Monday, October 25, 2010

The Fires by Joe Flood

The Fires: How a Computer Formula, Big Ideas, and the Best of Intentions Burned Down New York City-and Determined the Future of Cities by author Joe Flood is another MUST READ book for all real estate investors.

This exciting and exhaustively researched book tells the story of how much of New York City literally burned to the ground in the late 1960s and early 1970s because of policy making decisions made by then New York Mayor John Lindsay and the New York Fire Department.  While their intentions were good, they turned over much of their manpower assessment decisions to a computer system designed by the RAND Corporation, at the time one of the world's most respected think tanks.

The result, as author Joe Flood makes perfectly clear, was a disaster.

More than 2,000 people in New York City were killed.

Hundreds of thousands lost their homes.

Whole sections of New York, from the South Bronx, the Lower East Side, Harlem, and Brooklyn, went up in flames not because there were too few firefighters but because a computer system had them put in the wrong locations.

Real estate investors all across America need to read this book.  In an era of municipal budget cuts that will chop away at not just the fiscal fat but into real muscle as well, it is easy to see this same process replicated again in cities all across the United States as governments attempt to save money by using private consultants and their computer wizardry to create economic efficiencies.

There are no real villains in The Fires.  There are two mayors, an ambitious fire commissioner, and an assorted cast of consultants who have nothing but the best of intentions at the start but end with an epic catastrophe on their hands.

As a real estate investor you had better know who is assigning municipal protections to your neighborhoods and how they are doing it.  If you assume your local government is doing this correctly, you are naive.

The Fires by Joe Flood is a strong lesson as to what happens when government looks to technology for answers and only creates far worse problems for ordinary citizens.