Wait long enough, and many difference in residential real-estate prices get arbitraged away. That’s one takeaway, at least down to the metropolitan area, from this week’s data release from the Federal Housing Finance Agency (FHFA). It shows several instances of catch-up by areas of the country that have been less favored in recent decades. Maybe people still do move about America to seize on the “dream” of home ownership?
(A quick caveat: These FHFA numbers do not drill further down into zip codes or even towns. At that level, disparities in valuations can persist or even enlarge over longer stretches. The rich neighborhoods tend to stay that way.)
The FHFA release catches prices through the first quarter of 2024, comparing them back a few months, a year, five years, and since 1991. The last basis takes us back to the later days of the savings & loan crisis, so we can helpfully see the whole housing boom of the last 30-plus years. Longer time periods also help to correct for blips, such as the extreme days of the Covid lockdowns, although greater leeway for remote work is still doubtless a factor in recent trends.
So where do we see top price appreciations over the latest year? Would you believe, Allentown, Pa.? It’s number one, at 16%–and has a respectable 5-year gain of nearly 74%, vs. a U.S. average of 59%. You would not be wrong in thinking that the Allentown area has been a long laggard: up 228% since 1991, while American homes as a whole rose by 316%, or better than four-fold, in nominal prices.
Other metro areas that are making up for lost time include Rochester, N.Y., Camden, Buffalo and El Paso. Slowdowns, on the other hand, are evident over one- and five-year spans in San Francisco, Austin and Colorado Springs. So the larger snow to sun belt shifts occurring nationally (or as others would put it, blue to red) do not consistently hold.
Not everything evens out, even in 33 years. Wide price-appreciation gaps have persisted among losers: Honolulu (once a great winner), New Orleans and Fresno, for examples. Winners can continue to roll: Charleston, S.C., Miami and Fort Lauderdale, and San Diego. But broadly speaking, nowhere grows to the sky or sinks to pits of despond. The great multi-decade housing boom has lifted Salt Lake City by better than 675% and Hartford, Ct, by not quite 150%. Nobody went broke on equity alone, even if others really cashed in.
The FHFA also breaks down the nation by states, which is less precise but can yield political talking points. For the record, top recent and even 5-year gainers have been clumped in the Northeast (Vermont is hot!), with pandemic exceptions including Florida, South Carolina and the Mountain West. I must say, this surprised me. Also, it should be noted that the District of Columbia appears to be faring poorly in the big-government Biden presidency–it was the only “state” to decline in the latest year, and its homes appreciated less than 19% in the last five. But it had a good run through the Clinton, Bush 43 and Obama terms.
Many nonpolitical considerations account for these movements, but regression to a mean may be the most important. You have to live somewhere, and you likely wish to have “more” where you can. Perhaps my former Forbes colleague Rich Karlgaard had it right back in the early Aughts, when he published his book Life 2.0: How People Across America Are Transforming Their Lives by Finding the Where of Their Happiness.
Of course, it still helps to be able to pilot your own plane, as Rich did. Driving to Allentown, after all, is not that pleasant with all the trucks. –5/29/24
Long Island, N.Y.’s East End has a housing price/supply crunch, like the United Kingdom. So it might want to look at an earnest argument out of the UK for addressing the scarcity by restricting or reallocating bedroom supply. (See this derivative blog post.) The scholars there found no actual shortfall of home square-footage in the British isles, but rather a hoarding of unnecessary bedroom space by a blessed slice of the population. Any Hamptonite (U.S. version) would quickly see how this applies locally, as McMansions with six or more bedrooms (nearly always with en-suite baths) are standard fare in new construction, and for only weekend or seasonal use in many situations. Back in the UK, the policy wonks looking for “fair decarbonization of housing” measures acknowledge that some potential steps for redressing the bedroom imbalance carry obviously awkward implications. So they promote instead a tax on insufficiently justified sleeping space. (There’s a bit of Henry George in that, and luxury-penalty taxes are a favored Hamptons recourse.). However, this doesn’t fully capture the social dimensions of the UK problem, which is no longer Downton Abbey estates but empty nesters of more modest means who hang onto oversized residences for lack of preferred alternatives. Thus, it’s a “tenure” issue, and one aggravated by the cumbersome ritual of unfettered private-property ownership–it skews space toward older people with deeds. If housing stock were better influenced by the state, bedroom space could be shuffled more easily among households as demographic needs change. The authors point to some Euro experiments. This more rational approach to domiciling appeals to certain academic minds, if not to the denizens of Long Island’s East End. One other reality check: The UK decarbonizers should make sure their own country’s “council” homes don’t share the static bias of New York City Housing Authority “projects.” Bigger apartments there, like those on fashionable stretches of Park Avenue, tend to stay with occupants who’ve aged beyond child-raising. Maybe, like the buyers of oversized Hamptons homes, they just wish to think the grandkids will come to visit. –5/28/24
*H/T to Rent Free, the Reason magazine newsletter by Christian Britschgi, for flagging this UK item.
