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Thursday, May 2nd, 2013

The Gilded City

Politically left magazine The Nation just published a special issue devoted to New York City called “The Gilded City – Bloomberg’s New York.” As you can guess from the title, they aren’t necessarily great fans. There are a ton of articles and perspectives in there that are worth reading no matter what your take on Bloomberg or New York (or left wing politics for that matter). Here are some samples.

What Happened to Working Class New York? “But scratch a little and things do not look so good. During the recession, the city had big job losses in relatively well-paid sectors, including government, construction, manufacturing, finance and insurance, and wholesale trade. The biggest gains since then have been in low-paid industries: restaurants, retail trade and home healthcare. Between July 2008 and July 2012, New York City had a net loss of nearly 60,000 jobs paying $45,000 a year or more, while gaining more than 130,000 jobs paying less than $45,000 [see chart, page 18]. The changing mix contributed to a nearly 8 percent drop in real median wage earnings between 2008 and 2011. An analysis by Hofstra University economists Gregory DeFreitas and Bhaswati Sengupta suggests that many newly created jobs have gone to commuters, exacerbating the difficulty city dwellers face in getting good jobs. For residents of the five boroughs, the official unemployment rate in February was 9.1 percent, well over the national level of 7.7 percent. Though New York is festooned with displays of luxury, its median household income is below the national median and falling. In 2011, 21 percent of New Yorkers lived in poverty, compared with 16 percent nationally.”

The Legacy of the 1970’s Fiscal Crisis. “Today, the fiscal crisis in New York may seem a distant memory, like the graffiti-covered subway cars of the era or the fires that once blazed through Bushwick, a neighborhood now dotted with artisanal chocolate shops and pizza places that win raves from The New York Times. But the diminished expectations we have for the public sector and the increasing difficulty of living a middle-class life in the city suggest the legacy of the fiscal crisis even now. City governments today—including New York’s—seem primarily to be vehicles to attract and maintain private investment. Business improvement districts and public-private partnerships involve companies directly in paying for the services they receive, while the city sweeps away community challenges to business-oriented development. This is supposed to lead to improved services for all; yet over the same years that have seen the rise of this business culture in city government, New York has become the most unequal city in the country—the gulf between rich and poor widening in ways that would have been hard to imagine even in the early ’70s.”

The Education of Michael Bloomberg. “The notion that there had been a great improvement in the public schools, leading to sharp increases in achievement among minority children—the majority of the city’s public school students—was echoed in the mainstream media. It helped Bloomberg retain mayoral control of the public schools, which the state legislature had granted him shortly after his election in 2002, and to win a third term in 2009 (a campaign in which he spent a record $108 million). Unfortunately, his claims of closing the achievement gap proved misleading. On the reliable national assessment known as the NAEP, there had been no significant increase in scores or narrowing of the gap since 2003, when the mayor’s policies were first imposed. In 2010, the state Education Department finally admitted what observers had long suspected: that the state exams had become overly predictable and that scoring well had grown easier over time.”

Dreams Built and Broken: On Ada Louise Huxtable. “The role of the critic is to tangle with reality—its politics, players, construction, destruction—to remain skeptical but not cynical, to have strong opinions but be open to being wrong. The reason Huxtable’s criticism continues to resonate is that she never let her opinions grow stale. One can disagree with her conclusions, but rarely with her identification of the central question. As history brought highlights (Lever House) and lowlights (Lincoln Center) back around, she gave them, as with the Barnes, more than a second glance. Huxtable ended her Beaux-Arts essay looking out her window across 42nd Street: ‘I raise my eyes for an architecture-break in a city that is as heartbreaking in its beauty as it is in its poverty and decay. It is still a city of dreams—promised, built, and broken.’”

Sunday, April 28th, 2013

Global Cities Don’t Just Take, They Give

I had an interesting conversation about Washington, DC with Richard Layman a few months back. One of his observations, rooted in Charles Landry’s, was that great global cities don’t just take, they give. To the extent that Washington wants to be a truly great city, it needs to contribute things to the world, not just rake in prosperity from it.

Affecting the world, often for good but unfortunately sometimes for bad, is a unique capability that global cities have because they are the culture shaping hubs of nations and world. When an ordinary city does something, it can have an effect to be sure. But things that happen in the global city are much more likely to launch movements.

For example, Chicago did not invent the idea of doing a public art exhibit out of painted cow statues. I believe they copied it from a town in Switzerland. But when Chicago did it, it inspired other cities in a way that Swiss town did not. In effect, ordinary cities influence the world usually by influencing a global city, which then influences the world. Often it is the global city that gets the credit although the actual idea originated elsewhere. Thus the role of the global city is critical. But we shouldn’t assume that all ideas originate there or that other cities can’t profoundly influence the world.

We might also think of bicycle sharing, which was around in various forms for quite a while. But it was the launch of the massive Paris Vélib’ system in 2007 (which according to Wikipedia was inspired by a system in Lyon) that made bicycle sharing a must have urban item the world over.

Similarly it was the High Line in New York that has every city wanting to convert elevated rail lines into showcase trails. New York is really the city that made protected bike lanes the new standard in the United States as well.

Beyond simple urban amenity type items, global cities can also launch profound cultural and social transformations. A few examples.

The first is from Seattle, a sort of semi-global city. It was in such a depressed state in the 1970s that someone put up a billboard that’s still pretty famous: “Will the last one leaving Seattle please turn out the lights?” Yet in Seattle there was a coffeehouse culture that spawned a movement out of which came Starbucks which literally revolutionized coffee drinking in America and event pioneered the entirely new concept of the “third place.”

A lot of people like to attribute the emergence of Seattle as a player to Microsoft moving there from Albuquerque in the late 1970s. However, I think the coffee example shows that there were interesting things already happening in Seattle long before that. It was a proto-global city waiting for a catalyst.

