Search

Thursday, July 18th, 2013

The Illusion of Growth Economics: Can Cities Like Charlotte Reinvent Themselves?

My latest post is online at Governing. It is called “The Illusion of Growth Economics: Can Cities Like Charlotte Reinvent Themselves?.” I was prompted to write this by an article out of Charlotte discussing how that city was raising property taxes for the first time in 20 years as it became unable to annex new territory yet continued to have capital needs. I reiterate a number of themes I’ve hit here before. Here’s an excerpt:

The transition from thinking about managing rapid growth to thinking like an operator is a tricky one. Even many companies fail to make it. Retailers, for example, frequently fall on hard times when they reach the point where they can no longer simply open new stores to meet financial targets.

Cities that are benefitting from strong growth have the wind at their backs. But it would be naive to assume that they must be doing something better than everyone else just because of that. Places like Chicago and New York were the Charlottes and Houstons of their day, right down to their laissez-faire economies. But they eventually hit the limits of growth and had to wander in the wilderness while trying to reinvent themselves.

This is the mark of a great city. A London or a New York can sustain and reinvent itself across growth cycles. Too many places, particularly our Rust Belt cities, have not met this challenge. When the economy shifted and growth ended, they went into a decline that has not yet abated.

Charlotte may not be at the peak of its growth cycle, but an uptick in taxes should be a cautionary note reminding leader that for cities heavily dependent on raw growth, the punch bowl eventually runs dry.

Thursday, October 6th, 2011

The Cost of Congestion, The Value of Transit

Last week the Texas Transportation Institute released the 2011 edition of its benchmark Urban Mobility Report. It is packed full of useful statistics about roadway networks, congestion, and public transit, though is not without its critics (see below). I’d like to highlight some of the more interesting findings out of this.

The Value of Transit

One of the values TTI estimates is the number of additional hours of delay each peak hour commuter would incur annual if public transportation were discontinued. In effect, this is one key benefit to motorists of public transport. Here are the top 10 cities:

Obviously New York is far and away the winner with 63 hours of additional delay per peak period auto commuter if its transit system were discontinued. TTI puts the value of an hour of time at $16.30, so this translates into an average of $1026.90 in dollar benefits to each and every auto commuter in greater New York City from transit. That’s not nothing.

To further show the value of transit to New Yorkers, let’s do a quick back of the envelope type calculation for illustrative purposes. The median household income in metro New York is $61,927. If each home with an auto commuter in it has one and only one commuter who obtains the average benefit, and incomes of auto commuters follow the overall, then this auto benefit is equivalent to 1.66% of income. You can think of it as sort of like a 1.5 percentage point cut in the income tax rate for those households, just based on the value delivered to them.

Now of course those households probably make contributions towards transit through taxes and otherwise, but clearly they are also getting a return even if they don’t ever ride transit personally. Also, this considers only peak period commuters, not non-peak drivers (who also experience significant delay in New York) or the value of transit to commercial vehicles, which is likely big as well given than NYC incurs over $2 billion in cost due to trucking delays from congestion.

After NYC, the savings drop off rapidly, but there are six additional cities with more than 10 hours of delay savings per peak commuter, so they probably get something material out of it.

On an aggregate basis, the total value of congestion avoided as a result of public transit is impressively high as well, as this look at the top ten cities shows (in millions of dollars):

Again, New York dominates the charts with nearly $8 billion in savings. But even down the charts there’s big money. In Chicago, which is gearing up for another round of fare hikes and service cuts, the cost of congestion avoided due to public transit is about the same as the combined operating budget of all regional transit agencies. Chicago transit is effectively self-funded in terms of benefits delivered to motorists alone.

Commercial Vehicle Traffic

TTI has also started trying to break out the cost of delays to commercial vehicles. Here are the top ten cities for trucking congestion delays, in millions of dollars:

It doesn’t surprise me to see Chicago is number one, given its status as the nation’s premier transport hub and the large number of highways that pass through it.

Lane Miles

When looking at congestion, I think it’s also relevant to consider the size of the roadway network relative to the population. TTI reports freeway and arterial lane miles, so we can do this calculation. Here are the top ten cities for freeway lane miles per capita, for metro areas greater than one million people.*

The one that jumps out at me is Cleveland. As a shrinking region, it would appear to be significantly over-supplied with freeways. I think this shows the excess infrastructure overhang that hurts these places in trying to turn around decline.

Here are the bottom ten:


Note: Riverside has a likely data error in the master TTI spreadsheet the artificially lowers its score here.

Again unsurprisingly, the big cities with bad congestion have a comparatively low number of freeway lane miles per capita. Make particular note of Chicago as we’ll come back to it.

TTI and Its Critics

I could do a lot more on the TTI report, and maybe I will in future posts, but I wanted to address the notion that TTI’s measures have been “debunked” as some have said.

