REFinBlog

Editor: David Reiss
Cornell Law School

A Member of the Law Professor Blogs Network

February 17, 2016

Wednesday’s Academic Roundup

By Shea Cunningham

February 17, 2016 | Permalink | No Comments

February 16, 2016

10 Ways to Find Out About a Neighborhood

By David Reiss

neighborhood map

Realtor.com quoted me in 10 Ways to Find Out About a Neighborhood Without Being There. It reads, in part,

“So what’s the neighborhood really like?” is the ubiquitous refrain among home buyers shopping in areas they’re unfamiliar with. And though your real estate agent can fill lots of the big-picture details, it pays to do your research before committing to a residential purchase.

Short of stopping people on the street for intel—and being greeted by strange, skittish looks, or way worse—there are some far easier ways to get a feel for what living in a neighborhood is really like.

Best of all, you can even do them from afar (you’re welcome, relocators)! For starters, you can get local information on various neighborhoods on our site. Then for more deets, get digging in the resources below.

 *     *     *

For public transportation access …

Each day, 35 million Americans use public transportation, making access to it a must for, well, at least 35 million people. To check out an area’s accessibility to trains, buses, and light rail, David Reiss, a professor of law and research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School, recommends researching the Transit Score. “These scores are great, really giving you a sense of how important it is to have a car in a particular community,” he says.

For school quality …

Sure, a seller may tell you a local school is great. But don’t rely on bias when it comes to your child’s education. Instead, go to the nonprofit Greatschools.org and type in a potential ZIP code. You’ll have a chance to read school report cards crafted by reviews from teachers, parents, and even the students themselves. Or, if you already know which school district you want your child to attend, download realtor.com’s mobile app—you can search for homes by school district. 

For crime rates…

To see how safe it would be to set foot outside your home, enter your address into My Local Crime to pull up any recent local crimes from vandalism to shootings. Click on the map function to see where exactly those crimes were committed (in other words, maybe certain blocks to avoid after dark?).

For the lay of the land, literally…

When Professor Reiss asked students to find interesting web resources to learn about neighborhoods, they discovered that topological maps are a cool tool. Most maps show only a two-dimensional rendering. Topographical maps, which add the third dimension of elevation, show the surface and physical features of a given neighborhood. Besides highlighting hills and valleys, topography is important when it comes to weather events (just ask anyone in a flood plain).

February 16, 2016 | Permalink | No Comments

Tuesday’s Regulatory & Legislative Roundup

By Shea Cunningham

  • NYC Mayor Bill De Blasio released a new comprehensive zoning plan, arguing for taller buildings for affordable housing with fewer parking spaces.
  • The House Republicans have announced intent to form a six-committee task force to develop new policy agenda, including on issues of tax reform, poverty, opportunity and upward mobility.

February 16, 2016 | Permalink | No Comments

February 15, 2016

Lincoln at Independence Hall

By David Reiss

photo by Jeff Kubina

On President’s Day, it is worth sitting with the words of Abraham Lincoln, spoken at an address at Philadelphia’s Independence Hall in 1861:

I am filled with deep emotion at finding myself standing here, in this place, where were collected together the wisdom, the patriotism, the devotion to principle, from which sprang the institutions under which we live. You have kindly suggested to me that in my hands is the task of restoring peace to the present distracted condition of the country. I can say in return, Sir, that all the political sentiments I entertain have been drawn, so far as I have been able to draw them, from the sentiments which originated and were given to the world from this hall. I have never had a feeling politically that did not spring from the sentiments embodied in the Declaration of Independence. I have often pondered over the dangers which were incurred by the men who assembled here, and framed and adopted that Declaration of Independence. I have pondered over the toils that were endured by the officers and soldiers of the army who achieved that Independence. I have often inquired of myself, what great principle or idea it was that kept this Confederacy so long together. It was not the mere matter of the separation of the Colonies from the motherland; but that sentiment in the Declaration of Independence which gave liberty, not alone to the people of this country, but, I hope, to the world, for all future time. It was that which gave promise that in due time the weight would be lifted from the shoulders of all men. This is a sentiment embodied in the Declaration of Independence. Now, my friends, can this country be saved upon that basis? If it can, I will consider myself one of the happiest men in the world, if I can help to save it. If it cannot be saved upon that principle, it will be truly awful. But if this country cannot be saved without giving up that principle, I was about to say I would rather be assassinated on this spot than surrender it.

Now, in my view of the present aspect of affairs, there need be no bloodshed and war. There is no necessity for it. I am not in favor of such a course, and I may say, in advance, that there will be no bloodshed unless it be forced upon the Government, and then it will be compelled to act in self-defence.

My friends, this is wholly an unexpected speech, and I did not expect to be called upon to say a word when I came here. I supposed it was merely to do something toward raising the flag. I may, therefore, have said something indiscreet. I have said nothing but what I am willing to live by and, if it be the pleasure of Almighty God, die by.

February 15, 2016 | Permalink | No Comments

Happy Presidents Day!

By Shea Cunningham

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams

February 15, 2016 | Permalink | No Comments

February 12, 2016

Homeowner Nation or Renter Nation?

By David Reiss

Andreas Praefcke

Arthur Acolin, Laurie Goodman and Susan Wachter have posted a forthcoming Cityscape article to SSRN, A Renter or Homeowner Nation? The abstract reads,

This article performs an exercise in which we identify the potential impact of key drivers of home ownership rates on home ownership outcomes by 2050. We take no position on whether these key determinants in fact will come about. Rather we perform an exercise in which we test for their impact. We demonstrate the result of shifts in three key drivers for home ownership forecasts: demographics (projected from the census), credit conditions (reflected in the fast and slow scenarios), and rents and housing cost increases (based on California). Our base case average scenario forecasts a decrease in home ownership to 57.9 percent by 2050, but alternate simulations show that it is possible for the home ownership rate to decline from current levels of around 64 percent to around 50 percent by 2050, 20 percentage points less than at its peak in 2004. Projected declines in home ownership are about equally due to demographic shifts, continuation of recent credit conditions, and potential rent and house price increases over the long term. The current and post WW II normal of two out of three households owning may also be in our future: if credit conditions improve, if (as we move to a majority-minority nation) minorities’ economic endowments move toward replicating those of majority households, and if recent rent growth relative to income stabilizes.

This article performs a very helpful exercise to help understand the importance of the homeownership rate.  This article continues some of the earlier work of the authors (here, for instance). I had thought that that earlier paper should have given give more consideration to how we should think about the socially optimal homeownership rate. Clearly, a higher rate, like the all-time high of 69% that we had right before the financial crisis, is not always better. But just as clearly, the projected low of 50% seems way too low, given long term trends. But that leaves a lot of room in between.

This article presents a model which can help us think about the socially optimal rate instead of just bemoaning a drop from the all-time high. It states that

Equilibrium in the housing market is reached when the marginal household is indifferent between owning and renting, requiring the cost of obtaining housing services through either tenure to be equal. In addition, for households, the decision to own or rent is affected by household characteristics and, importantly, expected mobility, because moving and transaction costs are higher for owners than for renters.  Borrowing constraints also affect tenure outcomes if they delay or prevent access to homeownership. (4-5)

This short article does not answer all of the questions we have about the homeownership rate, but it does answer some of them. For those of us trying to understand how federal homeownership policy should be designed, it undertakes a very useful exercise indeed.

February 12, 2016 | Permalink | No Comments

Friday’s Government Reports Roundup

By Shea Cunningham

February 12, 2016 | Permalink | No Comments

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