Luxury housing and affordability

by Honolulu Mother

Our local news seems to take it as a received truth that building new luxury housing is at best neutral and probably harmful to the cause of creating affordable housing for local residents. This is something that usually causes me to rant to my husband, while clutching the paper, about how that is incorrect because there will always be something at the top of the market and someone with the money to buy the best available, so building new expensive housing (which is what developers are motivated to do) will push each preceding generation of housing slightly downmarket, and the ultimate effect is that the top-of-the-market housing of 20 years ago eventually becomes the middle-of-the-road housing of today, and ultimately more housing is more housing. This theory has in the past been based on My Personal Analysis rather than Actual Research, with examples drawn from aging condo buildings around town.

But now, how sweet to learn that Actual Research is backing me up! The study reported in this article found that building new luxury housing actually does increase the supply of affordable housing in an area.

Is affordable housing a hot issue in your area? Do you think the conclusion drawn from this study applies, or do you think there are other factors to consider in your area?

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198 thoughts on “Luxury housing and affordability

  1. Nice segue from yesterday’s topic.

    I think some/many people will remain unconvinced that allowing the market to decide which type(s) of housing should be built is the best approach no matter what the data show.

    One of the comments to HM’s article said the affordable housing issue only applies to rental housing. Not true, at least around here, and especially in the city here which has a tremendously high poverty rate. Contractors who want to build houses/condos always seem to be forced by the terms of their building permit to include something like 10-15% of the units as “affordable”, for which the city reviews buyers’ qualifications before letting them actually buy and I think there are later restrictions on selling the property. I don’t know how the “affordable” units actually differ from the others in fit/finish/amenities/size etc, but I do know they are not usually just sprinkled throughout the development but are all together in one part, like their own little affordable housing ghetto.

  2. Interesting. Affordable housing is not an issue in Atlanta because the metro is so sprawling. Things get more affordable the further you are willing to commute. There are a wide range of price ranges in the city as well, but schools are a concern so if you don’t have a bigger budget, you tend to move to the suburbs here.

    I see a lot of these arguments in my home town because wages aren’t high but housing prices are (tourist area, only so much land to build on). There is just not a lot of opportunity to build a solid middle class life there unless you are a teacher, in the medical field or in the high end residential construction business. Otherwise the jobs are in the service industry which is highly seasonal/not highly paid. They just built what they advertised as “affordable” cottages in my home town. The cottages are priced in the $400Ks so I suspect those are actually affordable second homes instead of affordable homes for the year round population.

  3. “I think some/many people will remain unconvinced that allowing the market to decide which type(s) of housing should be built is the best approach no matter what the data show.”

    Quick comment before lunch. This part of your statement surprised me, because my reaction is that luxury housing is often the direct (if unintended) result of government intervention. Zoning laws that dictate minimum lot sizes mean that a developer will only find it profitable if he can sell something at the upper end of the spectrum. They’re not going to be putting 1200 sf ramblers on two acres.

  4. Oh, yes, this is a huge issue in my community! Right now the big developers are having to make 20 or 25 percent of their units as affordable, or build that number at another location. I can’t remember what the current required percentage is, because the politicians and community activists work to hold up projects until the developers raise the percentage – some have gone as high as 30 percent.

    Some people feel that if they stop the creation of market rate housing and only allow affordable housing (say, in the Mission district), someone will actually build affordable housing, but that isn’t how things work. A company isn’t going to build apartments or condos that don’t make them (or their shareholders) money.

  5. I was just talking to my sister about the affordable housing in my home town. She clarified that some of the cottages are in the $500Ks but then they’ve subsidized others that will sell in the $200Ks. It will be interesting to see how that will work. Will the people that can afford a $500K house want to be with the subsidized housing people?

  6. We have a lot of housing at different price points. It is not evident but there are apartment complexes next to developments with high end homes and large developments with mid range homes. There are quite a number of smaller developers who buy old homes and flip them and teardowns and redevelopments abound.

  7. We just voted on a moratorium on new housing in the Mission last November, and luckily it did not pass. The city budget guy crunched the numbers and found that it would cause prices to go up, and lead to more housing shortages, which is the opposite of its intent.

    (FYI – the Mission district is an area in San Francisco in the southern part of the city that many tech people want to call home. It is hip and cool, and home to a large segment of the city’s latino population. Many people have been displaced as older homes and apartments are fixed up or rebuilt by speculators or tech people).

  8. I don’t know how the “affordable” units actually differ from the others in fit/finish/amenities/size etc,

    In Boston they need to be exactly the same in terms of fit, finish and amenities.

    At the Residences at Mandarin Oriental, where the market-rate units go for as much as $17,000 a month, a tenant in one of the building’s 10 affordable apartments says that even after years of living there, she’s still astonished when the concierge opens the car door for her.

    “They’ll do anything for you,” she said.

  9. The problem in my town is that when new luxury housing is built, the older housing gets taken over by college students from high-COL areas (NoVa/DC) whose wealthy parents are willing to pay higher rents than our teachers, police officers, university support staff, etc. can afford. The housing organization I volunteer with is careful to call it “workforce housing” because of the negative connotations associated with “affordable housing.” Most of the current zoning does not meet market demands, so we work with developers to include some amount of workforce housing in their plans in exchange for our support of their rezoning application for higher density. We will provide a resolution of support to the planning commission and town council, meet with community groups, etc. to help a project that will benefit our organization’s customers. This volunteer work is how I atone for my years of designing development plans for clients who placed maximizing profit over the needs of the community and environment.

  10. A housing issue that interests me is the screaming fits people are having over AirBnB and VRBO rentals. San Francisco has lots of activists who want to prevent homeowners from using their rental properties as short-term rentals. Only long-term rentals should be allowed because that provides more rental housing stock. This is where I turn into your basic Capitalist running-dog and think that if I own the property, I can rent it out as I see fit.

    And ssk, it still kills me that now people WANT to live in the Mission District.

  11. We have tons of new rental apartments that are now available for leasing and more expensive townhouses that are close in. We still have surburban developments been built further out.

  12. “the screaming fits people are having over AirBnB and VRBO rentals. San Francisco has lots of activists who want to prevent homeowners from using their rental properties as short-term rentals.”

    Good luck enforcing that.

    What pops into my head is “And how many divisions does the Pope have?”

  13. “the Mission district is an area in San Francisco…

    and most importantly home to La Cumbre Taqueria!

  14. I don’t agree with you about the VRBO rentals. I stayed in one in Austin and I felt bad for the real tenants or owners. People lie and bring more than the permitted 3 to 5 people per apartment. This was an upscale, residential apartment complex and people didn’t necessarily behave as they would have if it wasn’t just for s long weekend. I don’t want the house next to me rented out to strangers that are coming and going at all times and hours.

  15. Good luck enforcing that.

    The neighborhood busy bodies will gladly report any violations free of charge. Indeed some of them would even pay for the privilege.

  16. HM, I don’t disagree with your basic thesis. I know some people who have, or will, move into some of those high end condos in Kaka’ako, putting their previous homes into the market, many of which are likely to be bought by move-up families, putting their homes into the market. . .

    I dislike the building of the really high end houses and condos that target buyers from other locales. Any impact on the affordable housing market will be small and take many years, and in the meantime, we don’t really need any more people here. I realize there is some benefit to them coming here and spending their money, but wonder if that’s a worthy tradeoff.

  17. Lauren, I think that’s a separate issue. I agree that short-term tenants can be problematic for the reasons you note. But the activists I’m complaining about only care about controlling the amount of long-term rental stock.

  18. ““the screaming fits people are having over AirBnB and VRBO rentals.”

    IMO, one of the major causes of our shortage of affordable housing, and thus a major cause of homelessness here, is the illegal conversion of many housing units into short-term vacation rentals. AirBnB, VRBO, and their ilk exacerbate that.

  19. “IMO, one of the major causes of our shortage of affordable housing, and thus a major cause of homelessness here, is the illegal conversion of many housing units into short-term vacation rentals.”

    On the other hand, tourism is one of your biggest industries, and not everyone wants to stay in hotels. If you lose a big chunk of tourists, you’re going to put the tourism industry workers out of a job, and that also causes homelessness.

