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New York Times Audio Slide Show
This is an audio slide show to accompany my article on the Garment District (click here to read the Sunday Real Estate piece).
Interview with Journalism Jobs
In Oct. 2001, I was interviewed by Journalismjobs.com about the state of alt-weeklies. As the editor-in-chief of a Village Voice-owned weekly in
Interview with Brian Lehrer, WNYC
Scroll down to “Forever Broke” for an interview about an article I wrote for the New York Observer on the economic misfortunes of Generation X.
Interview with WCPN, Cleveland's NPR station
A transcript and link to audio of an interview about a piece I wrote that was included in Censored 2000 (the “Pulitzers of Alternative Media”). The article examined a theory that Crohn’s disease is caused by a bacterium in milk.
REAL ESTATE | December 28, 2005
Square Feet: Trying to Build the Grand Central of the West
By LISA CHAMBERLAIN
Plans to redevelop San Francisco's Transbay Terminal, which has deteriorated into an underused bus station, are finally moving forward.
The New York Times
By STEVE LOHR
THE housing market in California may look like a textbook case of superheated "irrational exuberance," but then how does one explain Spain?
Home prices there have risen 130 percent since 1997, twice the run-up in the United States.
These days, house price vertigo is more than a local or national condition. It's a worldwide phenomenon.
The American housing boom in recent years is nothing compared with the price run-up in countries like France, Spain, Britain, Ireland, Sweden and Australia, even though markets in Australia and Britain have cooled in the last year.
Million-dollar two-bedroom apartments are not only a fixture of New York, but of London, Paris and Hong Kong. In New Zealand, housing prices rose by more than 16 percent from 2003 to 2004. In Ireland, they rose more than 10 percent in that period.
The rise in prices is worrisome, because the international housing boom is a byproduct of globalization. A house on a plot of ground is the most local of assets. But the financial markets that make it possible for people to borrow money to buy a house, or speculate, are increasingly open, international and linked.
Interest rate policies in the industrialized world tend to move in lockstep, usually led by the United States. A growing community of affluent professionals around the world now buy second homes and invest in housing abroad.
The economic links act as a self-reinforcing network that has fueled the global surge in house prices but would also likely magnify the pain on the way down. The ripples would extend well beyond the housing markets. A fall in American house prices, for example, would crimp consumer spending - and free-spending Americans have supported growth in many export-minded nations, notably China.
"The real concern is that the housing boom extends across so many countries this time," said Susan M. Wachter, a professor of real estate at the Wharton School of the University of Pennsylvania. "That just raises the stakes, and the risk, when the music stops."
The global surge in house prices is a boom by design, largely manufactured by the world's central banks, led by the Federal Reserve. And it was done for good reason. Faced with a falling stock market and the collapse of the high-tech bubble, the Fed cut interest rates sharply in 2000 to try to limit the damage to the American economy and its trading partners.
Other central banks, like the European Central Bank, quickly followed the Fed's lead. Higher government spending and tax cuts were also part of the formula.
Cheap credit worldwide fueled the housing market, making mortgage payments less costly. Homeowners refinanced their mortgages at lower rates, and the savings went into consumer spending. They took out home-equity loans on houses of rising value, and spent that borrowed money on cars, clothes, furniture, restaurant meals and vacations. The higher consumer spending and the soaring value of the home nest-egg have kept the global economy chugging along.
"The Fed and other central banks encouraged this boom so that the wealth lost in the stock market was replaced by housing," said John Llewellyn, the global chief economist at Lehman Brothers in London. "And the housing boom has stimulated demand around the world."
The biggest globalization lift in house prices has been in what urban economists call "primate cities." These are the places where the world's well-off want to live or visit regularly for business or culture like London, Paris, New York, Boston, Shanghai, San Francisco, Miami, Sydney and Vancouver.
They are the most cosmopolitan of locales, often coastal cities and tourist hubs. They experienced the largest spikes in housing prices and pull up the national averages, while inland cities lag - the tourist coast of Spain outpaces Madrid, San Francisco outdoes Milwaukee.
