Friday, April 26, 2013
Matt Bevilacqua reports on a new study from the National Bureau of Economic Research:
Looking at more than 2 million home sales between the years 1990 and 2008, the report found that blacks and Latinos paid anywhere from 1 to 5 percent more than their white counterparts. These were for homes of comparable quality and within the same neighborhoods in four major metropolitan areas: Chicago, Baltimore-Washington, D.C., San Francisco and Los Angeles.
According to the report, a minority family’s income, wealth and access to credit had little to do with the higher prices they paid for homes. And outright racism on the part of sellers didn’t play the obvious role that one might think.
The report explains this conundrum in detail: "[A]ny disadvantage that black and Hispanic buyers face when purchasing homes disappears when it comes time to sell. While certainly not conclusive, this pattern suggests that the relative inexperience of black and Hispanic buyers, due to the historically lower rates of home ownership, may contribute to the higher prices that they initially pay upon entering the market."
Thursday, April 25, 2013
Richard Florida looks at the how the appeal of renting versus homeownership has changed since 2008:
A majority of Americans also say home ownership has lost its economic allure as an investment for the future. Nearly seven in 10 Americans (69 percent) report that "it is less likely for families to build equity and wealth through homeownership today compared with two or three decades ago." Most of all, three in five adults (61 percent) believe that "renters can be just as successful as homeowners in achieving the American Dream." This sentiment was felt among more than half of home owners (59 percent) and more than two-thirds (67 percent) of renters.
Contrary to popular belief, the minimum age at which a person is considered to be legally competent to consent to sexual acts varies from 16 to 18 in the USA.
The laws of Europe show even greater fluctuation. In Spain the age of consent is 13, in Malta and Turkey it's 18.
Wednesday, April 24, 2013
Los Angeles magazine does the knowledge:
At first glance, the fan palm guarding Exposition Park’s Figueroa Street entrance appears unremarkable. Palm trees, after all, are a fixture of the Los Angeles skyline. But that unassuming palm may be the city’s oldest, a survivor of three replantings and a witness to more than 150 years of Los Angeles history.
Likely still a sapling when it was dug up from a desert canyon in the late 1850s, the tree was transplanted with several other young palms to San Pedro Street in present-day Little Tokyo. Over the next 30 years, the trees grew up as Los Angeles matured around them. In 1888, the Times called the palms, which had witnessed the town’s evolution from a community of less than 5,000 to a booming city of nearly 50,000, “among the oldest landmarks of Los Angeles.”
Laura Anderson and Dan Pashman interview Kirk Kardashian (a land use lawyer turned writer) about how government sets the price of milk. As the interviewers note, milk is almost unique among commodoties, in that the government plays a very direct role in determining how much it costs. The interesting stuff starts at about 2:25.
Patricia McCoy (UConn) has posted The Home Mortgage Foreclosure Crisis: Lessons Learned on SSRN. Here's the abstract:
From 2007 through 2011, the United States housing market suffered a severe imbalance in supply and demand due to an excessive number both of foreclosed homes and homes awaiting foreclosure in the shadow housing inventory. Foreclosure prevention can help reduce the shadow housing inventory by keeping troubled mortgages from entering that inventory to begin with. The loan modification experience post-2008 yielded four main lessons about the best way to optimize foreclosure prevention. First, servicers should design loan modifications to lower monthly payments, including through principal reduction whenever appropriate. Second, servicers should evaluate loss mitigation as soon as possible following delinquency. Third, when distressed borrowers lack the cash flow for cost-effective loan modifications, servicers should explore other ways to keep those homes occupied, such as short sales, in order to avoid unnecessary spillover effects to the surrounding community. Finally, subsidies are not enough alone to overcome the frictions to an optimal number of loan modifications. The paper closes by discussing the implications for policy reform.
Tuesday, April 23, 2013
The N.Y. Times details a growing battle between the Confederated Salish and Kootenai Tribes of Montana and a group of local farmers:
Dependable water supplies mean the difference between dead fields and a full harvest throughout the arid West, and the Flathead is no exception. Snowmelt flows down from the ragged peaks to irrigate fields of potatoes and wheat. It feeds thirsty cantaloupes and honeydew melons. Cutthroat trout splash in the rivers. Elk drink from the streams.
So when the government and the reservation’s tribal leaders devised an agreement that would specify who was entitled to the water, and how much they could take from the reservoirs and ditches, there was bound to be some discord. But few people expected this.
There have been accusations of racism and sweetheart deals, secret meetings and influence-peddling in Helena, the state capital. Lawsuits have been threatened. Competing Web sites have sprung up. Some farmers have refused to sell oats to those on the other side of the argument.