  20. Rocky, IMO enforcing laws against short-term rentals, whether those laws are existing or newly enacted, will affect the stock of housing for owner-occupants as well as the stock of long-term rentals.

  21. “The neighborhood busy bodies will gladly report any violations free of charge.”

    So what? You think the patrol cops are going to be looking into the terms of the lease?

    “I’m staying here as a guest of a friend I met online.”

    If all it takes is busy-bodies, there wouldn’t be the violations in Hawaii.

  22. RMS – we also just voted no on an AirBnB type piece of legislation, and the “no” side used tactics like: “your neighbors will be spying on you” and “you’ll have to tell the city how many nights you stay in your home” and a billboard that showed an elderly couple (someone’s parents) forced out of their (or your) apartment. That last one was a little confusing.

    I agree with you for the most part, but the one area that I have a problem with is renters who rent out their apartment on AirBnB when it is forbidden in their lease. Oftentimes they are protected by rent control, so they actually can make money illegally subletting their place. If I was the landlord that would drive me crazy!

  23. We have continued to have housing issues as the land grant university has doubled in size without adding dormitories. Replacing older, smaller homes with 5 bedroom townhouses has been moderately successful. Current debates involve how many parking spaces are necessary per unit. We have a bus system, but given that it runs on the half hour or hour, with a transfer necessary to, say, get to the doctor’s office, it works best for people with copious spare time. The town has many college students and many retirees, especially people from California.

    Activists are currently seeking to have the last remaining large plot of land developable for housing under current state zoning laws designated as “green space,” because green space is a Good Thing. Unfortunately, there are equally passionate activists in favor of Affordable Housing. I don’t know who will win.

    We live 10 miles away, with the other middle income families, and where the city is proposing to build a new elementary school to accommodate growth while the university town closes elementary schools.

    It’s all a fairly predictable outcome of the zoning laws passed 40 years ago, but economists seldom do studies that study the effects of zoning laws over several decades.

  24. But I guess that type of subletting has been going on for a long time in many cities. It is now just a lot more short term, and easy to do!

  25. The inner city area of Houston is quite expensive, but you can find plenty of affordable housing and good schools in the suburbs. The problem is that then you’re stuck with a 45-60 minute commute each way.

  26. From article on Boston’s housing plan. “The majority of the City’s middle income housing is expected to be built by the private development community. In order to stimulate the market, Mayor Walsh’s plan outlines a first-ever set of incentives to drive down development costs, including zoning relief, permitting reform, tax incentives, modifications to the Inclusionary Development Policy, and better use of City-owned land.”

    Hmmm…

  27. You think the patrol cops are going to be looking into the terms of the lease?

    I assume it would be the Illegal Sublet Enforcement Office.

  28. We don’t have much land available around Boston for building, and low end apartment stock is almost all occupied by students. A few luxury towers, or McMansions in the exurbs. In a nearby desirable suburb, one of HM’s dated smaller older homes is not purchased by a middle class family as a stretch, but by a UMC family as a teardown. There aren’t too many well located pockets of distressed housing left – a lot of it was built not 30 years ago, but 100 or more, and despite years of neglect the bones are great and snatched up for urban restoration. (See Rhett’s comment.) As I have mentioned before, there is a strong tradition of family real estate holdings, mostly 3-4 unit properties built as such, among the ethnic middle class, which provides housing for a lot of the self perpetuating true middle class workforce. And there isn’t much permanent population inflow into the area for non tech or less educated workers, as a result of housing pressure and weather.

  29. Rhett, I think it’s an approving Hmmm. Mémé’s comment confirmed some suspicions I wasn’t sure about.

    Boston and San Francisco have housing shortages because well-educated workers are relocating to take well-paid jobs, driving up prices. This suggests that Boston and San Francisco will continue to have adequate tax revenues to fund municipal water systems, public schools, housing inspections, etc.

    But the people moving to Boston are not a random sample of people from rural Iowa- they are the best educated, most motivated people from rural Iowa. What happens to the states/communities left behind? And how much, if any, of those effects could/should be mitigated by government policy?

    Relocation has individual costs (not being near extended family) that are inadequately considered in traditional economics. It’s kind of like my argument that increasing GDP by turning unpaid work into paid work doesn’t necessarily make people’s lives better. I think it’s just a limitation of traditional economics.

  30. What happens to the states/communities left behind? And how much, if any, of those effects could/should be mitigated by government policy?

    I think we need some plan to wind down these communities if no one wants (or it’s not economically viable) to live there anymore.

  31. I dislike the building of the really high end houses and condos that target buyers from other locales. Any impact on the affordable housing market will be small and take many years, and in the meantime, we don’t really need any more people here.

    You’re assuming they wouldn’t be buying here if Hokua et al weren’t built. I don’t think that’s correct. I think nonresidents buy here because they’ve decided they want a place here, and the existence of new buildings advertising to nonresidents just makes it more likely that they’ll buy there instead of the Ilikai or those aging places along the Gold Coast or somewhere.

  32. Meme – I have a new client that is managing one of those 3-families. The client is the 4th generation of the family to live in the house. Problem is, the title was never transferred so now I have to figure out just how many heirs own it and how to get it into my client’s name.

  33. Decades ago, the city (in partnership with the university), forbade more than 3 unrelated people from living in housing units near campus. No idea how that is enforced, but one of the consequences is that “student houses” just moved a few blocks away, which in turn pushed the low-income minority residents elsewhere. The university gradually bought up many of the properties and built some very nice large homes for sale to faculty and staff. Some of them are within a stone’s throw of the original decrepit houses, but there is actually a waiting list for the new homes. Developers have built an astonishing number of high-end (for this area) townhomes and condos, some of which are marketed to affluent students and others at alums who occupy them mostly on football weekends.
    But you can buy a perfectly acceptable little house for under $100K here, so there really isn’t an affordable housing issue. Those who can’t afford that (or the $500/month 2-bedroom apartments), can live in one of the mobile home parks….

  34. “I think we need some plan to wind down these communities if no one wants (or it’s not economically viable) to live there anymore.”

    Like Flint.

  35. “Like Flint.”

    Is it just me, or did this remind anyone else of Derek Flint (In Like Flint, Our Man Flint)?

  36. “You’re assuming they wouldn’t be buying here if Hokua et al weren’t built. ”

    I’m assuming some of them wouldn’t be buying here if Hokua et al weren’t built.

  37. “Activists are currently seeking to have the last remaining large plot of land developable for housing under current state zoning laws designated as “green space,” because green space is a Good Thing. Unfortunately, there are equally passionate activists in favor of Affordable Housing. I don’t know who will win.”

    I wonder how many of those activists belong to both camps.

  38. Finn, the activists in both camps are the people I make fun of. There are many. And they aren’t from The Great State of Iowa.

  39. Here the city is extending the light rail line so that more dense and walkable housing is created along the rail line. The area that has been developed was formerly vacant industrial lots for the most part, so that didn’t create issues. But now, the rail extension to the north is gobbling up older but smaller homes in more affordable neighborhoods so there is much more opposition.

  40. “On the other hand, tourism is one of your biggest industries, and not everyone wants to stay in hotels. If you lose a big chunk of tourists, you’re going to put the tourism industry workers out of a job, and that also causes homelessness.”

    Perhaps. But the tourists who stay in illegally converted residences are not necessarily the ones who support the industry the most. E.g., those that stay in full-service hotels support jobs for maids, valets, etc., that the VRBO tourists don’t support.

    My guess is that we’d be better off with fewer tourists overall, but more tourists in hotels, especially full-service hotels.

  41. Oh Milo – that hits a bit too close to home for me. I have a lot of thoughts on anti-gentrification “activists” that mirror that satire.

  42. “I think some/many people will remain unconvinced that allowing the market to decide which type(s) of housing should be built is the best approach no matter what the data show.”

    But I don’t think the data show that, do they? They show that the free market does a better job than forbidding new market-rate development. But I think the first graph shows that pure-free-market (“communities without inclusionary housing”) does result in more displacement than using the free market with inclusionary housing policies — and that the discrepancy is in fact the highest in areas with a lot of market-rate housing development.

