THE WEEK’S BEST: Design, architecture, and technology

What I wrote last week:

Suboptimal personal finance advice: Take off two years to learn to cook ramen

But that bit of advice from Wealthfront – that you can quit your job, travel the world, find yourself, all within your long-term financial plan! – ignores a few small details. Like, it’s really hard to save money when you have no income, or the free money you forego from your company’s retirement savings matching program. Oh, and the time value of money – that money you save now is going to be worth a lot more in 20, 30, or 40 years. I once wrote that just a 1% additional fee on retirement products could cost millennials $590,000 in sacrificed returns. What do you think it’s costing you by not saving at all?

What I shot last week:

Design, architecture, and technology digest:

Architecture and Design: Cities

Pave Over the Subway? Cities Face Tough Bets on Driverless Cars — New York Times

Highways today can carry about 2,000 cars per lane per hour. Autonomous vehicles might quadruple that. The best rail systems can carry more than 50,000 passengers per lane per hour. They move the most people, using the least space. No technology can overcome that geometry, said Jarrett Walker, a Portland-based transportation consultant.

Finally, a fix for the city’s worst land-use mistake: Garment District to give way to modern uses — Crain’s New York

The city has at last recognized reality. In recent years, architects and design firms have swept in, along with tech companies and nonprofits—some in space restricted to manufacturers—bringing in a new, affluent workforce. Even more transformational, the district is now home to 42 hotels, with 12 more under construction. Tourists have in turn lured restaurants and bars.

The zoning did not save a single manufacturing job but cost the city dearly by depriving businesses of affordable Midtown space.

The Millionaire’s Mortgage: Paying off your house is saving for retirement. — Slate

At the beginning of 1996, urban homes were actually cheaper than their suburban counterparts. And then everything changed: From January 1996 to November 2017, suburban houses appreciated by 112 percent, while those in cities went up by 195 percent. That’s a huge difference, and there’s no reason to believe that the trend is going to abate any time soon.

What that means is that making mortgage payments can, in theory, be a way to accumulate wealth almost as effectively as contributing to a retirement fund.

Architecture and design: Style

How the Fleece Vest Became the New Corporate Uniform — WSJ

Typically, the vest is worn over a button-up shirt and paired with chinos and brown dress shoes of any flavor. “The uniform” is how this ensemble has been branded around the office of one 36-year-old working in capital markets in Pittsburgh, a past practitioner of the much-mocked look who asked that his name be withheld. During a recent trip to New York City this month, he observed scores of men wearing gray fleece vests even as temperatures touched the mid-90s.

And the retort…

DON’T MAKE FUN OF UNINSPIRED GREY FLEECE GUY — Niskanen Center

Fashion is a fun example for thinking about the excesses of self-expression, but it can have real implications for upward social mobility. Uniforms, whether in the form of the formal business suit, or the slightly more casual Midtown look, take attention away from meaningless status markers and put the focus on individual competence, helping talented young outsiders move up in an organization.

MARIE KONDO’S KEY TO HAPPINESS: BOXES — Quartz

The Hikidashi box, which retails for $89 for a set of six nested containers, feels like the thick laminated fiberboard boxes Apple uses to contain their products. They come with various decorative liners and perhaps most importantly for budding KonMari acolytes, they arrive bundled with Kondoisms—with buyers gaining access to folding tips, tidying newsletters and even an invitation to join a tidying support group.

Investing in Fine Wine Is More Lucrative Than Ever — Bloomberg

Chad Walsh, head sommelier of Michelin-starred restaurant Agern in New York, registers online for auctions where he’ll bid for both work and personal investment. “It’s one thing to chase the blue-chip stuff at a good price,” he said. “But the best investments are when you’re finding the thing that everyone is buying when they’re squeezed out of whatever the blue chip was.”

Top Notes of Poo: Natural wine is weird, funky, even dirty. Sommeliers are obsessed. but does it actually taste good? — Grub Street

Master sommelier Pascaline Lepeltier was walking through Central Park when she recognized a scent: manure, which rhymes with flâneur when she says it. “It’s funny because some guys love this smell — that kind of dirty, sweaty smell,” Lepeltier says. “That’s what they want in natural wine. Horse shit.”

