“When you find yourself in a hole, the best thing you can do is stop digging.”- Warren Buffet
The taxpayers of Oregon have had an ugly elephant on their backs for years – it is called the phony “dreams and aspirations” of toxic City of Molalla. Molalla has wedged itself into the negative hole of all holes. Molalla just keeps begging for more grant WELFARE money to try to pull itself out of its financial disaster. JUST SAY NO!
The City of Molalla has a bunch of laughable Kings and Queens – TEAM and the City Council – who worship at the throne of the sunk cost effect. That false god, the sunk cost effect, led to gigantic planning financial losses and to the current “we can outgrow” our financial disasters if we keep tossing the losing dice long enough (including proposing to “study” an insane truck bypass to get to CONTAMINATED LAND and retaining the “you must be kidding me” loser lawyer Crean! How could ANYONE have the guts to post “advice” from Crean in the current City Council agenda – does anyone connected with Molalla “leadership” have an IQ above 50?):
“The sunk cost effect is the tendency to persist in an endeavor once an investment of effort, time, or money has been made. This is problematic because it often leads to emotional rather than rational decision-making. We know [rationally] that “sunk costs” (past investments that are now irrecoverable) are irrelevant to decision making. Sunk costs are the same regardless of the course of action that we choose next. If we are to evaluate alternatives based solely on their merits, we should ignore sunk costs. We’d be better off making the decision by weighing future gains and losses. Yet, the more we invest in something (financially, emotionally, etc.) the harder it becomes for us to give up on that investment.” (http://financialtip.blogspot.com/2007/06/sunk-cost-effect.html)
We now breathlessly await the newest WALK OF SHAME November foreclosure rate for low quality Molalla (google “realtytrac foreclosures 97038” for the current fun list of 118 properties awaiting auction and be sure to note the gigantic loss of equity). There’s a great op-ed coming up below about THE DEATH OF THE FRINGE SUBURB (just insert MOLALLA in place of “suburb”) that the greedy fools who pretend there is an economic future in Molalla don’t want you to read. That “DEATH” article explains exactly why Molalla is an epicenter of foreclosures.
TEAM’s glib lobbyist (can it be true that she is soon moving on to greener pastures – can we be THAT LUCKY?) continues to pimp for business people who, by and large, don’t even live in Molalla. TEAM’s bandits grab funds from reluctant businesses, allegedly to “promote” the local economy, but really just to further the “cost sunk” effect. Even pathetic Christmas decorations can’t hide from us all the “boarded-up and vacant strip malls, surrounded by vast seas of empty parking spaces.”
What the glib lobbyist for TEAM doesn’t want you to know is that “These forlorn monuments to the real estate crash are not going to come back to life, even when the economy recovers. And that’s because the demand for the housing that once supported commercial activity in many exurbs isn’t coming back, either.”
Molalla – at least thirty LONG AND EXPENSIVE miles from REAL JOBS, REAL SERVICES, REAL INTERSTATE TRANSPORTATION CONNECTIONS, A REAL WORK FORCE, REAL STORES, REAL ENTERTAINMENT, REAL QUALITY NEIGHBORHOODS, REAL DIVERSE TRANSPORTATION, REAL PARKS, REAL DECENT SCHOOLS, AND GREAT RESTAURANTS – has only a LONG COMMUTE AND TANKING HOUSING VALUES TO OFFER.
Clearly, any “recovery efforts” for Molalla are a primer for the cost sunk effect!
TEAM’s lobbyist – TEAM’s pimp for for hiding the clear trends, a junky for the cost sunk effect – could mouth all the lies on earth but she can’t change the FACT that “It was predominantly the collapse of the car-dependent suburban fringe that caused the mortgage collapse.”
TEAM can’t change the massive oversupply of homes in 97038 created by the DICTATOR MAYOR via his fake planner. TEAM can’t hide the sleazy low quality of life in fringe Molalla with is glut of tanking foreclosures.
Molalla is face to face with its abject failure to accept PROVEN demographic trends. Molalla must accept that the cost sunk fixation of its pathetic “leaders” is a disaster because “Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey. This lack of demand all but guarantees continued price declines. Boomers selling their fringe housing will only add to the glut.”
