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Sunday, February 7th, 2010

An Interview With the Urbanophile

Indianapolis arts and culture maven David Hoppe is a columnist and editor at Nuvo Newsweekly, the city’s alt-weekly paper. I sat down with him for nearly three hours in December for a free-ranging discussion about the city that was turned into a three page interview in this week’s paper. I’ll let you read it there for yourself, but will share some highlights below.

One of the things we can do – and that we did in the past – is innovation in an urban context. If you go back to the Lugar and Hudnut administrations, we did some innovative things. Unigov was way ahead of its time. The amateur sports strategy – using sports to renew a city – nobody had thought of that. The Circle Centre Mall: we did retail in a downtown context right.

We need to bring back innovation. I think the Cultural Trail is one example of that. If we’re just going to import ideas like bike lanes and light rail, then we’re perpetually going to be playing catch-up. Cliques are, by definition, exclusive. So places like Chicago and New York and Portland are going to define themselves as cool in opposition to places like Indianapolis. It’s like Charlie Brown trying to kick that football. The minute you think you’ve got it, they’ve moved on to something else.

With something like the Cultural Trail, other cities will say, “Why can’t we have one of those?” I think our challenge is trying to figure out how to be innovative in a low-cost manner; to do it a lot faster and a lot cheaper and execute rapidly.

Excerpt:

NUVO: It sounds like the challenge is reconciling suburbia with an urban idea.

Renn: One of the things we need to do as a city is realize we cannot compete with the collar counties head-on. When we build things like strip malls downtown, or you put Arby’s, Subway, and White Castle right there on South St., you’re basically saying we’re going to compete with the suburbs on their terms. If you give people a choice between a real suburb and a city trying to act like one – but with all those cost and infrastructure issues – you’re going to lose most of the time.

We have to have a different product. It’s going to take courageous leadership to articulate a more urban vision for Indianapolis that people will buy into.

We don’t need to Manhattanize this city. If we just changed our zoning so that anywhere you have a single family home you could build a double with a carriage house in back, you would triple the effective residential density of Indianapolis without any change to the visual scale of the city. Moderate densification is what we need.

We have had a very powerful civic sector. Business and community leaders coming together to get things done in a way that doesn’t happen anywhere else. That leadership culture has served us very well.

The challenges we face today, though, are different. That leadership culture is perfect for projects. But what we need to do is lay up a new vision and make the case for change in public policy and planning, land use, zoning and public transportation in a way that’s probably not going to be popular initially. That requires someone to make the case in the political realm. Somebody has to have democratic legitimacy in saying, “This is where we’re going.” I know everyone hates Carmel, but [Mayor] Brainard in Carmel has done that. We have to have someone to stand in the kitchen and take the heat for a new vision of the central city.

Another excerpt:

The thing about urban visions being pushed right now is that they’re updated versions of Jane Jacobs’ ideas from the 1950’s. But we have a radically different world today. What should cities look like now? I think we could be the innovators in defining what it means to be a city.

We can own what it means to have sustainable agriculture. Given the size of Indianapolis and ease of getting out of town, we could build linkages between our urban and rural areas that are difficult to do in much, much larger cities. I think that’s one of the imperatives for us in bringing Indiana along on the journey.

If you set out an agenda, you can rally people by the promise of what is to be. To some extent, all of Christianity was built on that: the idea of the Kingdom of Heaven that we’ll never see here.

Friday, February 5th, 2010

Replay: Preserving Our Mid-Century Heritage

We walk around the hollowed out remnants of our old downtowns and wonder, “How did this happen? How could generations past have done this? How did they tear down all those wonderful 19th century buildings? Didn’t they know?” Yet I also wonder, will we ourselves bring the same thing into being?

It’s common for us to note the moral failings of the past. It’s less easy for us to imagine how future generations might find us wanting. Leslie Poles Hartley famously wrote, “The past is a foreign country; they do things differently there.” This betrays an all too common view of the past, a belief that the people who lived there were fundamentally different from you and me, that they are strangers to us, and that they represent a somehow more primitive stage in human existence. But the truth may be closer to George Santayana: “Those who cannot remember the past, are condemned to repeat it.”

I saw a blog posting about a redevelopment project that gave me pause to consider whether we stand on the edge of another great era of destruction of our architectural and cultural heritage, namely our mid-century modern buildings.

The proposal in question was to redevelop a small office building, in part by replacing the mid-century facade with something more contemporary. The reactions from readers of that post were almost unanimously positive. When I and a couple others suggested, not that the project was bad, but that there was nothing wrong with the old facade, and that we should take care not to destroy our mid-century modern heritage, there was push back even from people who are strong design advocates. The risk of damaging the architectural fabric of the city was dismissed, saying that the building was “run of the mill”. People were excited that there was finally some quality contemporary architecture coming to town.

I think this illustrates all too clearly how that great but irreplaceable stock of 19th century homes and commercial structures came to be destroyed. As one poster put it, “Mid-century modern architecture is now in the same danger zone chronologically that late 19th-century buildings were in during the urban renewal period. These buildings are old enough to be considered dated, but not old enough to be considered ‘historic.’ The exact same was true of all those buildings that got torn down in the 60’s and are now are so lamented by people in this forum.”

Exactly. Those buildings weren’t a hundred years old back then. They were considered functionally obsolete and they were in many cases in need of significant investment to upgrade. They were expensive to operate. They were no longer architecturally in fashion. And there was a large supply of them, most of them “run of the mill” or workaday type structures of little to no standalone significance. For every Penn Station or Marion County Courthouse demolished, dozens of unremembered buildings were razed.

What’s more, our cities were under economic pressure. In the post-war era there was a dramatic exodus from downtown and the traditional urban core, interestingly to new mid-century suburbs. Community leaders rightly were troubled by this and, like today, wanted to do whatever they could to pump new life into their dying cores. The study of downtown revitalization was in its infancy. Urban renewal (wholesale forced demolition of “blighted” areas in order to make room for parking lots or large modern developments such as the infamous public housing projects) was the urban planning orthodoxy of its day, supported by almost all “right thinking” people. The intellectual edifice for it was created by the likes of Le Corbusier and other leading-edge thinkers of the era.

Today all of these same things are true of mid-century modern homes and buildings. I’m not talking about the great signature buildings of the era: the Seagram Building, the First Christian Church, etc. Thankfully, I doubt well see many truly landmark structures destroyed, though probably some (especially Brutalist) ones will get hit. We’ve learned that lesson. No, I’m talking about the average structure: those homes in our aging suburbs, the bank buildings, the small offices. All that infill development that forms the core of the mid-century inventory in many places. These are often production buildings, of little note individually, but of great significance collectively.

Like the 19th century downtown before them, these buildings are obsolete. The homes are too small and require major upgrades. The commercial structures aren’t sexy and are out of fashion. They look dowdy and rundown even when well maintained because they seem dated. They’re expensive to operate, lacking, for example, energy efficient or green features.

And they are under enormous economic pressure. The inner ring suburban areas where these buildings are often concentrated are especially feeling the heat. Residents are fleeing to the boomburgs on the edge, and the businesses are following them. You see this decay in cities across America. I’ve said before this is one of the great challenges of our era. I’d argue that suburban revitalization is a much harder challenge than urban revitalization. And there are no proven strategies yet. It’s not difficult to see how any development, even destructive redevelopment, would be viewed as positive, and that these neighborhoods could fall prey to the next failed utopia designed by “experts”.

When you see your neighborhood commercial district decaying, when houses are starting to show signs of lack of maintenance, when people are scared about the future of their neighborhood, saving “old” buildings, particularly those everyday ones, is simply not a priority. As the problems of inner ring suburbs become more of a national crisis, the pressure will only ratchet up even more and the balance swing even further in favor of destructive redevelopment. Especially as the suburban form is considered obsolete and unsustainable today, just as old small buildings on a gridiron street pattern were once considered obsolete by yesterday’s generation.

As for mid-century infill in the central city, those buildings likewise are not viewed as important and often offer some of the rare redevelopment opportunities because all the older buildings are protected by historic districts or landmarkings. To the extent that the pre-war buildings are protected, this puts more pressure on the unprotected post-war ones.

It is easy to see how, in almost every individual case, the mid-century building in question will be considered expendable due to its lack of individual significance. And then one day we’ll wake up to find they are largely gone or mauled beyond recognition. If you’ve ever seen some of the horrible facade “improvements” done to 19th century buildings in years past, I think you can imagine what that might look like. This is what I mean by the ordinary spaces being as important as the special ones. This is what makes a real urban fabric instead of a few landmarks sticking out of an urban desert.

