New Geography

Category: housing

  • Australian Opposition to Loosen Land for Housing

    The opposition Liberal-National Coalition, locked in a close battle with the ruling Labor Party in Australia’s Saturday elections, has adopted a housing policy to improve the nation’s housing affordability. The policy would require states to monitor housing affordability and to release more land for development. There would also be a review of the efficacy of development charges.

    Australia suffers from some of the most unaffordable housing in the world, with a Median Multiple (median house price divided by median household income) of 6.8, which is more than double the historic norm of 3.0. With recent interest rate increases, the median household would have to pay more than 50% of its gross income to service a mortgage on the median priced house. Little more than 15 years ago, house prices were affordable in Australia, which had seen home ownership rise from approximately 40% before World War II to approximately 70%. The principal cause of the loss of housing affordability has been the virtual universal adoption of “smart growth” (“urban consolidation”) land use restrictions, which have (among other things) made it virtually impossible to develop inexpensive housing on the urban fringes, with the price of rationed land driven up many times.

    The Coalition’s housing policy includes the following provisions that are directly related to removing the urban consolidation barriers to affordable housing:

    In order to continue to receive federal funds, States and Territories will need to increase land supply and reform their planning and approval systems under the National Affordable Housing Agreement (NAHA).
    States and Territories will need to set affordability targets to guide land releases and dwelling approvals. In order to receive federal funds States and Territories would need to demonstrate that they had a plan for delivering these targets and those approvals and land releases occurred consistent with the targets established.
    The Coalition will review of State, Territory and local developer charges, which have been contributing an increasing component to the cost of development. State and local governments that build higher charges into the cost of housing will be less able to meet their home affordability obligations under the Compact.

    Housing affordability has been an issue of substantial concern in Australia for years and has emerged as the top concern among voters in this election. State governments have talked about housing affordability, but have done little. Over the past five years, house prices have continued to rise relative to incomes. Just in the last nine months, a mortgage payment on the median priced house has risen from $500 in Adelaide to more than $800 in Sydney.

    The Coalition policy, however, represents the second significant development in recent weeks (Note). The first was an expansion of the Melbourne urban growth boundary by 440 square kilometers. All of this may signal an overdue attention to housing affordability in Australia.

    —–

    Note: Performance Urban Planning statement on the Coalition housing policy.

    —–

    Photograph: Adelaide: Urban fringe land (no houses allowed). Photograph by author

  • Year 1959

    Get a glass of wine. Then click on this link, which plays a video called Community Growth, created in 1959.

    Once you’ve seen the video, read on…

    You’re probably sitting with a puzzled look – 1959? Aren’t these the exact same issues that are plaguing us today? Don’t those 1959 developments look like many of today’s latest developments? Even the way they bulldozed through the land and stick-built the homes looks just like the methods used today!

    When I was 7 year old, my mother bought a new white 1959 Chevrolet Impala convertible with a red vinyl interior. This was one of the best designs with those wonderful curved wing-like fins and oblong tail lights. I remember sitting in the front when my mother slammed on the brakes as a child ran in front of the car. Since they did not have seat belts back then, my head flew into the steel dashboard (your probably thinking; ah ha! so that’s why he writes for New Geography). That beautiful Chevy was a coffin in a crash, as witnessed by the following video showing 50 years of safety advances between the 1959 Chevy vs. 2009 Chevy.

    Back then, a 1959 Chevy with 50,000 miles on it was on its last legs, just about broken down, whereas today, a 2009 Chevy with 50,000 miles would be considered just about broken in.

    If a 1959 land development subdivision layout were to crash into (OK, be overlayed upon) a 2009 land development subdivision layout there would be little difference.

    We have written about this in the past, but it bears repeating: Designers look to the ordinances for guidance, and these regulations have been stagnant for about 5 decades (1959. Developers hire designers assuming they will get the best possible layout. Designers look to the six decade old ordinances and assume the minimum dimensions are the optimum ones to maximize density (their clients profits). The layout by minimums will result in cookie cutter monotonous designs. The council and planning commissions admonish the developer for submitting plans that lack character and imagination, yet the developer just followed the regulations that promote such development. And the cycle repeats, and repeats, and repeats for generations upon generations.

    You are reading this article on a computer that is more powerful than any that existed in 1959, or 1969, or possibly even in 1979. If you are older than 60 years old, chances are if this was 1959, you would be dead by now. Advances in health as well as an awareness of what we eat and how we live allow us to live longer happier and more productive lives.

    Technological advancements have touched virtually every product and aspect of our lives – except the neighborhoods we live, work and play within.

    There is something very wrong with this situation, and solving these problems through over densification and forcing a nation into public transportation is taking giant leaps backwards, not towards 1959, but more towards 1859. We posses innovation and technology for the design and building of sustainable future cities without sacrificing the desire for space and personal transportation freedom. This however takes more effort. But isn’t about time we leave 1959 behind?

  • Urban Legends: Why Suburbs, Not Dense Cities, are the Future

    The human world is fast becoming an urban world — and according to many, the faster that happens and the bigger the cities get, the better off we all will be. The old suburban model, with families enjoying their own space in detached houses, is increasingly behind us; we’re heading toward heavier reliance on public transit, greater density, and far less personal space. Global cities, even colossal ones like Mumbai and Mexico City, represent our cosmopolitan future, we’re now told; they will be nerve centers of international commerce and technological innovation just like the great metropolises of the past — only with the Internet and smart phones.

    According to Columbia University’s Saskia Sassen, megacities will inevitably occupy what Vladimir Lenin called the “commanding heights” of the global economy, though instead of making things they’ll apparently be specializing in high-end “producer services” — advertising, law, accounting, and so forth — for worldwide clients. Other scholars, such as Harvard University’s Edward Glaeser, envision universities helping to power the new “skilled city,” where high wages and social amenities attract enough talent to enable even higher-cost urban meccas to compete.

    The theory goes beyond established Western cities. A recent World Bank report on global megacities insists that when it comes to spurring economic growth, denser is better: “To try to spread out economic activity,” the report argues, is to snuff it. Historian Peter Hall seems to be speaking for a whole generation of urbanists when he argues that we are on the cusp of a “coming golden age” of great cities.

    The only problem is, these predictions may not be accurate. Yes, the percentage of people living in cities is clearly growing. In 1975, Tokyo was the largest city in the world, with over 26 million residents, and there were only two other cities worldwide with more than 10 million residents. By 2025, the U.N. projects that there may be 27 cities of that size. The proportion of the world’s population living in cities, which has already shot up from 14 percent in 1900 to about 50 percent in 2008, could be 70 percent by 2050. But here’s what the boosters don’t tell you: It’s far less clear whether the extreme centralization and concentration advocated by these new urban utopians is inevitable — and it’s not at all clear that it’s desirable.

    Not all Global Cities are created equal. We can hope the developing-world metropolises of the future will look a lot like the developed-world cities of today, just much, much larger — but that’s not likely to be the case. Today’s Third World megacities face basic challenges in feeding their people, getting them to and from work, and maintaining a minimum level of health. In some, like Mumbai, life expectancy is now at least seven years less than the country as a whole. And many of the world’s largest advanced cities are nestled in relatively declining economies — London, Los Angeles, New York, Tokyo. All suffer growing income inequality and outward migration of middle-class families. Even in the best of circumstances, the new age of the megacity might well be an era of unparalleled human congestion and gross inequality.

    Perhaps we need to consider another approach. As unfashionable as it might sound, what if we thought less about the benefits of urban density and more about the many possibilities for proliferating more human-scaled urban centers; what if healthy growth turns out to be best achieved through dispersion, not concentration? Instead of overcrowded cities rimmed by hellish new slums, imagine a world filled with vibrant smaller cities, suburbs, and towns: Which do you think is likelier to produce a higher quality of life, a cleaner environment, and a lifestyle conducive to creative thinking?

    So how do we get there? First, we need to dismantle some common urban legends.

