Search

Friday, July 30th, 2010

Urbanoscope

This is what’s known as a sticky state. People stick to the commonwealth [of Pennsylvania], for better or worse, like a marriage. Or a pest strip. Is this good? No, it is not. Love can be blind, and also confining. People so love the city, the region, and the state that they never leave. There are benefits to such loyalty, but also huge challenges. Chauvinism is a popular stance too often built on ignorance. We insist our hometown is better than anywhere else without the experience or knowledge to claim otherwise. When your world is small, you tend to think small. You take for granted the bounties that you have while believing that what’s inexorably wrong can never be fixed. You’re not prone to adventure. You believe the broken way of our government is the way that all governments work, and you give up trying to change the system or your situation. You accept the inadequate leadership, the status quo. With an enveloping love of home often comes a distaste for risk and a fear of innovation. And all of this comes at a price of stagnation. Change, as someone once said, is good. – Karen Heller

Ruth Holladay had some interesting thoughts on being a Hoosier as a sort of follow-up to my Columbus piece. Read the comments. Doug Masson also shared some thoughts.

Top Stories

1. Chicago Sun-Times: Why they won’t stop shooting in Chicago – “This is the story of why they won’t stop shooting in Chicago. It’s told by the wounded, the accused and the officers who were on the street during a weekend in April 2008 when 40 people were shot, seven fatally. Two years later, the grim reality is this: Nearly all of the shooters from that weekend have escaped charges….So far, not one accused shooter has been convicted of pulling the trigger during those deadly 59 hours.”

2. The $500 million journalist: A couple weeks after Greg Hinz pointed out that Chicago transit was getting $0 from the state’s capital program while IDOT had their busiest road construction season ever, Gov. Quinn coughs up $500 million for transit.

3. Shareable: Can a city build a better version of itself? – A look at San Francisco’s Treasure Island vision and the perils of utopian planning.

4. CNN: Techies reject coasts for ‘Silicon Prairie’

Metropolitan Exports

Brookings is out with another one of their huge metro studies, this one about metropolitan region exports. I haven’t had a chance to really dig into this, but it looks like many of the traditional heartland manufacturing and energy cities, as well as west coast tech outposts, rank highest in their percentage of GDP from exports:

But when you look at growth in exports, a different picture emerges:

We see here that while strong export centers like Houston, Portland, Seattle, and San Francisco continue to power ahead, the Midwest manufacturing belt is stagnant. Silicon Valley is also hurting. This can’t be a good sign for them. Indeed, in a follow-up blog post, a Brookings analyst notes:

A lot of Great Lakes metros…are exporting things for which global demand is dropping or being met by other countries. Or, demand is fairly steady, but the number of workers it takes to meet that demand has taken a nose dive, which is what happened with Youngstown and the steel industry. And these metros aren’t coming up with new things (or services) for which demand is growing to export instead….Most Great Lakes metros have unimpressive rates of innovation. Metros that are manufacturing-oriented or export intensive (or both) tend to generate patents at much higher rates than other metros. But most Great Lakes metros underperform on innovation, given their high degree of manufacturing employment.

Privatization and Policy Innovation

NPR has a story on San Francisco’s ‘Goldilocks’ pricing approach to on-street parking. Based on the theories of Donald Shoup, the academic who wrote “The High Cost of Free Parking,” this system will dynamically vary the price of parking in order to try to keep meters 80% occupied at all times.

I immediately thought of Chicago’s meter privatization. That deal was widely criticized, but I think most of the the critiques that have been leveled are overblown and even fall into the camp of manufactured outrage. (The city could have run a better process for sure, but does that mean the deal was bad? You don’t like spending the proceeds to balance the budget? Fine, but you tell me how you’ll balance it. Etc.)

But there’s one killer to this deal, and to most similar privatization deals I’ve seen, that almost no one talks about. To get a company to pay a huge lump sum up front, you have to give certainty as to the revenue parameters, in this case meter locations, rates, etc. In effect, what this does is cede urban policy making power to a private entity. That’s an explicit part of the deal in many cases, as these have often been described as “outsourcing political will.” The downside over a long contract is that you have committed to a policy framework that might become irrelevant or even counter-productive over time at high risk to the city.

Consider parking. I believe we’re on the cusp of a revolution in parking management. New technology and better management of civic assets means things like dynamic pricing are going to come to fore. Dittos with things like congestion pricing on highways. Locking yourself into an old school 20th century flat rate pricing scheme for 75 years probably wasn’t a good move. (There are many other similar types of problems that could be imagined).

I think one absolute key to any privatization deal is to make sure you do not impair your ability to change public policy in the future, particularly with long term deals. I won’t pretend this would be easy to structure. Perhaps it even means giving up the jackpot mentality and signing deals where there is more of a partnership with revenue sharing over time. But cities and states that sign inflexible multi-decade deals in an era of rapid change may be setting themselves up for pain later.

By the way, here’s one of those new San Francisco meters:

Merger Cost “Savings”

One of the great unexamined beliefs in American governance is that merging government entities saves money. Why anyone would prima facie believe that creating an even bigger bureaucracy would save money is strange to me. I think this comes from a failed analogy with business, where mergers do often save money by eliminating duplication, often resulting in layoffs. This is not how government mergers work, however. In a government mergers, there are generally very strong labor protections that keep people from losing their jobs, and all wages and benefits are harmonized to the high water mark, meaning costs actually go up. I previously documented this with regards to a fire merger in Indianapolis. And now, here’s another one:

The Lawrence Township Fire Department took another step Tuesday toward a merger with the Indianapolis Fire Department, a move that the city contends will save money….Lawrence Township firefighters were facing layoffs and took a 16 percent pay cut this year. Financial woes would go away if the merger goes through. “They’ll see a significant pay increase and a pension base increase,” Blackwell said.

How does handing out raises to firefighters for doing the exact same job they always did save money? Clearly, fire mergers in Indianapolis are a huge money loser for the city. I keep hearing about all this downstream rationalization that will occur when the mergers are complete, firefighters retire, etc. But how likely is that ever to happen? And when? I wouldn’t stay up and wait for it.

I’m generally all in favor of eliminating non-general purpose units of governments that aren’t controlled by elected officials of a real government that people actually care about (e.g., a city or county). But not for merger related savings, which don’t seem to exist.

World and National Roundup

io9: How an imaginary city changed the 20th century – An urban utopia designed by King Camp Gillette – yes, the razor blade guy.

Independent UK: Alain de Botton’s Modernism for the Masses

Joe Peach: Radically modernized bus system should be part of solution for London’s transport

The Guardian: London and Paris: A tale of two bicycle share schemes

Time: Crisis in the Statehouses

The Economist: America’s High Speed Railroading

Human Transit: What does transit do about traffic congestion? – Jarrett’s answer: Nothing! But please read on…

NYT: A City Outsources Everything, Sky Does Not Fall

WSJ: Economic Crisis Forces Governments to Let Asphalt Roads Return to Gravel

Richard Longworth: The real future of farming

Gordon Young: What Dan Kildee wants America to learn from the sorry tale of Flint, Michigan

Crain’s New York Business: New York’s richest cultural organizations

Fast Company: David Harvey’s Urban Manifesto – Down With Suburbia, Down with Bloomberg’s New York

Der Spiegel: Runnings for the Exits – German Giants Flee Wall Street – “What the SEC fully doesn’t grasp to today is that dealing with the US regulation system is a nightmare…It’s another reason to run to the exit door.”

Boston Globe: Linking cities and eras – A look at the proposed rehab of the Longfellow Bridge.

Chicago Magazine: On the Life and Work of Chicago Architect Harry Weese. Weese designed, among many other things, the Washington, DC metro system.

New City Chicago: What we’ll lose if we lose our mid-century modern buildings – An interesting piece, but I’d also add that beyond the landmark structures, we clearly need to care as much about the average infill building, which I discussed last year.

Time Detroit Blog: Becoming fully invested in Detroit.

Pittsburgh Post-Gazette: A river runs through us

Urban Out: Plan for ‘Modern Parking’ in Broad Ripple, Indianapolis an Oxymoron and also a look at Cincinnati’s best business district

INDOT’s Chickens Come Home to Roost

The Indianapolis Star had an article about how INDOT’s mismanagement of the US 31 corridor upgrade plan is now killing investment. After two decades of screw-ups, businesses in the area have had enough and are starting to vote with their pocketbooks, suspending investment plans and going on strike against a bad business climate resulting from state created uncertainty over the corridor:

With one office building brimming with tenants along U.S. 31, CMC Properties was ready to put the shovels in the ground on two more. But those plans are on hold….”It’s [US 31] crucial to our business,” CMC’s Stephanie Anderson said.

I could write a book on the mismanagement of this corridor, which goes all the way back to at least 1993 when INDOT undertook its first study of the road. Unsurprisingly, after all the broken promises, long stretches of radio silence, and frequent changes in direction, the state simply has no credibility with local leaders and more importantly with local businesses. It’s also very clear that this corridor, as well as I-69 in Fishers, simply are not and have never been priorities of the state.