The root of this goes back to a CEOs for Cities report called “Driven Apart” that basically says that TTI and the way they measure things are wrong, and that different measures would be more appropriate.

I doubt most of those who link to that report approvingly have ever read what it says in detail. I’ll freely admit I haven’t either. But having looked at previous work Joe Cortright did, I’m confident it’s technically sound.

Regardless, I think that this is never going to gain mind share with the greater public, and that only the hard core urbanist true believes are going to be impressed with it.

Let me explain why in contrast to the extremely successful CEOs for Cities “Talent Dividend” research which shows the size of the prize for increasing educational attainment. Firstly, in education there is already unanimous consensus that we need to raise education attainment, even if there are debates about getting there. So this is preaching to the crowd. Second, the idea that raising educational attainment boosts incomes its intuitively obvious because in our everyday experience, the people we interact with on a daily basis who have more education tend to make more money. And the causal link is clear. The Talent Dividend merely takes this everyday experience and makes it real at the macro level, showing the size of the prize. Also, its policy prescription of shooting for a one percentage point increase in college degree attainment is intuitively achievable.

Now contrast this with Driven Apart. Here we have low consensus about what we want to achieve. Additionally, the notion that places like Chicago are somehow better than Charlotte for drivers is counter-intuitive and flies in the face of the everyday experience of Chicagoans.

I am inclined to be pro-urban and pro-transit. But I’ve commuted in Chicago and can tell you that traffic is simply horrific. Complaining about traffic and the CTA are two of the most common Chicago pastimes. Not only that, traffic has been getting worse over the years. This is not just commuting. Expressways like the Kennedy and Eisenhower are now basically backed up all day. Even on a Saturday or Sunday, traffic frequently grinds to a halt. As near as I can tell, the ramp from the inbound Ryan to the outbound Ike is backed up effectively 24 hours a day. The numerous six way intersections like Belmont/Lincoln/Ashland and Fullerton/Damen/Elston make driving around the city a chore as you sit through multiple lights. (And hope you don’t have to turn left).

Now the Driven Apart report doesn’t deny this, but simply suggests that’s the wrong way to look at it. Rather, we need to consider distance, etc. and that it’s the total time driving that counts. Here’s the chart comparing Chicago and Charlotte:

Perhaps the “average” trip is shorter. However, what shapes most people’s view of traffic is commuting. And according to the Census Bureau, Chicago’s average commute time is longer than Charlotte’s:

A look at the distribution of commute times suggests that it’s better to commute in Charlotte than Chicago across the board:

Even if non-commute trips are on average far shorter and take less time in Charlotte, I can tell you that in Chicago, because of the unpredictability of traffic and transit, people routinely build huge extra time buffers into their journey, which is deadweight loss if your trip turns out to be short.

Driven Apart suggest that the real culprit we should be looking at is sprawl. I agree that’s a key problem. However, Chicago is one of the most sprawling regions in the US. Indeed, that’s one reason it’s traffic is so bad. This has been tirelessly documented by the Center for Neighborhood Technology and others. Talk to any urbanist planning group in Chicago, and restraining sprawl is a top priority. As I noted in my census coverage, virtually all Chicago growth in this stagnant region has been in the exurban areas. The region seems to actively promote this, with items such as extended Metra service to Elburn and a planned $69 million interchange expansion at I-90 and Route 47 in exurban Huntley. The sprawl has even spread into Rockford, whose metro area is seeing a big influx of people from Chicago despite its depressed economic state.

Beyond sprawl, Chicago also has the third lowest freeway lane miles per capita of any metro area in the US greater than one million people, though it does better when looking at arterial lane-miles.

So whatever the merits of Driven Apart (and I’m not claiming any of it is per se wrong), implying something like Chicago is better than Charlotte for drivers falls into the category of “extraordinary claims require extraordinary proof.” Something that is effectively a technical argument is never going to sell, particularly when it flies in the face of the everyday experience of people who live in these cities. I know both Chicago and Indy (another city cited for its sprawly commutes in the Driven Apart study) intimately from a driver’s perspective, and there’s simply no comparison. In terms of getting places, Indy is just indisputably better to me. I don’t think I could ever be convinced to think otherwise.

Given this, I think the idea that traditional measure of congestion are going to be dethroned is a long shot at best.

* Note that TTI urban areas are not metro areas but a bespoke region. The population used for thresholding which regions to include was the Census population of the metro area, but the population value used for per capita calculation was the population of the TTI region as reported by TTI.

Tuesday, January 12th, 2010

No Promise of Safety

He’s Baaaaack. Everyone’s favorite urban explorer and photographer seems to have successfully resolved his most recent round of legal problems, with the result that his No Promise of Safety Site is back up. At least for now.

