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Tuesday, October 13th, 2009

A Better Road to Clean Water Act Compliance

I’ve noted before that the astronomical cost of Clean Water Act compliance for our cities was a killer. Most older cities are also struggling with deteriorated street infrastructure that would require another massive dose of spending to correct. Also, in the Midwest, most cities have street networks that are not even right in their very conception for the modern day anyway. And, they need to make major investments to create a more green city as well. A plan out of Philadelphia shows the way to kill three birds with one stone.

With the most ambitious program of its kind in America, Philly is looking to remediate its combined sewer overflow problem with a massive program of green building designed to prevent the problem in the first place.

Philadelphia has announced a $1.6 billion plan to transform the city over the next 20 years by embracing its storm water – instead of hustling it down sewers and into rivers as fast as possible.

The proposal, which several experts called the nation’s most ambitious, reimagines the city as an oasis of rain gardens, green roofs, thousands of additional trees, porous pavement, and more.

All would act as sponges to absorb – or at least stall – the billions of gallons of rainwater that overwhelm the city sewer system every year.

The plan’s complex funding formula would raise rates somewhat but also attract grants and encourage private investment.

Further, the Water Department says the city’s greening would result in more jobs, higher property values, better air quality, less energy use, and even fewer deaths – from excess heat.

For those who aren’t familiar with the term, a combined sewer is where storm water runoff and sewage from buildings is carried in the same pipes. This was how sewers were built back in the day and were a huge improvement in public sanitation at the time. However, in heavy rains, the storm water runoff overwhelms the capacity of the treatment system, and the rest backs up in basements, pools on the streets, or is simply dumped into a nearby river, contaminating the environment with untreated sewage. Cities are being forced to largely eliminate these combined sewer overflows as part of the Clean Water Act.

The typical solution to this is to spend a few billion dollars building a “deep tunnel”. This is a huge storage pipe bored into bedrock deep underground, which holds excess sewage until after the storm when the treatment plant can process it.

There are a few problems with deep tunnels:

• They are ridiculously expensive. Washington, DC is spending $2.2 billion on one, Indianapolis $1.6 billion, Cincinnati $3.5 billion, and Cleveland $5 billion – or thereabouts. The prices seem to vary depending on the source you read, but the operative term is always “billion”.
• Like all projects designed to deal with peak of the peak capacity, it will be un-utilized or under-utilized 90% of the time. It’s mostly wasted capacity. If you can, it is generally better to use demand management techniques to smooth out demand spikes, such as congestion pricing for roads.
• It’s a hack. We’re still basically taking clean water (well, not entirely clean, but that’s another post), combining it with raw sewage, and creating even bigger amount of, well, sewage. That doesn’t sound too smart.
• It adds zero to the city. What does your city get for a deep tunnel no one can see? Not much. The environmental benefits will never generate a rational economic or recreational ROI and no one even attempts to justify it on that basis. We are simply doing this because we’ve decided it is the right thing to do.

The cost of this will add yet another incentive for people to move to suburban or exurban districts that are not part of the combined sewer zone to escape paying the sky high bills that will result. Those newer areas were built from the ground up with separate storm water and sanitary sewer systems. Sewer bills in Indianapolis are on their way to over $100 per month – triple suburban rates. This will certainly hurt low income people and make them look even more strongly at the collar counties.

Philadelphia is showing a better way to tackle this problem. Instead of building a deep tunnel for billions and getting more or less no return, it is looking to spend money at get something for it in terms of improved street and green infrastructure and more trees and greenery – while preventing the creation of billions of gallons of contaminated water in the first place. In short, exactly the type of demand management solution we should be looking at. There’s no guarantee the EPA will go along with them. Cincinnati floated this idea and it got shot down. But given the potentially huge benefits, it ought to be pushed with full vigor.

Consider the possibilities. Instead of a place like Indianapolis tripling sewer rates to dig a deep tunnel, then having to turn around and sell its water utility (a moving Cincinnati is also looking at) to raise funds to repave streets that, even if fixed up, still are not relevant to reinvigorating the urban core for the 21st century, why not instead do something like this? I was thinking about it just the other day walking past a construction zone on the Cultural Trail and seeing the rain gardens being built there. Why not use the billions for sewers to rebuild the streets with rain gardens, new curbs and sidewalks, bike lanes, new permeable pavements, trees and native grasses, etc? This would not be gold plated a la the Cultural Trail, but just what the new basics of a thriving urban environment today ought to look like. Think of the possibilities:

• CSO overflows fixed
• Streets re-imagined and upgraded
• New state of the art green infrastructure built

That’s called a trifecta. Any city that hasn’t already built a deep tunnel should launch a full court press on this – even it has already reached a settlement with the EPA. There are certainly challenges to overcome – I hear permeable asphalt can’t be salted, for example, a problem in a region with lots of snow – but technology is getting better every day and where there’s a will, we can find the way.

Cities that don’t do this, and go with the old school approach, face the serious of risk of building the civic equivalent of the new Comiskey Park. That is, the last of the 70’s style stadiums that were obsolete as soon as they opened as a new era of fan friendly ballparks debuted. Don’t be that city. Kudos to Philadelphia for really leading the charge.

President Obama is bringing a new focus on cities to the White House. If I could pick only one area he could make a huge difference in for our cities, it is in changing the game on Clean Water Act compliance. If he pressed the EPA to embrace a forward looking vision of using this type of green infrastructure program, it could be a huge force in increasing the attractiveness of our urban cores in an era when that is more critical than ever. And if the feds picked up the cost of this – and nothing would help cities more since it would remove a huge financial disincentive to live in the city – it would be the ultimate urban game changer. I’d urge the President to make this happen and our city leaders to go all out for it on their end.

Sunday, October 11th, 2009

Chicago Transit: From Good to Great, Part 5 – Getting It Done

This is the fifth and final installment of my series on taking transit to the next level in Chicago. Previous installments were:

• Part One: Building the Vision
• Part Two: Raising the Bar on Design
• Part Three: Cost Containment and Governance
• Part Four: Paying For It

As I write this, Chicago has just announced another massive transit revenue shortfall. The CTA’s budget deficit for next year is a projected $300 million – an incredible percentage of the overall budget. The need for change is clearly more urgent than ever. While we probably can’t look to raise revenues in the current economy, a lot of ground work needs to be laid to get to where we need to go.

Who Should Lead the Charge for Change?

The reality is that the CTA and the existing transit agencies are not going to be able to drive this themselves. The CTA is only one of the service boards. And many of the transit projects on its own system aren’t even driven by the agency, but by other organizations like the city DOT. The CTA has its hands full just operating the system. And it doesn’t have the clout to really drive regional change.

So who does? In Chicago, it starts with the mayor. It is critically important to convince the mayor to make transit a top priority for the city. He has to look at the CTA the same way he looked at Millennium Park or Chicago 2016. If it isn’t important to him, it won’t be important to anyone else either. As Mayor Daley contemplates a possible fifth term, I hope he considers what he wants to make the signature issues of that term, and what he wants to leave as the capstone of his legacy. Clearly, there are major issues of importance in the city: youth violence and rising crime, improving the schools, etc. But I believe transit needs to be on the list. Not least of which because it is vital to economic development in the city, and thus the city’s long term fiscal health, and also to neighborhood revitalization in many struggling parts of the city.

Ok, so that immediately begs the question: Who can get the mayor to put this at the top of his agenda? Ultimately, I believe it has to be the leadership of the business community. If you look at major civic change in most cities, including Chicago, the business community has been a big driver. That needs to be the case here as well.

