MISCELLANEOUS
How bad were the Oscars?
Why New Orleans will not recover
Pathetic.
ART: EDVARD MUNCH
Saw this while in New York. from the New Yorker:
When he was seven years old, in 1870 or 1871, Edvard Munch used a lump of coal to draw a sprawling procession of blind men across the floor of his home in Kristiania—as Swedish-ruled Oslo was then named—one in a series of squalid flats taken by a family prone to poverty, disease, mental disorder, and death. His mother had died of tuberculosis when he was five; his fiercely beloved older sister Sophie would do the same when he was thirteen. Another sister would be lost to psychosis. Munch himself was sickly from birth; he said later that he grew up feeling “like a boat built of hopeless material, of old rotten wood.” His father was a military doctor, at a time when doctors were ill-paid and little respected, and a guilt-ravaged religious zealot whose idea of parental duty was to instill the terrors of Hell in his children. The boy’s drawing expressed an alarmed fascination with anonymous crowds on city streets—the same theme appeared in major paintings that he made some twenty years later. According to Sue Prideaux’s assured and vivid recent biography, “Edvard Munch: Behind the Scream” (Yale), Munch’s Aunt Karen, the family’s mainstay, marvelled at “the trembling uncertainty” that the apparent prodigy had caught in the sightless figures. (As Munch matured, his talent was regularly noted—even as his art was loathed and his character deplored—in Norway.) In later years, Munch recalled “deriving such pleasure from the monumental format of my work, real satisfaction at the sensation of my hand so much more actively involved than when I drew on the back of father’s prescriptions.”
Two things impress me about this story. First, I believe it, despite its redolence of the sort of family lore that mythifies everybody’s childhood and abounds in the hagiographies of genius. No other great artist—and only a rare writer, short of Proust—has made so absolute a principle of truthful memory. (A perceptive German critic, in 1902, characterized Munch as “a Romantic who cannot lie.”) Second, I’m struck by the note of discovered joy in artmaking, never mind the direness of the subject, that may be typical of budding artists but would serve this one to an extreme degree, as an emotional tightrope over the abysses of a life that was otherwise pretty thoroughly awful.
“Edvard Munch: The Modern Life of the Soul,” at the Museum of Modern Art, is the second comprehensive Munch retrospective in the United States in the past fifty years. The first, at the National Gallery, in 1978, came as a revelation to observers who had not previously visited Norway, where all but a few of Munch’s paintings reside. (The Boston Museum of Fine Arts’ “Summer Night’s Dream (The Voice),” from 1893, is the only American-owned painting from his magnum opus, the series of pictures on themes of love, anxiety, and death which is commonly termed the “Frieze of Life.”) He was known here as a great printmaker—the most original of the Symbolist era—and, vaguely, as the father of German Expressionism. But reproductions of his work, including the already famous “Scream,” prepared no one for the originals’ astringent textures, dense space, tensile drawing, and eloquent color.
That show revolutionized my sense of modern-art history, particularly of its canonical elevation of the quartet of Post-Impressionism: Cézanne, van Gogh, Gauguin, and Seurat. Munch, though younger than those masters, and hitting his stride a bit later, suddenly seemed to me their peer in giving form to the seismic forces of European modernity. He still does, both despite and because of a radically impure style that, at its best, varies from picture to picture. His strongest works, dating from about 1890 to the early years of the last century, exalted pictorial functions—narrative and illustration—that were being combed out of modern painting as specialties more proper to literature and the popular arts. Thereafter, until his death, in 1944, Munch, with less to say of life, painted mainly just to paint, with so-so results, except for the occasional, jolting self-portrait. As a happy compensation for being so long marginalized, and at a time of resurgent interest in storytelling among young artists, Munch today appears fresh and challenging in ways that his more honored peers may not.
French painting (Gauguin and van Gogh), Scandinavian theatre (Ibsen and Strindberg), and German philosophy (Nietzsche) shaped Munch’s emerging sensibility as he moved through the bohemian scene in Kristiania, with some agonizing experiments in free love, and on to art school in Paris, under the academic realist Léon Bonnat, and to scandal in Berlin, where, in 1892, his first major exhibition was denounced by Kaiser Wilhelm II and promptly shut down. Munch’s first successful works were interiors and portraits that strained against the genteel conventions of naturalism. The MOMA show includes a regrettably later version, from 1896, of “The Sick Child” (1886), a torturous reminiscence of Sophie on her deathbed, in which Munch struggled toward a new pictorial language. In the ravishing “Summer Night / Inger on the Beach” (1889) seaside rocks seem to pulse with incipient life. After experimenting with semi-Pointillist Impressionism in Paris, he painted, upon learning of his father’s death, “Night in St. Cloud” (1890), which shows a top-hatted man in silhouette, sitting at a window and smoking, in variously inky and luminous blues. It is a ticking bomb of suppressed feeling.
Munch became Munch with his allegories of love. “The Voice,” presenting a seductive woman in white in the seaside woods, backlit by a low summer-night sun, memorializes the onset of his first love. “Ashes” (1894) is about the affair’s end. Postcoital, the same woman, in perhaps the same woods, dispassionately tidies her hair, as a male figure huddles dejectedly. “Madonna” displays a woman during intercourse as seen by her lover, for whom plainly she cares nothing. Not all of Munch’s many relationships with women ended badly, by the way; some were casual. But any real attachment foretold disaster—in the worst case, a tussle over a gun that went off, shattering the middle finger of Munch’s left hand.
“The Scream” (1893) is keenly missed. Its absence from the show, except as an image in prints, produces the effect of an opera minus its soprano. I mean the original “Scream,” a delicate and raw marvel in oil, pastel, and casein on cardboard, which hangs in Norway’s National Gallery, not the inferior remake (one of three, none of them quite right) that was stolen from the Munch Museum. Standing in for it at MOMA is “Despair” (1892), his first representation—with a faceless and inert foreground figure under a seething blood-red sky—of a ghastly epiphany (“I felt a scream penetrating nature”) that he had had years earlier on a road outside Kristiania. The flayed and writhing homunculus of “The Scream” came to him from nowhere, unprecedented in any art and without an equivalent in his own, apart from the merged faces of the lovers in his paintings and prints called “The Kiss.” Munch avoided representing unreality. With no use for the supernatural, he was a stony skeptic in circles of spiritualist friends. The power of “The Scream,” I think, owes much to an intellectual resistance that it overcame in the artist. A similar resistance explains the popular tendency to treat that icon of unhappy modern consciousness as a joke in cartoons and inflatable toys. Laughter dies in the face of the supremely matter-of-fact original. It is the touchstone of Munch’s definitive quality in his great years: a self-abnegating submission to emotional truth. “If only one could be the body through which today’s thoughts and feelings flow,” he wrote in 1892. He became that body intermittently, at a cost of becoming almost nothing in his own person. Study his self-portraits. What is uncanny in them is narcissism turned inside out, giving itself away.
Self-portrait
HOME BUYING
NY TIMES
Home Sweet Debt By WALTER KIRN
Every night, like millions of other homeowners, I lock the doors, turn off the lights, peer out the windows to check for burglars and go to bed inside my money. It's all around me, in the walls and ceilings, under the floors and spread across the yard. Some nights, when I'm lying very still, I imagine that I can even feel it growing. That faint vibration in the foundation? That subtle rumbling in the Sheetrock? It's not a small earthquake; it's equity accumulating in the cozy three-bedroom portfolio I call home.
Or maybe it's equity vanishing? I can't tell. I'm not a banker or a broker. When I bought my house several years ago, paying the asking price without a fuss after selling another house at its asking price, I didn't regard it as an investment but as a dwelling place that suited my needs. It reminded me of the house that I grew up in, whose value I never once thought to ask my parents about because it wasn't expressible in dollars. I loved that old house for its feeling of security, its reassuring wooden solidity, and that feeling was what I hoped to duplicate when I moved into this one decades later.
But things had changed, I realized, as time went on and my book of mortgage coupons grew thinner. The physical structure in which I hung my clothes and arranged my furniture was also a financial structure, and the security it seemed to offer fluctuated with the market — not only the local housing market but the national and international credit markets. A refuge? A castle? It didn't quite feel that way. Once I had remodeled the place, refinanced it and borrowed against its appreciating value to buy a depreciating car, I discovered — as so many of us do these days — that I was living in a bond with bathrooms, a stock certificate with a front porch.
I know I'm not alone in my mixed feelings about the economic and cultural shifts that have turned what we once called "houses" and "apartments" into what we now refer to as "residential real estate." It's a chilly, bureaucratic term that reflects an unsentimental fact: Americans have far more than their emotions tied up in their homes these days. They're our chief economic assets, in many cases — our sleep-in piggy banks and even our slot machines — and we're spending more and risking more in order to acquire them and hang on to them.
And many of us are worrying about being able to, thanks to a hyperactive lending industry that has been making it easier than ever to get in over our heads. The simple fixed-rate mortgages of old whose first and final payments were the same (and which I remember occasioning backyard barbecues when they were finally paid off) have mutated into complicated instruments that make borrowers more susceptible than ever to the fickle gods of finance. This is good and bad. Adjustable-rate mortgages (including the misleadingly named and popular "interest only" variety) have brought down initial payments for many people who might not have been able to buy a home at all, but they have also induced a lot of folks to purchase more home than they can handle. Big spenders have also been lured by lenders' willingness to raise the ceilings on the amounts they'll lend.
The new mortgages, which amount to bets that a borrower's income will keep pace if interest rates rise (which they're doing and look as if they'll go on doing), cast doubt on whether the word "homeowner" is even widely suitable anymore. "Home-hoper" or merely "occupier" might be better. Even in the bubbliest local markets, like those on both coasts and in certain favored ZIP codes, it's hard to know if the four walls around you are standing firm or closing in. It all depends, and on so many things.