Whoever this guy is, he’s part of a subculture of people who gain unauthorized access to buildings, factories, tunnels, and other parts of urban infrastructure. They appear to be driven a sense of adventure, thrill seeking, curiosity, and a desire to go where few folks ever visit.

I won’t necessarily condone this – especially not the vandalism and grafftti in which they engage – but this sort of thing is one of the many edgy sub-cultures that go into making urban life what it is. I might even suggest without these subcultures, urban life would be a lot more boring.

Also, this guy takes some of the most amazing photography of the places he visits I’ve ever seen. He deserves the title of artist based on these phenomenal photos alone. I strongly suggest checking them out – while you can. Since this guy seems to get in periodic trouble with the law, I might suggest saving a copy of any you can’t bear to live without in case the site disappears again.

Again, the pictures are amazing. Here are a few samples to whet your appetite.

Indianapolis

31 stories the hard way:

Chicago

Sitting on the balcony at Aqua, I believe:

Cincinnati

Charlotte

Tuesday, October 6th, 2009

Replay: Failure of Ambition

[ I am re-running this article for two reasons. One, after Chicago failed to win in its quest to host the Olympics, it's worth reminding us that there's nothing wrong with dreaming big and aiming for the top. You won't always win, but if you never get in the game to begin with, you are guaranteed to fail. I believe in stretch goals. If you don't fail to achieve at least a few of your ambitions, then you probably didn't aim high enough. As Theodore Roosevelt famously put it, "It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat."

That doesn't mean the ambition is a substitute for covering the basics. Far from it. I've long said the mark of a great city is in how it treats the ordinary, not the special. A handful of monuments or events don't make a great city. But nor does a steady diet of the mediocre. Man does not live by bread alone. I don't think there is any conflict between high ambition and taking care of every day business. A great city needs to do both. Nor does this mean you can't criticize or take issue with any particular ambition. "Make no small plans" is not a get out of jail free card.

The second reason is for the Midwest to enjoy a little Charlotte schadenfreude. Burgh Diaspora pointed us at this piece asking questions about the future of Charlotte. "The paper is filled every day with announcements on building loans for both commercial and residential real estate in default. The Building Cranes are disappearing. Projects are stopped in mid construction. The lot around the corner from my house that was supposed to be a high end luxury townhouse complex but hasn't had a worker on it in over six months. Pink slips are still handed out, bonuses aren't what they used to be. No luxury auto and jewelry displays this past Spring. All of the finance committees at the private schools are worried about next years enrollment as the students' parents are transferred or pink slipped." And, "The mayor ran an ill-fated campaign for Governor so the last of the Charlotte Trinity is gone. Charlotte is a ship without a captain." See Jim's take - Charlotte Bust - as well. And remember it since I'm taking his core idea for my next post :)

This article originally ran on September 28, 2008 ]

Why did the Midwest fall behind? Why do its big cities continue to lag the top performers nationally? It’s easy to blame this on structural problems, but could the problem simply be a lack of will to compete?

Burgh Diaspora points us at this Time magazine article on Charlotte. As I previously noted about Nashville, Charlotte is a city of high ambition. They look at the boomtowns of the region like Atlanta, Dallas, and Phoenix and say, “Why not us?” Quoting:

“‘To understand Charlotte, you have to understand our ambition,’ says chamber of commerce head Bob Morgan. ‘We have a serious chip on our shoulder. We don’t want to be No. 2 to anybody.’ Civic leaders often compare their city to New York, Chicago, and even London.”

London? Ok, there’s more than a whiff of hubris in this Charlotte story. They claim to be the #2 banking center, but that only includes commercial banking, and is a heckuva lot less true after one of its two champions, Wachovia, got swallowed up by Wells Fargo. And their claim to having weathered the housing storm successfully is belied by the fact that Charlotte is ground zero for the edge subdivision turned nouveau slum story.

Still, when you compare it to most Midwestern burbs, the difference in sheer ambition is astounding. Charlotte measures itself against London, New York, and the top cities of the world. Most Midwestern cities other than Chicago and Minneapolis would be happy to be known as the “Star of the Rust Belt”. That’s like saying your ambition is to win the losers bracket in the JV playoffs again this year. The Midwest has, to a great extent, even given up on competing. When I talk to my colleagues in India or Argentina, what strikes me is how hungry they are. These are people who’ve gotten a taste of success and are desperate for more. They want to hit it big and take what they see as their rightful place in the new world order – and they are willing to kill themselves to get there. The most astounding thing to me is the work ethic in India. Here’s a place where it is still dotcom 1999. Anybody on my team there could literally walk across the street for a 30-50% bump. But instead they are in the office Saturdays and Sundays, killing themselves to hit the deadline. Places like Charlotte, Nashville, etc. have a bit of that same attitude. The Midwest, by contrast, sits, as Richard Longworth put it so well of Cleveland, “sour and crumbling”, unable to even muster the will to understand the world it is in, much less complete in it.