Today, it is difficult for us to appreciate and see the significance of these structures. We’re prisoners of our own age. It is incumbent for us to be able to step outside ourselves, to see us as people 50 or 100 years from now might. What might they value in buildings? Might they not see the mid-century period as historic in its own right? It’s easy to imagine that they could. Indeed, it seems rather likely.

This is a legitimate conflict of values and an area where trade-offs are necessary. I firmly believe that the world belongs in usufruct to the living. The people of the past have no right to bind us, nor we no right to bind our children. We have to use our own best judgement about the right decisions, accepting that we’re going to get some wrong. Yet part of that means trying to be a good steward, of taking care to try to leave our cities better places for our children and grandchildren than they were for us. This means finding a way to balance the legitimate needs of neighborhoods in distress with the long term goal of preserving every era of architectural and cultural history for future generations to benefit from.

This is where I think we as urban thinkers, architects, economic developers, planners, etc. need to get creative and think hard about how to make these buildings into redevelopment assets and change the perception of them by the public at large. To help resolve that conflict in a positive way. I’ve said that the strategic dilemma facing the inner ring suburbs is that they are selling an obsolete, older generation model of the same basic suburban product as the edge, but with higher taxes, more crime, and worse schools. That’s an unsustainable situation. But invert the world. Figure out how to make those old, “obsolete” buildings an asset the edge sprawl can’t match.

Again, we’ve seen this movie before. It was a handful of passionate supporters who started buying up the old homes and buildings near our downtowns and renovating them, sparking much of the revitalization of our inner cities. Similarly, a new generation of people passionate for mid-century architecture could lead the way in reclaiming these structures for the present, and pumping new life into these faltering neighborhoods as well.

I’ll give one example. Check out the blog Atomic Indy. It’s dedicated to all things mid-century modern in Indy. It’s published by a couple who bought an old mid-century home near 46th and Arlington in Indianapolis for cheap and are renovating it into their dream home. I know at least one other young architect who moved to that area as well. Could this be the start of a more positive trend? We’ll see. Many of these homes are well-maintained today, but are occupied by long time owners who are getting older and there is not a next generation waiting in the wings. If new blood isn’t attracted into them as the current generation of residents disappears, it’s a recipe for ruin in broad tracts of America today. Convincing people of the value of mid-century architecture is a way to not only help preserve the city, but for people get quality architecture and a suburban lifestyle at a reasonable price.

Let us hope that we show that we really have advanced and learned something. Let us hope that we’re equal to the task and ultimately merit praise not opprobrium from our successors.

This post originally ran on January 8, 2009.

Thursday, February 4th, 2010

The Power of Greenfield Economics

I’ve touched on this before in other posts, but it is worth highlighting again. The great move from the city to the suburbs has been attributed to various factors: changing lifestyle preferences, the automobile, subsidies to sprawl, urban industrial pollution, etc. While there is probably truth in all of these, possibly the most powerful of them all is greenfield economics.

What is greenfield economics? This is simply the set of conditions that flow from building on new territory or exploiting new markets vs. redevelopment of old places, organizations, etc. Being able to start with the proverbial blank slate enables a huge number of benefits. Consider:

1. Everything is new and state of the art. A brand new home in the suburbs is new, comes with a warranty, and probably needs limited maintenance for the first few years. Also, it is built to the current fashion, with the layout, square footage, and room sizes people prefer today. The kitchen has stainless steel, not harvest gold. Everything about it is what the market is demanding today. As fashions and tastes constantly change and evolve, it seems unlikely older homes are hitting the market sweet spot, often requiring renovations, plus they require significant maintenance just to keep them up




2. No legacy costs. More broadly, the area has no legacy costs. There are no brownfields to clean up, no dead malls, etc. There are no unfunded pensions because nobody has accrued a pension yet. There are no bond repayments from yesterday’s boondoggles. And so on.




3. No legacy institutions and culture. A greenfield isn’t saddled with bunch of deals, and accommodations made years ago. It’s isn’t saddled with a mayor who is the grandson of the city council president from 40 years ago. There are a limited number of powerful special interest groups. As anyone who has tried to change an organizational culture that no longer meets institutional needs can tell you, this is a daunting task.




4. Ability to defer infrastructure costs. In particular, arterial street capacity and freeway capacity are built with a lag. This lets new towns avoid costs in the short term.




5. Scale economics are in your favor. Costs consist of fixed components and variable components. In a growth scenario, the fixed portion gets amortized across more units, meaning your cost per unit drops. Also, this allows substitution of additional fixed costs for variable costs to gain further unit cost efficiency. As long as growth holds, that alone can drive down cost per resident and business. This helps keep taxes low.




6. Efficiency of large lot development. New suburbs are usually developing relatively large parcels, which is efficient in that environment. For example, the land was probably acquired from a small number of original owners. The planning and zoning process is pretty much the same whether you are building five houses or five hundred. Again, there are unit costs efficiencies from building many units, etc.




7. Few low income residents. Because new towns tends to feature owner-occupied housing and new apartments, a job and credit history is generally needed to get in. Thus the nature of new places is avoid low-income people, and the associated social service costs. Part of the reason that the outer suburbs experienced particular stress in the housing collapse was because the weakened lending standards allowed people with marginal finances to buy in. A return to the status quo ante means those types of buyers will likely be excluded in the future. That doesn’t do anything to help lower income and working class people – they still have to live somewhere – but it will keep them from newer suburbs, as will restrictions like large lot size zoning and building codes that mandate upscale materials.

It isn’t hard to see why building new and moving to new places, particularly when staying within the same economic and amenity region, is very attractive.

You might say that this is a transitory state and the problems of the city will eventually hit the suburbs as well. Very true. And indeed, that’s what we see. Inner ring suburbs across America are struggling. Some of them are failed towns worse than any inner city. Many of today’s boomburgs will no doubt share the same fate 30 years from now. As a general rule, it seems that only the most affluent suburbs have staying power. But that doesn’t help you if you are a central city or inner ring suburb today.

Eventually all of the items above go into reverse. The town becomes “full”, it gets old, and its own deferred costs catch up with it. Then all of the logic that made the greenfield so powerful works to equally devastating effect in reverse. As the population and tax base shrinks, fixed costs loom large, for example.

The kicker in all this is that the liabilities and costs almost all attach to the territory, not the people. Thus they can be escaped simply by moving to a new greenfield. It’s like prospectors skipping from one clapped out mining town to the next. Or being able to run up a huge credit card in someone else’s name and skip town.

This is a huge structural challenge for old places. There is certainly a lot of work to be done on understanding how to deal with it. But the first step is recognize that simple greenfield economics can account for Hazel Morrow-Jones finding that “people like new and big homes far from the central city.” That’s where the greenfields are and people implicitly get that.

Tuesday, February 2nd, 2010

Chris Barnett: It Falls From the Sky

It used to be that people and policymakers in the eastern portion of the US (roughly east of the 100th parallel, which is the western boundary of the main body of Oklahoma) didn’t worry about having enough water. After all, that part of the US has abundant rainfall, mighty rivers, relatively frequent floods, and infrequent severe droughts that always end before the lakes go dry. Under such circumstances, even well-educated and thoughtful people ask themselves: How could there ever be a long-term shortage of water? When catastrophic multi-year drought occurs, as in the Southeastern US from 2006-2008, nature seems to right itself. After the extremely wet summer and fall of 2009, Lake Lanier, near Atlanta, has again reached full pool, less than two years after going nearly dry. Consequently, water conservation measures are perceived as unnecessary; swimming pools, green lawns, and oft-washed cars are again the order of the day in Atlanta. And it is likely to be so until the next drought, or until a Federal judge’s ruling takes effect: the water in Lake Lanier will no longer be available to Atlanta, as it is required for maintenance of Chattahoochee River flow downstream where it supports other cities in Georgia and Alabama and ultimately, the Apalachicola estuarine system on the Gulf Coast of Florida.

The Atlanta story above touches but does not begin to address the complexity of water supply issues: interstate surface water rights allocations, environmental stream-flow requirements, ground water usage and recharge in paved-over urban areas, stormwater and combined sewers, wastewater discharge and re-use (including the “emerging contaminants” issue of pharmaceutical concentrations in waste streams), and the water-energy nexus. Nor does the Atlanta story address the western issues of city growth vs. agricultural use of water, or the use of groundwater for irrigation of crops even in the eastern US. But the Atlanta story does illustrate a fundamental psychological and socio-economic truth of water in the eastern US: given that water falls abundantly from the sky and runs freely in streams and rivers, its perceived value is nearly zero in many places…and thus, so is its price. This is the part of the water story I’ll elaborate on in this post.