I mentioned before that Metropolis 2020 will soon unveil their plan for Chicago transit. They are an operation of the Commercial Club, which represents the major corporations in town. Still, Metropolis 2020 is a behind the scenes type organization that isn’t likely to lead a public charge. I doubt most Chicagoans have even heard of it. They could play a key role, but they are not sufficient.

What’s needed is for some current and former CEO’s who are trusted by the mayor to go to him and make the case for him to take on this issue. They have to make it clear that absent major investment in Chicago’s transit system, business investment in the city and especially the Loop will be threatened. Of course, they have to really believe this themselves. But assuming they do – and the fact that Metropolis 2020 is taking on transit seems to indicate that the business community does feel this is important – then they need to do that sales job.

They also need to stay engaged to drive a community effort to make it happen, with the mayor’s full support. This probably involves creating a committee similar to Chicago 2016 – one that has participation from the key stakeholders that would be necessary to move transit forward. The beauty of this issue is that is – or should be – everyone’s issue. It’s difficult to identify a natural constituency who would oppose it. The Loop business community needs it, organized labor should definitely be on board with a big construction program, various advocacy and grass roots organizations – including many of the mayor’s big critics – want the CTA upgraded, and minority communities want better access to transit and enhanced mobility in their neighborhoods. If there is any one issue that should unite the White, Black, and Latino communities, it should be better transit.

The city coalition should be easy. Of course, the city isn’t the only player. The big problem is likely to be suburban areas and the power structures in Springfield. Clearly, those are areas that need to be tackled, and that’s one of the group’s key to-do’s.

The Program for Change

So what does this committee do? Here is what I see as the workstreams that need to get accomplished. Most of these can and should run in parallel:

1. Visioning. Create the end state vision of what our city is like with an enhanced transit system. This includes a holistic, phased view of what is to be implemented. The existing plans can be used as input, but I believe we ought to rethink a bit what our system needs to look like. Many of the current proposed expansions, for example, are simply pet projects of various politicians. Again, I won’t give the answer, but simply say that we need to ask the question.
2. Cost Reduction. Figure out how to drive major reductions in the cost of construction on rail projects.
3. Governance. Rethinking how we ought to organize and run our transit systems, set investment policies, the city-suburb situation, etc.
4. Financing and Legislation. Identifying the preferred financing plan and doing the ground work to get the enabling legislation through the state legislature and for maximizing federal funding.
5. Sales and Marketing Plan. Looking at a short and long term program of making the case to the public and building that demand for the program so that when it is in Springfield and up for a vote in a referendum, there will be clear and overwhelming public support. This is where having that broad coalition is critical.

This creates the plan we need. In parallel, we should start right now, today, dramatically improving the quality of design in our system. And of course we then need to make it happen politically. Once approved, we need a clear focus on execution. I think part of the governance effort ought to look at the best way to organize the new build and capital side of the business vs. the operating side. And I think there should also be ongoing marketing as we deliver on the system to show people how the benefits are actually coming to life.

Doing this won’t be easy. It will probably take some time and cost some money – money that won’t be easy to raise in this environment. Probably it would have to involve a mix of public and private funds to really put together a proper and credible plan.

Again, taking Chicago’s transit system to the next level isn’t going to be quick, easy, or cheap, but it is important to be done. Without this investment, it will be a struggle to merely maintain what we have, and a deteriorating transit system could ultimately be a major stumbling block to the city realizing its civic ambitions.

More Chicago

Chicago Transit: From Good to Great
Part 1: Building the Vision
Part 2: Raising the Bar on Design
Part 3: Cost Control and Governance
Part 4: Paying For It
Part 5: Getting It Done (this article)

Other Transportation Related Articles
The Urbanophile Wins Chicagoland Chamber of Commerce Transit Competition
Transportation and the Burnham Plan
Metropolitan Linkages (high speed rail benefits case)
High Speed Rail (implementation)

Thursday, October 8th, 2009

What’s Killing California?

California has a case of the same disease that felled the Rust Belt. Will the patient survive?

California Failin’

The troubles of California, and their causes, are a widely discussed topic these days. America’s most populated state by far, its successes and failures always loom large in the national consciousness. In the last year we’ve seen the state face a massive $42 billion budget deficit and the humiliation of having to issue IOU’s as payments. Its pensions are radically underfunded and there are other long term structural budgetary problems. Parts of the state were ground zero for the housing collapse and among the highest foreclosure zones in the country. Unemployment, high everywhere, is particularly so in parts of California. California, the place people once moved to, is now the place the move from, as the state is experiencing net domestic out-migration, leading to the prospect of losing a representative in Congress for the first time in its history. A complicated political system has led to decision making paralysis. Even disasters like wildfires have been played up.

There are no end to explanations for this which, unsurprisingly, tend to follow people’s political beliefs. To those on the right, California is the ultimate blue state, with high taxes, an anti-business mindset, and environmental and other regulations designed to send people and businesses fleeing for the exits. To those on the left, California’s problems are the comeuppance for decades of unchecked sprawl, the ultimate car culture, and unchecked exploitation of resources. Whatever your particular policy pet peeve, California must be it.

But is this really the case?

The real problem could be much more simple and yet much more terrifying in its implications. California has simply now outgrown its youth and is now well into its middle age. Like the Rust Belt before it, California is now old. As with people as they age, “chronic lifestyle diseases” hit places too. These are: unfunded liabilities, the end of growth economics, and institutional rigidity, each of which builds on the one before it.

Unfunded Liabilities

I’ve long noted that places have an incredible tendency to accumulate unfunded liabilities, most of them of the “off balance sheet” variety. The temptation to defer problems into the future is simply too great for most governments to resist, hence structural imbalances build up over time. The sources of these liabilities are many, but here are some key ones:

• Deferred Infrastructure Investment. As populations and development grow, infrastructure is built with a lag and generally there is a lack of funds for completion. As a result, cities and states end up with deficient infrastructure for their size, leading to all sorts of problems such as traffic and transit congestion. Clearly, California is suffering here.
• Infrastructure Maintenance. Similarly, cities build some infrastructure, then “sweat the assets” as long as possible. Infrastructure is often not well-maintained, and the periodic capital refresh unbudgeted. Condo associations do reserve studies and set aside funds to meet future capital needs such as roof replacements to avoid painfully huge special assessments, but government do not. I have yet to see any city or state that even has a schedule of major assets and infrastructure with needed maintenance and replacement timeframes, much less funding for any it. California’s Golden Age infrastructure is now aging, and it is facing repair bills merely to maintain what it has.
• Underfunded Pensions. Politicians love to sweeten public sector pensions. This buys both labor peace and a powerful political constituency. These are seldom funded at adequate levels – and with the rapid growth in life extending technology, it’s questionable whether any level of funding is sufficient – leading to major problems downstream. California’s pensions are unfunded by upwards of $300 billion.
• Other Redevelopment Costs. When ever homes and buildings are shiny and new, things are great. But what happens when your building stock gets old like in Rust Belt inner cities, and often no longer meet the functional and technical demands of the modern day, such as sizes, layouts, energy efficiency, etc.?

Add this all up, and it’s a huge bill that eventually comes due. The most important thing to understand about this is that the bill attaches to the territory, not to the people. So residents and businesses can avoid paying up simply by leaving for another jurisdiction. It’s like being able to run up a huge credit card bill in someone else’s name, then skip town.

This ability to run up massive deferred and unfunded liabilities, then leave, sticking other people with the bill, is one of the most powerful forces driving greenfield development. Even if there weren’t a drop of subsidies to, say, suburban expansion, the financial incentive to escape the huge liabilities of central cities and older suburbs is a key incentive on its own.

