Expanding Livability, Workability, Affordability: A Small Example

In my prior post, I explained the need to expand the geographic area where later-born generations of Americans can live a good life, and have access to a wide range of employment opportunities, affordably.  Commercial real estate investments that make this possible have the best chance to be profitable and useful in the coming decades, especially after the next bust makes the entry point for them lower.

In this post I’m going to describe a specific, small-scale example with the potential to substantially expand access to rail mass transit, and the large number of jobs it connects with in metro New York.  It is based on a new technology that has been rapidly adopted by food delivery workers, some of the lowest-paid workers there are – small, light, electric powered and electric assist bicycles.  If those workers could afford to own their own e-bikes, and adopt the latest technology, workers in other industries and occupations certainly could.

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The Commercial Real Estate Future: Bankruptcy, Foreclosure, Workout, Value Added Reinvention and Redevelopment

Over the past few decades, the most successful commercial real estate investments have involved owning property in exactly the wrong place at exactly the right time – as long-term structural changes in the U.S. economy and society altered the distribution of businesses and people on the ground. These investments were solutions to the problems of their time.  That raises a question.  Where are the wrong places today, and when will it be the right time?

It is now the wrong time for the limited types of real estate in the limited number of places that have soared in value over the past 20 years.  It is generally acknowledged that the world is in an “everything bubble,” driven by the concentration of income and wealth in fewer hands, and extensive government intervention in the market to keep asset prices high.  Regardless of the income available to support those asset prices, and the consumer spending power available to support that business and investment income.


For real estate and equities, the acronym of the moment is TINO – with one third of the investment grade bonds in the world carrying a negative yield, There Is No Alternative.  While bullishness is generally thought of as optimism, however, it is now actually pessimism, as it presumes low future investment returns, and even losses, are the best that are and will become available.


That is the conclusion one reaches based on the financialization of real estate, as if it were a stock or bond, and not a home, a place, or a service business.  A look around the country, however, shows that today most places are wrong places, and at least some are waiting for the right time.  The end of this post will celebrate the three best examples of creating right places from my 15 years of chronicling commercial real estate.

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The National Transit Database: Comparative Operating Cost and Fare Revenue Trends from 2008 to 2018

It has been just under three years since I last downloaded and tabulated data from the Federal Transit Administration’s National Transit Database.


Since the data is published every year, I have long hoped that some other organization would use the data and publish reports showing what it says, having someone else to it as part of their job.  That hope increased after the New York Times used the data as part of its series on the New York City Subway.   And after Governor Cuomo directed the MTA to hire a consultant to study “MTA Reinvention.”  Moreover, the NTD now includes a spreadsheet titled “Metrics” with almost all the basic cost and service efficiency ratios one might want to see. As of the date of this post that spreadsheet for 2018 is on page 2 (tab at the page bottom), though it will be moving down as 2019 data is published.


There has been, however, no public discussion of what National Transit Database data shows about New York’s transit system since the NY Times articles.   So rather than allow this information to remain among the unsaid, I decided to at least analyze the operating budget.  (I’m not sure there really is a capital budget, since under the prior MTA capital plan, regardless of what officially passed, most of the money never actually arrived and most of the work was never actually done).

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New Yorkers Are Going To Pay More and Be Forced To Expect Less, But Shouldn’t Let Them Say It’s Fair or Blame Circumstances or Scapegoats

I was in Target the other day and noticed their motto:  “Expect More, Pay Less.”   That sure is a hell of a lot different from New Yorkers under the age of 60, and in particular under the age of 40, will be paying into and getting from the federal, state and city governments over the next 20 to 40 years.  At the federal level because of four decades of future selling by Generation Greed that have left us with a massive national debt and underfunded old age benefits – underfunded despite later-born generations already being required to pay in more while being promised less.  At the state level because New York City shares a tax base with Upstate cities and rural areas with extensive needs and dwindling resources, and suburban areas with more power and greater entitlement. And at the city level because one politician after another has cut deal after deal to cash in the future, to further benefit already-advantaged unionized public employees and contractors, who are cashing in and moving out.

The theft has occurred, the money is gone, and “Expect Less, Pay More” is inevitable.  In fact a New York City in the 1970s-style institutional collapse is highly likely, and not just in New York City.  So what will our “leaders,” still beholden to the same interests and generations and still promising to hand them even more, say about this?  I want them to be forced to admit the truth.  And let me tell you what I don’t want to hear.

