Monday, August 31, 2009

Tales of Three Cities/Bears/Men

I still feel compelled to write about the Economic condition as it is one that has affected us all. If you are fortunate enough to avoid the catastrophes that have befallen many than rejoice but know on some level you will pay the price in reduced wages and benefits over the long haul, longer hours and truly less security in knowing where you stand and your company does.

This morning's NY Times were filled with two tales from the opposite end of the spectrum as well as note of a casualty of it all.

The Dot com boom and bust of the Clinton years left many feeling flush and successful for basically doing little or next to nothing but creating a company on the back of a napkin. The Financial bust gave people homes and prosperity to a burgeoning building trade but the implosion left us with bust that was the Hurricane Katrina to Windstorm of 2000. The Dot com bust seems very minor league in reflection now but a storm warning for the future 2007. I wonder if any of these stories will become legends or just more of the same old same old.

Do we become numb from result of hearing about them or do we feel anything. Part of me has almost become immune. After spending the past month talking to men in my peer group as part of my marry for health care campaign, I don't long in returning there anytime soon I am afraid. This is one group I wonder if they will recover ever from that which they were so strongly a part.

Like the three bears read their stories and find your right bed in which to hide...

The Dot Commer....

For Him, the Web Was No Safety Net

Published: August 28, 2009

THERE was a time in the late 1990s when Josh Harris was a king of sorts. A Silicon Alley pioneer, he was flush with millions of dollars made from his first Internet company, and he was spending it wildly on a series of legendary SoHo parties, businesses and social experiments.

He wired a loft with Webcams to broadcast everything he and a girlfriend did (including bathroom visits). He enticed 100 people to live in an underground “bunker,” outfitted with a stylized altar, a see-through shower and a firing range. He created some of the first Webcasts through a company called Pseudo Programs.

And now it is all gone.

These days, Mr. Harris sleeps in a friend’s pool house in Los Angeles and earns a meager living playing poker at a racetrack.

Last week, in his first extended visit to New York in eight years, he said the $741 in his pocket was all the money he had in the world. He was in town for the opening of a documentary about him, “We Live in Public,” which portrays him as a visionary of the digital age, an eccentric who eventually retreated to an apple farm upstate to reboot his brain after a lifetime’s worth of media static.

“He is one of the 10 most important people in the history of the Internet,” said Jason Calacanis, an entrepreneur of digital media who once chronicled New York’s tech scene in his publication, The Silicon Alley Reporter. “He may not be the most famous.”

On a walking tour of SoHo, Mr. Harris admitted that he has missed the spotlight his companies and spectacles once attracted. Standing outside 353 Broadway, where his bunker experiment had been, he recalled: “One time after the bunker, we had this party called the Media Mirror. For three hours it hit this perfect groove. Fine women, the hum of the people talking, the feeling you get when you know you’re at the right place in the right time in the world. It’s like being high on heroin for three hours and then you can’t get any more no matter what you do.”

For a number of years, it was quite a high. Working for an early online research firm in the 1980s, Mr. Harris realized that computer networks were the next big thing. He founded Jupiter Communications in 1986, which measured online traffic. His stock was worth a reported $80 million at one point, and in 1994 he resigned from running the company to start Pseudo.

He began giving parties in a loft on Broadway at Houston Street, with artists, techies and other downtowners. There was sushi served off naked women, boxing, hip-hop artists including Eminem, and Mr. Harris sometimes dressed as his alter ego, a shrieky clown in smeared makeup named Luvvy, based on the wife of Thurston J. Howell III, a character from “Gilligan’s Island.”

He would hire interesting party guests to be hosts of Pseudo’s Webcasts, where computer users could communicate with the host through online chat.

Even before the dot-com bust of 2000, Mr. Harris’s increasingly wild experiments began to get out of hand. His bunker, stocked with guns, was raided by city authorities on Jan. 1, 2000. It had descended into chaos, and everyone was evicted.

During the experiment of broadcasting his life with his girlfriend, Tanya Corrin, the two split and have barely spoken since.

Pseudo burned through tens of millions of dollars and was sold for very little.

In 2001, a few months after moving to the apple farm in Livingston, N.Y., Mr. Harris received word that what was left of his fortune was nearly gone, and he cried. “I heard Jupiter stock had tanked, and I went from being worth $20 million to $2 million,” he said.

He sold the farm in 2006 and spent the last of his fortune trying to start another interactive television venture, Operator 11, which was eventually acquired by a company that agreed to pay the $150,000 Mr. Harris owed to American Express and other creditors, he said.

In 2007, he left for Ethiopia, where he said he had lived for three years as a boy (his father was stationed there on business). He tried to start an entertainment channel in Africa but instead spent a lot of time smoking marijuana, he said.

Meanwhile, Ondi Timoner, a filmmaker who had shot footage of Mr. Harris’s events in New York, had begun putting together “We Live in Public,” which won the Grand Jury prize for documentaries at the Sundance Film Festival this year. She paid to fly him to Park City, Utah, from Ethiopia for the festival, and he came on the conditions he be provided with oatmeal and a dentist appointment.

“We won, and he never went home,” Ms. Timoner said.

Mr. Calacanis, who in 2005 sold his company, Weblogs, to America Online, and said Mr. Harris was his mentor, offered him a place to stay in his pool house and a Corvette to drive.

Since his return, Mr. Harris has been trying to start a venture called The Wired City. Basically, it would have a large group of people living in a sort of three-dimensional real-world Facebook, where “friends” could participate in one another’s every move.

He explained that if two people were Wired City participants having lunch at a restaurant talking about clowns, friends watching remotely could send video that would, perhaps, be broadcast on the table showing a clip from “Shakes the Clown” followed by menu recommendations. The cleverest friends would be rewarded.

Despite his persistence, he sometimes seems distracted by personal demons. Over lunch in SoHo, he offered a rambling account of his activities in 2000 and 2001, trying to make a case that the F.B.I. is interested in him in connection with the 9/11 terrorist attacks. These included hiring a helicopter to circle the World Trade Center in March 2000 during a stunt by an Austrian performance art troupe named Gelatin, who claimed to have built a tiny temporary balcony on the 91st floor. He also said he was part owner of an art studio, Exploding Sky Worldwide, which created images of “Gilligan” for him. (An F.B.I. spokesman said the agency does not comment on who is or isn’t under investigation.)

Mr. Calacanis insisted that Mr. Harris has a keen mind, which will be obvious if some of the television producers he is meeting with will take a chance on him.

“I watch him in the pool house putting 50 pieces of paper on the wall and drawing stuff,” he said, conjuring, perhaps inadvertently, a famous scene from the film “A Beautiful Mind.” “He’s got some good ideas.”

Now the man who once filled his apartment with cameras is convinced he is being constantly watched. “There are people watching me and manipulating my life,” Mr. Harris said.

There is a madness behind the method, said those who know him. “Josh was and is very complicated,” said David Bohrman, who once was chief executive of Pseudo and is now a producer at CNN. “There are moments of insight and moments of craziness.”

Ms. Timoner, whose documentary spends time chronicling Mr. Harris’s troubled relationship with his family, said: “He needs to be significant. Whether it’s that the government is after him, or seeing articles about himself. Ultimately the only thing his mother cared about was reading those articles. That was how he felt loved.”

Walking past his old Pseudo offices at Houston and Broadway, Mr. Harris, who said he has never been in love, adjusted his dark sunglasses.

“It’s a funny thing being in fear for your life,” he said. “It’s kind of addictive.”___________________________

The Next Story.. .Average White Guy or Gen B

At 58, a Life Story in Need of a Rewrite

Published: August 28, 2009

MICHAEL BLATTMAN, 58, took a prudent path to a successful business career. Armed with an M.B.A., he started with the federal government, working at the General Accounting Office and Federal Reserve, before moving to the Sallie Mae student loan program, where he rose to be director of national sales.

From 2001 to 2008 he was a senior vice president for a private student-loan company and at his high point earned $225,000 a year in salary and bonuses, he says. He also taught business courses at the University of Maryland; lived in a 4,000-square-foot home in upscale Potomac, Md., and drove a Mercedes.

And then, in short order, this stable life came undone. When his younger of two children was almost ready for college, Mr. Blattman asked his wife of 25 years for a divorce.

“We’d just grown apart, we had a different opinion on mostly everything,” he says. “Life is short — you got to do what makes you happy.” Since he worked out of his home, he could live anywhere, and decided Florida would be the place to start over.

But soon after, in January 2008, he lost his job. His company was shutting down much of its student loan business. Still, Mr. Blattman wasn’t worried. He received a $188,000 severance package and says, “I thought I’d find another job quickly, and actually wind up ahead.” He is well regarded in his field. Jim Murphy, a former president of the New York State Financial Aid Administrators Association, calls him “innovative, dependable, an asset to any organization.” Tony Doyle, a dean at Widener Law School, describes him as “a highly capable, dedicated professional.”

None of that matters in this economy. Mr. Blattman has been out of work ever since, 18 months. He moved to New York because he thought prospects would be better than in Florida. (“I couldn’t go back to Maryland, tail between my legs.”)

But after applying for 600 jobs, he’s had just three interviews — two of them over the phone. At the only in-person interview, for a position supervising international admissions at a Westchester County college, he was asked about salary. “I said: ‘Whatever you’re paying, I’ll take it. I understand it’s a different world now, I can adapt.’ ” The job went to someone half his age, he says.

Being single, he wants to be in New York City, but lives in a studio apartment in this middle-class suburb, because rents are cheaper. He let his online dating membership lapse because, he says, once women figured out he was unemployed, it killed things. He can walk to shopping, but often drives his secondhand S.U.V. to a grocery store two towns away just to have someplace to go. “If I walk to the store, I’m back in 10 minutes, and then what?” Last Monday, asked what he had planned for the week, he said, “As of now, I have zero planned, not a thing.”

He has enough to live on for two to three years and knows he’s luckier than many. Still, he wakes in the night, scared. “If I don’t find work by then,” he says, “I don’t know what I’ll do.”