At some level, every city’s power structure understands that adequate quantities of good-quality water are absolutely essential to the city’s very existence. The US’ three largest cities all have water-supply legends: decades ago, NYC and LA secured (some would say “grabbed”) water from distant watersheds, and Chicago undertook a massive engineering effort to keep its Lake Michigan drinking water pure by making the polluted open sewer called the Chicago River flow “uphill” over the Great Lakes/Mississippi divide and down the other side into a tributary of the Mississippi. So this is not a new urban issue. But it is largely ignored in broad public debate: city-dwellers and suburbanites simply expect the local water purveyor (whether city-owned or private) to find all the potable water they want to use, and to provide it cheaply. After all, it falls from the sky free…all the water purveyors have to do is capture it, right?

Oklahoma City is leading a two-billion dollar storage and pipeline project to divert additional water from the Red River watershed of Southeastern Oklahoma, to assure water supply to its growing metro area in the Canadian River basin of Central Oklahoma. T. Boone Pickens bought up groundwater rights in the Texas Panhandle (above the southern end of the multi-state and very deep Ogallala Aquifer), intending to pump water from great depths and sell it via pipeline to the fast-growing Dallas-Fort Worth metroplex. Las Vegas and Central Arizona undertook a sophisticated trade-and-storage deal for some of their Colorado River water allocations. And little Waukesha, Wisconsin is trying to buck the Great Lakes Compact to pull Lake Michigan water up over the Eastern Continental Divide by way of a connection to the Milwaukee municipal water system. The common thread: all these projects are engineering-based and capital intensive, treating urban water supply as a matter of building the right infrastructure from source to tap. Water can flow uphill, toward money. But should it?

“City water” is seen as other public goods: to any single individual, it appears that the “supply” of water is, or should be, almost unlimited and nearly free. Further, because water is essential to life, there is a bit of a “do-gooder” notion that it should be cheap or free for users. Finally, there is the truth that public goods are seldom priced near actual cost, at least as long as the municipality has a good bond rating and can borrow against tomorrow indefinitely. This leads to the “tragedy of the commons”: because there’s more than enough for one person, the resource is overused by everyone.

Even though water falls from the sky freely, it costs money to locate, capture, treat, and distribute to users. The supply is limited, and the costs are quantifiable. Public water suppliers generally don’t build the real cost of the distribution system into prices. For example: let’s assume that Indianapolis Water has about 250,000 water connections. It’s not exact, but close enough for gross calculation. The city paid (borrowed) in excess of $500 million to buy the system in the early years of this decade; the embedded average capital cost per connection in the system was thus pegged at around $2,000. Using the dubious assumption that this amount approximates the replacement capital cost of the system, and assuming an average life of 25 years for the system’s capital plant, the system would have to recover $80 per year in Y2K dollars per connection (rounded, about $7 a month) just to maintain and replace system infrastructure. Interest on outstanding debt (at a low 4%) would be another $7 per month. This $14 would not cover any operating costs, just capital replacement expenditures and interest costs on the system purchase. Yet last month, my residential water bill had a fixed charge of only $9.10, which means that after the $7 for interest, just $2.10 ($25 a year) goes to system replacement…a built-in assumption that the system life is 80 years! Pipes, pumps and treatment plants are pressure vessels and big machines, and they just aren’t going to last 80 years on average. This calculation doesn’t even address the imputed average cost of $2000 to extend a new connection and increase system capacity as the system’s service area grows.

Furthermore, the 1500 gallons of water used last month cost $4.03, or less than 3 cents per ten gallons, which presumably covers the actual cost of treating and pumping the water to my meter. Altogether, with sales tax, it cost a little more than $14 for the water (which, incidentally, cost close to $16 to send down the sewer or out the dryer vent—but that’s another post entirely). It required quite a bit of math to even figure out usage in gallons: Indianapolis Water bills are expressed in units of “100 cubic feet”.

Those are ridiculous numbers. Electricity, natural gas, food, and transportation are all equally necessary for me to live and work in the city, and I probably spend close to $14 per DAY (before ever eating out) on those other basic necessities; their price assures that I don’t waste them. To the do-gooder argument of water as a necessity of life: if I am too poor to afford necessities, there are social-service providers or government welfare to help me; as an affluent and largely urban society, we don’t buy the rationale that food should be nearly free for everyone because it is a necessity of life. Water should be treated likewise. Further, the low price of water and water infrastructure almost assures that it is taken for granted and that significant amounts are wasted. Even the unit of measure sends the message “you aren’t using that much water.” But 100 cubic feet is 750 gallons, enough safe drinking water for four people for a full year or enough to flush a low-flow toilet 400-500 times. One person living alone used twice that amount in a single month!

Against this backdrop, some low-growth (or shrinking) Midwestern communities have lots of spare water-treatment and distribution infrastructure capacity. Several are using water availability as an economic development tool. Dayton, Ohio ran a half-page ad in the Wall Street Journal earlier this year touting its abundant (and well-protected against contamination) groundwater supplies. Milwaukee is gearing up to go after high-volume water users based on its Lake Michigan supply; its breweries and tanneries of the 19th and 20th centuries were based on the economic geography of water, grain, and livestock. Anderson, Indiana “won” a Nestle factory based on available water and labor (GM was once the major employer and now is gone). Grain ethanol production is extremely water-intensive, and it is no coincidence that its boom has occurred where both corn and nearly-free water are available: rural areas of Ohio, Indiana, Illinois, Iowa, Nebraska. But the resource isn’t unlimited; are states, cities, towns, and counties pricing the commodity too low, and essentially suggesting that water-wasters should move to the Midwest?

Lack of available and affordable freshwater is the one thing that has the potential to choke off industrial and population growth in arid-zone boomtowns (Denver, Albuquerque, Phoenix, Las Vegas, the LA megalopolis, and San Diego among them). Even Atlanta and Tampa-St. Pete don’t have enough freshwater; Tampa is using desalination and reclaimed water (highly-treated sewage) to meet some of its needs. Yet there is generally no federal mandate for water resource planning, or for a “grid” of system interconnections by pipeline to support regional or national markets (as exist for electrical energy and transportation).

Thus water is a local (in some cases, mini-regional) commodity and prices vary wildly across the country. This creates the very supply arbitrage that Milwaukee and Dayton hope to exploit. (Imagine a non-connected electrical, phone, gas/oil pipeline, or fiber grid!) There is no real control in most places on rural wells…which is why grain ethanol plants are generally in the middle of nowhere. Until the price of water starts rising, and in rural settings, until metering and volume charges are instituted, there will be no market incentive for really large users to become more efficient in their water consumption. Thomas Frank provided a sample of how much large industrial users spend in various US cities, and a sympathetic take on unintended consequences of low water prices and water-as-economic-development tool.

Given the current economics of water, Midwestern cities will indeed have a distinct water-availability advantage over their warmer and drier counterparts to the west but this may or may not persist for some cities. For Midwestern cities generally, presence within the Great Lakes watershed could bode well in a water-short US with expanding population. Metros on small rivers (such as Columbus, Dayton, Indianapolis, Madison, and Des Moines) will need to incorporate water resource planning as well as conservation measures and higher water costs into their growth plans just as their western cousins do today, as their water supplies are less obviously adequate than some of their Midwestern neighbors’. River cities that rely on the great rivers for their water (Pittsburgh, Cincinnati, Louisville, MSP, St. Louis) will increasingly have to deal with the issue of “microcontaminants”, primarily pharmaceutical products in upriver waste streams that are neither treated by sewage plants nor by conventional drinking-water treatment methods, on top of the “normal” load of industrial and agricultural contaminants the rivers carry.

Could the 19th-century location advantage of Cleveland, Detroit, Chicago, and Milwaukee on the Great Lakes also become a 21st-century advantage? It may very well be so when the real value of cities’ fresh water supply is more widely recognized and when true cost is reflected in “city water” pricing.

To inject this issue into a current thread of urban policy debate: how could Detroit play its Great Lakes water-supply and location advantages in the 21st century? Could Detroit partially rebuild its business base around ocean-going shipping and water-intensive industries? Should shrinking cities with ample water supplies and excess treatment capacity (like Detroit) become suppliers to the bottled-water industry, to ease the strain on scarce resources elsewhere? Thermo-electric power generation requires lots of fresh water and throws off a lot of heated “cooling water” that can be piped from the exit side of steam turbines. Could Detroit specialize in electric generation for the east-central US grid and develop a co-product of year-round urban hothouse agriculture? Food for thought.

