Friday, May 20, 2005

Hope for Moscow, Worry for L.A.

The latest issue of the New York Times Magazine offers a variety of stories about architecture on the theme, "Is It Time for the Preservation of Modernism?" The report by Nicolai Ouroussoff, "Russian Icons," discusses the fate of innovative buildings dating from that country's Soviet era. He launches his account with a visit to the Shchusev State Museum of Architecture. There he finds Ekaterina Melinokov, granddaughter of the architect Konstatin Melnikov, lobbying the Museum "to intervene in a family dispute over her grandfather's landmark house, completed in 1929."

Ekaterina and her father, Viktor, want to donate the house the state and have it preserved as a museum. Unfortunately for their plans, Konstatiin's daughter, Elena, claims that the property belongs to her. Ouroussoff ends the vignette with an apparently elegiac observation: "[G]iven that Moscow's various landmark groups are essentially powerless, the fate of this 1929 masterpiece will be decided simply as a matter of property law."

Mull that over a while. As recently as 1989, it would have been absurd to suppose that a citizen of Moscow could protect her family home from the grasping state "simply" by invoking her property rights. For all the recent bad news to come out of Russia, Ourousoff's account of the fight over Melnikov's house carries (albeit perhaps inadvertently) a message of hope. In the heart of the former Soviet empire, you have to buy a building if you want to preserve its architecture.

In contrast, consider another story in the same magazine about the struggle to preserve the architecture of a 1960's-era suburban housing tract in Los Angeles. Karrie Jacobs, in "Saving the Tract House," reports on the fate of Balboa Highlands, a San Ferndando Valley subdivision developed by the famed modernist architect, Joseph Eichler. Some of the subdivision's residents have cherished and preserved their homes' original appearances; others have radically revised their homes to suit their tastes and needs.

What's the problem with each individual owner expressing his or her architectural tastes? As one of the preservationist-minded owners explains, "[T]here just seems to be a great disparity between the potential that we see in this neighborhood and then what you actually do see when you drive down the street." So what have the preservationists done to enforce their aesthetic vision on their less-enlightened neighbors? They've lobbied to have the city designate their neighborhood as a Historic Preservation Overlay Zone (HPOZ).

An HPOZ gives a tax break to owners of buildings renovated to preserve their original appearance. Less tasteful homeowner presumably pick up the slack in the city's revenues. Adding injury to insult, an HPOZ designation "makes it difficult, though not impossible, to alter the facade of a house that is considered a 'contributing' part of a protected neighborhood; that is, one that preserves the building's original features."

So if you purchased a small, worn-out, unaltered Eichler house planning to remake it into a tasteful Craftsman-style home, the HPOZ would pull the rug out from under your American Dream. Perhaps you could console yourself with the thought that Los Angeles, by crushing your bourgeois architectural expressions, was promoting the greater Good of the People. That, at any rate, is how the Soviet Russians would have justified the matter. These days, however, Russians simply buy a building when they fancy its architecture.


Ben said...

But each time you change one of these houses you significantly decrease the value of all the surrounding properties which were bought because of the historical and artistic value of the neighbourhood. How would one indemnify the neighbours for their lost? It would be very hard to measure the lost of property value that is due to the remodelling of a single house. A complete collection is always worth more than the sum of the individual objects. Remodelled house amidst the old ones could arguably create very evident clashes.

Also, it is obvious that the city profits from high property values throught taxes and by having incentives for the rich to settle there. Doesn’t it make sense for the city to spend on trying to keep the value of its land high so that in the long run it can profit from it?

Tom W. Bell said...

Granted, the change of one house's architecture may affect the value of neighboring houses. There are always externalities, positive and negative, to publicly-visible architecture. It does not follow, however, that neighbors deserve any compensation for loss. Absent a prior agreement, my neighbors don't have to pay if I improve my house's appearance, even though they benefit. Ditto the converse.