Unemployment for middle-aged workers like Mr. Blattman is the highest it’s been since data was first collected 60 years ago. According to the Bureau of Labor Statistics, joblessness is worse for men over 45 (7.7 percent in July) than women the same age (6.9 percent). And while the middle-aged are still more likely to have jobs than younger workers, once people Mr. Blattman’s age are laid off, finding a new job is harder. In 2008, laid-off people over 45 were out of work 22.2 weeks, versus 16.2 weeks for younger workers.

Like steelworkers in the 1980s recession, Mr. Blattman was part of an industry, financial services, where entire companies and divisions collapsed and disappeared. “It wasn’t anything about me personally,” he says. “The world around me just changed overnight. Like East Germany, one day it was there, next day gone.”

Several factors were at play: credit markets contracted; a scandal over questionable ties between lenders and college aid offices put private lenders on the defensive; and Congress cut the subsidies paid to private lenders for issuing federally guaranteed loans, reducing profitability.

Mr. Blattman has many people to commiserate with, but few to network with. “Ninety percent of the people I worked with lost jobs,” he says.

After his layoff, he bought two suits, “to be prepared for the glut of interviews.”

He’s never worn them.

Companies insist applications be sent via e-mail. “I’d say 95 percent never even acknowledge receiving my application, let alone telling me I was rejected. No letters, no courtesy, everything is so chaotic and rude.”

Even headhunters stopped responding. “One tried to help for a few weeks, but disappeared and didn’t return phone calls or e-mails.”

“I’d see ads for business jobs, teaching jobs, that were my exact résumé and not even get a call. So many are out of work, if they want a guy with polka dots on his head, they can find polka dots.”

Just getting people to understand what he did for a living — setting up loan programs for colleges — is often not possible. “I just say I’m a sales guy, I can sell ice to Eskimos. My problem is, I have no credential. I’m not a lawyer or doctor, not in pharmaceuticals, not an expert in women’s fashion. I have no broker’s license or insurance certificate.”

“Here’s the reality,” he continues. “I used to be somebody, I had a job. Not anymore. Everything ground to a halt. No sense of purpose. No self-esteem.”

Filling the days is a chore. He goes for the $2.99 breakfast special at a nearby diner every morning, just to get out and be around people.

A few times a week, he rides the train into Manhattan, to a museum or street fair, just to be out. “I’ll walk from Union Square to the Upper East Side, walk through Central Park and just get lost and see where I come out.”

His father, a truck driver who survived the Depression, instilled the importance of hard work in his children by planting the fear of homelessness, and Mr. Blattman cannot walk by a street person now without wondering if this could be him.

When he’s out, he feels guilty he’s not home, hunting the Internet for job prospects.

His health insurance expired July 31, so he bought a new policy that starts Sept. 1, and is keeping his fingers crossed he makes it through August.

He fears he’s too old to find work and too young to retire.

He got a call from a headhunter last week; one of his former employees had listed him as a reference. She asked what he was doing and said she might have a job for him. “We’ll see,” he says. “I’ve got to the point — no one’s going to do that for me. It’s all about me making it happen. I can’t rely on the old world to take me back.”

With so much time on his hands, he decided to take a stab at writing novels. He’s finished a thriller about a consumer loan officer and is working on making contacts in the writing world. “I have befriended publishers, published authors, agents, taking certain people to lunch,” he says. A few hours after saying he had nothing going last week, he received an invitation to a book party in SoHo and planned to build a day in the city around it.

During his walks, he makes notes on his BlackBerry for his second novel, which, he says, is half finished. It’s about a 58-year-old unemployed man who lives in a studio apartment the size of a hotel room, and every morning goes to a diner, where he falls for a waitress who’s the daughter of Holocaust survivors.

It’s a love story, he says, and while he’s not yet sure exactly how it will turn out, his intent has always been to give it a happy ending.


And finally the man who crosses both X and B....

Rise of the Super-Rich Hits a Sobering Wall

Published: August 20, 2009

The rich have been getting richer for so long that the trend has come to seem almost permanent.

Mr. McAfee, who made his fortune in antivirus software, bought the property to have a place to fly open-cockpit planes with his friends.
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They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.

But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.

For every investment banker whose pay has recovered to its prerecession levels, there are several who have lost their jobs — as well as many wealthy investors who have lost millions. As a result, economists and other analysts say, a 30-year period in which the super-rich became both wealthier and more numerous may now be ending.

The relative struggles of the rich may elicit little sympathy from less well-off families who are dealing with the effects of the worst recession in a generation. But the change does raise several broader economic questions. Among them is whether harder times for the rich will ultimately benefit the middle class and the poor, given that the huge recent increase in top incomes coincided with slow income growth for almost every other group. In blunter terms, the question is whether the better metaphor for the economy is a rising tide that can lift all boats — or a zero-sum game.

Just how much poorer the rich will become remains unclear. It will be determined by, among other things, whether the stock market continues its recent rally and what new laws Congress passes in the wake of the financial crisis. At the very least, though, the rich seem unlikely to return to the trajectory they were on.

Last year, the number of Americans with a net worth of at least $30 million dropped 24 percent, according to CapGemini and Merrill Lynch Wealth Management. Monthly income from stock dividends, which is concentrated among the affluent, has fallen more than 20 percent since last summer, the biggest such decline since the government began keeping records in 1959.

Bill Gates, Warren E. Buffett, the heirs to the Wal-Mart Stores fortune and the founders of Google each lost billions last year, according to Forbes magazine. In one stark example, John McAfee, an entrepreneur who founded the antivirus software company that bears his name, is now worth about $4 million, from a peak of more than $100 million. Mr. McAfee will soon auction off his last big property because he needs cash to pay his bills after having been caught off guard by the simultaneous crash in real estate and stocks.

“I had no clue,” he said, “that there would be this tandem collapse.”

Some of the clearest signs of the reversal of fortunes can be found in data on spending by the wealthy. An index that tracks the price of art, the Mei Moses index, has dropped 32 percent in the last six months. The New York Yankees failed to sell many of the most expensive tickets in their new stadium and had to drop the price. In one ZIP code in Vail, Colo., only five homes sold for more than $2 million in the first half of this year, down from 34 in the first half of 2007, according to MDA Dataquick. In Bronxville, an affluent New York suburb, the decline was to two, from 17, according to Coldwell Banker Residential Brokerage.

“We had a period of roughly 50 years, from 1929 to 1979, when the income distribution tended to flatten,” said Neal Soss, the chief economist at Credit Suisse. “Since the early ’80s, incomes have tended to get less equal. And I think we’ve entered a phase now where society will move to a more equal distribution.”

No More ’50s and ’60s

Few economists expect the country to return to the relatively flat income distribution of the 1950s and 1960s. Indeed, they say that inequality is likely to remain significantly greater than it was for most of the 20th century. The Obama administration has not proposed completely rewriting the rules for Wall Street or raising the top income-tax rate to anywhere near 70 percent, its level as recently as 1980. Market forces that have increased inequality, like globalization, are also not going away.

But economists say that the rich will probably not recover their losses immediately, as they did in the wake of the dot-com crash earlier this decade. That quick recovery came courtesy of a new bubble in stocks, which in 2007 were more expensive by some measures than they had been at any other point save the bull markets of the 1920s or 1990s. This time, analysts say, Wall Street seems unlikely to return soon to the extreme levels of borrowing that made such a bubble possible.

Any major shift in the financial status of the rich could have big implications. A drop in their income and wealth would complicate life for elite universities, museums and other institutions that received lavish donations in recent decades. Governments — federal and state — could struggle, too, because they rely heavily on the taxes paid by the affluent.

Perhaps the broadest question is what a hit to the wealthy would mean for the middle class and the poor. The best-known data on the rich comes from an analysis of Internal Revenue Service returns by Thomas Piketty and Emmanuel Saez, two economists. Their work shows that in the late 1970s, the cutoff to qualify for the highest-earning one ten-thousandth of households was roughly $2 million, in inflation-adjusted, pretax terms. By 2007, it had jumped to $11.5 million.

The gains for the merely affluent were also big, if not quite huge. The cutoff to be in the top 1 percent doubled since the late 1970s, to roughly $400,000.

By contrast, pay at the median — which was about $50,000 in 2007 — rose less than 20 percent, Census data shows. Near the bottom of the income distribution, the increase was about 12 percent.

Some economists say they believe that the contrasting trends are unrelated. If anything, these economists say, any problems the wealthy have will trickle down, in the form of less charitable giving and less consumer spending. Over the last century, the worst years for the rich were the early 1930s, the heart of the Great Depression.

Other economists say the recent explosion of incomes at the top did hurt everyone else, by concentrating economic and political power among a relatively small group.

“I think incredibly high incomes can have a pernicious effect on the polity and the economy,” said Lawrence Katz, a Harvard economist. Much of the growth of high-end incomes stemmed from market forces, like technological innovation, Mr. Katz said. But a significant amount also stemmed from the wealthy’s newfound ability to win favorable government contracts, low tax rates and weak financial regulation, he added.

The I.R.S. has not yet released its data for 2008 or 2009. But Mr. Saez, a professor at the University of California, Berkeley, said he believed that the rich had become poorer. Asked to speculate where the cutoff for the top one ten-thousandth of households was now, he said from $6 million to $8 million.

For the number to return to $11 million quickly, he said, would probably require a large financial bubble.

Making More Money

The United States economy experienced two such bubbles in recent years — one in stocks, the other in real estate — and both helped the rich become richer. Mr. McAfee, whose tattoos and tinted hair suggest an independent streak, is an extreme but telling example. For two decades, at almost every step of his career, he figured out a way to make more money.

In the late 1980s, he founded McAfee Associates, the antivirus software company. It gave away its software, unlike its rivals, but charged fees to those who wanted any kind of technical support. That decision helped make it a huge success. The company went public in 1992, in the early years of one of biggest stock market booms in history.

But Mr. McAfee is, by his own description, an atypical businessman — easily bored and given to serial obsessions. As a young man, he traveled through Mexico, India and Nepal and, more recently, he wrote a book called, “Into the Heart of Truth: The Spirit of Relational Yoga.” Two years after McAfee Associates went public, he was bored again.

So he sold his remaining stake, bringing his gains to about $100 million. In the coming years, he started new projects and made more investments. Almost inevitably, they paid off.

“History told me that you just keep working, and it is easy to make more money,” he said, sitting in the kitchen of his adobe-style house in the southwest corner of New Mexico. With low tax rates, he added, the rich could keep much of what they made.

