Thursday, April 10th, 2014
This post originally appeared in the Cincinnati Enquirer on April 8, 2014.
Cincinnati arguably has the greatest collection of assets of any city its size in America. So why has the region been stagnant to slow-growing for so many decades?
When you look at the stunning collection of advantages and assets of Cincinnati – its geography; the amazing dense, historic architecture (great contemporary architecture, too); top-notch cultural institutions; a large corporate presence; and so many pieces of local culture and flavor of a type that has been homogenized away in most places – it’s an embarrassment of riches.
Yet since 1970, while the U.S. has grown by nearly 52 percent in population, the Cincinnati region grew by 26 percent, only half as fast. Other than Dayton, the other surrounding metro areas have also grown about twice as fast or more than Cincinnati. Cincinnati has lagged on jobs, too.
How is this? How can Cincinnati have the best stuff, but be a growth laggard?
Part of it is that all the assets in the world don’t help you if you don’t take advantage of them. Most of these are located in Cincinnati’s delightful urban core. But Cincinnati has to some extent abandoned that core in favor of low-grade sprawl.
The city of Cincinnati has lost a big chunk of population, and its regional share dropped from about 40 percent in 1950 to only 14 percent today. By contrast, New York City is still at 45 percent regional population share today. And while it’s a slow-growing region, too, the city of New York is at an all-time high in population and is booming in many ways, such as its tech and real estate industries.
Even Hamilton County has lost population as a whole, dropping by about 120,000 since 1970. By comparison, Indianapolis’s almost identically sized Marion County gained 135,000 during the same period – this in a place with far fewer obvious assets.
What’s more, unlike its fabulous core, Cincinnati’s sprawl isn’t even that good for the most part. So Cincinnati has chosen to fight its battle where it has few marketplace advantages instead of leveraging its unique and compelling assets.
This has proven a demographically, economically and financially unimpressive strategy. Instead, urban Cincinnati and Hamilton County should align available financial resources to make the most out of the amazing urban environment and assets that exist there.
Meanwhile, the suburbs aren’t going anywhere and will continue to grow, so they should seek to do so on a higher-quality pattern that will be financially sustainable long-term. The problem with sprawl is often less about the environmental impacts than the fact that as they age, older suburbs that weren’t very high-income to begin with become financial albatrosses as they fill up with dead malls, aging and less market-attractive homes, legacy costs and similar issues. And unlike the high-quality classic architecture of the core, they’ve as yet proven less adaptable over the long term.
The wonderful collection of assets Cincinnati has may also have bred complacency. Another name for an asset is “the stuff we did yesterday.” But what are we building for tomorrow? What is our generation’s contribution to the pot?
Cities like Columbus that started out with much less understood in their gut that they needed to go out and create some things. They were hungrier. Cincinnati needs to recover some of that hunger and fire in the belly that motivates other places that are keenly aware of what they lack and are fighting every day to improve.
Cincinnati has also been plagued with deep and counterproductive community divisions. This includes the East Side-West Side split, city vs. suburb, three states, tea partiers vs. liberals, racial divisions, etc. This makes it harder to get things done than it should be because there’s no civic consensus. The streetcar debate makes that very clear.
Cincinnati needs to find a way to heal these wounds and build a durable consensus while leaving room for appropriate debate.
A strategy that works with, not against, the unique qualities and competitive advantages of Cincinnati; a more aggressive, hungry civic attitude; and a way to bridge community divides are three of the things that will help Cincinnati to realize the sustainable growth and prosperity it should have in light of the fantastic place that it is and the incredible assets it has.
Tuesday, March 25th, 2014
[ Following on from Richey's piece last week, Pete Saunders asks how we can create urban revitalization strategies that connect with minorities - Aaron. ]
Cover of the East Garfield Park Quality of Life Plan, prepared by LISC through the New Communities Program. Source: Garfield Park Community Council
How is it that so many of the recent theories or models on effective urban revitalization absolutely fail to connect with minorities, especially African-Americans?
New Urbanists, Smart Growthers, Creative Class supporters and even advocates of the nascent Rust Belt Chic movement are bumping their heads against a low ceiling, trying to figure out how to achieve escape velocity and gain greater acceptance among the general public. General support from the African-American community seems to elude them all.
Let’s look at a few examples. Recently, the New Urbanist-oriented website Better Cities lamented the lack of support it has attained from minority communities for bike lanes and other measures that support pedestrianism and walkability. In Cincinnati last week, mayor-elect John Cranley defeated former mayor Roxanne Qualls by running on a platform to halt construction of the city’s streetcar project – a project supported by Qualls and that enjoyed the support of many urbanists. However, Cranley, a Democrat backed by many Republicans, enjoyed the support of a significant part of the African-American community. In New York, the election of populist Bill de Blasio as Michael Bloomberg’s successor has caused some consternation among corporate-oriented New Yorkers who may wish to continue New York’s Creative Class-style of revitalization.
All in all, this is causing adherents of the various theories and models to reevaluate their inclusiveness. In reality they need to reevaluate their mission, goals and message. If you look at what each theory has to say, it’s pretty clear where they fall short.
New Urbanists, who broadly support the notion that better design can create better communities, have a message that was crafted with the sprawling post-WWII suburbs in mind, and intended for implementation there. New Urbanists get their guidance from the pre-WWII urban development patterns of many of our nation’s cities, but often have little to say about how those cities should move forward today.
Smart Growth supporters may share the design sentiment of New Urbanists, but their focus is often on revisiting the regulatory environment that creates the cities we have. Similar to New Urbanism, Smart Growthers also get inspiration from pre-WWII cities, but have a message designed to appeal to suburban revitalization.
Creative Class advocates come a little closer to addressing the needs of cities. They broadly support the idea that establishing an environment for innovation and creativity in cities can drive urban revitalization. Perhaps, but that message seems to neglect a huge segment of the population of cities that don’t fit the high-education, professional, tech-oriented label at the heart of the Creative Class.
Finally, the new Rust Belt Chic model is gaining notoriety and followers. Supporters of this model believe that authenticity is key to urban revitalization. Cities, particularly Rust Belt cities, are who they are; they will attract new residents who seek an alternative to homogenous suburbia or Sun Belt by becoming better, and often more ironic, versions of themselves.
You can disagree with my characterization of the various models. They’re overly broad, I admit. What’s also overly broad is the role that African-Americans, and in fact other minorities, play in their formation and implementation. How can we have models supporting urban revitalization without really including all members of the urban landscape?
Let’s be real. The reason New Urbanists, Smart Growthers, Creative Classers and Rust Belt Chic-ers are looking into their appeal to minorities to go to the next level is that the Great Recession has changed everything. Prior to the financial crisis none of these models needed minorities to move forward. Whatever you think about the Occupy movement, it exposed growing income inequality in this country, and forced people who care about cities to consider inequality’s impact. Being on the short side of the haves/have nots divide is something that blacks are quite familiar with.