The antitrust-activist Federal Trade Commission (FTC) under the Biden administration and chair Lina Khan moved earlier this year to block a merger between grocery oligarchs Kroger and Albertsons. Its motivation is to preserve competition (such as it is) in traditional food shopping.
There’s a whole debate about whether choice in supermarkets is so relevant when many alternatives have arisen, both online and in physical stores from Walmart to Whole Foods to Trader Joe’s to Aldi and Lidl and even dollar stores. The marketplace, at least in population centers, does seem to keep offering ways to skip the old standbys.
But given the FTC’s current bent (it also has acted to bust a merger in branded handbags), where might concerted restriction of retail monopoly lead? Lessons can be found in America’s century-old regulation of alcoholic-beverage sales. In this case, I’d point to the curious case of New York state.
Other states have their own quirks, but New York’s general policy is to restrict wine and hard-liquor sales to specialized shops (often “mom & pops”) while leaving beer to food stores. As always, there’ve been lots of exceptions written into the law–the grocers can sell wine from New York grapes, or flavored wines, or wine-based coolers. But, in general, the distinctions have held, and the wine-liquor stores are well organized into a lobby that has fought vigorously to keep the boundaries. (That’s the reason, for example, that you cannot buy Costco’s popularly-priced Kirkland house-brand wines in New York–because Costco cannot deal in wine.)
There’s a flip side to this standoff: the liquor shops are prevented from selling food, even the snacks one might naturally serve with a drink. And they can’t, therefore, feature non-alcoholic beverages, even mocktails. Today’s article in the New York Post notes that the “package stores” are contesting this limitation, pleading poverty because alcohol-for-home sales are down (at least from pandemic binge levels) for various reasons. The back-and-forth in the Post’s account gives you a flavor for how petty this line-drawing has become.
Are consumers a winner from New York’s attempt to maintain an independent retail channel from being swept up by Big Grocer? (As well, of course, as to impose control on booze through special licensing.) Or might a more hands-off approach make it easier and perhaps cheaper to shop? If so, what might the nationwide lesson be for letting Kroger, Albertsons and their various rivals sort things out?
New York City, like many urban areas, has suffered vacant storefronts in recent years. The causes are likely many: online shopping, property crime, difficulty in hiring low-wage staff or paying the going rents. An article at politicsny.com this week notes that some city councilmembers are on the case and, as often, blaming landlords. Even a rare Republican on the council is threatening them with fines for, she says, “purposely” leaving space unrented. This is a frequent allegation in Gotham, both for commercial and residential space, based on suspected motivations growing out of the city’s tangled property laws. But what makes the charge ironic at the moment is that other landlords–or maybe the same ones–are accused of willfully leasing to the 2,000 illicit cannabis shops that have sprung up in the city since New York State legalized buying weed and tried, in a shambolic program, to channel sales to a reparations-based roster of approved dispensaries. Only a few dozen licensed shops have managed to open, but virtually every neighborhood has plenty of the other type. This has particularly incensed Gale Brewer, councilwoman on the Upper West Side (and former borough president of Manhattan). As the New York Times noted in a feature this month on her crusade, she is a “lifelong liberal” and “tireless tinkerer” who “had set out to prove how the power of government” could set things right. In fact, she has an ongoing interest in storefronts, having two years ago set after grocery-delivery outfits that were renting pandemic-emptied spaces as sub-depots and turning once-bustling blocks into dim warehouse strips. That problem mostly solved itself (the delivery craze subsided) but, in fact, there’s usually something in the naked city’s ever-changing commerce to cause political upset. Mayor LaGuardia rousted slot and pinball machines, and Mayor Giuliani closed porn shops. The thing about unruly spots like New York is that just about any human desire is met and, unless the law makes it impractical to do so, somebody will offer an interior to do the meeting–just wait. It takes a lot of tinkering to try to get the mix just right.
