TerraIncogito is moving

This blog is moving to http://www.TerraIncogito.com

New post there by Mike, about medical Marijuana!

--PLH

Short sales and lenders

I attended an interesting class this week. An attorney who specializes in short sales and foreclosures was presenting his opinion of the Arizona anti-deficiency statute. It was interesting in that most of us attending thought first, that there was only one statute, and second, that the statute applies only to foreclosures, and not to short sales.

What he said was fascinating. First, that there is a statute which applies to judicial foreclosures and one which applies to statutory foreclosures; and actually, they both apply to short sales!

The long and the short of it, for folks doing a short sale, is that when a lender asks you to sign a promissory note for more money, it is illegal and unenforceable. Second, if you go through a short sale or a foreclosure, the lender no longer has a right to pursue you for anything left (provided your home and the loan meet certain criteria).

In fact, the statutes have been interpreted in case law in such a way that they are construes to strongly favor the home owner, releasing them from personal liability in many of these cases.

Shoot me an email for details!

--Patrick

How the brain works and why it is important to know...

In my efforts to satisfy my need to always learn new things, I read and listen to audio information (books on tape, classes, webinars, etc.) And mostly I find out something useful from all of it. From reading Rich Dad, Poor Dad, and the Daniel Ariely books about the choices we make, to ongoing studies of Neuro Linguistic Programming, and lots of study and reading about the stock market, real estate markets, to Brian Greene's books about the universe and stuff about quantum physics and how the big atom smasher might destroy the earth, and even stuff about relationships and how to raise children, fish, and other things -- I get lots of info.

One of the most useful things I have studied is in the area of NLP -- Neuro Linguistic Programming. Because it (along with another obscure field called Spiral Dynamics) is a study of why we do the things we do, and how we can predict what someone else is likely to do in a given situation.

One of the "discoveries"  of NLP -- or at least one of the things that is a tenet -- is that the conscious mind can only remember 5-7 things at a time. So if you (by yourself!) write down, in 1 minute, the name of every breakfast cereal you can think of, most people will write down 5-7 items. Why is this important?

Because if we can only think of 5-7 ways to do something, 5-7 ways to solve a problem, 5-7 people to call who might have an answer we need, then we are limited by that. Napoleon Hill, in "Think and Grow Rich", says that Mastermind sessions are one of the ways that successful people operate. It is because in these sessions, you can get MORE than 5-7 ways, because the breakfast cereals I think of will be different than the ones you think of.  So a group of people will be able to find better solutions than one by themselves.

This is similarly the basis for the "right" solution to the famous "desert island" problem, where there are a bunch of survivors of a shipwreck on a deserted island, and the problems to solve involve allocation of resources (water, matches, blankets) and what to do to signal for help. Each participant in the game comes up with their answers, and turns them in, then the group comes up with their consensus answers, and that solution is almost always better than any of the individual answers.

Another useful piece of information from NLP is useful in determining whether someone is remembering something or making up a story. There are specific, involuntary things we all do, depending on what part of our minds we are accessing -- and let me tell you, this is an invaluable piece of knowledge to have in your pocket during a job interview -- whether you are the hiring manager or the candidate.

So how many cereals can you think of?

--PLH

PARK NOW, PLAY LATER

Here’s another New Year’s wish for my home town: Let’s figure out how to integrate some public parks into where the people live in the urban core.  See, Phoenix has a remarkable number of acres devoted for public parks, and some are truly magnificent for desert vistas and hiking opportunities.  Last time I checked, Phoenix’s South Mountain Park was the largest municipal park in the world.  Now, quiz time:  How far are those park’s entrances from downtown Phoenix, and which City bus lines run to the park entrances?  North Mountain Park is one of my personal favorites for hiking and enjoying spring flowers after a winter of good rainfall.  Adding to the questions above, how accessible is that park from the south end on the avenues side?  Matter of fact, do you know where that park’s entrance is, off 7^th Avenue?  Our urban parks may be massive, but are they accessible, really?  What happened to truly “neighborhood” venues for recreation among urban dwellers here?  My children flew their first kites and their first windup, rubber-banded glider planes in Butler Park, and learned the etiquette of sharing swing-sets and taking turns on the slides there.  There are neighborhood parks other than Encanto in the City core, but they seem, too often, to have lost their luster as public places.

In fact, a dozen or so years ago, the City got to the point of putting up several of its public parks for sale.  No maintenance dollars was the explanation for the selloff.  That’s a shame.  The City’s never had a policy of allowing the privatization of parks maintenance akin to the experiments of allowing public golf courses to be privately managed.  But there’s a new trend afoot, and the City is going to study its viability.  The concept is to create livable, walkable communities with the aid of private development. The public/private partnership created would buy busted commercial developments and vacant land in distressed locations and, in many cases, demolish unoccupied or underutilized buildings.  Part of the land reclaimed would become an urban park, with the remaining area being densely redeveloped to help pay off the project's debt and create jobs.  Makes sense, as long as the coalition of private development and neighbor associations pools their funds to upkeep that neighborhood park. 

Lord knows there’s an appetite for close-in urban parks in Phoenix.  When the old Ramada Inn was leveled after it briefly was pressed into service for ASU dorms, the Sheraton promoted the use of the land for “overflow” surface parking (and maybe Channel 12, for its video-remote vehicles).  Some of the downtown neighborhoods and the Downtown Voices Coalition balked, big time.  I ought to know; I presided over the initial hearing for the use permit application for a five year term to operate a 90 thousand square foot surface parking lot.  I got the “stink-eye” from a variety of downtown residents who decided I didn’t “get it,” when it came to the desire for more pedestrian promenades and dog-walk parks space and less parking spots for vehicles.  Unfortunately for the residents, the City Board of Adjustment upheld my recommendation to approve the permit.  The motion to approve passed with the stipulation of a two-year evaluation of the permit to make sure that “over 100 trees planted and 300 flowering plants” within the parking area are being watered, according to the city’s plans for the lot.

But I digress about the trend.  With a grant from the City Parks Alliance, Georgia Institute of Technology and the Speedwell Foundation, a project has been dubbed "Redfields to Greenfields," contemplating a public/private enterprise with social and economic objectives aimed at acquiring financially distressed real estate and turning it into public parks or open spaces.  Phoenix is one of about 10 pilot cities working on the project.  An initial "case study" out of Atlanta found that perhaps the city could gain 6,000 acres of park space and 780 miles of trails by acquiring selected properties.  You can read more at the City Parks Alliance Web site at this URL: http://www.cityparksalliance.org/news-a-events/red-fields .

Repurposing “toxic” spaces for urban parks is an idea really picking up steam in the New York City area.  In 2009, the High Line park/trail system got rolling on the site of an abandoned rail property.  Brooklyn Bridge Park is getting a lot of attention through its phased opening this year, transforming miles of industrial backwater, pier ruins and concrete wasteland into playgrounds, sports fields and promenades.  But the recurring challenge is that the requirement that parks like these must generate income for their ongoing maintenance.  The current plan in NYC is to permit selective private residential development within the park’s boundaries at a cost that will offset the expenses of park maintenance.

Phoenix, in the meantime, is trying to figure out how to turn toward, or away from, this Redfields to Greenfields program.   The City’s Transportation, Infrastructure and Sustainability Subcommittee of the City Council met December 16, 2010, intending to discuss future opportunities - but no decisions were reached.  Since there is plenty of vacant land and abandoned commercial development parcels within the City’s boundaries, and there are plenty of folks seeking gainful employment to develop those parcels into urban recreation areas, there is some reason to be optimistic that with appropriate federal funding, some sites could be acquired for a trial run.  Federal funding, you say?  Well, nothing’s going to come out of the State’s or the City’s coffers for a few years, that’s for darned sure, supporting any leisure activity – related use, no matter the ecological benefit.  But developing a park for neighbors is about as “shovel ready” a project as one gets, so long as the neighborhood has some notice and input into the planning process.  The construction of portions of the park could indeed be a community-building exercise.