In a recession where Indiana needs every dime of investment, every job, every taxpaying business it can get, a two decade collection of unforced errors finally catches up with the state at just the worst possible time.

Post Script

Original furnishings in the interior of Eero Saarinen’s Irwin Union Bank (now First Financial Bank) in Columbus, Indiana.

Thursday, July 29th, 2010

Globalized Professional Services

I wanted to follow-up on my Chicago piece with another look at professional services. A question was raised as to the conflict between saying Chicago is a professional services hub, and that its global city rankings are too high when those rankings are based on professional services. A fair point. I think it depends on the nature of what type of professional services we are talking about.

Saskia Sassen reminded me that global cities compete much less than is currently believed because they specialize in different things. So I wonder if perhaps specialization is one axis upon which we could measure professional services. Another might be how tightly these services are tied to the particular needs of the global economy. That is, globalization created the need for new financial and producer services to help control and manage the resulting networks. So my question would be, is any particular service one whose demand was created by globalization, or some previously existing type of demand?

I plotted these two dimensions into another 2×2 matrix, which I’ll test out for your feedback today:

My resulting four quadrants are:

  • Global City Function. These are what I think of when I think of globalization services. That is, they exist to serve the particular needs of our globalized economy, and they have some degree of specialization that makes them difficult to obtain just anywhere. Perhaps they depend on particular skills and expertise only available in particular places. One might think of something like services related to international steel trading here.
  • Niche/Cluster. These are also specialized functions, but aren’t particularly related to globalization as such. I might use as an example the design of super-tall skyscrapers. This may be global in that they are all over the world, but this isn’t a service that was per se created by the needs of a global marketplace. These services were needed to design the Sears Tower, for example.
  • Network Access. I’ll pick a geeky term for this. These functions are related to global markets, but less specialized. I can’t think of any slam dunk examples, but perhaps something like general international contract law might be one of them. I think of these as access points to the global economy or points of presence by various services firms. In a sense, these get you connected to some of the global economic circuits. They let you do basic things without going elsewhere. They might be driven by how important your city is as a place global services firms feel they have to plant their flag, for example.
  • Routine. This I believe is the bulk of professional services. It is basic strategy, IT, outsourcing, accounting, etc. that would be done for various businesses regardless of globalization. Indeed, these have been done for decades. Installing corporate IT systems for instance. Or evaluating a corporate cost reduction program such as what McKinsey did for Conde Nast last year. These might require some domain knowledge, but it’s not like you can only get them in a single place. Hence I raise the question as to whether some of these are vulnerable become commoditized.

As you can see, this has some similarity to my previous Diversity-Tradeability Matrix, where the top half of the chart is non-tradeable services. That doesn’t mean services they can’t be provided to an export market, but rather they are ones for which there are few alternatives sources of supply or substitutes, which makes them difficult to offshore.

My belief re:Chicago is that while it probably plays in every quadrant, its bread and butter was routine services. This is why I believe the global city surveys overstated Chicago’s standing. They rely on counts of branch offices and such without sufficiently differentiating the types of services being provided.

The word routine doesn’t sound glamorous. But I actually like the space because of its potential for more broad based employment generation vs. hyper-specialization. And these are in fact high value services. Plus, it is where I spent most of my career, so obviously I can’t hate it too much! The challenge is that this is the sector that is getting battered the most by offshoring and new entrants, as well as macrotrends in business. That’s its particular challenge.

I wanted to ad some additional commentary on this point. My thinking on this is clearly work in progress, so feedback is welcome.

Tuesday, July 27th, 2010

Mike Doyle: Meet Me In St. Louis, Not Milwaukee

Recently, two other fine Midwestern cities, St. Louis, MO, and Milwaukee, WI, launched tourism campaigns aimed at attracting Chicago visitors. Raging urbanist that I am, I love spending time in nearby metropoli, and have a particular fondness for our sister city to the north. It’s the Windy City’s smaller, quieter, less-flashy Lake Michigan alternative–and that’s why Milwaukee’s current tourism campaign has me wondering whether the city’s overselling itself in a potentially damaging way.

This summer, the Brew City’s ads are posted on Chicago ‘L’ trains and buses with powerful headlines claiming things like, “If I had a week, I’d spend it in Milwaukee.” Follow up those ads with a browse of the VisitMilwaukee website and you get more hubris-induced marketing messages claiming the city sits “At the Intersection of Water and Fun“–not to mention celebration, success, and value, too.

Considering that most Chicagoans have likely been to Milwaukee before–and, not for nothing, live in Chicago, already–you have to wonder why Milwaukee’s tourism board would think the ads would be effective here. I mean, I enjoy Bayview restaurants, the Art Museum, and the Domes as much as the next Windy Citizen. Send me to State Fair or Summerfest for a weekend and I’m all set.

But a week? Really? I have never met a Chicagoan willing to spend a week of valuable vacation time in Milwaukee and I probably never will. When we have that much time to get away, we tend to head for O’Hare and Midway airports to really get away–usually from the Midwest entirely, much less from just the Lake Michigan shoreline.

And call me a stuck-up Chicagoan, but those “At the Intersection of Water and…” tourism messages sure sound a lot like Chicago, to me. (Well, except maybe “value.”) Reading them on the VisitMilwaukee website, I couldn’t help thinking how generic and misplaced they were.

VisitMilwaukee sure doesn’t sound like it knows who Milwaukee is, what its values are, or where it wants to be. You can’t tell potential visitors–especially potential visitors from a world city like Chicago–that your town’s worth a week of their time, and then support your grandiose claim with a series of generic marketing messages that could have just as easily been written about any other Great Lakes city. If there’s anything unique or special communicated about Milwaukee in these tourism ads, I don’t see it. And as a result, even as someone who likes the place, they don’t particularly make we want to visit it.

***

I am dying to visit St. Louis, however. Unlike Milwaukee, I’ve never been there, but I’ve been curious about the city since moving to Chicago in 2003. I always say I want to visit, I just never seem to get around to it. Imagine my surprise to discover that hiding behind the KidnappedChicagoan ads festooning CTA transit vehicles (and at least at the moment, positively peppering the Adams/Wabash ‘L’ station) was a cleverly covert tourism campaign for St. Louis.

You don’t know that when you see the ads. They don’t tell you anything except that an average Chicagoan has been stolen away to an interesting place–that it’s not far away, he’s not angry at being kidnapped there, and you’d want to be him if only you could figure out where he’s been taken. Holy Interactive Interest Raiser, Batman!

Every time I saw these ads I thought, “Dammit, I keep meaning to go to that website!” When I finally did, I was greeted by a curiously familiar map with clickable push pins, and an invitation to click through to try and figure out my kidnapped compatriot’s current location. Mousing over each push-pin opened a photo and capsule summary about an interesting tourist destination–a museum, or historic site. Or an arch, for that matter.

I chuckled when I saw the message that sat below the map:

“Okay, so you’ve figured out which city—St. Louis. Der. But admit it. You were a little surprised by all the stuff there is to do in the Gateway City.”

You know what? I was. And without the help of an overblown, generically empty ad campaign, either. Unlike Milwaukee’s currently hard-to-believe tourism claims, the soft-shoed Explore St. Louis approach sends potential visitors on an Internet adventure to learn the city’s glories for themselves. Did I mention the Foursquare badges for checking in at locations he’s visited? (Earlier this week I sang the praises of Chicago’s own Foursquare-based tourism campaign.)

By mischievously whetting their whistle for adventure and then letting them learn about the city from their own task-oriented click-throughs, Explore St. Louis’s Kidnapped Chicagoan campaign gets potential visitors to arrive at the conclusion that the city is an interesting place on their own. (While I’m at it, feel free to check out the ongoing CityToRiver campaign to rebuild the urban fabric of the St. Louis waterfront.)

And in my book, letting the wonders of your city speak for themselves beats unstrategically overselling it any day.

Mike Doyle is a communications strategist and scribe of the CHICAGO CARLESS blog. A native of New York, he fell in love with Chicago and moved there for life in 2003. But he still has no plans to learn to drive a car.

This post originally appeared in CHICAGO CARLESS. Reprinted with permission of the author.

Sunday, July 25th, 2010

Chicago’s Structural Advantages (and Professional Services 2.0)

It’s no secret that Illinois, like the rest of America, has been suffering in this economy. It also has the dubious distinction of probably being in the worst fiscal shape in America. llinois Gov. Pat Quinn appointed a group called the Illinois Recovery Commission to examine the state’s future, who recently issued their final report. As is mandatory in this genre of document, the commission devoted a lot of ink to creating a “culture of innovation” in Illinois and putting it in the forefront of new economy businesses.

Illinois may exists as a political geography, but it certainly doesn’t exist as an economic one. Thus any report that purports to offer a statewide strategies is to some extent doomed. I can appreciate the political difficulties here, but thankfully I’m free of them. So I’m going to focus on metro Chicago.

