Up Sucker Creek

Up Sucker Creek
Photo Courtesy of the Lake Oswego Library

Sunday, June 25, 2017

Nanny job growth predicted

Who's your nanny? 

Portland is following SF and Seattle in a race to see who can be more progressive.  California leads the way, but the Number 2 spot is up for grabs as Seattle and Portland duke it out with stupid, nanny state laws and other oppressive ideas.

The state should not be punishing people for what they eat or drink.  Education about healthy alternatives is always better than coercion.

I foresee taxes on sugar (making jam and apple pie will be more expensive), cookies and cake (what about cake mixes, and gluten-free desserts?), candy, cereal, all products with high fructose corn syrup - and to be fair, alternative sweeteners like honey, stevia, etc.  It's a bitter world out there.

Where do these ideas come from?  Read the article - these are national campaigns (thank Michael Bloomberg) designed to snuff out whatever activity some group deems necessary - for our own good of course.  Because they know better how we should live. Progressive strongholds now, and then ?

Portland Tribune, June 22, 2017. By Nick Budnick
Tax on sweet drinks headed for ballot
Money could benefit health but could hurt businesses, but battle lines drawn over controversial proposal

A judge's ruling last week will trigger what's expected to be a record-setting ballot measure campaign, as Portland becomes the latest city to consider a proposed tax on sugary beverages. 
On June 15, Multnomah Circuit Judge Adrienne Nelson approved the ballot title sought by proponents of a countywide measure that would tax soda and other beverages 1.5 cents per ounce, or 18 cents for a 12-ounce can. That means the campaign can begin in earnest.
Despite supportive early polls, proponents are doing extra polling to keep "tabs on how thing are looking with this rather abnormal legislative session that we are still in the middle of," said Christina Bodamer of the American Heart Association's Oregon chapter, which is spearheading the campaign. "We don't have our poll back yet on what may or may not hurt us, so we're looking forward to getting more information." 
She said the new revenue would mean "fantastic benefits" in combating childhood obesity and improving health. 
Jack Evans, a spokesman who is working with the campaign against the tax, called Move Forward Multnomah, declined to say what their fundraising goal is. But he said, "We stand with small business owners and working families in Multnomah County who would be harmed by this tax." 
Move Forward Multnomah's website describes itself as "a coalition of concerned citizens, businesses and community organizations actively opposing new taxes on everyday items like juice drinks, sodas, teas, sports drinks, energy drinks, coffee drinks, and even kombucha."

Saturday, June 24, 2017

Fairness defined - sort of

What is "Fair Share"?

How do you know if you are doing or paying your fair-share?  Frankly, your fair-share can mean anything anyone wants.  The only way to achieve absolute equity is for everyone to have the same thing.  But is that fair?   If no one knows where the line is and whether or not the line is going to move, when does fair or equitable become unfair?

The National Review, October 21, 2017. By Thomas Sowell
What Democrats Mean 'Paying Your Fair-Share'

It is one of the many signs of the mindlessness of our times that all sorts of people declare that “the rich” are not paying their “fair share” in taxes, without telling us concretely what they mean by either “the rich” or “fair share.” 

Whether in politics or in the media, words are increasingly used, not to convey facts or even allegations of facts, but simply to arouse emotions. Undefined words are a big handicap in logic, but they are a big plus in politics, where the goal is not clarity but victory — and the votes of gullible people count just as much as the votes of people who have common sense.

What a “fair share” of taxes means in practice is simply “more.” No matter how high the tax rate is on people with a given income, you can always raise the tax rate further by saying that they are still not paying their “fair share.”

There are mountains of evidence, going back for generations, showing that raising tax rates does not automatically mean raising tax revenues — and has often actually led to falling tax revenues.

There was a similar reaction in Oregon and in Britain. Rich people do not simply stand still to be sheared like sheep. They can either send their money somewhere else or they can leave themselves.

There is nothing inevitable about either a higher or a lower amount of tax revenues, whether the tax rate is raised or lowered. The government can only set tax rates. How that will affect the tax revenues actually received depends on how people react, and you can know that only after the fact. Sophisticated projections have often been laughably wrong.

Contrary to the way some people on the left conceive of the world, neither rich people nor poor people are inert blocks of wood, to be moved about like pieces on a chess board, to carry out some grand design from on high.

Even outright confiscations of people’s wealth, including whole industries in some countries, have failed to spread prosperity, and have even led to collapsing economies.

But politics is not about what happened in the past. That is left for historians. What politicians are interested in is what they can get the public to believe in the present and to vote on in the future. Plans to “soak the rich,” who are not paying their “fair share,” have worked politically, time and time again — and may well work yet again in the 2016 elections.

— Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University. His website is tsowell.com. © 2015 Creators Syndicate Inc.

Say Yes to NIMBYism

Leave guilt and shame where they belong - protect what you earned. 