    Perhaps the most damaging misconception of all is the idea that concentration by its very nature creates wealth. Many writers, led by popular theorist Richard Florida, argue that centralized urban areas provide broader cultural opportunities and better access to technology, attracting more innovative, plugged-in people (Florida’s “creative class“) who will in the long term produce greater economic vibrancy. The hipper the city, the mantra goes, the richer and more successful it will be — and a number of declining American industrial hubs have tried to rebrand themselves as “creative class” hot spots accordingly.

    But this argument, or at least many applications of it, gets things backward. Arts and culture generally do not fuel economic growth by themselves; rather, economic growth tends to create the preconditions for their development. Ancient Athens and Rome didn’t start out as undiscovered artist neighborhoods. They were metropolises built on imperial wealth — largely collected by force from their colonies — that funded a new class of patrons and consumers of the arts. Renaissance Florence and Amsterdam established themselves as trade centers first and only then began to nurture great artists from their own middle classes and the surrounding regions.

    Even modern Los Angeles owes its initial ascendancy as much to agriculture and oil as to Hollywood. Today, its port and related industries employ far more people than the entertainment business does. (In any case, the men who built Hollywood were hardly cultured aesthetes by middle-class American standards; they were furriers, butchers, and petty traders, mostly from hardscrabble backgrounds in the czarist shtetls and back streets of America’s tough ethnic ghettos.) New York, now arguably the world’s cultural capital, was once dismissed as a boorish, money-obsessed town, much like the contemporary urban critique of Dallas, Houston, or Phoenix.

    Sadly, cities desperate to reverse their slides have been quick to buy into the simplistic idea that by merely branding themselves “creative” they can renew their dying economies; think of Cleveland’s Rock and Roll Hall of Fame, Michigan’s bid to market Detroit as a “cool city,” and similar efforts in the washed-up industrial towns of the British north. Being told you live in a “European Capital of Culture,” as Liverpool was in 2008, means little when your city has no jobs and people are leaving by the busload.

    Even legitimate cultural meccas aren’t insulated from economic turmoil. Berlin — beloved by writers, artists, tourists, and romantic expatriates — has cultural institutions that would put any wannabe European Capital of Culture to shame, as well as a thriving underground art and music scene. Yet for all its bohemian spirit, Berlin is also deeply in debt and suffers from unemployment far higher than Germany’s national average, with rates reaching 14 percent. A full quarter of its workers, many of them living in wretched immigrant ghettos, earn less than 900 euros a month; compare that with Frankfurt, a smaller city more known for its skyscrapers and airport terminals than for any major cultural output, but which boasts one of Germany’s lowest unemployment rates and by some estimates the highest per capita income of any European city. No wonder Berlin Mayor Klaus Wowereit once described his city as “poor but sexy.”

    Culture, media, and other “creative” industries, important as they are for a city’s continued prosperity, simply do not spark an economy on their own. It turns out to be the comparatively boring, old-fashioned industries, such as trade in goods, manufacturing, energy, and agriculture, that drive the world’s fastest-rising cities. In the 1960s and 1970s, the industrial capitals of Seoul and Tokyo developed their economies far faster than Cairo and Jakarta, which never created advanced industrial bases. China’s great coastal urban centers, notably Guangzhou, Shanghai, and Shenzhen, are replicating this pattern with big business in steel, textiles, garments, and electronics, and the country’s vast interior is now poised to repeat it once again. Fossil fuels — not art galleries — have powered the growth of several of the world’s fastest-rising urban areas, including Abu Dhabi, Houston, Moscow, and Perth.

    It’s only after urban centers achieve economic success that they tend to look toward the higher-end amenities the creative-classers love. When Abu Dhabi decided to import its fancy Guggenheim and Louvre satellite museums, it was already, according to Fortune magazine, the world’s richest city. Beijing, Houston, Shanghai, and Singapore are opening or expanding schools for the arts, museums, and gallery districts. But they paid for them the old-fashioned way.

    Nor is the much-vaunted “urban core” the only game in town. Innovators of all kinds seek to avoid the high property prices, overcrowding, and often harsh anti-business climates of the city center. Britain’s recent strides in technology and design-led manufacturing have been concentrated not in London, but along the outer reaches of the Thames Valley and the areas around Cambridge. It’s the same story in continental Europe, from the exurban Grand-Couronne outside of Paris to the “edge cities” that have sprung up around Amsterdam and Rotterdam. In India, the bulk of new tech companies cluster in campus-like developments around — but not necessarily in — Bangalore, Hyderabad, and New Delhi. And let’s not forget that Silicon Valley, the granddaddy of global tech centers and still home to the world’s largest concentration of high-tech workers, remains essentially a vast suburb. Apple, Google, and Intel don’t seem to mind. Those relative few who choose to live in San Francisco can always take the company-provided bus.

    In fact, the suburbs are not as terrible as urban boosters frequently insist.

    Consider the environment. We tend to associate suburbia with carbon dioxide-producing sprawl and urban areas with sustainability and green living. But though it’s true that urban residents use less gas to get to work than their suburban or rural counterparts, when it comes to overall energy use the picture gets more complicated. Studies in Australia and Spain have found that when you factor in apartment common areas, second residences, consumption, and air travel, urban residents can easily use more energy than their less densely packed neighbors. Moreover, studies around the world — from Beijing and Rome to London and Vancouver — have found that packed concentrations of concrete, asphalt, steel, and glass produce what are known as “heat islands,” generating 6 to 10 degrees Celsius more heat than surrounding areas and extending as far as twice a city’s political boundaries.

    When it comes to inequality, cities might even be the problem. In the West, the largest cities today also tend to suffer the most extreme polarization of incomes. In 1980, Manhattan ranked 17th among U.S. counties for income disparity; by 2007 it was first, with the top fifth of wage earners earning 52 times what the bottom fifth earned. In Toronto between 1970 and 2001, according to one recent study, middle-income neighborhoods shrank by half, dropping from two-thirds of the city to one-third, while poor districts more than doubled to 40 percent. By 2020, middle-class neighborhoods could fall to about 10 percent.

    Cities often offer a raw deal for the working class, which ends up squeezed by a lethal combination of chronically high housing costs and chronically low opportunity in economies dominated by finance and other elite industries. Once the cost of living is factored in, more than half the children in inner London live in poverty, the highest level in Britain, according to a Greater London Authority study. More than 1 million Londoners were on public support in 2002, in a city of roughly 8 million.

    The disparities are even starker in Asia. Shenzhen and Hong Kong, for instance, have among the most skewed income distributions in the region. A relatively small number of skilled professionals and investors are doing very well, yet millions are migrating to urban slums in places like Mumbai not because they’ve all suddenly become “knowledge workers,” but because of the changing economics of farming. And by the way, Mumbai’s slums are still expanding as a proportion of the city’s overall population — even as India’s nationwide poverty rate has fallen from one in three Indians to one in five over the last two decades. Forty years ago, slum dwellers accounted for one in six Mumbaikars. Now they are a majority.

    To their credit, talented new urbanists have had moderate success in turning smaller cities like Chattanooga and Hamburg into marginally more pleasant places to live. But grandiose theorists, with their focus on footloose elites and telecommuting technogeniuses, have no practical answers for the real problems that plague places like Mumbai, let alone Cairo, Jakarta, Manila, Nairobi, or any other 21st-century megacity: rampant crime, crushing poverty, choking pollution. It’s time for a completely different approach, one that abandons the long-held assumption that scale and growth go hand in hand.

    Throughout the long history of urban development, the size of a city roughly correlated with its wealth, standard of living, and political strength. The greatest and most powerful cities were almost always the largest in population: Babylon, Rome, Alexandria, Baghdad, Delhi, London, or New York.

