Friday, January 30th, 2015

Is Detroit Open For Business?

My latest piece is online in the latest issue of City Journal. It’s about the blowback people and firms ranging from Shinola to Hantz Farms have gotten when trying to bring what Detroit desperately needs to rebuild, namely investment. Here’s an excerpt:

Consider Shinola, a luxury-goods start-up that employs more than 250 people in Detroit, many engaged in the manufacturing of bicycles, leather goods, and watches. The firm has opened boutiques in New York and London and is running multipage ads in upscale magazines, boasting of its Detroit connection. But not everybody sees Shinola as a Detroit success story. “Shinola is using my city as its shill, pushing a manufactured, outdated and unrealistic ideal of America,” wrote Detroit native John Moy on Four Pins, a fashion website. He complains about Shinola’s out-of-town financial backers and its use of parts made elsewhere. When Shinola installed four outdoor city clocks, someone tagged them with graffiti.

What these and other incidents reveal is an “it’s our city” mind-set among locals deeply hostile to and suspicious of outsiders—and of outside investment. “Detroit is the only town in America where misery hates company, or at least distrusts it,” wrote Detroit Free Press columnist Brian Dickerson about the Shinola controversy. Detroiters, he notes, view enterprising newcomers as “mere poseurs, parasites feeding off a hardscrabble heritage to which they lack any legitimate claim.”

I note that some of this is understandable emotionally, but the reality is that if Detroit wants to improve, that means more people and investment from the outside, and those people are going to demand a seat at the table too. Click through to read the whole thing.

Wednesday, January 28th, 2015

New York’s Little Blizzard That Couldn’t

The “storm of the century” hit New England hard but was a bust in New York. I went out and surveyed the realm yesterday morning and filed at story over at City Journal:

New York’s “storm of the century” turned out to be a bust. Rather than the predicted 30-inch “snowpocalypse,” only eight to 10 inches hit most of the city. That’s not to say that it had no effect. It happened to be the perfect amount of snow needed to turn Central Park gorgeous. By 10 o’clock, park streets and paths had already been plowed, and joggers, kids with sleds, and even skiers were out enjoying the winter wonderland. With the streets mostly empty, the morning was a welcome respite from traffic noise, bicycle rickshaws—and bikes, period, as cyclists appeared to be skipping the festivities. I missed the clop-clop of horse-drawn carriages, however—a sad preview of what awaits if Mayor de Blasio succeeds in his quest to ban carriage rides.

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Topics: Public Policy, Urban Culture
Cities: New York

Tuesday, January 27th, 2015

Replay: A Tale of Two Blizzards

[ With the New York portion of the widely touted blizzard turning out to be a bust, I thought I’d dust off this 2009 piece I did for New Geography on cities, blizzards, and what the response to them says about the urban culture – Aaron. ]

January 1979 saw one of the worst blizzards in city history hit Chicago, dumping 20 inches of snow, closing O’Hare airport for 46 hours, and paralyzing traffic in the city for days. Despite the record snowfall, the city’s ineffectual response was widely credited for the defeat of Mayor Michael Bilandic in his re-election bid, leading to Jane Bryne becoming the city’s first female mayor.

In January 1978, a similar blizzard had struck the city of Indianapolis, also burying the city in a record 20 inches of snow. Mayor Bill Hudnut stayed awake nearly two days straight, coordinating the response and frequently updating the city on the snow fighting efforts through numerous media appearances. Nevertheless, the airport closed and it was several days before even major streets were passable. But when it was all over, Hudnut emerged a folk hero and went on to become arguably the most popular mayor in city history, serving four terms before voluntarily stepping aside.

While major snow is much less frequent in Indianapolis than Chicago, and Hudnut’s response certainly bettered Bilandic’s, these twin blizzards illustrate a powerful difference in citizen expectations between these two cities, reflecting two of the broad approaches to urban service provision in America today.

