Charley Ferrari

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  • Scientific Proof That Gentrification Will Hit Brownsville But Not Canarsie

    May 15, 13

    Stephen Smith, writing in onion-esque form at the Observer, believes that gentrification in Brooklyn has finally reached its end game, and is calling Brownsville the last frontier (in Brooklyn at least.)
    
    Well, if Brownsville truly is the end of the line, we should be able to compare interest in it to interest in Bushwick a few years ago. Those first steps: those pioneering hipster adventures out into wild urban frontiers, fueled by a burning question- "what's ACTUALLY out there?"- and a few PBRs, predate actual settlement. Lets check the Google trends:
    
    

    This graph tells a very clear story! Bushwick has a very constant, if slightly increasing, rate of interest over the past 10 years. Which would make sense given what's happening on the ground. Until 2010 however, interest in Brownsville seems to remain flat. Isabella and Ferdinand holding court at Roberta's didn't authorize exploration until 2010, when it seems the fixie Nina, Pinta, and Santa Maria finally left for uncharted territory.
    
    But Brownsville is over! It's obviously already been discovered. Lets compare this to the even more distant lands of East New York and Canarsie:
    
    

    
    
    

    I'm not sure why there's such high variance screwing with the scale, but it seems like East New York and Canarsie are at least 3 years away from becoming as discovered as Brownsville is today. These are still magical lands, marked on maps as "there be dragons here."
    
    The more interesting point in the article involves the South and East Asian immigrants filtering into these far flung neighborhood. The neighborhood I grew up in in the East Bronx, destined to forever be a boring backwater, is going through similar ethnic change. Ever since white flight in the 70s, city dynamics have been viewed as what's happening with white people vis-a-vis "undesirable" minorities. First the black people moved in and scared off the whites, and now the white people are displacing the blacks and hispanics. There are serious problems that are happening on both sides of this process, but focusing on just one process ignores everything else that's going on. Can you imagine hearing stories about what neighborhood the Asians are going to move to next? Flushing is so over, it's all about Bensonhurst now.
    
    I think it's a good thing that we're not hearing things like this. Ethnic diversity is spreading through New York.  Recognize the negatives of gentrification and try to fight against them, but change your focus. Instead of focusing on how young white hipsters are expanding their sphere of influence in the city, focus on the more general trend that young people are more comfortable with living with people who are different than themselves, our formerly balkanized neighborhoods are starting to become less so, and this underlying trend has both positives and negative effects.
  • What European Villages in China Really Mean

    May 10, 13

    
    
    A friend of mine posted this photo series on his Facebook wall, and had an interesting comment on these Faux European villages that have been springing up across China:
    
    

    You have to understand that there is little aesthetic education in China, especially the generation that grew up under communism that lacked charm (at least, the old type), so they have to look elsewhere to establish "charm". I wish they would just do what Asians are good at doing, minimalist, repetitive, modernist and futuristic glass and steal constructions. Maybe a bit colder, but at least a certain amount of authenticity!

    
    Photos like these bring up interesting feelings when observed. On the one hand, they are very obviously large scale mass fabrications of successful European cities. They lack the soul and "authenticity" that the originals have, and therefore according to some pale in comparison.
    
    On the other hand, good urbanism is good urbanism. I see amazing walkable city squares, dense city living, and cute townhouses that can serve as great templates for individuality to flourish as they age. It's aesthetically jarring to see classic European architecture look so brand new, but I also think the Chinese flora adds a unique touch to the landscapes. The Chinese brand of capitalism is one of top down organization; perhaps these kinds of pop up European villages are congruent with modern Chinese culture.
    
    More importantly, if you believe that we should be focusing on building more densely and with more of an eye towards moving away from car-centric development, will "authentic" modern Chinese style be capable of achieving this? All modern style is influenced by car culture, and I'd argue we don't have a modern style that's truly pedestrian oriented.
    
    This is why in American cities, urbanism is so tied to preservation. We have no modern model of what walkable space should look like, so the instinct is to preserve every single historic neighborhood because it's perceived as the best we have, even if development could increase supply, keep real estate prices under control, and divert environmentally unfriendly exurban development into cities with existing infrastructure.
    
    An urban planner friend of mine addresses this concern at Republic of Austin when comparing development in Dallas to the lack of development in Austin:
    
    

    I get it. Austin loves its neon signs, its vintage thrift shops in converted bungalows, and its trailer parks. Growth, however, is inevitable in this city and change is part of the process. Recognizing Austin’s morphology and transition from college town to major American city, Dallas may not be the poster child for what to avoid. In fact, Dallas may offer our city quite a few valuable lessons as we balance growth with quality of life. Both cities may find themselves in seas of suburban sprawl, but Dallas, quite honestly, has a head start on smart growth.

    
    The key point here is urban growth is going to happen. If NIMBY forces win out and freeze a city in time, the end result will be a luxury city surrounded by unhealthy middle and lower class car dependent sprawl as the city develops. The question becomes how to handle this inevitable growth.
    
    People perceive new development to be soulless, and fight hard to prevent it whenever they see it. This chases out all but the most profit driven new development, since anyone with aesthetic motives will begin siding with the preservationists. The more profit driven development is, the more soulless it will be perceived to be. A vicious cycle is born that freezes cities in place, and guarantees that any new development will look atrocious.
    
    This is why I always try to point to examples of new developments truly enacting positive change. Via Verde in the South Bronx is perhaps the best example I can think of that shows how cities can evolve in a community driven, aesthetically pleasing way. Michael Kimmelman's review of the complex runs through all of the points. In comparison to tower in the park projects built in the past, this development had input from its future residents starting with conception, ensuring that its residents will be completely in control of their environment from the minute they move in. Kimmelman counters a common argument about how it's hard to justify paying for aesthetics in public housing by estimating it was about 5% of the total cost. If it improves outcomes for the residents, which is the point of public housing, and provides positive externalities for the neighborhood, it's worth it.
    
    If all new development looked like this, I think we'd see a sea change in public opinion. Former NIMBYs would embrace change, and see that a city's identity is not just coded in its past, but coded in how it evolves into the future. In the meantime, at least for China, maybe it's best to recreate European villages.
  • Do Old Houses Behave More Like Classic Cars?

    Mar 29, 13

    Matthew Yglesias has used analogies similar to this in the past to describe how, theoretically, looser development restrictions should be in the benefit of existing home owners. One would think that these existing homeowners would benefit from tight regulations. In actuality, unbundling the complex good of "housing" as a physical depreciating product located on a speculative land investment, one sees why being able to do more with that land would be more advantageous to someone who owns it.
    
    This applies to the vast majority of housing stock in the United States, but things begin to fall apart when you look at the very urban areas that are most affected by high rents caused by supply restrictions. Maybe a suburban tract home built in 1994 is a depreciating asset, but a Brooklyn brownstone is a collector's item.
    
    Discounting the location and condition of a house, a house with historical charm and "good bones" will be worth more than a similar sized modern house. At first brush, it would seem that a historical house may behave similarly to a collectible car: depreciating at first and then appreciating as it becomes more classic and rare. But, there are a few more effects going on here.
    
    There are two countervailing effects I can think of that effect historic houses in a neighborhood. First, lets ignore the positive externalities dense construction provide (stick with me here...) and consider only the fact that new construction is valued less than historic construction. As a neighborhood gets more and more new construction, the neighborhood as a whole begins to decline in value, which in turn causes each of the house + land bundles to decline in value as well. On the flip side of this, imagine being the one leafy side street with handsome townhomes in a neighborhood of imposing apartment buildings. Your house is now a collector's item, and even before taking into account the positive externalities of densities, your townhome would have positive price pressures because it is now a rarity.
    