    But bigger might no longer mean better. The most advantaged city of the future could well turn out to be a much smaller one. Cities today are expanding at an unparalleled rate when it comes to size, but wealth, power, and general well-being lag behind. With the exception of Los Angeles, New York, and Tokyo, most cities of 10 million or more are relatively poor, with a low standard of living and little strategic influence. The cities that do have influence, modern infrastructure, and relatively high per capita income, by contrast, are often wealthy small cities like Abu Dhabi or hard-charging up-and-comers such as Singapore. Their efficient, agile economies can outpace lumbering megacities financially, while also maintaining a high quality of life. With almost 5 million residents, for example, Singapore isn’t at the top of the list in terms of population. But its GDP is much higher than that of larger cities like Cairo, Lagos, and Manila. Singapore boasts a per capita income of almost $50,000, one of the highest in the world, roughly the same as America’s or Norway’s. With one of the world’s three largest ports, a zippy and safe subway system, and an impressive skyline, Singapore is easily the cleanest, most efficient big city in all of Asia. Other smaller-scaled cities like Austin, Monterrey, and Tel Aviv have enjoyed similar success.

    It turns out that the rise of the megacity is by no means inevitable — and it might not even be happening. Shlomo Angel, an adjunct professor at New York University’s Wagner School, has demonstrated that as the world’s urban population exploded from 1960 to 2000, the percentage living in the 100 largest megacities actually declined from nearly 30 percent to closer to 25 percent. Even the widely cited 2009 World Bank report on megacities, a staunchly pro-urban document, acknowledges that as societies become wealthier, they inevitably begin to deconcentrate, with the middle classes moving to the periphery. Urban population densities have been on the decline since the 19th century, Angel notes, as people have sought out cheaper and more appealing homes beyond city limits. In fact, despite all the “back to the city” hype of the past decade, more than 80 percent of new metropolitan growth in the United States since 2000 has been in suburbs.

    And that’s not such a bad thing. Ultimately, dispersion — both city to suburb and megacity to small city — holds out some intriguing solutions to current urban problems. The idea took hold during the initial golden age of industrial growth — the English 19th century — when suburban “garden cities” were established around London’s borders. The great early 20th-century visionary Ebenezer Howard saw this as a means to create a “new civilization” superior to the crowded, dirty, and congested cities of his day. It was an ideal that attracted a wide range of thinkers, including Friedrich Engels and H.G. Wells.

    More recently, a network of smaller cities in the Netherlands has helped create a smartly distributed national economy. Amsterdam, for example, has low-density areas between its core and its corporate centers. It has kept the great Dutch city both livable and competitive. American urbanists are trying to bring the same thinking to the United States. Delore Zimmerman, of the North Dakota-based Praxis Strategy Group, has helped foster high-tech-oriented development in small towns and cities from the Red River Valley in North Dakota and Minnesota to the Wenatchee region in Washington State. The outcome has been promising: Both areas are reviving from periods of economic and demographic decline.

    But the dispersion model holds out even more hope for the developing world, where an alternative to megacities is an even more urgent necessity. Ashok R. Datar, chairman of the Mumbai Environmental Social Network and a longtime advisor to the Ambani corporate group, suggests that slowing migration to urban slums represents the most practical strategy for relieving Mumbai’s relentless poverty. His plan is similar to Zimmerman’s: By bolstering local industries, you can stanch the flow of job seekers to major city centers, maintaining a greater balance between rural areas and cities and avoiding the severe overcrowding that plagues Mumbai right now.

    Between the 19th century, when Charles Dickens described London as a “sooty spectre” that haunted and deformed its inhabitants, and the present, something has been lost from our discussion of cities: the human element. The goal of urban planners should not be to fulfill their own grandiose visions of megacities on a hill, but to meet the needs of the people living in them, particularly those people suffering from overcrowding, environmental misery, and social inequality. When it comes to exporting our notions to the rest of the globe, we must be aware of our own susceptibility to fashionable theories in urban design — because while the West may be able to live with its mistakes, the developing world doesn’t enjoy that luxury.

    This article originally appeared at Foreign Policy

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Photo: Mugley

  • New York Commuting Profile: From Monocentrism to Edgeless City

    The US Bureau of the Census has just released detailed county to county and place (municipality) to place work trip flow tables. This new data is the most comprehensive since the 2000 census and covers 2006 to 2008.

    The county to county data is particularly useful for analysis in the nation’s largest metropolitan area (Note 1), New York. The New York metropolitan area has more than 19 million people and stretches across 6,700 square miles of land area, one half of it in the urban area, which is the urban footprint that includes all areas, including suburbs, in the continuous urbanization (3,350 square miles) and the other half rural (Note 2). This area is composed of 23 counties, which makes far finer grain analysis possible than in Los Angeles, with just two counties or San Diego, where its single county precludes any county based metropolitan area analysis.

    The New York metropolitan area’s counties extend east to west from Suffolk on Long Island to Pike in Pennsylvania and north to south from Putnam in the Hudson Valley to Ocean on the New Jersey shore. Surprisingly, it does not include Fairfield and New Haven counties in Connecticut, which have strong economic ties to the urban area (and which are a part of the larger, Census designated “combined statistical area”). Indeed, major parts of these two counties can be considered part of the New York urban area (Note #3).

    Median house age is a useful indicator of the urban form in segments of a metropolitan area. This examination breaks the New York metropolitan area into rings. The core is New York County (Manhattan, where the median construction date of owned dwellings is 1942). The first ring is the other four boroughs of New York City. The inner ring includes counties outside the city in which the median aged house was built in the 1950s, while the outer ring includes counties in which the median aged house was built in the 1960s or later. The one anomaly is Staten Island (Richmond County) which although politically part of the city of New York, demonstrates a mean housing age closer to that of the outer ring (median construction date 1971). Visually it resembles late suburban New Jersey much more than it does the rest of the city. However, Staten Island’s strong ties to the city justify its classification with the other boroughs.

    Comparatively Centralized: New York is one of the most centralized large urban areas in the high income world,with only Tokyo ranking higher among areas over 5 million population. The Manhattan business district, located to the south of 59th Street is the world’s second largest (following Tokyo’s Yamanote Loop). But in terms of employment density Manhattan has more than double the employment density. What was, at least until recently, indisputably the world’s most spectacular skyline leads many to conclude that nearly everyone works in Manhattan.

    A Highly Decentralized Metropolitan Area: Yet in reality, New York is a highly decentralized metropolitan area. Approximately 74% of employment is outside Manhattan and the jobs are comparatively evenly dispersed among the sectors. There is more employment in the inner ring suburbs than in Manhattan (28%). Even the outer ring is competitive has nearly as many jobs, at 24%. Finally, the balance of the city, the four boroughs, has 22% of the employment (Figure 1).

    Wide Variations in the Jobs-Housing Balance: It is hard to understate the intensity of Manhattan’s central business district employment. Manhattan has 2.71 jobs for every resident worker. An important tenet of modern urban planning theory is to achieve a balance of jobs and housing. Manhattan’s jobs/housing imbalance is certainly the most acute of any county in the United States, yet it is to Manhattan that purveyors of smart growth densification policies are routinely drawn.

    Manhattan’s huge excess of jobs contrasts with employment the rest of the the city, where the jobs-housing balance at the county level is 0.67, the lowest in the metropolitan area. The inner ring suburbs have the highest jobs-housing balance at 0.93, while the outer suburbs have a jobs-housing balance of 0.87 (Figure 2), nearly one-third higher than the non-Manhattan boroughs (three of which are more dense than any major municipal jurisdiction in the nation). The city’s strongest jobs-housing balance is in Brooklyn (Kings County), at 0.72, which is lower than all of the suburban counties except for the most remote (Pike, Putnam and Sussex).

    Manhattan’s Impact: Diminishing Rapidly with Distance: There is no doubt that Manhattan remains the core of the New York economy, but that is less true the further you go out. While nearly 70% of the core’s workers commute from outside Manhattan, the employment influence of Manhattan drops off like the temperature falls the further you get away from a fireplace.