Touting bike lanes, streetcars, tech-led revitalization and amenity-rich areas has meant little to many blacks because they don’t deal with the structural inequities of our cities. Otherwise, the strategies simply seem like so many relocation efforts, reminiscent of urban renewal efforts from a half-century ago. For too long, the New Urbanism, Smart Growth and Creative Class models (Rust Belt Chic gets a pass for now) have all but neglected cities because they believed their strategies would indirectly improve cities – and they steadfastly avoided facing urban challenges directly. Now that more of suburban and exurban America is as structurally alienated as urban minority America has been, they want to reevaluate their message.
Blacks and other minorities have been looking for an urbanist response to the challenges they face. Our communities are plagued by rising violent crime, even as violent crime continues its steep decline at the national, metro and even city scale. Our communities are not only lacking poor physical connections to metro job centers, but poor social connections as well. The divide between challenged inner-city communities and all other parts of a metro area is reinforced by an inadequate educational system.
All our current urbanist models have been neglecting these challenges.
Addressing these challenges requires a social as well as a physical or economic approach. The best model that I’ve come across that unites these three is the comprehensive community development model, or quality-of-life planning. The model can be viewed as an outgrowth of the community development model that got its start in the late 1970s and early 1980s, and has largely been supported by the philanthropic community. Early community development efforts were geared toward alleviating poverty – providing affordable housing, connecting people to job opportunities, and stabilizing community decline. But the model took a leap more than 10 years ago when the Local Initiative Support Corporation (LISC) launched its New Communities Program in 2003, and expanded it to more than 20 cities nationwide. The model seeks to develop neighborhoods through five strategies:
- Expanding investment in housing and other real estate
- Increasing family income and wealth
- Stimulating economic development
- Improving access to quality education
- Supporting healthy environments and lifestyles
The comprehensive community development model has succeeded where implemented, but has largely escaped attention from the general public. Why? It hasn’t exactly gained wide acceptance in political quarters, where politicos feel the spotlight on low-income residents and communities highlights deficiencies in their efforts. CCD is resource-intensive. The model operates in a social realm that few people who focus on physical or economic matters feel comfortable. But I’ve found that the CCD model provides answers to questions that New Urbanists, Smart Growthers and Creative Classers are just now starting to ask themselves.
Since the onset of the Great Recession Richard Florida has talked about this particular time in history being the Great Reset. I agree. Times have changed, and advocates of the earlier models may not fully understand the depths of the changes. However, I’d encourage people to dig a little deeper – there are people who’ve been addressing these challenges – and developing solutions – for some time.
This post originally appeared in Corner Side Yard on November 11, 2013.
Friday, March 21st, 2014
One of lesser followed aspects of Detroit’s bankruptcy is a lawsuit filed by emergency manager Kevyn Orr to repudiate $1.4 billion in debt by claiming it was illegally issued. This appears to be mostly a negotiating tactic, but if the judge ends up agreeing with this, it will unleash an inferno of municipal moral hazard that will no doubt be exploited by politicians around the country.
Michigan, like many states, limits the amount of indebtedness cities can incur. To top off pensions, former mayor Kwame Kilpatrick borrowed $1.4 billion. To circumvent debt limits, he created special purpose entities to do the borrowing. Orr now claims these were sham entities, and so the debt issue was illegal, so the city is entitled to pocket the $1.4 billion and not pay it back.
Keep in mind that creating special purpose corporations of various types for this sort of purpose is widespread municipally and in the corporate world. Also keep in mind that Kwame Kilpatrick was a crook who’s going to spend the next 28 years in prison for corruption. It’s an interesting claim that an outright criminal who borrows money can claim that because his scheme is crooked he doesn’t have to pay the money back (Both Kilpatrick and Orr were both speaking ex-cathedra as municipal CEO). What kind of logic is this?
If Detroit successfully repudiates this debt, municipal leaders elsewhere would almost have to be idiots not to take advantage of the same trick. Elect a crooked mayor or merely one with few scruples. Borrow an insane amount of money by skating on the edge of the law. Then sue yourself claiming you couldn’t possibly have legally done the deal, so don’t have to pay the money back. Rinse, repeat.
The feds should drop the hammer on this hard on this. I don’t have a lot of sympathy for big banks. On the other hand, when someone takes out the municipal equivalent of a “lair’s loan”, they shouldn’t be allowed to profit from being a crook.
In large municipal bankruptcies, it’s pretty common to claim that the indebtedness is all the fault of those greedy bankers who deceived the poor servants of the public. I believe similar claims were made and generated quite a bit of municipal recovery in Orange County and Jefferson County, Alabama. But look closely and I think where you find a shady banker operating, you’ll often find a shady client as well.
Why do people keep electing crooks like Kilpatrick to office? Well, if it turns out those guys are able to fleece out of town bankers to the tune of $1.4 billion, why wouldn’t you? Looks like he might have cut a pretty savvy deal after all. This sort of behavior shouldn’t be rewarded. You can be sure shady municipal borrowing will only be on the increase if the courts allow the Detroit to play a heads we win, tails you lose game with the banks. Think about that the next time your city engages in legal contortions to dig itself even deeper into debt.
Speaking of Detroit, the free market Manhattan Institute will be doing a one hour live streamed event this Monday the 24th with Michigan Gov. Rick Snyder and Detroit emergency manager Kevyn Orr. It’s at 1pm ET and is called “Detroit: The Next American City of Opportunity.” You can access the event at: http://www.publicsectorinc.org/2014/02/detroit/. If you want to submit questions, tweet them to @ManhattanInst with the hash tag #SaveOurCities.
Tuesday, March 11th, 2014
[ Today Chuck Eckenstahler looks back at the unfulfilled promises of Benton Harbor, MI being declared metropolitan - Aaron. ]
It’s called the “Benton Harbor Rule”, a hard fought change spearheaded by now Congressman Upton and local leaders to obtain metropolitan status in 1980.
Back in the mid-1970′s, Berrien County Michigan, local governments and the Twin Cities Chamber of Commerce (predecessor to Cornerstone Chamber Services) identified the value of being recognized as “being metropolitan rather than rural”.
They identified the immediate opportunity to access as much as $1.8 million (1970’s dollars) of new federal and state funding that could only be obtained by “being metropolitan” for road improvements, bus transit, health and other social services. They estimated the designation would yield a $12-14 million dollar impact to the local economy.
To access these potential funds, they undertook a multi-year effort to change Federal Office of Management and Budget policy prohibiting Berrien County from ever being considered metropolitan.
