The Unfair San Francisco Housing and Rental Market

Writing in the London Review of Books, Rebecca Solnit expresses her discontent at the unstable housing market in San Francisco, driven by new money from the tech boom (Google, Facebook, etc.):

At the actual open houses, dozens of people who looked like students would show up with chequebooks and sheaves of resumés and other documents and pack the house, literally: it was like a cross between being at a rock concert without a band and the Hotel Rwanda. There were rumours that these young people were starting bidding wars, offering a year’s rent in advance, offering far more than was being asked. These rumours were confirmed. Evictions went back up the way they did during the dot-com bubble. Most renters have considerable protection from both rent hikes and evictions in San Francisco, but there are ways around the latter, ways that often lead to pitched legal battles, and sometimes illegal ones. Owners have the right to evict a tenant to occupy the apartment itself (a right often abused; an evicted friend of mine found a new home next door to his former landlord and is watching with an eagle eye to see if the guy really dwells there for the requisite three years). Statewide, the Ellis Act allows landlords to evict all tenants and remove the property from the rental market, a manoeuvre often deployed to convert a property to flats for sale. As for rent control, it makes many landlords restless with stable tenants, since you can charge anything you like on a vacant apartment – and they do.

A Latino who has been an important cultural figure for forty years is being evicted while his wife undergoes chemotherapy. One of San Francisco’s most distinguished poets, a recent candidate for the city’s poet laureate, is being evicted after 35 years in his apartment and his whole adult life here: whether he will claw his way onto a much humbler perch or be exiled to another town remains to be seen, as does the fate of a city that poets can’t afford. His building, full of renters for most or all of the past century, including a notable documentary filmmaker, will be turned into flats for sale. A few miles away, friends of friends were evicted after twenty years in their home by two Google attorneys, a gay couple who moved into two separate units in order to maximise their owner-move-in rights. Rental prices rose between 10 and 135 per cent over the past year in San Francisco’s various neighbourhoods, though thanks to rent control a lot of San Franciscans were paying far below market rates even before the boom – which makes adjusting to the new market rate even harder. Two much-loved used bookstores are also being evicted by landlords looking for more money; 16 restaurants opened last year in their vicinity. On the waterfront, Larry Ellison, the owner of Oracle and the world’s sixth richest man, has been allowed to take control of three city piers for 75 years in return for fixing them up in time for the 2013 America’s Cup; he will evict dozens of small waterfront businesses as part of the deal.

Evictions, foreclosures, and legal loopholes. This doesn’t sound like a city I’d want to inhabit. A must-read for perspective.

Amazon as a Charitable Organization

Following the dismal 4th quarter earnings announcements by Amazon, detailed below, Amazon’s share price shot up by more than 10%.

  • Q4 revenue of $21.27 billion missed expectations of $22.23 billion
  • Q1 EPS of $0.21 missed expectations of $0.27;
  • The firm guided top-line lower, seeing Q1 sales of $15-$16 billion, below the estimate of $16.5 billion
  • The firm guided operating income much lower, seeing Q1 op income of ($285)-$65 Million on expectations of $261.4 MM
  • The firm said the its physical books sales had the lowest growth in 17 years
  • Total employees grew by 7,000 in the quarter and 32,200 Y/Y to a record 88,400
  • Worldwide net sales Y/Y growth was the slowest in years at 23%, down from 30% in Q3 and 34% a year ago
  • And, last and certainly least, LTM Net Income is now officially negative, or ($49) meaning as of this moment the firm with the idiotically high PE has an even more idiotic N/M PE.

The question is why? Matthew Yglesias has a great thought: Amazon is a charitable organization. To wit:

The company’s shares are down a bit today, but the company’s stock is taking a much less catastrophic plunge in already-meager profits than Apple, whose stock plunged simply because its Q4 profits increased at an unexpectedly slow rate. That’s because Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don’t even buy anything from Amazon.

It’s a truly remarkable American success story. But if you own a competing firm, you should be terrified. Competition is always scary, but competition against a juggernaut that seems to have permission from its shareholders to not turn any profits is really frightening.

Sometimes (often) the markets are a fool’s game.