Chris Barnett has been a “practicing microeconomist” and manager through careers in industrial procurement, neighborhood business ownership, and community development in Indianapolis. He has also been a leader in groundwater protection locally since the 1990s, and received The Groundwater Foundation’s Phil Peters Award for service on its Groundwater Guardian Council 1999-2006. Most recently, he worked with a Central Indiana ad-hoc committee to plan, organize, sponsor, and moderate a three-session symposium on groundwater issues in urban redevelopment for urban planners, engineers, and development professionals. In his spare time, he is helping to organize Indianapolis’ first member-owned cooperative grocery. He can be reached at cbarnett.indy@gmail.com.

Sunday, January 31st, 2010

Framework: Transit Ridership

You might have a hard time believing I’ve spent most of my career in consulting due to the lack of Power Point presentations on my blog. While I’ll admit to not being partial to the tool, I can create frameworks. Going forward, I’ll occasionally share some that are relevant to cities, starting today with public transit.

Last year I won first prize in a global transit competition sponsored by the Chicagoland Chamber of Commerce. The goal was to devise a strategy for boosting regional transit ridership to one billion rides annually. If you’d like, you can read my winning entry, which won out over 125 others from around the world.

My plan includes over 50 potential actions that could be undertaken. You could think of them as being organized around the following framework.

In short, to boost ridership you need to create ridership demand, which you accomplish by increasing the number of transit addressable trips, then making transit the mode of choice for them. You then have to supply the capacity and pay for it, as well as creating an appropriate governance and operating model structure.

Generating transit addressable trips comes primarily by boosting CBD employment and land use policy changes. Making transit the mode of choice involves creating a transit service with the right mix of price, end-to-end journey time, and quality of experience versus other modes. Capacity is provided by more efficiently utilizing what you have and building new where appropriate. Financing – which includes capital and operating – typically comes from a mixture of federal assistance, sales taxes, and fares. I would favor a greater reliance on transit value capture, however.

To give some further perspective on this, I’ll share some considerations around various aspects of the framework.

Generating Transit Addressable Trips

Transit addressable trips are those that can reasonably be served by public transit. For example, a trip to Wal-Mart anchored shopping center or a suburban office park is generally fairly difficult to service by transit, at least for choice riders. We need to generate demand for more of the trips that are.

For work trips, the place to start is the Central Business District. CBD’s are generally fairly dense, constitute the largest single employment base in the region, were historically served by transit and thus are walkable, and are generally the focus of the transit that exists today, at least in the United States. The more jobs in the CBD, the better for transit.

Unfortunately, this is a challenging matter. Jobs have been decentralizing from downtowns for decades. Most cities have a fairly low percentage of their regional jobs in the CBD. This isn’t per se a problem as long as the CBD holds a significant job base, as it does in places like New York and Chicago.

The problem is that outside of the tier one cities, CBD employment has been experiencing absolute declines. Last year a Toledo Blade series documented how all of Ohio’s top seven downtowns were losing jobs. Even a great performing city like Columbus lost over 12,000 private sector downtown jobs between 2000 and 2005. This is not to pick on Ohio since I’d speculate most other places would show the same.

I have done a lot of thinking on this topic, but we’ll have to save that for another day. Suffice it to say that this will be a challenge outside of tier one cities. But as the key to the central city’s tax base, it’s an important matter to tackle even without the transit considerations.

Beyond that, land use policy is something I’m sure my readers already get. You need some level of density and walkability along transit lines and near rail stations.

Making Transit the Mode of Choice

Apart from a small hard core, I fundamentally do not believe people will choose to ride transit to save the planet or otherwise because it is the right thing to do. Rather, they are going to make the mode choice that seems best to them based on a combination of price, end-to-end journey time, and quality of experience.

Price again is where the CBD is poised to shine since that typically features expensive parking. This is the easy lever to win. Outside of CBD commuting though, the price equation can change dramatically. When you can park for free near a restaurant, for example, the price of round trip bus fare for two ($9 in Chicago) is a material amount of money. Heck, you can sometimes valet park for less than that. This off peak, non-commute price disincentive is one reason suggested that small cities should have fareless transit.

Price is also a consideration for automobile. Pricing roadway travel, especially congestion pricing to help ease peak of the peak travel, could potentially help transit even more. Also parking prices and taxes.

End to end journey time will almost always favor the automobile. It’s tough to address that. Most of the periods that feature express runs are during peak periods, targeting CBD commuters only, which is a group that already has reasons to take transit. Again, this is going to be tough for transit, but not necessarily a killer.

Quality of experience is an interesting one. Generally I think many people would prefer the private interior of their own car to a bus or train with other people. However, there’s a lot that can be done to make the experience better, as anyone who has used a first class overseas transit system can attest. And of course commuting in bad traffic is like a form of torture at times.

Also, the rise of wireless devices means transit time can be productive time. This might even favor longer commutes by transit since you can get some uninterrupted work time. Many people I know get lots of work done on Metra trains, for example.

Capacity

It’s obvious that we need to build the capacity to serve the market we want, but I’d like to highlight the idea of optimization of existing capacity. Public transit is to some extent like an airline. Once you decide how many vehicles and runs to put on the street, it is more or less a fixed cost business to operate. So you want to make sure that none of those seats go empty.

As with many things, adding capacity at the peak of the peak period is costly. For example, the CTA spent $550 million to lengthen platforms to enable eight car Ravenswood L trains that are only needed during rush periods. The rest of the time that capacity is useless.

To avoid having to add this type of very expensive but limited use capacity, we should look at how we can shift peak demand to shoulder periods or off peak. Variable pricing is one way to do this. I already wrote about this in my post “Transit Pricing Reconsidered.”

Of course, this is a nice problem to have. Many smaller cities would dearly love to have fully occupied buses.

Financing

How do we pay for this? Typically capital comes from a mixture of federal grants and bonds backed by sales taxes. Operating subsidies also come from things like sales and real estate transfer taxes. One problem with this is that it implies funding a more or less fixed cost system with variable/cyclical revenues. Without healthy reserves, this will lead to periodic “doomsdays”.

My preferred method of financing is transit value capture, where transit is funded through increases in the land values created by transit. I wrote about this previously as well.

Governance and Operating Models

This is not the sexy part of transit, but needs to be carefully considered. Often the current structures are more or less the result of legacy choices and aren’t appropriate to the current or desired environment. Changing them can be politically difficult, however. Part of this is recognizing that no system of government investment will be made purely on an ROI basis. Thus we need to find a way to strike the right balance among civic objectives in a way that enables real benefits to be delivered.

Obviously this only touches the surface of these items. I just wanted highlight some of the matters that must be considered when planning transit systems inside of an overall high-level framework for doing so.

Friday, January 29th, 2010

Midwest Miscellany

Discover what over 2,000 people already know by following me on Twitter. Every day I send info on many of the most important and interesting urban developments in America and the world, with select diversions to media, art, and current events. It’s a great way to keep up to date and expand your horizons. Don’t miss out.

Top Stories

1. Joel Kotkin @ WSJ: The Kids Will Be Alright.

2. Megan Cottrell: Eviction Is to Black Women What Incarceration Is to Black Men.

3. NYT: In Dayton, the Emptiness Echoes Where NCR Used to Be

High Speed Rail Grants Announced

The federal government announced the winners in the $8 billion high speed rail grant program. The Infrastructurist has the details, but major winners include:

• California: $2.25B
• Florida: $1.25B
• Illinois: $1.1B
• Ohio: $400M

Here’s a map:

The Transport Politic has additional coverage.

I think this shows the challenge we’ll have moving the needle. The feds basically peanut butter spread the money. Given the modest amounts involved to start with, don’t look for game changers anytime soon.

Related: Richard Longworth’s Derailing the Midwest and Thanks for Nothing.

The Surbanization of Poverty

The Brookings Institution recently released a major study on the increasing suburbanization of poverty. While poverty is often associated with the inner city, and we indeed see poverty concentrations there, the suburbs are actually home to 1.5 million more poor people than cities.

Here’s a national map of change in suburban poverty levels:

There is a huge amount of information in this study, including detailed profiles of the top 100 metro areas, so it is one to check out if you have an interest in poverty data.

