Preservation and Property Rights

So I heard this one this morning:

http://www.npr.org/2013/07/29/205850412/miami-beach-preservationists-battle-glitterati-over-homes

(Article text follows:)

Some of Miami Beach's quietest and most historic neighborhoods can be found in a chain of small islands connected by a causeway. On Di Lido Island, a community of homes built 50 and 60 years ago is being torn down and replaced, lot by lot. On one street alone, five houses currently are slated for demolition.

Daniel Ciraldo stands across the street from two '60s-era houses that will soon be demolished and replaced by a new home nearly double their combined size.

"We're looking at ceiling heights of around 10 foot per floor. And then, a roof deck on top that's going to loom over the neighbors," Ciraldo says.

Ciraldo is a member of the Miami Design Preservation League, a group that 30 years ago helped convince Miami Beach to preserve its district of Art Deco-era hotels. Now the group is working to save historic homes in Miami Beach's neighborhoods.

As Miami Beach's real estate market has heated up, Ciraldo says, developers have discovered the neighborhoods. Homes on the water costing millions — even historic ones — now are considered tear-downs.

For years he says, Miami Beach saw just two or three demolitions a year in residential neighborhoods. But that's changed.

"In 2012, that number skyrocketed to 24. And in 2013, we're projecting 29. And so we're looking at about 8 years worth of demolitions now happening in one year," Ciraldo says.

Ciraldo and his group are worried about the demolitions and how the new, large houses — McMansions, detractors call them — are changing the character of the neighborhoods. They're also concerned about Miami Beach's history.

A Real Battle

Star Island, a short drive across another causeway, has some of the area's best views. It overlooks Biscayne Bay and the Miami skyline. Some homes here sell for $35 million.

Ciraldo parks outside of a house that's become the poster child for efforts to stop the runaway demolitions.

"It is one of the most visible and most historic homes in Miami Beach," Ciraldo says.

It was designed and built in 1925 by one of Florida's first architects. But this is where history collides with reality — or at least reality TV. The owners of the home are featured in the Bravo TV show Real Housewives of Miami. Leonard Hochstein is a plastic surgeon who has trademarked his nickname, the "Boob God." His wife, one of the reality TV show's stars, is Lisa Hochstein.

After buying the property on Star Island, the Hochsteins asked Miami Beach for permission to tear it down and replace it with a 20,000-square-foot compound, complete with wine cellar, five-car garage, a guest house and staff quarters.

The city gave permission for demolition, but the Miami Design Preservation League intervened. The group sought to have the home designated historic, went to court and so far have blocked demolition.

In the meantime, the fight has spurred Miami Beach to declare a temporary moratorium on demolitions in the city while it considers ways to update its zoning and better preserve historic homes.

At a recent city commission meeting, Dr. Hochstein charged that the moratorium is aimed at him.

"The moratorium is about punishment. It's about punishing individuals. And nobody knows that more than me — because what myself and my family have had to gone through since we have tried to do something everybody has the right to do and followed the rules enacted by the city in doing so," he said.

Miami Beach Mayor Matti Hererra Bower doesn't quite see it that way.

"How about he's picking on us because he wants to demolish it? And there's more people that don't want that demolished. He's picking on Miami Beach," she says.

The moratorium, the mayor points out, doesn't affect the Hochstein's home or others that have already received demolition permits. If the court ultimately finds in the Hochstein's favor, they can tear down the 88-year-old home and replace it with their dream house.

But Bower says even if the home is lost, the battle has mobilized the community, bringing more and more residents out to city commission meetings.

"They see the quality of life changing. That's why so many people are coming, because 10 years ago, they had never seen a house, what could go next to it. Now they see it," Bower says.

The battle over the future of the home of Star Island will play out in the courts — and also on TV. The Hochsteins angered historic preservationists recently when they spattered fake blood on the walls of the vacant mansion for a gangster-themed party. Among the guests were fellow cast members of the Real Housewives of Miami — and a Bravo TV film crew.

