Thursday, April 23rd, 2015

What’s the Perfect Size For a City?

My latest post is online over at The Guardian. It’s called “What’s the perfect size for a city?” It is an expanded look at the right scale of regional governance – small box cities, large regional governments, etc. This goes beyond the United States to take a more expanded global view, incorporating some recent findings from the OECD and World Bank. Here’s an excerpt:

“Often, administrative boundaries between municipalities are based on centuries-old borders that do not correspond to contemporary patterns of human settlement and economic activity,” the OECD observed in a recent report. The thinktank argued that governance structures failed to reflect modern realities of metropolitan life into account.

Behind the report’s dry prose lies a real problem. Fragmentation affects a whole range of things, including the economy. The OECD estimates that for regions of equal population, doubling the number of governments reduces productivity by 6%. It recommends reducing this effect with a regional coordinating body, which can also reduce sprawl, increase public transport satisfaction (by 14 percentage points, apparently) and improve air quality.

The World Bank, meanwhile, is worried about the way rapid growth in developing cities has created fragmentation there, too. Metropolises often sprawl well beyond government boundaries: Jakarta, for example, has spread into three separate provinces. The World Bank calls fragmentation “a significant challenge in the East Asia region”.

Click through to read the whole thing.

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Topics: Public Policy, Regionalism, Strategic Planning, Transportation
Cities: Hong Kong, London, New York, St. Louis, Toronto

Tuesday, March 17th, 2015

More on Minneapolis-St. Paul and the North

Following up on last week’s post from Alex Schieferdecker about Minneapolis-St. Paul as the “Capital of the North” – an attempt to rebrand it to be in a region separate from the Midwest – I put together a few thoughts of my own that are posted over at New Geography. Here’s an excerpt:

There are two basic approaches cities are pursuing today. One is the regional capital approach of a Barcelona. (It would perhaps like to see itself as a national capital). The other is the global city approach of Chicago in which the city seeks to brand itself as a stand alone entity directly in the marketplace while actively divorcing itself from the region. The global city model seems more popular at present….If the Twin Cities are functionally a capital, this regional relationship will assert itself organically, however it seeks to brand itself.

Where the branding idea falls flat is in two areas….

Click through to read the whole thing.

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Topics: Civic Branding, Demographic Analysis, Economic Development, Regionalism, Urban Culture
Cities: Minneapolis-St. Paul

Sunday, January 11th, 2015

How to Start Rebuilding Chicagoland’s Infrastructure by Robert Munson

[ Contributor Robert Munson sent me the below as his take on how Chicago should reform its transportation governance structure. Comments will be enabled on this post and you can email Robert at rcmunson@icloud.com – Aaron.}


Photo by NASA

Night-time shows Chicagoland’s transportation corridors radiating from its center, but does not reveal their weakness: corridors don’t connect well to one another, adding to congestion and time wastage. Many connection improvements proposed in the region’s 2040 Plan are being failed by our politics. As an attempted remedy, the Chicago Metropolitan Agency for Planning (CMAP) is offering a proposal for a sales tax increase.

But before we try to fix the financials, we first must fix the region’s politics. Illinois’ insolvency and behind-the-scene manipulations make CMAP, a state agency, poorly suited to invest new funds. CMAP suffers under the political confusion created by having two Boards. This article looks at how each represents different levels of government and how both restrain regional progress.

CMAP’s proposal is an opportunity to shape a new, suitable regional funding authority that gives taxpayers better value and serves commuters far more effectively. If this new authority is elected directly, it then will have the legitimacy to achieve these three ingredients of sustainable transportation.

1) Balance taxes and usage fees so households have economical options.

2) Invest with greater return for public goals and private interests. And,

3) Minimize confusion caused by a deteriorated state and institute suitable      regional governance.

How Two Heads Are Worse Than One

Chicagoland’s obstacles are captured in a helpful history of our region’s planning, “Beyond Burnham.” This book’s concluding chapter summarizes three strategic problems in Chicagoland’s 20th Century planning. Two problems are manageable today. First, the separation of land use and transportation planning has been merged into CMAP; so most players, at least, know the benefits of tightly integrating the two functions. Second, CMAP has helped stabilize the historic tensions between Chicago and its suburbs.

The third problem blocks progress: the region’s lack of an organized constituency. My analysis concludes there is no constituency because there is no elected regional body. This was intentional by two powers-that-be: chiefly, the state’s Department of Transportation; and suburban mayors. Each has its own Board to govern CMAP. (If this seems confusing, link to CMAP’s org chart and you will see why.)

CMAP formed after a compromise ten years ago to merge two agencies. Each intended to protect its turf. Today that compromise — and the power politics behind it — blocks us from the adequate regional governance required to build economically the next generation of infrastructure.

The ultimately powerful Board is the Policy Committee of the Metropolitan Planning Organization (MPO). Mandated to spend Uncle Sam’s money, the MPO is controlled by the Governor through Illinois’ Department of Transportation, a singularly backwards bureaucracy restraining the nation’s key hub from updating itself. While allowing the region’s planning process to show trappings of democratic participation, the MPO can pull the levers of power… much like the man-behind-the-curtain.

The poster-child example is the Illiana Expressway. Unjustified by rational criteria, the Illiana’s approval was strong-armed by the MPO and symbolizes the current regime’s failings. The MPO recently reversed CMAP’s other Board that had clearly decided the Illiana should be a privately funded road in the “2040 Plan” that was produced by an open, public process and was published back in 2010. I call this reversal the “Illiana Incident.” The Incident shows signs that interest group machinations got to the Governor and turned this un-needed expense into a regional taxpayer priority.

