Saturday, April 23, 2011

To Rent or To Own

I tell people I have been looking to buy a place for 10 years, and for the most part, it's a true statement. Back after the turn of the century, my good friend Akemi Tinder and I did the dutiful tour through several of Boston's neighborhoods on consecutive Sundays in May, each of us looking to buy a condo. The hunt ended with her settling on a neat South Boston first-floor one-bedroom, with a Jacuzzi on the back patio. It led to me staying right where I am today, where I have always been, in an apartment on Beacon Hill that I always said I would rent until I buy a place.

Around that same time, I decided there was fundamentally something wrong with the real estate market. I visited a mortgage broker (remember them?) who said I could borrow a truly obscene amount of money and would only have to put five-percent or so down on the purchase. Through a home equity line of credit (HELOC), he explained, I could simply hold off paying the standard down payment (20-percent) until the home value increased a few years after a purchase, using the HELOC loan to cover the down payment in the meantime.

"OK so I get it now," I remember saying. "But what happens if the value of the home doesn't go up?"

"Ummm," came the reply from the broker, between condescending chuckles. "They always have, Ross."

The mortgage crash of the past few years, coupled with an American population that is coming to grips with the realities of the current and likely ongoing economic situation, has caused a fundamental rethinking of home ownership in this country, in my opinion. The American dream--indeed, the very inculcated sense of success in this country--has always included owning a home. Cities push for home ownership to promote healthy, vibrant communities. The conventional wisdom is ingrained in us all: You rent when you are either in college, too young to know what you want to do when you grow up, or when you are in a transitional stage in life. Otherwise, you own.

I am not an economist, but the tapestry of problems with the mortgage thing, in my opinion, boils down to two points. First, the mortgage industry has been propped up forever by the government, which created Fannie Mae and Freddie Mac to make it easier for people to get loans (simply put, the government has been willing to take much more risk than the private sector). Second, people are greedy. As one of my favorite authors, Michael Lewis, chronicled so nicely in The Big Short, everyone involved in the mortgage industry was making so much money just a few years ago that they didn't want to admit there was something fishy going on. The were addicted to it, despite the damage it was causing.

Given the crash, it makes sense that banks today would rather not give out any mortgages at all. The rules today put forth by the banks are ridiculous. More fundamentally, banks are not willing to give out mortgages that are not backed by Fannie Mae and Freddie Mac, since the banks want the assurance they can potentially sell the debt to the government-backed entities.

So the government is supporting the industry right now, until the banks get their sea legs again. And no doubt history will repeat itself, with the industry getting greedy once it's back on solid footing, and the government there to support it.

However, our elected officials in Washington are considering getting rid of Fannie Mae and Freddie Mac. Republicans think the industry can support itself, without needing taxpayer assurances. President Obama agrees that the government has too much skin in the housing game, and he agrees that the elimination of Fannie Mae and Freddie Mac is worth discussion. [Note: The New York Times has covered this issue at length.]

If Fannie Mae and Freddie Mac go bye-bye, you can also likely say goodbye to the 30-year mortgage, providing even less incentive for home buying. And let us not forget that our elected officials are also openly discussing tax reform that includes scaling back or eliminating the popular interest deduction, which I am reminded about almost every time I note my reluctance to buy.

With government support, the real estate industry has spent decades promoting the American dream of home ownership. Have you ever heard a real estate agent say it's a bad time to buy? I don't blame the industry, since it's good for business. The concept of ownership in general is uniquely American. One of our government's fundamental tenets is rooted in John Locke's teachings, the concept that we all have a right to life, liberty and property.

But forces today are strongly opposed to home ownership. In addition to legitimate concerns about how the mortgage industry operates, the economic woes of the past 15 years have caused Americans to tighten their belts. As today's New York Times put it:

Instead of wanting the biggest and the newest, even if it requires a long commute, buyers now demand something smaller, cheaper and, thanks to $4-a-gallon gas, as close to their jobs as possible. [New York Times, "Builders of New Homes Seeing No Signs of Recovery," by David Streitfeld. April 23, 2011.]

