Patrick Sisson - Writer, Journalist, Cultural Documentarian, Music Lover


Bloomberg CityLab

January 2021

Robert Futrell has spent decades studying right-wing militia movements. A professor at the University of Nevada, Las Vegas, he watched as a mob of Trump supporters stormed the U.S. Capitol on Jan. 6, killing a Capitol Police officer. Four others also died in the attack, which was part of an ongoing effort by President Donald Trump to subvert the presidential election. Similar demonstrations, some violent, also erupted at several state capitals, including Salem, Oregon. 

The insurrection was a shocking but not unexpected illustration of the threat posed by militias and white supremacist terror — a danger he believes the nation is belatedly coming to terms with.

“My sense is we’re not ready,” he says. “We’re starting to take it seriously, but we’re really behind.”

On Monday, an FBI bulletin warned of the possibility of further attacks aimed at the literal and symbolic centers of representative government: “Armed protests are being planned at all 50 state capitols” before the inauguration of President-elect Joe Biden on Jan. 20, starting Jan. 16, and again at the U.S. Capitol beginning Jan. 17. In a briefing on Monday evening with federal lawmakers, Capitol Police also outlined three potential new attacks planned for D.C. during the inauguration period. (D.C. Mayor Muriel Bowser has warned Americans to stay away from the nation’s capital earlier that day.)

The threats might not materialize, but they should be taken seriously, Futrell says. “Most experts expect violence,” he says. “Street-level violence, maybe bombings. There are threats all the time, and it’s hard to pinpoint who spins out of these networks and commits the kind of violence we fear.” 

By the end of this week, three-fourths of all state legislatures will have opened their new sessions, as well as their doors to the public. What can be done to protect these halls of democracy, the workings of government, those who work inside, and the cities whose identity and economy depend on functioning state government? 

“That is the challenge, making sure the government can function and perform its duties and function in a free society, while protecting the people charged with doing that,” says Brian Lynch, a former FBI SWAT team member and executive director of safety and security at RANE, a security consulting and risk management firm. “What’s the priority, open and functioning government at the expense of the safety of those people doing the government’s business? That’s the issue, and there’s going to be plenty of ongoing conversation.”

Protestors Rally At Kansas State Capitol Against Governor's Stay-At-Home Order
In April, armed protesters gathered at the Kansas Statehouse in Topeka, Kansas, in defiance of stay-at-home orders designed to slow the spread of the coronavirus. Photographer: Jamie Squire/Getty Images North America

A series of right-wing attacks on statehouses in 2020 helped set the stage for the violence in D.C. on Wednesday. On Jan. 20, 2020, participants in a pro-gun rally stormed Virginia’s seat of government in Richmond, while in April the Michigan State Capitol was overrun with armed demonstrators who objected to the state’s Covid-19 measures13 people were arrested in October after a foiled plot to kidnap Michigan’s Democratic governor, Gretchen Whitmer. (Some Michigan lawmakers now wear bulletproof vests into the legislative chambers.) Other attacks and armed protests have taken place in Georgia, under the eagle-topped dome of Idaho’s capitol building in Boise (maskless protesters barged into legislative chambers in August) and in Oregon (in December, a Republican state representative was later found to have let protesters into the capital through a side door). Some participants in violence in Salem went on to the Jan. 6 event in D.C. 

Statehouse threats have continued after the failed attack on the U.S. Capitol: In Frankfort, Kentucky, local militia held a rally in front of the state capitol on Saturday, with some participants brandishing zip ties. (Governor Andy Beshear tweeted: “We will not be bullied. America is counting on the real patriots. Those who condemn hate and terror when they see it.”) 

In response, a wave of new security measures is expected in and around the U.S. Capitol, which has already seen extensive limits to public access via bollards and fencing since the 9/11 attacks. But many U.S. statehouses are comparatively lightly defended, and the buildings themselves — sites of visitor tours and school field trips, centers of legislative work and representative democracy — could be dramatically altered by this past weeks’ events. State capitol buildings, built to embody the values of representative democracy, are the nation’s “unique contribution to monumental architecture,” wrote historian Henry-Russell Hitchcock in Temples of Democracy: State Capitols of the U.S.A. Most are grand, domed facilities that are designed to be open; Hawaii’s modernist statehouse even boasts an open-air rotunda, for example, that gives the public a view of politics in action. 

Balancing security, historic character and the functioning of an open government — with public space for protected First Amendment protests — is “very complicated,” says security expert Paul Joyal, a former Capitol Police officer and director of security for the U.S. Senate Select Committee on Intelligence who is now the director of homeland security practices at National Strategies, a consulting firm focused on local government, including safety and security.

The threats to state capitols in and around the inauguration should be taken seriously, says Joyal: He believes there’s a “broader conspiracy” at work, and right-wing extremists were waiting for a successful attack on the Capitol to launch other attacks across the country. 

Other experts on right-wing extremism are similarly alarmed. “This threat will absolutely not go away after Biden’s inauguration,” says Hampton Stall, the founder of MilitiaWatch, which tracks the right-wing militia movement. “I’m not sure what future mobilization towards the national capital may look like in the future, especially from militia organizations I’m most familiar with, but state capitals have been a target for their mobilizations for years now.”

In the past, militia groups have targeted state buildings because “they believe that the government as it stands isn’t a government of the people, it’s one of the elites plotting to control the population,” says Futrell. “Militias don’t see the government as it exists today as a defensible one.” 

Responses to the rising threat have been varied. In Madison, crews are boarding up ground floor windows of the Wisconsin Statehouse. Washington Governor Jay Inslee activated hundreds of National Guard Troops to help keep order at the Washington State Capitol in Olympia. South Dakota has set up new security screenings in Pierre, even creating a TSA PreCheck-style Fast Pass for frequent visitors. Michigan legislators banned open carry of firearms inside the capitol in Lansing on Monday, even as Texas legislators discussed bringing more guns into session in Austin. “Pretty sure more #txlege members are going to start carrying inside the Capitol,” Republican state representative Briscoe Cain tweeted

Joyal has four immediate recommendations for state leaders and law enforcement seeking to shore up defenses in the coming days. First, he proposes expanding the investigative capabilities of the FBI and state police agencies.Giving law enforcement the power to categorize right-wing militia groups as domestic terrorist organizations, for example, would allow the FBI the full use of all its investigative tools to surveil such groups for advance knowledge of any impending attack. 

Second, and perhaps most important for state capitols, ban weapons from statehouses and any government buildings or facilities. “If men in combat fatigues with beards and regalia show up, people are intimidated, and so is law enforcement,” he says. “Half the time, they have better weapons than the cops do. This type of intimidation must be deterred and prevented. The more guns on public display the more dangerous the situation.” If there’s pushback from pro-gun legislators, Joyal suggests citing former California Governor Ronald Reagan, who, in 1967, signed legislation banning guns at the statehouse after Black Panther activists brought weapons with them as part of “police patrols.” 

Third, he says statehouses and other state offices need to make sure all computer systems can be shut down remotely, to prevent bad actors from hacking into state systems or planting malware

In the longer term, state capitals can look into structural security measures, such as reinforced doors and hallway barriers that can be closed if mobs storm the building, creating safe rooms to protect officials and legislators who may be trapped inside, and pre-positioning portable fencing that can be swiftly put in place to impede attacks or encroachment. 

But turning statehouses into impregnable fortresses surrounded by armed troops could bring its own risks, Futrell says. “The more the state arms up against their claims of violence, the more it feeds into the conspiracies that they hold.” 

When asked about new measures being taken in response to the FBI bulletin, law enforcement agencies in Georgia and Michigan refrained from providing many details. “We do not share our operational plans,” a Georgia Department of Public Safety spokesperson told Bloomberg CityLab. “However, we are prepared to respond in the appropriate manner as we have always done in the past. Our primary concern will always be the safety of everyone who works at or visits the Capitol grounds.” In response to queries, the Michigan State Police, one of three agencies guarding the capitol, said, “We do not comment on security measures at the Capitol. We do continuously monitor and re-evaluate security protocols at the Capitol.” For example, the Michigan legislative buildings closed in December during the counting of electoral votes, due to a credible threat of violence.

After Jan. 6, Joyal expects such threats will be taken even more seriously.

“It wasn’t a failure of intelligence,” he says of the U.S. Capitol attack. “It was a failure of political will and the leadership of the police to think the unthinkable. We face a very troubled time.”

New York Times

December 2020

A plan to upgrade a cluster of nine unremarkable apartment buildings in Brooklyn typically would not merit a second look. But this isn’t a quick fix; the project, called Casa Pasiva, aims to be a new model for the sustainable transformation of the city’s housing stock.

Sleek new skyscrapers that incorporate the latest energy-efficient building materials like mass timber may look impressive, but when it comes to solving the climate crisis in New York, the real challenge lies in the city’s decades-old structures.

More than 90 percent of the buildings in New York today will still be standing in 2050, and nearly 70 percent of the city’s total carbon emissions come from buildings. Taken together, these facts suggest that the fate of those nine nondescript Brooklyn buildings, and others like them, is essential to cutting emissions.

Instead of demolishing older buildings, owners and developers are devising ways to retrofit them with the latest green technology.

Casa Pasiva, a $20 million retrofit project in the Bushwick neighborhood, aims to be a pioneer. The developer behind the project is pushing an aging collection of buildings to the cutting edge by essentially turning them inside out, all without tenants needing to relocate. Interior pipes, radiators and heating ducts will be removed or sealed, and a new facade on each building will cover a new all-electric heating and cooling system.

The project is being overseen by the nonprofit RiseBoro Community Partnership, which owns the structures. When Casa Pasiva is finished next summer, the buildings will meet a strict passive house standard, a modern building convention that substantially reduces heating and cooling costs, thanks to their airtight exteriors. The fading brick and concrete walls of the Casa Pasiva buildings will be buried under a white, sculptural surface that will help slash energy costs by 80 percent, according to RiseBoro.

“Our mission is long-term affordability, and low energy use is a stabilizing force,” said Ryan Cassidy, director of sustainability and construction at RiseBoro. He estimates the retrofit project, which is the first of its kind in New York, will cut energy costs by $180,000 a year. “It’s good for the environment, but it’s also good for our budgets.”

Casa Pasiva received $1.8 million in financing from RetrofitNY, a program funded by the New York State Energy Research & Development Authority. The agency is investing about $30 million in RetrofitNY projects. The effort to help kick-start the development of low-cost, scalable retrofit technology and build a market for energy efficiency upgrades comes as strict city and state laws trying to reduce the carbon emissions in buildings go into effect.

“Fundamentally, what RetrofitNY is about is developing a more streamlined, more modular, more efficient way of achieving deep decarbonization in housing,” said Janet Joseph, senior vice president of strategy and market development at the agency.

The city and New York State have zeroed in on buildings in pursuit of meaningful cuts to carbon, like the state’s goal to slash greenhouse gas emissions by 85 percent by 2050.

A measure passed last year as part of the city’s Climate Mobilization Actrequires owners of structures 25,000 square feet or larger to make often sizable cuts in carbon emissions starting in 2024 or pay substantial fines. The legislation affects 50,000 of the city’s roughly one million buildings, including a substantial number of residential buildings.

“There is a laser focus now on reducing carbon emissions from the built environment in New York unlike ever before,” said John Mandyck, the chief executive of Urban Green Council, a nonprofit advocacy group.

]The council estimates that the cost of bringing all buildings in New York into compliance with the law will reach $20 billion, creating a huge market opportunity for contractors and trade unions and potentially 141,000 jobs, and fostering the development of new technologies and business models for building upgrades.

Affordable-housing providers are exempt from the emissions requirements until 2035, but a low-cost way to raise energy efficiency and cut costs would be welcomed by owners looking for more financial stability, said Jolie A. Milstein, president and chief executive of the New York State Association for Affordable Housing, a trade group.

“Everyone is looking for new ways to upgrade the affordable housing stock,” she said. “Our goal is to make everything carbon neutral.”