    86% of Manhattan’s resident workers have jobs in Manhattan, but only 35% of workers living in the city’s other boroughs work in Manhattan. This falls off to 14% in the inner suburban counties and 6% in the outer suburban counties (Figure 3). In Sussex County and Ocean County, New Jersey, only 2% of resident workers commute to Manhattan.

    Working Close to Home: At the same time a larger number of resident workers outside Manhattan work in their home counties than work in Manhattan. In the balance of the city, 46% of workers have jobs in the same counties. The inner suburban counties employ 56% of their resident workers, while the outer suburban counties employ 63%. Overall, 58% of New Yorkers work in their county of residence, more than double the share that work in Manhattan (Figure 4). In Richmond County (Staten Island), Suffolk County and Rockland counties in New York and Pike County, Pennsylvania, more than 80% of jobs are filled by local residents.

    Local Workers Generally Come from the Same Counties: A review of the residential location of workers by job location reinforces the dominantly local nature of commuting in New York. Overall, 56% of jobs are filled by residents of the same county. The figure is the highest in the outer ring suburban counties, at 73%. The inner ring suburban areas draw 60% of their workers from the same county, while the balance of the city draws 69%. In Manhattan, with its seriously out of balance jobs and housing, just 32% of the jobs are filled by it residents (Figure 5).

    Dispersion: Past and Present. All of this is a huge change from a half-century ago. In 1956 (according to data in the classic Anatomy of A Metropolitan Area, by Edgar M. Hoover and Raymond Vernon), Manhattan accounted for 43% of the metropolitan area’s employment (1950 metropolitan definition). Since that time, employment has fallen substantially in Manhattan and risen elsewhere. There have been gains in the outer boroughs, related principally to the strong population growth Queens and Staten Island. There were also gains in the inner suburban counties. The strongest gains were in the outer suburban counties (Figure 6).

    The dispersion is continuing. As Ed McMahon and I showed in Empire State Exodus, there is considerable migration from New York to Pennsylvania, as people are moving to metropolitan areas such as Allentown and Wilkes-Barre. Obviously, as the modest level of commuting from the outer counties of metropolitan New York indicates, relatively few of these people are commuting to Manhattan. This impression may be more a product of the fact the Manhattan-based media only recognizes workers when they actually make it into town; those who stay in the periphery, it seems, might as well live on another planet.

    New York, with as by far the strongest central business district in the nation, still has moved from virtual monocentrism, to the Edge Cities polycentrism of Joel Garreau and increasingly even to the amorphous Edgeless Cities employment dispersion of Robert Lang. The strong core continues to regenerate, but no longer exerts anything like its former dominant influence.

    ——-

    Note 1: For complete data.

    Note 2: For a description of urban terms (metropolitan area, urban area, etc).

    Note 3: Demographia World Urban Areas includes the continuous urbanization of southwestern Connecticut as a part of the New York urban area.

    ——-

    Table 1
    COMMUTING IN THE NEW YORK METROPOLITAN AREA (2006-2008): SUMMARY BY GEOGRAPHIC RING
    RINGS Ring Jobs/Housing Balance (Jobs per Resident Worker) Workers Employed in Residence County Share of Jobs Filled by County Residents Workers Employed in New York County (Manhattan) Average One-Way Work Trip Time (Minutes): Residence Average One-Way Work Trip Time (Minutes): Workplace Median Year Owned Housing Built
    NYC: Manhattan 1 2.719 86.3% 31.7% 86.3%                30.3                49.1 1942
    NYC: Balance 2 0.674 46.4% 68.8% 35.6%                42.0                37.3 1939-1971
    Inner Ring 3 0.927 56.0% 60.4% 14.4%                30.5                29.1 1950-1956
    Outer Ring 4 0.870 63.1% 72.5% 6.2%                31.3                26.0 1967-1983
    New York MSA 1.000 57.6% 57.6% 26.1%                34.5                35.5 1955
    Derived from American Community Survey data (2006-2008)
    Note: MSA work trip times (residence and work location) differ because commuters from outside the MSA are included

     

    Table 2
    COMMUTING IN THE NEW YORK METROPOLITAN AREA (2006-2008): SUMMARY BY COUNTY
    COUNTIES Ring Jobs/Housing Balance (Jobs per Resident Worker) Workers Employed in Residence County Share of Jobs Filled by County Residents Workers Employed in New York County (Manhattan) Average One-Way Work Trip Time (Minutes): Residence Average One-Way Work Trip Time (Minutes): Workplace Median Year Owned Housing Built
    New York Co., NY 1 2.719 86.3% 31.7% 86.3%                30.3                49.1 1942
    Bronx Co., NY 2 0.676 44.3% 65.6% 36.8%                41.1                35.7 1950
    Kings Co., NY 2 0.721 51.2% 71.0% 36.7%                42.3                39.0 1939
    Queens Co., NY 2 0.645 42.4% 65.7% 36.0%                42.0                37.5 1949
    Richmond Co., NY 2 0.585 47.3% 80.8% 26.3%                42.7                29.8 1971
    Bergen Co., NJ 3 0.960 56.7% 59.1% 15.0%                29.3                27.2 1956
    Essex Co., NJ 3 1.052 53.6% 50.9% 9.7%                30.8                31.8 1953
    Hudson Co., NJ 3 0.892 47.1% 52.8% 23.6%                32.4                35.1 1950
    Passaic Co., NJ 3 0.797 45.3% 56.8% 4.3%                27.0                28.0 1954
    Union Co., NJ 3 0.969 50.7% 52.3% 7.1%                33.0                27.6 1954
    Nassau Co., NY 3 0.884 59.1% 66.8% 14.8%                31.6                30.0 1954
    Westchester Co., NY 3 0.928 67.3% 72.6% 19.9%                33.6                27.7 1955
    Hunterdon Co., NJ 4 0.736 49.5% 67.2% 3.7%                31.4                28.2 1978
    Middlesex Co., NJ 4 0.943 58.5% 62.0% 7.7%                26.9                25.8 1968
    Monmouth Co., NJ 4 0.880 63.4% 72.0% 8.2%                33.2                23.8 1970
    Morris Co., NJ 4 1.097 58.7% 53.5% 5.4%                29.4                31.2 1967
    Ocean Co., NJ 4 0.723 63.4% 87.7% 2.0%                31.1                21.3 1977
    Somerset Co., NJ 4 0.988 46.7% 47.3% 5.6%                31.0                31.1 1978
    Sussex Co., NJ 4 0.565 44.5% 78.8% 2.3%                38.2                23.7 1972
    Putnam Co., NY 4 0.441 30.9% 70.1% 8.0%                37.0                24.4 1967
    Rockland Co., NY 4 0.763 61.2% 80.1% 12.0%                29.8                25.1 1969
    Suffolk Co., NY 4 0.872 76.2% 87.4% 5.7%                29.8                23.5 1967
    Pike Co., PA 4 0.574 45.9% 80.0% 4.6%                44.1                25.2 1983
    New York MSA 1.000 57.6% 57.6% 26.1%                34.5                35.5 1955

    ——-

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

    Photo: Levittown (Nassau County): Inner Suburban (photo by author)

  • Syria: Luxury Rentals With A Turkish Backstory

    In looking for winners in the war in Iraq, a good place to start is the Damascus real estate market, which went from being a subprime, Axis-Of-Evil neighborhood to one where Iraqis with flight capital could stash their money.

    I had not connected the cost of a Syrian two-bedroom with those Iraqis who are losing hearts, minds, and subsidiaries, until I traveled with my teenaged son on the Ottoman and Crusader roads from Istanbul to Damascus… and heard of apartments selling for $2 million.

    In headlines about the Middle East, Syria is a front-line state, a radical Arab nation that is sworn to Israel’s destruction, and, more recently, an ally of Iran that will envelope the infidels running Iraq and agitate terror along the Lebanese-Israeli border.

    On the ground, however, Syria has softer edges than most rogue states. It has a nascent tourist industry, built around Roman ruins and Crusader fortresses. The populace is friendly, and largely indifferent to the protectionist rackets of the ruling al-Assad family. There is perhaps enough secularism to bridge east and west, if not Israel and the Arab world.

