Tag Archives: business

The Oakland Inferno and Government Caused Poverty; Does a Lack Respect for Regulations and Codes Cause such Tragedies or is Poverty Resulting from Regulations and Codes Lead to Disrespect for the Law?

At the 6 Dec 16 meeting of the Committee of the Whole, a commissioner uncharacteristically commented at length on the recent Oakland fire; we heard that the warehouse had not been properly inspected and certified for occupancy for residency or for hosting shows. The tragedy illustrated the need for inspections and enforcement of codes. I would have answered immediately but was taken aback by the unexpected. Also, I lacked even the most basic understanding of the issues involved in Oakland.

Within minutes of arriving home after the meeting, I was looking at NYT articles which presented the Oakland warehouse fire and analysed the reasons why alleged artists lived in that building and tolerated dangerous conditions.

I copied the following snippets from the two NYT articles that are linked in the title;

About the Ghost Ship: “The city’s (Oakland) $2,899 median rent is now among the highest, and just short of median rents in Manhattan….rising rents and fears of eviction can push vulnerable people in a desperate search for housing to unsafe spaces….a vast gray economy of live/work spaces that, legal or not, are regarded as an important source of affordable housing…“You bring these places up to code and you end up pricing out the people who make Oakland such a great place,” Mr. Dolan said.”

Now this is a bone on which a skeptic, such as myself, can gnaw.

I may have written here about my own housing experience. In Texas, where they still respect private property, I paid 400 dollars per month for a furnished one bedroom. This residence would cost me 700 in Kentwood where we have zoning and planning, 800 in Grand Rapids where they add inspections to the mix and 2500 in Manhattan where the residents also have rent control and where the landlords are hated and bled white by innumerable government leeches. Regulations, inspections, taxes, harassment of owners all cost money, something that poor people don’t have and so they gravitate toward the Ghost Ship and others like it. (Parenthetically, over 20 years ago, I knew that over a dozen otherwise homeless individuals squatted in the old Mary Free Bed building on Cherry Street. What happened in Oakland is not unique. There are poor everywhere squeezed by the high cost of real estate.)

The flaws with the “need for inspections” are that 1) I can’t find evidence that inspections of electrical, plumbing, structural and heating projects have any impact on safety or livability. Maybe there is evidence but no one publishes their findings. If someone knows of such a study, please tell me where I can review it. 2) Individuals who want to can easily avoid inspections, or worse yet, bribe, influence or frustrate the inspectors and end up doing what they want. The owners/managers of the Ghost Ship certainly had mechanisms in place to evacuate residents and to hide other evidence of people living there. 3) Many places will escape inspections due to the bureaucracy and ineptness of government. In Oakland, “no one is responsible.” The mayor has deflected criticism from the inspectors who ignored the building even though the program is probably a money maker for the cash strapped city.

We seem to have a chicken and egg problem here. I will concede that there are structural problems that can be detected and corrected by inspections so possibly averting a border line number of tragedies. However, the cost of inspections falls squarely on the poor who are driven to find ways to get around the costs. There are scofflaws who operate below the radar to provide services for these poor people and whose properties are never inspected or worse yet, who bribe inspectors so disgracing the law and government.

I’ll admit that we will never get rid of inspections. Ordinary peaceful folks who obey the law will pay the fees and justify the expense because it makes them feel reassured that someone in authority has blessed whatever project that they have paid for. There is a phrase that I saw somewhere; “Keep the yokels insecure, and the money never stops.”

Less scrupulous folks and the desperately poor who have nothing to lose will collude and easily get around inspections. Some, tragically, will get burned.

Self Driving Cars, Pitttsburg, Uber, and Us, Overlooking the Atlantic

So I’m here in a very nice seaside rented home on an obscure North Carolina island with the family. The kids and grand kids are off in various swimming/biking/exploring modes and rain is forecast. I’ve been working on my congressional campaign, and so distracted from blogging. Nevertheless, there is some new raw material that beg for expression, I’m on the porch watching storm clouds gather for the first time this week, so let’s organize the news of the last month and see if there’s anything that we on the commission need to heed.