(Back to me)

Historic Preservation is an interesting thing. In essence, the community is saying that the needs of the community to hold on to the visual and aesthetic properties of certain buildings and other man-made features outweigh the potential need for a property owner to redevelop. This can govern everything from paint colors to adding a new deck to the width of siding used on a particular house.  While it may seem a fairly intensive and invasive approach, it also helps preserve the essential character of a historic neighborhood, meaning that everyone's property values are enhanced through this preservation. 

People's needs change, however. Their means and their desires change over time. People may find it necessary or desirable to change their physical environment - add on another room to make way for another child, or aging parents, for example. They may want to stay in the same neighborhood for any number of reasons - social network, climate (those Miami Beach locations sound very attractive!), proximity to goods and services or work, and many others. And it may just come down to a matter of taste, which also changes over time. Maybe the little craftsman style bungalow was appealing, but now something more modern is desired.

All of these are perfectly valid reasons for a particular property owner to wish to change their property. Yet, in places deemed of historical value, cities, counties, and even states and the federal government all bring to bear a series of regulations that limit the ability of folks to alter their properties. This can bring these regulations and the property owner's desires into direct conflict.

So who wins? Whose needs trump the others?

On one hand, property rights seem to dictate that whatever is desired should be allowed. After all, all that is now old or historic was once new, and no one complained then. And we live in a country that is very much in favor of allowing people to do what they want with their own property. As long as what they want doesn't interfere with what other's want.

On the other hand, one doesn't move into a historic home/neighborhood without having at least some idea of what they're getting into. A historic home is as much a labor of love as it is an investment in a place to live. They're creaky, need constant maintenance, and require attention that a regular, newer home just doesn't demand. And you have to know that going in, or you're in for a world of disappointment and frustration. It can be very rewarding, but it takes work.

It's unclear from the article what the motive is for the doctor and his wife to want to remodel/tear down the space. There are ways of expanding one's home in a tasteful way, one that does not detract from the rest of the property and neighborhood. This has been done all over the country to great success. So the need for additional space shouldn't be a barrier. If it has to do with style, my opinion is that they should leave the place and find some property that is less sensitive. It would make everyone's life easier. In this instance, however, it appears that a law suit has been filed, so it will be interesting to see what comes out of it.

Motown

So if you've heard the news at all recently, you've no doubt noted that Detroit is bankrupt.

A bankrupt city is an interesting animal for a number of reasons. Detroit's woes stem from a long history of local, national, and even global events - most of which the city itself could have done little to remedy.

First off, Detroit became a manufacturing hub in the early part of 1900s. This is due to a series of happy accidents - it was on Lake St. Clair and Lake Huron, which means that it has easy access to shipping of raw materials from the steel mills in Pennsylvania and beyond. It also was the place which - for some reason - saw a significant interest in the design and innovation of automobiles, with the associated start up companies. Ford, GM (including Cadillac, Pontiac, Chevrolet, GMC, and others), and AMC all began in and around Detroit. In a rapidly expanding spiral of growth, ancillary industrial expansion, and support services, together with great marketing and good prices, Detroit became the place to go for people to be able to earn a good wage. Here is where the labor unions of the 1800s really were able to flex their muscle, staging demonstrations and lobbying for better working conditions and wages.

All of this expansion meant a vast influx of people, which generated need for housing, schools, roads, water and sewer lines, parks, libraries, and on and on... The horizon was distant, and who would have ever thought the bubble would burst? The city expanded, riding the rising tide of industrial might.

WWII was generally kind to Detroit. Factories were converted to military purposes, and women entered the workplace filling roles vacated by men. Most of these women did not stay in the factories, but many did, which began the modern movement for workplace equality. But I digress.