There is a lot of anger going around these days.  Social and economic "justice" are terms for a lot of the angst: They represent the age old struggle between the "haves" and "have nots".   "Justice" has nothing to do with the new terminology - there are no laws being broken - only someone's subjective sense of  "fairness".  Are the "haves" doing or paying their "fair share"?  When will the "have nots" have enough?

That questions are important.  Is society fair?  What does it mean to be fair?  How does government guarantee each citizen equality?  Equal rights under the law?  Or is the law is morphing from doing bad acts into punishing designated people - white, wealthy, male, etc. - for not doing enough?  Add owning property to the list of offensives.

Owning property is now a symbol of the class struggle as property becomes more expensive and out of reach for the average person.  Never mind that government created the problem with the land restrictions of the UGB - the propertyless want to use government to get their fair share.  Guilt and shame are powerful tools employed to wrest concessions from the haves - no one wants to be labeled insensitive, selfish or racist.  The mob have made owning more property than some unspoken amount a crime.  Indeed, for the Communitarians, no one would own property - it belongs to the commons and government grants trust rights to the land.

Hard work or just being alive?  What should determine rights to a particular piece of land?  Is one's property really theirs if government increasingly restricts what can be done with it until the owner must get government approval for what they can have or can do with it?

For me, NIMBY means get government off my property and out of my neighborhood - don't ruin what we have spent our lives working for, especially if it's because my property or neighborhood is determinedby someone to be better or my lot bigger than someone else's.

Portland's Laurelhurst Neighborhood Fights

to Keep the Housing Crisis Out.

The residents of a quaint Portland neighborhood plan to ward off developers who could bring teardowns, McMansions or apartment buildings for renters
"Laurelhurst is unique. Every house is unique," says John Liu, who bought his 1911 Portland foursquare in 2006. "If we can't stop redevelopment, this piece of Portland history will basically go away." 
"The whole street—it will look like Beaverton by the time they're done," says John Deodato, a longtime Laurelhurst homeowner who says he gets 20 letters a month from developers seeking to buy his home. "The city won't do anything about it unless we do."
Laurelhurst is one of many central eastside Portland neighborhoods where housing values have soared since the recession, and where developers are snatching up scarce vacant lots and a few modest homes they can demolish and replace. The average home price here is now $750,000—and one house sold this month for $1.6 million. 
Yet Laurelhurst's biggest opponents are those who share the same politics but think that neighbors are being selfish.
"We are facing a housing shortage with dire consequences," Oregon House Speaker Tina Kotek (D-Portland) said last month, "and frankly I am disappointed that this bill has run into some of the same old NIMBYism that helped create this crisis."
Critics charge that by trying to save Laurelhurst from the wrecking ball, its residents are in fact erecting a wall to keep out newcomers, renters and people of modest means—making Laurelhurst an oasis of money in the midst of a housing shortage.
Former Metro Councilor Robert Liberty, who once headed 1000 Friends of Oregon, perhaps the state's leading land-use advocate, says Laurelhurst's agenda is contrary to that of progressive politics.
"The consequence [of seeking a historic designation] is pretty clear: It isolates those neighborhoods from shared responsibilities to be a more welcoming community and to accommodate the housing that's needed," Liberty says.
Whoever wins the fight for Laurelhurst, this much is clear: Your neighborhood may soon be next.

Thursday, June 22, 2017

What?!? A new theme for LO?

Is the Lake Oswego brand out of style?  
Too monotonous to attract and amuse tourists?  
Did some developer complain about the design restrictions and demand changes?
Did someone at City Hall suddenly figure out that there are valuable mid-century buildings that need to be incorporated into a cohesive downtown design that includes something other than Craftsman lookalikes?    

My vote is on the third option.  A developer (North Anchor?) is balking at the stifling and oppressive Lake Oswego Style - a hodgepodge of Arts and Crafts, Lodge, cutesy styles that one might see in a mythical European village or American resort town.  

Our code does not acknowledge anything that looks like Lake Oswego had a history between 1930 and 1997, or any sense of creativity or forward thinking.  Then again, we could wind up with some of the awful boxy, urban, mixed-use junk that is populating Portland and urban renewal districts all over the country.  

Let the city know what you think, and copy your remarks to the City Council at the same time. 

Lake Oswego Review, June 22, 2017

City seeks input on 'Lake Oswego style'

City officials are asking for residents' help in clarifying the procedure for allowing architectural variety in downtown Lake Oswego and removing regulatory barriers to sustainable building designs. 
The current regulations, particularly the "Lake Oswego Style" provisions of the Downtown Redevelopment Design District (DDRD) adopted in 1997, have resulted in many attractive buildings, City officials say, but the code can also discourage innovations in building design and sustainability. 
In advance of a July 24 public hearing, the City Planning Department is accepting written comments to help it craft code amendments that address design variances within the DDRD. A public review draft of the proposals is available online at http://bit.ly/2siQKMN. 
All written comments received by 5 p.m. on Friday, July 7, will be considered. For more information or to submit comments, contact Planning Director Scot Siegel at ssiegel@lakeoswego.city or Senior Planner Leslie Hamilton at lhamilton@lakeoswego.city; call 503-699-7474; or write to Planning & Building Services Department, City of Lake Oswego, 380 A Ave., P.O. Box 369, Lake Oswego, OR 97034.