Small Business Vitality

Bizjournals.com/portfolio.com took a look at small business vitality. They computed an index score for 100 largest metros. Click through for the full list, or here is how key Midwest cities scored:

• #8 – Des Moines: 27.62
• #18 – Madison: 16.12
• #38 – Kansas City: 5.14
• #39 – Minneapolis-St. Paul: 3.61
• #48 – Indianapolis: -0.77
• #52 – Columbus: -2.35
• #57 – St. Louis: -3.81
• #71 – Pittsburgh: -7.83
• #72 – Chicago: -8.83
• #76 – Louisville: -12.01
• #83 – Cincinnati: -15.30
• #94 – Cleveland: -27.42
• #96 – Milwaukee: -29.74
• #100 – Detroit: -53.96

People Prefer the Suburbs

I think any realistic strategy around cities has to start with the recognition that people predominantly live in suburban areas and in fact like living there. I realize many of you would disagree with this, but as I promised when I started the blog, I’ve got to call ‘em like I see ‘em regardless of whether or not it is popular. There may be subsidies to the suburbs. There may be all sorts of reasons why people choose and prefer them, but they still seem to do it.

The Columbus Dispatch carried an article called “Sprawl Has Spread Deep Into Our Minds” that addresses this matter, citing the work of Ohio State urban planning professor Hazel Morrow-Jones:

Hazel Morrow-Jones has spent much of a lifetime trying to answer a simple question: Why do we live where we live?

The question might be simple, but the answer isn’t — hence the decades of research.

Do we choose a home because it’s close to work or has a pleasing design? Because it’s in a safe neighborhood or a good school district? Near family or close to where we grew up?

The question isn’t merely academic. Finding the answer is vital to keeping our cities and older suburbs healthy, or else residents will push farther and farther away from the central city.

As a professor of city and regional planning at Ohio State University, Morrow-Jones knows the possible answers are endless. She also knows that buying a home is an extremely emotional and individual decision, and that no single study will explain every choice.

Despite the daunting possibilities, some broad conclusions can be drawn from Morrow-Jones’ 30-some years of researching the topic, and they present huge challenges for urban planners.

The short version: People like new and big homes far from the central city.

Not all truths are pleasant to hear. I think we should understand and evaluate this research. If we want to really realize the potential of our urban cores, we need to understand where people are coming from, and figure out how to craft a re-imagining of the good life in an urban context that appeals to a material segment of the public. (This article is also indicative of the lure of greenfield economics, where people move to shed legacy costs. Tackling that problem would also help enormously).

World and National Roundup

City Mayors: Cities have to develop into successful brands

The Guardian: Berlin is poor but sexy, and oozes creative wealth

WSJ:E-Yikes! Electric Bikes Terrorize the Streets of China

Neal Pearce: No End in Sight to State’s Fiscal Agony

WSJ: The US Needs an Infrastructure Bank

Urban Omnibus: The Public Works

Fast Company: Why You Should Start a Company in New York.

Mass Transit Mag: Bay Area Trains, Buses Face Declines in Ridership and Revenues – “After enduring the most brutal year in the history of Bay Area public transit systems, train and bus operators are barreling down a track toward bankruptcy.”

SF Chronicle: Market St. changes as city evolves (via @OtisWhite)

The Advocate published a ranking of the top 15 gayest cities in America. Interestingly, three of the top five are in the Midwest: Iowa City (#3), Bloomington, IN (#4), Madison, WI (#5). College towns, obviously, but still, there are plenty of those all around the country.

Lastly, here’s a link to a presentation in Akron by economist Joe Cortright. Cortright is the person who did a lot of the research behind the CEO’s for Cities “talent dividend” and other items. He talks about the importance of talent and civic distinctiveness. It’s an hour long piece, so definitely not for everybody, but if you are interested in such things, it is worth checking out.

Amazing Cycling Infrastructure

Broken Sidewalk pointed me at this great idea for cycling infrastructure from Copenhagenize. The picture says it all:

Copenhagenize also posted a video about a super-cool automated bicycle parking facility developed by a Japanese company. Click the previous link if the video doesn’t display.

The Equal States

Fake is the New Real created an interesting map redrawing US state boundaries to make them equal in population.

More Midwest

Chicago
Transit for World Class Metropolises: Can Chicago Compete? (GOTO2040)
Fewer conventions are choosing Chicago (WSJ)

Cincinnati
Phase 1a of the Banks to rise quickly (UrbanCincy)

Detroit
Detroit: Open for Business (Hour Detroit) – Interview with Mayor Bing, via @urbanbydesign
Designing a better Detroit (Time)
High Class (Hour Detroit)
Blueprint America: Beyond the Motor City (PBS) – Preview of a forthcoming program

Indianapolis
Hotels spark expansion of downtown skywalk system (IBJ) – Features Your Truly

Kansas City
Missouri Transportation Alliance is looking for ways to run road improvements (KC Star)
Jackson County Sues Kansas City Over TIF (KC Star)

Louisville
Tarc rolls out another bus music video (Broken Sidewalk)

St. Louis
St. Louis demolished 8,000 buildings in the 2000’s (Dotage St. Louis) – Wow

Post-Script

Talk about a public transit fan. This woman had a map of the Chicago L system tattooed on her foot (via George Ritzlin Antique Maps and Prints).

Anybody want to step up and identify themselves?

Thursday, January 28th, 2010

Another Epic Public Space WIN in New York

I recently gave an overview of some of the great developments in the transportation system and public space of New York. Well the hits just keep on coming as this week New York announced the result of its sidewalk shed competition.

Sidewalk sheds are those generally unpleasant steel and wood scaffolding structures you have to walk through when traversing a construction site. They protect pedestrians, but not much more. Here’s an example of a classic version (via Lynn Becker):

And here’s a rendering of the new New York version:

Wow. Quite the difference, don’t you think?

The design is called “Urban Umbrella.” It’s so nice you might want to even, say, put a sidewalk cafe under it:

This is the type of thing that separates the men from the boys when it comes to cities. Here’s one more rendering showing the cool, integrated lighting.

The use of the urban umbrella will be encouraged, but not required. As there are approximately 6,000 sidewalk sheds in New York City, with over one million linear feet, the potential impact on public space over time is huge.

But beyond the design itself, there are a couple of other aspects of this that are noteworthy I want to higlight.

Design Process

The design was chosen as part of an international competition that received over 164 entries from 28 countries around the world. The winner was Young-Hwan Choi, a 28-year-old first year student from the University of Pennsylvania.

That’s right, New York’s new standard sidewalk shed was designed by a first year architecture student. Lot’s of cities hold design competitions, but how many select winners from student work? Thinking specifically about our smaller Midwest cities, I’m having trouble imagining it, though maybe there are some examples.

What usually comes to mind is something like the St. Louis arch grounds competition. Admittedly, that’s a significant landscape, not an object, but the cost of just participating in the competition is likely to scare off even many professional firms.

New York has the self-confidence to pick something it likes, regardless of where it came from. Perhaps that’s because New York is where reputations are made, while other places are where they are consumed. Almost paradoxically, a young upstart like Choi has a better chance of getting noticed in a hyper-competitive market like New York than in an ostensibly less crowded talent pool.

Price

One of the standard complaints I hear when suggesting we should make step change improvements in the quality of our public space is that “we can’t afford it.” I might argue you can’t afford not to, but that’s for a another day. But the reality is, in many cases cost isn’t even a legitimate objection.

The urban umbrella design costs the same amount of money as a conventional design, but costs less to maintain. In other words, this vastly superior design is actually cheaper. This is particularly noteworthy in New York, which is one city that might legitimately take the view that cost is not a major concern.

Design competitions always have various criteria around engineering, green feature, etc. I don’t know why we don’t just always include price in the equation. If I were running a competition like this, I’d say, “Unit cost 25% less than current models.” Even if you don’t get quite there, you’d be amazed what you can accomplish. It’s like Jaime Lerner said, “If you want creativity, cut one zero from your budget.”

Beyond the better appearance and pedestrian experience of the design, beyond the cheaper price that should appeal to CFO’s, the design also hides less of the building, letting building owners show off more of the facade. It’s an even greater incentive to install the product – no mandates required.

Another Example: Columbus, Indiana Bike Racks

I mentioned the New York bike racks before, but I want to highlight another bike rack project in Columbus, Indiana. The city decided to create bike racks from its icon “C” tourism logo. Here’s the result (image via American Dirt):

The city was able to get these fabricated locally at a cost of $200 each. A standard U-rack ranges from $80-$250, so this is at the high end of the range, but not out of line. Keep in mind, this is for a low volume production run, not output at scale. It’s bike facilities+civic branding+local production. In other words, a “win-win-win”, just what I always like to see.