As an adjustable-rate-mortgage holder whose loan will reset in 2007 (along with an estimated $1 trillion in similarly structured personal debt), I find myself reading the papers nowadays with an especially anxious eye for looming short- to midterm problems that might somehow boost my payments to the moon. Unfortunately, like many in my position, I lack the sophistication to discern what sort of problems I need to be afraid of. A dirty bomb? Global warming? The bird flu? Will they help or harm me? Not as a human being, I mean, or as a citizen, but as a guy on a budget whose old frame house could, frankly, use a second bathroom, if he could only get the financing.
It's easy to fall into shameful solipsism when your ability to retain your dwelling — or to draw on its worth for a range of goods and services, from riding mowers to Carnival Cruises to children's college tuitions — is subject to distant unmanageable forces, many of which weren't even manifest when you first bought the place. I sometimes think that it doesn't seem fair to have signed a mortgage before the War on Terrorism, as my monthly payments may rise because of it. Maybe I should have negotiated this exemption: "The party of the first part shall not be penalized for any inflationary processes not evident to him at the time of closing."
Isn't the idea of a home to give a person a sanctuary from history? To grant him shelter from the worldwide storm? Maybe in theory. Maybe way back when. Today, however, our "residential properties" (because of the ways we have arranged to pay for them) are a source of our vulnerability. I live in Montana, on a farm, which ought to be as fine a place to hide as this enormous continent can offer, yet I jump every time the federal government releases what the business pages call "new numbers." I don't want new numbers! I want the old numbers to stay the same! I want to hold on to my house — or, even better, to sell it at a profit and buy another one, maybe in Alaska.
But maybe I'm overcorrecting, as the financial writers say. According to some studies, there's encouraging news hiding inside all the jargon and statistics that homeowners nowadays must keep abreast of even when they're neither selling nor buying but merely trying to determine where they stand and wondering how their standing can be improved. In a lot of regions in America, the percentage of the median income needed to buy the median-priced home is lower than it was 20 years ago. Housing is cheaper in these places, relatively speaking. But is it, really? Not if, like me and millions of other homeowners, people have turned the roofs over their heads into gigantic credit cards by taking out home-equity credit lines. And not if taxes are rising, as they are here, along with insurance rates and power bills and the price of those rotary gizmos that you push to spread fertilizer pellets on the lawn.
Having your home as your chief asset sounds like a snug and tidy situation, but when you consider all the ways that such an asset can shrink, seduce you into overreaching, expose you to uncontrollable global troubles or just plain fall to ruin, it can make you nostalgic for passbook savings accounts. It can also, in subtle ways, prevent you from truly bonding with the place. Can an asset — a thing of numbers — be a home? Eudora Welty, the writer, died a few years ago, at 92, while residing in the same Mississippi house that she lived in as a child. I've been in a few such long-tenanted domiciles. They feel like shells excreted by their occupants, like extensions of their owners' souls and bodies. They barely feel physical, in some respects. They're human biographies written in brick and wood, and it's hard to imagine them on the open market, suffering the pragmatic molestations of appraisers, real-estate agents and inspectors. Worse is imagining how they might be advertised in the reductive language of the trade: "3 br, 1ð baths, fenced yard, all appliances inc., needs some updates."
Although there's no telling how long I'll keep my house or what the market will do to our relationship, I like to think that the place is part of me and reflects my spirit, tastes and habits. I know that it has begun to smell like me. I also know some of the stories behind its worn spots, like the groove in the kitchen floor where I slide back and forth in my chair while writing. To be honest, I'm wary of growing too attached. Sometimes at night I lay down my weary head, and it feels as if I'm resting inside a big thick checkbook. Whose balance I don't (and may not want to) know.
HOME ECONOMICS
NY TIMES
Home Economics By JON GERTNER
Edward L. Glaeser grew up on the East Side of Manhattan, went to school in Princeton, N.J., and Chicago, lived for a time in Cambridge, Mass., and Palo Alto, Calif., and recently moved with his wife and young son to a house on six and a half acres in the affluent suburb of Weston, Mass. To Glaeser, this last move has been a big adjustment. For one thing, he is not a good driver, and the new commute has prompted him to leave his house by 6 a.m. so as not to get ensnared in the morning rush hour. For another, Glaeser and the suburbs are clearly an unholy marriage of sensibilities, especially since his new house is bordered by about 600 acres of conservation land. "I wake up every day, thinking, My goodness, how many units of housing could you build here?" he says. Glaeser is a creature of density. An economist at Harvard, he has spent almost his entire professional life walking around, and thinking about, cities — seeking explanations why some metropolitan areas thrive and some suffer and what factors make some places pricey and some cheap. He is just 38. In the years since earning his Ph.D. at the University of Chicago, though, he has been prolific and provocative in a way that has left many of his colleagues awestruck. "I think he's a genius," says George Akerlof, an economist at the University of California, Berkeley, who was awarded a Nobel Prize in 2001. Gary Becker, an economist at the University of Chicago and a Nobel laureate, notes that before Glaeser came along, "urban economics was dried up. No one had come up with some new ways to look at cities." David Cutler, Glaeser's Harvard colleague and an academic star in his own right, puts it this way: "I think Ed is probably the most exciting urban researcher in half a century, if not longer."
In addition to teaching classes, Glaeser has recently taken over the Taubman Center at the John F. Kennedy School of Government, which finances studies on local and state governments, as well as the university's Rappaport Institute, which tries to link Harvard faculty members with Boston-related projects. As a result, Glaeser now divides his time between doing his personal research and serving as a dashing public advocate for urbanism. And he does make an effort to be dashing. Glaeser is not heir to the tweedy, harrumphing, bad-haircut tradition of academics. He radiates a confidence that to some fellow economists borders on arrogance. He has a tendency to speak quickly and in paragraphs rather than sentences, while projecting an Old World decorousness more reminiscent of Edith Wharton's New York than of today's Boston. He is tall, broad-shouldered and patrician in his bearing; he began wearing three-piece suits 23 years ago, back when he was in prep school, he says. One afternoon last December in his Cambridge office, Glaeser sported a bespoke pinstriped get-up and a pale blue silk tie, which he had tucked into a matching, fully buttoned pinstripe vest draped with the gold fob from his pocket watch. His shoes shone. He seemed to have stepped from a hansom cab, missing only a top hat. As he began to explain some of his recent work on housing prices, his large silver cuff links clinked against the table.
Unlike that of most other housing economists, Glaeser's recent work on real estate addresses the issues of supply rather than of demand. He is far more interested in the forces shaping land development and residential building in the United States than in the forces shaping buyers' motivations and actions. He views supply as crucial to appreciating what has happened to the U.S. real-estate market over the past 30 years. A few months ago, he traveled from his Harvard office to the Massachusetts State House, near Boston Common, to discuss with the leaders of the State Legislature a research project he had just completed on the local housing market. Between 1980 and 2000, four of the five cities in the U.S. with the fastest-growing housing prices were in Boston's metropolitan area: Cambridge, Somerville, Newton and Boston itself. (Palo Alto had the second-fastest-rising prices over that time.) Glaeser and several colleagues considered two explanations. First, the possibility that builders in the metro area were running out of land and that home prices reflected that scarcity. The second hypothesis was that building permits were scarce, not land. Had the 187 townships in the metro area created a web of regulations that hindered building to such a degree that demand far outstripped supply, driving prices up?
Almost as a rule, Glaeser is skeptical of the lack-of-land argument. He has previously noted (with a collaborator, Matthew Kahn) that 95 percent of the United States remains undeveloped and that if every American were given a house on a quarter acre, so that every family of four had a full acre, that distribution would not use up half the land in Texas. Most of Boston's metro area, he concluded, wasn't particularly dense, and even in places where it was, like the centers of Boston and Cambridge, there was ample opportunity to construct higher buildings with more housing units.
So, after sorting through a mountain of data, Glaeser decided that the housing crisis was man-made. The region's zoning regulations — which were enacted by locales in the first half of the 20th century to separate residential land from commercial and industrial land and which generally promoted the orderly growth of suburbs — had become so various and complex in the second half of the 20th century that they were limiting growth. Land-use rules of the 1920's were meant to assure homeowners that their neighbors wouldn't raise hogs in their backyards, throw up a shack on a sliver of land nearby or build a factory next door, but the zoning rules of the 1970's and 1980's were different in nature and effect. Regulations in Glaeser's new hometown of Weston, for instance, made extremely large lot sizes mandatory in some neighborhoods and placed high environmental hurdles (some reasonable, others not, in Glaeser's view) in front of developers. Other towns passed ordinances governing sidewalks, street widths, the shape of lots, septic lines and so on — all with the result, in Glaeser's analysis, of curtailing the supply of housing. The same phenomenon, he says, has inflated prices in metro areas all along the East and West Coasts.
It is rather unlikely that Glaeser is calling attention to the evolution of zoning to make an ideological argument or to pin the blame on local officials for any sort of housing bubble. "He doesn't wake up in the morning and say, 'My agenda is to fight government,"' says his Harvard colleague Martin Feldstein, an economist long in favor of privatizing Social Security and who, you might argue, knows what it's like to wake up with that agenda. While Glaeser admits to a libertarian bent, with a preference for market solutions over government solutions (he calls rent control "bad, bad, bad"), his inconsistencies are such that his colleagues disagree over whether he comes from the political center or the right. Certainly no one accuses him of being a lefty. But Glaeser has many admirers, and several research collaborators, on the liberal end of the spectrum; he likewise displays an odd enthusiasm for progressive efforts like those by London's mayor, Ken Livingstone (Glaeser affectionately calls him by his popular nickname, Red Ken), who imposed a stringent "traffic tax" on vehicles in the center city to reduce congestion.