Friday, June 16, 2017


Envy: One of the seven deadly sins.  

This article was written in 2013 while Obama was still President.  Things have only gotten worse.  The socialist rhetoric says everyone must "pay their fair share," - code for soaking the rich.  There is the feeling that many people are acting out their envy, with the establishment elites who run government there to provide fuel to their fire.

What, except envy, explains this visceral distaste for people who are successful and businesses that build wealth for society.  Envy that they have been left behind?  Envy that demands government guarantee not just equal opportunity for all, but equal outcomes?  

Envy is self-destructive, self-defeating.  There is no future in envy.

How Big Government Undermines Freedom and Prosperity

The dangers of viewing government as the be-all-and-end-all of our society.

After hearing the criticism directed toward golfer Phil Mickelson for his modest comments about California’s highest-in-the-nation tax rates causing him to consider relocating, I was left wondering what country we live in. Did you ever have one of those moments?

“If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate is 62, 63 percent,” Mickelson said. “So I've got to make some decisions on what I’m going to do.” He pointed to “drastic changes” that are driving his decision—an obvious reference to the income-tax hikes California voters placed on millionaires like him. Media and public critics were aghast and mocked this poor rich guy for his complaints.

The spectacle of Mickelson apologizing on Sunday, then doing so a second time later in the week, was the worst part of this spectacle. “I think that it was insensitive to talk about it publicly to those people who are not able to find a job, that are struggling paycheck to paycheck,” Mickelson said. To the AP reporter, Mickelson wasn't sufficiently apologetic: "He didn't apologize for what he said, only that he said it."

Mickelson is just trying to get his mind back in golf, so I don’t begrudge him for using the lingo that our society requires from the chastened. It’s now “insensitive” for a wealthy person to complain about a confiscatory tax rate as long as there are other, less fortunate people out there somewhere. That’s not a healthy attitude in a free and prosperous society.

“A generation ago, the vitriol his comments triggered would have been surprising, and somewhat isolated,” CalWatchdog’s Chris Reed argued. “Griping about taxes used to be something of an American tradition. No more.” This attitude, he notes, now comes from the highest level of government.

Consider the president’s second inaugural address, which was a celebration of the wonders of government. The Democrats who run our state view private business as something ranging from a blight to a necessary evil that can be endlessly tapped to fund every new program they envision.

If you think the “blight” comment is an exaggeration, consider this: Recently, the California Air Resources Board sent out a press release celebrating a $300,000 fine it imposed on a business. The quotation from CARB’s chief enforcement officer included this warning: “All business owners should pay attention to this case.” That’s like something uttered by a villain in an Ayn Rand novel.

I’ve always sensed a deep understanding that transcends left and right in America—you can make it big and enjoy the fruits of your labor. During the early days of the labor movement, the hard leftists never made much headway because of that deep-seated idea that, no matter how humble one’s beginnings, an American can make it big some day.

Something has changed, even as our society has become wealthier. Sure businesses have to comply with regulations and millionaires need to pay taxes, but somewhere we’ve shifted from honoring success to envying it, from viewing government as a limited tool to achieve a few necessary things (infrastructure, enforcing the rule of law) to seeing it as the be-all and end-all of our society.

Why is it assumed by these moralistic Affluence Police that the rich are mainly greedy people who spend their money on luxury goods? Charities and non-profits are funded by wealthy people. Real capitalists invest millions of dollars into ideas and often create good jobs in the process. I have no idea what Mickelson does with his money, but it isn’t any of my business. Given California governmental attitudes, one can’t blame him for looking elsewhere.

For instance, during a recent Capitol press conference, the Orange County Register’s Sacramento reporter asked Gov. Jerry Brown about the spending increases in his supposedly austere budget. Brown joked about there being no hope for Orange County readers, according to a Register editorial. Then he mocked “this doctrine that government is the problem,” which he said is promoted by the “Orange County Register or whoever all these people are.”

At the Capitol, the free market is viewed as an arcane joke. Yet I look at everything government does—at all those programs and bureaucracies and entitlements that Brown and Obama prefer. I see enormous debt, corruption, abuses of power, union-enrichment schemes, shoddy services, terrible attitudes, and an endless sea of scandal and greed. Just read the newspapers.

But the scorn should be expected. The state uses a static model for calculating revenues. It assumes that if you raise taxes by, say, 20 percent that the state will get 20 percent more money. In the real world, people move to lower-tax places or work less or hide more of their income, and the government gets 20 percent of a smaller pie.