Another example would be the emergence of rap music out of New York City. Or house music from Chicago.

Or consider the 1963 demolition of Penn Station in New York in 1963. The wanton destruction of this signature structure horrified the city and led to the adoption of its historic preservation ordinance. This was not the birthplace of historic preservation in the United States, but this demolition played a key role in bringing historic preservation to the fore, not just locally but nationally.

Lastly, the Stonewall Riots in 1969 clearly played a signature role in the gay rights movement in America. Many pride parades today are scheduled to fall on the anniversary of the event.

Who knows what might have happened with coffee in America without Seattle. But I think it’s clear that both the historic preservation and gay rights movements would have emerged at some point anyway regardless of what happened in New York. However, the events in New York clearly provided a sort of ignition and acceleration.

How many historic buildings in America were saved because Penn Station was lost? (Think about how many might have been destroyed had the historic preservation movement emerged later).

Think about a state like Iowa where gay marriage is legal. How many people in Iowa 40+ years ago had any idea that an obscure incident in New York City would ultimately transform the social conventions of the rural heartland?

I think this shows the power of the global city. I’m sure that there are things happening underground in New York and elsewhere that right now that we don’t know anything about yet that will ultimately transform our world 10, 20, or 30 years down the road. It’s crazy to think about.

Friday, April 12th, 2013

New York Day

This video, not to be confused with the previous “Night and Day” which I posted, is a more traditional time lapse of the Big Apple, and a cool one. If the video doesn’t display for you, click here.

h/t Likecool

Wednesday, March 20th, 2013

New York: Night and Day

Here’s an interesting video. The film maker apparently shot the same scenes in New York during the day and at night, then combined them into a single composite video that is part day, part night. It’s kind of freaky, but interesting. If the video doesn’t display for you, click here.

h/t Likecool

Sunday, March 10th, 2013

Replay: Are You a Consumer or a Producer?

Cities like New York offer a nearly unlimited range of pastimes, diversions, and consumption activities. If you want to have a good meal, see a top notch arts performance, shop, etc., this is the place for you. You can get more quantity of quality in the world’s biggest cities than you can anywhere else.

The question I often ask though, is whether most of the people living there and partaking of what the city has to offer in fact are part of helping to create those things apart from spending money on them. While anyone with a job or who does anything is a producer nominally, how many people in these cities are actually part of making the creative energy that flows there a reality? I’d suggest not many. The vast bulk of the people there, residents and tourists, are consumers, not producers. They work in average jobs and recycle their wages into the creative sector via consumption, an important economic activity to be sure, but they don’t directly produce anything there.

I thought of this while reading an article in New York Magazine this month titled, “What Could Make Someone Want to Leave New York and Move to Buffalo?” The author spends time in Buffalo talking to New Yorkers who’ve left or are thinking of leaving, checking out the scene and trying to figure out what caused them to make the switch.

The answer is partially the unsurprising one that it is cheap there and the quality of life can be high compared to the stress of New York. As the author notes, “Buffalo has qualities that tend to attract creative people: cheap rents, derelict industrial buildings, the romantic aura of a faded empire.” It’s biggest problem there is that it is competing against a number of other Rust Belt cities with more or less the same value proposition.

But the surprising second answer for many of them is that moving to Buffalo gives them a better opportunity to participate in society as a producer, not just a consumer, than they would ever get in New York. While testing yourself against the good and the lucky to try to make it to the top in the most competitive city in the world has its appeal – indeed, it’s what brought many of them to New York in the first place – it sometimes comes up wanting versus Buffalo where you can actually do and accomplish things.

Quoting:

“Some people will read this as a story of defeat. They will look at Herbeck and Cloyd [relocators] and think, They came; they couldn’t cut it; good riddance. That’s also a familiar New York narrative, one that’s especially comforting to those of us who stay and stick it out. Because, sure, stained glass and spare bedrooms are nice and all, but no one moves to New York because they think they’re going to get a great bargain on an apartment. You move here because you want to live in New York City.

“But I am here to tell you that this is not a story of defeat. Rather, it’s a story about choices. It’s a story about reaching that pivotal moment when the dream life you imagined for yourself in New York no longer seems attainable or attractive, or simply no longer seems worth the wearying chase. It’s a story, admittedly, about the kinds of people who have the luxury to move away, just as they once had the luxury to choose to move here; that is, people not pulled to one city or another by family obligation or job transferral, but rather by some grander idea of who they are and where they might best fit.”

Buffalo is not just the land of cheap rents, it is the land of opportunity. The place where you can actually play with the raw materials of the urban fabric and shape them to your own vision. A place where the productive avenues have not been foreclosed behind the walls of fortresses of money or connections.

“We tend to think that one of the consequences of leaving New York is giving up all sorts of opportunities. And yet, one quality common to everyone I meet in Buffalo is that, like Nussbaumer, they see opportunity everywhere. Where you see a boarded-up building, they see a future arts co-op. They use the phrases blank canvas or blank slate a lot.”

The article gives several examples of people who’ve taken the raw material of Buffalo and made something of it, including Newell Nussbaumer.

“You can bike around Buffalo and point to a lot of things and say, ‘Newell Nussbaumer did that.’ That week he’d been to City Hall with a group of cycling advocates and had persuaded the city to convert some of its old parking meters to bike stands, which is part of his grand scheme to make Buffalo the most bike-friendly city in North America. (Current title holder: Portland, Oregon.) Later, at the offices of Buffalo Rising, Nussbaumer explains how most of his staff are unpaid interns, who work for free not because they’re hoping to scrabble their way up some media ladder (in Buffalo, that ladder has no rungs) but because, as he says, ‘they know they’re helping to create this city where they want to live.’ I think of the many valiant unpaid interns I’ve known in New York, and while most of them were working hard to create their own lives, not one of them (or at least not the sane ones) imagined they were helping to create New York City.”

