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Friday, February 12th, 2010

Midwest Miscellany

Doomsday Is Here

After several recent near misses, transit doomsday arrived in Chicago this week as the CTA reduced service by 20% after failing to get union buy-in to concessions. As service cuts made their weekday debut on Monday, I was on Chicago Public Radio discussing transit. (If you don’t see the embedded player, click here.)

For additional perspectives, here is my five part series on Chicago transit referenced in the radio segment:

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

See also: Chicago Transit at Crossroads.

Top Story: Silicon Valley Wants a Bailout

I only have one top story in this edition. The AP reports on troubles brewing in Silicon Valley:

The 2010 Index of Silicon Valley said the region is entering a “new phase of uncertainty” where job losses, a shrinking foreign talent pool, a drop in investments and state legislative gridlock could put its standing as the center of technology at risk……”It’s a report with a lot of bad news in it. Most years, Silicon Valley has all this good news. But this year, it’s not entirely clear when the recession ends if we’re going to be able to very easily get back. That’s not a given,” said Russell Hancock, president and chief executive of Joint Venture, an alliance of business and community institutions. The report noted that the region lost 90,000 jobs from November 2008 to November 2009, and unemployment is higher than national levels.

So what’s the proposed solution?

The region started as an area invested in the defense industry, space and creation of the Internet, and the federal government heavily funded those ventures, said Emmett Carson, chief executive and president of the Silicon Valley Community Foundation. “When the government made those investments, there were spinoffs that happened in people’s garages. People were drawn here because this was the place that certain work was going on and people were making it happen,” Carson said. He said now the government is making massive investments in biotechnology and clean technology, and local business and government leaders need to compete for that money.

Holy rent seeking, Batman! Can you believe the chutzpah of these guys? The region with the biggest, broadest, deepest venture capital pool, huge numbers of multi-millionaire entrepreneurs, and enormous human capital. And these guys want a bailout? I’ve got a response to that, but it’s not fit for print.

Apparently the folks in Silicon Valley have decided they can get a better return on their money on K Street than in actual businesses. If that’s true, Silicon Valley really is in trouble.

World City Map

Our friends at GaWC recently released this interesting looking map:

I’m not entirely sure what it represents, but it looks cool!

World and National Roundup

The Guardian: The Population Crash – European demographic issues

LA Times: Korean activities target foreign English teachers – anti-immigrant sentiment in Korea

New York Observer: New York’s aging buildings.

NYT: In Portland, Growing Vertical.

Fast Company: How Sandridge Natural Gas Could Turn Oklahoma City Into an Urban Hot Spot.

Rob Pitingolo: Where We Live (a response to some of my writing).

Detroit Videos

Two Detroit-related videos present a sharp contrast. The first is a poignant documentary from the Netherlands talking about the bankruptcy of GM and the current state of Detroit, Flint, and Lansing. Unfortunately, this video does not seem to be embeddable, so you’ll have to click to visit. There will be a brief commercial and prologue in Dutch, but the vast bulk of the film is in English. This film is highly recommended. (h/t Urban Genetics).

This second video (if not visible, click here) is from America 2050, presenting an idealized version of what the future might look like, as a Chicagoan takes a high speed rail trip to see the White Sox in Detroit.

I think this is a particularly effective piece of advocacy work, showing how all the pieces of the puzzle fit together.

The gap between these two videos is quite stark. The Transport Politic probably summed it up best in a recent post “Detroit Stakes Its Hopes for Renaissance on Transit, But It Has Bigger Hurdles.” There’s still a lot of work to do to be sure.

Indianapolis Unveils Transportation Plan

Indianapolis leaders unveiled a major proposed transportation plan that includes transit upgrades. The Transport Politic also has coverage.

Here’s a video describing the plan. (If it doesn’t appear, click here).

This is by the same person who did the Kansas City video I’ve highlighted several times. This version is an improvement over that already strong piece, because it is about an actual plan, but also because it features more diversity and tones down the references to upscale business establishments.

Kansas City “Malaise”

I’ve had Kansas City on my list of good performers in the Midwest. The region beats the national averages on most of the key performance measures I track. But local leaders have some concerns, as a report from a recent leadership summit highlights:

Area residents on both sides of the state line think Kansas City, Mo., is sick — riddled with crime, bad schools and a squabbling City Hall….[Kansas Gov. Mark] Parkinson said it was sobering to hear how poorly area residents thought of Kansas City and he feared “a malaise of mediocrity.”….Because Kansas City, Mo., is the core city, its poor image reflects on the entire metro area, making it difficult to attract and keep business and people.

