Why your house is not an investment

Your house is not an investment. It is an asset.

I was talking to one of my neighbors. We’re both overwhelmed by our large suburban yards. She had talked about selling but decided not to. Her problem? Despite it being worth at least double what she paid for it, she can’t find anywhere to buy that would let her take out that money and not live somewhere completely impractical. Sure you can get a $100k home in temple, but that commute isn’t worth it.

I decided to quit. Give up on trying to maintain my yard. Something had to change. When we moved into this house I wanted to move into a garden home. I was already done doing yard work. A decade of substantially increased yard work has not made things better. And moving from working from home, to working in the office meant I no longer could keep up.

So I started looking around at homes. Selling our house we could afford a half million dollar house with only a small increase in house payment. Which sounds great. The only problem? It would increase our tax payment by 225%. Which would be like adding another half a house to our house payment. And unlike a house payment if our house keep going up in value that amount would keep going up. 10% a year increase in taxes on a half million dollar house is a substantially larger number than 10% a year increases in taxes on a quarter million dollar house.

So do we have an asset that has increased in value? Nope. We have an asset that has inflated in value along with all the other homes around us.

So we’re taking out a home equity loan and paying someone to make the yard lower maintenance. Also we’re going to do a ton of work ourselves and invest tons of money in those projects.

Because we’re trapped here in our “largest investment”.

Configuring a Wireless HP Printer without WPS

So newer routers don’t have WPS. This can be a problem if you have an older printer that connects to your network via Wireless. Here’s how I got my P1102w working.

  • First I reset the internet settings. This involves turrning off the printer. Holding down the wireless and cancel button and then powering on the printer. Once it’s done making noise you can release the buttons.
  • Next I printed a wireless information page. I held down the cancel button until 2 pages printed.
  • Then I connected to the printer’s device network on my Mac. The self-test page has a field Network Name (SSID). A network with that name was listed on my wireless menu under Device Networks. Note that while connected you won’t have normal internet access.
  • I then looked at the Host Name on that self-test page. Mine was NPI79343D. So I opened a web browser and visited:
    http://NPI79343D.local.:80/
  • I clicked on the Networking tab. Clicked on Wireless to the left.
  • I changed the network type to Infrastructure
  • Changed the Network Name to my home network
  • Changed the Security Mode to WPA/WPA2 and then entered my password.
  • I then hit Apply and got a blank white page. That’s good. It meant it had stopped using the device network and moved to the main one.

And that’s it. My printer is now discoverable and working again.

The Arts Should Be Your Anchor Tenant

In Austin recently a strip mall was converted into a mixed use project with housing, restaurants and a parking garage. It’s something we see in lots of cities across the US, but this one was different. The new restaurants immediately had patrons (and lines). There’s a fine-dining restaurant completely hidden from the street full of people. People know the names of the stores in the new development. What did this business do right? They anchored it with the Alamo Drafthouse Movie Theater. Their parking garage is always full and the complex teems with people.

This should be a model for every new development, although obviously there are not nearly enough movie theaters to anchor every new complex. Where to go from there? How about a performance space? Performance spaces bring in technicians and actors for rehearsal every night of the week. Technicians and actors who must be fed. It brings in wealthier clientele to performances. Clientele who generally have an intermission where they get up and stretch their legs (and discover all the great businesses your complex has to offer). A small subsidy to a performance group can provides a steady stream of traffic to keep your other renters thriving and rents high.

If any developers are reading this and would like to work with the arts community, I’d also love to push for a density bonus for providing affordable commercial space in vertical-mixed use projects. Just like we have density bonuses for affordable housing today. There’s no reason we couldn’t have a compliment on the commercial side.

Who’s the lobbyist?

According to the Austin Monitor Council Member Pool has joined forces with the Austin Neighborhood Council to make lobbying rules more strict. Which sounds great. Should people who make more than $1,000 in a field related to their volunteer efforts at the city be required to register? I mean if we forget that this favors kicking out the qualified in favor of the retired and wealthy, it sounds rational.

I’m 100% in favor of this as long as we include people who’ve seen more than $1,000 increase in the taxable value of their house in the past year. Council Member Pool has seen her home value go up almost $200,000 over the past 5 years. Since being elected Council Member Tovo has seen her taxable value go up over $100,000 on her homestead.