Hitching the world economy to the housing market has worked well for policy makers so far. But it probably can't continue. House prices in general are continuing to rise both in the United States and abroad, as speculative buying and interest-only mortgages are proliferating.
"Much of Europe is like the United States, with roaring increases in housing prices," noted Michael Bell, a real estate economist at the University of Reading, in Britain. "The boom must be peaking soon. It just can't keep going up."
The looming, unanswered question for the global economy is whether the housing boom will cool down in an orderly way over the next few years or end in a bust. The preferred path would be for interest rates to rise steadily but moderately, slowing the pace of house price increases and forcing consumers to save more.
This is what the Federal Reserve and some other central banks, like the Bank of England and the Reserve Bank of Australia, have tried to do. The hope is that increased business investment would pick up the slack as housing markets worldwide calm down.
But the European Central Bank is contemplating lowering, not raising, interest rates. It is more concerned with slow economic growth, especially in large economies, like Germany's - where housing prices aren't skyrocketing - than smaller, hot economies like Spain's.
The peril is that conflicting policies could conspire against an orderly retreat. And any trouble would come at a time when policy makers, especially in the United States, have fewer options than in the past.
The huge American federal deficit, trade deficit and minuscule savings rate mean the United States borrows about $5 billion a day mostly from foreigners, whose purchases of mortgage-backed bonds have helped keep mortgage rates low.
If house prices drop and American consumers are forced to tighten their belts, buying fewer imports, China and other nations would have to slow their dollar investment spree, driving interest rates higher and higher. That could smack housing markets from Paris to Shanghai to Auckland.
C. Fred Bergsten, director of the Institute for International Economics in Washington, says the overheated global housing market is cause for concern. Yet the larger danger, he said, would be if it combined with another economic jolt, like an abrupt rise in oil prices, which would increase inflation and interest rates.
"That would burst the housing bubble, and be a very serious hit to the world economy," Mr. Bergsten said.
In a recently published paper, Thomas F. Helbling, an economist at the International Monetary Fund, studied 75 housing price cycles in 14 industrialized countries from 1970 to 2002. He found that not every boom is followed by a bust, but booms often are signs of possible trouble.
So applying Mr. Helbling's historical standard for booms to today's housing markets makes for nervous reading.
The housing markets in France, Spain and New Zealand have already boomed, according to Mr. Helbling's definition - that inflation-adjusted prices have increased 19 percent or more over the last two years. And prices in the Scandinavian countries, Italy, Ireland and the United States are nearing that level.
All these countries must be looking anxiously to Britain and Australia, where prices have peaked, and the question is whether they will experience a bust.
History and common sense, of course, teach that sooner or later, economic gravity will return to house prices, either gradually or swiftly, soft landing or meltdown.
by Lisa Chamberlain
February 17, 2004
For nearly 20 years, activists in
For as long as gentrification has been a divisive topic, the underlying assumption has been the same: As wealthier people move into downtrodden neighborhoods, low-income people are pushed out. But does gentrification actually cause increased displacement? Lance Freeman, an assistant professor of urban planning at
What his data says is this: Low-income people in gentrifying neighborhoods are, in fact, more likely to stay in their apartments longer than low-income people in non-gentrifying neighborhoods. Not only does gentrification not cause displacement any more than the myriad other factors that result in poor people losing or leaving their homes, says Mr. Freeman, it actually provides an incentive to stay. Think about it: Would you be inclined to leave your apartment if the neighborhood was improving?
Mr. Freeman referred to the New York City Housing and Vacancy Survey in reaching his conclusion. He found that poor households living in gentrifying neighborhoods in
Mr. Freeman’s research, which will appear in The Journal of the American Planning Association in January, indicates that rent regulation plays an important role in protecting low-income residents. Between 1996 and 1999, Mr. Freeman says, average rents for unregulated apartments in gentrifying neighborhoods (such as
Perhaps not surprisingly, activists in
"This is crap," said James Lewis of Harlem Operation Take Back about Mr. Freeman’s research. Mr. Lewis said he almost lost his own apartment when his landlord tried to convert the building from single-room occupancies to traditional apartments. After saving his home, he started HOTB to help other people in danger of losing their S.R.O.’s. "I don’t know how he’s getting his conclusions," he said of Mr. Freeman. "He’s misinformed. You don’t need to see the fire to know a building has burned."