A city so far fallen that it has become nothing less than the new American frontier, the place where you can reinvent yourself and reinvent the city.

“When we think about leaving New York, we usually think about what we would lose, and rarely about what we might gain. To that end, prospective destinations are measured by how similar they are to here. Philadelphia is New York, but cheaper. San Francisco is New York, but gentler. It’s the “squint” factor: Well, if I squint, it’s like New York, sort of, and I guess I can live with that. When I went to Buffalo, I expected that to be the sales pitch: It’s a mini big city with parks by Olmsted, a few very nice neighborhoods and a really good museum. It’s pseudo–New York! This, after all, is how struggling cities sell themselves, especially in the post–Creative Class world, as though they’re designer-knockoff versions of more attractive destinations. We’ve got many of the things you love, at a fraction of the price!

“But that’s not what I found in Buffalo. I found it appealing for a different reason: not for how similar it is to New York (which is not very), but for how different. New York will always offer you the singular opportunity of testing yourself against the best, of sharpening yourself against the city’s fabled grindstone. Hopeful people will always scrape together their savings to come here, to split a one-bedroom apartment with five other people, whether that’s in Greenwich Village (then) or Bushwick (now). But New York, for all its mythology, is no longer a frontier. Buffalo is a frontier. And when you think of the actual frontier, you’ll recall that no one ever packed up and moved West to a gold-rush town because they heard it had really good local theater. They moved looking for opportunities. They moved for the chance to build a new life for themselves.

“This, ironically, has always been the siren song of New York City: the chance to turn yourself into someone new, to live the life you’ve always imagined. But what a city like Buffalo offers is a very different promise of what could be. It offers the chance to live on the cheap and start a nonprofit organization, or rent an abandoned church for $1,000 a month, or finish your album without having to hold down two temp jobs at the same time, or simply have more space and a better view and enough money left over each month to buy yourself a painting once in awhile. A city like Buffalo reminds you that, beyond New York, there are still frontiers.”

A very worthwhile article and one that every Midwestern city should consider as it tries to figure out the value proposition it is offering. I’ve often said, trying to emulate America’s biggest cities is a fool’s errand for smaller places like Buffalo. What they need to do instead is to find their own unique niche and vision of what they can be. Ultimately Buffalo would never be a very good substitute New York City. But it can figure out how to be a great Buffalo.

This post originally appeared on September 12, 2008.

Tuesday, September 4th, 2012

The Brief Wondrous Life of the One Dollar Bus by Jefferson Mao

[ People think New York and they think Manhattan first, or maybe the finer precincts of Brooklyn. But it's an amazingly diverse city. Jefferson Mao grew up in Flushing, Queens, and writes a blog dedicated to that extremely diverse and interesting neighborhood. It's called Flushing Exceptionalism and you ought to give it a look. In this piece reprinted from that blog, he talks about entrepreneurship and the life conditions of the immigrant - Aaron. ]

I was there for the entirety of the One Dollar Bus Era in Flushing. It was on a Sunday when they first appeared, and my friend and I saw them on Main Street, in the middle of everything. The buses were white, mostly blank, and obviously very recently painted over. It went from Flushing to Manhattan Chinatown, and the $1 per ride sign was a little hard to believe, so we stepped closer and listened to the lady hawking the tickets assure all the skeptical pedestrians. This is the greatest thing ever, we thought. Their margins must be shit! We are sensitive about other people gawking at the ridiculousness of Flushing businesses, but inwardly we’re still pretty impressed by it ourselves.

The commuter service itself is nothing new. Small commuter vans run the Flushing to Chinatown route every day, charging $2.75 per ride and doing brisk business from a stretch of 41^st Avenue near the decrepit and neglected LIRR station that’s supposed to serve this community. The vans follow no real schedule, leave whenever the driver deemed them sufficiently filled, and they’ve been around for as long as I can remember. But witnessing the entrance of the One Dollar Bus was weirdly exciting that day, to see it unfold for you on a random weekend afternoon like any other.

Of course, $1 is simply not a serious price to charge. From the beginning we knew that it wouldn’t last, and we could only speculate about how the appearance of these new buses would play out. We had a hunch that they were the same interstate buses that were shut down in May for safety and administrative violations. We knew that the smaller commuter vans that run the Flushing-Chinatown route would throw all they had against the encroachment of the buses. All of it seemed pretty inevitable, and it was only a question of how long the price war could last, and what laws or agreements of good faith would be broken in the process.

The One Dollar Bus Era lasted for two weeks. After a few days of ineffective resistance, the small commuter vans dropped their price to $1 as well in the face of the bigger, higher-capacity buses. At the same time, they appealed to the Department of Transportation, who proceeded with an investigation into the legality of the big buses. After a tense couple of weeks, including some reports of physical confrontations and violence (although where they were and how bad they were I never found out), the big buses were gone, as abruptly as they came. The police seized four of the buses, and issued $1500 fines for each. The DOT ruled that they were operating illegally; city law only permitted commuter van services that carry no more than 19 passengers at a time. On the same day that they were shut down, the small vans went back to $2.75 a ride.

