Ed Bacon, wrote the classic Design of Cities almost 40 years ago. The connectivity of movement and organic growth of urban places he depicted has lessons for us in such areas as web and mobile graphic design and technology convergence.

Ed had that devilish grin that comes from trusting and melding your instincts with creativity, smarts, pragmatism, and heart.

Ed fought for life (not his own as he worked until he died last week at 95). He fought for life and meaning in our cities.

I knew Ed from afar. He taught a class at Penn which I audited just to hear him and go on walking field trips around Philly with him. The Chinese ambassador, once pulled over in a motorcade, after recognizing Ed from the limo.

I saw him 3 or 4 years ago at a cocktail party after a 2 person show acted in by Suzanne Roberts, put on for her family, friends and Comcast associates. I introduced him to my wife as Kevin Bacon's father, and his eyes lit up, asking if we knew Kevin. Can't say I know Kevin, but his Dad is one special person.

Ed had that sparkle in his eyes, and of course loved hearing about Smarter Agent. Urban enlightenment over new media. Just a marvel that Ed. We meant to catch up and I wanted to talk to him about a Ed Bacon LBS tour of Philadelphia. A missed opportunity to get a little more of Ed.

Here's an interview I read. Interviewing Ed had to be one they would not forget. Read the last paragrpah, it's why he's Ed....

Bacon Bits
It wasn’t all that long ago that the late city planner fell off a skateboard in LOVE Park while defending skaters’ rights. Back in 2003 PW spoke with Ed Bacon about his vision of Philadelphia’s future. by Steve Volk

What do you envision happening in Philadelphia’s future? Can we reverse the population decline we’ve experienced?
"I first of all have to tell you the population decline is a cliche that in no way represents what’s actually happening. People think of numbers as absolutes, but to me numbers are to be avoided because they are dead concepts. They have no life.
"There happens to be occurring in Philadelphia a magnificent interaction, on a grand scale, between people who are leaving the city and people who are entering from the suburbs. The people leaving are low-income people, and the people who are returning in droves are extremely high-income, and some of the wealthiest people in the region. They have discovered it’s more fun to live in Society Hill Towers than Wayne.
"If you look at the rate at which neighborhood after neighborhood after neighborhood has been transformed after decades of decay to become a hot real estate market, then you’ve got a trend that promises a bright future for Philadelphia."

I’ve seen it most dramatically around Baltimore Avenue. University City is enlarging and taking up more and more of Southwest Philadelphia. You’ve got new people and businesses moving in consistently.
"Yes, from the suburbs! But if you could bother yourself to look on a broader scale, I just had somebody telling me about Pennsport and Bella Vista and one other neighborhood in the area.
"Oh, my old brain-I can’t remember it, but there are three neighborhoods there where prices are skyrocketing. North of Old City and north of Northern Liberties is just getting off and running, and Manayunk and Spring Garden Street and all directions it’s occurring!"

What about the difficulty of getting developers to build in blighted areas?
"The builders who are conditioned as suburban developers, building on farmlands and outlying areas, they are the people least preconditioned to be effective in the city, where the problem is not to deal with a whole new planned community but to deal with scattered vacancies.
"The mayor still hasn’t understood this, and his cohorts haven’t understood how to handle these scattered vacancies. There has to be a whole new mindset, where you look at neighborhoods and you see every house in good condition except a vacant house, or two or three or four, and you target those and fix them."

What do you make of the mayor’s race?
"I would say I am very disappointed no one has been able to structure the race so that the most vital issue facing Philadelphia-how city government may aid and assist this phenomenon occurring all around the city-would become the central issue of the campaign. There are high-income people eager to move back into the city, so how do we encourage and expand upon that?"

Isn’t Philadelphia trying to tear down old blighted homes to clear the way for developers to come in?
"Where there are individual abandoned properties, where nobody is in control and they are absolutely dragging the neighborhood down, that’s where government should step in. And they should do it in a far more logical way than they are right now.
"The mayor had a wonderful idea. He was going to get rid of abandoned cars, and at that he was very successful, because all he had to do was pick the damn thing up and take it to the dump and then it was gone. No more abandoned cars! But when you come to an individual property that has no owner and just sits there and becomes more and more ramshackle and people vandalize it … it’s an intractable problem, and the mayor’s whole [anti-blight initiative] has not produced anything to solve it.
"I have long proposed a solution where the city acquires and gets clear title to these abandoned properties, which would require new legislation, I know, but it could be done. Once that’s done, you can attract developers, even if you subsidize them. You can take this awful neighborhood hazard and completely turn it around."