Successful lobbing changed the rules for the 1980 Census creating, 9 new Metropolitan Areas like Benton Harbor-St. Joseph lacking a central city of 25,000 population in a concentrated urban area having a population of 50,000 or more, in a county having a population of 100,000 or more. This change modified the minimum sized “single city” criteria for determination of a “demographic dominate central city” requirement for federal metropolitan designation purposes.
Economic Development Advantages Identified
In the 1970’s being “metropolitan” meant more than increased state and federal money, according to the supporters. “Metropolitan” meant growth – increasing population and prosperity.
Business seeking to locate understood “metropolitan” to be a better place for new investment – both industry needing workers and retailers needing customers for success.
On the contrary, being a rural area meant the area didn’t quite make the grade for certain businesses especially the rapid growth of emerging fast food franchises and location of regional shopping malls.
The recruitment of these new businesses was a major goal of Chamber of Commerce visionaries who sponsored a nonprofit owned industrial park as a place for new industry to locate and create jobs. Back then there were no regional shopping malls and residents did a lot of their shopping in Kalamazoo, South Bend and Michigan City. It was believed the “metropolitan” designation would contribute to the redevelopment of Benton Harbor and the growth of communities throughout the county”.
Anyway, it just didn’t make sense that the home of several national firms such as, Auto Specialties, Leco Corporation, Tyler Refrigeration, Clark Equipment and Whirlpool would not reside in a growing metropolitan location.
Measuring the Impact of Metropolitan Designation
Today many wonder – was this successful? Did the change in federal policy truly make a difference?
Three decades later one measurement – population growth – can be used to gauge whether the legacy of this effort achieved results.
The adjoining table contains data for 8 of the 9 new MSA’s designated in 1980 due to the “Benton Harbor Rule”. The other has been merged into a consolidated MSA, a newer federal designation describing larger population centers, eliminating decade-to-decade data comparison.
This data reveals population of the Benton Harbor/St. Joseph MSA did not grow to the same extent as other comparative MSA’s created in 1980 – being a population loss of 8.4% compared to a 35.2% growth in population over the past three decades.
Where the average total comparative metropolitan growth rate in each decade ranged between 7-17%, the Benton Harbor St. Joseph MSA lost population twice between 1980 and 1990 and again between 2000 and 2010. The MSA only had marginal 0.7% population growth between 1980 and 1990.
Obviously, the legacy of the authors of the Benton Harbor Rule, raises questions – why and what happened to the well intentioned efforts to stimulate growth.
The logical questions based on the data include – Why didn’t the Benton Harbor-St. Joseph MSA achieve similar growth? Shouldn’t the population have grown in a similar fashion as the other MSA’s – at least at the average rate? What social, political and economic impediments arose to limit population growth?
Many credit the demise of the auto industry, the off-shoring of manufacturing jobs and globalization of business as impediment to population growth. Others mention Michigan’s unfavorable business climate as a cause.
There certainly some truth in each statement. However closer to home, the more appropriate question might be – are there local impediments that hampered population growth?
Economic Geography and Realities of “Place”
The following offers a few thoughts on social and political barriers that might cause the lack of population growth:
The “Friday Night” social identity of Southwestern Michigan where small town high school sports define the community is a barrier to multi-community collaboration and cooperation. It limits the ability of local government and customer trade areas to form and strengthen economic clusters of businesses to maintain economic marketability necessary to sustain small local business that once supplied the small town community shopping experience.
Paralysis of Political Geography
In place of economic consideration which should inspire cooperation there is paralysis, the inability to shed “political boundary binders” that maintain the historic political geography that may, in some cases limit the scale of economics necessary for retail business sustainability and the delivery efficient government services.
Cognitive “Place” Realism
Without a doubt, economic markets of Berrien County today are different compared to 1975 when efforts to create a demographic dominate metropolitan central city composed of smaller individual communities was first initiated. Individual mental mapping of the actual area of influence of the Niles and Benton Harbor – St. Joseph shopping areas shows customers pay little attention in which local government the actual shopping is done. This mental cognitive mapping discloses three major retail markets, Benton Harbor – St. Joseph, Niles – connected to South Bend and Harbor Country – connected to Michigan City.
This pattern creates a rather isolated St. Joseph – Benton Harbor metropolitan market area surrounded by two (or three) market areas influenced by more dominate regional competitors having a population approximating 70,000 people with a somewhat lackluster future growth trend.
Ethnic and Cultural Diversity Polarization
Modern metropolitan community development theory has identified “social capital” as a key to economic prosperity in a global market. This is especially important for international businesses who recruit globally for management talent. Academic researchers have documented communities who richly embrace ethnic, cultural, religion and gender differences that increase social interaction among a wide spectrum of people tend to have increased population growth resulting in greater economic prosperity.
Academic research also discloses communities with “less tolerance for differences” lag behind both in community population growth and employment growth by firms serving global markets; leading to the question of adequacy of inclusionary and tolerance tendency of the metropolitan area.
Questionable Externally Communicated Metropolitan Identity
A metropolitan area identity, or its “good name”, is formed in people’s minds by repeated exposure – being the accumulated knowledge they acquire from varied sources (news media, marketing publicity, testimonials, etc.) and their personal experiences resulting in a positive, negative or neutral image. To often this image is one that leaders prefer not to address or address by issuing cheerleader statements or other auditory claims promising a personal experience that cannot be kept. A positive metropolitan identity and image is a message designed to attract attention and then follow with support services that fulfill the expected experiences.
The decision to visit or invest in a “place” is based on faith and trust because “customers” are purchasing an intangible personal asset. The logical question for any metropolitan area is – Do we offer a “good name” identity and image?
“Metropolitan” As a Determinant of Future Growth
Post-recession public policy has reinstated the importance of “metropolitan areas” in Michigan’s economic development policy.
Academics and political leaders extol the virtue of economic advantages of Michigan’s metropolitan areas. They are assembling new legislation and administrative policy to direct public and private investment to Michigan’s “core community” metropolitan areas.
From a public policy perspective this makes logical sense. Young people gravitate to metropolitan areas due to job opportunities metropolitan areas generate, the greatest number of new business formations occur in metropolitan areas, metropolitan areas tend to have higher per household incomes for their residents, and metropolitan areas attract higher value real estate investment that enhance the local government tax base.
A recent Brookings Institution analysis confirms this statement, where their research documents that in 47 of the 50 states, metropolitan areas generate the majority of the states’ gross economic output. They report in 2009, the St. Joseph – Benton Harbor Metropolitan area accounted for $5,620,000,000 (1.5%) of Michigan’s gross economic output (See: Brookings Institution Metropolitan Policy Program – Metropolitan Area and the Next Economy and New Economy State Profiles).
