Unreal City

Robin is now in North Carolina, revisiting the old homeland. She owes me a blog entry, something to put this whole moving business in perspective for once and for all, but maybe this one will spur her to take action. There is so much to say that I don't know where to begin. I want to talk about real estate, for instance, but the whole subject makes me tired and discouraged. It's unreal, for one thing. Real estate is such a common term that we seldom pause to consider its actual meaning. Real property: something tangible, that is, touchable, holdable, build-upon-able. The defining feature of real estate is that it exists in reality, as opposed to the numbers in your 401(k) account or those funny-looking pieces of engraved green paper that the A.T.M. spits out, which have value only because we agree they do. They exist, you might say, in theory. A house and land, on the other hand.... what gives it value? I guess at the end of the day, when civilization collapses, that you could survive by growing potatoes on your fenced-off quarter-acre.

If civilization collapses, among my worries will be that I have no idea how to grow potatoes. I am told it is easy, however, that the ease of potato cultivation led to overpopulation and general fecklessness in the land of my ancestors.

Another problem: no place to grow them. I live in the air, on the second floor, in a world of steel and concrete and brick. We rent, as I have mentioned: even farther removed from reality, from real property.

The common form of home ownership in New York City is the co-op apartment. I think this is because, like so many things in New York, it defies logic and common sense, is needlessly baroque and replete with contradiction.

The structure of the co-op is essentially that you do not buy real property, not the walls around you nor any part of the land they stand on. You buy shares in a corporation, the corporation that owns your building and now graciously allows you to live there. The bigger the apartment, the more shares. You are at once shareholder, landlord and tenant.

Naturally, the current shareholders don't want deadbeats buying into their corporation, so they need to know as much about potential buyers as possible, especially their financial life. The fact that one can qualify for a mortgage is merely a starting point. The corporation needs to know: How much money do have and where? How much do you earn and where do you earn it? What else do you own? Do you pay your bills on time? Are you currently party to a lawsuit? Do you owe alimony? Do you have any pets, noisy hobbies, or other bad habits?

A curious asymmetry of information situation is created, in which the people on one's co-op board know more about the buyer than his doctor, priest and accountant combined. Yet the structure of the co-op purchase means that the most vital fact to the market -- the selling price -- is hidden from view. It is not public record the way property transfers are. Imagine making the most expensive purchase of your life and not knowing what other people are paying or have recently paid for similar items. That is what buying a co-op is. Although some hints can be gleaned by watching how quickly or how slowly apartments sell, there is no easy way of learning whether they sold above (multiple bids) or below their asking price. It's crazy. But this is the world I live in now. I asked for it.