Casa Pasiva was the brainchild of the architect Chris Benedict, a longtime partner on passive house projects with RiseBoro. She drew inspiration from Energiesprong, a Dutch process that uses standardized, premade building panels with built-in heating and cooling systems to upgrade older buildings. In the United States, and New York in particular, the wide variety of housing types, as well as differing climates, makes the standardized Dutch approach unfeasible.

Ms. Benedict had to design the Casa Pasiva system from the ground up. Each of the 146 apartments will have a wall-mounted electric heater and air-conditioner connected to a system of ducts and refrigerant lines that snake up the walls and eventually connect to an energy recovery ventilator, a rooftop machine that purifies and circulates air.

The new facade, layered up to eight inches thick atop the existing exterior, will consist of a barrier to prevent airflow; rigid insulation panels; stucco; and a self-cleaning finish, Lotusan, designed to whisk away water by mimicking lotus leaves. Ms. Benedict successfully lobbied for a change to the city’s building code to allow additional exterior cladding.

“When I first looked at how to design the wall, it was like a big puzzle,” she said.

Tenant benefits go beyond energy savings. The facade is thicker, airtight and watertight, which means improved air quality — it’s constantly recirculated because of the tight external envelope — less noise from the outside and fewer pest and mold issues. Electric induction stovetops will cut interior air pollution, and the apartments will gain extra space from the removal of radiators.

The incoming administration of President-elect Joseph R. Biden Jr. has made clean-energy retrofit projects a centerpiece of its $2 trillion climate plan, with a goal of retrofitting four million buildings in four years. But even that aggressive pace wouldn’t curb emissions enough to meet the goal of the Paris climate agreement to hold temperature increases under 1.5 degrees Celsius, said Martha Campbell, buildings principal at the Rocky Mountain Institute, an organization in Colorado focused on sustainability across the globe.

The nation would need to retrofit three million homes a year to reach the carbon mitigation goals of the Paris agreement, she said. To give a sense of the labor and scale of such a feat, about 900,000 new homes a year are built in the United States.

The Casa Pasiva approach is one of many that builders and engineers are examining through larger efforts like the Advance Building Construction Collaborative, which Ms. Campbell called “an opportunity to address deferred maintenance issues without digging deep into those buildings.”

Energy retrofit projects have become the focus of many climate plans, but funding for such projects has not always followed. Landlords and building owners support reducing emissions, but the approach taken by New York’s Climate Mobilization Act, for example, can come off as punitive and somewhat confusing, said Zachary Schechter-Steinberg, vice president for policy at the Real Estate Board of New York, a real estate trade association.

Ms. Campbell fears that some frustrated owners may simply pay the fine and skip the renovation, essentially throwing away capital that could be steered to energy efficiency investments.

To solve the issue, Urban Green Council and other groups have proposed setting up a carbon trading scheme that would let owners parlay large fines into investments in energy efficiency for other buildings, especially affordable housing. Technology, like that being pioneered at Casa Pasiva, could be one way to fix the disconnect.

“We need to get 100 more projects underway and 100 more Chris Benedicts working on them,” Ms. Campbell said.

CoMotion News

December 2020

While the full impact of the 2020 election is just beginning to come into focus, Uber, Lyft, and other tech firms in the gig economy notched a clear victory. Proposition 22, a California ballot initiative that creates special labor regulations for workers of rideshare firms and delivery companies like DoorDash and Instacart, was decisively approved by voters with a 58-41% margin. Silicon Valley sees the win as both a mandate in its battle over labor rights, and a loss to organized labor, which fiercely fought against the initiative’s passage. 

Uber CEO Dara Khosrowshahi said passage will set a global template for labor relations going forward. The victory was an endorsement of the firm’s “third way” approach to flexible pay and benefits, and the company will “loudly advocate” for similar policies in other states. “California voters have spoken, and they stood with more than a million drivers who clearly said they want independence plus benefits,” said Lyft Chief Policy Officer Anthony Foxx, former U.S. Secretary of Transportation under President Obama. 

Prop 22 was a direct response to the passage of AB5, a California state law signed in September 2019 that was aimed at the gig economy. It mandated that many independent contractors be reclassified as employers, with commensurate benefits and the right to unionize. Prop 22 creates an exemption for workers at Lyft, Uber, and other related firms, who will now remain independent contractors. 

While the initiative mandates flexible health-care subsidies and disability protections, these benefits aren’t as robust as those required for full-time employees; Prop 22 doesn’t give them access to paid leave, unemployment insurance, or worker’s compensation. They can’t unionize andand they have a low guaranteed wage

Melissa Berry, managing editor for The Rideshare Guy blog, a resource for the industry’s workers, says that Uber and Lyft successfully sold their narrative to the public: that drivers want flexibility and independence and riders want low fares and no disruptions to a service they depend on. A survey the site conducted with drivers found 60% in favor of Prop 22, though Berry did qualify the results, saying that most respondents were part-time drivers, who often obtain healthcare benefits via a partner. 

“This is the third way these firms have repeatedly spoken about, and what they proposed at the federal level,” she says. “Let workers set their own hours and we’ll offer them portable benefits, but they can’t unionize or gain full employment status. With Prop 22 passing in California, they see it as a fairly big win, and think other blue states can pass it, too.” 

But as the firms bask in their win—in the days after the election, stock prices for both Uber and Lyft closed higher, roughly 15% and 11%, respectively—is it truly a mandate?  

Steve Smith, communications director of the California Labor Federation, said that the lopsided spending over the ballot measure—tech firms spent more than $200 million, or 20 times that of labor—made it the most expensive such campaign in American history. And even though labor was outspent and ultimately defeated, the push against the law galvanized worker organizations and coalitions, which may make passage of Prop 22 a Pyrrhic victory for tech companies. Smith and other organizers believe it could be seen, in hindsight, as the first skirmish in an elevated battle over worker’s rights in the gig economy. 

“The post-mortem for this is pretty easy,” says Smith. “Any company willing to spend north of $200 million for favorable legislation has a good chance of winning.”

What is clear after Prop 22’s passage is that tech companies feel a renewed sense of confidence pushing their “third way” labor policies in other states, via ballot measures or new statewide laws, and even on the federal level. In DC, Coalition for Workforce Innovation (CWI), a lobbying group that includes Lyft and Uber, will likely continue to push hard against any action from Congress or the incoming Biden administration. 

Only 26 states allow some form of ballot initiative, but Uber and others have a long history of successfully pushing for friendly legislation at the state level. In Texas, for instance, when Austin passed legislation in 2016 that Uber and Lyft didn’t like, the rideshare startups proceeded to lose an expensive referendum campaign to overturn the rules, then ended up aggressively lobbying lawmakers at the statehouse to pass state legislation that superseded local regulations. Future campaigns will likely reuse the tactics that proved successful in California, such as forming advocacy groups—for instance, Lyft formed Illinoisans for Independent Work back in June—and spending extensively on advertising. 

Smith argued these lobbying groups and their messaging in California was misleading and made many voters see Prop 22 as more pro-worker than it actually was. A survey of voters found that 40% who voted for Prop 22 felt they were helping worker’s rights. Proponents also used their apps as means to motivate users to vote in support of the services they use. Uber drivers had to click through pro-Prop 22 messaging before being able to use the app. 

The post-mortem for this is pretty easy. Any company willing to spend north of $200 million for favorable legislation has a good chance of winning.

An increasing number of states are likely to take up worker classification laws in 2021 and 2022. Berry from The Rideshare Guy already sees a few future potential battlegrounds in blue states.  Regulators and courts in New York, Massachusetts, Illinois, and New Jersey have found at least some drivers for these services need to be considered employees for them to be eligible for unemployment benefits, and Massachusetts is both suing the rideshare firms over employee misclassification and pushing for a law similar to AB5. DoorDash actually listed the passage of Prop 22 as a risk factor for its upcoming IPO, explaining that it does add new benefit costs, and will likely inspire other states to take up the issue. 

“The passing of Prop 22 eases some of the overhang over Uber and Lyft and should enable these companies to maintain low prices and high growth,” says Asad Hussain, a mobility analyst at Pitchbook. “However, we believe labor regulation will remain a battleground issue over the long term. Ridesharing businesses are likely to be impacted by regulation in other US states such as New York and Washington targeting the use of gig economy workers.”

The incoming Biden administration is also expected to have a different posture around the gig economy, says Smith, after the Trump administration repeatedly ruled in favor of independent contractor classification for Uber and other firms. New leadership at the National Labor Relations Board (NLRB) is expected to be more pro-union and pro-worker, and Democrats may try to pass the PRO Act, worker’s rights legislation called a “federal AB5” by opponents, depending on the outcome of the January Senate runoffs in Georgia. Berry expects both companies to lobby strongly against federal action. 

Smith’s organization will be sharing its experiences and partnering with other unions and the AFL-CIO to fight against any similar bills or ballot measures, seeking to protect worker rights and increase wages. A survey by Gridwise, a third-party app for rideshare and delivery drivers, found California gig workers earned an average of $18.37 an hour for rideshare, and $16.57 an hour for food delivery. 

There’s also a legal challenge expected over some of the language in Prop 22, specifically a clause that mandates that any changes to the rules laid out in the ballot initiative must be passed by a seven-eighths supermajority, seen by opponents as an illegal maneuver to rewrite parts of the state constitution.

The Prop 22 fight also galvanized labor organization among drivers, says Smith, forcing more workers and voters to pay attention to the issue. More than 50,000 gig workers have joined groups in California alone, he says, and groups such as We Drive Progress, Mobile Workers Alliance, Rideshare Drivers United, and Gig Workers Collective have seen increased levels of action and organization since the campaign started. This will only “intensify the fight,” says Smith, one that appears to be far from over.

“This is really a question of the future of work in America, about precarity and instability,” says Smith. “Do we want to support jobs that provide basic protections we think all workers deserve?”


December 2020

“None of us knows how long this crisis will last,” pleaded Robert Reffkin in a letter to Nancy Pelosi and her Republican counterpart Kevin McCarthy in March. Reffkin, CEO of real estate startup Compass, was urging Congress to include independent contractors like real estate agents— some 2 million of them in the United States, according to the National Association of Realtors — in its economic stimulus package. In his plea, Reffkin cleared up any misconceptions about the professionals: They were entrepreneurs and small business owners who represent the backbone of the U.S. economy, personify the American dream, yet typically only earn less than $41,800 per year. “We do know that for real estate agents, the economic pain will last even longer than it will for those in many other professions.”

The heartfelt missive on the plight of his industry during a pandemic — he even mentioned his mother, who works as an agent for his firm — came during a particularly bleak moment for Compass and its more than 11,500 independent contractor agents who depend on it. With the backing of $1.6 billion in venture capital, including a $450 million infusion from SoftBankin December 2017, Compass had been on a growth streak, grabbing market share in the nation’s most expensive housing markets and becoming a major player in high-end residential real estate. But as everything, including real estate sales, ground to a halt in late March, it left a commission-dependent workforce desperate for signs of life.

Reffkin sent his letter on a Thursday. The following Monday, he laid off 375 of his full-time staffers, characterizing the moment as an “economic standstill” and forecasting a 50% revenue decline over the next half a year. By mid-April, after stay-at-home orders and shutdowns froze the economy, new weekly home listings in New York City, one of the company’s largest markets, were down 89% year over year. Worries of hollowed out, abandoned urban centers began to take hold, a particularly grim scenario for a luxury urban real estate company.

By this summer, Compass hadn’t just recovered, it was posting record-breaking monthly revenue every month from June to October.

While the urban exodus story was largely a myth, wealthy families would begin relocating to bigger, more spacious homes, or purchasing second homes. All of this made Reffkin’s letter seem as dated as a sepia-toned dispatch in a Ken Burns documentary. By late spring, home buying had started to swing back with a force no one had anticipated. Since then, real estate sales, particularly expensive single-family homes, have been booming, hitting a 14-year high in October, per the National Association of Realtors, the same month the number of homes on the market priced over $1 million doubled and the median home price jumped 15%, setting a record high.