    One thing that's clear from all of this is it's slightly incorrect to put off more aesthetic concerns like this as people not thinking about money, as Matthew ends his article with. The complexities explained in his last article are not only non-economic concerns such as condo laws, but real forces that can be accounted for along with the speculative qualities of land and the depreciating nature of many houses.
    
    I still believe these effects are smaller than the broader ones Matthew describes, but the fact is they do exist. A NIMBY's fear is that these considerations are not being taken into account at all, and more economically minded people would rather bulldoze a neighborhood into sterile oblivion in the name of progress.
  • Measuring the Paradigm Shift That is the Sharing Economy

    Mar 05, 13

    
    
    There are several issues with economic measurements that exist today. It's a known loophole, for instance, that the flurry of rebuilding activity following a natural disaster positively affects GDP numbers. The situation on the ground is obviously different than what is being expressed in the numbers.
    
    Emily Badger writes about the implications of the new sharing economy at the Atlantic Cities. :Looking at these through the lens of economic measurement highlights emerging errors that may make measures as they exist today more and more useless. Consider her assessment of what sorts of goods lend themselves to the "shared economy of stuff":
    
    

    The shared economy of stuff works best with assets that are expensive to own and infrequently used, like camera and music accessories, or high-end home tools. SnapGoods sells itself with the slogan “own less, do more,” a nod to the idea that our culture increasingly values the accumulation of experiences over assets.

    
    Economic measurement is built around discrete transactions. GDP is a stand in for personal utility because it's assumed that if I buy something, I (or perhaps my household if analyzing from that unit) receives the value. If I buy a lawn mower, my household receives all of the benefit from that lawn mower.
    
    The utility of having a mowed lawn is approximated by the cost of the lawn mower. In a traditional ownership economy, this makes sense. As sharing becomes a part of the mainstream economy, it will become clearer that the core concept behind the new sharing economy is in complete opposition to this assumption. A lawn mower doesn't intrinsically provide utility. If my lawn can be cut by sharing a lawn mower with neighbors, or even a service, I get the exact same amount of utility that I would have gotten if that mower were sitting in my garage. As Emily further articulates in the article:
    
    

    All of these models – alongside bikesharing, coworking spaces, shared nannies – are really at the end of the day about efficiency, even if the shared economy simultaneously speaks to our more altruistic motivations to do right by each other and the environment. Ownership, by definition, implies idleness. Whatever you own that you’re not using right this second may be going to waste. Or worse, you’re wasting scarce money on it.

    
    I'd take Emily's insight further to say that introducing formalized sharing into an economy completely decouples ownership from utility. To say that another way, assume that an economy is measured purely by the amount of lawn mowers sold. As people begin to share more, less lawn mowers will be bought. According to economic statistics, the economy is tanking, but in reality people are receiving the exact same utility as they were previously.
    
    Discussions about the merits of economic measures have been around forever; Bhutan makes headlines when it bases its well being on Gross National Happiness instead of Gross National Product. This particular societal evolution however could lead to one of the most egregious errors in economic data ever seen, and perhaps could lead to a complete rethinking of capitalism as a whole.
    
    To be clear, just because we're sharing doesn't mean we're becoming communist, but the transition from an economy based on ownership to one based on experience represents a paradigm shift that has no comparison. Even the Industrial Revolution, which changed our economy in countless ways, left this basic assumption unchanged.
    
    One would probably have to go all the way back to the transition from a hunter gatherer society to an agricultural one to find a comparison. The trade off of technological advancement was a loss of the traditional ad-hoc social organization that existed in tribal societies. In order to act in the larger units of settlements, we needed formal organization, strict division of labor, and in most cases, a concept of private ownership.
    
    With the advent of social networking, technology has finally caught up with us. We can see the beginnings of a more natural form of interaction within larger units. Within dense cities, social networking allows us to interact with each other in a "tribal" way. Humans naturally want to interact this way, and it's exciting to see technology finally approaching a point that brings us back to our roots.
  • More on What is Scarce in an Abundant Society: MOOCs and the Future of Higher Education

    Feb 01, 13

    
    
    My last post touched on the disruption of our current economy that 3D printing will cause, and how it's not entirely correct to say that we're entering a totally abundant world. The potential of MOOCs to disrupt higher education shows another side to what internet caused abundance really means.
    
    Maria Bustillos at The Awl had a relatively damning analysis of MOOCs, comparing the positions of Aaron Bady and Clay Shirky.
    
    She correctly identifies the tendency to simplify industries when trying to disrupt them. Making industries wildly efficient involves using hard measurements to drive production. For education, this results in high stakes testing, and evaluating teaching methods solely based off of those numbers. For non-personal industries this sort of cold approach makes sense, but it feels wrong when applied to education.
    
    Maria correctly portrays higher education today as a bundle of services. "College" in America today includes not only a series of lectures, but the forming of a social network of like-minded intelligent people, interacting with professors during office hours, taking advantage of the academic community available to you in college, and the signaling that going to an elite institution provides. She also describes what makes higher education different from other sectors by invoking Baumol's cost disease, but misses an important connection between these two concepts. It's not accurate to simply say higher education suffers from Baumol's cost disease. Parts of the bundle of services that we currently define as higher education suffer from Baumol's cost disease.
    
    Looked at this way, you can see why she mentioned that Shirky and Bady had more agreements than disagreements. they're talking about two different things, and both are neglecting to look at the whole picture. Lectures are very easily adapted to an abundant online format, but the community and professor interactions are not. The comment below is wiser than its snark would suggest:
    
    

    
    Touring office hours seems like a fun idea! You have the beginnings of this with the current "celebrity professors." Some professors blog, others have podcasts (and these innovative professors seem to cluster in George Mason University's economics department.) I could imagine this sort of idea expanding in a more local way. A community college professor could become an expert in his or her field, and have periodic talks relating to lectures a group of students is going to.
    
    This line of thinking leads to the problem of incentives and motivation. The hidden benefit of having educational services bundled is to force students to take advantage of the entire bundle. The positive aspects of community, social networks, and professor office hours are not explicitly stated as benefits of college, and cannot be commoditized in the same was as lectures can be.
    
    Commoditizing lectures will be an amazing boon. Students who could previously not afford it will have access to college level and quality information. But, there needs to be a corresponding change in culture. Instead of automatically being placed in an educational environment, students will have to actively make the decision to seek out an educated community of like minded intelligent people.
    
    On the professor's side, there will be less of an incentive to provide open office hours without a tenured university position. While I believe opportunities for students to form their own intellectual communities to accompany lectures will abound once this paradigm matures, professors do not have an incentive to add their expertise to these communities. With lectures largely free or minimally priced, I could see the role of government funding moving towards forming these networks of experts available for students.
    
    Traditional college in America is a luxury. I don't believe there will be a world where everyone will be able to afford to take four productive years out of their lives to live in a dorm, meet new people, and occasionally go to lectures. With MOOCs and targeted government investment in an academic culture however, I believe everyone will be able to have a high quality university level education that we today equate to "the college experience."
    
    
  • What is Scarce With 3D Printing

    Oct 09, 12

    I ended up on an interesting line of thought tonight about what exactly the world will look like with ubiquitous 3D printing. 3D printing will bring in an age of abundance, but in a very specific way.

    
    

    Once the manufacturing process is made costless, the only physical costs in any object will be raw materials. These materials will still be subject to the same laws of supply and demand as they always have.

    
    

    Ideas will matter more. For designed objects, the design knowhow will be in demand, while for practical objects the technical knowledge will be more important. In both cases, the actual knowledge of 3D design techniques will be needed at some stage, and in either case, they will face the exact same pressures faced by media companies today. These ideas will be easily copied, and a system will have to be arranged to allow designers, engineers, and 3D artists to be properly compensated for their efforts.

    
    For the first time however, this model will be applied to something completely new. Media companies had established business lines, and obviously tried to preserve those in the face of the unique pressures of the digital age. The ability to completely bypass the manufacturing industry has never existed before, and therefore the incentive structure surrounding it will necessarily be entirely new.