Buzzfeed as all the photos:
From tiny writing desks to giant painting studios, the only thing all of these creative studios have in common is that they inspired their successful inhabitants to create greatness.
(photo: Georgia O'Keefe's studio)
Patricia McCoy (UConn) has posted Barriers to Foreclosure Prevention During the Financial Crisis (Arizona Law Review) on SSRN. Here's the abstract:
The number of modifications to distressed residential loans has been subpar to date compared to the number of foreclosures. This raises concerns about the presence of artificial barriers to loan modifications in situations where foreclosure should be avoidable. Numerous theories have been advanced for the relatively low level of modifications, including restrictions on loan modifications in private-label servicing agreements, threats of lawsuits by private-label investors, servicer compensation arrangements, the high cost of loss mitigation, accounting rules, junior liens, and tax considerations. This Article concludes that servicer compensation coupled with the costly nature of loan workouts, accounting standards and junior liens form the biggest impediments to an efficient level of loan modifications. These factors also distort the mix of loan modifications that are made toward types of modifications with higher redefault rates. Other explanations, such as servicing agreement restrictions, tax consequences, and the threat of lawsuits, either are not at play or are of second order importance.
Monday, April 22, 2013
Rod Dreher has recently published a book (to generally glowing reviews) about the death of his sister from cancer at age 42. The book, The Little Way of Ruthie Leming, also centers on Dreher's decision to pack up his family from Philadelphia and move back to his hometown St. Francisville, La., a place of about 1,700 residents 30 minutes northwest of Baton Rouge.
After reflecting on the move and the experience of grieving for his sister, this is Dreher's advice:
[M]y advice would be to do your very best to root yourself in the community where you do live, and to do your best to stay there — achieving “stability” in the Benedictine sense. [...] The point is, you can live a very rooted life in Mill Valley, California or Portland, Oregon or NYC, as long as you commit to the place in a concrete way, and root yourself in the community, via church or synagogue, school, little league, or other “little platoons.” We should return to a definition of success as laid down by Ralph Waldo Emerson: “To leave the world a bit better, whether by a healthy child, a garden patch, or a redeemed social condition; To know even one life has breathed easier because you have lived. This is to have succeeded.”
But what do you do if [you] live in a place where just keeping up requires you to work crazy-long hours, and leaves little time for community life? I remember that my dad always got off at 4:30, which left him plenty of time for little league coaching and other things. [...] Anyway, maybe the lesson is that the good life is not possible in the Philadelphia suburbs, or any place where in order to keep your head above water, your job has to own you and your wife, and it keeps you from building relationships. There are trade-offs in all things, and no perfect solution, geographical or otherwise. Thing is, life is short, and choices have to be made. It’s not that people living in these workaholic suburbs are bad, not at all; it’s that the culture they (we) live in defines the Good in such a way that choosing to “do the right thing” ends up hollowing out your life, leaving you vulnerable in ways you may not see until tragedy strikes.
W.C. Bunting (ACLU) has posted Private Property Rights as War on SSRN. Here's the abstract:
embeds the famous Coase Theorem within a more general theoretical
framework of property rights. The concept of a transfer principle is
defined and the final allocation of property rights is derived as a
function of this transfer principle. Also, transaction costs are
defined in relation to the equilibrium allocation of property rights
implied by a given transfer principle.
Part II models private property rights as a conflict resolution mechanism and shows that for the Coase Theorem to be consistent on its own terms, private property rights must generate the Pareto-optimal allocation of resources among all feasible conflict resolution mechanisms. This conclusion is termed the Fearon Corollary. Equating the imposition of private property rights to war/conflict, the following question is posed: if the pre-conflict common-use property right regime is socially-optimal, under what conditions will disputing parties fail to bargain around/settle the conflict? In addition to the explanations specifically identified by Professor Fearon, the present article offers an additional explanation evidenced in the institution of private property rights itself, and, in particular, state “Castle Doctrine” laws that permit the use of lethal force in defense of real property. Skeptical that participants in a capitalist market-based economy will voluntarily enter into socially-optimal cooperative arrangements regarding the joint use of private property rights, a role for the courts is suggested wherein de facto common property rights are established by rendering private property rights random/uncertain. Although possibly producing socially-suboptimal misallocations of the property right, this uncertainty weakens private property rights, reducing the expected spoils of costly conflict, and, in turn, creates an incentive for the parties to settle/cooperate. In this way, less secure claims to private property promote social cooperation.
Part III examines judicial/Coasian intervention versus legislative/Pigouvian intervention and argues that legislative/Pigouvian rulemaking fails to make use of the disputing parties’ privately-held information to the extent that political conflict, unlike legal conflict, is “settlement-impossible.”