On allocating costs

A debate about who should bear the cost of building parking spaces has flared up in Helsinki. When new houses are built, they are required to build a certain amount of parking spaces. This amount is some quota based on the number of apartments built. In downtown Helsinki and the inner-city suburbs this means in practice building underground garages under the houses. This is not a cheap exercise, studies put the average cost per parking space at 40 000 euro. This cost is typically borne by all the apartments in the house, irrespective of whether the inhabitants have a car or not. 

Lately this has lead to some discussion as to whether this is a good system. Today's Helsingin Sanomat interviewed the chairman of the Helsinki City board on the issue. He claims that it would be unreasonable to demand that only those who use the parking spaces would pay for them. Why? "A civil servant or teacher couple cannot afford to pay 40 000 euro, buyt they may still need a car." So therefore the cost of the parking space should be split among all the inhabitants. 

This is a very interesting argument, especially coming from a representative of the main right of center Coalition party. Personally I'd be tempted to extend his argument. 

Consider a house with apartments of two sizes. The larger apartments might be too expensive for the civil servant or teacher couple described by the chairman. The obvious solution is for the owner of the smaller apartment to subsidize the cost of the larger apartment, so that the teacher and civil servant can afford to live there.

Another solution would of course be for those who want a parking space to pay the actual costs of it, and if they cannot afford it, either move to somewhere cheaper, or get rid of their car, if they don't consider it to be worth the cost.

The failure of corporate IT

I just got a invitation to a event organized by a medium sized organization. The invitation asked for signups to a gmail.com address created for the event. Evidence of the failure of corporate IT to cater to users' needs. But also evidence of users' increasing ability to bypass rigid corporate IT with the help of easy to use consumer technology.

Something wrong with the labor market

Today's Helsingin Sanomat writes about plans to reduce the incentives for sabbatical leaves. The federation of employer's director of legal affairs notes that the system with sabbaticals is a great way of testing potential new recruits.

Essentially what he's saying is that the need for temporary employees created by people on sabbaticals is a good thing, as it enables employing people on temporary, rather than non-temporary contracts.

There's something wrong with the labor market if the only decent way of testing potential recruits is having somebody leave so that you can employ people in a sensible way.

Debasing your trademark with Groupon

What are they thinking? Two Michelin star restaurant Chez Dominique is offering  a 50% discount through Finnish Groupon subsidiary Citydeal on a dinner for two. Puts you in the same league as pizza chain Kotipizza. Great way of debasing your trademark.

New bad suggestions for Greek collateral

Another twist in the saga of the Greek bailout and Greek collateral. The cash deposit idea was stupid. Now it is suggested that Greece nationalize some banks and post shares in those banks as collateral. Source: Handelsblatt

Seems like a good idea? But wait a minute. Those Greek banks hold a fair bit of Greek government debt. And the collateral is meant to guard other debt holders against Greek default on that same debt. So what happens if Greek defaults? The banks fail, and those shares that are supposed to act as collateral become worthless/lose alarge  part of their value. Fail.