Real Estate

Trying To Sweep Up After the Last Boom…

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Recently I saw this sign in River North, indicating the start of another large high rise project, with an optimistic start date of 2016. Apparently there is plenty of money sloshing around to fund the construction of large buildings, because cranes are up in the sky all over the downtown area. I don’t know if lessons have been learned from the last and most recent bust in 2008, where developers who put in only a bit of equity defaulted and handed the projects back to the creditors, who also took big losses. The most obvious lessons would be 1) require developers to put significant equity into the project 2) don’t fund too many projects competing for the same tenants. These projects don’t seem to be condominiums for the most part; I am only speculating but perhaps the failure of so many condominium projects rattled the banks (those that are still standing, at least).

I would consider it a victory if they finished a few of the half-built structures that have stood idle for five or more years without any progress. This hotel in River North is now restarting; I have been looking at this ugly mess for years so it is great to see some sort of actual effort to complete the hotel.

The real issue is whether or not the structures being built right now, at what is likely the apex of the boom, will be seen through to completion. I certainly hope so, because it is depressing to see half-built structures marring the skyline for years. The famous “Chicago Spire” didn’t get far (only a hole in the ground) which is a good thing because it would have been sad to see the “Stub” along the lake shore for years to come.

Cross posted at LITGM

The Many States of America

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Recently I was reading how a professor at the University of Illinois at Chicago was arrested for bringing an unloaded handgun to work, and that it made the news media. I reflected briefly on the fact that you can bring a loaded, concealed gun with you in most places in many states in the US and it wouldn’t be news, it would in fact be normal activity, for instance in the adjacent state of Indiana.

Meanwhile, in California, it is common for people to smoke marijuana openly as is discussed here. Needless to say, this behavior would get you immediately arrested in many states particularly in the south and midwest.

Taxation is also highly variable on a state and city basis. New York and California have some of the highest taxes, particularly on income beyond a particular level (progressive taxes). On the other hand, states like Florida and Texas have a much lower level of taxation and a much freer business climate in terms of regulation.

Without getting into the hottest of hot-button issues, clearly there are differences in the types of marriages and reproduction rights / right to life on a state by state basis. These differences are narrowing in some areas and getting wider in others.

Some states have “right to work” laws which massively limit union power, and have flourishing and expanding manufacturing economies as a result. Visit Alabama, South Carolina, and Texas to see where all the former manufacturing might in the midwest and Northeast and West Coast migrated to (if it didn’t go to China or overseas). The enacting of “right to work” laws obviously sends an important signal to business leaders whether or not a state is a friendly place to do business for incremental investment (along with taxation).

The “fracking” revolution has unleashed vast wealth in some states, and in other states it has been banned or severely curtailed. Meanwhile, California is going in on its own with carbon regulations and highly aggressive “green” energy targets, while other states are heavily reliant on traditional (and cost effective) technologies.

The differences on a state-by-state level on these different dimensions seem large and growing. They are much more subtle (though often correlated) with the Red / Blue analysis. An attempt to classify these vectors could be done as follows:
Energy Freedom – the ability to extract and use cost effective technologies (like natural gas, fracking, and coal) and a state’s willingness to invest more for reliability or the requirement to use expensive (green) technologies and curtail energy use even at the expense of industry competitiveness and reliability. California is likely on one end and Texas is on the other side, although many others have large freedom including Pennsylvania.
Safety Freedom – the right to defend yourself at home, in transit, at work and during study or whether that is assumed by the state. Sadly the most restrictive is Illinois and there are many candidates on the other side throughout the south and midwest (Indiana).
Personal Substance Freedom – the right to smoke, the right to drink, and the right to use various drugs or stimulants. Some odd states (like Colorado) are leading the way on this, it isn’t always the traditional Red / Blue divide.
Freedom to Work & Hire – the right to work and not be forced to join a union, and this is also tied with local laws and practices that limit the ability to hire and fire and direct hiring or limit firing in various dimensions.
Freedom to Build / Live / Rent – Houston is famous for having very limited zoning while other states and municipalities have highly restricted zoning practices. The New York co-op concept also severely limits new entrants along with rent control. These laws can also include whether you can work or have a business in your home. While subtle, these practices can have a large impact on prices and how the region functions.
Freedom From Excessive Taxation – Some level of taxation is necessary for government to function but high tax levels have severe intended and unintended consequences of under investment and evasion. Taxation includes state, local, city, sales, estate, property, and “sin” taxes. These vary significantly by area but are highest in California and the East Coast and likely the lowest in the South.
Freedom of Marriage Choice – A larger portion of states are recognizing marriages beyond the traditional marriage, and this varies by state
Freedom of Reproductive Rights – There are a wide variety of approaches and trends on a state level and then there are practical impacts, as well. This is highly variable by state in practice
Freedom on Medical Rights – an emerging model will be how each state approaches new medical practices and funding methodologies, along with the practical availability of doctors that subscribe to the state’s controls and funding methods. This area will grow exponentially in the near future

I believe that these sorts of analyses on a state by state level are much more useful than the traditional Red / Blue view (although they are often correlated) and when you start to dig in to the differences on a state and municipal level they are staggering, particularly when you view the extremes.