One of the starkest patterns in the data on inequality is the extent to which the incomes of the very rich are tied to the stock market. They have risen most rapidly during the biggest bull markets: in the 1920s and the 20 years starting in 1987.

“We are coming from an abnormal period where a tremendous amount of wealth was created largely by selling assets back and forth,” said Mohamed A. El-Erian, chief executive of Pimco, one of the country’s largest bond traders, and the former manager of Harvard’s endowment.

Some of this wealth was based on real economic gains, like those from the computer revolution. But much of it was not, Mr. El-Erian said. “You had wealth creation that could not be tied to the underlying economy,” he added, “and the benefits were very skewed: they went to the assets of the rich. It was financial engineering.”

But if the rich have done well in bubbles, they have taken enormous hits to their wealth during busts. A recent study by two Northwestern University economists found that the incomes of the affluent tend to fall more, in percentage terms, in recessions than the incomes of the middle class. The incomes of the very affluent — the top one ten-thousandth — fall the most.

Over the last several years, Mr. McAfee began to put a large chunk of his fortune into real estate, often in remote locations. He bought the house in New Mexico as a playground for himself and fellow aerotrekkers, people who fly unlicensed, open-cockpit planes. On a 157-acre spread, he built a general store, a 35-seat movie theater and a cafe, and he bought vintage cars for his visitors to use.

He continued to invest in financial markets, sometimes borrowing money to increase the potential returns. He typically chose his investments based on suggestions from his financial advisers. One of their recommendations was to put millions of dollars into bonds tied to Lehman Brothers.

For a while, Mr. McAfee’s good run, like that of many of the American wealthy, seemed to continue. In the wake of the dot-com crash, stocks started rising again, while house prices just continued to rise. Outside’s Go magazine and National Geographic Adventure ran articles on his New Mexico property, leading to him to believe that “this was the hottest property on the planet,” he said.

But then things began to change.

In 2007, Mr. McAfee sold a 10,000-square-foot home in Colorado with a view of Pike’s Peak. He had spent $25 million to buy the property and build the house. He received $5.7 million for it. When Lehman collapsed last fall, its bonds became virtually worthless. Mr. McAfee’s stock investments cost him millions more.

One day, he realized, as he said, “Whoa, my cash is gone.”

His remaining net worth of about $4 million makes him vastly wealthier than most Americans, of course. But he has nonetheless found himself needing cash and desperately trying to reduce his monthly expenses.

He has sold a 10-passenger Cessna jet and now flies coach. This week his 5.34-acre oceanfront estate in Hawaii sold for $1.5 million, with only a handful of bidders at the auction. He plans to spend much of his time in Belize, in part because of more favorable taxes there.

Next week, his New Mexico property will be the subject of a no-floor auction, meaning that Mr. McAfee has promised to accept the top bid, no matter how low it is.

“I am trying to face up to the reality here that the auction may bring next to nothing,” he said.

In the past, when his stock investments did poorly, he sold real estate and replenished his cash. This time, that has not been an option.

Stock Market Mystery

The possibility that the stock market will quickly recover from its collapse, as it did earlier this decade, is perhaps the biggest uncertainty about the financial condition of the wealthy. Since March, the Standard & Poor’s 500-stock index has risen 49 percent.

Yet Wall Street still has a long way to go before reaching its previous peaks. The S.& P. 500 remains 35 percent below its 2007 high. Aggregate compensation for the financial sector fell 14 percent from 2007 to 2008, according to the Securities Industry and Financial Markets Association — far less than profits or revenue fell, but a decline nonetheless.

“The difference this time,” predicted Byron R. Wein, a former chief investment strategist at Morgan Stanley, who started working on Wall Street in 1965, “is that the high-water mark that people reached in 2007 is not going to be exceeded for a very long time.”

Without a financial bubble, there will simply be less money available for Wall Street to pay itself or for corporate chief executives to pay themselves. Some companies — like Goldman Sachs and JPMorgan Chase, which face less competition now and have been helped by the government’s attempts to prop up credit markets — will still hand out enormous paychecks. Over all, though, there will be fewer such checks, analysts say. Roger Freeman, an analyst at Barclays Capital, said he thought that overall Wall Street compensation would, at most, increase moderately over the next couple of years.

Beyond the stock market, government policy may have the biggest effect on top incomes. Mr. Katz, the Harvard economist, argues that without policy changes, top incomes may indeed approach their old highs in the coming years. Historically, government policy, like the New Deal, has had more lasting effects on the rich than financial busts, he said.

One looming policy issue today is what steps Congress and the administration will take to re-regulate financial markets. A second issue is taxes.

In the three decades after World War II, when the incomes of the rich grew more slowly than those of the middle class, the top marginal rate ranged from 70 to 91 percent. Mr. Piketty, one of the economists who analyzed the I.R.S. data, argues that these high rates did not affect merely post-tax income. They also helped hold down the pretax incomes of the wealthy, he says, by giving them less incentive to make many millions of dollars.

Since 1980, tax rates on the affluent have fallen more than rates on any other group; this year, the top marginal rate is 35 percent. President Obama has proposed raising it to 39 percent and has said he would consider a surtax on families making more than $1 million a year, which could push the top rate above 40 percent.

What any policy changes will mean for the nonwealthy remains unclear. There have certainly been periods when the rich, the middle class and the poor all have done well (like the late 1990s), as well as periods when all have done poorly (like the last year). For much of the 1950s, ’60s and ’70s, both the middle class and the wealthy received raises that outpaced inflation.

Yet there is also a reason to think that the incomes of the wealthy could potentially have a bigger impact on others than in the past: as a share of the economy, they are vastly larger than they once were.

In 2007, the top one ten-thousandth of households took home 6 percent of the nation’s income, up from 0.9 percent in 1977. It was the highest such level since at least 1913, the first year for which the I.R.S. has data.

The top 1 percent of earners took home 23.5 percent of income, up from 9 percent three decades earlier.

***note the property did sell for 1.5 million**********

Physician Heal Thyself

I was just over reading my friend the Green Building Inspector's blog and caught this article. Interesting to say the least but is it surprising?

This is why we have such a lack of confidence in Government. When we need them more than ever to step up to the plate and fix the broken system it has become, advocate reform and model the promises of change and transparency we see this.

But on that note they are doing something and not hiding the fact that they are working to resolve the problems. Maybe next up Health care, Financial Reform and Public Financing for Elected officials to remove lobbyist influence.

Energy Dept. Fails to Use Thermostats to Cut Costs

Published: August 22, 2009

WASHINGTON — The Energy Department strives to be a leader in championing energy efficiency. Its Web site lists energy-saving tips, while Secretary Steven Chu calls conservation one of the department’s most important goals.

But at many of the agency’s buildings, even at national laboratories where talented scientists seek technological breakthroughs to save energy, the department has failed to use one of the most effective tools available to any ordinary household: thermostats that automatically dial back the temperature when nobody is around.

A recent audit found that the department could save more than $11.5 million annually in energy costs by properly employing these “setback” controls to adjust the heat and air conditioning at night or on weekends.

The Energy Department’s inspector general found that the department, which spends almost $300 million annually on utilities, could save enough energy to power more than 9,800 homes each year by doing what experts say every household in the country should also be doing.

The payback would far exceed the costs, and in some cases the equipment has actually been installed but is not working.

Cathy Zoi, an assistant energy secretary, said that the department took the audit’s findings seriously and that the report could give the agency “the impetus to show that efficiency really is a high priority.”

“If this can help us galvanize attention, then it’s fantastic,” Ms. Zoi said.

Lane Burt, an energy policy analyst for the Natural Resources Defense Council, said the department’s failure to use setbacks “was literally leaving money on the table.”

“They’ve actually invested taxpayer money to be more efficient, and then failed to use it,” Mr. Burt said. “It’s like a double penalty. But the good news is that because many of the systems are installed and ready, the savings can begin immediately.”

The inspector general reviewed 55 buildings at four department sites for the audit, finding that the agency had either not used or not suitably maintained setbacks at 35 of those buildings. Setbacks can be used in most buildings but should be avoided in buildings that contain items sensitive to temperature change or that are used for long hours.

The Energy Department runs a variety of programs relating to energy production and conservation and is in charge of the nuclear weapons production complex. The setback thermostats were neglected across the board.

The report found that at two buildings at the Los Alamos National Laboratory, a National Nuclear Security Administration facility in New Mexico, facility operators were not trained to operate setback controls. At the Oak Ridge National Laboratory in Tennessee, part of the Office of Science, setback equipment was not replaced in two buildings after a 2008 electronic control system failure because officials there “planned to implement campus-wide energy conservation measures in the future.”

And the property manager for two recently leased buildings at the Y-12 National Security Complex, an N.N.S.A. facility in Tennessee, told auditors that the buildings’ owner had not obtained software needed to use setbacks.

In the report, some department officials implied that financing issues could have contributed to setbacks’ not being used, while others said their use “was simply not a priority.” For its part, the inspector general’s office said it “could find no plausible reason for the lack of interest.”

“We could not obtain what we considered to be a satisfactory explanation as to why the department failed to take advantage of this conservation practice,” the report said, “one that is generally low cost and has limited, if any, adverse impact on operations or building occupants.”

Harvey Sachs, a senior fellow at the American Council for an Energy-Efficient Economy, said he was not terribly surprised by what he called “just one example of almost universal market failures” when it came to energy conservation.

“If I was in the nuclear management business,” Mr. Sachs said, “I imagine there would be much more urgent stuff for me to worry about than where the thermostat is set.”

But, he added, the results of the audit were another sign that “for a lot of reasons, energy efficiency has not gotten as much play as it should have.”

Ms. Zoi said the department was looking at steps to increase efficiency in its buildings, including offering more support to the facilities managers who oversee setbacks and other efficiency measures. “They’ve got a lot of responsibility, so we want to give them the help that they need to maximize efficiency,” she said.

This Crap House

I just received this in my recent Fine Homebuiding Magazine. In light of the last entry regarding LEED buildings I think I also need to address my particular field Residential housing failures.