This why I’ve said it is critical to find ways to prevent governments from accumulating these liabilities in the first place.

The End of Growth Economics

Look at companies and industries. There is a standard growth curve to them. They start out in incubation and infancy, then, if successful, on to growth, then finally to maturity and decline. Why would we think that what is true for firms would be different for places? Why would we think that cities or states are immune from the forces of creative destruction? The answer is, they aren’t.

Having done consulting in the retail industry for some years, I often observed the growth curves played out in companies. Category killers came along and grew and grew and grew, seemingly as unstoppable juggernauts. But eventually, they hit the end of their growth phase, and had to endure a period of wandering in the wilderness. The reasons for this are varied – market saturation and consequent over expansion, changes in the marketplace, insufficient infrastructure and operational disciplines, more nimble competitors – but we’ve seen it played out before our eyes in America. Think McDonald’s, Home Depot, and the Gap.

The logic and economics of high growth are fundamentally different from that of operating a more or less steady state or low growth business. In the growth phase, everything is oriented towards expansion, mostly building more infrastructure to keep up with it. Also, scale economics are in your favor. With more people, for example, you are spreading fixed costs across more bodies and more buildings, so you can spend more money and tax less per capita all the same time. Your brand value is expanding with size, etc. That’s all great if you can pull it off.

But when something causes growth to take a hit – maybe accumulated liabilities, resource exhaustion, jurisdictional limits, etc – the equation changes radically. You can no longer rely on growth to provide unit cost efficiency. You have to start thinking like an operator. That is an extremely difficult mindset shift and requires a totally different set of skills. From what I’ve seen, companies have an extremely difficult time doing this. They generally have to struggle for some time, usually bring in new leadership, and undergo painful structuring. Many of them never really recover. But some do. I think of McDonald’s, which stopped relying on store growth to fuel its engine, but now relies on product innovation (Angus burgers, coffee, salads, etc) and operational effectiveness.

California, for whatever reason, stopped growing. The trends in domestic out migration make this very clear. The fact that total population has not declined doesn’t matter. Most Rust Belt states never actually physically lost population. Their growth simply slowed to a crawl. And it was the most entrepreneurial and high skill classes that fled. In California that his been somewhat masked by outsized productivity in the technology sector and international immigration, but the overall trend is clear. California now has to think like an operator. Welcome to the world of legacy. California is now a gigantic “brownfield”.

As California struggles with this transition, the scale economics start to go in reverse. As people and businesses leave, the unit cost of all those unfunded liabilities looms large. Just as growth begets growth, decline begets decline. If you are young and ambitious, why stay in California and pay off all those pensions? All things being equal, it is much better to leave for a more greenfield location, where you can benefit from running up the credit card, not paying off someone else’s bill. If not arrested, decline eventually reaches a tipping point, as we’ve seen in so many Rust Belt cities.

Institutional Rigidity

The third symptom of civic aging is a creeping institutional rigidity that makes change difficult. In established, mature places, there many, many powerful institutions and interest groups. These can often be forces for good, but too often become barriers to change or getting things done. What’s more, these institutions were typically created in the past to meet the perceived challenges of that time and age, but survive today in a world that is very different. As most institutions are never sunset, and new ones form over time, there is a gradual accumulation of friction over time. Eventually, the gears and seize up.

These institutions can take many forms. Constitutions and political structures, non-profits, clubs and social networks, various trade-offs and political accommodations and deals from over the years, power structures, corruption, local business practices, unions, recipients of government funding, taxpayer or other advocacy groups, political party organizations, business groups, etc. Much is made of California’s many times amended constitution as a barrier to change, but that is only the tip of the iceberg.

As decline sets in, a toxic dynamic takes hold. In a growth mode, it is very easy for everyone to hold hands and sing kum-bah-ya. It’s comparatively easy to cut deals to divide the fruits of prosperity. In decline, those deals come back to haunt. The status quo is failing, but people are still profiting from it. Even in Detroit, America’s ultimate failed city, so many people and groups benefit from the current system that there is complete paralysis. No one wants to give up an inch of hard won gains, especially since in a dismal region there’s little hope of replicating that privileged position or income. Hard times promote solidarity, some say. But the reality is that hard times also often produce selfishness and civic dysfunction as well as people cling desperately to what they have instead of looking boldly forward to the future.

I’ve seen this shift happen in a few cities. Where once civic boosters dreamed of glory and invested their own money into the city, now they focus on what they can get out of it. So too in California. Everyone knows the Titanic has hit the iceberg, but they are determined to loot as many state rooms as they can before shoving the women and children out of the way and commandeering the life boats.

This institutional rigidity is another force driving people to greenfield locations. It’s a global phenomenon. Consider this Newsweek coverage of a study of Chinese industry that notes much lower levels of corruption and better governance in new cities than old.

An intriguing pattern is that governance is best in coastal cities that had very little industry when reform began in 1978. Shenzhen now has the highest per capita GDP in China. The same holds in Jiangmen, Dongguan, Suzhou–all were industrial backwaters in 1978, and responded to China’s opening by creating good environments for private investment and learning from outsiders. Cities that already had industry tended to protect what they had and reform less aggressively.

Jim Russell hypothesizes that this effect of frontier geography explains a lot of the success of the Sunbelt, which industrialized late.

Cities such as Austin, TX and Charlotte, NC have offered a frontier opportunity akin to the one observed in the boomtowns of China. On the other hand, Pittsburgh stagnates. Governmental reform is key for attracting investment and stimulating growth. This is unlikely to happen in Western Pennsylvania, leaving this region at the rear of economic globalization.

For Pittsburgh, substitute California and you’ve got a pretty good picture.

Writers like Joel Kotkin like to reminisce about the Golden Age of California, and the leadership of that age from enlightened members of both parties like Pat Brown and Ronald Reagan. But you can never go home again. That letter jacket from your high school glory days might still fit, but you’re never going back to the state finals. Brown and Reagan were products of their era – an era that no longer exists. While they might be better executives than Gray Davis and Arnold Schwarzenegger, even if you assume they could get elected today – unlikely – I doubt they’d prove much more effective.

It’s been said that China will get old before it gets rich. Well, California got rich first – but it still got old. Not old demographically, but old civically. The polity of California is now well into middle age. As with people, places that reach that point experience a mid-life crisis as they look back longingly at the optimism, energy, flexibility, dynamism, and endless capacity for reinvention of youth. That’s often a bitter pill to swallow.

Can California Recover?

Can California pull out of this? It’s hard to point to a lot of examples that offer hope. But California has a lot going for it. It’s got the stunning climate and physical geography. Cities like San Francisco and Los Angeles remain powerful. In addition to the technology and film industries, California also has a robust agricultural sector, legal and illegal, an entrepreneurial immigrant base, as well as an American hub for contemporary art and other creative fields besides the movie business. So there’s a lot of assets to build on.

The challenge is that these existing strengths are part of the institutional rigidity. Another way to say “build on assets” is “defend the past”. Other than the its physical setting, the assets of California only exist because previous generations didn’t build on assets. If they did, Silicon Valley would still be orchards, not the powerhouse of the global technology industry. If a city or state is failing to create new industries, it has economically stagnated, no matter how prosperous it might be or appear for a time.

