Friday, July 30th, 2010
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.
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
The Guardian: London and Paris: A tale of two bicycle share schemes
The Economist: America’s High Speed Railroading
Human Transit: What does transit do about traffic congestion? – Jarrett’s answer: Nothing! But please read on…
Richard Longworth: The real future of farming
Crain’s New York Business: New York’s richest cultural organizations
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.
Original furnishings in the interior of Eero Saarinen’s Irwin Union Bank (now First Financial Bank) in Columbus, Indiana.