    
    

    The economics of the future will be completely built around this fact. When "copy and paste" is applied to the real world, ideas, skills, and raw materials will have to interact in an entirely new way. We'll still have physical limits, but these will be expressed as raw material limits that will be immediately apparent to everyone. Ideas are no longer tied to physical objects, and can therefore no longer be priced as a "value add" to goods as they are today. Looking at it from this angle, it seems arbitrary that ideas were ever tied to physical goods, but in the future, we will need to come up with a way to properly incentivize people to create. The dystopian version of real world copy and paste is a world where creativity dies, society finds a way to function in a sustainable way, and continues eternally in a static world of no change.
  • The Past and Future of Philadelphia

    Sep 07, 12

    Aaron Renn's recent post on Philadelphia made me think of a few of the qualities that make it so unique. The other large Northeastern cities, New York, Boston, and Washington DC, have all followed similar tragectories: seemingly permanent urban decline followed by a drastic recovery. These trends apply to Philly as well, but it would seem they have taken a different form.
    
    Aaron explains the fabric of Philly as being a collection of small towns without a real city identity. Steve W, in one of the comments, further explains the relationship between the University of Pennsylvania and West Philadelphia. One could see this in stark contrast to the relationship Columbia and NYU have with their surrounding neighborhoods.
    
    Alan Ehrenhalt devotes one of the chapters of The Great Inversion to Philadelphia, and explains another unique character of Philadelphia: its concentration of row house homeowners. Moreso than any other comparable city, Philadelphia is a city of families who own their own row houses. Alan describes how in our new reality of demographic inversion, this hinders large scale developers which are more successful in other cities. In Philly, a single holdout is more likely to impede the development of a large scale modern apartment building in an improving neighborhood.
    
    Taken together these yield some interesting conclusions about Philadelphia. The established low-rise community-oriented character of Philadelphia act as a moderating force for the city. The community will serve as a stabilizing force during decades of decay, but will also prevent it from feeling the current wave of gentrification (for better or for worse.)
    
    While I wouldn't argue that Philadelphia was a safer place to be in the 70s than New York, Boston, or DC, I'd say its trough could be more compared to Detroit. In terms of the positive change, Philadelphia is still an anomaly on the east coast. It remains the cheap option to those who want the large city urban east coast experience. Even the most expensive neighborhoods in center city are extremely affordable when you're comparing them to other large cities in the Bos-Wash corridor. Of course this also means the poorer neighborhoods of Philly are more destitute than comparable neighborhoods in other cities, so while displacement hasn't happened to the degree it has in other cities, there isn't as much in city opportunity available to people from these marginal places.
  • The Real Problem With High Frequency Trading

    Sep 05, 12

    
    This podcast did a great job explaining a lot of things: The origins of high frequency trading, the absurdity of financial regulation made from the point of view of a bygone era, and the absurdity of high frequency trading today. High frequency trading has (rightfully so) been under intense scrutiny since the near collapse of Knight Capital and the previous afternoon long flash crash.
    
    High frequency trading is not bad as a concept. If the market reacts to data a day later, and you find a way to react in half a day, you have a more efficient market. You're essentially "oiling the gears" of the stock market.
    
    The problem lies in the incentives: they're winner take all. If I come up with that improvement, I get all of the value from my information edge as the market adjusts to normalcy. And if someone jumps ahead of me to react in an hour rather than half a day, they get all of the value. There is absolutely no mechanism to stop this from devolving into a destructive arms race, which is obviously happening as HFT companies are now fighting over milliseconds, and going to extreme lengths to get that edge.
    
    The marginal benefit of these increases in efficiency decline, but it's not reflected in the incentives. It's a good thing to take a process that normally takes a day and reduce it to an hour, but the efficiency gain in reducing this process by a millisecond is minuscule.
    
    There should be more regulation to correct this error. Some firms should specialize in high frequency trading, but they should not be encouraged to fight over such trivial time differences. I'm not sure what sort of policy would best fit this problem, but it does need to come from a place where it addresses this exact issue.
    
    This is only one of several problems that exist in our current financial system, but I believe it's a good example of how these problems should be approached. Instead of letting populist feelings guide thought around the regulation of the financial industry, policy makers should be looking for these misaligned incentives that are the true cause of wall street malfeasance.
  • Urbanists Should Pay More Attention To The Jersey Shore

    Jun 25, 12

    No really.

    
    

    Well, I'm sure my experience of the Jersey Shore is somewhat unique. I have a friend who has family in Bradley Beach, so when I think of the Jersey shore, I think specifically of the range from Asbury Park down to Belmar, and not of Snookieland. Through a series of particularities in their development, these towns might lead to a future development path for suburban areas.

    
    

    All of these towns were developed and incorporated in the late 19th century, which partially explains why the form of the area east of Main Street are very compact grids, and in some areas the architecture is more Victorian. These are also of course vacation oriented beach towns, which should lend itself more towards a compact form since there's an amenity everyone wants to  be close to (I'd love to see a study that actually explains this, it does seem to be true anecdotally!)

    
    

    Throw in an NJT train with closely spaced stops, and you have an urban area that's urban for every reason except proximity to the city. I think this sort of development is cool because it stands in stark contrast to more traditional transit oriented development. Instead of looking at the suburbs and trying to retrofit a series of centers around train stops, this is more of an urban sprawl similar to what one would find in the inner city.

    
    

    Because it's a beach town, cycling is of course a major mode of transportation. This definitely helps poorer residents further inland, who benefit from a more bike friendly culture and safety in numbers as a result of living close to the beach and don't have to waste money having a car.

    
    

    Inner ring suburbs could particularly benefit from this sort of development, since they share the age and bones of this portion of the Jersey Shore. It's more natural to have infill development in the suburbs to have a more uniform nature, rather than concentrations near stations interspersed among more open space. Tracts of these medium density developments would be amazing places for bike culture to flourish, and would help with its current image problem of being a toy for coastal yuppie elites.

    
    
  • Express Buses and SBS: An Easy Win

    Jun 21, 12

    Noah Kazis reported on Streetsblog yesterday the reaction of the New York City council at a transportation conference to select bus service: They want more of it!
    
    
    Vacca's comment was one of the more telling of the councilmembers quoted:
    
    

    Vacca also called for additional efforts to speed express buses. “They get stuck in the same traffic as everybody else,” he said, leading riders to turn to their cars. “That’s exactly what we want to avoid.”

    
    Having grown up in Vacca's district, I not only get the sentiment of this comment, but have a deeper understanding of the transportation decisions people living in these areas actually go through, and see more in this comment and its general sentiment that would (in my opinion) be dismissed too quickly as a "windshield perspective" by a blog like Streetsblog.
    
    
    I agree our elected officials can do way more for public transportation in our city instead of focusing on parking issues or other ways to make it easier to drive. But it helps to understand where outer borough dwellers are coming from. If you're in the outer areas of the outer boroughs, you live at the intersection of car culture and mass transit culture, and individual people can make the choice to orient themselves either way. I would further argue that choosing auto orientation is a more insular option, which is why it lends itself to the perspective that everyone in your neighborhood drives, and is the true basis for a windshield perspective.
    
    Unless a politician is positioning him or herself as a transportation visionary, it's easy to get caught up in viewing your outer borough neighborhood as an island from which you drive to the suburbs for most of your needs, and see a populist tinge in what you see as Manhattan-centric policies to make it harder for you to drive downtown, especially when they're not paired equally with transit benefits that your constituents will see.
    
    Vacca's comment shows that the windshield perspective isn't an ideological, stodgy, or blind perspective. It's simply one brought on by the climate one is in. In the right climate, outer borough politicians can be pro-transit. While there have been amazing strides made in transportation infrastructure under the Bloomberg administration, a lot of these strides were achieved in such a way as to alienate the people on this fringe. This alienation actually drives people in these areas to become more entrenched in car culture.
    