    Getting to Syria isn’t easy. The trip from Istanbul’s glorious Haydarpasha Station was a forty-hour excursion, including a train ride across Anatolian Turkey and the Taurus Mountains. Highlight: the kabuki theatre at the Turkish-Syrian border crossing, an Arabian Checkpoint Charlie. (Our taxi driver distributed duty-free cigarettes to each of the passengers and, between the borders, filled up the tank of his car with gas from a Pepsi bottle.)

    The places between Istanbul and Aleppo — Syria’s second largest city — included Tsarus, the hometown of St. Paul; Ceyhan, terminus of the geopolitical Azerbaijan-Georgia-Turkey oil pipeline; and ancient Antioch, now Hatay, where the word “Christian” first circulated in caves beyond the city.

    We spent the night in the port of Iskenderum in the province of Hatay, which remains a sore point in the often troubled foreign relations between Turkey and Syria. To keep Turkey away from an alliance with Nazi Germany in 1939, the French government, which had a League of Nations mandate over Greater Syria, gave the Arabic province to the Turks.

    Syria claims the region, which may explain why, in happier days, Turkey was friendly with Israel. When that relationship cooled, irredentism in Hatay was forgotten, and now trade is booming between Syria and Turkey.

    The Iskenderum waterfront feels like a Black Sea resort. Most importantly, it has backgammon and strong coffee. The town was contemplated as the terminus of a Persian Gulf railway, to speed British troops to India. In 1917, after his ignominious defeat at Gallipoli, Winston Churchill wanted to stage yet another amphibious assault behind the Ottoman lines, this time from Alexandretta (now Iskenderum). Britain’s war cabinet ignored him.

    Aleppo is a traveler’s dream, and far from the raw emotions of Middle East politics. We stayed at the Hotel Baron in the Agatha Christie room (I checked the armoire for a body), and wandered around the souk, the Crusader citadel, and the mosque, which has more little boys with soccer balls than it does angry Muslims.

    In the Armenian genocides of 1915, the few survivors walked to Aleppo. I met an older woman at the hotel whose father, at age ten, was the only member of a large family to survive the forced march. As she told the story of their fate, she wept.

    T. E. Lawrence (of Arabia) also stayed at the Baron. We inspected his hotel bill, saved in a musty cabinet. In 1909, to research his Oxford thesis on Crusader fortresses, Lawrence walked across Syria, at that time just an Ottoman province.

    We did his trip in reverse—not on foot but in a rental car—and ended up at Krak des Chevaliers, which he called the “finest castle in the world.” Imagine the roundtable of King Arthur on a Syrian mountain.

    The Crusaders lost their foothold in the Near East, in part because they failed to form a lasting alliance with their logical protector in Constantinople, the Byzantine Empire. Even now, the Christian enclaves in Lebanon and Syria, not to mention those in Israel, feel adrift from history. Diplomatically, Syria is largely alienated from its neighbors.

    For its patchy tourist industry — a few more road signs would be nice — Syria can build upon the soaring columns of its Roman ruins, which can be found near the Mediterranean coast and in the remote eastern desert.

    We walked the imperial miles at Apamea and in Palmyra, where many columns are intact. Hadrian and other emperors turned these distant watering holes into cities that resemble the Parthenon in Athens. Palmyra feels like a Greek mirage.

    I didn’t linger over the tourist kitsch of Old Damascus or the city’s charming alleys. Instead, I found a cafe overlooking the Umayyad mosque and read David Fromkin’s A Peace to End All Peace, a book that tries to lay the blame for current Middle East instabilities on the British decision in World War I to break up the Ottoman Empire.

    The 1919 Peace of Paris (for Turkey, it was the Treaty of Sèvres) left the Middle East with national borders drawn haphazardly around tribal clans. Of the partitioning, Fromkin writes: “It was the Liberal dream of triumphant Hellenism and Christianity, promoted by Gladstone’s political heir, David Lloyd George.”

    Lawrence dreamed of independence for the Arabs, only to see them subjugated to the British and French empires. He observed: “Our government is worse than the old Turkish system.” He might well have said the same about the United States, which has taken up the Ottoman’s burden in the Middle East.

    The modern nations of Syria, Lebanon, Israel, and Jordan were originally figments in the imaginations of Paris mapmakers. Arabs complain about Israel’s artificial borders, but the same can be said of all its neighbors.

    Few people I met in Syria ever mentioned Israel, the Golan Heights, or the Arab-Israeli conflict. The border wars seemed more symbolic than real, a looming menace that allows the al-Assad family to prove its bona fides with Arab nationalists (few of whom have a voice in the Syrian government). Syrian diplomacy is generally cynical: Syria talks tough against Israel, funds Hezbollah, and rails against the Americans… so that the Syrian government can then lord over the local economy as if it were a family business.

    As a train man, I spent much of the trip searching for the Hejaz Railway, which Lawrence devoted his time in the desert to blowing up. The railway brought pilgrims, not to mention janissaries, from Damascus to Medina, now in Saudi Arabia, and it had a branch line to Haifa. Since the lines were cut, the Middle East has been fractured.

    To further the cause of peace in the Middle East, I am for its revival. The narrow gauge engines are still in working condition, and much of the track bed remains. Call it the Peace Train or the Freedom Express, but have rail service from Beirut to Damascus, and a connection to Haifa. Rail buffs and tourists would love it, but so would Syrian merchants and Israeli trading companies.

    The line might not connect Berlin to Baghdad, or even Alexandretta to the Persian Gulf. But it would be a better use of Middle East reconstruction money than what’s now disappearing into Damascus apartments.

    Photo by Steven Damron; Damascus apartments.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, winner of Foreword’s bronze award for best travel essays at this year’s BEA. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • Misunderstanding the Bubble and Burst in Sacramento

    An opinion piece in the Sacramento Bee by Sean Wirth of the Environmental Council of Sacramento could not have been more wrong in its characterization of the causes of the housing bubble in Sacramento.

    The article starts out promisingly, correctly noting that:

    • The housing bubble spawned the Great Recession
    • Demand exceeded the inventory of houses in the Sacramento area
    • Sacramento prices “soared sky high”


    But it is all downhill from there, with the suggestion that the extraordinary price increases in Sacramento were the result of too much suburbanization (the theological term in urban planning circles is “sprawl”). In fact, all things being equal, house prices tend to escalate where the supply is more constrained, not less. Where suburbanization is allowed, the market can supply enough housing to avoid inordinate house price increases. Where suburbanization is severely constrained, a legion of evidence indicates that house prices are prone to rise. It is all a matter of basic economics. George Mason University economist Daniel Klein puts it this way:

    Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

    Housing is not atypical and Sacramento house prices soared in response to the tough use regulations. By the peak of the bubble, the Median Multiple (median house price divided by median household income) had risen to 6.8, well above the historic norm of 3.0. Many houses were built, but not enough to satisfy the demand, as Mr. Wirth indicates. Building many houses is not enough. There need to be enough houses to supply the demand, otherwise land prices soar, driving up house prices.

    Unless a sufficient supply is allowed, speculators and flippers will “smell the blood” of windfall profits, which are there for the taking in excessively regulated markets.

    During the housing bubble, house prices rose well above the historic Median Multiple norm only in metropolitan areas that had severe constraints land use constraints (called “smart growth” or “growth management”). This included Sacramento, other California markets, Miami, Portland, and Seattle and other markets around the country.

    At the same time, more liberal development regulations allowed a sufficient inventory of housing to meet the demand in high growth areas like Atlanta, Dallas-Fort Worth, Houston and Austin. In each of these places (and many others), the Median Multiple remained near or below the historic norm of 3.0, even with the heightened demand generated by a finance sector that had lost interest in credit-worthiness. As would be expected, speculators and flippers avoided the traditionally regulated markets, where an adequate supply of affordably priced housing continued to be produced.