The Innovation section makes a number of recommendations such as having the state pension fund invest in startups. Rather than a line by line analysis I want to home in on one idea they had around picking strategic industries for the state. I don’t believe in central planning or that government can pick winners and losers. But, the government and private sector organizations can do a lot to create fertile environments for certain types of industries to thrive. Your city can’t be all things to all people. At some point you’ve got to take a stand.

So with that, let’s take a look at their sample recommended sectors. Drum roll please…..

  • Information Technology
  • Biotechnology
  • Alternative Energy
  • Medical Technology
  • Advanced Materials/Nanotech
  • Communications/Wireless

I don’t know whether to laugh or cry. The best Chicago can do is a warmed over me-too list of the hot sectors du jour that every other city and state are already chasing? While I’ll give them the benefit of the doubt that this might possibly have been intended as illustrative, Chicago needs a lot deeper and more serious thinking than this.

Chicago is a huge, tier one city in America and the only interior city with truly global reach. This is a city with real capabilities and advantages it ought to look to exploit. I don’t believe it is in such a weak position that it needs to fall back on the equivalent of momentum investing and chasing the crowd. Sure, Chicago can get a “fair share” of those industries, but is this the best it can do?

In that light, I’m going to do some preliminary analysis of where Chicago really can build unique offerings. This is based on the competitive advantages that can be derived from Chicago’s unique structural conditions. As with anything, some of these can cut both ways. The key is to turn them into assets. Some of those unique structural conditions are:

  • Centrality
  • Regional Capital
  • Bottlenecks

Centrality

Lots of places are in the middle of the country, but if you think about it, Chicago is the only tier one, really urban city in the middle of the country. All of the others are on the coasts. This provides, and has provided, Chicago with enormous advantages.

The American interior has been dismissed as “flyover country” but this gets at the heart of the dilemma. It is very painful to fly from coast to coast. Flying from NY to LA takes like five and half hours and crosses three time zones. You lose a day doing it. If you need to travel all over the United States, you sure don’t want to be based on the coasts. This is where Chicago ought to look to play.

The first step is to do an industry scan to look for ones where Chicago could successfully exploit its centrality advantage. The characteristics are:

  1. A significant number of employees who need to fly about the country
  2. Not an industry already clearly established in clusters elsewhere
  3. Industries that could take advantage of Chicago’s unique urban environment

The last one is important because it is the only thing that really distinguishes Chicago from say Dallas. Both are big cities with lots of talent and big airports. But Dallas is a lot cheaper. So look for things that leverage the urban environment and other unique characteristics of Chicago. Here are some examples.

1. Professional Services 2.0. Chicago has long been a hub of professional services. I believe it can continue to be so, but that industry has experienced change that has hurt Chicago and puts its future at risk here. After the exchanges, there is no more important plank in Chicago’s economic future than making sure it continues to be the dominant location in America for general professional services. That’s why I even put it in the title. I don’t see anyone even thinking about this issue though.

Let’s take a step back in review some history. Chicago was the traditional interior business capital and always had a large professional services presence. Arthur Andersen started his company here, so it was the HQ of that huge business. While AA itself is no more, its old consulting arm, now called Accenture, is still huge in Chicago, as are many other services firms such as some of America’s top law firms. We can define professional services in many ways, but I’d say the core sectors are management consulting (e.g., McKinsey), technology consulting (e.g., Accenture), IT/business process outsourcing (e.g., TCS), accounting (e.g., KPMG), and law (e.g., Mayer Brown). You could draw a broader ring if you wanted, though.

I recommend that you review my post “A Better Tomorrow” for more details, but two huge macro-forces converged to Chicago’s benefit in these industries in the 1990’s. One was the digitization of business and the other was the nationalization of business.

The 90’s were really the core of the technology revolution. We went from a mainframe dominated world in 1990 to the internet dominated world of 2000, with many waves of change in the middle: client/server, PC and mobile phone ubiquity, Y2K, ERP, etc. These drove enormous demand for technology consulting and also business expertise to embed this technology into the fabric of business and organizations. Similarly, the nationalization of business driven by deregulation led to rollups of many sectors like banking, utilities, and retailing, all of which required fundamentally changing the operating paradigm of these entities.

Both of these generated enormous benefits to Chicago. First, demand for professional services to help companies with the change led to a big expansion in a sector where Chicago was already big. Second, the services firms themselves transformed, becoming national or global to match their client base and organized around industry verticals to reflect the new demand for domain specific expertise. Where once these firms were organized around local office geographies, they were now national or international practices based on industry. This meant their employees weren’t primarily serving local but national clients, which of course meant they flew to where ever the client might be.

An explosion of aggregate demand and the need to fly around a lot fit Chicago’s value proposition like a glove. Chicago, and also cities like Dallas and Minneapolis, benefited hugely from this massive demand for professional services. Chicago was simply the best place in America for professional services over staffing. That is, it was the best place to hire more people than you needed for the local market, with the idea that you’d send them around to other places to fulfill demand there.

Then another change set in, this one not so good for Chicago. The dot com bust and scandals like Enron set off a transformation of the industry, as did the rise of globalization. First, the digitization of business and national industry rollups were largely completed. This reduced demand growth and even total demand. Also, clients got a lot smarter and a lot more savvy, both in doing things themselves and in working with and getting value out of professional services firms. A significant amount of the work became commoditized, like ERP installations. And most importantly, there was a rise in offshore competition, particularly in the IT/outsourcing sectors. This shook those businesses to their core as most traditional players couldn’t adapt in the face of the onslaught of newcomers. And this isn’t quite done yet. Law is now going through it as clients become more sophisticated in deal making, work becomes commoditized and offshoring looms. (How long will most Chicago law firms maintain their entire back office operations in the Loop, for example?) These all I believe drove a contraction (or at a minimum reduced growth) in professional services employment in Chicago in these sectors. In the 90’s there was massive growth and it was all onshore, with a lot of it in Chicago. In the 00’s, the growth was still huge, but all of it was offshore.

My hypothesis is that this professional services story arc explains a lot about Chicago’s economy in the last two decades. In a piece earlier this year where he asked “Has the Chicago area lost its mojo?”, Chicago Fed economist Bill Testa noted that:

The Chicago area economy and its central city experienced a surprising revival from the late 1980s through the 1990s. The revival led many local leaders to believe that the region had begun a new improved course of growth and development…..Chicago’s turnaround following the 1980s was remarkable in that a fundamental restructuring supported it. Specifically, though the metropolitan area shed much of its manufacturing base, its work force shifted increasingly into professional and business services….Chicago’s performance in the current decade looks much less sanguine….Chicago’s lagging post-recessionary recovery earlier in the decade can also be traced to its hefty professional and business services sectors.

Read the entire thing for full context, as he did not write that piece to make my point, but my explanation of the rise and fall of professional services helps explain a lot of his charts. This would be easy to validate with a market survey. Simply make a list of the major firms in all those sectors I outlined. Ask them what their Chicago based employment was on January 1, 1990, 2000, and 2010. The results would be illuminating.

This notion of broad-based professional services also explains why Chicago’s GDP per capita and such is lower than other tier one cities. Those cities I suspect contain more specialized functions. Now Chicago has some of those too, ranging from the exchanges to the design of supertall buildings. But its bread and butter has always been more general services like IT and accounting. This is a very good thing to some extent. I’d rather have one broad based firm with a couple thousand employees producing pretty high value output than a 200-person shop with super-duper high value, for example.

It also explains Chicago’s high standing in global city rankings. The GaWC study, for example, is among the most famous. It ranks cities based on whether or not they have a branch office location of one of a specific list of professional services firms. Because Chicago is a professional services capital and dominant interior city of the world’s largest economy, one too huge to service from a single capital like New York or Washington, it has lots of these offices so ranks very high on lists that use methodologies like this. But that doesn’t make Chicago a sophisticated mega “control node” of the global economy. I’ve long believed that Chicago’s global city status is vastly overrated and this is one big reason why.

My core recommendation to Chicago would be to focus on next generation professional services, or “Professional Service 2.0.” Its leaders must ensure that Chicago remains the dominant capital of professional services in the future, and the next generation of that industry. This would involve understanding industry dynamics, the status of Chicago and other Chicago players, and how to position the city as the favored location for staffing. The macrotrends are about low-cost right now, and that works to the advantage of places like Dallas, so Chicago has work to do. How can Chicago beat Dallas? It has to be sure that it’s transportation environment, business culture, tax/regulatory schemes, etc are advantaged to this industry. Also, it needs to be able to position its unique urban environment. I give one example immediately below, but superiority in talent recruitment might be another advantage.

Here’s one indicator. I looked up on their web sites where the Chicago office locations of some key Indian IT/outsourcing players were. Infosys is in Lisle. Wipro is in Oakbrook Terrace. Tata Consulting Services is in Naperville. I don’t know how many people these companies employ in Chicago, but if I were the city I’d make it my business to find out, and to make sure that they view Chicago has their key domestic hub, particularly as they move up the value chain. I have no beef with business in the suburbs. I want Chicago’s suburban business centers to prosper, but this is not Chicago’s competitive strength. Clearly these businesses are not taking advantage of Chicago’s unique urban environment, which leads me to believe this isn’t their core growth center of the future. These are some of the firms of the future, so time to get to work.