Looking at the Rust Belt, we do see that tier one global cities have managed to renew their cores. Chicago, New York, and Boston have glittering city centers and a migration back to the city of upscale residents. This is a far cry from the sour days of the 70’s. But if you look beyond those zones, you see places with surprisingly unimpressive metro area statistics in many regards. And the states they are in look at lot like, well, California. A handful of metro thriving cores can’t energize an entire state or even metro area. Places like New York and Illinois have major structural challenges of their own. And California has already followed this program, with booming regions that are among globalization’s winners, with many larger areas of losers. Of course the alternative is worse – look at Michigan, with the same failures and no global city to even partially make up for it.

The global city phenomenon perhaps illustrates the way. Cities that have experienced that boom like to pat themselves on the back. Indeed, there has been some good leadership along the way. But when something happens in most similarly situated cities, you have to look first to a common force acting on them. Chicago, New York, London, etc. all had their own Rust Belt eras and suffered in the 70’s and 80’s. Starting in the 90’s a large number of what we now call global cities had urban core booms. As Saskia Sassen noted, the new networked global economy requires new financial and producer services, that tend to be concentrated in global cities. In effect, the global city is an emergent property of the globalized economy, just like the company town was in a previous era. I noted previously with regards to Chicago that it was the artifact, not the architect.

To me that shows that a state like California needs to look at and understand the macrotrends affecting it and the world, and figure out how to position itself to profit from them. One area it is trying to do so is in the “green economy”. I’ve got a few problems with “green jobs”. The first is that the entire concept of a green economy is a transitory one. Likely in a decade or so it will be gone. There will no longer be green industry, but only industry – it will all be green. This immediately prompts the question of whether, since we’re not going a very good job of competing in traditional industry, we’ll do any better in green industry. Indeed, China and others are already making a move here.

The other aspect of this is the huge gamble California is placing on the environmental trend. That is, it has imposed the strictest environmental controls in the world. There is no doubt this is one factor causing a lot of short term pain. But the state hopes that in the long term this will attract talent and, what’s more, position it for future success because other states will be forced into the same painful restructuring for environmental issues in the future and California will be ahead of the game. California’s ultimate goal here is clearly to push to federalize its policies to prevent any other states from not following its lead and producing a differentiated product. Because international migration is so much more difficult than domestic, this would, in theory, eventually help staunch the flow of people out of the state. Other states no doubt realize this and will resist the push at the federal level. It remains to be seen how this turns out on many fronts.

Other than that, it is difficult to identify a strategy California has other than more of the same. While the green realm might be a good place for California to put some chips, I don’t think piling everything on one square is a good idea, so new ideas are clearly needed.

And these economic strategies will only be ultimately a success to the extent that they enable California to reach an equilibrium and either successfully make the transition to an operator, or somehow reignite growth.

I would suggest that California and other maturing jurisdictions should look to partner with academics in our economics departments, and especially our schools of business, who have studied industry growth and maturity curves, and how to manage that transition over time, strategically and operationally.

Has the United States Reached Maturity?

Given the problems of California and the current Great Recession and associated talk of American decline, it’s worth asking the question: has the United States matured? That is, are the life cycle forces that are hurting California now affecting America as a whole?

Let’s consider our three harbingers: unfunded liabilities, the end of growth, and institutional rigidity. Clearly, we’ve racked up huge unfunded liabilities, just like every industrialized nation. I believe we are projecting a deficit of $1.8 trillion this year alone and that doesn’t even count off balance sheet problems like social security and medicare. So a definite check mark in that box.

As far as institutional rigidity, clearly we observe some. There is no doubt that it has gotten harder to do things in America and that one of the key advantages of China is its greenfield location and lack of this cruft, not just its low labor costs. Regulatory arbitrage, for example, can be a powerful motivator. Still, I haven’t observed a ridiculous amount of change here in my lifetime. At the federal level, it has always been hard to do things in America, by design. I do argue that in some areas we’ve turned the dial too far. In a country that desperately needs to make transportation investments, it shouldn’t take a decade to get approval to build a new transit line, for example. But on the whole the United States still feels like a fairly dynamic society to me.

Which brings us to growth. Clearly we have been in a major recession. The question is whether our best days are behind us. I say clearly No here. America is demographically healthy. Compared to Europe we have comparatively high birth rates, more or less replacement rate, in our native born population. This shows a society with confidence in the future. Also, people from around the world are still voting with their feet to come here. And I believe we’ll get back on economic track eventually.

But this is where the warnings signs should be looked for. If growth dries up, I believe the institutional rigidity will enter that toxic cycle and we could be in trouble. Keep an eye on immigration. When people stop wanting to come here – because they don’t want to pay taxes merely to pay off yesterday’s unfunded liabilities, because they think there are better opportunities elsewhere, or whatever – and especially if Americans start leaving in any material numbers, we’ll know we have a major problem on our hands.

Obviously no one can predict the future, but I remain bullish on America.

Tuesday, October 6th, 2009

Replay: Failure of Ambition

[ I am re-running this article for two reasons. One, after Chicago failed to win in its quest to host the Olympics, it's worth reminding us that there's nothing wrong with dreaming big and aiming for the top. You won't always win, but if you never get in the game to begin with, you are guaranteed to fail. I believe in stretch goals. If you don't fail to achieve at least a few of your ambitions, then you probably didn't aim high enough. As Theodore Roosevelt famously put it, "It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat."

That doesn't mean the ambition is a substitute for covering the basics. Far from it. I've long said the mark of a great city is in how it treats the ordinary, not the special. A handful of monuments or events don't make a great city. But nor does a steady diet of the mediocre. Man does not live by bread alone. I don't think there is any conflict between high ambition and taking care of every day business. A great city needs to do both. Nor does this mean you can't criticize or take issue with any particular ambition. "Make no small plans" is not a get out of jail free card.

The second reason is for the Midwest to enjoy a little Charlotte schadenfreude. Burgh Diaspora pointed us at this piece asking questions about the future of Charlotte. "The paper is filled every day with announcements on building loans for both commercial and residential real estate in default. The Building Cranes are disappearing. Projects are stopped in mid construction. The lot around the corner from my house that was supposed to be a high end luxury townhouse complex but hasn't had a worker on it in over six months. Pink slips are still handed out, bonuses aren't what they used to be. No luxury auto and jewelry displays this past Spring. All of the finance committees at the private schools are worried about next years enrollment as the students' parents are transferred or pink slipped." And, "The mayor ran an ill-fated campaign for Governor so the last of the Charlotte Trinity is gone. Charlotte is a ship without a captain." See Jim's take - Charlotte Bust - as well. And remember it since I'm taking his core idea for my next post

This article originally ran on September 28, 2008 ]

Why did the Midwest fall behind? Why do its big cities continue to lag the top performers nationally? It’s easy to blame this on structural problems, but could the problem simply be a lack of will to compete?

Burgh Diaspora points us at this Time magazine article on Charlotte. As I previously noted about Nashville, Charlotte is a city of high ambition. They look at the boomtowns of the region like Atlanta, Dallas, and Phoenix and say, “Why not us?” Quoting:

“‘To understand Charlotte, you have to understand our ambition,’ says chamber of commerce head Bob Morgan. ‘We have a serious chip on our shoulder. We don’t want to be No. 2 to anybody.’ Civic leaders often compare their city to New York, Chicago, and even London.”

London? Ok, there’s more than a whiff of hubris in this Charlotte story. They claim to be the #2 banking center, but that only includes commercial banking, and is a heckuva lot less true after one of its two champions, Wachovia, got swallowed up by Wells Fargo. And their claim to having weathered the housing storm successfully is belied by the fact that Charlotte is ground zero for the edge subdivision turned nouveau slum story.