Regionalism appears to be on the agenda of this business group:

“A city of 450,000 can’t provide all the amenities for a region of 2 million,” Bowser said. “We have to generate revenues across the state line if we ever dream of reaching our dreams as a region. The state-line carping has gone on too long.”

Michael Burke, a lawyer who intends to run for Kansas City mayor, said the poll’s sour regional impression of the core city didn’t dampen his enthusiasm for public service.

“People have to know that they can’t escape to a bedroom community and enjoy their great schools and lifestyles but not share in the responsibility for funding the regional amenities, like the zoo, the public hospital, and all the other things that make Kansas City the metropolitan center,” Burke said.

More Midwest

It is interesting to see that a couple of Midwest papers editorialized against high speed rail recently. This includes the Columbus Dispatch and the St. Louis Post-Dispatch. And the Plain Dealer carries an article about Ohioans wondering whether the new rail line will be too slow.

Also in Ohio, a high techs job plan goes on the ballot.

Chicago
Groundhog Day for Chicago’s Economy? (Bill Testa @ Chicago Fed) – Has the Chicago area lost its mojo?
Apply for a business license, loose your livelihood – only in Chicago (Laura Heller)
High speed rail could be transformative, but stations (and architecture) matter as much as speed (Blair Kamin @ Tribune)

Cincinnati
We’re plugging into the smart grid (Enquirer)
Brent Spence bridge designs down to six (Enquirer) – sounds like many people aren’t thrilled with any of them.

Cleveland
The story of the renaissance of Playhouse Square (Plain Dealer)
Youngstown makes strides towards being technical hub (Plain Dealer)

Columbus
City tallies wins, losses as it prepares new downtown plan (Dispatch)

Detroit
The future of Michigan’s cities still short changed (Free Press editorial)
Detroit plans alternate use of 92 parks (Detroit News)

Indianapolis
Indianapolis mayor reflects his city and his team (NYT)
Downtown Indianapolis: Urban Form, Suburban Experience (Urban Queer)

Kansas City
Museum to get 29 impressionist works from the Bloch collection (KC Star)

Milwaukee
Downtown history presents urban opportunity in Milwaukee (Urban Milwaukee)

Pittsburgh
Maestro pitches Pittsburgh to foreign businesses (Bloomberg)

Twin Cities
MPR may sue over light rail (MPR) – another lawsuit against the central corridor
Decentralization dulls metro’s edge (Star Tribune editorial)

Post Script

Car meets bus shelter in Chicago.

Thursday, February 11th, 2010

Joel Kotkin on the Future of the Heartland

Joel Kotkin is an unpopular figure in many urbanist circles. I suspect that doesn’t bother him too much. His writing suggests he even delights in it at times, as he seeks out perhaps the most provocative contrarian examples he can find to challenge urbanist conventional wisdom. He champions Houston as a paragon of urban success, for example. And he’s been known to extol the popularity and virtues of the suburbs. A typical piece is his 2005 “Rule, Suburbia: The Verdict’s In, We Love It There.”

Among his various ventures, Kotkin is the executive editor of New Geography, where I post articles from time to time. I started writing for NG when Kotkin emailed me after I had taken issue with some of his ideas, and asked if I’d be interested in writing for the site. This made me start paying closer attention to his work.

Kotkin has written some books, but most people know him through his various web opinion pieces like the one above or his weekly column at forbes.com. These are often written in the sharp, opinionated style expected of the genre. But if you actually look beyond that, many of his actual positions aren’t that different from some of those who hate him, often differing more in degree than in kind. For example, in the Rule, Suburbia piece he says:

What [the suburbs] have failed to do, often miserably, is to live up to their promise of becoming self-contained, manageable communities that can both coexist amiably with the natural environment and offer a sense of identity. The prospect of a nation crisscrossed by ugly sprawl corridors like Lee Highway in Virginia or Interstate 10 between Los Angeles and San Bernardino may be too gruesome to contemplate….The great challenge of the 21st century — not to mention the main economic opportunity — lies in transforming suburban sprawl into something more efficient, interesting and humane….the suburbs need to evolve from a pale extension of the city into something more like a self-sustaining archipelago of villages.

This isn’t totally dissimilar to the goals of those new urbanists who seek to retrofit suburbia into more sustainable communities.