It was totally predictable, the way things ended, but it felt very unsatisfying. The mainstream publications readily picked the story up, and the Village Voice even compared it to the soap opera Dallas, what with the reported fisticuffs and the screaming price war. But for something that was supposed to be dramatic and sensational, it was all so perfunctory. Public transit proves inadequate for the people, so we come up with an alternative mode of transportation; gutsy, immigrant entrepreneurs work for wages that are basically unfathomable for anyone else; eventually the government shuts down the big buses on a regulation that still seems a little arbitrary. There is vague talk of congestion and safety, with unsurprising arguments from both sides. In the comments sections of the newspaper stories, a lot of readers automatically started taking shots at Bloomberg. Overall the whole thing reads like a didactic story about the failure of our transportation system. Flushing just illustrates this point in an ostentatious way by playing the role of a messed up place where a lot of messed up things happen. In the end that’s all anyone took away from the whole episode.

The most interesting thing about the Chinatown Bus is that it was only made possible by segregation. It’s the classical example of a new industry born entirely out of exclusion. Of course, all immigrants are limited by the few occupations that are open to them. But the Chinatown Bus specifically served those who were separated from the population at large, both geographically and culturally. It was created with a very specific audience in mind. It was never meant to be for everyone.

The earliest iteration of the Chinatown Bus came out of New York in the late 90s. The Fung Wah Transportation Company, the most famous of the bunch, started as a jitney service that shuttled Chinese workers from Manhattan to Brooklyn. Growing affluence and the desire to spread to the suburbs, combined with gentrification pressures in Manhattan, led to the establishment of various Chinese communities in the outer boroughs and all along the eastern seaboard. Commercial outposts formed around these communities, and new immigrants from Manhattan moved out there to work in the Chinese supermarkets and restaurants. But they would always have to return to New York to see family and to socialize, and they were connected through the buses. They went on vacations by the buses, going from one Chinatown to another and back. When their kids grew up, they went on college tours. The New York to Boston route was the most popular.

Everything depended on the immediate, surrounding Chinese population. The buses idled curbside along Allen Street because they had no terminal to depart from. They advertised solely through word-of-mouth through the community, because they couldn’t afford to reach out in any other way. They were able to trim infrastructure, marketing, and service costs to bring lower prices for a limited clientele. And it was sustainable, repeat business — they had a niche all their own. In 2002, the advent of online ticketing services helped the curbside bus business proliferate. A lot of bus companies joined in, many good and many bad. In 2008, the major players in the coach industry gave up their years of lobbying efforts against curbside buses and formed curbside bus lines of their own.

Today MegaBus and BoltBus enjoy the highly debatable reputation of being the safer and more upscale alternative to the Chinatown Bus while still keeping competitive prices. Good PR, a centralized Midtown loading location, employees that actually speak English, and a ridership that’s more presentable in the eyes of your average American have cemented them as the Chinatown Bus gone legitimate. Curbside buses now make more than 2,500 trips a week between New York, Boston, D.C. and Philly, moving millions of people per year. Essentially, MegaBus, BoltBus, and the multitude of new entries into the market took an industry created for a segregated and autonomous population and turned it into something else. Meanwhile, the term “Chinatown Bus” has become a catch-all for any of the bus companies associated with the ethnic Chinese or with any business practice that would appear nonstandard to a mainstream ridership. This was reinforced by a wave of incidents that raised public apprehension, culminating with a casino bus crash in the Bronx that killed 15 people in March of last year. It was the worst crash in curbside bus history. It’s interesting to note that neither the bus driver nor the owner of the company was Chinese; only the victims were Chinese.

I don’t ride the Chinatown Bus very often, but I am familiar with it in all its iterations, and I understand it in the peripheries of my mind like anyone who’s ever relied on it. I remember taking a Chinatown tour bus to D.C. with my parents when we first came to the America. We wanted to see the landmarks of this country but didn’t know enough English to fend for ourselves. I remember taking the Flushing to Chinatown commuter van to get to high school when the subways were shut down during the Great MTA Strike of 2005. I remember taking the bus again with my parents, when we were deciding between colleges. And after college, I remember visiting my friends at their internships up and down the East Coast.

The buses mean much more than just a cheap way to get around. This is so obvious that you’d think it should be commonly understood, but it’s rarely ever brought up. From the very beginning, the buses were made for a very distinct customer base, and throughout the years, despite the online ticketing service changes and such, they never really changed the way they operate to accommodate other kinds of riders. I guess in recent times, students and young college grads have found the scrappy, urban, DIY aesthetic of the bus endearing or whatever. However, it wasn’t made for them either. It was always meant to be exclusive and protective for the Chinese immigrant population, stitching together a network of people who are slightly more sympathetic and a handful of places that make slightly more sense. Of course it also happened to be cheap, but for the people who relied on them, the Chinatown Bus was never so simple as a tradeoff between price and quality.

A week after the $1 buses were shut down, I went to see the small commuter van drivers on 41^st Avenue. These vans are typically self-owned, self-driven operations, although they pay significant fees to other fleet owners to handle paperwork and regulations. The drivers were good-natured but outstandingly cynical, sure that unfair competition could come back at any given time. “Check back tomorrow,” they told me.

Still though, things seemed to have come back to normal. All the customers fell back in line and weren’t too bothered. If the buses were running for $1, then great. If the price was back to $2.75, well, they still had to get home. And plus, everyone knew that $1 was pretty ridiculous anyway. The edict in May to shut down some of the interstate bus companies could prove to be a blessing as well. Certainly there are some bad companies within the industry, and as the service has proven itself with a mainstream ridership, maybe the city will start caring about regulating for safety. The Chinatown Bus will continue to develop and adapt itself, especially now that it directly competes with BoltBus and MegaBus. “They’ll have to grow and evolve, most likely through consolidation,” says Dr. Jimmy Chen, owner of the largest curbside bus online ticketing service, and an amateur historian of the Chinatown Bus industry. “That’s the normal process of industrial development.” In the grand scheme of things the two weeks of One Dollar Bus didn’t mean much, and it’ll be forgotten soon enough.