Technically codes and regulations are to prevent crap builds. In theory. I am watching a house being built down the street from me and well I don't know what to say. If I was an Architect I would be legally required to report what is ostensibly a failing build but I am not but I am morally and professionally obligated to at least express outrage and concern. But to whom? Do I contact the City and say "hey this house is improperly wrapped and the windows and doors flashed incorrectly" I have been out of building for some time so I don't know if current codes are addressing this and then if that is the case the house would not pass inspection. But just the order of things and the oddness of the construction process tells me that any inspection will not include what I see as critical elements in a home's weather tightness. So now what? Given my last foray into political activism and protest that ended badly I am not sure I want to stand in front of the property and vent about this.

So what is the recourse?

And on that note I reprint the article for review and debate.


Who Do You Blame for Your Energy Lemon?
August 27th, 2009 in Blogs
Charles Bickford,

So I was talking to Tucker Windover, a carpenter who writes for this magazine, and he said that every new house should have a sticker on the front door, just like the ones they put on appliances, that tells you how much energy this model is going to save you. "This house is air-tight and insulated to R-45. It will cost an average of $XXX for heat, hot water and electricity." Here are a couple of reasons why I happen to think this is a great idea.

A month ago, I went to see an author who was trimming out a big new spec house in a suburb filled with big spec houses. I was surprised to see that they had stuffed fiberglass around the windows (instead of spray foam), so I asked about the rest of the house, which is on the market for somewhere between two and three million. According to the carpenter I spoke to, the builder didn't insulate beyond the bare minimum of R-19/R-30, didn't use rainscreen walls, and generally seemed to build as if it were still 1975.

A few days later, I happened to browse through Breaktime and noticed a thread that asked if Fine Homebuilding had "gone Green Crazy". A couple of the posters suggested that while it had its merits, "green" building was just a fad.

So what's the issue? Certainly the examples above aren't representative of all builders. But you know they're out there, probably more than we'd like to admit. When I see guys building houses like the spec house above, I wonder how many other builders are doing the same thing - putting up sub-standard housing for people who don't know better. Do they really think it's a fad? Is oil a fad, too?

But is it only the builders' fault? They only build what people will buy, right? Why doesn't the home-buying public demand a better house? How can they tell at a glance? They can't see through the walls, and if they could, they might not understand it anyway.

So let's make it easier for everyone. A big yellow sticker on the front door of a new house would force the builders to become competitive - they couldn't get away with building crap. Eventually, builders who ignored the energy crisis would end up like the last industry that ignored it - the auto industry. Except that this time, I hope the government doesn't bail them out.

Another LEED Building Bites the Dust

I do not like to trump the failure of a building endorsed and certified by LEED because I think it leads people to forgo the concept of Green Building and label it faddish and foolish. And that is not the intent. As in all good intentions there sometimes is too much focus on the ideals vs the practicalities. This is something I have seen in many Green builds. A need to overdo rather than just do. And because of the increasing attention paid to LEED and their failures I do see the potential for litigation and disintegration to the brand if they do not clean up their act.

LEED is responding and is evolving and I really wish they would get out of this silly awarding points and certification process and go fully into training, evaluation and the study of building science. I have made my reasons clear why I avoid third part certs of any kind and will continue to do as a way of minimizing my risk insurance wise and also removing any potential conflict of interest. I don't see why I cannot participate in all building programs equally glean knowledge and share experiences without having to commit to one being "better" than the other. Really aren't they all supposed to do the same things - make our environment cleaner and our homes more efficient?


Some Buildings Not Living Up to Green Label

Published: August 30, 2009

The Federal Building in downtown Youngstown, Ohio, features an extensive use of natural light to illuminate offices and a white roof to reflect heat.

The LEED program was created in 1998 and has gone through periodic revisions.

It has LEED certification, the country’s most recognized seal of approval for green buildings.

But the building is hardly a model of energy efficiency. According to an environmental assessment last year, it did not score high enough to qualify for the Energy Star label granted by the Environmental Protection Agency, which ranks buildings after looking at a year’s worth of utility bills.

The building’s cooling system, a major gas guzzler, was one culprit. Another was its design: to get its LEED label, it racked up points for things like native landscaping rather than structural energy-saving features, according to a study by the General Services Administration, which owns the building.

Builders covet LEED certification — it stands for Leadership in Energy and Environmental Design — as a way to gain tax credits, attract tenants, charge premium rents and project an image of environmental responsibility. But the gap between design and construction, which LEED certifies, and how some buildings actually perform led the program last week to announce that it would begin collecting information about energy use from all the buildings it certifies.

Buildings would provide the information voluntarily, said officials with the United States Green Building Council, the nonprofit organization that administers the LEED program, and the data would be kept confidential. But starting this year, the program also is requiring all newly constructed buildings to provide energy and water bills for the first five years of operation as a condition for certification. The label could be rescinded if the data is not produced, the officials said.

The council’s own research suggests that a quarter of the new buildings that have been certified do not save as much energy as their designs predicted and that most do not track energy consumption once in use. And the program has been under attack from architects, engineers and energy experts who argue that because building performance is not tracked, the certification may be falling short in reducing emissions tied to global warming.

Some experts have contended that the seal should be withheld until a building proves itself energy efficient, which is the cornerstone of what makes a building green, and that energy-use data from every rated building should be made public.

“The plaque should be installed with removable screws,” said Henry Gifford, an energy consultant in New York City. “Once the plaque is glued on, there’s no incentive to do better.”

Scot Horst, the council’s senior vice president for its certification program, said that any changes in the process would have to be made by consensus to ensure that the building industry would comply. Already, some construction lawyers have said that owners might face additional risk of lawsuits if buildings are found to underperform.

The council is planning several meetings with builders, owners, developers and others around the country in September and October to promote its building performance initiative, which could lead to further revisions in the rating program to ensure buildings reduce energy consumption as much as they can.

Mr. Horst called the issue of performance one of his “absolute priorities.”

“If you’re not reducing carbon, you’re not doing your job,” he said.

The LEED label, developed by the council in 1998 to have a third-party verification of a building’s environmental soundness, certifies new homes, schools and other buildings, as well as existing ones. (The certification for existing buildings is the only one currently tied to energy performance.) Its oldest and largest program, in terms of square footage, is the certification of new commercial and institutional buildings, with 1,946 projects already certified and 15,000 more that have applied for certification. Many other buildings include environmentally friendly features and advertise themselves as “green” but do not seek the LEED label.

The program uses a point system based on a broad checklist of features and buildings can be certified by accumulating points on not just efficient energy use but also water conservation, proximity to public transportation, indoor air quality and use of environment-friendly materials.

Council officials say that these other categories also help reduce energy use and emissions. And many architects and engineers praise the comprehensiveness of the label. But the wide scope of the program, many in the industry point out, also means that buildings have been able to get certified by accumulating most of their points through features like bamboo flooring, while paying little attention to optimizing energy use.

Another problem is that the certification relies on energy models to predict how much energy a planned building will use, but council officials and many experts agree that such models are inexact. Once a building opens, it may use more energy than was predicted by the design. And how a building is used — how many occupants it has, for example — affects its energy consumption.

“If the occupants don’t turn off the lights, the building doesn’t do as well as expected,” said Mark Frankel, technical director for the New Buildings Institute, which promotes improved energy performance in new commercial construction and conducted the research commissioned by the Green Building Council on LEED buildings.

“In the real world, the mechanical systems may have problems, so that increases energy use,” Mr. Frankel said, adding that keeping track of energy use is rarely a priority for owners.

LEED energy standards have grown more stringent over the years, and construction like the Youngstown federal building, built in 2002, would not be certified under the current version of the program, the G.S.A. study noted. The LEED standard goes through periodic revisions, and this year, the minimum energy requirements needed for the basic LEED certification for new buildings were raised.

But in its own study last year of 121 new buildings certified through 2006, the Green Building Council found that more than half — 53 percent — did not qualify for the Energy Star label and 15 percent scored below 30 in that program, meaning they used more energy per square foot than at least 70 percent of comparable buildings in the existing national stock.

Anecdotal information from follow-up research to that study indicated that the best-performing buildings had limited window areas and tended to be smaller.

Sometimes, a building’s inhabitants are the first to notice energy-wasting features.

At the Octagon, a LEED-certified residential rental building on Roosevelt Island in New York City, residents like Alan Siegal say that obvious energy savers, like motion sensors in the hallway, are hard to miss.

But Mr. Siegal, 59, a customs service broker, said his three-bedroom apartment has floor-to-ceiling glass windows that offer great views but also strong drafts.

“If there’s a lot of glass, is that going to be efficient?” he asked.

Bruce Becker, whose company Becker and Becker Associates developed and owns the Octagon, said that the windows offer day lighting but conceded that there were plenty of opportunities to become more energy efficient. He said the Octagon would soon switch to a fuel cell system for heat and electricity, partly to cut energy costs at a time of a depressed rental market.

Mr. Horst, the LEED executive, said that LEED may eventually move toward the E.P.A.’s Energy Star model, which attests to energy efficiency only for the year the label was given, similar to restaurant ratings.

“Ultimately, where we want to be is, once you’re performing at a certain level, you continue to be recertified,” Mr. Horst said.

Tuesday, August 25, 2009

What is Greywater?

I have been getting a lot of inquiries about Grey Water systems. I am an advocate of finding ways to reuse or reduce water usage for some time. I advocate always conservation as the most affordable option. I then encourage rain barrels attached to the gutter/downspouts outside the home as the next easiest and affordable method. (The City here provides very inexpensive barrels and it takes no effort to incorporate). Of course water reduction through low flow faucets, dual flush toilets and European washers also contribute to less water use. But if you are looking to finding a full system that is the largest means of fully reducing water use.

Current information I found cites this as cost related analysis and benefit: Department of Housing and Urban Development's Partnership for Advancing Technology in Housing (PATH) Program, the initial cost of installing a grey water reuse system in a new home ranges from approximately $500-$2,500, depending on local code requirements for the treatment of grey water. If a monthly treatment and testing contract with an outside company is required, those costs may run $30-$75 per month.

With that in mind the proper installation and use of a grey water system. Because the cost savings of such a system equates to $5-$20 a month at best, and some systems can be over-built, it's very important to ensure that a system is designed minimally for homeowners' use. Why? Because if the system is very expensive, the consumer is better off from a cost standpoint to buy the extra municipal water. And if the system is overbuilt with valves, pumps, fittings and piping, the theoretical environmental impact of the water savings is negated.