Kotkin’s latest book, The Next Hundred Million: America in 2050 was recently released. As the title suggests, this is a future look at the United States, rooted in the impact of the arrival of one hundred million new residents by 2050. This projection, by the way, is simply the Census Bureau’s medium scenario projection for US population, not anything proprietary to Kotkin.

I won’t go into detail on book. Suffice it to say that the suburbs and Houston continue to feature prominently. However, the writing style largely avoids the “op-ed voice” in favor of a more traditional journalistic narrative. This, I think, allows one to get a more clear picture of Koktin’s views without getting hung up on incendiary rhetoric. I’d recommend reading it for yourself. Many would disagree with his unconventional views on many topics. I certainly don’t agree with everything he says. But I’m confident anyone reading it with an open mind would find it interesting – and even have parts they agree with. And I think we all benefit from being forced to engage with ideas that are contrary to our own.

I do, however, want to examine some of Kotkin’s predictions about what he calls the Heartland. Among his contrarian notions is that the Heartland, far from being consigned to the scrapheap of history by economic change, is actually poised for a rebound. He devotes an entire chapter to this theme of Heartland resurgence. Kotkin doesn’t define his Heartland geography, but it appears to be mostly a combination of the Midwest and Great Plains. While it clear that he’s mostly focused on the Great Plains, an area he previously called the “zone of sanity,” a lot of his logic applies to the Midwest as well.

Kotkin’s prediction comes from both demographic growth and structural economic changes. On the demographic front, the US is poised to grow its population by 1/3 or 100 million people in the next 40 years. This begs a very simple question: where the heck are we going to put all those people? Regardless of whether in some sense it is the preferred destination, the Heartland is where a significant number of them are going to end up.

Partially this is because of increasing development restrictions on the coasts that make it difficult to expand housing supply. As our population grows, this puts upward pressure on prices in those areas and leads cost sensitive people to head to the interior where there have been fewer restrictions on building. This price phenomenon was identified some years back by Paul Krugman who argued there are really two Americas, the coasts, which he calls the “Zoned Zone” and the “Flatlands.” Per Krugman:

In Flatland, which occupies the middle of the country, it’s easy to build houses. When the demand for houses rises, Flatland metropolitan areas, which don’t really have traditional downtowns, just sprawl some more. As a result, housing prices are basically determined by the cost of construction. In Flatland, a housing bubble can’t even get started.

But in the Zoned Zone, which lies along the coasts, a combination of high population density and land-use restrictions – hence “zoned” – makes it hard to build new houses. So when people become willing to spend more on houses, say because of a fall in mortgage rates, some houses get built, but the prices of existing houses also go up.

Reading this made me think again of California and Texas. While Kotkin doesn’t make this claim in the book, another way to look at the California population flatlining vs. the growth of Texas is as simply an artifact of this housing dilemma. You can’t grow population easily if you can’t grow housing supply. Places like Texas take off because of both the lumpiness of migration due to network effects and such, as well as greenfield economics.

What Kotkin does believe is that the Heartland is positioned to capture some of this market, and with projected market growth of one hundred million, it isn’t hard to imagine it figuring out how to grab at least some of it.

There’s a tendency in all of us to simply extrapolate trends onward into the future. But things are seldom so predictable. Even 20 years ago, would anyone have predicted our world today? Perhaps that inherent unpredictability of the future is one of the reasons we in the greater Midwest should retain hope for the future.

As a bit of a contrarian myself, I can’t help but observe that often when negative sentiment is the highest, that is sometimes the marker of an inflection point. As they say on Wall Street, until the market reaches the point of “capitulation” in a downtrend, it is tough to turn around.

This makes me think of pieces like Ed Glaeser’s, “Can Buffalo Come Back?” He immediately answers his own question in the dek, saying, “Probably not—and government should stop bribing people to stay there.” Glaeser’s logic is based on a type transportation determinism. Buffalo existed for the era of water transport, that’s over, ergo Buffalo no longer has a raison d’etre.

Now I happen to agree that perhaps there is no other major Rust Belt city more poorly positioned than Buffalo for many reasons. Many other places are likewise challenged. I myself have noted that many cities like Detroit have lost their economic rationale and must reinvent it, and shrinkage is probably part of the story for many places. Richard Longworth wrote that “The first task is to tell the truth, that the Midwest’s golden era is gone forever. Much of the Midwest is in denial. It will take courageous leadership to speak the truth.”

