Sprawl

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Rich
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Re: Sprawl

Postby Rich » September 30th, 2014, 11:40 am

FISHMANPET wrote:That's YOUR choice, and that's how you DECIDE to live your life
Speaking for myself and most of my friends and neighbors, the primary reason we live in our suburb is to be closer to our places of employment. It’s much less a lifestyle choice than it is one of practicality. Jobs are what brought us here, not the pursuit of “suburban life.”

go4guy
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Re: Sprawl

Postby go4guy » September 30th, 2014, 11:48 am

Fishmap, you are the very person who vilifies people for living in the suburbs. You appear to think that people who live in the city are better than those who live in the suburbs. I get that you love your urban livestyle. Good for you. Not everyone does. And if this isnt your belief, I apologize. But it sure comes off that way.

Have you ever bought a house before? Do you know what goes into that? You can buy more house if you live in the city than if you have more costs living in the suburb. It isnt a hard set rule of 30% DTI. You can go up to 45% DTI if you can make an arguement for it, and if you budget yourself accordingly. So I am not sure why this made up program you are proposing needs to happen.

And I get that you think people in the suburbs need to bear more of the cost. I get that. But you are going about it the wrong way. You are trying to make them pay more thru rediculous means. A mortgage is not the way to make suburbanites pay more.

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FISHMANPET
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Re: Sprawl

Postby FISHMANPET » September 30th, 2014, 11:57 am

Show me where I said that suburban mortgages should be more expensive (or since we're talking about how much house someone should be able to qualify for, where I said suburbanites should qualify for less house specifically).

RailBaronYarr
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Re: Sprawl

Postby RailBaronYarr » September 30th, 2014, 2:00 pm

Rich wrote:Speaking for myself and most of my friends and neighbors, the primary reason we live in our suburb is to be closer to our places of employment. It’s much less a lifestyle choice than it is one of practicality. Jobs are what brought us here, not the pursuit of “suburban life.”
Isn't everyone advocating for this here on the same page that this would be a good indicator of lower financial risk, at least on the onset? Great for the folks living in EP and working in EP with a 6 mile commute. It may very well be that this person will stay at that job for 4-8 years (or whatever the average for that a person of that age, family condition, and industry is). In the meantime, this living situation still requires at least one car, if not 2 for the family (maybe more if the kids are of age). That comes with a fixed cost and the banks should be well within their right to evaluate that, even if total miles driven in a year is less than someone living in Faribault but working downtown Mpls (yes! it happens!). And when they decide to leave their job (or are let go against their will, as will happen), they have access to X% of metro area jobs within that same distance commute and 1-X% outside that range with $YY added transportation costs. It's all a model to say what the liklihood of payback is.

And yes, a single 45 year old buying a house should likely be able to afford more in the bank's eyes than a 26 year old couple with a kid, household income holding steady. Kids come with fixed costs like clothes and food (and daycare if you're committing to have both parents' income be on the mortgage). Why can't a bank say you're a higher risk than someone who has a 5% chance of marrying and having kids?

go4guy
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Re: Sprawl

Postby go4guy » September 30th, 2014, 2:35 pm

For the record. If you own a car, and have a car payment, your car payment is factored into your Debt to Income Ratio. So, it is accounted for.

What if I dont have cable and internet. That is $200 a month right there. Why cant the bank factor that into the decision process?

Someone in EP could just as easily bike to work and the grocery store as someone living in Uptown.

grant1simons2
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Re: Sprawl

Postby grant1simons2 » September 30th, 2014, 2:51 pm

Someone in EP could just as easily bike to work and the grocery store as someone living in Uptown.
Agreed, but I feel like this isn't the point. I feel like this is more about people who want to go to the cities mostly have to drive, which creates a need for a highway system mostly. If there was never sprawl though a few of bad things would happen. There is not much room left in Minneapolis to build housing, really not much of any at all, most spaces can only build up to be efficient. I don't think Victoria or Savage should be growing at all, that is what I consider sprawl, Eden Prairie just does not seem too sprawly because it borders Edina and from some parts of Eden Prairie it is only 8 miles from the Minneapolis borders.

xandrex
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Re: Sprawl

Postby xandrex » September 30th, 2014, 2:53 pm

RailBaronYarr wrote:And when they decide to leave their job (or are let go against their will, as will happen), they have access to X% of metro area jobs within that same distance commute and 1-X% outside that range with $YY added transportation costs. It's all a model to say what the liklihood of payback is.
Because my afternoon is pretty quiet, I've been thinking more about this topic. I'll reiterate that I generally think we can actually make such a system work, but there are a few more kinks/things to work through:

If we can only use housing as a proxy for determining transportation costs, therefore determining some sort of mortgage bonus (and assuming we can't simply use proximity to job since jobs move):

1. Fixed transportation costs (car payment, insurance) don't decrease by living in an urban area (in fact, your insurance premium may jump). Because of that, you're likely to only really reap gains if you eliminate a car from a two-car household or, as a single person/couple, go car free. But does eliminating one or all of your cars not eliminate your ability to get to X% of jobs? With no car as a single person, the bank could weigh the the fact that you now have to rely on transit. A couple with one car would carry the added risk that in the future two of them would need to reach their job by car but only have one available. My cousin and his family (wife and two daughters) have essentially lived more or less car free for years now. They can mostly function without one since they live in St. Paul, but as he was getting ready to get a school placement for his masters program, he had to let them know that his job had to be within biking distance or along a bus line. Surely that limits him greatly, despite being in the core (though obviously he's in a better position than if he was living in Woodbury with the same requirements).