So how do you know you need a grey water system. Extensive landscaping, large water usage on a monthly basis would be the best way to determine if you need it. Know that a retrofitting or adding a system to an existing property will likely be more than the estimate provided so don't expect a rate of return. Know your location and your local rules and codes. Some states and cities are highly regulated with the idea of containment of water.

I reprint this article from this weeks GBA to further inform you about what it means to have a Grey water system installed. While the values of such a system are enormous on an environmental scale actual real practicality for a residential home may be minimal and could be resolved with other real energy efficient adaptations.

Reuse water, don't waste it

To collect and use gray water for irrigation, drain lines from bathroom sinks, tubs, showers, and the washing machine empty to a centrally located holding tank, typically in the basement or crawl space. A filter at the holding tank screens out particles. Water is either drained or pumped from the tank to the irrigation lines.
A properly designed system has overflow protection for both the holding tank and the irrigation lines. The overflow valve for the holding tank feeds water directly to the sewer line if the filter clogs. Overflow protection for the irrigation lines can take two forms: a diverter valve directs water to secondary irrigation loops or, if the irrigated area becomes saturated, to the sewer line.
Plumbing codes vary. Options for reusing gray water vary according to local plumbing codes. If the building inspector allows, you can decide between systems that capture all of a house’s gray water or just the drain water from specific sources.
Although the bacteria in gray water are generally aerobic, gray water can’t be stored for longer than 24 hours without using up all of the oxygen in the water and encouraging the growth of smelly anaerobic bacteria.
That's why the easiest and least expensive use for gray water is irrigation. The irrigation lines should be in the biologically active portion of the soil — no more than 9 in. to 12 in. below the surface.


Gray water must pass slowly through healthy topsoil for natural purification to occur. Although it doesn’t need extensive chemical or biological treatment before using in the garden, it often contains grease, hair, detergent, cosmetics, dead skin, food particles, even fecal matter and should be used with care.
Use only on well-established ornamental plants, shrubs, and trees, never on seedlings. Since it’s alkaline, never use it on acid-loving plants, such as rhododendrons and azaleas. If irrigating food plants, fresh water is always preferable. Restrict application to soil around vegetables of which only the above-ground part is eaten, never on leafy vegetables or root crops.

Apply gray water directly to the soil over a broad area. Avoid use on slopes or concentration in one area. Don’t use overhead sprinklers or allow gray water to splash and contact the above-ground portion of plants. Don’t use gray water in a drip irrigation system, since it can easily clog the pipe’s emitters. The simplest method is by hauling it in a bucket from your source. Rotate gray water with fresh water use to help leach contaminants. Thick compost mulches help speed the natural decomposition of waste residues.

A square foot of well-drained, loamy soil can handle about a half-gallon of gray water per week. So, a 500-square-foot garden can tolerate up to 250 gallons of gray water per week. Given a choice, use shower and bathtub water first, followed in decreasing order of desirability by water from the bathroom sink, utility sink, washing machine, kitchen sink and dishwasher.


Instead of irrigation lines, a planter box can be used to filter and clean gray water.
Filtered gray water is pumped into the top layer of the planter box, which contains at least 2 ft. of humus-rich topsoil. Beneath the topsoil are two layers of sand: common cement-mix sand and, below that, coarse sand. A filter keeps the sand from clogging the pea gravel that makes up the planter’s bottom layer.
Outdoor planters can leach treated water directly into the ground, or the water can be piped to a leach field. A planter can even be used indoors as long as it's plumbed to carry off the treated water.

Water Conservation Alliance of Southern Arizona

Tuesday, August 18, 2009

Construction for Deconstruction

I have long been an advocate of designing and building with deconstruction or re-construction in mind. What is "perfect" for one may not be for another. Our needs and demands of a home changes as we change and how we live in them and ultimately remodel or retrofit homes reflect that change. Most changes now are with regards to energy efficiency and ultimately the choices we make can affect the permanent structure of the home and should be considered for long term goals and expectations before doing so.

I was reading the Daily Journal of Commerce and found this submission and it discusses the rationale behind this changing movement.


Zero waste: betraying our mission?

by Dave Bennink, owner of Re-Use Consulting.

I recently was asked to speak at the California Resource Recovery Association Conference in Palm Springs. I know, Palm Springs, it sounds like a vacation, but the high for each day was 112 degrees. Anyway, this year’s theme was ‘zero-waste’. The CRRA had asked me to discuss building deconstruction in the context of it helping to achieve zero waste goals in many California cities. It caused me to pause and think about what zero waste means and how to achieve it. I came up with a couple of interesting points.

Betraying the mission:

Some of the projects that I have been involved with or have read about that have strived for zero-waste or very high diversion rates may have succeeded in doing so, but at what cost? It may have taken weeks to accomplish and cost much more than demolition. Therefore, even though the project stands as an example of what is possible, the general public may see this as confirming their belief that building deconstruction (and perhaps other green building methods) cost too much and take too long.

Looking at this another way, we see that the single project may divert 70 tons from the landfill during
Is this going to a site or from one?

its 3.6 week schedule. A less aggressive approach that we frequently follow would divert 60 tons in 1.2 weeks or 180 tons during the same 3.6 week schedule. So, in the end, who is closer to zero-waste?

There are different ways to achieve zero-waste, by achieving zero-waste on one project and building off of that and using it as a bar that others can reach, or to achieve high-diversion on 10 projects at a cost-competitive price and time-sensitive schedule. In the end, we really do need the zero-waste projects to push us forward, we just need them to admit that we still have a ways to go before achieving zero-waste on a regular basis.

Designing for disassembly:

When planning our presentation, we reviewed past projects that we had completed and sent the materials in three directions: reuse, recycling and disposal. Our focus was on how we could have eliminated the disposal category on projects performed in the ‘real world’. Our conclusion was that if we design waste into a structure, it is not surprising that we get waste out of projects.

Designing for disassembly is a movement in architecture to admit that their structures will likely not live out their entire lifespan and that when the building is removed someday in the future, the materials that make up that structure will be worth harvesting and that the design should favor this disassembly. The more fasteners, ADHESIVES, and other waste producing or labor consuming building systems that are battled when the building is taken apart, the more unlikely that deconstruction will be a viable choice for building removal.

Having deconstructed 500 structures in the last 16 years, RE-USE Consulting has gained a unique perspective on this problem and is moving ahead with its own solutions to be applied to today’s buildings. We hope that tomorrow’s buildings will be made of reusable panels that can be reused and are perhaps constructed on multiples of 16″ or 24″, floating floor panels, paneling set in channels with fewer fasteners, and well thought out use of adhesives.

I have seen what zero waste looks like. It is an amazing thing. Imagine a job site where the building was removed and the stacks of materials sitting on the ground confuse the passer-by. Is a building about to be built, or did it just come down?

Should we focus first on zero-waste, or should we focus on increasing the percentage of materials that are diverted for reuse? In the end, the reuse of materials can be many times better than simply recycling them due to the preservation of energy, job creation associated with it, and from resource conservation.

Zero Energy Home

I wrote this for Home Saavi a local referral site that is free to BOTH homeowners and contractors.

And while I think the article is too brief it describes what is called a "Zero Energy Home" (I of course loathe the term and would prefer Positive Energy) and I have included water conservation as an element which actually is NOT included in the EPA definition.


What is a Zero Energy Home or Net Zero House?

A ZEH home is one that combines state-of-the-art, energy-efficient construction and appliances with commercially available renewable energy systems, such as solar water heating and solar electricity. A combination that results in a home that produces its own energy—as much or more than it needs. Even though the home might be connected to a utility grid, it has net zero energy consumption from the utility provider.

A ZEH incorporates the following

* Has Climate-specific design
* Passive solar heating and cooling
* Energy-efficient construction
* Energy-efficient appliances and lighting
* Solar water heating system
* Small solar electric system.

A ZEH is one that provides Improved Comfort – having a stable indoor air quality and temperature; Reliability – functioning even during blackouts; Energy Independent – not reliant on local utilities or rate fluctuations; Environmental Impact – saving on energy and reduction in pollution

To attain this goal homes can be built OR retrofitted to make “zero energy” possible by following what is called the Whole House Systems Approach.

Whole House Systems Approach takes local climate needs into account (as well as local building codes) to design or alter a home to meet the standard. It includes a site application to assess how to take the best advantage of direction and location of sun, wind or breeze factor and even natural or designed landscaping that surrounds the home which can provide impact on how the home will perform year round.

In new build it considers the types of the building material and mechanical systems needed to further the design and intent. This can include Optimum Value Engineered framing techniques, SIP panels or ICF blocks. In the case of retrofits this would include insulation upgrades and building/structural alterations.

This is followed by a complete inventory and assessment of the types of appliances, insulation, solar water heating, windows, doors, skylights, as well as lighting and daylighting. Additionally, paints, finishes, cabinetry and wood used should also factor in the decision making process as they can affect indoor air quality.

And while it ‘s not on the “official” ZEH definition but should is an assessment of water use and incorporation of greywater systems and reduced water use throughout the home and its landscape. Incorporating other water saving utilities in the form of dual flush toilets, a backup tankless water heater, low flow faucets and showerheads.

The final and most essential element is the addition of Solar Panels or PV (Photovoltaic) that will provide the major source of energy for the home reducing the need to use municipally sourced power. And in return produce excess energy for return to the grid.

Committing to a fully ZEH can be a massive and yes expensive undertaking. But homes can be still Energy Efficient and “green” without going the Whole House System approach. Understanding your energy use and needs are essential in saving money and the planet overall and can be either simple or grand in however you pursue this goal.

Saturday, August 15, 2009

Recovery, it don't come easy

This blog of late has transcended what began as a Green Blog into one more about the economy and state of the world which I feel is far more important than discussing current trends in insulation.

I believe that by understanding the economy and ironically building that contributed to the collapse we have to understand where we are headed in the future and plan accordingly.

Without that honest assessment and acknowledgement of what happened we will end up either stifling growth further or even worse contributing to a further decline. Proper responsible and affordable growth must become the norm if the state of America is to ever be restored let alone renewed in the years ahead.