I served on CMAP’s Citizen Advisory Committee (CAC) from 2008 through 2010. I did not fully understand the MPO’s power. I could not penetrate its opacity. Its “Memo Of Understanding” is cryptic, not showing the ruling hand. I observed two MPO meetings… and got no further feeling. But during 2010, subtle signs indicated road-building constituencies were asserting themselves. When the Illiana was forced back on to taxpayers in 2014, my naiveté vanished. It became clear that the man-behind-the-curtain also had a hammer that shattered illusions of democratic planning.

That hammer must be laid to rest permanently before taxpayers agree to a new tax. The Illiana Incident is a lesson to taxpayers about how new taxes will be wasted. With the highway largely unpopular and hugely ineffective at resolving the region’s transportation needs, reaction to the MPO’s 2014 reversal spread like a media wildfire. Here is a synopsis of editorials. While that website has an anti-sprawl agenda, the media’s complaints echo a brazen affront to our emerging sense of regional sovereignty.

The Illiana Incident also offers a window into how MPO spending decisions perpetuate the monopolies of the 20th Century agencies that sit on the MPO’s Policy Committee. These agencies tend to give short shrift to the innovations proposed by CMAP staff. In the big picture, a narrow-minded MPO lost us the decades when infrastructure was cheaper and makes today’s investment much larger.

Wasting taxes is condemnation enough. But… the MPO’s authority also is not justifiable when you consider that Uncle Sam is retreating from transportation funding relative to when he mandated MPOs to protect his 80% of capital to Illinois’ historical 20% match. But with a broke state, few expect Illinois to make its match.

We see other signs of the MPO’s lack of accountability. Consider the top five priorities listed in the consensus “2040 Plan,” three were road projects and two were rails. As 2015 ends, the three road improvements (plus Chicago interchanges not even listed) will be nearly complete. The two rail projects are mere plans sitting on a shelf without funding. With the region’s passenger rail plan again sacrificed, a balanced plan can only be executed if there is autonomy from the state’s apparatus. Controlled by the man behind-the-curtain, CMAP cannot invest new regional funds to achieve benefits for the greatest number.

So, how legitimate is it for a state DOT-controlled MPO to exercise ‘de facto’ veto power on Chicagoland’s transportation spending? Not very.

To be direct, Illinois uses the MPO and federal power to thwart regional initiative. The MPO looks like a dinosaur perpetuating 20th Century sprawl and cannot direct the next generation of transportation investments. Any new tax money should be protected from the MPO, which would just build more business-as-usual boondoggles like the Illiana.

Without enough autonomy, CMAP will continue to be burdened by its poor parent. Illinois’ de facto insolvency emerged after decades of short-term decisions and recurring corruptions. To understand taxpayer’s likely resistance to CMAP’s proposed new sales tax, let’s see what debt has wrought. Bad state governance saddles each Illinois citizen with a cumulative debt of $21,130. This same opinion piece in “The Wall Street Journal” references also the Cook County Treasurer’s report in which this debt is much larger and close to unbearable for Chicago residents.

While these numbers are not widely known among the electorate, they are clearly felt. Rapidly being shaped is a citizens’ consensus that their state cannot solve problems merely with more money. The proverbial “throwing good money after bad” now eats food from too many families’ tables. Although still largely a public intuition that voices itself in gutter-low approval ratings for legislators and knee-jerk reactions to tax increases, the public’s distrust makes approval of CMAP’s tax unlikely.

Simply put: Illinois has abused the public’s trust and, quite reasonably, they won’t willingly give the state controlled MPO more money.

CMAP’s Second Head Lacks Authority… Intentionally

While the hidden and more powerful Board undermines legitimacy, CMAP’s other Board is visible but minimizes regional coordination. Controlled by suburban mayors, this visible Board does a good job synthesizing the needs of a diverse region. But to protect their turf back in 2005, suburban mayors insisted that CMAP plans were to be “advisory.” While politically necessary a decade ago to merge the region’s dueling agencies, that compromise holds us back from the path we need to travel as a region. The state’s insolvency forces taxpayers to demand results…not advisory plans that gather dust on the shelf. Mayoral restrictions on CMAP are fundamental to how it is not suited to produce the higher level of results required to invest new taxes.

Consider the commonly held planning principle: the closer transit investments are aligned to compact and mixed uses, the higher the ridership and higher return on investment. This alignment increases transit’s operating revenues. Suburban downtowns prosper and property tax revenues increase. Everyone scores.

But because CMAP has only the power of persuasion, its “advisory” plans do not require changes in comprehensive plans as a prerequisite to making a transit investment pay-off sooner. The 2005 scoring area was so large that a municipality still could spend regional money on, say, a new train station without first having a believable plan for compact redevelopment. The scheme with Illinois’ DOT/MPO allows a town merely to wait its turn and it would get its grant for a station or arterial. Protecting this distribution scheme gets played out in the collaborative appointments of County representatives to the MPO and CMAP’s Board.

Too subtle to describe fully in this article, I saw how CMAP’s Board enforced its 2005 deal. Senior staff suggesting tight alignment were forced out. Similarly in early 2011, the CAC that I served on (and also uttered such blasphemies) was replaced by new citizens, hand-picked by CMAP’s Board members.

Uncle Sam’s gradual withdrawal from transit and Illinois’ insolvency make aligned spending even more imperative today. Our multi-decade backlog of maintenance and very little money creates urgency. The policy nexus between transportation and land use must be precise if it is to serve households economically. Instead of merely waiting their turn for grants, towns today must compete for new capital.

As one example, new tax funds should be allocated to communities whose viable TOD plans will increase transit revenue and, thereby turnover that capital for the next town’s station down the line. This accelerates the three decade process that transformed Arlington Heights’ mid-Century downtown into a 21st Century model for its neighbors. Today, quicker returns on investments are how Chicagoland will do more with less capital.