RICH-PEOPLE FOOD HAS CHANGED RADICALLY SINCE THE EARLY 90S — Quartz

Celebrity food culture now is inextricably linked with wellness—which actually means thinness. From the idea of “clean eating” to the various juices, tonics, and supplements promising to boost everything from your brain power to your sex life featured on Gwyneth Paltrow’s wellness hive, Goop, fancy food is much more austere now. Rather than pointing to a simpler past, it promises an unlined future, in which the glow of youth remains incandescent, powered by dried mushroom powder and matcha smoothies.

Technology

Amanda Hess is a fantastic writer, and I’m stoked about this project of hers.

Like, Comment, Subscribe, Weep — New York Times

Wherever the trends move and the cash flows, there we all are. The dizzying rise of online visual culture means our faces and bodies are exposed and scrutinized like never before. Whatever it is we “do” for a living is increasingly stitched up with who we are. We sell ourselves and stuff at the same time — my Instagram cat photos are interspersed with links to my articles, asking you to like me and my work, too.

Between the lines: Venmo’s public transaction feed is a bad idea — Axios

Sharing transaction information publicly could reveal a lot, especially if one makes a lot of transactions over time. While designed for friends, information shared publicly could find its way into the hands of data brokers, credit monitors or others.

As a reporter, it struck me as a potential gold mine of information, but I can’t think of any good reason why someone would want to share their purchase history and LOTS of reasons why that’s a terrible idea.

The Rapid Rise of Millennial Collectors Will Change How Art Is Bought and Sold — Artsy

We’ll use technology to co-opt art to enhance our personal brands—not so much in our real lives, but in our digital avatar lives on social media. Trent says that Instagram “has been the real game-changer for the art world.” It’s the perfect mix of visual and social. She notes that “for the first time, a completely open awareness exists about who owns and who collects what.” This hyper-connected transparency may benefit the market, but it might also imbue our collecting with a herd mentality, defined by insta-trends, branding, and channel buzz (try and find a hedge fund manager today not looking to acquire a George Condo).

Suboptimal personal finance advice: Take off two years to learn to cook ramen

I’m a millennial, and I fully fit in “I like experiences, not stuff” form. I love to travel, and eat, and learn new things. But it’s tough to really travel. I don’t do it nearly enough. I have kids. I have a mortgage. I have to save my money for things, like paying off my mortgage, saving for my kids to go to college, retirement.

 

If I were independently wealthy, I would certainly be writing this from Lohan Beach House. Nevermind. More likely the south of France or a Shoreditch cafe. Or I’d love to be like Dev in Master of None, to move to a small town in Italy to learn to make pasta by hand.

 

But I’m not independently wealthy. And I have a family. And a job that I worked for years to get.

 

Oh, and I have to save money. A lot of money. And one of the best ways to do that is through robo-advisors.

 

I also don’t ever want to seem woefully out of touch. I value my relative youth. I appreciate and fully support the shift from experiencing things rather than owning things. But Wealthfront, the robo-advisor, is pushing my limits.

 

Welcome, financial robot overlords

So I don’t personally use a robo-advisor. Considering my time horizon (~35-40 years), risk tolerance (pretty high), and overall portfolio (heavily weighted in real estate), my financial asset portfolio is 100% stocks. And I can do that easily and cheaply with an extremely low-fee, broad based index fund. I don’t want to pay a robo-advisor any more in fees when I don’t necessarily need adjustments on a regular basis.

 

That said, I think robo-advisors are the right choice for 95% of people who need some sort of advisory service. Wealthfront and Betterment are design marvels. They are easy to use, clear in their benefits, and are far cheaper than the alternative. It’s really a technological marvel, compared to what long-term savers a generation ago had.

 

I’m also a sample of one – what works for me isn’t universal advice. I’m sure I’ll jump on the robo-advisor bandwagon as soon as I need to add bonds to my portfolio, or want to tax loss harvest.

 

I’m also not in the business of money shaming, telling people to stop buying lattes or avocado toast because it’s going to cost them in retirement. Those are incredibly minor expenses in the grand scheme of things. It’s the cost of housing and education that are pinching people, especially younger people, not caffeine habits.