I would add to the Times assessment that Americans today have a desire or a need to be mobile. The demise of the old-style corporation and the shift away from workers' rights has meant people need to be willing to move, if necessary, to find work. Plus, it's taking longer for younger Americans to settle, which delays their home buying decisions.

Then there is the whole argument about whether a home is a good investment. I think it is, but only if you are planning to stay in the same home-- paying down the mortgage-- for a long time. Say 20 years. The online calculators I have used show that, given modest increases in home values, it takes a dozen years or so for buying a home to be more lucrative than renting one. And of course, no one is expecting even modest increases in home values in the near term.

If America is to become more a nation of renters and less a nation of owners, it will have a profound effect on what we think about our neighborhoods, about our preference for suburbia, and it could dramatically affect the balance between the haves and the have-nots. I don't dispute that. I merely note that given how the mortgage industry has changed forever, given the reality of the lack of growth in family wealth over the past 15 years, and given other factors such as gas price increases, the luster of home ownership is long gone.

I certainly don't profess that any of the reasoning above is why I did not buy a home before the housing crash. That was because I am merely a wimp.

Sunday, April 17, 2011

Bravo Lululemon

Lululemon Athletica front entrance
Boylston Street, Boston
April 17, 2011

As a marketing guy, I am fascinated by oxymoron brands. Take McDonalds. Parents take their kids to McDonalds because kids like to eat the food. But McDonalds' amazing marketing feat, as chronicled in the often overlooked first section of the book Fast Food Nation, is in making parents feel good about bringing their kids to the golden arches. The marketing oxymoron is hidden there: Somehow a company can convince rational grown-ups that shoving fatty food down their kids' throats is good parenting.

Well, my marketing oxymoron award of the year goes to Lululemon. The company sells high-end yoga gear. Really, Lululemon sells sweatpants. Very expensive ones.

Since my friend Annmarie first alerted me to Lululemon's symbol, which resembles an upside-down horseshoe, I have seen Lululemon apparel popping up in my gym. Lululemon has made sweatpants fashionable. And when you consider each pair of sweatpants costs roughly 100 dollars, Lululemon must be making a fortune.

But that alone is not what amazes me about Lululemon's marketing success. What amazes me is that Lululemon seems to make women feel better about working out. My good female friends say that the pants make their derriere regions look better. And here lies the brilliance of the marketing oxymoron. Lululemon makes people feel good about sweating and, in reality, looking horrible.

I have also spotted the Lululemon horseshoe popping up around town, outside the gym. A New York Times story last month outlined how sweatpants are becoming accepted attire in the workplace, too. Psychologically speaking, if Lululemon's pants make you look good in the gym, where everyone looks like disgusting pigs, then they must make people look absolutely fantastic everywhere else.

Today, I visited the Lululemon store on Boylston Street in Boston, behind the new Mandarin Oriental Hotel there. The place was a zoo. Women inside were trying on Lululemon pants and jackets by the armfuls. I made my way to the small (but hardly insignificant) men's section. I admit I got caught up in the madness, forking over 64 dollars to buy a shirt that I am looking forward to wearing to the gym this week. I have a thousand t-shirts at home, but somehow the Lululemon shirt is now at the top of the pile in my closet.

It must have been the sales guy in the store. When I grabbed the shirt, he nodded his head, quickly noting that the shirt was made of some special fabric (the adjective he used for the material began with multi-, but I forget the rest). The key, he explained, was that the fabric cut down on odor.

How about that, a shirt that makes me smell good while I work out. A true miracle, indeed.

My Road to a National Championship

I picked one heck of a year to decide to go all out rooting for the UCONN Huskies. Here's a review of my road to a championship (When your team wins it all, calling it a Road to the Final Four seems so limited).