If this basic principle isn’t on the table while discussing new taxes for infrastructure, then taxpayers should end the discussion because they will not get maximum results.

To summarize, we should view CMAP’s two Boards as blocking us from overcoming Chicagoland’s two strategic obstacles: Illinois is losing legitimacy to tax for and approve new initiatives; and, CMAP’s plans lack authority to maximize regional return on investment.

Making The Most Of CMAP’s Proposed Sales Tax Increase

Aside from the MPO’s fatal flaw of not acting in the region’s best future interests, I like CMAP. It certainly is an improvement over two non-communicating agencies. CMAP’s staff is competent. It produced a great long-term plan that won top national awards. Everyone I know who worked on it was gratified to help the undertaking. CMAP transformed a historically fractious region by sketching a potential consensus for progress.

Today, CMAP is on trajectory to win the trust of most jurisdictions. In the four years since the “2040 Plan” was approved, CMAP built productive relations with over 100 jurisdictions to help them plan. Maximizing its power to persuade, CMAP has a convincing Executive Director and a beefed-up communications staff. Most municipalities now understand the regional consequences of their land use. Progress.

But despite its good work in a tough spot, CMAP is not suited to the daily job of reinventing the public’s transportation business. With a narrow skill-set and subjected to vetoes by the state’s road-building agency, CMAP should stick to its knitting as the region’s long-term planning agency. Because it is controlled by a drunkard parent, the state of Illinois, CMAP is unfit to invest public capital well, especially in a time of fiscal constraint.

Here’s how to convert our transportation lemons into some semblance of lemonade.

We start by shifting new funds to a new Board. Consider the Twin Cities; driven by similar political parallels. Their MPO also is controlled by the Governor. Taxpayers of this famously “good government” region viewed their MPO as unworthy of making transit deals that used a new sales tax. So in 2008 they created a Counties Transit Improvement Board. It has revitalized the Twin Cities transit by investing to complete three light rail lines, two central stations and a suburban line. Best yet, Minneapolis and St. Paul seem to have learned faster than pre-2008 practices about how transit investments should be leveraged with land uses to promote economic redevelopment.

Chicagoland’s Board must do the same and also innovate big-time. Because we are broke, we need to develop flexible and entrepreneurial organizations that invest public funds so they employ private sector efficiencies that serve everyone. For this, a Board must isolate itself from the state. Otherwise it will have trouble attracting private capital, since no competent company wants an insolvent partner.

So, an independent Taxpayers Regional Investment Board should be created. TRIB will be substantially more effective by including these three innovations.

  • TRIB’s directors will be elected. This shapes a broad regional constituency and helps affirm that taxpayers’ money will be well spent. To protect voters from the cynical distortions of state and federal campaigns, candidates should be non-partisan and only small campaign donations from individuals accepted.
  • TRIB’s authorities should include usage fees, not just taxes. The sales tax predominance has proven ineffective at reducing bad transportation habits. TRIB will find the right economic mix of transportation investments (carrots) and usage fees (sticks).
  • TRIB will be the taxpayers’ and riders’ advocate. Our monopolistic transportation systems block better returns for new investments. TRIB’s job is to advocate policies that level the playing field for all transportation subsidies so multi-modal, market-based options will emerge faster. TRIB also will respond to rider and commuter complaints and synthesize them to develop solutions. TRIB takes responsibility.

However the new Board emerges, Illinois’ irresponsibility toward transit must be solved. To get perspective on transit’s governance problems, read this study comparing six of the nation’s largest metropolitan areas. Its conclusions for Chicagoland start on page 20. The study serves as a good reference to sharpen our solutions.

For the next six months, CMAP’s sales tax proposal is unlikely to get a fair hearing within the frenzy of every special interest protecting its slice of the Illinois budget. CMAP will alter its strategy for the 2016 session. Supporters should consider tactics that give CMAP more autonomy from an increasingly illegitimate and counter-productive MPO. Good luck!

In the meantime, local progress is possible. We first should take very seriously the Cook County proposal to leverage federal loans, much as Los Angeles has for its transit renaissance. Part of the new County President’s ambition to revitalize transit, this carefully-crafted proposal deserves action. If the Cook County Board shirks this duty during the next few months, then this proposal also should go back to the drawing board so it can win taxpayer support. Since Cook County represents over two-thirds of Chicagoland’s transit trips and most the chronic car congestion, a Cook County adaptation of the TRIB concept can serve as a prototype for the seven-county region’s evolution.

But whatever new tax is proposed, it must offer the public this simple deal: any new tax or usage fee will buy discernible improvements in transportation and increase accountability. If we believably make every initiative work towards a new deal that puts taxpayers and transport users as the head of their systems, then Chicagoland’s connections will be made.

Thursday, January 8th, 2015

The Myths of Municipal Mergers

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

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

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

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

Click through for the whole thing.

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Topics: Public Policy, Regionalism

Sunday, September 14th, 2014

The New Donut

Former Indianapolis Mayor Bill Hudnut used to like to say that “you can’t be a suburb of nowhere.” This is the oft-repeated notion has been a rallying cry for investments to revitalize downtowns in America for three decades or so now. The idea being that you can’t have a smoking hole in your region where your downtown is supposed to be. This created a mental based on a donut. You can’t let downtown become an empty hole. For reason that will become apparent soon, I call this model “the old donut”:

Filling in the hole became every city’s mission. Pretty much any city or metro region of any size has pumped literally billions of dollars into its downtown in an attempt to revitalize them. This took many forms ranging from stadiums to convention centers to hotels to parking garages to streetcars to museums and more. It’s popular today to subsidize mixed use development with a heavy residential component.