But it really did make me think a lot about how this whole ridiculous bus business was able to succeed in the first place. What does it take to build a burgeoning industry from a few blocks of parking space in Chinatown? People talk about entrepreneurs and “job creators” like they’re wizards or something. But it’s not that complicated or abstruse to figure out, is it? Here we have a perfect example.

There’s been a lot of emphasis on the fundamental shifts in our economy to high-skill, high-paying jobs, and the need for the trained professionals to fill those positions. And it’s true that Facebook and Twitter and Google all happen to require technological innovation and a multitude of talented, well-educated individuals. But to take that as the basis of economic growth would be looking at it all backwards, I think. After all, the Chinatown Bus didn’t have any of those things. It wasn’t born out of high education, technology, tolerance, bohemianism, or even very much creativity, if you really think about it.

No, the underlying reason for the success of the Chinatown Bus is the same as that of any other business: it caters to a well-defined, tight-knit consumer niche. The fact is, Facebook started as a networking site for elite college students. Twitter really took off when Shaq started tweeting. The salient feature of these success stories is not the ingenious and daring innovation of their founders so much as the privilege, the social capital, or the economic well-being of its niche consumer base. In the celebrated new industries of Brooklyn, the clients are usually well-established institutions with wealth and influence. Even the successful coffee shops, venues, and small businesses of gentrifying neighborhoods are tied together by a network of people with shared interests, complementary ideology, similar life experiences, and the luxury of free time.

Chinese immigrants have neither money nor influence, but what they lacked in resources they made up for through sheer introversion. They relied on each other, working and eating and socializing within the neighborhood, mostly because they had no other alternative. It was the very differentness of the Chinese immigrants that became the foundation that led to the creation of the buses. In the autonomous little region that they carved out for themselves, word-of-mouth and community needs could substitute for marketing and advertising. It takes a niche community to nurture an idea until it can gain enough steam to be adopted by a broader audience. And this plays out all the time in every aspect of immigrant life in America. Chinese restaurants across the country have long given up on the thought that Americans could like Chinese food as it truly is, so they gave in to their god-awful tastes in beef and broccoli or whatever. But in the ethnic enclaves, faithful renditions of Chinese cuisine can sustain themselves and gain traction to such an extent that… well, that it “inspires” or becomes co-opted by everyone else. New York magazine recently declared 2012 to be the “Year of Asian Hipster Cuisine.”

Recent technological and social developments have led to truly innovative new businesses and industries. But not mentioned very much is the fact that these new innovations overwhelmingly serve the section of the population that is already well-off, well-connected, and well-educated. They are built around this niche community, and its inherent advantages account for much of their success. If you are not fortunate enough to be able to enjoy the benefits – if you have neither the education nor the cultural capital to work for Facebook or Google – you are out of luck. In that case, the Chinatown Bus might be a more illustrative business model than anything else. For all the people and neighborhoods across America who’ve had it rough not just in the last few years but in the last few decades, it’s time to look at what niche communities you do belong to, and what advantages might be open to you. These advantages might be very meager. Sometimes the only advantage you have is that everyone around you must depend on each other because there are no alternatives. That’s what the Chinese in Chinatown and immigrants and minorities everywhere have done for so long. Does anyone have a better idea?

I did manage to catch the One Dollar Bus before it went under. I needed to go somewhere in Lower Manhattan, and that was a good enough excuse to take the bus. The ride was much faster than on the 7, thirty minutes from boarding to destination, but since I knew that, I left the house much later than usual. I was meeting someone on the west side, a bit of a walk from where the bus dropped me off. I still ended up late.

“I’m on Forsyth and East Broadway,” I told her over the phone, climbing out of the bus and trying to orient myself.

“Where?” She sounded a little exasperated.

I made my way out across Confucius Plaza and through the old core of Chinatown, the rough pentagonal section formed from Bayard Street and Mott and Pell. Here, in the subtler part of town, you get a better sense of the way things have slowed down. The demographics of the neighborhood have changed, of course, and the new residents are not as interested in supporting and patronizing the local establishments in the same way. Even on the still-busy throughways near Canal, the type of commerce is more outwardly directed – t-shirts and trinkets that you can find in basically every other neighborhood in the city. People lament that it’s even hard to find good Chinese food in Chinatown nowadays.

With the influx of an affluent and more cosmopolitan population, Chinatown has become less and less autonomous and self-sustaining. The new residents are interested in the neighborhood, and they will frequent the local establishments. But they’ll never support the fabric of the neighborhood to the same degree. Why should they? They are used to having a choice. BoltBus and Mission Chinese Food have their advantages, after all. There are now all kinds of people — different classes, different races, different ways of living, and they are interested in different things about the neighborhood. It’s more “mixed-income” and “mixed-use” and open to a broader swath of the population. But this has not helped the people in the neighborhood who needed the most help to begin with. It’s funny — Chinatown is a more inclusive place now than it ever was.

This post originally ran in Flushing Exceptionalism on August 19, 2012.

Sunday, August 26th, 2012

Chicago As a Global City

This article is part of the State of Chicago series.

At this point in my series I’m looking at a couple of my frames on Chicago’s problems that are not commonly known or held. The first was Chicago’s lack of a calling card industry. I’m now looking at Chicago’s weakness as a global city and the excessive focus civic leadership has put on being a global city at the expense of everything else. (I will not be further reviewing well-known and uncontroversial problems such as the fiscal mess).