By this summer, Compass hadn’t just recovered, it was posting record-breaking monthly revenue every month from June to October. In June, July, and August, agents netted 50% more revenue than the same period last year. Since April, it has brought on 3,500 more agents to meet demand. Compass competitor Redfin found that luxury home sales, defined as homes in the top 5% in the market, are up 42% year over year in the third quarter of 2020, and showings, both virtual and in-person, have skyrocketed in recent months, up 64% year over year in September. The surge has been most pronounced at the highest end. “New listings for what we define as affordable homes is up just 2.8% in Q3,” says Daryl Fairweather, chief economist at Redfin. “For luxury, inventory is up 45%.”

Now, rapidly expanding during a historic upswing in home buying, Compass is using its billion-dollar war chest to build on that momentum with new technology and its army of agents. Compass, first launched as an apartment rental site called Urban Compass in 2012 co-founded by Reffkin and serial tech entrepreneur Ori Allon, is aiming to build a brokerage with the valuation of a tech giant.

With the SoftBank backing and massive valuation, there have also been no shortage of Compass comparisons to WeWork.

While well-funded upstarts taking aim at large established industries is nothing new, few asset classes boast the value of U.S. homes, worth more than $30 trillion dollars. Compass’ strategy has been to develop what its chief technology officer Joseph Sirosh told Marker is an “operating system” for the antiquated real estate industry. Things like bespoke customer relationship management tools that use predictive A.I. to tell agents who and when to target; computer vision and machine learning to examine pictures of your home and tell you what upgrades you need to make to increase the sales value; and a slick smartphone app that lets an agent create customized video clips for social media to help one client sell their home, send a bottle of champagne to another happy customer, and generate and send itineraries for tomorrow’s home tour, all in minutes. The aspiration is that with every agent interaction tracked, it will eventually be able to recommend which strategies work best. “The nature of our platform is that it’s like Shopify or Salesforce,” says Sirosh.

The narrative of the tech-first disruptor is a well-tread path. Salad giant Sweetgreen, which has raised nearly half a billion dollars, has shown the value of casting itself as a technology firm that just happens to sell lettuce.While Compass is currently valued at $6.4 billion, it’s been met with skepticism, often withering, especially from established industry players. Its valuation is 10 times that of Realogy, the giant conglomerate of marquee firms such as Sotheby’s and Coldwell Banker that dominates the U.S. real estate market and has almost six times more annual revenue and 20 times more agents. When asked by business journalist Andrew Ross Sorkin why it appears that his company is actually seeing growth from rolling up small and large real estate firms as opposed to tech investment, Reffkin responded with the pithy “Is Amazon a retailer or tech company? Is Uber a transportation or tech company?”

With the SoftBank backing and massive valuation, there have also been no shortage of Compass comparisons to WeWork. (While Reffkin and Allon declined to speak to Marker, Compass fiercely resists those comparisons, underscoring that unlike the co-working giant, it has no debt.) According to The Real Deal, Compass has acquired more than a dozen brokerages, including a San Francisco-based firm with $14 billion in annual sales. It expanded from 37 to 122 markets in 2018, reportedly seducing brokers with unsustainably high commissions. A real estate executive in New York City who doesn’t compete with the firm says the startup’s greatest strength isn’t technology — but good old-fashioned brute force. “They’re a disruptor by capital, not innovation,” he says. “It’s amazing it’s gotten this far. They’re a brokerage that doesn’t offer anything different; they’re just better at selling an idea.”

Real estate has largely defined the history of America, from land grabs and westward expansion to the growth of cities, suburban sprawl, and today’s McMansions. But the actual realty profession is little more than 100 years old, born, according to Jeffrey Hornstein, author of A Nation of Realtors, of the early 20th century progressive-era drive to encourage entrepreneurship and escape the yoke of corporate servitude.

Beginning in the late 19th century, real estate salesmen created professional groups as a reaction to the dubiousness of the then relatively unregulated career path. Prospective sales agents, nicknamed curbstoners, would compete by placing multiple signs and placards in front of a for-sale property brimming with modern conveniences, the public left hoping to choose an agent with scruples. It was an “open listing” market filled with speculators; a seller could work with as many agents as they wanted to, only paying the one who brought them a buyer.

Realtors saw professionalization as a route to more sales and less consumer skepticism, and pushed a narrative of moral salesmanship to the public. The home, according to Hornstein, was fast becoming a focal point of consumerism, and consumers needed expert guidance to find the right one.To help combat the reputation of agents as bamboozling sharks, realtors pushed for state licensing requirements and formed multiple listing services; sellers would offer agents exclusive rights to their property and pay them commission for sales.F

Throughout the economic booms and busts, the hot market of the 1920s, and the vast post-WWII homebuilding spree, realtors would continue evolving their business practices and organizational structure, taking advantage of the government’s explicit backing of homeownership as an economic good (one that was, and still is, severely restricted for people of color). Before the Great Depression, a down payment for a home may have been as much as half the home’s value. But the New Deal and postwar boom in government loan programs, revolution in credit availability, and dramatic increase in supply due to suburbanization and a booming economy meant that consumers saw their paychecks rise while home prices stayed relatively flat between 1950 to 1970. By 1928, one in every 80 Californians had a real estate license.

Over the past 50 years, the two biggest factors upending real estate was the cultural obsession with it — and the internet.

While marketing methods would change, a formalized industry began to take shape. In 1925, a broker in Fort Wayne, Indiana, had a “brand-new sales idea” to show completely furnished homes. In the ’30s and ’40s agents created sales networks so they could show prospective buyers multiple options. (Before, it was typically one agent moored to a single home.) In 1952, a realtor in Dallas began using the model house concept, to sell the future vision of a home. Century 21, founded by a pair of Orange County agents in 1971, set out to create the franchise “McDonald’s of real estate” model. Alongside firms like Coldwell Banker, initially founded in 1906 in San Francisco, Century 21 would rapidly expand in the ’70s and ’80s, corporatizing and scaling the franchise model, comprised of independent contractors as agents, to improve sales and salesmanship. In the ’80s, brokers would provide access to MLS books, huge, telephone-directory-like collections of local listings agents would thumb through for listings, often making photocopies to take into the field.

Over the past 50 years, the two biggest factors upending real estate have been our increasing cultural obsession with it — and the internet. Beginning in 1999, Home and Garden Television began airing House Hunters, the first in a long series of shows featuring what writer Kate Wagner, who founded McMansion Hell, called “sledgehammer-driven makeovers,” and the underlying idea that smart renovations can inflate values and transform property. (The home-flipping boom would soon follow.) Zillow, which launched in 2006, became a portal of real estate information and an aspirational time-suck for millions, one in a wave of websites and services that would democratize access to real estate data.

Where realtors previously were experts with rarified knowledge and insider information, by the 2010s, they were mostly engaged in customer service and facilitation, less oracles and more operators and advisers connecting buyers and sellers (though they still make relatively the same commissionamount they did decades ago, according to a 2019 Brookings study, a nice cut when average home prices have skyrocketed). During a 2006 interview, Zillow founder Richard Barton said, “Realtors currently sit at the middle of the transaction. I think in the future they will sit more on the outside offering specific services.”

But the process — endless paperwork, applying for mortgages, working with inspectors and escrow, and, yes, the old-fashioned signs — make it seem behind the times, lending a car salesman vibe.

This sidelining has only been compounded by what real estate tech investor Clelia Peters has coined “the white T-shirt problem” — a consumer is more heavily tracked and analyzed, and experiences a more technologically savvy checkout process, when they purchase a plain shirt, she argues, than when they make the most expensive and potentially consequential purchase of their lives: a home. And then there’s the diminishing reputation of the profession. Top residential real estate brokers are skilled professionals, juggling million-dollar-plus deals in certain markets. But the process — endless paperwork, applying for mortgages, working with inspectors and escrow, and, yes, the old-fashioned signs — make it seem behind the times, lending a car salesman vibe. It makes sense that in 2020, young brokers, given the choice between an old-school established real estate firm and a hot tech company, will probably choose the latter.

All of this made the industry a prime target for Ori Allon, an Israeli-Australian serial entrepreneur and computer scientist. Allon had sold companies he’d founded to both Google and Twitter, each boasting proprietary technology that became core parts of how both tech giants operated. (In 2005, when he was 25 pitching to Google in San Francisco, he started by saying, “I’ll show you the future of the world of search.”) He used some of the proceeds to buy his hometown basketball team — Hapoel Jerusalem — a perennial also-ran, and turn it into a championship contender. Along with Reffkin, a former chief of staff for the president of Goldman Sachs and White House Fellow who ran nearly 50 marathons, who he met during dinner at an American Academy of Achievement conference, Allon launched Urban Compass in 2012.

Allon initially saw the real potential in real estate in the data. There are more than 600 versions of the Multiple Listing Service, the shared data platform that lists homes for sale, across the country. Allon believed that by bringing all these data sources under one roof, creating a system that could parse and analyze, seeing trends faster than a human agent, he could create a more efficient, and ultimately more lucrative, sales process. In 2014, he told the New York Times that he loves to “fix things with technology, and real estate needed to be fixed.” It was a challenge “way more interesting to me than what I’ve done in the past,” and his target demographic was “every person that can operate an iPhone or website.”

Allon’s vision for a real estate tech company did tap into a colossal problem faced by the industry. The work of agents is very inefficient. As M. Ryan Gorman, CEO of Coldwell Bankers (part of Realogy), puts it, they are the “quarterback of every transaction,” and responsible for so much marketing and prospecting work that happens out of the eyes of a consumer. Coordinating with escrow companies, prepping homes for showings, creating marketing material, scheduling tours, and even setting up renovations can add hours of work before factoring in face-to-face conversations with clients. But Gorman says both consumers and agents had been resistant to taking the human touch out of the largest transaction most of them will ever make.

In 2018, the firm, flush with SoftBank funding, launched a massive acquisition campaign in cities across the country, poaching agents with the goal of grabbing 20% of 20 markets by 2020.

Other tech companies had already digitized pieces of the process. Whereas Zillow made home values more accessible and transparent, and Redfin created a digital-first brokerage, Compass, bolstered by technology, would aim to make the sales process more efficient. To get there, Allon and Reffkin swung in a bunch of directions. Initially, the firm touted its agent-side technology. Then, in 2016, it launched an app for consumers that provided agents and buyers and sellers constantly updated market information. The company would continue to ping-pong back and forth between being an agent-focused and consumer-centric platform, eventually settling on trying to be all things to all people. Now, according to Rory Golod, president of Compass’ New York region, the platform is “B-to-B-to-C” (business to business to consumer), with the agent at the center.

Compass began with an $8 million seed round in 2012, with investments from Goldman Sachs and Founders Fund, among others, and by 2016, had raised $208 million with a valuation of $1 billion. In 2018, the firm, flush with SoftBank funding, launched a massive acquisition campaign in cities across the country, poaching agents with the goal of grabbing 20% of 20 markets by 2020. Candy Evans, a Dallas-based publisher who runs a local real estate news site CandysDirt, says that “high-end brokers were quaking in their boots, and everyone perked up” when Compass came to town. Agents tend to prefer firms with more expensive property and better commission splits, which enable them to make more money on each sale. This was especially important amid increased competition: The National Association of Realtors found that while the number of brokers nearly doubled from 760,000 in 2000 to 1,359,000 in 2018, the number of total transactions actually dropped, from 5.99 million to 5.96 million.

Across the country, agents spoke about getting generous fee splits from Compass, or signing bonuses some rumored to be in the seven figures. Compass said they do not poach; Realogy, which has a pending lawsuit in New York accusing the company of just such an action, disagrees. Matt Spangler, Compass’ chief marketing solutions officer, says Compass’ retention rate is the best in the industry, and they’re “not paying people any more money than anybody else.” (“You’re not poaching anyone; you’re attracting someone,” he clarifies.) Investor Peters, who sits on the board of trustees of Side, a VC-backed brokerage in San Francisco, says that an explicit part of their strategy is to lock up as many good agents as they can for as long as they can, so the ecosystem of other options for them will be limited. “Is that innovation?” she says. “To me, that seems more scorched earth.”