--MNW

A Wish for the New Year (Live-Work Spaces Along the Transit Core)

            It’s perfectly logical to conclude that persons having no permanent stake in a neighborhood are less inclined to invest in its present upkeep or the future state of repairs – except to the degree that inclination affects those persons’ bottom line.  Ironically, that “neighborhood investment” cuts both ways; the greater the investment, in other words, the greater the commitment, if your world – view encompasses economic reality.  If it does, then you may agree that an urban form in which folks who work in a place live on the spot makes some sense.  Take a look, for instance, in the couple of blocks along Roosevelt Street just west of 7^th Street at the lofts that top the shops and restaurants (like the Nile Café at 610 East) on the ground floor.  The vested interests of those worker/dwellers, whether a function of aesthetic perception or property values, are directly evident and palpable.  There’s pride of business and residential ownership.

            Segregation of commercial from residential functions lengthens distances required for essential travel.  In turn, that circumstance increases traffic and parking demands at “central gathering points” like shopping centers, a situation improved by mass transit options.  So, what would result in Phoenix if we allowed folks who produced – on a low-key scale - goods and services to live in two and three story buildings along the path of the light rail system above the businesses they operate?  Envision that the goods are produced on the second floor, sold from the ground level, and the owner rests her head anywhere there’s room for a pillow.  Suppose further little pockets of grouped buildings where foot traffic is stimulated is by rows of shade trees or some other kind of shade structures.  Imagine the invitation emanating from buildings not set back 25’ feet from the sidewalk but instead that are open for shopping right adjacent to the shade structures.  Is that threatening?  Not if minimal parking spaces were afforded in shared configurations to discourage vehicular traffic aggregating in these live – work situations.

            I think it’s highly likely that such spaces would become neighborhood gathering places where an intimacy develops between the producers and the consumers.  Would not that fact offset the inconvenience of minimal parking opportunities?  An illustration of how that works occurs at Central and Camelback with the coffee drive through flanked by the retailers at Red Hot Robot, Smeeks, Frances and Halo.  Those merchants earlier this month had an outdoor craft fair that drew a boatload of folks who, of course, had to drive so as to “contain” their purchases somewhere – but I had the sense that many attending walked or rode light rail.  It was wall to wall humanity, and it was fun just to gauge the mood of the crowd which seemed relaxed and festive.  That corner is not multistory, but I’ll wager the owners would love to live right there where they work, and it’s right next to the Camelback stop for the light rail.

            Transit Villages aren’t new concepts, folks.  Michael Bernick and Amy Freilich were writing about the concept of building new communities at transit stations in suburban and inner city areas in the late 1990s.  If the cities (Phoenix, Tempe and Mesa, for now) own any excess property near the stations, they should request development offers and sell these excess parcels for live-work development at market rates, nothing more.  And while they’re at it, Valley METRO should try out this wacky idea: charge 50 cents for one-way and 75 cents for all-evening ridership after 7:00 p.m. on weekdays and all day on Sundays.  The increase in ridership likely will nurture a culture of “taking the train” all the time, including during peak ridership hours.  Or, Valley METRO could sell a monthly “night pass” for one fee for ridership on light rail and busses valid only after 7:00 p.m.  Would that encourage “undesirable elements” to crowd the valley’s transit system?  Doubtful; see, gang-bangers and pickpockets both require a “quick getaway” option that doesn’t exist with bus or light rail travel, unless the rascal intends to hurl himself out the window.  Not gonna happen.  The growth of usage of the transit system in this ever-increasingly crowded metroplex justifies a trial of such a concept. 

--MNW

Inflation? If it happens, what will it look like?

This morning I am attending a class about disclosure, taught by Bill Gray, the former owner of the Arizona School of Real Estate and Business. He talked about one aspect of the health care bill, which for individuals earning more than $200k or couples earning more than $250k, imposes a 3.8% tax on the profit from selling properties.

And generally the attitude is that it doesn't really apply to anyone. But let's think for a moment what happens if inflation comes. Say prices rise by a factor of 5. (I'll talk about whether this is possible or not in a moment) If this happens, your $200k home you owe $300k on is now worth $1,000,000. When you sell it, the tax for the health care bill will be about $24,000 (depending on down payment and commissions.)

At this point in history, the national debt is larger than it has ever been, at it is at a point where history shows us that the United States might collapse. Historically a nation which has a huge debt compared to gross national product is in danger of collapse. However, in the 1930's, due to a shrinking of GNP, debt reached as much as 128%. So it doesn't always happen. And even in that time in history, inflation did not occur. Instead we had deflation.

Two things helped in the recovery at that time. First, home ownership became a priority. Prices were low, and in 1934 the FHA was created. Home ownership was seen as a way to get the nation back to work. The government subsidized loans to promote home ownership. People who buy homes also buy furnishings, refrigerators, radios, curtains, etc. and this drives manufacturing. The other thing that helped lift us out of depression was the onset of war, which also drove manufacturing.

And if you look at history, the path for many nations out of depression is war. Not that the wars help, but rather the people are so miserable and distrustful of the government that war becomes inevitable.

So what is our government trying to do now? They are trying to cause inflation, because deflation is just too scary. In a deflationary environment, asset prices fall and the banks (who now bear most of the risk) have little hope of recouping their investments. But if we are in an inflationary environment, asset prices rise (in terms of our fiat currency) and the banks can recoup their investments, as in the example at the beginning of this post. It is vitally important to the banks, particularly to the Federal Reserve, to cause inflation -- and lots of it.

It hasn't been able to do it. The Fed tried quantitative easing, pumping more than a trillion into the economy and nothing happened. QE2 is another $600 billion. The only thing they haven't done is to give money away on the street corners. There are some signs of inflation, though, as we see commodity prices and food prices rising, even as housing prices continue to fall. Prices today are the lowest they have been in 10 years, for resale homes in the Phoenix area. The least hard hit areas are in Texas, especially in oil related areas.

Parts of Arizona are also doing better -- due to rising commodity prices, such as copper. I don't understand why, but this is likely exactly the opposite effect desired by the Fed. They want to inflate real estate prices and not harm commodity prices; that would be the best answer. Unfortunately, foreign trade does not often invest in single family homes, rather, they buy goods ... and commodities. So a weak dollar does not help the housing market, and increases prices in things we need to buy.

I wish I had better news.

--PLH

PLANNING TRAFFIC SPEED & RESIDENTIAL APPEAL IN A ROUND-ABOUT WAY

                  In some of Phoenix’s older neighborhoods (e.g., Willo, Encanto, Arcadia), so-called traffic-calmers – meaning any apparatus or device, frankly, that compels rambling traffic headways to slow down – have been installed along major streets in the last several years.  Aside from their functionality, Phoenix’s traffic-calmers are wretched pieces of hardscape for the most part.  They do cause traffic to decelerate instead of smashing against bollards, raised curbs or what have you.  Slowing traffic, however, appears to be their only purpose; there certainly is no focus on aesthetics or public assistance.  (Okay, I’ve seen one traffic-calmer at Central Avenue and Mountain View that has some lantana and a palo verde tree planted in the median; otherwise, they are all ugly inventions.) Therein lays a missed opportunity.  Compare the multipurpose functions of France’s “circulations,” or roundabouts or “traffic circles,” as we may call them here.  Circulations are used across France to beautify the intersections of roads, to prevent chaos in the handling of traffic movements in multiple opposing directions, to celebrate local history and traditions, to provide useful guidance on directions to nearby and distant towns and thoroughfares, and to afford directions to local businesses and attractions.