Charlotte gets it. As their leaders say, “Charlotte’s nine FORTUNE 500 companies help run the city, not only by writing checks–Bank of America and Wachovia have pledged $15 million apiece to build new cultural centers–but also by helping to write plans. ‘We’re a pro-business city like none I’ve ever seen,’ says Center City Partners head Michael Smith. ‘It’s true about Southern hospitality, but there’s a real hunger here.’ It can be jarring to hear Charlotte’s power brokers explain that it’s important to improve their city not for its own sake but for the sake of its businesses, which need high-quality culture to attract high-quality talent. “

And “While the rest of the country is sinking, Charlotte is soaring, with 28 construction cranes downtown. It’s got the nation’s least-battered metropolitan-housing market, lowest office-vacancy rates and fastest-growing airport. It hosts the NBA’s Charlotte Bobcats and the NFL’s Carolina Panthers. Its center-city population has doubled since 2000, and its light-rail system, just a year old, is already approaching its ridership goal for 2025. Meanwhile, ribbon-cuttings are scheduled for the NASCAR Hall of Fame, three museums, a theater and an African-American cultural center by 2010.”

Again, some of the stories are oversold, but the cumulative effect is real. I’ve been known as a light rail skeptic for small sprawling cities, but regardless, when you decide to do something, do it. Not one comparable city in the Midwest has cranked out a rail system while Charlotte and Nashville put theirs into operation and started remaking their cities to take advantage of them. And a little hubris isn’t bad, when it motivates you to try to live up to your own big talk. In the Midwest, all we ever here from smaller cities is how they can’t compete with San Francisco or New York and have to get by on table scraps. Yet in Charlotte it seems every other person is a transplant from the Northeast. They figured out that they can build an offering that is capable of attracting the right kind of person – if they show a civic ambition that matches the personal ambitions of their target audience.

There’s still room in the club. There is an opportunity out there for one of the smaller Midwest cities to step up and claim their place at the table. But right now it looks like only Chicago and Minneapolis wants it. It’s the parable of the talents, played out in real life. Will anyone else step up? Only time will tell.

PS: One of the top sources of migrants to Charlotte: the Rust Belt.

Saturday, November 15th, 2008

Charlotte, Bruce Mau, and Other Miscellaneous Musings

I’ve repeatedly shown how the Midwest’s cities are getting smoked not just by the Seattle’s and Austin’s of this world, but by the oft derided sprawlburgs of the South. Atlanta has a heavy rail subway system and massive urban infill, including lots of in city high rises. Nashville has a small starter commuter rail line and a form based zoning ordinance. Charlotte is building tons of high rises downtown and has a light rail line. These cities see other places with nice stuff and say, “We want nice stuff too. We want to be in the top tier of American cities”. They are hungry. I think the bulk of Midwestern cities aren’t even aware of what’s going on out there, much less want a piece of it.

The Overhead Wire took a recent trip to Charlotte. To help show what they’ve got, here are a couple of pics he took.

Light rail with new transit oriented infill being built directly next to the tracks.

New streetcar tracks going in.

Ridership – on a Thursday midday – not rush hour.

Gasp! – They actually have a zoning classed called “TOD” – Transit Oriented Development.

I got to check out one other program at the Chicago Humanities Festival. This one was a Bruce Mau presentation on something called “The Chicago Project”. For those who you aren’t familiar with Bruce Mau, please check out my review of his book “Massive Change”. The Chicago project is his entry in the Burnham Centennial celebration. He’s trying to develop new and innovative ways to reinvent the city to face the urban and environmental challenge of the 21st century. This was a very exciting project to me because it hits head on the biggest problem facing the city. Namely, that Chicago is out of ideas, a topic I previously covered.

The first example idea they gave was interesting, but not without its downsides. They talked about erecting a sort of greenhouse canopy over the L tracks on the Jackson Park branch of the Green Line. This would create a protected environment for local agriculture, as well as provide a mutually beneficial heat exchange with the L station. The idea is to bring agriculture into the urban context, especially into an environment that is a “food desert” with high percentages of obese people, and utilize electric rail for distribution. It’s a very interesting and creative concept. The challenge is that surrounding the L with farm fields is like surrounding it with park and ride lots. You disengage the L from the urban context and reduce the ability of transit oriented neighborhood development to emerge. This might work on a small scale, however.

Also in Chicago, from the better late than never file, the city was named the eighth most important global city in the world by Foreign Policy magazine.

I also had the pleasure of attending a lecture by Modern Art Notes blogger Tyler Green at the Central Library in Indianapolis. This was part of the Spirit and Place Festival. The presentation was entitled “10 Things I Hate About Contemporary Art”. I was expecting a bit of bomb throwing, but Green was much more measured and laid back in tone. Perhaps too measured. His ten things were amusing, however, and ranged from Mary Cassatt to “political art” to the art of disgraced gay televangelist Ted Haggard. Nothing he said challenged any of the fundamental tenets of contemporary art, however. One thing of interest to the Midwestern city: he thinks the Nelson-Atkins Museum in Kansas City is the most successful new museum building in the United States.