Glaeser's goal seems less to further a particular philosophy than to explain the interplay of housing and human behavior. His desire to provide a persuasive, data-driven explanation for elevated home prices fits into a decade of research that he says he hopes will ultimately provide a broad and ambitious framework to explain the function and evolution of America's cities. His view is that the life of the city cannot (and should not) be separated from its real-estate market. "They mutually cause each other," he says. "Housing supply determines to a certain extent what goes on with the economic life of the city; and the economic life of the city is intimately related to the demand for housing. And you cannot possibly understand that if you're going to try and treat them as being separate." Put another way, we shape cities; cities shape real estate; real estate shapes cities. And cities shape us too. Cities, Glaeser often says, should be thought of as "the absence of physical space between people and firms." This sounds like a poetic definition of urbanism, but it is actually more than that. To Glaeser, the concentration of people and business puts us close enough to share one another's company, culture and ideas. That goes not only for a densely packed place like Manhattan but also for car-based areas like Silicon Valley. As David Cutler points out, almost all of Glaeser's work is about social interaction and space, about seeing cities as places where all kinds of important transactions occur in "the union of everything." It is not a coincidence that one of Glaeser's great heroes is the writer Jane Jacobs, a keen, street-level observer of cities who celebrated the freedom and vitality of urban neighborhoods; he keeps an autographed copy of her book "The Death and Life of Great American Cities" on his bookshelf. In economic jargon, city living creates what Glaeser calls "spillovers." Some urban spillovers are not so good, like the pollution and congestion from so many people and cars. But others are the very essence of civilized life — the decency of community, the spread of ideas, the possibility of sublime inspiration. If there is a common theme to his work, Glaeser says, it is that "people are changed by the people around them." And it is the absence of physical distance, more than anything else, that makes that happen.
Much of Glaeser's outlook derives from his own experience. Growing up in Manhattan, where his father was an architectural historian and a curator at the Museum of Modern Art, he found it difficult not to get swept up in the city's density and energy. He traces the origins of his career in economics to his mother, who worked for the John D. Rockefeller 3rd Foundation dispensing grants to artists. "She went back to get her M.B.A. when I was 10," he says, "and I would occasionally go with her to classes when I was on vacation." Some adults remember fondly the first time they went to a major-league baseball game. Glaeser recalls a revelatory experience as a youngster when his mother sat him down and explained marginal cost pricing. In high school thereafter, and as an undergraduate at Princeton, he spent most of his time on math, economics and history. The physical sciences were a bore, he says: "How the sun works? I just didn't care. But I did care about people and man's interaction in his environment."
The University of Chicago gave Glaeser the opportunity to study at what was arguably, at the time, the best economics department in the United States, a stellar lineup of soon-to-be Nobel laureates like Gary Becker and Robert Lucas. In the regular seminars where members of the faculty typically sat at a central table and graduate students were on the classroom's periphery, Glaeser would sit at the faculty table, recalls his friend Matthew Kahn, now an economics professor at Tufts University. "So at a very early stage he saw the academics as a peer group," Kahn says. "At the time, it seemed audacious to me, but now it makes perfect sense." If there were two seminal moments for Glaeser at Chicago, the first was reading through a paper by Robert Lucas, "On the Mechanics of Economic Development," that looked at forces that spur economic growth around the world. Deep in Lucas's paper, there is a glancing mention of the role that human capital — the term economists use for the skills and knowledge that people possess — might play with respect to cities. Glaeser began to mull on that. In the meantime, he began working with his thesis adviser, the Brazilian economist Jose Scheinkman, on a study that considered whether it is better for a city to be focused on one particular industry, like textiles or finance, or whether a city with diverse industries is healthier and richer. Glaeser's and Scheinkman's paper came to the conclusion, surprising at the time, that given the choice, any city that wanted to grow should pursue commercial diversity rather than specificity. In economic circles, the paper made Glaeser famous in his mid-20's. Harvard invited him to join its faculty in 1992.
One day this January, Glaeser took the lectern in Midtown Manhattan to deliver a lecture, sponsored by the Manhattan Institute, titled "Why Are Skilled Cities Getting More Skilled?" He didn't answer this question right away. In the years since coming to Harvard — and in the years that have preceded his current work on real estate — Glaeser has methodically examined how transportation, education, crime, weather and sprawl affect the fortunes of America's cities, as if turning over tarot cards one by one. He isn't the only economist to look at these subjects, but he is arguably the most original in assimilating careful and highly mathematical economic research. His lecture, given to an audience of about 90 people, first discussed the historical trends that have shaped urban growth. Until recently, cities existed to economize on transportation costs — hence their locations near industries or agriculture to reduce the expense of shipping products by sea or by train. Yet because transport (mainly trucking) costs dropped significantly during the 20th century, location has become irrelevant. In Glaeser's view, cities now exist so that people can have face-to-face interactions or be entertained or consume products and services. For businesses, cities are a place to benefit from a spillover in ideas and to reduce costs by being near other companies.
This evolution, of course, has coincided with a vast American migration toward regions of sun and sprawl. Glaeser likes to point out the close correlation between a city's average January temperature and its urban growth; he also notes that cars per capita in 1990 is among the best indicators of how well a city has fared over the past 15 years. The more cars, the better — a conclusion that seems perfectly logical to Glaeser. Car-based cities enable residents to buy cheaper, bigger houses. And commuters in car-based cities tend to get to work faster than commuters in cities that rely on public transit. (The average car commute is about 24 minutes; on public transportation, it is around 48 minutes.) While many of his academic peers were looking at, and denigrating, how the majority of Americans have chosen to live, Glaeser (though no fan of the aesthetics of sprawl himself) didn't think an economist should allow taste to affect judgment. "You shouldn't go around thinking that all these people are just jackasses for deciding to drive an automobile," he says.
In any case, Glaeser discovered that there can be more to urban success than cars and palm trees. For a city without warm weather and a car-friendly environment, skills are destiny. That is why New York and Minneapolis, with vast numbers of college graduates, have done so well. "Boston would be just another declining, cold, manufacturing city if it weren't for its preponderance of human capital," Glaeser says. And his studies suggest that the more skilled a city's population, the more skilled it is becoming, as entrepreneurs attract skilled workers who in turn attract entrepreneurs. Americans, as a result, are sorting themselves through education and geography more and more with each passing year.
The process yields losers as well as winners. Late last year, Glaeser wrote a controversial article that made a case against rebuilding New Orleans. He has since become an intellectual leader to a tiny, unsentimental, let's-not-rebuild-the-city faction. "There's some small core of the city that should be there," he says, "but the city itself has been in decline for 50 years and in relative decline for 150 years relative to the U.S. population as a whole. It's not a great spot to have a city; it's incredibly expensive to build the infrastructure to keep it there. You can't possibly argue that New Orleans has been doing a good job of taking care of its poor residents, either economically or socially. And surely some of the residents are better off by being given checks and being allowed to move elsewhere." Glaeser admits that many critics have responded to his views with shock, asserting that he is unfairly attacking the city at a moment of terrible vulnerability. "No one has accused me of hating the poor or being racist," he says. "But I have been accused of not having a heart."
It's a familiar complaint. A few years ago, in an article Glaeser wrote about poverty for Harvard's alumni magazine, he suggested eliminating public housing in the U.S. in favor of housing vouchers. His argument was attacked for being coldblooded as well as impractical. Chris Mayer, a housing economist at Columbia Business School and a frequent admirer of Glaeser's research, says that Glaeser's perspective on things tends to attract controversy and incite debate. "I think Ed does care a lot about helping the poor and about social equality," Mayer says, "but his view of how to get there is a different view than other people."
Glaeser, for his part, says he feels the same about New Orleans as he does about many cities of the Rust Belt. "I believe very strongly that our obligation is to people, not places, and I think we certainly have an obligation — ethical, economic, what have you — to the residents of Detroit," he told me. But he sees no economic or geographic reason to have a large city there anymore, and he views the prospects for any rebound as dim. (Detroit ranks last among cities with more than 500,000 residents in percentage of college graduates.) The city produced the cars that produced the sprawl that helped destroy the city; such tragedy might have been lessened had it produced more universities too. "There are no reasons why it can't, and shouldn't, decline," Glaeser says. "And I would say that for many other cities. There's no reason not to let decline go forward." The greatness of America is dependent in part upon regional evolutions and migrations, he adds. "Places decline and places grow. We shouldn't stand in the way of that."
Glaeser first began to think about how real estate fit into this urban order a few years ago, after he spent some time looking at the effects of skills and sprawl on cities. While Glaeser seems able to turn out academic papers at an astonishing pace — he almost always writes at home, so he can smoke cigars while he types — it sometimes takes years for him and his collaborators to assemble the data and equations used to support his ideas. In addition to his urban research, Glaeser has written on voting behavior, hatred, poverty and public health; a few years ago, with David Cutler, he wrote a widely discussed paper that looked at why Americans are becoming so obese. (They attributed it partly to the microwave oven.) Yet urban subjects have consumed most of Glaeser's time and attention. In the late 1990's, he began thinking less about incorporeal forces like human capital and consumerism and more about the physical nature of places — buildings, roads, buses — and what kind of effect that had on a metropolitan area.
In 2000, Glaeser took a sabbatical from Harvard and began to spend a few days a week in Philadelphia working with Joseph Gyourko, a real-estate economist at the Wharton School of the University of Pennsylvania. Glaeser had already been thinking about the relationship between housing and urban poverty when one day he and Gyourko began to discuss why cities like Philadelphia and Detroit — places with poor future prospects, both economists believed — weren't doing even worse in terms of population. Why didn't everyone leave, Gyourko wondered, and go to a place like Charlotte, N.C., that had a fast-growing economy? This question addresses a puzzle of urban economics. Cities (think of Las Vegas or Phoenix) can grow at a very fast rate, exploding overnight with businesses and residents. Some can increase in population by 50 or even 60 percent in a decade. But cities lose their residents very slowly and almost never at a pace of more than 10 percent in a decade. What's more, when cities grow, they expand significantly in population, but housing prices tend to rise slowly; even as Las Vegas grew by leaps and bounds in the 1990's, for instance, the average home there cost well under $200,000. When cities decline, however, the trends get flipped around. Population diminishes slowly, but housing prices tend to drop markedly.
