Friday, December 19th, 2014

Why the Rent Is Too High, Reason #239

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

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

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

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

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

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

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

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

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

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

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

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

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

Wednesday, December 17th, 2014

Paris / New York

This week’s video is a split screen comparison of New York and Paris that’s kind of fun. If the embed doesn’t display for you, click over to Vimeo. h/t Likecool

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Cities: New York, Paris
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Wednesday, December 3rd, 2014

The New York Project

Here’s a fun timelapse of New York City. Nothing particularly unusual about it, but the city looks great. Awesome in full screen, high definition. If the video doesn’t display for you, click over to Vimeo. h/t Likecool

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Cities: New York
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Wednesday, November 19th, 2014

Covering Corruption

I’ve written a few pieces on corruption lately. I’ll continue in that theme with this 30 minute video, part of series called “Straight Up” from Brooklyn Independent Media, about how journalists should think about covering corruption. As important topic as obviously the media plays a huge role in breaking corruption stories. If the video doesn’t display, click over to Vimeo. h/t City Limits

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Cities: New York

Sunday, November 9th, 2014

Replay: Global Cities Don’t Just Take, They Give

This post originally ran on April 28, 2013.

Creativity for the world or for your city gives something back – Charles Landry

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.

Wednesday, October 22nd, 2014

Talking Transit

This week I want to share a couple of urban podcasts. The first is another installment in Carol Coletta’s Knight Cities program, this one featuring Vin Cipolla, President of the Municipal Art Society in New York. I should note that the MAS Summit for New York City is actually tomorrow and Friday. If you aren’t attending in person, previous ones were live-streamed I believe, so my assumption is that this one will be too.

Cipolla talks infrastructure, density, entrepreneurship, civic leadership, and outer boroughs in a talk focused on New York City but relevant to other places. If the audio player doesn’t display for you, click over to Soundcloud.

The second is a radio segment in Kansas City featuring Jarrett Walker talking about public transit. As always, this is fantastic, must-listen stuff. If the audio embed doesn’t display, click for the MP3.

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Topics: Transportation
Cities: New York

Wednesday, October 15th, 2014

Video Roundup

Time for another round of videos that I’ve had in my to-post list for a while.

The first is a short documentary piece on two skyscrapers in New York that were built specifically a telco switching points: the AT&T Long Lines Building and the Western Union Building. They are still in use today. If the video doesn’t display for you click over to Vimeo. h/t BLDGBLOG

The next is another installment in the “Time-LAX” series of LA timelapses. If the video doesn’t display for you, click over to Vimeo.

Lastly a TV news segment in Indianapolis from 1978. It’s a look back at a 25-year futuristic vision of the city from 1953 that was featured in the Indianapolis Star. Lets just say the vision didn’t quite come true. If the video doesn’t display for you, click over to YouTube. h/t We Are City

Tuesday, October 7th, 2014

How Segregated Is New York City? by Daniel Hertz

[ I don’t know how he comes up with this stuff, but Daniel Hertz has continued to turn out tons of interesting maps and findings on segregation and inequality. In this piece from last April, he looked at the matter of segregation in New York City. For more, check out his web site – Aaron. ]

Update to Original Post: I wrote this in the comments, but several people have asked about it and not everyone makes it down there: this post focuses on white-black segregation because that, for various social and historical reasons, has been by far the most significant geographic separation in American cities, certainly in the Midwest and Northeast. But by far the second most significant separation – white-Latino segregation – is also very extreme in New York. The same Census analysis that found NYC was the second-most-segregated metro area in terms of white and black people found that it was the third-most-segregated metro area in terms of white and Latino people. That’s obviously not the end of the story either, though. If you know about or are curious about some other aspect of segregation, leave a comment.

***

The online reaction to the recent reports on racial segregation in New York state’s public schools reminded me, yet again, that most people think of New York as an integrated city, and are surprised or incredulous when that impression is contradicted.