Nouriel Roubini a pessimist but highly intelligent Economist has written an article for Forbes regarding what will be the situation regarding wage and job growth in the future. This is not isolated knowledge as it is well known that the wages will stagnate in response to this meltdown. How long and to what degree may be debatable. Of course for our banker friends that seems to be not the case but for the rest of us... well you and your banker know the truth.

A 'Jobless' And 'Wageless' Recovery?
Nouriel Roubini,

After severe job losses in early 2009, the pace of job losses slowed starting in April, and the July numbers have brought more respite. Non-farm payroll job losses were 247,000 in July. However, the private sector lost 254,000 jobs. This is considerably better than analysts expected (around 325,000) but not good enough to claim that we are in the middle of a strong and sustainable recovery.

Looking at the recessions of the post-war period, average monthly job losses ranged between 150,000 and 260,000. Average monthly losses in this recession are still at 350,000. For the first four months of the year, the average was at 648,000. The improvement with respect to the first part of the year is clear. The improvement with respect to what we are used to seeing in recessionary periods is much less clear cut. The latest numbers are not exactly what you'd call good news, at least not in absolute terms. In relative terms, however--after skirting a near-depression--markets seem to consider 247,000 payroll losses a breath of fresh air.

The increase in average weekly labor hours in July is certainly a positive sign. But it also shows that, when economic conditions begin improving, companies will increase labor hours and temporary workers and move workers from part time to full time. Only after that do they begin hiring new workers. So hiring is still a long way ahead. The decline in the unemployment rate from 9.5% in June to 9.4% in July was not due to an improvement in the employment situation but is explained by the large decline in the labor force (-422,000). Workers facing hiring freezes, fewer full-time jobs and jobs at lower wages are leaving the labor force.

Implications of Continued Job Losses

The economy has lost over 6.6 million jobs since the recession began, which is way above the job losses that we are used to seeing in recessionary periods when job losses have ranged between 1.5 million and 2.5 million. The large job losses of the past months and longer unemployment duration will continue to weigh on the economy in the coming months. The unemployment duration improved slightly in July from the record high witnessed in June, which is positive news. Unemployed workers are falling behind their debt payments, raising defaults on loans and making government mortgage modification programs ineffective. Default rates on various loans have already surpassed the unemployment rate. According to the Moody's credit card index report, published in May 2009, the credit card charge-off rate crossed 10% in May 2009 and is expected to reach a peak of 12% by the second quarter of 2010.

For the labor market to stabilize, job losses need to slow to 100,000 to 150,000 per month, and jobless claims need to fall to around 400,000. Payrolls alone don't reflect the strength of the household sector. Labor compensation and work hours also function as indicators, and both of these have slowed sharply in recent months. Even as borrowing conditions remain tight and home prices continue to fall, the dip in labor compensation will continue to constrain consumer spending, notwithstanding any fiscal stimulus.

In a severe, consumer-led recession like this one, the labor market is a leading (rather than lagging) indicator of economic recovery, and the consumer still drives the U.S. economy (private consumption still makes up over 70% of GDP). A slowdown in the pace of job losses from 650,000 to 250,000 is welcome, but in no way offers comfort about a prompt comeback of the U.S. consumer. This raises concerns about the strength and sustainability of any economic recovery that most people are expecting in the second half of 2009, and beyond.

Besides Cutting Jobs, Businesses Are Reducing Compensation

Companies need a certain head count to run their businesses. After cutting jobs, companies are increasingly reducing compensation and work hours to keep a lid on labor costs. Labor compensation slowed significantly to 0.4% in Q2 2009, after slowing to 0.3% in Q1 2009. The slowdown in wages and salaries (0.4%) and benefits (0.3%) is significant, especially in the private sector (0.2%). Private sector labor compensation slowed to 1.5% in the 12 months ending June 2009, the smallest increase on record. Firms are reducing benefits significantly in the service sector while employers in manufacturing are largely cutting wages.

Average weekly hours in the private sector, despite slightly improving in July 2009, are still hovering at record-low levels, especially in services. The number of part-time workers has risen sharply since late 2008 because many workers cannot find full-time jobs. Employers are also switching to temporary employers to cut spending on worker benefits. However, the bid to maintain profit margins will backfire on companies in the form of subdued sales as labor incomes suffer.

A Jobless Recovery Ahead

Continued pressure on sales, uncertain demand recovery, weakened balance sheets and tight credit access, especially for smaller firms, imply that firms will continue to shed jobs through 2009. The unemployment rate, even after peaking in late 2010 or early 2011, will remain elevated for some time. It may take several quarters or years to recover the jobs lost during this recession. Several jobs in housing and related activities, finance, autos and consumer-oriented services will be lost permanently. Wage-bargaining power will also weaken, implying another "jobless" and "wageless" recovery.

About 53% of the unemployed have been jobless for over three months and around 34% of them for over six months, which is the highest on record. Over 50% of the unemployed have lost their jobs permanently, again the highest on record. Underutilization of workers will lead to an erosion of human capital and a deterioration of labor productivity going forward and will negatively affect the potential growth rate of the economy. Inadequate safety nets, the dearth of labor retraining programs and tight access to student loans suggest that when workers begin looking for work during the recovery, they will face the possibility of skill mismatches. These factors might raise the structural unemployment in the economy from below 5% in 2007 to close to 7% ahead.

Private Demand Will Remain Under Pressure

Apart from job losses and income pressures, several factors will continue to weigh on consumers. Consumer credit has been contracting since Q4 2008, and mortgage equity withdrawal is negative as home prices have about 10% more to fall. Mortgage rates are higher compared to early 2009, and oil prices are up from their February 2009 lows. Thus, there hasn't been any fundamental improvement in the health of the household sector in recent months, except for the potential wealth effects from the ongoing market rally. And these income and wealth constraints are unlikely to ease markedly in the second half of 2009.

Lower home-equity withdrawal, tighter credit conditions, a jobless recovery and higher taxes imply that the ongoing change in consumer spending is structural rather than cyclical. As witnessed since Q2 2009, any stimulus in the form of tax cuts will fail to have a significant impact on consumer spending, as almost 80% of tax cuts are saved. Credit incentives such as the "cash for clunkers" program and tax incentives for first-time home-buyers will have only a small and temporary impact on consumption.

Rather than fiscal incentives, consumer spending going forward will depend on income, net worth and the debt burden of households. The household debt-to-GDP ratio is over 125% (as of Q1 2009), implying that households have a long way to go in terms of de-leveraging. In the coming quarters, a larger share of the growth in household income and wealth will go towards savings and paying off debt, not for consumption. This will reduce the ratio of consumption-to-GDP to below 70%.

Investment recovery will lag the recovery in consumption. With sluggish consumer spending and rampant excess capacity in the economy (capacity utilization is at a record low of 68% compared to the historical average of 81%), firms will be reluctant to start hiring workers and investing in structures and equipment. In fact, it may take several years for capacity utilization to return its pre-recession levels. Some capacity in manufacturing, housing and services will be destroyed permanently as firms adjust to a lower level of consumption.

Temporary Improvement in Growth?

There are hopes that inventory restocking, auto production and residential investment will drive the GDP growth in the second half of 2009 to positive territory. Despite the large inventory drawdown in the first half of 2009, the inventory-to-sales ratio hasn't come down significantly (the ratio is still over 1.40, while the historical average ratio is close to 1.25). This is because sales are plunging faster than inventory drawdown.

Given the bleak outlook for consumer spending, firms need to continue cutting inventories aggressively. This diminishes the hope of inventory restocking making a large positive contribution to GDP growth during the second half of 2009. However, the sharp decline in auto inventories in Q2 2009 and the "cash for clunkers" program may temporarily boost auto production and auto sales in the second half of 2009. Given large home inventories, residential investment is likely to have only a limited affect on GDP growth. Tighter mortgage conditions, low expectations of appreciation in home values and government intervention will also reduce this sector's significance in driving growth going forward. In sum, the boost to growth from these factors, if any, will be small and temporary.

As inventory adjustments and fiscal incentives end and the impact of fiscal stimulus wanes, the economy might fall back into lower growth sometime in 2010 as the drivers of the recent economic boom--the consumer, the housing sector and easy credit--will remain under pressure. By then, there will be little or no room left for further fiscal and monetary stimulus without aggravating investor concerns about long-term fiscal sustainability.

Sluggish Recovery Ahead

It is very difficult to argue that the U.S. economy is not still in a recession while the labor market is still weak. But the interesting question is not whether the U.S. economy is still technically in a recession, or whether the recession will end in Q3 2009 or Q4 2009--or later. What is interesting is understanding the implications of this severe downturn and financial crisis for the recovery.

Any sustained and strong improvement in growth has to come from a revival in private demand, and not from temporary factors like inventory adjustment and policy measures. The U.S. consumer, who, as we've noted, still accounts for close to 70% of GDP, is pulling back. Investment, which still trails consumer spending at home, will be weak. Exports will be a source of growth only in the medium term. In the short term, the rest of the world will remain dependent on the U.S. to drive demand while consumption abroad will be unable to offset the decline in U.S. consumption.

These factors suggest a sluggish economic recovery for the U.S. in the coming years until new sources of growth emerge (such as exports to emerging markets, investment, new energy and technology). Factors such as unsustainable public debt, higher structural unemployment, lower credit growth and higher taxes in the future will also constrain growth.

What is Your EI?

I just finished reading a couple of interesting books. First up is EI, What is your Ecological Intelligence, by Daniel Goleman the author who wrote the book on on EQ or your emotional intelligence that was all the rage a few years ago.

Here is how it is described on his website...

The bestselling author of Emotional Intelligence and Primal Leadership, Daniel Goleman reveals the hidden environmental consequences of what we make and buy, and shows how new market forces can drive the essential changes we all must make to save our planet. Ecological Intelligence draws on cutting-edge research to reveal why "green is a mirage," illuminates inconsistencies in our response to the ecological crisis, and introduces new technologies that reveal with "radical transparency" the Eco-impact of products we buy, with the potential to drive consumers to make smarter decisions and companies to reform their business practices.

I read it in response of Wal-Mart's current "new" green philosophy. As Mr. Goleman writes with regards to this new stance.