Kris retired two years ago and decided that she liked to travel with me as I do locums work. This means that we take a taxi to and from the airport, a truly awkward experience. We call a day ahead, call half an hour beforehand, and still they don’t show up. The drivers are invariably African and hostile until my alcoholic personality disorder kicks in; “Africa, big place, where in Africa?” “Ethiopia.” “The Highlands or coast?” “Oh, you know Africa! The HIghlands.” Kris; “You’re Christian? Did you get kicked, go to Libya?” By this time the guy is wracked with emotion, ready to talk about his family, hopes, past, and we’re at the end of the journey. It costs $13.40. I try to give the guy 15 dollars, if I can find it as it’s often dark or worse yet, raining. Awkward.

Then the people at the airport decreed that Taxis bringing folks from Kentwood had to charge a minimum of 15 dollars. I don’t know how the airport can write a rule like that or even enforce it. We at the city commission should investigate.

This diktat caused me to rebel. I downloaded Uber and we have since had an excellent experience. The price is $7.30, half of a taxi, it automatically goes on my credit card and so is a recorded as deductible cost of doing business, the cars are uniformly interesting (two Priuses) and the drivers are all fascinating (a guy who sold art, several retired executives escaping their wives, an African American who was damned if he would ever work for somebody again.) In creative moments I calculate that if Uber can get us to the airport for 7 dollars, that they can get us to Meijers for 5; maybe get rid of one of our cars……

Then the Economist threw a bomb. It devoted a recent issue to the Uberization of transportation. It’s not what our Uber drivers had envisioned. Uber wants to get rid of all their drivers and instead operate a fleet of self drivers.-enough self drivers to replace most car functions as Americans now use them. They would operate a large fleet, cars constantly running, that would pick people up at their front doors and deliver them to their places of work, doctor’s offices, bars and at Aunt Tillie’s, then go off to pick up yet another customer.. The cost would be minimal, safety high, efficiency nearly perfect.

Wow.

Then Uber announced that they were testing 4 Ford Focuses that had been modified to be self drivers in Pittsburg.    Pittsburg!   Fifth Avenue is the only straight street in the whole region. They had to build the airport 20 miles out of town where it was flat enough to land a DC4 back in the day. It’s ice and snow, steep grades, intersections where 5 streets come together, narrow, 1900s built streets. Everything is lined with worn out brick or cement. No one would test drive a self driver in that environment.

Unless he knew that his product could handle the job. (I would have said “Had the calm confidence of a Christian holding 4 Aces” (Twain) but can’t make it work.)

Daughter who has lived in P’burg for 7 years is here with us, so we ask about the self drivers; Yep, she’s seen more than one. They exist, ugly, roof has a bubble so distinctive enough for it to be known if they fail somehow.

I’d guess that we’ll know that self drivers are viable, efficient, attractive and cheap enough to go commercial by next spring. How long before you can buy one, or before Uber orders a few 100,000 Priuses modified to self drive? another year? maybe 2? These 100,000 cars will replace a million personal cars in people’s garages and on the parking lots.

We on the commission had better think on this.

Some thoughts.

The cars likely will not be built in Michigan, or if they are, the mechanical parts will be mere commodities lacking attractive luxury pricing markups that would stimulate competition and creativity. Self drivers are computers and software with a metal attached.

Public transit in all it’s forms is doomed. Taxis and buses cannot compete with personalized pickup and delivery in a warm (or air conditioned in the summer) car. Passenger railroads (why do we support Amtrack? This company regularly kills and maims the elites in the NY to Washington corridor;  even as I write, there’s been death and over a hundred injured in Hoboken, NJ) and intercity buses will be replaced in their roles of moving people a few hundred miles to other cities or even to Florida in the winter. School buses, kaput.

Will parking lots, parking spaces on streets and the width of roads be affected? If so, what do we do with the extra space; more buildings next to the malls? Parks that never get used?

Will shopping for groceries, clothing and minor purchases be abolished since things can be ordered on the internet and then delivered cheaply when the resident is at home and ready to receive the goods. So what happens to malls, big box stores and strip centers? A warehouse full of dry goods and staffed by robots will no longer need to be located on our main streets.

Will plunging transportation costs encourage people to live further out in the country? I can’t think of any arguments that would support them wanting to live closer together, so scratch the New Urbanism and Smart Cities. That’s my opinion but maybe others can marshal opposite arguments.

Do good street lighting, traffic lights and signs mean much to a robot? No, but there will be many years before human drivers no longer struggle with steering wheels and brakes? How important will street maintenance and snow removal be in this pending storm of change?