            Of course, one anticipates the argument that Phoenix’s weather is too hostile to plant life for vegetation to be included in such a device on our city’s streets.  I doubt the truth of that proposition, given the development of xeriscape plant palettes by the city to be used in common areas and parks (and there’s the one at Central and Mountain View).  It’s just a bit more pricey to install plant groupings than to cover any raised portion of the calmer devices with gravel or concrete.  And I suspect that imagination is not the bailiwick of the traffic engineering staff when it comes to the beautification of traffic calmers.  Imagination need not be an issue.  There are landscape architecture students and general architecture students at ASU who could be engaged to re-envision traffic calmers, and their input could be “juried” by city staff and the members of the Village Planning Committees who live in the area of the devices.  These diverters, encountered by hundreds of drivers a day, could become points of pride or expressions of local tradition or local culture for the neighborhoods they occupy and serve.

How about using public art in some of these diverters?  Our city’s Arts Commission has a Public Art program that would be well suited for recommending treatment of calmers and the decoration of the vertical elements of those devices.  Look, for instance, at the Seventh Avenue & Melrose project, described at this URL: http://phoenix.gov/ARTS/seventhave.html; the scope of what I’m proposing here is far less ambitious (and, therefore, less costly).  That Commission should be able to advise the Village Planning Committee members and the traffic engineers so that together, they can devise something pleasing to the eye as well as serviceable.

Let’s face it, though – the issue is who pays to maintain “vertical objects” of substance against the onslaught of taggers and “bashers” who stupidly decide on a close encounter with elements of the the traffic calmer.  It’s surely not in the city’s budget.  But there are a variety of forms of urban commons management undertaken by private actors to steward a local resource.  First of all, we should not assume that there would be no momentum to forming a neighborhood foot-patrol to keep watch out over and maintain a roundabout, if it was established as a point of local pride adopted by a Village Planning Committee.  Alternatively, there could be an improvement district “ownership” of a roundabout that may lead to management of the asset once it has been upgraded to something of perceived value to a neighborhood.  Sheila Foster at Fordham University has written lately on the collective management of certain “Urban Commons,” and some of her work is at www.ssrn.com (put her name into the little search engine and her article, called “Privatizing the City,” will pop up).

One rudimentary example of how such a resource is manageable is to hire a person like the Salt River Project coordinates with neighborhoods to employ Zanjeros.  (A Zanjero is an SRP employee whose principal responsibilities involve the manipulation of irrigation gates for the orderly delivery of water to fill irrigation requests to homeowner subscribers to the irrigation system.)  A group of nearby neighborhoods could cooperate to hire a person charged to keep the traffic calmer in good condition and repair, such as maintaining a drip irrigation system for the watering of plant material or to cover up or eradicate graffiti.  If neighborhoods will address this issue with their respective Village Planning Committees, perhaps something positive will develop to improve resources that currently are useful but dismally disappointing to behold and that diminish the beauty of some otherwise - classy neighborhoods.  

--MNW

Mixed Uses as Community-Building Devices

                  Looking around Phoenix, one must admire much of our urban planning; but that doesn’t change the fact that severe segregation of housing and purveyors of goods and services doesn’t always serve the citizens well.  For openers, it condemns us to use cars for transport to pick up everyday household consumer items.  The idea, I suppose, is that grocers, pharmacies and small restaurants are untidy and noisy, so keep them well away from single family housing subdivisions.  (Apartment dwellers, well, for them noisy and untidy is less consequential, it would seem from land planning policy.)  Let’s be clear; some retail uses are untidy and noisy.  So what?  Is a little additional ambient noise that devastating to the human psyche?  If it is, then single family residents should all be completely insane, if I take as the norm the magnitude of home remodeling with power tools occurring in my neighborhood in just the last 3 years.  And a trash-compactor compressing sound is shorter in duration than noise made by the 5 guys using leaf-blowers in the residential yards on our street every week, usually before the hour of 8 a.m.

                  Our retail world has created, together with strip centers and every-corner pharmacies, lifestyle centers of 100,000 square feet of space so that one-stop shopping is possible when we cruise over to it, or to the mall, in our horseless carriages.  Walking to the store is eliminated; so our personal energy is being saved for what?-personal consumption?  Now of course we can’t walk, due to the too-bloody high temperatures of our 7-month summers.  So we assume.  Would our assumptions change if the grocer or other retailer was only ¼ mile away, accessible by a shade-tree lined walk or bicycle path?  Certainly we can’t spend money on a bicycle lane because we need to pave more lanes to accelerate vehicular traffic.  Naturally we can’t invest in street trees - they’ll just die on their sidewalk homes, right?  Isn’t it a wee bit mysterious that we cannot irrigate streetside trees when our city water lines are beneath the very same streets? – nah, there’s some justification of cost-prohibition I’m not seeing.

                  Like all insurmountable planning problems, the genuine issue is that we’ve not yet committed the time and other resources to devise the appropriate solutions, even in our sort-of hostile climatic environment.  Here’s a thought.  What would be the impact of allowing at every light rail Phoenix station, within 250 linear feet of the platforms, a grocery store of no more than 20,000 square feet that is focused on handling the needs of the surrounding dwellers within a quarter mile radius – including the need not to be awakened by deliveries or trash pickup before 8 a.m.?  What would happen if we allowed, as a matter of right (no NIMBY input, thanks), a restaurant or coffee shop or bar, with reasonable closing hours and restrictions on amplified sound, in such locations?  In other words, what is the effect of allowing neighbors to shop, eat or drink right in convenient neighborhood places that do not require an automobile to reach?  No doubt at first, among the none-too-pleased, would number the supermarket and pharmacy chains – but what would be the public’s reaction?  Is “buying local” a pipe dream for anywhere but the “Old World” villages of Europe, South America and Asia?  The New Urbanists don’t believe so, but they are building their towns as they roll out their ideas.  It’s easier, admittedly, when you get to start Utopia from scratch.

                  Seriously, though, what about retrofitting cities like Phoenix with local establishments where you can get to know your grocer and your pharmacist and hairdresser?  Phoenix has a marvelous PUD ordinance that can flex to allow notions of mixed use in denser-populated vicinities already afflicted by greater ambient noise from sources like traffic or light rail whistles.  I say, let mixed uses rip!  Don’t such decisions boil down, eventually, to the issue of political will?

                  

--MNW

A Town Crier – One Voice for Neighborhood "Scale"

I recently traveled in France for 3 weeks by car, bus, train, light rail, subway and Air France, crossing the country in a weird figure-8 pattern.  Toward the end of our sojourn, we nearly got ensnared in the public transportation strike (meticulously and randomly engineered), so I hunkered down with my bride in a burg near the de Gaulle airport called Roissy-en-France.  The town’s chief stock in trade is hospitality to the de Gaulle International traveler, since there are nearly 5,000 hotel rooms in 22 hotels, and the huge majority of the restaurant seats, located within a mile’s radius of the town center.  I expected the town would have the sterile feel of a service community like the area around Disneyland (Buena Park), with no reference point for civic pride other than in accumulating riches generated by tourist dollars.  Mine was a grossly mistaken belief; I realized after touring the streets, shops and a local restaurant for a few hours that I would enjoy staying in Roissy for a time even if the airport weren’t convenient, as it had genuine local charm.  In the process, I received a useful education on how urban planning can overcome a single economic driver.