    The fact that Vacca mentions express buses in his comment-- something most people living in Manhattan and the gentrified outer boroughs have probably never even heard of-- shows an easy win for sustainable transit policy makers. Select bus service is amazing, but so far has been positioned as improvements on existing local bus routes. Directing these sorts of changes towards express bus routes shows that the city's policy makers are specifically targeting these marginal individuals who would otherwise be nudged towards an auto-oriented existence.
    
    I believe that targeting these marginal individuals is the key to New York City's transportation future. The transit oriented future of New York does not rely on making it easier for people living within the downtown core to stick with alternative modes of transportation. They already have the infrastructure available, and the car free culture to live off of. The future lies in the marginal users. Only by giving marginal individuals an easier alternative to car culture will we be able to begin to affect the greatest amount of change. Urban living isn't something that has to remain insular from the rest of the country; it is something that can be spread very easily.
    
    
  • Sudden Changes in Demand and the Great Inversion

    May 23, 12

    I've been making my way through The Great Inversion by Alan Ehrenhalt. His main thesis is that the majority of the changes going on in central cities, which is occasionally attributed to gentrification, are actually symptoms of a more systematic demographic inversion taking place across the country. This process is fairly quickly reversing a decades long trend of suburbanization to create new American cities that more closely resemble those of nineteenth century Europe.
    
    This is an extremely apt observation. While gentrification as a process occurs, it's important to put it into a larger framework of what the root cause really is. It always has taken as its assumption a changing pattern of demand (coupled with a potential value in urban land not currently realized), and Ehrenhalt's analysis of what this means for downtowns, exurbs, and everyplace in between is extremely enjoyable.
    
    One thing I still found missing from the analysis is a clearer explanation of why this change in demand is occurring. The demand created by aging boomer parents is fairly apparent, but it isn't so with millennials. For millennials, Ehrenhalt included anecdotes of college students polled showing a preference for living in the city, after watching Seinfeld and Friends from the safety of the suburbs.  While I'm sure this happened to many American college students, I still think there is something broader to be said about the general change in urban demand among millennials without falling back on the story of the bored suburban kid rebelling by moving to the big city.
    
    A possible explanation for this change in demand is the fact that suburban growth was always in essence a ponzi scheme. Demand for the suburbs was dependent on the fact that demand for suburbs would always continue among later cohorts. The analogy I would draw is a line that is constantly growing longer. You'll more willingly get on line if you see people will gather behind you. The wait doesn't seem too long when compared to the growing number of people behind you. Whatever inconveniences you have to deal with in your suburb is mitigated by the fact that people are still moving further away than you, and they have it worse out there.
    
    Of course like any ponzi scheme, collapse is inevitable. Once this process stops, demand for suburban areas as a whole ends up suffering. Exurban areas immediately feel the hit, as they have during the latest housing crisis, and other suburban areas are forced to adapt in the myriad of ways Ehrenhalt describes, which depends on whether the metro area is growing, stagnant, or declining, and how far out the area is.
    
    This ends up describing both why this change is happening now, why it seems to be happening to millennials (it would happen to any cohort in our position), and why the change seems to be happening so suddenly.
  • Parkchester: Bad Urban Planning at its Best

    Apr 18, 12

    I took these pictures of Parkchester in the Bronx the last time I was biking in the area.
    

    
    

    
    

    Parkchester was built as a middle income housing project, similar to Stuy Town in Manhattan. On the surface someone would probably classify the development with other failed urban renewal schemes styled as "towers in the park," but there are some positive qualities that set Parkchester apart from comparable projects and developments.

    
    

    
    

    Unlike other developments, Parkchester has two fairly major streets passing through it: Metropolitan and Unionport

    
    

    
    While a lot of the smaller dead ends within the complex are very sparse, and contain only building entrances set back from the street, the main streets serve as commercial arteries that interact with the towers very successfully in my opinion.
    

    
    

    
    In the Death and Life of Great American Cities, Jane Jacobs prescribes inserting a grid into the parkland, and replacing the footprint of the spread apart towers with storefronts closer in. I imagine if lower income projects in New York ever were remedied in this way, it would look a lot like this.
    

    
    

    
    

    Jacobs framed this as more of a "best case" for integrating towers into a neighborhood, while favoring the smaller scale of her native Greenwich Village. I think this is an example of how nuanced urban planning problems can be. A place like this is a more vibrant and accessible community than Greenwich Village today, and it gives hope that urbanism can survive in areas that on paper may seem like urban wastelands.
    
    Check out Forgotten-NY's post on Parkchester as well for some pictures of its whimsical art.
  • More Thoughts On Why The Rent Is Too Damn High

    Mar 20, 12

    I actually wrote my last post before realizing that it was one of the central ideas in Matthew Yglesias' book: The Rent Is Too Damn High.  I'm really glad that the this relationship between development and rising rents, or as Yglesias calls it "the mirage of gentrification", is getting more popular exposure.  Hopefully this, combined with the numerous other calls for increasing densification will actually have an influence on public policy.

    
    

    While Ryan Avent and Edward Glaeser show the simple case that allowing development will alleviate rental prices, Yglesias' continuation of the theory to explain WHY policy makers think development causes higher prices is the key of why development continues to be fought.  One added problem here is what I explained in my last post: any cause of NIMBYism strengthens the perceived link between increases in density and rent prices.

    
    

    In this way, Charlie Gardner is right in his take on this book: cities can't simply "build" their way to affordability.  They can build their way to relative affordability, but there will always be a relationship between denser city center and unaffordability.

    
    I plan to do a lot more thinking on where exactly denser development should be occuring.  I'd like to suss out whether it's more useful to build more housing units in a city core or just outside a city core.  One thing to note is in order to increase affordable housing, it makes sense to start at a location where housing prices are simply high and not astronomical.  

    
    

    In the coastal cities, there can never be enough development in major city centers to handle the demand to live in prime locations.  In some coastal cities (though not all) you also have a steep drop off in density, meaning outside of the core areas the metro area is more spread out and can't take advantage of the economies of scale you get with density.

    
    

    Perhaps instead of building up an area like Manhattan, we should try to make other areas like Manhattan.  For recently gentrified outer borough neighorhoods, realize that they were gentrified for a reason.  Instead of building up those areas with the intent of making them more affordable, develop the already affordable frontier neighborhoods to make them more desirable.  While I agree that we should remove a lot of restrictions we have on development in central cities, this additional policy focus will help the entire region become more liveable, and thus make more liveable areas affordable.
  • The Key Fallacy in the Debate Surrounding Height Restrictions

    Feb 21, 12

    
    Emily Badger at the Atlantic Cities writes a balanced piece on the debate surrounding height restrictions in cities.  On the one hand, we have density being a quality that provides positive externalities for cities by itself and should be encouraged, while on the other you have the negative effects of density such as loss of sight lines, possible increases in congestion, and increased use of city services.
    
    One thing she throws in somewhat casually however, is that this increased density may raise rents.  I've previously written about this fallacy in a different context, but this is a purer example of how this kind of thinking can be damaging.  Densification has both positive and negative externalities, and these deserve to be compared to come up with a more coherent plan on how to maximize density while minimizing the negative side effects if may lead to.  Rising rents simply isn't one of these negatives.
    
    The problem is rising rents and densification are definitely correlated in most practical cases, and wouldn't be in a purely theoretical context. Instead of densification causing rising rents however, they are both caused by an exogenous increase in demand. Whenever you have restricted development (which is pretty much the only type of development that can happen in a city), an exogenous increase in demand will lead to a pent up need to increase supply. Because development is limited and supply is not able to catch up with demand, prices will rise.
    