Moving on, this week’s Indianapolis Business Journal runs a longish interview with new Convention and Visitor’s Bureau chief Don Welsh. The answers were all extremely positive for the city in my view. I was impressed. Highlights include:

  • A new aspiration level to compete with cities in a high size bracket. “We will be a city that can compete with Boston, Chicago, Minneapolis, Seattle and Denver.” As I’ve long said, if you don’t have high ambition, you are sure never to get to the top.
  • Big plans to more than double convention business.
  • Rebranding the city. As I noted, “So Easy to Do So Much” is fine, but it says nothing at all about what Indy is about as a city and what’s more, it’s something most competitors would probably claim as well. His interim choice is “America’s Premier Convention and Sports City”, which is good as a statement of intent. Premier means first or best after all. And “sports” tells us something about Indy. I suggest that they continue digging deeper, however, and especially consult my post on “The Brand Promise of Indianapolis“. While it might not make a good marketing tagline, I think “Capital of the New Midwest” is the right aspiration.
  • Targeting medical and life sciences oriented events. This is strategic thinking in life sciences. Just as the city used the lure of non-profit orgs and events in the music and amateur sports business, there are intuitively great synergies with the life sciences effort. I believe that the city should try to focus on biomedical and infotech related events to the greatest extent possible to align the events strategy with the rest of the city’s economic strategy.
  • He thinks there will be an announcement of another 1,000 room hotel within give years.

The only thing I wanted from this was more. I would have liked to have heard plans about arts and cultural tourism, which absolutely must be boosted. Also, what he plans to do about the quality (as opposed to quantity) of the hotel rooms on offer. There is not a single hotel in downtown Indy I can unreservedly recommend to an upscale traveler. Even the Conrad, which has ok facilities, is dramatically below par in the service department. There is not a single boutique or design concept hotel in the city.

Staying in Indy, the Indianapolis Museum of Art got a nice mention in this month’s Surface magazine about its Art and Nature Park. There’s a nice rendering of the visitor’s center. Also, the IMA received a $2.6 million Lilly Endowment grant for its conservation department. This would ordinarily not rate mention here, but it highlights a point I’ve been making about strategy. In my previous posting I said I like to know people’s aspirations. At a recent lunch with IMA Director Max Anderson, I asked him what his aspiration was for the IMA. How can that museum carve out a place for itself on the international stage when it doesn’t have the compartive unlimited funds that other museum’s do, or a royal collection at its core? One of the things he said was that he wanted the museum to become known in the conservation field. A very good choice if you ask me. Now you see them acquiring the funding and specialized equipment needed to beef up that department. That’s the way to do it: strategy led development.

The new Indianapolis airport terminal opened this week, and the cutover went very smoothly, a big tribute to the airport staff given how horribly many of these moves are botched. At the dedication ceremony this week, Airport Authority Chairman Randall Tobias quoted Yours Truly’s blog review of the airport, which you can watch here should you so desire. You can see more airport coverage in an article from last March in the NYT, as well as one focused on security.

Which is more important in the new economy, jobs or people? Well, thinkers in this space don’t get any better than Harvard economist Ed Glaeser, whose findings suggest that it is labor supply that matters most.

Here’s a great streaming audio piece from Richard Longworth on globalization and the Midwest. If you think globalization isn’t relevant, think again. I’ve noticed that my globalization writings seem to attract the least interest, but I’m going to keep them up because everyone absolutely needs to be thinking about the implications for themselves and their city. Please be sure to skip the first 13 minutes of that audio program, which is random BS.

Why do many non-riders have a bad image of transit? Perhaps because of ads like this. Copied from Richard Layman’s blog.

It’s totally OT, but some guy tracked down the company behind those ubiquitious “Single?” yard signs referring you to web sites like www.laconiasingles.com.

Chicago. The CTA base fare is increasing to $2.25 under the budget approved this week. The CTA is also cutting over 600 positions.

The Tribune’s Jon Hilkevitch picks up on the transit funding theme from the recent election. Place like Seattle and California are voting to invest while Chicago does virtually nothing.

Local CEO’s warn Mayor Daley that huge layoffs are coming. There are also big worries about how travel cutbacks will affect the city.

Blair Kamin writes about Chicago’s skyline on hold.

The Tribune touts an undersubscribed program to pay for transit with pre-tax dollars.

Cincinnati. The Delta hub at CVG appears in danger in a post Delta-Northwest world. Delta will only say that they are positioning to keep it through 2009. Cincy is in an interesting position with both non-stop flights to Europe, but also America’s highest fares.

