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Posts Tagged ‘London’

Between The Lines, My Parking Space Is A1

July 12, 2007 | 12:35 pm | | Public |

Yesterday I got the word that a New York Times story on parking spaces I was interviewed for was going to make the front page, known as A1 or Page One by regular readers. About 20 minutes after I got the call, I started getting email alerts that Lady Bird Johnson had passed away at the age of 94. Not to get sidetracked from the point her but I really enjoyed Robert Caro’s 2 biographies of Lyndon Johnson: Means of Acent and Path to Power.

I had been certain my story would get bumped from A1 forever or another day. I was pretty excited this morning to find Vivian Toy’s story: For Parking Space, the Price Is Right at $225,000 on the front page. Its my 5th time on the front page of the NY Times (but who’s counting) and it is not any less exciting than the first time (back in 2000).

But I digress…

One thing I learned from Vivian is that developers allocate about 150 square feet for a space. 10′ x 15′ Thats about the same size as a separate maid’s room and a similar price point.

Private parking spaces are is a rare commodity in Manhattan. Its a geographic area, where the majority of residents, don’t drive for their commute everyday. The mayor is attempting to initiate congestion pricing to make it more expensive to drive a car or truck south of East 86th Street, which is about half of the island and the most densely occupied. This concept has been successful in London. Commuting by car is not easy within Manhattan. It is expensive and slower than using the subway or other public transportation services. The public transportation system is inexpensive, generally reliable and accessible. Yet the the cost of owning a parking space is relatively expensive, given the current price point of Manhattan real estate.

It is interesting that a premium is being placed on the right to purchase a parking space since this is an area of public transportation commuters. But hey, its all about supply and demand.

My good friend and appraisal colleague in Chicago, Chip Wagner shared with me some stats from what is arguably a much more car-dependent city: $300,000 to $500,000 condo units parking spaces are $25,000 to $40,000
$500,000 to $100,000 condo unit parking spaces are $35,000 to $50,000
And highest I know of is $75,000 for over $2,000,000 properties.

Supply/Demand of parking is not out of flux like your city. Most of the new developments, the ratio is 1:1. Actually, some buildings, the parking spaces may be 4 spots for every 5 units, therefore in a building that might have a balanced or oversupply of units, might have an undersupply or balanced supply of parking spaces.

Based on a median sales price of about $550,000, the price ratio in Chicago is about 7% while Manhattan is about 25% ($225k/$895k).

As Manhattan housing’s fortunes go, so does parking.

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Hold Out Becomes Island

March 28, 2007 | 6:54 am | |

It is not uncommon for tenants and homeowners to refuse to move out or sellout to developers. They simply don’t subscribe to the argument by the developer that, besides the money, it is being done for the greater good. In order to apply pressure, the developer builds taxpayers, usually one story buildings with short term tenants that pay enough rent to cover the real estate taxes. The developer simply waits, sometimes for decades until they are able to aquire the site.

Here’s an old New York Times article that provides some hold-out stories.

The page one photo in the New York Times yesterday was something more surreal. The Chinese developer simply dug out around them. The homeowners in New London, CT who were booted from their private homes by eminent domain might look at this for inspiration.

Update: More photos.

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Houses Can’t Walk

March 26, 2007 | 7:36 am | |

Ever since I was a kid (just a few years ago), I had always had a dream of owning my own home. It always gnawed at me and, after starting a business, marriage and kids (not necessarily in that order), my wife and I finally bought a house. Admittedly, it was a happy moment, a personal goal not unlike many of my peers. The American Dream.

In fact, on the day of the closing, I had only been home a few days from the hospital after a bout with viral meningitis. I couldn’t stand upright without experiencing a severe migraine, but I insisted on attending the closing, despite repeated offers by my attorney for a power of attorney. It was that important to me. We had successfully entered that land of pride, happiness and tax deductions.

Thinking Macro

When I came across this interesting article in Slate called The Renter’s Manifesto (via Greg Mankiw’s Blog) which basically says that homeownership causes unemployment. This conclusion is based on the work of English economist Andrew Oswald

Its “home” to me because I have family in Detroit, MI.

Big cities can struggle if they overspecialize and then find that times change. Detroit is an example. So is Manchester in Northwest England. Birmingham, in the English midlands, is a different story, a city bustling away, making everything and nothing in particular. As the wise economy-watcher Jane Jacobs once pointed out, Birmingham was thought highly inefficient compared with the specialized mills of Manchester, but when the downturn came, Manchester was devastated and Birmingham kept on chugging along. Chicago, Seattle, New York, and London have similarly reinvented themselves again and again.

The work force in a city that has specialized labor is less able to adapt and move. His theory is that home ownership makes occupants less agile.