 

But the personal finance hill I will die on is that saving for the big expenses – education and housing and retirement – is absolutely necessary. Buying a few flat whites a week won’t do much to impede your progress there. However, quitting your job and travelling the world will.

 

Ok! Great! Wait… Oh gtfo.

So let’s just say I was a little surprised at a Bloomberg piece this week, with the clickbait gold headline “Why It’s Time to Quit Your Job, Travel the World”. It described a, shall we say, curious new product from robo-advisor Wealthfront.

 

The sabbatical—a chance to recharge midcareer—is hardly a new idea, and it’s still common in academia. But until recently most wouldn’t dream of quitting their jobs just to have fun for a year or two. And, as Gratton acknowledges, doing so is still a financial impossibility for the vast majority of workers.

 

For well-paid workers in high-demand fields such as technology, however, the idea may be catching on.
Wealthfront Inc., the online money manager based in Silicon Valley, launched a tool on Wednesday that allows clients to estimate whether they can afford to take time off for travel. They can set a months- or yearslong trip as a priority alongside other goals like retirement or buying a home.

 

Just for reference, academics are paid when taking sabbatical. And nearly all American workers aren’t highly-paid tech workers (and that leaves aside the question how long companies will offer programs like that – see: Twitter and Facebook’s share prices this week).

 

Oh, and then this:

 

When the robo-adviser surveyed its clients, more than half listed “take time off to travel” as a top priority, listing it ahead of all other goals except “financial independence” and “early retirement.”

 

That’s almost certainly a conflicting goal to one’s other priorities. And it’s just as deserving of ridicule as that research that said we shouldn’t start working full-time until age 40.

 

How many nights free can I get for my 200+ Instagram followers?

It would be great to be an Instagram sensation, logging your global travels in your feed and Stories. You might even get hotels comped (heck, you might be able to get free hotel stays by just pretending to be an Instagram influencer).

 

But that bit of advice from Wealthfront – that you can quit your job, travel the world, find yourself, all within your long-term financial plan! – ignores a few small details. Like, it’s really hard to save money when you have no income, or the free money you forego from your company’s retirement savings matching program. Oh, and the time value of money – that money you save now is going to be worth a lot more in 20, 30, or 40 years. I once wrote that just a 1% additional fee on retirement products could cost millennials $590,000 in sacrificed returns. What do you think it’s costing you by not saving at all?

 

Look, young people are having a hard enough time savings as is. What you don’t need to be doing is encouraging wanderlust over saving for those massive future – and past, if we’re including student loans – liabilities hanging over your head.

 

Burton Malkiel, Princeton economist and probably the expert in retirement savings, offered an easy, succinct rule of thumb in his book A Random Walk Down Wall Street:

 

What if you did not save when you were younger and find yourself in your fifties with no savings, no retirement plan, and burdensome credit card debt? It’s going to be a lot harder to plan for a comfortable retirement. But it’s never too late to make a plan. There is no other way to make up for lost time than to downsize your lifestyle and start a rigorous program of savings now. You may also have no other choice but to remain in the workforce and push back retirement a few years. Fortunately, it is easier to play catch-up with tax-advantaged retirement plans.

 

So put time on your side. Start saving early and save regularly. Live modestly and don’t touch the money that’s been set aside.

 

And-oh-by-the-way, Malkiel is the Chief Investment Officer of Wealthfront.

THE WEEK’S BEST: Design, architecture, and technology

What I wrote last week:

Boston’s Seaport: Would you pay $500,000 for a studio condo that might be underwater in 10 years?

Neighborhoods are all unique. Do you like glassy towers, all the trappings of moneyed millennial life, massive investments and growth in jobs from companies like Amazon and… checking notes… an entire neighborhood that might be underwater in a decade? Let’s take a tour of Boston’s Seaport.

What I shot last week:

Design, architecture, and technology digest:

Architecture and Design

Blokable’s Quest to Disrupt Prefab — Architect Magazine

Miller, who got his architecture degree at Tulane University and went on to study design strategy and business, spent a few years at the Seattle office of Teague and, like Holm, is a veteran of the Amazon Go project. He thinks of what he’s doing at Blokable as developing “architecture for manufacturing instead of architecture for construction.” Miller doesn’t regard himself as the designer of the final product, whether that’s a cluster of single-family homes or multifamily developments constructed from stacks of Bloks. Rather, he sees himself as the creator of a tool kit that architects can use to design their own bespoke projects. “It gives them the puzzle pieces,” says Miller, “the Legos for them to build with.”