The most interesting aspect of yesterday’s discussion at the Korea Society in New York concerned Park Chung Hee, the transformative autocrat who ruled from Seoul for most of the 1960s and 1970s. He was an army general who seized power in 1961 and maneuvered, sometimes brutally, to maintain it until he was assassinated in 1979. But as the authors of new introductory volume to the history of the Korean peninsula, Victor Cha and Ramon Pacheco Pardo, note, Park was instrumental in creating the modern South Korean economy, which has subsequently flowered as the North sank into widespread misery. A key turning point came in 1965 when Park opened the Republic of Korea to relations and commerce with Japan, its historic tormentor. As Cha here suggests, this was a deeply unpopular move among Koreans and one that no democratic government, fragile or otherwise, would have countenanced. This is a development truth that must be kept in mind when promoting human rights in emerging economies–and is far from the only such episode in growth stories of Asia or elsewhere. The democratic ascent of the U.S.–itself one of limited popular franchise in our first two centuries–is a global exception.
As we’re reminded constantly, the U.S. is an increasingly polarized society, politically and otherwise. It is getting ever more so “otherwise” in the housing market, where many enjoy rising property values and easy mortgage payments while others are pressed for shelter anywhere near their desired locations. This affordability issue has gained steam, and is causing political change followed by political backlash–so, more polarization. To wit: many comfortable communities, such as the New Jersey suburb cited in this Gothamist article from last week, do not want many if any lower-cost units added to their jurisdictions. This may reflect snobby prejudice or, instead, distaste for more traffic congestion, school crowding or environmental effects (e.g., sewage and garbage). In blue states such as New Jersey, legislatures increasingly are commanding–with the help of courts, as in this case–the localities to bend, either to affordable-housing quotas or to greater leeway for developers to build. It is easy to see how, from one side, this is adding to grievance that “liberal elites” are forcing putatively middle-class Americans close to home to succumb to rules that disrupt their preferred ways. From the other side, it’s a different coloration. Of course, housing doesn’t always cut so cleanly in politics–libertarians and many businesspeople favor greater construction opportunities, and not a few of the leafy-lawned suburbanites are left of center in their other lives. But in the 2024 climate, any dispute can send parties to the familiar outrage corners for settling matters…just how?
A few months short of its 42nd birthday, the California-based sundries-and-more chain 99 Cents Only is going to die. An Orange County columnist for the Los Angeles Times delivers this fond obituary while visiting a store in Santa Ana that I used to patronize, and captures much of the appeal. He doesn’t mention the long-running, whimsical weekly newspaper ads (often joking on the 99 rubric) that helped set this retailer apart from the other “dollar stores”–now hulking national rivals–that grew around it, but he’s right about the distinction. As so often in business, the flavor came from the founder, instinctive merchandiser Dave Gold, whom I profiled in Forbes in 1998. His company earlier became a listed–and later quite hot–stock, and disheveled Dave briefly appeared on the Forbes 400 list of richest Americans. Even frugal Mr. Gold could overreach, however, and the company made an ill-fated expansion into Texas from which the stock never recovered. As the founder neared his death in 2013, the company was sold to private equity. What killed it a decade later–inflation? thievery? competition? California’s business climate?–will be debated. Dave was a Democrat so I doubt he’d blame the politics. “99” still had a loyal customer base, as this ode suggests. Maybe too much of the joy had gone out of its act.
When an 18-hole golf club—private and exclusive—opens in the next couple of years at the controversial Lewis Road luxury development in East Quogue, it will mark the latest and probably the last of 135 years of links building on and around the South Fork of Long Island. This will bring to 20 the number of golfing options, not including some favorites on the North Fork.
But long before it got to No. 20, the Hamptons made history with No. 1.
Shinnecock Hills, oldest incorporated golf club in the U.S., was the start of a first-wave of “summer colony” courses to populate the stretch. It took its name—and some say its land—from a native tribe that arguably had been hornswoggled by settlers decades earlier. But Shinnecock’s pedigree with golf professionals is solid—it will host its fourth U.S. Open tournament in 2026.
With the extended Long Island Rail Road opening up the territory to a new seasonal population, other courses followed in short order in the 1890s: the Westhampton Country Club (relocated in 1915), Quogue Field Club, Southampton Golf Club, the Maidstone Club in East Hampton and Gardiners Bay Country Club on Shelter Island. A decade later came National Golf Links, neighboring Shinnecock Hills on the Peconic Bay side.
The next burst of course creation occurred in the Roaring Twenties. The Bridgehampton Club opened nine holes near that village, south of the Montauk Highway. Soon, nine holes were carved out of woodlands east of Sag Harbor for a public club (today Sag Harbor Golf Course is operated by the state of New York). Another “executive” course, the Shelter Island Golf Club, was opened to general play. And in 1927, Carl Fisher’s grand resort vision for Montauk featured the initial iteration of today’s celebrated Downs layout.
As noted in William Quinn’s pictorial history, “America’s Linksland: A Century of Long Island Golf” (2002), several of the coastal courses were heavily damaged in the September 1938 hurricane that struck the area. The Quogue club lost a few holes and ultimately shortened to nine. Shinnecock Hills, meantime, had to shift some holes that once straddled the railroad tracks northward as the Sunrise Highway was extended into town.
New links activity went quiet for decades, awakened only by the golf craze of the 1960s. First came nine new public holes at Poxabogue in Sagaponack, in 1962. The membership course at Noyac Golf Club signaled new wealth in the mid-‘60s, inland from an old bay boating hamlet and existing, it says, as a “hidden gem” for years until a course redesign. (Noyac is the course depicted in the early-March photo.)
Meanwhile, tucked away in a forest of upper Westhampton, Hampton Hills Country Club opened in 1965. Remarkably, given later battles over the surrounding Pine Barrens, it attracted little controversy. (However, later proposals to build hundreds of homes along the course and by the Teamsters union to build 2,000 homes on property it held nearby did not fly.) Completing this era, Suffolk County in 1972 created Indian Island Golf Course around what had been a huge Riverhead duck farm.
Even then, however, the great change in the Hamptons was yet to come. One indication is a June 1964 advertisement in the East Hampton Star for the Montauk course: $4 green fees and “No Waiting for Starting Times.” Ownership would later shift to New York—and today it’s $86 for out-of-staters and a lot of luck could get you a prime spot on the tee.
A last push for golfing rights on the South Fork would be seen after the great Hamptons rush of the 1980s. By then, land values had begun to skyrocket—it’s generally accepted that at least 125 acres is needed for 18 holes—while a natural-resources lobby had grown unhappy to see fertilized grass stretches take the place of native terrain. Projects were floated for spots like an old stock farm in North Haven, only to fizzle.
Several golf-developer visions of the later 1900s failed to pass muster in the area, as local or state parklands or open space were approved instead. One of the last such efforts to die, in 1999, was at Montauk’s ocean-facing Camp Hero, a former federal installation given over instead to the public as rustic day-use grounds.
The increasingly vocal resistance complicated the founding of the next 18-hole course to open, the private Atlantic Golf Club in upper Bridgehampton. After a long battle over the 200 acres of onetime potato farm, with both competing developers and foes of any repurposing, Atlantic members—many of them from the South Fork’s growing Jewish community–realized their aims in 1992.
Almost a decade later and two miles up Millstone Road, another tussle ensued over the former Bridgehampton Raceway site on a rise overlooking Noyac Bay. Again, various interests including nature lovers sought to control the parcel. Ultimately the racetrack’s last impresario, Robert Rubin, put together an exclusive golf resort, The Bridge, to accompany a handful of fancy home sites. Rubin’s plans were sufficiently restrained to overcome opposition. But the approvals came just before the Community Preservation Fund, an East End tax designed to allow towns to compete for valuable and sensitive properties, could kick in enough to vie for the scenic site.
Meantime, an 18-hole membership course had opened in the agricultural belt above Amagansett with few fireworks. The South Fork Country Club, however, had the benefit of history. The locally prominent Bistrian family created a public 9-holer, the East Hampton Golf Course, on its farm plot there in 1978, before the landscaping graders became such a sore point. A new membership simply expanded to 18 and took charge in 2000.
The most recent course to open on the South Fork, Sebonack Golf Club in 2006, also avoided serious resistance. This may be explained by its location and pedigree: It adjoins the National Golf Links on what had been Bayberry Land, a banking magnate’s compound going back to 1919 and subsequently a retreat for the IBEW electricians union. Michael Pascucci spearheaded Sebonack’s creation with a “green” sensibility and ceded a long stretch of waterfront to Southampton town for conservation purposes. (With today’s polarized times, this has not satisfied all objections.)
In the nearly 20 years since, more affluent golfers have descended on the South Fork, with few openings for play. But development issues have only become more fractious and legally bound. So it’s no surprise that future golf prospects come in the form of a highly contested project. Lewis Road, formerly known as The Hills, is to be part of a 100-some home project over nearly 600 acres of woodland south of the Sunrise Highway. (See below for a shot of the site as of end of November 2024.) Just to its north are hundreds of protected acres of the Pine Barrens, and indeed the Long Island Pine Barrens Society was an early foe of the whole plan.
The current iteration of the project is four years old, and an earlier, similar blueprint failed after that long of a fight. But Discovery Land, the developer, has prevailed at all stops so far this time, and construction looms.
As hard fought as each additional golf hole has been in recent years, there’s likely plenty of demand to keep all the existing courses busy for Long Island’s eight-month active seasons. Thus, even with a generally-aging player population and high land values, closure of any of them for developments is a political nonstarter. (Increasingly, the bigger clubs have had to house maintenance workers on site, because nearby rental shelter is so dear.)
Reversion to nature preserves, as has happened elsewhere as golf supply exceeded demand, is an economic leap too far in the Hamptons. But there can be ancillary outdoor uses—the Southampton Trails Preservation Society has pitched an “accessible” visitor path on the donated bayfront stretch next to Sebonack, and created an unusual hike in the watershed of the Atlantic club. Enthusiasts asked for a trail as part of the Lewis Road project.
In years past, ample winter snowfalls created cross-country skiing possibilities on gently sloping fairways, but such cover has become rare on the South Fork. If anything, the warmer bridge seasons have brought more golf to a place that won’t be seeing any more spots to accommodate it. –March 15, 2024 and updated.
This weekend’s New York Times article marvels over the apparent embrace of New Urbanist notions of densified and commercially active housing corridors by a seemingly fresh breed of market-oriented libertarians. They have come together under various banners of YIMBY–Yes In My Back Yard–to address a scarcity of “affordable” homes in many areas of the country. What the Times calls red-state Republicans are in fact policy wonks and some homebuilder allies who are channeling longtime philosophical objections to zoning and related restrictions on land use. New Urbanists often draw on Jane Jacobs but are civic planners to their core. The pairing of these traditionally opposing camps (they still are basically at odds over laws that set metropolitan “growth boundaries” or require subsidies within projects for low-income residents) is worthy of note. But as a political force, it is yet to advance beyond a few blue-state legislatures. At ground level, localities from Boston to San Diego are resisting changes in single-family-only zones that keep neighborhoods of a certain flavor (and price). This resistance itself is an amalgam of ideologies–from many of those “red state Republicans” to affluent professionals with Biden-Harris signs in their landscaped front yards. Maybe the phenomenon identified by the Times is one more example of shifting political currents in the country, although it does not reflect class divisions in the way other reorientations do. It really comes down to a simpler old adage: Where you stand depends on where you sit.
A full-page advertisement (there are still a few!) in today’s print New York Times salutes an act of philanthropy but is full of ironies.
The gift is $59 million from the HMO fortune of Leonard Schaeffer and his wife to the University of Southern California, for establishment of a (named for him) Institute for Public Policy & Government Service at USC’s “campus” (building) in Washington D.C.
“Confidence in our political system and our ability to protect democracy are at historic lows,” the ad reads. The gift “will establish a coast-to-coast think tank for bolstering our democracy.” The institute will “train new leaders,” conduct research to “advance public policy proven to improve citizens’ lives” and “serve as a nexus” for “public and private sector leaders, researchers, policy experts and elected officials to exchange ideas and solve global issues.”
So: Another glass-walled urban hive of modern America’s well-degreed class to formulate thinking about why so many of their fellow countrymen do not share the democratic propositions embraced by this elite. This does not seem likely to move the ball in 2024 and thereafter.
For all I know, USC trustee Schaeffer, who was the founding chairman and CEO of Wellpoint, is a worthy citizen–“a recognized expert and published author in health economies and health policy”–and means to contribute here. But with a fortune that derives from the medical-financial sector (Wellpoint is now called Elevance) that has helped alienate so many among the disaffected millions in the U.S., he isn’t the ideal benefactor of a forum for repairing deep social divisions.
Huge naming donations to richly endowed universities are another symbol of the rupture between the establishment and the estranged. Even with $59 million, this latest platform for proper civic intercourse may reach “coast to coast,” but will struggle to connect with a lot of what’s between. –March 3, 2024
Tim W. Ferguson 