Glaeser and Gyourko determined that the durable nature of housing itself explains this phenomenon. People can flee, but houses can take a century or more to finally fall to pieces. "These places still exist," Glaeser says of Detroit and St. Louis, "because the housing is permanent. And if you want to understand why they're poor, it's actually also in part because the housing is permanent." For Glaeser, this is the story not only of these two places but also of Buffalo, Baltimore, Cleveland, Philadelphia and Pittsburgh — the powerhouse cities of America in 1950 that consistently and inexorably lost population over the next 50 years. It is not just that there were poor people and the jobs left and the poor people were stuck there. "Thousands of poor come to Detroit each year and live in places that are cheaper than any other place to live in part because they've got durable housing still around," Glaeser says. The net population of Detroit usually decreases each year, in other words, but the city still attracts plenty of people drawn by its extreme affordability. As Gyourko points out, in the year 2000 the median house price in Philadelphia was $59,700; in Detroit, it was $63,600. Those prices are well below the actual construction costs of the homes. "To build them new, it would cost at least $80,000," Gyourko says, "so there's no builder who would build those today. And as long as those houses remain, the people remain."
The resulting paper, "Urban Decline and Durable Housing," caused a stir among urban economists even before its publication last year. (It was initially circulated with a subtitle along the lines of "Why Does Anyone Still Live in Detroit?" until the authors, thinking it politically insensitive, removed it.) In addition to illuminating some of the forces shaping our poorest cities, the research proved to Glaeser that it is impossible to think about urban economies without thinking of urban buildings at the same time. Meanwhile, it demonstrated to him how useful it can be to consider the relationship between actual construction costs and the market price of homes. That lesson seemed to apply not only to declining cities but also to places with extraordinary price appreciation, like the San Francisco or Boston metro areas. How could homes in these places be priced so much higher than construction costs? And why did the prices keep going up?
Glaeser has come to believe that changes in zoning regulations may be the most important transformation in the American real-estate market since the mass acceptance of the automobile. In his view, these regulations have essentially created a "zoning tax" that has pushed prices far above construction costs. Very, very far above construction costs. It is not a perspective shared by all housing analysts; some economists have been far more inclined to blame high prices on high demand (spurred by low interest rates) or on rampant speculation. Others agree with Glaeser in emphasizing supply but not necessarily fixing on zoning. Karl Case, for instance, an economist at Wellesley College who counts himself a fan of Glaeser's, agrees that lack of supply has led to steep prices in the Boston area, but he attributes the housing shortage not just to zoning but also to the nature of the construction business and the scarcity of large desirable tracts of land. Still, among the half-dozen leading economists who study housing supply, there seems to be wide agreement that regulations have had a tremendous effect on prices. "I think the evidence is overwhelming," says John Quigley, an urban economist at Berkeley who has looked specifically at the effects of regulation on the California market.
As Glaeser says: "It's so easy to forget the world that we were living in around 1970, when basically almost all of the value of houses was in the physical infrastructure. That was actually the cost. There was some land, and it was worth something, but it wasn't worth more than 20 percent of the value of the house." Even in New York City, Glaeser says, the price of an apartment back then was essentially the cost of building the next floor. In researching New York City's housing prices, in fact, Glaeser and Gyourko discovered that over the past 30 years, the average height of new residential buildings in Manhattan decreased in size. "That's crazy," he insists, especially in light of how much the demand to live in New York has increased. "You know, if prices in Manhattan are skyrocketing, you should be building more and more at 50 stories, rather than at 30. Not the reverse." So is it his contention that Manhattan could build far more than it has recently? "Oh, for sure," he says. "Technologically? Certainly. No reason why you couldn't."
Let's go back to Manhattan in the 1920's, Glaeser says. "New York in the 1920's is a pretty developed place, a pretty mature place. But they're producing a hundred thousand units a year. They're tearing up swaths of Manhattan and building higher buildings." That would be legally and politically impossible today, but as he and Gyourko see things, it is precisely those legal and political roadblocks to "tearing up" the city that have made the place so expensive. Actually, in 2004, the two men took a close look at Manhattan and estimated that one half or more of the value of condominiums in the borough could be thought of as arising from some type of regulatory constraint preventing the construction of new housing. The data for co-ops (because of their ownership structure) was more difficult to interpret, but Glaeser and Gyourko suspect that their estimates probably apply to the Manhattan market as a whole.
Glaeser has little doubt that there are regular cycles in real-estate markets; the recent slowdown may perhaps be evidence of one of those cycles. But he says he doesn't think that the supply issues are something that will disappear, even if the demand for housing levels off or drops over the next few years. "We will never go back to a world in which developers in Massachusetts or California or New York are able to do what they want with their property unimpeded by their neighbors," he says. And what surprises him is that the changes in how we have treated property rights for the last 40 years — who gets permission to build, the size and location of what owners are permitted to build — have been the subject of virtually no national dialogue, even as the effects on prices, in his view, have been extraordinary.
This is not to suggest that Glaeser wants New York or Boston to become another Houston or Phoenix, where developers build without hindrance and housing, as a result, stays cheap. "I'm pretty sure that Boston and California have gone too far to one extreme," he says. "But I'm not sure that Texas hasn't gone too far to the other extreme." He says he tends to think that officials in the Boston and New York metro areas need to allow for more housing when the market gets tighter again. At the very least, he says, officials should discuss the long-term effects of restricting home building. And there is a bigger point here anyway, he says. Zoning and housing supply ultimately determine not only who lives in a city but also the very nature of these places. Boston, San Francisco and Manhattan are obviously becoming rarefied destinations, mostly for America's elites (Glaeser calls the cities "luxury goods"), with housing floating beyond the reach of the young and the middle class. These cities' economies are in the process of becoming boutique, too, accommodating only the most skilled and privileged. Their desire to limit construction and grow not in buildings and population but in prices has, in effect, begun to shape their destiny. "A healthy city is one that has a healthy mix of demographic groups," Glaeser says. "Shutting out your 25-to-40 year-olds? That feels like a bad strategy for urban innovation."
But economists, like any social scientists, often discover that the leap from conducting research to making policy can be enormously difficult. It can take years, perhaps decades — and that's when it happens at all. Glaeser is fortunate in that he already has the ear of mayors and state legislators who at least took notice of his recent work on regulations in the Boston metro area. Still, he admits it will be difficult to go against the current momentum. "I'm not in any sense trying to suggest that we want a developer's paradise where you can build anything, anywhere," he says. "But I sure as heck think the current situation happened by happenstance, happened by changing the legal norms, which in no sense is guaranteed to yield a socially desirable outcome." Homeowners, he points out, have a strong incentive to stop new development, both because it can be an inconvenience and also because, like any monopolist, stopping supply drives up the price of their own homes. "Lack of affordable housing isn't a problem to homeowners," Glaeser says; that's exactly what they want. "The thing you want most is to make sure that your home is not affordable if you own it. And for that reason, there's absolutely no reason to think that little suburban communities with no businesses that are run essentially by their homeowners will make the right decisions for the state as a whole, for the business in the area, for the country as a whole."
As a matter of fact, Glaeser long ago became convinced that there is a lot riding on supply. "The welfare of the world is shaped in part by our urban form, by the way that we live, the way our communities are constructed," he says. "These things like growth controls have changed the way communities are developed." Joseph Gyourko shares the view that where we live, and why we sort ourselves into those places, have profound effects on society, culture, politics and business. "It's important," he says of the sorting process. "It's not an innocent thing." Thus, the two academics have resumed their real-estate research, taking on two projects. The first, closer to completion, is an attempt to explain the occurrence of housing cycles. So far, the preliminary data have led Glaeser to believe that the past decade's run-up in prices is probably caused by factors beyond the restrictions on supply; the home-appreciation numbers appear to be so high that they suggest that prices in coastal cities have some psychological component too. (In his view, the supply shortage greatly magnifies the effect of any sort of "irrational exuberance.") Glaeser is the kind of economist who is reluctant to make predictions. Yet, he says, "I'm comfortable with the notion that we're going to have a substantial correction over the next five years."
His other project is both more ambitious and more difficult. He and Gyourko say they know that the country's regulatory environment, and thus the supply of housing, began to change around 1975. But they don't know why it changed. So along with a third researcher, Raven Saks, they have begun to track building permits from hundreds of cities around the country over the past four decades to investigate the nature of the evolution. Glaeser speculates that there may be a viral phenomenon whereby once housing prices reach a certain level, residents become aware of high home values and agitate for restrictions; another possibility is that judges have become much more sympathetic to blocking development for environmental reasons. Still another thought: that homeowners, utilizing skills learned during the civil rights movement and political protests of the 1960's and 1970's, became much more adept at organizing against developers. (There appears to be a reasonable correlation between liberal enclaves, zoning regulations and high housing prices.) In any event, Glaeser says, he doesn't know the answer yet, and it may take years to find out.
He was explaining this one afternoon in January as he sat in a club chair on a third-floor landing at the Harvard Club in Midtown Manhattan. Glaeser visits urban neighborhoods all around the U.S., but his teaching schedule often restricts his observation of the American landscape to data and algebraic models. When it was time to go, he seemed relieved to step onto the concrete sidewalk, into the city he once called the country's "urban colossus." Waiting for the light to change at 44th Street and Fifth Avenue, the defender of sprawl, the explainer of human capital and the avenger of zoning regulations — and the wearer of a splendid beige cashmere overcoat — didn't seem much suited for the suburbs of Boston. Here on the street, disappearing into a crowd of people, he seemed right at home.