After WWII, the returning GIs fell on Detroit like a tidal wave. Black folks, in particular, found the easy access to jobs, good/affordable housing, and the relative lack of stereotypes found in the South to be a boon. As a result, Detroit is now over 80% African American. This is in stark contrast with the rest of the state.

Detroit's population continued to grow through the 50s, when the expansion stopped and started to decline. Manufacturers, taking advantage of cheaper labor outside of urban areas, began to spread out their interests. Now you had people making parts all across the country, and even assembly plants were moved to different locations. As the plants moved,so did the workers, and the population declines have been dramatic. The population of Detroit peaked between 1950 and 1960, when there were over 1.8 million people in the city. By 1990, the population had decreased to 1 million, and in the latest census, the number is only around 700,000.

I haven't mentioned much about the impact of environmental legislation, both in the cost of raw materials and in the manufacturing processes themselves, and the energy crises. Really, these factors played a role in the decline of Detroit, but they were just additional blows to an economy already reeling from the relocation of factories and support services outside the region.

So now, Detroit is faced with a vast housing surplus, decaying and dilapidated infrastructure, a vastly diminished tax base, and a veritable ocean of debt. Bankruptcy, in Detroit, is really the only viable option. So who is to blame, and what can we learn?

As can be seen, blame is difficult to pinpoint. There were so many factors that led to the decline that it's impossible to single out one that had a stand alone significant impact. One easy thing to point out, though, is the shortsightedness of planners and city officials. When one city or region puts all of it's eggs into a particular economic basket, the fall is absolutely disastrous. We have seen that in places like Houston in the 1980s, where there was no actual decline, but the anticipated growth was reduced from 20% to 2%. Houston, however, along with many other cities across the nation, have continued to prosper. Indeed, the region surrounding Detroit has continued to prosper in ways that are very dramatic. The population of the Detroit region has continued to grow, while Detroit itself has contracted to the point of insolubility. So what are we to learn?

Economic diversity is important. Having jobs in as many different sectors as possible is vital to the long-term growth and continued relevance of any city. Being so closely tied to any one particular industry means that the city is also subject to the periodic ebb and flow of that industry. Having a broader base of support, having a variety of economic sources, means that there is greater resilience to the vagaries of the market.

Further, fiscal responsibility and conservative policy are important. Cities are NOT like the Federal government. There is no regional shift possible: the Feds can rely on the idea that if California is doing poorly, that New York and Texas will be there to pick up the slack. Further, the Fed can raise taxes relatively easier, and the spending policies are much more likely to reflect the very long term - even out to 20 years or more. Cities don't have that luxury. In my experience, five years is really the longest term that a city should commit to. Beyond that, the waters are just too murky, market conditions just too mercurial, to perceive well what will happen.

Finally, I would (humbly) suggest that the responsibility lies with the planners for Detroit. City planners are not the end-all, be-all of a community. But we have the specific and unique task of trying to read the tea leaves and decide what is best for our communities. We work to serve and to improve the lot of the folks we live with. We have been trained in policy, in theory, and in practice on how to make places work. It was an unmitigated failure on the part of the city planners in Detroit, which failure goes back to the 50s and continued to the present day. Why didn't someone notice the population trend? Why did no one notice the declining tax revenues? Why were the costs of maintaining dilapidated infrastructure in far-flung regions never considered? Why wasn't more done by city leaders to help stem the tide of folks abandoning the area? Why didn't they reach out to other industries in an effort to diversify job/tax base?

I have been to Detroit. I was there in the late 90s when things were pretty bleak - and looking bleaker. I have been to many large cities around the world, and the thing that scared me most about Detroit was the absolute lack of people. No vehicular traffic. No folks milling around. No business people waiting for a bus. It was eerie, like a post-apocalyptic nightmare. I felt very uncomfortable and couldn't wait to get out. Which is a feeling I have never had before, even in the most sketchy parts of the various large cities I've been to, including LA, Chicago, Houston, Seoul, London, Paris, etc.

Ultimately, Detroit's failure was due to poor planning.