Tag: housing crisis

• Operating at the margins

  

  I’ve been thinking about land markets as of late and so today I thought I would share a post by Toby Lloyd that I recently discovered called: Understanding and adapting the land market is key to solving our housing crisis (2014). It’s from the London School of Economics’ British Politics and Policy blog.

  His argument, as the title suggests, is that we need to dig deeper and look at how our land markets are functioning if we want to address some of the challenges facing our cities today.

  The post is obviously written from a UK perspective, but many of his points will probably ring true for a lot of you in the industry. One remark that stood out for me was his point about developers always operating at the margins:

  “The result of the land auction process is that the worst scheme, the one that offers the least to the community, the poorest quality homes, and charges the most for them, is generally the one that will happen, because this is the one that offers the most cash up front to the landowner. As a result, development is always already at the margins of viability. Even a relatively small shock can see construction grind to a halt rapidly, because there is simply not enough margin left after the landowner’s cut has come out for the developer to want to build.”

  When it comes to building, most people tend to think about the developer, the architect, and so on. But what I think many people overlook is that this entire process starts with a land input and a landowner. And the cost, availability and usability of that land input has a significant impact on everything that happens downstream.

  2017.05.18

• Are department stores going to die?

  Here’s an interesting graph I found on Businessweek that outlines retail sales growth in America over the past decade:

  

  What’s interesting is not that furniture stores suffered during the housing crisis of 2008-2009 – this much is obvious – but that there seems to be a few other trends at work.

  For one, warehouse club sales have gone from being the highest growth to the slowest growth sector (excluding, for a second, department stores). The urbanist in me wonders if this has to do with “The Great Inversion.” That is, the trend towards more and more young people choosing to live in inner city neighbourhoods – where warehouse club penetration is low – as opposed to the suburbs.

  The other notable sector is department stores. It’s the only sector that seemingly hasn’t been able to rebound along with the rest of the economy. I think this points to another larger trend at play: there are structural problems with the department store model. They’ve been beaten up by category killers, the internet and the fact that individual retailers seem to want to manage their own brands and experiences from top to bottom.

  I know that for me, personally, I rarely shop at department stores. What about you?

  2013.10.10