People in Chicago expect and demand high quality public services. Chicago is the “City that Works”, and woe be to the mayor when it doesn’t. That’s why every mayor since Bilandic has treated snow clearance like a military operation, deploying a division of armored snow trucks to assault the elements at the merest hint of a flake, often leaving more salt than snow in their wake. If Chicagoans pay relatively higher taxes than the rest of the country, at least its citizens know that they are getting something for their money, whether it be snow clearance, garbage collection, street lighting, landscaped boulevards, or bike lanes.

In Indianapolis, by contrast, public services are not the main concern. People gripe if snow is not cleared, but are not outraged. No Indianapolis mayor ever lost his job for failing to deliver good services. Rather, taxes have always been the primary issue. Nothing illustrates this better than the most recent mayoral election. Buoyed by an emerging demographic super-majority, a large campaign war chest, and the support of almost every establishment figure of both parties, Mayor Bart Peterson confidently raised city income taxes by 0.65 percentage points shortly on the heels of a major property tax jump. In the fall, however, he lost his re-election bid to political neophyte Greg Ballard, who ran on a taxpayers first platform. Ballard won without significant backing from his own Republican party, supported only by a collection of grass roots activists, bloggers, and his own relentless door-knocking campaign.

The divergent citizen and policy preferences of both cities continue to the present, amply illustrated by this very winter. Mayor Daley, facing a recession-induced budget gap, decided to save money by ordering that residential streets not be cleared by workers clocking overtime. Citizen unhappiness over the state of the streets during December snows led even the widely popular Daley to backtrack on this experiment, reverting to the traditional all out assault for the balance of winter.

In Indianapolis, after 12.5 inches blanketed the city this January, crews took several days to clear its snow routes and, as per its standard operating procedure, did not plow residential streets at all. The local media carried tales of people’s laments, but ultimately the city government knows that the response to the snow will be forgotten soon after it melts. Higher tax bills, by contrast, are long remembered. In an inverse situation to Chicago, people in Indianapolis sleep at night knowing that, if services haven’t been all that great, they at least have more money in their pockets.

While both cities have long seemed happy pursuing their respective courses, storm clouds are gathering over both strategic models of operation.

Backing down from a high service stance in government is almost impossible. Government spending only ever seems to go one way. Faced with that logic, and the clear expectations of its citizens, Chicago in effect decided to double down. With the much celebrated resurgence of urbanism, Chicago put its chips on a soaring Loop economy driven by an emerging status as one of the top global cities, a real estate boom, and a series of tax and fee increases. It embarked on a civic transformation epitomized by community showplaces like Millennium Park, miles of top quality streetscape improvements, a new terminal at Midway Airport and the start of a multi-billion dollar O’Hare modernization, one of the nation’s best bicycling infrastructures, and perhaps most ambitiously, a bid for the 2016 Olympic Games.

This model is increasingly showing signs of strain, however. Many taxes and fees, including the nation’s highest sales tax at 10.25%, appear to be close to maxed out. The real estate crunch hit hard at Chicago’s transfer tax revenue, another key source of city funds. This, in combination with a weak economy, has hammered the city’s budget, leaving Daley with tough, often unpopular choices to make. The CTA recently raised fares. City parking meter rates will be quadrupling under a privatization plan recently signed, hopefully plugging operating budget holes – something Daley had previously resisted. As with New York City, Chicago may be faced with the cold reality of both service cuts and tax increases.

More importantly, as with the dot-com bubble before it, there are real questions as to whether the financial and real estate driven economy that fueled Chicago’s boom will come back in full force any time soon. In the meantime, the economy and cost of living in the city are squeezing the middle class harder by the day, and despite perhaps America’s biggest condo boom, the city’s population is slowly shrinking. All this leaves Mayor Daley, although still very popular, with perhaps the toughest leadership challenge of his tenure.

Meanwhile Indianapolis faces problems of its own. It too has budget challenges, just as years of deferred investment are finally catching up with the city. Indianapolis has a $900 million unfunded backlog of curb and sidewalk repairs alone. It is the 13th largest municipality in America, but has the 99th largest transit system. And, more troubling, the city now finds itself outflanked by its own suburbs.