2. With this same logic, could the bank make decisions based upon the fact that not only does a person not have a car, but they also never learned to drive? In a case like that, it's not like they can simply get a car loan. They actually have to take classes and do behind the wheel and such. That's certainly a risk.

3. And if we've opened a can of worms where we weigh all sorts of things (the house's proximity to urban areas, if a couple has kids, etc.), should we not also be weighing what type of job they have? If you work in logistics and warehousing, there's a pretty good chance that you are going to be working in the suburbs (or exurbs), for instance. With years on the job comes expertise and honing a craft that can't always be carried over to other jobs. Does this mean mortgages should weigh the risk that should you lose your job, you'll end up in a workforce development class?

4. Frankly, I think the biggest obstacle is that people have a really hard time thinking with their heads when it comes to housing. And a lot of people are also misled, misinformed, or sometimes plain stupid. A lot of people overreached with their housing during the height of the bubble. Most people aren't experts on finances or housing. So when a banker giving you a mortgage says you can afford this amount and to not worry about your that ARM or your realtor smiles and tells you that you just have to spend a little bit more to get the house you want...it's really hard to just say no. I'm fairly financially savvy and I still have trouble sticking to a budget, even if I know I can only spend so much. In that sense, I'm wary of giving people another way to spend more money when there are definitely parties involved that are invested in getting more dollars out of everyone's pockets.

RailBaronYarr
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Re: Sprawl

Postby RailBaronYarr » September 30th, 2014, 3:00 pm

go4guy wrote:For the record. If you own a car, and have a car payment, your car payment is factored into your Debt to Income Ratio. So, it is accounted for.
Sure. Unless you own junker cars outright with no payment but will need to purchase one in the future. Or buy a larger one if you end up having kids. Still seeing why you're cool with the bank knowing that at the moment you have a car loan but not saying that a home/work combo could mean not having to own (+ insure/maintain/fuel) one means a shift in the H/T balance.
go4guy wrote:What if I dont have cable and internet. That is $200 a month right there. Why cant the bank factor that into the decision process?
Maybe they do already? I don't know. They don't ask us to contractually say we'll cap our discretionary expenditures at $YYYY per month, which would be the only way to prove you were serious about something like that. They use general formulas based on as much detail about you (and people like you across the country) they have to say what amount of house you can afford.
go4guy wrote:Someone in EP could just as easily bike to work and the grocery store as someone living in Uptown.
Sure, they could. Some do. But most don't. Land use patterns that drive distances up, transportation networks that inhibit walking/cycling (for anything other than recreation), the availability of free parking, etc all vastly increase the likelihood of car ownership and use. Again, why would it be a bad thing if the banks offered up an option for would-be suburban home-buyers to state they only have one car and will only have one family car throughout the course of the mortgage in exchange for higher purchasing power? Why would it be a bad thing if they used the law of averages to allow this higher purchasing power in areas where you're more than likely going to walk/bike/bus places every day? Given the huge economic consequences of the housing collapse, fueled at least partially by an inability to make good on payments thanks to total household expenditures (that includes cars!), why would a shift in the rules that identifies auto-depended exurbs as having a higher chance of the burden of 2+ household cars and limit their (banks') risk accordingly?

Rich
Rice Park
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Re: Sprawl

Postby Rich » September 30th, 2014, 3:08 pm

RailBaronYarr wrote:Isn't everyone advocating for this here on the same page that this would be a good indicator of lower financial risk, at least on the onset? Great for the folks living in EP and working in EP with a 6 mile commute. It may very well be that this person will stay at that job for 4-8 years (or whatever the average for that a person of that age, family condition, and industry is). In the meantime, this living situation still requires at least one car, if not 2 for the family (maybe more if the kids are of age). That comes with a fixed cost and the banks should be well within their right to evaluate that
Yep. I agree that banks should analyze each household’s financial prospects however they see fit, using whatever data applies. Living in the burbs can be expensive and that should be taken into account. I’m just trying to counter the notion that those who settle in the suburbs have made a socially irresponsible decision, and must therefore suffer some additional penalty above and beyond what the market has already dished out.