Ranking Chicago as a Global City

Last week I examined the question of what a global city is. Today I want to look at Chicago specifically. Looking at the various rankings out there, here’s how Chicago measures up on some of them:

• On the GaWC Roster of World Cities, Chicago is an “Alpha” world city in the second grouping just behind New York, London, Tokyo, Paris, and Los Angeles.
• In the AT Kearney/Foreign Policy reports, Chicago ranks as the 6th most important global city. As this is the highest ranking in any recent survey, this is the one locals are most likely to cite.
• In the Economist Global Cities Competitiveness Index, Chicago ranks 9th
• In the Knight Frank/Citi Wealth Report listing of most important cities, there were only 20 cities included and Chicago did not make the list at all.
• In the Mori Memorial Foundation Global Power City Index Chicago was 26th
• In a hot off the presses McKinsey/Foreign Policy ranking of most dynamic cities of the future, Chicago ranked 38th

As you can see, this is quite a spectrum of rankings, ranging from nearly the best to only so-so. Again, we have to look at the specifics of the rankings to see what is being measured.

My argument is two-fold. I would argue that Chicago is most certainly a global city however you define it, but:

1. Chicago has comparatively few “core” global cities functions, that is, it is not particularly strong in advanced producer and financial services vs. more generalized professional services.

2. If you define global city more broadly as the greater Loop economy and high end, elite functions as a whole, Chicago’s global city component is still too small to carry the city, region, and state.

Advanced Producer Services

This argument is basically a hypothesis based on my own experience as part of Chicago’s professional services community. It’s not something that I have the resources to research on my own, and I’ve yet to see a survey that really tries to dig into it.

Chicago has always been a key professional services hub. In fact, I’ve argued that Professional Services 2.0 should be core to the city’s future economic strategy. But what portion of those services are high end, specialized functions related to the global economy vs. traditional services updated for the global age?

Chicago clearly has some high end global functions. I generally like to cite the financial exchanges, the design of super-tall skyscrapers, and privatization contracting as examples. I’m sure there are many more.

But other than the exchanges and the financial center side of Chicago (which I see as stagnant to declining in some respects anyway), I believe most of these are pretty small niches. They don’t, in aggregate, employ that many people or generate that much wealth or value.

I believe that the vast bulk of Chicago’s professional services consists of traditional accounting, law, and the like. These bread and butter type firms employ lots of people, pay good wages, and deliver a lot of value. But they don’t create a “wide moat” business in most respects. Chicago’s a great place to staff people who need to fly, and has a compelling talent market, but isn’t the only game around. There are many other regional services hubs.

This I think is another part of the story on Chicago’s comparatively low GDP per capita and incomes per capita versus the top tier cities even in America. As with the lack of a calling card industry that generates super-sized returns, Chicago lacks a large quantity of the high end specialized global services functions as well. Both of these factor into its fairly average metro area value creation profile.

Again, this is just a hypothesis at this point.

Global City Chicago Is Too Small

Global, global, global. It’s pretty much all you hear in Chicago. Actually, this is a good thing in a lot of ways. Travel around America and you’ll find that it’s replete with places that have no concept of the reality of global competition. Chicago is not one of those cities. This is a city that understands it is competing in a vicious global marketplace.

But while everything you do should be underpinned by an understanding of the global competitive environment, Chicago has to too great an extent focused its response on being a global city. While I agree Chicago is to some extent a global city, the global city portion of Chicago is simply not big enough to carry the load.

Let’s look at this by comparing payrolls in the Chicago Central Area (basically the Loop plus surrounding fringe areas) with Manhattan South of 59th St.. And we’ll throw in Cook County for good measure:

Annual private sector payrolls, 2009, thousands of dollars. Source: County/Zip Code Business Patterns

As you can see, New York’s core generates more payrolls that even all of Cook County, and vastly more than Chicago’s Central Area. And this doesn’t even include investment income. Actually, the data is probably even worse than this as I’ve never gotten the zip code data to fully sum up to the countywide totals. If you look at Manhattan as a whole, you get about $180 billion in payrolls. This is 55% higher than all of Cook County.

There are some similar types of statistics around jobs. Here’s a chart I’ve posted before showing jobs in Cook County vs. Manhattan:

Total Employment, Source: Quarterly Census of Employment and Wages

Manhattan, with only 8.4% of the metro area population, has nearly as many jobs as all of Cook County, which accounts for 54.9% of the metro area population. Manhattan accounts for 28.9% of metro New York jobs. Interestingly, there are as many jobs in Manhattan North of 59th St. as there are in the Chicago Loop. (The Loop jobs pay much more, however).

The average Manhattan job also pays more than the average Cook County job as you can imply from the previous charts. In fact, the average job in Manhattan pays 79% more than the average job in Cook County.

Average Weekly Wage, Source: Quarterly Census of Employment and Wages, 2011

Chicago is a cheaper place to live, so the gap probably isn’t quite this dramatic. Nevertheless, I think the data are clear. New York, along with London considered to be the paradigmatic global city, has a vastly larger core than Chicago, has an economy more concentrated in its core than Chicago, and generates far greater wealth from that economy than Chicago.

Because of that, New York can plausibly rely on its global city component to pay the bills for the entire city, region, and state (and even part of Connecticut and New Jersey). Given that a large proportion of that comes from finance – too large – New York may yet rue its over-concentration there.

But just because New York may run into big problems in the future doesn’t change that Chicago and Illinois have big problems in the now. Part of the fiscal issue is mismanagement plain and simple. But part of it is that Chicago has decided it wants to be a global city, but global city Chicago isn’t big enough to pay the bills, not even for the city, much less a region of ten million or a state of 13 million.

How then do other places besides New York get away with it? I haven’t studied them all in detail. But I suspect that other tier one cities in America harvest outsized returns via calling card industries like tech in the Bay Area. They also utilize restrictive housing policies to keep access exclusive. And they are smaller than Chicago regionally, so don’t need as much money to keep it all going. And I’m not convinced all of them are getting away with it. Los Angeles, the other big city often compared to Chicago, has huge problems. The city of Los Angeles may even go bankrupt.