Given the prices here, there is simply no excuse. If you aren’t doing things like this, you either don’t care or don’t have it on your priority list. Or maybe it’s like Wal-Mart, where the architecture of the store is deliberately intended to look cheap, to convey the message that the company is committed to low cost and low prices. Regardless of price, maybe communities consciously don’t want change or to look “uppity” or like they are aspiring to anything other than the generic status quo. Perhaps, ultimately, the quality of public space in America is simply a deliberate statement of community values.

More Coverage of New York’s Urban Umbrellas

Streetsblog: Coming Soon – Ped-Friendly “Urban Umbrellas” for NYC Sidewalks
The Architect’s Newspaper: The Decorated Shed
GOOD: No More Ugly Scaffolding
A Daily Dose of Architecture: Three NYC Projects
Lynn Becker: Scaffolds Slum Up Chicago’s Streets

Tuesday, January 26th, 2010

Drew Klacik: Place-Based Clusters

Indiana’s Cities and Their Contributions to the State’s Economic and Fiscal Condition

The Indiana Fiscal Policy Institute (IFPI) and the Ball State University Center for Business and Economic Research recently released a report that proves that in Indiana, as in most other states, when it comes to funding state government urban areas subsidize rural areas (Intrastate Distribution of State Government Revenues and Expenditures in Indiana, 2010). Civic leaders in Indianapolis and other urban areas often battle the perception that urban areas are net takers. But the fact that large urban areas are now documented as net givers rather than net takers may not be enough to change that perception and the entrenched anti-urban bias that accompanies it.

The IFPI report does an excellent job of documenting the patterns of state revenue collection and distribution. However, focusing solely on state revenue ignores the locally subsidized contributions most of these urban counties make to their regions and the state. These contributions include investments in growing the state’s economy in the form of tax abatement and tax increment financing, as well as the provision of services to large, regionally important tax-exempt properties.

For example, the city of Indianapolis provides both tax abatement and TIF to support the hotels, restaurants, and shopping facilities required to attract conventions, Big Ten and Final Four tournaments, and even the Super Bowl to the state. When these big events come to Indianapolis, it is primarily the taxpayers of Marion County who pay for the services, such as public safety, that visitors consume. Additionally, many of the facilities that attract visitors, including the convention center, football stadium, and basketball arena are tax exempt yet located on valuable property.

In addition, core cities make contributions to regional and state economies that go well beyond the convention and tourism industry. In Indianapolis, TIF and tax abatement have been used to attract and retain firms in the life sciences, information technology, advanced manufacturing, and a wide variety of other professions. Indianapolis is home to 18 percent of all the jobs in Indiana and 24 percent of all wages earned. The fact that the share of wages is higher than the share of jobs suggests that the jobs located in Indianapolis are of high value.

I suspect that this evidence is not going to result in an outpouring of support for Indianapolis or any other of Indiana’s urban counties. But what if we looked at the state’s economy spatially rather than from the now traditional industry cluster perspective? Virtually everyone accepts that the life sciences, transportation, distribution and logistics, advanced manufacturing, clean-energy, motor sports, and information technology are the competitively advantaged economic clusters that are essential to Indiana’s economic future. However, if we looked at the state’s economy geographically there are eight place-based clusters in Indiana that contain 48 percent of all the state’s jobs and 54 percent of all the wages earned in Indiana. Furthermore, when you add in their subsidiaries or places where employment and wages are attributable to the core industry, the share of Indiana’s employment increases to 66 percent and wages to 68 percent.

Those eight place-based clusters are Indiana’s most populous and most urban counties—Allen, Elkhart, Lake, Marion, Monroe, St. Joseph, Tippecanoe, and Vanderburgh counties. All but Elkhart are net givers rather than takers. The subsidiaries are the suburban counties that comprise the metropolitan areas that surround these core counties and prosper due to their proximity. By definition, without a core city/county there cannot be an affluent suburban county.

Indiana’s Place-Based Clusters (Graphic by Luke Renn)

To suggest that we think of clusters as place based as well as the more traditional industry perspective is not intended to diminish the importance of industry clusters, rather it seeks to acknowledge that many of our competitively advantaged industries are located in these urban counties and their surrounding metropolitan areas. For example, a study of the life sciences industry in 2000 found that 48 percent of all life science industries in 30 central Indiana counties were located in Marion County (Indianapolis) and an additional 11 percent of the Central Indiana life science firms were located in Monroe and Tippecanoe counties (two of the other core place-based clusters.*

Life sciences employment in Central Indiana

Of course, there are key exceptions scattered throughout Indiana, such as the life science firms in and around Warsaw and advanced manufacturing facilities such as the new Honda plant in Greensburg. More importantly, when we think about supporting the state’s economy, it does not have to be one cluster or the other, rather we should support both the industry clusters and the places where many of those firms are located (the eight core counties). As the attraction and retention of human capital continues to emerge as an important economic development strategy, making sure the place-based clusters are exciting and appealing is becoming an increasingly important strategy to assure that our cluster industries can attract the creative class workers they need to thrive.

These key urban counties have many economic and cultural assets, but not all is positive. Fifty percent of all individuals living in poverty in the state in 2007 resided in these eight counties, average educational attainment levels trail the state average, and many of the urban counties have high crime rates. These issues and others threaten the ability of these counties to continue to be net givers supporting the state’s economy and generate the revenue necessary to invest in the future of our small towns and rural counties

As Indiana and the nation seek to emerge from the most serious economic downturn since the Great Depression, it may make sense to turn to history and consider a notion first espoused by the 1937 National Resources Committee’s report – Our Cities: Their Role in the National Economy. The report suggested that big cities are the drivers of the nation’s economy and that as go the cities so goes the nation. As Indiana begins to work its way out of the recession of 2008-09 perhaps it makes sense to recognize the economic and fiscal importance of Indiana’s place-based clusters and consider how Indiana might invest in our economic clusters (the key industries) and our place-based clusters (where the key industries are located) to jump start our state’s economy. Perhaps most importantly, as the IFPI study suggests, without the tax revenue associated with these economically vital urban areas there will not be any resources to invest in the future of the state’s small towns and rural counties.

Thus investing in our urban areas is not taking resources away from small towns and rural counties, rather investing in our urban areas and making certain that they continue to remain economically competitive is actually a strategy that assures that we continue to have the resources to support the entire state. We cannot have a great Indiana without a healthy core.

* Wolcott, Susan. The Life Science Cluster in Central Indiana. The Center for Urban Policy and the Environment 2001.

Drew Klacik is a Senior Policy Analyst at the Indiana University Public Policy Institute’s Center for Urban Policy and the Environment at IUPUI. Drew’s principal areas of work include economic development, state and local taxation, and community development policy. Much of his work is focused on trying to understand how these issues interact and affect the quality of life and economic vitality of regions. He can be contacted at dklacik@iupui.edu.

Sunday, January 24th, 2010

The Core Vitality Imperative

What does a healthy urban core mean to a region? Maybe the difference between success and failure. Here’s a look at urban core and regional job growth for selected cities*, ranked by percentage job growth in the core county from 2001 to 2009.

Notice a pattern? Clearly, for these cities at least, core county performance is an excellent proxy for overall regional performance. I’m not making a statistical claim here, but the data for these cities is suggestive. I think it also foots with our common sense view. How many thriving metro areas have a core city/county that is going down the tubes? I can’t name one.

The Dynamics of Growth and Decline

It might be easy to dismiss cities like Cleveland and Detroit by simply calling them dysfunctional. But that misses the point. Of course they’re dysfunctional. All struggling cities and organizations are dysfunctional, or they probably wouldn’t be in that state. What’s more, rather than just dysfunction causing failure, which is sometimes true, it’s also true that failure causes dysfunction. As a city (or company or other organization) starts into decline, it fails to attract customers, top talent leaves, and operational and financial issues creep up. In this regard the civic dysfunction noted in places like California is as much as product of decline as its cause.

Growth and decline are both positive reinforcement cycles. During growth, economies of scale drive unit cost efficiencies, and there’s rising wealth to fund investments that generate more wealth. As places like Phoenix and Florida attest, even the raw construction that accompanies growth can generate its own bubble.

Similarly for decline. Scale economics go into reverse, there’s no money to invest, people start fleeing. Harvard economist Ed Glaeser attributes a lot of this to an inelastic housing supply. As people leave, the quantity of houses stays the same, which drives prices down. This scares more people into leaving, attracts poor people, which cause more middle class people to leave, which cause prices to decline further, etc.

The Imperative of Preventing Core Decline

Given these dynamics, it is imperative to prevent decline from taking hold. I identify four basic states of regional growth: Hyper-Growth, Moderate Growth, Stagnation, and Decline. Austin is Hyper-Growth, Portland and Columbus are Moderate Growth, Cincinnati is Stagnation, and Cleveland and Detroit are Decline in this scenario. (Assignment not entirely based on job growth).