    When you compare this to more stagnant areas which have no increase in demand, and therefore will have no invasive development and no increasing prices, one can erroneously think that the development in the more popular area is what caused the high prices.
    
    This sort of dynamic can be dangerous because it feeds into itself.  The more restrictions in place, the more pronounced this effect will be.  This means that the cities that are more predisposed to restrict development will seemingly be proved right more than those with more lax restrictions.
    
    I'd even go farther with this line of reasoning.  I'd argue that restrictions on development could increase the other negative effects of density.  A developer without restrictions might be more able to make their property more desirable than others; they'd add some public space, or build more aesthetically pleasing buildings.  If a developer is constrained, they'd be more focused on squeezing in as many units as allowed by law, perhaps at the expense of those more aesthetic effects.  This only adds to the feedback loop, and the city will be again be prompted to restrict development further.
    
    The only way out of this is to realize this connection simply does not exist, and to try to completely divorce housing prices from arguments about densification.  Despite what evidence may suggest, prices are still driven down by increases in supply.  While I personally believe there should be less restrictions on development, there are still valid arguments to be made on the pro-restrictions side.  Rising rents simply isn't one of them.
    
  • Adventures in Gerrymandering

    Jan 27, 12

    Gothamist ended up getting their hands on the newly redistricted State Senate and Assembly districts.  While they posted some examples of primo gerrymandering, the district including the neighborhood I grew up in caught me as particularly flagrantly drawn:
    

    
    

    
    

    I grew up here so it was immediately apparent why this shape was chosen.  Here's a hint.
    
    
    District 34: The White-People-Who-Live-in-the-Bronx-and-Some-White-People-from-Pelham-So-It's-Not-Too-Obvious-That-We-Literally-Drew-This-District-Based-On-Race-But-Ew-Make-Sure-You-Don't-Include-Mount-Vernon-It's-Kinda-Sketchy-There-If-You-Know-What-I-Mean District.
    
    This is why I just can't get into politics.
    
  • Infrastructure for the Future

    Feb 27, 12

    The A Train, going through an empty field.  Picture from Forgotten-NY.com

    I've been thinking a bit about how forward looking city investment has been, how this sort of thinking changes over time, and what factors might lead to changes in the "forward looking-ness" of this sort of investment.

    
    

    At first I didn't even really consider changes, and considered the effect more exogenous.  I would think that it's simply politics, something that changes at the whim of society, and ends up framing how long term investment ends up happening in a city.

    
    The one example that always gets me considering this is the New York City subway system.  I would always think how ridiculous the current capital projects are when you compare it to the subway's history.  Subways were originally built to farmland.  There was no existing demand, it was assumed that people would begin moving up there around subway lines as the city developed.  

    
    

    Today, the MTA is officially working on two line extensions entirely within Manhattan, one of which through the densest neighborhood of Manhattan.  While it makes sense to build infrastructure where it will benefit the most people, and that place is exactly where the MTA is working on it, it's obvious that the subway was formerly developed for FUTURE use, and with an eye out for how the subway would effect the development of the city.

    
    

    Looking at this degree of forward future consciousness a bit more however, I ended up coming up with a few alternative explanations.  one is the fact that the subway was originally developed by private companies that had their own real estate interest, where it makes sense to build subways to your own developments where remote land is cheap, whereas now the MTA is more controlled by the government which exists to serve the current population.

    
    

    More interesting however, because it's a relationship that can be tested elsewhere, is simply the fact that development becomes less forward looking as cities or infrastructures themselves age.  A blank slate lends itself to grand plans without precedent, while an older city and infrastructure is thought of as "set" and the framing of any investments change from future inhabitants to the current inhabitants.

    
    

    This is interesting because it's obvious we should always take these future considerations into account, and if this relationship really does exist, then there is some sort of systematic bias towards stagnation in older cities that can be predictably accounted for.

    
    

    
    
  • Home Ownership Alternatives

    Nov 21, 11

    There have been a few posts at Atlantic Cities considering the "forever renter".  The subprime crisis has caused a major reevaluation of the risks of home ownership.  In a world where housing prices are not guaranteed to go up forever, does it make sense to leverage yourself so heavily on a single investment?  If stable "organization man" careers are replaced by constant change, does it make sense to tie yourself down to one location?
    
    While it would seem the new economic reality is stacked against homeownership, there are still some non-economic downsides to a life of renting.  Emily Badger writes about a few of these concerns, explaining the non-economic indignities that renters suffer.  There is a psychological toll to not being able to paint the walls or hang paintings on nails, and a huge psychological benefit from the feeling of owning the space where you live.
    
    I think it's important to distinguish between the economic and psychological side of home ownership vs renting. Some of the comments explain alternative agreements between landlord and tenant, which is a completely non-economic consideration.  It's interesting to think about how much of the landlord/tenant relationship is culturally determined, and how this can mitigate the feeling of missing out on home ownership.
    
    There are separate economic considerations however.  Home ownership is partially an investment, and since a house by itself is technically a depreciating asset, the investment is in the neighborhood.  Home owners benefit from an improving neighborhood, while renters get priced out.  Home owners care about maintaining their neighborhood and are incentivised to become active citizens, while renters would experience any positive changes as rent increases.
    
    I've considered this situation before, and have always wondered why housing as an investment can't be decoupled from your home.  I've thought of a few plausible alternatives to the standard model of home ownership we have in place today.
    
    Home Ownership as a Completely Flexible Share-based Equity Investment
    
    If I would like to invest in my neighborhood, why is my only option to leverage myself and buy a house?  Amanda Erickson writes about NYU professor Andrew Caplin's idea of housing partnerships, which I believe partially touches on this idea.  In my opinion he still seems to frame his idea as a way to invest in a fraction of YOUR home, along with the help of an institutional investor.
    
    Whenever I've considered this sort of option, I've thought it should be framed as an investment for the occupant as well.  Buying shares in your house is a hedge against rising rent: as rents go up, the value of your investment will go up as well and partially offset the rent increase.  Viewing it in this way is key in my opinion.  With this framing it would make sense to live in one rental building and buy shares in the building across the street.  It gives you full control over how much you want to put into your investment.  The decision on how much you would like to hedge your rent would be based off of so many new variables, such as the amount of time you spend in a particular place, and your future expectations on gentrification within the neighborhood.
    
    This also allows a person to diversify their housing investments.  It's insane that we ever thought it was a good idea to leverage yourself on an investment in ONE house.  Perhaps you'd like to invest in several neighborhoods in your own city to protect yourself against the risk of housing prices in your home neighborhood declining in value.  Or, you can invest in comparable neighborhoods across different cities, to hedge against any city specific variation that might adversely affect housing prices.  The opportunities are endless.
    
    Rent Stabilized Leases as a Commodity
    
    I actually began thinking about this issue as a result of considering the effects of rent stabilization laws, and my first particular solution involved a revamping of this system.  Economists generally view this as they would any other price control.  The artificially low price of rent stabilized apartments makes them extremely hard to come by, the lower supply of market rate apartments cause all non-rent stabilized rents to be higher than they should be, and the fact that rents can't rise discourages investment by landlords into rent stabilized buildings.  Overall, it seems to be bad policy.
    
    However, rent stabilization is a guarantee that your rent won't go up, which is the main risk you'd be hedging against in the housing share situation I described above.  This guarantee creates a sort of permanence that one would normally only get with home ownership.  Rent stabilized tenants have the same incentives as home owners to become active citizens and improve their communities.  In both cases they will reap the benefits of their improving neighborhood.
    
    The economic distortions caused by the current implementation of rent stabilization disappears if these leases can be bought and sold.  Rent stabilized leases would be priced based on expectations of future increases.  Assuming a lease is being sold directly by a landlord in a previously market rate building, the landlord is compensated for his restricted lease.  The benefits of an improving neighborhood get moved from the landlord to the residents, which actually a better incentive system overall and avoids problems of "absentee landlords".
    
