Thursday, September 29, 2016

Rent control and the political dynamic

Often discussion of rent control focuses on the economic impact, but I feel the dramatic change this policy creates in a neighborhood's political dynamic can be more important.

In growing cities without rent control, you have opposing sides shaping policy on development: The pro-density and anti-density sides.

Long term homeowners make up a big part of the anti-density side. People tend to oppose change in general, and this is especially true when change appears to have few benefits. For long-term homeowners, the downsides of new density are readily apparent: more traffic, more construction noise, more people using parks, less sun, more “lesser” people in their neighborhood.

On the other side, you'll find the main pro-density groups: There are developers who want to build and local business that want more customers -- while this group has money, it's not very big. There are also non-local people who want to move to the neighborhood, but given the design of our political system they often have no influence. Instead, the biggest politically influential group in favor of more density tends to be current renters. While more density also means more traffic and more construction noise for renters, it also means lower rent and more rental options-- which is most important to them. This can be a self-feeding loop. Density-friendly policies should lead to even more density-friendly policies as the percentage of renters grows.

The Portland survey on their infill proposal shows this. While it is a self-selecting survey, the findings are still telling. It found: “The most significant differences among demographic groups were between homeowners and renters, particularly concerning housing types. More than 70 percent of renters felt all proposed changes related to housing types were moving in the right direction, while homeowners were more divided. Renters were also more supportive of applying diverse housing types more broadly throughout the city than homeowners.

Rent control divides renters

Rent control, however, splits renters in two politically. Long-term renters who have no plan on moving start to think more like homeowners. For them, more density means more traffic and construction noise with no upside. If anything, they become even more opposed to new development since they have no financial reason to want land values to go up, and allowing new development could mean their rent-controlled apartment building is torn down.

Renters who hope to move in the future --because they are having a kid or hope to buy a house, for instance -- still have a reason to support development, but this is a much smaller political group. It is also a group less likely to be involved in local politics. Splitting renters into these two political groups can shut down the cycle of density-friendly policies.

While rent control does change the investment dynamics surrounding a new building, that is a relatively minor change compared to the dramatic political shifts it creates. It's a policy that shifts the political dynamic around density dramatically to one side.

Friday, September 23, 2016

The future of delivery drones is on wheels

While much attention has been paid to the the idea of Amazon's flying delivery drones, the real future of drones is much closer to Earth. I firmly believe that the vast majority of delivery drones in the future will travel along the ground, a trend that's just starting thanks to Starship Technologies. From Recode:
Starship Technologies, an Estonia-based startup created by two Skype co-founders, Janus Friis and Ahti Heinla, is slated to begin testing its autonomous delivery robot to bring groceries and restaurant takeout to Washington, D.C., homes and businesses this fall. It’s the first U.S. municipality to approve ground-based robots to roll around on city sidewalks.
Starship hopes to solve the “last mile” problem –– the work of getting packages from the fulfillment center directly to people’s homes — currently done by humans. It’s a problem Amazon wants to solve with drones, but the FAA’s rules bar drones from flying around humans without an operator in line of sight. But with ground-based delivery, Starship’s founders say, there’s less that can go wrong.
Basically the only advantage a flying delivery drone has over a delivery drone on wheels is that it can travel in a straight line and theoretically will deal with fewer obstacles in the way.  
Now compare this to the numerous serious downsides to flying:
  • Flying is significantly more energy-intensive, which should increase cost and limit range.
  • Flying drones will never be able to carry as much as a drone on wheels.
  • Flying is dramatically more dangerous. If a 40 pound cooler on wheels ran into you, it might leave a bruise; if a 40 pound drone drops 50 feet out of the sky on you, that could kill you.
  • This means flying drones will be more expensive to insure. 
  • It also means the risk of a big PR disaster is bigger.
  • Failure in flying is more catastrophic. If battery in a wheeled drone dies, it stops in the middle of the sidewalk; if that happens to a flying drone, it could fall out of the sky.
  • So flying drones should likely require more maintenance checks.
  • As the article points out, the added danger of flying means such drones will likely face more regulatory issues.
There is a good reason people and goods are mainly moved around on wheels and not by helicopters. As of yet there has been no technological development to change this basic issue of physics.

Thursday, September 15, 2016

Income data shows we need to build more dense housing in cities

There is some good news out of the U.S. Census Bureau’s annual Current Population Survey, but it can turn into bad news if we don't see the correct policy response. For the first time in years median incomes are up. The problem is that all of this increase is primarily focused in cities. From  Next City:

Households in metro areas saw a 6 percent increase in median incomes, from $55,920 in 2014 to $59,258 in 2015. Households in the “principle cities of metropolitan areas” saw a 7.3 percent increase over the same time period. Suburban households — those in metro areas but outside of principle cities — had the highest median income at $64,144. 

At the same time, households in rural areas or small towns didn’t see a statistically significant change in median income, and had the lowest median income — $44,657. Similarly, the poverty rate dropped to 13 percent in metropolitan statistical areas — down from 14.5 percent in 2014 — but the poverty rate outside of metro areas remained almost unchanged at 16.7 percent.
We are seeing a re-urbanization trend in this country which I believe is thanks to a dramatic drop in urban crime over the past several decades. People are moving to our now much safer cities, and American cities have once again become what cities have been throughout most of human history: drivers of innovation and prosperity. We should be helping more people who want to move to cities take advantage of this.

The problem is that policy makers are not allowing this to happen. We aren't building enough densely situated apartments, rowhouses, and condos in the most desirable cities. This is pushing rent up dramatically in cities. I wouldn't be surprised if people living in these urban cores didn't feel any financial improvement because rising rents have more than eaten up any income increases. This is an issue that can be easily be solved by simply allowing people who want to build more urban housing to do so.

Creating more density to allow more people to move to major cities would improve their health, their finances, and dramatically reduce their carbon foot print. Yet even in big cities that are run by liberal politicians --who supposedly care deeply about these things-- building more is way too difficult. In some places it is even being made more difficult thanks new rules that are actually counter productive.

As a futurist, I find this deeply depressing. Re-urbanization is a fairly simple societal change and a straightforward policy goal that would actually improve the lives of most people. If we can't deal with this issue, I fear how we will handle more dramatic changes soon to come, like the massive employment displacement self-driving technology will cause.

Thursday, September 1, 2016

Get my sci-fi novel for free this Labor Day weekend!

For a limited time my first science fiction novel, Cobalt Slave, is free on Amazon!

You have the chance to download and read it this Labor Day weekend. It is a fun quick read. A great book for when you are enjoying your one last trip to the beach, a late summer camping trip, or just lying around your house doing nothing.

All I ask is that if you enjoy the book you take a minute to leave a nice review.