Hamilton County Commissioners gave their approval to the creation of a regional transit authority.

UncleRando puts together a sweet self-guided walking tour of downtown Cincinnati.

Columbus. The Columbus Foundation took in a record $119 million last year, bringing its assets to over $1 billion. This makes it one of the top ten community foundations in the country. They also give out donations of about $100 million annually.

Detroit. Like much of the rest of the city, the Detroit Institute of the Arts is in serious trouble.

Louisville. Local rail supporters are now looking at a commuter line to Ft. Knox.

A nice USA Today article that highlight’s Louisvilles art bike rack project.

A library expansion plan continues to move forward.

Milwaukee. The RTA voted 6-1 to ask the state to increase the sales tax to fund transit, including a new commuter rail line.

The Milwaukee County Board reverses course on privatization.

Pittsburgh. Jim Russell of Burgh Diaspora is now also blogging for New Geography. This debut is a compelling, as always, piece on the fallacy of brain drain.

Twin Cities. The final NTSB report on the I-35W bridge collapse blames gusset plate sizing, plus ancillary factors such as excessive construction equipment weight on the bridge.

Monday, September 29th, 2008

Failure of Ambition

Why did the Midwest fall behind? Why do its big cities continue to lag the top performers nationally? It’s easy to blame this on structural problems, but could the problem simply be a lack of will to compete?

Burgh Diaspora points us at this Time magazine article on Charlotte. As I previously noted about Nashville, Charlotte is a city of high ambition. They look at the boomtowns of the region like Atlanta, Dallas, and Phoenix and say, “Why not us?” Quoting:

“‘To understand Charlotte, you have to understand our ambition,’ says chamber of commerce head Bob Morgan. ‘We have a serious chip on our shoulder. We don’t want to be No. 2 to anybody.’ Civic leaders often compare their city to New York, Chicago, and even London.”

London? Ok, there’s more than a whiff of hubris in this Charlotte story. They claim to be the #2 banking center, but that only includes commercial banking, and is a heckuva lot less true after one of its two champions, Wachovia, got swallowed up by Citigroup. And their claim to having weathered the housing storm successfully is belied by the fact that Charlotte is ground zero for the edge subdivision turned nouveau slum story.

Still, when you compare it to most Midwestern burbs, the difference in sheer ambition is astounding. Charlotte measures itself against London, New York, and the top cities of the world. Most Midwestern cities other than Chicago and Minneapolis would be happy to be known as the “Star of the Rust Belt”. That’s like saying your ambition is to win the losers bracket in the JV playoffs again this year. The Midwest has, to a great extent, even given up on competing. When I talk to my colleagues in India or Argentina, what strikes me is how hungry they are. These are people who’ve gotten a taste of success and are desperate for more. They want to hit it big and take what they see as their rightful place in the new world order – and they are willing to kill themselves to get there. The most astounding thing to me is the work ethic in India. Here’s a place where it is still dotcom 1999. Anybody on my team there could literally walk across the street for a 30-50% bump. But instead they are in the office Saturdays and Sundays, killing themselves to hit the deadline. Places like Charlotte, Nashville, etc. have a bit of that same attitude. The Midwest, by contrast, sits, as Richard Longworth put it so well of Cleveland, “sour and crumbling”, unable to even muster the will to understand the world it is in, much less complete in it.

Charlotte gets it. As their leaders say, “Charlotte’s nine FORTUNE 500 companies help run the city, not only by writing checks–Bank of America and Wachovia have pledged $15 million apiece to build new cultural centers–but also by helping to write plans. ‘We’re a pro-business city like none I’ve ever seen,’ says Center City Partners head Michael Smith. ‘It’s true about Southern hospitality, but there’s a real hunger here.’ It can be jarring to hear Charlotte’s power brokers explain that it’s important to improve their city not for its own sake but for the sake of its businesses, which need high-quality culture to attract high-quality talent. “

And “While the rest of the country is sinking, Charlotte is soaring, with 28 construction cranes downtown. It’s got the nation’s least-battered metropolitan-housing market, lowest office-vacancy rates and fastest-growing airport. It hosts the NBA’s Charlotte Bobcats and the NFL’s Carolina Panthers. Its center-city population has doubled since 2000, and its light-rail system, just a year old, is already approaching its ridership goal for 2025. Meanwhile, ribbon-cuttings are scheduled for the NASCAR Hall of Fame, three museums, a theater and an African-American cultural center by 2010.”

Again, some of the stories are oversold, but the cumulative effect is real. I’ve been known as a rail skeptic, but regardless, when you decide to do something, do it. Not one comparable city in the Midwest has cranked out a rail system while Charlotte and Nashville put theirs into operation and started remaking their cities to take advantage of them. And a little hubris isn’t bad, when it motivates you to try to live up to your own big talk. In the Midwest, all we ever here from smaller cities is how they can’t compete with San Francisco or New York and have to get by on table scraps. Yet in Charlotte it seems every other person is a transplant from the Northeast. They figured out that they can build an offering that is capable of attracting the right kind of person – if they show a civic ambition that matches the personal ambitions of their target audience.