    Over time, this will create an amazing variety of housing options.  As rent stabilized leases grow older an more out of touch with current market rates, their values will increase.  At any point, landlords could buy back their leases and create new ones based off of current market rates.  A wide spectrum will develop between pure home ownership and non-regulated market rents.  The first few rungs of the "housing ladder" will be lower, people can begin to buy less expensive regulated leases closer to the market price, and can work their way up to full home ownership over time.
    
    Of course there are hurdles to implementing a system like this.  There is no clear answer to how to transition existing rent stabilized leases (in this case who "owns" the lease?)  Once in place however, it is a great way to keep the positives of rent stabilization such as stability and a renter's stake in a neighborhood, while getting rid of the market distortions rent stabilized leases causes.

  • Decentralization: Disservice to the Poor or More Equitable Urban Arrangment?

    Nov 10, 11

    
    Stephen Smith recently analyzed how off-center employment clusters end up being hurtful towards the poor.  It serves as a continuation on an earlier post of his, which explains how European cities have relegated skyscrapers to the periphery in order to preserve historic city cores.  He makes the argument that these off center skyscraper districts are the result of restrictions on central city growth (in Europe's case this is for historical preservation), and follows up by saying that these off center employment districts are not desirable.
    
    This analysis ends up holding true with a few assumptions:  there is an existing monocentric city with a defined downtown, transportation is arranged to get people from the periphery to the center, and there is a relatively small number of off-center employment clusters.  Under these assumptions, it's absolutely correct that off-center employment clusters cause a disservice to the poor.  It will take longer to go from one side of the periphery to another, and the formation of off-center clusters will produce least favored quarters on the opposite side of the city.  Stephen frames this as a problem that is caused by restraints on development in the center of the city, and concludes that if only these constraints were lifted a monocentric city would emerge, and that city would be more beneficial to the poor and therefore more desireable.
    
    I agree that restraining growth in the central city leads to inefficient land use, and that most cases you will look at can be captured in the above example.  However, I believe his conclusion that monocentric cities are desirable overall and the main government problem overall is restriction of central city development is a wrong one.
    
    Stephen touches on the fact that most existing transit systems are built to get users from the periphery to the center, and that it's an interesting thought experiment to consider hypothetical decentralized transit system. I would actually argue this sort of transit arrangement is a major failing of the monocentric city.  I previously wrote about differing urban forms and how equitable they are, and came to the exact opposite conclusion as Stephen: decentralized cities are more equitable.  My assumption is independent of the skeleton you start out from: if you were looking at lots of different theoretical cities evolving over hundreds of years, those that evolved more decentralized would be more geographically equitable.
    
    There is a similar issue when looking at the nature of these employment clusters.  I'd prefer to think of this in more continuous terms, and finding out where on the scale between centralized and completely evenly distributed employment a city is.  Aside from existing conditions, there's no reason why one sector would be preferred over another.  Given the right conditions, instead of having quadrants of the city with different fortunes, there will be no anchor for land prices to get bid up around, and an even distribution of rich and poor neighborhoods.
    
    If you look at the article that spurred my analysis for example, you can see how it might be dangerous to follow Stephen's line of reasoning.  It may seem like a good thing to build up Downtown LA towards Manhattan style densities, but is this where we should be encouraging development?  LA developed mostly with the car in mind, and became really decentralized as a result.  While downtown LA suffered the same fate as the downtowns of older monocentric cities, it might not have been as grave a misinvestment as in other cities.  Because it's a newer city, LA developed it's decentralized "skeleton" that older cities with already established forms did not develop.  I'd argue that trying to centralize LA would lead to problems just as decentralizing older cities would.
    
    Of course, my argument isn't simply that framing matters.  I believe that there if you were ever given the choice between decentralization and centralization, decentralization is more equitable.  While you run into problems trying to force multiple centers on an older centralized city, I think we should move in that direction whenever given the opportunity.  Using New York as an example, we should be building the Triboro RX instead of the Second Avenue Subway.
    
    In my opinion it comes down to a timescale issue.  In the short term, do what's best given the existing urban form.  In the long term, where decisions can change the urban form, try to slowly but surely decentralize that form.  While restriction of development is definitely a problem, the more pressing concern is how hard it is to invest towards these long term goals.
  • The Problem With Ranking Walkable Cities

    Oct 17, 11

    I pulled this map from Richard Florida's latest post on the Atlantic Cities.  This map is his updated list of the top 10 walkable cities overall and the top 10 walkable large cities.
    
    Florida explains several correlations based off of this data, but I was particularly struck by the arbitrariness of the top 10 cities overall.  Several small Gold Coast New Jersey and Boston area towns end up topping the list. Simply using municipal boundaries highlights the arbitrariness of these boundaries.  These walkable cities are incredibly small and might as well be neighborhoods of New York City and Boston.
    
    I could think of a few ways to counter this.  Florida himself measured MSAs and megaregions by looking at contiguous illuminated areas on a nighttime satellite picture of the US.  Perhaps these regions can be used to get measurements of walk scores.  Alternatively you could weight the walk score with size, so that smaller walkable cities don't end up beating larger cities that contain suburban fringes within their boundaries.
  • The Real Link Between Urban Growth and Gentrification

    Sep 30, 11

    Many urban thinkers such as Edward Glaeser, Ryan Avent, and Matthew Yglesias make the simple economic argument in their latest books that increasing the supply of urban housing will lower its price.  While these books present sound cases against the commonly perceived notion that development causes higher prices, there are still several examples of neighborhoods experiencing both influxes of development and higher prices that would lead people to link them causally.
    
    Stephen Smith addresses these concerns by saying it all comes down to amenities.  These poor urban neighborhoods have attractive housing stock, but lack goods and services that more wealthy residents would demand.  New development brings along these new amenities.  New development by itself acts to lower housing prices, but this decrease is overcome by the increase in prices caused by the new amenities.  If this cycle were allowed to continue, the diminishing marginal returns to amenities would eventually lead to a peak in housing prices and cause them to start dropping again.  However, before that happens the new wealthier and more politically savvy neighborhood residents would fight against development, causing prices to remain high and for gentrification to continue to spread outward.
    
    I've thought of these issues as well, and while my conclusions are similar I've always had a slightly different line of thinking.  Amenities tell only a small part of this story, and I think there's way more going on here.
    
    Given any exogenous increase in demand, prices will start to rise.  Higher prices lead to development, and normally this development will occur until prices go back to their original levels.  If there are any restraints to development, then any increase in demand will lead to both increased development and increasing prices, which could lead outside observers to incorrectly assume that development is causing higher prices.  This feeling will lead to more restrictions on development, and this conventional wisdom becomes a self fulfilling prophecy.  NIMBYism very easily breeds more NIMBYism.
    
    That's the bare bones of what's going on.  It completely explains why there's a perceived link between development and rising prices, why it's fought against so hard, and doesn't even take into account amenities or gentrification.
    
    Stephen does have some absolutely valid points, and it is fascinating piece of analysis in its own right. There is a diminishing marginal return to amenities, there is more NIMBY activism in wealthy neighborhoods than in poorer neighborhoods, and this does lead to an acceleration in the existing process of gentrification.  I begin to disagree when he expands this argument and says that the presence of amenities is when things start to go awry.
    
    I think that the increase in demand is where everything begins, and is the culprit behind everything that follows: development, rising prices, and increased amenities.  Amenities don't automatically come with new development, they arrive for the same reasons as developments.  Amenities are a result of the surrounding population, and the population is determined by housing prices.  If these housing prices are artificially high because development wasn't allowed to keep them low, higher class amenities will follow.