Round 1: UCONN vs. Bucknell
My location: Verizon Center in Washington, D.C. My brother Brett and I went to the game. Curiously enough, the earlier set of games at the venue featured UCONN's ultimate championship game opponent, Butler, so our "venue" t-shirts purchased in D.C. include the logos of both championship contenders.
Result: UCONN wins 81-52.

Round 2: UCONN vs. Cincinnati
My location: MJ Sports Bar at Mohegan Sun in Uncasville, Conn. After an afternoon within miles of where I grew up, I gathered with good friend Jen Mehigan and a few dozen or so other UCONN fans to watch a victory. On the road to Uncasville, my car crossed the 100K threshold.
Result: UCONN wins 69-58

Sweet Sixteen: UCONN vs. San Diego State University
My location: Kinsale Pub, Boston. The Thursday night game found me back in Boston. For some reason, this game worried me the least of the six.
Result: UCONN wins 74-67

Elite Eight: UCONN vs. Arizona
My location: My apartment in Boston. Why did Derrick Williams not try to drive and take a two on Arizona's last possession? It's a question that will haunt Arizona fans for decades.
Result: UCONN wins 65-63

Final Four: UCONN vs. Kentucky
My location: My brother Mark's house in Moosup, Conn. On one of the final days before his own move to a new condo in Norwich, I stopped by Mark's house, a mere 25 miles or so from the UCONN campus in Storrs. It worked out, as I was at my high school earlier in the night to attend a charity auction organized by my mother. Mark was right: It's much better to listen to sports radio for two hours (during my ride home) when your team wins. Random fun fact: It was the first time a team with a dog mascot played a team with a cat mascot in the Final Four.
Result: UCONN wins 56-55.

National Championship: UCONN vs. Butler
My location: The Hill Tavern, Boston. When UCONN won in 1999, I was at my apartment in Medford, Mass. In 2004, I was at my apartment on Beacon Hill when the huskies won their second championship. This year, I walked three blocks down the hill to my local watering hole. And it was there that UCONN settled the madness.
Result: UCONN wins 53-41.

Saturday, April 16, 2011

My Testimony to the Boston City Council

Ross Levanto
Testimony to Boston City Council (As Prepared)
Committee on Environment and Health
April 14, 2011

I want to thank this committee for investigating an issue that is very important to all residents of Boston. I speak to you today in two roles. First, as a board member of the Beacon Hill Civic Association, and the former chair of that group’s city services committee. Second, as a resident of Beacon Hill who has been investigating cleanliness, and the related issue of recycling, since I moved to the neighborhood in 1999.

The Beacon Hill Civic Association is a strong advocate for investigating ways to increase recycling rates. Adding a day of recycling would provide our neighbors with two days of recycling per week—currently we have one day of recycling and three days of trash pick up. By making recycling more accessible, it follows that recycling rates will increase. At the same time, the association is mindful that adding recycling days requires close investigation by the city and consideration of other circumstances, such as trash and recycling pick up schedules and, of course, costs.

The civic association’s strong support for increased accessibility to recycling dovetails the group’s successful cooperation with the City of Boston on the issue. The civic association has always helped the city to distribute the blue bins and now larger containers that are used to collect recyclables. Current association programs aim at educating our neighbors, whether it be through our email newsletters, by communication to land owners and realtors, or by distributing our own materials and those provided by the city that outline recycling options.

The Beacon Hill Civic Association applauds the single stream recycling program, which has clearly made recycling easier for our residents. We also strongly support other efforts by the city and our elected officials that have helped to keep our streets clean.

I am spearheading an effort by the civic association to investigate the impact of potential changes to our trash and recycling pick up schedules. Let me be clear, the Beacon Hill Civic Association has set no policy regarding any potential changes to the trash pick up schedules. However, we are investigating, in part, whether changes would increase recycling by our neighbors by making recycling even easier. The public works department has been very accessible during this process and is encouraging an open dialogue among the neighborhoods of Boston and City Hall to investigate options that meet the needs of residents, make our streets cleaner, and increase recycling rates.