Chicago is a city that has been a success in professional services and has the unique characteristics that give it the platform to be an even better success tomorrow. What’s more, unlike a typical internet startup, these businesses still scale with people, and have the potential to be large scale employers with lots of high talent people and high value jobs – and even high tech ones in a sense. And the very nature of having to constantly renew their revenue base makes them act like traditional “corporate citizen” type businesses that invest back in the community. Owning a good chunk of the future of this industry is job number one for Chicago. But the city is going to have to fight for it. Other places aren’t just going to hand over the keys.

2. Corporate Showplace. Various companies, including those aforementioned consultancies often set up laboratories or centers of excellence or demo centers or whatever you want to call them to bring in customers and show them the cool new stuff they are working on. This is another space Chicago should dominate.

Think about it. Again, it’s easier for national customers to get to Chicago. People want to come to Chicago – certainly a lot more than they want to go to a meeting in Dallas. It’s a great place to entertain people. In short, these are the same factors that drive Chicago’s convention business. These operations are like mini-convention centers, only have the added benefit of being paid for by private entities. Chicago should make sure it is the best place in America to locate these facilities.

3. Sales. Clearly, sales is another are in which Chicago excels. Not as glamorous as high tech perhaps, but often high value. Chicago’s culture of hustle, of being, as my friend put it, “a city that runs on testosterone” fits perfectly with an aggressive sales culture. Clearly Chicago is already the regional sales center, but looking to beef this up somehow would be a plus. It also fits with the above corporate showplace idea.

These are relatively straightforward extensions. Actual research would need to be done to develop further target areas, but I believe there are many possible ones.

The other key here is to make sure flying from Chicago stays convenient. That means completing the O’Hare Modernization Program of course. But the terminals are in dire need of upgrading. Unfortunately, some of them are relatively new, but weren’t designed with today’s travel realities in mind (e.g., international terminal T5). Contrast O’Hare’s terminals with the new ones in Indy and Detroit, and there’s a big difference. If Chicago wants to be a world class city, it needs a world class airport, and whatever the architectural merits of Helmut Jahn’s United Terminal (which I like), O’Hare just isn’t it. The city needs to replace its entire terminal infrastructure. The OMP has something on this, but the push for a dubious new western terminal complex makes me question whether they are on the right track.

Regional Capital

Chicago is also relatively unique in that it is a regional capital. Chicago is clearly the main city of the greater Midwest. The only analogous situation is that of Atlanta, a city that I believe is very similar to Chicago in many respects. One might consider Boston the capital of New England, but it exists in the long shadow of New York, and outside of greater Boston itself, New England just isn’t that big.

One might think this would be something Chicago would want to take advantage of. Unfortunately, the opposite is the case. Chicago seems to see being the capital of the Midwest as baggage it would like to get rid of. That’s one key difference versus Atlanta. Atlanta self-consciously sees itself as the “Capital of the New South”, a clearly Southern city, but one transformed and reinvented for the 21st century and ready to lead a transformed region forward. That’s true whatever my reservations about their current performance.

But Chicago seems embarrassed about being the Midwest. It seems to view being the capital of the Midwest in the same way it does its old manufacturing heritage. If you read the rest of the recovery report, or pretty much any other document about Chicago, you’ll see lots of obsession over (and self-congratulations about) making Chicago a “global city”. It’s global, global, global, global. Now, Chicago clearly is a city with global reach. And no doubt the global agenda is an important plank in the city’s future success strategy. But the idea that Chicago can simply turn its back on the Midwest is a mistake.

For one thing, Chicago’s economy is still dependent on the Midwest to a greater degree than it might want to admit. Back to the Testa piece:

It is more difficult to draw the conclusion that the Chicago area had successfully restructured its jobs base away from its surrounding region to become a global city. Whether Chicago had become more of an interconnected global financial and business center, such as New York or London, is still an open question. As seen above, for much of the 1990s, the Chicago region’s per capita income made little if any gains on the Great Lakes region. Rather, by way of explanation, the surrounding Midwest region was also experiencing a comeback of the same degree…The Chicago regional economy continued to restructure toward high-skilled service provision, but its linkages may have remained somewhat parochial. That is, the Chicago area’s own growth appears to have been achieved through the provision of professional and transportation services to its traditional Midwest business partners.

As you might be gathering, that Testa piece is a must read for any Chicago leader.

I’m not totally sold on the idea that Chicago’s 90’s rise was attributable to regional comeback. But clearly Chicago is still linked to the Midwest in ways it doesn’t like to acknowledge. Richard Florida has talked about how local professional and business services got rolled up into these regional centers like Chicago. Clearly, providing services to the surrounding region is a part of what makes Chicago tick. Chicago can’t thrive as the only regional atoll that doesn’t get swallowed up by rising sea levels. Just like Ann Arbor can’t get away with pretending it’s not in Michigan, Chicago has to recognize that it is where it is and make the best of it.

And there’s no shame in being a regional capital. It’s not bad to be like Barcelona. By the way, Barcelona has global aspirations too. It just hasn’t sacrificed its Catalonian ones to get there. In fact, it realizes that in a world of ever more generic global cities, its Catalonian language and heritage are an asset. Chicago should take notes.

The first step for Chicago is to start taking its role as regional capital seriously again. The second is to start caring more about the fate of the greater Midwest. The third is to figure out how to take advantage of greater collaboration with this region.

In recent major Crain’s piece on Mayor Daley’s tenure as mayor, Paul O’Connor, formerly head of the regional economic development agency World Business Chicago said, “So we get the headquarters of the windmill company, and Indiana gets the jobs building the windmills. Why?” This is the type of zero-sum thinking that is killing this region. That scenario might not sound so great if you want the whole pie for yourself. But consider an all too easy to imagine alternative scenario: Sunnyvale, CA gets the headquarters and Guangzhou gets the factory. The Midwest division of labor seems a lot more attractive seen in that light.

I’ve did an extensive four part series on this previously called “Reconnecting the Hinterland” that talks about this. Re-establishing something of a regional hierarchical division of labor, if such a thing is possible, is something we should be looking at. I noted in that series that Chicago has among the steepest cost gradients in America. That it, costs plummet the minute you get outside of Chicago. It’s just a quick South Shore train ride to South Bend, Indiana, for example. And only a three hour drive to Indianapolis, the cheapest major housing market in America. Most other tier one cities offer nothing like this to exploit. (DC does have some limited advantages here with nearby Richmond, as someone pointed out to me).

You can read my previous series with some starter ideas on extended labor markets and professional services collaboration and onshore outsourcing. (Hint: remember those discussions with Infosys, Wipro, and TCS I said the region should be having?)

Bottleneck

Chicago is a transportation bottleneck. It’s famous for the length of time rail traffic takes to make it through town. O’Hare is famously congested. It’s expressway traffic is famously bad. It’s just an overall famous bottleneck.

Today bottlenecks are considered bad things but in the past they were often good things for cities located near them. In fact, bottlenecks often drove the very creation of cities. Louisville was founded at the Falls of the Ohio. Chicago itself was located at a gap separating the Great Lakes and Mississippi River watersheds, and is also located at the tip of Lake Michigan, which blocked east-west travel.

So why don’t more people try to figure out how to use being a bottleneck to their advantage? I won’t claim that it would be easy. The world has changed a lot and there are generally options to by pass bottlenecks. But that means we have to think harder, because even with things like the CREATE rail plan, the bottlenecks aren’t going way.

One obvious idea to me is that Chicago ought to focus on transportation innovation as one of its target industry segments. Chicago is the transportation hub of America, and is clearly a major center of distribution, even though lacking a major port.

I think about this in the most broad sense, ranging from urban street design to intelligent highways to financing approaches to operating practices to governance, etc. There’s plenty of high tech in here, which gives lots of potential angles for Chicago to establish businesses in that sector.

Unfortunately, I don’t see a lot going on here. The Skyway deal was a home run, showing some leading practice applied domestically. So good news there. Chicago used to be in the forefront of American urban cycling infrastructure, but no more. Chicago had widely deployed ITS systems when I first moved to Chicago in 1992, but hasn’t done much in the space since. Today it is Boston opening up its transport data and letting its tech developers create the most leading edge applications. New York is America’s urban transportation infrastructure leader. Los Angeles is leading the way on things like computer optimized traffic lights, HOT and congestion pricing, etc.

Of all my recommendations, this is the most speculative, since there’s little of it in Chicago today and it will require a big mindset change. I’ve constantly pointed out the low quality of design of things like Chicago’s street lights or the bus shelters. These aren’t per se bad, but they are conservative, backwards looking, and frankly suburban. It’s hard to make the mental leap from forward looking design and high design aspirations to matters like transport innovation. But the reality is that the mindset that makes the banal design possible is the same one that has caused Chicago to lose some of the leadership in transport innovation it once had. You want to build a culture of innovation? Start here.

