This is a story about the triumph of the City—not “the city” that Ed Glaser has written about in sweeping global and historic terms—but the triumph of a particular city: San Francisco.
For decades, the San Francisco Bay Area’s economy has been a microcosm and a hot house for studying the interplay between innovation, economic prosperity, urban form and social impacts. It gave us the quintessential model of technological geography, Silicon Valley. And today, it’s showing us how that geography is changing—and shifting towards cities.
As a graduate student at the University of California, Berkeley, more than three decades ago, one of the first things I learned about living in Bay Area was that the large city between us and the Pacific Ocean was not “San Fran” nor “SF,” and especially not “Frisco.” San Francisco was simply “the City.”
In the late ’70s and early ’80s, San Francisco was the queen of her little geographic universe, the center of arts, culture, and commerce in Northern California. That was heyday of San Francisco Chronicle columnist Herb Caen, the martyred Harvey Milk, and George Moscone in City Hall. In the wake of Prop. 13, California’s voter-adopted property tax limitation measure, there was a lot of political unrest that led to, among other things, rent control in the City.
Down Highway 101, there was Silicon Valley—or, to those in the Bay Area, simply “the Valley.” Santa Clara County, on the peninsula south of San Francisco, was long regarded as an agricultural hinterland—much as the Central Valley or Salinas are thought of today. The Stanford University campus, the South Bay’s major intellectual center, was (and still is) nicknamed “the Farm”; the area was historically famous for its fruit orchards. But all that changed. San Jose and its surrounding communities grew steadily in the 1960s, 1970s, and 1980s to become the economic hotbed of the region. The personal computer was essentially invented in Silicon Valley garages. Hewlett-Packard, Intel, and Apple all got their start in The Valley. Cities and states across the nation and the world set about trying to replicate what they perceived to be the elements of Silicon Valley’s success: research universities, science parks, technology transfer offices, entrepreneurship programs, and venture capital investment. But no matter how many emulators emerged, Silicon Valley remained the dominant epicenter of new technology firms in the U.S.
As the Valley grew, the City seemed quaint and dowdy by comparison. In the 1990s, it lost some of its corporate crown jewels, as Bank of America decamped its headquarters to—shudder—North Carolina. Sure, the City had its counter-cultural cred with the Jefferson Airplane and, later, Dead Kennedys and others, but the Valley was where the work got done.
The technology wave, particularly the personal computer and the Internet, seemed to bypass San Francisco of the big new firms, the Ciscos, the Oracles, the Googles, got their start in Silicon Valley and grew there. Measured by gross domestic product per capita, San Jose blew by San Francisco in the 1990s, and never looked back. It was, as Joel Kotkin famously argued, the victory of the suburban nerdistans. Engineers and businesspeople wanted to live split-level houses on large lots in suburbs and drive, alone, to work each day. While Kotkin admitted that some creative types might gravitate toward Richard Florida’s boho cities, he pushed that most job growth would be in sensible suburbs:
“Today’s most rapidly expanding economic regions remain those that reflect the values and cultural preferences of the nerdish culture — as epitomized by the technology-dominated, culturally undernourished environs of Silicon Valley. In the coming decade, we are likely to see the continued migration of traditional high-tech firms to new nerdistans in places like Orange County, Calif., north Dallas, Northern Virginia, Raleigh-Durham and around Redmond, Wash., home base for Microsoft.”
But for the past decade or so, and most notably since the end of the Great Recession, a funny thing has happened. Tech has been growing faster in the City than in the Valley. Lots of new firms working on new Internet technology plays—the Ubers, the AirBnBs, the SalesForces—started up in San Francisco and grew there. At the same time, more and more young tech workers, not unlike the young workers nationally, had a growing preference for urban living. The City is a lot more urbane than the Valley. As Richard Florida has chronicled, venture capital investment, perhaps the best leading indicator of future technology growth, has shifted from the suburbs to the cities—nowhere more strikingly than in the San Francisco Bay Area.
And so, to accommodate the needs and desires of their most precious input—the human capital of their workers—Silicon Valley companies started running their own subsidized, point-to-point transit services. The “Google buses” pick up workers in high-demand neighborhoods in San Francisco and ferry them, in air-conditioned, wifi-enabled comfort, to prosaic suburban office campuses 30 or 40 miles south. These buses became the flashpoint for protests about the changing demographics and economic wave sweeping over the city, as Kim-Mai Cutler explained in her epic TechCrunch essay, “How Burrowing Owls Led to Vomiting Anarchists.” In the past 12 years, the number of workers commuting from San Francisco to jobs in Santa Clara County has increased by 50 percent, according to data from the Census Bureau’s Local Employment and Housing Dynamics data series.
Those trends came to their logical culmination this week. The San Francisco Business Times reported that Facebook, now headquartered in the Valley’s Menlo Park, is exploring the construction of a major office complex in San Francisco. According to the Times’ reporting, the company’s decision is driven by the growing desire of its workers to live in urban environments. Additionally, Facebook has faced competition and poaching for talent from San Francisco-based companies, including Uber.
Facebook’s interest in a San Francisco office is just one harbinger of the northward movement of the tech industry. Apple, which has famously insisted that its employees work in its campus in Cupertino, has recently leased office space in San Francisco’s SoMa neighborhood. Google now has an estimated 2,500 employees in San Francisco, and has purchased and leased property in the city’s financial district.
The miserable commute to Silicon Valley from San Francisco means that busy tech workers find it more desirable to work closer to where they live. Paradoxically, as Kim-Mai Cutler warned, the protests and obstacles to Google and other tech buses are prompting tech companies to expand their operations in The City, which brings in even more tech workers to bid up the price of housing there. As she tweeted on July 25:
As we’ve chronicled at City Observatory, jobs are moving back into city centers around the country, reversing a decades-long trend of employment decentralization. Companies as diverse as McDonalds, which is relocating from suburban Oak Park to downtown Chicago, and GE, which will move from a suburban Connecticut campus to downtown Boston, all cite the strong desire to access talented workers. Those workers are are increasingly choosing to live in cities. While we view the resurgence of city center economies as a positive development, it also poses important challenges, especially concerning housing supply and affordability. For economic and equity reasons, it is critical that we tackle the nation’s growing shortage of cities.
Our apologies to Ed Glaeser for borrowing the title of his excellent book, The Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier, for this commentary. We’re deeply indebted to Dr. Glaeser for outlining many of the forces at work in America’s cities, including agglomeration economies and the theory of the consumer city. These are chief among the explanations for the recent triumph of San Francisco over Silicon Valley.
When we talk about gentrification, we often focus on housing. But another major concern is the effects of rising prices on retail—both because of what it means about the accessibility of goods and services for local residents, and because of questions of “community character.”
The Philadelphia Federal Reserve Bank’s recent symposium on gentrification included a paper from Rachel Meltzer of The New School on just this subject. Meltzer begins by indicating two ways that gentrification might affect small businesses: changing the kinds of goods and services that local residents demand, and changing the cost of doing business, making some lower-margin businesses no longer profitable.
Meltzer then explores data from New York City between 1990 and 2011 to look at how small business retention rates vary between neighborhoods that are gentrifying, and those that aren’t. The overall results, perhaps counterintuitively, show virtually no difference. In fact, the percentage of small businesses that leave their storefront and are replaced by another business—the kind of scenario you’d expect to see in a gentrifying neighborhood, with (say) bodegas getting replaced by artisanal coffee shops—is very slightly higher in non-gentrifying neighborhoods than in gentrifying ones.Credit: Rachel Meltzer
The essential fact here is that local storefront businesses have a high rate of turnover generally. So while there are lots of examples of businesses going out of existence in gentrifying neighborhoods, there are lots of examples in other kinds of neighborhoods as well.
At a closer-to-the-ground level, looking at differences in business retention between Census tracts in the same neighborhoods, Meltzer does find some distinctions: Businesses are less likely to leave without a replacement—that is, create a vacancy—but somewhat more likely to leave with a replacement in gentrifying areas.
The takeaway is not necessarily that business displacement never happens in gentrifying neighborhoods—plenty of people in high-cost cities can cite a favorite old business that relocated or disappeared because of rising lease costs.