                  The hotels are all along a single strip of highway, along either side; I was going to use the word “ghetto,” but truthfully, stripping away the glitz, staggering building heights and hot lights, it could have been the Las Vegas Strip.  Focusing all the tourist auto and bus traffic along the sides of a single node enabled the town center to celebrate a normal French village ambience for Roissy’s citizens, which included:

Many wonderfully-landscaped open spaces and urban parks (especially a central park with curvilinear walkways that skirted the town’s basilica) spaced apart but easily accessible from the edges of the town;

Classic two story buildings that fronted the local streets with few front-yard setbacks from the sidewalks, and in many cases no setbacks at all;

A ruined Chateau, tastefully honored as an historic and cultural icon of the community;

Signage throughout the historic district that contrasted the current appearance of the structures with their appearance 75-100 years ago, displayed on triangular, decorative sign panels;

Outdoor markets on two sides of the Place du Pays de France, together with the post office and the ubiquitous boulangerie;

One-car garages and ample scattered public parking lots with lots of vegetation, along with a city bus line down the two major commercial streets;

Mixed use buildings so that locals can live in close proximity to where they work and shop, making a second (or additional) four-wheeled vehicle largely redundant;

A small but vibrant indoor community and cultural center and an outdoor, band-sized gazebo.

                  In short, the place had the human, pedestrian scale you crave in a town one calls home despite the presence of a lot of foreign travelers confining themselves to their three and four-star ranked hotels if they lack the curiosity to look around.  It truly was a delightful community with many amenities you expect to see only in larger towns or cities – and perhaps this was the contribution Roissy exacts from its visitors in the form of a bed tax on its hotels (one Euro per person per room night).  Now, I’m a Francophile but not a crazed land-use fanatic that thinks that whatever is delightful in a small French village is translatable into any setting in a much larger community and in whatever culture one is dealing with.  That confessed, it does seem that there are some features of smaller European town life that may be adaptable to American cities that are worth thinking about.

No, we cannot knock down our modern structures and start building cobblestone streets around which packed-in, wheezy buildings made of stone loosely joined with mortar will be assembled.  But there are some things we do in American cities that seem to make little sense if an atmosphere of community is desirable, and I will talk about a few of those land use features in the next couple of posts.  The philosophical initial inquiry is if community is truly desirable on this side of the Atlantic.  The New Urbanism movement in this nation suggests that some Americans think that “less may be more” when it comes to boulevards, use of automobiles as primary transportation, scale of neighborhoods and so on.  “Vibrant,” one the one hand, and “vast” or “immense” are not synonymous concepts, as anyone visiting a French plein aire marketplace knows and Americans meeting one another in periodic farmer’s markets are discovering.  It may be worth mulling over how to “tweak” a few land planning conventions to try to restore community pride in places and create new public spaces for neighborhood environments in the U.S.A. 

--MNW

                  

Gotta Love Foreclosure Law, Lawmakers!

I’ve been away from this space a while now, though not engaged in idle pursuits.  Since July 3rd, I’ve written two articles for publication of 12,400 and 16,400 words.  That’s a lot of characters, I guess, but what’s with the 400 extra words?  You can read such things on http://ssrn.com, if you’re so inclined.  I’ve pined for the informality of the blogosphere.  And I’ve been treated by our State Legislature to free material of interest to real estate lenders and owners, in the form of new Arizona statutes that went into effect at the end of July.  Both deal with residential foreclosure scenarios, and the lenders’ nemeses, the defaulting borrower and the occupants of the house.  These statutes are intended to protect the unwary and unfortunate.  Let’s see how they work.

The first statute is the new A.R.S. Section 33-1331.  This reads that the owner of a house in foreclosure can’t rent to a new tenant after owner gets a notice of sale, without first letting the tenant know that the property is possibly being foreclosed upon.  Failure to do that subjects the owner to damages and “injunctive relief”.  No explanation is afforded on what sort of an injunction would be involved – would it be an order to “not get your house foreclosed on?”  I suppose the real relief needed would be to get your security deposit back and to be fully released from any payment obligations under the lease.  The notice to the tenant has to disclose who you can contact (lender or attorney for lender) to get more information on the pending foreclosure.  Bulletin: You can’t get anyone from a lender or its legal eagles to discuss a pending residential foreclosure with anyone other than the defaulting borrower, no matter how serious a matter the renter thinks it is.  If you call the law office, the first question you’ll get is “what is that foreclosure file number?”- and good luck guessing the correct answer.  The legislature forgot to compel these foreclosing persons to address the foreclosure with the renter.

What the legislature remembered to do is to make the statute inapplicable to apartment projects of 4 or more units – why do those renters get less protection under the statute?  The other small omission in the new law is dealing with the circumstance where the rental agreement postdates when “the foreclosure action was initiated.”  Problem is, the recording of the notice of trustee’s sale, or NOTS, which initiates the foreclosure, isn’t simultaneous with the lender’s giving notice of that recording to the borrower; in fact, the foreclosure statutes provide the lender a few days to give its borrower notice of the recording.  Bummer for the borrower here; technically, it could lose the renter’s lease even if it tries to comply with the statute, if the timing of conditions is bad.

The other new statute is A.R.S. Section 33-807.01.  It obligates the lender, in certain circumstances, to “attempt to contact the borrower [in writing] to explore options to avoid foreclosure at least 30 days before” it records the NOTS.  Sounds nice, for sure – now, what is meant by these phrases: “attempt to contact” and “explore options?”  My problem with the first phrase is this:  What if the borrower has already moved out of the house (hey, he rented the place a week before the NOTS went out to the house), and left no forwarding address but a mail box number – or his mother in law’s house?  How heroic do the lender’s measures have to be to give that required written notice?  Hire a P.I. to find the borrower?  What if the borrower moved to Dallas?  Second, what does “explore options” mean, and how sincere does that options-exploration effort have to be, if the borrower can be found?  Must the “options” be contained in the written notice?  Is it enough to say “why don’t you consider paying the mortgage installments?”  Doesn’t this statute just invite discussion of (a) deeds in lieu of foreclosure and (b) short sales – and are those better alternatives to just walking away, if you’re the defaulting borrower?  Is the hit the borrower’s credit score will take from a deed in lieu or short sale necessarily less severe than if the foreclosure just runs its course?  You sure about that?

It’s noteworthy that the statute only applies to non-judicial foreclosures, since the triggering of the required notice is a function of recording a notice of trustee’s sale.  Hey, judicial foreclosures make for more work for lawyers – I’m not complaining, you know!  Note also that the statute doesn’t apply to casual lenders who made five or fewer loans in one year secured by real estate, or to lenders complying with “the United States department of treasury home affordable modification program.”  Whatever that means.  Okay, what it’s supposed to say is that the HAMP participants have to give notices under federal law, and federal law preempts state law, so the HAMP participating lenders (both of them) don’t have to comply with any conflicting state notice requirements.   Unfortunately, that isn’t what the provision says.  Regardless, the statute doesn’t require lenders to “provide a modification,” just discuss it.  Ultimately, this statute seems to be largely window-dressing allowing some lawmakers to campaign on the theme that they looked out for the little guys – borrowers and renters of houses.  Good show; thanks for the added landfill material.  

--MNW

Just good advice

I spent the first part of this week at a seminar in San Diego where the focus was on the psychology of building and maintaining wealth. We heard from several pretty interesting speakers, including Keith Cunningham, Michael Smorch, Joe Williams, and Scott Harris, in addition to some market specific people like Joel Comm and Frank Kern.

Frank Kern was pretty interesting. If you don't know his story, he was pretty poor, working in direct sales, and got so he really did not like working with people. He sent for many "how to make money" products, and ultimately started an internet business selling people books about how to teach your parrot to talk. No, really!