No matter how bad things get in Detroit or Treorchy, the houses will still be there, and if they are cheap enough, people will want to live in them. The likely result is a gloomy sort of segregation: Those who feel that they can find a good job in the boom cities will move there and pay the higher rents. Those who are less confident of that would rather have no job in a cheap house than no job in an expensive house. Detroit will have residents for a long time to come.

Perhaps I will avoid thinking macro, it gives me a headache.

Important Update: I am second in our March Madness pool…need Florida to win it all to clinch and crush my kids in the standings (ok, ok, I take that back, I get a little carried away…)

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Housing Price Survey: Paris or Tehran?

March 6, 2007 | 10:02 am |

Covering the New York real estate market has definitely ingrained a New York-centric perspective on a few things, namely how darn expensive it is to live here. In fact, New Yorkers are proud of how expensive it is here. Sort of like North Dakotans being proud of their harsh winters. Self-rationalization for being here prevails otherwise everyone would live in San Diego (ok, so I am being simplistic).

Its not a housing survey but since toothpaste generally makes people feel good, or at least not afraid to smile, they are more inclined to purchase real estate. Ok, not really but I need a reason to post these stats…

The survey compares the cost of a basket of 160 goods and services in 132 countries. Everything from tobacco to toothpaste to theater is considered.

A survey by the Worldwide Cost of Living survey released Monday by the Economist Group ranks Oslo, Norway (a North Dakota parallel here) as the most expensive. In fact, with New York as the base indicator of the study which I found strange (ok, at least New York gets some recognition), Oslo is 32% more expensive to live in.

Not surprisingly Paris and London are in the top five. Luxury residences in London are going for $6,000 per square foot (on leased land!) while New Yorkers are quick to brag about $3,500 to $4,000 per square foot achieved around Central Park these days.

Growing up, I seem to remember that Tokyo was always number 1, but now, even with their federal funds rate equivalent set at just above 0, Tokyo was ranked 5th. Europe dominated the top of the list. The weak dollar here probably helped.

Tehran, Iran was at the bottom of the list, costing about 1/3 as much to live there as in New York City. Perhaps we’ll soon be saying, (borrowed from the movie Casablanca):

We’ll always have Tehran.

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Election Aftermath: States Are Masters Of Their Eminent Domain

November 13, 2006 | 12:01 am |

Les Christie’s article Kelo’s revenge: Voters restrict eminent domain: Eight (actually, 10) states vote to prohibit or restrict the use of eminent domain to take property from one private individual and give it to another [CNN/Money] summarizes the election aftermath relating to eminent domain.

We discussed the historic Kelo v. the City of New London court decision last year in Eminent = Imminent where a homeowner could lose their private home to a private developer.

After the outrage relating to this court decision, more than 30 states enacted laws and/or constitutional amendments to prevent this from happening. It has energized watchdog groups such as Castle Watch, to prevent more of this type of emminent domain taking.

Here’s a pre-election tally and its substantial. California did not vote for the proposition because the law was too broad and pressure from conservation groups concerned that it would weaken government authority too much.


The US Relieved That New Yorkers Can Breath Easier: London Is More Expensive

September 5, 2006 | 6:49 am | | Public |

A Bloomberg and AP story on London housing prices exemplifies how fascinated we are with rankings when it comes to housing no matter where we live. CBRE compared upper end London housing prices to my most recently completed Manhattan Market Overview in the 2Q and were found to about 20% more expensive (1,200 pounds vs. 1,000 pounds).

While thats interesting, its not the reason for this post.

Look at the extent of the coverage [Google].

As of this morning, the story was picked up by 147 newspapers. Except for markets like Shanghai, Taiwan, Canada, Australia and a few major US markets and national publications, the vast majority of the coverage was in mountain, midwestern or southern states. Most of these markets did not see appreciation rates as high as the US coasts did. These markets include locations such as Alabama, North Dakota, Arkansas, Wyoming, Montana, Nebraska and Wisconsin among others.

Apparently big numbers, either real estate prices or appreciation, still sell newspapers.

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Eminent = Imminent

June 27, 2006 | 6:43 am | |
Susan Kelo: New London, CT

The fallout from the seminal Supreme Court eminent domain ruling KELO et al. v. CITY OF NEW LONDON et al. has been widespread as state legislatures have sought strengthen state’s rights in order to prevent the takings of private property for public development.

Its been a year since the eminent domain ruling and the City of New London, Connecticut has negotiated with the two remaining homeowners to vacate their private homes in order to make way for private development.

The ruling touched a nerve for the simple reason that its one of the basic principles of US citizenship.

Government ability to seize private property for public good has been relegated to things like roads, schools and government buildings. Economic reasons have now reached the forefront of the concept. This is not a new concept.