The Twenty Year Game of Tag

The Wall Street Journal has a bizarre story of four grown men who’ve been playing a game of tag for 23 years:

It started in high school when they spent their morning break darting around the campus of Gonzaga Preparatory School in Spokane, Wash. Then they moved on—to college, careers, families and new cities. But because of a reunion, a contract and someone’s unusual idea to stay in touch, tag keeps pulling them closer. Much closer.

The game they play is fundamentally the same as the schoolyard version: One player is “It” until he tags someone else. But men in their 40s can’t easily chase each other around the playground, at least not without making people nervous, so this tag has a twist. There are no geographic restrictions and the game is live for the entire month of February. The last guy tagged stays “It” for the year.

I guess this game beats Facebook pokes, but:

The participants say tag has helped preserve friendships that otherwise may have fizzled. Usually, though, the prospect of 11 months of ridicule overrides brotherhood.

Weird.

On Chicken Wings and Super Bowl XLVII

The Atlanta-Business Chronicle reports that chicken wing prices are the highest ever ahead of Super Bowl XLVII:

Chicken wing prices typically increase around the Super Bowl, but this year the ballgame favorite has reached a record high.

Wholesale wings are currently at about $2.11 a pound (Northeast), the highest on record at the U.S. Department of Agriculture, up 26 cents or 14 percent from a year earlier, according to The National Chicken Council.

The council says Americans will eat 1.23 billion chicken wings on Super Bowl Sunday. That’s down one percent from 2011 due to a shortage in the number of chicken wings produced.

There’s also this:

Meanwhile, here in metro Atlanta, two men were arrested for stealing $65,000 in frozen chicken from Nordic Cold Storage in the 4300 block of Pleasantdale Road in Doraville where they were employed, reports Fox 5 Atlanta.

Get your chicken while it’s hot, folks.

The Hidden Risks of Taking a Shower Daily

In a strong op-ed piece in The New York Times, James Diamond (author of Guns, Germs, and Steel) argues that we overestimate certain risks while understating the risks we come across daily (such as taking a shower):

Studies have compared Americans’ perceived ranking of dangers with the rankings of real dangers, measured either by actual accident figures or by estimated numbers of averted accidents. It turns out that we exaggerate the risks of events that are beyond our control, that cause many deaths at once or that kill in spectacular ways — crazy gunmen, terrorists, plane crashes, nuclear radiation, genetically modified crops. At the same time, we underestimate the risks of events that we can control (“That would never happen to me — I’m careful”) and of events that kill just one person in a mundane way.

The op-ed focuses on Diamond’s fascination with the natives of New Guinea. Diamond’s biggest lesson is realizing the importance of being attentive to hazards that carry a low risk each time but are encountered frequently.

Why Ambiverts Are Better Than Extroverts and Introverts

Daniel Pink, writing in The Washington Post, explains how ambiverts are at an advantage over introverts and extroverts in leadership/sales roles:

Ambiverts, a term coined by social scientists in the 1920s, are people who are neither extremely introverted nor extremely extroverted. Think back to that 1-to-7 scale that Grant used. Ambiverts aren’t 1s or 2s, but they’re not 6s or 7s either. They’re 3s, 4s and 5s. They’re not quiet, but they’re not loud. They know how to assert themselves, but they’re not pushy.

In Grant’s study, ambiverts earned average hourly revenues of $155, beating extroverts by a healthy 24 percent. In fact, the salespeople who did the best of all, earning an average of $208 per hour, had scores of 4.0, smack in the middle of the introversion-extroversion scale.

What holds for actual salespeople holds equally for the quasi-salespeople known as leaders. Extroverts can talk too much and listen too little. They can overwhelm others with the force of their personalities. Sometimes they care too deeply about being liked and not enough about getting tough things done.

But the answer — whether you’re pushing Nissans on a car lot or leading a major nonprofit or corporation — isn’t to lurch to the opposite end of the spectrum. Introverts have their own challenges. They can be too shy to initiate, too skittish to deliver unpleasant news and too timid to close the deal. Ambiverts, though, strike the right balance. They know when to speak up and when to shut up, when to inspect and when to respond, when to push and when to hold back.