    Wirth expresses understandable concern about the house price losses since the bust. From the peak to the trough, the drop in Sacramento median house prices was more than 55%. However, this is to be expected once a serious economic decline is precipitated, especially in the sector that precipitated the crash (in this case housing). Economists Ed Glaeser of Harvard and Joseph Gyourko of Wharton have shown that not only (1) are house prices higher in more restricted markets but also that (2) there is greater price volatility in more highly regulated markets. Indeed, it is likely that the housing bust would have been much less severe or even avoided altogether if constraints on land had not driven the prices and subsequent mortgage losses so high in California and a few other states that they could not be absorbed by financial institutions. At the time of the Lehman Brothers collapse, 11 “ground zero” markets (including Sacramento), all highly regulated, accounted for 75% of the mortgage losses in the nation, with a per house loss rate of 15 times that of traditionally regulated markets.

    Wirth’s article expresses opposition to a Sacramento County decision to allow more development to occur on the urban fringe. He would prefer to force development into the existing urban footprint. The economic consequences of such folly are well known. In Australia, such policies have driven led to a doubling or tripling of house costs relative to incomes. The annual mortgage cost of the median priced house has risen to 50% of the median pre-tax household income, in a country that defines mortgage stress at the 35% level. Before the adoption of smart growth policies, Australia’s housing affordability was similar to that of liberally regulated markets in the United States.

    Avoiding the next housing bubble requires not repeating the mistakes that led to the last. Sacramento’s young and lower income households can only hope that the additional land approved by the Board of Supervisors will be enough of a safety valve to keep housing affordable so that they can become owners rather than renters.

    Photograph: Sacramento (author)

  • Mass Transit: The Great Train Robbery

    Last month promoters of the Metropolitan Transit Authority’s Los Angeles rail projects, both past and future, held a party to celebrate their “success.” Although this may well have been justified for transit-builders and urban land speculators, there may be far less call for celebration among L.A.’s beleaguered commuters.

    Despite promises that the $8 billion invested in rail lines over the past two decades would lessen L.A.’s traffic congestion and reshape how Angelenos get to work, the sad reality is that there has been no increase in MTA transit ridership since before the rail expansion began in 1985.

    Much of the problem, notes Tom Rubin, a former chief financial officers for the MTA’s predecessor agency, stems from the shift of funding priorities to trains from the city’s more affordable and flexible bus network. Meanwhile, traffic has gotten worse, with delay hours growing from 44 hours a year in 1982 to 70 hours in 2007.

    Sadly, this situation is not unique to Los Angeles. In cities across the country where there have been massive investments in light rail–from the Portland area to Dallas and Charlotte, N.C., and a host of others–the percentage of people taking transit has stagnated or even declined. Nationwide, the percentage of people taking transit to work is now lower than it was in 1980.

    None of this is to argue that we should not invest in transit. It even makes sense if the subsidy required for each transit trip is far higher than for a motorist on the streets or highways. Transit should be considered a public good, particularly for those without access to a car–notably young people, the disabled, the poor and the elderly. Policy should focus on how we invest, at what cost and, ultimately, for whose benefit.

    In some regions with large concentrations of employment, downtown major rail systems often attract many riders (although virtually all lose lots of money). The primary example would be the New York City area, which is one of only two regions (the other being Washington, D.C.) with over one-fifth of total employment in the urban core. In the country as a whole barely 10% of employment is in the city; and in many cities that grew most in the 20th century, such as Dallas, Miami, Los Angeles and Phoenix, the central business district’s share falls well under 5%.

    Some other urban routes–for example between Houston’s relatively buoyant downtown and the massive, ever expanding Texas Medical Center–could potentially prove suitable for trains. But most transit investments would be far more financially sustainable if focused on more cost-efficient methods such as rapid bus lanes, which, according to the Government Accountability Office, is roughly one-third the cost of light rail.

    Making the right choices has become more crucial during the economic downturn, even in New York City. The city and the federal government continue to pour billions into a gold-plated Second Avenue subway but now plan to cut back drastically on the bus service that serves large numbers of commuters from the outer boroughs and more remote parts of Manhattan.

    Ultimately the choice to invest in new subways and light rail as opposed to buses reflects both a class bias and the agenda of what may best described as the “density lobby.” The people who will ride the eight-mile long Second Avenue subway, now under construction for what New York magazine reports may be a total cost of over $17 billion, are largely a very affluent group. The new subway line will also provide opportunity for big developers to build high-density residential towers along the route. In contrast, the bus-riders, as the left-of-center City Limits points out, tend to be working- and middle-class residents from more unfashionable, lower-density districts in the Bronx, Queens, Brooklyn and Staten Island.

    The proposals for High Speed Rail–a favorite boondoggle of the Obama administration and some state administrators–reveals some of the same misplaced fiscal priorities. California’s State Treasurer, Democrat Bill Lockyer, has lambasted the proposed HSR line between Los Angeles and the Bay Area, suggesting the state may not be able to sell private investors on between $10 billion and $12 billion in bonds without additional public subsidies.

    Other prominent Democrats as well as the State Auditor’s office have challenged the promoters’ claims about the viability of the system and its potential drain on more reasonable priced transit project.

    This issue funding priorities was raised recently by the current administrator of the Federal Transportation Authority, Peter Rogoff, who questioned the wisdom of expanding expensive rail and other transit projects when many districts “can’t afford to operate” their own systems. He noted that already almost 30% of all existing “transit assets” are in “poor or marginal condition.”

    Ultimately we need to ask what constitutes transit’s primary mission: to carry more people to work or to reshape our metropolitan areas for ever denser development. As opposed to buses, which largely serve those without access to cars, light rail lines are often aimed at middle-class residents who would also be potential buyers of high-density luxury housing. In this sense, light rail constitutes a critical element in an expanded effort to reshape the metropolis in a way preferred by many new urbanists, planners and urban land speculators.

    The problem facing these so-called visionaries lies in the evolving nature of the workplace in most parts of the country, where jobs, outside of government employment, are increasingly dispersed. Given these realities, transit agencies should be looking at innovative ways to reach farther to the periphery, in part to provide access to inner-city residents to a wider range of employment options. Considering more than 80% of all commuter trips are between areas outside downtown, priority should be given to more flexible, less costly systems such as rapid commuter bus lines, bus rapid transit, as well as subsidized dial-a-ride and jitney services that can work between suburban centers.

    If reducing energy use and carbon emissions remains the goal, much more emphasis should be placed as well on telecommuting. In many cities that have invested heavily in rail transit–Dallas, Denver and Salt Lake City, for example–the percentage of people working from home is now markedly larger than those taking any form of mass transit. Since the approval of the Dallas light rail system in the 1980s, for example, the transit share of work trips has dropped from 4.3% to 2.1%; the work-at-home share has grown from 2.3% to 4.3%.

    In fact, people who work from home now surpass transit users in 36 out of 52 metropolitan areas with populations over 1 million–and receive virtually no financial backing from governments. Yet if New York, home to roughly 40% of the nation’s transit commuters, was taken out of the calculations, at-home workers already outnumber the number of people taking transit to work; and since 2000 their numbers have been growing roughly twice as fast as those of transit riders.

    Clearly we should not spend our ever more scarce transit resources on a nostalgia crusade to make our cities function much the way they did in the late 1800s. Instead, we need to construct systems reflecting the technology and geographic realities of the 21st century and place our primary focus on helping people, particularly those in need, find efficient, economically sustainable ways to get around.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Photo: Michael | Ruiz

  • Melbourne: Government Seeking Housing Affordability

    Once a country known as “lucky” for its affordable quality of life, Australia has achieved legendary status as a place where public policies have destroyed housing affordability for the middle class. Draconian land rationing policies (called “urban consolidation” in Australia and more generally “compact city” policy or “smart growth”), have made it virtually illegal to build houses outside tightly drawn urban growth boundaries that leave virtually no room for new construction beyond the urban fringe. As a result, house prices have increased to the point that Australia now suffers one of the most unaffordable markets in the world.

