Notorious R.O.B. – Conversations on Marketing, Technology, Real Estate

My friend John is moving from Cambridge, MA to some tiny little town on the Illinois/Iowa border whose name I can’t remember — possibly because I don’t believe he ever told me.  The move is on account of his academic wife getting a job at the local college — and seriously, if you think you’ve got it bad on the employment front, you have no idea until you start looking for a job teaching anthropology.

In any case, the very first thing he said to me as he was mournfully relaying the news was, “There’s not a Starbucks or a Whole Foods for at least a hundred miles around.”

I was reminded of this when I saw this cartoon from gapingvoid (whom I love, incidentally):

What I couldn’t figure out was whether Hugh was making fun of the small town guy or the big city yuppie fuck.

For one thing, it seems… highly ignorant to blithely assume that Small Town, USA doesn’t have a cafe that serves iced lattes.  Is the idea that rural areas and small towns are populated exclusively by uncultured dumbasses?

For another, and relevant for blog like this one, is the notion that one would move from some metropolis to Small Town, USA, and still expect to have everything one had in the big city.  What kind of a provincial moron thinks that?

My wife and I talk all the time about leaving the rat race behind, finding some lovely Small Town, USA, and moving there.  We know we would have to leave some of the things we take for granted behind.  Not many Small Towns have the opera, for example.  Perhaps the selection of restaurants will be limited. Maybe finding gourmet cheeses will be more of a challenge.

But one thing we’re pretty sure of is that we wouldn’t be walking around Small Town, USA going, “Where the hell is Whole Foods?”  That strikes me as provincialism of the worst sort.

Furthermore, my time in real estate has afforded me the ability to meet some of the most sophisticated, worldly, intelligent, and savvy people from all kinds of Small Town, USA’s.  One woman I remember clearly was one of the best-dressed people I have ever met, who would have fit in perfectly in any chablis-and-brie gathering in the Upper East Side of Manhattan.  She carried herself with an innate grace, wit, and culture and was the COO of the dominant commercial brokerage in her local market in rural Alabama.

I’m frankly not sure where the provincialism of the cityfolks comes from.  I just can’t imagine it’s anyplace good.

-rsh

Courtesy of Zillow’s blog, we hear about the economically depressed city of Youngstown, OH razing thinly populated neighborhoods in order to save on public services costs to the area. There are lots of reasons to do this — abandoned homes can become a base for crime, drugs, and other naughty activities that civilized society frowns upon. And I’m not opposed to the “Honey, I Shrank the City” movement.

On the other hand… I’m just wondering…

Why not try homesteading?

And I don’t mean the modern definition of the term that refers to bunch of neo-hippies practicing some “back to earth” sustainable living type stuff. I mean the original, 1862 version of the word homesteading.

The 1862 Homestead Act required that the claimant “improve” the land he was claiming, and stay there for five years. At the end of that period, the land was his free and clear.

A homesteader had only to be the head of a household and at least 21 years of age to claim a 160 acre parcel of land. Settlers from all walks of life including newly arrived immigrants, farmers without land of their own from the East, single women and former slaves came to meet the challenge of “proving up” and keeping this “free land”. Each homesteader had to live on the land, build a home, make improvements and farm for 5 years before they were eligible to “prove up”. A total filing fee of $18 was the only money required, but sacrifice and hard work exacted a different price from the hopeful settlers.

This was an amazing chapter in the history of the United States. Former slaves, freed by the Civil War, could become landowners. New immigrants, women, the poor — all had a real shot at making a life for themselves and achieving the dream of landownership.

Why not again today?

Suppose Youngstown were to simply condemn the houses, then hand out title to any U.S. citizen who claimed a property, with some conditions, similar to the one in the 1862 law.

• You must stay in the residence for at least five years.
• During your stay, you must maintain the house in reasonable condition and not engage in any illegal activities in the house.
• It must be your primary residence for those five years.
• You must pay all property taxes and government fees associated with homeownership, such as for trash removal, water and sewage, etc.

At the end of five years, title to the house belongs to you free and clear.

If there is a homelessness problem in this country, rather than continuing to invest in public housing, why not encourage (in the most radical way possible) private homeownership for the poor?  Imagine a poor family suddenly having title to their own house after five years.  What can they do with that?  If the economy turns around because of an influx of people, businesses start up again, jobs start to get created, and the value of the property becomes something substantial… those people might have a real nest egg for retirement, or use the equity in the house to start a business or go to college or whatever else they want.

And Youngstown wouldn’t just have a reduced cost for services, but a higher tax base as well.

Rather than embracing defeat and shrinkage, a city faced with the blight of mass foreclosures can actually revitalize their entire economic base simply by giving away abandoned houses.  The “owners” are not likely to be complaining, seeing as how the alternative is to have the property razed and turned into a public park or some such.  After Kelo, I can’t see how this sort of program would not pass muster, especially as it pertains to abandoned homes in blighted areas.

What am I missing here?

-rsh