You’re saying the city needs to get some mechanism in place to acquire abandoned properties and turn them around, quickly, to new residents.
"Yes, and the other part of the concept is you would then have a city program to develop blight-free blocks. Inspectors would come out and rapidly transfer ownership to an organization that would move in efficiently and restore the building and sell it or rent it. It would quickly change the math and change people’s conceptions of the city. Success would not be quantified by individual properties we have developed but by how many cancerous sores we have eliminated."

But what happens to Philly’s poorest neighborhoods? This doesn’t seem to do anything for them.
"This program is not for the most blight-afflicted neighborhoods. You’re now talking about the worst neighborhoods where city planning’s only plan is simply tearing houses down. There is no logic to it. The people in those neighborhoods don’t even want that. They want new neighbors.
"It’s pretty damn silly to go on to those neighborhoods and make a major investment in tearing down buildings when there are these outlying neighborhoods where you can turn things around much faster. In fact, it’s not just silly-it’s outrageous! You see your ‘either/or’ is invalid.
"Maybe there would be larger, poorer areas you could do wholesale, but the impact vs. dollars spent of the blight-free block program makes it more attractive. And working in the center where the blight is terrible is illogical. My way you attack blight from every side and slowly move in on it until you reach the center."

I can only imagine a big part of the problem here is how difficult it is to get developers to work on projects in the inner city. Mayor Street must have imagined that developers would come in after these homes were torn down.
"You’re kidding yourself. Engaging in some kind of delusion. He didn’t imagine a damn thing, and neither did the planning commission. I’m not saying it’s in any way wrong to clear an area, but there has to be a bigger plan in place-see to it they put in urban homes and not try to do these cute little front yards. To concentrate on the center and not do a damn thing about the outskirts where the single removal of a single blighted property can have such a great impact is outrageous."

When you say put in "urban homes," are you referring to the way suburban developers concentrate on these big housing communities where they save money by building every house out of the same material and according to the same design so they all look alike?
"You talk about look-alikes. Again, that’s precisely the opposite of what I’m saying. Most neighborhoods in Philadelphia-all the homes look alike. But they have street trees and they have character. It’s wrong to let developers have huge lots in the city, and it’s a habit we have to get over. There’s a great danger that the pseudo-suburban will take over."

I’m sorry. Clarify this for me: What makes something pseudo-suburban if it isn’t that the homes all have this cookie-cutter appearance?
"First of all, you’ve apologized, but I’ve already forgiven you. You’re forgiven. Secondly, put your mind on Philadelphia. Almost any block in any neighborhood contains homes that look alike, but they have different-colored front doors and different characteristics. Importantly, they are close together. The key is the size of the lot-not the architecture of the house.
"There’s a sociability people are looking for in a city. The houses are close together. You can talk and socialize from your stoops on the sidewalk and watch your children play together with the neighbor’s children. But if you start putting these houses on corner-styled acre lots, that’s the danger of what suburban developers do.

"We must develop as a city an urban image, in which we have row houses and urban spaces in the neighborhoods, and every space is occupied and healthy."

Thank you very much for your time.
"Thank you! I’ve been sitting here writing my memoirs and thinking about these sorts of things, so your call was perfectly timed as it gave me the opportunity to talk about them. Not only that, but your questions were intelligent, which was shocking, and you actually listened to my answers. Plus, you weren’t afraid to say when you didn’t understand something, and you asserted your own vision of things, which I then smashed."

As we have said in this Blog, on the radio talk shows and interviews we do.....

DO NOT (in most cases) buy residential real estate (homes, condos) as an investment in this environment. Buy a place because you need somewhere to live. Buy with the assumption that real estate prices drop 15% in most areas, and assume taxes and insurance rates rise every year. Can you still afford to make the buy? Whether it is 3 years or 5, there is going to be a lot of depressed (in value) condo's out there for the picking. Soft landing during this Bush administration, probably, but not forever. This new class of 2nd home buyers and residential investors are fueling 1/3 to 2/3 of this boom and are going to get some whoop-ass. Just like in the mid/late-80's.


On a related note, below are 3 news stories summarized (bottom of this post) by Steve Murray's folks at RealTrends.

>Department of Justice still suing the National association of Realtors (NAR)

>A GAO report finds realty commissions are artificially high

>Fed Chairman comes to the conclusion that using your home equity to go on vacation is probably a dumb idea.

[Not that we post so often, but if you have been reading our posts from early 2004, Smarter Agent has been telling our readers that the above items will come to a head.]

OH Boy, do all those stories make me bullish on the technology opportunities in real estate .

Here are some reasons the current environment is great for Smarter Agent:

>The new Internet policy by NAR is much better than the last 2 versions NAR has come up with over the past 4 years. It's called ILD (Internet listing display, and replaces IDX and VOW).

For example, it lets you advertise next to listings.

It also prohibits a broker from singling 1 firm out to withhold its listing from off the bat..But it still lets Realtors bullshit sellers by making up some non-factual statement to get them to opt-out of other brokers web site displays. I haven't read the revised DOJ complaint yet but it should be a good read.