    Not that they define what they mean by “inclusionary housing”(which, I assume, includes the kind of mandatory affordable housing as part of new market-rate developments that people are discussing). And I wish they had done a direct comparison of “communities without” vs. “communities with” — as is, the graph just compares communities without this amorphous inclusionary housing to all communities, which is going to understate the difference.

  43. LfB, have you read any books by Thomas Sowell? If so, do you find his arguments persuasive? He has written about affordable housing policies.

  44. OT, I think we may have found a car – a leftover ’15 still listed at MSRP, three hours away.

    What percentage off the MSRP should I offer, Fred? A used ’15 is going for about 75% of MSRP, from what I can tell.

  45. Would it be a bad thing if popular cities were filled with high income residents who had to either have their nannies live with them or pay a higher rate for their nannies to commute, and who had to make their own coffee, due to a lack of coffee shops? The US doesn’t require residential permits to live in a city like China does- we have chosen to allow the market to determine who lives where.

  46. Sowell is a Friedman disciple who I first heard of when Friedman used to have him on his TV show (Free to Choose). While I think he takes free markets to an extreme, he is well worth reading or listening to.

  47. Which reminds me, I wanted to recommend the autobiography Two Lucky People (Milton and Rose Friedman) to Milo’s audiobook list.

  48. “I think some/many people will remain unconvinced that allowing the market to decide which type(s) of housing should be built is the best approach no matter what the data show.”

    The problem with the market as it exists is that not all costs are allocated to those who incur them. One classic example is old smokestack industries dumping pollution into the air, but the cost of that pollution is shared by many.

  49. Westchester County has been embroiled in a federal lawsuit mandating the building of 100s of new affordable housing units because the court found it failed to prevent racial discrimination in past developments. This racial discrimination is based on the oft-used principle of “disparate impact” — an assumption of discrimination not based on any actual proven discrimination but on the existence of areas that lack diversity. It’s a complicated situation, but local municipalities are unhappy about being forced to take on the costs to build low-income housing as the result of this lawsuit. From what I can tell, most residents who oppose this do so on the basis of classism not racism. Obviously homeowner have concerns about preserving the values of their $600k+ median price homes.

  50. A used ’15 is going for about 75% of MSRP

    Did you go with the Buick? I’d say 75% adjusted to account for the lack of mileage would be a good start. Say 82.5% of MSRP…? And see what they say.

  51. Sky, a ’15 model has already lost some value to depreciation. One datum that might help in determining a price is blue book valuation, which I will guess is less than MSRP.

  52. @WCE – there is move here to bring more shopping into the city center but so far it has not succeded. Without that even the aspiring city dwellers are forced to live a bit further out where there are grocery and other stores. Getting stores like Target etc to move closer in has been struggle. The city center still empties out at night despite all efforts to make it vibrant all 24 hours.

  53. My grandfather observed that he didn’t know any Jews as a hog farmer in Iowa. He first met some Jewish friends as a senior citizen in Florida.

    Analysis of the percentage of Jewish hog farmers in rural Iowa suggests widespread anti-semitism. An alternative explanation would be that no Jewish mothers pushed their sons into hog farming.

  54. Louise, our “downtown” has limited shopping. So far, my suggestions for a 24 hr Walmart have been ignored.

  55. “One datum that might help in determining a price is blue book valuation, which I will guess is less than MSRP.”

    I agree, but one of the entering assumptions of blue book valuation is prior private-party ownership. It’s a little bit different when it’s still on the dealer’s lot.

  56. “Louise, our “downtown” has limited shopping. So far, my suggestions for a 24 hr Walmart have been ignored.”

    Walmart opened a store (I don’t know if it’s 24hr) in the heart of our downtown, in a location vacated by a long-time retailer, much, much smaller than a typical Walmart. I’ve heard it is very successful, and is extremely crowded for much of the day as downtown workers make frequent small purchases.

    I’m guessing that Walmart location, along with a long-time drugstore downtown, reduce traffic levels by facilitating a lot of errands being done on foot by downtown employees who would otherwise run those errands by car.

  57. WCE, I have memories of going to Portland to attend a friend’s wedding, and driving around and around downtown trying to find an open drugstore on a Saturday. I was staying in a hotel downtown, but most of downtown seemed to have closed and gone home.

  58. Enclave. MSRP is $48k with options, comparable used cars per KBB and Edmunds are $35k-$37k. ’16s are selling for $46k, per truecar.

    GM has started its own factory pre owned sales site of year old rentals and fleets cars, but the pricing is poor even when the added value of the warranty is considered – most don’t have nav, have 20k-30k miles and are priced at $37k-$38k, plus whatever fees the ticked off local dealer tags on. GM can’t sell direct, so the final sale has to be arranged by a participating dealer, and the program cuts their margins.

    Supposedly the price is negotiable, but since it only started two weeks ago and most dealers haven’t tried it yet, it’s not clear how negotiable. The warranty coverage seems better, but I’m not sure it’s that much of an improvement over the standard CPO warranty.

    It’s almost as fun as real estate!

  59. In a tangent, I don’t known this guy, but we’ve been to some parties together and our Facebook worlds overlap. He’s Milton’s grandson, and he has spent a lot of his adult life not working for a living. He really wants to build his own country where the government can’t tell you what to do-maybe in the ocean. https://en.m.wikipedia.org/wiki/Patri_Friedman

  60. WCE, a local writer, who is Jewish, has written about his experience moving here from the mainland, and suddenly not experiencing any anti-semitism, largely due to the people around him not having had any experience with Jewish people or knowledge of anti-semitism.

    He did encounter some racial bullying, due to being white, similar to the anti-semitism he’d encountered on the mainland at the hands of non-Jewish white kids who, he noted, would’ve been bullied along with him had they also been here with him.

  61. Finn, I don’t know that it really affects traffic levels, but it’s certainly been convenient to have it there. It’s the first time since Woolworth’s closed that you can get sewing supplies downtown, for instance. And the grocery part of it looks to be popular with those who do actually live in the downtown area (Executive Center, the artists’ lofts toward Chinatown, those highrises around Nuuanu street starting just mauka of Beretania), in addition to the people bringing snacks to the office or running an errand midday.

  62. Sky, keep in mind that, depending on tax laws where you live, buying a car for $38k from a private party could be less expensive than buying a car for $38k from a dealer, depending on whether you have to pay sales tax.

  63. Maybe it’s because I’ve always lived in expensive real estate markets, but I’ve never really accepted the idea that there is a right to live close to your work, or to the amenities of the city, regardless of your ability to pay.

    But then I’ve spent the majority of my working life with a 3-4 hour round trip daily commute :)

    One of my friends is looking in SV, and wants Cupertino. I suggested she get in her car after work and drive an hour or so east, or south, or north, and see where she ended up and if it looked pleasant. Why lock yourself into an artificial scarcity mindset?

    Fremont looks nice enough. (I can see you rolling your eyes, RMS :) )

  64. Finn, the tax man lurks behind every rock in this blasted state and rims sales tax payment upon registration, but only charges sales tax on the difference between the sales price and trade in value. Since we have a trade I’m better off at the dealer.

  65. There are some really, really nice homes in Fremont, in the hills east of 680. I believe there is also a very highly rated school district that encompasses part of Fremont.

    Is your friend Asian? I’ve heard that Cupertino is largely Asian, and the high schools there are competitive. I believe there is a causality to that correlation.

  66. Sky,
    First things first, qualify yourself as a bona fide buyer. Call the dealer’s internet department and ask if they still have the car on the lot; if yes, tell them you are planning to buy a 2015 Enclave by Monday 2/29 for the lowest out the door price (there looks to be up to $3000 in incentives thru 2/29: $1500 customer cash, $500 bonus cash, $1000 conquest) you receive in writing/email by Friday at 5pm. Tell them you’ve contacted a couple of other dealers before you noticed these guys have a vehicle you are interested in and you wanted to give them the opportunity to earn your business. Emphasize you are serious about this, and you are only considering price quotes that show your total cost taking into consideration the price of the car, less all rebates/incentives, plus tax, dmv, and allowed/published dealer doc fees.