  • Maspeth: New York City's Cycling Capital, 2021

    Sep 01, 11

    
    I just discovered a cool feature that I didn't notice before on Mapnificent that allows you to calculate travel times depending on whether or not you have your bike.  I've always thought about what sort of long term effects prevalent bike usage would have on the geography of the city, and this tool allows you to get a visual idea of this.  So many areas are easier to get to if you don't have to worry about staying close to a subway line, and even more areas open up if you take your bike on the subway, which is how Mapnificent does its calculations
    
    Check out what sort of difference having your bike makes if you're trying to get to Union Square in 30 minutes:
    
    

    
    

    The odd spacing of subways in some areas of the outer boroughs creates some weird areas that are physically close to Manhattan, but are not subway adjacent and inconvenient to get to without a car.  While having a bike expands the range of where you're able to go on the margins, the most dramatic results are in these spaces where gaps in subway lines are filled.  Take a closer look at Queens:

    
    

    
    

    The Astoria Waterfront and Maspeth are the two areas where having a bike would provide the greatest transportation improvement, and are two potential locations for outer borough bike commuter neighborhoods.  Red Hook is in the same position:

    
    

    
    

    
    

    This sort of approach isn't perfect (for example, it assumes that if you live in Weehawken you can fly across the Hudson), but it gives a rough idea of what sort of changes one would expect once biking becomes a more established form of transportation.

    
    

    Bike infrastructure development currently has been focused on already dense neighborhoods.  This has been a great way to allow biking to gain a foothold in the city, but the next step should be to become more forward looking, and develop infrastructure in areas with the most potential to become bicycle dependent in the future.

    
    
  • US Treasuries Are A Giffen Good

    Aug 09, 11

    
    

    Technically this isn't true. But it's the exact same dynamics: a secondary effect of treasury markets is superseding what you'd think the primary effect would be.

    
    

    This Business Week article is what originally got me thinking about this. This is what it says happened to treasuries after yesterday's sell off:

    
    

    Some analysts had worried that Treasury yields would surge after S&P's downgrade. That would happen if investors demanded higher returns to compensate for their risk.

    
    

    The opposite happened. Treasury yields fell Monday to their lowest level of the year as investors sought a safe place for their cash. Their actions showed continued confidence in long-term U.S. debt.

    
    

    This got me immediately thinking of the example always used for Giffen Goods. People eat rice and meat. The price of rice goes up. You'd expect less people to buy less rice because of this. But meat is a luxury while rice is an inferior good, and the rise in price of rice makes people so much more comparably poorer that they eat more of the inferior good: rice.

    
    

    US treasuries are indeed an inferior good. They're seen as a safe haven investment when risk is too high in other markets. This "risk effect" can be compared to the income effect. The S&P downgrade of US treasuries can be compared to the price going up. Under normal circumstances, a downgrade would cause less people to invest in a country's treasuries. But, this downgrade ended up jolting markets so much and rising risk everywhere that people wanted to rush to the safer investment: US treasuries.

    
    

    To make the comparison clearer I'll bring it back to food. Assume people eat only two things: bread and sushi made from a small, safe, and tasty sliver of an otherwise deadly poisonous blowfish. Now consider what happens if a small percentage of bread is found to be poisonous. You'd expect people to eat less bread now that it's less safe. But, this got people thinking about how much risk they should be taking in their food, and all of a sudden it doesn't seem like such a great idea to be risking your health on deadly blowfish if even BREAD can kill you.

    
    

    So, paradoxically, as bread becomes more dangerous, people will eat more bread. Giffenish behavior if you ask me!

  • Another Way to Implement Higher Gas Taxes

    Apr 27, 11

    The Economist's Free Exchange Blog wrote recently about just how effective gas taxes are in spurring investments in alternative energies and in changing consumer behavior. Jim Manzi originally argues that because short term elasticity is so low, gas taxes won't have an effect on consumer behavior and shouldn't really be used as a policy tool. The Economist blogger counters this point by pointing out that either way the tax will achieve something. If elasticity is low, then the tax will be extremely effective at raising funds which could be put towards research, and if elasticity is high then the tax will be extremely effective at changing consumer behavior.
    
    However, for both of these cases we still have price volatility. Assuming that spikes in gas prices occur in the short-term low-elasticity time scales, exogenous spikes will have no behavioral effects, will decrease real disposable incomes, and will lead to a more inefficient allocation of consumer spending as people are spending too much on fuel during these periods of high gas prices.
    
    One would think that a long term expectation of oil price volatility is enough incentive to drive investment into alternative fuels or change consumer behavior. Assuming that it isn't (or won't have an effect for a while), the volatility is simply a dead weight on the economy.
    
    So, how about you set tax policy such that gas prices + tax will always be $6 a gallon no matter what sort of market fluctuations occur? If gas prices are predictably high like this for the consumer, the higher long term elasticity will come into play and behaviors will be more likely to change. Not only that, but simply the expectation of steady but high gas prices will cause the long term behavior to kick in sooner, meaning that behavior will change even more quickly. The dead weight cost of volatility disappears, funds are raised through the tax for research, and behavior will change to demand that research.
  • Pretty Game Theory

    Aug 09, 11

    
    
    These slugs are amazing. Read the whole article about them here. The below point however got me thinking about how they became so beautiful:
    
    

    
    

    Many mobile nudibranchs - vulnerable as they move in daylight between feeding spots—announce their weapons with garish color designs, a palette millions of years in the making. Contrasting pigments make them highly visible against a reef's greens and browns, a visual alarm that turns predators wary—bold nibblers quickly learn to avoid the color patterns that announce unpalatable flesh. Animals able to mimic the designs, including nontoxic nudibranchs and other invertebrates like flatworms, are similarly left alone.

    
    

    That last sentence made me wonder how free-riders can exist in an evolutionary sustainable equilibrium with the nudibranchs, which in turn made me think about what sort of evolutionary game they must be playing.

    
    

    There are costs associated with any of these strategies: costs for being poisonous and costs for distinguishing yourself physically. If it is already "known" among predators that a certain body form is poisonous, then there is an incentive for all slugs (and free-riding flatworms) to assume that body plan. However, it becomes a prisoner's dilemma: the more free riders there are, the less chance there is for a predator to pick a poisonous animal of a specific body type. Therefore, predators will begin to start eating those types of animals.

    
    

    On the surface, it would seem that the evolutionary equilibrium would not really hold in this way. It would not make sense to expend the costs on complex body plans to serve as a signal to predators, since the free-riders would end up watering down that signal and making it useless. Everyone would adopt the lowest cost form and only some would be poisonous.

    
    

    However, there is another way out of this. If the poisonous nudibranches were to constantly change their body into new and unique forms, then the signal would remain effective. Starting from a point where all slugs look the same and are eaten with the same frequency, their body plans begin differentiating randomly. Those body plans associated with the "poison" genes will begin getting eaten less and less by predators, as predators evolve to avoid certain types of animals. Once the body plan becomes safe, non-poisonous slugs will begin assuming this poisonous body plan. Predators will now start to lose their evolved fear of this type of the poisonous-looking slug. A few poisonous slugs evolving their looks randomly that look even more unique will start this whole process over again.

    
    

    In short, the evolutionary incentive of the slug is to just get more and more weird and unique. This sort of evolutionary path IS sustainable, and can continue as long as the slugs don't gather too many competitive disadvantages as a result of their accouterments.

    
    

    Think about that. It's one thing to see the odd things that arose in nature. Imagine knowing that a certain weird animal is only going to continue to get more bizarre. How beautiful is that?
  • Los Angeles is a Lot Like Paris?

    Jul 16, 10

    
    

    
    

    This article on development in Los Angeles is an incredibly fascinating read. I love the conclusion: nothing I ever would have thought of but so true! It describes how the urban form of Los Angeles is more similar to Paris than New York in its decentralized nature.