Rather, the results of this study on retail displacement are strikingly similar in some ways to the results of studies about residential displacement: while there are certainly examples of it happening, systematic studies that compare gentrifying and non-gentrifying neighborhoods repeatedly fail to find that there’s significantly less displacement in non-gentrifying neighborhoods. And just as rising apartment rents may sometimes be offset by an increased willingness to pay because of better neighborhood amenities, rising retail lease prices might be offset by more and higher-income customers who are willing to pay more or buy more high-margin products. More customers with more disposable income translates into higher sales, which can enable businesses to still profit while paying a higher rent. On the other side, just as non-gentrifying low-income neighborhoods usually see a kind of “displacement,” with rapidly declining populations as people leave for areas with stronger neighborhood amenities, local businesses in these neighborhoods may also struggle to remain in a place with a declining customer base. In these struggling neighborhoods, low or stagnant incomes mean relatively lower sales for local merchants, making it hard for them to be profitable, even if rents are low.
In other words, with business displacement as with residential displacement, the reality of gentrification appears to be much more complicated than prevailing narratives. It is not clear that gentrification leads to higher levels of small business turnover.
Team Better Block has used duct tape, stencils and tempera paint to instantly implement bike lanes and other city improvements. All images courtesy Jason Roberts
As Jason Roberts puts it, “We all want to live in places that look like this….
….So why do we keep building places that look like this?”
That’s the question that inspired Roberts to make changes in his community in Oak Cliff, a first-ring suburb of Dallas. It started with making a bike lane with stencils and duct tape and hosting an art party in an old, vacant theater. It grew to a new business, a new career and $23 million to bring back a streetcar system to his city.
Roberts, the founder of Team Better Block, presented at an evening forum at SPUR San Jose last week. (See his full presentation.) As his story goes, Roberts was a musician and IT consultant who just wanted a coffee shop and bike lane in his neighborhood. But he found that even the simplest streetscape improvements were too expensive or, worse, illegal under the city’s municipal code. Just adding café seating and an awning cost $1,000 each, not including the cost of furniture.
Dallas Development Code
Before the first Better Block project, city codes outlawed crowds on sidewalks and charged prohibitive fees for improvements like planting flowers and putting up awnings.
Rather than getting the rules changed, Roberts and his friends decided to “just break every law at the same time” and invite everyone, including city councilmembers, to a block party to see what they were missing. The first Better Block was a lasting success. City Hall dramatically reduced permitting fees and peeled back ordinances that had banned street activity. Some of the pop-up businesses have since become permanent.
It’s a prime example of “tactical urbanism” — low-cost, temporary, do-it-yourself projects meant to make communities better to live, work and play in. Local iterations include San Jose’s art crosswalks, PARK(ing) Day and the Market Street Prototyping Festival in San Francisco.
Roberts didn’t stop at Dallas. Last year, he and Team Better Block created a nonprofit organization called Better Block Foundation, which educates and equips people with downloadable guides, podcasts and toolkits to create vibrant neighborhoods all over the country—one block at a time. It’s an important part of their work, for as cities begin to embrace and even regulate urban prototyping, the novelty of a few well-intentioned citizens “breaking every law at the same time” will wane. And even now, not everyone can get away with doing so. (Even if, as Roberts suggests semi-seriously, they’re wearing an orange vest while installing unsanctioned streetscape improvements.) The best possible outcome for the tactical urbanism trend isn’t a thousand pop-up projects around the world, but repealing the city codes that made street life illegal in the first place.
Tactical urbanism has always existed. It’s become mainstream as a workaround solution to restrictive municipal codes, prohibitive permitting processes and a lack of funding for more permanent improvements. Now the real work begins: legalizing good urban design and lively communities for the long term.
We haven’t had much to say about the presidential candidates themselves this year, but one exercise that’s worth paying a bit of attention to is the writing of each major party’s official policy platforms. These are documents without any legislative power, of course—but they do indicate the state of the public debate within each of the major parties. Moreover, as FiveThirtyEight argues, there’s evidence that what gets put in the platform predicts real policy tomorrow.
So today, we’ll look at what the platforms say about housing. Later, we’ll focus on transportation.
Both the Republican and Democratic platforms focus on homeownership in their (brief) forays into housing. “Homeownership expands personal liberty, builds communities, and helps Americans create wealth,” says the Republican platform; the Democratic one has no such paean but makes increasing access to homeownership the subject of one of its four paragraphs on housing. (Regular readers will know we are skeptical.)
Perhaps predictably, the Republican platform calls for “scal[ing] back the federal role in the housing market,” although there are few details about exactly what this means. It appears to be targeted mainly at programs meant to expand credit to low-income households to buy homes, which the platform blames for the housing crisis of the 2000s. (Many economists do not agree.) They also mention ending Federal Housing Administration mortgage support for “high-income individuals” and ending requirements for federally-insured banks to “satisfy lending quotas to specific groups,” presumably a reference to the Community Reinvestment Act, which is meant to counteract the effects of years of “redlining” by guaranteeing credit access to communities with large numbers of black, Latino, and low-income residents.Credit: City of Jacksonville
The Democratic platform’s section on housing is much shorter even than the Republicans’. About half of it is dedicated to improving housing affordability; it promises to “substantially increase funding” for the National Housing Trust Fund, and “provide more federal resources to the people struggling most with affordable housing,” though the mechanism is vague. (In case you guys are looking for one, you could try our automatic tax credit idea!) Vouchers, public housing, and anti-homelessness programs are mentioned in the most perfunctory possible way, with promises of more funding.
Perhaps the most interesting, and surprising, issue is zoning. The Republican platform is the only one to explicitly use the word—a change from 2012, when it did not appear. “The current Administration is trying to seize control of the zoning process through its Affirmatively Furthering Fair Housing regulation,” it says. “It threatens to undermine zoning laws in order to socially engineer every community in the country.” This is disappointing inasmuch as some conservatives have argued that the generally anti-regulation party might be an ally in the fight against sprawl-inducing, segregation-promoting local development rules. But it’s also unsurprising inasmuch as many local Republican officials and writers have been enthusiastic defenders of the hyper-regulation of property rights when it comes to urban space.
Meanwhile, the Democratic platform doesn’t include the word “zoning,” but it does say that the party will attempt to “eas[e] local barriers to building new affordable rental housing developments in areas of economic opportunity.” Given the Democratic administration’s ongoing fight with Westchester County, New York, that seems like a clear reference to battling low-density zoning regulations that make below-market housing difficult or impossible to construct in certain areas—and a recognition of the importance of economic integration to opportunity. But it appears to leave out the growing consensus among researchers from across the political spectrum that building market-rate housing is also a key part of any affordability strategy.
Platforms are ultimately political documents, and this year, that’s especially the case as it relates to housing policies. While we’d like to believe that the platforms would clearly spell out the differences between the two parties, and give voters a clear choice of direction. The 2008 campaign, in part, hinged on different approaches to health care reform and helped provide President Obama with a mandate that led to the enactment of the Affordable Care Act. The smaller bore and more muted discussions presented here don’t suggest that either party has much interest in making the election hinge on housing issues, or in building a strong public consensus for bold policy action in this area.
This is Riga, Latvia. The Baltic Republics had a particularly difficult time during the twentieth century with Nazi Germany invading in 1941 and Soviet Russia occupying them until 1991. What had been a prosperous group of small Scandinavian style countries became relatively impoverished and isolated.
This is nothing new. The Baltic has been repeatedly dominated by larger nations since the 1200’s. Riga is equidistant from both Berlin and Moscow. It’s a rough neighborhood and it seems likely there will be more such impositions in the future. The region is too important to left alone. But the people will adapt as they always have.
Between the various wars and occupations when the country was allowed to flourish on its own Latvia proved to be industrious and highly cultured. The buildings that survived the tumults of history attest to the quality of the people, economy, and place.
It was a matter of national pride for the Latvian people to completely restore the historic core of Riga after the Soviets left things in Havana style dishevelment. This is their homeland and the repository of their culture, language, music, and history. It was also an excellent business model. The city is a dynamic and highly profitable venue for foreign investment, trade, and tourism. Every inch of the old city is productive.