Still, when you compare it to most Midwestern burbs, the difference in sheer ambition is astounding. Charlotte measures itself against London, New York, and the top cities of the world. Most Midwestern cities other than Chicago and Minneapolis would be happy to be known as the “Star of the Rust Belt”. That’s like saying your ambition is to win the losers bracket in the JV playoffs again this year. The Midwest has, to a great extent, even given up on competing. When I talk to my colleagues in India or Argentina, what strikes me is how hungry they are. These are people who’ve gotten a taste of success and are desperate for more. They want to hit it big and take what they see as their rightful place in the new world order – and they are willing to kill themselves to get there. The most astounding thing to me is the work ethic in India. Here’s a place where it is still dotcom 1999. Anybody on my team there could literally walk across the street for a 30-50% bump. But instead they are in the office Saturdays and Sundays, killing themselves to hit the deadline. Places like Charlotte, Nashville, etc. have a bit of that same attitude. The Midwest, by contrast, sits, as Richard Longworth put it so well of Cleveland, “sour and crumbling”, unable to even muster the will to understand the world it is in, much less complete in it.

Charlotte gets it. As their leaders say, “Charlotte’s nine FORTUNE 500 companies help run the city, not only by writing checks–Bank of America and Wachovia have pledged $15 million apiece to build new cultural centers–but also by helping to write plans. ‘We’re a pro-business city like none I’ve ever seen,’ says Center City Partners head Michael Smith. ‘It’s true about Southern hospitality, but there’s a real hunger here.’ It can be jarring to hear Charlotte’s power brokers explain that it’s important to improve their city not for its own sake but for the sake of its businesses, which need high-quality culture to attract high-quality talent. “

And “While the rest of the country is sinking, Charlotte is soaring, with 28 construction cranes downtown. It’s got the nation’s least-battered metropolitan-housing market, lowest office-vacancy rates and fastest-growing airport. It hosts the NBA’s Charlotte Bobcats and the NFL’s Carolina Panthers. Its center-city population has doubled since 2000, and its light-rail system, just a year old, is already approaching its ridership goal for 2025. Meanwhile, ribbon-cuttings are scheduled for the NASCAR Hall of Fame, three museums, a theater and an African-American cultural center by 2010.”

Again, some of the stories are oversold, but the cumulative effect is real. I’ve been known as a light rail skeptic for small sprawling cities, but regardless, when you decide to do something, do it. Not one comparable city in the Midwest has cranked out a rail system while Charlotte and Nashville put theirs into operation and started remaking their cities to take advantage of them. And a little hubris isn’t bad, when it motivates you to try to live up to your own big talk. In the Midwest, all we ever here from smaller cities is how they can’t compete with San Francisco or New York and have to get by on table scraps. Yet in Charlotte it seems every other person is a transplant from the Northeast. They figured out that they can build an offering that is capable of attracting the right kind of person – if they show a civic ambition that matches the personal ambitions of their target audience.

There’s still room in the club. There is an opportunity out there for one of the smaller Midwest cities to step up and claim their place at the table. But right now it looks like only Chicago and Minneapolis wants it. It’s the parable of the talents, played out in real life. Will anyone else step up? Only time will tell.

PS: One of the top sources of migrants to Charlotte: the Rust Belt.

Sunday, October 4th, 2009

Midwest Miscellany

The Other Side of the Tracks

If you like Midwest Miscellany and would like to have more good links, I suggest subscribing to Reconnecting America’s daily email blast called “The Other Side of the Tracks”. It focuses on transit oriented development and is an interesting collection of 6-12 of the best pieces from around the web that day. To subscribe, just email info@reconnectingamerica.org and ask to be added.

The Lake Wobegon Effect

A reader emailed me an interesting response to my open thread about the best and worst Midwest characteristics. It was about my personal pick of the active discouragement of the pursuit of excellent as the worst characteristic, and some of the reactions that spawned. Here’s an edited version of the note:

I subscribe to Salon.com, and yesterday there was a little essay by Garrison Keillor, who, as you may know, had a stroke recently [he's fine]. Point being, it made me reflect a little more on the Midwestern mindset and how close he gets to capturing it. It’s the place where “all the women are strong, all the men are good-looking, and all the children are above average.” Don’t know if you’ve been a fan of “A Prairie Home Companion.” I read “Lake Wobegon Days”, which was and is to this day, IMHO, the best description of the best and worst of the Midwest mindset I’ve ever found.

The point is the “Lake Wobegon Effect“. Wikipedia describes it as “the human tendency to overestimate one’s achievements and capabilities in relation to others.” The article, with citations, goes on to say, “The effect has been found repeatedly by many other studies for other traits, including fairness, virtuosity, intelligence, and investing ability, to name a few. It is similar and may be related to in-group bias and wishful thinking.”

Got me thinking about this in terms of Midwestern cities and the Midwestern mindset — under the surface modesty, there is a quiet smugness and complacency — arrogance, even — the Lake Wobegon Effect — that overestimates the quality of Midwestern life. As you and some other commentators have pointed out, Midwesterners are quick to blame external forces for the demise of their cities, which is entirely consistent with a core conviction that we in the Midwest secretly feel ourselves JUST FINE — maybe not quite as smart or modern as the coastal folks. But certainly better than average. Yes, we have our problems, always have, always will. But don’t focus on the negative. We never claimed to be PERFECT — just above-average. Whatever our problems, we’re better off than most, and, when you come right down to it, things are, basically JUST FINE. We get Gentlemen’s C-pluses.

Which, when you think about it, is all anybody should want, because if you get too big for your britches or think TOO BIG, you’re sure to get a comeuppance. Pigs get fat; hogs get slaughtered. Pride goeth. Etc. We’re not show-offy, always drawing attention to ourselves like the over-achievers. The quarterbacks, prom queens and class valedictorians all must have “something to prove.” They’ve got to be over-compensating for something we have that they’re missing. Only logical explanation. They’re the type who gets all worked up about things instead of appreciating what’s right under their noses. They’re belly-achers with Bad Attitudes who won’t ever accomplish anything because they don’t respect how Things Get Done Here. Why, they can barely hide their scorn for their neighbors, the rest of us. With such a superior attitude, their subscriptions to the New York Times (don’t think we don’t know) and their worrying about things going on in places that don’t affect us at all, who’s going to vote for them? Who do they think they are, anyway? Or, they’re day dreamers who come up with Big Schemes rather than do what everybody else does, which is Work Hard — Work Hard and Save. The ones who sing “Over the Rainbow” instead of feeding the hogs. You know what they lack? COMMON SENSE. They don’t understand that if this new idea of theirs was any good, somebody would’ve already figured it out and put it in place. They just don’t get it, that, in this town, IF YOU BUILD IT, PEOPLE WON’T COME; They’ll stay away to make a point — or maybe show up once, just for a good laugh. And you know what? The prom queens and valedictorians, the know-it-alls with the superior attitudes who want to change things just for the sake of being different — they usually come to a bad end. They’re never satisfied, they get divorced, they lose their business, their kids get dangerous ideas and end up on drugs or pregnant. Or they move away (another form of coming to a Bad End), which is fine with us. They never really did belong here. Probably best for all if they do move somewhere else.

And yet, these are the people who are going to show up with casseroles and jello molds when somebody in your family gets sick. They’re the ones who can spot a phony a mile away, and are There When You Need Them. Aargghh. These are the people whom Dorothy missed so much that she clicked her heels and gave up Oz and Technicolor to return to. (Wish the “Wizard of Oz” had been one reel longer. Would love to know if Dorothy lived to regret her decision. Wonder if she settled down happy, tried to challenge Miss Gulch and start her own broom factory, or ended up trying to conjure Glinda nightly and pray for another cyclone.)