But agents like Evans say that while Compass’ aggressive splits and signing bonuses work in the moment, agents are mobile by nature, and when one- or two-year contracts are up, they often return to their old firms. She believes the spree of acquisitions, bonuses, and favorable terms is about market share, more than anything else. “You can keep your revenue split at 90 or 95%, what agent wouldn’t want to go there?” she says. In Dallas, Compass took on legacy firms such as Briggs Freeman and Ebby Halliday, and now, according to Evans, are on nearly equal footing. “They did find the agents,” she says, “but here’s the rub: How are you going to turn a profit when you’ve given them almost all of their commission? They have a beautiful office. Their marketing has expensive signs. But how are you going to turn a profit?”

At the end of 2018, Compass made a splashy hire with its new CTO, Sirosh, Microsoft’s former CTO of artificial intelligence who had also created a fraud detection system for Amazon. He’s helped introduce Compass Lens, which determines which upgrades will raise the sale price the most, and the custom CRM software that tells agents when it’s better to get in touch with contacts. He’s opened up Compass tech campuses in Seattle and India and hired hundreds of coders and A.I. experts to help improve Compass’ technology, all while the company has gone on an acquisition tear, buying up Contactually (customer management), Detectica (A.I.), and Modus (digital title and escrow services, core parts of a real estate transaction).

Over Zoom in mid-October, Sirosh explained that Compass’ technology could handle all the grunt work, with agents doing more transactions with less cost, and reach more customers with Amazon-level service quality. As co-founder Allon — who has no day-to-day role at Compass, but currently serves as executive chairman — once said, “bringing the science to what has for too long been only an art.”

Tony Accardo has been a realtor for the last 12 years, working the Los Angeles beachfront and Palos Verdes. He saw Compass as the only player that’s “looking forward, not backwards” in an often stodgy business. When the company came to L.A., he saw them growing at such a fast pace, he told his wife, “If I don’t do this, I’m going to miss the train.” He joined in 2018 and now 90% of his day is spent behind the Compass dashboard, looking at market data, seeing which properties his clients click on. It’s a “portal that provides everything, cohesively branded and well thought out.” He says it makes him much more efficient with his time, and his 2020 sales are triple what they were last year.

Victor Lund, a real estate tech consultant, says that as Compass continually adds more data points to better understand the market and its clients, it’ll create a longer-lasting relationship with the high-end buyers and sellers making up an increasingly large part of the market. “In terms of raving fans, Compass agents we speak to often refer to their CRM and marketing tools as the best they have encountered,” he says. “I tend to agree. Compass has already passed their peers who have fumbled quite significantly in the core tools provided to agents, but the next iterations of Compass tech that leverages data as an asset to improve agent effectiveness and client services will reveal an entirely new landscape for the industry.”

Lund believes other tech solutions for real estate — Keller Williams’ A.I.-powered virtual assistant Kelle, for example, which is focused on teams and associates, and various iBuyer options, which use an algorithm to place a competitive bid on a property — just aren’t as focused, and loyal, to the agent as the one being built by Compass.

But when pressed for specifics and stats to confirm the effectiveness of its technology, Sirosh won’t go beyond vague. When asked if he had data on how the agent tools impacted sales and performance, he noted that the top third of agents are growing at amazing rates year over year, but “it’s hard to say whether it’s correlation or causation, but either way, it’s a good story.” Could he provide more details, or hard numbers or statistics that proved the efficacy of Compass technology? Sirosh suggested the company was growing too fast, and changing so quickly, it was hard to quantify. “It’s all good and positive and big numbers, but with hockey stick growth in the number of agents, there’s limited history around any specific thing. Meanwhile, a multilayered study by real estate tech expert Mike DelPrete from this spring showed that on an array of different measures, from production to transactions, Compass agents lagged behind the competition.

If there were a ubiquitous symbol of real estate in need of a high-tech reimagining, Compass believed it was the for-sale sign sitting on someone’s front lawn.

J Maggio, a top-producing agent with Conlon, a Chicago boutique firm that operated in the city and nearby suburbs, was courted by Compass in 2017, says he got the “horse-and-pony show,” but turned them down, only to become a Compass agent in 2018 when they bought out his firm. “I’ll say this as politely as I can: Compass had a cool software presentation, but none of it saved me time, made me extra money, or made my life easier,” he says. The tech he used until he left the firm in March of this year was worse than what he’d used at other brokerages. “Compass has a young, swaggy vibe, but the tech wasn’t fully baked for what I needed it to be.”

Ifthere were a ubiquitous symbol of real estate in need of a high-tech reimagining, Compass believed it was the for-sale sign sitting on someone’s front lawn. “The real estate sign, for years, was very stagnant, a missed opportunity,” says Johan Liden, an industrial designer at Aruliden, a global design firm hired by Compass in 2017 for the makeover. “It needed to be a true icon that people can interact with.”

When Compass unveiled the reinvented sign in the summer of 2018, it seemed like the perfect totem of the rapidly expanding brokerage: A sleek, black extruding aluminum wand, backlit by LED lights and wired with an accelerometer, temperature sensor, and Bluetooth connectivity, it announced, like an upside-down exclamation point, that the house was a must-see — walk right up, scan a QR code, and take a virtual tour with your phone. Fast Company hailed Compass for the innovation, which was set to hit the front yards of its properties that fall.

But it never made it past the first batch of 1,000 signs. Which was probably a good thing. “I thought a $1,000 digital sign was a waste of money,” says Maggio, the Chicago broker who left Compass this past March after two years. “This was like the show Silicon Valley where an idea really doesn’t need to be improved upon; it’s for the wow factor.”

As Compass tries to make the financial case for its technology-juiced business model — with the eventual goal of taking the company public, which Reffkin indicated in September — it needs to prove it’s more than just flashy packaging. “What’s happening now with the acquisitions and the scrambles is they’re attempting to reposition themselves as a tech company,” says investor Peters. “Is the market going to buy that story?”

The first wave of post-pandemic home buying was more impulsive, with families jumping to the suburbs looking for more space. But as time goes on, and the pandemic continues, and decisions about remote work and lifestyles may harden, Redfin’s Fairweather expects more and more buyers to make a move. She points to Sacramento as a key example; it’s long been attractive to Bay Area residents looking for a cheaper, more spacious home, and saw a massive spike in high-end sales, 86% year over year across the metro area. As people look for more long-term housing solutions, she thinks smaller, secondary markets like this may be more popular, such as Portland, Oregon, or West Palm Beach, Florida.

Brokers say the suburbs are on fire. In the New York region, the Hudson Valley, Long Island, Westchester, and the Hamptons are seeing homes disappear as soon as they go on the market. Maggio in Chicago says this luxury buying spree means a lot of the larger, older suburban homes — McMansion-like properties that may have gone out of style in the rush toward downtown — are suddenly in demand. “This is as liquid as the market is going to be,” he says. “There’s a big push by agents to get people to sell because buyers are coming from the city, and homes need to be on the market now.”

Meanwhile, Reffkin, who purchased his new home in New York City during the pandemic, is as bullish as ever about his city’s housing market. While Manhattan’s office space continues to empty out — it hasn’t had this much available since 2003 — Reffkin believes that as soon as the vaccine arrives, companies and workers will change their tune. Plus, he says Compass’ elite slice of the market is continuing to boom — at least for now. “In the $20 million-plus listing market we’re seeing more activity driven by wealthy and savvy investors looking for opportunity, and in the sub-$2 million market, we’re seeing a font of new first-time buyers being driven by record low interest rates,” he recently told CNN. “And they want to take advantage of it while it lasts.”


November, 2020

When a tub of popcorn can run nearly $10, renting out an entire theater for $99 seems like a steal. For AMC Theatres, the mega-chain that recently introduced the private screening plan as a Covid-era concession to safety and shrinking audiences, it’s more a desperate ploy to keep the lights on as the American megaplexes face the prospect of a final showing. 

Recent coronavirus case spikes, new lockdowns and the expectation of minimal family outings during the holidays has turned a year of bad news for the country’s cinemas into an outlook that’s simply bleak. In early October, when Regal Cinemas shuttered all 500-plus locations nationwide, that darkened more than 7,000 screens alone. The industry has already seen a cinema cull in the U.S., per the National Association of Theatre Owners, with the number of movie theaters shrinking from around 7,200 in 1996 to roughly 5,500 as of late 2019. But that may just be a preview. John Fithian, head of the National Association of Theatre Owners, told Varietythat unless Congress passes the Save Our Stages Act, a bipartisan push to support concert venues and theaters that have seen their businesses decimated by Covid, “probably around 70% of our mid- and small-sized memberswill either confront bankruptcy reorganization or the likelihood of going out of business entirely by sometime in January.”

In past economic downturns, theater owners tried stunts like “dish nights” —  giving away different pieces of a table setting, such as a saucer or salad plate, to lure Great Depression patrons. That probably won’t work this time, leaving a lot of moviegoing real estate in need of a reboot. 

There’s a long tradition of adaptive reuse when it comes to the older generation of neighborhood moviehouses, many of which died off in the second half of the 20th century as new suburban multiplexes appeared. These smaller facilities often see a second life as community theaters, churchesgyms and bookstores. The electric vehicle startup Rivian recently announced plans to turn a 1930s-era Laguna Beach theater into an elegant showroom

But modern multiplexes can be poor candidates for adaptive reuse, theater owners and real-estate experts told the Wall Street Journal, because of their sloped floors and subdivided spaces. That’s especially true at a time when the malls they are often attached to are struggling reinvent themselves. Closed theaters may fare better on the real estate market as available land in need of a demolition; a shuttered Regal Theater in North Charleston, South Carolina, for example, was simply demolished, with plans to build an apartment building in its place. 

Some developers do see sequel potential in modern movie theaters, though. Last year, PMB, a development firm focused on the medical field, turned a 1980’s multiplex in Goodyear, Arizona, into a collection of medical offices. And Walter Crutchfield, co-founder and partner of the Arizona development firm Vintage Partners, turned a Flagstaff movie theater into perhaps the country’s most creative department of motor vehicles. 

The nine-screen theater, part of the Harkins chain, reopened in 2016 as a 72,000-square foot, two-story Arizona Department of Transportation headquarters and Motor Vehicles Division office. Reuse presented multiple challenges, such as cutting windows into the concrete walls to provide more natural light. But the end result, which split the high-ceilinged theaters into two stories with a mezzanine floor, speaks for itself, Crutchfield says.

relates to Giving Closed Movie Theaters a Second Act
The Arizona Department of Transportation in Flagstaff turned a nine-screen movie theater into a Motor Vehicles Division office. Photo courtesy ADOT

“It was a great project because the poured-in-place cement building was designed for public access, so it gives you a pretty cool canvas,” he says. “There’s a huge four-story atrium. Now 200 workers, who used to be spread over six locations, can collaborate together in a brand-new office.” They even kept some neon lighting fixtures and the lobby popcorn machines for office snacks. 

He says that contemporary movie theaters offer plenty of valid reuse potential — prime locations with lots of empty square footage — if only developers get creative. 

“If you can make $5 million and do something that’s repeatable and easy, or make $1 million doing something that’s incredibly complicated, essentially building a battleship inside of a bottle, how many people are going to sign up for the later?” Crutchfield says.

On the south side of Pittsburgh, another theater-to-office space is in the works, set to open in May or June of 2021. New York City-based SomeraRoad Partners will turn a shuttered theater into a mixed-use development that includes retail, apartments and the aptly titled Box Office workspace.

Ian Ross, a founder and principal at SomeraRoad, says the project started pre-Covid, when they looked at the potential of redeveloping SouthSide Works, a retail site close to the city’s growing tech scene. Ross and his partners looked at options for upgrading the SouthSide Works Cinema, and decided a new movie theater wasn’t “the highest and best use of the land.” 

“We could have invested $5 million in it, but does it make sense investing in what we think is a dying industry?” he says. “I wouldn’t say we called the current demise of movie theaters, but in retrospect, we sort of shut it down before it shut itself down.”

