Notes From My Journal
On April 16, 2007, I wrote this in my journal: Rents are expected to go up in 2007. This would be the third year in a row. The rise is projected to be 5% this year for a 14% total rise since 2004, a report by Marcus & Millichap said. That compares to a 4% increase in pay. Over the same period, adjusted for inflation. Marcus & Millichap says this situation will make housing more difficult to find, especially in the coastal cities. They predict the trend will continue for another three years. From 2000 to 2004 landlords couldn’t raise rents, USA Today said, because tenants were leaving to buy houses or condos. To feed that buying frenzy, about 300,000 apartments were converted to condos for sale in the past 3 years. Now, even with 92,000 new rental units this year, the stock is still too little to meet the rising demand. New York City is one of the worst. There rents have increased 7% in the last year. The national median rent will be $943 a month, which is 60% of the median mortgage payment of $1,566. Renters will get a break in Miami, Las Vegas and San Diego, where investors bought up thousands of condos hoping to flip them. Since the market faltered, many of those investors will need to drop rents to help them pay expenses or will be forced to sell them at steep discounts.
That was then.
This is now…
Since 2010, housing supply has increased considerably. Thousands of new units have been built and so the market for rentals has slowed. My partners and I have been selling our single-family holdings in favor of small-to-medium apartment buildings (8-50 units). And though we have seen some evidence of prices going down, it’s mostly on properties that were priced too high to begin with. As a result, we’ve had a tough time finding buildings in our general price range (up to 8 times gross rents).
Today’s Word: career (verb)
To career (kah-REER) is to go at top speed. As in “We careered toward the embankment.” Note: “Careen” means much the same thing.
“Compassion is probably the only antitoxin of the soul. Where there is compassion even the most poisonous impulses remain relatively harmless.”
– Eric Hoffer
From My “Work-in-Progress” Basket
Swarm Intelligence and Free Enterprise
Scientists use the term “swarm intelligence” to describe how relatively dumb animals can do amazingly smart things.
Termites, for example, have nearly nonexistent brains. Yet, as pointed out in a HarvardBusiness Review(HBR) article I came across (in a friend’s bathroom, of all places), “they build mounds that are engineering marvels, able to maintain ambient temperature and comfortable levels of oxygen and carbon dioxide even as the nest grows.”
Ants are able to find the shortest possible route from their base to a food source. They do this by working together. Individual ants wander out, walking here and there. As they do, each ant leaves a chemical substance – pheromone – that attracts other ants.
“In a simple case, two ants leave the nest at the same time and take different paths to a food source, marking their trails with pheromone. The ant that took the shorter path will return first, and this trail will now be marked with twice as much pheromone (from the nest to the food and back) as the path taken by the second ant, which has yet to return.”
Humans are generally believed to be more intelligent than social insects. But that doesn’t mean we don’t use swarm intelligence to guide our behavior.
In fact, many of our traditions and rituals may be derived from swarm intelligence, including those connected with marriage, divorce, and even war . Swarm intelligence may also be used to solve complicated problems.
An example from the HBR: a freight-transportation business that used swarm intelligence to figure out its routing parameters. In one instance involving a package bound from Chicago to Boston, it turned out to be more efficient to leave it on a plane heading for Atlanta and then Boston than to take it off and put it on the next flight to Boston.
There is something to this idea that relates to a longstanding “debate” on social issues. On one side are those who believe that problems can be fixed by the ideas of one or a few very smart people. On the other side are those who think that they are way too complex and fickle for any one system to work over time.
There is part of my mind – an arrogant part, I admit – that would like to be in charge of the world’s ills so I could set them straight. There’s another part – the part that has tried and failed – that is inclined to think that social problems are best sorted out over time through swarm intelligence.
There appears to be a tiny owl in the upper right-hand corner of the front of a dollar bill. Get out your magnifying glass and take a look. The owl is perched on the left-hand corner of the shield surrounding the numeral 1.
Look at This…