I'd be more sympathetic if there were not ready alternatives to the use of State power. All the home-owners know who they are and what their interests are. They can thus contract to mutually-agreeable solutions. On the assumption that uniformity increases the average home value, however (which assumption I don't, by the way, think holds uniformly), it will be easily to convince homeowners to conform; mere self-interest should suffice.

The prospect of higher property taxes cannot suffice to justify the city's involvement. The city is only a residual claimaint; the primary beneficiary remains the home owner. The home owner is thus more sensitive to increases in home value than the city. If the preservationists have a valid claim about the financial (as opposed to mere aesthetic) value of their project, they will find it easy enough to rely on consensual exchanges.

Besides, we can hardly let cities act on the mere claim that they are maximizing property taxes. In that event, they would kick out the poor, regulate aethetics in minute detail, and abolish churches. No, the rule of law requires that government actors not change the rules mid-stream, contrary to justified expectations and in violation of property rights, in pursuit of such vague goals as maximizing property taxes.

Ben said...

If I accept the presumption that there is value in the uniformity of the houses, I'm not convinced that "it will be easily to convince homeowners to conform". I perceive in this situation an occurrence of the prisoner's dilemma. It would be quite hard to make everyone participate in the agreement and it would not be very attractive to be in the few that are not allowed to modify their houses. Just a few dissidents and the whole deal is helpless.

In this particular situation I presume that at least some proprietors value uniformity, else why the complaints? Granted, that a few people take this position might not make a that good argument that city control is the socially desirable outcome. Nonetheless, if past experience of similar situations tells us that other regions have been found to benefit (aesthetically/financially) from city regulation, maybe it is the right decision. I don’t think you can separate the aesthetic (/historical) and financial aspect of this problem. The aesthetic is afterall what creates the (financial) value.

Tom W. Bell said...

I agree, Ben, that seeking uniformity *ex post* may give rise to a prisoner's dilemma. But several caveats apply.

First, it is not at all apparent that the supposed suboptimal outcome--a hold out with a non-uniform house--really wreaks havoc. There is not natural category of "neighborhood." One steet over, where the odd house cannot be seen, it makes little difference to home values. That means the hold-out can at worst try to extort only a few neighbors. But, happily, those are the same people best placed to use social sanctions as persuasive tools.

Second, I emphasized "ex post" above because all of these problems can be solved *ex ante,* through contracts. Hence the home owner's association. My beef with L.A.'s regulations, however, is that they violate the rule of law and property rights by imposing new restrictions on extant homeowners.

Third, granting that aesthetics can translate into economics, we still don't know the market value of uniformity. Why? Because the preservationists are not using the market to enforce their preferences; they are using coercive regulations. For all we know, there is an equal or even greater demand for an attractive mix of home styles. It's not implausible; that is one reason why *we* moved out of a planned community.

Anonymous said...

eeew. i wouldn't buy these homes-- they're ugly in my opinion modern or not. they remind me of old austere southern baptist churches i used to attend as a child. in fact, i think the homes that are remodelled to look different look much more attractive than the original house.
i don't know if uniformity necessarily makes the value of the homes go up. They look too much like track homes. I'd rather be in a neighborhood with a variety.
speaking of which, it's so damn expensive to buy right now. i bet that home is worth at least a million. i went and saw a 2 bed apt that is being converted to condos with an option to buy in Toluca Lake (SF valley) and it was $500,000! I would never buy that ugly condo for that price. it's disgustingly inflated right now and i pretty much will be outbid every time. but i'm still looking and hopefully will find something i like for the right price. i bet Tom your property value went up quite a bit.


Matt said...

Alas, That's much to sanguine a view of what happens in Russia, esp. in Moscow. "Settle as a matter of property law" should be seen as a local idiom meaming something like "settle by bribing judges or local officials". Note that even if a judge rules one way, it will mean nothing if the local officialls don't go along, and often enough they don't. (Often they are first in line to violate the law.) There is sometimes the appearance of law in Russia, but you can't believe it. There are in fact no property rights in the western sense there.