But there’s a big difference between telling hard truths, recognizing that we can’t adopt a “no casualties” policy, and simply writing off a large chunk of America. When I read articles like Glaeser’s, Buffalo implies much more than just that city. It seems to be a sort of shorthand for the whole Midwest apart from a few favored locales like Madison.

But while there are changes in transportation and the economy that have undermined and are undermining this region, there are others that offer significantly more hope. For example, population growth + permissive zoning can equal picking up a reasonable sized chunk of an expanding market. That’s what Krugman implies and Kotkin argues.

Kotkin’s demographics also give reasons for optimism even for the Midwest’s urban cores. Even he estimates 15-20 million new urban dwellers by 2050. Consider this: that range is equal to the populations of New York City, Los Angeles, Chicago, San Francisco, Boston, Seattle, and Washington – all combined. Given the prices and development constraints in those cities, even a low estimate for urban growth like Kotkin’s shows an incredible opportunity for Midwest and other cities to capture new residents. The supply of urban spaces simply isn’t enough to meet the projected demand. If Midwest cities are able to field a reasonable urban product – currently a challenge to be sure – then there is reason to believe they can capture part of this growth as well.

And keep in mind, this is Kotkin’s prediction. If people who take a more optimistic view about the preference for living are right, the potential market for new urban residents is much greater – giving even more room for optimism.

This the beauty of trying to reverse decline in a nation with strong population growth. In Europe, post-industrial regions in Germany and Eastern Europe will face a much tougher time since they face an environment of population stagnation or decline, even with the immigrants they are already having trouble integrating into their societies.

Demographics also play a role in Kotkin’s prediction that agricultural expansion will play a role in the Heartland’s change of fortune. The world as a whole is going to add something like three billion people in the next 40 years, and those people need to eat. With the largest quantity of arable land in the world and them most productive agricultural industry, the United States is poised to grow output significantly. The Midwest is the epicenter of this. Kotkin notes that from 2002-2009, for example, the number of farms increased by 4%.

But it’s not just industrial agriculture. Kotkin believes that the sustainable agriculture movement also benefits the Midwest:

The growing popularity of organic products has opened new market opportunities for producers, and organic farming is now one of the fastest-growing segments of US agriculture….This phenomenon has tremendous long term potential for American farmers…At the same time, community-supported agriculture – in which farmers sell directly to individual or groups of consumers on a regular basis – has emerged as a new model of food production, sales, and distribution, aimed at heightening both the quality of food and the quality of care given the land, plants, and animals…The rise of smaller-scale agriculture, more specialized and more closely linked to urban consumers, offers a glimpse into an emerging future for the Heartland.

Kotkin also sees potential in energy production, both in traditional fossil fuels, which the Heartland has aplenty, and also cleaner energy sources:

The shift to alternative fuels should be encouraged…Over time biofuels will create new jobs, increase commodity prices and farm income, improve the country’s balance of trade, and reduce our dependence on imported fuel and chemicals. These products will likely expand well beyond corn-based ethanol and towards other, perhaps more sustainable nonfood fuels based on wood and agricultural waste in addition to switchgrass….The Heartland is well positioned also to play a greatly expanded role in the development and implementation of new energy solutions.
…
The Great Plains have been referred to as “the Saudi Arabia of wind;” North Dakota alone could eventually provide enough win power, by some estimates, to supply 20 percent of the nation’s electrical needs.

Also on the economic front, Kotkin sides with the notion that longer term the Internet will level the playing fields for the Heartland, allowing even specialized production to occur anywhere. While certainly the highest value activities will continue to be concentrated in places like Silicon Valley and New York, that still leaves plenty of opportunity for the Heartland to both capture other parts of the value chain, as well as to develop its own indigenous companies.

Kotkin cites an impressive list of places and firms ranging from Renaissance Learning, a software company that employs 700 people in Wisconsin Rapids, to Great Plains Software in Fargo, now part of Microsoft but still employing over 1,000 people locally. He also noted the trend towards more use of onshore outsourcing, a trend I previously discussed at length.

The book doesn’t even scratch the surface of this phenomenon. I think about things like the internet marketing cluster in Indianapolis or the emerging “Tech Belt” between Cleveland and Pittsburgh, where initiatives like the wildly successful Youngstown Business Incubator are gathering national attention.