These efforts have paid off to a certain degree. Most big city downtowns have done very well as entertainment and visitor districts, eds and meds centers, etc. More recently we’ve seen an influx of residents, even in places where the overall city or even region has struggled or declined. Cleveland added about 4,000 net new downtown residents in the 2000s. St. Louis added 3,000. With most cities in some stage of an apartment building spree consisting of a few thousand units, these numbers should only improve.

Key weaknesses remain in private sector employment (declining in most places) and retail (not enough high income residents yet). And other than the tier one types of cities like Chicago, few places seem to have reached a sustainable market rate development level yet – pretty much everything is getting public assistance. Yet its pretty evident that most larger downtowns have made huge strides and are experiencing overall reasonable health.

In short, the donut hole has been filled in. Where does that leave us? I’d argue with a paradigm I call “the new donut”:

In this model, the old donut is inverted. What used to be the ring of health – the outer areas of the city and the inner suburban regions – are now struggling. Whereas the downtown is in pretty good shape, and the newer suburban areas are booming. (You might add in a fourth outer ring with troubles – these were the exurbs where very low-end housing proliferated because development standards were very low).

You see this in the population figures. Wendell Cox cranked the numbers and found that major metro areas gained 206,000 residents in the two mile radius from the center, but lost 272,000 residents from the 2-5 mile ring. Growth picked up strongly beyond that arc. This is the new donut area, though the start and end of it vary by metro and some have thicker rings of challenge than others.

We’ve got three decades of experience in downtown revitalization, but much less in dealing with this newer challenge zone. I’ve said that suburban revitalization may prove to be the big 21st century “urban” challenge. This is where it is happening in many cases. These areas have an inferior housing stock (often small post-war worker cottages or ranches), sometimes poor basic infrastructure, and are sometimes independent municipalities that, like Ferguson, MO, are often overlooked unless something really bad happens. Unlike the major downtown, they are often “out of sight, out of mind” for most regional movers and shakers.

What’s more, while downtown provides a concentrated location for massive public investment, this more spread out area is too big to fix by throwing money at it. And how many stadiums and convention centers does a region need in any event?

This is where we need to be doing a lot of thinking about how to bring these places back, look at what’s being done, etc. And also, given the inequality in the country, to try to think about ideas that don’t involve gentrification. One project that appears to be in this kind of zone, for example, is Atlanta’s Beltline project, though there’s a gentrifying aspect to this one. Regions that figure this one out will be at a big advantage going forward.

Sunday, June 29th, 2014

Columbus: Getting Fit For the Competition Ahead

This is the last of my entries prompted by my recent trip to Columbus. I’ve noted before that Columbus and Indianapolis are twin cities in many ways, though with some important differences.

One of those differences is that the civic discussion in Indianapolis today is heavily driven by the urgency of reversing the decline of Marion County as the city of Indianapolis increasingly loses out demographically and economically to its suburbs. In Columbus, by contrast, I didn’t sense nearly the same concern about suburban competition. While again I only have limited data points to go by, what conversations I did have if anything suggested to me that the city of Columbus thinks it’s holding most of the cards in the region. I suggest letting Indianapolis be a cautionary tale, and that Columbus should be much more focused on how to manage future suburban competition than it presently seems to be.

By the late 1960s Indianapolis had, like most cities, been steadily losing ground to suburban development. The response was a city-county merger called Unigov* that in effect annexed all important contemporary suburbs are well as most of the empty land that would be urbanized in the next two decades. This allowed Indianapolis to capture that suburban tax base and avoid many of the problems that plagued other older cities during the 1970s.

Fast forward to the present and it’s clear that the Unigov model is out of gas. Marion County is now largely full apart from some areas in the southern parts, and has a fairly flat growth curve in population. Most the growth is now in the collar counties. What’s more, there’s been a huge employment shift as well, with the city losing 41,000 jobs since 2000 and the suburbs gaining 78,000. I gave an overview of the dynamics in a previous post.

Today Indianapolis has a serious problem on its hand. How did this happen? It’s pretty simple. Unigov bought he city 40 years. But what did it do with that time? It built up its downtown to one of America’s best, a legitimately impressive and important accomplishment. But beyond that it was basically business as usual. Unfortunately, the 5.5 square miles of downtown can’t carry the rest of the city’s nearly 400. The city should have been aggressively preparing for the day when Unigov would reach exhaustion. But it did not.

Columbus utilized a similar technique to Unigov by aggressively annexing suburban development. And it had fairly similar results, doing well and avoiding the problems. But it seems to be widely accepted in Columbus that the city is nearing the end of its growth by annexation phase. While unlike in Indiana, Ohio makes it fairly easy to annex across county lines, and Columbus extends into multiple counties already, annexation has slowed to a crawl. In part I’m told that they are now reaching into territories that have other sources of water than the city of Columbus water utility, and thus the city has less leverage to annex than before. While technically not hemmed in, Columbus has less room for growth than before. This raises the question of when the dynamics of decline will set in within the newly stagnant city.

Columbus appears to be in better shape than Indy right now. I’d say this is for a few reasons. First, Franklin County, Columbus’ home base, is geographically bigger than Indy’s Marion County, giving Columbus a larger area of natural historic dominance. Columbus is also home to newer office/retail suburban development than Indianapolis. For example, Indy’s Keystone Crossing area is based on edge city and power center templates that are dated, while the corresponding Easton area in Columbus is newer and built to a lifestyle center type template that’s a bit more up to date. Columbus similarly has the relatively new Polaris area inside its borders.