There’s still room in the club. There is an opportunity out there for one of the smaller Midwest cities to step up and claim their place at the table. But right now it looks like only Chicago and Minneapolis wants it. It’s the parable of the talents, played out in real life. Will anyone else step up? Only time will tell.

PS: One of the top sources of migrants to Charlotte: the Rust Belt.

Saturday, February 16th, 2008

The Next Slum

The Atlantic Monthly has an article in its March 2008 edition called “The Next Slum“. Drawing on trends in urban redevelopment and noted foreclosure problems, especially in newer, starter home communities of cheaply built houses, this article claims that it is our auto-oriented suburbs on the fringes that are destined to become the next slums, while prospects for more traditional communities is looking up. While I think they overstate the case a bit, and minimize the ever shortening cycle of living and shopping trends, this is nevertheless an interesting article.

Ground zero for this phenomenon is the southern neo-boomtown of Charlotte. I noted earlier how many starter home communities were suffering from extensive foreclosures and increasing crime. One elected official referred to these entry level communities as the “projects of the future.” This article follows in that vein.

At Windy Ridge, a recently built starter-home development seven miles northwest of Charlotte, North Carolina, 81 of the community’s 132 small, vinyl-sided houses were in foreclosure as of late last year. Vandals have kicked in the doors and stripped the copper wire from vacant houses; drug users and homeless people have furtively moved in. In December, after a stray bullet blasted through her son’s bedroom and into her own, Laurie Talbot, who’d moved to Windy Ridge from New York in 2005, told The Charlottee Observer, ‘I had thought I’d bought a home in Pleasantville. I never imagined in my wildest dream that stuff like this would happen.’

I’ve heard reports of similar types of incidents from other cities, though nothing this extreme. It does make you wonder if many suburban communities were prescient in banning this type of development through mandating higher end design and construction standards. I’m actually a big fan of market based solutions to affordable housing. These types of development play a key role in helping people buy into the American Dream with their own home in a solid school district. So going too far in the direction of squeezing out working class people from home ownership is something I’d definitely oppose. I do think this model needs to be revisited, and indeed I expect most of the builders in this space to start looking at how they can tweak their product and sales practices to avoid this in the future. A development that goes south like this can be a major black eye to a builder, and that’s something they will want to avoid having on their reputation. One can proudly build an entry level product that luxury buyers sniff at, but something that turns into a nightmare for buyers isn’t good for anyone. So I expect the builders, prodded by both the government and commercial considerations, to modify their development approach.

Before people with higher incomes brush this off as not their problem, it is affecting higher end communities too. The article cites a similar example from Sacramento where home prices were in the half million range. Admittedly, that’s at California prices, but the principle applies.

The authors go on to suggest that while these problems are being perhaps triggered by the subprime crisis, they are not likely to go away in a cyclical recovery because of structural changes in the preferences of Americans and shifting demographics.

In the 40’s, many Americans were cramped into squalid urban apartments that they were happy to leave behind post-WW II. This led to the decay of our inner cities and their well publicized problems. The city was the source of bad things and dysfunction, in the popular imagination as well as reality. The article cites films like “Escape from New York”. Today, it is the city that is portrayed on TV as the hip and happening locale and the suburbs that are the source of anomie. Contrast Seinfeld and Sex in the City with a Todd Haynes film or Desperate Housewives. This has been backed up in the real world with escalating urban real estate prices and condo building spurts across the country.

Other factors weigh in too. The baby boom generation is about to retire, leading to a new market of empty nesters to whom a large house where you can’t walk anywhere is a burden more than a benefit, and where school districts no longer matter. Families with children make up a smaller percentage of households every year. As gas prices remain high, the cost of commuting from a home far from work becomes almost like a tax, to say nothing of ever escalating traffic congestion.

Put together trends in lifestyle preferences, demographics, energy prices, and the lifecycle of housing and commercial development, and researchers like Arthur C. Nelson are forecasting a surplus of 22 million large-lot homes by 2025, equivalent to 40 percent of such homes now in existence.

Personally, I think this overstates the case. The urban condo boom has largely been limited to America’s largest cities, which are outliers whose experience is not applicable to most places. Even in my favorite example of Chicago, which has comparatively moderate prices and has experienced perhaps the largest condo building boom of any city in the United States, the population is still declining, or stagnant at best. People are still moving out as fast as others move in. Most of these new neighborhoods remain playgrounds for the upper classes, not the broad-based neighborhoods of yore.