If you haven’t read “Lake Wobegon Days”, think about doing so. In it, Minneapolis figures as Sodom [read: NYC]. The tension that gets set up between the good decent, hard-working people in Lake Wobegon, and those who leave for Minneapolis and return from time to time with foreign uppity strange ways, dubious morals, get-rich-quick schemes and all the rest of it — good and bad — you’ll really get a kick out of it, and, perhaps, get a better handle on articulating what it is that makes us love this region enough to get so damn exasperated by it.

Also brings to mind the lyrics of the great ode to the Midwest — Professor Hill’s “Mothers of River City” number in “The Music Man”, using the pretext of the pool table in the community as a basis for starting the boys’ band (for which Hill will provide uniforms and instruments) — “List’nin’ to some big out-a-town Jasper, hearin’ him tell about horse-race gamblin’. Not a wholesome trottin’ race, no! But a race where they set down right on the horse! Like to see some stuck-up jockey’boy sittin’ on Dan Patch? Make your blood boil? Well, I should say!”

Of course, “Music Man” is the success story that your blog keeps rooting for — out-of-town slick salesman comes in ready to fleece the locals with some fancy, useless ideas. Local intellectual dissident, the librarian, with her Dangerous Books is naturally seduced by the guy, too foolish to see through the scam. City Fathers and Mothers set out to expose the the rip-off and protect the populace. So far, not looking good. But, somehow, miraculously, the good values rub off on the outsider, Marion the Librarian is exonerated, and the town ends up with the damned marching band and a parade. Template for your happy ending. Toledo is saved!

The Next Youth Magnet Cities

The Journal ran an article this week that made the rounds asking six experts to pick the next “youth magnet” cities. Perhaps unsurprisingly, this was an utterly conventional wisdom list: DC, Seattle, NYC, Portland, Austin, San Jose, Denver, Raleigh, Dallas, Chicago, Boston. Did the Journal really need to convene a panel of experts to come up with this list? Why not ask six random people off the street if you aren’t going to go off the menu, as it were.

Are these really the big stories of tomorrow? As we see from bubble mania and other things, humans have an incredible tendency to simply project present trends indefinitely into the future. The reality of change has a way of sneaking up on us, however. Jim Russell is right to call this “yesterday’s news”. What matters is where the hockey puck is going.

I’m not surprised, but also not discouraged, to see so little Midwest representation on the list. I happen to think the future is one of wide open possibilities. Tomorrow’s winners are yet to be chosen.

Wisconsin Bio-Tech Boom

Wisconsin is doing so well in bio-tech that Minnesota is very concerned about falling behind. This prompted the Minneapolis Star-Tribune to do a two part series on it. Part one is called “A bio border battle“.

Wisconsin has become the regional biotech equivalent of traditional high-tech powerhouses like Boston, Silicon Valley and Research Triangle Park in North Carolina, thanks to strong political support, an influx of investor capital and what is arguably the most formidable university technology transfer program in the country.

“Wisconsin is a very exciting place,” said Peter Bianco, a former executive with Nerites Corp. and a current scientific advisory board member at Flex Biomedical in Madison. “You just get this sense of forward motion. Wisconsin is doing something right.”

The article gives a slew of facts, including noting that since 2007 three biotech spinoffs from UW-Madison sold over over a $1 billion – more than the combined total of the 107 spin-offs from the University of Minnesota in the past 25 years – and that the UW research park currently houses more than 115 companies.

The second part is “Badger state’s biotech boom“. It talks all about the streamlined and entrepreneur friendly IP policies and processes of the University of Wisconsin. Definitely worth a read.

Detroit to Demolish Lafayette Building

Perhaps there is something wrong about valuing the fate of buildings over that of people. Yet most of us cannot helped but be moved by grand expressions of the human spirit, often given corporeal form in the great buildings created by civilizations of all ages. Often our grief is greater for lost architecture than for lost peoples.

Detroit has one of the best and largest collections of pre-war skyscrapers anywhere in America. It is simply one of the 2-3 most important. Yet so many of these buildings have fallen victim to neglect and demolition, as they are functionally obsolete and market demand will not support renovations.

The latest victim is the Lafayette Building, scheduled for demolition soon. It is the twin tower structure in the background:

Here’s a shot of some roof detailing:

Yes, this building is in terrible condition. There are actually trees growing on the roof which led to much of the damage. This interior shots will give you a sense of how bad a shape the building is.

If you want to see more, just click this flick search link.

I understand that in a place like Detroit hard choices have to be made. But the loss of historic structures like this isn’t just a loss to Detroit, it’s a loss to America and the destruction of a piece of our shared heritage. And for the city, this isn’t just a loss of the past, but of the future as well. As we look across America at where urban revitalization has happened, it is often historic areas. Detroit is facing a challenge unlike any other. But I’ve got to believe that the answer doesn’t lie in demolishing precious historic buildings like these.

More coverage on this demolition is available over at Detroit Blog.

Time: Assignment Detroit

Time Magazine is already filing stories from their new Detroit bureau. Here is a link to their series home page. And here are some selected pieces to give you a sense of what they are up to:

• Why Time, Inc. is in Motown
• The Death – and Possible Life – of a Great City
• For Iraqi Refugees, a City of Hope

The New York Times took a look at Time’s effort in a piece called “Time focues on Detroit, a city sicker than journalism“

More Detroit Agriculture

The Toronto Star has a major piece on urban agriculture in Detroit called “From Motown to Hoetown“. Here’s an excerpt:

“Detroit might seem an unlikely champion of urban agriculture, as the birthplace of the automobile and its farm-devouring offspring – urban sprawl.

But, it has become ground zero for North America’s local food movement.

Last year there were roughly 550 gardens in the city’s urban farming network. This year there are more than 850.

Driving around the city, you can see everything that will make up your dinner – chickens, goats, mushrooms, plum trees, honeybee hives. I passed a whole block growing shoulder-high corn. A horse grazes outside a barn behind a high school. Edith Floyd parks her tractor behind her house – 12 kilometres from city hall, where bureaucrats are scrambling to catch up with the collard greens sprouting on street corners.

Here, a locavore doesn’t eat food that’s travelled 100 kilometres. She eats food that’s travelled 10.

“I picked these this morning,” Floyd says, carrying a laundry hamper filled with watermelons to her stand at the Wayne State University farmers’ market. The chalkboard propped in front reads “Grown in Detroit.”

The article also talks about a person who is looking to do full blown industrial agriculture in the city, though he is running into neighborhood opposition. I think again goes to show that there are some possibilities for the future that exist moreso in Detroit than in any other city.

I’m also interested to see the intersection of urban agriculture with more traditional inner city concerns like food deserts, neighborhood empowerment and social justice. When you look at it through this lens, it is not hard to imagine agriculture as a catalyst for bringing together whites and blacks in a city where racial healing is a prerequisite to civic renewal. You think of terms like local agriculture often in terms of upscale whites buying their organic regional produce at Whole Foods and farmers markets. But in Detroit we also see it as a vehicle for African American empowerment. Can these two very diverse groups somehow find ways to collaborate and start building relationships? It will be interesting to see.

“We’re not just into farming. We’re into community self-determination,” says Malik Yakini, one of the leaders of Detroit’s nascent farming movement. The self-described “social architect” runs an Africentric school and chairs the Detroit Black Community Food Security Network. He talks about food justice – where the community reaps both the nutritional and financial rewards of the food it buys.