Still curious? Daniel Pink is the author of To Sell is Human: The Surprising Truth about Moving Others, which I am currently reading. The basic gist: we are all salesmen, day in and day out, whether we realize it or not.

On Loneliness, Social Threat, and Art

Olivia Laing contemplates the meaning of loneliness in a piece for Aeon Magazine:

Something funny happens to people who are lonely. The lonelier they get, the less adept they become at navigating social currents. Loneliness grows around them, like mould or fur, a prophylactic that inhibits contact, no matter how badly contact is desired. Loneliness is accretive, extending and perpetuating itself. Once it becomes impacted, it isn’t easy to dislodge. When I think of its advance, an anchoress’s cell comes to mind, as does the exoskeleton of a gastropod.

I think Olivia is correct in hypothesizing that loneliness comes and goes in vicious cycles (it’s hard to break free when you’re in a slump).

She adds:

It seems that this is what loneliness is designed to do: to provoke the restoration of social bonds. Like pain itself, it exists to alert the organism to a state of untenability, to prompt a change in circumstance. We are social animals, the theory goes, and so isolation is — or was, at some unspecified point in our evolutionary journey — unsafe for us. This theory neatly explains the physical consequences of loneliness, which ally to a heightened sense of threat, but I can’t help feeling it doesn’t capture the entirety of loneliness as a state.

A wonderful essay.

Traversing Provence by Foot

In a blog post titled “Pilgrims in Provence,” Matt Goulding realizes his dream of vising Provence, France.

My first dreams of Provence came as a teenager, when I stumbled across a picture of a local market in one of my mom’s glossy magazines. The village was tiny and cobblestoned, dappled with a gentle light so perfect it looked like it had been painted onto the page. Everything in that picture seemed impossibly vivid: the Technicolor tomatoes and eggplants, the farmers with dirt still crusted on their fingers, the cafe on the side of the plaza with the chalkboard menu listing untold treasures du jour.

That picture drove me wild with wanderlust. I wanted to be there to smell those tomatoes, to pepper those farmers with questions, to wander back to a small country house with nothing but a dog-eared journal and an armful of ingredients. I’ve been carrying those images around in my head for the better part of two decades, waiting for the day when I could transpose them on to reality.

All of this sounds warm and fuzzy and ripe for disappointment, but the great majority of Provencal cliches exist primarily because it is exactly that fairy-tale region you imagine it to be. To paraphrase Bourdain, it’s what Martha Stewart sees when she closes her eyes.

Having spent some time in Provence (mostly in Avignon) a few years ago, this description is apt:

Avignon is the kind of town that brings Provence’s virtues into sharp focus: the old part of town, circumscribed by an ancient city wall, is home to leafy avenues, a sprawling central market housing the building blocks for historic feasts, and the types of cafés you’d sacrifice unspeakable things to have in your neighborhood back home.

On navigation:

No, your best friends in this mysterious new world are the maps you procure from the local Tabacs shops (or from excitable outdoorsmen in Avignon) and the colored lines that mark the trails at every turn: red and white for the GR 6, our path for much of our time in the Luberon, red and yellow for the long-distance GRP trail, and so on. It takes a bit of getting used to, but soon you learn that an x means you’re going the wrong way, that a 90-degree angle indicates an imminent turn, and that the absence of any color at all for more than, say, 100 meters means you’ve gone rogue.

A convincing paragraph on why it’s better to travel on foot than by car/bus:

Maybe it’s the rosé talking, but there is something undeniably magical about approaching a town on foot. You are invariably greeted by a host of intense, deeply conflicting emotions: elation (over the fact that you won’t be sleeping under a rock tonight), exhaustion (because you haven’t exercised this much in many years), hunger (because that pack is heavy and bread and cheese and sparkling wine only go so far) and, above all, wonder (at just how beautiful and poetic it can be to watch a town towering on the horizon grow closer and closer until the road between you and it has disappeared entirely).

A wonderful essay. Highly recommend reading the whole thing.