If wealthy people keep leaving, then the state will have to pare back its budget. Perhaps the backlash against Mickelson is a sign of desperation by those who understand there might be limits to how many golden eggs the geese keep laying.

Wednesday, June 14, 2017

Planned congestion

This is not a joke.  The only funny thing about this is that the article and report (below) are not about Portland, but about the Twin Cities.  Everything said about the Twins could just as easily apply here.

Conclusion: All of the planners in the US must have gone to similar schools, read the same books on planning and want all our cities to be clones of whatever the books say we should look like. And we would all have the same lifestyle options just as they plan for us - only our geography would differentiate us.

How did we ever get along without Central Planning?  

Read the blog post use the link for the full report on The Antiplanner website.  It's no coincidence that the wbsite is run by Cato Institute Fellow, Randall O'Toole, an expert in land use and transportation.


Stuck in Traffic

If you are stuck in traffic in the Twin Cities, says this new report, don’t blame population growth; blame the Metropolitan Council, the region’s metropolitan planning organization.

The Metropolitan Council’s official attitude is, “We can’t build our way out of congestion, so we will provide alternatives to congestion” in the form of light rail, bike paths, and maybe a few high-occupancy/toll lanes. The council’s 2040 plan has $6.9 billion programmed for transit improvements, $700 million for bike paths, and $700 million for road improvements. That means 8 percent of the funds goes for the 90 percent of the people who drive to work while 83 percent goes for the 6 percent who take transit.

Beyond providing alternatives, many of the council’s policies actually make congestion worse. These include traffic calming, giving transit priority at traffic signals, giving buses priority at metered freeway ramps, increasing urban densities, and complete streets programs that take lanes on busy streets from cars and giving them to bicycles when safer bike routes would have been available on parallel streets.

Use link to continue.

"There's no such thing as unaffordable"

Recently I debated a committed progressive (socialist?) about rent control (rent stabilization).  He was adamant to the point of becoming angry and physically upset that his point of view was the only correct way to look at the problem of rising rents.  Maybe  his passion had something to do with the fact that he was French, but I don't think so - there's plenty of passion about the subject here too.

My debate opponent contended that without government controls, greedy landlords would raise rents continuously without end, pushing struggling renters to the brink of insolvency or to the street.

I challenged his logic.  How can anyone charge more for a product than their customers can pay and still stay in business?  No landlord can afford to own rental units that remain vacant because they charge too much.  When the top end of the market is achieved, landlords have to halt rent raises and/or lower rents.

The rent control fan could not see beyond current affairs and his own perceptions of a landlord class that abuses and cares little for his or her tenants.  For him it came down to visceral animis and displaced compassion:  Landlords are always villains and tenants are their captive victims. Logic be damned.

It is scary to think that otherwise
smart people fall
prey to this nonsense and connive to rob people of their businesses, their personal incomes and property rights in order to punish the mythical "evil landlord."  Reaction to mob appeals is frightening.  What will the mob demand next?

If we are not careful, capitalism will be destroyed or perverted in an expanding regulatory hell. When the public claims a direct share in the wealth of private businesses through subsidies or unfair taxes from owners, few people will continue to provide that service or product.  

Unless honest - not biased - political and economic systems, and business fundamentals become part of our educational system, we will continue to see business-busting laws like gross receipts taxes and rent control -- and the mob and society will get what it deserves.

Rent control is illegal in Seattle. Here’s why

KUOW April 3, 2017. Amy Rolph 

The cycle has three parts, and they go like this: Employers are paying high wages, landlords are charging what the market will bear, and developers are building new units for all the people moving here for those high-paying jobs.
“There’s no such thing as unaffordable,” Young said. “If it were unaffordable, no one would buy it. And people are buying it.”
Young said that imposing rules on how much landlords can increase rent is a disincentive for builders, which can result in a housing shortage — the opposite of what you need to create lower rents and home process. Rent control can also create disincentives for landlords to maintain buildings and might make them seek to evict tenants paying disproportionately less than the market rate.
“If you’re going to think of a political solution, the economic consequences might actually be more extreme than the problem you're trying to solve,” Young said.  

Tuesday, June 13, 2017

Belief in the impossible is bad policy

A good description of the idiotic, self-destructive, self-absorbed, magical thinking of supporters of rent control (euphemistically called "rent stabilization ").  

Seattle Times, May 7, 2015. By Richard S. Davis 

There is never a time for rent control

Rent control has been proven to have adverse effects. Seattle should take a pass. 

The same people who believe you can increase the price of labor without dampening demand now argue that you can lower the return on property owners’ investment without reducing supply. It’s time for another walk through the looking-glass world of Seattle politics. Like the White Queen, progressive activists here make a habit of believing six impossible things before breakfast.