That web site made him some $3000 or more per month. Subsequent web sites made him many millions. So I was pretty interested in what he had to say. It was something I have heard many times, from other speakers, in other ways. Keith Cunningham says it like this: Get in line, stay in line. If you get bored with being in line, or if the line isn't moving how you want, then you will probably get out of line, and you will have to return to the end of the line. The people at the front of the line started at the back.

Keith also says "Ordinary things, done consistently, produce extraordinary results." Frank Kern, (paraphrased), says that you have to quit sitting on the couch watching TV. You need to want to succeed more than you want to sleep. Most people would rather sleep.

Ray Kroc, founder of McDonalds, said that the key to success is to find a good idea and take immediate and massive action.

Most of us have great ideas, but never do anything with them. We do not need to have a great idea, though. For every business, there are people who have succeeded, and people who have failed at the same business. If you want to take a date to the very best restaurant, you probably will not be taking them to the most profitable restaurant; McDonald's does not have the best hamburgers in the world, but they have one of the best business models and management teams.

Entrepreneurs (and I include myself here) are usually in love with their idea, their product -- and this is a problem, because they should be more concerned with how the business works, not the product. Another gem from Keith Cunningham: Anything worth doing, is worth doing BADLY. He says this because most people who want to do something really well, will never actually do anything, because there is always some way to do it a little better.

A company I worked for at one time created a new type of product, and we pre-sold thousands of them. When we finally shipped them, they were, well, version 1 and had a 100% return rate. But version 2 was much better. We crushed the market and kept market share, because we had excellent customer service and took care of every customer and got them a version 2 unit as fast as we could. We did something badly and got our foot in the door. It was something worth doing.

Sometimes we just need to hear what we already know.

--PLH

Unemployment

The USA has a huge debt, manufacturing is going overseas, and the people are already taxed more than they can pay. Unemployment is high and rising. How can we solve these problems?

I know that anytime the government creates an incentive for something, people will use it! Look at welfare, cash for clunkers, the solar energy credits ... all the things the government should NOT be involved with (in my opinion). The federal government should defend the nation, deal with foreign countries, and provide an infrastructure for trade. Not much else, read the constitution and federalist papers. It should not fund the arts, health care, there should not be social security, ... but don't get me started, we all have opinions on these things and I am sure to be unpopular with many and popular with many. But maybe here is something we could all agree upon (although fundamentally this is also something the government should not be involved in...)

If a company sells a product, they get a tax credit for each percentage of the product's components manufactured in the USA, and another bit if it is assembled in the USA. So if you want to sell a cheap DVD player or cell phone, manufacture all the components in the USA and assemble it in the USA.

If something is 100% made in the USA with 100% USA manufactured components, then you get a huge (100% ?) tax credit. This could start immediately and be phased out over, say, 10 years, so next year it is 90%, then 80% ... This would give a HUGE incentive to manufacture things here rather than in, say, China or Mexico.

Comments anyone?

--PLH

Of Tongues

Last week, I went to New York to visit my Mom. Not NYC, Mom is privileged to have a summer cabin on one of the lakes in the Adirondacks. She has two interesting neighbors, one of whom is one of my most respected friends and mentors, but that is a story for another time.

When my wife and I arrived at the camp, it was late, about 2AM, because, well, it is in the middle of nowhere. We snuck in and went to sleep. The next morning, I was walking around the house and I noticed something odd on the floor; I couldn't really identify it, and it was an irregular shape; I vaguely recall picking it up and throwing it into the lake.

One of my brothers was also there, along with his son and son's family. They have a one-year old daughter who is just the cutest... and as they will, she was crawling around on the floor in the main room.

Some many years ago, Mom had a moose head, and a Jackalope, and other interesting critters mounted here and there in the cabin. The moose head was evicted a few years ago, and something ate all the fur off the jackalope and so it was also discarded. But one of the things I like most is that she has a bearskin rug, complete with head. I always wanted one, I suppose because of all the cartoons I watched where people ended up wearing the rug and sort of turning into a bear.

Now, Mom is in her mid 80's, and not as sharp as she once was, and has some short term memory loss. Sometimes the situations and conversations border on the silly. This was one of those times...

"Patrick!!!! See that bear? Someone STOLE the tongue out of it!!!"

I had no idea what she was talking about.

"The tongue?"

"YES!!! Someone STOLE the tongue. I bet it was Molly!" (The one year old)

"Um, I don't remember seeing it" (I had not connected that the thing I found on the floor and threw in the lake might have been the tongue)

"Well I just bet she got it out and it is under one of the couches or something. Or someone TOOK it."

"What would someone want, with, umm, a bear tongue?"

This sort of conversation happened several times a day, for several days. After about the 3rd day, the rusty synapses in my mind sort of remembered that I had thrown something away when I arrived, and that it might have been, well, a tongue. Out of context, what does a bear tongue really look like, anyway? And, what could you use one for? Licking big stamps?

So I did what I often do, when challenged, I used the universal cop-out and googled "bear tongues", and then "bear tongue taxidermy". Did you know you can buy tongues for black bears, brown bears, and grizzly bears, and that they come in small, medium, and large?

I suppose the most interesting thing is that you can buy a bear tongue for around eight bucks, and they show up in a few days, Apparently the usual installation techniques involve the use of staples and glue.

Mom got the new tongue, and put it in the bear's mouth, and she says it has changed the bear's personality somewhat. (It is another mystery how she knows what the personality was, and how she knows what it is now.... long bear conversations in the night?)

So next time you visit your parents during the summer, and find an oddly shaped plastic thingy on the floor, don't throw it in the lake! It might be a stolen bear tongue!

--PLH

Preframes

Pre-frame. That's an odd word, isn't it? I never used the word until I got involved in NLP. Of course I did lots of pre-framing, I just had no idea that it was something people studied, learned, and practiced.

So what is it?

Anytime you tell your son or daughter that they "will have a great time at the party tonight", then you have pre-framed them. They are now expecting to have a good time. And (studies show) they are more likely to enjoy the party than if you said nothing, or told them it would be awful.

A study described in "Predictably Irrational" by Dan Ariely investigates how much we cheat. Most of us cheat or steal a little -- say by making a copy of something we need at work, even though it is not work related. Copying one or two sheets -- most of us would do that. Few of us would make 5,000 copies of something for personal use.

But Ariely found something really interesting: An appropriate pre-frame made people stop cheating. In one experiment, before they had the opportunity to cheat, he had people either list 10 books they liked, or try to list the 10 Commandments. The people listing 10 books still cheated. The ones who listed the 10 Commandments, did not cheat!

This is a most excellent unconscious (or subconscious) pre-frame. Listing the Commandments had nothing to do with the ensuing experiment (where people had to solve some simple problems and then turn in their results in ways that either precluded cheating, gave people an opportunity to cheat, or gave them an opportunity to cheat without any possibility of being caught). It did insert something into their minds, though, that changed their behavior.

In the real estate business, I use pre-frames all the time. I'm not usually as overt as "I found the perfect house for you!" but I will find a way to set expectations so clients enjoy the process. Imagine working with someone who says, "Well I have only sold a few homes, and the market is really tough right now, and I'm not sure we can find what you are looking for, but let's go out tomorrow and see". Are you excited to go out and look for a home tomorrow? Maybe, but not with that agent!

When we work with clients, or interact with friends and family, we can use pre-frames effectively to make life more fun. (Of course we could use pre-frames in an evil way as well). Your wife might call you in the early afternoon and say something like, "I'm making your favorite dinner tonight ... and I have something planned for after than will be really fun!" Depending on your mood, you might think "Oh, no, she's rented 'Beaches' again!" but it is more likely that this pre-frame will have you in a pretty good mood for the rest of the day.