If I might, I would like to talk to you a bit about my personal thoughts, separate from my official capacities as a board member of the Beacon Hill Civic Association. Fortunately for you (and perhaps unfortunately for me), I have studied the issue of trash and recycling on Beacon Hill for a long time. I have been asking my neighbors to consider reducing the number of trash pick up days on Beacon Hill from three to two, in exchange for having two days of recycling.

In that scenario, we would have recycling and trash pick up on the same two days each week. Other members of the civic association’s city services committee have also asked that the pick up times for trash and recyclables be moved very slightly so that trash pick up can begin at 9 a.m. instead of the current time of 7 a.m. The combination of two days of trash pick up, two days of recycling, and the move in pick up times... I call that 2+2+9.

Germane to today’s hearing, in my opinion, such a move would make recycling easier on Beacon Hill, because there won't be any more confusion as to which day is our recycling day. It will also dramatically reduce the amount of time trash is at the curb. Finally, it will not mean an increase in the number of pick-up runs the city must pay for on Beacon Hill, so hopefully it will not increase the cost to the public works department. By moving the start of pick up to 9 a.m., neighbors can advocate strongly for same-day trash pick up, which will further limit the amount of time trash is at the curb.

As part of my research, I worked with the civic association office to poll young professionals on Beacon Hill. These residents are more likely to live in a small space in our neighborhood and therefore would be the most adversely impacted by changes to trash pick up schedules.

Hot off the presses, here are some of the results of that survey. Less than half of these residents put their trash out on the curb three times a week. Roughly half of these residents recycle regularly. I have also heard comments from some of these and older residents that they end up having much more recycling each week than trash. I have come to the conclusion that these residents would feel an impact from the removal of a trash pick-up day, but that the effect is not overwhelming, and given the propensity of this group to recycle, by adopting 2+2+9, we could actually see a nice increase in recycling volume from younger residents. And I would imagine the impact would be similar to other constituencies throughout the neighborhood.

In summary, thank you again for holding this hearing today. We all know that recycling saves money, helps our environment, reduces landfill use, and in general, is just the right thing to do. And I look forward to working with each of you to put in place policies and processes so that we can increase Beacon Hill resident participation in recycling to 100-percent.

Thank you.

Submitted by:
Ross Levanto
112 Myrtle Street, Apt. 2
Boston, Mass. 02114
April 14, 2011

Wednesday, April 13, 2011

What a Site!

Revere Street,
Beacon Hill, Boston
April 13, 2011

An entire block without a car! This section of Revere Street is ready for the street sweeper. And I can tell you the only reason people moved their cars is the threat of being towed.

Saturday, April 09, 2011

Recycling Front and Center at the Boston City Council

This Thursday, April 14, a Boston City Council committee is hosting a hearing on recycling in Boston. Specifically, City Councilor Mike Ross is interested in adding a day of recycling to current citywide programs, which typically involve one day of recycling in each neighborhood.

Councilor Matt O'Mally chairs the Committee on Environment & Health, which will conduct the hearing, scheduled for 12:30 p.m. on the 14th in the Iannella Chambers at City Hall.

I plan to attend the hearing and will provide the committee with my thoughts. The timing of the hearing is ideal for me, as I have been working with the Beacon Hill Civic Association (BHCA) to investigate the current state of trash and recycling pick up on Beacon Hill. The BHCA is right now conducting a survey of its younger residents on their trash and recycling tendencies, as those residents would be affected significantly by changes in trash pick up policies. It's just part of the research we are conducting.

I have had quite a blast with the BHCA research project, which I hope to conclude during the summer with recommendations to the BHCA's City Services Committee. And I plan to give a high-level review of what I have found so far during the committee meeting Thursday. Much more to come on this blog, too.