How bad were the Oscars?
Why New Orleans will not recover
Pathetic.
ART: EDVARD MUNCH
Saw this while in New York. from the New Yorker:
When he was seven years old, in 1870 or 1871, Edvard Munch used a lump of coal to draw a sprawling procession of blind men across the floor of his home in Kristiania—as Swedish-ruled Oslo was then named—one in a series of squalid flats taken by a family prone to poverty, disease, mental disorder, and death. His mother had died of tuberculosis when he was five; his fiercely beloved older sister Sophie would do the same when he was thirteen. Another sister would be lost to psychosis. Munch himself was sickly from birth; he said later that he grew up feeling “like a boat built of hopeless material, of old rotten wood.” His father was a military doctor, at a time when doctors were ill-paid and little respected, and a guilt-ravaged religious zealot whose idea of parental duty was to instill the terrors of Hell in his children. The boy’s drawing expressed an alarmed fascination with anonymous crowds on city streets—the same theme appeared in major paintings that he made some twenty years later. According to Sue Prideaux’s assured and vivid recent biography, “Edvard Munch: Behind the Scream” (Yale), Munch’s Aunt Karen, the family’s mainstay, marvelled at “the trembling uncertainty” that the apparent prodigy had caught in the sightless figures. (As Munch matured, his talent was regularly noted—even as his art was loathed and his character deplored—in Norway.) In later years, Munch recalled “deriving such pleasure from the monumental format of my work, real satisfaction at the sensation of my hand so much more actively involved than when I drew on the back of father’s prescriptions.”
Two things impress me about this story. First, I believe it, despite its redolence of the sort of family lore that mythifies everybody’s childhood and abounds in the hagiographies of genius. No other great artist—and only a rare writer, short of Proust—has made so absolute a principle of truthful memory. (A perceptive German critic, in 1902, characterized Munch as “a Romantic who cannot lie.”) Second, I’m struck by the note of discovered joy in artmaking, never mind the direness of the subject, that may be typical of budding artists but would serve this one to an extreme degree, as an emotional tightrope over the abysses of a life that was otherwise pretty thoroughly awful.
“Edvard Munch: The Modern Life of the Soul,” at the Museum of Modern Art, is the second comprehensive Munch retrospective in the United States in the past fifty years. The first, at the National Gallery, in 1978, came as a revelation to observers who had not previously visited Norway, where all but a few of Munch’s paintings reside. (The Boston Museum of Fine Arts’ “Summer Night’s Dream (The Voice),” from 1893, is the only American-owned painting from his magnum opus, the series of pictures on themes of love, anxiety, and death which is commonly termed the “Frieze of Life.”) He was known here as a great printmaker—the most original of the Symbolist era—and, vaguely, as the father of German Expressionism. But reproductions of his work, including the already famous “Scream,” prepared no one for the originals’ astringent textures, dense space, tensile drawing, and eloquent color.
That show revolutionized my sense of modern-art history, particularly of its canonical elevation of the quartet of Post-Impressionism: Cézanne, van Gogh, Gauguin, and Seurat. Munch, though younger than those masters, and hitting his stride a bit later, suddenly seemed to me their peer in giving form to the seismic forces of European modernity. He still does, both despite and because of a radically impure style that, at its best, varies from picture to picture. His strongest works, dating from about 1890 to the early years of the last century, exalted pictorial functions—narrative and illustration—that were being combed out of modern painting as specialties more proper to literature and the popular arts. Thereafter, until his death, in 1944, Munch, with less to say of life, painted mainly just to paint, with so-so results, except for the occasional, jolting self-portrait. As a happy compensation for being so long marginalized, and at a time of resurgent interest in storytelling among young artists, Munch today appears fresh and challenging in ways that his more honored peers may not.
French painting (Gauguin and van Gogh), Scandinavian theatre (Ibsen and Strindberg), and German philosophy (Nietzsche) shaped Munch’s emerging sensibility as he moved through the bohemian scene in Kristiania, with some agonizing experiments in free love, and on to art school in Paris, under the academic realist Léon Bonnat, and to scandal in Berlin, where, in 1892, his first major exhibition was denounced by Kaiser Wilhelm II and promptly shut down. Munch’s first successful works were interiors and portraits that strained against the genteel conventions of naturalism. The MOMA show includes a regrettably later version, from 1896, of “The Sick Child” (1886), a torturous reminiscence of Sophie on her deathbed, in which Munch struggled toward a new pictorial language. In the ravishing “Summer Night / Inger on the Beach” (1889) seaside rocks seem to pulse with incipient life. After experimenting with semi-Pointillist Impressionism in Paris, he painted, upon learning of his father’s death, “Night in St. Cloud” (1890), which shows a top-hatted man in silhouette, sitting at a window and smoking, in variously inky and luminous blues. It is a ticking bomb of suppressed feeling.
Munch became Munch with his allegories of love. “The Voice,” presenting a seductive woman in white in the seaside woods, backlit by a low summer-night sun, memorializes the onset of his first love. “Ashes” (1894) is about the affair’s end. Postcoital, the same woman, in perhaps the same woods, dispassionately tidies her hair, as a male figure huddles dejectedly. “Madonna” displays a woman during intercourse as seen by her lover, for whom plainly she cares nothing. Not all of Munch’s many relationships with women ended badly, by the way; some were casual. But any real attachment foretold disaster—in the worst case, a tussle over a gun that went off, shattering the middle finger of Munch’s left hand.
“The Scream” (1893) is keenly missed. Its absence from the show, except as an image in prints, produces the effect of an opera minus its soprano. I mean the original “Scream,” a delicate and raw marvel in oil, pastel, and casein on cardboard, which hangs in Norway’s National Gallery, not the inferior remake (one of three, none of them quite right) that was stolen from the Munch Museum. Standing in for it at MOMA is “Despair” (1892), his first representation—with a faceless and inert foreground figure under a seething blood-red sky—of a ghastly epiphany (“I felt a scream penetrating nature”) that he had had years earlier on a road outside Kristiania. The flayed and writhing homunculus of “The Scream” came to him from nowhere, unprecedented in any art and without an equivalent in his own, apart from the merged faces of the lovers in his paintings and prints called “The Kiss.” Munch avoided representing unreality. With no use for the supernatural, he was a stony skeptic in circles of spiritualist friends. The power of “The Scream,” I think, owes much to an intellectual resistance that it overcame in the artist. A similar resistance explains the popular tendency to treat that icon of unhappy modern consciousness as a joke in cartoons and inflatable toys. Laughter dies in the face of the supremely matter-of-fact original. It is the touchstone of Munch’s definitive quality in his great years: a self-abnegating submission to emotional truth. “If only one could be the body through which today’s thoughts and feelings flow,” he wrote in 1892. He became that body intermittently, at a cost of becoming almost nothing in his own person. Study his self-portraits. What is uncanny in them is narcissism turned inside out, giving itself away.
Self-portrait
HOME BUYING
NY TIMES
Home Sweet Debt By WALTER KIRN
Every night, like millions of other homeowners, I lock the doors, turn off the lights, peer out the windows to check for burglars and go to bed inside my money. It's all around me, in the walls and ceilings, under the floors and spread across the yard. Some nights, when I'm lying very still, I imagine that I can even feel it growing. That faint vibration in the foundation? That subtle rumbling in the Sheetrock? It's not a small earthquake; it's equity accumulating in the cozy three-bedroom portfolio I call home.
Or maybe it's equity vanishing? I can't tell. I'm not a banker or a broker. When I bought my house several years ago, paying the asking price without a fuss after selling another house at its asking price, I didn't regard it as an investment but as a dwelling place that suited my needs. It reminded me of the house that I grew up in, whose value I never once thought to ask my parents about because it wasn't expressible in dollars. I loved that old house for its feeling of security, its reassuring wooden solidity, and that feeling was what I hoped to duplicate when I moved into this one decades later.
But things had changed, I realized, as time went on and my book of mortgage coupons grew thinner. The physical structure in which I hung my clothes and arranged my furniture was also a financial structure, and the security it seemed to offer fluctuated with the market — not only the local housing market but the national and international credit markets. A refuge? A castle? It didn't quite feel that way. Once I had remodeled the place, refinanced it and borrowed against its appreciating value to buy a depreciating car, I discovered — as so many of us do these days — that I was living in a bond with bathrooms, a stock certificate with a front porch.
I know I'm not alone in my mixed feelings about the economic and cultural shifts that have turned what we once called "houses" and "apartments" into what we now refer to as "residential real estate." It's a chilly, bureaucratic term that reflects an unsentimental fact: Americans have far more than their emotions tied up in their homes these days. They're our chief economic assets, in many cases — our sleep-in piggy banks and even our slot machines — and we're spending more and risking more in order to acquire them and hang on to them.
And many of us are worrying about being able to, thanks to a hyperactive lending industry that has been making it easier than ever to get in over our heads. The simple fixed-rate mortgages of old whose first and final payments were the same (and which I remember occasioning backyard barbecues when they were finally paid off) have mutated into complicated instruments that make borrowers more susceptible than ever to the fickle gods of finance. This is good and bad. Adjustable-rate mortgages (including the misleadingly named and popular "interest only" variety) have brought down initial payments for many people who might not have been able to buy a home at all, but they have also induced a lot of folks to purchase more home than they can handle. Big spenders have also been lured by lenders' willingness to raise the ceilings on the amounts they'll lend.
The new mortgages, which amount to bets that a borrower's income will keep pace if interest rates rise (which they're doing and look as if they'll go on doing), cast doubt on whether the word "homeowner" is even widely suitable anymore. "Home-hoper" or merely "occupier" might be better. Even in the bubbliest local markets, like those on both coasts and in certain favored ZIP codes, it's hard to know if the four walls around you are standing firm or closing in. It all depends, and on so many things.
