Friday, October 23, 2009

People are too Expensive

A few months ago, I went to a corporate function at Blue Hill at Stone Barns, an organic restaurant 30 miles north of midtown Manhattan, in Pocantico Hills, part of Westchester County. Glad someone else was paying, because it was damned expensive and I left hungry. They grow most of the food there, on 80 acres that is owned by some non-profit organization.

Some of the other people at the event commented how nice the rolling hills and farmland looked. My response was that yeah, it looked nice enough I guess, but since the place was just 30 miles from Manhattan, and since many people want to live near Manhattan, I'd certainly have no objection if instead of a non profit farm, the place was occupied by a subdivision of 80 or 100 houses. After all, housing is very expensive in Westchester, and if you increase the supply of something, it'll make that product more affordable. Yeah, 80 to 100 houses wouldn't make that much of an impact, but every little bit helps.

I sort of expected some reaction about open space, traffic, and the usual arguments against more development. However, I was a little surprised by the almost universal reaction that I got. The problem that everyone said they'd have with development of the land would be that the property taxes collected wouldn't cover the additional school costs the children in those houses would require.

In Pleasantville (Pocantico Hills is part of Pleasantville), the median home and condo value in 2007 was $638K, so the median home would be somewhat higher. Not sure what the median house would be today, but you could probably sell the houses there for $750K each. These houses would likely generate $20K in annual property taxes each. In the school district, they spend Over $28K per student.

This leads me to a deeper question. Here we have a situation where people who can afford $800,000 homes and who are going to presumably have good jobs are too expensive to support. These are people that make the top 5% of income in the country. The local school district has become so expensive, that there are only a tiny portion of families that carry their weight. The shortfall has to be made up from people without children, businesses and other commercial property, and state and federal aid. Poorer people who could only afford say $400,000 houses (if such animals existed) wouldn't come close to carrying their costs. With the exception of multi millionaires in country estates, or with single (and childless) people living in condominiums, no one is really affordable anymore. The educational expenses in this community have become so bloated and expensive that it's encouraging basically everyone to take a no-growth stance. How does a society even hope to function if families become too expensive?

Oh, and another thing. You have a non profit organic farm that pays no property taxes 30 miles from the most desirable city in the country. Yet the restaurant is over $100 per head and serves tiny portions. So how exactly is the whole local, organic farming thing really supposed to work from a practical perspective? How are we going to feed all the people who make less than $300,000 per year?