You probably own this 7-Eleven (and that's why it looks so sad)(thenewatlantis.com) |
You probably own this 7-Eleven (and that's why it looks so sad)(thenewatlantis.com) |
My parents, grandparents, aunts and uncles all own or have owned 7-Eleven stores and have since the 80's. I've worked there, been to their conferences, and still get to hear about them at all family gatherings :)
Last I knew (this was the 1990s) there were still a few single-store franchisees but most franchisees owned at least half a dozen stores in a market. I also think the investment required to buy a franchise is vastly larger than it was in the beginning. It's really only affordable to owners who can leverage the income they are making from the stores they already own.
AFAIK they do still require owners to be operators. You can't own a McDonalds franchise passively. But I'm not sure that's still the case.
The US has devolved to the point where only someone with a large amount of wealth can start and run a business. You can't open up a small hardware shop anymore because no bank will give that loan and no supplier will give you the same wholesale prices they give to the likes of Home Depot or Lowes or heck even Walmart.
At every level in the supply distribution system we've seen consolidation and ultimately locking out of competition.
For example, here's why independent pharmacists have been going out of business [1]. We need new Theodore Roosevelt and Franklin Roosevelt anti-trust breakups to make capitalism work again. Capitalism can't work without a diverse competitive market.
Are the Mom & Pops going to deliver an order you place at 4 pm on your phone by 10 am the next morning? Because if not the antitrust measures you suggest are going to be deeply unpopular among a middle class that's used to having a stream of Amazon packages being delivered every day.
Too bad the oligarchs slowly whittled away the government immune system until it was weak enough to infect last election cycle and is busy destroying what little is left. America seems to be headed into a feudal dark age. Once the government is toothless only the people can fix it with mass protest and/or violence.
But the real issue here a that people stop at a 7-Eleven where if the same building in same condition said Bobs Convenience Store, they would not. We learned that decades ago.
This was the mid-1970s.
There was a larger "convenience store" at the other end of the next subdivision, you could bike to it but it was a few miles so we went there less often. They had a lot more snack choices though, and you could get a glimpse of the covers of the Playboy magazines that were on the shelf behind the counter.
You can easily go to NYC and find entire neighborhoods owned by large absentee landlords and yet are still walkable and desirable to live in. Yes perhaps regulations and tax laws favor large firms, but in the end zoning laws can easily require those large firms to build desirable neighborhoods.
Sure, because they were largely built a hundred years ago, and parceled into lots a hundred more before that, and because NYC remains uniquely friendly to continued mixed-use development today.
> Intrinsic responsibility” means that the system is designed to send feedback about the consequences of decision making directly and quickly and compellingly to the decision makers. Because the pilot of a plane rides in the front of the plane, that pilot is intrinsically responsible. He or she will experience directly the consequences of his or her decisions.
Workspace safety didn’t improve by blaming the workers, even though they bore the risk.
That's pretty much the job of test pilots even today. They are usually dual trained pilots and engineers/technicians, and their job is basically to QA new planes. In military aviation especially test pilots are often feeders into the astronaut program (a different but similar type of daredevil).
That's basically the job description of a Test Pilot.
Is there anything that makes real-estate significantly different, beyond how the pathos can be more-easily photographed?
In other words, I expect the (legitimate) issues raised in the article have close analogues in legal/financial/incentive problems for other forms of investment.
> The shortcoming of such analyses is that they make it difficult to capture the value that would accrue to a project that created a neighborhood.
Sounds like an opportunity for experts in the field to develop and sell a good kind of analysis!
Though point-taken: It'd still be hard to attract cautious investors until something is perceived as "proven".
Small touches such as landscaping can really make a difference. For example, 7-11s at the beach often seem to put in a little more effort, although I don’t know if that’s the store or the landlord.
The wood paneling and nice front lights actually seem like an improvement over local 7-11s if anything.
It’s really the small villages and grass roots communities that shine with heritage, tradition, and unique experiences. Unique of course when compared against one another, but even more homogeneous within their own borders.
[1] https://www.ted.com/talks/james_howard_kunstler_the_ghastly_...
I _love_ the pictured 7-Elevens, especially the one in Austin, TX. They are perfectly functional: you drop in, get whatever items you need, and get out in seconds. Everything is designed to help you with that.
The parking lot is a necessity for convenience stores because you likely won't invest 30-40 minutes of your time to _walk_ to a convenience store. You might as well just walk to a full-blown store. The exceptions are, of course, "food deserts" where the density death spiral has hit the bottom and made the city unliveable (see: Manhattan, Tokyo).
The places like "Captains Row" are beautiful to look at but hellish to actually _live_ in. Ask me how I know. They are the equivalent of the restored classic cars: beautiful to look at, but unsafe and uncomfortable for actual use compared to modern cars.
A local government has options like creating a historical district if they really want to control aesthetics. A home owner’s association can control aesthetics in a residential area. They are just people and you might disagree with their decisions.
Real estate is expensive. Large commercial properties usually require rich owners. the local gentry that owns farms and car dealerships and shopping malls and fast-food franchises isn’t necessarily any more interested in aethetics than an REIT.
It seems like land-use governance is always going to be messy no matter how it’s structured?
Of course the root cause of this is wealth concentration, and that's not something you can fix with a couple new laws.
I agree with you about planning. Councils keep wanting to control how their neighborhoods look - because people who live there don't want their own stupid neighbors making their own decisions and "ruining" it. So they impose rules that lead to uniformity. Where I live, most new houses look indistinguishable from each other, but they all have the same multi colored offset walls with two different cladding types and alternating angles of their roofs. A style guideline made by the council to force them to look interesting.
It means you’re a landlord!
Congratulations!!
Give yourself a round of applause. By not maintaining it, you are electing to keep cash flow high and profits secured. The overall commercial market has negative numbers so even if said REIT is down 2.65% it’s hedged together with numerous properties in a nice geographic arbitrage opportunity to minimize losses.
Is that really… So bad?
My guess is the author lives in a densely populated urban area, and doesn't understand how "soul-crushing suburban districts" really work.
I've been walking to my 7-11 for over 30 years, and have gotten to know many attendants over the years.
It's certainly walkable from the hotels, and the houses/apartments to the north, but not the ones to the south as there's a stream in the way (see OpenStreetMap) but no footbridges.
I can also walk to a convenience store, in fact I’m fairly lucky with the amenities available in my neighborhood, but many places I’ve been (and previously lived) are disorganized and lack the livability of communities where the buildings have primarily local owners.
So, even if this is a problem, fixing it doesn't immediately make neighborhoods beautiful.
The mass US real estate fraud that ended in 2008 was entirely built around loaning money to people who weren't creditworthy for overvalued property that they had no expertise to judge, then immediately selling that loan to somebody who would hide it in a complex product and immediately sell it again. Eventually, these was sold to municipalities and pension funds in complex gambling vehicles whose value would fall to zero if anything went wrong in this structure, after being branded "AAA" by institutions 1) paid by the people selling the products, and 2) literally written into legislation by name and into the rules governing the pension funds.
That's what distance between an investor and in investment gets you. Tax every single hop. Make them break themselves up.
edit: Yes it does. Tax them. These transactions cost the public more than direct transactions. I know that people feel like they're far beyond having to justify a tax other than "I like it, so don't tax it," but this distance in and of itself imposes costs to the public. If you dump money into Vanguard, and Vanguard then invests in an index, Vanguard gets taxed and you get taxed, too. Poof, no more Vanguard. The horrible outcome of that is that people understand the stocks they're investing in, and that the stock market becomes a repository of intelligence - which is what I thought was supposed to justify it.
Nobody cares about justice, though. They're libertarians when they're rich and revolutionaries when they're poor. Government to protect my stuff when I have stuff, government that gives me stuff when I don't have stuff.
As a friend once noted, the great thing about living in America instead of Europe is that we make enough money living here instead of there that we’re able to take vacations in Europe.
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edit: Financial literacy is not alchemy. It will not turn nothing into something. The price of consumption has risen insanely (which is why investors have done well), and consumption when you're poor is not optional or luxurious.
There may not be a lump of labor, but there's certainly a lump of profit. 10-20% are getting it because 80-90% aren't. We've created a society (again) where the people who are most rewarded are the people who work the least (and whine about school lunches and shoplifting.) Owning things is the most lucrative job you can have; if you exclusively own and don't work, you've probably doubled or tripled your worth since covid. If you worked, at the lowest end you've barely kept your head above water, and at the middle end you've lost major ground. If you're either lower or middle, and you've accidentally reproduced (bad morlock!), you could be homeless after a single bad year.
With the high end worker is where you need financial literacy; but if you don't spend enough, how are you going to meet the people who will employ you or find you employment? Assuming they'll come to your small, somewhat comfortable apartment far from your workplace, attracted by your home haircuts and your cheap but comfortable clothes to have conversations about your used books, houseplants, and how hard your bicycle commute is, over one of your three board games - you've now moved the meter to 15-25% being able to retire one day. Congratulations, you're European.
Objection 1: Are you arguing that it's not 50%, but more like 40%? Because I wasn't attempting an exact figure. You gave me a median number that is under a Bronze plan's deductible. One concussion will bankrupt them. A childbirth will throw them into $10Ks of debt.
Objection 2: 50% report owning stock in a Gallup poll. Which I'm sure includes at least 60% saying "you mean some money in a 401K?" Temp services have 401Ks that some people have contributed hundreds of dollars to.
OK then say that! The made up $500 emergency number is not true and thus not an effective argument. The precariousness and contingency of healthy and self-sufficient life as regards $5-10,000 emergencies absolutely is an effective argument! You take my statement of fact as a statement of opinion counter to yours when we are probably closer than you'd think.
Funny enough it was getting my wages garnished to pay for the MRI that my insurance didn't cover after I got a concussion when I was hit by a car on my bike commute that got me really into politics that demand we apply material analysis to material conditions, if you catch my meaning.
https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...
The majority of people do have a safety net in social security. While it may not be enough, it is something…
While I agree with you make money when you buy/biggerpockets quotes, you want cash flow to minimize holding costs.
Also, other than flippers, the vast majority of real estate investors I'm familiar with are very focused on buying cashflow, and prefer never to sell. It might be different for REITs focused on CRE, I'm not as familiar with that space, but my impression has always been that the biggest and most successful investors are buying and holding, not trading.
There are some historic districts in my hometown and it's because they have rows of posh but nearly identical houses. That uniformity seems to be part of what makes now gives them "character".
It does not mean that McDonald’s replaced all restaurants, nor that they are better, but it does mean that when you go to one you know exactly what you are going to get vs the uncertainty of the unknown competitor.
It’s why suburbia all looks the same.
And for that matter, it’s happening in cities that pride themselves on not having things like McDonald’s. There is cool kids Blue Bottle coffee in SF, and LA, etc. Whole Foods used to be only in hip places and now it anywhere trying to be hip (don’t worry, Erehwon is here to soak up hipsters cash).
Oh sure the large corporate model of stores may have a bigger pile of capital in their accounting book to spend versus the same grouping of small independent stores even if they were added together, but nowhere in the accounting book is there any mention of money leaving local economies and ultimately making it poorer and down the line reducing the value of the community which devalues the stores too.
Also a mom and pop store is far more likely to be able to and willing to break from the standard mold and let you call at 4 PM and then come pick something up at 7 PM after the store would normally be closed. That might also seem "inefficient" because now some employee is sitting around an extra two hours just to serve one customer. But what about the efficiency on the customer's side who may gain even greater value by having that thing ready to go at 5 am the next day?
Very few people are accounting for all the "efficiencies" that are not represented by capital holding in somebody's accounting book.
Yeah, my hometown is a good example of that. It has always had a population of around 300 people. When my dad was a kid it had a hardware store, a grocery store, a bowling alley, a restaurant, a pharmacy, and an auto repair shop.
Every single one of those shops closed and a big reason why they closed is because distributors decided they didn't want to deal with them anymore. So they raised their minimum order size and decrease the discount to the point where the same product could be had for a lower price by traveling 40 minutes away to the nearest Walmart or Home Depot. In fact, the grocery store closed while I was a kid and, in the end, what the owner was doing was literally going to walmart and reselling what they purchased retail.
That has had a cascading effect on the town and services available in town. It's also caused a number of longtime families to move out and away because the work they did dried up.
Where the small town had a large amount of economic activity and jobs, those all dried up to where now basically every kid born there moves away. There's no way for that town to grow and prosper.
There are diminishing returns to efficiency. Grocery stores, for example, are just as efficient as Amazon is even though many of them are a fraction of the size. Something like a gas station will be just as efficient whether it's ran by a mom and pop or whether it's ran by Shell.
> Are the Mom & Pops going to deliver an order you place at 4 pm on your phone by 10 am the next morning?
Often yes, if it's in inventory. If it's not you'll have to wait longer than you would with amazon. In fact, one of the benefits of mom and pop shops is that they can generally get things delivered to you same day because they live in the same city as you do. Much like you get same day delivery from a restaurant even though they are often mom and pop shops.
But to my point above, you don't need a company the size of amazon to get next day delivery. Amazon could be broken up into several smaller (but still big) companies and it'd have close to exactly the same efficiency. It would also result in lower prices because now Amazon would have actual competition.
The decline of the classic US fast food restaurants (McD's, Wendy's, BK) has been matched by gas station food getting better and better. The 7-11 breakfast sandwiches are pretty good these days and sometimes the hamburgers even taste like real meat :) .
I would agree that not overpaying is probably the most important thing.
It’s possible to build new buildings that are interesting and unique, it’s just very expensive under current zoning, building codes, and local planning restrictions, so it usually only happens with very large structures.
Things seem bleak, but we've been here before and came out of it better.
You're using Hudson Yards as a positive development example? It's broadly hated for pretty much exactly the kind of large-scale developer homogenization discussed in the article.
> But the sameness and isolation of our built environment is not just the work of the invisible hand; policies have also encouraged this trend.
See how the author conveniently lumps together sameness and isolation? My comments are responding the isolation part, and you are probably referring to sameness. This is how a badly written article causes commenters to talk past each other.
But specifically on the point of sameness and homogenization: I disagree here. I think most people are insufficiently attuned to the differences in buildings. Next time take a real camera, put yourself in a street photographer’s shoe and photograph the Hudson Yards neighborhood. Even the skyscrapers aren’t the same. There’s enough aesthetic variation there.
2. There is a cost of living adjustment matched to inflation.
3. It was supposed to supplement your retirement not fund it.
But I do agree it is on shaky ground with the current administration and the future of the US dollar in the world. The problem is, if I’m critical of it and it crashes, I get nothing. So why would I be critical of my own interest?
Do I have alternatives such as buying vanguard ETFs and minimizing risk? Yes, is that the primary vehicle? More assurance than social security, that’s for sure.
But who knows what’d happen in 25 years.
Should be a huge part of the K-12 curriculum in a putative capitalist country, but we barely touch on it.
Kids graduate high school and don't really understand time value of money or how a credit card, a 401k, a car loan, or a mortgage work.
It's just a 7-11. The charm is the walk and the experience.
I have lived in places where you can’t walk anywhere useful because the absentee owners didn’t want to invest in finding good tenants. The buildings were fine, but partially empty, and there was even a shortage of local office space, so they could have rented at a premium with just a little bit of investment.
Is life really that complicated?
The point is that much of America is like this, and the problem is only getting worse. We’re not yet at the level of blight that we saw in some areas after the post-1970s industrial collapse, but concentration of ownership is gradually leading us there again. Poor maintenance, poor tenant selection, and underinvestment eventually hollows out neighborhoods when businesses move away or close.
Where are you going to move when most places have the same problem? The few areas not like this are getting swarmed, which creates its own problems (like traffic, parking, overcrowding, and absurd property values).
Just take a drive through random cities, neighborhoods, and towns if you don’t see it where you live.