I posit as a hypothesis that these states don’t exist as a pure continuum, but rather behave more as discrete quanta, with forces that tend to keep cities in their present state. What’s more, I’d suggest that transitions from one state to another occur as a result of a sort of “punctured equilibrium” that occurs when growth, or more likely decline, in the core reaches a tipping point. Or as Dietrich Dörner put it, “‘Catastrophes’ seem to hit suddenly, but in reality the way has been prepared for them. Unperceived forces gradually eat away at the supports necessary for favorable development until the system is finally unable to resist any longer and collapses.”

Why the core? Because it seems that decline in a region first becomes evident there. The implication is that we should would keep a very close eye on core city and core county demographic trends (population growth, domestic and international in-migration, and educational attainment) and economic statistics (job growth, income growth, output growth). It seems unlikely that core counties are likely to have net in-migration as they are structural exporters to the suburbs. But if they aren’t attractive to international immigrants, are losing jobs, etc. that’s definitely a very bad sign. These negative trends might not be obvious or be ignored because of the stickiness of the current growth state – until it is too late.

For example, even ostensibly healthy cities like Columbus, Ohio might have underlying trends that put it as risk. How likely is it that the Columbus region will be long term successful if Franklin County loses 50,000 jobs per decade? Not very. That’s the city’s tax base slowly bleeding away. And with Columbus very dependent on commuter taxes, that’s doubly true in this case.

Don’t Hate the Suburbs

It might be tempting to view the suburbs as the “bad guy” here. I reject that view. In a growing community, it isn’t reasonable to believe that all the new residents and businesses are going to land in a fixed area. And clearly, despite an optimistic trend towards urban living being back in fashion, the suburbs continue to have a hold on the desires of large numbers of Americans, particularly families with kids.

I want to bring the central city up, not pull the suburbs down. A great city needs great suburbs. That doesn’t mean I don’t think there’s room for regional solutions or other matters. But especially in a struggling region like the Midwest, we need every part of a region to understand its role on the team and bring its “A game”. Pitting city and against suburb is like beggars arguing over table scraps. The real competition is between, not within regions, on a global basis. And even that competition need not be a zero-sum game.

If we start taking an antagonistic point of view towards the suburbs, especially in regions like the Midwest and South with strong suburban traditions and little political demand for pro-urban policies, we’re just asking to fail, practically speaking.

I think we need to focus on maintaining core vitality, without worrying that the suburbs are growing too. Even Austin has most of its growth in the suburbs, but the core county is still growing as well. Portland has moderate core decline, but that may be a temporary state due to its under performance in the recession. And Portland has the problem of being on a state border, which leads to tax and policy arbitrage with nearby Washington – a tough challenge. Still, the policies Portland has put in place has kept its core significantly more healthy than those of the Midwest. As long as the core stays strong, that’s a good thing.

And, of course, as these numbers show, perhaps the best way to boost the suburbs is to boost the core.

What’s Your Policy?

So how do we keep our urban cores successful over the long term? That’s a tough challenge. Frankly, it’s a nut America hasn’t cracked, other than for the tier one global cities, and even there, the story is very overplayed.

On the one side are those that cite high costs and poor services in the city. The recipe here is cutting costs, improving schools, and reducing crime. But as readers of my blog know, this, by itself, will never save the core. Cut costs and taxes? By all means, let’s be as efficient as possible. But we’ll still have higher taxes than the suburbs. Reduce crime and improve schools? Sign me up. But no matter what, the city will still fail to measure up to the average suburb. Cities are structurally higher cost and and structurally weaker providers of education, public safety, and some other services than the suburbs. This strategy, by itself, isn’t enough.

On the other hand, promoters of urbanist solutions du jour – light rail, bike lanes, “green” projects, stadiums, etc – often fail to make the case for how their projects will actually change the game. Rather, they rely on cookbook policy and talking point advocacy.

What’s more, success is often measured by eye candy rather than hard data. For example, people visit Chicago and gawk at the skyscrapers and crowds without considering that the area tourists and even many residents see is only a tiny part of the city or region. People visit Portland and see crowded street cars and sidewalks in the Pearl District, but discount job growth if they even consider it. I can read urbanist blogs all day long and rarely ever come across the word “job”, unless it is some reference to the green economy.

That’s not to say that Portland or Chicago are failures – far from it – but the impression given by visiting or a glowing magazine article is certainly not the whole story.

The Way Forward

For me, I think the first imperative is still to convince people of the importance of the urban core to overall regional (and state and national) success. Too many people still don’t get this. Our cities are still often resented more than loved. As they are often home to the upscale amenities, high end jobs, and may wealthy residents, this reinforces the notion that they are already privileged, when as the data above shows, this is really not the case. And of course, cities are often Democratic strangleholds, which makes Republicans take a skeptical view of pro-urban policy. It’s a hard argument to make, but we’ve got to figure out how.

We also need to remember the importance of the basics. Things like costs, taxes, regulatory policy, crime, and schools do matter. We simply can’t take our eye off the ball here, or ignore costs. We need to remember that sustainability includes demographic, economic, and fiscal sustainability.

On the other hand, cities do have to offer a differentiated product. They can’t try to out suburb the suburbs. That’s a sucker’s game. Rather, they do need to strengthen their core urbanity, make diversity into an asset, and find ways to make targeted investments that are aligned with an urban strategy, tailored to the local context, and for which we think we can generate good ROI.

It’s a tough balancing act and a hard challenge, one we haven’t figured out yet. But we’ve got to go beyond dogma and ask the tough questions. Because if we fail to keep our urban cores healthy, we’ll end up in a place we really don’t want to be. I plan to keep exploring how we get to a better place in this blog.

Related from the Columbus Dispatch: When will Ohio’s economic plunge end? (Answer: When its urban cores return to health)

Post Script: Suburban-Only Job Growth

Lest someone thing I’m trying to disguise the suburban-only growth, here it is for the cities in question. Note that other than Portland, the rankings don’t change.

* Data is from the Quarterly Census of Employment and Wages, Q1-2001 to Q1-2009, which was the maximum year over year range available for easy download from the BLS at the time I started pulling data. I originally intended to include all my Midwest metros, but the BLS took the database offline for multiple days in the middle of my queries. This isn’t the first time that happened. Their database query uptime is highly suspect, so caveat emptor if you ever need BLS data.

Friday, January 22nd, 2010

Replay: Impossibility City

The Louisville Cardinals were in the NCAA regionals last weekend in Indianapolis. In conjunction, a group of people from Louisville planned to bring up a laser projector and put images on the sides of buildings in Indianapolis ranging from the Cardinal logo to Louisville’s “Possibility City” marketing slogan. I thought this would be great fun in the grand tradition of college game day pranks (here’s a famous one to show you what I’m talking about).

The city of Indianapolis, however, felt otherwise. Prosecutor Carl Brizzi said it would be illegal since these projections would require a permit and a variance. I thought this was a terrible shame. A permit? Print them one. Or fine them afterward. You can bet that if the Colts wanted to do this, no permit problem would have been allowed to stand in the way. It shows fear, as if Indy is a city so insecure that it would have felt itself “disrespected” by a mere light show. They could have taken the high road. The right response is would have been a bit of bemused, “Whatever”. (For Louisville’s part, they screwed up by announcing they were going to do it. You can’t do guerrilla marketing if everyone knows about it in advance).

While this incident is a nit in the grand scheme of things, it makes me think generally about the ways cities more and more are trying to regulate fun out of existence. An ever more complex regime of permits, licenses, inspections, and a general attitude that “whatever is not explicitly permitted is forbidden” seems to have taken hold in American cities. Every urban activity now seems to be subjected to some form of scrutiny and sanitization.

I think this is a mistake. There’s a name for a places with an over-regimented, over-scripted, over-manicured, “approved fun only” mindset: the suburbs. But cities aren’t suburbs and they shouldn’t imitate them. Many urban advocates correctly abhor bringing strip malls and other manifestations of the suburban built form into the city. But we shouldn’t import suburban values or functioning either. It’s not that those values are bad. They are wonderful in the right context. But they hurt cities.

The richness of life in the city comes from its capability to contain diversity, generate the unexpected, and produce the innovation, color, and energy that comes from a vital “informal” sector. I think about the busker, the Latino men you see pushing around ice cream carts, elotes sold from a ramshackle corner stand, gypsy cabs, grafiti artists, etc. Even in a less edgy sense, I think of an enterprising guy who turned an old bowling alley into Chicago’s premier punk rock venue or the internet entrepreneurs taking advantage of a new area without regulation to create one of the most dynamic and thriving sectors of our economy.