At one time Indianapolis could comfortably decide to purchase bronze-level services while other cities paid more for gold. But now its own suburbs are offering silver, and at a lower price point in taxes than the city is selling bronze. Many of its suburbs today not only have better schools and safer streets than the central city, they feature fully professional fire departments, large park acreage, lavishly landscaped parkways exceeding city standards, and even better snow removal. In the recent storm, upscale north suburban Carmel finished plowing its cul-de-sacs before Indianapolis finished its main arteries. When people can pay less and get more just by moving to the collar counties, that’s what they do. Tens of thousands of people have left the merged central city-county in recent years. Only a large influx of the foreign born has kept Indianapolis from losing population.

The current economy is exposing the long term structural weaknesses of both civic strategies. Chicago and Indianapolis show that both higher service and lower service models face big challenges and that neither approach represents a safe harbor in the current economic storm.

This post originally ran on February 14, 2009 at New Geography.

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Topics: Public Policy, Urban Culture
Cities: Chicago, Indianapolis

Monday, January 26th, 2015

Urbanoscope

As a change things around here at Urbanophile HQ this year, I want to resurrect something that was extremely popular, but too time consuming for me to produce, namely my Urbanoscope roundups of urban links. I’m going to do it a bit differently this time, and instead of a general curation from the entire web (stay tuned on that front) put out a monthly post with some of the best articles that appeared in other places where I’ve been a contributor: City Journal, Governing, Guardian Cities, and New Geography.

Firstly though, in his FT column this weekend Tyler Brûlé dissed the urban environment of the Bay Area, saying:

I have a theory about social media: that it exists not because people are dying to share everything but because of poor urban planning. The reason these channels have developed on the US west coast stems from millions of people being lonely and trapped in sprawling suburbs. Apparently, the Swiss are among the lowest users of social media in Europe. I’d venture this is due to village life, good public transport, and a sense of community.

With that.

City Journal

In the current issue, William Bratton and George Kelling mount a defense of Broken Windows policing.

Nicole Gelinas says that New York votes should have booted Sheldon Silver a long time ago. One might say the same about Illinois house speaker Mike Madigan.

Governing

Charles Chieppo says Dallas should have paid competitive wages instead of relying on gold-plated pension sweeteners to retain firefighters.

Scott Beyer writes about revamping San Francisco’s Market St.

Guardian Cities

Oliver Wainwright takes a look inside Beijing’s airpocalypse, saying it renders the city “almost uninhabitable.”

Justin Welby, Archbishop of Canterbury, weighs in on the growing divide between Greater London and the rest of England.

New Geography

John Sanphillippo makes the case for young people to choose authentic urban neighborhoods in lower cost cities in the Rust Belt like Cleveland and Cincinnati.

He also goes in search of the virtues of America’s decaying inner-ring suburbs.

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Thursday, January 15th, 2015

Why Policing?

My latest post is online at City Journal and is called “Why Policing?” in which I reiterate my view the crime reduction is overwhelmingly the most important things for cities to get right, especially struggling cities and neighborhoods. Here’s a short excerpt:

New York’s biggest accomplishment was making many poor neighborhoods safe. It’s nearly inconceivable that the struggling neighborhoods of Chicago, Indianapolis, or other cities will see legitimate recovery until they get crime under control. Safe streets in all neighborhoods, not just some, are a precondition of social equality. New York’s experience with policing shows that crime can be greatly reduced with enough political and public will. Such will is lacking in too many places. Other matters of public order, it’s worth noting, don’t get overlooked in any city.

It’s a curious blind spot in the urbanist discussion. There’s this belief that crime is just an ambient force in cities that ebbs and flows as it will no matter what we do. For example, activists routinely deny that police strategy and tactics drove the decline in NYC crime. We always hear instead about an overall crime decline. Sure, without a doubt there was a secular decline in crime that benefited NYC, but that doesn’t explain that city’s vastly outsized success. Places like Chicago and Indy have murder rates 4x NYC. Cleveland is something like 7x.