Coming from where the industry started in 1999, this new policy is a huge, huge, huge improvement.

Of course it took an anti-trust complaint, but what the heck.

I feel bad for the VC's who lost millions trying to re-invent the system before the rules were ready. Actually, don't ask them. They are still shellshocked that a group of 55 year old woman (the average Realtor make-up according to NAR) that is fed a bunch of crap by a few men who run the brokerage firms and NAR could take them down.

At Smarter Agent we reinvent - within the rules and the system - with our eyes wide open. In our view, this new ILD plan -while not perfect- gives us the wind at our back and we are full steam ahead with our plans - with a lot less bad regulations flying around. We do hope the Justice department wins, as the new ILD policy can still hold back progress in empowering consumers.

>The GAO report is a little weak. And I wonder why no one ever mentions although the industry has more than 3 major franchisee players and lots of independently owned firms - so it is very fragmented in one sense --- that control at the top is actually consolidating. Did you know the Cendant brands (C21, ERA, Coldwell Banker, Sothebys) sell or represent buyers in 25% of all home transactions in the USA! And they have an exclusive agreement with the PHH mortgage division they just spun off (but own 40+ %) off to pitch mortgages to all these Buyers.

Corporate Cendant has a lot of franchise control over what goes on evidenced how they and ReMax totally came out and got the NAR bureaucracy to rollover with the last IDX/VOW policy. When you add Remax, GMAC and Prudential to Cendant, I would not be surprised if 60%+ of all transaction are done by a half dozen brands with that number going way higher over the next several years.

The great news is the new ILD policy will help the savvy take business from the pack and make consumers happier to boot.

Also the Smarter Agent bank product is a winner in this environment. If GAO sheds light on letting Banks into real estate, we have a 100M opportunity here.

Not to mention our pending real estate listing configuator patent (first time mentioned) that really will change commission 'ciphering' over time by making the process more efficent without the need to discount.

>Finally, Alan Greenspan. He just gets more and more pessimistic with each piece of info he throws out there.
Here are the article blurbs so you can see what I am talking about.


===DOJ amends antitrust lawsuit against NAR===
The Department of Justice today amended the complaint in its antitrust lawsuit against the National Association of Realtors (NAR), charging that the group's modified policy continues to prevent Internet-based real estate brokers from offering better services and lower costs to consumers. The lawsuit challenges NAR rules that limit competition from brokers who use Internet tools to serve their customers. The new complaint addresses how NAR's changes to its rules still obstruct competition, threaten to lock in outmoded business models and inflate prices in the industry."Last-minute changes by NAR did not fix the anticompetitive problems of its policy," said J. Bruce McDonald, Deputy Assistant Attorney General in the Department's Antitrust Division. "When buying and selling a home, consumers should receive the full benefits of competition - better services and lower costs. NAR's modified policy continues to prevent consumers from realizing these benefits."

===GAO report on competition in the real estate industry===
The Government Accountability Office (GAO) has released a report on competition in the real estate industry that found that its competition appears to be based more on nonprice variables, such as quality, reputation or level of service, than on brokerage fees. One potential cause of the industry's apparent lack of price variation is the use of MLSs, which facilitates cooperation among brokers in a way that can benefit consumers but may also discourage participating brokers from deviating from conventional commission rates. Further, while the Internet offers time and cost savings to the process of searching for homes, Internet-oriented brokerage firms account for only a small share of the brokerage market and many consumers are therefore unaware of those options. The study also found that although about 30 states potentially authorize state-chartered banks or their operating subsidiaries to engage in some form of residential real estate brokerage, few banks in these states appear to have done so, and usually only because their markets are so small that few real brokerages exist.

===Fed Chairman warns of reliance on housing loans===
Federal Reserve Chairman Alan Greenspan, drawing on new research he has personally supervised, said American consumers have become enormously dependent on borrowing against their homes to fuel their spending, and that a rise in mortgage rates could trigger a spending pullback. Mr. Greenspan's new data from his study, "Estimates of Home Mortgage Origination, Repayments and Debt on One-to-Four Family Residences," show that borrowing against home values added a stunning $600 billion to consumers' spending power last year, equivalent to seven percent of personal disposable income, compared with three percent in 2000 and one percent in 1994.The Fed chief attributed that increase to declining mortgage interest rates, an increase in the turnover of homes, the popularity of cash-out mortgage refinance and home-equity loans. Should mortgage rates rise, he told the American Bankers Association, turnover and borrowing would decline, consumer spending would slow and saving would rise. Greenspan suggested that such a reversal need not be "disruptive," but instead would bring about a welcome rise in U.S. savings and a narrower trade deficit. But he also sounded new warnings about speculation in the housing market.