I believe the takeway for Chicago is clear: it cannot continue to focus on simply the elite greater Loop economy as the growth platform for future prosperity. It must diversify beyond that. The road to doing so is difficult, but that doesn’t mean it doesn’t need to be taken and that there aren’t things that clearly are within the city’s power it can do.

In a couple follow-on installments this week, I’ll highlight some additional aspects of the global city problem, notably Chicago’s continuing tie to the Midwest and national manufacturing cycle, and some key gaps in the global city fabric.

Discussing Global Cities

In the meantime, I was on a couple of Chicago radio programs this week talking about Chicago as a global city.

The first was an appearance on WBEZ’s Afternoon Shift, which was driven by the new Foreign Policy study that ranked Chicago only 38th for future dynamism. The audio is embedded below. If it doesn’t display for you, click here.

The first portion of this is Isaac Stone Fish of Foreign Policy magazine talking about his recent survey and the rise of Chinese cities. The second segment I am on with Andres Mendoza Pena of AT Kearney to talk about Chicago.

I also did a segment with Outside the Loop radio talking on the same topic. Here’s the embedded audio, and my segment starts at about 19:00. Again, the player lets you skip ahead. If the player doesn’t display for you, click here.

Enjoy!

Wednesday, August 22nd, 2012

Infographics: The Decongestion of Manhattan, New York Walking Commutes

Jim Russell pointed me at an interesting article about densification vs. de-densification over at the Urbanization Project at NYU Stern. It contains this very interesting map of the change in census tract densities in Manhattan over the century between 1910 and 2010:

Walking Related Commutes

Streetsblog, in an article covering the annual NYC DOT scorecard, included this graphic of the percentage of commutes that include walking as a core component (e.g, transit) in various parts of New York:

Tuesday, July 10th, 2012

Chicago, Summer Crime, and the Slide Towards Detroit by Mark Bergen

[ Mark Bergen writes a blog called Econometro at forbes.com. He wrote this piece about the rising murder wave there. I'm including it as part of my State of Chicago series, but I should note that it was written independently and is not intended to endorse any of my particular views regarding Chicago - Aaron. ]

Here in Chicago we are fretting about crime. Philadelphia is hosting a jump in violence, with an 86 percent rise in homicides in June alone. But, otherwise, we are mostly alone. Other major cities are continuing the decades-long decline in crime rates, while Chicago has seen a nearly 40 percent spike in murders this year. (You can see a nicely visualized breakdown of the city’s crime, by ward, with this newly released interactive tool.)

The crime spike recently spread to the Magnificent Mile, the squeaky clean shopping district downtown. It led one Alderman, granted anonymity perhaps to escape the wrath of Mayor Emanuel, to suggest that these shootings in safe areas mark “when we start becoming Detroit.” That taps into a huge fear here—turning into the gutted city up north. Lines like that, though, are usually associated with simple, sensationalized ideas about urban violence.

One person who has spent much of his career dispelling these easy notions of crime is Jens Ludwig, a researcher at the University of Chicago. He has an op-ed in Crain’s this morning laying out three reasons why Chicagoans should be concerned with crime. One, in particular, has enormous implications for business in the city:

Third, no one should want Chicago to turn into Detroit — but that’s the direction that violence leads cities. Research by my University of Chicago colleague Steve Levitt and Julie Cullen of the University of California, San Diego, showed that for every homicide that occurs in a city, total population declines by 70 people. The 2010 census showed that Chicago had shrunk by 200,000 people in the past decade. If Chicago had New York’s success in controlling violence (that city’s homicide rate is about one-third ours right now, even though our rates were similar in the early 1990s), Chicago’s population would have held steady or even grown the past 10 years.

This, I believe, is the research he cites. Crime isn’t the only factor pushing city residents out; for that decade of Chicago loss, violent crime rates were steadily falling. But it is a factor, and population loss certainly is a drag on a city’s economic prowess.

That parlays nicely to New York, where the city continues to suppress its crime and expand its economic force. The legal scholar Franklin E. Zimring has a lengthy, nuanced article titled, tellingly, “How New York Beat Crime”:

Once again, the simple explanations are not of much help. Some of the authorities’ more prominent campaigns were, in fact, little more than slogans, including “zero tolerance” and the “broken windows” strategy — the theory that measures such as fixing windows, cleaning up graffiti and cracking down on petty crimes prevents a neighborhood from entering into a spiral of dilapidation and decay and ultimately results in fewer serious crimes. For instance, the NYPD did not increase arrests for prostitution and was not consistent over time in its enforcement of gambling or other vice crimes.

But other campaigns seem to have had a significant effect on crime. Had the city followed through on its broken-windows policing, it would have concentrated precious resources in marginal neighborhoods rather than in those with the highest crime. In fact, the police did the opposite: they emphasized ‘hotspots’ a strategy that had been proved effective in other cities and that almost certainly made a substantial contribution in New York.

Despite the myths of a tough crackdown on crime, pushed by, among others, one-time mayors, New York’s imprisonment rate fell relative to other cities. A sharp fall in illegal drug use in the city helped quite a bit. Zimring also touches upon the role of aggressive, stop-and-frisk policing in the violence decline, though he notes its impact is small, its costs potentially large. Like every other factor, it eschews simple explanations. For those interested in crime policies, the whole thing is worth a read.

Following Ludwig, Zimring does arrive at a simple, cost effective recommendation: “First of all, cops matter.” In loads of studies, more police seem to be the only factor neatly correlated with reduced crime. Facing red budgets, both Detroit and Chicago have shrunk their forces. Unlike leadership in the former city, Emanuel seems to be avoiding the broken windows tactic, opting, according to the Times, to strategically target gangs with the statistical approach of Superintendent Garry McCarthy, the police chief who oversaw much of New York’s decline. McCarthy’s current department, though, has roughly 450 uniformed positions unfilled.