    The consequences of this may finally be dawning on some governments. The state of Victoria, for example, is expanding its urban growth boundary around Melbourne.

    Severely Unaffordable Australia: The Reserve Bank of Australia (the central bank) has described the considerable extent to which house prices have increased relative to incomes since the 1980s. The annual Demographia International Housing Affordability Survey makes similar findings, showing that the price of housing has doubled or tripled relative to household incomes over the past quarter century. All major markets in Australia are “severely unaffordable.” This has occurred in a country that has long boasted one of the largest home ownership shares in the world, which epitomized the “Great Australian Dream.” Until urban consolidation policies were widely adopted and strictly enforced, Australia’s housing affordability (measured by the Median Multiple, which is the median house price divided by median household income) was virtually the same as that of the United States.

    That has changed radically. Over the past two years, the median house price in Melbourne, has risen by 30%.

    Expanding Melbourne’s Urban Growth Boundary: In this environment, it comes as welcome news that the Brumby Labor government has enacted an expansion of the Melbourne urban growth boundary. The initiative attracted broad based support, including that of the Liberal-National opposition in the Victoria (state) parliament. The government expects that the expansion will “maintain” housing affordability.

    There was, not surprisingly, the kind of hysteria that has become typical of Australian land use debates. Suburban Casey Mayor Lorraine Wreford expressed concern that the expansion would consume agricultural land and increase food costs. In fact, the higher costs that Melburnians are paying for housing as a result of the urban growth boundary is more than enough to pay grocery bills for the neighbors on both sides.

    The “loss of agricultural land” argument is even more daft in Australia than in the United States. Australia’s agricultural production continues to improve, which has permitted huge amounts of land to be abandoned and returned to its natural state. Since 1981, an area nearly the size of New South Wales has been taken out of agricultural production. Lest anyone think that urbanization is a factor, this is more than 50 times the land area of all the urbanization that has developed in Australia since western colonization began.

    Will it be Enough? The risk, however, is that the urban growth boundary expansion may not be enough to materially improve housing affordability. The expansion is modest, at less than 170 square miles (440 square kilometers*). Worryingly, the government indicates that this will be the last urban growth boundary expansion in this generation.

    How Much Land is Needed for Housing Affordability? However, US experience indicates that a surprisingly small amount of developable land beyond the urban fringe may be enough to keep land and house prices from escalating.

    For example, Portland’s urban growth boundary appears to have had little cost escalation impact on house prices until the 1990s, when urban fringe developable land within the urban ground boundary fell to less than 10% compared in relation to the already developed urban footprint (Note). This is the equivalent of a developable ring around Portland of less than one/half mile (0.8 kilometers in Portland).

    As the developable land became more scarce, house prices escalated. Now, Portland house prices are more than one-third above the historic Median Multiple norm of 3.0 and they peaked at more than 60% above during the housing bubble.

    Similarly, there are virtual urban growth boundaries in Las Vegas and Phoenix. These development constraints are defined by circumferential government owned land, which has been released to the market at rates intended to maximize revenues, which means they minimize housing affordability. Yet these constraints appear to have had little impact on prices until developable fringe land dropped to below 20% relative to the urban footprint.

    Strengthening Melbourne’s Competitive Position? The Victorian action may have been impelled by a recognition that the affordability-driven economic stagnation already existent in Sydney could well spread. This could help to restore Melbourne to its role as Australia’s principal urban area, more than a century after having been dethroned by Sydney. Bernard Salt, one of the nation’s leading demographers, has predicted that Melbourne’s population will exceed that of Sydney by in less than 20 years.

    Offering Australia’s future generations the chance to live out the Great Australian Dream by improving housing affordability could not only expand Melbourne’s competitive edge over Sydney, but could even neutralize fast-growing Brisbane’s trajectory. Ross Elliot has suggested that the new Southeast Queensland Regional plan could seriously retard growth in that vibrant area.

    Are Australian House Prices in a Bubble?

    There is a raging debate over whether Australia’s housing price boom is an asset bubble. International financial analysts Edward Chancellor, who correctly predicted the Great Recession, believes that Australian housing is a bubble that will burst before long. Others disagree. Either way, Australia loses.

    • If Australia’s price boom is a bubble, history says it will burst (as virtually all do), likely inflicting serious damage to the economy. In this regard, Australia could be more at risk than the United States was in its housing bubble burst, since housing in virtually every market, large and small, has been driven up to unsustainable levels. In the United States, the bubble was contained within markets accounting for about one-half of housing, where Australian-type planning policies were in operation. Other markets, such as Houston, Dallas-Fort Worth, Atlanta and much the Great Plains did not experience the bubble.
    • If Australia’s planners have simply succeeded in raising the long term price of housing and there is no bubble (as many Australian analysts suggest), then future generations of Australians will have much less money to spend and their standard of living will lower than it would otherwise have been.

    Regrettably, the spirited debate over an Australian “bubble” is far different that the public deliberations that preceded the adoption of urban consolidation policies in Australia. For the most part, state governments and planning academics carefully avoided any discussion of the housing affordability consequences. Perhaps this was out of ignorance. But whatever the intentions, the smart growthers have imposed great costs on both present and future generations of Australians.

    —–

    Note: This is a far smaller area than recent research suggesting a relationship between geographic constraints (mountains and other undevelopable land) and higher house prices. Research by Albert Saiz at Wharton uses a 50 kilometer (30 mile) radius from the urban core to identify the share of land that can be developed. The data in the research would indicate that more than 1,750 square miles are developable, yet Portland is among the more geographically constrained according to this analysis. This seems to be an unreasonably large area for measuring the impact of geographical constraints. It is nearly 4 times the urban footprint of Portland and is nearly 60 times the developable land area that exhibited virtually no impact on housing affordability in Portland in the early 1990s and is more land area than covered by all but 8 of the world’s largest urban areas. It is to be expected that that politically imposed development constraints (strongly enforced as in Portland and Australia) render any more remote geographical constraints irrelevant.

    Photo: Inside the expanded urban growth boundary: Western Freeway toward Melton (photography by author)

    *The original version of this essay read 17 square miles and 44 square kilometers.

  • Can The Suburban Fringe Be Downtown Adjacent?

    For many suburban Americans, the thought of migrating to a center-city environment holds an intriguing appeal, fueled by urbanists who tout the benefits of stunning cityscape views, walkability, proximity to civic and cultural amenities, and street vibrancy. I happen to be among those suburbanites who have harbored a secret fantasy of living in a dense downtown environment, replete with throngs of creative millennials roaming the streets, fancy coffee houses, and close access to fine dining. A decision to move from suburban Sacramento to Denver has been the result.

    The urban/suburban residential conundrum has generated epic debates that match the joys of city living against the benefits of suburbia. Terms such as “sprawl,” “drivable urbanism,” and the “slumming of suburbia” appear in the news regularly, often in an attempt to sway the pendulum in favor of dense city living.

    The tsunami of hoopla around “urban livability” has been of growing interest to my family and me as we prepare to relocate to Denver. I’ve come to believe the accuracy of the assertion, often voiced on this site, that America’s interest in suburbia has not abated. It has become abundantly clear from the brisk interest of potential buyers of our current Folsom, California residence, that living in a suburban locale still holds a special appeal. The environmentalist clamor aside, what people really want from a community is amenities that appeal to their specific interests. Folsom, a city of 72,000 nestled on the outskirts of Sacramento, offers myriad advantages for leisure — such as boating and biking — to basic requirements like low crime rates and quality schools.

    For us, the move to Denver is a transition from suburbia that’s been a challenge. Despite steady buyer interest, our 3100-square-foot house is still on the market. Suburban critics, like Urban Land Institute-fellow Christopher Leinberger, would likely cite a potential cause as being declining interest in what are affectionately known as McMansions, those big cumbersome houses replete with big lawns, big mortgages, and big utility bills. Demographic trends also show a steady rise in the number of adults without children, who are presumably less likely to purchase a big house. And, as a real estate professional pointed out to us, people are holding out for a windfall deal these days amid the abundance of foreclosures in the Sacramento metro area.