While economists may quibble about the effects of minimum-wage hikes, there's no such debate about rent control's adverse effects.  Fifteen years ago, economist Paul Krugman called rent control one of the best-understood and least controversial economic issues.  A 1992 poll of the American Economic Association found that "a ceiling on rents reduces the quality of housing."  A 2012 survey of leading academic economists reached the same conclusion.

If the topic were climate change, scientific consensus would be invoked to end the debate.

Yet, the idea gains political traction as rents rise, along with concerns about income inequality and gentrification. Renters are the majority of the population in nine of the nation’s 11 largest cities, according to The Wall Street Journal. That’s also true in Seattle. The city recently became one of the 10 most-expensive cities for renters, according to the U.S. Census Bureau, posting the steepest rent increase in the nation between 2010 and 2013.
Naturally, then, the city’s populist progressives think there ought to be a law. 
Rent control is not just wrong in principle, it’s a violation of fundamental property rights. It also fails to deliver.
Imposing controls that would reduce the quality and quantity of affordable housing in the city would compound, not solve, the problem. Believing the impossible does not make it so.

The New City: Global, walkable, unaffordable

A website after my own heart from Australia - the tag line says it all.

 The New City 
"Cities for people, not planners"

The New City is a web journal on urban development, arguing that cities should be prised from the control of bureaucratic planners and left to a free market of workers, families and businesses. Based in Sydney. Click here for our free email updates.

Catalogued in the National Library of Australia's PANDORA archive and featured on New Geography, On Line Opinion, Quadrant Online, Demographia, Catallaxy Files, Forbes.com, the National Post, RealClearWorld, Architecture Insights and others ... past articles


The Suburban Economy and its Enemies

Environmentalists and planners - two increasingly interchangeable categories - are oblivious to the prospect that their creeping regulations and imposts, and misallocated resources, could unravel the suburban economy. Yet they will always struggle to mobilise public opinion. Their all-purpose pretext, the climate change hypothesis, relies on aggregated data which can’t be used to argue particular cases. Take the NSW government’s recent decision to review the costly ‘energy efficiency building sustainability’ rules. While the Housing Industry Association came to the issue armed with a raft of statistics about price impacts and falling housing starts, green outfits like the Total Environment Centre could do little but sputter the magic words ‘greenhouse’ and ‘global warming’. They were not in a position to show why, how and to what extent this particular decision would exacerbate climate change.

Progressives clearly feel a need to delegitimise suburban life. This stems from their barely suppressed rage against people they can’t control. Like Kurtz in Joseph Conrad’s Heart of Darkness, suburban people have strayed too far from civilisation, they contend, and will lose their minds. Yet they fail to explain why surveys indicate an overwhelming preference for detached housing on sizeable blocks, or why the latest Australian Unity Wellbeing Index registers higher rates of happiness amongst suburban people than their inner-city counterparts.

Deindustrialization of Sydney  4/17

 Malcolm Tyson of Colliers warns that Sydney could run out of industrial land in just 6 years. Dreaming of “global city” amenities like dense housing, commuter rail, walkability and bike paths, our planning elites may be occupied elsewhere. But this is a crisis in the making.

Sydney lurches to housing unaffordability  11/16

Second, progressive policy analysts and welfare advocates, closely aligned with the university system and highly educated knowledge-worker elite. They too promote inner-urban infill development, higher core and middle-ring densities, and public amenities associated with TOD. While the Big Project coalition is mostly driven by finances, cultural-lifestyle factors loom large for knowledge-welfare types. Hence their demands for more housing near “consumer city” localities crammed with trendy bars, pubs, nightclubs, restaurants, cafes, art galleries, theaters, museums and cinemas. This plays into “creative-class” perspectives on economic growth and an aversion to suburbanization as “unsustainable”. Some of them are supply-solution sceptics, leaning toward demand-management, and most are aggressive critics of tax concessions. They urge more social housing schemes and regulatory responses, such as mandating a portion of affordable units in new housing developments (inclusionary zoning), which Big Project lobbies like the Property Council and Committee for Sydney oppose (with good reason, as the evidence suggests IZ reduces supply and raises prices).  

The ABC of making housing unaffordable 12/16

This feeds into the false narrative being built up by the ABC and other media outlets, particularly catering to a younger audience. It’s all the fault of greedy oldies or wealthy investors with their snouts in the trough. The impulse is to slap taxes on the scapegoats. In the meantime, the real causes go undiscussed and the problem keeps getting worse.

Californians: Slaves or Serfs?

Only the tech- rich oligarchs will survive -  at least until the proletariat's money runs out.  That's when the retribution begins for ruining a beautiful state.  How long before Oregon sinks this low?

I used to think that we were too far removed from SF and SoCal to be threatened by their nonsense.  Oregonians were simply smarter and well-grounded - immune to the flights of fancy that were making paradise an expensive social experiment.  Our dampness was always a roadblock to immigration.  Damn Goretex.  Oregon has been Californicated, susceptible to all the progressive, regressive, dissterous ideas that are ruining paradise.