    Under no circumstance:
    >do you name a price
    >go to any dealer unless you have gotten an out-the-door price quote in writing from them.

    I’m very interested in knowing how this turns out. On a $48k list car that’s been on the lot for a while, I’m thinking you should be able to get it for $4-5k below that (now you’re at $43-44k) less the incentives, so now you’re down to $40-41k plus tax, dmv, etc.

  67. “I’ve never really accepted the idea that there is a right to live close to your work, or to the amenities of the city, regardless of your ability to pay.”

    This.
    I have also never been convinced by the argument that those who happened to have been born and raised in a now-desirable area have the right to remain there in perpetuity, followed by their descendants, regardless of their ability to afford it.

  68. “Why lock yourself into an artificial scarcity mindset?”

    I like the way you think.

    LfB – I wish you’d been in this most recent meeting. Paraphrasing, “Yes, it [that statement] is in the regulation, but there are times when it applies, and times when it doesn’t, and you can’t just apply it universally.”

  69. Sky, here in the Pacific Northwest, it’s not uncommon to shop nationally for a car then fly to pick it up. Are you open to that option? It’s interesting to see how popular the Enclave is. When I bought my Buick Century (a 2003 in January 2004), the MSRP was ~$22k, I negotiated down to ~$13k and then used ~$2k from 5% back toward a new vehicle from my GM credit card to lower the price further.

  70. and do not mention your trade; make up whatever story you like for being unsure about what you’re going to do with your existing car. when you go in they’ll ask if you’ve made up your mind about your current car and do you want them to appraise it while you’re there? Go ahead and let them as long as…
    you get a quote from Carmax before you go to get the new car on how much they’ll pay for your car. It’s good for a week and then you have a leg to stand on when then dealer lowballs you. Many will easily match CarMax. Your breakeven by going the dealer trade in route is ~92.5% of what CarMax offers, but you don’t need to let them know you know that.

  71. “I’ve never really accepted the idea that there is a right to live close to your work, or to the amenities of the city, regardless of your ability to pay.”

    How do you feel about the right of a homeowner to keep his or her neighborhood the same despite intense pressure for it to change. Say some wiz kid creates a booming startup at Scarlett’s university and the market demands that her neighborhood be converted into office buildings and condo complexes. Should her neighbors be able to sell to developers or should Scarlett be able to prevent any development.

  72. Yeah, I’m comfortable $41 is doable for the price of the vehicle:
    Base $45,400
    Options $2300
    Destination $925
    Total $48,700
    Less at least 10% of base + options $(4770)
    Less Incentives which look to be $(2000)
    Net $41,900

    If they’re hungry, and want to make whatever February incentive is out there for them, they could make it worth your while to get it by Monday.

  73. Sky, Fremont’s a lot better than it used to be.

    I have also never been convinced by the argument that those who happened to have been born and raised in a now-desirable area have the right to remain there in perpetuity, followed by their descendants, regardless of their ability to afford it.

    Ha! Do not participate in the Palo Alto nostalgia group on Facebook.

  74. Patri Friedman used to share a lot of personal information on his LiveJournal. Like, really a lot. Bugged the crap out of his father. Ada, you go to the same parties? I’m…impressed, I guess. I know Mémé knows David F. from SCA. Small world.

  75. The reason that the term “workforce” has come into vogue is that there are plenty of low or moderate paying location specific jobs that are necessary to the functioning of high cost areas. Pure market forces eventually will want government to step in. The options are to use private busses to bring people in for the day from far away, create local de facto dormitories such as exist in Nantucket or Martha’s Vineyard during high season, have government preserve/set aside/construct housing units that are affordable, or call on government not to regulate but to spend your tax dollars to build inefficient mass transit or ten lane highways.

  76. “or call on government not to regulate but to spend your tax dollars to build inefficient mass transit or ten lane highways.”

    Eh, you can do toll lanes. :)

    Then the high-income people can decide if they want to pay their housekeepers and nannies enough to effectively reimburse their EZPass charges.

  77. “Pure market forces eventually will want government to step in.” I’m thinking about the $80k lineman job in Sault St Marie (?) Michigan that we discussed because no one would take it, and Ada’s role as a physician commuting to an underserved area.

    I think you’re probably right that at some point, people will want government to step in, but I’m not sure when. Many local grass seed farms prefer to be without fire protection or have their own water truck vs. paying the taxes to be part of a fire protection district, for example.

  78. The options are to use private busses to bring people in for the day from far away

    Or, a train.

  79. Patri Friedman was named for a former housemate of mine, best man at my youthful wedding and all through the 70s a dear friend. An antiquarian and a gentleman. I was a member of the household of Sir Patri du Chat Gris. Somewhere in my attic I have a photo of 2 month old DS1 in a baby tunic embroidered with the crest of Chat Gris.

  80. To Rhett’s question of a community changing, once one home owner sells the trickle becomes a flood unless you can totally block development in a large area. You can rail against it, but no individual homeowner wants to be in the middle of dentists offices (true description of how older homes here are converted to commercial use)
    On traffic -We have become quite spoiled because those who have a longish commute (defined as 45 minutes one one way) have convinced the powers that be, that they need to work from home full time or go to a satellite office closer to their home or come into the main office one day a week. They are horror stricken when they hear about the commutes of their colleagues in the large metros.

  81. but no individual homeowner wants to be in the middle of dentists offices

    Why not? When you need a cleaning – just walk over.

  82. I think building luxury housing can expand affordable housing in markets where there is enough space for everyone. In an area like mine, there is no question that luxury housing is driving out affordable housing. We live in a densely populated, highly desirable suburban area where there just isn’t enough room for everyone. There has been a spate of luxury apartment developments popping up around town, all aimed clearly at well heeled 20 somethings, or maybe wealthy retirees. We lost an excellent car mechanic’s shop, as well as the beautiful old trees that lined the playground where my kids went to afterschool (and where lots of kids go to preschool). The playground is now overhung by a tall, ugly “luxury” condo unit. I hope the kids scream and yell and whup it up and generally disturb the residents of the building. I hate the thing. It has ruined our little downtowny area by the train station.

  83. “Should her neighbors be able to sell to developers or should Scarlett be able to prevent any development.”

    Not too long ago, my neighborhood was part of a farm. It would be hypocritical to argue against change.

  84. When I lived in Manhattan, I was in a small loft building where we all knew each other, with a locked front door. If anyone had started doing short term airBnB rentals, I would have moved out. It is scary to have a parade of strangers traipsing through your supposedly secure building.

  85. The playground is now overhung by a tall, ugly “luxury” condo unit. I hope the kids scream and yell and whup it up and generally disturb the residents of the building. I hate the thing. It has ruined our little downtowny area by the train station.

    And now we find the root of the problem.

  86. I think building luxury housing can expand affordable housing in markets where there is enough space for everyone.

    There is enough space everywhere – just build up.

  87. Rhett, building costs per square foot are higher for buildings over a certain number (6? Help us out, SWVA Engineer) of stories. To have a decent living situation, soundproofing and more expensive construction techniques are also necessary. The technology exists- I read about it when I review papers on construction in Seoul- but existing construction techniques do not produce “affordable housing” by US standards.

  88. Rhett, if the ugly buildin were aimed at families who needed affordable housing, I would at least have been sympathetic, if sad that the building is so ugly and we lost our car mechanic. But I feel no sympathy for the invariably entitled young financial industry dudes who will probably move in there.

  89. “We live in a densely populated, highly desirable suburban area where there just isn’t enough room for everyone.”

    Why is it better to allocate that scarce space to those who happened to get there first, instead of to those who are willing to pay the current market price?

    DH was part of a university committee responsible for allocating desirable parking spaces. They decided to experiment with paid reserved spaces, instead of the “first come, first served” method used in the past, but some argued that paid reserved spaces were unfair to lower-income employees. DH’s response was that it was no more “fair” to award those spaces to people willing to spend their time than to people willing to spend their money.

  90. Rhett, building costs per square foot are higher for buildings over a certain number (6? Help us out, SWVA Engineer) of stories

    While that is true, living densely you can often get by with one or zero cars which can save upwards of $ 500-1000/month. Not to mention the massive HVAC savings (if you’re LfB $900/month) vs. stick built single family construction.

