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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.

12 Comments
Topics: Economic Development, Globalization, Transportation

12 Responses to “Urbanoscope”

  1. When looking at those two maps for export data, it appears as if Cincinnati may be the strongest market in the Midwest when taking in both total exports and percent of annual growth. Is this a fair assessment to make?

  2. I’d have to look at the numbers, but just from the map it does look like Cincinnati is a standout in export growth, and from a decent base. The GE aircraft engine facility has to figure large here. That’s super-high value.

  3. I’m interested in your comment: “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.”

    I’m not disagreeing with this, necessarily; but how far would you take this? What government functions often handled by special districts, would be better handled by mainline government? Schools? Ports? Transit? Parks? Fire protection? Utilities (here, privatization is also a major option)? Public works?

    It seems that the only executive functions which aren’t frequently farmed out to special districts are things like law enforcement and corrections. (I’m excluding the legislative and judicial functions from this analysis, obviously). Planning is another one; given that the output of planning activities is frequently quasi-legislative in nature.

  4. Alon Levy says:

    Reading some more about the waste that goes on at New York’s MTA, I think that you’re missing something important about agency consolidation: when it’s done well, there’s a lot of potential for streamlining back office functions. Agency duplication leads to a lot more people at call centers, tech support, etc., as the MTA has just discovered (forty years and it’s just now getting around to consolidating all those functions…).

  5. Scotty, if you look closely at a lot of special districts, they are more or less controlled by elected officials like mayors, who appoint their governing boards. Though oftimes technically the mayor can’t actually tell them what to do after he appoints them, which ocassionally causes problems. But in general I don’t have a problem with these types of districts.

    I do dislike special districts that aren’t accountable. Indiana township government is a perfect example. Indiana townships are not general purpose governments. They provide only certain functions like poor relief and fire departments (mostly in rural areas). They are controlled by their own elected officials, who operate largely out of sight, out of mind with the public. Unsurprisingly, the trustees and boards who run them do so as if they were personal fiefs, often employing relatives, and giving themselves generous pay and benefits for almost no work. Center Township in Indianapolis, for example, which is entirely inside the city limits, has amassed a huge property portfolio and over $10 million in cash for no apparent purpose.

    Schools are another interesting one. They are often a similar case. I support mayoral control of schools, generally.

    This old school notion of Tocquevillian style government with a plethora of elected officials and a patchwork of jurisdictions is simply not relevant in the current era. For sure it doesn’t work, or get the benefits that Tocqueville saw from it today. I do happen to think there’s a loss there. For example, we’ve seen the rise of the political class versus the citizen government ideal of old. But we can’t roll back the clock, and today’s urban scale is very different from the past.

    The MTA is an interesting agency in that it is state controlled. I think the story of 40 years of duplication is instructive. They could have addressed that at any time, but didn’t. That’s one of the silver linings of this financial crisis. The fiscal pressure on state and local government is making reforms possible that never would have been implemented otherwise.

    Of course I believe it is theoretically possible to get savings from mergers. As I said, it happens in the private sector all the time. But in government it just rarely occurs in practice.

  6. Wad says:

    Thanks for the links to Richard Longworth’s article on the future of farming in the U.S.

    It’s an eye-opener that should be read for metropolitans and ruralists alike. He deconstructs the trope of the family farmer. There are a lot fewer of them, but agriculture is not dead. It turns out that most farms, even the giant ones, are still family-controlled. They just happen to be technological marvels. It’s more mechanized, the yields are much larger and the supply chain centers around a few market-makers (ADM, Cargill, Monsanto, etc.).

    Farmers are also far more technologically savvy, using computers for crop management, information gathering as well as monitoring the market price for commodities.

    In the face of this, there is still a market for “reactionary” farming — organic, heirloom, local-market, etc. Politically, the term connotes backwardness and primitivism. Ironically, “reactionary” farming, as in a reaction against the technology and scale of most of American agriculture, is embraced by the people who call themselves progressive.

    Both are thriving.

  7. Wad says:

    Longworth’s farming article also has me thinking about what California’s agricultural sector will shape up to be, particularly in the high-speed rail era.

    California, by many measures, is America’s leading agricultural producer as well. The heart of it all is the Central Valley. This is also where most of the high-speed trains will run on the way between L.A. and the Bay Area.

    Whenever tracks are laid, development follows.

    The question will be what kind of development will the Central Valley get, and what will happen to the farms?

    The mainstream journalistic approach is to work with the frame that’s capable of handling two, and only two, opinions that are mutually hostile.

    One: High-speed rail means sprawl on steroids and benzedrine. A big fear is that the Central Valley will become another Los Angeles and sacrifice soil for asphalt.

    Two: High-speed rail is just for the urban sophisticates in Southern California and the Bay Area, and the Central Valley will be flyover country.

    Yet there could easily be plotted a third, fourth, fifth, sixth … hundredth scenario. Many of them will involve the question of how California can eat its cake and have it, too (fast trains and bountiful farms).

    Some of the possible scenarios: Central Valley cities might implement urban growth boundaries or protect agriculture through zoning; urban plantationing (residents would live on an agriculturally productive property and work in the Bay Area or SoCal cities and leave the ag work to an industry of servicing firms); a “California-ag” industry where Central Valley agribusinesses will collaborate with the Bay Area tech industry and the Southern California marketing and logistics industry to incorporate urban business sectors into agribusiness; Central Valley cities may refine existing urban farming efforts to take it to the next level within their existing urban footprints.

    It sounds utopian. Heck, in light of California’s chronic fiscal troubles and restive taxpayer mood, scrapping HSR is a very real and increasingly certain possibility. We might not even get to see these plans bear fruit, so to speak.

