Incentivizing Borrowers

I’m shopping for trucks and auto loans. Specifically, I’m looking for a 2004 Toyota Tacoma. I’m buying a 13 year old truck for multiple reasons. Firstly, after 2004, the body size of Toyota Tacomas got much larger – larger than I need and too large to park on Capitol Hill where I live. Secondly, buying a used vehicle is important to me from an environmental standpoint. I like knowing that if I’m going to be a car owner, at least I’m not going to increase the number of cars already in existence. By purchasing a used vehicle instead of a new one, I’m taking on less financial risk myself, while also reducing the environmental impact of new vehicle manufacturing.

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Despite my effort to be both financially and environmentally responsible, the interest rate on my auto loan will be nearly double what it would be if I were to purchase a brand new car. I understand the rationale that older cars are more likely to have problems and thus, be worth less as collateral. Yes, banks exist like any business to make money. But they also function to help people make big purchases and work toward financial goals. By charging a higher interest rate for an older vehicle, banks are incentivising higher risk borrowers.

If the lending functions of a bank operated more like a micro-lender, the community and environmental benefit might be far greater. Micro lenders make smaller loans to borrowers who typically have very little credit history. These loans typically have much lower default rates while offering a sustainable step toward borrower goals.

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How to get people outside

One of my favorite features in a car is seat heaters. I do a lot of skiing and spending time outside in inclement weather and am also someone who runs cold most of the time. Getting into a car with seat heaters at the end of a long day skiing or a wet trail run takes those experiences that I already loved to a completely new level. Heated seats make an already comfortable ride in a modern vehicle, all the more enjoyable.

Recently, I went to a bar in Bend, Oregon after day of skiing that featured tables in a covered courtyard. I ordered a beer and sat down at a table with bench seating along the perimeter of the courtyard. I was surprised and so thrilled to discover that the bench I was sitting on was heated just like the seats in the car I arrived in!

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Despite the freezing temperatures, my friends and I enjoyed our beers and dinner outside thanks to those glorious heated benches. They were just warm enough to be comfortable and easily loose track of the time (and number if beer’s we’d had!) sitting out there in the cold.

I am a big proponent of outdoor dining and believe that for the mild climate, Seattle doesn’t have nearly enough of it. People are naturally drawn to spaces with access to natural elements, be in air, water or fire, and I believe can truly make a dining experience. As I was reminded while sitting on that toasty bench, creating comfortable outdoor spaces can really be very simple, even in cold climates. Heated with radiant hot water tubes, those benches likely used relatively little energy, the cost of which was most certainly offset by the additional beers purchased by people who just wanted to enjoy that bench a little longer.  

The last one standing

Recently I spoke with a Vancouver architect who specializes in cross laminated timber buildings. As he described the benefits of the structural material, he made an important point about the current american seismic code. As it stands, the seismic code mandates that all structures are built to allow inhabitants to escape safely after a major seismic event. However, there is no requirement that buildings stay functional after a major seismic event. There is no incentive to engineer buildings beyond the code requirement and thus, if a major earthquake were to hit Seattle, much of the city’s building stock would be deemed unusable.

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When concrete buildings are under seismic pressure, they are engineered to sway but not fall down, allowing inhabitants to escape but making no further guarantees about the structure’s integrity. As the building sways, the concrete cracks making it unsafe and difficult and expensive to repair. Buildings built with cross-laminated timber are less likely to crack under seismic pressure due to the inherent flexibility and self-levelling properties of wood. If we were to build skyscrapers out of wood, they would be much more likely to withstand an earthquake and remain usable after the fact.

It’s difficult to imagine every building in the seattle area being deemed unusable after a major earthquake. Until we were able to rebuild, we would need to completely rethink the way we conducted business. It is also mind boggling to think of the cost that would be incurred by property owners, insurance companies, investors and local government in order to rebuild that much infrastructure. While CLT construction may not be Seattle’s silver bullet solution to seismic resilience, if I were an investor or insurance provider, I would sleep better knowing that my buildings were constructed with CLT and likely to be some of the last ones standing after “the Big One” hit.

Better Stuff

Last night I was slowly working my way through the Vancouver BC transit infrastructure design guidelines. As riveting as the turning radii of articulated busses was, I needed some fresh air and a sugar fix. I walked down the street to my neighborhood grocery store for some ice cream. I went straight for my favorite coffee chocolate chip pint both because it’s heavy on the chips (something that you don’t often find in most coffee chocolate chip varieties) and also because it comes in a perfect little reusable screw top container. Once I discovered the versatility of this container, I’ve rarely strayed from the brand.