But then there’s all that left over communist stuff ringing the city. What exactly do you do with it all? Pulling it down and replacing it is too expensive. And many of these buildings are occupied by ethnic Russians not Latvians. (Latvia is a quarter Russian as a result of the Soviet occupation, but the city of Riga is closer to half Russian.)
This was top down bureaucratic central planning at its finest. Residential buildings were isolated from industry and from each other for health and safety. Operating a business of any kind in these apartment buildings was strictly forbidden. Tightly regulated shops were provided at convenient but segregated locations. Highly consolidated schools and isolated office and manufacturing parks were constructed in their own little pods at some distance.
The preservation of green open space was a hallmark of Soviet design. Grass and trees were necessary for recreation, health, and social tranquility. There’s also a coincidental side effect of this kind of land use planning that worked in favor of central authority. Where exactly would people organize a protest rally in this environment? There is no prominent central square or iconic rallying point. What exactly would the rebel cry be here? Rise up and storm the shrubbery!
Honestly it’s not that different from American suburbia. Communists just preferred concrete tower blocks to wood framed tract homes. If you’ve ever been inside an original 1947 Levittown house then you’ve essentially been inside one of these Soviet apartments. I spent a chunk of my childhood in a beige stucco apartment in Los Angeles that was nearly identical on the inside. The kitchens are small, there’s only one bath, the ceilings are low, there’s no craft or workmanship in the architecture. It’s utilitarian. It’s not terrible. People can and do live perfectly comfortable lives in these places. It’s just bland and there’s never anything to do in the neighborhood. It’s the precise opposite of the historic city center. No tourist ever ventures out to this part of town and you’ll never see photos of these neighborhoods in brochures.
So here’s what the pragmatic Latvians are doing. First, these inherited communist buildings are given a quick skin job. They’re scrubbed clean, fitted with new cupboards and fixtures, painted, given new windows and doors, and generally made to feel fresh. If you squint these buildings look like the lesser offerings of 1960’s Sweden or Germany. There are worse places to live in the world. A tidy apartment in a boring suburb of Riga is what some people genuinely prefer. There’s plenty on offer here for them. And there isn’t much else that can be done with these places.
Silver Spring isn't a city, but it faces the challenges of one. Its Citizens Advisory Board, which advises the Montgomery County Council, has eight empty seats. If you want to help shape Silver Spring, from how it grows to how people get around, joining the board is the best way.
After decades of decline, Silver Spring is booming. Thousands of new homes have been built in the past few years, and more are still coming. We're home to well-regarded local brewers, butchers, and ice cream makers. A new civic building, town square, and library have given this community places to gather and celebrate.
Yet this rebirth is fragile. Rising home prices have led to worries about displacement and gentrification. Years of Purple Line construction could disrupt local businesses. There are ongoing concerns about crime and homelessness. And there's a tension between the reality of an urban, diverse, and inclusive place and some neighbors who want it to be suburban and exclusive.
Silver Spring looks like and functions as a city, but like most communities in the DC area, it's unincorporated, meaning all local government takes place at the county level. We have a County Councilmember, Tom Hucker, who represents all of eastern Montgomery County. But downtown Silver Spring and adjacent neighborhoods don't have a mayor or city council to speak for them exclusively.
However, there are Montgomery County's five Citizens Advisory Boards, each of which are appointed by the County Council to be that community's voice to the county government. They're similar to the District's Advisory Neighborhood Commissions in that they don't make laws, but they have some influence on issues you might care about if you read this blog, including transportation, economic development, housing, young people, and the environment.
However, unlike the ANCs, they're not elected, and they represent a much bigger area, sometimes as many as 200,000 people. Each board member serves a three-year term. They don't get paid, but they can get reimbursed for travel costs.
There are five Citizens Advisory Boards in Montgomery County: Silver Spring (which includes Silver Spring inside the Beltway, Four Corners, and Takoma Park), Bethesda-Chevy Chase (which includes Potomac and Rockville), Mid-County (Wheaton, Aspen Hill, and Olney), East County (White Oak, Colesville, and Burtonsville), and Upcounty (Gaithersburg, Germantown, and beyond).
The Silver Spring Citizens Advisory Board has eighteen seats for people who live or work in Silver Spring and Takoma Park. Right now, there are eight empty seats. If you want to see this community continue to grow, attract new businesses, retain its diversity, and be a better place to get around, the board is an excellent way to get involved.
If you'd like to be on the Citizens Advisory Board, go here to learn more or send your application. You've got until August 1 to apply.
Once applications are in, Montgomery County executive Ike Leggett will appoint board members, and the county council will approve them.
Suddenly, we’re awash in calculators. Housing calculators.
If you’re a Baby Boomer, you remember the day you saw your first electronic calculator. It had an electronic display–red or green light-emitting diode segments, usually eight or ten of them that would display numbers, arithmetic operators and a decimal point. They had a few hard-to-press chicklet type keys, but they would add, subtract, multiply and divide with a speed and accuracy that was previously unavailable. Precise math suddenly became easier. (And if you typed in 07734 and turned it upside down it looked like is was saying “hELL0.”)Calculators (Flickr: Marcin Wichary)
In the past few months, we’ve seen the advent of a new generation of calculators–housing calculators, aimed at helping us understand the complex dynamics of financing and affording housing. Like the early days of the electronic pocket calculator, there are a lot of competing brands and different designs. Each of these calculators looks at the interplay of different factors that influence the feasibility of building new housing, embracing a range of purely private sector considerations (construction costs, interest rates, rents) and some public policies as well (inclusionary zoning, parking requirements, height limits, planning processes). All are designed as generalized “what if” models, and specifically disclaim their use for investment purposes.
The latest of these is the Urban Institute’s new “Affordable Housing: Does it Pencil Out” website, released today. In theory, these tools ought to give us a clearer picture of the factors influencing housing affordability and how we might make some progress in tackling this problem. Here’s a quick thumbnail of it, and three other examples of the genre.Urban Institute: Does it Pencil Out? The Urban Institute
The Urban Institute’s calculator estimates construction costs and rents for apartments built in Denver, which it characterizes as a fairly typical metropolitan area. You are given the choice of modeling a 50 or 100 unit apartment building, and you can see how varying the level of rent charged and some key development costs (like interest rates, land costs, construction costs, and operating costs) influence the profitability of a proposed development. The site’s key conclusion: It’s very difficult to build housing that’s affordable to anyone below 100 percent of area median incomes without some sort of subsidy.Terner Center, UC Berkeley: Will Housing be Built Terner Center, UC Berkeley
The Terner Center’s calculator takes a slightly different approach than the other calculators presented here, and as its name suggests, offers up its estimates of the probability that a particular housing development will go forward under different assumptions about financing, affordability requirements, rents, construction costs and approval processes. It’s calibrated using data from Oakland California. The Terner Center model has a rich set of controls that let you explore the impacts of varying inclusionary zoning requirements, parking requirements, and uniquely, the impact of a more attenuated approval process.Cornerstone Partnership: Inclusionary Calculator Cornerstone Partnership
Cornerstone Partnership, a housing advocacy network, has created its own tool which lets the user select the number of units to build, construction costs, the cost of land, parking requirements, interest rates and rents, and other variables. The model then estimates the total cost of the project and whether it is profitable. Projects that generate more than a ten percent rate of return for the investor are judged feasible. Unlike the other calculators presented here, you have to register with the website to use this calculator.Citizen’s Housing and Planning Council (NY): Inside the Rent Inside the Rent
This calculator, built for New York City, allows the user to see the factors that influence the rental cost of new apartment construction in different neighborhoods in New York City. Between land, construction, soft costs and financing, new apartments in a mid-rise building in a typical neighborhood have a sticker price of around $500,000; and unsubsidized rents for these newly constructed units run at more than $4,000 a month. A unique feature of this calculator is its effort to estimate the cost of paying prevailing wages for construction and upkeep.Some thoughts on the state of the art in housing calculators
While billed as calculators or tools, each of these is actually a gussied-up, html-coded quantitative model. Like all models, each is only as good as the assumptions that it’s based on. An ideal model is transparent about what its assumptions are, and enables the user to test those assumptions. But frequently models–especially complex models–make it difficult know exactly which assumptions are driving its conclusions. Different modelers will choose different assumptions–which may be buried deep in a model’s structure–which may unfortunately conceal biases.