It would be interesting and useful to begin to put together the various data sets to analyze states and municipalities along these continuums, and others that I’ve likely missed.

Cross posted at LITGM

Real Estate: Flight Capital and Bigger Government

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Miami residential real estate prices are holding firm and even increasing despite the weak economy. The recovery appears to result in significant part from capital inflows from French, Venezuelans and other foreigners whose governments are ramping up their attacks on private wealth. With low interest rates, a weak dollar and relative safety from confiscation, residential property in the more cosmopolitan US cities is a financial haven for Europeans and Latin Americans.

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Reviving the Garden

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One of the best things about buying a house and retiring from the military was being able to feel free to actually get serious about a garden. I went through a phase of planting roses – many of which have thrived and survived – and a long project to rip out the existing lawn, back and front, and put in xerioscape plants. The back yard was the place that I put the most into, though. Because of the layout of the rooms and the windows in them, the back was the part I looked at the most. And because of the peculiar soil composition – a foot or so of heavy, dense clay laid down over an impermeable layer of caliche which apparently goes all the way to the core of the earth – getting certain things to thrive and grow in it has been a challenge.

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America 3.0 [bumped]

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James C. Bennett, author of The Anglosphere Challenge (Rowman & Littlefield, 2004), and Michael J. Lotus (who blogs at Chicagoboyz.net as “Lexington Green”), are proud to announce the signing of a contract with Encounter Books of New York to publish their forthcoming book America 3.0.

America 3.0 gives readers the real historical foundations of our liberty, free enterprise, and family life.  Based on a new understanding of our past, and on little known modern scholarship, America 3.0 offers long-term strategies to restore and strengthen American liberty, prosperity and security in the years ahead.

America 3.0 shows that our country was founded as a decentralized federation of communities, dominated by landowner-farmers, and based on a unique type of Anglo-American nuclear family.  This was America 1.0, as the Founders established it.  The Industrial Revolution brought progress, opportunity and undreamed-of mobility.  But, it also pushed the majority of American families into a new, urban, industrial life along with millions of unassimilated immigrants. After the Civil War, new problems of public health, crime, public order, and labor unrest, on top of the issues of Reconstruction, taxed the old Constitution.  Americans looked for new solutions to new problems, giving rise to Progressivism, the ancestor of modern liberalism.

America 3.0 shows that liberal-progressive solutions to the challenges of America 2.0 relieved some problems, and kicked others down the road.  But they also led to an overly powerful state and to an overly intrusive bureaucracy.  This was the beginning of America 2.0, the America we grew up with, which dominated the Twentieth Century.

America 3.0 argues that the liberal-progressive or “Blue State” social model has reached its natural limits.  Even as it continues to try to expand, it is now dying out before our eyes.   We are  now living in the closing years of the 20th Century “legacy state.”  Even so, it has taken the shock of the current Great Recession to make people see the need for change.  As a result, more and more Americans are calling for a return to our founding principles.  Freedom and individualism are on the rise after a century-long detour.

America 3.0 shows that our current problems can be and must be transcended with a transition to a new America 3.0, based on modern technology, decentralized communities, and self-reliant families, and a reassertion of fiscal responsibility, Constitutionally limited government and free market economics.   Ironically the future America 3.0 will in many ways be closer to the original vision of the Founders than the fading America 2.0.

America 3.0 gives readers an accurate, and hopeful, assessment of our current crisis.  It also spotlights the powerful forces arrayed in opposition to the needed reform.  These groups include ideological leftists in media and the academy, politically connected businesses, and the public employees unions.  However, as powerful as these groups are, they have become vulnerable as the external conditions change.  A correct understanding of our history and culture, which America 3.0 provides, shows their opposition will be futile.  The new, pro-freedom, mass political movement, which is aligned with the true needs and desires of Americans, is going to succeed.

America 3.0 provides readers a program of specific “maximalist” proposals to reform our government and liberate our economy.  America 3.0 shows readers that these reforms are consistent with our fundamental culture, and with our Constitution, and will make Americans freer and more prosperous in the years ahead.

America 3.0 provides a “software upgrade” for the Tea Party and for all activists on the Conservative and Libertarian Right.  It provides readers with historical evidence and intellectual coherence, to channel the energy and enthusiasm of the rising mass political movement to renew America.

America 3.0 shows that our capacity for regeneration is greater than most people realize.  Predictions of our doom are deeply mistaken.  We are now living just before the dawn of America’s greatest days.  Within a generation, positive changes beyond what we can currently imagine will have taken place.  That is the America 3.0 we are going to build together.

(Cross-posted from the America 3.0 blog.)