This is somewhat jarring, since virtually every attempt to actually measure racial segregation suggests that New York is one of the most segregated cities in the country. This University of Michigan analysis of 2010 Census data, for example, suggests that New York is the second-most-segregated metropolitan area in the U.S., exceeded only by Milwaukee, and that about 78% of white and black people would have to move in order to achieve perfect integration. (Chicago’s corresponding number is just over 76%, good enough for third place.)

Why is this so surprising? One obvious reason, I think, is that most people’s conception of New York is limited to about 1/2 of Manhattan and maybe 1/6 of Brooklyn, areas that are among the largest job and tourist centers in the world. As a result, they attract people of all different ethnic backgrounds, especially during the day, even if the people who actually live in those areas tend to be monochromatic. Imagine, in other words, trying to judge racial segregation in Chicago by walking around the Loop and adjacent areas: you would probably conclude that you were in a pretty integrated city.

But it goes beyond that, I think. Segregation in New York doesn’t look like segregation in Chicago, or a lot of smaller Rust Belt cities. For one, there just aren’t very many monolithically black neighborhoods left in New York. Here, for example, I’ve highlighted every neighborhood that’s at least 90% African American:

NYB90

Were we to do this in Chicago, half the South and West Sides would be lit up. But in New York, black neighborhoods have become significantly mixed, in particular with people of Hispanic descent. This is a phenomenon Chicagoans are used to in formerly all-white communities – places like Jefferson Park or Bridgeport, which as recently as 1980 were overwhelmingly white, now have very large Latino and Asian populations – but in New York, it’s happened in both white and black neighborhoods.

That said, white folks in New York have still on the whole declined to move to black areas, except for some nibbling along the edges in Harlem and central Brooklyn. That means that instead of measuring segregation the way we might in Chicago – by looking for very high concentrations of a single ethnic group – it makes more sense to look for the absence of either white or black people.

Here, then, I’ve highlighted all the places where white people make up less than 10% of the population:

NYW10

It’s a lot. And, correspondingly, here are all the places where black people make up less than 10% of the population:

NYB10

It’s also a lot. And if we put the two maps together, we see that these two categories cover the overwhelming majority of NYC:

NY10

The same pattern holds pretty well if we lower the threshold to no more than 5% white or black:

NY5

And there are even a significant number of areas that are truly hypersegregated, with fewer than 2% of residents being either white or black:

NY2

Because I now love GIFs, here’s a summary GIF.

NYSeg

What does all this tell us? For one, it confirms graphically what the Census numbers suggested, which is that the median black New Yorker lives in a neighborhood with very few white people, and vice versa.

But it also suggests a racial landscape that looks different from that of Chicago, and lots of other American cities, in important ways. In particular, where Chicago has a relatively simple racial geography – white neighborhoods at various levels of integration with Hispanics and Asians to the north and northwest, black and Hispanic neighborhoods to the south and west, with only a few small islands like Hyde Park and Bridgeport that break the pattern – New York’s segregated neighborhoods form a more complex patchwork across the city. That means that while a North Sider in Chicago might go years without having to even pass through a black neighborhood, lots of white New Yorkers have to get through the non-white parts of Brooklyn or the Bronx to reach job and entertainment districts in Manhattan or northern Brooklyn.

I imagine that structural-geographic fact, combined with New York’s relatively high level of black-Hispanic integration, goes a long way to explaining my anecdotal experience that white New Yorkers tend to be less ignorant and scared of their city’s non-white neighborhoods than white Chicagoans are of Chicago’s. (There’s some interesting research that suggests white people tend to be more sympathetic to brown people, and their neighborhoods, than black people and theirs.) There’s also, of course, the fact that Chicago’s segregated non-white neighborhoods tend to have much higher violent crime rates, and much more modest business districts, than New York’s, although that’s likely both an effect and cause of their relative isolation.