These calculators have some similarities: They let you vary key financial parameters, like the price of land, rent levels, interest rates, construction costs, the amount of affordable housing included, and the extent of the public subsidy. They’re particularly useful for exploring the tradeoffs and costs of different policies; parking requirements and construction delays can move an otherwise likely and feasible development into the risky or unprofitable categories.
What’s difficult — and maddening, though not surprising — is how difficult it is to compare the results of the different calculators. They use varying terminology and definitions, and seem to have a wide range of assumptions. They are individually complex, and produce results that are framed differently, so that one can’t easily say how two calculators would appraise a project with the same inputs.
For example, the Urban Institute’s Will it Pencil and Cornerstone’s Inclusionary Calculator seem to produce very different messages about housing affordability. The authors of Cornerstone Partnership model use it to support their claim that developers can profitably build additional units of affordable housing with modest or no subsidies while remaining profitable. CityLab summarized the model’s conclusions as: “A new tool shows that developers can profit by building affordable housing almost anywhere.” In contrast, the authors of the Urban Institute’s model essentially say that it’s unprofitable to build any amount of affordable housing without substantial subsidies. They say: “Without the help of too-scarce government subsidies for creating, preserving, and operating affordable apartments, building these homes is often impossible.” It’s not immediately apparent from looking at the two calculators which of these conclusions is the most accurate.
What’s needed here, is a kind of Consumer’s Guide to housing calculators. It would be useful, for example, if we had a standardized “benchmark” development: a certain number of units, and certain land cost, rent level and other parameters, than could be plugged into each model, and then we could see what kind of outputs each model produced for the same development.
The best that can be said at this point is that while the calculators we have don’t definitively answer the question, they do a good job of framing the variables that we need to pay attention to in discussing affordability. They’re also helpful in exploring the tradeoffs between policy objectives, for example, how increased parking requirements or longer approval processes lower the likelihood that housing projects will move forward. These calculators are in their infancy–two of them are self-described “betas”–and we hope that the people who’ve built them continue to develop and refine them, and research and debate the assumptions on which they’re based.
Today we’re getting really wonky. Paul Romer, who’s currently at New York University’s Marron Institute has just been appointed to be the chief economist for the World Bank. Personnel decisions involving technocratic positions at global NGOs is about as wonky as it gets, of course. But this is a genuinely interesting development, especially if you’re passionate about cities, and economies, as we are.Paul Romer (James Duncan Davidson / TED)
First, an introduction: Romer is a prolific and wide-ranging economist. He’s most famous for his work in creating what’s come to be called “New Growth Theory” (NGT). It bears a much longer and more precise description, but briefly, NGT focuses on the critical role that creating new ideas plays in driving long term economic growth. The reason we become more prosperous over time, is not because we accumulate more stuff, but because we continuously generate new and better ways of making use of the finite materials around us. A critical property of ideas are that they are “non-rival”–you and I can equally make use of an idea without diminishing its utility to one another. Romer pointed out that non-rivalry is crucial for driving growth, and for some pretty technical reasons, it also means that unfettered free markets can’t automatically generate the conditions that produce long term growth. As a result, the kinds of institutional arrangements we create, both nationally and locally, are very important to whether we experience growth or not.
New Growth Theory has an important implication for cities. Cities are, as Jane Jacobs argued decades ago, the crucibles and laboratories where new ideas — what Jacobs called “new work” gets created. The combination of a diverse population, frequent interaction, and the right set of rules or institutions is what makes economies grow–and these forces play out most dramatically in cities. (For a much longer explanation of NGT and its policy implications you can read a report I wrote for the US Economic Development Administration).
Romer explained this all in a quite accessible article written for the World Bank 25 year ago, entitled “Two Strategies for Economic Development: Using Ideas and Producing Ideas.” This article demonstrates Romer’s keen ability to translate complex economic arguments into simple and powerful metaphors. He illustrates the difference between traditional views of economic growth and the knowledge-driven growth of new growth theory by contrasting two child’s toys. The conventional model is the Play-Dough Fun Factory. It combines capital (the plastic press and dies) with labor (a child’s arm) and raw materials (clay) to produce tubes, I-beams, and other shapes. This model (and the very math-ey versions of it used by economists) are good for thinking about production efficiency and allocation, but don’t help much to explain how growth happens.Conventional Growth Theory
In contrast, New Growth Theory visualizes the growth process much as if it were a child’s chemistry set. It turns out that there are so many different possible combinations of even a few handfuls of ordinary chemicals, that its simply impossible for a manufacturer to verify that all of the ways they might be mixed would turn out not to be hazardous or explosive (which for many children is the chief motivation for playing with chemicals). That’s a downside for chemical companies, their risk analysts, attorney and insurance companies, but its got a surprisingly optimistic implication for long run economic growth.New Growth Theory (Flickr: Russel Oskay)
The point is that prosperity is driven by the nearly inexhaustible opportunities to create new ideas–new combinations of things–that produce useful products and services. The trick is figuring out the kinds of institutional arrangements that will prompt people to undertake the experiments that will generate these ideas. This has a critical implication for cities, as Romer explains:
“As the world becomes more and more closely integrated, the feature that will increasingly differentiate one geographic area (city or country) from another will be the quality of public institutions. The most successful areas will be the ones with the most competent and effective mechanisms for supporting collective interests, especially in the production of new ideas.”
In recent years, Romer has been a strong advocate of cities, and has pointed out the direct relationship between urbanization and economic and productivity growth. Across countries, within countries, and over time, a higher degree of urbanization is strongly correlated with greater economic output.More urban, more productive. (www.paulromer.net)
The question going forward is what we might do to harness the growth potential of cities as places that offer new ways to do things and develop ideas. He proposed the idea of “Charter Cities” — de novo city-states that would experiment with new institutional arrangements, looking to generate the kind of growth that we’ve seen in places like Singapore, Hong Kong and Shenzen. An abortive attempt to do actually try this out in Honduras actually died stillborn–for reasons that illustrate what it will take to really make such a proposal work.
More recently, he’s also made the case that creating new cities would be one of the ways that Europe might better respond to its refugee crisis: HIs argument, in a nutshell:
1. It takes only a few cities, on very little land, to accommodate tens or hundreds of millions of people.
2. Building cities does not take charity. A city is worth far more than it costs to build.
3. To build a city, do not copy Field of Dreams. (“Build it and they will come.”) Copy Burning Man. (“Let them come, and they will build it.”)
The World Bank is the dispenser, not just of billions of dollars in loans for less developed nations, but is also the dispenser of the the conventional wisdom, especially when it comes to cutting edge development strategies. Its notions about the processes and strategies that can stimulate economic growth have immediate, practical and widespread implications.
Romer is a brilliant and original thinker, and is an economist who is willing to fully explore the policy implications of his theoretical work, and regularly comes up with ideas that make us look differently at the world. He’s somebody who sees cities at the center of the solution to many of the globe’s most pressing problems. We’re excited to see what he does at this new job.
Everything has a beginning, a middle, and an end. It’s a good idea to remind ourselves of this every once in a while. I can’t see myself voting for either of the presidential candidates on offer come November, but it may not matter who wins. All the sturm and drang we see these days is largely beside the point. The candidates aren’t the problem. Instead it’s the mood of the population and the spirit of the times that summoned them that’s at the root of the troubles.
We’re entering the end of one long deep multigenerational cycle, but the beginning of the next cycle is still some years away. In between there’s going to be a period of unpleasantness where people cling to the old set of arrangements even though they stopped functioning quite some time ago. But the new arrangements have yet to be crafted. Someone needs to preside over that rough spot in between. That poor sorry bastard. From my perspective both candidates are equally qualified to assist in the great unravelling. That’s actually what they’re required to do given the current zeitgeist- stand there as things go terribly wrong and make things even worse.