    Yet, as Longworth’s article pointed out, a lot of these developments are already happening in some form. There’s no reason it can’t happen in the Golden State as well.

  8. Alon Levy says:

    It’s very unlikely that Fresno and Bakersfield will implement UGBs. The cities further north haven’t; on the contrary, they’ve embraced their status as Bay Area exurbs, as this would make them slightly less poor than they are today. However, one mitigating factor here is that CAHSR is expected to have a wide stop spacing. Most agricultural land in the Central Valley is too far away from the future train stations.

    (By the way, Longworth’s article really grated me – not because of the digs at city dwellers, but because of the claim that American farmers feed the world. The truth is the exact opposite: with their lobbying for farm aid and fuel crops, they starve much of the world.)

  9. Wad says:

    Time will tell, Alon. It all depends on the political organization and commitment of the agricultural sector.

    Some companies may want to hang on to their land and enterprises. Others may follow their Los Angeles farming forefathers and take the money and run.

    Fresno has long seen rural-urban conflicts, as both agriculture and urban interests (mostly developers) are pretty big wheels. Here you may see the county divided into agricultural and urban growth basins.

    In the Central Valley, this would be easy to do. Most urban growth already occurs north and east of SR-99.

    The big temptation is going to be for Central Valley counties to urbanize the agricultural frontier that is between SR-99 and I-5. (The valley is hemmed in by mountain ranges and/or parklands to its east and west).

    This is the “sprawl on steroids” fear many are having. They worry that an L.A. to Bay Area trip will involve going through Houston, if you will. By extension, some have even predicted an “exurban arms race”, in which the Central Valley will promise 10,000-, 25,000- or even greater- square-foot houses corresponding to the scale in which a homeowner is able to work in the Bay Area or Southern California to pay for it.

    It’s a remote possibility. The one hope is that the real estate crash was so catastrophic that investment in land plays has been chilled for about a generation. This would also lean in the favor of UGBs. The legendary stratospheric land prices in the Bay Area are the result of many counties artifically suppressing land supply. Many do it by zoning it as agricultural. This’ll help put a floor on the Central Valley prices.

    On the other hand, what will likely happen is urban plantationing. The Bay Area knows this all too well. There, a pastime of Bay Area Money is to take their earnings and buy a vineyard. They are winemakers in the way that the landed gentry were farmers. They’ll keep the land for the production of wine, only rely on outside hands to handle the business end of things. Often, their income source is still tied to the city. The urban plantationing has since spread from wine to reactionary farming.

    This is going to be more likely probable in the Central Valley, where Northern and Central California money will buy up extant farms and keep them running as a side project (“the ag lifestyle”, it’ll be called) while their main income source will be within the cities. Farming will be done by ag service agencies, who’ll carry out the actual grunt work.

  10. Wad says:

    Alon writes, “By the way, Longworth’s article really grated me … because of the claim that American farmers feed the world.”

    American farmers, rightly or wrongly — mostly wrongly — do feed the world.

    The bigger problem is that the farmers in the third world will have to choose from the bad alternatives the bullies in the developed world throw at them unless they find a way to subvert the order.

    Taking away farm subsidies with the intent of global fair play will have the result of a new unfair play.

    Farmers will still grow their food for the highest bidder. Or worse, better capitalized nations will just buy the developing world’s fertile land from the poor nations. China and South Korea are taking it a step beyond — they’re transferring and resettling their native populations and creating enclaves in Africa.

  11. Alon Levy says:

    First, the main reason the Central Valley probably won’t go for UGBs isn’t the local economics; it’s the politics. Anything that’s associated with liberal urban environmentalism is a no-go away from places where people like urban liberals. So, for example, the environmentalism that’s now prevalent in Montana is a very localist type, railing against big business but maintaining support for local libertarian traditions.

    Second, the entire first world dumped subsidized agricultural products in the third world, dispossessing many farmers, who couldn’t compete. (Often, this came attached with free trade agreements prohibiting the third world from instituting retaliatory tariffs.) Then the US decided to up the ante and divert funding to fuel crops, creating a worldwide food shortage. The food crisis of 2008 was every bit as manufactured as the various famines that occur in agrarian communist countries; it was just manufactured by capitalists this time.

    What China and Korea are doing isn’t relevant here (and on top of it, they’re not doing any sort of resettlement, unless you count China’s settlements in Tibet and Xinjiang). China is a poor country, and Korea is too small to matter. And neither is going to stop engaging in economic imperialism if the first world keeps its farm aid.

  12. cdc guy says:

    Aaron, I think you might not be on target regarding the Lawrence/IFD merger. I think you’re comparing a snapshot to a movie.

    The snapshot is that the Lawrence Twp. Trustee was going to have to cut back his budget and lay off firefighters.

    However, with the merger, those specific LTFD firefighters who were about to lose jobs are now able to get different jobs within the much-larger IFD on a different wage scale…that’s the “movie”.

    IFD will continue to rationalize its station coverage, and possibly save money for the county by reducing overall station and job count.

    Just like a corporate merger: some “offices” and jobs are eliminated, but some people whose jobs are eliminated get to take advantage of normal attrition and slide into previously occupied positions.

    I think the jury’s still out, but I wouldn’t be quick to assume that it won’t work or isn’t working. By eliminating a number of full department chiefs (and staffs) and replacing those job with a batallion chief for operations only, I think there will be either savings or a net wash for each of the consolidations.

    To be fair, one would have to go back to the time before any township consolidations with IFD, add all the budgets, and then compare with an inflation-adjusted (consolidated) IFD budget 2 or 3 years hence.

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