU student who was apparently shot by someone he knew.  The police think it might have involved selling drugs.  It isn't like this is some random drive by in the sketchy part of town, and "you better watch out, because you never know what could happen in this scary part of town."  The lesson is more, "don't hang out with drug dealers."

Maybe the AJC can focus less on what a scary place Downtown can be, and more on wtf a GSU student is doing selling drugs and hanging out with dudes that want to shoot him?  I'm not naive - this stuff goes on all the time at every college campus in the nation.  It went on at Michigan, and I'm sure it goes on at UGA.  I don't remember anyone getting shot, but there were plenty of drugs in Ann Arbor and plenty of drug dealers who were crazy enough to carry guns around.  But if the media is going to cover the story, maybe that's a better angle?

I suspect that GSU's location in a major metropolitan area (rather than simply in scary ole Downtown) means the professionalism of campus drug dealers is higher than at Michigan or UGA, and so guys with guns are more likely.  Either way, I'm not sure the emphasis on the perceived danger of the location is fair.

Handel surpsingly sane on zombie toll road

I don't really care about the Northern Arc.  I personally don't care about traffic on 316, or in Sandy Springs, or any of that other stuff.  What I do care about is the economic viability of the metro Atlanta region, because it affects the economic viability of Atlanta itself.  So unfortunately this means I probably should pay more attention or give two figs about suburban traffic issues. 

In my dream world, the city itself would have the resources to build a world class transit system within the city limits, clean up many parts of the city, and attract business Downtown on its own.  That ain't gonna happen, so the best thing to hope for is some sort of regional transit solution and some refocusing on economic development for the region to try and catch up once the recession ends. 

All of that is a long way to introduce this article about Karen Handel doing some posturing about the Northern Arc and some GDOT proposals for new highways up that way.  It strikes me all as a bunch of B.S. campaign rhetoric, but one piece did catch my eye:
Handel said “we need to look at” some sort of connection between I-75 and I-85.  As to another possible major toll project under debate, a north-south tunnel through east Atlanta linking Ga. 400 to the southern Perimeter, Handel said, “It’s absurd.”
At least one GOP candidate isn't completely insane.  If I were handicapping the 2010 Governor's race, I'd have to give Handel pretty good odds. 
  • She's politically savvy, and I can't think that she's ever lost a race she's been involved with (Perdue 2002, Fulton County Commission, Secretary of State).  
  • She somehow navigated the insanity of the Fulton County Commission and came out looking relatively mature - no small feat!  
  • She's managed to avoid all the mess at the Capitol, and has a much higher profile than someone like Eric Johnson who has been down there in the muck for years.  
  • She doesn't have the ethical issues that Nathan Deal has.   
  • Finally, she has an advantage over the Ox simply because she isn't a raving moron.  
FWIW, this was my early take on the Atlanta mayor's race (about a year and a half out):
My thoughts on the race at present, subject to change: right now I think Lisa Borders has the inside position, and Kasim Reed will have the best machine. Mary Norwood could do surprisingly well - she is particularly attentive to the white middle class in-town demographic. If white females go for Norwood instead of Borders, Kasim wins.
A lot changed between then and the election, but I think I was in the ball park.  So in that vein, my fearless take on the Gubernatorial election:
  • Handel is the GOP nominee.  Eric Johnson does very well, but not well enough.  Deal and Ox falter at the end.  Handel beats one of those three in a runoff. 
  • DuBose tanks.  Barnes gets the Dem nomination, but Baker might make a strong run for it.
  • Barnes can't beat Handel - there simply isn't enough juice left in the old Democratic brand he represents.  Dems are totally depressed about everything right now, turnout will suck.  Handel wins 55-45. 

Wednesday, March 3, 2010

Peachtree-Pine still alive

Last month I wondered if the Peachtree and Pine shelter would manage to avoid foreclosure once again.
The shelter has been on the brink so many times in the past though, it is hard to believe they won't have some way to pull this out of the fire.
To no one's surprise, the foreclosure has been delayed.  Among the items I find I found interesting from Maria Saporta's article:

“We have an existing offer on the property for $4.2 million,” Hall said. “We have paid down principal and we’re current on all the interest that’s due.”
I'm skeptical about that, of course, but the $4.2 million is about half the $10.5 million they were asking for originally.  At the time (a year ago), I noted that the $10.5 million seemed to indicate the shelter was serious about selling the building - although I said I wasn't sure if the price was "good," I thought it indicated a real intention to sell.