As an adjustable-rate-mortgage holder whose loan will reset in 2007 (along with an estimated $1 trillion in similarly structured personal debt), I find myself reading the papers nowadays with an especially anxious eye for looming short- to midterm problems that might somehow boost my payments to the moon. Unfortunately, like many in my position, I lack the sophistication to discern what sort of problems I need to be afraid of. A dirty bomb? Global warming? The bird flu? Will they help or harm me? Not as a human being, I mean, or as a citizen, but as a guy on a budget whose old frame house could, frankly, use a second bathroom, if he could only get the financing.
It's easy to fall into shameful solipsism when your ability to retain your dwelling — or to draw on its worth for a range of goods and services, from riding mowers to Carnival Cruises to children's college tuitions — is subject to distant unmanageable forces, many of which weren't even manifest when you first bought the place. I sometimes think that it doesn't seem fair to have signed a mortgage before the War on Terrorism, as my monthly payments may rise because of it. Maybe I should have negotiated this exemption: "The party of the first part shall not be penalized for any inflationary processes not evident to him at the time of closing."
Isn't the idea of a home to give a person a sanctuary from history? To grant him shelter from the worldwide storm? Maybe in theory. Maybe way back when. Today, however, our "residential properties" (because of the ways we have arranged to pay for them) are a source of our vulnerability. I live in Montana, on a farm, which ought to be as fine a place to hide as this enormous continent can offer, yet I jump every time the federal government releases what the business pages call "new numbers." I don't want new numbers! I want the old numbers to stay the same! I want to hold on to my house — or, even better, to sell it at a profit and buy another one, maybe in Alaska.
But maybe I'm overcorrecting, as the financial writers say. According to some studies, there's encouraging news hiding inside all the jargon and statistics that homeowners nowadays must keep abreast of even when they're neither selling nor buying but merely trying to determine where they stand and wondering how their standing can be improved. In a lot of regions in America, the percentage of the median income needed to buy the median-priced home is lower than it was 20 years ago. Housing is cheaper in these places, relatively speaking. But is it, really? Not if, like me and millions of other homeowners, people have turned the roofs over their heads into gigantic credit cards by taking out home-equity credit lines. And not if taxes are rising, as they are here, along with insurance rates and power bills and the price of those rotary gizmos that you push to spread fertilizer pellets on the lawn.
Having your home as your chief asset sounds like a snug and tidy situation, but when you consider all the ways that such an asset can shrink, seduce you into overreaching, expose you to uncontrollable global troubles or just plain fall to ruin, it can make you nostalgic for passbook savings accounts. It can also, in subtle ways, prevent you from truly bonding with the place. Can an asset — a thing of numbers — be a home? Eudora Welty, the writer, died a few years ago, at 92, while residing in the same Mississippi house that she lived in as a child. I've been in a few such long-tenanted domiciles. They feel like shells excreted by their occupants, like extensions of their owners' souls and bodies. They barely feel physical, in some respects. They're human biographies written in brick and wood, and it's hard to imagine them on the open market, suffering the pragmatic molestations of appraisers, real-estate agents and inspectors. Worse is imagining how they might be advertised in the reductive language of the trade: "3 br, 1ð baths, fenced yard, all appliances inc., needs some updates."
Although there's no telling how long I'll keep my house or what the market will do to our relationship, I like to think that the place is part of me and reflects my spirit, tastes and habits. I know that it has begun to smell like me. I also know some of the stories behind its worn spots, like the groove in the kitchen floor where I slide back and forth in my chair while writing. To be honest, I'm wary of growing too attached. Sometimes at night I lay down my weary head, and it feels as if I'm resting inside a big thick checkbook. Whose balance I don't (and may not want to) know.
HOME ECONOMICS
NY TIMES
Home Economics By JON GERTNER
Edward L. Glaeser grew up on the East Side of Manhattan, went to school in Princeton, N.J., and Chicago, lived for a time in Cambridge, Mass., and Palo Alto, Calif., and recently moved with his wife and young son to a house on six and a half acres in the affluent suburb of Weston, Mass. To Glaeser, this last move has been a big adjustment. For one thing, he is not a good driver, and the new commute has prompted him to leave his house by 6 a.m. so as not to get ensnared in the morning rush hour. For another, Glaeser and the suburbs are clearly an unholy marriage of sensibilities, especially since his new house is bordered by about 600 acres of conservation land. "I wake up every day, thinking, My goodness, how many units of housing could you build here?" he says. Glaeser is a creature of density. An economist at Harvard, he has spent almost his entire professional life walking around, and thinking about, cities — seeking explanations why some metropolitan areas thrive and some suffer and what factors make some places pricey and some cheap. He is just 38. In the years since earning his Ph.D. at the University of Chicago, though, he has been prolific and provocative in a way that has left many of his colleagues awestruck. "I think he's a genius," says George Akerlof, an economist at the University of California, Berkeley, who was awarded a Nobel Prize in 2001. Gary Becker, an economist at the University of Chicago and a Nobel laureate, notes that before Glaeser came along, "urban economics was dried up. No one had come up with some new ways to look at cities." David Cutler, Glaeser's Harvard colleague and an academic star in his own right, puts it this way: "I think Ed is probably the most exciting urban researcher in half a century, if not longer."
In addition to teaching classes, Glaeser has recently taken over the Taubman Center at the John F. Kennedy School of Government, which finances studies on local and state governments, as well as the university's Rappaport Institute, which tries to link Harvard faculty members with Boston-related projects. As a result, Glaeser now divides his time between doing his personal research and serving as a dashing public advocate for urbanism. And he does make an effort to be dashing. Glaeser is not heir to the tweedy, harrumphing, bad-haircut tradition of academics. He radiates a confidence that to some fellow economists borders on arrogance. He has a tendency to speak quickly and in paragraphs rather than sentences, while projecting an Old World decorousness more reminiscent of Edith Wharton's New York than of today's Boston. He is tall, broad-shouldered and patrician in his bearing; he began wearing three-piece suits 23 years ago, back when he was in prep school, he says. One afternoon last December in his Cambridge office, Glaeser sported a bespoke pinstriped get-up and a pale blue silk tie, which he had tucked into a matching, fully buttoned pinstripe vest draped with the gold fob from his pocket watch. His shoes shone. He seemed to have stepped from a hansom cab, missing only a top hat. As he began to explain some of his recent work on housing prices, his large silver cuff links clinked against the table.
Unlike that of most other housing economists, Glaeser's recent work on real estate addresses the issues of supply rather than of demand. He is far more interested in the forces shaping land development and residential building in the United States than in the forces shaping buyers' motivations and actions. He views supply as crucial to appreciating what has happened to the U.S. real-estate market over the past 30 years. A few months ago, he traveled from his Harvard office to the Massachusetts State House, near Boston Common, to discuss with the leaders of the State Legislature a research project he had just completed on the local housing market. Between 1980 and 2000, four of the five cities in the U.S. with the fastest-growing housing prices were in Boston's metropolitan area: Cambridge, Somerville, Newton and Boston itself. (Palo Alto had the second-fastest-rising prices over that time.) Glaeser and several colleagues considered two explanations. First, the possibility that builders in the metro area were running out of land and that home prices reflected that scarcity. The second hypothesis was that building permits were scarce, not land. Had the 187 townships in the metro area created a web of regulations that hindered building to such a degree that demand far outstripped supply, driving prices up?
Almost as a rule, Glaeser is skeptical of the lack-of-land argument. He has previously noted (with a collaborator, Matthew Kahn) that 95 percent of the United States remains undeveloped and that if every American were given a house on a quarter acre, so that every family of four had a full acre, that distribution would not use up half the land in Texas. Most of Boston's metro area, he concluded, wasn't particularly dense, and even in places where it was, like the centers of Boston and Cambridge, there was ample opportunity to construct higher buildings with more housing units.
So, after sorting through a mountain of data, Glaeser decided that the housing crisis was man-made. The region's zoning regulations — which were enacted by locales in the first half of the 20th century to separate residential land from commercial and industrial land and which generally promoted the orderly growth of suburbs — had become so various and complex in the second half of the 20th century that they were limiting growth. Land-use rules of the 1920's were meant to assure homeowners that their neighbors wouldn't raise hogs in their backyards, throw up a shack on a sliver of land nearby or build a factory next door, but the zoning rules of the 1970's and 1980's were different in nature and effect. Regulations in Glaeser's new hometown of Weston, for instance, made extremely large lot sizes mandatory in some neighborhoods and placed high environmental hurdles (some reasonable, others not, in Glaeser's view) in front of developers. Other towns passed ordinances governing sidewalks, street widths, the shape of lots, septic lines and so on — all with the result, in Glaeser's analysis, of curtailing the supply of housing. The same phenomenon, he says, has inflated prices in metro areas all along the East and West Coasts.
It is rather unlikely that Glaeser is calling attention to the evolution of zoning to make an ideological argument or to pin the blame on local officials for any sort of housing bubble. "He doesn't wake up in the morning and say, 'My agenda is to fight government,"' says his Harvard colleague Martin Feldstein, an economist long in favor of privatizing Social Security and who, you might argue, knows what it's like to wake up with that agenda. While Glaeser admits to a libertarian bent, with a preference for market solutions over government solutions (he calls rent control "bad, bad, bad"), his inconsistencies are such that his colleagues disagree over whether he comes from the political center or the right. Certainly no one accuses him of being a lefty. But Glaeser has many admirers, and several research collaborators, on the liberal end of the spectrum; he likewise displays an odd enthusiasm for progressive efforts like those by London's mayor, Ken Livingstone (Glaeser affectionately calls him by his popular nickname, Red Ken), who imposed a stringent "traffic tax" on vehicles in the center city to reduce congestion.