While the theater did get foot traffic on weekends, it doesn’t create the vibrancy possible from alternative uses. Ultimately, the developers settled on office space that will float above the rest of the development, designed by architecture firm HOK, with tech and creative tenants in mind. Ross would like to say this concept could be reused for all closed theaters, but he and his partners don’t think it’s that simple. He sees this example working because it was already a distressed property that was incredibly structurally unique, with a strong three-story steel podium that could be repurposed. 

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SomeraRoad Partners plans to transform a Pittsburgh movie theater complex into shared office space. Rendering: HOK

Shuttered cinemas have similar reuse possibilities as the neighboring big box stores across the mall parking lot, says K.C. Conway, chief economist with the CCIM Institute, a professional accreditation group for commercial real estate executives. Hard hit by the rise of online retail, many of those spaces are finding use as e-commerce warehouses and fulfillment centers. 

The key is big and bulky items, Conway says: As online shopping continues to expand, last-mile delivery of oversized goods has become a tricky, and expensive, problem for retailers, especially home goods stores. Enter empty movie theaters: Their 24-foot-or-more ceiling heights offer more headroom than typical 18-foot-tall department stores, they’re often in dense suburbs near main commercial arteries, and they have upgraded HVAC and electrical systems. Those with flat floors and stadium seating can easily be gutted to make room for storage. Many even have special light industrial zoning, so unlike, say, a purely commercial property such a Best Buy, they don’t require time-consuming rezoning.

Big players in home goods and contracting are already looking at the potential of filling dead-mall megaplexes with pallets of lawnmowers and drywall, says Conway. The price is also right: New construction for last-mile warehouses can run between more than $140 a square foot in expensive markets. Theaters bought for a steal might go for $50 a square foot, and require just $25 a foot to retrofit for logistics, Conway estimates. 

“People have been slow to figure out the full potential of adaptive reuse,” says Conway. “Adaptive reuse helps by adding more affordable housing, reducing blight, gets old stores back on the property tax rolls, and it’s good for the environment. Lots of boxes get checked. Capital just needs to be less afraid, and the government needs to be more flexible.” 

 As the virus resurges and films get streaming-only premieres, the post-vaccine fate of the movie business remains murky; it may be months or years before moviegoers feel like packing into theaters for the latest blockbuster. Amazon was rumored to be looking at scooping up theaters earlier this year. Ross at SomeraRoad doesn’t think the industry is going to disappear, by any means, but it’s due for a correction; he thinks the bottom 20% of theaters — those already struggling — may go bankrupt and get repurposed post-pandemic.

Crutchfield predicts a higher percentage of cinemas will go dark than most other asset classes, such as offices, whether it’s the pandemic or streamers like Netflix that force them to close shop. And he’s confident that creative uses for these spaces will be found. 

“I just don’t know the life expectancy of the sit-down movie experience,” he says. “But the assets, and opportunities, are there.”

Bloomberg CityLab

October 2020

This summer, Los Angeles Mayor Eric Garcetti found himself generating international headlines for cracking down on a house party. On Aug. 19, city officials disconnected utilities at the Hollywood Hills home of Bryce Hall, Noah Beck and Blake Gray, young stars on the video platform TikTok who had turned their residence — a rented 8,500-square foot mansion known as the Sway House — into a “nightclub in the hills.” 

The Sway House stood accused of hosting parties “in flagrant violation of our public health orders” during a pandemic. Never mind that some of the footage that generated outrage — an Instagram video showing shoulder-to-shoulder crowds drinking and dancing on tables — was shot at a blowout party at a different home, in Encino, roughly 15 miles west of the Hollywood Hills. The Sway House had already established a reputation for bad behavior among its neighbors, creating a “party war zone.”

At a press conference announcing charges, city attorney Mike Feuer said, “We allege that in many cases these parties and the party houses associated with them have hijacked the quality of life for neighbors in the affected communities. If you have a combined 19 million followers on TikTok, in the middle of a public health crisis you should be modeling great behavior, best practices, for all of us, rather than brazenly violating the law and then posting videos about it, as we allege happened here.” 

Garcetti’s crackdown is indicative of how the contentious arrival of a relatively new kind of celebrity real estate has become tangled up in an older phenomenon: LA’s famously disruptive party house scene. During coronavirus lockdowns, rented mansions have been serving as ad-hoc nightclubs for illegal gatherings, creating tension, anxiety, and sometimes violence in affluent neighborhoods. At one early August party, a woman at a massive Hollywood Hills party was shot and killed, bringing on a pledge from city leaders to boost party house enforcement.

The mansion Palazzo Beverly Hills, where a large party held in defiance of coronavirus-related health orders ended in a fatal shooting in August. Photographer: ROBYN BECK/AFP via Getty Images

That pledge is focusing attention on high-end homes — variously called TikTok mansions, content houses, or collab houses — that are rented by talent management groups and filled with young social media stars and creators. The homes are used as backdrops for the video content that social media influencers churn out, and, as the Sway House incident in August shows, as headquarters for their antics. 

Collab houses emerged in early 2020, growing with the continued rise of the video app TikTok. “Call it the boy-band model but for Gen Z,” Rebecca Jennings recently wrote in Vox, “where stars leverage each other’s burgeoning fame against the backdrop of multimillion-dollar homes.” As chronicled by technology and business journalists like Taylor Lorenz and Amanda Perrelli, early examples like Hype House have spawned a host of newcomers, including the Clubhouse and Cabin Six (focused on LGBT creators). 

It’s not new or exclusive to the TikTok platform; stars of YouTube and Vine established their own such setups, including 02L Mansion and 1600 Vine Street. Back in 2017, Vine and YouTube celebrity Jake Paul famously posted the location of the Team 10 House in Hollywood online, which was flooded with fans. The trend has also migrated beyond Los Angeles: A sextet of UK influencers has occupied a lavish English country home and dubbed it the Wave House, the Daily Mail recently reported. 

James McClain, editor-at-large for the celebrity home site Dirt, sees collab houses as just the latest example of the intermingling of entertainment and real estate in Southern California — from the star mansions of Hollywood’s Golden Age to MTV Cribs. While Dirt tracks housing sales for all manner of celebrities, it’s the influencers that are getting the most attention now. “Jeffree Star’s house was the biggest story for us in terms of traffic,” he says, referring to a popular YouTuber and makeup artist. “The concept of fame has changed for a new era.” 

Collab houses may be new, but the market for these types of homes in Los Angeles isn’t. According to real estate agents who have sold to these types of clients, or work with high-end rental homes, many of them are spec homes, built in expensive areas with beautiful properties with lots of land: Burbank (FaZe Clan), Beverly Hills (Clubhouse), Bel Air (the Sway House) and Hollywood. Investors had previously made money on these properties by renting them for one-off events or film, TV, or commercial shoots; more recently, Airbnb and short-term rental sites provided another revenue option. 

If you are in the market for a TikTok mansion, you’ll be shopping for a property with “awe factors” like an elevator, pool and a great view — features that lend themselves to the medium and can become video backdrops. “It should have all the amenities you’d want if you’re spending $30,000 to $50,000 a month, including plenty of space and parking, large kitchens and common areas, and lots of bedrooms,” says Josh Picker, an agent at Douglas Elliman. “You’re basically paying for a place you don’t need to leave.” 

Michael Senzer, vice-president and head of business development at TalentX, which represents the Sway House crew, says he wants properties that give the talent a beautiful place to live and “take all the thinking out of their daily lives so they can focus on what they do best — monetize and strategically grow themselves.”

Same goes with the interiors. The Sway House was outfitted with items picked out by the TikTokers or donated by brands hoping to be tagged in a video.

Sally Forster Jones, a Compass agent who has worked on rentals for location scouts and YouTubers, says it can be difficult to find properties open to the number of people, and parties, that come with these content houses. The right properties can be rented via short-term rental sites, or more formal, year-long leases. Stars often pay their rent, especially in homes sponsored by management companies or brands, by producing a set number of social videos every week “as a form of in-kind rent,” according to Lorenz of the New York Times. 

Young stars living together amid the glitz and glamour of the entertainment industry in Los Angeles may be a concept as old as the entertainment industry. But for residents of many of the wealthy Los Angeles neighborhoods where this type of real estate exists, having a crew of selfie-shooting teen influencers move in next door can be a major headache. 

Kristen Stavola runs We Are Laurel Canyon, a community group for the affluent hillside neighborhood. She says that these management companies, who are “fronting for YouTubers, Instagrammers, and TikTokkers,” have caused numerous issues.

Laurel Canyon, often called party canyon, has drawn high-living celebrities since the 1960s.

“We love our heritage up here and celebrate it,” says Stavola. “We’re all about people having a good time.” But “social media has put it on steroids.” Residents are weary of late-night noise and traffic jams of Uber or Lyft vehicles on the narrow, winding streets. The blind curves and dirt roads near more remote locations don’t mix with inebriated drivers. “We’re anti-party house when the neighborhoods, hillside and wildlife are being threatened,” she says. “Anybody running a party house during Covid is incredibly reckless.”

Some collab homes went undetected for months, but when the coronavirus pandemic arrived and more people began working from home in March and April, it became hard not to notice the sound of live DJs playing in the middle of an afternoon. (Other influencer collectives do not lay low: Hype House, in Mount Olympus in the Hollywood Hills adjacent to Laurel Canyon, had a signature painted school bus parked in front of the entrance.) “Earlier this year, some genius at a management firm said, ‘Let’s put these kids together in a Big Brother-type setting and have them earn their rent with posts,’” Stavola says. “The problem with collab houses is that it’s encouraging the problems we’ve been trying to curb for years. It’s actually monetizing them. It’s turned homes into businesses, whether or not they’re having parties there every night. You’ve turned a nice house into a dorm or frat house.” 

Talent management groups Influences and FlipMgmt didn’t respond to CityLab, and TalentX didn’t want to talk about recent incidents involving the influencers at their collab house. “It’s a level of accountability they have to have on themselves,” Michael Gruen, a founder of TalentX, told the New York Times in response to questions about their talent hosting and participating in parties. 

relates to The TikTok Party House Next Door
The new Sway House is sponsored by Triller, a deep-pocketed rival to TikTok.Photo courtesy TalentX.

Dirt’s McClain argues that conflating the rise of collab houses with the broader party house issue misses some important distinctions. “These kids, and young adults, see what they’re doing as a legitimate business,” he says. “The whole reason they enter into these collaborations is because they have sponsors or investors behind them. They don’t want to do anything to mess up their future earnings, or get in the way of how they earn a living. It’s a new phenomenon and a lot of people don’t understand this.” 

Picker also doesn’t think his clients should be blamed for the problematic party houses; companies are fronting big money for content and the talent is on the line if something goes wrong. Many influencers have apologized for large parties, and even called out those organizing such events. “Just because they’re in their early twenties doesn’t necessarily mean they’re causing the problems,” he says.

Still, it’s not surprising that Angelenos would connect influencers with the party house scene. Several social media stars have indeed been liberal with social distancing practices and thrown Covid-noncompliant events this summer, with some even arguing that it’s part of their job to entertain (and facing few consequences from sponsors). And the Hype House was established in a Hollywood Hills home that already had a notorious pre-TikTok reputation for hosting such events. 

Numerous attempts have been made to crack down. Los Angeles signed a Party House ordinance in 2018, and on Aug. 4, issued a warning about large parties held during the pandemic. Airbnb issued a global party ban on Aug. 16, saying that “we do not want that type of business, and anyone engaged in or allowing that behavior does not belong on our platform.” In addition, the company launched a city portal to help track nuisance properties, and banned one-night stays over Halloween weekend

One of Stavola’s Laurel Canyon neighbors (who wishes to remain anonymous), says his family has been traumatized by a party house incident next door. Over the long 4th of July weekend this summer, a group of young men rented the home next door and threw a series of parties, including shooting mortar-type fireworks over a tinder-dry hillside. When the neighbor contacted Stavola, who reached out to Airbnb about the issue, the service canceled the booking and later banned the guest who reserved the home from making future bookings, but the guests remained (it’s up to the property owner to call law enforcement or evict the short-term tenant). Over the next few weeks, the three renters would occasionally taunt the neighbor and his wife and young child, spitting at them and calling them “Karens.”