Countries are divided internally. Nations are turning against each other. The economy if faltering. It isn’t just the banks or the political parties, it’s the broad underlaying assumptions and procedures that are dissolving. We know how these things play out. We’ve been here before. 1775. 1861. 1941. Count. That’s about every eighty years on average. That’s the length of a full human life. That’s the rhythm of history. We’re right on schedule for another one of destiny’s little adventures.
Ultimately the slate gets wiped clean. There’s a fresh start. But first the old stuff needs to be put to rest. Institutions don’t change voluntarily. Things fail. Then they fail some more. They get patched. The can is kicked down the road. Things fail some more. Then another round of patches. And then… things break for real. No more can. No more road. Shit gets real and history unfolds very quickly.
Once the dust settles we’ll all lick our wounds and gather for the beginning of whatever comes next. It’s not the End of the World. It’s not the Apocalypse. But it is the end of the institutions and expectations we’ve been used to. There will be winners and losers. But the future will be very familiar. Human nature doesn’t change – just the names on the official placards. Failure fixes itself.
I returned to the suburbs fifty miles south of San Francisco yesterday to visit a friend at her home. That’s twice in one week. Each time I go I’m confronted with two discordant sets of emotions. On the one hand her home is spacious, clean, attractive, and very comfortable. She has a lovely back garden with a hot tub. Her newly remodeled kitchen is large enough to land a helicopter. She has a formal dining room and a guest bedroom – all things I would very much like to have at my place back in the city. I’m content when I’m there. Mostly. But then there’s that other set of emotions.
When I arrived I parked across the street. My friend came out, not so much to greet me, but to tell me I needed to move the car. “The neighbors don’t like people parking in front of their house.” I looked around. It was a Saturday – a time when most people are home and parking should be limited, but there were empty spaces all up and down the street. I asked if the neighbors were elderly or handicapped? “No.” Are they having guests today and they want the house to be extra visible? “No.” Are they part of the Mafia and need a clear shot from all the windows?
My friend raised her hands and gave me a look that effectively communicated the nature of the situation. I know. It’s picayune. Just humor me. I have to live near these people. “They leave little notes on the windshield whenever anyone parks in front of their house, then watch to see which house the people go in to and leave little notes in the mailbox and tape little notes on the door. They just don’t like anyone parking in front of their house.” It took thirty seconds for me to move the car.
My friend has lived there for two years and she doesn’t know any of the neighbors beyond the “little note” level of engagement. It may seem superficial, but I can’t live in a place like that.
After years of moving around my family ultimately settled in Toms River, New Jersey. Toms River is consistently ranked among the “best places to live,” “best places to raise a family,” “best places to retire” and so on. For most of its history it remained a quiet agricultural town that served as the county seat. The Garden State Parkway opened in the 1960’s just in time for urban race riots and white flight to the suburbs. My family was part of that migration out of New York.
The corn fields and pine forests around Toms River were quickly transformed into a wonderland of tract homes, strip malls, and office parks. State and federal highway funds meant ever expanding roads. Zoning regulations were enacted that guaranteed that under no circumstances could anything like a dirty, congested, crime ridden, high tax city ever be built anywhere near Toms River. For a few decades Toms River boomed as white middle class people poured in from North Jersey in search of cheaper homes, lower taxes, better schools, and a more verdant environment. It was the right place at the right time.
I remember the Ocean County Mall being constructed in 1976 and watching the downtown shops close one by one. The movie theater, the clothing stores, the restaurants, and small mom and pop shops all shut their doors. These Google images show the mall and adjacent big box stores at the same scale as the old downtown. The mall didn’t add to the town’s business district. It replaced it.
The authorities aggressively dismantled most of the historic downtown in favor of surface parking lots, multistory parking garages, and expanded municipal buildings. I colored the parking areas red. Much of the space that isn’t parking is grass. There’s about a block and a half of Main Street left and the buildings have been half empty since I was in middle school.
The town has effectively been removed and transformed into a municipal version of an office park. That was an intentional triumph of the planning and redevelopment agencies. In a concerted effort to prevent the town from becoming “urban” some of the most valuable waterfront property in the region is now mostly government owned asphalt. The people of Toms River like it that way. It’s convenient and tidy and nothing bad ever happens there.
But here’s the problem. Toms River’s suburban matrix is aging. Badly. Sure, there are plenty of new big box stores and luxury gated communities on the far edge of town. And waterfront homes are commanding premium prices as always. But all up and down the commercial arterials things are looking decidedly seedy. I remember when many of these buildings were new. It didn’t take long for them to fully depreciate and start to fester. These empty shops and dead gas stations do nothing for the surrounding residential subdivisions. These junky throwaway establishments are what passes for the public realm in Toms River. No one has ever cared about any of it, and no one ever will. People who can afford to move have already started to migrate to better neighborhoods.
In fact, Toms River is no longer the preferred destination for people looking for the next better cheaper place. Many of the kids I went to high school with are now in North Carolina, Florida, Georgia, and Texas. Toms River lost its comparative advantage as homes became more expensive, taxes rose, and the general quality of the place peaked and declined.
So what exactly happens to the sad empty buildings that line the side of the six lane arterials? I noticed whole blocks have been cleared to make way for new self storage facilities. It makes sense. These locations are no longer viable for commercial real estate and they’re even worse as residential property. Storage sheds are large, quiet, and relatively benign. They don’t employ very many people, generate much tax revenue, or do anything for the neighborhood, but they make excellent buffers and fill the void.
Another option is to clear the land and replace it with the next generation of roadside commerce. This convenience store and its associated gas station fill an entire block. The store itself is pretty small. The gas station is a roof covering a row of pumps. Everything else is surface parking and storm water retention ponds. I want you to look at the amount of public infrastructure surrounding this block. The roads, sidewalks, underground pipes and such.
Here’s the surviving block of Main Street downtown. Even in its greatly diminished form after decades of neglect these half empty buildings are in relatively solid shape and provide a greater return on the public infrastructure investment.
Toms River doesn’t know it yet, but it’s in the early stages of contraction. Its development pattern is such that the town can never meet all its obligations. As a result taxes will continue to be forced upward and public services will decline. The local culture is vehemently opposed to the kind of infill development that would generate more wealth for the town. The most prosperous members of the community are also the most mobile and have no particular allegiance to the place. Toms River was built as a collection of convenient commodities and it will be discarded once it exceeds its usefulness. Will the decay happen all at once? Not really. The town will fail in chunks over many years as the lesser neighborhoods slide. Does it have to be this way? No. But it’s easier to move than fix what’s wrong with the place. Remember how the middle class once fled the cities for greener pastures?
I un-ironically wear a raspberry beret sometimes in the winter, and yes, I do throw it up in the air and tell the world that I’m going to make it after all. I was already cliche Minneapolis before I even set foot there the first time.
Two of my favorite speaking opportunities have been in the Twin Cities region of Minnesota. Specifically Minneapolis. Let’s relive some moments from my first visit, in 2014.
I was joined by two of my besties and we ate and saw some cool things. Plus, I remember vividly, that it was one of the first days that I had to wear a sweater and my wool coat in the fall of that year. Which made it pretty easy to stand here and made me pretty mad that it was so cold my regular raspberry beret wasn’t sufficient.
(Ok, it was still a raspberry headband. And practically every parody of this scene results in the hat falling down on the ground or being picked up and stolen…)
For those of you who still don’t understand this double-reference, here’s the original Mary Tyler Moore title sequence and here’s Oprah imitating it and talking about why the character of Mary Richards as portrayed by Mary Tyler Moore is an icon, especially to feminist media types like myself. And do I really need to link to this. (Most of the originals on YouTube are muted. You can purchase the original here.
The main theme of the Twin Cities for me, through all the things tied to it (MTM, Prince, the loss of Philandro Castile), is resilience and making it after all. Sadly, Castile and Prince did not, but thanks to the spirit of MTM’s character, we have Oprah and in turn we have a bunch of us out here, making content and owning our own things. Teaching people how to be a better community, as I did in this shot below in 2014:
and I was about to do this year in this shot. on telling your story and the tools to do so:
Another theme of the weekend was seriously just woman power. The group I was meeting with, the Association of Community Design, was powered by more than a handful of women and nice supportive men. In the design, development and governance conversation, you just don’t see that too often. Here’s a bit of our group, as we were wrapping up a weekend, that we spent just being present.