And of course such arguments never apply to any urbanist preferred policy. For example, pretty much every downtown in America is seeing a bit of a resurgence, with new apartments, restaurants, etc. Yet we are frequently hear streetcars or some other such credited as producing these, even when there are similar results in places without them. I think in this case advocates would clearly see that there is a trend, but that policy and implementation also matter.

Others want to bring up police misconduct. Accusations of that should be investigated thoroughly and fairly, and bad cops need to be held accountable for their actions. But that doesn’t somehow mean good cops implementing good policies should stop doing so. I think we can walk and chew gum at the same time.

And I can’t help but notice an endless stream of pieces pounding the drum about police improprieties juxtaposed to next to nothing about the far too large number of innocent people killed and otherwise victimized by criminals each year.

Twitter user @True_Urbanism shared his remembrances of NYC in this consolidated tweet storm in response to my piece (translated from Twitterspeak):

The most successful economic development policy in NYC was the big reduction in crime. In declining years, so many people fled because of high crime crime. It’s hard to communicate the pall that fell over NYC — even in relatively “safe” neighborhoods — people staying home in evenings, etc. Weird safety “precautions”: carrying mugger $ (so mugger won’t slash out of frustration); triple locked doors…Popular special “Fox police locks” on doors: leaning bars that prevented aggressive robbers from pushing in weak doors! Special instructions from friends regarding which street to use and not to use when visiting (e.g. on Upper West Side, Chelsea). In poor neighborhoods, great demoralization: coming home and being robbed of week’s pay or home robbed of hard-earned appliances. And concerned minority families sending kids to live with relatives to be safe and to be away from bad influences. It seemed like “everyone” was planning to leave NYC when they could finally afford to, or could get a job elsewhere.

The thing is, this is the reality in a lot of urban neighborhoods today in cities outside New York. Parents still have their kids trained to hide under the bed or in a bathtub when the bullets start flying. Just because the rich neighborhoods in many places have crime rates at near-NYC levels doesn’t mean its still not the civic equivalent of 1974 in others.

If we really care about inequality, the first thing we should care about is public safety inequality. Yes, that means building better police-community relations and a lot of other things. But it also means aggressive policing using best strategies we’ve seen work in places like New York.

By the way, this the exact approach urbanists loudly agitate for constantly when it comes to traffic safety: more policing, more enforcement, more technology, more prosecutions, etc. for those violating traffic laws.

I’ll mention one other argument I hear that I don’t believe even the people making really believe. Namely this idea that because NYPD stopped writing parking tickets and such for a couple weeks and chaos did not ensue, that means policing is overrated. As if we’d suffer an instant wave of building collapses if inspectors stopped citing small code infractions, or a major outbreak of food poisoning instantly if health inspectors did the same. I don’t believe the 1970s are sitting in a cage waiting to escape the minute we turn our eye way. It takes time or changes in policy, enforcement, and incentives to percolate through. But you can be sure that if the police stopped enforcing speeding or parking laws, drivers would eventually figure out they could do what they want with impunity. There are eventual consequences to changes in enforcement behavior.

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Topics: Public Safety
Cities: New York

Thursday, January 8th, 2015

The Myths of Municipal Mergers

My latest post is in the January issue of Governing Magazine and is called “The Myths of Municipal Mergers.” Consolidation and regional governance are often touted as a solutions to urban ills. There was a lot of focus on the fragmented geo-political landscape of the St. Louis region in the wake of Ferguson, for example. But while consolidation can have benefits and curb abuse in some cases, it’s far from a panacea and can create as many problems as it solves. An excerpt:

As for cost savings, evidence suggests that these are vastly exaggerated and that the cost of government can actually go up. This was the case in Indianapolis, where in 2007 the city finally consolidated police departments. The move was projected to save $8.8 million per year. A post-merger audit by the firm KSM Consulting found that actual savings were “negligible.”