His D-Town Farm spans two acres of city parkland on Detroit’s western edge, where little bungalows with rusted awnings still line wide streets and a faded ice cream truck does laps of the yellowing boulevard. The volunteer team running it sells its leafy greens and radishes to local restaurants and farmers markets. Next year, it plans to hire two permanent employees.

“We’re trying to create an economic model, to show how agriculture could contribute to the economic recovery of Detroit,” Malini says, pushing into the brush to reveal a plastic greenhouse where oyster mushrooms will soon grow.

Stay tuned. (h/t @gosner)

Kansas City Arena Turns Profit

Here’s one you don’t see every day. Kansas City is about to get a check for $1.8 million in profit sharing from the Sprint Center arena. The arena was built with the idea that KC would attract an NBA or NHL franchise, but that has proven elusive. Interestingly, the lack of such an anchor tenant actually means the arena itself is profitable. As the article puts it:

“When it comes to visitors, concerts and gross revenue, the building, from that standpoint, is an overwhelming success,” he said Tuesday.

Leiweke said the strong, concert-fueled profits at the arena during the fiscal year that ended July 31 means AEG can be more selective about pursuing an NHL or NBA franchise for the facility.

Any professional team would likely demand big chunks of the facility’s revenues from luxury suites, concessions and sponsorships. That would cut the arena’s ultimate profits.

“The economic model of this building is quite successful,” said Leiweke, who was in town for a preseason NHL match Tuesday night between the Los Angeles Kings, owned by AEG, and the New York Islanders.

“The last thing we or the city want to do is throw away that model and make the arena a loss leader with another tenant,” he said.

“It’s a tougher scenario with a professional team,” he added. If there were a team there now, “I’m sure we wouldn’t be able to write a check to the city for $1.8 million.”

While landing a professional sports team as an anchor for the arena remains the ultimate goal for AEG, Leiweke said the presence of a team also could diminish its popularity as a concert venue. Now, the arena has an abundance of options to offer concert promoters.

The team’s games at the arena would remove up to 50 dates from the calendar and also would likely put much of May and June on hold because of potential playoffs, Leiweke said.

“We want an anchor tenant, but the right tenant and the right time,” he said. “We’re going to have to be patient.

“There’s a lot going on with both the NBA and NHL … I think it’s best for us now to stay focused on keeping this a great arena, and the leagues will sort themselves out over the next two years, and when the time comes, we’ll seize the opportunity.”

It’s rare that you ever hear anyone publicly state that an arena is designed to be a loss leader for a community. Kansas City already has two professional sports franchises, which for a city of its size is probably enough. They already get the branding and entertainment benefits of pro sports. It is worth it for them to go for the trifecta? Is there another region as small as KC with all three major leagues?

National and International Roundup

GOOD Magazine has an interesting look at rethinking cities.

Sid Burgess gives us his “7 Blunders of Sidewalkdom“

Six key lessons from Portland’s urbanism.

Squeeze on tax rolls set to tighten in Atlanta. (via @OtisWhite) and Atlanta Beltline feasibility rises to the forefront.

Oklahoma city MAPS out big plans. Yes, OKC too wants to build a downtown mini-Millennium Park.

The Guardian asks whether California will be America’s first failed state.

Long Island’s Changing Face (NYT). Article on immigration to Long Island.

In parched Los Angeles, the streets suddenly run wet (NYT)

Here’s an interesting piece on the high percentage of non-natives in Seattle. This is a huge difference versus the Midwest and explains a lot. (h/t @OtisWhite)

The Guardian: Gordon Brown signals commitment to high speed rail

Unplanned cities could be the future of urbanism (via @GenslerOnCities)

More Midwest

The Columbus Dispatch has a database of Ohio stimulus projects.

Midwest Home takes a look at Lustron homes. (via Worth Your Attention)

A Louisville blogger compares his city’s biking infrastructure with Indianapolis. (via The Indy Cog)

Chicago
The Chicago Symphony Orchestra: America’s Finest Orchestra (The Telegraph)
Architectural review of the Trump Tower (Blair Kamin @ Tribune)

Cincinnati
About Cincinnati and how I ended up there (Walking Green) via VisuaLingual

Cleveland
Cleveland Orchestra to establish New York residency (NYT)
The Gay Games are coming to Cleveland in 2014 (Plain Dealer)

Detroit
More minorities leaving Detroit (Detroit News)
Michigan is singing the white collar blues (WSJ) – via Rust Wire
In defense of Detroit (Forbes)
Five one way tickets to Michigan please (Jeff Bocan @ Huffington Post)
Detroit mayor’s tough love poses risk in election (NYT)
Can Detroit stop the bleeding? (Jeff Gerritt @ Free Press)

Kansas City
Kansas City has lost top three convention (KC Star)

Milwaukee
Milwaukee lands federal grant to develop water cluster (BizTimes)

Pittsburgh
What’s at stake for Pittsburgh? (Bruce Katz)
Google CEO: Pittsburgh’s economy a model for others to follow (Post-Gazette)

Friday, October 2nd, 2009

Transit Roundup

Guerrilla Bus Shelters in Raleigh

Raleigh, NC is in big need of bus shelters but the city isn’t providing them. So what to do? According to New Raleigh, if the city won’t, then the public will.

The Raleigh area needs more guerrilla art and architecture….Something else Raleigh needs more of is bus shelters. I could probably count on one hand how many covered bus shelters are in the downtown Raleigh area. The city has sponsored multiple transit stop competitions and even with the new R-Line being seemingly successful, the city still lacks shelter for public transit riders….While this isn’t a complete combination of the two, some local artists have bounced around the downtown area and installed impromptu bus shelters to make a statement. The statement is clear: IF THE CITY WON’T BUILD SHELTER FOR OUR PUBLIC TRANSIT RIDERS, WE’LL DO IT OURSELVES!

And they did. Here are a couple of pictures:

Cities hate this stuff. They will always claim safety and such is the reason. There is something to that. But it is also true that when the citizens have to take matters like this into their own hands, it is an intolerable rebuke to those in power who have failed to provide the service the community wants and needs. It goes back to what I said about the weakness of Detroit’s government and that city being a new American frontier and land of possibility precisely because its government can’t get in the way of citizens doing things for themselves. So many cities don’t have the will or capability to take care of business, but they can stop other people from taking care of it.

Raleigh was also the home of the famous “barrel monster”, made by an Indy native who took some amazing photos for his No Promise of Safety site, which has been decommissioned after he had one too many brushes with the law. Luckily, somebody saved this one:

(h/t liberty-belle)

The FRA as Obstacle to a Modern Passenger Rail System in America

Back in my opus on high speed rail from earlier this year I suggested that some of the biggest barriers to the establishment of a modern passenger rail system aren’t from those opposed to it, but from the existing agencies in the business today: Amtrak and the FRA.

The good folks over at Skyscraperpage pointed out an article from 2007 taking the FRA to task. Called “How the FRA is Regulating Passenger Rail Out of Existence“, this is a must-read. A sample:

What if the FAA required that jet aircraft be able to survive crashes into the ground?

Or if the FWHA said automobiles had to survive any head-on crash at 60 mph into a tractor trailer without deformation?

Even if such vehicles could be engineered, they would be far too costly to operate. But for passenger trains, that is precisely what the FRA has been doing.

It is an arcane government agency few ever heard of. The Federal Railroad Administration was created in 1966 to set and enforce railway safety standards. And certainly in terms of safety, the FRA has been wildly successful passenger rail is perhaps the safest mode of transport in the US. But many rail advocates argue that the FRA regulations have not only come at too high a price (by making rail prohibitively expensive) but in many cases are completely nonsensical.