Want to read my presentation? Go here. Stop and listen to it below:
And the communication checklist for designers is here.
I also ran into more woman rail fans. That world has been even harder to crack the glass ceiling in, but later this afternoon, I rode these streetcars:
That middle image shows a woman driver, who took the opportunity to highlight the history of how women in World War II often drove streetcars. That last image is my new Como-Harriet line T-shirt, one of the many clothing bargains I got while in Minneapolis. Speaking of clothing and bargains. Yes, I went to the mothership. The mothership of City Targets:
And because I’m that urbanist who admits I’m a mall rat and quotes Victor Gruen as a defense we went here.
As you know, my urbanism was shaped by my dad. My dad and I often went to the Four Seasons Town Centre and the late Carolina Circle Mall in Greensboro. I was raised and grew up in the 1990s, which was the high era of bigger is better suburbia. It was also the best era of Nickelodeon. And I loved Legos as a kid, still do. Especially, when you see awesome creations like this:
I also went bargain hunting at New York and Company, to the left of this picture, which hands down is still my favorite adult era mall store. I have to give them credit for making a dress I now own in five iterations.
If all other enclosed malls die and this one stays, then we will be ok. It will fulfill it’s role as a tourist attraction. It was disappointing that not all the existing department stores were here, that the IKEA was across the street and that there was a tax on the clothing here, unlike in other parts of Minneapolis, including at that mothership Target. One bonus is its rail accessible. Same with the airport on the same line. This is what you see when you get off at the mall.
And as we end this time of fangirlling and making it after all, let me leave you with a few recommendations of things and places to do in Minneapolis.
I felt safe, and I felt like this could be a place that I could thrive professionally. But then again, I was staying at the hotel attached to the IDS Center and that probably had something to do with it.
On a more serious note, I have been told that efforts are being made to incorporate more people in the Twin Cities society, especially by the arts community. However, it was noted that residential segregation was still very high and that, along with the issues surrounding the police shootings in the area, this knocks down the Twin Cities.
The high points? Light rail to the airport and a handful of major tourist points,regular bus service to a number of ethnic enclaves (which while have great food, shouldn’t be so segregated), artist resources and those tax breaks on clothing, grocery and other necessities!.
One last picture, as I left town on the Blue Line.
1. Homeownership: A failed wealth creation strategy. Its an article of faith that owning a home is the most reliable route to wealth building in the US. But this hasn’t been true over the past decade, and its especially problematic for low income households and minorities. The housing market is structured so that they buy at the wrong time, in the wrong place, pay a higher price and face far greater risk.
2. Homeownership can worsen inequality. Policies that promote homeownership have worked far better for the wealthy than the poor, with the result that wealth inequality related to housing has actually grown in the past decade. Low income households experienced greater value declines and more frequent foreclosures; higher income households continue to experience gains in home equity, with the result that the top twenty percent of households had, on average 9 times as much home equity as the typical household in 2010, up from a five-fold difference in 1990.
3. Housing can’t be a good investment and affordable. There’s a fundamental contradiction between the two pillars of US housing policy. In order to be a good investment, it has to increase steadily in value over time. But rising home values are synonymous with diminished affordability. Until we confront this contradiction squarely, we’ll have real difficulty making progress on either front.
4. Changes. We bid adieu and bon chance to our colleague Daniel Hertz, who’s taken a new position with a public policy think tank in Chicago. His thoughtful analysis and clear voice have defined City Observatory, and we’re delighted that he’s agreed to continue to provide monthly contributions. Thanks, Daniel!
The week’s must reads
1. Car-sharing reduces traffic. Susan Shaheen and her research team at the University of California Berkeley used fleet data and surveys of users of Daimler’s Car2Go car-sharing service. They estimate that each additional vehicle in the ride-sharing fleet leads to 9 to 11 fewer cars on the road, and greenhouse gas emissions per user decline substantially. Users report selling existing cars, or avoiding buying cars, and can utilize car-sharing on an as-needed basis to supplement transit, biking and walking. This is strong evidence that “transportation as a service” will be more efficient than our current model of having each household own one or more cars.
2. Making the buses run on time in NYC. For the past several years, bus ridership in New York City has been dwindling, even as subways have become increasingly crowded. The Transit Center released a detailed report–“Turnaround: making recommendations on how to get buses moving faster, including re-designing and straightening routes, electronic payment, all-door boarding, and dedicated lanes. It’s a list of ideas that could be applied in nearly all cities. Conspicuous by its absence is one other idea: charging private vehicles using the public roadway in peak hours to reduce traffic and speed buses.
3. Demographic Headwinds for Job & Housing Growth? A new report from John Burns Real Estate, a consultancy, predicts much slower job growth in the years ahead, due to lower growth in the working age (20-64) population. They forecast that this group, which grew 1.0 to 1.5 percent per year in the past decade, will grow at less than 0.5 percent annually through 2024. The result: labor shortages and likely subdued demand for housing. Some provocative data here.
1. Segregation and the Financial Crisis. NYU’s Furman Institute has posted another one of its series of well-structured discussions of key urban policy topics. This one explores an essay by Jacob Faber which suggests that the size of the housing market collapse was shaped heavily by segregation. In reply, Steve Ross acknowledges the key role of segregation in shaping housing market outcomes, but argues the decline was much more broad based.
2. Public Support for Road Finance Alternatives. Everyone, it seems, wants more and better roads, but no one actually wants to pay for them is the short summary of Indiana University’s Denvil Duncan’s paper exploring survey evidence on support for road finance alternatives. Of five considered options, none gets majority support; higher gas taxes (favored by 29%) or tolls (34%) are the least unpopular. Raising the income tax is the least favored. The title of this paper “Searching for a Tolerable Tax,” gives away the game; the full paper is available (paywall) from the Public Finance Review.
3. How Housing Market Fluctuations Affect Young Households. In hot housing markets, high prices keep younger households in the rental market, and also seem to lead to lower rates of marriage and child-bearing, according to research from economists Luc Laeven and Alexander Popov. They look at across market variations in home prices in the US, and conclude that housing booms tend to disadvantage young households, while benefiting older homeowning households.
The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.
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I spent the afternoon down in Silicon Valley visiting friends. We hired a driver and made the rounds to local wineries to sample their wares. Evidently a lot of tech money has found its way up into the hills where large fortunes are turned into slightly smaller ones by way of the grape.
When we got back to my friend’s house we opened a bottle of pinot noir and she asked about my recent travels around the country. I took out my laptop and showed her some photos. I explained that a group of community organizers were concerned about some of their less successful neighborhoods and were looking for ways to improve them.
She has absolutely no interest in city planning or economic development which is a good thing from my perspective. I knew she wouldn’t overthink things. So I asked her what she thought of these photos. “It doesn’t look like there’s any reason to ever go to a place like this.” Then I asked her what could be done to make it better. “Fill the empty space with people and buildings so there’s stuff to do.” That, in a nutshell, is exactly the same conclusion that I came to.
While I had my laptop out I checked my e-mail. As coincidence would have it one of the people from this very same town had a request for me. She asked in the most delicate way possible if I could remove a couple of photos and one tiny reference from a past blog post. They cast some local establishments in an unfavorable light and the proprietors may take offense. I assured her that I was opinionated and abrasive, but marvelously amoral. I did as she asked without hesitation. In order to be effective she needs to get key players on board and it does no good to alienate folks. I get it.
This takes me back to my overall assessment of the town. It’s a profoundly risk averse location with a particular set of preoccupations. Everyone I spoke with – black and white, rich and poor – listed all the things they didn’t like about their community. People have ugly old furniture out on their front porches. The signs are ugly. We need more flowers and greenery planted where people can see them as they drive by. I understand these concerns, but they’re cosmetic. They in no way address the underlaying dynamics of why some places succeed and others fail. Yes, many thriving places have attractive lawn furniture, tasteful signage, and abundant flowers. But adding those items to a place with fundamental flaws is just lipstick on a pig.