The accidents that are reported for self drivers in Palo Alto, where these have been standard for years, are almost all caused by humans disobeying the law while the patient self drivers are scrupulous in heeding the law. The patrolling for- and punishing of speeders, drunks, and unlicensed drivers will disappear, so there go lucrative traffic fines, busybody drug courts and the fill in the hours work of lurking for speeders that police do. Also, we should anticipate fewer accidents with their fires and injuries that occupy the fire department.  Maybe we should cut budgets and recruitment.

The latest fad in policing is DDACTS, in which our police concentrate on known high crime areas looking for minor traffic violations and vehicle defects that serve as an excuse to “stop and frisk” the drivers without ruffling constitutional feathers. Gone. Those old Pontiac and Toyota beaters will be soon retired and the traffic in poorer areas will resemble that of the wealthiest suburbs. And all the self drivers will soon have traces of cocaine and marijuana detectable, just as it is on our US currency.

Will our fleet of cars, fire engines, plows, utility trucks self drive? Quite probably, to some extent so we’ll get some cost savings.

The folks who will first use self drivers are the old who are still living in their own home. They can more easily take care of themselves if they have the increased mobility, so forestall moving into retirement villages. So what happens to the explosive growth of these corporations that depend on a aging and dependent population?

I think that air traffic will be relatively spared, so our connection to Kent County’s airport will be an advantage.

Well the rain passed us by, a watery sunshine, temperature 78, moderate wind,  and I see an osprey hunting off shore.  Commission meeting next Tuesday, so gotta get back in the next few days. Life in retirement is hard but yo gotta do what ya gotta do..

I Get My Comments Published in the NYT, Expect Hate Mail

The problem with economics and other soft sciences is that a series of unsubstantiated pronouncements constitute an argument. We have no reason to trust any of these explanations, much less the standard liberal bromide that we need to tax money away from savers and give to spendthrifts. All of these theories are propounded by Keynesians who got the Japanese and Europeans into the pickle in the first place. My problem is that we in the USA have exactly the same trajectory and Keynesians in charge as did the Japanese and Europeans. The throwing money at the dartboard to pick a solution has failed and no one has any better ideas.
Economics, as a “science” does not have the power that would justify allowing the Fed and Congress, or any other central power to engineer the economy. Capitalistic societies have booms and busts, deflations and inflations, localized collapses and even disappearances of productive life. Visit any ghost town or recall the 1840, 1870-90, 1930 deflations, the panics, most short lived and self correcting in the history of the USA.
There may not be anything wrong with deflation. Little people who save can gain by putting money under their mattresses and won’t lose it to inflation. Investors will need to be much more careful to be sure that their projects make sense, our government will struggle and be hampered in its attempts to “help” people.
Finally, under socialism, planned economies, welfare states and the like there are no booms, only chronic busts.

More on Sidewalks; We’re Past Horsemanure.

Sidewalks were first elaborated when dirt roads and horses reigned transportation. Women hated the dust, mud and semidigested oats from streets and so insisted that these be paved and swept daily. In commercial areas the merchants provided walkways for pedestrians to keep the two modes of transportation separate. Walkers could keep their shoes clean.
Later as cars took over the streets, most families did not have a second car but did have an icebox and so women walked to the grocery and kids to the local small school. Sidewalks made sense.
A very few folks still walk; dog walkers, The few using public transit, an oddball like myself who walks to clear his head. I’m alone when I walk from our condo, cross 28th street, and hit my usual haunts, all the while thinking. Occasionally when there is light snow, I emerge from my fog enough to notice that I’m usually the first person to walk on many sidewalks. I should take pictures next winter just to document this failure of government.
After my last blog on grass growing on unused sidewalks, it occurred to me to do a documentary now. We on the commission spent (?) $700,000 in the last few years to line 28th street with sidewalks; “It would allow walkers to patronize those businesses!” I voted in favor because it was “free” money from the Feds or someone.

I biked over and photographed a few segments….
I have included one picture because it is all I can load, but another shows a grape vine all but crossing the sidewalk on a segment opposite Roaring Twenties strip mall. Long grass is growing in cracks and over the edges in one year old sidewalks in front of Fruitland and Lazy Boy. Everywhere some grass grows despite a hot, dry summer.

They say that grass won’t grow on a busy street, but in Kentwood, our ideologically justified sidewalks carry legions of imaginary customers to shop along 28th Street. Images don’t need to step on the cracks, y’know.