And we’re worried about the impact of people making $1,000 or more corruption our government? What about those whose policies are pricing out renters and first-time home buyers and are enriching their pockets to the tune of hundreds of thousands of dollars? Aren’t they lobbyists as well?

 

Single-Family Homes and Social Justice

Have you ever thought about how people know where “good schools” are? Like really thought about it. With the exception of people like me and my wife who can not only tell you which programs each school has, but also how their test scores rack up relative to other schools. Most people aren’t like that, though. At best they might which of the 4 rankings the TEA hands out their school has obtained. And then there are plenty of schools that have the best rankings from the TEA that “people have heard have challenges”.

So how do we find “good schools”.  Take a minute and think about areas around you. How do you know they have good schools? What are the features of the communities?

I’ll bet you came up with something very suburban. Single-family homes with large green lawns. Homes on cul-de-sacs. New homes being built all the time. Ultimately these places do frequently have better schools by keeping out everyone without a college education, or parents rich enough to help with the down payment.

 

But this is ultimately the zoning of discrimination. It allows racism and segregation to persist in the guise of an obtainable dream. But the down payments and housing prices can always be set just a bit higher to ensure the right sort of neighbors.

We see this in Austin. Super-high end suburbia in the city ringed by apartment complexes. But what if we knocked out the suburbia entirely?

Seattle’s doing something very interesting about this. A Seattle committee recommends replacing “single-family zones” with “low-density residential zones”.  Every neighborhood right now that has single-family homes could add row houses, duplexes, and triplexes. This is something I’d really like to see happen in Austin. What do you think? Would you be willing to give up a suburban single family neighborhood to help out people who rent? If you rent would you be willing to fight for this change?

Think Creation Centers not Basic Wage

There’s a lot of talk about the need for a basic wage in the US. Self-driving vehicles have the potential to wipe out huge swaths of our economy. The obvious ones – truck and taxi cab drivers. And the less obvious – gas station attendants, fast food workers, grocery store cashiers and anyone else who works in a business that makes money off of luring you in while you drive by in a car.

It’s also pretty clear that a certain subset of the population is too influenced by 20th century propaganda to ever accept a basic wage.

A basic wage is socialism, communism, or welfare – and they don’t want it.

But when you look at the future of companies like Apple, the future is terrifying. Apple requires not only a wealthy consumer base, but a growing wealthy consumer base. Apple cannot survive in a world where the US has 40% unemployment.

I would suggest to see the future we look at Silicon Valley.

We already see the results of people with too much capital and not enough return on investment pouring money into startups praying for some sort of payoff. Take that concept wider.

I participated in Manuel Zarate’s first ArtSpark festival that gave participants space to work and a chance at a cash prize to work on new pieces of art. It kept a lot of people very busy and producing new things for several months. It didn’t have the capital we see in Silicon Valley, but it certainly could. Create foundations to sustain these incubators all over the US.

Inside the incubator participants would receive an “iPhone wage” along with bonuses and cash prizes for creating marketable ideas. Have them on every subject matter –

Create gardening incubators. Transportation incubators. Culinary incubators.

Ultimately they don’t have to be profitable, but if they are companies like Apple get new products, and at the very least they create jobs so people can afford new iPhones.

What do you think of this? Is it more feasible than a basic wage?

 

Denser Cities are not more expensive

A lot of time people trot out the canard that more dense cities are more expensive. A short (but not exhaustive) list of cities that are cheaper and more dense than Austin.

Buffalo
Pittsburgh
Cleveland
Milwaukee
Detroit
St.Louis
Akron
Toledo
Cincinnati

And here in Texas:
Houston
Dallas
San Antonio

Density does not equal expensive.

Keeping traffic out of your neighborhood doesn’t work.

TXDot released a map of the most congested roadways in Texas. There is only one East/West road in Austin on the list – Slaughter lane. I know when I lived at Dittmar and Mancaha there was quite a lot of concern about another neighborhood going in around the corner and what it would do to traffic. A lot of these projects were not pursued due to neighborhood opposition. You can see that there’s a lot of undeveloped space between Mancaha and South Congress.