  91. Rhett, if the ugly buildin were aimed at families who needed affordable housing, I would at least have been sympathetic,

    HM’s post would indicate the presence of the condo building takes pressure off the single family housing stock thus making it more affordable for families.

  92. Rhett have you ever been to Shanghai? There they accomodate the demand by building up, everywhere, massively. Shanghai makes NYC look like a village. It is a forest of uber high rises. And yet, everyone wants a car, the roads are utter gridlock, and the pollution problem is immense. Worst of all, they still have a massive housing affordability problem there. I don’t think that solution really works.

  93. Rhett, no it doesn’t work that way. The new building is built so it can’t accomodate families, so the same pressure on single family housing (and the apartments in town that accomodate families ) is still there. Most of the new luxury housing being built is aimed only at singles

  94. Mooshi,

    I don’t think that solution really works.

    What’s your solution that will work better?

  95. The new building is built so it can’t accomodate families

    If the building didn’t exist the finance dudes would just buy a single family house.

  96. Zoning laws that dictate minimum lot sizes 

    I’ve never lived anywhere that this exists. My guess it is only in wealthier areas.

  97. Unlike CoC, I would prefer that my town comply with the affordable housing mandates rather than fight in court while filling in all available space with luxury developments.

  98. Denver Dad, many of the towns in CT have minimum lot sizes, often at 1/2 acre or 1 acre. The result is a hugh amount of sprawl, and communities that are completely car oriented. This is a big reason why I do not live in CT

  99. “I have also never been convinced by the argument that those who happened to have been born and raised in a now-desirable area have the right to remain there in perpetuity, followed by their descendants, regardless of their ability to afford it.”

    This is Cape Cod now. It’s sort of sad in a way because it’s not that people are moving there for high paying jobs and driving long time families out, it’s the 2nd home market that has pushed up prices beyond the reach of the year round residents. A lot of high schools have closed on the outer cape because there are no kids. Sort of weird to have this dynamic where there is a declining amount of actual families that live there but the summer people still need the infrastructure that the towns offer.

    http://www.nytimes.com/2015/12/21/us/welcome-to-provincetown-winter-population-dwindling.html?_r=0

  100. One of my friends is looking in SV, and wants Cupertino. I suggested she get in her car after work and drive an hour or so east, or south, or north, and see where she ended up and if it looked pleasant. Why lock yourself into an artificial scarcity mindset?

    Because you don’t want to spend 2 hours a day commuting.

  101. “If the building didn’t exist the finance dudes would just buy a single family house.”

    That wouldn’t be so bad.

    I think it’s more likely that the finance dudes would buy single family houses, which would have more of an impact.

  102. Sky, if you get in your car in rush hour in Cupertino, an hour later you will still be in Cupertino.

  103. Sky, if you get in your car in rush hour in Cupertino, an hour later you will still be in Cupertino.

    If it was the first rainy day of the year you’d still be in the parking lot.

  104. “Zoning laws that dictate minimum lot sizes ”

    I’m pretty sure that is the reason that the first house I bought was in a neighborhood in which nearly all of the non-corner lots were exactly 5000 ft^2.

  105. What are they protecting their cars from???

    The sun. The technology is much better now but in times passed cracked dashboards were a big problem in CA.

  106. “Pure market forces eventually will want government to step in. The options are …:

    Another option is to pay those people enough that they can afford to live near where they work.

    In the case of teachers, another option is to bus the kids to schools located in lower-cost areas.

  107. “What are they protecting their cars from???

    The sun.”

    Have you ever gotten into a car with vinyl seats that had been sitting all day in the hot sun, while wearing shorts (or a short skirt)?

    It may also be a safety thing. You don’t want drivers not touching the steering wheels while driving because they’re so hot to the touch.

  108. “The playground is now overhung by a tall, ugly “luxury” condo unit. I hope the kids scream and yell and whup it up and generally disturb the residents of the building. ”

    Every so often I have reason to go to my kids’ school during the middle of the day, and there’s about two hours or so when there are always at least a couple of grades of kids out in the playgrounds. So there’s always this unmistakable buzz of kids playing then.

    I love that sound of kids having fun.

  109. Much of the state of Oregon is affected by 2/5 acre minimum lot size requirements, among many others. http://www.oregonlaws.org/ors/215.780

    As far as I can tell, around $50-75/hr is the rate where people are willing to commute a long distance and work ~3 twelve hour shifts back-to-back before returning to their families. During the nursing shortage, nurses from here worked weekend nights in California two or three weekends/month. Local tradesmen left for the man-camps of North Dakota during the 2009 recession. Some people here have elderly relatives/friends in now-high-cost areas of California and those relatives/friends will let them stay in a spare bedroom when they’re not at work. In high cost areas, au pairs become the default childcare arrangement. Retail options likely decrease.

    Given family sizes among wealthy families and private/homeschooling trends, I don’t know if teacher shortages would exist in wealthy communities in the absence of housing subsidies or if teacher supplies would be sufficient, given that relatively few teachers in wealthy areas are breadwinners. (Plenty of teachers locally teach because it’s their calling.)

    RMS, wasn’t your sister a teacher in the Bay Area? What do you think?

  110. Regarding mandated construction of ‘affordable’ housing:

    Just as DW and her HS friends were graduating from college, there was a building boom going on here, including a lot of these ‘affordable’ units. A lot of her friends bought such units, typically condos; they easily qualified because, just out of college, their net worths were low, in some cases negative; their starting salaries were low, and their earnings history was also low.

    About 5 to 10 years laters, most of those friends were getting married and moving up to single family homes, selling or renting their affordable units.

    Had those affordable units not been available, most of those friends would’ve lived at home instead until they bought and moved into those single family homes.

    I’m not convinced that mandating those units did much to relieve the ‘affordable housing’ crunch.

  111. WCE, yes, my sister taught in the Palo Alto Unified School District. She made just shy of $100K when she retired, but there were tons of bennies, too. Her situation was different because part of the time she lived in a house owned by my parents and paid negligible rent, and then for the next 20 years lived with (and still lives with) her boyfriend, rent-free. I think other teachers have issues finding affordable housing in the area but there’s a BIG demand among teachers to work in PAUSD because behavior problems are so minimal.

  112. Your story confirms my suspicions that teachers of adequate quality (mothers whose children are in school, new college grads who can live with their parents) can probably be procured in high cost areas without providing teacher salaries that allow the recipients to afford local housing.

  113. Ada, you go to the same parties? I’m…impressed, I guess.

    Went to some parties. Long ago in a universe far away. I think the parties today involve parkour and polyamory, neither of which I am fit enough to participate in.

  114. We’ve toyed with the idea of putting a mother in law unit in the yard of the new house. We could put in something around 750 sq feet, fully self contained that would be legal on our 5000ish sqft property. I think we could rent it for $1500/month, or $250 per night on AirBnB. All of this would be fully legal (including the short term rentals – not restricted in our city).

    So, these guys don’t actually seem legit (because there website hasn’t really been updated in about a year, and I can’t find examples of what they have done), but I am in love with little container homes: http://www.montainer.com

    The fact that I can do this is good for the housing supply in my city (of which there is quite a shortage). Whichever I choose, it eases pressure (by one tiny bit) on the availability of rentals, short term or otherwise. If 1/20 houses did this, the housing crunch would be solved (where I live).

  115. I think the parties today involve parkour and polyamory, neither of which I am fit enough to participate in.

    Brilliant alliteration :-)

  116. “but no individual homeowner wants to be in the middle of dentists offices ”

    My dentist’s office is less than a block from home. Literally across the street (though the street has 3 lanes going each way). : )

  117. teachers of adequate quality

    I may have my differences with my sister, but she was an outstanding teacher. Significantly beyond “adequate”.

  118. Back to the finance dudes… No, they wouldn’t buy OR rent single family homes. The idea of the luxury housing is to convince them to move out of Brooklyn and come here. The towns in Westchester are trying to CREATE the demand, by building housing suited to the wealthy young single lifestyle. So these buildings are ADDING to the housing pressure, not helping it.