Wal-Mart Exposes the De-Value Chain
Written on July 24, 2009 – 9:45 am | by Daniel Goleman |

Wal-Mart’s announcement of its new sustainability index marks the dawning of the age of ecological transparency in the marketplace. This is not just idle speculation; Wal-Mart has signaled that suppliers who ignore the requirements for ecological transparency will become “less relevant” to them. In other words, suppliers may one day compete for shelf space on the basis of their transparency about the ecological impacts of their products.

The retailer’s 100,000 suppliers around the world will have to calculate and disclose the total ecological costs of their products — and that data will be boiled down into a single rating that shoppers will see right next to the price tag. For consumers, this will drop to zero the “effort cost” of finding an item’s ecological impacts, which today often means digging through a confusing forest of rating systems online, then trying to recall that information while strolling the aisles of a store.

As consumer surveys have shown for years, only a small portion, maybe ten percent, of shoppers are passionate about shopping their values; around 25 percent couldn’t care less. The action is the two-thirds in the middle, who say they would value shop if they didn’t have to make any extra effort, and if prices are comparable. And Wal-Mart has the knack for keeping costs down.

It is the latter half of that paragraph that is the most telling. Goleman would like to believe that shoppers if given a wealth of data on a product's ecological history would make better decisions about what to buy. To that I go ARE YOU KIDDING ME?

I, like any green consumer, do try to consider the long term goals and consequences of what I buy and what I actually recommend to clients. A good example: Caesarstone. I love it. Hard, harder than granite, tough, zero maintenance, lifetime warranty, amazing color choices and quality. Downside.. shipped across the globe, expensive. Well is there anything made locally that compares. No. So how do you reconcile what is something that will contribute to your quality of life vs the long term quality of overall life.

Wow thanks for putting that burden of decision making on me. I just wanted a cool countertop/sweater/shampoo/etc. When given a lot of information I find that clients or customers shut down. They like enough information to make an informed decision which especially relates to spending money but when is too much information too much.

I believe that people who shop at Wal-Mart are the LAST consumers who care about this. Customers like myself who do not care for Wal-Mart are not suddenly going there to buy anything simply because thanks to their new labels I feel better about my decision making. Sorry I won't go there at all because I know you don't pay your people sustainable wages, you are anti-union and have gone out of your way to block nationalized health care. Sorry Wal-Mart your greenwashing is showing.

I also just finished Cheap, the High Cost of Discount Culture by Ellen Ruppel Shell. The book has some errors in editing but the intent and subject matter is still relevant. She discusses both the history and philosophy behind the growth of discount culture, especially Wal-Mart and my nemesis, IKEA.

We all want to do good but in the process we have devalued true artisanship and craftsmanship as the ultimate goal when buying furnishings, building materials and products for our personal use. More is better paying less for more even better.

Green building costs more because simply it is using more in regards to building products. Adding thermal insulation, water vapor retardants, better quality wood that is free of toxins, using products that are sustainable and responsibly produced. But when you ask people what they care about more its cost. And simply is because while those costs have risen to do accomplish these goals of energy efficiency and saving resources our wages have not. There is no balance there.

But as in life and as in building you get what you pay for and things that are badly made no matter how well you document the chain of sourcing will not last any longer. The reality is it costs more to get more.

Wednesday, August 12, 2009

We've Come a Long Way Baby... or have we?

I am very passionate about many Humanist issues. I call them that because I think the term best describes and encompasses many things in contemporary society that I am interested in.

I am of course a strong advocate for Nationalized Health Care, Gay Rights, Universal Living Wages, Green Policies in all aspects of society, not just building, and more importantly how we treat and relate to one another in society. We have a violent culture and gun laws that seemingly allow for the freedom to use them not as the Constitution sees fit but in genuine harm against men or in most cases women.

I have a friend who runs the PX on the military base in Tacoma. We have seen the rising tide of violence there with many of these tragic servicemen often using violence against others, often spouses, as the way of expressing the anger and tragedy they witnessed. I do not hold them fully accountable and wonder why we are not doing more to address those deep psychological wounds. But this time one of his staff was killed not by a current GI but in fact an older retired man who had been dating her and after it failed began a campaign of stalking, harassing and finally culminating in her murder and his suicide at her workplace on base.

I am just starting or am in the middle of right now my 30 Day trial of dating and trying to overcome my fear of it. I was concerned yes about my personal safety as one should but also frankly the fact is that I am not all that interested in finding the one or the soul mate. And when you really aren't vested in that it brings the question, should you be doing it? I used to think dating was fun but now it seems to be in earnest an almost quest and need on the part of the seekers. I think online dating reminds me of shopping for a car and you are kicking tires and going for "test rides" to find the right one. Frankly that is a tad disturbing as I think of myself as a woman and not a model to trade up or down to.

Of course people think my direct approach and observations are the result of anger, a bad breakup, etc... sadly no. I just see and hear and truly comment on what I see and hear and that sometimes makes those around you a little uncomfortable. But the truth often hurts. I just would rather when the time comes find someone "organically" and yes pun intended.

But this column by Bob Herbert the other day spoke to me and I am glad it came from a man. I truly thought men rarely understood what its like to be a woman in an age when rejection seems to generate such a vitriolic response by men (and yes sometimes with women but usually not to this level.)

And to understand why I am passionate about this matter is because I saw my mother verbally and physically abused by my father all my life. My mother was also raped in our home by an intruder. He threatened to kill me, a sleeping child, while he raped her in our home.

I have long since overcome those emotions. I was married to a perfectly decent human being and we divorced amicably and moved on. I have no need to see all men as enemies. I have been working almost exclusively with men for the last dozen years and all of them, warts and all, were decent guys. I used to listen to them complain about their crazy girlfriends. Men love nutty girls the same way women love bad boys. But its all in a day's work! So I only judge on how you present yourself and sometimes it takes only 5 minutes for others a lifetime. But if I do blog on what I found dating well that would be an entirely different blog.... but I am taking it for what is a fun experiment and opportunity to learn.

So read this column and understand that perhaps we haven't really come very far...


Women at Risk

Published: August 7, 2009

“I actually look good. I dress good, am clean-shaven, bathe, touch of cologne — yet 30 million women rejected me,” wrote George Sodini in a blog that he kept while preparing for this week’s shooting in a Pennsylvania gym in which he killed three women, wounded nine others and then killed himself.

We’ve seen this tragic ritual so often that it has the feel of a formula. A guy is filled with a seething rage toward women and has easy access to guns. The result: mass slaughter.

Back in the fall of 2006, a fiend invaded an Amish schoolhouse in rural Pennsylvania, separated the girls from the boys, and then shot 10 of the girls, killing five.

I wrote, at the time, that there would have been thunderous outrage if someone had separated potential victims by race or religion and then shot, say, only the blacks, or only the whites, or only the Jews. But if you shoot only the girls or only the women — not so much of an uproar.

According to police accounts, Sodini walked into a dance-aerobics class of about 30 women who were being led by a pregnant instructor. He turned out the lights and opened fire. The instructor was among the wounded.

We have become so accustomed to living in a society saturated with misogyny that the barbaric treatment of women and girls has come to be more or less expected.

We profess to being shocked at one or another of these outlandish crimes, but the shock wears off quickly in an environment in which the rape, murder and humiliation of females is not only a staple of the news, but an important cornerstone of the nation’s entertainment.

The mainstream culture is filled with the most gruesome forms of misogyny, and pornography is now a multibillion-dollar industry — much of it controlled by mainstream U.S. corporations.

One of the striking things about mass killings in the U.S. is how consistently we find that the killers were riddled with shame and sexual humiliation, which they inevitably blamed on women and girls. The answer to their feelings of inadequacy was to get their hands on a gun (or guns) and begin blowing people away.

What was unusual about Sodini was how explicit he was in his blog about his personal shame and his hatred of women. “Why do this?” he asked. “To young girls? Just read below.” In his gruesome, monthslong rant, he managed to say, among other things: “It seems many teenage girls have sex frequently. One 16 year old does it usually three times a day with her boyfriend. So, err, after a month of that, this little [expletive] has had more sex than ME in my LIFE, and I am 48. One more reason.”

I was reminded of the Virginia Tech gunman, Seung-Hui Cho, who killed 32 people in a rampage at the university in 2007. While Cho shot males as well as females, he was reported to have previously stalked female classmates and to have leaned under tables to take inappropriate photos of women. A former roommate said Cho once claimed to have seen “promiscuity” when he looked into the eyes of a woman on campus.

Soon after the Virginia Tech slayings, I interviewed Dr. James Gilligan, who spent many years studying violence as a prison psychiatrist in Massachusetts and as a professor at Harvard and N.Y.U. “What I’ve concluded from decades of working with murderers and rapists and every kind of violent criminal,” he said, “is that an underlying factor that is virtually always present to one degree or another is a feeling that one has to prove one’s manhood, and that the way to do that, to gain the respect that has been lost, is to commit a violent act.”

Life in the United States is mind-bogglingly violent. But we should take particular notice of the staggering amounts of violence brought down on the nation’s women and girls each and every day for no other reason than who they are. They are attacked because they are female.

A girl or woman somewhere in the U.S. is sexually assaulted every couple of minutes or so. The number of seriously battered wives and girlfriends is far beyond the ability of any agency to count.

There were so many sexual attacks against women in the armed forces that the Defense Department had to revise its entire approach to the problem.

We would become much more sane, much healthier, as a society if we could bring ourselves to acknowledge that misogyny is a serious and pervasive problem, and that the twisted way so many men feel about women, combined with the absurdly easy availability of guns, is a toxic mix of the most tragic proportions.

Tuesday, August 11, 2009

Build It and they Won't Come

When I returned to Seattle to see what had happened in the 10 years I was gone, I was pretty shocked and appalled. Now I have never been a member of Lesser Seattle and I think growth is a good thing or hello Flint! But this seemed incredibly haphazard and well odd. I am not an urban planner but I did get a degree in Sociology and studied Demographics as part of my major. I always find patterns of migration very essential in studying Economics, History and Psychology.

When Seattle was named "best of" several times there was great fear people would move here and dangerously affect the quality of life. Well if you mean poor public transportation, very poor public schools and a general shopping/entertainment core that lacks and folds up at 9 pm "quality" then I can see the fear.