Glaeser's goal seems less to further a particular philosophy than to explain the interplay of housing and human behavior. His desire to provide a persuasive, data-driven explanation for elevated home prices fits into a decade of research that he says he hopes will ultimately provide a broad and ambitious framework to explain the function and evolution of America's cities. His view is that the life of the city cannot (and should not) be separated from its real-estate market. "They mutually cause each other," he says. "Housing supply determines to a certain extent what goes on with the economic life of the city; and the economic life of the city is intimately related to the demand for housing. And you cannot possibly understand that if you're going to try and treat them as being separate." Put another way, we shape cities; cities shape real estate; real estate shapes cities. And cities shape us too. Cities, Glaeser often says, should be thought of as "the absence of physical space between people and firms." This sounds like a poetic definition of urbanism, but it is actually more than that. To Glaeser, the concentration of people and business puts us close enough to share one another's company, culture and ideas. That goes not only for a densely packed place like Manhattan but also for car-based areas like Silicon Valley. As David Cutler points out, almost all of Glaeser's work is about social interaction and space, about seeing cities as places where all kinds of important transactions occur in "the union of everything." It is not a coincidence that one of Glaeser's great heroes is the writer Jane Jacobs, a keen, street-level observer of cities who celebrated the freedom and vitality of urban neighborhoods; he keeps an autographed copy of her book "The Death and Life of Great American Cities" on his bookshelf. In economic jargon, city living creates what Glaeser calls "spillovers." Some urban spillovers are not so good, like the pollution and congestion from so many people and cars. But others are the very essence of civilized life — the decency of community, the spread of ideas, the possibility of sublime inspiration. If there is a common theme to his work, Glaeser says, it is that "people are changed by the people around them." And it is the absence of physical distance, more than anything else, that makes that happen.
Much of Glaeser's outlook derives from his own experience. Growing up in Manhattan, where his father was an architectural historian and a curator at the Museum of Modern Art, he found it difficult not to get swept up in the city's density and energy. He traces the origins of his career in economics to his mother, who worked for the John D. Rockefeller 3rd Foundation dispensing grants to artists. "She went back to get her M.B.A. when I was 10," he says, "and I would occasionally go with her to classes when I was on vacation." Some adults remember fondly the first time they went to a major-league baseball game. Glaeser recalls a revelatory experience as a youngster when his mother sat him down and explained marginal cost pricing. In high school thereafter, and as an undergraduate at Princeton, he spent most of his time on math, economics and history. The physical sciences were a bore, he says: "How the sun works? I just didn't care. But I did care about people and man's interaction in his environment."
The University of Chicago gave Glaeser the opportunity to study at what was arguably, at the time, the best economics department in the United States, a stellar lineup of soon-to-be Nobel laureates like Gary Becker and Robert Lucas. In the regular seminars where members of the faculty typically sat at a central table and graduate students were on the classroom's periphery, Glaeser would sit at the faculty table, recalls his friend Matthew Kahn, now an economics professor at Tufts University. "So at a very early stage he saw the academics as a peer group," Kahn says. "At the time, it seemed audacious to me, but now it makes perfect sense." If there were two seminal moments for Glaeser at Chicago, the first was reading through a paper by Robert Lucas, "On the Mechanics of Economic Development," that looked at forces that spur economic growth around the world. Deep in Lucas's paper, there is a glancing mention of the role that human capital — the term economists use for the skills and knowledge that people possess — might play with respect to cities. Glaeser began to mull on that. In the meantime, he began working with his thesis adviser, the Brazilian economist Jose Scheinkman, on a study that considered whether it is better for a city to be focused on one particular industry, like textiles or finance, or whether a city with diverse industries is healthier and richer. Glaeser's and Scheinkman's paper came to the conclusion, surprising at the time, that given the choice, any city that wanted to grow should pursue commercial diversity rather than specificity. In economic circles, the paper made Glaeser famous in his mid-20's. Harvard invited him to join its faculty in 1992.
One day this January, Glaeser took the lectern in Midtown Manhattan to deliver a lecture, sponsored by the Manhattan Institute, titled "Why Are Skilled Cities Getting More Skilled?" He didn't answer this question right away. In the years since coming to Harvard — and in the years that have preceded his current work on real estate — Glaeser has methodically examined how transportation, education, crime, weather and sprawl affect the fortunes of America's cities, as if turning over tarot cards one by one. He isn't the only economist to look at these subjects, but he is arguably the most original in assimilating careful and highly mathematical economic research. His lecture, given to an audience of about 90 people, first discussed the historical trends that have shaped urban growth. Until recently, cities existed to economize on transportation costs — hence their locations near industries or agriculture to reduce the expense of shipping products by sea or by train. Yet because transport (mainly trucking) costs dropped significantly during the 20th century, location has become irrelevant. In Glaeser's view, cities now exist so that people can have face-to-face interactions or be entertained or consume products and services. For businesses, cities are a place to benefit from a spillover in ideas and to reduce costs by being near other companies.
This evolution, of course, has coincided with a vast American migration toward regions of sun and sprawl. Glaeser likes to point out the close correlation between a city's average January temperature and its urban growth; he also notes that cars per capita in 1990 is among the best indicators of how well a city has fared over the past 15 years. The more cars, the better — a conclusion that seems perfectly logical to Glaeser. Car-based cities enable residents to buy cheaper, bigger houses. And commuters in car-based cities tend to get to work faster than commuters in cities that rely on public transit. (The average car commute is about 24 minutes; on public transportation, it is around 48 minutes.) While many of his academic peers were looking at, and denigrating, how the majority of Americans have chosen to live, Glaeser (though no fan of the aesthetics of sprawl himself) didn't think an economist should allow taste to affect judgment. "You shouldn't go around thinking that all these people are just jackasses for deciding to drive an automobile," he says.
In any case, Glaeser discovered that there can be more to urban success than cars and palm trees. For a city without warm weather and a car-friendly environment, skills are destiny. That is why New York and Minneapolis, with vast numbers of college graduates, have done so well. "Boston would be just another declining, cold, manufacturing city if it weren't for its preponderance of human capital," Glaeser says. And his studies suggest that the more skilled a city's population, the more skilled it is becoming, as entrepreneurs attract skilled workers who in turn attract entrepreneurs. Americans, as a result, are sorting themselves through education and geography more and more with each passing year.
The process yields losers as well as winners. Late last year, Glaeser wrote a controversial article that made a case against rebuilding New Orleans. He has since become an intellectual leader to a tiny, unsentimental, let's-not-rebuild-the-city faction. "There's some small core of the city that should be there," he says, "but the city itself has been in decline for 50 years and in relative decline for 150 years relative to the U.S. population as a whole. It's not a great spot to have a city; it's incredibly expensive to build the infrastructure to keep it there. You can't possibly argue that New Orleans has been doing a good job of taking care of its poor residents, either economically or socially. And surely some of the residents are better off by being given checks and being allowed to move elsewhere." Glaeser admits that many critics have responded to his views with shock, asserting that he is unfairly attacking the city at a moment of terrible vulnerability. "No one has accused me of hating the poor or being racist," he says. "But I have been accused of not having a heart."
It's a familiar complaint. A few years ago, in an article Glaeser wrote about poverty for Harvard's alumni magazine, he suggested eliminating public housing in the U.S. in favor of housing vouchers. His argument was attacked for being coldblooded as well as impractical. Chris Mayer, a housing economist at Columbia Business School and a frequent admirer of Glaeser's research, says that Glaeser's perspective on things tends to attract controversy and incite debate. "I think Ed does care a lot about helping the poor and about social equality," Mayer says, "but his view of how to get there is a different view than other people."
Glaeser, for his part, says he feels the same about New Orleans as he does about many cities of the Rust Belt. "I believe very strongly that our obligation is to people, not places, and I think we certainly have an obligation — ethical, economic, what have you — to the residents of Detroit," he told me. But he sees no economic or geographic reason to have a large city there anymore, and he views the prospects for any rebound as dim. (Detroit ranks last among cities with more than 500,000 residents in percentage of college graduates.) The city produced the cars that produced the sprawl that helped destroy the city; such tragedy might have been lessened had it produced more universities too. "There are no reasons why it can't, and shouldn't, decline," Glaeser says. "And I would say that for many other cities. There's no reason not to let decline go forward." The greatness of America is dependent in part upon regional evolutions and migrations, he adds. "Places decline and places grow. We shouldn't stand in the way of that."
Glaeser first began to think about how real estate fit into this urban order a few years ago, after he spent some time looking at the effects of skills and sprawl on cities. While Glaeser seems able to turn out academic papers at an astonishing pace — he almost always writes at home, so he can smoke cigars while he types — it sometimes takes years for him and his collaborators to assemble the data and equations used to support his ideas. In addition to his urban research, Glaeser has written on voting behavior, hatred, poverty and public health; a few years ago, with David Cutler, he wrote a widely discussed paper that looked at why Americans are becoming so obese. (They attributed it partly to the microwave oven.) Yet urban subjects have consumed most of Glaeser's time and attention. In the late 1990's, he began thinking less about incorporeal forces like human capital and consumerism and more about the physical nature of places — buildings, roads, buses — and what kind of effect that had on a metropolitan area.
In 2000, Glaeser took a sabbatical from Harvard and began to spend a few days a week in Philadelphia working with Joseph Gyourko, a real-estate economist at the Wharton School of the University of Pennsylvania. Glaeser had already been thinking about the relationship between housing and urban poverty when one day he and Gyourko began to discuss why cities like Philadelphia and Detroit — places with poor future prospects, both economists believed — weren't doing even worse in terms of population. Why didn't everyone leave, Gyourko wondered, and go to a place like Charlotte, N.C., that had a fast-growing economy? This question addresses a puzzle of urban economics. Cities (think of Las Vegas or Phoenix) can grow at a very fast rate, exploding overnight with businesses and residents. Some can increase in population by 50 or even 60 percent in a decade. But cities lose their residents very slowly and almost never at a pace of more than 10 percent in a decade. What's more, when cities grow, they expand significantly in population, but housing prices tend to rise slowly; even as Las Vegas grew by leaps and bounds in the 1990's, for instance, the average home there cost well under $200,000. When cities decline, however, the trends get flipped around. Population diminishes slowly, but housing prices tend to drop markedly.