  119. @Mooshi – what sort of housing do the finance dudes inhabit in Brookyln ? Can the wealthy, single lifestyle be duplicated in the Westchester surburbs ? A wealthy single lifestyle means short commute, nice restaurants, gym, entertainment/nightlife. Stuck in buildings in the surburbs doesn’t seem appealing.

  120. They live in trnedy apartment buildings in Brooklyn. And we do offer a short commute, and I think they have gyms in these luxury buildings. No, we don’t have the nightlife, but I think the belief in Westchester is that we will get the nightlife if they come. Not sure how well that has worked in New Rochelle, where some of the first of these luxury buildings were created. But I think the idea is that Westchester has short train commutes, and is cheaper than Brooklyn. I personally think, though, that we need to first serve the people already in the area who desperately need reasonable housing and we aren’t doing that by simultaneously fighting the affordable housing mandates in court and building luxury housing for people who don’t even live here.

  121. Mooshi – I just saw an ad for Brookynites to take a bus tour of the suburbs – Westchester, NJ, etc. I was both tempted and bemused.

    Wealthy finance dudes still prefer Manhattan. Those with dogs and/or a girlfriend/ wife with kids expected move to Brooklyn, for that extra bedroom. I don’t think you get quite the same lifestyle as either in Westchester.

  122. Real finance douches will live with their 5 kids in Manhattan. These are future beta douches. These developments are there to keep them from needing a single family for a few years.

  123. hey, hey…some of those dudes that you escalated to another word are my colleagues and friends.

    housing is a big problem in this county, but A LOT of time and money was wasted on fighting the federal government when they mandated that individual towns and villages in the county were not doing enough. There is affordable housing that is finally close to completion in my town, but it went to the local workforce through a lottery.

    most of them are local police, fire, etc.

  124. in your area there are no setback requirements?

    If there are, they are very minimal. Even in the outlying areas that want to preserve open space, they build 3,000 sqft houses right next to each other. Let’s see if I can get a photo link to work:

  125. It worked. That’s in Castle Rock, about 25 miles south of Denver. They just cram the houses together.

  126. There are huge teacher shortages happening here. The look at my kids’ school is new teachers who don’t have kids and older teachers whose kids are out of the house & who bought homes when their spouses were working and prices were a bit lower. We’ve seen several teachers leave once they have kids because they don’t want to commute 1.5 hours each way to come here, or they can’t swing appropriate childcare on their teaching salary.

  127. My area IS the affordable/workforce housing for the big cities on the East Coast. Similar, situation to the states near California. Fascinating, this topic. I would think this would be covered in Human Geography – the Brooklynites, the Westchesterites and not to forget about the finance dudes.

  128. It seems like Westchester has a smart strategy attracting people who pay taxes but won’t be putting kids in public schools just yet, as opposed to only getting the people from NYC three months before their eldest starts kindergarten. And maybe they’re also enticing a few more empty nesters to stick around.

    Mooshi and ATM – I’ve never seen these condos, but you may be underestimating their appeal to beta douches like a younger version of me. Those of us who grew up outside the NYC area will come with much higher expectations for real estate than what Brooklyn is probably offering at a given price point, so if 25-year-old me and my old roommate from Indianapolis and South Bend are looking at options, we’d pick the newer , more spacious, brighter, more luxurious Westchester condo.

  129. I would enjoy going on that Westchester bus ride advertised for NYC residents seeking to move to the suburbs.  It would be like going to an open house in my neighborhood.

    Westchester Heats Up as Rental Destination
    Developers see potential in Westchester as renters look for cheaper options outside New York City

    The train ride between New Rochelle and Grand Central Terminal could take the same amount of time as a commute from Brooklyn or the Upper West Side Manhattan to midtown Manhattan, said Anup Misra, chief executive of East & Hudson.

    “It’s desirable to be in Manhattan, but once they get out-priced…the option is to go to the burbs where you get almost the same lifestyle,” Mr. Misra said.

    Here’s a link to the apartments pictured in that article. http://www.thecastleapts.com/?medium=tsa&ctd_ac=1081055&ctx_name=PayPerClick&ctx_Ad%20Source=PayPerClick&utm_source=Google&utm_medium=CPC&utm_term=PZthe_PZcastle_PZport_PZchester+broad&utm_campaign=The+Castle:+Property+Search+Port+Chester+NY

  130. It seems like Westchester has a smart strategy attracting people who pay taxes but won’t be putting kids in public schools just yet

    This was exactly the issue for the new apartments in our school district, which is already overcrowded.  The original proposal was for larger units, but ultimately residents were able to convince the town to limit them to mainly studio and a few 1-bedroom.

    While I haven’t expressed an opinion on the mandated low-income housing, I oppose more high-density housing in our village, already one of the most densely populated municipalities in Westchester.  Granting exceptions for parking space and similar requirements doesn’t make sense.  It’s a quality of life issue.  While I lean libertarian in my outlook, that does not mean I oppose reasonable zoning restrictions.

  131. More affordable housing is an attraction fueling the growth of “Silicon Prairie,” America’s new entrepreneurial frontier

    … an explosion of startup software companies in the heartland …

    Paul Jarrett compared “Silicon Prairie” to Silicon Valley….

    But another competitive edge is that everything’s cheaper in the prairie. The median home in San Francisco sells for $1.1 million — in Lincoln, it’s about $158,000.

    “You can grow your team a lot faster with a lot less capital. Same with office space,” Jarrett said.

    Today, Lincoln is becoming a mini Palo Alto, home to more than 100 software startups. And once-abandoned buildings now house coworking spaces and incubators.

    “You just hear from people who come visit and check out the town, they go ‘Lincoln is cool! This is really cool!’ And we’re like, ‘It is, right!?'” Jarrett said.

  132. Do you mean The Castle Apartments? Check out the floorplans. They start at about $2,000 for a studio with a “sleeping nook”.

  133. @Milo: For your next such meeting, I offer you Appalachian Power v. EPA, 208 F.3d 1015 (D.C. Cir. 2005). In short, EPA cannot issue “guidance” that contradicts its regulations. My favorite paragraph:

    “The phenomenon we see in this case is familiar. Congress passes a broadly worded statute. The agency follows with regulations containing broad language, open-ended phrases, ambiguous standards and the like. Then as years pass, the agency issues circulars or guidance or memoranda, explaining, interpreting, defining and often expanding the commands in the regulations. One guidance document may yield another and then another and so on. Several words in a regulation may spawn hundreds of pages of text as the agency offers more and more detail regarding what its regulations demand of regulated entities. Law is made, without notice and comment, without public participation, and without publication in the Federal Register or the Code of Federal Regulations. With the advent of the Internet, the agency does not need these official publications to ensure widespread circulation; it can inform those affected simply by posting its new guidance or memoranda or policy statement on its web site. An agency operating in this way gains a large advantage. “It can issue or amend its real rules, i.e., its interpretative rules and policy statements, quickly and inexpensively without following any statutorily prescribed procedures.” Richard J. Pierce, Jr., Seven Ways to Deossify Agency Rulemaking, 47 Admin. L. Rev. 59, 85 (1995).9 The agency may also think there is another advantage–immunizing its lawmaking from judicial review.”

  134. CofC,

    I wonder to what degree high prices provide a HR function. If you hire a 32 year old developer in SV who lives in Cupertino with his family, he must be very good as anyone who wasn’t very good couldn’t afford to stay and washed out. In Lincoln you don’t get that winnowing.

    The other issue with startups in Nebraska is non-compete agreements are legal. They are illegal in CA which makes staffing a startup in much easier. MA tried to address this as it substantially inhibits our ability to compete with CA in terms of startups. So far no luck.

    WCE will of course be familiar with the traitorous 8.

    https://en.m.wikipedia.org/wiki/Traitorous_eight#

  135. One of those studios (pet friendly and onsite gym) is exactly the floor plan I would be looking for as my final apartment in DC or certain very near walk-to-Metro burbs. (They have recently built some at that price point, but not in my target neighborhoods.) I think of it as a tiny house in the sky. The buildings are targeted at young renters because of the amenities, so I don’t know whether they would find a way to weed out elderly applicants.