For them to come in and tell me how much my property’s worth and for me to get out because they’re bringing in somebody else when I own the land is unfounded to me.

Kelo brought clarity to the concept however and touched a nerve. This could be of particular concern on the east coast where land is much more scarce and big box retailers, who try to stay below the public relations radar, may seek to take advantage.

The federal government has now taken action to prevent its own agencies from seizing private property [WSJ] except for public projects reflecting conservatives concerns over the erosion of the Constitution’s Fifth Amendment. They have argued such takings are an unjustified governmental abuse of individual rights. Liberals see the new power as a powerful tool in urban renewal to revitalize cities. The executive order is an attempt to offset some of the momentum of the Supreme Court ruling.

The battle over the issue will be waged for years to come. The New York Times posted an editorial for the responsble use of Eminent Domain and the good that it can do. The Real Estate blog quipped that the New York Times is calling for responsible use of eminent domain while it was imposed on the development of their upcoming new headquarters on 41st Street.

In 1998, pharmaceutical giant Pfizer built a plant next to Fort Trumbull and the City determined that someone else could make better use of the land than the Fort Trumbull residents. The City handed over its power of eminent domain—the ability to take private property for public use—to the New London Development Corporation (NLDC), a private body, to take the entire neighborhood for private development. As the Fort Trumbull neighbors found out, when private entities wield government’s awesome power of eminent domain and can justify taking property with the nebulous claim of “economic development,” all homeowners are in trouble.

I am all for urban revitalization, new urbanism, etc., but this ruling goes beyond where I am comfortable. Everyone can call it as they see it from a distance, thats easy. Imagine living in your home for 40 years in an area where there is no urban blight, where houses are kept up, and the community is cohesive? What is the just compensation in this case? That is exactly what happened in New London, CT.

I suspect that the issue of just compensation, is probably more than market value can support.

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State Legislatures to Supreme Court: Don’t Tread on Me

February 22, 2006 | 12:01 am | |

The front page, above the fold, article States Curbing Right to Seize Private Homes [NYT] talks about the national backlash to the Supreme Court findings in KELO et al. v. CITY OF NEW LONDON et al..

In a rare display of unanimity that cuts across partisan and geographic lines, lawmakers in virtually every statehouse across the country are advancing bills and constitutional amendments to limit use of the government’s power of eminent domain to seize private property for economic development purposes.

Rarely has a Supreme Court ruling created such a universal reaction that was not made up along party lines. The idea that the loss of private property to private development seems to have struck a cord with state and local legislatures and they are passing laws that would disallow many situations that would involve emminent domain. In fact, one of the justices seemed to apologize after the 4-3 decision and said that “We emphasize that nothing in our opinion precludes any state from placing further restrictions on its exercise of the takings power.”

“It’s open season on eminent domain,” said Larry Morandi, a land-use specialist at the National Conference of State Legislatures. “Bills are being pushed by Democrats and Republicans, liberals and conservatives, and they’re passing by huge margins.” Americans see property ownership, and the rights associated with them, as a right of citizenship. This ruling seemed to bypass American sentiment.

Like everything to do with real estate, Americans tend to go from one extreme to the other. More neutral observers expressed concern that state officials, in their zeal to protect homeowners and small businesses, would handcuff local governments that are trying to revitalize dying cities and fill in blighted areas with projects that produce tax revenues and jobs. Many emminent domain situations need to be judged on a case-by-case basis.

USA Today provided a list of strategies that legislatures are taking:

  • Explicit bans. Some bills would ban the use of eminent domain for economic development. Others would do so indirectly by stating when it can be used and leaving commercial development off the list.

  • Narrower rules. Many states are considering making it harder for cities to declare a neighborhood “blighted” just for economic development.

  • Economic penalties. New York and Indiana are among states considering making eminent domain more expensive. The government would have to pay 25% or 50% above market value when it confiscates a property for commercial development.

_Here’s a sample of the action that is taking place to limit takings:_
Eminent-domain bills given a hearing [Baltimore Sun]
Limiting eminent domain [Journal-Advocate – CO]
Rethinking eminent domain: Lawmakers want to curtail the power of local governments [Bradenton Herald – FL]

_Prior Posts In Matrix_
The Kelo Backlash: Now Many Are Rethinking Eminent Domain [Matrix]
Wrecking Ball: Taking Eminent Domain Private [Matrix]

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The Kelo Backlash: Now Many Are Rethinking Eminent Domain

December 22, 2005 | 12:01 am |

In Nicole Gelina’s article for City Journal They’re Taking Away Your Property for What? covers the backlash of the controversial Kelo v. City of New London eminent domain [Wikipedia] ruling last summer that rattled the concept of private property.