Cities and the Vertical Economy — CityLab

Not only do rents rise by floor as tenants pay more for status, prestige, and view, but the rate at which rents increase, or the rent gradient, is higher than the price premium tenants pay for being in prime locations in the central business district. In other words, vertical clustering is a bigger deal than horizontal clustering, at least in terms of the premium on commercial rents that tenants are willing to pay.

Cape-to-Connecticut ride shows progress, bumps on Greenway — AP

It costs an average of $1 million per mile to build the Greenway and can take up to 20 years to complete a segment, but officials say it is worth the investment. A recent study by the planning and design firm Alta in North Carolina showed the East Coast Greenway generates over $90 million in total benefits annually in the Raleigh-Durham-Chapel Hill triangle.

How Many Square Feet Does $200,000 Buy You? — New York Times

For $200,000, you could buy a nearly 2,200-square-foot house in Fort Worth — or a room measuring about 16 by 16 feet in San Francisco. Apparently location really does matter. It was no big surprise that Manhattan topped the list, with $200,000 (the approximate U.S. national median home price) buying 126 square feet of space — less than half of what you might get for the same amount in San Francisco.

America Has a Lot of Parking Spaces. It’s a Problem. — Bloomberg Opinion

Investments in public transportation and innovations ranging from ride-hailing services to self-driving cars to electric scooters can all reduce these cities’ dependence on cars that need to be parked somewhere. But in the end, asking car owners to bear the full costs they impose does seem like an essential part of the solution. Trying to get rid of auto subsidies can generate a lot of opposition, though.

Technology

The Rise of “Urban Tech” — CityLab

Contrast that to cities, where offices and homes sit vacant much of the time, where cars sit idle, and where congestion is rampant. The third great economic transformation, which we are going through today, is a shift to a knowledge economy that is concentrated and based on cities. Just as farms and factories of previous epochs were optimized for efficiency, the offices, apartments, cars, and other elements of cities that sit unused much of the time will be adapted for greater productivity.

Can Cities Shape the Automated Future? — CityLab

According to one popular estimate cited by the World Economic Forum, for children today approximately 65 percent of jobs they may do have not yet been created. There’s a wide swath of new jobs that are still to be imagined.

Frankly, the kids who will be doing these jobs get it. This is the world they already live in, and their expectations reflect the reality that these changes will largely happen through a process of co-creation between human and machine

Taste-Testing Walmart and Trader Joe’s Wines: Whose Are Better? — Bloomberg

After studying the big data Walmart accrues on what its customers want and buy, Simpson says: “I saw a gap in the market.” Her 18-month process, from concept to bottle, included months of tasting hundreds of wines to find winemakers to work with in various areas. These are not repurposed bulk wines, she says, but—in today’s buzzword—highly curated regional selections.

$800 Million Says a Self-Driving Car Looks Like This — Bloomberg

The company has six prototypes, or mules, in auto industry lingo. They’re named VH1, VH2, and so on—the VH being short for “vaporware horseshit,” which is how a car blog once described the company’s technology.

Boston’s Seaport: Would you pay $500,000 for a studio condo that might be underwater in 10 years?

Neighborhoods are all unique. Do you like glassy towers, all the trappings of moneyed millennial life, massive investments and growth in jobs from companies like Amazon and… checking notes… an entire neighborhood that might be underwater in a decade? Let’s take a tour of Boston’s Seaport.

 

The Seaport District is one of the hotter neighborhoods in the city – if not the hottest. Glitzy new condo towers, hotels, and businesses have been opening up here. Amazon and GE are companies that have opened up shop in the neighborhood.  It also has the Harpoon Beer Hall, where the beer itself is… meh… but the view and scene are A+.

 

It’s also a short walk right into downtown Boston, so unsurprisingly home prices have been on fire here over the past few years.

