Real Estate Opportunities Provided by Climate Change?

Justin Gillis focuses on which U.S Eastern coastal areas are at increased flood risk due to rising sea levels.    People have to live somewhere. If specific areas such as Norfolk Virginia are at increased risk of flooding, what areas on “higher ground” will experience increased demand to live there?    Could real estate developers help the coastal population to adapt to climate change by identifying geographic areas that have natural advantages in coping with emerging risks?  This is free market adaptation.  Implicit in Gillis’ claims is the belief that we will continue to rebuild our cities in the same places using the same materials and continually repeat our same mistakes in the face of new risks.    There is a group of rational choice economists who argue that we learn from our past mistakes.  This is an interesting debate that offers several testable hypotheses!  If the people of Norfolk Virginia want to keep things as they were, then they are free to do so but should use their own resources to finance their efforts.  If federal subsidies are offered then spatial moral hazard arises.

A Good Christmas Present?

On December 25th and 26th, Amazon will be giving away free e-book copies of my Fundamentals of Environmental Economics.   This is not your typical textbook.  This book presents many new ideas and examples as it discusses articles from the NY Times and from the frontier of environmental and urban economics.   After teaching my 116 student course at UCLA this fall, I completely rewrote the book.  If you download it and read parts of it, please send me your thoughts.    My only other present I can offer to all is a funny talk I gave on the Future of Chicago.

Free Access to the New Yorker Profile of Mark Kleiman’s Research

Patrick Keefe’s profile of Mark and his research is now available for free at this link.    This piece weaves a sketch of Mark’s background while also discussing his current research and its relevance to this  important policy debate.   With my ego, I thought about how a similar article could be written about me but I quickly realized that it couldn’t be published.



Kelly Kleiman’s Letter to the New York Times

Here is her letter and I agree with her point about quirky admissions essay questions for elite colleges.   A quote;

“As a former admissions officer, I know that questions like these are a practice sport, and that the young people who’ve had practice have gained it at upper- and upper-middle-class dinner tables, sparring with parents already able to give them every advantage. So to an impoverished student’s burden of measuring up to competitors who have had fancy internships and expensive overseas experiences, colleges have added what purports to be a search for creativity but is in fact a preference for privilege.”

She describes my family as we debate everything and our pre-teen son sketches “his” views on a large number of subjects including Paul Krugman.

Twitter and the Rejuvenation of a Downtown San Francisco Neighborhood

The NY Times provides a balanced piece about the benefits the 1% can bring to a downtown neighborhood.    San Fran’s Market Street has always amazed me.  Before Twitter showed up, you could walk 300 yards from the Embarcadero BART stop and be in a different world.   Whether Twitter’s presence at 1355 Market Street  is the sole cause of the recent neighborhood upgrading remains an open question.   As an urban economist, I would be interested in knowing what new restaurants have located nearby?  Have local public school API scores jumped with new Twitter kids moving into the area’s new housing?  Has crime fallen?  Has crime fallen because the police have stepped up patrols there?  In a zero sum game, where did these new patrols used to patrol?   Are the properties near 1355 Market Street now being restored and repaired?  From the city’s tax appraiser’s data —- how much has local property tax revenue increased by?   Given that the city has introduced time of day parking prices, has it considered charging more for parking close to Twitter?  Such price discrimination would allow the city to engage in some land value capture.    What high tech firms gain from being close to Twitter?  Are they leasing commercial property nearby?   This case study provides an opportunity to study how a center city can revitalize itself.   While all jobs used to be in the city center, we now consider it a rarity when a major company chooses to locate downtown.  Center cities would be stronger if this became a more common place event.    The environment is protected when more activity concentrates in center cities.  Compared to their Facebook rivals, the Twitter nation has a smaller carbon footprint as they walk to work and commute by public transit.

UPDATE:  For those who want to see the content of a UCLA undergraduate class on Environmental Economics, I have posted all of my lectures, notes and readings here.

A Face to Face RBC Blogger Meeting

In Chicago today on the 6th floor of the University of Chicago’s Gleacher Center, I had the pleasure of meeting Harold Pollack  for the first time.   He saw that I was speaker at a Booth School Real Estate conference and he was kind enough to find me and introduce himself.  We had a nice talk.    Whether the Internet is a substitute or a complement for face to face meetings is an old question.  In this famous 1998 paper , Glaeser, and Gasper argue that they are complements (i.e like peanut butter and jelly).    I have now met three RBC bloggers.   Michael O’Hare and I have had lunch in Berkeley.  I always learn from Mark K on the 6th floor of the UCLA Public Policy building and now I have met Harold and hope to see him when I return to Hyde Park in early December.    I’m going to Stanford a few times soon and now I’m wondering if I can track down Keith.

Trust, Declining Crime and the Rise of the “Sharing Economy”

A good sociology Ph.D. thesis will be written about the rise of the sharing economy (where people share with strangers in return for payment).    On both the supply and demand side of the transaction, the reduction in urban crime shifts perceptions about safety.  Are you willing to allow a stranger into your car?  Are you willing to enter a stranger’s car in return for a lift?  Of course, the macro economy is driving this new market but I think that the reduction in crime is another big piece of the story that hasn’t gotten enough attention.

A Quote from the LA Times;

The “catalyst” for growth, Sundararajan says, has been the lousy economy, which has provided an incentive for people to exploit their most valuable assets, their homes and cars, for extra income. That poses the question of whether the expansion of sharing networks will slow as the economy recovers and owners no longer feel the need to give up their privacy for cash.

In the past, it wasn’t unusual for families facing hardship to take in boarders to help make ends meet, but the practice fell out of favor during more prosperous times. Will that happen again? “We won’t know until economic conditions change,” says Paul, though he claims that many Sidecar drivers appreciate not only the money but also the experience of meeting new people.

And of course these services can fill needs unmet by traditional providers of short-term goods like cars and rooms by expanding the available inventory, sometimes at lower prices.

The downside of these peer-to-peer arrangements is that there’s no guarantee that either the driver or the passenger will be sane, that the car will be street-worthy, that the accommodations will be livable. The sharing firms typically say that their services are “self-policed.” By this they mean that users are encouraged to give public ratings to their counterparties at the conclusion of each ride or stay, which weeds out bad actors.