FACT: European style light trainsets have proven exceptionally safe in their operating environment. It’s not just about crash survivability, but preventing collisions in the first place.

The Chicago Olympic Bid and Selling the Vision

The outcome of the vote in Copenhagen was a big disappointment in much of Chicago. I don’t want to go too much into Olympic land, but clearly support for the games was less than universal. Some pundits suggested even in advance of the vote that a lack of public support would doom Chicago’s bid.

Jason Fried of 37 Signals wrote a piece on this that should sound familiar to those who read my call for a new vision of selling transit improvements in Chicago. Jason gets it on many fronts, so I thought I’d share some of his words here:

The 2016 announcement is just hours away. Will it be Chicago? Rio? Madrid? Tokyo? The favorites appear to be Chicago or Rio, but who knows. I’d like to see Chicago win.

As as Chicagoan, I’ve seen the campaign close up. A recent poll suggests Chicago citizens are about equally split on whether or not they want the games. The results show slippage from the 2-to-1 support found in an earlier Tribune poll in February.

I think this reveals a flaw in the local marketing of the games. And I think there’s a good lesson in all this: Chicago sold the features, not the benefits. Chicago didn’t tell its citizens why the games would be good for Chicago. Chicago didn’t lay out the lasting legacy of the games for the city. What’s really in it for us? Why should we really support it? What happens after they are over? 8 years of work for a few weeks of sunshine. Then what?

This is a bit of Friday-morning quarterbacking, but here’s what I would have loved to have seen: A campaign centered around Chicago 2017. Show us what the city will look like after the Olympics. Give us a reason to want the games for the decade after the games. Give us examples… If a kid’s 16 years old today, what will the city be like for her when she’s 26? How will the games make Chicago a better place for Chicagoans. Will it be a better place to grow up? Why? Will it be a better place to work? Why? Why would we want to put up with all the construction, traffic, congestion, and attention? Why will it all be worth it?

I do hope we get the games. I do think it will be great for the city. But I have a hard time communicating why. And if I can’t say why, I can’t tell other people why. Shallow support is barely support. That’s a problem.

It’s the exact same problem with transit.

Milwaukee Transit Update

Mayor Barrett recently gave an update on the city’s transit efforts, focusing on three different downtown streetcar alignments to be studied. I won’t go into details on this, since Urban Milwaukee already has it covered, complete with route maps.

I did want to note a couple things, however. If you look at the mayor’s presentation, you see two very important items:

1. It talks about streetcars in the context of the city’s overall transit strategy. I think this is generally important. (I will admit to having dinged Cincinnati for doing this, but that is only because voters already rejected a regional transit system).

2. It has some great photos showing aspects of Milwaukee – its economy, culture, and architecture – in the context of and measured against the world cities with which it aspires to be compared. In short, it markets this as about putting another piece of the puzzle together for Milwaukee’s 21st century aspirations. You can disagree with the direction, but the marketing is good. Here’s one slide to show what I’m talking about:

Indianapolis Express Bus Routes to End

This is the sort of thing that kills me. Indygo, the Indianapolis bus service, started a series of express buses from the suburbs to downtown using CMAQ funds. Launched when gas prices were high, these routes were over-subscribed. As gas prices fell and the economy slowed, ridership declined, but stabilized at a decent base for the Carmel and Fishers routes.

I thought the concept of these express buses was a good one. It gave people a taste of a transit service targeted at middle class riders in a city that had no experience with this. It could have been a way to start building a transit culture and a ridership base for future expansions of service such as rail.

Unfortunately, IndyGo used a temporary grant that will soon expire so the bus routes are scheduled to be terminated. This is devastating for the future of transit in Indianapolis. By stopping and starting service, all this does is pull the rug out from underneath riders, and, what’s worse, provide ammunition to anyone who would oppose transit expansion. Clearly, if Indy can’t sustain a couple of bus routes, why would anyone believe it can sustain anything more? If these routes are permitted to expire, it will be a big setback to the credibility of transit in the city.

More Transit

The Phony Coney has a look at US rail transit projects from 2000-2009.

Thursday, October 1st, 2009

Midwest Metro GDP, Unemployment

Ryan Avent pointed me at newly released BEA figures for metropolitan area GDP. Here’s a national map of how the nation’s metro areas fared in terms of GDP growth or decline in 2008:

You see here very clearly the “zone of sanity” in the middle of the country. Not only has this area not seen a house price implosion, it also has the best GDP performance, as one might expect. There is wide divergence among Midwest metros here.

Here is how my 12 Midwest metros stack up in 2008 GDP per capita. Since the BEA numbers only provide values in 2001 dollars, I’m including that since I don’t have time to convert to current dollars.

1. Minneapolis-St. Paul – $50,797
2. Indianapolis – $46,450
3. Milwaukee – $45,591
4. Chicago – $45,463
5. Kansas City – $43,112
6. Columbus – $42,890
7. Cleveland – $41,493
8. Detroit – $40,086
9. Pittsburgh – $39,492
10. Louisville – $38,142
11. Cincinnati – $37,970
12. St. Louis – $37,744

Ryan’s analysis talked about the wide variations in growth in GDP per capita over the years. So I thought I’d run the numbers for the Midwest. Here we have the change in real GDP per capita between 2001 and 2008 for my twelve metros.

1. Pittsburgh – 10.9%
2. Milwaukee – 7.6%
3. Minneapolis-St. Paul – 7.6%
4. Cleveland – 6.0%
5. Chicago – 5.5%
6. Kansas City – 5.1%
7. St. Louis – 5.1%
8. Louisville – 3.8%
9. Cincinnati – 1.7%
10. Indianapolis – 1.7%
11. Columbus – 0.6%
12. Detroit – (2.0%)

I think GDP per capita is one of the most important economic variables out there. How much output per person is this metro area creating? It’s effectively a measure of the productivity or wealth creation ability of a region. It’s not perfect. A community could have its figure depressed by large numbers of non-working people such as children or retirees. But non-working people can also represent people who are involuntarily unemployed, and thus a legitimate drag on GDP creation. Perhaps complementing this with GDP per job, which I’ve seen some people use, provides a more complete view.

Ryan posits some demographic drivers for this variation. Just looking at the Midwest list, it isn’t difficult to generate some hypotheses along those lines. For example, Pittsburgh has natural population decrease, indicating a more elderly and thus likely less productive population. This might account for its lower GDP per capita score and the very high increase in it (capita is decreasing with natural decrease).

You expect the Twin Cities to post high figures, but it is interesting again to see that Indianapolis and Milwaukee have higher GDP per capita than Chicago, which conventional wisdom says specializes in more higher value activities. Detroit’s GDP per capita is actually shrinking as the auto industry restructures. But there area a host of other metros with anemic growth who should be doing some digging to find out why.

By the way, to put the Midwest GDP per capita performance in perspective versus some other places, Seattle is $55,982, New York is $57,097, San Francisco-Oakland-Fremont is $60,873, and San Jose-Sunnyvale-Santa Clara is $82,880.

Also, monthly unemployment figures were just released by the Bureau of Labor Statistics. Here’s how Midwest metros are faring as of their August unemployment rate:

1. Minneapolis-St. Paul – 7.7%
2. Pittsburgh – 7.9%
3. Indianapolis – 8.2%
4. Columbus – 8.8%
5. Kansas City – 8.8%
6. Cleveland – 8.9%
7. Milwaukee – 9.3%
8. Chicago – 9.7%
9. Cincinnati – 9.9%
10. St. Louis – 9.9%
11. Louisville – 10.3%
12. Detroit – 17.0%

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