Saturday, April 18th, 2009

Midwest Miscellany

I don’t normally post this sort of thing, but I thought this Cleveland “tourism video” was priceless. WARNING: Not for the humor impaired.

On a more positive note, Cleveland is frequently victimized by lengthy analysis pieces in the national media. No places seem to get more bashing than Cleveland and Detroit. So it was great for Cleveland that the Wall Street Journal did a positive piece called “Artists vs. Blight” that used Cleveland as an example of how artists are coming back to the Midwest and, lured by almost free housing, are starting to turn around blighted neighborhoods.

I’ve seen this up close and personal. It happened in my Indianapolis neighborhood, Fountain Square. What I think is the most notable part of this is that unlike in bigger cities, housing is so ridiculously cheap that these artists are buying, not renting. This means it will be much harder for them to get displaced by gentrification.

However, I don’t see many signs of gentrification hitting. Many years ago I worried that would happen to Fountain Square, but now it seems years off if it ever happens. Here’s the dynamic. There is huge demand for urban living in places like New York and Chicago. So when artists start changing a neighborhood to make it yuppie safe, lots of people will move in, seeking the urban life at comparatively reasonable cost. There is pent up demand. In most Midwestern cities, however, there is very limited demand for urban living. There just isn’t a sufficient inflow of people to redevelop much of these cities, sadly. Even a few thousand new residents moving into a city like Cleveland aren’t going to move the needle in a place that has lost hundreds of thousands in population. So the pressure of gentrification is lower. This has its good and bad points. We’ll see how it evolves.

There was more high speed rail news this week as President Obama outlined his national HSR strategy. Clearly, the President is upping the rhetoric. The question is whether this will become a reality. $8 billion peanut butter spread around the country won’t accomplish a lot. And I think 110MPH service from Amtrak (instead of real HSR) could actually do as much harm as good to the cause. Plus, given the lead times, this isn’t going to be a Spain like system before the next election. HSR has the potential to be a major presidential legacy for Obama the way the interstate system was for Eisenhower – if he has the staying power and perseverance to stick with it knowing the results will probably not be fully realized until after he’s out of office. Of course, that’s the case with almost all real legacies. For another view, take a look at Adron Hall’s more negative slant.

CNN/Money is running a survey of city taxes (via Advance Indiana). Here is how the Midwest stacked up. The higher your ranking, the worse your taxes, so the worse your rank, the better you are. Think of this as the hall of shame.

  • #4 – Detroit
  • #5 – Indianapolis
  • #6 – Milwaukee
  • #8 – Louisville
  • #9 – Columbus
  • #13 – Kansas City
  • #23 – Minneapolis
  • #42 – Chicago

There were 51 cities surveyed. I don’t think the results can be dismissed, but extraordinary claims require extraordinary proof. As someone who pays property taxes in Chicago, I don’t know where they are getting that $1000 figure. That must either be the municipal rate only, or somehow factor in taxes on the large volume of rentals in the city, many of which are in vintage buildings. I’d like to see the methodology.

I talk a lot in this blog about cities knowing who they are and what they stand for. The folks over at 37Signals had a great blog post on this recently, on the difference between having a mission statement and truly standing for something. “Standing for something isn’t just about writing it down. It’s about believing it and living it.”

The Chicago Tribune talks about tough times ahead in the Midwest in auto dependent areas.

Ohio wants $57 million in stimulus funds for highway studies.

More Midwest

Express bus will use I-55 shoulders (Tribune)
Innermost workings of the CTA explained (John Hilkevitch @ Tribune)
New day dawning: It’s a good time to be in Chicago (Site Selection Magazine)

Team NEO gives site consultants a tour of Northeast Ohio’s assets (Plain Dealer)

Retain grads, experts warn (Detroit News)
Michigan’s best and brightest bailing out on state (Daniel Howes @ Detroit News)
Ann Arbor entices entrepreneurs (Free Press)
How Michigan is working to keep auto jobs (Gov. Granholm @ Newsweek)
Granholm: State budget in dire shape (Detroit News)

Special Report: Simon says, city does (IBJ)
Price tag for I-69 growing (IBJ)
Ronald Reagan extension is a go (Indy Star)
US 31 construction sequencing plan (INDOT)
Web site of the week: Art Babble (San Francisco Chronicle)

Topics: Economic Development, Public Policy, Transportation
Cities: Cleveland

14 Responses to “Midwest Miscellany”

  1. Alon Levy says:

    I was surprised that New York is only 15th, but the breakdown makes sense. New York has high city income taxes, but low property taxes. The income taxes are progressive because they have high standard deductions – a family of three can take a standard deduction of $25,000 overall. The city also has high corporate taxes, but they don’t affect families of three making $75,000.

  2. Paz says:

    The video might just be the funniest thing I have seen this week.

    I think your point on Midwestern “gentrification” is well made. True gentrification in the stage-model sense doesn’t seem to be a huge issue in the Midwest. However, “economic redevelopment”, with the top-down emphasis on public-private partnerships is a much more obvious force and does a lot more in the Rust Belt I think. It’s apples and oranges.