The focus of much research on third world cities is often on how to “regularize” things and bring marginalized activities into the mainstream. But first world cities now seem to have the opposite problem. They are squeezing out anything with a hint of the unusual or the unscripted. They suffer from over-formalization. I think this is an area that needs serious academic study.

This has been ongoing for a while, but I attribute a lot of the current penchant for it to the Rudy Giuliani administration in New York. He tamed a city once thought ungovernanable by employing a variety of techniques and programs, ranging from aggressive policing informed by the “broken windows” theory to an aggressive campaign to “clean up” Times Square by running out the sex businesses and bringing in Disney. Other cities are keen to see the same results.

There are a few problems with this. The first is that it co-mingles multiple items into a single program when they should really be evaluated separately. Broken windows policing seems to be backed by solid social science research, including some very interesting recent studies in the Netherlands, hardly the poster child for the police state. On the other hand, cracking down on criminal activity is very different from using zoning, and civil and administrative processes to get rid of legal activities you don’t like.

Also, this took place in New York City. New York is sui generis in America. Its scale and density are beyond any other place. And its unique ability to draw the not just America’s, but the world’s elite, as well as massive quantities of tourists, all into a rather confined geographic space, means that killing off the traditional generators of urban energy doesn’t destroy the power of the urban fabric as a whole because so many other forces sustain it. This isn’t true in the vast bulk of other cities.

Unfortunately, the same story of clamping down on anything that isn’t Disney compliant has spread throughout America. When I was in school, my college buddies and I could hang out in Grant Park during the Taste of Chicago proudly drinking our own beer out of cans right in front of the cops. Try that today and you are going to jail. The city’s “public place of amusement” license requirement has all but rendered starting a live music club – the central meeting place of Chicago’s fabulous indie rock scene – impossible. A new ordinance would require any music show promoter to get fingerprinted. The City Council banned foie gras, since thankfully repealed.

Now a lot of this regulation is in place for good reason. Chicago had an incident where an unsafe, overloaded deck collapsed, killing several people. The fire at the E2 nightclub killed 21 people in an environment that was overloaded and not compliant with fire codes. INDOT just built a fantastic looking new overpass at 46th St. in Indianapolis, and some jerk already tagged it. I’m not saying there’s not a legitimate role for public regulation, but you can definitely have too much of a good thing.

There are two things we need to do to put this into perspective.

1. We should understand what we are giving up as well as what we are gaining through this hyper-regulation approach, and make a balanced choice.

2. We need to understand that novel, unplanned, and even uncomfortable activity in the city is the key to urban function and success – not just street energy and attractiveness, but also economic success.

On the first part, I want laws to protect public safety. I don’t want to eat unsafe food, nor do I want somebody spray painting my house. On the other hand, we need to understand that everything comes with a cost.

Consider the example of America’s love affair with huge SUV’s and vans. I frequently see this ascribed to our national character, cheap gas, subsidies, etc. But while Americans have long loved big cars, I think the rise of SUV’s and mini-vans is more easily explained by child seat laws.

I’m 39 years old, not young, but hardly ancient. My parents were divorced and my father got re-married to a woman with two children of her own. When my brother and I were with them, we’d often drive around in a Toyota Corolla with the two adults in the front and us four kids piled into the back. Nice and eco-friendly – and wallet-friendly too. Today, that would get my dad arrested. How can you possibly ferry around four kids who all require child seats except in a huge SUV or van? And even if you only have two kids, they might have, you know, friends. And think about it, parents who might want to live in a city with their young kids in a car free lifestyle are handicapped because they can’t use taxis easily on account of the car seat issue. Not good.

I think a lot of the anti-SUV crowd are urban dwellers without kids or with few kids, where they simply don’t run into this issue. It is virtually impossible to have a decent sized family today without a large vehicle whereas in the past a small vehicle would do. Remarkably, most of us did not die. Improved safety? No doubt, but at a cost.

Another classic example is, of course, zoning, which accomplished many good things, but also had a lot of unintended side effects that hurt our cities.

On the second front, I don’t think people truly get the link between a broad vision of what a city is, a large sphere in which individuals can pursue divergent activities and goals, and economic success. As Sam Jacob of FAT put it, “Cities are not about the perfect vision; they are not about a singular idea. They are about a collision of all kinds of incompatible demands.” The life of the small town or the suburb are rigidly circumscribed. They might not be about a single vision, but they are about a more narrow and defined view of what life should be. They demand conformity. A place like that, no matter how large or even how successful, is not a true city.

A collision of incompatible demands. What a great way to put it. It is in containing that collision within a geographical, political, social, and culture context that a city creates its meaning. Cities can resolve the paradox, reconcile the incompatible into something new and powerful. It isn’t always pretty. The results are sometimes messy or unpleasant. But its in that resolution process that we create the energy and innovation that moves the city forward and allows its residents, business, and institutions to reinvent themselves and their lives if they so choose.

Let’s put it in terms that are broadly understood, by considering this in the framework of Richard Florida’s “Creative Class”. I don’t think this is the end all, be all by any means. But clearly, in a nation pinning its hopes on an innovation economy to replace the jobs lost by productivity gains and offshoring in traditional sectors, and to power the economic growth of the future, you need to both have the talent and the catalyst to make innovation happen.

Florida’s simplified thesis is that successful cities are about talent, technology, and tolerance. The last point is usually taken to mean a tolerance for gays and various “bohemian” types. But tolerance isn’t about non-discrimination ordinances and it isn’t about gays. Tolerance is a mindset.

The dictionary definition of tolerance is “sympathy or indulgence for beliefs or practices differing from or conflicting with one’s own”. From this is clear that most advocates for “progressive” policies of the type advocated by Florida really aren’t tolerating anything. They might be about allowing differences, but it is seldom about allowing views or actions that are in actual conflict with their own values. Indeed, progressives can be as intolerant as anyone for beliefs or actions that differ from their orthodoxy.

We need tolerance properly so-called. We need an environment where we are willing to put up with things we don’t like in return for the same freedom for ourselves. We need cities where “live and let live” is the motto. Rules that stifle this in order to produce a perpetual suburban style family friendly or least common denominator view of what a city should be are ultimately counter-productive. They sap the city of its animating power.

This isn’t just an obscure philosophical point. It’s real and tangibly important. George Bernard Shaw famously said that “all progress depends on the unreasonable man”. Innovation requires non-conformity with existing ways of doing things. This requires not just the idea, but the mental fortitude to break away not just from our own patterns of doing things, but from the social pressure to conform. In a sense, all innovation depends on the outcast.

A civic culture that over-values social conformity will ultimately stifle innovation, creativity and the conditions that bring it forth. Firstly, such locales are not attractive to innovative people in the first place, hence you won’t have the talent. Secondly, it raises the degree of difficulty for bringing innovative ideas to be because there are so many social obstacles to overcome. And thirdly, it deprives the city of the conflict of incompatible demands that catalyzes and sparks creativity. “Iron sharpen iron, so one man sharpens another”. Perhaps another great description of the essential function of the city.

We’ve got to stop making our urban areas “impossibility cities”. We’ve got to adopt a mind set of, to use another basketball analogy, “No harm, no foul”. We’ve got to let people play. Let the people themselves decide the outcome of the game. By all means we need to take an appropriate stance on health and safety, bona fide criminal activity, and the environment. But we also need to create an enlarged public sphere in which individual expression and action is permitted to flourish. Our cities will never be truly successful over the long term until they do.

It might seem a leap from tolerance of some projections on the sides of buildings to the innovation economy. But you can’t expect a civic culture to stop at the boardroom doors. It’s hard to have good table manners at a fancy business dinner if you eat like a slob at home. Similarly, building the culture that supports success in the 21st century knowledge economy starts with letting innovation and creativity flourish on the streets and in the general life of the city.

I’ll wrap this up with one other personal observation. I grew up in the country. The mindset I just described is not that far off from rural values. In the country, you meet a lot of strange people. But interestingly, people tend to stick to a “I’ll stay out of your business if you stay out of mine” mindset and quirkiness is often surprisingly tolerated. In a sense, city and rural dwellers have more in common in this way than small towner or suburbanites. Is this a way to bridge the city-rural divide in some way? It’s something to think about.

This post originally ran on April 6, 2009.

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Aaron M. Renn is an opinion-leading urban success strategist and writer on a mission to help America’s cities thrive in the 21st century global economy. His particular focus is the oft-overlooked cities of the Midwest.

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