Hopefully, California will burn itself up and show everyone what terrible mistakes are being made before we lose it all - down south and here too.

Tyranny, elitism and oligarchs are already here.  Be viligant.

Orange County Register, June 11, 2017
Opinion - By Joel Kotkin
California's descent to socialism

California is widely celebrated as the fount of technical, cultural and political innovation. Now we seem primed to outdo even ourselves, creating a new kind of socialism that, in the end, more resembles feudalism than social democracy.

The new consensus is being pushed by, among others, hedge-fund-billionaire-turned-green-patriarch Tom Steyer. The financier now insists that, to reverse our worsening inequality, we must double down on environmental and land-use regulation, and make up for it by boosting subsidies for the struggling poor and middle class. This new progressive synthesis promises not upward mobility and independence, but rather the prospect of turning most Californians into either tax slaves or dependent serfs.

California’s progressive regime of severe land-use controls has helped to make the state among the most unaffordable in the nation, driving homeownership rates to the lowest levels since the 1940s. It has also spurred a steady hegira of middle-aged, middle-class families — the kind of tax-burdened people Gov. Jerry Brown now denounces as “freeloaders” — from the state. They may have access to smartphones and virtual reality, but the increasingly propertyless masses seem destined to live in the kind of cramped conditions that their parents and grandparents had escaped decades earlier.
There is some irony in a new kind of socialism blessed by some of the world’s richest people. The new policy framework is driven, in large part, by a desire to assume world leadership on climate-related issues. The biggest losers will be manufacturing, energy and homebuilding workers, who will see their jobs headed to other states and countries.
Under the new socialism, expect more controls over the agribusiness sector, notably the cattle industry, California’s original boom industry, which will be punished for its cows’ flatulence. Limits on building in the periphery of cities also threaten future growth in construction employment, once the new regulations are fully in place.
In the end, we are witnessing the continuation of an evolving class war, pitting the oligarchs and their political allies against the state’s diminished middle and working classes. It might work politically, as the California electorate itself becomes more dependent on government largesse, but it’s hard to see how the state makes ends meet in the longer run without confiscating the billions now held by the ruling tech oligarchs.

Monday, June 12, 2017

Where the American Dream is going

Government single-handedly created the conditions for the quickening disappearance of the American Dream, perhaps intentionally.  To give the public back the dream of a household a lot they can call their own, it just needs to get out of the way.

High priced housing was predicted to happen in Oregon over 40 years ago. This wasn't a guess, it was a mathematical and economical certainty.  Only the timing was unknown.  So, here we are, at last, and we are not alone.

Why housing is so expensive:
  • In-migration increases demand faster than supply can accommodate.
  • Housing shortage following the Great Recession creating tight credit and few buyers.
  • Apartment-to-condo conversions took a large supply of existing, affordable apartments out of the market during the housing bubble.
  • Demographics  Two of the world's largest generational cohorts are in the housing market at the same time.  This adds the demand and puts another strain on supply.
  • Land containment regulations.  If cities are not allowed to expand, the result is expensive, scarce   land to build on, which in turn demands an expensive house with smaller lot.  
  • A good economy gives people more money to spend on housing and adds to in-migration.
  • Gentrification - usually follows government-initiated and publically funded urban renewal which provides the impetus for improvements that raise property values.
  • Sub markets' prices rise faster and higher because they are more desirable.
The main reason housing is so expensive is:
Proof that cities with land containment policies (urban growth boundaries) have more expensive houses can be seen in the graph below.  Article provides insights about how and why cities and states use their regulatory authority to manipulate prices of land, and consequently the housing and construction market. Is it any wonder that the construction industry and labor unions lobby state and local officials and contribute heavily to their campaigns?  Politicians are in powerful positions ro choose who wins and who loses in high stakes real estate games.  

When an activist group identifies a cause, the special interests and governments go looking for an outside party to blame rather than look inward at their own practices for a cause and solution.  Besides, the UGB is seen as an environmental necessity.  It isn't, but that's another story. Government leaders won't change popular policies no matter how stupid or damaging they are.  The more government tries to "help" us, the bigger the regulatory morass they create.  

The article below presents a very strong, fact-based argument.  If you don't agree with the author's reasoning, why not?  Is yours a logical argument that can be proofed?  Did you research your facts?