Well they came and they left. Many blamed Californians, many blamed the weather, the Seattle Freeze or they blamed Microsoft. Meanwhile Boeing really is responsible for the immense growth to the North of Seattle and the sprawl there by far more so than Microsoft and Bellevue/Redmond area. The reason being is the "type" of employee they hire and their style of life. I will say Boeing people are by far more "middle class" and work harder to build a community than most of the tech geeks, millionaires or not. Paul Allen is a classic example of "business" not "philanthropy" and the same goes for Simonyi and the others. Most are obsessed with putting names on buildings, buying real estate and cars rather than helping poor service oriented charities. If they do it must be really on the down low.

Outsiders are blamed here for all the ills but in reality long before the growth we were as a community very ineffectual about developing a city plan so our accountability for these failings are largely those of long time residents, transplanted or not, of the past 20 years not the last few. Most of the transplants I meet are not Californians and not even tech people. They are actually working class or middle class who wanted away from cold winters and hot horrid summers. Few seem to be these "California" type. Those people went to California and to the Bay Area where I lived. This is not the City that keeps that kind of people.

Its why I left and then also why I returned. Living in those Cities are expensive and hard when you are not making enough money and are becoming invaluable due to your age. San Francisco's average age 32. When you want roots and stability you think of cities like Seattle. I knew at least I could go back to teaching and then well......

This mornings Crosscut has an OUTSTANDING article about the ridiculous claims of growth with regards to the current plan for development. I have to agree. In order to grow you need work and businesses to sustain that growth. All the housing and buildings do not make a living. Without REAL true SUCCESSFUL business there is no need. Build it and they won't come. Putting all our hopes on Bio tech was a big big mistake. Many Many Many cities are doing the same and only a few truly are successful and once again the Bay Area succeeds. Let's face it we are not going to get that business especially now. So then what? More Retail and Restaurants? Those two industries are notoriously low paid so how will they afford all the outrageous costs of living in the City. A city where the current district is CLOSING 5 schools and laying off staff. What is the imperative for people who generate sufficient income, meaning families and people who are not transient (ie: older) to come and stay. There is little adequate real public transport and our roads are shit.

Seattle is a blue collar town with silly white collar aspirations. It is wasted here to think we will be another San Francisco. Sorry there is room only for one.


Why Seattle won't grow as fast as planners say

The common claim that the city's population will double by 2040 is bogus. Historic factors and our own failures at building to a broad market are the main reasons.

By Kent Kammerer

Advertisers understand that if a message is repeated often enough it will sell. Repeat a slogan frequently and it is believed. Repeated messages are inherent in advertising, religion, and politics.

Case in point: Not long ago a representative from Futurewise and a realtor said that Seattle’s population will double by 2040. I heard the same number quoted again at recent public hearing made by an architect builder. At a candidates' forum several City Council candidates said the same thing, “we must get ready for growth because they're coming”! “People are coming” is repeated like the mantra in a religious ceremony.

If Seattle’s current population does double we would reach 1.2 million. Only a fool would fail to prepare for such a population explosion. Surely urban planners and politicians are right on top of all the numbers and wouldn’t mislead us? What could they possibly gain by misrepresenting what could happen?

Yet those numbers are almost certainly wrong.

Puget Sound Regional Council (PSRC) has a division that does major demographic forecasting. In their web site they publish a disclaimer that their data is a calculated guess, but they project that in Snohomish, King, Kitsap, and Pierce counties, “the entire region,” will grow by 1.7 million people by 2040. They don’t say Seattle will double its population by 2040.

They forecast that Bremerton, Everett, Bellevue, Tacoma, and Seattle will together gain 550,000 people divided between them. While each jurisdiction is actively seeking growth, the distribution of the half million people is unlikely to be equal. Bellevue, Tacoma, Bremerton, and Everett will want their share, so I'm going to assume that Seattle will attract roughly a third of that number or around 180,000 new residents.

If Seattle’s current estimated population is 602,000 and we add the hypothetical 180,000 and you get 782,000 people by 2040 — considerably short of the 1.2 million that some claim are on the way.

Another way to look at the issue is to estimate how many people could live in Seattle, the city's capacity. It’s nearly impossible to be certain. Are we talking about spaces where buildings can be constructed, "zoned capacity," or how many buildings might be built, "buildable lands"? Two different calculations would result. Seattle’s zoned capacity is frequently said to be 700-800,000 people, allowing that some buildable space might not be fully utilized. (That's called the squish factor.) The assumption is that right now, without changing or increasing any zoning at all, Seattle has the capacity to provide housing for up to 800,000 people without changing the rules to make buildings more dense like the proposed multifamily update or up zoning single family neighborhoods. Theoretically the capacity is already there.

Whichever means of calculating you use, it turns out we aren’t anywhere near capacity.

PSRC working with the state growth management board, has already come to that conclusion. Here are findings from that PSRC analysis in the 2007 King County Buildable Lands Report:

* Seattle has household capacity under current zoning, over three times the 2022 projected household growth. Current residential capacity is for 123,000 new households. Growth targets for 2022 for Seattle are 38,000 new households.
* Seattle has the largest surplus of household capacity of any area in King County (3.2 times projected population growth). East King County has 1.7 and South King County 2.9. Rural cities have 3.1, but represent a small number.
* Seattle under existing zoning has capacity for 123,000 new households, compared to 154,000 new households for the all the rest of King County’s Urban Growth Area.

The argument that our population will double by 2040, or even increase by the 180,000 hypothetical share projected by PSRC, makes one wonder whether those numbers are reachable. If they are, that would drastically reverse a 50-year trend.

In 1960 we had population of 557,087. The last census in 2000 said we had 563,334 people. If the City of Seattle estimate of 602,000 population is accurate, we have in almost 50 years grown by only 44,913 people. Despite all the construction cranes, our population is moving upward very slowly.

From year 2000 to 2008 Seattle grew by 29,500 people while outside Seattle, King County gained 118,000, Pierce 105,000, and Snohomish 91,000. Yet Futurewise, developers, and some politicians insists that a major migration of new people will come to Seattle — like a swarm of locusts! — so we must build and densify to accommodate them.

Now let's look at the numbers in a close-up: where in the city is the growth expected to go? Seattle has established housing targets for different areas of the city, based on expected growth. If Seattle were seriously lagging behind the growth targets overall, which it isn't, then our City Council might reasonably come to the conclusion that it should increase zoning to stimulate more housing capacity. But Seattle’s own analysis says we are at, or far ahead, of our targets for new housing without rezoning or changing what can be built within an existing zone. Why are they telling us we need to build-build-build when we are already building much faster than planned growth has predicted?

According to Seattle’s own numbers from January 2005 through March of 2009, over 28,000 housing units have been added to Seattle's stock either built (16,504 units) or permitted and at various stages of construction (11,721 units). Seattle in just 51 months has reached 60 percent of its 20-year target. At this rate we'll add over 110,000 units under current zoning by 2024, over twice the rate needed to fulfill our targets. It’s more interesting to note that from 2003 to 2008, before the collapse of the lending market, Seattle’s 2008 vacancy rate averaged around 6.33 percent, varying by the census tract. There is no reliable data yet on how many units are vacant in late 2009 at the height of our economic downturn, but common sense suggests there is a major spike in empty units. As of June 1, for instance, the new complex in Northgate reports selling only one condo out of hundreds.

If Seattle’s growth has been steady and moderate for 49 years, curious people will ask why some politicians, greens, developers, and real-estate people believe a major population spike is on the way. What’s different now that will make such a huge growth spurt possible? Could it be about new high tech jobs? Certainly a valid assumption since the Mayor has been pushing economic development, especially in the high tech fields. But new high tech job opportunities are locating all over the Puget Sound basin not just in Seattle’s core, and they tend to prefer suburban locations.

How about the argument from smart-growth advocates that sustainable development will attract people to dense urbanized living? They argue that increasing density is an answer to climate change and sprawl. Will this response to sustainability stimulate a massive surge in population? Again, that seems unlikely, because growth outside Seattle in three counties has been 10.3 times greater than Seattle and consistently so for 20 years.

Why aren’t people choosing Seattle in the numbers expected? The answer has to do with a long list of factors big cities find very hard to solve. Do urban schools inspire confidence? Do we have the kind of parks and open spaces that provide for trees and views of our natural beauty? Do we have a variety of housing types from large to small from old to new, and affordably priced?

Do we have infrastructure that meets Growth Management Act tests for concurrency, and that is well maintained and capable of handling the increased population? Are the roads maintained? Do we have enough good cops and firefighters? Is our government honest and efficient? Does our criminal justice system work properly?

Do we treat all neighborhoods with the same attention as the downtown core? Do we provide a wide range of transportation choices that includes rail, bus, bikes, and automobiles? Do we provide places for people to park their cars even when they use public transportation every day?

Do we get nickel and dimed with punitive taxes or fees to support a bloated city government? Seattle sells water to high-growth areas outside Seattle and charges every Seattle rate-payer for the privilege. Is Seattle saving enough water for the 1.2 million that are coming? Will our power grid have sufficient capacity? Will broadband telecommunications be of sufficient speed to handle new high tech expectations? Will we have privacy, light, view corridors and a sense of neighborhood cohesion that offers a us a sense of community? When people make housing the largest investment in their life, predictability about their property is a major issue. Seattle’s leadership has reneged on supporting neighborhood plans and will break their promise to concentrate development in urban villages when developers seek zoning changes outside those areas.

I suspect that a major reason we won't have the growth the planners project is that Seattle is creating a less friendly spatial environment, one that seems to be driving prospective new residents out of Seattle into our smaller fringe cities and suburbia. Seattle’s obsessive drive to be green with massive dense cheap buildings doesn’t appeal to new arrivals. The glut of vacant condos suggests the folly of favoring a lifestyle that only a segment of the public is accepting.

In these many ways, the numbers make it clear: Seattle is shooting itself in the foot.

Footnote. All of the demographic data referenced in this article came from the US census, Puget Sound Regional Council, or the City of Seattle. The web site also uses the same data but presents it in more detail with supporting charts. Included at this site is an outstanding research paper titled “Hysterial Counterproductive.”