Listen for pre-frames, and think about the effects different ones have on people. A few well-chosen words, at the right time, can make an experience much better!

--PLH

Common Law Easements Clarified

Just before the 4th of July (07-02), the Arizona Supreme Court reminded us that occasionally, private rights in property are fundamental and should be treated as such. (Kelo decision notwithstanding) In the process, it tidied up a bit of a mess that I blogged about in early April. You’ll recall that Arizona’s Court of Appeals in Kadlec/Howell v. Dorsey held that Dorsey had ownership of a parcel through which a right of way had been dedicated to the public by a prior owner (of the Dorsey tract) through a deed. The deed was quietly ambiguous; there was no statement in the deed that the grantor intended to dedicate a dirt road to the public, nor any statement that the grantor of the parcels “hosting” the road intended to limit the easement’s benefit to any particular parcel or person. I wrote in that earlier post that the general tenor in Arizona law, when an alienation of property is not explicit, is that the court will look to the intention of the party or parties that is (are) making the grant of a benefit or title.

The Court of Appeals majority opinion stated that when land is sold subject to a roadway easement, there is a presumption of an intention to dedicate the roadway to public use; and, since there was no clear expression of an intent “contrary to a public dedication,” the deeds gave rise to a presumption of a dedication that the grantor failed to refute. The Supreme Court disagreed; it said the effect of the Court of Appeals’ decision would be to cause any parcel conveyed with a roadway easement in place to convert the easement to a publicly-dedicated road. The Supreme Court ruled that a court must look to the affirmative actions of the grantor to see if there is a basis for finding intent by the grantor to make a public dedication. The Supreme Court also held that the burden of proof of dedication must remain upon the party asserting the fact of dedication, in keeping with the Restatement (Third) of Property – Servitudes. There is no presumption of intention to dedicate, in other words, arising merely from the fact that the easement is for vehicular transportation. Last week, the appellate court system in Arizona worked the way it should, in clarifying basic principles of property rights.

--MNW

You’re On Notice, Lenders!

Our Court of Appeals recently issued an opinion that raises a few questions without giving altogether satisfactory answers. In 3502 Lending, LLC v. CTC Real Estate Service, decided in late April, the court held that notice available to a lender precluded it from claiming the insufficiency of prior liens in a quiet title action. Seems that the appellant, 3502, signed an August, 2006 agreement with a junior trust deed holder (Camis, Inc.) under which it would substitute for that holder under a debt structure (secured by a Paradise Valley residence) where the lien it purchased from Camis held third position (had “third lien priority,” according to the opinion). It’s an expensive house, and it’s in Arizona; naturally, that means it was foreclosed upon, and 3502 ended up with title at the foreclosure auction on its third position note.

Not wanting to pay on the senior notes, 3502 sued to quiet title, seeking a declaration that the first and second position trust deeds were extinguished by the foreclosure. Why? Because they were re-recorded on May 10, 2006, after the initial recordings of the first and second lien instruments (in August, 2005) failed to include legal descriptions of the residence. Those instruments did have the residence’s street address and Maricopa County Tax Assessor’s Parcel numbers, however. “Inadequate under the deed of trust statutes!” howled 3502. But when the instruments were signed in August, 2005, so said an affidavit, the legal descriptions were attached – they just fell off before recording happened, I suppose.

The trial court rendered judgment for the senior secured party, on exactly what premise cannot be inferred from the opinion. 3502 raised two issues on appeal. First, it contended that the senior liens were void because they lacked a true legal description (Argument I). Second, it argued that even if the liens were not void, there should still be a finding of inferiority of those first and second encumbrances because 3502 had no actual or constructive notice of these liens (Argument II). Apparently, either 3502’s principals did not obtain a title commitment, or do a title search themselves, or did not read the results of anyone who did perform a title search. If all of those assumptions are true then the $156,475 deed of trust (the remaining balance on the third lien) 3502 picked off must have been acquired from Camis at a smokin’ price. (The credit bid that prevailed on 3502’s lien was $202,000, but that included fees and costs and fluff, more than likely).

The Court of Appeals consumed some ink and paper blunting Arguments I and II; it’s unclear how much of a service it did in the process. First, it seems to me that Argument II was easily disposed of by pointing out that the contract under which 3502 acquired the third lien position explicitly stated the lien priority. Bingo! Game over on Argument II; you contracted for a junior position, and that’s what you own. But the court proceeds to explain why 3502 had constructive notice of the senior liens, and cites an Arizona case, Watson Const. Co. v. Amfac Mortg. Corp., that isn’t great authority for the proposition - because what was missing in Watson was two pages of text of the deed of trust, not the legal description of the collateral. A better statement of the principle is found in In re Wonderfair Stores of Ariz., albeit it’s a federal appeals court decision with Arizona roots. I wouldn’t have offered to argue the point of constructive notice at all, in the circumstances.

Argument I is a tricky one. Citing an Alaskan case, the Court of Appeals says that since an unrecorded instrument is fully enforceable between its original parties, and since the legal description was attached to the original instrument, the senior deeds of trust, when executed, fully complied with the deed of trust statute. Okay, the initial proposition is a correct statement of the law, but that’s not what A.R.S. §33-802(A) provides for a trust deed; that statute says to refer to the parcel by its subdivision lot number, if it’s a lot identified in a recorded plat.

So, here’s a few things I would have ventured from the bench on Argument I:

One, I’m not sure that the statutory language is jurisdictional; there’s a pre-statute Arizona Supreme Court opinion that says that the “description of property mortgaged must be such as to identify it.” Granted, the legislature isn’t the court; but I’m not sure that, constitutionally, real property must be described in one fashion only - or the deed of trust is void. Two, a federal court said in 1938, interpreting Arizona law, that “as between the parties thereto and their successors in interest with actual notice,” an unacknowledged and unrecorded declaration of trust “was as good as though all formalities had been complied with.” Since Argument II was resolved by a finding (as a matter of law) by the Court of Appeals that there was actual notice of the senior trust deeds, the federal court opinion at a minimum could be bootstrapped upon to find that the supposedly invalidly-recorded deeds of trust here are no “worse” than the unrecorded deed of trust referenced in the federal case. Therefore, I might rule, the descriptions in the senior deeds of trust are sufficient as a matter of law. In effect, however, that would be overruling the statutory provision in §33-802; that’s some heavy lifting for the Court.

Three, I would have discussed the availability of the equitable subrogation to the senior lienholder under the circumstances presented – a doctrine that equity produces the just and proper result. In effect, that’s fundamentally the same as item “two” above – based upon the notion of actual notice of a prior lien, a junior lienholder equitably is denied seniority in rank. I think that may be the best justification for the resolution of Argument I. (In fairness to the Court, however, I don’t know if that was raised by the appellee as a basis for denying the appeal.) Four, in the worst case, I might have remanded the matter back to the trial court, to find out to whom the May 2, 2006 Notice of Trustee’s sale was mailed by the agent for 3502, so that I could hold as a matter of law that 3502 had waived its claim to have been harmed by the failure of attachment of a legal description to the senior trust deeds when they were recorded. In any event, the Court’s disposition of Argument I troubles me, without further Court explanation.

--MNW

T-Rex Towers: Do Offices Face Extinction? (Part Four)

How will the American workforce work in another 30 years? The response to this question has much to do with whether today’s conventionally developed and occupied offices will be replaced by an entirely new paradigm. So, for a “part” or two, I’ll ruminate over this issue of tomorrow’s workers’ behaviors and attitudes, and how work “attitudes” and the norms of labor may change in the knowledge economy.