The one pint wide mouth plastic container with a screw on lid works perfectly for storing leftovers, freezing meals for one (something I do a lot of as a grad student who lives alone), carrying lunch in my bag without threat of spilling, or containing any number of other food and non-food items.

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The Carbon Efficient City raised the point of excessive packaging of milk in the United States. I agree completely that . It’s clear that we could reduce massive amounts of waste by cutting back on the material that we use to package consumer products. What would happen though, if packaging for some of our products got a little more robust so that they could be reused? In Europe, certain brands of yogurt are sold in tiny terracotta jars. After the yogurt is gone, the jars work nicely as votive holders, succulent planters, or pencil jars.

The benefit of reusable packaging to the environment is clear. However, a well designed, well branded reusable package could also hold incredible marketing value for a company. Each time a consumer reuses a packaging item, they think about and advertise for the company and the product. The more durable the packaging, the more marketing benefit the company receives. The environment, consumers and corporations alike could benefit if we thought not just about making less stuff, but also better stuff.

The Case for Incrementalism

I appreciated the Buckminster Fuller quote referenced in chapter 2 of the “The Carbon Efficient City,” which states that “ You never change anything by fighting the existing. To change something, build a new model and make the existing obsolete.” This is an inspiring and empowering message. However, I don’t fully adhere to it. Generally, I reject utopian thinking that point to impossible solutions such as “Capitalism is the problem. If we could just get rid of capitalism, everything would be fixed.” While starting from scratch is an appealing idea, especially in the face of overwhelming global problems, If we want to make change, we need to begin by setting realistic and more importantly attainable goals. I believe that one of the most effective ways to make change is to work from within an existing system and find the most effective leverage points. The difference in these approaches is the difference between total overhaul and incrementalism.

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As is the case for many of us this week, the recent inauguration and last weekend’s marches are on my mind. The millions of people who gathered all over the world on Saturday to peacefully protest Trump’s election was one of the most powerful things I’ve ever experienced. Yet on Sunday evening, after the intense energy of Saturday started to ware off, I, like many others started to wonder how to maintain the momentum from the event. What I’ve been so impressed with in the past 24 hours as I talk to peers, read the news and scroll through social media is the unprecedented focus on concrete, incremental action steps to counter the Trump administration. This alone, is what gives me hope for getting through the next four years.
The political system, like many of the others we function in are grounded in logic and shaped by smart, thoughtful and well intentioned people. While I would not hesitate to agree that parts of the political system have completely gone off the rails in recent years, I still don’t believe that building a completely new model is necessary or feasible. Instead, might we ask ourselves “which foundational elements of this framework can we anchor new ideas to?”

Takers Not Invited

In “The Saintly Way to Succeed,” Susan Dominus describes the strategic nature of the most successful givers. According to Adam Grant, they most successful givers are ones that align themselves with other givers, leveraging the power of their generosity – because of course, at the end of the day even the most giving of the givers are acting in their own self interest. This is a tough pill to swallow considering how much we rely on the generosity of others to run non-profits, operate schools, take care of those at the bottom of the income bracket, house the homeless and countless other critical societal functions. As soon as I was able to get past the initial heartbreak of realizing that altruism may all just be a total farce, I wondered how we might be able to “trick” the givers among us into being even more giving as government spending for social programs looms closer as a reality.

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We know that when we are “nudged” by those around us, we tend to perform to the level of our peers. What if we could easily categorize people by their tendency as a “giver,” a “matcher” or a “taker?” If we knew where on Grant’s spectrum, we could leverage the giving-ness of the givers by creating environments where they were surrounded by other givers. What if organizations had access to a person’s giving classification along with their name and other information? What would social business look like if you a condition of being hired was that you had to be a giver? Invitations to charity events might be dependent upon a person being a giver or a matcher. Takers would simply not be invited. Events could be organized so that attendees worked together to maximize their own benefit as well as benefit the organization. Instead of silent auctions, fundraisers could feature activities that required participants to engage with one another and pool their resources with other givers and matchers in order to maximize the benefit for the charity.

While excluding the entire population of “takers” from the work of contributing to society would clearly not be an ideal or popular approach, I do wonder what would happen if we made space for givers to no only do what they do best, but also created opportunities where that benefit could be leveraged further by others.