That Times article ends with a Chicago resident lamenting that “we’ve lost our way.” It’s a natural expression for someone at the center of truly depressing violence, and a fine capstone about a subject, city crime, bereft of easy answers. But the idea that a kid in Chicago is locked into a criminal path, or that the city is on some unstoppable decline, isn’t necessarily true. Here’s Zimring:

Perhaps the most optimistic lesson to take from New York’s experience is that high rates of homicides and muggings are not hardwired into a city’s populations, cultures and institutions.

Chicago need not become Detroit, and Detroit need not remain itself.

This post originally appeared at forbes.com on June 26, 2012. Reprinted with permission of the author.

Tuesday, July 3rd, 2012

Will New York’s Economy Strangle Itself With Success?

Big cities have been on a bit of a roll in recent years. But sometimes you can have too much success, as we may be seeing in the case of New York. This week the New York Times reported that finance firms are moving mid-level jobs away from Wall Street to places like Salt Lake City and Charlotte.

There’s a lot going on here. First, a lot this is driven by New York’s success, not its failure. New York is increasingly valuable as a site of high end production. As a result, lower value activities get squeezed out and replaced with higher ones. Despite the exodus of Wall Street jobs, New York City has been booming, and a stat from last year showed that the city was within 60,000 jobs of its all time employment high. This sort of churn is somewhat normal when high value and lower value economic geographies come into contact within the same physical space, as I noted regarding California in “Migration: Geographies in Conflict.”

It might be tempting for city leaders to actually celebrate this, but they shouldn’t. In a city that is desperate for middle class jobs, these are white collar middle class positions that are being lost. New York has stunningly high levels of income inequality – Joel Kotkin has noted it is the same as Namibia’s – and this can’t be making it any better.

Also, is there any precedent for a city being successful and dynamic, over a longer term purely as a production center for ultra-high end activities (with perhaps an associated servant class)? Sure, places like Aspen can do it. Imperial capitals seem to have been able to do something of the sort. Perhaps that’s how New York’s leaders like to see their city, but they are taking an awful risk.

New York is too concentrated in high end activities already, notably the high end of finance, as Ed Glaeser noted in his article “Wall Street Is Not Enough.” This renders it extremely vulnerable to downturns in that sector.

It might seem like exporting finance jobs would be part of that re-balancing, but when they are lower end positions, all you are doing is re-concentrating finance at more elite levels. Because to these types of businesses cost is almost literally no object, they have driven the cost of New York real estate through the roof.

When one industry becomes super-dominant in a neighborhood, Jane Jacobs noted it could lead to a situation she called “the self-destruction of diversity,” where a particular type of user – generally banks – gobble up the land and ultimate sterilize what formerly drew them to the area.

I wrote about this in regard to Chicago in a speculative piece called “Preventing the Self-Destruction of Diversity” in which I worried that redevelopment of lower rent Class B and C buildings in the Loop as condos or something would end up pushing out all but high end uses by destroying lower priced office space. It’s easy to imagine something similar in New York. It’s interesting that the new industries the city is targeting – like high tech – are also high end businesses, which can afford finance type rents and/or don’t need much space.

Maybe New York thinks it’s ok to specialize purely as a high value production center. Bloomberg took a lot of flak for calling New York a “luxury city” but it’s a simple statement of fact. No one will ever choose to do business there because it’s low cost.

On the other hand, often even high end businesses don’t always start out that way. New firms and industries often need moderate rent zones to get off the ground, and/or access to an ecosystem that relies on mid to lower value businesses, such as legacy craft industries. (Think American Apparel and other fashion businesses in LA and to a lesser extent New York that take advantage of the fabrication capabilities in those places). Jacobs also noted the advantage of big cities in having the most diverse set of industries and suppliers, which isn’t an advantage if you no longer have them because they can’t afford to be in business. A lot of the great cultural movements in New York were likewise enabled by neighborhoods with cheap rents – neighborhoods that are long gone from much of the city.

If I were New York I would not be sanguine about losing middle class jobs and people, or take too much comfort in the flourishing of ultra-high end business. There’s clearly a lot the city can do to broaden the economic base, even if they are politically challenging in practice. For example, making it easier to build in New York is something that economists like Ryan Avent have been pounding the table on for some time. Clearly with prices up, the market is signalling a need for new supply. Another thing might be fixing New York’s notorious small business climate, where the regulatory environment may well be the worst in America.

Another thing this article highlights is how smaller cities are viable locations for much higher end activities than many would ever have believed possible. It is now possible to do almost anything but the highest end activities in places like Charlotte, Salt Lake City, Nashville, Austin, Indianapolis, Kansas City, Cincinnati, etc. They have upgraded their workforce, infrastructure, and amenities such that they can compete at a level few would have thought possible 20 years ago. And they do it while still delivering rock bottom pricing and a general lack of big city traffic and taxes.

The biggest cities can no longer rely on keeping the bulk of employment just because they have the headquarters. And increasingly this even goes for professional services business, where a lot of the routine work is outsourced either overseas or to near-shore domestic locations. (I wrote a bit about this phenomenon in a piece called “Chicago: Corporate Headquarters and the Global City” in which I note a flow of corporate headquarters back into global cities, albeit reconstituted executive headquarters only).

This puts the bigger cities in a tough spot. They have to continue to go up the value chain because smaller cities are rapidly eroding their competitive advantage at lower ends. Ultimately we’ll see where this leads but I don’t think it’s healthy in the long term at all. Figuring this out is just one piece of the rebuilding our overall economy for the 21st century that needs to be accomplished.

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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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