This is one where, in the city at least, with a mayor who can make things happen if he simply wills it, Chicago is positioned to shine. Chicago should be looking to make itself into the transport innovation center of America. Particularly in a state strapped for cash, this is a must.

Hopefully these ideas spark additional and more serious thinking about where Chicago should be positioning itself for the future. Again, this is a city with vast resources and a lot of unique structural elements that could play to its advantage. There’s no need for Chicago to pursue a me-too strategy when it had a lot more scope to step up, seize control of its own destiny, and set the agenda that other people want to follow.

Friday, July 23rd, 2010

Replay: Detroit – Urban Laboratory and New American Frontier

[ This post about Detroit is the most popular ever on the Urbanophile. It still gets many hits a day from all over the world. Since I’ve increased readership here quite a bit since it was originally published, some of you probably haven’t seen it yet, so here’s a look – Aaron ]

The troubles of Detroit are well-publicized. Its economy is in free fall, people are streaming for the exits, it has the worst racial polarization and city-suburb divide in America, its government is feckless and corrupt (though I should hasten to add that new Mayor Bing seems like a basically good guy and we ought to give him a chance), and its civic boosters, even ones that are extremely knowledgeable, refuse to acknowledge the depth of the problems, instead ginning up stats and anecdotes to prove all is not so bad.

But as with Youngstown, one thing this massive failure has made possible is ability to come up with radical ideas for the city, and potentially to even implement some of them. Places like Flint and Youngstown might be attracting new ideas and moving forward, but it is big cities that inspire the big, audacious dreams. And that is Detroit. Its size, scale, and powerful brand image are attracting not just the region’s but the world’s attention. It may just be that some of the most important urban innovations in 21st century America end up coming not from Portland or New York, but places like Youngstown and, yes, Detroit.

Let’s refresh with this image showing the scale of the challenge in the city of Detroit proper:

There are zillions of pictures to illustrate the vast emptiness in Detroit. Kaid Benfield at NRDC posted this one:

This phenomenon is prompted someone to coin the term “urban prairie” to capture the idea of vast tracts of formerly urbanized land returning to nature. The folks at Detroit’s best discussion site, DetroitYES, posted this before and after of the St. Cyril neighborhood. Before:

After:

A site named “Sweet Juniper” recently had a fantastic photo of the spontaneous creation of “desire line” paths across all this vacant land. You should click to enlarge this photo.

One natural response is the “shrinking cities” movement. While this has gotten traction in Youngstown and Flint, as well as in places like Germany, it is Detroit that provides the most large scale canvas on which to see this play out, as well as the place where some of the most comprehensive and radical thinking is taking place. For example, the American Institute of Architects produced a study that called for Detroit to shrink back to its urban core and a selection of urban villages, surrounded by greenbelts and banked land. Here’s a picture of their concept:

It seems likely that this will get some form of traction from officialdom, as this article suggests, though implementation is likely to be difficult.

Detroit is also attracting dreams of large scale renewal through agriculture, as Mark Dowie writes in Guernica (hat tip @archizoo).

Were I an aspiring farmer in search of fertile land to buy and plow, I would seriously consider moving to Detroit. There is open land, fertile soil, ample water, willing labor, and a desperate demand for decent food. And there is plenty of community will behind the idea of turning the capital of American industry into an agrarian paradise. In fact, of all the cities in the world, Detroit may be best positioned to become the world’s first one hundred percent food self-sufficient city.

This isn’t just a crazy idea from some guy who lives in California. He documents several examples of people right now, today growing food in Detroit. It wouldn’t surprise me, frankly, if Detroit produces more food inside its borders today than any other traditional American city.

About five hundred small plots have been created by an international organization called Urban Farming, founded by acclaimed songwriter Taja Sevelle. Realizing that Detroit was the most agriculturally promising of the fourteen cities in five countries where Urban Farming now exists, Sevelle moved herself and her organization’s headquarters there last year. Her goal is to triple the amount of land under cultivation in Detroit every year. All food grown by Urban Farming is given free to the poor. According to Urban Farming’s Detroit manager, Michael Travis, that won’t change.

The fact that Urban Farming moved to Detroit is exactly the effect I’m talking about. To anyone with aspirations in this area, it is Detroit that offers the greatest opportunity to make your mark. It is the ultimate blank canvas. For urban agriculture and many other alternative urban dreams, it is Detroit, not New York City that is the ultimate arena in which to prove yourself.

It’s not just farmers, intellectuals and artists of various types are drawn to Detroit, both to study it and pursue ideas about the remaking of the city:

Detroit has achieved something unique. It has become the test case for all sorts of theories on urban decay and all sorts of promising ideas about reviving shrinking cities.

“It’s unbelievable,” said Sue Mosey, president of the University Cultural Center Association, who has been interviewed recently by two separate PBS crews and an Austrian journalist writing about Detroit.

“All of us have been inundated with all of these people who somehow think that because we’re so bottomed out and so weak-market, that this is this incredible opportunity,” Mosey said.

Robin Boyle, a professor of urban planning at Wayne State University who has been interviewed by numerous visitors, echoed that sentiment.

“They realize that there is an interesting story to tell, that has real characters, but even more, they discover a place that is simply not like everywhere else,” he said.

Toby Barlow wrote in the New York Times about out of towners buying up $100 houses, moving to Detroit, and doing all sorts of interesting things with them:

Recently, at a dinner party, a friend mentioned that he’d never seen so many outsiders moving into town…Two other guests that night, a couple in from Chicago, had also just invested in some Detroit real estate. That weekend Jon and Sara Brumit bought a house for $100.
….
A local couple, Mitch Cope and Gina Reichert, started the ball rolling. An artist and an architect, they recently became the proud owners of a one-bedroom house in East Detroit for just $1,900. Buying it wasn’t the craziest idea. The neighborhood is almost, sort of, half-decent. Yes, the occasional crack addict still commutes in from the suburbs but a large, stable Bangladeshi community has also been moving in.

So what did $1,900 buy? The run-down bungalow had already been stripped of its appliances and wiring by the city’s voracious scrappers. But for Mitch that only added to its appeal, because he now had the opportunity to renovate it with solar heating, solar electricity and low-cost, high-efficiency appliances.

Buying that first house had a snowball effect. Almost immediately, Mitch and Gina bought two adjacent lots for even less and, with the help of friends and local youngsters, dug in a garden. Then they bought the house next door for $500, reselling it to a pair of local artists for a $50 profit. When they heard about the $100 place down the street, they called their friends Jon and Sarah.
….

But the city offers a much greater attraction for artists than $100 houses. Detroit right now is just this vast, enormous canvas where anything imaginable can be accomplished. From Tyree Guyton’s Heidelberg Project (think of a neighborhood covered in shoes and stuffed animals and you’re close) to Matthew Barney’s “Ancient Evenings” project (think Egyptian gods reincarnated as Ford Mustangs and you’re kind of close), local and international artists are already leveraging Detroit’s complex textures and landscapes to their own surreal ends.

In a way, a strange, new American dream can be found here, amid the crumbling, semi-majestic ruins of a half-century’s industrial decline. The good news is that, almost magically, dreamers are already showing up. Mitch and Gina have already been approached by some Germans who want to build a giant two-story-tall beehive. Mitch thinks he knows just the spot for it.

It’s what Jim Russell likes to call “Rust Belt chic”, and Detroit has it in spades.

This piece also highlights one the absolutely crucial advantage of Detroit. It’s possible to do things there. In Detroit, the incapacity of the government is actually an advantage in many cases. There’s not much chance a strong city government could really turn the place around, but it could stop the grass roots revival in its tracks.

Can you imagine a two-story beehive in Chicago? In many cities where strong city government still functions effectively, citizens are tied down by an array of regulations and permits that are actually enforced in most cases. Some of the South Side of Chicago has Detroit like characteristics, but the techniques of renewal in Detroit won’t work because they are likely against code and would be shut down the minute someone complained. Just as one quick example, my corner ice cream stand dared to put out a few chairs for patrons to sit on while enjoying a frozen treat on a hot day. The city cited them for not having a license. So they took them away and put up a “bring your own chair” sign. The city then cited them for that too. You can’t do anything in Chicago without a Byzantine array of licenses, permits, and inspections.

In central Indianapolis, which is in desperate need of investment, where the city can’t fill the potholes in the street, etc., the minute a few yuppies buy houses in an area and fix them up, they immediately petition for a historic district, a request that has never been refused, ensuring that anyone who ever wants to do anything will be forced to run a costly and grueling gauntlet of variances, permits, hearings, etc. Only the most determined are willing to put up with that.

In most cities, municipal government can’t stop drug dealing and violence, but it can keep people with creative ideas out. Not in Detroit. In Detroit, if you want to do something, you just go do it. Maybe someone will eventually get around to shutting you down, or maybe not. It’s a sort of anarchy in a good way as well as a bad one. Perhaps that overstates the case. You can’t do anything, but it is certainly easier to make things happen there than in most places because of the hand of government weighs less heavily.