Here’s the real challenge for this town. Will it be possible to persuade nervous people to embrace proposed changes that could gradually turn things around? Or will the fear of change chip away at the process until it becomes pointless? Will local merchants reject the idea of mobile business incubators like food trucks because they present competition for brick and mortar operations? Will school and church officials kill any notion of beer gardens? Will nearby residents lobby against live/work accommodations in dead commercial buildings? Will the end result of these compromises devolve into a few weekend events with face painting and balloon animals because that’s what’s left after everything else has been scratched off the list?
I like this town. I especially like the people. But it’s dull. And all the things that might make it a bit more interesting are scary. On more than a couple of occasions people expressed concerns. You want people to just gather in the streets? What if they do things that are loud or unruly? How do we control them?
Maybe enacting a few city ordinances about acceptable outdoor furniture and proper signage would be more culturally acceptable here. And perhaps community events could be organized where people come together to plant flowers by the side of the road… This might be the best this place can muster at the moment. Or maybe they can rise to the occasion and be bold. It’s their town. They’ll ultimately figure things out in their own way. It’s up to them.
Last April, I wrote my first ever post for City Observatory, which unfortunately began with a David Foster Wallace quote. But it was up and up from there. Over the last year-plus here, City Observatory has given me an incredible platform to explore urban issues in public, combining intellectual rigor with a variety of subject matter and willingness to embrace heterodoxy that I’m not sure is matched anywhere else.
Fortunately, I will get to keep writing for City Observatory. But after this week, it will be in the capacity of a once-a-month columnist, rather than a full-time Fellow. (And of course, I’ll still be tweeting at @danielkayhertz and writing occasionally at danielkayhertz.com.) Though I’m fascinated by national (and even international) urban issues, I’ve always been a myopic homer at heart, and I have taken an opportunity to work on policy in my hometown of Chicago at the Center for Tax and Budget Accountability.
I’m incredibly proud of the work we’ve done at City Observatory, and very grateful to Joe Cortright for providing the leadership that made it possible, and giving me the opportunity to be a part of it. In the less than two years since its founding, City Observatory has become a staple of the urban policy conversation, getting nominated as one of Planetizen’s top websites (“every single post is required reading”), and routinely showing up in mainstream news stories about important urban issues, both in local media and top-flight national outlets like The Atlantic, Bloomberg, and the Washington Post.
There’s a growing understanding of the ways in which urban policy are at the core of many of America’s greatest challenges, especially issues of economic inequality, opportunity, and climate change. City Observatory plays a crucial role in investigating and explaining both these challenges and possible solutions. I’m excited, both as a contributor and reader, to see how it grows over the next two years and beyond.
…and San Francisco, and Chicago, and Portland
There’s been a lot of chatter lately about how New York City (which almost always really means Manhattan) has hit the tipping point. It’s just too expensive now, goes the current wisdom. Housing is officially out of control. George Hahn wrote a well-shared piece, where he said things like this:Sure, Manhattan has always been about status and money, but the importance of money here has exploded exponentially. Unless you were born into money, make a ton of it or were lucky enough to grab a rent-controlled apartment when it was possible, you don't belong here.
A little over a year ago, I unleashed a long tweet on this exact topic, especially focusing on the pressures the big coastal cities are facing. While I’m sure my dozens of Twitter followers were captivated, it didn't quite have the depth of content I usually desire. It's high time to correct that flaw, and look more closely at one overlooked facet of this conversation.
And that facet lies in Bangor, Maine.
I spent a bit of time in Maine this month escaping the scorching heat of Savannah in July and visiting family. Walking around downtown Bangor, I couldn’t help but think about that earlier notion that all markets are not local. More on that in a minute, but first a little bit about Bangor for those of you that are unfamiliar.
Downtown Bangor has all of the bones necessary to be very walkable and lively – the kinds of places people are flocking too these days. It has attractive old buildings, a pair of rivers that run through it, craft breweries, hip restaurants and some lovely walking paths. It’s 45 miles from the beautiful Maine coast, and also has the virtue of being inexpensive.
Bangor has what basically every city in America has that is older than 1930, and wasn't completely destroyed by highway money and urban renewal. Bangor is Topeka is Cheyenne is Dubuque is Macon.
These places all have many of the physical elements needed for success, quite frankly because they were built for it originally. What they mostly need is people; people that care about the place, have the energy to make it better, and a deep understanding of what makes walkable places tick.
The standard practice for cities in this predicament is to make their downtowns more accessible to people driving, and to try and lure in a big employer. How has that worked out so far? What has the cost-benefit been for all of the incentives, parking garages and free-flowing traffic? Is there a single city that's used that formula for real, lasting success?
Walking around cities like Bangor or the dozens of others I've visited that are like it, I can't help but wonder instead about a simple, two-pronged approach: recruit young and young-ish people in more expensive places and then get out of their way. Yes, literally get out of their way and let them create life. Clear the obstacles, make your zoning and processes streamlined and easy, and get rid of outdated ordinances. et the people themselves program spaces, improve them and experiment. Don't let private or public sector naysayers stifle their innovation and creativity.
Of course, in the real world I know that that is not enough for folks working in local government and the civic-minded folks who feel the need to do more to be proactive. For them, the formula is also pretty basic: focus on easy, cheap and fast. Plant street trees; make biking easy and walking attractive; clean the sidewalks; narrow up the streets to force cars to slow down; get your police out walking the beat. The more human and welcoming everything feels, the better. By all means, don’t build a lot of new parking; in fact, spend your time trying to heal the scars of previous parking installations.
IMPORTANT POINT: (You know it's important since it's in all caps.) The success of these downtowns do not hinge on people driving in swiftly from the outskirts and parking for free. They hinge on building a great neighborhood for the people that live there, which more than anything means valuing walking and biking. I know that that is heresy in many quarters, but chances are your downtown will be made economically weaker and less desirable if you spend all of your time figuring out parking and access solutions for those that don't live there.
So, hearing that, if you still really feel the need to “go big”, do it by building some quality public spaces. Add paths along rivers and natural features that are beautiful and actually go somewhere long-distance. Go crazy and connect those paths to the next town! The recipe really can be that simple. Sell the stressed-out entrepreneurs of large cities on the virtues of cheap real estate, charm and low barriers to entry. Certainly someone making and shipping gourmet pickles or hand-crafted consumer goods can do that as easily in Bangor as in Brooklyn.
Bangor is Duluth is Montgomery is Rochester.
Now of course, the obvious criticism at this point is to say that these cities are what they are because people simply don't want to be there. Even with the expense, people prefer THE big city, the larger market potential and the bigger dating pool. And then, yes, some are in cold climates. To which I say: whatever - these don't matter as much as you think. Or at least, they don't matter to everyone in the bigger cities.
I moved after all, so I understand the impulse. In fact I struggled with it for years in my hometown. Others do the same. All of these places produced people that all things being equal might want to stay. But if that lifestyle option isn't available, they'll go.
The situation we're in today is that literally millions of people are clamoring to live in the tiny handful of cities that actually have walkable, urban character. A large segment of people desperately want what's left of what we didn't destroy in the 20th century. That small group of cities can all do more to make themselves more affordable (like for one, letting people build for the demand), but a better strategy for all is to accommodate some of the demand in the hundreds of cities in this country that used to also have the same qualities.
A town the size of Bangor could quite easily accommodate 20,000 people in its downtown. That size sounds small to a New Yorker, but big to someone from central Maine. Truth is, 20,000 is a pretty good size for an urban neighborhood. A freestanding city of 20,000 can support multiple grocers, dozens of places to eat and drink, schools, churches and more. If it's part of a larger city or region, the larger market area will only enhance the diversity that makes the urban area interesting. Think that sounds crazy? Here are some neighborhoods and their populations:Population of Various Neighborhoods
Now I admit that 20,000 may seem crazy to people from Bangor. But it's pretty obvious as an outsider that it has that capacity, and had it historically. In fact, I'd argue 20,000 is conservative in today’s market.
What then does this all have to do with NYC?
Let's do just a bit more math to see. Bangor is the 268th biggest MSA in the US.