Corporations frequently manage to save money when merging. That’s because they can pare costs by eliminating redundancy and harmonizing salaries. But in the public sector, nobody is likely to lose his job, and salaries tend to be harmonized to the high water mark.

Yet there’s an argument to be made for consolidation of especially small cities. Unlike big-city governments, these often fly under the media and state radar unless a major problem erupts. This renders them vulnerable to abuses. It’s no surprise that it was Bell — not small on an absolute basis, but only the 215th largest municipality in California — where the city manager was making nearly $800,000 per year. Combine small size with poverty, as in Bell, and these places are often doubly overlooked.

Click through for the whole thing.

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Topics: Public Policy, Regionalism

Saturday, January 3rd, 2015

The Urbanophile 2014 Year in Review

Happy New Year everybody! I’m back after the holiday with a look back at the previous year here at the Urbanophile. Thanks so much for your readership and support.

As I mentioned, I’m going to be dialing back my posting frequency this year. To keep up without having to keep checking back to see if I’ve posted anything new, the best way is to subscribe by email (which includes exclusive content) or subscribe by RSS for those of you like me who prefer newsreaders.

Here are some of the best pieces from the last year.

January
I make a major case that state economic development strategies should be metro-centric.

February
Michael Scott examines the overlooked potential of urban alleys.

March
Eric McAfee takes a visit to Wal-Mart’s hometown of Bentonville, Arkansas.

April
Over at New Geography, I examine the rise of the executive headquarters.

May
As more businesses move downtown than anywhere else I’ve seen, I ask if something is wrong with Chicago’s suburbs.

June
I talk about how Dallas is an an inflection point in its development trajectory, and that one thing it needs to address is its challenging pedestrian environment downtown.

July
I ask: do cities really want economic development?

And I rake Rhode Island over the coals in City Journal for its failed economic policies. I also give a three part installment on how to fix it: part one, part two, and part three.

August
I take a look at how the small industrial city of Kokomo, Indiana is trying to reinvent itself.

I also talk about how the loss of hometown banks and other operating businesses turned many cities from growth machines into decline machines.

September
I talk about my paradigm of the new donut.

October
Daniel Hertz shared some stunning maps of New York City segregation.

November
Pete Saunders talks about the three generations of black mayors in America.

December
Steve Eide uses Hollywood to explore the three ages of boss rule in American cities.

These are but a few highlights. Check out the full archive of posts in my left sidebar.

Again, thanks so much for reading. Have a great 2015!

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Sunday, December 21st, 2014

Global City Framework

I’m going to be away until after the New Year. If you haven’t finished your shopping yet, a great way to support the Urbanophile without it costing you an extra dime is to do your last minute shopping through this affiliate link to Amazon.com.

This is a concept in development, so I’m going to open this post up to comments.

Global cities are like that famous quip on obscenity: we know one when we see it. But the definitions of global cities are incredibly varied and there doesn’t seem to be a consensus or well-defined way to think about. I looked at the criteria used in various prominent studies back in 2012 and found them highly divergent. Only the Sassen based one appeared to have a robust definition and theoretical basis, but it’s a pretty narrow definition. While it’s very important and useful, I don’t think it fully captures what the average person or urbanist thinks of on the topic.

In wrestling with the global city idea while working on the global city study I did some research for, I put together this framework to help organize our thinking.

Global City Framework

This framework seeks to capture in a structured manner all the ways people talk about global cities that I’m aware of.

There are three basic categories of criteria people use in defining global cities: economic function, non-economic function, and size.

Economic Function

Some, like Sassen, define global cities by economic function. In her case, just being a financial center isn’t enough. You need to be producing financial services products specifically related to the global economy, not just making mortgages domestically. I list “Financial and Producer Services Center” as a shorthand for this. In all of these definitions, when I say a “center” I’m referring to a center of global or regional (e.g., European or Latin American) significance, not simply a domestic center.