Why the Great Divide Is Growing Between Affordable and Expensive U.S. Cities

Wall Street Journal, By Laura Kusisto,  April 18, 2014

Across the country, a divide is emerging between cities that are growing outward and remaining affordable and ones that are hemmed in by geography and onerous zoning codes and are becoming  more and more expensive.
As a whole, U.S. cities are expanding as rapidly as they have throughout the last half-century. From the 1950s until the 2000s they have added about 10,000 square miles per decade, or an area roughly the size of Massachusetts, according to research by Issi Romem, chief economist at real-estate site BuildZoom, to be released Monday. But beneath the surface a divide is deepening.
On the one side are cities such as San Francisco, Boston, New York and Miami that have slowed their pace of expansion dramatically since the 1970s, in part as they have added layer upon layer of building regulations. On the other side are cities concentrated in the southeast and Texas, which have grown outward and seen much slower price growth.
The developed residential area in Atlanta, for example, grew by 208% from 1980 to 2010 and real home values grew by 14%. In contrast, in the San Francisco-San Jose area, developed residential land grew by just 30%, while homes values grew by 188%.
The developed residential area in Raleigh, N.C., grew by 219% in the same period, while home values grew by 27%. In Seattle, the developed area grew by 69%, while home values grew by 119%.
Mr. Romem draws the distinction succinctly: expansive cities versus expensive cities.
“If you don’t let the city grow, you’re going to get prices going upward…and see the middle class being pushed out,” Mr. Romem said.
Mr. Romem’s research reads on its face like an argument for suburban sprawl, which has come under fire both for its environmental consequences and tendency to lead to oversupply that can lead home prices to crash.
Mr. Romem said ideally cities would relax regulations and build upward rather than outward. But, he said, promoting development on empty fields is more politically feasible than building apartment towers in single-family neighborhoods, and thus likely to ease affordability pressures more quickly.

Housing affordability a global crisis: Variations on a bad theme

Investigate Demographia.com for a wealth of facts and research on all aspects of demographics.  Site control and much of the research is by Wendell Cox, a Hillsboro, Oregon native.

13th Annual
Demographia International
Housing Affordability Survey: 2017
Rating Middle-Income Housing Affordability 

Australia Canada China (Hong Kong)Ireland Japan New Zealand Singapore UnitedKingdomUnitedStates 


Housing Affordability: A Social Imperative 
Oliver Hartwich, Executive Director, The New Zealand Initiative 

Demographia’s reports and countless other surveys and studies do not leave the slightest doubt that unaffordable housing is almost everywhere and every time caused by the same factor: housing supply restrictions. The more restrictive the market, the more prices will increase over time.

To any undergraduate student of economics, this will not come as a surprise. But it is still a relatively novel discovery for many planners and politicians. 

Fortunately, the media are waking up to the realisation that housing and land supply matters. The most powerful infographic of 2016 was produced by The Wall Street Journal. It showed what happened to house prices in US cities that had expanded their residential areas between 1980 and 2010 – and those that had not.1 As was to be expected, greater land supply went hand in hand with lower price increases.

Senator Bob Day AO 
Senate of Australia  
The distortion in the housing market... resulting from the supply-demand imbalance is enormous ... and affects every other area of a country’s economy. New home owners pay a much higher percentage of their income on house payments than they should.

However, the real culprit ... was the refusal of ... governments ... to provide an adequate and affordable supply of land for new housing stock to meet demand. ... the "scarcity" that drove up land prices is wholly contrived - it is a matter of political choice, not geographic reality. It is the product of restrictions imposed through planning regulation and zoning. 

Dr. Shlomo Angel
New York University
We all understand what it means to prepare adequate lands for urban expansion, enough land to accommodate both residences and workplaces, so as to ensure that land—and particularly residential land—remains affordable for all.

Unfortunately, municipalities of many rapidly growing cities often underestimate the amount of land needed to accommodate urban expansion. In the minority of cases where expansion is effectively contained by draconian laws, it typically results in land supply bottlenecks that render housing unaffordable to the great majority of residents. 

For cities to expand outward at their current pace ─ to accommodate their growing populations or the increased demand for space resulting from higher incomes ─ the supply of land must not be artificially constrained.

The more stringent the restrictions, the less is the housing market able to respond to increased demand, and the more likely house prices are to increase. And when residential land is very difficult to come by, housing becomes unaffordable. 

Alain Bertraud
New York University

It is time for planners to abandon abstract objectives and to focus their efforts on two measurable outcomes that have always mattered since the growth of large cities during the 19th century’s industrial revolution: workers’ spatial mobility and housing affordability.

As a city develops, nothing is more important than maintaining mobility and housing affordability. Mobility takes two forms: first, the ability to travel in less than an hour from one part of a city to another; and second, the ability to trade dwellings easily with low transactions costs. 

Hon. Bill English
Deputy Prime Minister (Now Prime Minister)
 New Zealand
Housing affordability is complex in the detail – governments intervene in many ways – but is conceptually simple. It costs too much and takes too long to build a house in New Zealand. Land has been made artificially scarce by regulation that locks up land for development. This regulation has made land supply unresponsive to demand. 

Robert Bruegmann, PhD
University of Chicago

... I think it is fair to say that a growing number of people who have looked at the figures have tended to agree that a good many well-meaning policies involving housing may be pushing up prices to such an extent that the negative side-effects are more harmful than the problems the policies were intended to correct. 