“It was disheartening,” the neighbor said. “Ultimately, the sites can do what you request, and if the owner doesn’t kick them out, they may be here for another two weeks. My wife and I are both lawyers, and this was crazy to us.” 

Stavola says that despite more vigilance from Airbnb and local officials, she fears the issue isn’t going away. “As long as the clubs are closed in Hollywood, this won’t stop.”

The collab house trend doesn’t appear to be slowing down either. Even during the coronavirus pandemic, more houses opened, though some have shut down after the promised sponsorships, fame and payment never materialized, as Vox’s Jennings wrote. 

At TalentX, Senzer says they’re looking at opening another home, and are in talks about a potential reality series. They have a big financial incentive to keep the party going as long as possible. After the city unplugged the Sway House in August, the erstwhile TikTok stars recently found a new sponsorin the video platform Triller, a TikTok competitor, which pays the rent and other expenses for a new Sway House in Bel Air in return for talent postings on their platform. That arrangement has “generated a significant amount of revenue for these guys and our business,” he says. “It’s hard to say it wasn’t worth it.”


November 2020

Holiday hiring events for malls used to be a big deal, with lines rivaling those for jaw-dropping Black Friday electronic deals. Anchor retailers and specialty stores held huge in-person hiring events as early as September, heralding the start of the busiest, most exciting part of the retail year. This season, don’t expect big spikes in hiring for mall Santas (who may be socially distanced in plexiglass snow domes), gift wrappers, or additional staff to work the aisles on Black Friday.

As the pandemic continues and shoppers mostly stay home, the holiday season will be a gift for e-commerce as retailers scramble to adjust inventory and schedules to find some bright spots amid spending uncertainty. As the ongoing shift online accelerates this year, its impact will be magnified in the job market. According to Andrew Chamberlain, chief economist of the jobs site Glassdoor, the site has seen a sharp rise in interest for jobs in the warehouse sector, 210 percent more than last year, one of many indications that, in 2020, often-temporary seasonal hiring signifies something more permanent.

“Economies usually leave a recession looking different,” he says. “This is an example where a pandemic will lead to a massive shift in how we spend.”

Getting a part-time gig folding sweaters at the Gap or being an elf for a fake North Pole display has long been a tradition during the busy holiday season, an important way to make a few extra dollars during an expensive time of the year, especially for students and seniors. In 2018, retailers added roughly 625,600 temp jobs. Last year, the seasonal hiring spree slowed down a bit, with companies looking to fill only 590,000 positions. This year, recruiting firm Challenger, Gray & Christmas says companies have announced just 378,200 positions as of mid-October. Glassdoor’s Chamberlain says that an analysis of the site’s roughly 6 million holiday and seasonal job postings shows listings are down 8 percent over last year, which is actually better than the overall 16 percent drop in postings across all industries. There’s a bump this winter, just not as big as in years past.

Analysts believe 2020 will radically upend that model, perhaps for good. In-person retail, already restricted due to health precautions and wary customers eyeing a coming third wave of the coronavirus, is a shadow of its usual self. A National Retail Federation survey of 54 retailers found that 96 percent expect more online sales this year, 61 percent plan to stock less in-store merchandise, and half likely won’t hire extra in-store staff. Sucharita Kodali, retail analyst at Forrester, says one of the only bright spots this year, when a record-breaking 1 in 5 retail dollars was spent online, has been essential retail, such as grocery and pharmacy. Even big holiday shopping draws like toys have migrated online. Retailers such as Walmart and Target will be spreading out Black Friday events to avoid drawing large crowds (some promotions have already started). 

“Black Friday is kind of over as an idea,” says Zachary Rogers, an assistant professor of supply chain management at Colorado State University who previously worked at an Amazon subsidiary. “Prime Day was October, Black Friday and Cyber Monday in November, holidays in December. It’s basically Black Fall.”

Holiday shopping as a whole won’t have the same meaning this year or for many years in the future, says Ashwani Monga, a marketing professor at Rutgers University who specializes in consumer psychology; with the retail industry in tatters, it’s unlikely to represent the break-even point for businesses (when ledgers go from red to black). And optimistic forecasts that families will want to maintain the holiday tradition of a visit to the mall may underestimate the desire to cut or consolidate trips, not to mention the specter of more restrictions or shutdowns. 

“Even if stores do open, people will be reluctant to go out and have fun or splurge as if the last few months didn’t happen,” he says. “Shopping is a way to connect and do something for yourself, and that habit has changed during this year’s disruption. Shopping is a part of our culture, and this year has changed culture itself.” 

The significant shift in the seasonal employment picture doesn’t show a temporary break with tradition; it’s more likely evidence of the continuing, radical restructuring of the economy away from in-person retail. The pandemic has pushed many shoppers who were e-commerce holdouts to adopt online shopping, Monga says, and consumer inertia is hard to reverse.

“If consumers aren’t spending, retailers don’t have cash on hand to hire people, which creates a vicious cycle where there’s less employment, fewer profits, and the economic engine of stores just doesn’t grow,” Monga says. “The whole ecosystem of retail is disrupted.” 

It’s also strained the warehouse and logistics industry currently struggling to meet surging holiday demand that will likely become a permanent expansion of e-commerce capacity. The industry hit a record 1.25 million employees this September, according to the Bureau of Labor. The Logistics Managers’ Index, an industry report compiled by Rogers looking at demand and capacity, predicts record-high levels of e-commerce activity this season; Q4 activity will be up 50 percent compared to last year, a huge leap from pre-pandemic predictions of a 13 percent jump. Karl Siebrecht, CEO of Flexe, a company that provides temporary warehouse space to retailers, says there’s a huge hiring problem in e-commerce in anticipation of fourth-quarter delivery spikes (Amazon announced plans to hire 100,000 more seasonal workers in September and is offering some $1,000 bonuses).

“We’re already running hot, How do we layer on the fourth-quarter peak?” Siebrecht says. “Competition for labor is the biggest issue.”

Filling jobs at sites typically located away from population centers is already a challenge. A recent report by Daniel Schneider and Kristen Harknett, sociologists who have been studying retail and service-sector workers, found that “Walmart, Amazon, and UPS lag in terms of cleaning, gloves, and masks” for employees, exacerbating worries that as warehouses get more crowded over the coming months, infection risks will rise. 

Valeria (who prefers not to use her real name), 59, works at a warehouse in Elizabeth, New Jersey, that packages and ships cosmetics and hand sanitizer. She says that as the holidays approach, management has added more and more workers; it’s the busiest she’s seen since she began working at the company four years ago. Workers are provided with hand sanitizer, masks, and gloves, but there’s no social distancing, they just cram the lines tighter and tighter.

“Right now, a few people are sick,” she said via a translator. “The company told them to get tests and not come back until they are negative. They’re operating like every product is essential, but only the hand sanitizer is. We all want to be beautiful and we’re in difficult times. I only work because I have to, if not I’d stay at home, I’m scared all the time of being sick.”

Beth Gutelius, an academic and researcher at Center for Urban Economic Development who studies the changing nature of work, says a simple calculus — more temporary workers being added to the same fixed warehouse space — raises the risk of safety issues, Covid-19 spread, and burnout (and Amazon has been less than transparent about these issues throughout the last six months). 

“In the end, you have to throw more workers at the problem of e-commerce fulfillment, and they’ve raised very serious issues about health and safety,” she says. “There’s lots of physical and mental strain on workers’ bodies when they’re handling work that quickly.”

According to a survey of industry operators conducted by Flexe, 65 percent said labor shortages were impacting their business and 47 percent have increased wages to be more competitive. Amazon’s and Walmart’s big announcements earlier this year that they would add hundreds of thousands of jobs and pay a few extra dollars an hour have rippled through an industry seeking more and more capacity. And it’s not just for the winter surge — typically the season when workers face weeks with additional overtime and higher-than-normal rates of on-the-job injuries and stress — but for next year. 

E-commerce is racing to adjust to unforeseen circumstances, with a predicted “shipageddon” this year leading analysts to suggest hot items will disappear early and companies will plead with consumers to order as early as possible. The sector is clearly dealing with the downsides of unexpected demand, not painful contraction, often turning to temporary employees and hiring agencies.

A shopper with a mask rolls her cart down the end of an aisle full of holiday decorations
Holiday shopping season begins in 2020.

“Honestly, I don’t know how Amazon is going to do it this year,” says Rogers. “That’s why they shifted Prime Day to October. The transportation part of this will be really tough. They’ll do whatever they can and everyone else will try to keep up.”

Shipping is not the only concern. There’s also the problem of returns, which Rogers says are “two to three times more for e-commerce purchases versus brick and mortar, depending on the product.” That adds up: “There will be like an additional billion dollars of returns this year, and they’re going to need to process this stuff. There’s a wave coming, and I’m very interested to see what happens between late November and early January.” 

It may seem counterintuitive that in the midst of severe economic shock, huge corporations such as Amazon and Walmart would struggle to find workers. But the labor supply situation is incredibly unorthodox, says Chamberlain. There’s a significant compositional shift away from traditional work — say, a job at the counter at Sephora — and toward warehouses and delivery gigs. And many workers are simply sitting this season out; whether they’re worried about getting sick, the added pressure of handling child care, or waiting out a furlough, many people are simply in limbo, Chamberlain has found.

Monga points to two indexes of consumer activity and attitudes as red lights for retail: the Michigan Consumer Sentiment Index (down nearly 20 percent since last December) and the savings rate (currently double the typical 6-8 percent range). Americans are, overall, wary and worried, and even those who are employed are holding onto a portion of their potential disposable income. The few bright spots, such as outdoor retailer REI, can’t overcome sharp drops in clothing purchases. This dismal holiday hiring season will just lock in structural shifts decimating retail, especially as warehouse operators adopt robotics and other means of increasing efficiency.

“Automation and rising productivity are ways to do more with less,” says Chamberlain. “By far the largest cost in production is people. Wages are high. If sales double in traditional retail, you may need to double your number of workers. But for Amazon and Walmart, they may need just 10 percent more people to handle that rush.” 

Rogers points to a newly reopened Macy’s facility in Littleton, Colorado, as the future of retail employment. This new omni service center features packing, delivery, and pick-up services, but the so-called dark store isn’t open for the public to enter and shop. In effect, Macy’s is hiring and staffing for the holidays, but the jobs it’s offering are becoming indistinguishable from the gigs found in the general logistics and warehouse industry. Even many of the seasonal retail gigs that remain are starting to look more and more like those found in warehouses.

“They’re doing the same job as an Amazon picker, but in a store,” says Gutelius. “The lines are getting very blurry.”


November 2020

They died out of sight, underneath a scorching late-summer sun.

In Los Angeles, when midday temperatures reach 38°C (100°F), the asphalt cooks at a blistering 66°C (150°F). Over the Labour Day holiday weekend of 6 September, when temperatures in the city’s Woodland Hills neighbourhood hit a record 49°C (121°F), at least three homeless Angelenos perished due to heat-related causes (autopsies may reveal up to a dozen more cases in coming months). Holland Harmon, 60, was found dead on the sidewalk in the middle of the afternoon.

It’s not uncommon to see low-income Californians, housed or unhoused, die of heat stress, even when solutions such as shade, shelter and air conditioning can literally be within arm’s reach. “Living on the margins and knowing how expensive it is to run that A/C, they try to push through,” says UC Berkeley professor Rachel Morello-Frosch, who studies climate change and inequality. “It could have detrimental consequences for pre-existing health conditions that make them vulnerable to these heatwaves.”

LA, already accustomed to droughts, heatwaves and wildfires, serves as a cautionary tale concerning the dire threat to human life posed by climate change. The city also holds up an equally unflattering mirror to another very US policy failure: rampant geographic inequality. A study of Los Angeles neighbourhoods found that those that were “redlined” – the term that describes how mortgages and financial services in the early 20th century were systematically denied to people of colour due to racial discrimination – are today, on average, 7.6 degrees hotter than non-redlined areas and still predominantly Black and brown.