 

 

A quick look at Zillow (July 15, 2018) shows the cheapest property available in the 02210 zip code – right in the prime waterfront part of the Seaport is a 413 square foot studio for $515,000.

 

Just for a quick comparison, that’s about $1250 a square foot – or about what you’d pay in prime Williamsburg in Brooklyn, according to Trulia.
 

 

Look, its a great neighborhood. It’s about the best location possible in Boston, it’s mostly new housing stock, there are a lot of creative professionals moving into the area.

 

There’s just one problem – it’s going to be underwater at some point.

 

Boston sits on the Gulf of Maine, which the NOAA said is warming faster than 99% of the global ocean. There have already been storms that have flooded the area. Some experts say the Seaport is Boston’s most vulnerable neighborhood to intensifying storms.

 

 

High prices + giant environmental risks = big press coverage

Both CNBC and AP  recently did profiles of the neighborhood.

 

CNBC wrote that $8 billion of residential and commercial real estate projects have been built or approved over the past decade – or three times as much as Boston’s entire downtown and financial district. That’s even in spite of research from the city of Boston that said the neighborhood might be underwater on a regular basis anytime from 10 to 30 years from now.

 

 

To make sure these massive investments do not literally sink into the sea, developers are turning to some interesting building strategies. The electrical infrastructure in a building develped by Skanska is 40 feet above the 100-year floodplain. They also added a 40,000 gallon water reclamation tank and elevated the ground floor. That all costs money – but if you’re going to invest in the neighborhood, you really don’t have a choice. Massive, expensive projects like office towers don’t pay themselves off in 10-years, so you have to take a longer, multi-decade view.

 

AP’s article quoted Boston’s city planning deputy, who said “We know the water is going to be coming in through South Boston, pretty much from every direction, by 2070.”

 

The article also said the Boston Planning and Development Agency recently updated its climate-ready checklist for developers, which are required to detail strategies in architectural design to mitigate climate change impact. However, they aren’t binding, as the city does not require developers to actually incorporate those designs.

 

So the entire East Coast is pretty much going to be a massive floodplain

Boston’s Seaport District is far from the only neighborhood where building and construction are butting heads with nature and the long-term challenges of global warming.

 

The New York Times also recently wrote about new buildings rising in the riskiest waterfront areas of Brooklyn and Queens. One developer said a new Brooklyn luxury tower has units that start at nearly $1 million for a two-bedroom, up to $3.71 million for a four-bedroom penthouse. However, it sits on some of the riskiest flood zones in the city, and was “built specifically with Sandy in mind.”

 

In case of hurricane, don’t flush the toilet

The NYT article also argues that it’s great that buildings have to be built with hurricanes and flooding in mind, but the increased development only puts a bigger strain on the local infrastructure (think sewage), which makes it even more susceptible to further damage in the case of flooding.

 

This is only going to be a bigger problem in housing-starved cities like Boston and New York. Forcing developers to take climate impact into design choices is a great first step. But it’s completely ineffectual if they aren’t actually used. Plus it completely ignores the existing housing and office space stock – which are only under bigger threat than flashy new towers with raised lobbies.

 

Just something to think about when you’re ready to drop a half a million dollars on that waterfront condo.

101 Seconds – New York’s SoHo

Flaneuring through New York’s SoHo in 101 seconds.

SoHo is inimitable, though other neighborhoods in New York and other cities have tried to recreate what makes this neighborhood special. Galleries, restaurants, high-end furniture and fashion. Or even knock-off Supreme and Gucci bags sold off the sidewalk on Canal.

It has some of the most expensive residential and retail property in the country. The cobble-stone streets. The cast-iron facades holding up massive windows, which perfect for the artists who moved into the neighborhood when in the late 70s and early 80s, before this former industrial neighborhood turned into the pinnacle of style, design, and fashion (though you could easily argue the Disneyland-ification of the neighborhood is complete, trying to recreate the creative urban experience of three decades ago but instead becoming the most stratified of any New York neighborhood; struggling artists can take the L train toward Canarsie. Past Williamsburg, of course.).

All video taken June 16, 2018.

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Gear:

Camera: Panasonic LUMIX GX850 https://amzn.to/2Kh79rx

Tripod: Joby Gorillapod 1K kit https://amzn.to/2Mkinwn