If each of the 267 bigger could accommodate 20,000 more in their downtowns, that's a sum of 5.3 million people. Again, conservative numbers by any real measure, since many of those are much larger markets. Truth is, nearly all of those should be able to double it. But to just do 20,000 takes a substantial amount of market demand pressure away from the big markets that simply can't handle the demand currently. And, it gives life, variety and local character to hundreds more cities that truly need it.
This is when I add the qualifier that I don't know that 20,000 is a perfect measure. In fact, I’m sure it’s not at all perfect. Someone with more time on their hands and a research grant could probably come up with a more accurate number. But I’m confident that it's within range of what will work for urban neighborhoods. Every neighborhood in the chart is a dynamic urban community, and none of them are filled with high-rise construction.
The key strategies of the late 20th century for people that truly understood urbanism were to preserve what we were destroying and stop the bleeding. Check and check. Those are still important in many cities, but in the big picture the new reality is figuring out how to accommodate today's market demand. We are paying the wages of sin now for halting the construction of walkable, urban neighborhoods 70+ years ago. The places that we saved are all now just too good compared to everyplace else, and they are all increasingly becoming unaffordable to most.
A huge part of the problem is zoning and processes stuck in the 1950’s. Our cities are in desperate need of code reform, so that they can begin to naturalize urbanize again as they did 100 years ago. But we also need to recognize that not all markets are local, and that what happens in Bangor or Peoria impacts New York or San Francisco. People, especially young people, want to go where other people are, and want to find dynamic, sociable cities. If they can’t find it locally, they’ll find it somewhere else. And today, that somewhere else is likely one of the handful of cities that didn’t completely ruin itself. We can do better. By all means let’s work to make New York and San Francisco and Portland more affordable. But let’s also help Topeka and Macon and Duluth and Cheyenne and Dubuque and Bangor.
This is the fourth post in a series on police violence, race, safety and cities. See more at the end of this post.
All Americans have been affected by the relentless stream of abhorrent violence in our nation. We are well beyond the ability to gloss over these events — there are just too many, and they are too horrifying to ignore. Our nation is suffering from a large, gaping wound reminiscent of the 1960s.
During that era, my parents were active in el movimiento, working alongside Cesar Chavez to advocate for better living conditions, educational and job opportunities, community safety and cultural acceptance. Together, they participated in social clubs that organized concerts and dances and civic clubs that promoted citizenship and community involvement. They were also active in Our Lady of Guadalupe Church, in the Mayfair neighborhood, where Cesar’s first organizing efforts began. Our family’s home on Sunset Avenue was in the center of this activity.
My parents dreamed of and worked toward a different future than we are experiencing now. That scale of the violence against Black people we are now seeing is truly shocking. And the type of anti-Latino rhetoric and immigrant scapegoating that we’ve heard from the most-prominent voices should have been silenced long ago.
The answer is not what San Jose witnessed six weeks ago, when people came out to attack Trump supporters attending a rally in San Jose. Nor is it vicious attacks on public safety officers who often work alongside our community advocates to make conditions better for all.
Instead, I maintain a vision of what I was raised to believe and what I experienced growing up in San Jose: that our cities can be places of peaceful coexistence and opportunity for people of all backgrounds.
I grew up on the east side and benefited from a good education. Unlike many youth of today, I was able to get my first job at 15, working at the Emporium retail store at Eastridge Mall, and attend San Jose State directly after graduating from high school. I had the opportunity to work my way through school with a series of temp-agency jobs at high-tech companies like Atari and Rolm, as well as paid internships with the City of San Jose and NASA/Ames Research Center.
The doors that were open for me then are now closed for too many, particularly for young people from communities like the one where I grew up. Residents of those communities are grappling with the stress of rapid growth, and struggling with rising costs and greater uncertainty.
But the growing violence and distrust we are witnessing across the nation is like a cancer in our cities. It cannot be ignored or allowed to grow. It must be diligently combatted and, if not fully eradicated, forced deep into remission.
We must work together to get back to what San Jose was when my parents arrived here and when I was growing up: an inclusive community that provides the path to job opportunities and upward mobility.
This is what SPUR works toward: laying the foundation for economic prosperity for everyone, making it affordable to live here, building great neighborhoods, giving people better ways to get where they need to go, and supporting local government so it has the means to provide the services we all need and benefit from.
To this end, SPUR has a long history of developing and advocating for public policies that make our communities better. My own commitment as SPUR’s San Jose director is to take that mission and expand the conversation to include a broader set of partners and neighborhood leaders.
My city has changed. As all cities do. They are like living bodies, constantly evolving, never frozen. And sometimes that’s hard to accept. We may not like the changes we see, and they may not always be fair.
But I joined SPUR to do what I can to carry on my parents’ work, alongside many others, to build an inclusive community. I know that San Jose is a great place to live. So many people who have relocated here talk about feeling welcome and easily connecting to professional and civic networks.
That’s great. But this must also be a place where all individuals — not just those with means — feel safe and economically secure, where families can establish roots and live to see their children be successful. That’s what San Jose offered to me and my family, and I hope it’s what the city can mean for the next generation.
Read more from this series:
In the 1950’s and 60’s plans were drawn up to build an extensive rail network that would create a ring around San Francisco Bay connecting all the towns and cities in the region. It was an ambitious plan fitting an optimistic era of large projects.Jake Coolidge
Below is a rendering of what that system would have looked like if it had actually been built.
But this was also the height of white flight to the suburbs. Cities were in decline. The middle class was keen to escape anything that even hinted at the urban crime, pollution, and racial strife of the day. Local opposition successfully stopped BART from being built in most of the proposed suburbs. Instead, funding was limited and public money flowed to a highway network that looks almost exactly like the old rail plan. BART was limited to a bare bones system that connects San Francisco, Oakland, Berkeley, and a few eastern suburbs.
Fast forward to today. The horizontal growth of car dependent suburbs has hit natural limits in the form of water and mountains, yet market demand for more intensive development is insatiable. As the suburbs thicken with new corporate campuses and condo complexes the roads simply can’t accommodate the high volume of traffic. Highway expansion has not ceased for decades, yet still the traffic keeps getting worse. Local opposition now focuses on limiting new development which then causes real estate values to soar along with rents. The end result is a region that is actively forcing people and companies to relocate to entirely different cities in other states. The long term consequences of transportation policy and land use regulations are choking one of the most dynamic and productive areas in the world with no political solution in sight.
In the absence of sensible regional cooperation private companies are developing work-arounds. Employers had a hard time hiring and retaining highly skilled workers who won’t tolerate soul crushing commutes. So fleets of private buses were leased to collect workers each morning and drive them home each night. While on board there’s secure WiFi and a company-only ridership that allows people to be both comfortable and productive while on the road. These shuttle services work perfectly well, but only employees can get on a propriety vehicle. Everyone else is out of luck.
Enter Leap and Chariot. These services are being beta tested in San Francisco and nearby suburbs. As soon as the kinks are worked out they’ll be ramping up in new markets across the country. These crowdsourced buses are more expensive than traditional public transit, but significantly cheaper than owning a car or taking an Uber, Lyft, or Flywheel. They’re also more convenient because they’re tailored to the exact needs of a specific subset of the population. And because these are private companies they can add new routes and more capacity to new locations in keeping with market demand. They can also experiment more freely and retreat if the market isn’t ripe.
In a city like San Francisco this will be an augmentation of existing transportation options. But in most suburbs this may be the only viable form of non-car transportation that’s ever going to come close to functioning properly since it skips the usual paralyzed political process. Is it perfect? No. It’s a middle class model that (indirectly or intentionally?) filters out people lower down on the economic ladder. Low income people may not be able to afford the service or the bus companies may quietly avoid routes in low income areas. Will the people who can afford these private buses care? Will suburban municipalities want it any other way? I’m not holding my breath when it comes to social equity. But that’s just more of what we’ve always had in the U.S. Shrug.
On the one hand I don’t like Godfrey Bloom’s political or personal temperament at all. His views on many topics are unfortunate as far as I’m concerned. On the other hand, he is rather good at articulating the nature of our current banking conundrum. It saddens me that only marginalized personalities are expressing these underlaying realities. In the end our troubles with finance will fester until they resolve themselves by some other means – not of our choosing and not at all pleasant.