A Modest Estimate

Capital is dead labor, which, vampire-like, lives only by sucking living labor, and lives the more, the more labor it sucks.

-Karl Marx

The unfamiliar buzz of our doorbell alerted me to the arrival of visitors downstairs. Peg and I had forgotten that she had scheduled a local HVAC contractor to inspect our system at the new condo, make recommendations, and enter an arrangement to clean and maintain the components, most of which live in our attic and are only accessible by ladder.

They seemed nice enough, these two young men in matching company polos. I gave them a fairly grouchy welcome, having been interrupted in the middle of an unwieldy writing project, and quickly handed them off to Peg while I went back to work.

At the conclusion of their crawl through our maze of ducts and air handlers, they gave us a verbal overview of their observations, mostly minor stuff like having a proper overflow system for the pan under the air handler vent, and promised a more comprehensive set of recommendations in an email attachment in a day or two. So far, so good.

Then came their estimate: $61,412.41. We were floored. Their proposal essential removes and replaces the entire HVAC system, as well as replacing our hot water tank with a tankless system. All "premium" stuff, per their description, with loads of verbiage about how happy we'd be with our top-of-the-line, maintenance free system.

But our current system works well enough. I'd be far happier with the $61,412.41 in our bank account, or better yet for P and me to have the luxury of not working all the hours it would take to amass that amount. I'll just call the little family outfit that replaced the heater at Tara, and give them a shot at the work.

What happened here? The company that performed this week's inspection seems the biggest HVAC contractor in town, with billboards dotting the valley and signature red trucks zipping all over from Bath to Owego. It takes a lot of money to make that engine hum, and we must've looked like two old marks in a relatively poor community.

But it's bigger than that. Over the last decade, private equity has sunk its talons into the mom-and-pop heating and air businesses that are as much a necessity in this age of global warming as plumbers.

https://www.forbes.com/sites/davidwmccombie/2024/07/16/private-equity-is-coming-for-your-ac-repairman/

These guys aren't content with the 6% returns of, say, a stock market investment. Their expected return runs more in the range of 25-30%, in part because they need to cover all the bad bets they make and build cash for the next acquisition.

So a business that once counted success by generating enough income for the owner to install a pool or put the kids through college, or by making sure its employees had health insurance and a living wage, now must squeeze perhaps three or four times its historic return on investment out of a customer base whose wages have been dropping for as long as I've been in the workforce. You have to figure these poor guys who are sent out to offer an assessment of one's climate control systems are under a lot of pressure to deliver for their venture capital overlords. They probably took one look at this place, with all its fancy trappings, and figured they'd hit the mother lode.

Meanwhile, fall finally arrived here overnight, bringing temperatures in the high 30s and our first frost warning of the season.

We slept a little better last night, with Slane locked in his cat carrier back here in my office. I closed and latched the office door before going to bed, and was amazed at 2 a.m. how clearly I could hear him moaning plaintively. When I awoke up this morning and walked across the condo to let him out, the door was open. Another ghost? Peg seems to think Lucia followed us over here, given some of the unexplained goings on at the Schoolhouse over the last few weeks--lights turning themselves on, that sort of thing. Or maybe it never really was Lucia. Maybe instead we've picked up some guardian angel here along the banks of the Chemung, and she opens a door or flips a switch to let us know she's still here with us. A comforting thought in a disorienting age.