Next, our planners will grind up the road and have fantasy horses trotting up and down our street producing fertilizer to encourage very real weed growth and mud just to infuriate the cleaning crews in the grateful stores.

Watch for it.

Breton Taking Wing on Wing Avenue, a Proposed Double Purposing

We just got the proposed agenda for the 5 July meetings. Planning wants to put on its dog and pony show of how they propose to ease Kentwood back to the 20th century by willing businesses and builders to behave abnormally, but, I digress.

The one real muddle involves the necessary rebuild of Wing Avenue along with the upgrade of the infrastructure forcing the folks along it to hook up to utilities. This seems inevitable and will be unpopular.
The other yet longer term building project will be extending Breton Road seamlessly through to 60th Ave. It currently stops at 52nd , and folks have to stop, make a left turn, then a right turn at Wing to go through to 60th. The current vision is to build an entirely new road across an existing farm when that can be acquired, over wetlands with those bureaucratic headaches and necessitating two signals.

It’s occurred to me that there is a more compact way to solve both problems. Why not make two round and rounds on 52nd Ave, one at the south end of Breton, and the second at the north end of the newly rebuilt (maybe slightly widened and graced with a bike path that would preserve its scenic charm and make at least two commissioners happy.)? The traffic from either direction would not have to stop, but rather would be routed onto 52nd Street for about a quarter mile. Breton Ave would not have to be built through saving money and stress on the environment.
Since we’re into round and rounds, maybe also put a round and round at the junction of Wing and 60th Street?
It’s also possible to make what would technically be just one round and round on 52nd to be more of a long rectangle, but traffic and civil engineers get paid a hell of a lot to figure out small details like that.

I probably won’t be able to be at the meeting but will forward this to several commissioners; might make for some interesting conversation, and actual planning..

City Commissioners Vote to Starve Poor Children and to Lower Real Estate Prices

The big roll out of the 2016-7 budget occurred last evening, six hours of it. I voted “no” twice, once on a proposal to hire a new rental property inspector and the second time against the entire budget in part because of the inspector issue.

The pitch was that the city could help control crime and shiftlessness by improving the housing in which renters lived. Therefore the city should increase the inspection of these properties so forcing correction of perceived deficiencies. The city would do well by doing good!

I differed. The sociology here is dubious and the economics is even worse.

Sociologically, there are data showing that hooligans don’t own their apartments but rent. I’d intuit that these lowlifes don’t have much money, live in shabbier and cheaper quarters and are likely beat property up more than their more civilized contemporaries. But none of this supports the notion that living in a self created fleabag causes bad behavior. Correlation is not causation. Crime, poverty and laziness are not treatable by “improving” housing. It doesn’t pass the sniff test.

The economic implications of increased inspections are actually more ominous especially here in “Rentwood.” Nearby Grand Rapids increased inspections in 2011 and drove rental costs up by about $100 per unit.  Inspections cost landlords a average of $5,000 per unit which, capitalized, might have supported a $50 dollar a month increase But landlords had to come up with lots of money rapidly, they were uncertain about what other fantasies that the GR city fathers harborred and facing risk, doubled the rent increases. The knock on effect was that fewer renters could afford the new fare, so they moved back in with parents or doubled up in existing units so the demand for rental units faltered.  Marginal landlords were forced to exit the industry, they sold or abandoned their properties and so lowered real estate prices. Decrepit areas of Grand Rapids became more threadbare, not that you’d notice.

Well, say the reformers who wanted to improve the lives of the poor by improving the housing in which they live, it only costs each renter an extra $100 dollars a month to live in housing that we approve of. True enough, except that for many a $100 dollars is  a $100 dollars and spending it for rent means that they can’t afford peanut butter and jelly sandwiches for their kids, so they go hungry and, at best stare listlessly at the well fed reformers who arranged the original inspections and “improvement” of their quarters; at worst the urchins slit the throats of their oppressors.

If renters are unhappy with the cleanliness, safety or cost of their apartments they can easily move to others that they can afford that satisfy their wants. Governmental intrusion intended to make folks better by forcing them to live in more expensive housing than what they prefer comes at huge costs both socially and economically that dwarf the minor costs to the city of hiring another inspector.

Doesn’t anyone pay any attention to theory of unintended consequences anymore?