This picture illustrates perfectly how pushing development away from you can still clog up the streets near you.

slaughter

Looking at the map you can see that Slaughter connects to IH-35 and MoPac shortly after that they become congested heading Northbound. We can assume that very few people living North of Slaughter are driving south to catch more of the congestion as they head into the city.

So the majority of this congestion is coming from the amazing curlicues of culdesacs and sprawl south of Slaughter Lane. The sprawl got pushed away, but it ensured that Slaughter was congested. It ensured that IH-35 and MoPac congestion started further south. In short the neighborhoods that pushed these residents away ended up getting all the traffic downsides, without any of the upsides of more people – better buses, more walkable stores, parks and amenities.

Vouchers and the End of the Suburb

So, new Texas governor Dan Patrick is making noise about passing school vouchers in this legislature. And I see no reason why it won’t happen. It might not get implemented because this ledge frequently writes bills in such a way that ensures a court case, but ultimately I think it will pass.

If I were a large scale home builder I’d be scared witless.

If you ask anyone why they move to the suburbs I almost guarantee they’ll say “good schools”. But what if the suburbs didn’t guarantee good schools? I would expect to see exactly what we’re seeing in Austin. School choice has led to huge numbers of students going to private and charter schools. It also has led to huge numbers of students transfers.  It has completely destroyed the notion (or value proposition) of neighborhood schools.

Parents seemed to have learned from Monty Hall and always choose to open another door. I’m frequently at parties with two different sets of parents who’ve decided to transfer their child. Into each other’s schools. This is common. The grass is always greener in someone else’s neighborhood school.

The other side of school choice is congestion. School choice ensures additional trips during rush hour. This could double commutes for those exclusive exurbs.

I think ultimately this is going to increase the speed of gentrification and the decline of outer-ring suburbs. It’s going to be an interesting change to say the least.

Neighborhood Plans are broken

Currently Austin is governed by a set of standards. We have base zoning which says where you can build single-family homes and where you can build businesses. Then we have overlays such as the waterfront overlay, that says that your building has to be short near the waterfront. Then we have FLUMs and Neighborhood Plans on top of that.

FLUMs (Future Land Use Maps) and Neighborhood Plans were created by neighborhoods in a lengthy neighborhood process about a decade ago. From all accounts it was a horrible process. No one was happy with the results, and it was horribly unrepresentative.  In my neighborhood with 40,000 residents the meetings didn’t yield more than 100 participants. Many of those participants no longer live in the neighborhood and the intent of large pieces of the plan is no longer understood. Yet you still see people defending adhering to them.

A great example of why we need to chuck them is the East Riverside Corridor. One of our priorities that was set at the time was to get the Lady Bird Lake Boardwalk implemented. Mission accomplished! We did it. High fives. When I went to ask the city to remove it from our plan requirements they said they couldn’t do so without going through a massive neighborhood amendment process (multiple stakeholder meetings, etc). Things that are complete cannot be removed.

Currently the East Riverside plan has target increased density along East Riverside near the planned rail transit stations. These are the areas in peach below.

Selection_001

Now whether you agree with that or not, you may be asking yourself – “What if the Rail Bond fails at the polls?”

That’s exactly the problem. The neighborhood plan doesn’t change. We still have these weird density pockets around non-existent train stations. And what about maybe filling in the white spaces in between so that they match the tall buildings that are built? Nope. No change. That will require a neighborhood plan amendment process with multiple stakeholder meetings. So without rail Riverside just gets left with a weird neighborhood plan they can’t change.

We have roads and buildings that don’t appear on our maps and can’t be trivially added.

That doesn’t even get into the Future Land Use Maps (FLUMs). FLUMs are basically fantasy maps. Dreams of a small group of shareholders a decade ago. In many cases they include less affordable and multifamily housing than currently is in the base zoning. So FLUMs are already making Austin more expensive.

It’s time to chuck neighborhood plans and FLUMs. Let’s get a better system where it’s easy to build affordable housing. Where we can easily adapt to allow nice things in our neighborhood, and where people who haven’t lived in a neighborhood for decades have a seat at the table.