If I have a contribution to the global city definition genre, it’s my contention that places like the Bay Area (tech) or Paris (fashion and luxury) that are important global or regional epicenters of an important 21st century macroindustry are also global cities in a powerful sense by virtue of that.

The idea of being a transport hub for goods or services is self-explanatory, though I’ll note that simply being a goods distribution hub (such as a global air freight hub like Memphis) doesn’t necessarily imply a high value, high wage economy.

Lastly, and perhaps this is one I made some contributions to as well, is the idea of a “safe zone” for investing or parking capital. Much of the world is volatile economically and only has a dubious attachment to the rule of law and property rights. Hence wealthy people in those countries like to stash their cash in places where they consider it safe. Where I would distinguish this from a simple offshore account as in the Caymans is that this investment often includes real estate, and the rich folks in question often establish a personal base there. New York and London as the paradigmatic global cities obviously fall into this category, but I’m more thinking of regional hubs like Dubai, Miami, and Singapore. These places have established themselves as premier business (and in some cases cultural) hubs for their regions.

Non-Economic Functions

These are other aspects of a city’s function that I see as not directly economic, though obviously there are economic impacts. Most of these perhaps could be subsumed under being in an industry epicenter, but since global city surveys often call them out separately, I will as well.

The first item is being an important global political capital like Washington, Moscow or Beijing. Enough said.

Another important dimension is being a cultural and media center. Los Angeles profoundly affects the world because of its entertainment machine and the media that goes along with it. (By contrast, Mumbai may be a huge film center, but serves largely a domestic and Indian ethnic audience). Obviously the English language cities have a big advantage here in terms of media, though cities like Paris have a powerful cultural role.

Lastly, being a global tourism center is another dimension. Which places draw foreign visitors? You might want to read Nicole Gelinas’ recent taken on international tourism’s affect on New York. NYC attracts a third of all foreign visitors to the United States.

Size

Lastly, many surveys include measures that are purely about size, such as total GDP. The rhetoric about megacities (those with more than 10 million people) shows a fascination with size as well.

Success and Performance Indicators

Beyond the categories that define what global cities are, I include a horizontal layer talking about how to think about whether they are successful. I think there’s a big debate that can be had about whether these are performance indicators or selection criteria. Obviously more global city surveys want to pick highly performing cities, so these are part of their evaluation matrix. I myself originally included diversity and educational attainment (talent hub) on the non-economic function list.

I won’t go through these as they are pretty self-explanatory. I’d be interested to see where you all would put these, and what you’d add to or drop from the list.

By the way, in that global city survey I worked on, we decided to look purely at economic function, though pulling across media hub and treating that as an industry. We felt that taking this sort of view was a gap in the existing inventory of ratings, and also perhaps the most important way to think about global cities.

Again, comments are open on this one, so please share your thoughts.

Friday, December 19th, 2014

Why the Rent Is Too High, Reason #239

It’s no secret housing costs are high and going higher in major US cities like NYC, San Francisco, etc. I was just tweeting with someone this week who moved back from Park Slope, Brooklyn to Indianapolis because her rent was being raised by over 50% (possibly that’s a cumulative increase over time – not sure).

Most of the urbanist discussion tends to focus around zoning as the reason prices are high. That’s certainly an important factor. But there are also other things driving up costs and rents. The NYT highlighted one of them last Sunday, namely the permit expediter tax:

When Mark Brotter dies, the inscription on his tombstone will read simply: “Thank God — no more plumbing Schedule B.”

Mr. Brotter, 55, is an expediter, an imprecise term that is used to describe the men and women whose workdays are spent queuing up at the Manhattan branch of the New York City Department of Buildings to file the documents and pull the permits that allow construction projects — your kitchen renovation and the high-rise next door — to go forward. “I’m basically a middleman,” he said. For its part, the Buildings Department insists on the title “filing representative.”

Others are employed by large firms that do nothing but expediting, or are on the staffs of architectural or engineering firms. In the early 1990s, expediters numbered 300 to 400; today there are more than 8,300. (Filing representatives must register with the Buildings Department and pay a $50 annual fee for the right to stand on lines at department offices.)