What’s more, the fact that government is so weak has provoked some amazing reactions from the people who live there. In Chicago, every day there is some protest at City Hall by a group from some area of the city demanding something. Not in Detroit. The people in Detroit know that they are on their own and if they want something done they have to do it themselves. Nobody from the city is coming to help them. And they’ve found some very creative ways to deal with the challenges the result. Consider this from the Dowie piece:

About 80 percent of the residents of Detroit buy their food at the one thousand convenience stores, party stores, liquor stores, and gas stations in the city. There is such a dire shortage of protein in the city that Glemie Dean Beasley, a seventy-year-old retired truck driver, is able to augment his Social Security by selling raccoon carcasses (twelve dollars a piece, serves a family of four) from animals he has treed and shot at undisclosed hunting grounds around the city. Pelts are ten dollars each. Pheasants are also abundant in the city and are occasionally harvested for dinner.

This might sound awful, and indeed it is. But it is also an inspiration and a testament to the human spirit and defiant self-reliance of the American people. I grew up in a poor rural area where, while hunting is primarily recreational, there are still many people supplementing their family diet with wild game. Many a freezer is full of deer meat, for example. And of course, rural residents have long gardened, freezing and canning the results to help get them through the winter. So this doesn’t sound quite so strange to me as it might to you. The fate of the urban poor and the rural poor are more similar than is often credited. And contrary to stereotypes the urban poor often display amazing grit and ingenuity, and perform amazing feats to sustain themselves, their families and communities.

As the focus on agriculture and even hunting show, in Detroit people are almost literally hearkening back to the formative days of the Midwest frontier, when pioneer settlers faced horrible conditions, tough odds, and often severe deprivation, but nevertheless built the foundation of the Midwest we know, and the culture that powered the industrial age. No doubt in the 19th century many of those sitting secure in their eastern citadels thought these homesteaders, hustlers, and fortune seekers crazy for leaving the comforts of civilization to head to places like Iowa and Chicago. But some saw the possibilities of what could be and heeded the call to “Go West, young man.” We’ve come full circle.

This post originally ran on August 9, 2009.

Comments Off


Thursday, July 22nd, 2010

Commuting Market Share Is the Wrong Way to Judge Transit

It’s common to look at transit in terms of commuting market share. It’s understandable why we do this, since, among other things, it is easy to get the data.

But the generally low showing of transit on this metric I think misses the bigger picture. Chicago metro has a transit market share of 11.5%, for example. Firstly, this is a metro area statistic, so includes huge numbers of areas that aren’t even transit addressable. It’s hard for transit to win when it isn’t even present on the battlefield. In the city of Chicago itself, transit has 26.7% market share.

But remember, this is only for commuting. The real transportation benefit of transit is in the leverage it provides on other trips. Someone could live in my neighborhood – Lakeview – and conduct pretty much all of their daily business on foot. I actually don’t ride transit that much these days. But I make many daily trips on foot and rarely feel inclined to drive anywhere. There are plenty of cars on the street to be sure, but the density of pedestrians shows that there are tons of other trips going on that probably aren’t being counted in most surveys because they are non-commuting and unlike with transit passengers or cars, there hasn’t been much in the way of an effort made to quantify them. This trip leverage, by the way, is true even of people who drive to work – lots of folks do – and never ride the CTA. They can still walk to Walgreens, walk to Starbucks, walk to the neighborhood frozen custard stand, etc.

The point is that without the transit, the neighborhood would not exist in its current form, and its walkability would be significantly degraded.

Beyond the transportation benefits, which are substantial, transit is also arguably the single most important factor that gave Chicago a different trajectory than other Midwest cities, though other factors like Chicago always being bigger, richer, etc. certainly played a key role as well.

Because Chicago retained 360 degree transit access to downtown, including from the far suburbs, it could remain a viable business destination in an era of suburbanization and the automobile. New developments such as skyscrapers could be built in the Loop without any parking. This made it easier to assemble land and led to the enormous densities that fuel its urban energy because you didn’t need to have a footprint for a large attached parking structure. Contrast with smaller cities like Indianapolis, where new buildings were of the “box on a pedestal” type design where one skyscraper might consume an entire city block. This is rare in downtown Chicago outside of a few ill-conceived urban renewal era “skyscraper with plaza” style buildings.

With business vitality in the Loop, there was still reason for people to live in the city, there was still a base for shopping, restaurants, etc. All of this created a virtuous cycle that kept property values high. Even at its Rust Belt nadir, Chicago’s Loop was still doing fairly well and a strip of lakefront and other neighborhoods were in decent shape.

If for some reason Chicago had lost its formidable transit system in the way that so many other cities did, I have no doubt it would have followed a similar development pattern. In those places, even a history of dense urban neighborhoods couldn’t save them once the CBD declined as a major economic growth force and suburbanization took hold.

The same is true of most of the other cities that made it: Boston, New York, San Francisco, etc. Even LA has a very extensive bus network and DC has emerged with a powerful central core thanks to the exploding federal government and the relatively new metro system. Philly’s transit system didn’t save its downtown, but the city could be in a lot worse shape, that’s for sure.

So I think it is very clear that transit, in its service area, provides enormous value, transportation and otherwise, that isn’t fully reflected in commuting market share numbers.

Wednesday, July 21st, 2010

Urban America’s Quality vs. Quantity Dilemma

My latest post is up over at New Geography. It’s called the “Urban Quality vs. Quantity Dilemma.” In this piece I examine what we might call “high quality” cities ranging from New York to Portland vs. “high quantity” cities like Austin or Atlanta. The data are very interesting. It looks to me like each sort of place has only got half the puzzle figured out.

The dilemma in America is that it seems that to some extent you can have per capita income and GDP growth or you can have population and job growth, but you can’t have both easily.

As an aside, the most interesting stat I found when looking at the data is that Portland, Oregon had the highest per capita GDP growth of any metro over one million in the US from 2001 to 2008, the full range for which data is available. It’s number one. Portland grew GDP per capita by 22.4%. That’s particularly impressive when you consider how many people are unemployed or underemployed there. Clearly, something about the talent program there is working, because they are really ratcheting up their economic output. So my hat’s off to Portland on this one.

Tuesday, July 20th, 2010

H. L. Mencken: The Libido for the Ugly

[ H.L. Mencken was one of the all time great misanthropes and polemicists. I’ve no doubt that Kunstler has spent many an hour studying the master. Mencken’s is some of the most biting and humorous writing ever in America. He rarely had much good to say about anybody or anything, though of course much of his writing is satiric. For those who aren’t familiar with the master himself, I’m presenting an on topic sample for your enjoyment. Though his views are not necessarily mine, I thought this would help illustrate that the critique of America’s built environment as ugly, complete with class dimension, far predates modern sprawl. Reading this recalls to mind W.E.B. Du Bois somewhat earlier observation that “Little of beauty has America given the world, save the rude grandeur God himself stamped on her bosom; the human spirit in this new world has expressed itself in vigor and ingenuity rather than in beauty.” I should also add that while I’ve never been to Westmoreland, Pittsburgh is actually a delightful city – Aaron. ]

On a Winter day some years ago, coming out of Pittsburgh on one of the expresses of the Pennsylvania Railroad, I rolled eastward for an hour through the coal and steel towns of Westmoreland county. It was familiar ground; boy and man, I had been through it often before. But somehow I had never quite sensed its appalling desolation. Here was the very heart of industrial America, the center of its most lucrative and characteristic activity, the boast and pride of the richest and grandest nation ever seen on earth-and here was a scene so dreadfully hideous, so intolerably bleak and forlorn that it reduced the whole aspiration of man to a macabre and depressing joke. Here was wealth beyond computation, almost beyond imagination-and here were human habitations so abominable that they would have disgraced a race of alley cats.

I am not speaking of mere filth. One expects steel towns to be dirty. What I allude to is the unbroken and agonizing ugliness, the sheer revolting monstrousness, of every house in sight. From East Liberty to Greensburg, a distance of twenty-five miles, there was not one in sight from the train that did not insult and lacerate the eye. Some were so bad, and they were among the most pretentious—churches, stores, warehouses, and the like–that they were downright startling; one blinked before them as one blinks before a man with his face shot away. A few linger in memory, horrible even there: a crazy little church just west of Jeannette, set like a dormer-window on the side of a bare, leprous hill; the headquarters of the Veterans of Foreign Wars at another forlorn town, a steel stadium like a huge rat-trap somewhere further down the line. But most of all I recall the general effect–of hideousness without a break. There was not a single decent house within eyerange from the Pittsburgh suburbs to the Greensburg yards. There was not one that was not misshapen, and there was not one that was not shabby.