First, I confess an assumption. The assumption is that tomorrow’s work force will be led by, progressively, Generation Y (aka Millennials, or sometimes the “Net Generation”) and, thereafter, the iGeneration. In other words, my assumption is that there will not be a massive younger - adult “abandonment” of the work force in western industrial societies. Your reaction to the preceding sentence may be “what’s he talking about?” I’m thinking of the phenomenon in Japan of the rise of an underclass of youth and newly middle-aged working persons whose earnings place them below the poverty-line. This recent rise is largely based on the increasing rate of “unconventional” employment, resulting from restructuring within Japanese companies cutting costs and facing the challenges of globalization. An estimated one-third of the total workforce in Japan today is engaged in non-regular or temporary occupations, namely as freeters, as day laborers, part-timers, so-called dispatch workers (temps) and hybrids of these, forming a new “working-poor.”

Japan’s workforce dilemma arose from the now-distrusted relationship called 'kintractship', a form of 'adoption' by the worker’s employer, coupled with pressure on permanent employees to succeed that was manifested in little annual leave, long working hours, massive amounts of 'service-overtime', and death from overwork (karōshi). These are just a few challenges that made some regular Japanese male employees' working lives miserable through the 1980s. When the Japanese economy hit the skids in the 1990s and the now-famous “salaryman” was riffed from the workforce in copious numbers, massive cynicism grew among Japan’s youth. They have come to doubt the loyalty of corporate Japan to its devoted workforce while witnessing the career fates of their (predominantly paternal) parents. What’s my point? I’m assuming that the iGeneration won’t “drop out and turn on,” but instead will succeed the Millennials in the ranks of professional and technical workers in America’s knowledge-economy workforce. (Just to plug any thought-gap, I’m not disrespecting the Japanese via this observation; I’m simply stating that I’m anticipating the workforce in America over the next 50 years will consist largely of persons who are task-oriented specialists if not career-oriented, whether or not driven with lust for the trappings of “success” that seemed to obsess workers in the 1980s in our land, and regardless of whether they elect to work alone, or within or among smaller or larger groups of persons. Whew!)

Second, I need to define the forthcoming generations of American workers, although I’m not sure there’s a bright-lined way to choose “cut dates,” or whether doing that even makes sense. I’m using the working definitions of Millennials as those born from approximately 1980 through roughly 1996, while iGeneration members are and will be those born thereafter. The basis of those definitions is that for those Millennials born about 1980, their teen years were reached during the popularization of Mosaic, which had a revolutionary impact on the World Wide Web. Mosaic's graphical user interface allowed the Web to become, by far, the most popular Internet protocol. When added to the availability of JavaScript after 1995, the interactivity of the Web was assured. With it, users could interact with a page even while data was being retrieved by the browser; so the currency and accessibility of the Web was a foregone conclusion. Millennials became the masters of the Internet, although doubtlessly they are viewed by some among the iGeneration (including the younger brothers and sisters of Millennials) as hopelessly static and their favorite technologies “so last week.”

The iGeneration, born (more or less) since 1997, became preteens and adolescents at the time of the universal availability to industrialized societies of iPods, iPhones and iTunes, among other things (hence the denomination “iGeneration; this is not a pitch for Apple technologies). I am inclined to agree with Professor Larry Rosen - the convention that a new “generation” arises every 25 years is no longer, well, conventional. Technology breakthroughs representing quantum leaps in human communications, once available to mass markets, have the capacity to influence radically children during their formative development years. When game-changing tech tools’ usage becomes second nature to youth, it’s a bit medieval to pretend that there has been no notable transformation between age-based groups. It may temporarily be a difference of degree rather than kind – but differences become magnified each time there’s a quantum leap in accessibility of a new technologies to succeeding groups of youth who embrace them fearlessly and instantly.

Here’s an illustration: Millennials are used to Skype and video conferencing hardware and software for communications with fellow workers, perhaps wary of the limitations of impersonal contact through electronic media. Today’s preteens, on the other hand, being intimately conversant with virtual worlds and online games, see little distinction between online friends and physical friends - some would sooner play with their imaginary friends online as attend a party with classmates from school. Here’s another one: Millennials appreciate the wonder of, and rely on, instant messenger-ing, emails and text-messaging, achieving cost and time-savings in their business and personal communications. They do accept-grudgingly perhaps-that occasionally, although increasingly less frequently, there are bandwidth or wireless limitations on their freedom. Today’s preteens don’t process that; they expect a near – instant response from everyone they communicate with. Finally, there is anecdotal evidence that toddlers increasingly are referring to their parents’ Kindles as “books,” and believe that “true” computers are hand-held devices.

I’ve heard the transition explained this way: iGeneration members have lived, from their first moments of cognition, in a ubiquitous environment of electronic communications. What does that mean for workplace dynamics? In the next post or two, I’ll start explaining my hypothesis of how these differing growth environments inform attitudes, and attending behaviors, may impact the performance (and expectations) of Millennials and the iGeneration in the workforce (the latter haven’t started working just yet), leading to ruminating about how that will affect the way that the workplace functions – or won’t function – for them as the next leaders of the economies of the “white collar” nations that conventionally gathered in offices to perform their labors.

--MNW

T-Rex Towers: Do Offices Face Extinction? (Part Three)

In parts One and Two, I’ve described trends affecting in profound ways, over the next decade, the way offices will be developed, including their site planning, entitlements, ownership and financing and, ultimately, their leasing and occupancy. This part, and perhaps a few to follow, addresses how technology affects up-and-coming workforce members; and how, in turn, office workplaces are exploited by future “distributed” work forces. Offices are not headed for utter irrelevancy in the knowledge economy era; neither, however, are they going to perform as (in the past) 8-to-5 shelters either for repetitive-tasks performance or for machines and paper filing systems.

Here are four technology trends that augur profound changes in the workplace in the short term. (Even saying this feels absurd. When I look back at this post 3 years from now, I will scoff at my myopic vision. Perhaps all of these trends will themselves have become superseded by further innovations.) The first of these trends is cloud computing. This phenomenon makes storage of costly and bulky equipment as outdated as affordability permits. Offsite storage of data and software platforms and services means that desktop computer processing units, servers and drives are gone. Vanishing hardware in turn reduces overhead (minimizing in-house personnel to manage and maintain servers, hardware and software platforms) and enhances flexibility, since the Web-interface apparatus is accessible anywhere and at any time. Applications, together with their operating systems and accompanying services are hosted by a vendor or service provider, eliminating installation and downloading requirements. Of course, certain bandwidth availability issues remain to be resolved, but in urban areas where most offices are located, needed bandwidth solutions are forthcoming soon.

Second is the impact of virtual document repositories. Web-based repositories support businesses for external collaboration and file-sharing. In short, filing cabinets or shelving units with interminable binders/folders/envelopes containing documents stored are soon to be eliminated. Here’s an illustration: In 2008, the majority of business merger and acquisitions transactions had their due diligence processes operate from such online workspaces. Sure, there remain doubts about the security of such systems, but those anxieties will be addressed with new encryption technologies. These anxieties will be mollified further by the ability to view, upload and download thousands of documents in minutes from a variety of sources without any travel expense or the inconvenience of making multiple, physical “trips” to the currently-familiar repository buildings. Add to the cost-savings avoidance of crowding into a room or rooms with other persons to view the same physical documents, and one can see why these virtual workspaces are gaining popularity.