What’s more, Columbus’ suburbs are comparatively underdeveloped and thus aren’t rivals as of yet. Indianapolis has five suburbs with more than 50,000 people – two of them with more than 80,000. Columbus has none. Only Dublin, which has 43,000 people, 9.5 million square feet of office space, and major downtown development ambitions, appears to be a full scale competitor at this point. Most other suburban municipalities are much smaller (e.g., New Albany has less than 10,000 people) and/or enclosed by the city of Columbus and thus limited in growth. Favored quarter suburban Delaware County has 185,000 people (some of which are in the city of Columbus) vs. nearly 300,000 for analogous Hamilton County, IN. What’s more, Hamilton County is far ahead in infrastructure vs. Delaware County. Delaware County has next to no upgraded east-west or “crosstown” arterials. Two reservoirs there make developing them difficult, with one of them separating I-71 from the developed parts of the county. Thus the county is even lacking in north-south “radial” movements.

These factors and others have essentially kept Columbus from facing any significant suburban competition. But unless the city wants to somehow double down on annexation and try to restart that engine, at some point these dynamics will change and the city of Columbus will find itself physically constrained and competitively disadvantaged vs. newer and now more powerfully developed suburban entities. Dublin is likely a preview of coming attractions.

I don’t have any particular policy suggestion in mind here, nor am I saying that anything the city is doing is necessarily wrong. But given what has happened in Indianapolis, I would certainly encourage the future prospect of suburban competition to be top of mind. The city of Columbus should be aggressively scenario planning for how this will play out, and use the runway that it has left to be preparing for the era of more intense intra-regional competition to come. Better to err on the side of paranoia, because the risks of waiting until you’ve got a serious problem on your hands are too high to ignore.

* Unigov also ensured a white majority in the city

Thursday, May 22nd, 2014

When Sprawl Hits the Wall

I’ve long argued that the real reason sprawl, or suburban development as we’ve been practicing it, is a problem isn’t because it’s ugly, environmentally damaging, racist, or some other form of evil. The more fundamental problem is that it’s a long term financial loser. The numbers just don’t add up over the long term when you take a lifecycle view of it.

As I outlined in “The Power of Greenfield Economics” and elsewhere, new suburbs look attractive for a number of transitory reasons: everything is new, state of the art, and exactly in line with current market tastes; no legacy costs; no legacy institutions, deals, political dynasties, etc; few low income residents and thus low social service costs; deferred infrastructure development; the efficiency of large lot development; and scale economics in public service provision in a growth environment.

Eventually though, your shiny new suburb fills up and so growth comes to a halt, then often about the same time it gets old. This send all of those positive factors into reverse, triggering a cycle of decline that will ultimately cause major problems in vast tracts of suburban America that aren’t either a) wealthy communities or b) in markets that have tight restrictions on new building (which preserves these communities at the expense of rendering them unaffordable).

The perfect display of this is happening before our eyes in Indianapolis as the Indianapolis Business Journal reported this week in a major story called, “Aging suburbs face long road back” which sadly is likely behind a paywall at this point.

Like many places, the old city of Indianapolis found itself losing population to suburban areas further out in Marion County due to a variety of factors. Their solution to this problem was city-county merger, a system called Unigov. In a sense, it was regional government in which the city annexed its suburbs.

Problem solved, right?

No so fast. The problem is that growth at a rate of 200,000+ people per decade plus further expansion of the urban footprint sent growth out past the boundaries of the merged city and into the surrounding counties. As this happened, the old suburbs of Marion County themselves got old and fell out of favor, and are increasingly zones of suburban blight. The city is now close to being right back where it started. Unigov bought Indianapolis 40 years, but other than using that captured suburban tax base to build up downtown – a legitimately important and impressive accomplishment – it otherwise continued with business as usual. The result is that vast tracts of the city are now behind the 8-ball, with no plan or prospect for near term change. Per the IBJ:

Poverty is encroaching on the outer townships of Marion County, adding to their handicap in the competition with doughnut counties, where houses are newer, and sidewalks, sewer connections and bike paths come standard. Now, Marion County’s suburban neighborhoods also face the flight of national retailers and poverty-driven challenges for their school districts. Spreading poverty makes it even more difficult to market a four-bedroom, two-bath house on a suburban lot in, say, Warren Township on the east side against a similar product over the county line. “That’s a tough nut to crack,” said John Marron, an analyst at the Indiana University Public Policy Institute. “To me, it’s easier to sell the authentic urban experience.”….. For decades after Unigov merged city and county government in 1970, Marion County’s suburban townships propped up the city’s tax base. Now they could become a drag.
….
Wayne Township has the largest low-income area outside of Center Township, with 20 square miles and 62,327 residents. Many of those neighborhoods are inside the I-465 belt. One encompasses a cluster of apartment complexes just south of Ben Davis High School. Marron thinks the changes in Wayne Township stem from its concentration of homes built in the 1970s or earlier—a less desirable housing stock than is available farther west in fast-growing Hendricks County….The median Wayne Township sales price in 2013 was $66,505…“We have not seen any significant economic development here on the west side for some time” [says Wayne Township schools Superintendent Jeffrey Butts].

This was entirely predictable. Given that Wayne Township’s officials, no matter what they might say in this article, are dead set against change (such as merging their independent fire department with IFD), don’t expect much change in the results.

One thing the IBJ didn’t highlight but represents a big overhang in these aging suburbs is the aging in place population. A lot of these places skew older as there are baby boomers and up who bought and have simply stayed put. On the one hand, this is great. On the other, that long term population masks the fact that there’s no next generation moving in, so as the older generations start to die, the situation is going to continue to degrade. We already saw this happen in a lot of the inner city.

But the most telling quote in the entire article was from West Side Chamber of Commerce President Rick Proctor when he said, “There’s probably never going to be enough money to retrofit all of Indianapolis with the amenities all of us would like in our neighborhoods.”