The results do seem to fly in the face of observable reality—not just to Mr. Lewis, but probably to most people who have witnessed the migration of the bohemian bourgeoisie into what were once declining neighborhoods. When Mr. Freeman presented a short version of his research in an obscure newsletter last year, it was greeted by other academics as somewhat of a surprise. So another study is currently being conducted by researchers at Rutgers University, who are using some of the same data and are also asking questions about gentrification and displacement.
"Because the results seem somewhat counterintuitive and raise a lot of questions, they want to make sure it’s right," said Mr. Freeman. "You don’t usually see that in the social sciences. Who knows—maybe they’re going to trash my research."
Mr. Freeman’s research, however, does not stand completely alone. Conclusions similar to his were reached two years ago by Jacob Vigdor, an assistant professor at Duke University, who analyzed Boston neighborhoods.
"There’s no evidence that gentrification increases residential turnover," Mr. Vigdor concurred. "The typical image people have in their minds is that people are being thrown out of their homes in gentrifying neighborhoods. But there is usually some degree of vacancy and rehabbing of buildings that weren’t previously inhabitable. The thing everyone has to keep in mind is that there’s turnover in all neighborhoods, and landlords harass poor tenants in all neighborhoods. What happens in gentrifying neighborhoods is that it becomes visible."
While some activists are willing to admit the research may be valid, they say it misses the bigger picture. "The bottom line is that in these neighborhoods, any vacant apartment is replaced by a completely different tenant from a completely different lifestyle," said Tom DeMott, who organizes the Tiemann Place block parties and has lived and worked in Harlem for 30 years. "That’s right in your face. An old Chinese family moves out, that apartment will be rented to white kids between the age of 22 and 35."
And herein lies the confusion between gentrification and displacement. Mr. Vigdor cited studies suggesting that, over a five-year period, roughly half of all residents in typical urban communities move voluntarily. In a non-gentrifying neighborhood, the people who move out are replaced with tenants from a similar socioeconomic background. By definition, apartments that are vacated in gentrifying neighborhoods are filled with a different class of people. But that doesn’t mean there’s more forced displacement than in any other neighborhood. What does happen—and both Mr. Freeman and Mr. Vigdor readily acknowledge this—is that the pool of low-income apartments in gentrifying neighborhoods shrinks over time, which may be cause for serious concern. But, says Mr. Freeman, even this process isn’t as dramatic as it’s often portrayed.
"If you walk through [Harlem], it’s clearly still a low-income neighborhood," said Mr. Freeman. "But compared to what it was 10 years ago, it seems like a big difference. People see the chain stores that opened up: Modell’s, Old Navy, H&M. But they’re not necessarily targeting an affluent clientele. They’re serving the neighborhood. To say that Harlem is going to turn into Park Slope—that seems far-fetched."
In an effort to look beyond sheer numbers, Mr. Freeman has been conducting interviews with longtime residents of Harlem to get their impressions of how the neighborhood has changed. "People are appreciative of the improved services and like the increased diversity, but there’s some resentment about the engine of change," he said. "They perceive an invisible hand that is cleaning up the neighborhood because whites have moved in. So there’s some resentment about that. But overall, people seem to recognize that an entirely low-income neighborhood isn’t necessarily good."
Not everyone agrees, of course. "I don’t have mixed feelings about the gentrification process," insisted Mr. DeMott. "I see what it does; I see the difficulty that people face. That’s my concern. I love the neighborhood. I love the people. When I see something that is steam-rolling them, I don’t have mixed feelings."
Despite the hard line taken by some anti-gentrification activists, there seems to be an increasing realization of the fallacy behind the anti-gentrification stance. "We got angry when the middle class moved out," said Mr. Vigdor. "Now we’re angry when the middle class is moving back in. Usually when something is bad, the opposite of that is seen as good. So there’s some cognitive dissonance going on here."Mr. Freeman agrees. "To say that it’s all bad is somewhat undeserved. It’s more complex than that. If you take that stance to its logical conclusion, you’d have to say that a declining neighborhood is a good thing."