Joel Kotkin
Chapman University

Although usually thought of as “progressive” in the English speaking world, the addiction to “smart growth” can more readily be seen as socially “regressive”. In contrast to the traditional policies of left of center governments that promoted the expansion of ownership and access to the suburban “dream” for the middle class, today regressive “progressives” actually advocate the closing off of such options for potential homeowners. 

Dr. Tony Recsei
Save Our Suburbs, Sydney, Australia

During the 18th century, especially after the industrial revolution, rural dwellers desperate to make a living streamed into the cities, converting many areas into overcrowded slums. However, as the new economic order began to generate wealth, standards of living improved, allowing an increase in personal living space.

Unless we are vigilant, high-density zealots will do their best to reverse centuries of gains and drive us back towards a Dickensian gloom

Dr. Donald Brash
Former Governor, Reserve Bank of New Zealand

...the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residential land.

Australia is perhaps the least densely populated major country in the world, but state governments there have contrived to drive land prices in major urban areas to very high levels, with the result that in that country housing in major state capitals has become severely unaffordable... 


2.2: All Housing Markets

Among the 406 markets, Ireland has the most affordable housing with a national Median Multiple of 3.4 (moderately unaffordable). The United States is second (3.5), followed by Canada (3.9). Japan (4.1), the United Kingdom (4.6) and Singapore (4.8) are all rated seriously unaffordable. The least affordable markets are China (Hong Kong), at 18.1, Australia (5.5) and New Zealand (5.7), both
severely unaffordable (Figure 5 and Table 8).

Among all markets, 99 are affordable (Median Multiple of 3.0 or less). There are 116 moderately unaffordable markets (Median Multiple of 3.1 to 4.0) and 97 seriously unaffordable markets (Median Multiple of 4.1 to 5.0). A total of 94 markets are severely unaffordable, with a Median Multiple of 5.1 or higher.

(Well, at least we aren't as bad as Hong Kong!)

Why public employees are so expensive

A Good Idea:
Public employers should offer employees a BASIC insurance allowance to be spent on the type and level of coverage each employee wants.  Employees can contribute to insurance premiums over the basic limit.  Those who don't want or need as much insurance can save money, and those who need more can buy more coverage.  Taxpayers will be assured resources are allocated more fairly and efficiently.  The Basic allowance should be aligned with private company averages.  

It is wrong for government entities (cities, school districts, the federal, state and county) to tell the public it is running out of money for programs and services while it continues to grant ultra-generous benefits to public employees.  Consider:  Unlike the private sector, some public employees receive post-employment health insurance to bridge the gap between early retirement and Medicare eligibility.  ???  Did anybody tell these employees they don't have to retire after 30 years if they are under 65?  Or to at least to save enough to pay for their own insurance premiums?  But if the administrators who do the negotiating and politician who approve the contract are offering it, why not take it?

Controlling benefits won't take care of the PERS drain on our public systems - for that we need to reduce the number of public employees on the payroll.  Cutting staff and hiring more contractors for services should be done immediately.  "If you find yourself in a hole, stop..."

Responsibility for out of control employee expenses come back to the public body we elect and put in charge.  However...
  • City Councils and School District Boards are indebted to public employee unions that helped get them elected.
  • The school district and city administrators who negotiate contracts are incentivized to reward their subordinates.  
  • Unions have a lock on employees' membership and dues.
  • Insurance companies are happy to pitch their most profitable products to public employers.
Other Good Ideas:  
We need to give control of government back to the people.
  • It's time public bodies hire 3rd party negotiators to work on the taxpayers' behalf to get the issue out of the political crony network.  
  • It is past time for Oregon to become a "Right to Work" state.  Workers in all states should be free!  All workers should have their right to work protected - especially a public employee!

Health care and retirement make Oregon teachers pricey 

High health insurance and retirement costs make teachers more expensive in many Oregon school districts than in Vancouver or Boise, according to a new study by Portland State University's Center for Public Service.
And that disparity is likely to worsen as public employers' retirement costs in Oregon jump higher in the next five years to bail the state pension system out of its $22 billion funding deficit.
The study comes at a time when Oregon legislators are looking to trim both health care and retirement costs for public employees in their efforts to close a $1.4 billion budget shortfall. It is the latest of several studies from the Center for Public Service looking at public employers'
compensation costs
The biggest driver was employer-paid health insurance, which was consistently highest in Oregon. The study said the cost of that coverage ranged from $13,569 in Hillsboro to $18,713 in Lake Oswego. That compares to $10,016 in Seattle, $9,360 in Vancouver and $7,320 in Boise.
Retirement costs get a lot of attention in Oregon, as they are set to jump in each of the next three two-year budget cycles. The study looked at current costs, so it didn't take those increases – set to begin in July - into account. Districts in Washington and Idaho are not facing those increases.