Ladies and gentlemen, we have a winner!

The bottom line is that the type of development that’s been ongoing in Indy and most American communities can’t ever generate enough tax revenue to pay to provide the infrastructure, amenities, and services necessary to support it. To show you what I mean, I’ll show you a picture from the old city, the supposed “urban core”. This is my block:

As you can see, the infrastructure here is minimal. Not even curbs much less sidewalks. Spend any time in Indy as you’ll immediately get it that this place has always been cheap. Even the old city was never built right to begin with.

What would it cost to retrofit this street with real infrastructure? What would it cost to perform routine maintenance and basic services like street lighting (currently provided at minimalistic levels), street sweeping (not performed) or snow plowing/salting (not performed either, unless there’s over six inches of snow)? Let’s just say it would be a huge amount of money. Now ask yourself how much in property and income taxes these mostly 2-3 bedroom, one bath worker cottages are likely to produce in taxes. It’s clear the math will never work. And this is in a neighborhood that still has a lot of pull to younger families thanks to its proximity to the urban commercial districts in the area.

I wrote an entire series on building suburbs that last, but one thing is clear. You have to at least build the infrastructure up front if you wait to have any hope. Because if you want to provide basic streets and arterials, etc. until later, then you’re not going to be able to afford it. If your development can’t support the cost of full infrastructure, that’s a powerful market signal that it’s not viable. This is a government concern because it’s the government that’s forced to come in after the collapse and pick up the pieces – or try to anyway. Of course, that would be the same government that got us into this mess in the first place.

The most tragic thing about all this? Despite the ample evidence of the catastrophe that awaits, Indianapolis is still doing more of the same. Right now in Franklin Township, one of the few places inside the city limits that is still a greenfield from a development perspective, the city is approving and permitting out vast tracts of low-grade sprawl there. We are building tomorrow’s addition to our pile of problems right now. And nowhere in any city initiative that’s currently ongoing is there any hint of changing that. The same is true all over America. I might suggest the old adage applies: if you’re in a hole, first stop digging.

Monday, April 21st, 2014

The Urbanophile Interview: Cincinnati Mayor John Cranley

I was able to sit down this month with new Cincinnati Mayor John Cranley to spend an hour on such topics as Cincinnati’s incredible historic assets, its history of social conservatism, streetcars and bike lanes, the repopulation of the urban core, and more.

If the audio player below doesn’t display, click here for the MP3 file.

Mayor John Cranely. Image via City of Cincinnati.

Here are some edited highlights of our discussion. For those who prefer reading to listening, a complete transcript is available.

By far the most provocative thing the mayor talked about to me was his direct challenge to the idea of metropolitan government. Cincinnati hasn’t annexed territory since 1925, leaving it as a smallish, hemmed in city that is only 14% of a very fragmented region. Meanwhile cities like Indianapolis and Nashville had city-county consolidation, Columbus annexed, etc. He thinks that in a new urban era, this model of government is running out of gas and the pendulum is going to swing back the other way:

There’s a real cultural shift and renewed pride in Cincinnati. More specifically though, there are some unique advantages that we have. Think of it this way: if you took our Downtown and Uptown and the corporate base, let’s say it’s 70% of all of our major jobs and income taxpayers. If you take the same exact area and map it in Columbus, they’re going to have 70% of their companies Nationwide, et cetera, all within the same geographic area. The difference is that they have to spread that money among all of Franklin County. We have to provide for 300,000 people. And very quality 19th century historic neighborhoods that already have a sense of place and culture. And we get the benefit of, on a per capita basis, being able to invest way more in these urban neighborhoods than any of our peers because we didn’t annex.

Now, historically, the attitude of urbanists had been, like myself, the we’ve got to have metro government. In essence, the attitude has been, “We poor city.” We need you guys have to play Robin Hood for us. I think the shift is already underway. Now, we have more work to do but the shift is already underway that we’re going to be a better choice for the dollar value because of our historic infrastructure, our density, our diverse economies of scale. The home owner to apartment mix which looks bad at a distance but, candidly, makes it more dense in which it makes labor pools a lot easier to transport inside the city.

What we haven’t done, in my opinion, is be insistent enough on value for the dollar, because we’re spreading our dollar over a much smaller population than cities of size. So why isn’t the quality of customer service of all services of city government superior? You still get complaints today of people who say, “I live in a nice suburb and my snow is picked up immediately and it’s cleaner and my roads paved faster and less litter. Coming to a city, I can immediately tell it’s a city.” There’s no excuse for that. And I believe that we can provide a better customer service because we have more money over less people than our competitors do. Which if you think about the fact that we lost population to cities this way, people kept moving one suburb out — and I think most of us agree we’re going to repopulate from the inside out — we have more resources to invest in economic growth policies than our competitors do, and we intend to use that advantage to become the most exciting urban city in the country.

We’ll have to see how this plays out, but I think there’s something to this. When places like Indy, Columbus, and Nashville annexed all those suburban areas, they were able to capture that tax base to support the central city. Now though they are saddled supporting miles and miles of aging and decaying suburban type development that may ultimately represent a drain on the resurgent urban core tax base. To the extent that the urban core does come back, places like Cincinnati, from a municipal point of view, will get a bigger lift from it because it gets spread over a smaller area. It’s easier to turn around a small ship than a big one.