    
    

    Unlike New York, there isn't really a reason to be in downtown Los Angeles. On the surface, you could say this is because the city is too suburban and has cut off the air supply to its downtown hub. However, this type of development can not only be ok in some circumstances, but it's ingrained in the DNA of the city. Rather than being suburban, it's more comparable to a city like Paris (which has suburb problems of its own). There, the center of the city is paralyzed because it is a historical "museum" where there is resistance to change, and the main business district La Défense developed on the outskirts.

    
    

    The article goes on to show how rail lines are different in these two cases: it's focused in a more dispersed rather than hub-and-spoke model (something I always used to wish for when I wanted to get to middle of nowhere Queens from the middle of nowhere Bronx!) However, I think another conclusion to draw is this dispersed development ends up being more equitable than a monocentric form.

    
    

    Suburbs may be unsustainable in the long term, but so are diverse city centers when looked at in this angle. There is by definition a limited amount of space within a reasonable distance to the center, and the most efficient transit system in the world won't change this. Jobs will concentrate in the center. The rich will concentrate and create a homogeneous downtown that takes away from the diversity that actually makes city centers desirable. The poor and middle classes are dispersed with little access to centralized public services and economic activity, and everyone suffers from the lack of income diversity in the city.

    
    

    In a dispersed city, there is no "center" to encourage this concentration and its ill effects. Of course there will still be rich and poor and middle class neighborhoods, but their distribution will be more random and not focused into groups on a metro scale. There will be no such thing as being marginalized from the city center and probably less of a disparity between commuting times of the rich and the poor. No one will be able to live in their isolated bubble and ignore marginalized populations.

    
    

    The one downside to this versus a centralized city is that there is no natural inclination to dense less-car-dependent development, which is why Los Angeles is Los Angeles. Incentives have to be carefully managed to encourage dense development, because the natural inclination with no center to be close to will be sprawl. Getting back to the point of the article, if you have a transit system that connects various "mini-hubs" in a grid-like way, it will provide a nice skeleton for future transit oriented development.
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  • Charley Ferrari

    Sr. Customer Solutions Advisor at IHS

    Information Services | Greater New York City Area, US

    Summary

    Customer support coordinator for IHS financial clients. Starting out at our helpdesk, I now work more intensely with a specific group of clients facilitating their access to our data and forecasts.

    Experience

    • Dec 2011 - Present
      Sr. Customer Solutions Advisor / IHS

      •Manage senior level customer support for all IHS financial clients.

      •Guide client workflows to efficiently integrate their own internal workflows with IHS’ data software.

      •Give clients general support including providing detailed explanations for conceptual questions about economic data and theory, and answering general subscription and software questions specific to our services.

      •Tailor software training sessions to my client’s specific needs, taking into account legacy IHS Global Insight software used and particular data required.

    • Apr 2009 - Dec 2011
      Client Relationship Manager / IHS Global Insight

      IHS is a global information company with world-class experts in the pivotal areas shaping today’s business landscape: energy, economics, geopolitical risk, sustainability and supply chain management.

      •Managed over $1 million in recurring subscription sales.

      •Provided customized support outlined above, with the goal of increasing my own book of business.

    • Oct 2007 - Mar 2009
      Client Support Specialist / Global Insight

      Global Insight provides comprehensive economic and financial information on countries, regions and industries, using a unique combination of expertise, macroeconomic models, data and software within a common analytical framework to support planning and decision-making.

      •Provided phone and email support to existing clients, including detailed explanations for conceptual questions about economic concepts, software questions specific to our services, and general subscription questions.

      •Worked with financial client relationship managers to proactively reach out to clients and solve problems.

      •Created interview questions designed to test the economic prowess of new helpdesk hires.

    • Mar 2007 - Oct 2007
      Premium Auditor / Regional Reporting

      •Performed workers compensation and general liability audits on location.

      •Set up home office to take care of scheduling and filing of audits.

      •Used pre-programmed excel macros on the audit worksheet.

    • Oct 2003 - Dec 2006
      Supervisor / McGill University Alma Mater Fund

      •As a caller, solicited alumni donations by phone.

      •Was promoted to supervisor after one year of calling.

      •As supervisor, assisted callers with work-related issues.

      •Performed regular evaluations on callers.

      •Independently managed multiple aspects of the fund, such as employee statistics.

      •Took on clerical responsibilities in the phonathon office.

    • May 2006 - Aug 2006
      Research Assistant / McGill University

      •Created figures for a paper on price competition in an asymmetric duopoly.

      •Gained Matlab experience.

      •Performed internet research for case studies relevant to another paper.

    Education

    • 2003 - 2007
      McGill University
      BA in Economics, International Relations, Physics
    • 1999 - 2003
      Bronx High School of Science
      High School Degree

    Additional Information

    • Websites:
      Personal Website, Company Website
• Tweets

  Tweets

  Profile
  • RT @DKThomp: "Big data is coming to economics but data is not knowledge and big data is not wisdom." http://t.co/fL7aLXvczh

    May 24, 13 from web Reply, Retweet, Favorite
  • Really though, state birds are the worst. http://t.co/HTlyUAKX8j HT @mattyglesias

    May 18, 13 from web Reply, Retweet, Favorite
  • Scientific proof that Gentrification will hit Brownsville but not Canarsie. http://t.co/gXTm6lN783 @MarketUrbanism I ran the numbers for you

    May 15, 13 from web Reply, Retweet, Favorite
  • Flirting in the year 2013 http://t.co/cdpcQLDmaP

    May 14, 13 from web Reply, Retweet, Favorite
  • I'll never stop loving posts on Westerosi economics http://t.co/fZAPUO7i5O

    May 13, 13 from web Reply, Retweet, Favorite
  • RT @trevso_electric: Cats get mad when people start living in their houses.

    May 12, 13 from web Reply, Retweet, Favorite
  • America defunds NASA. Canada sends an astronaut with youtube celebrity ambitions to the ISS http://t.co/rXMH2c2pUn

    May 12, 13 from web Reply, Retweet, Favorite
  • RT @trevso_electric: As you read this, living cells are rapidly dividing inside Kim Kardashian, combining her DNA with Kanye West's. Happy…

    May 12, 13 from web Reply, Retweet, Favorite
  • YOU GUYS! Who wants to move to Flemengarr with me? I hear Lorvenshenia is the undiscovered jewel of the Black Sea. http://t.co/ygeCFTDB3A

    May 12, 13 from web Reply, Retweet, Favorite
  • Is it just me or is Jarque-Bera a really cute name for a dog? It's just me isn't it.

    May 12, 13 from web Reply, Retweet, Favorite
  • Look at this awesome blog of NYC subway lines that will never get built http://t.co/Iggn5LKJLK RT @MarketUrbanism

    May 11, 13 from web Reply, Retweet, Favorite
  • RT @FakeMTA: There will be no J trains between Brooklyn and Manhattan due to Shabbos.

    May 11, 13 from web Reply, Retweet, Favorite
  • Two ton piece of metal gets into an altercation with a human. Is the two ton piece of metal ok? Think about the paperwork!

    May 11, 13 from web Reply, Retweet, Favorite
  • Sure Chinese Faux-European villages may be soulless, but what's the alternative? http://t.co/yAhMYoCnfI

    May 10, 13 from web Reply, Retweet, Favorite
  • Important information for the upcoming outdoor drinking season http://t.co/cwZ6GDYU0W

    May 10, 13 from web Reply, Retweet, Favorite
  • Signs it's time to move out of New York: When you look at this blog and think "these rooms aren't THAT bad." http://t.co/LAf3wkqYkm

    May 10, 13 from web Reply, Retweet, Favorite
  • http://t.co/No2sdTmzwD Sad to think that we live in a society where handlebar cams are probably a necessity...

    May 10, 13 from web Reply, Retweet, Favorite
• Profile