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February 18, 2016

next stop east new york

East New York is not my neighborhood. I live a mile or two to the west of it. It's a pretty different place than the Brooklyn that somehow got famous — well away from the shores of the East River, underserved by MTA buses and pretty much not served at by the subways other than on the fringes, East New York is one of the remaining areas in the five boroughs that is uniformly on the losing end of income inequality. It's a working class neighborhood, predominantly African-American and Latino, and over half of the couple hundred thousand residents live below the poverty line. And the fact that it's a marginalized community, of course, makes it a choice target for development and ultimately gentrification.

Our mayor, Bill de Blasio, was elected promising to address affordable housing development, and East New York is one of the neighborhoods that he has IDed as a zone that could be a home for new affordable units. The plan (an intended rezoning of the area) is pretty far along, with a vote scheduled by the City Planning Commission for next week. Today, the environmental impact study detailing the possible effects and consequences of the rezoning was released to the public. It's some somewhat dry stuff (though probably not to residents), with insufficient public school seats and a paucity of public outdoor spaces mentioned. I hope it goes well for East New York, and I am not confident that I know what would constitute "well" in the context of East New York.

But the reason I bring this up is the following, which is the reasoning behind the wholesale rezonings:

It is the first of 15 neighborhoods the mayor hopes to rezone in a move to encourage more market-rate development that would help fund low- and middle-income housing. City Hall, realizing the challenge of attracting developers to the blighted East New York area, has promised to spend however much money it needs to ensure half the new homes are affordable to existing residents.

This makes perfect sense on the face of it — in order to effect the building of housing for middle and lower-than-middle income residents, bribe developers into making units that aren't as lucrative by creating brave new very-expensive development opportunities. Simple math.

But the question I have, and the question that I cannot answer, is how did we get to the point where this was the most common-sense way to address housing issues? Breaking this down into specific questions:

Why are there no private developers who are willing to build affordable units without incentives? Is this a question of pure greed, inasmuch as why would anyone build something for a modest profit when they could build for a much healthier profit? Are we to that point?

Is the government, whether city/state/federal, entirely out of the housing business? I know that NYSHA projects are horror shows, even before Sandy, with little political will to properly fund or administrate. But, if private developers are too greedy, is it time for a hopefully non-Robert Moses revitalization of NYCHA, which would have a nice little side-effect of giving a leg up to the 400,000 NYC residents already in NYCHA units?

And finally, is there a place for existing housing stock in these plans? Obviously, with converting or rehabilitating existing stock, it's not the same financial opportunity (for developers, hi!) than it is to rezone/raze/build from scratch, but there is an awful lot of existing units in this city, and many of them are quite lovely, whether the single-family homes or the four-story tenements or the pre-war giants with a 100 units or more. Is the endgame that all of these will go away and we'll all be living in glass boxes with some version of marble countertops?

I don't know the answers to any of these questions, and the handful of people who are actual experts in housing issues pretty much only know how to ask the above questions better. But it would be a shame not to give this at least a half-thought before we turn every last neighborhood into what Williamsburg looks like now. (Which is icky.)

And maybe ask who profits.

Ultimately, it should be also noted that "market-rate" in this instance (and in this decade) is synonymous with "unaffordable". This says something pretty ugly about the market, which I'm pretty sure is a synechdoche for the Free Market, which, who exactly is it helping again?

Posted by mrbrent at 2:16 PM

February 17, 2016

why we recycle

A small business story that got lost in the heady weekend before the Westminster Dog Show. Or the Grammys? One of them. Anyway:
In a cavernous recycling facility crisscrossed with conveyor belts, enormous bales of crumpled plastic bottles are stacked one atop another, waiting to be sold to the highest bidder.

For Waste Management, the company that runs this operation, collecting, sorting and bundling recyclables was until recently a profitable endeavor. A year ago, Waste Management could have fetched $230 for each bale of thin translucent plastic.

But today, thanks to the glut of cheap oil flooding global markets, they are worth just $112 each.

I like where we are as a species. Obviously, we need to be trying harder to ameliorate if not save the planet, but we've come a long way. We've banned a bunch of substances that just weren't good for the biosphere, we try to act in harmony with nature (well, those of us who are not soulless punchlines to jokes too dumb to be told), and we really have embraced addressing the problem of what to do with our waste — how to separate it, and take the components that can be repurposed and repurpose them. We should give ourselves a pat on the back!

But we should also realize that these programs did not come around because of any collective virtue, but rather because rapacious companies like Waste Management found a way to make a buck off them. And since trash ain't nothing but a commodity by another name, now that commodities are dipping world-wide, so to is the need/desire to recycle.

Even when we do the right thing we do it for the wrong reason.

Posted by mrbrent at 11:04 AM

February 15, 2016

disruption: omnisciency bias

There are a couple of ways to read this NY Times story on the current status of start-ups with a robust home delivery component. The most obvious way is as it is written: there are a bunch of tech companies/apps/whatever they call themselves that involve bringing some product or service to the door of the user, and while these companies raised a bunch of money and received some enthusiasm from the app-using public, they ran into the wall of high driver turnover. That is to say, they hired (or suborned or "partnered with") a bunch of drivers and the drivers did not stick around. Why? The pay wasn't enough, for greener pastures, whatever — suffice it to say, there are retention issues.
The issue is just one headache now troubling delivery start-ups, which have been among the hottest sectors of start-up activity in recent years. Based on a belief that the companies would succeed once they grew to enormous scale, investors poured more than $730 million into delivery firms like DoorDash, Instacart and Postmates from early 2014 through the first half of 2015, up more than 1,100 percent from the same period a year and a half ago, according to data from CB Insights, a venture capital analytics firm.

But entrepreneurs and investors are beginning to find that the economics of making a delivery service work are far from easy.

Headaches!

The other way to read the story is to flip it upside down a bit. Tech bros, as ever eager to solve the existential problems of the wealthy kid suddenly living on one's own, turn their disrupting attention to delivering. "Hey, if we develop an app that connects people that need something delivered with people willing to deliver something, then we can skim money off the top AND we don't have to capitalize for boring shit like employment and insurance because we're just connecting deliverer/deliveree!" And then a different kind of tech bros, the kinds with giant stacks of cash, mindful of the rewards reaped from funding so-called unicorns, think it's a very good idea and everyone will get rich and here, have fifty million dollars!

But then, as the app bros set the base rate to pay the deliverers (which kind of they shouldn't do as not-employers but why do you hate progress so much?) ends up being not exactly the kind of rate that makes any sense for the deliverers to be paid, the deliverers are harder to find and even harder to convince to stay around against their better wishes. App bros sad! VC bros even sadder!

The short version of that is, if the key to your business plan is cheap exploited labor, and then the cheap exploited labor decides nuh-uh, that's not a bump in the road to Amazon-like ubiquity (and Amazon has a labor problem down the road, give it time), that's just a shitty business plan to begin with.

This has been another cautionary tale about the sharing economy and the ways that it will disrupt us into paradise.

Posted by mrbrent at 9:31 AM