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(hat tip: @legalnomads/@MikeAchim)

 

The Hoodie Phenomenon

Tim Maly, in a thoughtful essay titled “Mark Zuckerberg’s Hoodie,” ponders the role of privacy and social behavior as the hoodie has gone mainstream:

People who know they’re being watched change their behaviour. In a world awash in surveillance devices, hoodies are an element of fashion driven by an architectural condition. They are a response to the constant presence of cameras overhead. People who don’t want to be watched wear them. People who want to be the kind of people who don’t want to be watched wear them. People who want to look like the kind of people who don’t want to be watched wear them.

Through a series of vignettes, Maly brings us from 2005 to present day:

It is January 13, 2013 and Mark Zuckerberg is promising a revolution. He’s on stage, wearing his hoodie. He seems comfortable. His colleague Tom Stocky is trying to help a hypothetical girl find a date. He runs a query and gets a list of men who are friends of friends and single. It’s a veritable cornucopia of potential men. He narrows them down to people in San Francisco. Then down to people in San Francisco who are from India. His hypothetical woman is sure to be pleased.

Just don’t wear that hoodie to a first date, you know?

The Incredible Portland Karaoke Scene

“Here’s the important thing to remember about Portland. No one’s here to get rich. Unlike everywhere else in America. There’s a critical mass here of people here following their passions.”

The quote above is from one of the best pieces of journalism I’ve read this month; it is Dan Kois’s story on the karaoke scene in Portland, Oregon. I’ve only been to karaoke maybe five or six times in my life, but I love the city of Portland, and Dan’s experience resonated with me.

In the piece, Kois profiles John Brophy, who runs  Baby Ketten Karaoke in Portland and every week:

adds as many as 20 tracks to the Baby Ketten songbook. Some of these are songs he purchases from karaoke studios, not unlike any karaoke jockey, or K.J., in America. But many of them are songs hand-assembled by Brophy, much as he’s doing with “Electioneering” — B.K.K. originals that Brophy constructs either because the studios that recorded “official” karaoke versions did bad jobs, or because the song is such an obscurity that no studio has ever recorded a karaoke version. For example, if you’d like to sing Bikini Kill’s “Rebel Girl,” the Gregory Brothers’ “Bed Intruder Song” (with full Auto-Tune), Danger Doom’s “Sofa King” or Neutral Milk Hotel’s “In the Aeroplane Over the Sea,” Baby Ketten has them all. (I know: I saw people sing them.) Your local karaoke bar doesn’t.

There are just so many things to learn from this article, such as the popularity of “Prisencolinensinainciusol,” a 1972 epic written in gibberish by the Italian performer Adriano Celentano, supposedly to mimic how English sounds to the Italian ear. The lyrics are pure gibberish, and the original music video is below:

 

 

In the piece, Dan meets Addie Beseda at Baby Ketten Karaoke. Here’s a clip of her nailing “Prisencolinensinainciusol”:

 

 

This paragraph was excellent, but you have to watch the video clip below to fully appreciate it:

A tall young man in a puffy jacket swayed up onto the stage, then kicked into the lyrics — but instead of imitating Jack White’s rock ’n’ roll keen, he sang in a rhythm-and-blues croon. The song was instantly transformed from dirty garage rock to bedroom soul. It sounded incredible, as if the song were written that way in the first place. When it was over, Justin bowed, accepting our applause, then replaced the microphone in its stand and walked out the door, never to return.

The slow rendition of “Seven Nation Army” by The White Stripes mentioned above:

 

 

Wow.

Dan Kois with a beautiful conclusion on the city of Portland:

Portland isn’t just the capital of karaoke, I was realizing. The Japanese influence, the small-business climate and the abundance of bands don’t really matter. Portland is the capital of America’s small ponds. It’s a city devoted to chasing that feeling — the feeling of doing something you love, just for a moment, and being recognized for it, no matter how obscure or unnecessary or ludicrous it might seem to the straight world. It is the capital of taking frivolity seriously, of being silly as if it’s your job.

I’ll be back in Portland in July 2013 for the annual World Domination Summit (here are some readings to get you familiar; here is my summary from Cal Newport, who spoke at WDS 2012). I am going to spend a few days outside the conference doing touristy things, and certainly on my list of things to do this year will be to check out the karaoke scene in Portland. Who’s with me?