Kate Gordon, senior climate change adviser to California Governor Gavin Newsom, acknowledges that extreme temperatures are an immediate, urgent equity and economic issue in her state. And LA’s technocratic Mayor, Eric Garcetti, has outlined an extensive Green New Deal touted as one of the US’s best examples of local climate leadership. Yet extreme gaps in heat readiness and resilience across a sprawling metropolis, one that is geographically defined by class and racial divides, make notions of climate equity in LA a far-off goal. During the deadly Labour Day heatwave, just six modest cooling centres were opened for the entire city; the fact that fewer than 300 Angelenos used them that weekend suggests a programme in need of significant expansion and improvement.

The circumstances of Los Angeles, much like dry brush on a hillside, make the issue of rising temperatures even more primed for deadly outcomes: a varied topography of coasts, mountains and valleys that has allowed the wealthy to settle in cooler areas; an economy weighted towards heat-exposed occupations such as construction, landscaping and manufacturing; a car-centric transportation system that produces heat-trapping exhaust; and a metastasising homelessness crisis.

“Due to the social factors like less access to healthcare, suboptimal work access, less optimal nutrition, indigenous, Latino and Black communities have higher rates of conditions such as hypertension and cardiovascular disease, which make them much more vulnerable to the adverse health effects of heat,” says Morello-Frosch.

Heatwaves, like other natural disasters, get the media attention. The 2006 heatwave in the state of California resulted in $5.3bn in healthcare costs, 16,000 emergency-room visits and 650 deaths. But it’s the slow, persistent rise in average temperatures, coupled with pollution and wildfires, that will push the limits of adaptability and add pressure to low-wage workers, says Juanita Constible, a senior advocate with the Natural Resources Defense Council.

“Having people taking care of themselves isn’t the morally appropriate response to this moment,” says Constible.

The working poor in Los Angeles will feel the inexorable rise in heat in ways that many of their neighbours won’t. Rising temperatures lower labour productivity, a huge hit to the overall economy and the incomes that keep poor families clothed and fed. During wildfire season, when particulate-matter pollution spikes, lower-income workers will still have to work even as the air quality decreases; if they’re mandated to put on respirators for protection, the added effort required to breathe through protective equipment only increases the stress and strain of toiling in the heat.

Numerous studies show the dire impact warmer weather has on the livelihood and well-being of the US’s workers: higher rates of heat-related occupational deaths occur among Hispanic men working in construction and agriculture; construction workers make up 6% of the US workforce and 36% of heat-related deaths; nationally between 2000 and 2018, extreme temperatures led to a cumulative loss of nearly 1.1 billion work hours in the agricultural, manufacturing and service sectors; and in 2018, fewer than half of construction workers had paid sick leave.

And heat stress doesn’t stay at work. Kevin Riley, a UCLA researcher, analysed associated hospital visits in Los Angeles and found that for every percentage point increase in residents working in construction in a particular neighbourhood, there was an 8.1% increase in heat-related emergency room visits and a 7.9% increase in associated hospitalisations.

“Occupational health thinks about the workplace and regulations, and public health thinks about community, about cooling centres and housing stock, and they never put them together,” he says.

“We have a system of labour laws that aren’t ready for climate change,” adds Constible. “In the United States, the strong immigrant workforce, especially in construction, landscaping and farmwork, isn’t likely to be covered by existing labour laws.” Morello-Frosch says this “racialised division of labour” and its often piecemeal or pickup system of pay means workers are reluctant to take the breaks or protections afforded them due to the structural nature of how they’re paid. Immigrants, especially those without legal status, often have the least protections; fully 96% of heat-related deaths in the US between 2004 and 2015 happened to non-citizens.

The city’s efforts to reduce temperatures have been explicit about making equity a key requirement. First adopted in 2014, a successful Cool Roofs ordinance that requires reflective surfaces and provides rebates for lower-income neighbourhoods has, like many weatherisation programmes, been a wonky success story: reflective surfaces and lighter-colour paint on a rooftop can reduce the surface temperature of shingles by an incredible 50°F on a hot day. “It constantly delivers 20% energy savings without having to pay a monthly bill,” says Kurt Shickman, executive director of the Global Cool Cities Alliance. Collaborative projects in neighbourhoods such as Watts and Compton will invest millions in urban design initiatives focused on equity and heat resilience, and Garcetti’s Green New Deal promotes expanded park access. Los Angeles has also promised to invest in tree plantings and rectify the imbalance across neighbourhoods: the wealthier West Los Angeles and Los Feliz areas have 35% more tree canopy than South LA. The city recently hired an urban forestry manager and, according to chief sustainability officer Lauren Faber O’Connor, is on track to plant 90,000 trees between 2019 and 2021. LA aims to grow its tree canopy by 50% in the areas of greatest need by 2028.

Trees have been heralded as a solution to cooling and shade, but it’s not as simple as planting saplings, says Edith de Guzman, director of research for TreePeople* and a member of the LA Urban Cooling Collaborative. New trees take years to provide shade, and there are tangible barriers to city planting efforts, including maintenance and engaging residents in care. Many areas, especially those with little tree canopy, have minuscule parkways between streets and sidewalks, complicating the planting process. Studies have shown that much of the available land for planting trees is privately owned. The long-term nature of these efforts also raises a question: what species will survive and prosper in the new climate a decade or two in the future?

“How do you cool an entire neighbourhood?” says Guzman. “If we don’t engage private land to plant trees, we’ll fail.”

Is any of this enough? LA’s Green New Deal road map offers numerous plans and initiatives to cool the city by 2028, including creating 250 miles of cool pavement, piloting “cool neighbourhood” programmes with added shading and water features such as splash pads, as well as shading at every transit stop. A trip during rush hour, where it’s easy to spot workers baking under the sun at unshaded bus stops, shows how far the city needs to go. The program director of climate change and sustainability at the Los Angeles County public health department*, Elizabeth Rhoades, says LA has worked to establish a network of cooling centres, with particular focus on areas with the most need. But during the record-breaking heatwave that hit the city in early September, access was found lacking in many neighbourhoods. (Rhoades declined to comment about the performance of cooling centres during this year’s heatwave.)

“I would agree the city is addressing the heat inequality issue with the resources they have,” says Shickman. “It’s analytic, it’s research-oriented. They just need to find a way to scale it up five- or tenfold. They need to get the financial community to value the cost of rising heat.”

“People in the past have thought of extreme heat as an inconvenience,” says Rhoades. “But what people need to realise is that as extreme weather events become more frequent and severe, they’re going to affect the entire county, with power shutoffs, increased droughts and worse air quality. Privileged people who felt impervious will feel the impacts, and the cascading effects, in their daily lives.”


October 2020

Infrastructure often gets sold as a new solution to past mistakes. In Mumbai, India’s financial capital, an ongoing project to fill in part of the city’s coastline and build the initial 9.8km (6.1 miles) of an eight-lane Coastal Road can best be understood as an old mistake applied to a new problem. Building an expensive waterfront highway to “solve” traffic congestion highlights a consistent pattern in this tropical megalopolis of more than 20 million people: paving over green space and wetlands – even reclaiming part of the ocean – with new development. 

“At a time when we recognise the city is getting hotter, it seems a little perverse to pave over some of the city’s last open spaces to build a road that will produce heat-capturing emissions and make the city hotter,” says Nikhil Anand, a professor at the University of Pennsylvania who writes about Indian infrastructure. “This is one of the few escapes for people to get fresh air and recreation, and it’s being repurposed for the interest of a wealthy few.” 

The Coastal Road represents how a nexus of class and caste concerns, capital, concrete and road construction conspire to keep the most vulnerable citizens of India’s largest city at an inequitable risk of rising heat. The rich and poor in India often live “cheek to jowl”, says Anand, so poverty isn’t just expressed in spatial separation. It’s about access to resources, with open or recreational spaces understood to be places of privilege. The availability of trees, parks, drinking water and protection from the heat will become even more of a meaningful dividing line in coming decades. 

“Baked-in climate change, in a broad sense, is the unequal global distribution of damage,” says Amir Jina, a professor of public policy who works with the Tata Center at the University of Chicago. “Mumbai is a lot closer to the frontiers of hot temperatures right now and only stands to face the negative effects of a hotter planet.” 

Originally an archipelago of seven islands, Mumbai has been developed, filled in and paved over for decades, especially during a recent spate of runaway growth. The topographic shift is visible from above, says Roxy Koll, a climate scientist at the Indian Institute of Tropical Meteorology. Mangrove trees, the lungs and kidneys of the city due to their power to filter the air and absorb floodwaters, have been decimated and replaced with massive developments. The Mithi River, infamous for being declared an “open sewer” due to rampant pollution, now takes a winding path to the sea due to overdevelopment on its banks, rendering it less and less useful as a way to quickly disperse floodwaters. 

The city’s rich have taken the high ground, leaving the poor – typically migrant workers from other parts of the country – to settle in low-lying, flood-prone informal settlements and shantytowns such as Dharavi. Nearly three million Mumbaikars live within a kilometre of the coastline, and many millions more live near rivers. All of these areas are vulnerable to extreme rainfall events, storm surges, rising sea levels and, most deadly, the combination of all three. According to Nandan Maluste, a banker and board member of Mumbai First, a public-private partnership, those who live in makeshift homes with tin roofs have to contend with flooding and rising temperatures: “Warmer weather means stronger storms and stronger humidity, especially in areas that can’t afford air conditioning,” he says. The British-era drainage system, built in the mid-19th century when mangroves and open green spaces were still plentiful, could handle roughly 25mm of water an hour, repeatedly exceeded during this summer’s record rainfall (a replacement system is still under construction). Koll estimates the city experienced a threefold increase in extreme rainfall events from 1950 to 2019, and a recent analysis by McKinsey projected that Mumbai will see a rise in the number of intense flash flood events of nearly 25% by 2050. 

“The government’s response is largely one of neglect,” says D Parthasarathy, who studies cities and climate change at the Indian Institute of Technology Bombay. “The people who live in these informal settlements are largely migrants, religious minorities or lower castes, and Mumbai has a history of discrimination against these groups. It’s also not a vote bank local leaders count on.”

The late former Prime Minister Indira Gandhi famously said, “The biggest polluter is poverty.” It’s also the biggest barrier to individual Indians’ building more resilient homes. Hotter days deliver a financial blow to Mumbai’s poor, who often have access to water for just a few hours a day. In industries such as construction and manufacturing, where workers face sweltering conditions and get paid by the piece or the project, not the hour, making money means more effort during hot, humid days. The International Labour Organization estimates that India will lose 5.8% of its working hours due to heat stress by 2030. That is equivalent to 34 million full-time jobs. 

“Let’s get the poverty problem solved first, and the environment is a luxury good we can get to later,” Anand says. “That’s the typical approach. But those on the front lines, the poor and dispossessed, face large, significant and structural environmental issues now.”

Jina helped conduct a yet-unpublished study with 600 low-income Indian households where they were given subsidies to install cool roofs or apply light-coloured paint to reflect heat, both effective passive-cooling interventions with track records of success. He found that respondents preferred to use the money to pay for other things and “got used to the heat being hot”. 

“It seemed that what people wanted, what they were demanding, was the few hundred dollars we spent painting their roofs,” he says. It wasn’t that they didn’t like the cooling effect of the roofs, but the savings were more important. “From their point of view, perhaps the temperature exposure wasn’t the worst thing they were facing,” Jina adds.

Complicating the hope that Mumbai’s poor could be induced or even paid to build more climate-resistant homes is the lack of landownership. Many of Mumbai’s millions of slum dwellers quickly find out housing is their biggest expense, even in informal settlements, and they don’t own their domiciles. Even if they had enough savings to build or repair a dwelling, they don’t have a title or long-term financial reasons to upgrade. 