Still, we’ll see what happens. I was at a business dinner a couple weeks ago at Spiaggia on Michigan Ave with a mostly 40 and 50-something crowd of business associates and their spouses. Of those from Chicago, 100% of them with children in or nearing high school said they were planning to move into the city as soon as their kids were out of the house or out of college. Friends of mine who used to live in Hinsdale put their toe in the water with a pied-à-terre, then dumped their house to move downtown full time. I have multiple younger friends in the city with small children who’ve said that they are planning to not only stay in the city with their kids, but send them to public schools. One particular woman has been volunteering at the local elementary school with other upscale parents, trying to make improvements before her daughter is old enough to go there. Perhaps the greatest hope for our urban schools is that middle and upper class parents decide to start sending their kids there.

The author doesn’t expect us to all go for the hard core urban experience. He also extols walkable suburbs, such as traditional towns along the railroad lines and those with a strong walkable core. And that traditional suburban neighborhoods closer to these walkable cores might be insulated from the shakeout. He touts especially newer “lifestyle centers” as creating walkable environments that appeal to today.

This last bit is where he really over-reaches, IMO. Lifestyle centers are shopping centers, period. Throwing a tiny amount of residential or office space in there doesn’t make them mixed use communities. The fact that many towns are now referring to lifestyle centers as their downtowns is a bit amusing to me, personally. The principal difference between a lifestyle center and previous shopping centers is aesthetic. It is retro Main St. feel. But functionally it is not that different from an enclosed mall.

This, I believe, highlights the real problem many urban lovers have with the suburbs: their key issue is aesthetic. And it can be easy to drive down some multi-mega-lane thoroughfare lined with car dealership after strip mall after fast food joint and conclude you’ve arrived in some strange version of hell. While I’m all in favor of good aesthetics, if what comes after is largely functionally equivalent to what was there before, what does that ultimately accomplish in terms of changing the game in where people want to live? Craig McCormick highlighted this to great effect in his Pecha Kucha presentation on strip malls, where he noted such design requirements as faux second stories, 360 degree facades, and “frosting” that nevertheless left the Platonic form of the strip mall intact. Lifestyle centers are simply the latest fad in commercial design. It may last a while, and indeed may be better than the soulless strip malls of the 70’s, but styles will change to something else at some point, leaving these lifestyle centers just as obsolete.

The real problem, as I’ve highlighted, is that of staying power. When you build a suburban environment that copies the fashions of the day, whether that be “power centers” and subdivisions or “walkable” lifestyle centers, you still haven’t created a reason why anyone would want to live there 25 years later when preferences have changed and there is something elsewhere that is more in tune with contemporary tastes and which is brand new to boot. The decaying older suburban areas of the Indianapolis townships should show where that path leads. If poor construction quality and the subprime crisis are causing new suburbs in Charlotte to get there faster than in the past, that’s just a difference in degree, not kind.

The author has a good idea, but it need to be tweaked a bit. You need to create an environment with staying power. One that is going to give someone a reason to want to live there 25 years later. Some of the suggestions made about mixed use, walkable urban cores and transit are a start at that. I’ve highlighted before the great things going on in Carmel, which is really trying to build a differentiated environment that will be here for the long haul.

So I recommend reading the article. While clearly it is as much wishful thinking on the part of the author as prediction, it is still definitely worth looking at and thinking over.

Saturday, December 15th, 2007

Suburban Decay Comes to Charlotte

Thanks to Urban Indy for linking to an article about suburban decay in Charlotte. The interesting things it that this isn’t happening in older areas, but practically new starter home subdivisions. Many of these homes were very cheaply built, were sold to people with marginal credit, and are now experiencing significant blight as the housing market turns south. Cheap buildings and common areas are damaged and unsightly. Homes get converted into rentals as investors swoop in to buy them out of foreclosure. And crime is skyrocketing.

Charlotte, like Indianapolis and many places where there is ample cheap land, threw up thousands of these types of home. Many of these subdivisions are struggling, though I haven’t heard of it being this bad before. Many of these places were built as borderline disposable communities, and they appear to have a very short shelf life.

One of the Charlotte city council members referred to these starter home communities as the “projects of the future”.

It will be interesting to see what happens. As I noted in my latest brief on Indiana annexation, municipalities are stepping up to take the lead on development in Indiana now, not counties. And municipalities take a jaundiced view of these types of developments. Many of them are implementing minimum design standards to mandate, for example, brick facades, and various anti-monotony ordinances designed to keep these places out. This pushes the developers further out on the fringe. Speculating, this could start leading to a development pattern where there are alternating rings of thriving and decaying communities, with some of the worst on the actual suburban fringe. There’s a thriving downtown at the core, ringed with traditional urban decay and some older, decaying suburbs. Then you’ve got a ring of newer, properous, higher end suburban communities, then you’ve got an exurban ring of cheaper suburbs where the development standards are lighter, featuring new suburban decay. We’ll have to see how it all plays out.

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