All of this is another reason that I’m kind of excited about the growing entertainment and shopping district on 53rd St. in Hyde Park, since the more that the South Side has “neighborhood downtown” strips that draw people from across the city, the more likely North Siders and suburbanites are to travel through the black and Latino neighborhoods that surround them, observe that many of them are actually quite nice, become less committed to shunning them, and thus contribute less to the social and economic dynamics that have created the institution of the ghetto, and the poor job prospects, failing schools, and high crime rates that accompany it.

In conclusion: New York is super segregated, but the numbers aren’t everything.

Also, let me have another Talk To Me Like I’m Stupid moment: suggestions for books about the racial history of New York? What’s the equivalent of Making the Second Ghetto or Family Properties? I’ve already read Caro’s Moses book.

This post originally appeared in City Notes on April 14, 2014.

Tuesday, September 9th, 2014

Brooklyn Is Getting Poorer by Daniel Hertz

[ Analyst Daniel Hertz found some interesting maps of Brooklyn back in May that tell a different tale about Brooklyn than the one you’ve probably heard – Aaron. ]

I’m trying to make more of an effort, whenever I write or talk about gentrification, to point out that the real issue is larger: that gentrification is only one aspect of income segregation – specifically, the part where the borders between rich and poor neighborhoods shift – and that the real problem is that we have such sharply defined rich and poor neighborhoods to begin with.

I might also throw in that income segregation used to be much less severe.

Anyway, one problem with our obsession with gentrification as the end-all of urban equity issues is that it discourages us from talking about other important things happening in our cities. In some instances, gentrification has become such a dominating narrative that it has completely erased broader trends that we really ought to be concerned about.

Case in point: Brooklyn is getting poorer.

Does that shock you? Were you under the impression that all of Brooklyn was in the process of becoming one giant pickle boutique? That would be forgivable, given that nearly every article filed from Brooklyn for a decade or so has been about gentrification. But no.

I recently ran across a post from data-crunching blog extraordinaire Xenocrypt, which noted that from 1999 to 2011, median household income in Brooklyn fell from $42,852 to $42,752. That’s not a huge drop, obviously. The national median income fell from $56,000 to $50,000, so Brooklyn is actually catching up, sort of, to the country as a whole. But it still got poorer in absolute terms.

Moreover, if you map (as Xenocrypt did) the borough’s neighborhoods by change in median income, you get a really striking picture:


Credit: Xenocrypt.blogspot.com

…which is that, indeed, a good three-fifths or so of Brooklyn is actually getting poorer. Have you read any articles about that? No, I will wager that you have not. Neither have I. I strongly suspect that is because they don’t exist – at least not in any outlet that might be considered mainstream.

And what about housing prices?

Brooklyn Gentrification Map: Increase, Decrease in Home Values 2004 vs. 2012
Credit: http://www.citylimits.org/

So in large parts of Brooklyn, real estate prices are falling.

I have nothing particularly intelligent to say about this – these maps were news to me – except that it’s maybe the most dramatic example I’ve seen yet of just how limiting our fixation on gentrification is. I mean that both in a sort of journalistic sense, in that we’re being deprived of an accurate sense of what is actually going on in our cities, as well as from an advocate’s perspective: how can we claim to be working for fairer, more equitable, etc., cities, if we’re ignorant of their most basic economic and demographic changes?

This post originally appeared in City Notes on May 3, 2014.

Wednesday, August 27th, 2014

The Independent City

Last week’s episode of Monocle 24 radio’s show The Urbanist was about independent cities. If you’ve listened before, you’ll know that their episode themes are applied loosely, but there are a couple of specific segments on “city-state” type of constructs, one is the very first segment, which is a hypothetical discussion about London, and the second a short commentary about Singapore starting around 30:00. If the embed doesn’t display, click over to Monocle’s site to listen.

Other segments include a piece about a Liverpool discount program for independent businesses, a segment about Istanbul that immediately follows the Singapore one, and a look at New York’s Bed-Stuy neighborhood starting at around 43:00.

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Topics: Public Policy, Urban Culture
Cities: Istanbul, London, New York, Singapore

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

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Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

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