The country itself is not uncomely, despite the grime of the endless mills. It is, in form, a narrow river valley, with deep gullies running up into the hills. It is thickly settled, but not noticeably overcrowded. There is still plenty of room for building, even in the larger towns, and there are very few solid blocks. Nearly every house, big and little, has space on all four sides. Obviously, if there were architects of any professional sense or dignity in the region, they would have perfected a chalet to hug the hillsides–a chalet with a high-pitched root to throw off the heavy Winter snows, but still essentially a low and clinging building, wider than it was tall. But what have they done? They have taken as their model a brick set on end. This they have converted into a thing of dingy clapboards, with a narrow, low-pitched roof. And the whole they have set upon thin, preposterous brick piers. By the hundreds and thousands these abominable houses cover the bare hillsides, like gravestones in some gigantic and decaying cemetery on their deep sides they are three, four and even five stories high; on their low sides they bury themselves swinishly in the mud. Not a fifth of them are perpendicular. They lean this way and that, hanging on to their bases precariously. And one and all they are streaked in grime, with dead and eczematous patches of paint peeping through the streaks.

Now and then there is a house of brick. But what brick! When it is new it is the color of a fried egg. When it has taken on the patina of the mills it is the color of an egg long past all hope or caring. Was it necessary to adopt that shocking color? No more than it was necessary to set all of the houses on end. Red brick, even in a steel town, ages with some dignity. Let it become downright black, and it is still sightly, especially if its trimmings are of white stone, with soot in the depths and the high spots washed by the rain. But in Westmoreland they prefer that uremic yellow, and so they have the most loathsome towns and villages ever seen by mortal eye.

I award this championship only after laborious research and incessant prayer. I have seen, I believe, all of the most unlovely towns of the world; they are all to be found in the United States. I have seen the mill towns of decomposing New England and the desert towns of Utah, Arizona and Texas. I am familiar with the back streets of Newark, Brooklyn and Chicago, and have made scientific explorations to Camden, N.J. and Newport News, Va. Safe in a Pullman, I have whirled through the gloomy, God-forsaken villages of Iowa and Kansas, and the malarious tide-water hamlets of Georgia. I have been to Bridgeport, Conn., and to Los Angeles. But nowhere on this earth, at home or abroad, have I seen anything to compare to the villages that huddle along the line of the Pennsylvania from the Pittsburgh yards to Greensburg. They are incomparable in color, and they are incomparable in design. It is as if some titanic and aberrant genius, uncompromisingly inimical to man, had devoted all the ingenuity of Hell to the making of them. They show grotesqueries of ugliness that, in retrospect, become almost diabolical. One cannot imagine mere human beings concocting such dreadful things, and one can scarcely imagine human beings bearing life in them.

Are they so frightful because the valley is full of foreigners–dull, insensate brutes, with no love of beauty in them? Then why didn’t these foreigners set up similar abominations in the countries that they came from? You will, in fact, find nothing of the sort in Europe save perhaps in the more putrid parts of England. There is scarcely an ugly village on the whole Continent. The peasants, however poor, somehow manage to make themselves graceful and charming habitations, even in Spain. But in the American village and small town the pull is always toward ugliness, and in that Westmoreland valley it has been yielded to with an eagerness bordering upon passion. It is incredible that mere ignorance should have achieved such masterpieces of horror.

On certain levels of the American race, indeed, there seems to be a positive libido for the ugly, as on other and less Christian levels there is a libido for the beautiful. It is impossible to put down the wallpaper that defaces the average American home of the lower middle class to mere inadvertence, or to the obscene humor of the manufacturers. Such ghastly designs, it must be obvious, give a genuine delight to a certain type of mind. They meet, in some unfathomable way, its obscure and unintelligible demands. They caress it as “The Palms” caresses it, or the art of the movie, or jazz. The taste for them is as enigmatical and yet as common as the taste for dogmatic theology and the poetry of Edgar A. Guest.

Thus I suspect (though confessedly without knowing) that the vast majority of the honest folk of Westmoreland county, and especially the 100% Americans among them, actually admire the houses they live in, and are proud of them. For the same money they could get vastly better ones, but they prefer what they have got. Certainly there was no pressure upon the Veterans of Foreign Wars to choose the dreadful edifice that bears their banner, for there are plenty of vacant buildings along the track-side, and some of them are appreciably better. They might, indeed, have built a better one their own. But they chose that clapboarded horror with their eyes open, and having chosen it, they let it mellow into its present shocking depravity. They like it as it is: beside it, the Parthenon would no doubt offend them. In precisely the same way the authors of the rattrap stadium that I have mentioned made a deliberate choice. After painfully designing and erecting it, they made it perfect in their own sight by putting a completely impossible pent-house, painted a staring yellow, on top of it. The effect is that of a fat woman with a black eye. It is that of a Presbyterian grinning. But they like it.

Here is something that the psychologists have so far neglected: the love of ugliness for its own sake, the lust to make the world intolerable. Its habitat is the United States. Out of the melting pot emerges a race which hates beauty as it hates truth. The etiology of this madness deserves a great deal more study than it has got. There must be causes behind it; it arises and flourishes in obedience to biological laws, and not as a mere act of God. What, precisely, are the terms of those laws? And why do they run stronger in America than else where? Let some honest Privat Dozent in pathological sociology apply himself to the problem.

This essay originally appeared in Prejudices: Sixth Series, 1927. In the public domain.

Sunday, July 18th, 2010

It’s Time for America to Get On the Bus

New York magazine recently had a fantastic story on NYC’s plan to focus on improving the quality of its bus system:

Buses are what most people think of when they think of not getting anywhere: senior citizens waiting in lines, guys counting out change, double-parked cars. They are less sexy than subways and tend to be ignored until the MTA announces another round of service cuts. The last time buses were new was in the forties, when they were installed around the city as a cheaper, more flexible alternative to streetcars….But over the last decade, in a few transit-enlightened cities around the world, the bus has received a dramatic makeover. It has been reengineered to load passengers more quickly. It has become much more energy-efficient. And, most important, the bus system—the network of bus lines and its relationship to the city street—has been rethought.

If New York City, the ultimate American city for rail transit, can see the wisdom of reinvigorating its bus system, then every other city in America should as well. No, New York is not cancelling its subway expansions. But it realizes that in a world of financial constraint, New Yorkers can’t wait decades for the relatively small number of projects that it has in the pipe to come online, much less develop new ones.

Too many American transit enthusiasts, especially outside our largest cities, harbor a deep hostility to buses for some reasons. There’s been an interesting alliance for light rail between transit advocates who pooh-pooh buses and the traditional rent seeking interests that brought us things like many local stadium boondoggles. Especially for smaller cities, light rail is, like pro sports teams, just another accoutrement of the “big league city” that they need to have in order prove they are one.

I’ll be the first to admit that some who advocate buses actually don’t like transit much at all. Promoting a bus alternative to a light rail line is simply a convenient way to try to sink the whole thing. Also, the bus in many cities isn’t that great, and isn’t well patronized.

But with the financial realities we face in America, and the need to create an actual network of service, not just a couple of showpiece light rail lines, we ought to be giving bus a hard look. This is doubly the case because rail construction costs are simply out of line in the US versus the rest of the world. No one cares to solve this problem – not the FTA and certainly not the consulting engineers, construction companies and rolling stock vendors who are doing just fine indeed off the current system – so we should really be thinking twice about rail anyway until we can rein in the costs.

A friend of mine once said, “People claim folks won’t ride buses. I agree. So why don’t we work on fixing that problem instead of jumping straight to the conclusion that we need to spend a billion dollars on light rail?”

Actually, people will ride the bus. In London, twice as many people ride buses as the famed tube system. In Chicago, despite its well known and extensive L system, more riders take the bus than all CTA and Metra trains put together. And there is nothing even particularly fancy about Chicago’s bus system. It’s what I call “Plain Old Bus Service”.

Still, with poorly designed systems and poor service levels, buses in many cities aren’t well patronized, particularly by discretionary riders. So how do we fix that? Jarrett Walker over at Human Transit has been on fire lately. He always has some of the finest transit writing anywhere, and if you aren’t reading, you’re missing something.

Lately he’s been writing about Paris, and Europe generally, and how their approach to bus design differs from the US. In Converging Vehicles, he writes:

European systems present buses and trams as part of a unified system, with amenity choices that minimize the difference between the bus experience and the tram experience. This is a striking contrast to US “streetcar cities” such as Portland and Seattle, where the streetcar is as differentiated as possible from the bus system, as though it’s expected to serve a different clientele.

In a lot of cities they do seem to be designed for different clienteles. And I don’t think it takes a rocket scientist to imagine who those might be.

Jarrett supplies a photo of a bus interior to demonstrate.

And here’s the inside of a tram:

He then describes the similarities:

Look again at the [bus] interior above. Note details like the ticket readers next to the first set of doors. Note, just visible in the upper left of the photo, a strip map showing every stop that this bus makes along its route. Note the whole look and feel…. [On the tram] the continuous open space is wonderful. But there’s nothing else about this design, in terms of overall level of amenity, that differs from the bus. This vehicle isn’t trying to serve different people than the bus serves, or to provide a higher quality experience. This vehicle is on rails for one good reason: The corridor it serves needs huge capacity…In Paris, light rail is just what you do when you need a really, really long bus.

