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Archive for February, 2012

Art Imitates Land Use

Hill and Ploughed Field Near Dresden. Caspar David Friedrich. 1824.

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An interesting proposal, close to home: S-1566 was proposed in the New Jersey Senate by Democrats Barbara Buono and Raymond Lesniak. The bill is similar to a proposal in Truthout that LT linked to last month: It would authorize the state to acquire foreclosed properties, in order to assemble an affordable-housing land bank. Properties in the program would be conveyed to qualifying buyers with 30-year deed restrictions on future sale and rental prices; allowable prices would be pegged to an affordable ratio of the region’s median income.

I think this proposal is a good step. It would be hard to overemphasize the importance of the role that a durable stock of affordable housing could play in improving the economic health and social equity of New Jersey’s communities– or the price that the state has already paid in these areas for the absence of such housing. Since the 1970s, this state has followed the most affirmative approach to inclusionary housing in the nation. Yet, all of the statutory attempts to comply with the Mount Laurel doctrine have been inadequate to solve the state’s housing crisis. S-1566 strikes me as a modest but practical new way to approach the challenge of creating durable, affordable housing in competitive metropolitan land markets. Incidentally, the NSPs championed by HUD (under both Bush and Obama) have followed a similar approach, with deed restrictions and median-income ratios.

I would love to see an amendment to this bill that actively encouraged the formation of limited-equity co-ops, in order to develop high-density, privately-owned communities on some of the acquired lands. Obviously, this would work better in some places than in others. It worked well in New York City during the mid-20th century, and it could work well again in metropolitan New Jersey today. Another notable absence from the language of S-1566 is any reference to eminent domain powers. Presumably, the lenders wouldn’t bargain too hard for a lot of these properties, in the first place. However, the New Jersey Constitution of 1947 explicitly authorizes the use of eminent domain to acquire blighted parcels (N.J. Const. art. VII, § 3, ¶ 1), and I’d imagine that abandoned foreclosed properties would meet even the strict Gallenthin criteria for defining such conditions, if such an approach became necessary.

Update, 02/16: S-1566 passed unanimously in the N.J. Senate Economic Growth Committee on Thursday. It will now go before the full Senate, and its counterpart, A-2168, will be introduced in the General Assembly. Clearly there is a broad base of support for this measure in Trenton. In terms of finding bipartisan backing for a good idea, this is great news.

The main question I have now is about how the spending criteria will be developed. The Senate bill doesn’t spell out a set of conditions that must be met prior to property purchases. It may be that these matters are customarily developed on the ground, and not at the legislative level; I don’t know. But whether this issue should be explicitly worked out in the legislation, or somewhere else, I’d like to think a basic principle would be acknowledged with some specificity in the bill: Namely, that the amount paid to an institutional lender for any property acquired under this program must be limited to a price that ensures that the lender will be paid no more than a certain ratio of what the Corporation intends to ask for the eventual sale price of that property, pursuant to the affordability formula. Furthermore, reasonable projected costs for any necessary pre-occupancy repairs, upgrades, and legal work should also be subtracted from the maximum allowable purchase price under this program.

In most cases, I’d think that the right maximum ratio would be 1:1, minus costs, but there may be occasional situations where it’s worth taking a loss to acquire a particular property for a specific purpose. The point is that the state has leverage here: These are unsold, abandoned properties. Enacting language that exercises that leverage for the benefit of New Jersey taxpayers could greatly mitigate the potential for program losses, and quell public suspicions that a government program might overpay lenders to acquire low-value properties. In exchange for greater solvency and legitimacy, such language would likely result in at least two trade-offs: First, it would likely reduce the total number of properties in the program portfolio. Second, it would sharply reduce the number of program properties in expensive neighborhoods. But I think these outcomes would merely emphasize the limitations of this solution. At best, this program could be one more piece of a larger housing puzzle.

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The Recent Mortgage Settlement

The Los Angeles Times has an article by Michael Hiltzik that casts the recent settlement between several major U.S. banks and 49 state attorneys general in a pessimistic and cynical light. Among his main points: (1) The supposed $25B price tag is misleading, because it is comprised mostly of a rosy estimate of future principal write-downs and interest-rate reductions for non-foreclosed mortgagors; (2) the states will receive only approximately $5B in direct payouts from the deal; (3) of the two million owners who have lost homes to foreclosure since 2008, only about 750,000 will receive compensation– at a grand total of $2,000 each; and (4) a separate suit by the federal Office of Comptroller of the Currency has been quietly settled for nothing, so long as the defendant banks follow through with their agreements in the main settlement with the states.

My sense, after hearing a passing summary of the deal on N.P.R., was that the settlement was very modest. Reading this article, and a few other news reports, has not changed my mind. One bit of a silver lining: Attorney General Schneiderman’s MERS action, filed last week in Brooklyn, will go forward, in spite of this settlement– and so will a number of other state actions. So, this agreement may turn out to be just one piece of a larger puzzle.

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The Compassionate Care Foundation dropped its suit against the zoning board of Westampton Township, New Jersey. In the latest episode of the medical marijuana story, the group’s attorney tells the Star-Ledger that the organization has found a new site in the shore town of Egg Harbor, in Atlantic County. But, the state health department still has to issue another permit, or something, before things can go forward there. I guess we’ll see.

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Cityscapes

Sometimes, the mindset of planning can cause us to lose track of something that makes the field so compelling: the social fabric that neighborhoods express. Here’s a story that brings the American cityscape back to earth. It’s about an amateur photographer– a young policeman– whose work over the last decade captured the grit and beauty of ordinary time in some of New York City’s least glamorous precincts. To some extent, a few of his images remind me of my own memories of doing Census field work in Jersey City, when I was 19.

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An Online Look at Gismondi’s Rome

Here’s a large photo set posted on Flickr, by a user called MrJennings, showing Italo Gismondi’s Model of Imperial Rome, at the Museo della Civiltà Romana. The 1:250 scale model depicts the city in the time of Constantine. Snapshots of the model turn up frequently in the context of articles about the imperial city, but this is a rare look at the work itself in its entirety. Meanwhile, here’s a more interactive look (zoom, pan, etc.) that also includes a bit of a description.

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The Atlantic has an article by Jordan Weissmann entitled, “Why Your Prius Will Bankrupt Our Highways.” It paints an ominous picture of the relationship between gasoline taxes and federal highway funding. I think it’s interesting that proposed public spending on rail infrastructure is reliably controversial in the United States, but not the subsidizing of motor travel through public spending on roads, highways and related infrastructure costs. It would be fair to say that the business model for private railroads would be a lot rosier if the government built and maintained all of the tracks, switches, and stations across the country, without controversy, and the private sector had only to supply the actual engines and rail cars.

Weissmann’s article also, indirectly, makes the case for land use policies that discourage sprawl and facilitate more compact development patterns. I’ve been reading about this topic lately in connection with some work that I’m doing for a research center. Studies have found that, in addition to the staggering highway costs that are generated by car-based land-use patterns, added costs for the development and maintenance of water and sewer infrastructure, private sector utilities, and lost productivity due to traffic congestion also grow in direct correlation with low-density, sprawl-type development.  These externalities ultimately redound to taxpayers, utility customers, and other consumers, where they are shared by town-dwellers and sprawl-dwellers alike. In traditional towns and cities, these costs were borne more directly by those who would benefit– a practice which strongly encouraged efficient land use.

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