…what critics haven’t noticed is that the decision simply expands the Court’s approval of a practice that state and local governments have long used to bring about urban renewal or economic development. More important, they have also failed to notice that, over its long history, this practice has almost never worked. The Court’s decision fails not just on moral but also on utilitarian grounds.

“50 years ago the Court replaced the “public use” rationale for eminent domain with a more nebulous concept of “public purpose,” in order to allow cities to condemn slums to remove urban blight. “

In Kelo, the 5-4 majority went a step further, ruling that governments don’t need to show that property they condemn is even nominally blighted

“the vague promise of higher tax revenues and the hope of private-sector jobs through planned development are no less public goods than a road or a water-treatment plant. And so the Court allowed New London, Connecticut, to condemn a middle-class waterfront neighborhood and to parcel it out to private developers who would make more lucrative use of the property, including building luxury condos.”

Big-box retailers to acquire properties [CNN] for development in prime locations.

Limits on Eminent Domain May Go Too Far, Experts Warn [NPR]

In the post Concern over the Kelo case has also inspired a flurry of legislation at the national and local level. [Gotham Gazette]

“In Congress, a bill, dubbed the “Private Property Rights Protection Act of 2005, has already passed the House and is awaiting a vote in the Senate. It would withhold federal aid from states that Congress believes abuse eminent domain.

In New York, there are several bills being considered in Albany, including a package of legislation drafted by Assemblymember Richard Brodsky which would slow down local eminent domain proceedings, create an ombudsman to oversee the use of the law, and require 150 percent of market value be paid for private property that the government takes over. This week, the New York City Council will hold hearings on the subject.

And recently opponents of eminent domain claimed victory when the U.S. Court of Appeals ruled that the city of Port Chester, New York failed to properly alert a businessman of his right to challenge an eminent domain decision before the government seized his four buildings to make way for a convenience store. The court’s decision, some said, was a warning to local governments who may be tempted to take private property without properly notifying the people who own it.”


Wrecking Ball: Taking Eminent Domain Private

October 16, 2005 | 7:13 pm |

In the article Is Eminent Domain the Only Hope For Redeveloping Inner Cities? [REJ], eminent domain has been used effectively in blighted areas for economic redevelopment, but not without controversy. Opponents contend that economic redevelopment can occur without eminent domain.

After the KELO et al. v. CITY OF NEW LONDON et al. [Find Law] case, where the state powers were upheld for taking property for private development, state legislatures are beginning to react:

Here’s a summary of additional states reactions to the Kelo ruling: Eminent Domain: States React to Kelo Decision [APA]

For more details on Eminent Domain:
[Eminent Domain: Nice Home, I’ll Take It] [Matrix]
[Eminent Domain: What The Supreme Court Ruling Means To NYC] [Gotham Gazette]


Read Between The Longitude Lines: Global Housing Boom Turns Gentle

October 16, 2005 | 3:35 pm |

In a recent story Is the real estate boom cooling off?[IHT] an anecdotal discussion of several market areas were summarized.

Paris: Since July, the market does not have same intensity as before.
Hong Kong: No slowdown but concerns about rising mortgage rates
Japan: Commercial property prices are rising rapidly as residential remains weak.
London: After a rapid rise in prices, more modest growth predicted.
Moscow: Housing prices rising about 12% annually as the introduction of mortgages have extended the boom.
Spain: Prices are projected to rise 12.3% this year down from 17.5% last year.

For the most part, the global real estate market appears to be cooling. But what does that mean? There doesn’t seem to be any real estate corrections occuring at the moment. Its all about the easing of the rate of appreciation and how accurately the media presents this information.

For example in the above IHT story, the headline read: “Spain: Trending Downward” but prices are projected to rise 12.3% this year down from 17.5% last year. 12.3%? Thats seems fairly strong to me.

A more accurate headline would have been: “Spain: Price Growth Eases But Remains Above Historic Norms”


Extreme Housing: Useless Habitat Trivia

September 26, 2005 | 10:15 pm |

Here’s a set of useless housing trivia [San Diego Union-Tribune]


The world’s largest residence is Istana Nurul Palace, the home to the Sultan of Brunei. With more than 200,000 square feet of floor space, including 257 bathrooms, it dwarfs Aaron Spelling’s little 36,500-square-foot shack, which is the largest house in Hollywood.


The smallest house is a wee cottage in Conway, Wales, that measures roughly 6 feet by 10 feet by 8 feet. It’s so tiny that it has no bathroom, and its most modern feature is a faucet!


The most expensive house ever built is the Hearst Castle in San Simeon. It was built for William Randolph Hearst between 1922 and 1939 at a total cost of more than $30 million. In today’s dollars, that’s nearly $276.9 million. That makes the most expensive house sale – the $101.9 million paid in 1997 for a property in London – look like chicken feed.