Brookings advocates a “metro-led vision” for the future since they have “distinct assets and market strength to grow quality jobs and provide statewide prosperity”. They also note that metropolitan areas have:
1. In 30 states (including Michigan) the most innovative and educated workers,
3. Generate the majority of internationally exported goods and services, and
4. Host 89% of the working-aged people with post-secondary degrees.
All in all, Michigan’s strategy to define and focus government economic development attention to metropolitan “core communities” areas having greatest economic development impact is a reasonable and prudent “statewide” public policy. Michigan’s future hinges on performance of its metropolitan urban “core communities” hosting innovative firms, educated workers and critical infrastructure.
The Importance of “Geographic Place Identity”
Michigan’s newly forming metropolitan focused economic development public policy direction again draws attention on the importance of “metropolitan” and its impact on future growth of the Niles – Benton Harbor – St. Joseph Metropolitan Statistical Area.
Future community growth success is about understanding residents and, in the case of southwestern Michigan, to a lesser extent, seasonal residents and the occasional visitor. Population growth, especially well-educated workers is paramount to participation in the next wave of U.S. economic growth.
They say history repeats itself and again today – the term “metropolitan” once again communicates a sense of vitality and future prosperity.
In the eyes of the world a “metropolitan geographic brand identifier trumps a rural territorial identifier”.
This post originally appeared in Chuck Eckenstahler’s blog on February 27, 2014.
Sunday, March 2nd, 2014
Ed Glaeser’s plan for more skyscrapers in California?
[You may recall that when I posted Daniel Hertz's take on Chicago's zoning insanity I promised a somewhat different take. Well here it is. Daniel has already posted a reply. Your reasoned thoughts pro and con are of course always welcome - Aaron. ]
As housing prices and rents soar out of control in tightly regulated cities like San Francisco and New York, many people have called for a significant loosening of zoning rules to permit greater densification. Many policies contribute to unaffordable housing, including rent control, historic districts, eminent domain abuse, and building codes, but zoning puts an absolute cap on dwelling units per acre thus is generally part of any solution to the supply problem. What’s more, as recent commentators have started to notice, even many of America’s most dense cities are predominantly zoned for single family homes, calling into question the need to dedicate so much space to a single housing typology.
For example, a web site called Better Institutions posted this map of Seattle, in which all of the yellow districts are zoned exclusively for single family homes:
The poster lets his feelings be known by using scare quotes to denote single family “character” and blaming the zoning for Seattle’s high rents.
And Daniel Hertz posted a similar map of Chicago in which the red is single family homes only and yellow is industrial space unavailable for any residential use:
Some go beyond affordability, saying that we also need to significantly increase densities in central cities in order to reduce greenhouse gas emissions. Harvard professor Ed Glaeser wrote an article advocating this subtitled, “To save the planet, build more skyscrapers—especially in California.” He says, “A better path would be to ease restrictions in the urban cores of San Francisco, San Jose, Los Angeles, and San Diego. More building there would reduce average commute lengths and improve per-capita emissions” and “Similarly, limiting the height or growth of New York City skyscrapers incurs environmental costs. Building more apartments in Gotham will not only make the city more affordable; it will also reduce global warming.” He claims that, “The best thing that we can do for the planet is build more skyscrapers.”
These complaints and the proposed solution of more dense multi-family development may be true in a technical sense, but what would carrying that out mean for people who actually live in our cities?
Some critics may disdain the character of single family districts but few of these pundits ask the question of what eliminating lower-density housing actually means to the survival of the urban middle class. Districts, like the Portage Park example Daniel Hertz gave in Chicago, are some of the last bastions of middle class family life in the city. It’s clear that some densification can be implemented without radically changing the appearance or functioning of the built environment. Allowing 2-flats and coach houses, or even the corner apartment building or townhouse development, wouldn’t ruin Portage Park. There’s no reason such things should not be allowed. But nor would they make a major dent in affordability in places where a tidal wave of global demand is washing over the city such as in San Francisco.
To materially boost the number of units in an era in a manner that moderates prices in a highly desirable place like San Francisco would require massive changes in the built environment of its neighborhoods. This would radically transform the character and nature of the city in question. If San Francisco were really covered in skyscrapers, it would cease to be San Francisco— a city of low-rise buildings framed by hills that would be obscured by high rises. There may well be the same geography on the map labeled as such, but it would be a completely different place. We would have to destroy the city in order to save it.
One person who gets that is Alex Steffan. He’s angry about prices, saying that the “criminal lack of housing is a global scandal.” He’s also honest enough to forthrightly acknowledge that a sufficient scale of new homes to bend the cost curve would fundamentally change many of our cities:
We can build some housing incrementally, without changing the skyline or cityscape, but not anything like enough. To produce enough homes to matter, fast enough, we’re going to have to fundamentally alter parts of our cities. That, of course, demands a local government willing and able to plan and permit such widespread change. It also takes an array of homebuilders doing the actual work, often in more innovative and low-cost ways, like more collaborative housing, manufactured buildings and flexible living spaces. Most of all, it takes broader public insight into how large-scale development can improve our cities.
In other words, it’s a major change in communities that requires selling the public on the idea. He believes that young people will be the agents of change here. This shows perhaps one of the signature affects such changes would have. They would displace families by eliminating their preferred housing typologies in favor of forms more amenable to predominantly younger singles or the childless for whom living in an apartment with no backyard is more likely a relief than an imposition. But it’s hard to imagine cities as places for solving the problem of climate change if they are, like San Francisco, increasingly places devoid of families with children.
Steffan also says affordable housing is a social justice issue. Yet is it really social justice to require everyone to have equal access to San Francisco, population 825,000? I think not. Especially not when America is replete with urban centers whose biggest problems are depopulation and worthless houses that you can’t give away. There are plenty of options of places for people to live; we should look at making our now failing cities more attractive to people who may like the housing and neighborhood, if not for issues such as crime and poor schools. There’s no guarantee in America that you can afford to live in the place you might most want to choose. That’s long been true of suburbanites and city dwellers alike.
Also, the willingness to fundamentally reshape cities is odd in light of the fact that such previous attempts are uniformly viewed in the urbanist community as disasters. The idea of Manhattanizing San Francisco brings to mind nothing so much as Le Corbusier’s Plan Voisin for Paris, in which the historical cityscape is replaced with towers in the park.
Fundamentally altering Paris
Of course no one is actually saying to take it this far, although Glaeser’s vision gets close it. But once we enshrine the rule that a certain threshold of unaffordability means more density and building regardless of neighborhood character, it’s hard to see what the limiting principle would be. Also, high rises or even buildings above 4-5 stories in height usually require expensive construction techniques, and thus are inherently costly.
It’s true, however, that cities are not static entities. Every downtown skyscraper in America is built on a site that was once used for something else. Yet we see this densification overall as a good thing. Had Manhattan been preserved as of its pre-skyscraper era, it’s not clear the city would have benefitted.