    Finding a family home in Denver has been even more interesting. While the downtown Lo-Do District has great appeal to us because of its vibrancy, civic amenities, and proximity to Coors Field (Rockies Baseball), Invesco Field (Broncos Football) and the Pepsi Center (Nuggets Basketball and Avalanche Hockey), it simply doesn’t strike my wife and me as the ideal environment for raising our seven-year-old daughter. The questionable schools in the city-center core were the deal breaker, and the catalyst for our decision to explore quasi- suburban areas on the fringe of downtown.

    As is the case with many downtowns across the country, real estate values in central-city Denver have taken a severe beating. With tepid demand, large inventories of condos have sat vacant for months, leading some developers to convert them into rentals.

    After several exploratory trips and careful consideration of our options, particularly since our house in California is still on the market, we elected to rent in a neighborhood called Cheeseman Park. An eclectic, diverse enclave just on the outskirts of downtown, the area offers the hybrid urban/suburban environment that we were seeking. It also has a top-notch elementary school for our daughter.

    Our choice of location within the Denver area seems to support a national trend that was much discussed at the recent Urban Land Institute Summit/ Spring Council Forum in Boston; namely, that the vast majority of population growth in U.S. urban regions will occur not in downtown cores, but in suburbs, and of those, most notably the close-in suburbs exuding an urban feel.

    This is something that leaders in our current home region of Sacramento failed to grasp recently. The City Council made the decision to pursue a mixed-use project with 256 housing units in the downtown core, over a more ambitious proposal outside of downtown featuring a complex with live music, a year-round farmer’s market, and a venue showcasing California’s rich agricultural history. The choice seems ill-advised, since previous downtown housing projects have failed, in part due to tepid residential demand.

    In the end, urban living has its benefits, although decisions to reside in a denser environment should be sprinkled with a dose of pragmatism. The large population is one factor that maintains Denver’s robust spectator sports scene, which is a huge draw for me personally. And, like many bigger cities, it also offers a wider selection of social and cultural activities than that of the Sacramento region. While urban housing has captured the imagination of many Americans, downtowns may be best suited for the role of civic and cultural centers – places that people come to visit, rather than where they reside.

    Photo by Michael Scott of a “suburban” neighborhood in Denver.

    Michael P. Scott is a Northern California urban journalist, demographic researcher and technical writer. He can be reached at michael@vdowntownamerica.com.

  • Resort Towns Becoming Neo-Company Towns

    Over the past few years resort communities – communities ideal for a ski vacation, a beach week, a hiking excursion or the like – have been hard hit by the downturn in real estate.

    The key question is how these communities can be revived. If the issues involved are successfully addressed head-on, these small towns are able to provide significant amounts of affordable housing, viable and productive public transportation networks, and public functions such as parks, schools, police, and fire, despite limited financial and physical resources.

    Resort towns face growth-related issues not usually associated with such perceived idyllic settings. Many of these involve concerns over sprawl, workforce housing and lack of basic infrastructure. In the wake of the financial fallout that has affected both primary and second homes, there is an opportunity to address a quiver of such issues. Resort communities are still hard pressed to provide adequate housing stock for their workers, despite vacancies and stalled projects throughout their respective regions.

    Most stalled or dead projects were geared to higher-end buyers searching for second, or third or fourth, homes. As the lenders and creditors seize these assets and write down their values after taking heavy losses, perhaps there is an opportunity to reposition them and solve both worker housing demand and over supply of second homes.

    Indeed, post-write down, these places can become profitable through the conversion of costly amenities, like golf courses, in to less capital and maintenance intensive community amenities, such as walking trails or greenbelts. Note, however, that many of these communities can be relatively remote, so assessing transportation systems for workers will be necessary. This, too, can become an opportunity, as concentrated and growing communities provide growth centers for transportation systems.

    There is an added bonus to such an approach, often overlooked by competing sides of the battle over “sustainability” that weighs ever more heavily in regions whose economy is built primarily on the natural environment. The environmental lobby, which likely opposed such communities from the onset, may be too hostile to embrace the conversion to workforce housing. But, whatever their wishes, these communities are not going away; few will become 21st Century ghost towns. They are already built, with their infrastructure laid in. The question will be how to promote “creative destruction” without destroying the physical environment.

    Populating such areas with local workers also addresses the oft-ignored social, political and economic end of the sustainability equation. There is an opportunity to promote the evolution of true communities, with neighbors and stakeholders likely to take up the cause, among other things, of protecting the natural environment in their community and promoting transportation alternatives. Indeed, the “green” movement gains by putting existing buildings to better use than simply being second homes for the affluent. And, in the amenity region, they could grow their constituency. This should be a win-win for environmentalists, families, new purchasers and indeed everyone, except perhaps the original developer.

    Such resort communities may have started as a ski or golf resort, but they can certainly be transformed into something far less ephemeral. These places would remain amenity-based, but not in the same sense that a golf community uses the golf course as a sales and marketing pawn. Instead, they could evolve much like the company towns of the industrial era, with the difference being that a single, centralized corporation is not the hub of the wheel.

    A series of public and private institutions, unique to that particular place and not replicable, will become the anchors. These intstitutions would provide the central “amenities” that provide for the needs of the expanding number of home-based or spin-off businesses and the services they require. In this sense, a new hub of economic development can emerge. The remaining tourists at the resorts, as well as groups such as students and visiting faculty at universities, could bring some dynamism to both local residents and businesses.

    So, what exactly is the market for real estate sales in these communities? College towns and resort towns have inherent advantages. One key consideration will be physical access to larger communities, airports and other key transport facilities. Another will be to make sure that high levels of communications technology – internet, cell phones, laptops, etc. – are installed. Although there is still no substitute for face-to-face contact, technology can enable markets to attract the quality-of-life-seekers who nonetheless want to and need to feel as if they can get where they need to go.

    Thus, these “neo-company” towns need airport access and the ability to easily and quickly connect to large international airports. For example, the mountain communities of the west need air connections to Salt Lake City or Denver. The physical connectedness complements the technological connectedness to overcome the isolation that has made the countryside so difficult for business activities. Those seeking lifestyle-driven locales are the same demographic groups, marketers, merchandisers and trendwatchers often considered major trendsetters, along with Generation Y, or the millennials, and the Baby Boomers. The millennials are getting in to their 30s and many want a better environment than the suburbs for themselves and their kids, but they still want the quality schools and range of housing types often unavailable or unaffordable in major core urban areas such as Washington, New York or Los Angeles. On the other end of the age spectrum are the Baby Boomers, a huge cohort that has been re-writing demographic trends as they age. The Baby Boomers are working in large numbers beyond the traditional retirement age. They are, however, slowing down and cutting back on work hours, focusing increasingly on their own lifestyle. Educated, motivated, active and relatively worldly, a large portion of Baby Boomers should be attracted to the amenities and activities in resort communities for their primary residences.

    Lastly, combining both the millennials and the Baby Boomers allows for greater proximity within family units. Both the millennials and boomers make location choices based not only on lifestyle, but family consideration, as well. As aging parents make lifestyle choices and decide to relocate, their children are increasingly following, concerned about their care and also taking advantage of grandparents able to provide daycare. This is particularly critical for dual income households.

    These locational decisions by two enormous demographic cohorts have the potential to profoundly shape the built environment. The reconfigured resort communities could create new communities, new economic vitality and a powerful constituency to preserve local character and environment. Rather than a legacy of abandoned, foreclosed, slow-selling or otherwise underutilized developments, we can create a harvest of new, sustainable communities for a broad spectrum of generations and incomes.

    Howard Kozloff is Manager of Development Strategies and Director of Operations at Hart Howerton, an international strategy, planning and design firm based in New York, San Francisco and London.

    Photo by caribb