  136. “In Lincoln you don’t get that winnowing.”

    You’s have to actually fire them, which can be a challenge. Not sure if I buy that theory, but I’m reminded of this song:

    If I can make it there
    I’ll make it anywhere
    It’s up to you
    New York, New York

  137. “I wonder to what degree high prices provide a HR function. If you hire a 32 year old developer in SV who lives in Cupertino with his family, he must be very good as anyone who wasn’t very good couldn’t afford to stay and washed out. In Lincoln you don’t get that winnowing.”

    Isn’t that why you have employment history on your resume?

  138. You’s have to actually fire them, which can be a challenge.

    It’s the hiring moreso. In Lincoln they don’t come with the same degree of baked in proof of concept.

  139. COC: Similarly, Austin is booming with ex-Californians. Lots of startup activity. Lower real estate prices. Terrible traffic, though.

  140. Here our close in condos (not apartments) have both empty nesters and younger professionals. Both sets of people have pets. Gyms, grocery stores restaurants and cleaners are within these complexes – so no need to take your car out for daily errands. Some of the condos are short term rental properties managed by management companies. There are usually certain floors or sides of the complexes designated as owner vs. rentals. Other than that the units are similar.

  141. There is a sneaky problem in Westchester with taxes for condos. Since so much of the property tax law in NY state is based on housing in NYC, the condos in many other areas of NY state are taxed at a much lower rate than a house. This is true for coops and condos in NY state. For property tax purposes, there is a loophole that allows the condo to pay lower property tax than a similar house with the same square feet. There are districts that get more than 75% of their revenue to run the schools from property taxes instead of the state, so a large condo building or development can actually hurt a school district. My town and CoC/MM live in towns that border a large undesirable city school district. It is very easy for those parents to rent or buy an apartment, and suddenly be in a great school district that is only a mile away. We’re getting kids from NYC and other cities in Westchester living in these apartments. The developers say it will be millenials and retirees, but that is not the reality.

  142. Very nice, but I am talking no car in my 80s, and the point of moving is to live near enough to an adult child so that the inevitable elder management is less stressful. Just to do the math, the sum of the avoided monthly nut on the townhouse and the municipal bond interest on the conservatively invested proceeds would be about 2.5K a month for rent.

  143. Rhett: Older house, but large lot and 2 blocks from the central business district and walking distance to WF, etc. If I were buying in Austin, I’d take a look at it. If there were any sort of neighborhood with a good school, the house would be very attractive to me.

  144. That Austin house is $650 per square foot. Is Austin really that expensive? I had no idea. At the high end in Atlanta you’d be asking for mid $300 as a price per square foot.

  145. My CT town figured out that (in some cases) it’s less expensive in the long run to buy parcels of land and leave them undeveloped, than to have a developer come in and put up a bunch of McMansions to be occupied by residents who then require a slew of town services (schools, roads, water, sewer, etc.). As result, there are some nice pocket parks here and there, open space areas, and even a farm.

  146. So reverting back to the recent Onion-like parodies, I now am one — Mom hurls self off bridge, unable to tolerate disappointment of discovering child is merely above average. DD’s PSAT scores came in, and they sucked by my standards (in the 1100s). I was disappointed by how disappointed I was, especially since I knew she was going to struggle (has no clue about test-taking strategy and is far to concrete/literal for some of the abstract reasoning they test). But of course, I had to hide it, because she did Just Fine by any normal calculus (paper said it was 90th percentile, which must be compared to other 9th graders, because the overall published percentiles say that’s about 75th percentile), and she gets down on herself so easily and came home telling me that her scores sucked. But when I look at what she wants to do, it’s not going to cut it. The student profile for the college she currently wants to go to doesn’t even have a line on the graph that starts with an 11; even for her current safety school she’d just be lower-middle of the pack. And med school? Right.

    Luckily, the scores came with a paper about Khan Academy, and we have three years before the actual SAT, and DD is very interested in figuring out what she needs to do to get into the kind of school she wants to go to. So we just need to start spending a little time every week on the practice. So this is probably a good thing, because now she knows where she is and what she needs to do to get where she wants.

    But I *hate* that I’m one of those moms — both that I care, and that we are now going to be doing stupid “test prep” stuff years in advance.

  147. That Austin house is $650 per square foot. Is Austin really that expensive?

    I was thinking about that re: Houston. From what I can tell, home prices are about the same in Houston and Boston for a given distance from downtown. River Oaks to downtown Houston is about the same distance as Chestnut Hill to downtown Boston. Homes in both areas look to be about $550/sq foot.

  148. Ouch, LfB. I think you’re doing your best for her and being honest about your reaction. It’s easy to not care when your kid does awesome, and it’s harder not to care when you think that without the work, it might shut her out of something she wants to do and/or would be good at. Good luck weathering!

  149. Fred, I called four dealers last night and this morning and am getting bids on several cars.

    So far I got one response on two cars, which turned out to be dealer/loaner with several thousand miles and 8 months of used up warranty on them, and on which I was offered only the standard rebates. As if they were brand new! Not even a deduction for the mileage and lost warranty time!

    I wrote back and asked whether he thinks this bid is final, since I could buy an identical used rental car from the new GM Factory Certified program for several thousand less and get a one year extension on the warranty.

    If he doesn’t cut that price big time, he can forget it :)

    But at least I didn’t drive to the next state to find that out!

    Going to CarMax later….

  150. Thanks, Tulip — you’re right, it was always so easy for me, so it’s difficult to realize how much harder she’s going to need to work to get where she wants. Then again, that’s probably a good barrier to entry — she thinks she wants a path in life that is going to require a lot of hard work/studying, so if she’s not willing to work hard/study to get there, it’s not the right path for her anyway.

    Not that I actually *feel* that zen about it right now. . . .

  151. Fred, tried answering but it didn’t post.

    Short recap: Called several dealers, sent bid emails this morning.

    One response so far on two cars that turned out to be dealer loaners, and the only reductions were for the standard rebates even though there is several thousand miles and several months of “in service” time on the warranty clock.

    I wrote back and asked if he thinks the bid is final, given that I could buy an identical 2015 used Enclave rental car direct from GM Factory Certified program for several thousand less.

    Will see what he says next. If he thinks I’m paying sticker on used cars, he’s got another think coming….

  152. Oh, now it posted. And it posted my dedicated spam email. CoC, if you can edit that out, please do :)

  153. “And med school? Right.”

    Don’t rule it out based on one three hour test. Med schools take students from all kinds of colleges, not just the high-powered ones with median scores well above 1400. I see tons of undergrad applications from would-be doctors who simply aren’t competitive for our university, but who have respectable transcripts and a clear passion for medicine. They aren’t going to be admitted here, but they will go to perfectly acceptable schools where their scores are closer to the median. IMO they will have a better shot at med school coming from one of those schools than from a school filled with Type A over-achievers.

    And that assumes that her 9th grade PSAT score is predictive of her senior year SAT/ACT score, which is not necessarily the case. There is a reason that those tests aren’t generally administered to freshmen.

    But I totally get your disappointment with your disappointment. It’s hard not to be that mom even if you don’t want to be.

  154. LfB – I agree with what Sky says. There is time for her to work at improving her scores. Heck, I am thinking about the 2400 SAT scorer right now !
    If she gives it her best shot but doesn’t get into the tippy top college she has chosen it is not the end of the world.
    And yes, it is a disappointment when you as a parent see the score – no sugar coating that feeling and it is fine to feel that way. I am pretty sure I will face the same scenario with my Kid #1.

  155. LFB: It’s hard and colleges are getting insanely competitive. Here is my advice: 1) Learn to say “F*ck the score” and believe it, 2) Explore a bunch of colleges with your DD, some which are real safeties, 3) Explore jobs/careers that suit your DD’s style of learning and living.

    Given what you’ve shared, it doesn’t seem like medicine would be the best fit. So much pressure and studying… and for what? You can do so many cool things without devoting your entire youth to studying, internships, and fellowships. I say this as the daughter of a doctor. I’d try and talk my DS out of it, if he wanted to pursue medicine.