Glaeser and Gyourko determined that the durable nature of housing itself explains this phenomenon. People can flee, but houses can take a century or more to finally fall to pieces. "These places still exist," Glaeser says of Detroit and St. Louis, "because the housing is permanent. And if you want to understand why they're poor, it's actually also in part because the housing is permanent." For Glaeser, this is the story not only of these two places but also of Buffalo, Baltimore, Cleveland, Philadelphia and Pittsburgh — the powerhouse cities of America in 1950 that consistently and inexorably lost population over the next 50 years. It is not just that there were poor people and the jobs left and the poor people were stuck there. "Thousands of poor come to Detroit each year and live in places that are cheaper than any other place to live in part because they've got durable housing still around," Glaeser says. The net population of Detroit usually decreases each year, in other words, but the city still attracts plenty of people drawn by its extreme affordability. As Gyourko points out, in the year 2000 the median house price in Philadelphia was $59,700; in Detroit, it was $63,600. Those prices are well below the actual construction costs of the homes. "To build them new, it would cost at least $80,000," Gyourko says, "so there's no builder who would build those today. And as long as those houses remain, the people remain."
The resulting paper, "Urban Decline and Durable Housing," caused a stir among urban economists even before its publication last year. (It was initially circulated with a subtitle along the lines of "Why Does Anyone Still Live in Detroit?" until the authors, thinking it politically insensitive, removed it.) In addition to illuminating some of the forces shaping our poorest cities, the research proved to Glaeser that it is impossible to think about urban economies without thinking of urban buildings at the same time. Meanwhile, it demonstrated to him how useful it can be to consider the relationship between actual construction costs and the market price of homes. That lesson seemed to apply not only to declining cities but also to places with extraordinary price appreciation, like the San Francisco or Boston metro areas. How could homes in these places be priced so much higher than construction costs? And why did the prices keep going up?
Glaeser has come to believe that changes in zoning regulations may be the most important transformation in the American real-estate market since the mass acceptance of the automobile. In his view, these regulations have essentially created a "zoning tax" that has pushed prices far above construction costs. Very, very far above construction costs. It is not a perspective shared by all housing analysts; some economists have been far more inclined to blame high prices on high demand (spurred by low interest rates) or on rampant speculation. Others agree with Glaeser in emphasizing supply but not necessarily fixing on zoning. Karl Case, for instance, an economist at Wellesley College who counts himself a fan of Glaeser's, agrees that lack of supply has led to steep prices in the Boston area, but he attributes the housing shortage not just to zoning but also to the nature of the construction business and the scarcity of large desirable tracts of land. Still, among the half-dozen leading economists who study housing supply, there seems to be wide agreement that regulations have had a tremendous effect on prices. "I think the evidence is overwhelming," says John Quigley, an urban economist at Berkeley who has looked specifically at the effects of regulation on the California market.
As Glaeser says: "It's so easy to forget the world that we were living in around 1970, when basically almost all of the value of houses was in the physical infrastructure. That was actually the cost. There was some land, and it was worth something, but it wasn't worth more than 20 percent of the value of the house." Even in New York City, Glaeser says, the price of an apartment back then was essentially the cost of building the next floor. In researching New York City's housing prices, in fact, Glaeser and Gyourko discovered that over the past 30 years, the average height of new residential buildings in Manhattan decreased in size. "That's crazy," he insists, especially in light of how much the demand to live in New York has increased. "You know, if prices in Manhattan are skyrocketing, you should be building more and more at 50 stories, rather than at 30. Not the reverse." So is it his contention that Manhattan could build far more than it has recently? "Oh, for sure," he says. "Technologically? Certainly. No reason why you couldn't."
Let's go back to Manhattan in the 1920's, Glaeser says. "New York in the 1920's is a pretty developed place, a pretty mature place. But they're producing a hundred thousand units a year. They're tearing up swaths of Manhattan and building higher buildings." That would be legally and politically impossible today, but as he and Gyourko see things, it is precisely those legal and political roadblocks to "tearing up" the city that have made the place so expensive. Actually, in 2004, the two men took a close look at Manhattan and estimated that one half or more of the value of condominiums in the borough could be thought of as arising from some type of regulatory constraint preventing the construction of new housing. The data for co-ops (because of their ownership structure) was more difficult to interpret, but Glaeser and Gyourko suspect that their estimates probably apply to the Manhattan market as a whole.
Glaeser has little doubt that there are regular cycles in real-estate markets; the recent slowdown may perhaps be evidence of one of those cycles. But he says he doesn't think that the supply issues are something that will disappear, even if the demand for housing levels off or drops over the next few years. "We will never go back to a world in which developers in Massachusetts or California or New York are able to do what they want with their property unimpeded by their neighbors," he says. And what surprises him is that the changes in how we have treated property rights for the last 40 years — who gets permission to build, the size and location of what owners are permitted to build — have been the subject of virtually no national dialogue, even as the effects on prices, in his view, have been extraordinary.
This is not to suggest that Glaeser wants New York or Boston to become another Houston or Phoenix, where developers build without hindrance and housing, as a result, stays cheap. "I'm pretty sure that Boston and California have gone too far to one extreme," he says. "But I'm not sure that Texas hasn't gone too far to the other extreme." He says he tends to think that officials in the Boston and New York metro areas need to allow for more housing when the market gets tighter again. At the very least, he says, officials should discuss the long-term effects of restricting home building. And there is a bigger point here anyway, he says. Zoning and housing supply ultimately determine not only who lives in a city but also the very nature of these places. Boston, San Francisco and Manhattan are obviously becoming rarefied destinations, mostly for America's elites (Glaeser calls the cities "luxury goods"), with housing floating beyond the reach of the young and the middle class. These cities' economies are in the process of becoming boutique, too, accommodating only the most skilled and privileged. Their desire to limit construction and grow not in buildings and population but in prices has, in effect, begun to shape their destiny. "A healthy city is one that has a healthy mix of demographic groups," Glaeser says. "Shutting out your 25-to-40 year-olds? That feels like a bad strategy for urban innovation."
But economists, like any social scientists, often discover that the leap from conducting research to making policy can be enormously difficult. It can take years, perhaps decades — and that's when it happens at all. Glaeser is fortunate in that he already has the ear of mayors and state legislators who at least took notice of his recent work on regulations in the Boston metro area. Still, he admits it will be difficult to go against the current momentum. "I'm not in any sense trying to suggest that we want a developer's paradise where you can build anything, anywhere," he says. "But I sure as heck think the current situation happened by happenstance, happened by changing the legal norms, which in no sense is guaranteed to yield a socially desirable outcome." Homeowners, he points out, have a strong incentive to stop new development, both because it can be an inconvenience and also because, like any monopolist, stopping supply drives up the price of their own homes. "Lack of affordable housing isn't a problem to homeowners," Glaeser says; that's exactly what they want. "The thing you want most is to make sure that your home is not affordable if you own it. And for that reason, there's absolutely no reason to think that little suburban communities with no businesses that are run essentially by their homeowners will make the right decisions for the state as a whole, for the business in the area, for the country as a whole."
As a matter of fact, Glaeser long ago became convinced that there is a lot riding on supply. "The welfare of the world is shaped in part by our urban form, by the way that we live, the way our communities are constructed," he says. "These things like growth controls have changed the way communities are developed." Joseph Gyourko shares the view that where we live, and why we sort ourselves into those places, have profound effects on society, culture, politics and business. "It's important," he says of the sorting process. "It's not an innocent thing." Thus, the two academics have resumed their real-estate research, taking on two projects. The first, closer to completion, is an attempt to explain the occurrence of housing cycles. So far, the preliminary data have led Glaeser to believe that the past decade's run-up in prices is probably caused by factors beyond the restrictions on supply; the home-appreciation numbers appear to be so high that they suggest that prices in coastal cities have some psychological component too. (In his view, the supply shortage greatly magnifies the effect of any sort of "irrational exuberance.") Glaeser is the kind of economist who is reluctant to make predictions. Yet, he says, "I'm comfortable with the notion that we're going to have a substantial correction over the next five years."
His other project is both more ambitious and more difficult. He and Gyourko say they know that the country's regulatory environment, and thus the supply of housing, began to change around 1975. But they don't know why it changed. So along with a third researcher, Raven Saks, they have begun to track building permits from hundreds of cities around the country over the past four decades to investigate the nature of the evolution. Glaeser speculates that there may be a viral phenomenon whereby once housing prices reach a certain level, residents become aware of high home values and agitate for restrictions; another possibility is that judges have become much more sympathetic to blocking development for environmental reasons. Still another thought: that homeowners, utilizing skills learned during the civil rights movement and political protests of the 1960's and 1970's, became much more adept at organizing against developers. (There appears to be a reasonable correlation between liberal enclaves, zoning regulations and high housing prices.) In any event, Glaeser says, he doesn't know the answer yet, and it may take years to find out.
He was explaining this one afternoon in January as he sat in a club chair on a third-floor landing at the Harvard Club in Midtown Manhattan. Glaeser visits urban neighborhoods all around the U.S., but his teaching schedule often restricts his observation of the American landscape to data and algebraic models. When it was time to go, he seemed relieved to step onto the concrete sidewalk, into the city he once called the country's "urban colossus." Waiting for the light to change at 44th Street and Fifth Avenue, the defender of sprawl, the explainer of human capital and the avenger of zoning regulations — and the wearer of a splendid beige cashmere overcoat — didn't seem much suited for the suburbs of Boston. Here on the street, disappearing into a crowd of people, he seemed right at home.
posted by D @ 6:03 AM
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