Clearly the zoning and building regulations in our cities are often too strict. Yet the disasters of previous generations’ radical change suggests that incrementalism is a better course. By all means allow two-unit houses, corner stores with upper story apartments, etc. into currently all-single family zones. Add areas where high rises are allowed the peripheries of districts currently zoned for such; warehouse districts as well as office buildings that are not well occupied. But don’t bring out the bulldozer wholesale. Additionally, a healthy city should make sure to embrace the entire palette of housing types – including single family homes. There’s more to making cities attractive to middle class families than just cost, and things like the prospect of a backyard for the kids to play in are among them.
And given the relatively few intact and attractive urban cores in America, prices are going to continue to go up. That’s true even with radical new building. As mentioned, San Francisco only has a bit over 800,000 people. Boston and DC have only about 600,000 each. How many people can you plausibly put into these places? Realistically, not all of us who would like to live in San Francisco or lower Manhattan are going to be able to do so. That’s true no matter how many skyscrapers we build.
This post originally appeared at New Geography on February 26, 2014.
Tuesday, February 25th, 2014
[ Last week Jef Nickerson told us about a proposed strip mall development in inner city Providence. This week James Kennedy of the blog Transport Providence pans back the lens to look at the bigger picture around this kind of development - Aaron. ]
The McDonaldization of Society
McDonald’s is no stranger to the love and hatred of people all over the world. It’s most vocal opponents have faulted it for being the robotic extension of a hyper-efficient assembly line. An important urban planning model is getting more and more attention across the country, and its models show not that auto-centric businesses like McDonalds are hyper-efficient, but the opposite. Even successful sprawl is a sinkhole for huge government subsidies, and results are that municipalities seeking new tax revenue from them may be shooting themselves in the foot.
One of the most prominent critique of McDonald’s is George Ritzer’s “The McDonaldization of Society.” Ritzer’s central thesis is that McDonald’s has perfected what Max Weber called “bureaucratic rationalism” in the use of its resources to such an extreme as to have dehumanized the process of eating.
I talked to Ritzer on the phone and by email, finding some of what he has to say about McDonalds interesting. Overall, though, I am a critic of his perspective. A lot of his examples of creeping McDonaldization don’t seem all that troubling to me. Quoting from his book:
- “The department store obviously is a more efficient place in which to shop than a series of specialty shops dispersed through the city or suburbs. In addition, the shopping mall increases efficiency by bringing a wide range of department stores under one roof.” Certainly the disappearance of Main Street stores from many small towns and cities is something to be concerned about, and especially in its suburban form the shopping mall has meant lots of low-wage, high-turnover jobs that require huge amounts of wasteful driving and land use to produce endless streams of unremarkable places to shop. But what has to be understood is that Ritzer means to go beyond the big box store as an example of one-stop-shopping and criticize the idea of mixing different types of buying at all. In Providence, where we recently struggled over the addition of a new sprawled-out McDonalds and Family Dollar in Olneyville Square, Ritzer’s critique could not only apply to suburban places, but also to the newly-refurbished Arcade in Downtown, or even to the Winter Farmers’ Market in Pawtucket.
- “Supermarkets have sought to make shopping more efficient by institutionalizing ten-item limit, no-checks-accepted lines for consumers who might otherwise frequent the convenience stores.” To have a more humanized society, shoppers expecting to pick up just a few items should apparently wait in line with people buying hundreds of dollars of items. As someone who values transit and biking, this example particularly irks me, because the ten-items-or-less line is a good demonstration of exactly the advantages brought with transit or bike lanes. I see this example as a huge stretch.
- “Shopping also offers many examples of imposing work on the customer. The old-time grocery store, where the clerk retrieved the needed items, has been replaced by the supermarket, where a shopper may put in several hours a week ‘working’ as a grocery clerk, seeking out wanted (and unwanted) items during lengthy treks down seemingly interminable aisles. Having obtained the groceries, the shopper then unloads the food at the checkout counter, and in some cases, even bags the groceries.” Ritzer described the problem with imposing work on the customer as its effect on job creation. I personally can’t wrap my mind around why it would be bad for customers to be able to decide they want to order in a line or collect their own napkins and condiments in return for a lower price.
Certainly there are problems with fast food businesses, but I find Ritzer’s explanation of what those problems are to be lacking. I’m actually a very economically liberal person in many ways, but I also value consumer choice, and I feel like the McDonaldization thesis actually is a perfect combination of nanny-state patronization without any deeper analysis of how working class neighborhoods and businesses are fleeced by welfare-queen corporations.
Urban3 believe cities can increase their economic stability and community benefit by analyzing how architecture, planning and policy impact a community’s revenue base. (Image Credit: Urban3)
It’s Not About Fast Food
There’s another way of looking at McDonalds that sheds more light on its problems. The urban design and economics firm Urban3 in Asheville, N.C., uses math that’s receiving a lot of attention from national media. Urban3 asks, should cities be after any kind of economic growth or should they focus instead on how much growth they can squeeze out of an acre of land? The group produces some astounding visual models of what economic output per acre looks like, and its work has helped cities such as Memphis, Tenn., visualize what the balance between land use and economic growth actually looks like.
The firm first noticed the relationship between land use and real value in North Carolina, when staff worked to restore a JC Penney store that had been vacant in Asheville’s downtown for four decades. Made usable again, the property went from being worth $300,000 in 1991 to $11 million in 2012, according to a story about the firm’s work to restore the building, which takes up about a fifth of an acre.
The real insight of Urban3’s logic comes when one contrasts the value of the Walmart just outside of town, valued at almost twice the JC Penney building’s assessment. Emily Badger writes in The Atlantic article:
“Asheville has a Super Walmart about two-and-a-half miles east of downtown. Its tax value is a whopping $20 million. But it sits on 34 acres of land. This means that the Super Walmart yields about $6,500 an acre in property taxes, while that remodeled JCPenney downtown is worth $634,000 in tax revenue per acre. (Add sales tax revenue, and the downtown property is still worth more than six times as much as the Walmart per acre.)”
Urban3 contends that although businesses such as Walmart, which operate in similarly car-centric way to a McDonald’s with a drive-thru, appear to bring far more revenue than other businesses, that when looked at in a broader context are actually very inefficient at producing wealth.
I set out to apply his model to Providence, and found some interesting results.
For example, 235 Thayer St., home to a Chipoltle on the ground floor, carries exactly the kind of fast-food fare that Ritzer derides. Sitting on less than a tenth of an acre, the building is worth $636,100, according to the most recent tax assessment. The Whole Foods Market down the street at 261 Waterman has a small parking lot out front, and is valued at $2,222,300. But taken at a per-acre value, the Chipoltle wins hands down — $7 million an acre to the grocery store’s $1.5 million.