    However, the last laugh might be on me–DS wants to follow in his father’s footsteps. The father who is an entrepreneur, and works without benefits or a steady paycheck…

  156. LFB: There are studies that show that success is not based on where you go to college, but where you apply to college. If you’re a “striver”, you’ll do well no matter which college you attend.

  157. it is a disappointment when you as a parent see the score

    She’s in the 90th percentile, how is that a disappointment?

  158. LfB – are you disappointed in the score or the percentile? She is scoring in the 90th percentile for her peer group. Is that typical for her? If so, look at the 90-whatever percentile SAT scores to get an idea of where she can expect to end up. I believe that is 1300s. She’ll cover a lot more math and English before she is done this testing.

  159. She’s in the 90th percentile, how is that a disappointment?

    Because LfB was easily in the 99th percentile. Not a criticism. I totally understand where she’s coming from.

    But if I may, let me speak as the girl who was 97th percentile in a family 99th-ers. Please don’t start carefully explaining to your daughter that if she tries with all her might, MAYBE she can be a P.E. teacher in a terrible school district somewhere. Please don’t start “steering” her towards the dream of being an assistant manager at McDonald’s. Just help her with the Kahn Academy stuff and don’t start obsessing about how she has to drop her dreams. Or, if you must obsess, try not to show it. If she applies to Harvard and gets rejected, well, that will be bad; but telling her not to apply, or to maybe apply to Ferrum College in Virginia, or showing her that Mom is sad about her dumbness will be way, way worse, and she will never recover from it.

  160. I agree with Rocky. We are not discouraging DS from applying to any colleges, but I am asking him to apply to several colleges into which admission is practically guaranteed *in addition to* the colleges on his list. At the end of the day, it is his choice on where he goes.

  161. Rocky,

    Thanks for your wisdom. DS is not the academic or athletic rock star his sisters are. He is a standout kid in his own right with his own talents. One of the challenges of parenting is how to celebrate each kid’s successes without turning in to the Brady Bunch where everything is Marcia, Marcia, Marcia…..

  162. One thing we have learned in the college admission go round/college experiences of the nieces and nephews is that there are a ton of colleges with different experiences and the key is to pick the right one, not the BEST one.

    And as for medical school, just as a general question, if one doesn’t want to be a specialist, why would someone choose to go the MD route to become a family practice doctor instead of going the PA route? From my perspective as a patient, it seems that family practice MD and PA do the same job, but one has a lot longer education route to get there.

  163. LfB, did your DD answer every single question in the PSAT?

    My understanding is that the new PSAT, which was given starting this past October (I’m guessing that’s the one she took, as there are a lot of stories about how long it’s taken to get the scores, and yours wouldn’t be the only one I’ve read about just getting the scores this week) is, like the new SAT, no longer neutral on guessing, but includes a penalty against not guessing.

    If she went into the test not knowing this, and left some questions unanswered, then she clearly has room to improve.

    This is one example of how test prep can make a difference.

    We know a kid who was NMSF and is now at Yale. His first shot at the PSAT was as a soph, and according to his dad, he went in totally cold, and did not do very well, which was a wakeup call for him. Over the next year he did some prep, took numerous practice tests at home, and I believe he also took a prep class (very commonly taken by kids the summer after sophomore year), and got a big bump the next year.

    Her score as a frosh is just a starting point.

  164. Yes, Rocky, exactly. This stuff just came so naturally to me — of *course* you nail the standardized tests, with no prep; it’s like my superpower or something (and it’s DS’s as well). Whereas DD can go on and on about the components of a cell and how they work, but put her in front of a bubble sheet and it’s deer in headlights. Then again, life with DD has been a struggle in figuring out how to relate to/manage someone who is *so* fundamentally different than me; I guess this is just another example.

    Anyway, thanks to you all for not treating me like the doink that I feel like right now. And Rocky, don’t worry — this is just going to be another lesson in “things don’t come easy, if you want it, work for it.” The only people I’ve mentioned my disappointment to are my mom, DS, and you guys; with DD, I pointed to the 90% percentile, told her that was a great start given that she’s never even been taught all of the tricks on how to take the test, and talked about how many opportunities she has to learn more before the “real” test comes. We’ve had similar conversations about her choice of career, i.e., that it’s a great career option that I think suits her, but that the path to get there requires a lot of study and work involved, and that it’s basically going to be her choice if she’s willing to make that tradeoff.

    She wants to be an ER doc, btw, not a family practitioner — one of her friend’s dad is an ER doc who came to career day in maybe 3rd grade, and that’s been IT ever since. So my primary focus has been to keep her from getting too tunnel-vision on that, because I don’t want her to either overwhelm her with a workload that makes her miserable or feel like a failure if she decides it isn’t worth it.

  165. “There are studies that show that success is not based on where you go to college, but where you apply to college.”

    I read about one that compared students admitted to a HSS and went elsewhere to the students who actually went to that HSS. Similarly, both sets of kids did well, suggesting that the success of kids from HSS is due more to the pool of kids they get than the schools themselves.

  166. “It is very easy for those parents to rent or buy an apartment, and suddenly be in a great school district”

    I worked with a woman who was an operator, IOW, a line employee in a manufacturing plant, who rented a small apartment in PAUSD during the time her DD was in school. When her DD was in HS, she and her DH were looking at homes they could afford, and as soon as DD graduated, they closed on a house about a 1.5hr commute from her job.

  167. LfB, you can be a PA or NP and work in an ER. However, PA school has become more competitive than med school now for reasons that Cordelia mentioned. There are direct to NP programs where you can get your NP degree in 5 or 6 years.

  168. LfB – between freshman PSAT and junior year SAT, I added 330 points (of 1400). I’m not sure if that helps, or if that still leaves you guys in the misery range.

  169. I read about one that compared students admitted to a HSS and went elsewhere to the students who actually went to that HSS. Similarly, both sets of kids did well, suggesting that the success of kids from HSS is due more to the pool of kids they get than the schools themselves.

    Wasn’t a similar study done on charter schools?

  170. LFB – I honestly didn’t know, because the scores and percentile lineup have shifted over the years, and you and Rocky seem to be talking about the distinction between 97 and 99 percentiles. I would place myself at the 95 percentile–I work with a lot of people who are considerably smarter than me.

  171. I don’t know. I was a 99% scoring kid, and so was my DH. When our kids don’t, for whatever reason, my instant reflex *is* a bit of disappointment. But as a rational adult, I generally can go back and think about why it’s not a big deal, etc. I imagine that’s what LfB is doing. You were disappointed in your initial response, but you’re aware that it doesn’t have to mean anything long term, and you’re looking critically at your response to do the best by your daughter. To me that’s good parenting, and acknowledging human limitations!

  172. @Milo — funny how we anchor. Back IMD, 1450 was NMF level, so I thought you were making a Tiger Mom joke.

  173. Just to echo a few things that have been mentioned here, there are plenty of doctors who are 90th percentile kind of people. There are plenty of doctors were below that. I wish my rockstar PSAT score mattered more now, during the residency application process, even during the med school application process. Unfortunately, they seem to focus on character and study habits as well. A good friend from college scored below the 50th percentile the first time through on the MCAT. She retook it, reapply, and is now a successful position with the career that is more bright and sparkly than mine.

    I hate hearing how everything is more competitive than medical school these days. Applicant pools are not identical. Number of applicants divided by number of slots is not universal index for competitiveness. If that were true, working as a greeter at Walmart is more competitive than being a neurosurgeon. Let’s narrow surgeon openings have 1 to 2 applicants per opening. Often they have only one. A greeter position at Walmart can have 50 applicants for one position.

    I have often thought that if I knew then what I know now (and I still plan on practicing medicine), I should have gotten a two year degree when I turned 18 and an RN. I’ve been should’ve traveled through my 20s, worked with Doctors Without Borders, USAID, or other such endeavors. Perhaps some highly lucrative travel contracts as well. At 30, I could have gotten a NP degree in 3 to 4 years, And been practicing with a similar salary and a lot less debt by 40.

  174. Ugg. Voice-recognition. “Most neurosurgeon openings have a less than two applicants per position.”

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