Third are mass-meeting technologies such as Go to Meeting and other conferencing software systems. Today’s annual subscription fee of $468 (or thereabouts) is less than the cost of a single coast-to-coast round trip airline ticket in cabin-class. Last time I checked, a corporate account on Go to Meeting allowed 25 separate loci for attendees of the same online meeting. That’s bound to be increased as competition increases and the cost of upgrading the “program” decreases. Consider the impact upon demand for conference space within the suite your office occupies. Now, consider the local commuting time-savings of your team members, not to mention the savings in petrol costs. Of course, no one imagines that in most companies, management will require the full elimination of face to face group encounters; there will always be a need, especially in the creative enterprise sectors, to “look the other person in the eye,” not to mention waving your hands or drawing as you describe with enthusiasm or vigor what you are trying to articulate on a conceptual level But routine meetings (think of the weekly staff department meeting – do you think Dilbert will miss those?) are going to be gradually phased out by those companies that master the elementary instructions of the conferencing systems to integrate graphics, power point presentations and spreadsheets into their collaborative gatherings.

Communications technologies will improve to the point where, in many industries and companies, staffing functions are entirely outsourced to online providers of goods and services such as accounting and library/source-material functions. One illustration of this advance is a British law firm, Temple Bright. The firm’s commercial practice is based in Bristol, England, but its accounts services and law library are entirely based on the Internet. The firm’s plan is to offer flexible work hours and higher compensation by shedding traditional law firm infrastructure and substituting technology, thereby offering greater value for the fees charged. Theirs is a no-staff, paperless business model. When the present generation of Internet-anxious lead partners retires, professional offices in law, accountancy, insurance and similar industries that do not feature incessant customer interaction will accelerate the transition to this custom.

The reallocation of interior space, and the shrinkage in square footage that a distributed workforce, coupled with integration of newer, more portable and less physically space-intensive technologies, will be pronounced. How will that new interior appear, and for what purposes will space be employed? More will appear in the following posts on the future of the workforce and management attitudes toward physical infrastructure. That in turn will lead to a discussion of what directions office land planning and development may take.

--MNW

T-Rex Towers: Do Offices Face Extinction? (Part Two)

The last third of 2001 was significant for the concept of office development on two fronts. The main event, indubitably, was the destruction of most of the World Trade Center in Manhattan, and a large piece of the Pentagon, the world’s largest government office building. This temporarily, at least, tweaked the noses of Americans seized by the concept that “the business of America is business.” It also prompted Richard Florida, one of America’s leading urbanism thinkers, to write an article positing that the devastation might affect development of future high-rise properties altogether due to security and insurance concerns. Manhattan, apparently, begs to differ.

The second event of far quieter publicity to September 11th but significant substance was the publication of a groundbreaking study in December, 2001, by The Rand Corporation with Gartner, supported by 22 industry participants, on workplace strategies for the future. That report expressed that workplaces would need to be far more “agile” than traditional view of offices and manufacturing plants development contemplates. In contrast to the major drivers of office development expressed by Kohn and Katz (see the prior post), radically new considerations appear, primarily stemming from “globalization.” By that term, I mean: the universality of the economic infrastructure (which the recent financial meltdown has amply illustrated is truly interdependent – or watch how Greece’s economic collapse affects the rest of the European Union, starting with currency hits); of communicative work forces; of shared technologies; and of environmental degradation sensitivity.

Here are a few affects of this globalization:

First is an increase in competition from international sources and attendant economic fallout. Organizations that survive the latest global financial tsunami must continue to turn their focus from sheer outputs of goods and services to saving. Volumes of production and marketing initiatives alone will not override bottom line expense excesses. Saving money is an imperative of equal value to productivity. Massive capital expense on owned or leased workspace is counterintuitive.

Second is altering workspace social and environmental dynamics. The old model of single-purpose office buildings is non-responsive to the new, mobile ways of working. Recently trendy work methods like tele-working and job-sharing are harbingers of what urbanists and industrial engineers refer to increasingly as “distributed work.” One graphic way to illustrate the essence of distributed work comes out of a study by DEGW, an international workplace consultancy. DEGW concludes that office workers sit at their desks only about 35% of their workday. Since most office operations use only a four or five day work-week, viewed from a 24 hour clock, most office workers sit at desks less than 10% of the entire calendar week. This reflects neither cost-consciousness nor carbon-footprint awareness. In short, it’s wasteful; and the “cure” is to substitute work spaces that, in the words of Despina Katsikakis of DEGW, will be “stimulating, supportive and sustainable.”

Third is envisioning the integration of a global distributed work force. I like the visual recall of the late Peter Graves, the Impossible Mission Force team leader (from the middle 1960s and early 1970s TV series), choosing from the pile of dossiers stuffed in his briefcase (by the way, why did the other 6 candidates never get picked? But I digress.) his next, temporary unit of superspies. Work units are less likely to consist of full time employees of long tenure in a single company. Instead, project teams are likely to consist of free-lance problem solvers who, akin to tradesmen on a construction site, periodically are “mobilized” and later demobilized by a number of general contracting businesses. These individuals may be linked through professional or social networking Web sites on a continuous basis, sharing a lengthy history of overlapping, interactive shared assignments. Flexible work environments will be required for persons who enter and leave a work community at irregular intervals. Those environments will reflect the control and choice of how, when and where these “task specialists” perform. Providing physical space flexibility will be a key to organizational resiliency in future decades.

Fourth is the adaptation of communication technologies to the new, agile workplace. Indeed, the technological innovations drive the agility potentials; for one thing, they mark the obsolescence of offices as places to store heavy pieces of equipment and voluminous files. These innovations are anchored by the trend toward ubiquitous computing environments, sustained by an upcoming generation of youth who know essentially nothing else of the history of work environments. These conditions must have their own set of posts on this blog, because, well, there’s a lot there to ruminate about, starting with Cloud Computing, paperless offices and virtual data rooms. Oh, my.

--MNW

Responsibility

Recently a friend sent me an email with a video in it that showed the streets of San Francisco when cars had just arrived; people had to run to get out of the way! In those days, there were few "watch your step" signs, and there were almost no laws that protected people from doing stupid things.

And it got me to thinking: Seems like, in those days, people had to have more responsibility for themselves and their actions; they had to be more aware of their surroundings, because the world was, perhaps, a more dangerous place.

I'm all for the world being a safer place; and I am also disturbed at the trend (which is now perhaps changing) that has led to people not taking responsibility for what they do. The woman spilling hot coffee in her lap is just one example of things we see every day. And the courts and insurance companies, to a great extent, have rewarded their behavior. Because the insurance companies want to subrogate claims (sue whoever is responsible on your behalf), and because there is often a law firm that will take a case on a contingent basis.

Sure, it is good to put up a sign that says "Do not stand too close to the edge" at the Grand Canyon, but when there is a law that requires that the switch for the garbage disposal be positioned such that you can't turn it on if your hand is in the drain...

I like to think about what sort of things happen if taken to the extreme. It is the sort of argument about the camel getting his nose under the tent. Or slowly warming a frog in water -- you've heard these. Do something gradually, no one will notice. Do it quickly, everyone objects. Eventually, if the trend continues, no one will have any responsibility for anything; the government will take care of us. (See how that's been working...)

The current administration seems to want to continue to expand the role of government in our lives; to continue the trend of reducing personal responsibility. Fortunately it seems like the pendulum is swinging back the other way.

Just for a moment, think about what different decisions you would make in your life, if there was no insurance. Get in an accident, and lacking any criminal elements, you pay for your problems, they pay for theirs; no lawsuits. No tort claims. I bet we would all be MUCH safer drivers! We might all think twice about when to change lanes, whether we should drive when we are tired, etc.

Come to think of it, maybe we should do that anyway!

--PLH