Healthcare Reform Saves Money

The Boston Ward 5 Democratic Committee hosted a very informative forum this past Tuesday on federal healthcare reform. Representatives from the state joined local activists at the event.

I was able to ask the one pressing question I have had about reform: Where will the cost savings come from. A little reported fact about federal healthcare reform is that it is projected to save money long term. It's always been a bit confusing to me as to where those savings will come from.

On Tuesday, Daniel Delaney, who's from the Mass. Dept. of Public Health, answered my question. A significant amount of savings in the federal reform comes from changes to Medicare, specifically the rates that Medicare will pay doctors. A red flag here: These rates typically are scheduled to change to save money every year, except Congress typically passes laws that override the changes. It will take courage in D.C. to keep this part of reform intact.

Separately, cost savings come from routine care. If people get regular checkups and are friendly with their doctors, they will make less visits to the emergency room. It's a logical thought. The key is that a visit to the emergency room-- which is the only route to healthcare for many without insurance-- is the most expensive option. And for those without healthcare it's an option that is generally paid by the taxpayer.

I work in the communications field, and I believe that there are cost benefits to better logistics and communications within the system. If doctors better communicate with one another, they will provide better and more cost-effective care. Hence the rise in use of electronic medical records (My doctor now carries a laptop, and not a clipboard, into our sessions).

Further, there was a lot of talk when healthcare reform was passed about how costs can go down if we change how healthcare is delivered. Teams of doctors working together to keep people healthy--paid with an annual salary-- would be far less expensive than paying doctors by treatment. But we're a long way from that concept here in the United States.

Sunday, April 03, 2011

I miss Brent Musburger

Last night I was in Moosup, Conn. with my brother Mark watching UCONN beat Kentucky to advance to the NCAA national championship. As the crow flies, I was a mere 30 miles from Storrs and the UCONN campus.

Mark and I both thought that CBS's coverage of the NCAA Final Four, in general, stunk. We both remember the days when Frank Fallon, longtime Final Four announcer, introduced both teams. The player introductions were staggered, with the starters at each position announced, back and forth, until all ten starters were given their praise.

For some reason, CBS has decided to turn the Final Four into the Superbowl, with Jim Nantz introducing the teams to fanfare fitting an NBA game. And there were these weird video montage intros for each club when UCONN played Kentucky.

It made us long for Brent Musberger. He was the CBS announcer in the late 1980s when I became a college basketball fan. Last night, Mark and I recounted his most memorable calls, like his award-winning performance in the 1988 NCAA final, which pitted underdog Kansas against Oklahoma:

"They've come to the summit, and both of 'em are playin' like champions."

"Billy, you think he might have taken it to the Twilight Zone?" [Reference to partner Billy Packer's comment before the game that certain underdogs, like Kansas, had played in a "Twilight Zone"-like way in the 1980s.]

"And there is Blaylock; Those hands are so quick, they could catch flies." [Reference to a steal by Oklahoma guard Mookie Blaylock.]

"Bedlam reigns in Kansas City, as the Jayhawks beat the Sooners 83-79."

Mark pointed out that in the years since Jim Nantz took over for Musberger, we can't remember one of Nantz's calls. And yet here we are 23 years removed remembering several Musberger calls from one game in 1988.

Oh Brent, where have you been?

Below is the starting lineup introductions from that game back in 1988. I watched it at home at age 12.

Saturday, April 02, 2011

100K Miles Traveled

Thompson, Conn.
March 19, 2011
(Photo credit: Jen Mehigan)

My car, a 2004 Honda Accord, crossed 100,000 miles on the morning of March 19 on Route 395 in Thompson, Conn., just a few miles south of the Massachusetts border. My friend Jen Mehigan, who thankfully was in the car with me, took the photo above.

My car has been as far south and west as Morgantown, W.V. and as far north as Montreal, Canada. Fittingly, on the day it crossed the millennium threshold, I was on "The Road to the Final Four," traveling to Mohegan Sun to watch the NCAA Tournament.