The lesson to draw from this isn’t that grocery stores are a bad investment. Though located in a less-valued neighborhood and worth just a bit more than $400,000, God Is Able African Market, in three-story building at 743 Cranston St., is worth $2 million an acre — half a million more than the Whole Foods. Fertile Underground, at 1577 Westminster St. on the West Side, came in at about $3 million per acre, trouncing a 6-acre Super Stop & Shop on Manton Street, worth more than $6 million, but only $1.1 million per acre.
In Olneyville Square itself, Recycle-A-Bike occupies the bottom floor of a building worth $200,500, but with a land footprint of just one-tenth of an acre, the building is worth 10 times that much on a per-acre basis compared to some other businesses in the area. The nearby Olneyville New York System has a parking lot in back that increases its footprint to a fifth of an acre, making the $272,600 building worth only $1.3 million an acre. The United Way at 50 Valley St. is assessed at nearly $600,000, but with a land footprint of 1.4 acres comes in at $423,000 value per acre.
I asked the city to provide tax information for a number of other businesses, many of which the city was surprisingly unable to locate in its tax records. These included a number of McDonalds restaurants built in suburban styles, a Home Depot which I had intended to contrast with a small neighborhood hardware store, several suburban and urban-style buildings that had Dunkin Donuts—which I figured is the ultimate in low-cost fast food—and a larger Whole Foods grocery store with even more parking which I was interested in contrasting with the smaller footprint one on Waterman Street. There were also several businesses in Olneyville that weren’t located.
Minicozzi emphasizes that it’s not just about how much value is created by an acre of land, but all the many extra costs that low-density development has.
“I think you have to ask yourself, what is the lifecycle cost of the road out front of the business? How much did it take to run sewer service across several acres of land for just one business, instead of connecting it ten feet from the next building over?” he asks. “If you’re in a nice three-story Victorian and someone just plops a gray box next to it, it’s not only about whether you dislike that box. Does that box pay its bills? I think the answer is no.”
Taxes in Providence are based on property values rather than land use, so some of the very small but very efficient businesses we studied pay very high taxes in relationship to the amount of infrastructure they consume.
I spoke with Nina Maxwell and Mike Giroux of Fertile Underground to get a sense of what one high-value-per-acre business pays in taxes. Fertile Underground pays $500 a month in taxes. But the costs to this small business go much further. “We pretty much have a permit for everything. I mean everything. There’s one for selling ice cream, and one for having chairs inside, and yet another for having chairs outside,” Maxwell says. “We had to pay the state a couple thousand dollars to put in bike racks on the sidewalk.”
When the zoning board in Providence approved the development of the McDonalds, alongside a Family Dollar of similarly sprawly style, it put forth the argument that while the businesses weren’t ideal, they were a step forward for a neighborhood with high unemployment. But the pattern of taxation and business-unfriendliness for small startups alongside bad land use and high consumption by sprawl businesses asks questions about whether that small-step-forward approach is exactly backwards. This isn’t helped when many of the officials in charge of directing policy admit to having no understanding of how these things work. Jim Bennett of the city’s economic development office testified at the meeting as follows:
You would think I would be supportive of this project because of the jobs, and there are jobs. I’ve checked it out, they’re accurate. The jobs particularly that are attuned to the minority community where we’re getting crushed.· We have probably the highest minority unemployment in the country; this addresses that issue. That’s not why I’m supporting the project.
You would think I’m supporting it because the property taxes are going to be raised between 5 percent and 10 percent. Several hundred thousand dollars, which could be used for infrastructure, schools. That’s a reason to be supportive of these jobs.
I went by and I got a picture of every building in Olneyville, every one. I looked at them and there’s not one business there that wouldn’t benefit by the increase in traffic. So that’s another reason to support it. However, my reason for being here … is that I do support the councilwoman who works with me at Providence Economic Development Partnership, who helped me get our loan program out of trouble with HUD, who I like to kiddingly call my assistant economic development director, who knows her constituency better than anybody. That’s who I support.
And lastly, and this is very important. Bob Azar, for 13 years he’s been involved with every major project in the city of Providence. The reason why this city is a jewel is because, part and parcel, of Bob and his staff. I have to tell you, I’m the director of economic development. I don’t know the first thing about zoning and planning and all this stuff, nor do I want to, but I’m a business person. I rely on the experts, that’s what I do. A lot of the work that Bob has done for 13 years here is seen around the city.
So Bennett’s points seem to be 1. I don’t know anything about this, but listen to me. 2. Things that expensive and harmful, like highway traffic through a low-car-ownership neighborhood, have only an upside without any counterbalance, and 3. I’m supporting this because my buddy in local government does. Very convincing.
Bennett initially agreed to set up an in-person meeting with me on behalf of ecoRI News to discuss the new development, but the morning of the scheduled meeting his secretary wrote to cancel, citing snow. I offered to do an interview by phone, and sent an e-mail with questions pertaining to the lifecycle costs of things such as Routes 6 and 10, the sewage overflow system that was just installed in Olneyville, the underground water pipes to the site and RIPTA efficiency. Bennett didn’t reply to requests for an e-mail or phone exchange.
At least one Rhode Island city has a different approach. Central Falls, located north of Providence, and itself quite a struggling rust-belt town, but the director of economic development for CF, who is also an Olneyville resident, spoke at the zoning meeting to recommend that the businesses themselves be approved, but only with the zoned urbanism intact. He said that Central Falls had been approached by a Family Dollar for its historic Broad Street and had insisted on no set backs from the sidewalk, and that Family Dollar had complied.
The Central Falls example gives one hope. In a state the size of Rhode Island—a state that also has the highest unemployment in the country, a shrinking population, and lots of unmet road infrastructure obligations around its neck—we should be able to get our heads wrapped around the idea that land is limited and has value that should be protected.
A version of this post originally appeared in a ecoRI on February 21, 2014.
Friday, February 21st, 2014
I’ve said many times that it is predominately larger metropolitan regions of 1-1.5 million people or larger that are best positioned to succeed in the global economy. This is in effect the minimum viable scale to compete. These cities have bigger talent pools, thicker labor markets, the right infrastructure (e.g., major airports) and amenities, bigger local markets, more specialized suppliers, and more entrepreneurial ferment. Smaller places that don’t have a unique asset (such as a major university) are going to struggle.
We see that on display again in Michigan, where Battle Creek based Kellogg’s is opening an operations center in Grand Rapids. This will employ 300-600 people, including some transferred from the headquarters. As the company put it:
Kellogg CEO John Bryant told The Grand Rapids Press/MLive they chose Grand Rapids for the new center after looking at nine possible locations around the U.S. as part of a new corporate restructuring initiative dubbed “Project K.”
Bryant said the company chose Grand Rapids because 40 other corporations have created similar service centers in the area, creating a labor pool from which Kellogg hopes to draw.
“We’re very excited about the Grand Rapids location. There’s a good population base for this sort of activity,” Bryant said.
Leaders in Battle Creek are angry about the company choosing to open in nearby Grand Rapids:
“This was a unilateral action by the Kellogg Company,” [former Battle Creek mayor and U.S. congressman Dr. Joe] Schwarz said Monday, “blindside, if you will. And that’s not the way people in Battle Creek, especially those that have been here a long time and worked with Kellogg on so many issues like myself, that simply is not the type of behavior we’ve come to expect from the company.”
At the time, Jim Hettinger was CEO of Battle Creek Unlimited. In a column for the Battle Creek Enquirer, Hettinger expressed his frustration over Kellogg’s announcement, saying the city has continually gone to great lengths to accommodate the company’s needs.
I understand the frustration, but at the end of the day, this is the reality of the modern world we live in. We see similar business decisions every day. Kellogg’s is in Battle Creek for historical reasons. There’s no way the company would ever choose to locate there today. The changing demands of the global marketplace create a need for skills that are easier to find in or lure to a place like Grand Rapids (metro population one million) than Battle Creek (metro population 135,000). That’s reality.
Note here that cost is simply not the issue. Both Grand Rapids and Battle Creek are lower cost locations. It’s clearly about being in a place that has better scale to serve the needs of a business serving upwards of 600 white collar employees.
This divergence understandably fuels resentment and bitterness within states, as I noted in a recent column in Governing magazine. I frequently find that to locals it’s particularly galling when a company does something like this within the state boundaries. Had Kellogg’s opened in Austin, Texas, I strongly suspect Battle Creek wouldn’t be nearly so bitter. I’ve long noted the same thing in Indiana, where smaller towns and cities would far rather see an out of state company buy their local bank or whatever than have an Indianapolis company come in. (Though I’ve also noticed this has changed for the better in the last 20 years). The reality is these jobs could have left the state entirely. Had Grand Rapids not been there, they probably would have.
This is one reason I have pounded the table for more expanded regional thinking by the likes of Grand Rapids. It’s not an easy problem, but if they can’t demonstrate that there’s a win-win in here somewhere for regional metros like Kalamazoo and Battle Creek, resentment will become entrenched. This can be difficult because the answers aren’t obvious and places like Grand Rapids – which itself is of marginal scale and what’s more not on the trade routes in the way a place like Columbus, Ohio is – are pedaling hard to just to make sure they themselves can make it. But longer term I think it’s imperative.
In the meantime, it’s important for state leaders to understand and respond to these realities. If they don’t, they will only drive business out of the state completely, just like effectively Indiana’s entire banking industry got gobbled up with little to show for it.
PS: One exception I’ve noted to this rule: Chicago. I didn’t seem to hear the same anger from Decatur over ADM that we see here. I think in part it’s because they understand Chicago is just a far different place than them. It’s such a unique city that losing a small executive headquarters doesn’t even seem like genuine poaching. Plus the entire leadership of the state is Chicago-centric, and and their top priority is building up global city Chicago.
Tuesday, February 18th, 2014
[ Providence, Rhode Island was spared some of the worst of the urban renewal disasters and has a lot of intact neighborhoods. But there have still been some not entirely positive changes in the urban fabric in others. One such neighborhood is Olneyville. As you can see in this aerial, there's an old mostly intact neighborhood commercial center at the core, though with areas of demolition. The area is also cut off by a freeway.
In the piece below Jef Nickerson discusses a proposal for a strip mall in the area that would further degrade the urban fabric. (It's near the bottom left of the photo above). This is sadly what happens in many struggling areas where a desperate city approves suburban style "redevelopment" that's actually destructive to the only things giving the neighborhood appeal in the first place.
As an aside, I believe this development is across the street from the legendary Olneyville New York System Wieners. Somewhat oddly, the term "New York System" actually means "Rhode Island style." Here's a picture of the classic, complete with cheese fries and coffee milk (like chocolate milk, but made with coffee flavored syrup - another Rhode Island classic).
Rendering of proposed McDonald’s and Family Dollar store on Plainfield Street in Olneyville.
After learning of plans for a drive-thru McDonald’s proposed on Plainfield Street in Olneyville, I requested plans for the proposal from the Planning Department.
The developer is seeking master plan approval from the City Plan Commission for the construction of a McDonald’s and Family Dollar store in a separate building on a site which was cleared of existing structures last year.
Per the CPC agenda, the applicant seeks relief from front yard setbacks (they are requesting to set the building further from the street than allowed) and also for a special use permit for a drive thru for the McDonald’s. The applicant plans for a total of 56 parking spaces on the site (per the plans, 19 parking spaces in two rows between Plainfield Street and the Family Dollar Store). The McDonald’s is situated on a corner lot (Plainfield and Dike) with the drive thru lane wrapping around the building between it and the sidewalk. Pedestrian access to the McDonald’s is proposed to be via two crosswalks across the drive thru lanes and a third crosswalk from the Family Dollar store across the parking lot. Direct off-road pedestrian access to the Family Dollar store is only provided via crosswalks from the McDonald’s or via sidewalks crossing a driveway entrance on the Atwood side of the parcel.
According to ProvPlan, as of the 2000 census (the most recent data available) 59.5% of households in the Olneyville area have automobiles this compares to 52.5% Downcity. With such low car-ownership numbers, the residents of Olneyville are highly dependent on public transit, walking, and bicycles. Buildings separated from these forms of transit by parking lots with drive thru lanes are not the best way to serve this population. Olneyville is a major traffic artery to points west where car ownership rates are much higher (~80% in Hartford and Silver Lake). The residents of Olneyville should not be further burdened with automobile infrastructure catering to people outside their community.
The removal of the buildings at this site has widened a widened a gap in the street-wall along the south-side of Plainfield Street and Olneyville Square which only had small gaps between the Route 6 overpass and the eastern end of the square. For generations Olneyville has fallen victim to the automobile, first the highways, them the retail mindset that set in in the middle of the last century with places like the former Price Rite plaza, the car wash on Westminster, the Burger King with a drive thru and 60 parking spaces, and the gas station across from this site.
The Olneyville community has been working hard to bring street-life back to the square and Olneyville Housing are providing homes for residents who can walk to this area. Allowing auto-centric design at the southwest side of the square will make that area dead to walkability for generations more, just as we’re making progress on reversing prior generations of damage.
This isn’t about the proposed retailers (though I’m sure we could have a long discussion about the food choices we have in lower-income neighborhoods), this is about their physical manifestation in the neighborhood.
This post originally appeared in Greater City Providence on January 15, 2014.
Tuesday, February 11th, 2014
[ Daniel Hertz is back with another zinger originally posted over at his personal urbanist blog, which is a must read if you live in Chicago. If you're not familiar with his work, check out his posts on public safety inequality and school gentrification.
Today he takes a critical look at another topic: the prevalence of single-family zoning in the city. I myself am working on a piece with a somewhat divergent view from Daniel's, but I thought this was really great and wanted you all to see it.
As a companion piece to this, you might want to check out a post over at Better Institutions that makes a similar point re:Seattle. Here's their zoning map. Everything that is in solid gray without hash shading is zoned exclusively for single family homes.
But enough prologue, on to Daniel's piece - Aaron. ]
So one thing that happens when I bring up the fact that Chicago, like pretty much all American cities, criminalizes dense development to the detriment of all sorts of people (I’m great at parties!) is that whoever I’m talking to expresses their incredulity by referencing the incredible numbers of high-rises built in and around downtown over the last decade or so. Then I try to explain that, while impressive, the development downtown is really pretty exceptional, and that 96% of the city or so doesn’t allow that stuff, or anything over 4 floors or so, even in neighborhoods where people are lining up to live, waving their money and bidding up housing prices.
Then they make some non-committal grunt and change the subject.
But I’m not BSing here. Not only does the city make it illegal in the vast, vast majority of the city to build super-dense towers or medium-dense midrises in very high-demand neighborhoods like Lincoln Park or Wicker Park, but it even criminalizes your standard two- or three-flat apartment building in the majority of neighborhoods, meaning that a developer who wants to build some moderate-price housing in a moderate-demand neighborhood (like, say, Portage Park) has to deal with local segregationists.
Let me say that again: In most Chicago neighborhoods, it is illegal to build anything other than single family homes.
You don’t believe me. That would be really weird, you say. Well, here’s the map:
There you go. Everywhere that’s red, it’s single family homes or nothing. And that makes it look better than it really is. If we highlight all the places where you can’t build anything residential at all – because the land’s been zoned for manufacturing, or parks, or whatever – the places where you can even legally build a two-flat get squeezed even more:
Red = single family homes only. Yellow = non-residential use.
What kind of public interest could this possibly be serving?
PS – It is of course the case that developers sometimes get concessions from aldermen to rezone a plot of land they would like to build on. But when that happens, they’re susceptible to massive pushback from locals who would like to use the power of the government to segregate themselves from lower-income people, or to establish local housing supply ceilings for their benefit at great expense to everyone else.
In any case, the proof is in the pudding: walk around any of the city’s desirable non-downtown neighborhoods and see how many developments that added net housing units have been built in the last 10 years. The answer is precious few.
This post originally appeared in City Notes on January 27, 2014.
Friday, February 7th, 2014
I’ve seen a few pieces in the conservative press lately boasting about Scott Walker’s performance as governor of Wisconsin. For example, the American Spectator ran an article called “Wisconsin Thrives Under Scott Walker“:
In 2011, Wisconsin had a whopping deficit of $3.6 billion dollars. But a cooperate tax cut and collective bargaining reforms invigorated the state economy. Now, the state is boasting a $911 million surplus, credited to “good stewardship of the taxpayers’ money.”
And what will Walker do? Buy his wife a $19,000 dress? Increase his paycheck? Go on vacation? Nope. He’s proposing $800 million in tax cuts. “What do you do with a surplus? Give it back to the people who earned it. It’s your money,” Walker said.
I find these articles revealing because they show how the Tea Party mindset has affected the definition of success in Republican circles generally. Why has Scott Walker been a success in their view? Because Wisconsin’s state government is financially healthy. The actual people of Wisconsin take a back seat to that. A friend of mine in Indiana summed up the mindset when she noted that many people today equate the financial health of government with the well-being of the people in the state.
This I think is the Tea Party mindset writ large. As I’ve noted before, under Tea Party influence, Republicans have come to see government as purely a fiscal machine in which nearly the entirety of good policy consists in reducing the amount of money flowing through it. This is rooted in a single factor determinism view of economics. Much like Marxism, it has a base and a superstructure. The base in Tea Party thinking is government. If you shrink it, the theory goes, prosperity must inevitably follow.
The fiscal health of government is no doubt important. But to determine if Wisconsin is actually “thriving” you need to look at statistics that actually affect people. So let’s do that. Scott Walker took office in January 2011. So here is the percentage change in jobs in Midwest states between December 2010 and December 2013 from the Bureau of Labor Statistics:
Wisconsin actually doesn’t rank that well in job growth during Scott Walker’s administration, barely beating fiscal basket case Illinois. The state looks better in its unemployment rate:
However, in part that’s because Wisconsin’s unemployment rate was already low on a relative basis when Walker took over. It ranks near the bottom in reducing its unemployment rate, though obviously reductions are harder to come by when you’re already lower. Michigan had nowhere to go but down.
I actually support many of Scott Walker’s reforms. Public sector unions clearly need to be reigned in or even eliminated as they are a huge barrier to rational fiscal management and effective service delivery in addition to being an inherently corrupting political force. Items like allowing unions to force localities to buy health insurance through union affiliated firms at inflated rate were clearly abusive.
It’s also early to judge, and this is monthly data that is fairly volatile, even though it’s seasonably adjusted and with a same month comparison. There just isn’t that much other data available.
What I object to is declaring victory when the budget is balanced. The attitude exposed by this is profoundly revealing and shows everything that’s wrong with Tea Party type thinking. It’s obvious that people claiming Wisconsin has thrived under Walker didn’t even take a cursory look at the actual economic performance of the state.
Wisconsin balanced its budget? Big deal. You’re supposed to balance the budget. That’s just doing your job. It shows how far we’ve come that you can receive plaudits simply for meeting what should have been the baseline expectation.
The charts above should also cause a reconsideration of the notion that government finances are the primary determinant of business climate and economic growth. There are states on both the left and right of that issue that are both thriving and struggling. Part of it is that states have limited power in the modern economy. There’s only a limited amount they can do to make things better, whereas they can definitely screw it up.
Also, the natural condition of a participant in a marketplace is failure. The vast majority of new businesses fail. Similarly, places can fail too, and having a budget surplus can’t necessarily stave that off.
My view is that while state governments are weak actors and there’s a risk of screwing it up, the likelihood of failure in the marketplace is high enough that government does actually have to try to do things. By all means prudent finances and a good regulatory climate need to be maintained, but if you think that’s enough to save you, you’ve got another thing coming. Now that Scott Walker has repaired the budget, what’s his actual plan moving forward to try to build actual personal and marketplace success for Wisconsin residents and businesses? That’s what will determine his actual legacy. It’s in whether he boosts the fortunes of the state’s residents over the longer term, and manages to bend the curve of progress in a positive direction over time.