RailBaronYarr
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Re: Sprawl

Postby RailBaronYarr » September 30th, 2014, 3:13 pm

xandrex wrote:Because my afternoon is pretty quiet, I've been thinking more about this topic. I'll reiterate that I generally think we can actually make such a system work, but there are a few more kinks/things to work through:

...
Very good points. This comparison certainly lends credence to the notion that (today, thanks to 1) years of highways and people/businesses moving out of the core that very well may have stayed in Minneapolis, and 2) not so great transit service) even a person living in the Wedge today with no car (or one family car) has about the same overall job accessibility by transit as someone living in Chanhassen, Burnsville, southern Eagan, etc with 2 family cars. Of course, job accessibility may just be a proxy for how long it will take to get hired again, or it also could mean something for what your wages will be (firms competing for you, etc). Either way, that should account for something, though. And I'm sure if it had for the past 60+ years we'd see a different resulting transportation network. But, in the here and now, perhaps it wouldn't really make a difference, and folks looking for homes in the EPs, Edinas, Bloomingtons of the world would be better served financially by owning 2 cars.

I'd say having a valid driver's license is proof you learned to drive, so easily solved. I'd also say a bank should be able to use your education and job history as predictors of what types of jobs you may have in the future (and where they're located, maybe even the outlook for those industries 20-30 yrs out). Is that really all that terrible? We're talking about banks lending out hundreds of thousands to people, then securitizing those loans to be sold off to other investors around the world. As we've seen, poor risk mitigation has some serious consequences.

Your last point is a good one, obviously. If there's no teeth to the whole "live urban, forego the car, and buy your dream home!" then it may actually be more of a risk to the banks. But more or less risk than "buy a house in a location where you're almost guaranteed to drive 20,000 miles a year as a family with no worries of rising gas prices, etc!"

mattaudio
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Re: Sprawl

Postby mattaudio » September 30th, 2014, 3:13 pm

I said it much earlier in the thread, but it appears to have been missed by those arguing about if this is a debate on the moral standing of living in a particular type of area. I've attended sessions on these efforts at CNUs, and I've only ever heard of using aggregate data for these. So it's not really the "can this person pay this back" part of the underwriting decision, where they care about personal details. It's the "is this investment going to maintain its value and provide a low-risk income stream" part of the underwriting equation. Completely different discussion.

grant1simons2
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Re: Sprawl

Postby grant1simons2 » September 30th, 2014, 3:15 pm

Sure, they could. Some do. But most don't. Land use patterns that drive distances up, transportation networks that inhibit walking/cycling (for anything other than recreation),
Which is why I'm working with the city to put bike lanes in on overly large streets. For instance Dell Rd is wide enough for 2 lane but is only one. And the green spaces on either side are also large, we're talking about cutting in better those 2 and putting in a protected lane.

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Nick
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Re: Sprawl

Postby Nick » September 30th, 2014, 3:19 pm


ECtransplant
US Bank Plaza
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Re: Sprawl

Postby ECtransplant » September 30th, 2014, 4:06 pm

And that is why you should need a license to procreate

David Greene
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Re: Sprawl

Postby David Greene » September 30th, 2014, 10:27 pm

ECtransplant wrote:And that is why you should need a license to procreate
I have actually considered doing exactly what that dad did but didn't because, y'know, food. It is enormously frustrating to not have changing tables in a Chipotle of all places. Rice and beans is like the perfect 1yo food. If you don't have kids you really can't understand what a tremendous pain in the rear it is to change a diaper in a car. I've repeatedly talked to Chipotle managers about their lack of what is today basic customer amenities and I've never gotten more than a shrug.

Snelbian
Rice Park
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Re: Sprawl

Postby Snelbian » September 30th, 2014, 10:48 pm

It's nearly as frustrating when I know that the store I'm in DOES have changing tables...in the womens' restroom.

grant1simons2
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Re: Sprawl

Postby grant1simons2 » September 30th, 2014, 11:04 pm

I think they're changing that in the new law they passed on non gender bathrooms

David Greene
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Re: Sprawl

Postby David Greene » September 30th, 2014, 11:13 pm

Snelbian wrote:It's nearly as frustrating when I know that the store I'm in DOES have changing tables...in the womens' restroom.
Yep, that's almost worse than not having any at all!

mplsjaromir
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Re: Sprawl

Postby mplsjaromir » October 2nd, 2014, 10:01 am

I am not too sure where to post this, but Streetsblog has a piece about a group in Wisconsin that took WIDOT to task on their ludicrous traffic forecasting. Maybe something similar could be done here.

http://streetsblog.net/2014/10/02/deran ... 3-billion/

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FISHMANPET
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Re: Sprawl

Postby FISHMANPET » October 2nd, 2014, 10:09 am

Hmm, I'm sure their premise is correct, but they keep saying "outliers excluded" and I don't know what that means. Did they remove every road from their data that doesn't support their claim?


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