We also talked about the geography and architecture of neighborhoods like Mt. Adams, which is like a Midwestern San Francisco. Mayor Cranley likes that analogy:

As I always say, if Chicago is the New York of the Midwest, we’re the San Francisco — in fact, that’s exactly my mind is to say Chicago is the New York of the Midwest. We’re the San Francisco. Because we have the hills, the architecture, the arts, the culture, the big league teams, all the advantages of a major city with the livability of a small town. And everyone has an opportunity to be a big fish if you got that kind of ambition. And it really is. Again, we’ve proven that’s true because we’ve been able to maintain such a concentration of Fortune 500 companies which then, of course, leads to all kinds of spin-off businesses and a huge privately held company, group of businesses, that have really been family traditions that have lasted a hundred years and have really continued to come. As I like to point out, what city our size has an entire company dedicated to Shakespeare? We have a theater that does all Shakespeare. And it has full on season.

I pointed out one important difference vs. San Francisco: Cincinnati’s history of extreme social conservatism. A number of wealthy conservatives like billionaire Carl Lindner and Charles Keating (yes, the Keating Five Charles Keating) poured tons of money into anti-pornography campaigns. Hustler publisher Larry Flynt was convicted as recently as the late 90s of obscenity charges. In 1990 locals tried to ban an exhibition of explicit photographs by Robert Mapplethorpe and even put the museum director on trial for obscenity (he was acquitted). An anti-gay rights amendment was added to the city charter by citizen initiative in the early 90s. There was a race riot in Over the Rhine in 2001.

This is clearly a sore point for the mayor, as he answered at length. He acknowledges the history of these things, but says things have changed radically and wants to be able to get the word out on the new attitude in the city:

I think that’s changed. You take one rather prominent issue with gay rights. In 1993 an anti-gay law was passed in the city charter which was awful, and would stain our reputation for ten years. When I was on council we had a transvestite who was murdered, and even the very conservative chief of police said that this was a hate crime. And I led the effort to add sexual orientation to our hate crime law. And that was sort of — this was 2002, I believe, 2002 or ’03, it might have been 2003. And this had only been ten years since the charter thing had been passed. Remember, the charter thing was passed in the aftermath of Bill Clinton being elected and gays in the military, that first debate. And several cities, including Denver, Colorado, passed virtually identical [language] ran by a right wing group around the country.

Here, we went on a major effort and we progressively, in 2004, in the midst of Bush getting reelected in Hamilton County 54 to 46, got the thing repealed by a substantial margin, which showed a real shift in our culture and our attitudes. And then we immediately passed — reinstated — the human rights ordinance. We immediately reinstated the non-discrimination. We passed benefits for domestic partners and many, many other things. So candidly, and this is why I think it’s so important that you’re here, we need to get the message out. I believe that we have moved many, many miles since then.

In addition, we have been incredibly progressive as it comes to civil rights and to police-community relations. We had, in 2001, a very difficult time with police and the community, the black community in particular. And we voted to invite the Justice Department in the Cincinnati to mediate rather than litigate allegations of police misconduct. And we led to the 2002 collaborative agreement — which I’m proud to say I helped negotiate — which is now held up as a role model for how to improve police community relations around the country. In fact, the judge in New York who struck down the “stop and frisk” law in New York City specifically cited Cincinnati’s collaborative agreement as the right way for the police and the community to work together.

And so I respectfully say that I understand that we have some baggage in terms of what happened in 1993 on gay rights, and we’ve had on the 80’s and 70’s…Larry Flynt… So I’m not denying that there isn’t some reason for that reputation, but it’s no longer fair.

In addition to a Harvard Law degree, Mayor Cranley also has a Masters of Theology from Harvard Divinity School as describes himself as a man of deep faith. I asked him how that informs him in his role as mayor:

I think that all of this has to be done in the context of the common good and building a society that expands opportunity. And I think at the end of our lives we’re fundamentally going to be asked did we make the world a better place for those who didn’t have as many advantages as we had and did we leave it better than we found it. A sense of stewardship. And all that comes, I think, deeply from my faith, schooling and family, values, traditions, et cetera.

And so we spend an enormous amount of time thinking about how are we going to reduce the poverty rate. One of my major planks in my campaign was reducing the poverty by at least 5% over the next four years. We are engaged at every level, re-examining the dollars that are — federal dollars that come in to the city budget that are earmarks for low income individuals and must be spent to the benefit of low income individuals — are we really getting the most bang for the buck out of these dollars?

Right now we have a cohort coming out of the Great Recession of folks who have never had high school or college degree, with kids, who have got very bleak prospects, and that is not surprisingly where those folks live tend to be some of our toughest neighborhoods. If we can, I think, rise to the moral challenge of figuring out how to not write off this entire generation but invest in job training and skill set to get them at least ready to work at low skill, low paying jobs and bring the dignity back of having a breadwinner in the family, the social dividends of that are enormous in terms of turning those neighborhoods around, those families around, the city around.

But in addition, if we can do it on a systematic basis, we can then market Cincinnati as a place for companies who want to locate with a large, ready to work population. Now, obviously, 20-30 years from now I’d love for us to have a higher education rate. I’m not saying it’s good and we just want to leave the education rates where they are, but given what we have today, how do we turn all that into an advantage and, at the same time, tackle the moral issues of poverty?

And while it’s not the same thing — a very sensitive issue, this is not the same thing — but building a more inclusive and welcoming society for immigrants and for African-American, Hispanics is also, I think, part of my faith tradition of — it does come from a history of prejudice that Cincinnati has been part of. And so we do have a moral obligation to tackle those issues but I do think from a political standpoint, it’s better — and true, not just better political argument, which it is, but it’s also true — that it’s better for all of us to have a more inclusive and welcoming city.

Thursday, March 27th, 2014

The Urbanophile Interview: Louisville Mayor Greg Fischer

I recently sat down to talk for about half an hour with Louisville, Kentucky Mayor Greg Fischer. We had a wide ranging discussion that ventured from branding to globalization, regionalism, talent attraction, legacy, and more. If the audio player below doesn’t display, click here for the MP3 file.