We laugh watching the Cost Sunk addicted City Council grapple with “should we or shouldn’t we” approve the ridiculous and unneeded apartment/commercial Hart Street complex that would simply add to THE GLUT OF RESIDENTIAL HOUSING AND TO THE GLUT OF COMMERCIAL SPACE. Given the failure of the Molalla City Council to grasp any FACTS, god only knows what dumb outcome will come from the Hart Street million dollar waiver.
Hello, City Council: READ ABOUT THE COST SUNK EFFECT! Or shall we just line you all up for a photo in front a shuttered storefront and market a “COST SUNK GANG OF FOOLS” poster?
Whatever the Ship of Fools “decides” we can expect a further hemorrhage of public money – that’s about the only “work” that comes out of Molalla. It is the COST SUNK EFFECT center of the universe. We’ll all just sit back and watch SINKING SHIP MOLALLA till the money runs so far into deficit spending that maybe someone will wake up from their “let’s spend ourselves silly just to see what happens” gambler’s binge.
COST SUNK EFFECT: REDUX AND REDUX AND REDUX AND REDUX AND REDUX… times infinity it seems! Hello bankruptcy! Hello stuck in decay!
Nope! Maybe the horse has a good reason for being stuck in a hole but the “leaders” of Decayville have no EXCUSE for any more of their bad judgment calls that squander public funds on “what ifs” or for further decisions based on the cost sunk effect. There’s ZERO ROOM FOR WASTE these days.
Willamette Week just ran a revealing story about how tight the intercity PDX rental market – people are falling all over each other to live in the walkable, bikeable, mass transit friendly intercity:
The demand for housing in inner PDX is reflected in the Death of the Fringe article: “Today, the most expensive housing is in the high-density, pedestrian-friendly neighborhoods of the center city and inner suburbs… The good news is that there is great pent-up demand for walkable, centrally located neighborhoods in cities like Portland, Denver, Philadelphia and Chattanooga, Tenn.”
What was stunning in the Willamette Week article is that those desperate renters consider places like Gladstone, Oregon City and Gresham too far out in the fringes to be in their target rental area – where does THAT leave way, way off in the fringes Molalla? It leaves Molalla with piles of rentals up for grabs and no hope for sound reinvestment: “”Many drivable-fringe house prices are now below replacement value, meaning the land under the house has no value and the sticks and bricks are worth less than they would cost to replace. This means there is no financial incentive to maintain the house; the next dollar invested will not be recouped upon resale. Many of these houses will be converted to rentals, which are rarely as well maintained as owner-occupied housing. Add the fact that the houses were built with cheap materials and methods to begin with, and you see why many fringe suburbs are turning into slums, with abandoned housing and rising crime.”
Take a look at the growing piles of rental ads in the local paper, the apartment rentals are piled up like cordwood in all the local “fringe cities – and Molalla is by far the farthest out on the “fringe”! When Molalla got its Motel 6 Barracks (StonePlace Apts) a couple of years ago, StonePlace started advertising that it was “Section 8” friendly almost immediately.
That’s just the demographic trend “Death of the Fringe” outlines.
And, worst of all, foolish TEAM, always with its hands out for public money like a city on welfare, fails to understand that in the age of PEAK OIL location is EVERYTHING. Every extra mile to a job or every extra mile for a business to truck raw materials in and finished goods out is MONEY WASTED. Anyone who can read economic trends knows that “It was predominantly the collapse of the car-dependent suburban fringe that caused the mortgage collapse.”
So read up on the FACTS for a change, TEAM and “leaders” of Molalla. Get your heads out of your asses and accept what the future really holds for FRINGE MOLALLA. Here’s the poster of the “leaders” of Molalla (Let’s market it along with the BOYCOTT MOLALLA: IT’S TOXIC bumperstickers!):
Beware GREEDY, BROKE, LUNATIC FRINGE MOLALLA, the land of “we don’t want to hear no FACTS”!
November 25, 2011
The Death of the Fringe Suburb
By CHRISTOPHER B. LEINBERGER
DRIVE through any number of outer-ring suburbs in America, and you’ll see boarded-up and vacant strip malls, surrounded by vast seas of empty parking spaces. These forlorn monuments to the real estate crash are not going to come back to life, even when the economy recovers. And that’s because the demand for the housing that once supported commercial activity in many exurbs isn’t coming back, either.