The expediter’s fee varies depending on the outlay of time and the complexity of a job. The charge for securing a permit for a contractor ranges from $200 to $400; for filing a project, $1,500 to $3,500. Plans that must go before the Landmarks Commission are a more costly proposition, as are projects that involve the conversion of a commercial space to a residence.

Now these prices aren’t ridiculous in the grand scheme of things for New York City real estate. But the idea that there are 8,300 people making a living standing in line to file permits for people points to the entire structure of how development gets done in big cities (NYC is hardly alone in this particular industry) in ways that continually raise costs. This is beyond the cost of delays that a baroque permitting process introduces.

Particularly when you are trying to build lower rent buildings, all of the fixed costs you have to incur to built anything (land, permits, expediters, etc.) have to be recovered and amortized across the units. When you have a hyper-complex development environment, these fixed costs raise the minimum viable rent threshold and thus push the cost of construction towards the higher end of the market that is already being served.

To bring the cost of housing down, cities should be working on all fronts, not just zoning to make it happen.

This particular case is instructive regarding barriers to reform, however. If the city made it easy enough to file plans and get permits in ways that didn’t require an expediter industry, 8,300 people would be out of work. Presumably they would squawk about it. I’m sure I would if I were in their shoes As with many regulatory reforms, the benefits are diffuse and hard to see, whereas the costs are concentrated and obvious.

Also, just one reform in and of itself is unlikely to produce immediate substantive change. Broad based reform in many areas is needed, then there will be a lag as investors adjust to and take advantage of the new environment. This may involve shorter term pain for longer term gain, much like disruptive technical innovation.

That’s not a formula politicians like. It’s one reason Japanese Prime Minister Abe’s “third arrow” of structural reform remains mostly in its quiver. Too many interest groups face immediate pain from reform, but the payoff is raising the economic potential of Japan and creating conditions in which future growth can occur, the exact nature of which can’t be predicted. That’s a hard sell to make, which is one reason politicians tend to focus on things that have immediate benefits to at least some people, such as tax cuts or spending programs.

Regardless, beyond just changes in zoning or this or that process or regulation, there needs to be a mindset shift in how these cities approach development to bring about a broad based change in housing affordability.

Thursday, December 18th, 2014

The Urban vs. Rural Wars Within States

The well-known fault line between urban and rural portions of our states got a lengthy treatment (and one that not surprisingly tilts pro-urban) in the Kansas City Star:

It’s a formula played out in one state after the next. Rural areas hold political clout well beyond their numbers, winning regularly on the issues and in the division of tax dollars.

They triumph primarily by better holding their coalitions together — driven partly by the stubborn myth that they get the short stick from their big-city cousins — and because the drawing of legislative districts works in their favor.

The result leaves people in urban areas regularly outplayed at lawmaking. “We simply cannot count on the state government to help us,” said Kansas City Mayor Sly James, voicing a frustration felt by urban mayors across the country.

The piece is worth a read.

I’ve written on this topic before myself. As a guy who is the Urbanophile today, but who came from a rural area in Southern Indiana, I feel like I’ve got a foot on both camps.

I completely understand and share many of the frustrations of urban areas. State policies towards urban regions are often awful, and too many states seem determined to destroy their biggest economic success stories.

But in my view urban folks have as many blind spots and prejudices towards rural areas as the other way around. Clearly urban dwellers have no intentions of leaving rural residents alone to live in the country with their guns, farms, etc., so it shouldn’t be surprising to see that rural residents are painting a target on cities too. Part of the detente we need to have here is to adopt something of a live and let live philosophy, so that, if urban and rural people don’t agree on a lot of things, they’ll at least leave each other to pursue their own definition of the good life.

I’d also remind urbanites that they tend to advocate for increasing redistribution, not reducing it. The redistribution of revenue from metro to rural areas is in my view very consistent with urban values as urban areas are more prosperous as a whole than rural ones.