Mayor Greg Fischer. Image via Wikipedia.

Here are some edited highlights of our discussion. For those who prefer reading to listening, a complete transcript is available.

On an economic development partnership between Louisville and Lexington, Kentucky’s second largest city:

[Globaization] is central to who we are as a city. We have a very high export ratio here. We out export, we punch above our weight if you will, as a city. My background is one as an international business guy and we’ve spent a lot of time growing a broader regional economy. The city of Lexington and Louisville have a joint economic development plan that we did with the Brookings Institution called BEAM, Bluegrass Economic Advancement Movement. And a central thrust of that is growing exports throughout the region. We have people that go out and help businesses understand that’s the way of the future.

As a business guy, I’ve been more of a small, medium sized business person, 500 employees and below, so frequently I would compete with large, multinational corporations. When you start your career, you’re like, “My gosh, how can I compete against this firm that’s got manufacturing plants or offices all over the world and 10,000 employees?” What you find is as a small company, you have a lot of advantages that the big company doesn’t have. You’re closer to the customer. You’re nimbler. You can speak for the company.

So when you take a look at the challenges of a state like Kentucky, we’re not one of the biggest states. We’re certainly not one of the smallest, either. So what we’ve got to do is be excellent at partnering with each other internal to the state so that we can use that as a competitive advantage when we compete with other countries or other states for economic development. Louisville and Lexington combined metro region, including Southern Indiana, is about two and a half million people or so, more scale than just us at 1.3 million and certainly, more scale than just Lexington.

On regional cooperation with Southern Indiana:

When people move to Southern Indiana, they identify as moving to the Louisville area, typically. Our restaurants over here, our housing options over here are complementary to what’s in Southern Indiana so if a company is going to say, “Okay. I’m going to be in Southern Indiana or I’m going be in Missouri,” I want them in Southern Indiana.

Southern Indiana’s got some advantages that we don’t have. We don’t have that much open land left in Jefferson County. River Ridge, which is just opening across the river, is going to be helped by these bridges going in right now, these megaprojects, the Ohio River Bridges Project. It will be where a lot of these businesses are going to locate. I’d rather they locate there again than in some other state. So we win as a region because people live regionally. We’re happy to cooperate and brainstorm with Southern Indiana.

On how Louisville’s relationship with the state of Kentucky is evolving:

Evolving is the right term. Louisville produces about $2.4 billion a year of taxes and we get back $1.2 billion. Kentucky has been cited as the fourth most centrally controlled economy in the country in terms of states. In other words, sending taxes to our capital and redistributing them throughout the state. So it’s a challenge for us. I’m working right now to get the state constitution changed so that all cities and counties have the right to levy a local option sales tax where their citizens have the right to vote on specific capital projects, paid for in a specific way with that temporary sales tax sunsetting. Part of that is so local cities, whether it’s Louisville or Pikeville or anywhere in the state, could have more specific control over their built environment. So, that’s one way to address it.

Long term, we need some type of overall state tax reform. But in any state, you’re going to have an economic engine like we are here in Kentucky that contributes more to the balance of the state than what it is they generate. Our rural legislators are very good at teamwork, if you will, and our metropolitan legislators are not so good at teamwork. So they can be our own worst enemy in terms of directing more funds back to where they were originally generated – in this case, Louisville.

On the local food scene:

It’s been an interesting way to see how the rural parts of the state and the metropolitan areas really appreciate the partnership that we have with our local food movement. Like many places around the country but particularly here, when you go into restaurants, you’ll see the origin of the food in terms of the farmers that they came from. We were the first city in the world that we know of to do a demand analysis for local food, how much local food do people want to consume here. We did that deliberately to help our partners in the rural areas of the state, the farmers, so that they can understand that they’ve got a big, growing market in the biggest city in Kentucky.

When we did this survey, no matter what somebody’s socio-economic background was, everybody supported local food. They said, a), it’s healthier and b), we want to help local businesses. So, it kind of busted this myth that local food, farmers markets, all this was just yuppie kind of thing. Everybody appreciates good local food.

On why a 2014 college grad would choose Louisville over other cities such as Cincinnati or Nashville:

One, you want to take a look at the culture of the city. Are you going to be able to fit in? Are you going to be able to make a difference? You know, not every city is perfect for every student. So, is there a connection? Do you like our art scene? Do you like our local food scene here? What about the innovation we’re doing with the makerspace, for instance? Because I think we’re among the best in the country in that regard.

Take a look at the economic development clusters that are important to a city. In our case, are you into lifelong wellness and aging care, or food and beverage, or logistics and e-commerce, or business services, advanced manufacturing? Where is that fit for you? I can guarantee if you’re going to live here, you’re going to have a good quality of life and enjoy yourself, but are you going to be able to be employed in a meaningful way?

Any city that says they’re everything for everybody is being disingenuous. It’s just like a company. When you look at the city, find a place whose values mirror yours and whose opportunities mirror your interests at the same time. Make sure it’s got a beautiful, natural environment like we have here that’s full of nice people, and then you’ll have a good place to live – and it would be nice if it was Louisville.

There’s a lot more where this came from so listen to the whole thing or read the complete transcript.

Some may be wondering about the Ohio River Bridges Project. There were no restrictions on what topics I could ask about, and I haven’t changed my opinion on it. But I felt the discussion time would be productively spent elsewhere so did not ask about it.

Tuesday, March 11th, 2014

Does Calling Someplace a Metropolitan Area Make It So? by Chuck Eckenstahler

[ 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.

Background

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.

What Happened

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:

Geographic Isolationism

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.

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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