By now, nearly five years after the housing crash, most Americans understand that a mortgage meltdown was the catalyst for the Great Recession, facilitated by underregulation of finance and reckless risk-taking. Less understood is the divergence between center cities and inner-ring suburbs on one hand, and the suburban fringe on the other.
It was predominantly the collapse of the car-dependent suburban fringe that caused the mortgage collapse.
In the late 1990s, high-end outer suburbs contained most of the expensive housing in the United States, as measured by price per square foot, according to data I analyzed from the Zillow real estate database. Today, the most expensive housing is in the high-density, pedestrian-friendly neighborhoods of the center city and inner suburbs. Some of the most expensive neighborhoods in their metropolitan areas are Capitol Hill in Seattle; Virginia Highland in Atlanta; German Village in Columbus, Ohio, and Logan Circle in Washington. Considered slums as recently as 30 years ago, they have been transformed by gentrification.
Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.
The shift is durable and lasting because of a major demographic event: the convergence of the two largest generations in American history, the baby boomers (born between 1946 and 1964) and the millennials (born between 1979 and 1996), which today represent half of the total population.
Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town, according to a recent survey by the National Association of Realtors.
The millennials are just now beginning to emerge from the nest — at least those who can afford to live on their own. This coming-of-age cohort also favors urban downtowns and suburban town centers — for lifestyle reasons and the convenience of not having to own cars.
Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey. This lack of demand all but guarantees continued price declines. Boomers selling their fringe housing will only add to the glut. Nothing the federal government can do will reverse this.
Many drivable-fringe house prices are now below replacement value, meaning the land under the house has no value and the sticks and bricks are worth less than they would cost to replace. This means there is no financial incentive to maintain the house; the next dollar invested will not be recouped upon resale. Many of these houses will be converted to rentals, which are rarely as well maintained as owner-occupied housing. Add the fact that the houses were built with cheap materials and methods to begin with, and you see why many fringe suburbs are turning into slums, with abandoned housing and rising crime.
The good news is that there is great pent-up demand for walkable, centrally located neighborhoods in cities like Portland, Denver, Philadelphia and Chattanooga, Tenn. The transformation of suburbia can be seen in places like Arlington County, Va., Bellevue, Wash., and Pasadena, Calif., where strip malls have been bulldozed and replaced by higher-density mixed-use developments with good transit connections.
Reinvesting in America’s built environment — which makes up a third of the country’s assets — and reviving the construction trades are vital for lifting our economic growth rate. (Disclosure: I am the president of Locus, a coalition of real estate developers and investors and a project of Smart Growth America, which supports walkable neighborhoods and transit-oriented development.)
Some critics will say that investment in the built environment risks repeating the mistake that caused the recession in the first place. That reasoning is as faulty as saying that technology should have been neglected after the dot-com bust, which precipitated the 2001 recession.
The cities and inner-ring suburbs that will be the foundation of the recovery require significant investment at a time of government retrenchment. Bus and light-rail systems, bike lanes and pedestrian improvements — what traffic engineers dismissively call “alternative transportation” — are vital. So is the repair of infrastructure like roads and bridges. Places as diverse as Los Angeles, Phoenix, Salt Lake City, Dallas, Charlotte, Denver and Washington have recently voted to pay for “alternative transportation,” mindful of the dividends to be reaped. As Congress works to reauthorize highway and transit legislation, it must give metropolitan areas greater flexibility for financing transportation, rather than mandating that the vast bulk of the money can be used only for roads.
For too long, we over-invested in the wrong places. Those retail centers and subdivisions will never be worth what they cost to build. We have to stop throwing good money after bad. It is time to instead build what the market wants: mixed-income, walkable cities and suburbs that will support the knowledge economy, promote environmental sustainability and create jobs.
Christopher B. Leinberger is a senior fellow at the Brookings Institution and professor of practice in urban and regional planning at the University of Michigan.
A link to another great article about the changing demographics of America “How History Killed the Suburb”: