Trends: Personal Interests, Education and Employment

Our first class was on our individual personal interests, education and employment in real estate trends.

My personal interests in real estate trends are in the interconnectedness of cities. I think there’s a lot more going on there than either planners or developers take into account. For example, we didn’t use to know that Vitamin C cured scurvy.

Today a lot of people don’t know that Vitamin D prevents cancer and Vitamin B17 cures it. It’s also just about impossible to get enough B12 in your diet as a vegetarian but it won’t catch up with you for about 7 years.

The key is to eat food that’s as organic and local as possible. I think our cities are that way too. We don’t know what ingredients may be missing until we look at it and see there’s something not right. I’m interested in seeing how all the pieces fit together.

I’ve gotten interested in Permaculture lately too. Here in Texas, most of the cities around here are going to water restrictions and the price of food has been increasing for everyone. But then when you look at the vast majority of homes, they’re designed to have the water run off the house and into the street as quickly as possible.

Instead, we need to look at the patterns and systems that can sustain food production. We need our land to work for us instead of us slaving to maintain our little patches of green grass that does nothing for us. I’m interested in seeing how that all plays out and doing my own permaculture experiments.

Finally, I’m interested in our changing demographics. As baby boomers age, they’re going to start needing more intensive health care (many from simple Vitamin D deficiency). Many will move back in with their kids for the care.

And then Generation Y (aka Millennials) are sometimes moving back in with their parents after going to college. With the state of the economy, we’re having a variety of different living situations emerge.

There are a number of business opportunities associated with these trends. My parents do residential home care for 3 elderly persons (you don’t need a license for up to 3). My wife and I plan to start a Montessori school in our home (but may need to call it day care for zoning reasons).

And of course tiny houses fit into that equation too. The returning parent or kid can have their own place in the back and come and go more independently.

I noticed that Austin has an Alley Flat Initiative. After taking a real estate development course, I found a number of issues with it that planners may not have considered.

Yes, it makes sense to increase density inside the city – at least for planners. People generally like more space rather than less. And no one seems to have thought about what would happen if we parked an extra car on the street in front of every house.

But for the Alley Flats, the idea is that you invest about $100K to build a really nice tiny house (think social equity) in your backyard. For a fee, the city will set you up with a designer and fast track all your permits. But then you’re required to limit the rent you collect to $750 for a number of years so that you’ve just created affordable housing.

I haven’t learned to do the other numbers yet but anyone can see that cash flow isn’t going to work out. The point would have been to create more affordable housing which is a city interest, not a property owner interest.

For the property owner, this is what you may have just done – you got a home equity loan for $100K and after 6 months or so, you’re now collecting rent that’s equal to your new payments. If your renter moves out, you’re now in the hole an amount that could cause you to loose both properties. How’s that for affordable housing?

The other two topics of the class were education and employment.

I’m particularly interested in education as I was a substitute teacher and middle school math teacher in Austin for about a year. I’m also coming off of a bad educational experience in architecture where I wasn’t getting adequate feedback on my work. And then my wife is a Montessori teacher. And I’ve been working on accelerated learning projects for a few years now.

The main topics we discussed are the trend toward moving education online. My real estate development class was half in class (the discussions) and half online (tests and assignments). It worked out really well. My current class in Trends is requiring about 3-4 hours of research before class each evening.

The old model of teacher pouring knowledge into students and then checking that knowledge with multiple choice tests is dead. The only reason people are still getting away with it is the massive institutions that have been built up around it.

As evidenced by my tiny house, people can learn just about anything they want on their own without a degree. Some of the best architects in history were unschooled. Even so, there’s something to be said for going through a structured program and adding to the body of knowledge.

There are plenty of other educational trends. You can see most of them in TED talks. The top 2 out of the top 10 according to the Huffington Post were on education – The World Peace Game and Khan Academy.

Another facet of education in real estate in particular is LEED. Government has selected this particular certification as THE certification for sustainability and now requires new federal buildings to be LEED Silver. Of course LEED doesn’t address a number of important sustainability issues like a full cradle to cradle analysis, low impact development or permaculture. It also leads to weird designs like bike racks where no one is riding bikes. But then it’s a step in the right direction.

For employment we talked about the changing workforce. We’re moving toward a more knowledge worker based economy. That was going to happen regardless of any economic bubbles. A recession just makes people tighten their belts and get more creative to be more competitive. The people who are able to articulate real value are doing well regardless.

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