But beyond redistribution there needs to be a great effort made to build bridges and understanding between these areas, something that hasn’t been on the urban agenda. Here below is a column I wrote for the January 2014 issue of Governing talking about this issue and the new bargain I think we need to find a way to strike:

Who could argue against making things better? It seems absurd. So why is it so hard to make progress? One reason is that there are often structural forces that act to suppress improvement. One force in particular is the increasing divergence in attractiveness and performance between communities.

Ball State University economist Michael Hicks, writing in Howey Politics Indiana, elaborated on the problem: “Almost all our local economic policies target business investment and masquerade as job creation efforts. We abate taxes, apply TIFs [tax increment financing] and woo businesses all over the state, but then the employees who receive middle-class wages (say $18 an hour or more) choose the nicest place to live within a 40-mile radius. So, we bring a nice factory to Muncie, and the employees all commute from Noblesville.”

This tells you everything you need to know about why Indiana’s state government has traditionally been hostile to efforts by localities to improve quality of place, whether through mass transit or through public services such as new libraries and better performing schools.

To the extent that a place like the Indianapolis suburb of Noblesville continues to improve itself, this only increases the advantages it has in luring residents and jobs away from struggling post-industrial communities like Muncie that have fewer resources to rebuild with and are further out from the urban center. This dynamic is hardly unique to Indiana.

Struggling places that surround prosperous communities may not be interested in seeing those successful towns improve any further. That’s not necessarily out of malice, nor may it even be explicitly considered. It’s simply an implicit incentive, and has a certain amount of logic. If those struggling places constitute an influential block in the state legislature, they can certainly put roadblocks in the way of community improvement efforts that would only fuel the divergence that puts their city increasingly at a disadvantage. This creates a structural barrier to change.

Removing this barrier requires a type of thinking and bridge-building that has fallen by the wayside in the contemporary economy, namely restoring connectivity between thriving cities and their broader but less-well-off hinterlands.

In the age of globalization, cities and states would rather build bridges to the world than to the town next door. Some of this is simply the way the economy works. As Richard Longworth, senior fellow at the Chicago Council on Global Affairs, wrote in his book Caught in the Middle: America’s Heartland in the Age of Globalism, “Chicago probably deals more, daily, with Frankfurt or Tokyo than it does with Indianapolis.”

He went on to identify the problem at hand, noting that “Globalization is beginning to isolate cities from their hinterlands: The hinterlands see this trend and are disinclined to do anything to speed it up. They perceive that most of these people—globalization’s winners—have never spent 30 seconds worrying about globalization’s losers.”

This is the two-tier society we see developing nationally playing out at the local level. It creates a tug of war at the state policy level, and it tears apart the whole notion that we are a commonwealth. It creates states that are, as Longworth put it, “hives of warring interests.”

There are no easy answers for many of the struggling post-industrial cities in America. Many places realistically may not recover, particularly if they are too far from a metro center or too far into decline. But we can have more successful places than we do. One obvious challenge for smaller areas is that they are cut off from global flows and economic opportunities. Building stronger links to their neighbors that are connected is critical. That’s their potential on-ramp to globalization.

What’s needed is a new bargain in our states and regions. Larger metros and thriving regions will be given the authority, tools and financing they need to improve themselves and meet the demands of today’s globalized, talent-based economy. In return, they will be expected not just to send back tax “remittances” to the rest of their state, but also to deploy some of their intellectual and policy resources toward the problems facing the left behind areas. The losers need to let the winners get on with their winning, while the winners need to remember where they came from and who brought them to the dance.

Creating those connections won’t be easy. But it starts with a conversation, with getting to know each other, building trust and creating commitment. That’s not as sexy as an overseas trade trip. But if the winners want to get the losers on board with state policies that promote civic improvement instead of fighting every step of the way or trying to steer the course toward a race to the bottom, this is something they very much need to do.

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Topics: Public Policy, Urban Culture
Cities: Kansas City

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.

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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.

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