In part two, Jarrett goes on to talk about how you can board that Paris bus through any door, with proof of payment just like light rail. The New York magazine piece picks up this theme, talking about the Bx12 Select Bus Service in the Bronx:

All of the sudden, though, here it comes: the Bx12. Right away, you see it’s different. A different paint job—new branding, as the transit people like to say—and bright-blue lights flashing on the header. Buying a ticket is different, too: You pay before you board, from a little box like a MetroCard vending machine that offers you a receipt. In the world of transit planning, boarding time is everything, and the receipt streamlines the process. “You just hold on to it,” a woman offers, shouting from under her earbuds. She smiles. “It’s much faster.” Waiting on the curb, you notice that the bus has its own lane, painted terra-cotta, with signs to deflect non-bus traffic.

The relatively new head of the MTA used to work in London, where he was part of a change that saw a big upswing in bus popularity.

About a year into his tenure at Transport for London, Walder achieved the satisfaction of watching his neighbor, a London business executive, decide to make his primary mode of daily transportation the bus. It was simply the easiest, fastest way to get to work. “He would say to me, ‘Hey, the bus goes where I want to go, and it gets me there, and I’m taking the bus!’ ”

And that’s what a heck of a lot more US cities ought to be doing too. Of course, if there’s a legitimate case for rail, then go for it. I support rail projects ranging from the Second Ave. Subway to the Cincinnati streetcar. But clearly there is enormous opportunity in the US to start transforming the transportation infrastructure of our cities with high quality bus service in a way that is faster, cheaper, and much more pervasive than we’d ever be able to achieve with rail.

As NYC DOT Commissioner Janette Sadik-Khan, principal architect of that city’s remarkable public space transformation put it, “The bottom line is buses are back.” They need to be back in a whole lot more cities than just Paris, London, and New York.

PS: Again, if you care about transit, you should definitely have Human Transit in your reader. Here’s a link to another piece on Paris, about bus lanes to help convince you.

Friday, July 16th, 2010

Urbanoscope

“I think that troubled cities often tragically misinterpret what’s coolest about themselves. They scramble for cure-alls, something that will “attract business”, always one convention center, one pedestrian mall or restaurant district away from revival. They miss their biggest, best and probably most marketable asset: their unique and slightly off-center character. Few people go to New Orleans because it’s a “normal” city — or a “perfect” or “safe” one. They go because it’s crazy, borderline dysfunctional, permissive, shabby, alcoholic and bat s*** crazy — and because it looks like nowhere else. Cleveland is one of my favorite cities. I don’t arrive there with a smile on my face every time because of the Cleveland Philarmonic.” – Anthony Bourdain, No Reservations

Top Stories

1. True Economics: The Future of Our Cities – An interesting look at a number of points around economic changes, skill concentrations in cities, talent shortages, etc. from a European perspective.

2. Greg Hinz: Springfield Taking CTA, Metra Riders on Road to Nowhere – Talking about the Illinois capital plan, Hinz talks about how transit got pimped again, noting: “Roads and schools have received big initial allotments of the billions of new state bonds that have been or are about to be sold. In fact, the Illinois Department of Transportation says this year’s budget for road work is its biggest ever….. But transit? The thing that millions of us Chicago-area folks rely on to get to work every day? Not one penny. Zip — even though, as of next week, the state will have issued $3.2 billion in bonds under the new program…I guess the money that goes for transit is a different color than the money that goes for roads…instead of giving money directly to the CTA and Metra and Pace, the Legislature gave it to IDOT to administer.”

3. Detroitblog: Graveyard Shifts. Detroitblog is arguably the very best there is. This piece hits close to home. Growing up, I know there were many times local car repair shops and such did work for free or at deep discount for my single mother because they knew she needed it and had no money to pay. Because it was a tiny rural community, they knew her and her situation intimately, which is why there’s so little scam-ability in a place like that. Real Grapes of Wrath style. All of those places I remember are gone today. Most of them passed with their owners. I’m no Wal-Mart hater, but I can’t help but wondering what this means to our social fabric in America.

4. Chicago’s Transit Chief – A nice profile of CTA president Richard Rodriguez.

Is the Smart Grid a Dumb Idea?

National Geographic has an interesting article on the smart grid this month. It’s clear that there is no single thing that is the “smart grid.” Rather, it’s a collection of things ranging from upgraded transmission lines to new wind farms to so-called “smart meters.”

Things like mainline transmission upgrades seem straightforward. We’ve under-invested there for years. But the smart meters that are being rolled out across the country give me pause. First, they are a huge privacy risk. It seems likely that, especially with so many samples to analyze, that real time information on electricity consumption would let the electric utility know what you are doing – that uses electricity at least – at any given time. Listen up, kids, you think they can spot your grow lamps now…. I’m not sure adequate safeguards are in place.

Also, there seems to be relatively little consumer benefit. There’s a lot of talk about saving money, but consumers are already complaining about their bills going up. These meters will not, for example, help me by introducing consumer choice about my electricity provider the way we have choice on broadband providers. That would be a real game changer. We are still captive to a monopoly supplier at the residential level.

Which brings me to the final point, which the author of the article makes for me:

When consumers are given a price difference, they can choose to use less of the expensive electricity and more of the cheap kind. They can run clothes dryers and dishwashers at night, for instance. The next step is to let grid operators choose. Instead of only increasing electricity supply to meet demand, the operators could also reduce demand. On sweltering summer days the smart grid could automatically turn up thermostats and refrigerators a bit—with the prior agreement of the homeowners of course.

The principal reason for these meters is to introduce “real time tariffs”. In other words, airline style pricing. Now I’m all in favor of “congestion pricing” and demand management, but the tagline at the end – and which I can see the author with a smirk on his face as he wrote it – shows the risk. In the politicized world we’re in, how likely is it that in fact a market price will be chosen? These “smart meters” frankly enable involuntary rationing of power when someone decides you are consuming more juice than you should be.

I realize this sounds a bit black helicopter, but whatever the motivation for these meters, there is clearly huge scope for abuse of this technology. I think we ought to take a breather on deploying it until we’ve had a more robust public debate on the issues and put appropriate safeguards in place.

New Indian Currency Symbol

Apparently India decided they needed their very own currency symbol:

Looks like an inverse euro symbol with some garish flair. AOL keyword: Not Good. (h/t Ryan Avent)

World and National Roundup

Vanity Fair: Architecture’s Modern Marvels

The US DOT just awarded a major round of circulator grants. This includes $25 million for the Cincinnati streetcar, $25 million for a St. Louis trolley loop, and almost $35 million for BRT in Chicago. Transport Politic has complete coverage and a full list of the winners.

NPR: Cities’ woes will linger, thousands of jobs will go – a story on municipal finances

The BBC ran a series of upbeat profiles of Rust Belt cities. You can watch these segments on there site for Kokomo, Indiana; Youngstown, Ohio (a must watch), and Rockford, Illinois.

Technology and the City: Why city branding fails

I can appreciate Joel Kotkin’s contrarian nature, as I have more than a streak of it myself. He’s bullish on the Great Plains, and wrote a piece last week called The Great Plains Are Great Again that prompted a couple of responses. One is from Richard Longworth, who talks about the urban-rural split in this region. And Jim Russell makes some related points in War for Talent: Sioux Falls.

Richard Layman: It’s not enough to be smart, you have to be productive – rent seeking doesn’t count.

Richard Layman: Is Montreal the number one city for bicycling in North America?

NYT: After High Line’s Success, Other Cities Look Up

Time: What Lies Beneath – the salt mines of Detroit.

Time Detroit Blog: Getting a Regional Attitude

NYT: Budget in the red, Illinois has stopped paying its bills

WSB-TV: Giant quarry is centerpiece for a new park on the Atlanta Beltline – Reading the extolling of the virtues of this old quarry as both a water reservoir and a recreational amenity, I can’t help but wonder what the reaction would be if someone proposed a new quarry in a similar location today.

Post-Script

Here’s a photo from downtown Columbus, Indiana that makes a point related to my previous blog post. It’s some concrete barriers and a fence around a construction site. Note the pride of place in spray painting their “C” log on the barriers, and the colorful artwork. This is totally superfluous, which of course it is why it is so very important.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

Telestrian Data Terminal

about

A production of the Urbanophile, Telestrian is the fastest, easiest, and best way to access public data about cities and regions, with totally unique features like the ability to create thematic maps with no technical knowledge and easy to use place to place migration data. It's a great way to support the Urbanophile, but more importantly it can save you tons of time and deliver huge value and capabilities to you and your organization.

Try It For 30 Days Free!

About the Urbanophile

about

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

Full Bio

Contact

Please email before connecting with me on LinkedIn if we don't already know each other.

 

Copyright © 2006-2014 Urbanophile, LLC, All Rights Reserved - Copyright Information