While more immediate financial concerns mean India’s poor can’t afford to alleviate sweltering temperatures, the heat will undoubtedly get worse. Mumbai and other Indian cities will soon face days where the wet-bulb temperature – a measure of heat stress that includes humidity, wind speed and other factors – crosses 35°C (95°F), a point where healthy adults can’t survive outside for more than a couple of hours. Workers will toil all day in the heat, then return to makeshift housing with tin roofs that trap the heat, meaning less sleep and an inability to recover by the time the next workday begins. Melissa LoPalo at Montana State University studied workers in Bangladesh and Pakistan who conduct household surveys; when wet-bulb temperature crossed 29°C (85°F), their productivity dropped by 13% to 14%.

Despite its location and the urban heat island effect, Mumbai historically sees few temperature-related deaths, especially compared with inland and agricultural regions of Maharashtra, the state where it’s located (Nagpur, for instance, located more than 800km inland, saw five heat-related deaths last May, according to state records). Heat Action Plans across the nation have helped lower the mortality of recent heatwaves in India; a government report found just 25 deaths nationwide in 2018, compared with more than 2,000 in 2015, and as of late May, one of Mumbai’s hottest periods of the year, there were no heat-related deaths reported in Maharashtra.

Heat resiliency typically isn’t part of Mumbai’s environmental policy discussion because flooding is such an immediate threat. Raghu Murtugudde, an earth climate scientist at the University of Maryland, says long-term climate shifts will deluge Mumbai. Warming in the Bay of Bengal and Arabian Sea will mean late-season cyclones with more moisture, which will roll over Mumbai’s heat islands (themselves dense with moisture), hit the surrounding Western Ghats mountains and “explode like a sponge”, he says. Murtugudde, who has overseen the creation of an early-warning SMS system for flooding in the Chesapeake Bay, says the new one run by the government in Mumbai, which reaches “several hundred thousand” residents, has helped make recent record deluges less deadly. Currently, officials are working on the “last-mile problem” and getting the alerts translated into the languages spoken by migrant workers. This effort sidesteps catastrophe while large-scale resilience efforts run into so many barriers: the poor don’t have resources, the government isn’t engaged, and there aren’t broad  studies of the benefits of investing in the expensive process of retrofitting older buildings. 

The rising heat and water, Maluste says, suggests a need to “radically reimagine Mumbai”; while Mumbai First has an action plan for flood prevention, he personally thinks about abandoning much of the topography that has sustained the city for centuries. And growth marches on: the city’s remaining mangroves, which cover 6,600ha, will not survive the city’s current growth trajectory, including projects like the Coastal Road. 

“I don’t like to talk about it as apocalyptic,” says Jina, “but climate change will make society less fair and affect how we think about ourselves as a society on this planet.” 

Bloomberg CityLab

November 2020

As a nail-biter U.S. election creeps to its resolution — and tallies in urban areas decide key battleground states — a few things are clear. While the ideological cleavage between urban and rural parts of the country continues to grow, progressive candidates at the local level had a strong showing on Tuesday. There’s a “dramatic progressive turn” taking place on the local level, says Richard Schragger, a University of Virginia professor and author of City Power: Urban Governance in a Global Age.

The 2020 results, so far, shows that trend will continue, even if it doesn’t trickle up into control of state legislatures or executive leadership. Schragger sees the range of policy that prevailed at the polls, from housing and transit to new ideas for land use and economic development, broadening significantly in cities of all sizes. 

Moving forward, many political observers and leaders tell CityLab that action will continue on tenant and worker rights, criminal justice reform and transportation. And with evolving vote tallies in battleground states pointing (as of Nov. 5) towards a Democratic White House, and Senate control decided by runoffs in Georgia, they feel it’s imperative that cities continue to advance progressive policies that reshape the local economy.

Tory Gavito, president of Way to Win, a progressive political coalition and PAC, points to the passage of Proposition A in Austin, a $7.1 billion transit improvement initiative, after the city council passed a Green New Deal last year as an example of progressives pushing big reforms when they have the votes and the power. 

 Wins like that stand out in a more muddled national picture, as predictions that voters would deliver a resounding repudiation of the Trump-era GOP have given way to a mixed assortment of results — and an ever-deeper gulf between urban and rural America. Still, Gavito sees the results so far as a step in the right direction for the progressive agenda. “The first thing to note is that Democrats are winning the popular vote, and their numbers are only increasing in urban and suburban areas, with demographic change in the south and southwest,” she says. “Arizona flipping, Georgia in a dead heat, Texas moving left, and wins down ballot are a sign this country is shifting.” 

Ross Morales Rocketto, co-founder of Run for Something, which backs state and local progressive Gen Z and Millennial candidates, emphasizes the generational shift in local politics. Overall, Run for Something endorsed 525 candidates this cycle, with 202 victories, 77 races left to call and three runoffs as of Nov. 5. Among the winners: Gabriella Cázares-Kelly, an Indigenous candidate who declared victory in her race to be the new Pima County Recorder, which oversees elections in the Tucson area; she ran in response to other Native Americans being disenfranchised. And Nikil Saval, an Asian-American architecture critic and first-time candidate just elected to the Pennsylvania State Senate, ran in part on a “housing for all” agenda. 

Candidate For Missouri's 1st District Cori Bush Holds Election Night Party
Congresswoman-elect Cori Bush speaks during her election-night watch party in St. Louis, Missouri. Photographer: Michael B. Thomas/Getty Images North America

Rocketto also pointed out a pair of congressional winners who come with progressive credentials: former nurse and Ferguson activist Cori Bush, the first African-American woman to represent Missouri in the House of Representatives, and former middle-school principal Jamaal Bowman from New York City, who has promoted restorative justice and increased community investment.

These political newcomers, Rocketto says, reflect a generation that grew up watching Democratic leaders from Bill Clinton’s “big government is over” school of politics try to solve massive social problems with small fixes and slight shifts; now, they are loudly asking why government can’t do more. Rocketto doesn’t see it as an ideological fight as much as a demand that things get done. “Democrats have been in control of most major American cities for decades and Black people are still being killed on the streets by police,” he says. This summer’s racial justice protests fueled a surge in interest from younger people interested in public office, he says. “It was already too late to get on the ballot, but we had literally thousands of people contact us about running. We haven’t come close to seeing all the young candidates running for office in cities, counties and school boards. There will be a wave of new people in 2021.” 

Some victories could beget future wins. Rocketto points to Lina Hidalgo, judge for Harris County, Texas, which included Houston. Her election in 2018 and subsequent work to encourage and support increased voting access fueled early (albeit overly optimistic) Democratic hopes of a blue wave in Texas, and shows the power of putting progressives in local office. “In 2018, Harris County spent $6 million on their election,” says Rocketto. “This year they’re spending $36 million. It may feel small — $30 million isn’t a ton of money — but that small change impacted the lives of hundreds of thousands of people, who saw an example of the government impacting their daily lives.” 

Local progressives have already succeeded in shifting the national conversation on issues such as affordable housing, says Maurice Jones, president and CEO of Local Initiatives Support Corporation (LISC), a national community development financial institution. “Local government is chomping at the bit for a federal partner, and if they saw one that wanted to be more aggressive, they would get more aggressive themselves,” Jones says. 

Tara Raghuveer, co-founder of KC Tenants and director of the national Homes Guarantee campaign, says that this election has already shifted the terrain of ideas in terms of raising awareness of the affordability crisis. “On the state and local level, we’ve seen a proportional shift,” Raghuveer says. She points to candidates like Nithya Raman, a 39-year-old urban planner who’s holding a strong lead in her bid for a city council seat in Los Angeles. “She’s running front-and-center and saying that incrementalism is dead, and L.A. can solve homelessness tomorrow.”

Raghuveer sees the election of representatives Bush and Bowman, and the reelection of New York Congresswoman Alexandria Ocasio-Cortez and the rest of “the Squad,” as a “deepening of the bench,” with more representatives headed to D.C. with lived experience to understand the impact of housing policy on urban America. It gives voice and platform to the tenant’s rights movement, and could push a potential Biden administration to feel pressure to address the issue and “force a reckoning.”

Early 2020 results also suggest more ambitious local transportation policies, again filling the gap left by federal inaction during the previous four years of the Trump administration. Romic Aevaz, a policy analyst at the Eno Center for Transportation, says that regardless of exact ballot initiative results, there is movement towards significant local investments in new rail and mass transit, such as Austin’s Prop A, as well as more measures to fund Vision Zero and bike lane safety improvement. “There’s more optimism, more enthusiasm for big-ticket proposals in Austin and the Bay Area,” he says. “If local governments put the funds up and we get a Biden administration, we’ll have a better chance to get federal matching funds, too.”

But cities in red or battleground states may soon face bigger challenges. As of yet, there haven’t been any Democratic takeovers of state legislatures in places like Texas, meaning preemption of local powers will continue to be a problem. Schragger points to Virginia, which saw its House of Delegates flip to blue last year, as an example of how such a change can create a state much more responsive to urban constituencies. “The anti-urbanism of the Republican party will be magnified if Trump is re-elected,” Schragger says. “No support at a minimum, as well as outright hostility in the form of ‘anarchist jurisdiction’ declarations.”

Gregorio Casar, a city councilmember in Austin, Texas, laments the lost opportunity to turn the state legislature blue this year, as it would provide a better chance to make sure the work progressive cities do holds — a paid sick leave law he championed was later struck down — and hold other more moderate politicians to account, who can’t blame preemption fears for their refusal to take bold action.

“Every time we have a good idea in our cities, we have to ask, will this be stopped by the legislature, will the governor have a press conference to bash it?” he says. A less-hostile state government could also increase voter participation and turnout. “Texas has been a non-voting state, not a red or blue state, and I can understand that, since it’s been so gerrymandered.” 

Even with a more helpful executive branch, local progressives may still be forced to do much of the heavy lifting of enacting change themselves. That often starts with budgets, which have been under the microscope of activists since the summer’s reckoning with police violence. 

Eunisses Hernandez is a longtime criminal justice advocate with Re-Imagine L.A. and a supporter of Measure J, an approved Los Angeles County initiative that calls for redirecting more than $360 million to community investment and alternatives to incarceration. She’s seen increased activity around budgets and funding for years as a progressive coalition has formed around longtime community frustrations. Hernandez says that the diverse campaign around Measure J grew out of decades of activism and community demands for jobs, housing and health services, including East L.A. protestsof the 1960s and the work behind Prop 47, a statewide ballot measure that reduced sentencing for nonviolent crimes.

“Now, with younger people, you see that demands are shifting,” she says. “I’ll say radical for lack of a better term. Instead of asking for a piece of the pie, it’s about asking for the entire pie. There’s a demand for deep reform, and not leaving people behind. Black Lives Matter really set the stage for us to be able to make these demands of the bureaucracy. What’s happening here is a blueprint to show what your tax dollars can do, and how they can represent your values.” 

Elise Buik, president and CEO of the United Way of Greater Los Angeles, says that the younger generation leading the charge is “bringing focus and scrutiny to public budgets in a way I’ve never seen,” she says. The group is part of a coalition supporting Measure J, which she says could be “a really important model for California and the country. L.A. county is bigger than 41 states in terms of population.”

Campaigns like the one for Measure J may represent Rocketto’s vision of how to expand the progressive coalition beyond its urban strongholds. “The real opportunity at the local level across the country, is to fundamentally talk about local problems,” he says. “It’s not about running on ideology. Connect with voters over shared values. That’s how you get a Republican, who only sees a Democrat on Fox News, to trust and vote for a Democrat.”

“We shouldn’t be afraid of contrast in a time of polarization,” Gavito says. “The more you can tell a story of how progressive policies are helping a multiracial coalition succeed, the more you can pull people into the coalition who are natural allies.” 

Raghuveer observes that it’s become something of a radical notion, in a divided nation, that the government should be the source of power that can fix serious societal issues — especially after seeing how ineffective it has been in protecting jobs and lives during the coronavirus pandemic. 

“The clarity provided by the last several months,” she says, “is that almost nothing about the way we’re set up allows cities to care for people in the way we need them to care.”