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In Global Politics, Technology and the Grim Reaper Are Our Best Hopes

In the wake of the U.S. getting sucked into yet another crisis in the Middle East SUV cheap gasoline supply area, it occurs to me that Iranians and Americans have the same problems.

Each are being ruled over by a generation that thinks of itself as the generation, the Americans who came of age in the 1960s and the first half of the 1970s, and the Iranians of the Iranian revolution of 1979 and 1980.

Each of those generations is obsessed by its particular culture war, in part sex-driven, tribalist issues, and those of at the top in politics seek legitimacy based almost exclusively based on those “people like us vs. people them” issues.  They don’t want to talk about anything else.

At the same time, however, these aging generations, in their own self-interest, have left the generations to follow worse off than they have been, by cashing in the future. And despite having done so, they still think they have the right to dictate the terms of that future to those following, and stifle their aspirations, rather than allowing disadvantaged later-born generations to find their own way through the mess they have inherited.

The dictating the future aspect is more obvious in Iran, where I would probably be in jail (at best).  But you see it in the United States too, every time those over the age of 60 show up to protest against a bike lane being added or a multifamily housing development being approved (and, of course, Obamacare).   “We don’t need it,” they say, “it will change things and benefit outsiders!”

U.S. Millennials get paid 25 percent less, on average, than Baby Boomers had at the same point in their lives, despite higher educational attainment on average and, frankly, less socially destructive behavior.  And yet those Boomers want to force the Millennials to live the same way.  To buy their houses at inflated prices, in places where it takes one car per adult just to live.

The Boomers, while running up public debts and grandfathering themselves into richer benefits and lower taxes, claim that later born generations can deal with higher taxes and diminished old age benefits, because they have “time to adjust.” But that doesn’t mean the Boomers feel compelled to allow those adjustments.  They seek to foreclose alternatives and shut down discussion, just like the Ayatollahs in Iran.

In olden days, the passing of the wise elders was a loss those following had to overcome. But as I look around the world, and see the tribalist geriatrics in charge, sometimes I think the Grim Reaper is the best hope for everyone on the planet.

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The Executive/Financial Class, The Political/Union Class, Generation Greed and the Serfs: Wherever You Look It’s Getting Worse

I think people who read this blog would agree that I follow U.S. public finance issues pretty closely, including those related to taxation.  But I recently found out something I had never heard of before, that was never publicly debated in any news source I follow, that no “progressive” politician has objected to as far as I know, and frankly I’m shocked.


In a country with a median household income of less than $62,000, you can get more than $100,000 a year while not working and pay no federal tax at all, because $80,000 in investment income (dividends and capital gains) is tax exempt!  Even as work income for the less well off is taxed twice, by the payroll tax, and the income tax.   It turns out that for married couples, while other income might be taxable if it is higher, that $80,000 in investment income is fully exempt from taxes even if total income is as high as $184,250 — with other deals up to $200,000.

How could this possibly be thought of as fair?   After all, a working couple with half that income from work would pay $7,500 in payroll taxes (or $15,000 if they were “gig” workers) and federal income taxes – at a higher rate – on top of that.  Why hasn’t a single pundit or politician raised a loud objection?

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Bureau of Economic Analysis Local Area Personal Income Data: Somebody Screwed Up the State and Local Government Earnings Data for NYC

A couple of years ago, I wrote a post based in part on Local Area Personal Income data from the Bureau of Economic Analysis, showing how the mean earnings per worker (adjusted for inflation) had changed for state and local government workers, financial sector workers, and other private sector workers from 1969 to 2016 – for Downstate New York, Upstate New York, New Jersey and the U.S. as a whole.  I later added data for Connecticut.


I recently downloaded the same data from the same source to see if there was anything different.


The data shows that the total earnings of state and local government workers in New York City increased 22.7% from 2017 to 2018.   While Manhattan was flat, the increase was 52.1% in the Bronx, 43.8% in Brooklyn, 39.3% in Queens and 47.8% in Staten Island.  Clearly that did not actually happen.

In the past I would have dismissed this as an error, to be pointed out to the BEA and fixed next year. But more and more data and other factual information has been altered in more and more ways over the past three years, or disappeared completely, specifically for state and local government finances in New York.  So I have begun to fear something worse.  I looked into it.  Here is what I found.

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