  3. JG says:

    TAXES: I am surprised to see INDY and so many other midwestern cities this high on the list. I would want to look at this data stratified among different income levels and groups in society. Additionally it would be helpful to consider STATE level taxes. For some areas those many in fact be quite high and used to fund things at LOCAL levels, thus keeping a city or local tax level lower. Still even with methodologic corrections or alterations, the midwest is not representing well. I suspect INDY took a big jump due to recent property tax increases.

    HSR: The map of cooridors seems to make connections to some distant, medium population areas. I hope the money is prioritised where more immediate demand is high – I suspect SoCal, Chicago area, and the NE. Consider the line from Dallas to Texarkana and then Little Rock. That is a lot of ground to lay tracks on to connect a low density, modest city like Little Rock to Dallas. I still question the environmental, energy, and economic benefits of investing in HS passenger rail; as opposed to expanding freight rail efficiency in the US, to cut down on the number of trucks making cross-country trips that is wasteful, expensive, and dirty. In an ideal world, we would address both at the same time (and maybe are.)

  4. Anonymous says:

    On the Taxes rankings: I think there’s something wrong with how they calculated property tax values. $4000 for property taxes in Indianapolis? I suspect they probably had some sort of benchmark residence possibly costing around $250,000 and then looked at the average property tax rate for the city. The problem with this approach is that $250,000 can go far in some places in the country and not so in others. You’ll get a very nice upper-middle class house in Indy for that much but in SF you’ll get a 400 sf studio in the Tenderloin.

    I believe if they would have adjusted their base residence according to the cost of real estate in various parts of the country Indy would have been a lot farther down the list.

    garbage in – garbage out

  5. Alon Levy says:

    JG: apparently, the South Central corridor was put there because of pressure from Bill Clinton. That’s how old the map is. Currently the high-speed rail plan in Texas is to connect the cities in the Houston-Dallas-San Antonio triangle, without extensions to Oklahoma, Arkansas, or Louisiana.

  6. JG says:

    THANKS ALON: I have seen a similar map showing the triangular TEXAS cooridor. I would agree that could be a heavily used HSR line. I see similar cooridors though through the SE, I would hope would be re-evaluated or shelved until the NE, SoCal, and the Great Lakes areas recieve HSR. (FL may be an exception due to congestion along the coast, however I find FL a bizarre place and will not begin to analyze how people there live.)

  7. Alon Levy says:

    Florida’s rail issues are a bit weird. On the one hand, it has enough empty space between its metro areas to make a viable HSR line. On the other, the way its metro areas are laid out, it’s hard to get from Miami to Orlando to Tampa without reversing direction somewhere. The best that can be done is a three-legged configuration meeting near Winter Haven or Kissimmee.

  8. Anonymous says:

    I see Charlotte and Atlanta are in the top 15 for taxes- I think that puts to rest the notion that high taxes discourages investment and population growth.

    It costs money to have a nice city- things like parks, schools, roads, public transit, and museums are not free.

  9. Alon Levy says:

    Anon: some towns are rich enough to be able to afford low tax rates and high spending at the same time. Part of what fueled suburbanization in postwar America is the proliferation of towns with no lower and lower middle classes, which meant the tax base was large, but there was little need for social spending. This made it easy to have high spending on schools, parks, and roads without very high tax rates, attracting more people (at least until minorities and poor whites started moving in, causing the upper middle class to flee to the next town out).

  10. JG says:

    I hate to be one to push MORE taxes, however I have discussed with others an idea of METRO tax rates for cities that have spilled over their previous city limits. In Indianapolis this would essentially take money in the form of local income taxes from the out-lying 8 counties for reinvestment in Indianapolis infrastructure. The rationale is to prevent the urban core, that supports the outlying suburbs, from rotting and ruining the entire area. Certainly this is not a permanent solution to Indianapolis’ woes but would help while the city works on attracting back wealthier business and residents. (They are working on this, right…?)

  11. thundermutt says:

    JG, to borrow a bit from both Aaron and The Beatles:

    All you need is jobs.

    Or Steve Jobs, maybe. :)

    But seriously, a thriving city depends upon job creation and job growth. Merely attracting “people with money” won’t do it. You need, as Aaron points out, risk-takers.

  12. Stephen Gross says:

    Just found out about your blog–looks awesome and I look forward to reading it regularly.

    I’ve lived in a number of midwest cities, and though each one has its charm I worry a lot about the future of them all. Midwest suburban residents have a distinctly active dislike of their central city cores. At least, that’s what I’ve run into. In contrast, the NYC-area suburbanites I have met don’t particularly want to live in the city, but have a healthy appreciation for the economic engine that it provides.

  13. The Urbanophile says:

    Stephen, thanks for reading and the comment. I’m sad to say it, but you are probably right on that point.

  14. Alon Levy says:

    Stephen: the NY-area suburbanites I know have an appreciation for the gentrified parts of Manhattan and Brooklyn, but that’s it. They never go further uptown than Columbia, and tend to shun even areas outside their comfort zone. I’ve never seen any of them even go to Chinatown or the East Village, much less Harlem, much less anywhere in the Bronx or Queens.

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