Our first topic is to create a field guide on some subject to contribute to a collection of Energy Field Guides. The field guide will be small pamphlet or zine. My randomly selected topic to research is "Life Cycle Costs," which I understand to mean both the visible and hidden costs associated with some entity or thing.
It wasn't immediately clear to me how my topic relates to Energy. I would have preferred to have a topic like Nuclear Energy so I could research the various technologies humankind is using or could be using to generate electricity with nuclear fission or fusion. But Life Cycle Costs? What does that mean in this context? In class I inquired further and was told by Marina to think about the hidden costs of ownership of something.
After thinking and exploring I decided to research "Life Cycle Costs of NYC Home Ownership."
This research focus does not relate to Energy in the same way that other topics like Nuclear Energy does. Home ownership doesn't generate electricity and can't light up an LED. But some of the other potential topics like Meditation or Entropy don't generate electricity either, so perhaps that interpretation isn't important. Instead of focusing on powering electrons one can take a more abstract view of what Energy is and then consider value of home ownership. Home ownership is important to the vitality and stability of a community and the people in it. It is a source of economic and sociopolitical power. One could argue that home ownership helps power communities.
To see this, consider what SoHo would be like today if the artists residing there in the 70's bought their apartments or lofts instead of renting. Those artists were critical to revitalizing that neighborhood. They turned the area into a neighborhood people wanted to live in. And in return, the neighborhood was gentrified. Most of the artists were priced out of the neighborhood, forced to leave to seek more affordable apartments in the outer boroughs.
In present-day NYC there are asymmetries in home ownership with skyrocketing costs making it difficult for first-time buyers to purchase apartments, particularly for those people early in their careers with student loans. People who can afford down payments face a complex and intimidating process. There are information barriers that discourage people from pursing home ownership.
Looking at apartment listings posted in the windows of Real Estate offices I see prices of great looking apartments. A one bedroom on 31st street for $279K. A one bedroom on 72nd street for $625K. A townhouse in Greenwood for $2.25M. The prices of these places are displayed in the listings, but how much do they really cost? What does it take to own one of these? I know there are hidden costs beyond the price shown in the listing. I think it would be educational to understand what those costs are.
My first step was to read as much as I can about the subject. There is a lot of information available on the Internet about all steps of the apartment ownership cycle. The initial purchase and the terminal sale are obviously big contributors to the total life cycle costs but there are also many hidden costs in-between. There was a lot I didn't know. Seriously, who knows what a ground lease 1 is? There are also certain NYC-specific home ownership taxes to be paid that homeowners elsewhere don't have to consider and wouldn't know about.
I put all of the information I read about into a mind map so I could comprehend the components of this process.
With the mind map it quickly became clear who the potential agents are in the systems of interacting components associated with NYC home ownership. I did some more brainstorming to identify as many agents as I could. Some agents like grocery stores and local commerce should probably be excluded from the system maps. Others like real estate agents and banks clearly should be included.
And what do I mean by systems or system maps? And is there more than one system?
There is more than one system of interacting agents associated with home ownership. With different perspectives some agents become important or unimportant.
The first and most obvious system is the financial system. This is the most obvious relating to the actual financial transaction between the buyer, seller, and various banks.
Additionally there is a human system relating to the actual people who interact and work diligently to make the process work. For example, the plumbers and contractors that need to be available to make repairs. This is a different perspective and is equally relevant.
Both systems are important. I can use the different systems to identify worthy questions to explore.
I need to think carefully about where I want to go with this. I am not totally sold on this topic and still kind of wish I could research Nuclear Energy instead. I do very much want to steer away from a business school-like treatment of NYC home ownership life cycle costs. That would be extremely boring.
It could be interesting to find a more accessible way to present the financial aspects of home ownership to people who don't have the background to absorb information communicated in a more traditional approach. It could also be interesting to do something that is not dry and informational. But how? And perhaps instead of presenting analytical information more experiential or anecdotal information would be better?
I need to keep thinking about this. I hope it becomes more clear after Tuesday's class.
Some co-op buildings do not own the land they sit on and pay something called a ground lease. The residents' monthly fees are used to make the payments on that lease. The ground lease has a finite term and will need to be renewed when the contract ends. If a buyer is considering a co-op apartment they need to be aware if the building has a ground lease that ends soon. If this is the case it is likely the co-op monthly fee will increase considerably.
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