economics

In 1950, Hud and Ellen Weeks purchased land from Hud’s parents to build a home for their growing family. An otherwise unremarkable story might have ended there but for two things: Hud was the son of Des Moines makeup magnate Carl Weeks, and the parcel they purchased was carved from the Salisbury House grounds, Hud and Ellen Weeks Home - Double Lustron KitchenHud and Ellen Weeks Home - Double Lustron Kitchennow a national landmark and museum. On this historic site, Hud and Ellen commissioned a unique modern dwelling comprised of two “Lustron” ready-to-assemble steel home kits built around a central atrium. Only about 2,000 Lustrons remain in the world today. The double Lustron home was significant architecturally due to its distinctive design and historically because of its association with an influential Des Moines family.

On a chilly February morning in 2013, Salisbury House staff arrived to find massive machines tearing into the enameled steel-cladding of Hud and Ellen Weeks’ former home. A developer had purchased the lot and proceeded with demolition. Historians had no chance to document or reclaim any portion of the structure for study or reuse. This story is playing out today with the demolition of three century-old buildings for expansion of the EMC Insurance Companies in downtown Des Moines.

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Gentrification

09 Aug 2011

The term "gentrification" carries with it a substantial cargo of economic, social, and racial baggage. In general, it is a pejorative and Completed renovation of a vacant homeCompleted renovation of a vacant homeloaded word used to describe what might otherwise be seen as positive changes in a challenged neighborhood: increased investment in homes and influx of middle-class and wealthy occupants.

The negative aspect of gentrification is, of course, "displacement"

The Displacement Dilemma

In order to be adequately parsed, displacement due to gentrification must be subdivided into several categories:

  1. Displacement of homeowners due to rising property values - As properties are renovated, rising property values may impact long-term homeowners on fixed incomes who find themselves unable to keep up with property taxes.
  2. Displacement of renters due to rising rents - Increased property values, more desirable properties, and increased competition may lead to rent increases that existing tenants cannot accommodate.
  3. Displacement of minorities due to changing neighborhood demographics - Racial, religious, and social minorities may feel excluded or unwelcome in their own neighborhoods as the population demographics change.
  4. Displacement of poor families due to changes in available goods and services - As neighborhood economics change, so change the types of stores and services available to neighborhood residents.
  5. Displacement of criminals due to increased crime reporting and police response - With wealth comes political power, including the ability to do things like hire private security and influence resource allocation.

Clearly some of these categories are neutral, some good, and some negative. For example it may benefit one neighborhood to push criminal activity elsewhere, but unless the underlying issues are dealt with, it is a zero-sum game. Some other, less fortunate neighborhood will see an increase in crime.

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Drake Neighborhood StreetscapeDrake Neighborhood StreetscapeI will be presenting a talk at the upcoming State of Iowa Historic Preservation Conference in Red Oak. My topic, also the subject of my talk at a Terrace Hill Tea, is "Why Old Buildings Matter".

I am not a strict preservationist. My basic approach to renovation design is to identify those elements I feel are "character defining" about a building and open everything else up to reinterpretation. My personal threshold is somewhat less than the State Historic Preservation Office. Of course, when I am working on a historic tax credit project, I conform to their requirements. The exterior is of particular importance in most historic buildings because the relationship between buildings is often a character defining element of a neighborhood. Consistency of character across a neighborhood or sub-neighborhood enhances the value of all the homes.

So why do old buildings matter? Here's a little preview:

  • Context - The shape and size of homes, and their pattern of arrangement into neighborhoods, both influence and are influenced by broader social, economic, and technical forces.
  • Narrative - To people who know what to look for, old buildings can weave just as complex a narrative as the greatest storyteller. These narratives give us a connection to the past.
  • Craft - Most of the materials and methods we use to construct our buildings today are designed to be replaced rather than repaired when damaged (and they tend to damage more easily).
  • Sustainability - At the individual level, extending the useful life of a structure through renovation allows us to improve energy efficiency while minimizing use of new-source construction materials. On a larger scale, renovation and preservation allow us to better utilize existing infrastructure and provide services more effectively to more people.

Come to Red Oak to see the whole presentation - hope to see you there!

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Victorian Home in Danger of Demolition: This home is on the City's "Public Nuisance" list and may be demolished if deficiencies are not corrected in a timely manner.Victorian Home in Danger of Demolition: This home is on the City's "Public Nuisance" list and may be demolished if deficiencies are not corrected in a timely manner.The Iowa legislature recently passed a bill more than doubling the Iowa historic rehabilitation tax credit. The program had previously been capped at $20 million; it is now capped at $50 million - 10% of which is dedicated specifically to "small" projects of under $500,000.

As a revitalization stimulus and economic engine, historic tax credits are an excellent investment. Not only do they leverage significant private capitalized investment, but they also encourage preservation of historic buildings. Because the tax credits are not issued until the project is complete and put "in use", the economic return to the state actually precedes the tax credit payout.

Historic tax credits can be used throughout the state in both urban and rural areas. In urban areas, qualifying buildings can be located in a designated historic district, individually nominated, or eligible for nomination. In rural areas and small towns, bridges, barns, and other potentially eligible properties may qualify for the credits.

While large rehabilitation projects often steal the limelight, even a privately owned single family home can qualify. With the expanded credit, I look forward to a new professional infrastructure developing to help shepard projects of all sizes through the process: architects, engineers, tax credit consultants, and accountants.

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Yesterday, the Iowa Supreme court issued a unanimous ruling declaring the state's "Defense of Marriage" act unconstitutional. I am not a legal scholar, and must pull my understanding of this ruling from other sources. In essence, the Court has determined that the State Constitution forbids discrimination in issuing marriage licenses based on the sex of the people applying for the license. By specifically defining marriage as between a man and a woman, the DOMA took on the state constitution and lost. Big time.

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General Growth Stock Price PlummetsGeneral Growth Stock Price PlummetsReal estate investment giant General Growth stock plummeted to around $0.35 per share this morning on news that the company may declare bankruptcy. General Growth developed and owns the Jordan Creek Town Center "retail resort" in West Des Moines.

Over the next few years, almost $4 billion in debt from recent property acquisition comes due, but current income from their real estate holdings doesn't cover the payments. General Growth acquired Rouse Company in 2004 for $7.2 billion, mostly financed through short-term debt instruments. Defaulting on one debt would likely cause other creditors to call their loans due, precipitating a catastrophic avalanche of defaults.

General Growth officials blame the "credit crunch" for the company's current financial woes. That is, they cannot find people to loan them money to cover their existing loans. Now that there is blood in the water, it becomes even more unlikely that anyone will loan them money - a self-fulfilling prophesy.

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There. Like ripping off a band-aid, I said it and there's no going back.

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