The plural of anecdote isn’t data, and it’s clear the Midwest has a long way to go in transforming its economy. But it is still early days. The success stories in the region suggest that it is possible to develop technology businesses in the Midwest. The question is whether that can scale up over time or whether it will end up constrained by talent or some other issue. Time will tell.

And to bookend this with another demographic point, Kotkin, like Longworth, sees the promise of renewal in the increasing levels of international immigration to Heartland locations:

From an economic point of view, immigrants have transformed dying places into enlivened ones. Where small stores had once been languishing, there are now Latino markets and restaurants. Rural Wal-Marts offer yucca roots, tomatillos, and tripe. Communities like Lexington, Nebraska that were otherwise losing families, jobs, and workers now feel tensions but also a sense of a future. “I can remember when every house on the street was for sale except ours and our neighbor’s,” recalls Barry McFarland, a local resident, reflecting on how much has changed due to newcomers.

Will Kotkin be right? Any look into even the near future, much less 40 years out, is certain to be wildly wrong in many respects. But with all the doom and gloom about the future of the Midwest, it is nice to read someone who has something positive to say, and provide a multi-faceted look at why this region can be successful if it gets its act together.

A growing Heartland population, with more immigration, agricultural and energy growth, onshore outsourcing, high tech, and recreational amenities. If nothing else, this is one Kotkinesque prediction that I think many could at least hope comes true.

Tuesday, February 9th, 2010

Drew Austin: The Living…The Built…The McDonald’s Parking Lot

[ Brendan Crain's Where blog was for some time one of the best urbanist blogs, period. As eventually happens to blogs, time pressures forced him to put it aside, but there is still a treasure trove of great posts in the archives I highly recommend browsing.

One of his occasional contributors was Drew Austin, now a grad student in the Boston area. He graciously agreed to let me re-post some of his work here, and even went the extra mile to track down Brendan for me. When I met Drew he was was working as a transit planner in Chicago, which is when he wrote this post. I hope you enjoy it - and don't forget to check out Where. - Aaron ]

You may not agree with TS Eliot’s statement that every age gets the art it deserves, but it’s hard to argue that we don’t—to some extent—get the cities we deserve. In fact, a city may be human culture’s most perfect expression of collective will, a direct and tangible product of millions of individual decisions multiplied by thousands of days. Certain forces, people and institutions tend to exert disproportionate influence on the way cities evolve, but by and large the masses make the cities, and without all those people cities would not even be cities.

Human culture produces cities, and cities in turn influence those cultures. Eliot thought the same about art, and art’s cultural role is more limited than that of cities. Does this mean that subpar cities are created by subpar cultures, and can one expect crappy cities to foster even crappier human relations in their streets and buildings? Are planners, architects and other creators of the built environment to blame for the desolation of downtown Detroit or for me not knowing my neighbors?

Probably not. Architectural historian Spiro Kostof made this unexpected yet intuitive point in his 1987 commencement address to UC Berkeley’s College of Environmental Design:

Cities are amalgams of the living and the built, always tidying up, never finished. Their agenda is colossally overburdened, its charge near impossible to rein in. There is no way in which design alone will breathe life into a dying enterprise, any more than a vibrant sense of community can be attributed in earnest to the act of design.

Kostof’s speech—at least that part of it—amounts to a call for more piazzas. That is, more free spaces where human activity can run its course, whatever that turns out to be. The life and energy teeming within cities is bound to find its own way, perhaps guided and elevated by the Burnhams, the Olmsteds and the Koolhaases but never steered by them.

The most vibrant public space near where I live happens to be the neighborhood McDonald’s. Although there’s a beautiful, expansive park only two blocks away, a large group of elderly gentlemen are congregating in that McDonald’s from morning until evening on any given day of the week, usually having nothing more than a coffee. During the summer, they bring their own chairs and hang out in the parking lot. The place is full of people every time I pass by. I opt for the big park when I want to get out of the house, but for some variety of reasons many others find the Golden Arches to be a suitable piazza of sorts. I can tell you this much: They aren’t there for the food.

Many view McDonald’s (and parking lots) as the worst American culture has to offer, and more than a few planners would raze every McDonald’s in sight given the opportunity. Builders and planners can only build and plan, though. They can’t actually add the people or dictate the uses of their creations. Ultimately, I think, we do get the cities we deserve because, to a great extent, we are those cities.

This article original appeared in Where. Reprinted with permission of the author.

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 meridian, 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.

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